1993-03-12

Hon. Bernard Valcourt (for the Deputy Prime Minister and Minister of Finance) moved: that Bill C-112, an Act to amend the Excise Tax Act, the Access to Information Act, the Canada Pension Plan, the Customs Act, the Federal Court Act, the Income Tax Act, the Tax Court of Canada Act, the Tax Rebate Discounting Act, the Unemployment Insurance Act and a related Act, be read the second time and referred to a legislative committee in the Economics envelope.


Mr. Jean-Marc Robitaille (Terrebonne):: Madam Speaker, I am pleased to speak on second reading of Bill C-112.
This bill contains amendments that were proposed in the notice of Ways and Means motion tabled on December 9, 1992. It contains refinements to the goods and services tax that have been developed through extensive consultations with businesses, organizations, tax professionals and individuals during the first two years that the tax has been in place. These measures reinforce the government's commitment to the smooth and efficient operation of the GST.
With a major tax reform such as the replacement of the federal sales tax with the GST inevitably refinements must be made to the system as the government and the private sector together draw on the practical experience of seeing the tax at work in the marketplace.
The proposed amendments are technical in nature. As such, they do not substantially alter the way in which the GST operates. But this does not diminish the importance
of this legislation, for these measures represent a rigorous fine tuning of the details of the tax. They simplify GST compliance across many sectors of the economy.
Over the past two years since the GST was implemented we have actively consulted industry associations, organizations and businesses, large and small. We responded to their suggestions with concrete proposals on how to improve the operation of the tax in specific industries.
Allow me to mention just a few examples of the changes that are contained in this bill. Following consultations with the Canadian taxi-cab industry the government proposed adjustments to the operation of the GST in this industry so that it could use a consistent pricing structure.
We heard representations from direct selling organizations whose sales contractors sell household goods door to door. As a result of these discussions we are proposing new rules under which hundreds of thousands of independent sales contractors do not have to register and file GST returns.
For retailers the bill contains amendments that would simplify the operation of the tax for a wide variety of special types of transactions, ranging from the treatment of discount coupons to the treatment of returnable beverage containers. In addition, simplified rules have been designed specifically for situations where retailers make purchases through buying groups. These special rules would significantly reduce the amount of paperwork that would otherwise be required under the normal rules of the tax. These changes have also been supported by associations representing manufacturers and distributors of grocery products.
We also introduced changes simplifying the operation of the tax in areas where activities are often undertaken by joint ventures. These proposals have been supported by the oil and gas industry.

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The improvements to the tax system that are reflected in this bill will make Canadian industry more efficient and competitive, both in foreign and domestic markets. For example, there is a proposal that would improve the competitive position of service exporters by allowing them to import goods for servicing without having to pay tax on the importation.
In addition, the bill provides broader relief under the tourist and foreign convention rebate program, a program that is already unequalled among other countries that have similar tax systems. This would enhance the competitiveness of our tourism and convention industry by helping to maintain the attractiveness of Canada as a destination for foreign visitors.
These are not the only measures that would strengthen the international competitiveness of Canadian suppliers. We received representations from businesses requesting changes to the GST to facilitate the export of goods and services by these companies to their foreign customers. In response to these representations this bill proposes refinements that will be particularly welcomed by auto parts manufacturers in southern Ontario centres such as Windsor and Oshawa.
The Bill also contains proposals that would directly benefit consumers in need. These include additions to the list of tax-free medical devices and prescription drugs.
Finally, the government is also proposing a special credit for certified institutions that employ mentally or physically disabled individuals. This credit was designed in recognition of the unusually high costs faced by these institutions during the transition to the GST.
This bill contains proposals to allow Canadians who live year-round in travel trailers to rent their trailer sites on a tax-exempt basis, thereby providing them with the same treatment as other residential tenants. In addition, this bill provides a simpler and more generous GST housing rebate to individuals who build their own homes.
The measures included in this bill improve upon the operation of the GST in the retail, farming, oil and gas, export and tourism sectors, to name but a few.
This bill makes the tax fairer for tenants and homeowners alike, and helps consumers in need. All of these
stand to benefit in one way or another from specific amendments contained in this bill.
An important objective of the government is to simplify compliance with the tax system, especially for small businesses. To this end the bill contains measures that would allow for greater flexibility with respect to reporting requirements. These measures include a plan that would make it easier for up to one million businesses to file GST returns only once a year.
The Bill would make the GST not only simpler but fairer for businesses. It gives the Minister of National Revenue discretion to waive penalties and interest in cases where someone is unable to file a return or make a remittance on time due to extraordinary circumstances beyond his or her control.
When this legislation was in draft form it was studied by tax experts. It is indeed noteworthy that they applauded the many streamlining improvements and clarifications contained in it. They have also urged speedy passage of the legislation in order to reduce uncertainty in the application of the tax.
In closing, I would like to emphasize that this bill is the result of extensive consultations with businesses, organizations, individual Canadians and their professional advisors. We have worked together to identify specific problems in particular areas of the GST and today we are proposing workable solutions that are tailored to the realities of today's marketplace.
This bill reflects representations made by members of all major parties on behalf of their constituents. It corrects anomalies and clarifies the application of the tax laws. Therefore I urge hon. members to give their full support to this bill and to ensure that it is approved as soon as possible, because these adjustments will make life easier for many people.


Mr. Dennis Mills (Broadview-Greenwood):: Madam Speaker, I listened to the hon. member on the government side while he was giving his speech and I heard the words: a simpler GST, a fairer GST and the fact that the government was working together with business in refining the GST.
March 12, 1993

Here we are almost three years later with 350 pages of simplification. This whole GST operation by the government has been the worst initiative that any government has ever perpetrated on a people.
Today people want their politicians to focus on one issue: putting people back to work. That is the priority issue. Whenever an initiative or a bill has come before this House that would help in any way, shape or form to put people back to work we on this side of the House have co-operated.
Madam Speaker, two weeks ago you were sitting in the chair when we debated the Small Businesses Loans Act. It was a Friday, it was third reading, but I can remember we also sat on the previous Tuesday. We worked with the government uninterrupted for 10 hours to make sure the Small Businesses Loans Act was put through this House in record breaking time so that it would be an instrument to assist the small business community, the 960,000 businesses whose sales are under $5 million. We, the Liberal Party of Canada, co-operated with the government. We applauded the government for this initiative. Small businesses can go to their local financial institutions or credit unions and get a Government of Canada loan guarantee of up to $250,000.
When government members from time to time hurl insults across this way suggesting that we are not working with them, that we are not constructive, they cannot say that we did not co-operate on that specific bill, a bill that could put people back to work immediately if properly utilized.
I have observed two things since that bill was passed. First, the government made a commitment that it was going to promote the bill, that it was going to make sure the small business community knew about it. I know in my own community I sent at least five small businesses to the local banking institutions. I can tell you five for five, they came away with no help at all from the banking community. Either the banks did not know about it or they did not care to know about it and this government was sitting when it made that commitment.
The second thing I noticed-and then I am going to come immediately to the bill because it is relevant-was that I thought it was a pretty productive day in the House. We were working together on a very good piece of legislation. However, in all of Canada there was only
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one small news story on the very important legislation we passed that day, legislation that would give hope to a lot of small business people and a lot of people that had not even started their businesses but wanted to. That is what it was designed for.
I forget what newspaper carried the story, but in my city the only paper that covered it was the Corriere Canadese which covered it in Italian. That is important as we have a large Italian community in our city, about
700,000	Italians, but it was not covered by The Toronto Star, The Toronto Sun or The Globe and Mail. It was good news. It was a positive story and the press never covered it. This is the reason why I say to the government that it has to promote the Small Businesses Loans Act.
It is a specific example of the opposition working with the government because it is legislation that will help put people back to work, it is going to be something that could help create more jobs.
Today we have before us Bill C-112. It is sort of the son of the son of GST, three years later. It is another attempt at refining a tax that has done a great deal to dampen and suppress entrepreneurial spirit and consumer confidence in this country. I know in my own riding it has practically cut the restaurant business in half, not to mention what it does to students who tend to work thenway through either high school or college by working in restaurants part time. They count on not only this type of work in the restaurant-tourism business but on the tips. It has just gutted the hopes for half-decent, part-time income for tens of thousands of university students right across Canada.
This poorly designed GST has brought further red tape to all the small business community in Canada, surprising for a Conservative government which tends to be a little bit more sensitive, which is supposed to be more sensitive to business. It has throttled people with this bureaucratic nightmare of a GST. Here we are three years later with some amendments, some refinements.
This bill that the government has put forward is proof positive of what we have been saying about the complexity, about the unfairness and about the inefficiency of the GST during the last three years. The government is now admitting, three years later, that what it had really was not that great.

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My leader three weeks ago said that this GST will be scrapped. Make no mistake about it, the GST will be scrapped if we are given the trust to run the Government of Canada.
When we talk about scrapping the GST, the most common question we hear from the other side, from the street or sometimes from journalists is: What are you going to do to replace the $15 billion worth of revenue that the GST delivers? What is the Liberal Party of Canada going to do to generate the $15 billion?
For starters, this GST has done much damage to the retail business in this country. It has done much damage and caused much unemployment and welfare. Yes we have had a world recession, but this GST has exacerbated the confidence problem in this country. Therefore, when we talk about revenue this tax has caused a situation where our welfare and unemployment insurance payments, including interest rates, are over $30 billion.
If you developed a fair tax system in this country and if you put 400,000 or 500,000 people back to work you could find $15 billion within four or five months, not to mention the fact that we would start giving people back their dignity. We have to understand that there are close to two million people in this country who are out of work.
I cannot imagine a single member of Parliament in any party in this House of Commons wanting to defend the status quo in terms of tax law in this country. In fact I have not met a member of Parliament who believes that the tax act of this country is fair, simple or efficient. We all agree that this 2,400-page document, with its rules and regulations and its exceptions and its exceptions to exceptions, is no longer intelligible. This tax act, combined with the GST, has caused an underground economy of cash deals in this country. Experts estimate that right now there are over $100 billion of cash transactions in this country.
Why do people want to do cash deals? They want to do cash deals because they feel that the current tax system is unfair. Everyone in the country feels it is unfair. Because the GST has exacerbated that feeling of unfairness people collaborate with one another. They say "I will paint your house at half the price if we can do a cash deal". He will pay GST on half that amount because on a cash deal he would not pay any GST. Sometimes it is half
cash and maybe a third on an invoice so they pay the GST on the smaller amount. All kinds of schemes are going on in this country right now. That underground cash economy is just out of control.
The question comes to us in opposition: If you are going to scrap the GST what are you going to do to find $15 billion? For the twentieth time in this House of Commons I am going to plead with this government to look at reforming this system. There is an alternative to the GST and there is an alternative to this current tax act. You do not need to defend the status quo. This is just one option-there are many-and it is the single tax.
People want accountability. When you have a tax act where there is absolutely minimal accountability, and that is reinforced by the GST because of the underground economy, you have to look at the single tax. What is the single tax? The single tax system essentially would say we have to stop running every aspect of the economy through the tax act of Canada. Right now, for every sector of our economy, whether it is the forestry sector, the mining sector or the environment, we run all kinds of tax preferences, special preferences, through the tax act. We have tax loopholes in this tax act that go back 20 years that have not been reviewed in terms of accountability.
Just this year, two offshore drilling projects cost the taxpayers of Canada close to $2 billion. They did not create hardly a single job in Canada because of a loophole that was buried in that tax act from 20 years ago. All of those tax preferences should be flushed out of the tax act. If any sector of our economy wants a tax grab or a tax expenditure it should go to the line department, justify it and link it to job creation.
Right now there is very little linkage, if any, in terms of the preferences in here and how they are meeting job creation possibilities.
If we had a single tax system in which we basically asked people on the corporate side for 20 per cent of their net income and the same on the personal side-after allowances were made for seniors, families with children, and charitable donations, and we could keep the RRSP structure in place-then that would empower people and get them back on stream. Right now people are running away from the tax act of this country because they can no longer understand it. It is so complex.
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The GST has exacerbated that. No matter how many amendments or refinements the government brings in on this bill it cannot make a silk purse out of a sow's ear. The GST is a sow's ear and the Canadian public is never going to accept it. One of the reasons the Canadian public is never going to accept this bill is because the government introduced it at a time when people were on their knees. They were crying out for some hope, looking to the national government for some confidence and it threw this bill at them.
Going back to the single tax, if we have a system which everyone in the country feels is fair then people work harder, they work smarter, and productivity levels rise. When productivity levels rise then that is how jobs are created.
If we could put 400,000 or 500,000 people back to work in the next four to five months and if we could regain some of that underground economy, cut it in half to about $30 billion or $40 billion, just think of the amount of revenue that would bring to this Treasury.
I hear criticism and people asking: Where are you going to get the $15 billion? That is a defeatist attitude. Does the minister want to defend the status quo?
This is going to be a great six months, because I love people who defend the status quo. The status quo is a GST that has exacerbated the underground economy in this country to the point where it is over $100 billion. The Minister of Transport knows that. There are two million people out of work and he wants to continue to promote the status quo.
Is the government saying that it cannot do better? The government is essentially saying it cannot improve on the status quo. Canadians do not believe that for a second. They do not believe for a second that we cannot regain some of the underground economy. They do not believe for a second that there are not ways to put people back to work.
The problem with this government is that it talks a good deal but it has no action plans. I refer specifically to that Small Businesses Loans Act where the Minister of Finance committed to do something about it and the
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minister for small businesses committed to do something about it. I called the department this week and it said not to start promoting the Small Businesses Loans Act right now because it has not even gone through the Senate, which the government controls.
That is how much this government really cares about the small business community in this country. The government has this smug and arrogant attitude that it cannot improve on the status quo. Canadians are not going to accept it. They want a debate on tax reform.
I am not saying that the single tax is the panacea for this country. I am not saying that it is the only alternative. I am saying that when there are $40 billion worth of tax grants to business in here, which have been mostly put in by lobbyists and people that have been able to influence the Department of Finance, and if the government refuses to review these from time to time and not have some form of accountability then how can it say it is serving the taxpayers of Canada?
Is it telling me that in $40 billion worth of tax grants there is no room to flush some of those out or review them? Does the minister agree with the offshore drilling that happened with two oil companies last year, which cost the taxpayers of Canada $2 billion? How many jobs were created in Canada? That is defending the status quo.
I think it is wrong. Canadians know it is wrong and they want a fair, simple and efficient system. Did you know, Madam Speaker, that 80 per cent of the tax returns filed in this country had to be returned because of mistakes made in the system. Does this government want to defend that? If it sits there, smiles and says that it cannot do better then that is defending the status quo. Canadians want better. We need better and we can do better.
The government says that we are not constructive, that when something good comes along in this House we do not co-operate. The government fooled me two weeks ago because I really believed that this government was sincere and serious about trying to get credit for the
960,000	small businesses in this country.

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This government is not sincere when it makes a commitment to help small business. It brings a bill before this House, gets it before the House, we co-operate, and then nothing happens. That is wrong.


Mr. Domm:: That's not the case.


Dennis Joseph Mills: The member for Peterborough says that is not the case, but I can tell the House that it is. We co-operated. The member knows it, he was there. I called the minister's office on Monday and I do not want to repeat the answer in this House.


William Henry (Bill) Domm: Put it on the record.


Dennis Joseph Mills: I will put in on the record. I was told that I should not be promoting that bill right now because it has not gone through the Senate. Does the hon. member for Peterborough agree with that? He does not believe that. Do not tell me that the member was not in his riding last week tiying to promote and help small business. He was.


William Henry (Bill) Domm: It's not proclaimed, but it's through the Senate.


Dennis Joseph Mills: Another excuse. This is the GST government, the defenders of the status quo and it makes these nice announcements before Christmas about the Small Businesses Loans Act. What a great bunch of teasers we have here. They are a great bunch of teasers. They come in today and talk about simplifying the GST; 350 pages of simplification.
In this country today there is a crisis of confidence. We have to do something in order to get the entrepreneurial spirit of this country moving again.


William Henry (Bill) Domm: You better get your party together.


Dennis Joseph Mills: This is what happens when a government has been around for 10 years and we try to make a point on behalf of those people in our community who are crying out for help right now, the 960,000 small business people. We try to make a constructive point on the fact they are not operating the Small Businesses Loans Act, that they are not actioning it, and they come back with smug, arrogant remarks. Instead of making smug, arrogant remarks, why do they not go to their Minister of Finance and their minister for small businesses and do something about it? They are in charge. Why do they not ask them to live up to the legislation that went through this House?
This is one of the reasons people have lost trust in the government. The government has lost its feeling for the
pain out there in the community. It has lost feeling for the fact that two million people right now are crying out for help. They want work. They want more jobs. It is not right to laugh. I am not treating this issue lightly. It is serious.
We have a situation today where the government wants us to support a bill to refine the GST. I am totally opposed to the GST. It is an inefficient, unfair tax. Small businessmen despise the GST. They want it replaced. They definitely want to make sure we do it in a responsible way. We cannot just snap our fingers and pull something out of the hat. There has to be a serious debate on tax reform, but they do not want us to defend the status quo which the Conservative government wants to defend. We are not going to defend the status quo. There is no way. There is absolutely nothing that could ever make me change my attitude toward the GST.
For the last three years I have seen the pain. I have watched people lose their businesses. I have watched retailers lose their stores. I have seen people lose their homes. A leadership change does not matter. It does not matter whether it is the Minister of Finance, the Prime Minister, the Minister of Transport or the Minister of National Defence. This is the GST government. Two million people out there are in pain and have been in pain for the last three years. They are not a mirage. They are real.
Believe me, the people who are working care as much and more about the people who are not working. They think if they ignore the two million unemployed that the ten million or eleven million who are working will support what they are doing to the others. They are making a mistake. It is not going to happen.
There are alternatives to defending the status quo. The status quo is unacceptable when we have over $100 billion in underground economy. The Auditor General said last year that most Canadians could not even understand the tax forms.
I am totally opposed to the bill. I cannot wait for the next election when the GST will be the singular issue hanging over this government.


Madam Deputy Speaker:: I see the hon. member rising on questions or comments. He can do so with unanimous consent. This is first-time debate at second reading so the first two speakers are allowed up to 40 minutes and there are no questions and answers unless there is unanimous consent.
March 12, 1993


William Henry (Bill) Domm: Madam Speaker, I rise on a point of order. I wonder if there is unanimous consent so that I could make comments and ask questions.


Madam Deputy Speaker:: Is there unanimous consent to allow the hon. member to make a comment or ask a question?


Some hon. members:: No.


Mr. Nelson A. Riis (Kamloops):: Madam Speaker, I join with my colleague who has just spoken to speak out as strongly as I can against Bill C-112, an act to fine tune the goods and services tax. That is what it is all about.
What will the people of Canada say when they see this document containing hundreds and hundreds of pages to fine tune the GST? It is already an impossible task for most people to handle. This is what makes small business operators, people running small firms, shake their heads in disbelief. An effort to improve the tax, from the government's point of view, is good news, but it cannot improve a tax that does not make any sense. It cannot improve a bad tax by introducing in the House of Commons hundreds of pages of detailed changes. That is not the way to deal with the GST. There is only one way for the country to deal with the GST, that is to scrap it as soon as possible to allow people to get on with rebuilding the economy.


An hon. member:: What would you replace it with?


Nelson Andrew Riis: My hon. friend on the government benches asks me what we would replace it with. I would ask him to take the time to read the economic recovery report presented by the federal New Democratic Party. It lays out in very specific detail the set of alternatives to the goods and services tax. I tell my hon. friend opposite that because of the GST and a whole range of government policies regarding taxation there is absolutely no faith at all in this country in the tax system of Canada. People have long since abandoned any hope that it is fair, just and equitable. They know this is a tax system dedicated almost exclusively to serving the wealthiest people of this country and the very largest corporations of Canada.
The best example of that is what the government introduced in the House a few days ago: a special tax loophole for the wealthiest families of Canada. The tax loophole was originally introduced in the early 1970s by the Liberal government of the day. It provides for
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tax-free family trusts. By rolling money into a family trust no income tax is paid for 21 years. The 21 years under the Liberal administration was about to run out. Now the government steps in and says that it has a new twist to it. It is going to continue the tax gift to the richest people of Canada, to the richest families of this country, and they will not be paying any taxes until their children die.
In other words, the $70 billion in these special family trusts is not being taxed. That is wrong. That is unjust. That is unfair. That is why the people of Canada have lost complete faith that the government has any intention of trying to bring in a fair and just tax system. That is only one example.
Today, as we speak to this bill in the House of Commons, there are thousands and thousands of individuals with incomes over $50,000 a year who do not pay a single penny in income tax, not a single cent in income tax. There are hundreds of people whose incomes are over a quarter of a million dollars a year who do not pay one penny in income tax, to say nothing of people who make $100,000 and pay $10 in income tax.
It is an unjust system. It is an unfair system. It is a system the people of Canada have long since jettisoned in terms of being a reasonable system. Day by day by day the government makes it worse. Family trusts to give a tax loophole to the wealthiest people of Canada are ridiculous. The people of Canada are disgusted. That is why the minute there is an election call the Conservative benches across the way will be literally jettisoned as those people become new kinds of Tories. We will call them migratories, as Tories migrate away from Parliament Hill.
The GST, special tax breaks for the largest corporations and special tax breaks for wealthy people have turned Canadians into a population that has lost confidence in the tax system. Consequently much of our economy has moved underground. The best estimate we have is something in the neighbourhood of $100 billion annually in transactions that are untaxed because they are underground, they are on a barter system, they are on a cash system and no records are kept. Imagine if those $100 billion of annual transactions were taxed at the regular level of taxation. It would take care of our deficit. The deficit of this country alone would be dealt with on that one aspect alone, the $100 billion now in the underground economy.

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No wonder we are in such difficulties. No wonder we have a deficit problem. No wonder we have a debt problem. People have lost complete faith in our tax system.
Here we have the government's effort to simplify the tax system. If people are watching television today and hear us saying that this is a way to simplify our tax system it is no wonder that people have lost faith not only in this government but in a tax system as it is presently constituted.
However this bill deals specifically with the GST. One of the things it does is stated in clause 211. What clause 211 states is that information about the GST is to be kept secret from the people of Canada. It bars information about the GST. Therefore under the freedom of information legislation when we try to get information about how the GST is being handled in the country we will be barred from that information.
I ask the government members opposite: What is it that you are trying to hide? How can you support legislation that keeps valuable information about the GST from the people of Canada? What is it that you are trying to hide? I think these are fair questions and perhaps at the end of my presentation I can ask some of my hon. friends across the aisle to explain that. Why would you support legislation that keeps information about the GST from the Canadian public? Presumably you have a good reason and I am looking forward to hearing your speeches later. That is one clause.
The bill goes on and on. For example, one of the clauses covers yoghurt. It states that if you buy six containers of yoghurt you will not have to pay the GST. There is another clause relating to bull semen. It states that if you pay GST on bull semen it is refundable. For all the people who are interested in purchasing bull semen this is great news, the GST will be refundable. That is probably a good provision if you are a cattleman.
What about reading? Why do we have GST on reading material? Why do we have GST on children's story books? I look forward to hearing my friends across the way explaining, when they speak today, why they support one of the only tax systems in the entire world that taxes children's books, that taxes the Bible and that taxes
reading material. Why would people support a tax regime that does that? Why would they not at least now, when they are supposedly improving the GST, bring in legislation that would exempt reading material so that we can encourage people to read and work to fight against the high rates of illiteracy in this country?
Madam Speaker, you might detect a certain anger in my voice. I am angry because I have just spent two weeks in my constituency visiting people who operate small businesses, small retail stores, small manufacturing firms-


Mr. Fee:: Theatrical firms.


Nelson Andrew Riis: Yes, as a matter of fact, as my hon. friend calls out, a number of organizations involved with the arts have just been informed they are going to have their arts funding slashed. Is this not an intelligent approach to take to the arts organizations across Canada, to slash budgets for another year, after years and years of reducing their budgets, now to make them almost totally inoperable? I am pleased that my hon. friend reminded me of that.
As I visited business after business there was one common concern raised at every single visit. I cannot recall a single firm I visited that did not have this to say. They said: "As our federal representative do what you can to have this government reverse its position on the GST and drop this tax because of what it is doing to our business".
It is not the only problem that businesses face but for many it is the straw that breaks their backs. It is the reason that people lose their homes, it is the reason that families break up, it is the reason that there are thousands and thousands of bankruptcies every month in this country. One of the critical reasons is the GST. It puts the cost beyond what is reasonable. It eliminates those extra few customers that make the difference between a successful business and an unsuccessful business.
In conclusion, as we break for Question Period, I want to say on behalf of my party that we will oppose this legislation. We will oppose it as strongly as we can because even by changing the GST we cannot make this bad tax a good tax.
March 12, 1993


Madam Deputy Speaker:: If the hon. member wishes to continue after Question Period there will be nine minutes left. We will now proceed with statements by members, pursuant to Standing Order 31.


STATEMENTS PURSUANT TO S. O. 31
Douglas Fee: Madam Speaker, Canadians had just reason to feel pride last night after the greatest day in Canadian figure skating history. Not since our own Otto Jelinek and his sister Maria along with Don Jackson won 31 years ago have Canadians won both the pairs and the men's world championships.
Following Isabelle Brasseur and Lloyd Eisler's victory in pairs, Elvis Stojko skated almost flawlessly to claim a silver medal in the men's championship.
My pride and the pride of everyone in central Alberta was absolutely unlimited as Kurt Browning clinched his quad, a fourth world championship.
Four times I have had the pleasure of rising in this House to share our pride and congratulate Kurt Browning. He is an outstanding athlete, a fierce competitor and a proud Canadian. Kurt not only expresses his pride in Canada but by his skill and his actions he brings pride to this country. I am sure that all members of the House of Commons join me in congratulating Isabelle and Lloyd, Elvis and Kurt. They are the best in the world.


Some hon. members:: Hear, hear.


PEACEKEEPING
Mr. Fred J. Mifflin (Bonavista-Trinity-Conception):: Madam Speaker, I am concerned about Canada's ability to sustain our current level of peacekeeping operations. In the past five years more peacekeeping operations have been approved than in the previous 40 years. There is every indication that this trend will continue as ethnic tensions throughout the world increase along with the inability of smaller countries to cope.
Canada has 4,700 peacekeepers deployed around the world in 15 different locations. The size and scope of operations are increasing dramatically. On the other hand, our contingency planning is based on deploying half that number with a force structure of 4,000 more soldiers. Too much slack is being taken up by reserve forces who will comprise 55 per cent of the relieving battalions scheduled for Croatia in April.
There are disturbing problems with United Nations command and control, and defence analysts are expressing concern to the Standing Committee on National Defence about the adequacy of equipment in use by our peacekeepers and the depth of training for our reserves.
Both the minister of external affairs and the Minister of National Defence have expressed concern over this and I believe that-


Madam Deputy Speaker:: I regret the member's time has expired.


NATIONAL DEBT
Hon. Lome Nystrom (Yorkton -Melville):: Madam Speaker, this country is now in a debt crisis, both nationally and provincially. I would like to recommend to the federal government that it take a serious look at the call made by Saskatchewan premier Roy Romanow and other premiers that there be a federal-provincial conference on the debt crisis in this country, in other words a conference on fiscal management or fiscal federalism in this country.
It is important that we have a federal-provincial conference. The debt now is an interprovincial debt, not just a federal debt but a provincial debt as well. The debt-GDP ratio in this country is almost the highest of any country in the industrialized world. It is more than twice as bad in our country as it is in France or Germany, and many times higher than in countries like Sweden or Japan.
Another reason for this conference is that we must take a look at the question of transfer payments. The C. D. Howe Institute said recently that the federal government should be admonished for the way it is transferring part of its debt on to the backs of the provincial governments.

March 12, 1993


S. O. 31 AIDS
Mr. Murray W. Dorin (Edmonton Northwest):: Madam Speaker, at a time when government expenditures are being reduced in order to combat the deficit and stabilize the economy it is important to note that the federal government has recognized the significance of the fight against AIDS and has made a commitment to spend $42.2 million a year over the next five years.
While everyone would like more funds to fight AIDS, in boosting AIDS funding by 13 per cent the federal government has emphasized its strong commitment to finding a cure for this disease while at the same time maintaining a realistic attitude toward our fiscal situation. Finding a cure and promoting awareness of HIV infection and AIDS continues to be a priority of all Canadians.
I am pleased that the Minister of National Health and Welfare has especially recognized the important work of the AIDS Network of Edmonton Society. This organization has experienced tremendous growth since it was established in 1986 and today has a staff of 15. Over 200 trained and active volunteers deliver a comprehensive range of outreach training and prevention education programs which serve almost 500 clients.
I commend the society's tremendous efforts in the continuing fight against AIDS and I am pleased that the Department of National Health and Welfare-


Madam Deputy Speaker:: I am sorry, the hon. member's time has expired.


FIGURE SKATING
Mr. David Kilgour (Edmonton Southeast):: Madam Speaker, today we can say: We are the champions. The world should nod heads and agree. The pride shining in Kurt Browning's face last night was as bright as the gold medal around his neck. By his side stood Elvis Stojko with the silver medal around his neck.
How often do we get to see heroes in the making? Better yet, how often do Canadian heroes emerge while the entire world is watching? It happened last night in Prague during the World Figure Skating Championships.
Alberta native Kurt Browning won the gold medal for Canada and Elvis Stojko won the silver. One and two. It
is the first time Canadians have ever finished first and second over-all.
As if that was not enough, Isabelle Brasseur and her partner Lloyd Eisler won the pairs competition the night before. They persevered. They tried for six years to win the gold and it finally paid off. Not since 1962 when Donald Jackson and Maria and Otto Jelinek won two gold medals for Canada have we come out so far ahead. That was 31 years ago.
These past two days will go down in figure skating history throughout the world, and here especially. The 26-year old Kurt Browning was quoted by one local newspaper as having said: "I'm back on top. That's something, when I decided to stay around for two more years, I wasn't sure-"


Madam Deputy Speaker:: I am sorry. Everybody is taking more than their allotted time. I have to stop everyone. The hon. member for Fredericton-York- Sunbury.


NEW BRUNSWICK CONSTITUTIONAL AMENDMENT
Mr. J. W. Bud Bird (Fredericton-York-Sunbury):: Madam Speaker, today marks an important chapter in the constitutional history of both New Brunswick and Canada. Today the resolution respecting the equality of New Brunswick's two official linguistic communities is proclaimed by the Governor General and becomes an official amendment to Canada's Constitution.
Most New Brunswickers have long accepted and supported the reality of two official languages as a fundamental concept of society in our province. Our province has long recognized that the most effective way to an harmonious and prosperous society is to exercise policies that will help develop communications, confidence and mutual respect among the two linguistic communities which derive from those official languages.
Part of doing that is to ensure that each linguistic community feels secure in its right to government services in official languages, particularly with respect to provisions for education and cultural development. These two areas are basic to the preservation of either official language.
March 12, 1993

Although we continue to have some intense political debate about linguistic matters in New Brunswick we have made tremendous progress in building a peaceful and productive society together.
If the rest of Canada can catch the spirit of what New Brunswick has been able to achieve then I believe that the proclamation ceremony today will prove a milestone toward the ultimate lasting unity of our nation.


PREMIER CATHERINE CALLBECK
Mr. Joe McGuire (Egmont):: Madam Speaker, on September 17, 1991 a former colleague in the House of Commons and a fellow Prince Edward Islander, Premier Catherine Callbeck, introduced a private member's motion calling on the federal government to honour the contributions made to Canada by our late former Prime Ministers. This was to be done by placing a commemorative marker near their burial sites.
Yesterday in an historic event hosted by the Speaker of the House of Commons and attended by the Prime Minister, the former Prime Minister the right hon. member for Vancouver Quadra, and members of the families of our past Prime Ministers 14 commemorative plaques were unveiled.
I want to take this opportunity to congratulate Catherine on the success of her initiative to honour our past leaders. I also want to congratulate her on her successful quest for the leadership of the Liberal Party of Prince Edward Island. This made Catherine the second woman to hold the office of premier of a province in Canada.
I look forward to March 29 when the voters of Prince Edward Island will make her the first woman to be elected premier in the history of Canada.
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AIRLINE INDUSTRY
Mr. Scott Thorkelson (Edmonton -Strathcona):: Madam Speaker, there is overcapacity in our airline transportation system. Canadian Airlines recently announced a reduction in capacity and Air Canada effectively refused to respond.
Air Canada continues along its self-destructive path. It refuses to recognize that it made a colossal blunder by pushing its monopolistic made-in-Canada solution. This strategy will be recognized as an error in judgment of historic proportions. Its management team, which is bound by a paradigm of bureaucratic inertia, has failed to respond to competitive pressures by reducing capacity and cutting costs. Instead, Air Canada tries to side-step the issue by driving toward a monopoly.
I call on both major airlines to face reality, reduce capacity and restore order to Canada's transportation system.
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FIGURE SKATING
Mrs. Gabrielle Bertrand (Brome -Missisquoi):: Madam Speaker, all Canadians take tremendous pride in the outstanding achievements of our figure skaters. It was not luck but a combination of hard work, perseverance and a very legitimate desire to win for their country.
Emotions ran high as we watched remarkable performances by Isabelle Brasseur and Lloyd Eisler, Kurt Browning and Elvis Stojko. Today, our hearts will go out again, this time to Josee Chouinard and Karen Preston, as they too go for the gold.
To all these outstanding athletes we offer our warm congratulations on reaching the top of their discipline and being the best in the world. Their determination, strength of character and courage are an inspiration to Canada's youth. Truly, they are the best ambassadors Canada could have.
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EMPLOYMENT
Mr. Howard McCurdy (Windsor-St. Clair):: Madam Speaker, today's report from Statistics Canada shows that since free trade youth unemployment has soared from 11 per cent to almost 18 per cent. This is so despite a 14 per cent increase in the number who have given up hope and have left the work force altogether.

March 12, 1993
Worse still, the figures show that the employment losses were all in full-time employment. People who should be working as professionals, business people, engineers or workers in plants are instead working as temps, bicycle couriers and waiters. Why? It is because this government, in failing to adapt to a change in the economy, has failed to create enough new value-added employment and has done its utmost to slam the doors to our universities, colleges and other training opportunities.
The figures are numerical proof of what Vancouver writer, Douglas Coupland, calls the McJob phenomenon. Young people are being knocked off the career ladder and forced into a succession of low-paid, deadend service jobs. But then, perhaps McJobs are all we can expect from free trade and Tory McGovernment.


IMMIGRATION
Mr. Francis G. LeBlanc (Cape Breton Highlands - Canso):: Madam Speaker, I am rising to register my opposition to the absurd and blatantly political proposal by this government to close some 45 regional immigration offices across Canada and set up a mail-in centre for work permits, visitor visas, student visas and family applications in Vegreville, Alberta, right in the Minister of Finance's own riding.
One of the offices slated for the chopping block is the Canada Immigration Centre in Sydney, Nova Scotia. This centre in Sydney not only processes student, worker and tourist visa extensions, as well as family class applications, but also provides valuable support and monitoring of business and entrepreneurial immigrants to Cape Breton. These prospective immigrants from countries such as Germany, Austria and Switzerland provide investment and badly needed jobs in Cape Breton.
Closing down the Sydney immigration office, as this government seems set to do, will only hurt our efforts to bring badly needed jobs to eastern Nova Scotia. I urge the Minister of Employment and Immigration-


Madam Deputy Speaker:: I am afraid the member's time has expired.


YOUNG OFFENDERS
William Henry (Bill) Domm: Madam Speaker, I take this opportunity to speak today on a subject of growing concern among many Canadians. That is the question of how we can best deal with crimes committed by young people.
I will be presenting petitions today from 9,000 of my constituents who wish to see Parliament reduce the maximum age from 18 for those youths who commit crimes. I applaud their initiative and support the intent of their petitions.
I am particularly supportive of the private member's bill of the hon. member for Calgary Southwest. Bill C-354 would see the maximum age of young offenders reduced from 18 to 15. As well, it provides for young offenders who have been twice convicted on indictable offences to be tried in adult court.
I believe that legislation such as the bill standing in the name of my colleague and seat-mate from Calgary Southwest is a step in the right direction-


Madam Deputy Speaker:: I am sorry, the member's time has expired.


ELVIS STOJKO
Mr. Mac Harb (Ottawa Centre):: Madam Speaker, Canada's domination at the World Figure Skating Championships continued last night as Elvis Stojko followed Kurt Browning's gold medal with an inspiring silver medal skate.
Heading into the final program, Elvis was well back in fifth spot. However, he showed incredible determination and desire and skated the performance of his life under incredible pressure. Landing eight consecutive triples, he scored the highest marks of the evening for difficulty.
To go from fifth spot to second is an incredible feat, and given the high level of competition that he faced many would say that such an accomplishment was miraculous. The ability to fight back under difficult circumstances, combined with his sportsmanship, embodies the true quality of Canada and Canadians. His performance is something we can all take pride in.
March 12, 1993

I am sure that I speak for everybody in the House of Commons and across Canada when I say congratulations, Elvis, for a job very well done.


Some hon. members:: Hear, hear.


REFORM PARTY
Mr. Blaine A. Thacker (Lethbridge):: Madam Speaker,
I rise to alert Canadians, and especially Canadians in southern Alberta, to a very dangerous plank in the Reform Party platform.
The Reform Party promises to balance the budget in three years. That sounds good but it is very dangerous. If $34 billion of purchasing power were to be withdrawn in three years from Canada, we would be plunged into a very deep depression. In fact land values would drop by some 75 per cent. Tens of thousands of retail stores would close. Seniors' pensions, student loans and many other programs would virtually disappear.
For southern Alberta the Lethbridge Research Station, the Animal Diseases Research Institute, Waterton National Park, the Lethbridge Airport and Lethbridge as a regional suboffice for many civil servants would be drastically cut back.
In summary I warn Canadians, especially southern Albertans, about this very dangerous policy.


FITNESS AND AMATEUR SPORT
Mr. John Brewin (Victoria):: Madam Speaker, the House congratulates Kurt Browning, Elvis Stojko, Isabelle Brasseur and Lloyd Eisler, the whole figure-skating team, and recently the World Cup wins by Kate Pace and Myriam Bedard.
Unfortunately the government has not matched the performance of our athletes. The government is inflicting very deep cuts on sport and active living funding, jeopardizing programs, off-loading more on to the provinces, schools, municipalities and the volunteer community.
It is blatantly disregarding recommendations of the progressive Best task force report and is fundamentally undermining the opportunity of Canadians to pursue excellence in sport.
Oral Questions
This week the government devastated the active living community in an outrageous fashion when it shepherded 50 staff of the active living organizations into the Congress Centre and fired 21 of them. It reneged on its promise to give them-


Madam Deputy Speaker:: I am sorry, the hon. member's time has expired.


APPOINTMENT OF JEAN-CLAUDE RIVEST TO SENATE
Mr. Gilles Rocheleau (Hull-Aylmer):: Madam Speaker, as a Quebecer I feel I must comment on the appointment of Jean-Claude Rivest to the Senate by Prime Minister Brian Mulroney. I was astonished to hear that someone so closely involved in drafting the Allaire Report, which in its initial version demanded the abolition of the Senate in Ottawa, should now accept an invitation to join this old fogies club, while the role-


Madam Deputy Speaker:: I would ask the hon. member to sit down. Insults are not on the agenda today. We will now proceed to Oral Question Period. The Leader of the Opposition.



ORAL QUESTION PERIOD

['Madam Speaker, I would like to designate Monday as an allotted day or supply day.']
Hon. Jean Chretien (Leader of the Opposition):: Madam Speaker, I would like to ask a question of the government House leader.
The House has been informed that there is a big rush to pass the NAFTA deal. Yesterday in the United States Congress it became very clear that the United States legislation was not about to pass unless there were some major changes in the form of new agreements.
Now that it is evident this deal will not easily pass in the United States, will the government wait to learn exactly the results of the negotiations that will start next week and act only after that? Why not use the occasion to get clear definitions of what is a subsidy and what is dumping so that everybody will be happy?

March 12, 1993
Oral Questions


Hon. Harvie Andre (Minister of State and Leader of the Government in the House of Commons):: Madam Speaker, the deal is signed and remains a deal to which all governments are committed. It of course needs to be ratified in all of the legislatures.
The U.S. is talking about a side deal and negotiations will be going on in terms of a side deal with respect to the environment and labour and that was something our government talked about last February.
In terms of this House, I have offered to the opposition that the proposed legislation be referred to a committee so it can be studied by Canadians. So far I have not been able to get the co-operation of the opposition parties, although not the Liberal Party, in terms of doing that.
I do not see anything wrong with the opportunity of having a committee of the House of Commons study the deal while negotiations on the side deal are carried on.


Joseph Jacques Jean Chrétien: Madam Speaker, the opposition will be ready to guarantee to the House of Commons that this bill will not be passed in Canada until it is passed in the United States. To study the bill is one proposition, but to pass it is something else. The indication we have received from the government is that it wants to pass the bill before June.
The United States has decided it will not submit the bill to Congress before this summer. There is some indication that if it is not ready before the summer in the United States it probably will not be passed in the United States before the end of the year.
Can we have a guarantee from the government that the bill will not pass this House of Commons until the bill is passed in the United States?


Harvie Andre: Madam Speaker, that does not make a lot of sense to me.
The reality is that it only becomes law if all governments, all legislatures pass it. Who is first or who is second seems to me to be rather immaterial.
The deal is that the agreement as negotiated will proceed. We want to have the fullest of discussion. We want to have an opportunity for people to examine it, to have this House of Commons examine it. However, at an appropriate time we must make a decision. The fact of
the matter is the government stands committed to this deal, which is a good deal for Canada.


Joseph Jacques Jean Chrétien: Madam Speaker, they want us to adopt the bill as is, but in July or August the Americans may decide to adopt a different version.
We have no objection to discussing and examining the bill. However, we want the government to guarantee that the bill will not be approved in Canada until the Americans have obtained what they want to obtain and until we are satisfied with the content of this potential agreement between Canada, United States and Mexico.


Harvie Andre: Madam Speaker, the agreement will not be amended. The agreement is the agreement as it stands.
Whether it passes the United States Congress is a question for the United States government to deal with. Presumably some of these comments we read in the press are part of the political manoeuvring going on down there.
The United States cannot unilaterally amend the deal. It has been signed by the three governments. It remains in effect. President Clinton said he supports the deal. The Mexicans clearly do. This government clearly does. It makes sense.


An hon. member:: What about changes?


Harvie Andre: No. I am sorry, no changes to the deal.
They are talking about side agreements, which are something else. We are participating in those negotiations. Frankly it just makes sense for us after proper discussion and consideration here in Canada to pass the deal and have it in place because it is a good deal for Canada.


Hon. Herb Gray (Windsor West):: Madam Speaker, my question is also for the government House leader.
Today, according to the press, the U.S. House of Representatives majority leader, Richard Gephardt, said: "I will not support and I think a lot of members will not support NAFTA on a leap of faith". Also Robert Matsui a prominent Democratic congressman said: "I have to tell you that my reading on the floor of the House at this time is that the votes are not there for the approval of NAFTA".
March 12, 1993

I ask the government House leader, what sense is it? How does it serve Canada's interests for the government to force through this House a measure which may turn out to be disapproved by the U.S. House of Representatives? How does this serve Canada's interests if Canada is left out on a limb because of this government's foolish approach to this unwarranted and bad NAFTA deal?


Hon. John McDermid (Minister of State (Finance and Privatization)):: Madam Speaker, first of all Canada is not left out on a limb at all.
The Liberals talk about sovereignty. They talk about the independence of Canada. They talk about how the Americans dictate what goes on in Canada. Now they are standing up in the House today and suggesting that Canada should not move until the United States moves.
There are three different governments with three different systems of government examining this particular bill. I might remind the hon. member, and I think he knows this because he has been through the free trade agreement, that this is on a fast track in the United States. The United States cannot amend the agreement as such. It either has to approve it as is, or turn it down as is.
All we are trying to do in Canada is get the committee to start studying this bill. The hon. member knows he would be the first on his feet to complain if we did not have the full time to study this bill and tried to speed it through in a few weeks after the Americans had approved it. He would be up on his feet screaming that we have not had time to study it. Well we are giving the Canadian people and this House of Commons time to study it now.


Herbert Eser (Herb) Gray: Madam Speaker, surely the minister will have to recognize that the fast track in the United States Congress does not start until the legislation to implement NAFTA is submitted to Congress. President Clinton has said he does not intend to present the legislation unless he gets appropriate side deals on things like labour standards and the environment.
So there is no need for any rush in Canada. Therefore, I ask the minister how does it help to protect Canada's
Oral Questions
sovereignty if after rushing this bill through this House, the U.S. Congress does not approve the deal?
Is this government claiming it is going to be able to force the NAFTA on the U.S. Congress? Surely that is a lot of nonsense and the minister knows it.


John Horton McDermid: Madam Speaker, not at all. As a matter of fact, no more than it can force NAFTA on us or on Mexico. Three independent governments will be studying this.
What we are suggesting here in Canada, and I think the House leader made it very clear and he is absolutely correct, is that this will give Canadians an opportunity to study the agreement and to make comments. These additional agreements will be negotiated. As far as fast track is concerned, in the United States once it is presented to Congress it has 60 days to either approve it or not approve of it.
If we said we only had 60 days or less to approve it in Canada and if the Americans did not approve it until the fall and we then came back saying that we only had 30 days or 15 days to approve it, that hon. member would be up on his feet screaming like the devil here in the House that we had not given Canadians enough time to study it. Well, we are giving Canadians enough time to study it now.


Hon. Audrey McLaughlin (Yukon):: Madam Speaker, my question is for the Acting Prime Minister.
A report today prepared by the Mexican Centre for Border Studies and Human Rights has said that the North American free trade agreement will cause further environmental degradation. The centre's president further says that parallel agreements will not work because they already exist between the U.S. and Mexico and are not enforced. It is clear that NAFTA is fundamentally flawed.
Will this government stop simply trying to rush legislation through before an election? That is what is driving this. Come clean with the public. Will the government withdraw this so that there can be real study in all three countries about NAFTA?

March 12, 1993
Oral Questions


Harvie Andre: Madam Speaker, I wish the hon. leader of the New Democratic Party would talk to her caucus about honest study. I am unable to get the commitment from her caucus to proceed with referring this bill to a committee so that the study could begin.
How much time is required? If in fact we could do that and they want us to provide the same kind of studies as in the United States 60 days would put us sometime in May. Is that an appropriate time? Would 90 days be necessary? What is the appropriate time required?
I suggest the faster we get started, the greater the opportunity for Canadians to examine it. The hon. member is becoming increasingly isolated in her position that this is a bad deal. Everybody knows that it is a good deal.


Audrey Marlene McLaughlin: Madam Speaker, I suggest to the Acting Prime Minister that we test his hypothesis about who supports NAFTA and who does not support NAFPA in an election. Stand up and have the courage of your convictions. Put this issue before the electorate. Then we will see what Canadians think.
Today there are reports on the concerns about NAFTA. In the United States there are concerns about the fact that NAFIA will benefit multinational companies to the detriment of consumers. A Canadian steel company has said it is going to set up shop in the United States. The U.S. Congress has expressed very grave concerns which we have just heard. As mentioned earlier, NAFTA will seriously harm the environment.
My question to the Acting Prime Minister is simply this: Since he is always defending NAFTA and his government with the argument that NAFTA will benefit Mexican workers, could he tell this House how harming the health of the Mexican people and Mexican workers will benefit the Mexican people?


Harvie Andre: Madam Speaker, we did have an election over free trade. We were taunted and threatened into it. In the end because of the Liberal majority in the Senate we had to have an election on free trade. We know the results of that election. Therefore, threatening us with an election on NAFTA is hardly a scary prospect.
The New Democratic Party was quick on its feet to say that the free trade agreement was going to destroy the auto industry in Canada. We know it was wrong. It was adamant in terms of opposition to the free trade agreement. We know that our exports are booming. We know that those exports made up of manufactured high value goods have been increasing and that Canada's share of the total trade in North America has been increasing. All the numbers show it is a success.
Only the New Democratic Party and maybe the Liberal Party think that trade is bad for us. Everybody else knows trade is good for everybody concerned.


Audrey Marlene McLaughlin: Madam Speaker, this debate is not about whether trade is good or bad and this minister is misleading the House when he says that is what the debate is about.
The debate is about a specific trade deal which trades away the sovereignty of Canada. That is what the debate is about.

It is clear the U.S. Congress in Washington has second thoughts. The Mexicans have second thoughts. Union members and environmentalists in Quebec have second thoughts. Only this government remains uncritical of NAFTA. Why does the Deputy Prime Minister not stop the ratification process? We need more time to discuss issues that are crucial to the economic future of this country.
\English]


Harvie Andre: Madam Speaker, I welcome the suggestion of the New Democratic Party leader that we examine this deal. I would ask her again to talk to her caucus so that we might get approval of a motion in the House to refer the deal to a committee so the examination could take place. That is what we would welcome.
I know that in certain quarters there is a feeling that we must retain the ability to maintain high tariffs and restrictive laws to protect little Canada. We believe in a larger Canada that competes with the rest of the world. We do not believe in the view-and nobody in the world believes it any more except a few dinosaurs-that restrictions on trade and obstacles and all those things are good.
March 12, 1993

We welcome the opportunity to examine the benefits. We are sure people will find, just as the auto pact was tremendously beneficial to Canada and just as the free trade agreement is proving to be tremendously beneficial to Canada, that NAFTA will be tremendously beneficial to Canada.



Hon. Roger C. Simmons (Burin -St. George's):: Madam Speaker, I have a question for the Minister of Employment and Immigration.
He will know that 434,000 Canadians have lost their jobs according to Statistics Canada since the recession, which was induced as the Prime Minister has said publicly by this government. In the last month alone the number of full-time jobs has dropped by 5,000. In my province the jobless rate is now over 20 per cent.
If the government's policies are as magical as he has been suggesting, how does he explain those figures? Why does he not admit that despite all the rhetoric he and the government do not have the foggiest idea how to deal with this problem?


John Horton McDermid: Madam Speaker, once a month over the last few months the Liberals stand in the House when the employment figures come out and talk about all the doom and gloom. Yet we had 9,000 more jobs created in February than in the month before. We have had an increase in employment in nine of the last ten months. There have been 155,000 full-time jobs created. As a matter of fact in February, and I was pleased to see it, unemployment figures were still very high for youth but there were 14,000 more young people working in the month of February, which these statistics show as well.
There is a litany of good-news stories coming out now. When will the Liberals finally wake up and start talking positively about Canada instead of negatively about Canada?


Roger Simmons: Madam Speaker, the minister talks about the 9,000 jobs. Why does he not for a change tell the truth and say they are part-time jobs he is talking about when he quotes that
Oral Questions
9,000	figure? Or, was it not convenient to say that? Why does he not tell about the thousands who have dropped out of the labour force-altogether?
Since the last election, if he wants statistics, Canadians under 25 years of age have lost 409,000 full-time jobs. Is that the good news he is talking about? Or is it that 19.3 per cent of young men are now unemployed in Canada?
The x generation does not want those McJobs he is talking about, slinging burgers on the midnight shift for four bucks or four loonies an hour. They want a chance at a career.
Why is the government so maliciously strangling and squandering the talents of our young people?


John Horton McDermid: Madam Speaker, it is very obvious the government is not doing that and the hon. member knows it. If he got into the statistics and took time to examine them he would also see that manufacturing jobs have increased rather dramatically by some 33,000 jobs.


Roger Simmons: It's a lie.


John Horton McDermid: No, it is not. He is saying it is a lie, Madam Speaker. I am not sure that is parliamentary, but it is a fact that there were 33,000 more manufacturing jobs in the last few months in Canada. As a matter of fact in the province of Ontario there have been 91,000 new jobs created in the last 10 months. Those are positive stories. As I said to the hon. member, there were 14,000 more young people working in February than there were in January.
I agree with the hon. member that unemployment is too high, but the rate has dropped from 11.8 per cent to 10.8 per cent. It is heading in the right direction. The policies of this government are working and we are going to continue to see improvement in employment as the economy improves. The hon. member should be happy about that.


Some hon. members:: Oh, oh.


Madam Deputy Speaker:: It would be useful if the Speaker could be allowed to hear what is going on instead of people screaming. This is the House of Commons, not a school yard.

March 12, 1993
Oral Questions


Some hon. members:: Hear, hear.


Mrs. Beryl Gaffney (Nepean):: Madam Speaker, my question is for the Minister of Employment and Immigration.
We know that unemployment among women rose by
11.000	in the month of February. This will push even more single parent families into poverty and already we know that one million children live below the poverty line.
Will the minister please come forward with a budget to address this grave crisis among women and children in this country?


John Horton McDermid: Madam Speaker, the hon. member is correct. There were fewer women working in the work force in the month of February. We do not like to see that at all, though I must point out to her that there were
35.000	more working by the end of February than there were a year ago. This is a one-month drop, but the record over the last number of months has shown that it has increased.
I cannot explain the reasons for that. I am sure there are reasons that drop in the month of February took place. Unfortunately a lot of the part-time jobs that take place over the December-January months for Christmas and for sales in January disappear in February. I am sure that has something to do with it.
I agree with her that is a major problem, but this government is spending a tremendous amount of money, well over $3 billion, on training and retraining to try to get people into the work force with the skills they need for the jobs available today.
The hon. member knows, if she read it this week, that the help-wanted index is up rather significantly. Employers are now starting to look for employees. There are some very good signs in the economy. I believe we will see a marked improvement in employment as this year progresses and as the economy improves.


Beryl Gaffney: Madam Speaker, we also know that many of these single parents, women in particular, are working in jobs in the service industry that are low paying and they are hurting very badly.
It is also a fact that the unemployment rates are highest among single parents: 16.8 per cent unemployment for women led families and 15.7 per cent for male led families. That is far above the national average. We know this is caused mainly by an inflexible job market.
Why is this government failing to develop coherent policies that will empower these people to break this cycle of poverty?


John Horton McDermid: Madam Speaker, I can speak fairly authoritatively about what goes on in my community in the city of Brampton in the region of Peel where in fact there are very significant ongoing programs for single parents to get them back into the work force, training programs together with support for day care while the single parents are out working.
These programs are ongoing. I know they are taking place across this country. I can speak more authoritatively about the ones in my area because I keep a very close eye on them. As a matter of fact we are meeting with the region of Peel this afternoon to cover a number of these subjects.
That is a great concern. There is no question about it. There are programs in place, as the hon. member knows, in which the federal government funds the provinces very significantly when it comes to social assistance, trying to get people off social assistance, back into the training market and rnto the job market. Those programs are ongoing and will continue to be ongoing because they are a priority of this government.


Mr. Lyle Dean MacWilliam (Okanagan - Shuswap):: Madam Speaker, U.S. President Clinton has recently stated that he will not ratify the North American free trade agreement unless substantive parallel agreements are made, including an environmental accord.
Is the minister or whoever is answering for the Minister of the Environment aware that through articles 301, 309, 310, 314, 315, 708 and annex 702.1 of the proposed NAFTA agreement and article 2201.9 of the harmonized coding system Canadian waters are treated as a commodity of trade and are exempted from environmental safeguards?
March 12, 1993

Will the minister seize this opportunity, an opportunity presented by President Clinton, to press for an irrevocable exemption for the export of Canadian waters under NAFTA?


John Horton McDermid: Madam Speaker, that was pretty impressive. I do not know if the member has read the agreement or a researcher gave him those numbers, but let me just read a very brief clause in the agreement, which says: "For greater certainty nothing in this act or the agreement, except article 401 of the agreement, applies to water. In this section water means natural surface and ground water and liquid in gaseous or solid state but does not include water packaged as a beverage or in tanks".
NDP members went through this export of water under the free trade agreement. They were shot down then and they are going to be shot down again under NAFTA.


Mr. Rod Murphy (Churchill):: Madam Speaker, the minister knows that all it takes is one line change in legislation to let water flow under the NAFTA to the United States. He knows that.
God knows that in the past the government said it would not sell Air Canada and all sorts of other things that it changed in the future. The NAFTA allows water to flow. The government knows that.
An American congressman is quoted this morning as saying that NAFTA will mean windfall profits to U.S. based multinational pharmaceutical companies. Why is this country allowing this to happen? It is one of the changes we are not asking for to make sure that generic drugs can be sold cheaply to consumers and to hospitals right across this country.


Madam Deputy Speaker:: There seems to be a supplementary question from water to drugs. The hon. minister.


John Horton McDermid: Madam Speaker, I will try. I am not sure how we got from the export of water to generic drugs, but let me say the hon. member is totally wrong on water and he knows it. He is totally wrong. I want that to be clearly understood by this House and by Canadian citizens.
As far as generic drugs are concerned, I just happened to read in the paper the other day where an individual
Oral Questions
announced a major expansion in the city of Toronto of a generic drug company. That same individual said a year ago it was dead. Now that company is expanding and doing very well.
I think the generic drug companies are doing fine under the very progressive legislation brought forward by this government. This will mean a great deal for research and development and high-tech jobs-


Madam Deputy Speaker:: I think we will go on.


OZONE DEPLETION
Hon.   Chas. L. Caccia@Davenport: Madam Speaker, in the absence of the Minister of National Health and Welfare, my question is directed to the Minister of State for the Environment.
As she knows, the levels of ozone, the atmospheric gas that filters harmful ultraviolet radiation, reached historic lows over Canada this winter and are likely to remain significantly below normal at least until the fall. The trend is posing a threat to the health of Canadians, particularly in relation to skin cancer.
My question is this: What is the minister doing to assure the public that the government is taking the necessary steps to protect the ozone layer and thus the public?


Hon. Mary Collins (Minister of Western Economic Diversification and Minister of State (Environment) and Minister Responsible for the Status of Women):: Madam Speaker, first of all I think it would be helpful to tell my colleague what we expect the situation to be over the next few months, during the summer, if we ever get summer here.
The ozone depletion this summer is expected to be just slightly greater than observed in the last few years. Summertime values will be between 3 per cent and 7 per cent below the pre-1980 normal.
As the hon. member knows, we started a system of providing information about the ozone layer and ultraviolet radiation to Canadians so they could have that information. I would certainly suggest they take advantage of it and take precautionary measures to keep out of the sun when there are conditions that are particularly dramatic during the summer.

March 12, 1993
Oral Questions
I know my hon. colleague is aware of the fact that Canada has been the leader in promoting the international protocol. In Montreal last year, again we played a very active role in putting forward and strengthening that international protocol. In fact at that meeting the protocol was strengthened and the agreement that has been reached at Copenhagen calls for-


Madam Deputy Speaker:: I think we are getting into a speech now and the hon. minister will agree with me.


Hon.   Chas. L. Caccia@Davenport: Madam Speaker, while the protocol, as the minister says, has been strengthened, one of the dangerous chemicals which is damaging the ozone layer is methyl bromide.
Methyl bromide has been banned in Holland and will be banned in the United States by the year 2000.
My supplementary question is this: Why is the government of Canada so hesitant in protecting the public and not acting in banning methyl bromide?


Mary Collins: Madam Speaker, my hon. colleague mentions methyl bromide which was one of the issues considered in Copenhagen.
As a party to the accord that was reached, Canada supports the initiatives put forward in the protocol. We will be reducing the use of methyl bromide by 1995 down to the levels it was prior to 1991. We will be committed to recover, recycle and reclaim methyl bromide and to reduce emissions. Canada, as one of the partners around the world, will be ensuring that we all work in a concerted fashion to ensure that this does not continue to be a contributing cause to ozone depletion.


MUNICIPALITIES
Mr. Eugene Bellemare (Carleton - Gloucester):: Madam Speaker, my question is for the Minister of Public Works.
In his economic statement last December the Minister of Finance froze to 1990 levels all grants in lieu of taxes the government pays municipalities on its properties across Canada. A great number of these government properties are located in the national capital region.
Does the minister intend to rescind this unfair freeze on grants in lieu of taxes or does he intend to freeload on the increased cost of municipal services and bully the rest of the property owners in the national capital region into paying for the shortfall?


Hon. Elmer M. MacKay (Minister of Public Works):: On the contrary, Madam Speaker, we are hoping to find an equitable way to cope with the escalation in the costs to the government because of the rapid increase in grants in lieu assessments.
This has been done across the country under different methodologies. We are hoping as a result of meetings which we will have with the Federation of Canadian Municipalities and other people that we will be able to find an equitable and consistent way to restructure the process. We are not trying to bully anyone and to the extent that we can we would like to try to be as equitable as possible under the constraints of the freeze.


Eugène Bellemare: Madam Speaker, the minister seems to have no immediate plans for dealing with the freeze.
The Ottawa-Carleton regional government recently approved a report by the province of Ontario which reassessed all property categories in the region. The regional government was aware of the implication that federal properties would yield about 3.4 per cent less in revenue in 1993. Will the government accept or reject this new lower assessment of its properties in Ottawa-Carleton?


Elmer MacIntosh MacKay: Madam Speaker, this is encouraging news. The government would welcome any change in methodology that would allow the taxation system to be fairer to special use properties that the Crown has in Ottawa and in other areas.
The point is that we do have this constraint and we do have this freeze. We are trying to cope with it as best we can and as equitably as we can until we can get a better methodology across the country that will be consistent and will reduce this rapid escalation in grants in lieu.
March 12, 1993


JUSTICE
Scott Jon Thorkelson: Madam Speaker, my question is for the Acting Solicitor General.
In our recent hearings on crime prevention, the justice committee examined ways to speed up police response times when dealing with parolees. One valuable suggestion was to enter the individual's parole conditions into the police computer system. Today it only tells whether a person is on parole but not the conditions.
Will the minister require parole conditions to be entered into the national police computer system so that police officers can determine if a person is violating the terms of his or her parole?


Hon. Pierre H. Vincent (Minister of Consumer and Corporate Affairs and Minister of State (Indian Affairs and Northern Development)):: Madam Speaker, I want to thank the hon. member for his excellent question.
At the present time, general information on transfers and release on parole is available to all police forces through the Canadian Police Information Centre. Any other details on a specific case are communicated in writing to the police in the area where the parolee is released.
However, in accordance with the intent of the new legislation on corrections and parole, a new system aimed at providing better protection for the public will be operational this summer. Furthermore, police will be able to obtain through the CPIC a detailed profile of each parolee, including conditions of parole, which will reduce the response time.


TRANSPORTATION
Mr. Vic Althouse (Mackenzie):: Madam Speaker, my question is for the government House leader.
Oral Questions
The National Transportation Act review commission report that was presented this week recommends phasing out the subsidies to transportation.
Since the government has already cut 10 per cent from the Crow benefits on grains, oilseeds and their by-products for the coming crop year, what is the government's timetable for the phase-out of the rest of the Crow payment in light of this recommendation?


Hon. Jean Corbeil (Minister of Transport):: Madam Speaker, as I said earlier in the House this week, as the result of the tabling of the report of the National Transportation Act review commission we have sent this report to the Standing Committee on Transport. It will examine the conclusions, tell us what timetable it would prefer for all the different recommendations and whether some of them can be implemented on a practical basis.
At the same time we have set up an internal work force comprising officers of the Department of Transport and people from the different modes of transportation to make their own appraisal of this very excellent report so that at the end of the day we will be able to come to this House with the proper amendments to the legislation.


Victor Fredrich (Vic) Althouse: Madam Speaker, the government seems to have already adopted the phaseout portion of the report with the 10 per cent reduction it announced in the economic statement in December.
Is it also the government's intention to pay the Crow benefit to the producer, as was recommended in the report? Has a decision been made to make that payment to the producer on the declining subsidy that is left?


Jean Corbeil: The answer to this question is no.

.(1155)


THE ENVIRONMENT
Mr. Jack Iyerak Anawak (Nunatsiaq):: Madam Speaker, my question is for the Minister of Indian Affairs and Northern Development and it concerns Panarctic's proposed dumping of 400 tonnes, or 800,000 pounds, of scrap metal into the Arctic Ocean.

March 12, 1993
Oral Questions
The government has a policy, the Arctic environmental strategy, for which this minister is responsible. It is supposed to protect the Arctic environment and fully accommodate the views of the aboriginal people. Given the absolute and total opposition of the Inuit to this proposed dumping, how can the minister allow it to proceed?


Hon. Thomas Siddon (Minister of Indian Affairs and Northern Development):: Madam Speaker, I heard the Minister of State for the Environment respond to this question yesterday. She indicated that an appropriate environmental screening of this project was conducted under the provisions of the Canadian Environmental Protection Act and the environmental assessment process.
I was disturbed to learn that we might permit the dumping of such a large amount of steel into Arctic waters. I know the Department of the Environment is similarly concerned. I am told there were public meetings in Resolute before the permit was authorized. In view of the concern that has been expressed by northern leaders, I am told there will be meetings with community representatives to further review those concerns and to see if further appropriate steps are necessary.


Jack Iyerak Anawak: Madam Speaker, having an environmental assessment review would be welcome news but the first preference of northerners is to see that these metals are removed to the south from where they came.
Has the government rejected the option of totally removing this garbage from the north?


Mary Collins: Madam Speaker, perhaps I could respond to that.
I understand a number of options have been looked at as to what can be done. One of the requirements of Panarctic is that it clean up its site. That is under the legislation.
Certainly other options were looked at. Land disposal was looked at but given the conditions of permafrost this really was not a feasible option.
The option of transporting these materials south was examined. However, it would cost I understand something in the order of well over $1 million to do that and it was obviously considered excessive considering the situation involved.
As my colleague the Minister of Indian Affairs and Northern Development has indicated, there will be further meetings about this. The bottom line is we want to ensure that any disposal is environmentally safe. Certainly the information we have would indicate that it would be safe but obviously further consultations will be under way.


PUBLIC WORKS
Mr. Don Boudria (Glengarry-Prescott-Russell):: Madam Speaker, my question is for the Minister of Public Works and it concerns the Saint-Jean-sur-Riche-lieu airport land deal.
Yesterday the minister apologized for what he called a departure from good public policy in the sale of the land without tender. I want to thank the minister for his candour yesterday. Perhaps other ministers should do the same every now and then.
Canadians still deserve to know why the policies were not followed. Will he order an inquiry into this land deal and will he table the result of that departmental inquiry in the House of Commons?


Elmer MacIntosh MacKay: Madam Speaker, sometimes these things escalate. I think it is a bit of an exaggeration to call it a land deal in the general sense.
I am not happy about the way it was handled. I can tell my colleague that when these long negotiations began the property was of a different configuration than it was when they ended, but nonetheless it should have been tendered.
I have asked my department to look into it fully, to get all the documentation it can and I will table it as soon as it is ready. If there is any need for a more formal inquiry I will consider it at that time, but I believe there should be enough documentation around that he can be fully satisfied as to all of the background.
March 12, 1993


Don Boudria: Madam Speaker, I appreciate the minister's reply.
However, could the minister tell the House whether a complete assessment of the property was made before the sale, as required by Treasury Board guidelines? Will he undertake to table this assessment in the House, with the documents he intends to table here later on?


Elmer MacIntosh MacKay: Madam Speaker, I see no reason why that is not a reasonable request. I will undertake to do it unless there is some procedural requirement that prevents me.
I want to point out one more time that there are lands on both ends of the runway as my colleague probably knows. A portion of the land at one end of the runway has not yet been sold. It certainly will be put up for tender.


Mr. Dan Heap (Trinity-Spadina):: Madam Speaker, my question is for the Minister of Employment and Immigration.
As the minister knows, both Amnesty International and the United Nations have renewed their condemnation of Iran for gross and systematic violations of human rights.
For example, Zarah, an Iranian woman who was beaten, raped, threatened with death by her husband and refused a divorce by male-biased Iranian law escaped to claim refugee status in Canada but was rejected by the IRB and ordered to return to face beatings, prison or even death under Iranian law.
Will the minister, in light of the new IRB regulations offering protection to unprotected battered wives, use his humanitarian and compassionate powers to land Zarah in Canada? Will he deal similarly with the 14 hunger strikers in their eighteenth day of a hunger strike in Vancouver and at least agree to let them stay in Canada until the United Nations has said Iran is a safe country to return to?


Bernard Valcourt: Madam Speaker, refugee claimants re-
Oral Questions
fused convention refugee status by the IRB have their cases reviewed to ensure that they will not face unduly harsh or inhumane treatment upon returning to their country.
That is done in each and every case. The people he referred to will be offered the same treatment. Of course we will review each case individually. In 1992 we had 1,194 claims from Iranian nationals that were accepted and only 12 people were returned to Iran because the circumstances warranted their return. This will also be the case for the ones the hon. member just mentioned.


INDIAN AFFAIRS
John Williston (Bud) Bird: Madam Speaker, I have a question for the Minister of Indian Affairs and Northern Development.
I would like to inquire about the policy of his department with respect to liability arising from large construction and engineering projects on Indian lands where debts remain unpaid.
Many suppliers and contractors presume that the Department of Indian Affairs and Northern Development is essentially a guarantor of Indian financial commitments when the funds are advanced by his department. I would like to understand what his policy is, both in the ethical and in the legal sense.


Thomas Edward Siddon: Madam Speaker, this is a very important question raised by the hon. member for Fredericton-York-Sunbury and one which other members have also asked me about.
I should begin by indicating that the majority of the bands which are administered across Canada by chiefs and councils handle their own financial arrangements, both their O and M funding and the capital funding they administer, often under multi-year operating budgets. We call them alternative funding arrangements.
The majority of these communities and their leadership pay their bills and meet their financial obligations. There are exceptions. Our position is both legally and morally that in the spirit of the self-government ethic that First Nations are seeking, the minister of Indian affairs and the government should not guarantee bills which are not paid.

March 12, 1993
Routine Proceedings
There are remedies through the courts and the legal system. It is important for contractors and those who do business with aboriginal communities to realize that they are dealing as they would with any other commercial entity. They are dealing in a situation where contract law must be respected and where it is not, the remedies are to be found through normal legal recourse, notwithstanding my concern that native leaderships live up to their obligations.


Harvie Andre: Madam Speaker, I would like to designate Monday as an allotted day or supply day.



ROUTINE PROCEEDINGS


Mr. Murray Cardiff (Parliamentary Secretary to Minister of Agriculture):: Madam Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 20 petitions.
[Editor's Note: See today's Votes and Proceedings.]


Madam Deputy Speaker:: I have the honour to present to the House, in both official languages, the report of the Canadian Section of the International Assembly of French-Speaking Parliamentarians (AIPLF) on the meeting of the international board of the AIPLF held in Paris on February 1 and 2, 1993.


[Stage Direction]
71ST REPORT OF STANDING COMMITTEE
Mr. Jim Edwards (Edmonton Southwest):: Madam Speaker, I have the honour to present the 71st report of
the Standing Committee on House Management concerning the list of members who are to be on the legislative committee on Bill C-109.
Pursuant to Standing Order 113(1), this report is deemed adopted once it is laid upon the Table.
[Editor's Note: See today's Votes and Proceedings.]

[English ]



POINT OF ORDER


Mr. Peter Milliken (Kingston and the Islands):: Madam Speaker, I assume the bill that is about to be introduced is the new borrowing bill which the government proposes to put to the House. If so, I would like to raise a point of order as to its procedural acceptability.


Madam Deputy Speaker:: Yes.


Peter Andrew Stewart Milliken: Yes, very good, that is the bill that is about to be introduced.
Beauchesne's sixth edition, citation 595, states that:
The Crown, being the executive power, has the responsibility for the raising and spending of money. Acting through responsible Ministers, the Crown makes known to the Commons the financial necessities of government. The Commons grants such aids and supplies as are necessary to meet the demands of the Crown and provides through taxes and other sources of revenue the ways and means to meet the supplies that have been granted. The Crown, therefore, demands money, the Commons grants it and the Senate assents to the grant. The Commons does not vote any money except for the necessities of the country as defined by the Crown.
This particular bill is a borrowing bill. I assume that since it applies for the following year it is a borrowing bill for money for the new financial year. It has been the accepted practice in this House over the last decade and a bit that any such bill will be preceded by a budget or an economic statement that defines, within the meaning of Beauchesne's, the financial requirements of the Crown.
We have had no explanation as to any funding that may be required for borrowing purposes for the new financial year. Indeed, we were given conflicting answers as to whether there is going to be a budget. One day the Minister of Finance thinks there will be and the next day he is thinking about leadership possibilities instead. "


March 12, 1993

I want to look at the practice and I urge Your Honour to look at it also. I have done some research on this and I want to point out that in May 1980,1 have gone back that l'ar, following an economic statement in April, a borrowing bill was introduced in the House and that practice basically has been followed ever since.
On two or three occasions during the period of 1981 and 1982 the borrowing authority was included in a supply bill. The Speaker in 1981 ruled that it was improper to include the borrowing bill in a supply bill and had it removed. The government then reintroduced a new bill that gave borrowing authority. That practice has been followed ever since. It was tried again in 1982 in a supply bill but, again following complaints from the opposition, which is the government side at this time, the borrowing authority was removed from the supply bill and placed in another bill.
It has been a very consistent practice since that time that the borrowing bill be introduced separately and that it be introduced following an economic statement. I note for the record that in December of this year in the economic statement, borrowing authority was requested and that borrowing authority has been granted. It was additional borrowing authority for the current financial year. The borrowing authority for this year was originally requested in last year's budget on February 25 and the borrowing bill was in fact introduced immediately the budget was presented.
That has been the practice throughout the term of the government. It was the practice for the few years preceding this government coming to office. I could cite every bill.
I realize I am rising on a procedural point and it would be quite out of order for me to refer to incompetent management on the part of the government as the reason for this bill coming forward and I would not want to do that. It would also be wrong for me to suggest that the government in introducing the bill really does not know what it is doing or that it is busy in a leadership campaign. I will not go into that area because I do want to make the point procedurally. The government is by-passing the normal requirement that it come to the
Routine Proceedings
House and present a statement as to the country's finances and explain why it is the government-


Madam Deputy Speaker:: I have listened veiy patiently to the hon. member on his point of order, which in a way is very premature. He based his point of order on a nod of my head when he said: "I imagine the bill is a borrowing bill". As the bill is not yet in front of the House, it has not been printed. I think the hon. member's point of order is somewhat premature.
I will put the motion to the House and once the bill has been printed and comes back to the House at second reading we will hear the hon. member again.

[ Translation]



BORROWING AUTHORITY ACT, 1993-94 MEASURE TO ENACT

Thomas Edward Siddon: for leave to introduce Bill C-117, an act to provide borrowing authority for the fiscal year beginning on April 1, 1993.


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



BILL C-275 REQUEST FOR WITHDRAWAL

['Agreed.']
Mr. Ron Fisher (Saskatoon - Dundurn):: Madam Speaker, I ask permission of the House to withdraw Bill C-275. Is this the appropriate time to do that?


Madam Deputy Speaker:: Is there unanimous consent for the hon. member to withdraw this bill?


Some hon. members:: Agreed.
Bill withdrawn.


Ron Fisher: Madam Speaker, if I may just explain, it is a bill which has been introduced and printed, unlike the debate a few minutes ago.

March 12, 1993
Routine Proceedings
It was a bill introduced on the subject of conflict of interest in the House and the Senate. Of course, since the government introduced legislation on the very same subject two or three days ago my bill has become redundant. I would not want to waste the time of the House by insisting that it go forward.
I thank the members for giving me permission to withdraw the bill and I thank you for your time, Madam Speaker.



William Henry (Bill) Domm: Madam Speaker, I am pleased to present some 9,000 signatures from constituents in the Peterborough federal riding and some of those surrounding it, calling on Parliament to consider major amendments to the Young Offenders Act. The majority of Canadians who signed this petition support equal treatment of criminal offenders but with legislated age shelters from criminal law for very young adolescents.
The petitioners request that Parliament give consideration to revising the laws of Canada to replace the Young Offenders Act with an updated juvenile delinquents act with a lower maximum age of 13.


Beryl Gaffney: Madam Speaker, pursuant to Standing Order 36, I submit approximately 525 signatures from people from Nepean, Gloucester, Ottawa, Hull and Gatineau, all communities in the Ottawa-Hull area.
These petitioners ask that Canada recognize rape as a war crime and they ask that Canada, through the United Nations, place more emphasis on resolving the deplorable situation in Bosnia and that Canada also communicate its displeasure to governments that promote and condone rape as a means of controlling their people as a weapon of war. For example, they mention again Bosnia, Croatia and India.


Mr. Steven W. Langdon (Essex-Windsor):: Madam Speaker, I have two petitions to present to the House today. The first petition is from residents of Essex-
Windsor and results from a petition drive across the constituency on a single day.
The petition calls the attention of the House to serious problems with the North American free trade agreement. It suggests that Canadians will lose more good jobs as a consequence of this agreement. It suggests that there will be further restrictions placed on the ability of Canada's various governments to assist Canadian industry. It suggests that there is no possibility of this being remedied through renegotiation.
The petitioners therefore call upon the House to reject the proposed North American free trade agreement and recommend to the government that it use the termination clause to end the U.S.-Canada free trade agreement.


Steven W. Langdon: The second petition I have also comes from my constituency. It is from a group of people who are very concerned about the serial killer board game which has been for sale in Canada. They are concerned that the laws of Canada do not deal with materials portraying torture, rape and murder as fun such as this game.
The petitioners therefore request Parliament to consider amending the Criminal Code so that violence and degrading material such as this serial killer board game can be kept from being distributed in Canada.


Douglas Fee: Madam Speaker, I too have a petition to present under Standing Order 36. There are slightly more than a thousand signatures on it from residents mainly of the Caroline-Rocky Mountain House area in my riding.
These people recognize that treaty rights entitle treaty Indians to preserve their traditional way of life including hunting, fishing and gathering. However, they point out that there are no bag limits in enforcement of hunting regulations for treaty Indians. They express concern that completely unregulated hunting interferes with good conservation and sound wildlife management practices.
The petitioners therefore call upon us to conclude an agreement with Canada's treaty Indians regarding sound wildlife management practices restricting native rights to hunt, fish and gather for personal consumption and prohibit the sale for profit of wildlife meat or parts obtained by treaty rights.
March 12, 1993


Mr. Walter Van  De Walle@St. Albert: Madam Speaker,
I have the honour to present a petition duly authorized under Standing Order 36 concerning the Income Tax Act. The petitioners are residents of the federal riding of St. Albert.
In support of automotive technicians the petitioners wish to draw to the attention of the House that many automotive technicians as a condition of employment must provide for all costs including purchase, maintenance and insurance pertaining to their hand tools. Those costs are excessive and the annual updating and replacement of tools are additional costs. Automotive technicians receive no income tax assistance.
The petitioners therefore request that Parliament amend the existing Income Tax Act to address the plight of automotive technicians.


Mr. Robert E. Skelly (Comox-Alberni):: Madam Speaker, I have two petitions. The first one states that Bill C-91 allows brand name drug companies to market their drugs without competition from generics for periods up to 20 years. The prices of both new and existing drugs have already increased substantially as a result of Bill C-22 which allows a 10-year period of no generic competition.
The petitioners ask the House not to proceed with Bill C-91 and to repeal Bill C-22, which was passed in 1987. Therefore Canadians will have the full benefit from lower priced generic drugs and provincial and private drug plans will be able to serve Canadians without being forced to charge higher fees or provide less coverage.


Robert Evans Skelly: My second petition relates to petitions presented previously by a number of people in the House concerning the serial killer board game.
The petitioners call on Parliament to consider amending the Criminal Code of Canada so that violent and degrading material such as the serial killer board game
Routine Proceedings
and the mass murderer trading cards can be kept from being distributed in Canada.


Mr. George S. Rideout (Moncton):: Madam Speaker, it is my pleasure to present a petition from numerous residents of my riding concerning Christine Lamont and David Spencer. They have been sentenced to 28 years in a Brazilian prison and have suffered miscarriages of justice, cruel and unusual treatment and discrimination in sentencing and parole.
The petitioners urge the Prime Minister to request of the Brazilian government the expulsion of these two Canadians and return them to Canada.


Mr. Brian O'Kurley (Elk Island):: Madam Speaker, pursuant to Standing Order 36 I have the honour to present three petitions which include the names of hundreds of Canadians in and around the Elk Island riding. Many of these people are from the communities of Fort Saskatchewan, Beaumont, Sherwood Park, Gibbons, Redwater and the entire Edmonton area.
The petitioners ask Parliament to revise the Young Offenders Act. They are concerned that there should be harsher penalties for young offenders and the act should be changed to make young offenders more accountable for their crimes.


Mr. Jack Whittaker (Okanagan -Similkameen -Merritt):: Madam Speaker, I have two petitions to present to the House today pursuant to Standing Order 36.
The first group of people from the city of Penticton in my riding are concerned about the links between violence and entertainment. They are petitioning Parliament to consider amending the Criminal Code of Canada so that violent and degrading material such as the serial killer board game can be kept from distribution in Canada.


John R. (Jack) Whittaker: Madam Speaker, my second petition is from citizens of the city of Grand Forks. It concerns the present telephone system and their fears under the Unitel thrust that there will be increased costs to local communities.

March 12, 1993
Routine Proceedings
The petitioners urge the Government of Canada to consult with all affected parties, especially rural residents who are at risk of substantially increased costs for local telephone calls. They further urge the government to hold hearings in rural communities before deciding the fate of Canada's telephone system.


Don Boudria: Madam Speaker, I wish to table today an additional 10,180 signatures in a petition asking the government to ban the serial killer board game.
This is in addition to the 14,222 signatures that I tabled some days ago for a grand total of 24,402 people who have expressed their displeasure at the possibility of this product coming into our country.
I want to thank all Canadians who signed this petition. I have several thousand more signatures that I intend to present in the next two weeks.


Mr. Brian L. Gardiner (Prince George -Bulkley Valley):: Madam Speaker, I have the pleasure to table a petition signed primarily by the residents of Prince George and Fort St. James in my riding.
These constituents continue to express their concerns about the goods and services tax. They call upon the government to bring in legislation to reform the taxation system so that there is an effective minimum tax on wealthy individuals and corporations and to develop a fair tax system in Canada.


Daniel James Macdonnell Heap: Madam Speaker, it is my privilege and duty in accordance with Standing Order 36 to present a petition from a number of residents of Kamloops, B.C.
The petitioners point out that Multinational Resources Company has announced its intention to divert the North Thompson River at Valemount in order to sell the water in the region of California, U.S.A. They point out also that the federal government does not prohibit the diversion of Canadian rivers into the U.S.A.
The petitioners therefore urge the government to state categorically that it will not permit our freshwater
rivers to be diverted into the U.S.A. and to state that our Canadian rivers are not for sale.


QUESTIONS ON THE ORDER PAPER
Murray Cardiff: Madam Speaker, question No. 468 will be answered today.


Mr. Proud: How many programs does the government presently have that offer
(a) direct assistance or grants to businesses (b) indirect assistance or
grants to businesses?


Hon. Gilles Loiselle (President of the Treasury Board and Minister of State (Finance)):: The 1993-94 Main Estimates tabled by the President of the Treasury Board on February 25, 1993, contain a number of federal programs which provide assistance to business.
The main financial assistance programs can be found in the following departments and agencies: Industry, Science and Technology Canada, Atlantic Canada Opportunities Agency, Western Economic Diversification Canada, Federal Office of Regional Development- Quebec, Export Development Corporation, Canadian Commercial Corporation, Farm Credit Corporation and Federal Business Development Bank.
Other direct and indirect business support programs are provided through sectoral activities which can be found in departments and agencies such as Agriculture, Forestry, Energy, Mines and Resources, Transport, Employment and Immigration, Indian and Northern Affairs, External Affairs and International Trade Canada, Consumer and Corporate Affairs Canada, National Research Council, National Sciences and Engineering Research Council, and Canadian International Development Agency.
Details could be examined in the respective part Ills of the departments and agencies noted above.


Madam Deputy Speaker:: The question as enumerated by the parliamentary secretary has been answered.


Murray Cardiff: I ask, Madam Speaker, that the remaining questions be allowed to stand.
March 12, 1993


Madam Deputy Speaker:: Shall the remaining questions stand?


Some hon. members:: Agreed.



GOVERNMENT ORDERS

[Stage Direction]
[English}

[Stage Direction]
The House resumed consideration of the motion of Mr. Mazankowski that Bill C-112, an act to amend the Excise Tax Act, the Access to Information Act, the Canada Pension Plan, the Customs Act, the Federal Court Act, the Income Tax Act, the Tax Court of Canada Act. the Tax Rebate Discounting Act, the Unemployment Insurance Act and a related act, be read the second time and referred to a legislative committee in the Economics envelope.
Roger Simmons: Madam Speaker, I have a few words to say on Bill C-112.
Maybe by way of background we could recall the events of 1990. The government told Canadians and Parliament that it was going to have some tax reform. It went on to say that it would not just be tax reform, it would be tax reform in the best tradition. The government undertook to ensure that the reform would result in fair and simplified taxation.
It spared no effort, as will be remembered, in ensuring that its tax reform package got through the system. It used every rule in the book and invented a tew rules. It broadly interpreted some other rules to ram the tax changes through this House.


John R. (Jack) Whittaker: To say nothing of the eight GST senators.


Roger Simmons: My friend from Similkameen feels a speech coming on. I did not hear what he was saying. I was coming to that but he reads my notes well from back there with those glasses.
My friend from Okanagan-Similkameen-Merritt just reminded me of something I want to mention to the House. The government used every rule in the book and every perversion of most of the rules to get the GST, and that is what I am talking about in case some of my friends on the other side of the House have forgotten so soon, the goods and services tax. It is called many other names
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by those 85 per cent of Canadians who vehemently and strongly oppose that tax measure.

I see my honourable friend, the Minister of Transport, has entered the House. I hope he will make a speech on the subject later on, to indicate to Canadians whether he still supports these measures.


Jean Corbeil: Like the Grit sneaky tax.


Roger Simmons: I would love to hear the Minister of Transport tell us. He seems to be seized with the-


Thomas Edward Siddon: Can I not get an honourable mention here?


Roger Simmons: They are all excited over there this morning. It must be the leadership. They all see themselves as the Prime Minister of this country. God knows we need a Prime Minister for this country. Need we look further? Why the Minister of Transport and the Minister of Indian Affairs are not out there running, I do not know.
We were talking about the GST, so understand the diversionary tactic. They are not particularly excited about having anybody talk these days about the GST, but I want to do it for a few minutes for old times' sake. I want to one more time before this administration disappears because we are told that as of June 15 it is a whole new millennium, a complete change. All the bad deeds of this administration are going to be swept under the rug, all will be new, there will be a new day dawning around June 15, and all the bad, terrible policies of the Conservative administration will be forgotten by Canadians.
I do not know if the Conservatives are going to invent a new pill, a kind of amnesia pill. Is that what they have in mind? Maybe they are going to administer to all Canadians some kind of a prescription for a pill that will make them forget the bankruptcies of the last eight years. I am not talking only of the bankruptcy of ideas, there has been that as well, but about the pain that has been inflicted on individuals, families and corporations out there, on people trying to do business, trying to run their homes, and trying to maintain and manage their family budgets. I am talking about that kind of bankruptcy, that kind of pain.

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What kind of amnesia pill are they going to need-in a quantity of 27 million, and some of us might need a double dose so they had better make a few extra-to get Canadians, including the 12 per cent who still support the government, to forget the pain that has been inflicted by this administration over the past eight or nine years?
Before that millennium arrives and before we get into that brave new world let us talk about another brave new world, the one of late 1988, 1989 and 1990 when this government came before this House and before Canadians and said: We have a great idea. It is called tax reform, it is called the goods and services tax, and we promise it will be fair.
Now that it has been implemented for just over two years, since January 1991, go out there and ask almost any Canadian how fair the GST has been for him or for her. Ask the person who is in university and who must buy some books how fair the goods and services tax is. Then remember that the goods and services tax was going to lower prices.
The Minister for Indian Affairs needs another honourable mention. We need to tell Canadians that he is here signing documents in the House, placing his x on every sheet he has in front of him.
The goods and services tax was supposed to lower prices. It was supposed to be simple. We all remember the very thick document that was put through this House over our objections, over my objections. That was only two years ago. Remember what this tax instrument was going to be. It was going to do away with the manufacturing tax, and yes it did that. It was going to collect some money, and it has sure done that; ask almost any Canadian. It costs a lot to do it. The government will not tell us how much it is costing but it is costing an awful lot of money to collect this goods and services tax. It is costing so much that the government has elected to hide the totals on that particular issue.
It was going to be a simple tax. That is what the former Minister of Finance said the government wanted. He said that it wanted to simplify the tax system. If we want to understand how it has simplified this particular tax then we have to understand the double-talk of this government on many matters. When it says it is going to do something then that is code for saying that it is really
going to do the opposite but for the record it has said it will do something else.
On this issue it has been no different. It said it was going to have a simple tax, it was going to have a GST and, boy, girl, is it going to be simple.
After two years Canadians love the simplicity so much that the government has come up with a bit more simplicity, another 350 pages of simplicity. How is that for keeping its promise? The most convoluted, diabolical, and unpopular tax in Canadian history now becomes the most complex tax in Canadian history.
Now, two years and two months into the new tax regime it needs another 350 pages of rules to explain it and make sure it is milking every last cent from those who have to buy books to go to university and from those who are trying to operate small businesses.
I suppose this bill is not a bad opportunity to also remind Canadians about this government. I am not just talking about the gentleman from Baie-Comeau. Sure, he is the leader of that government and leader of his party but he is not the only one responsible for the government's policies, unless the Conservatives have been having a one man show over there. I understood it was a great democratic institution in which everybody had his say. I suppose they mainly say: "Me too", but they have their say.
I am sure the Minister of Indian Affairs has his say. He is known to have not only a considerable mind but a fairly independent mind so I am sure he has his say. Nobody would suggest that he would be a sheep in any administration or any caucus, so we know there is one voice over there speaking out. I know the member for St. John's West, the minister of fisheries, is a man who would not sit quietly by if he saw something of which he did not approve. I could go down the line and mention other people on that side of the House who have established their reputations in their constituencies and across this country as people of integrity and independent mind. I believe that, but which is it? Are they, generally speaking, people of independent mind and integrity, as I believe, or are they a bunch of sheep?
Are they a bunch of sheep saying: The devil made us do it, the only reason we went along with all these policies over the last eight years was that we had a fellow
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from Baie-Comeau who was leading the charge. That is what we are going to hear over the next few months. They are going to say: All those tax measures are all the legacy of one man, but he is gone now and it will be a brave new world. Which is it?
Were they the team of men and women pooling ideas to put before the House to help run the country, the team they pretended to be and said they were for the last eight years, or were they a bunch of people in bondage? Were they 150 or so people in bondage, being slave-driven by one man from Baie-Comeau who foisted his unpopular ideas and theories of government on everybody? Which is it? It cannot be both.
If this tax measure today and the one that it addresses, the GST, is the brain-child of this government then by extension it must be the brain-child of the minister of employment, who would like to be Prime Minister. It must be the brain-child of the Minister for International Trade, who would like to be Prime Minister. It must be the brain-child of the Minister of National Defence, who would like to be Prime Minister. It must be the brainchild of the Minister of Communications, who would like to be Prime Minister.
I put that on the record because we are going to see the reintroduction of the Tory two-step during the next three months leading up to the leadership convention. The old Tory two-step, in philosophic terms, tends to have it both ways. It tends to move in both directions at once depending on what theory is being supported at the moment.
I have seen a bit of it already, and I am looking forward to that exercise, that fast dance which allows the Minister of Employment and Immigration, Minister of Communications or Minister of National Defence to say in the same mouthful: "Yes, I fully support the gentleman from Baie-Comeau but if he did not have me in complete bondage I would have done it differently".
What we are dealing with here today on March 12 is no different than what we will be dealing with on June 20 or 21, 1993, after the Tory leadership has been resolved. That is the record of an administration of 35 or 38 people, one of whom will likely be the new Prime Minister at least on an interim basis. That is what we are dealing with.
That record is the record of that government, that administration, and not the record of one man. It has to be, particularly when it comes to matters of taxation and tax reform, one of the most arrogant records in Canadian history. Why? I say that because this is the administration that imposed the GST, the most hated tax in Canadian history, not only without proper consultation with Canadians but over the almost unanimous objection of Canadians. Fully 85 per cent had voiced their opposition to this particular tax.
This is the administration that imposed the GST on small businesses, despite their strenuous objections. This is the administration that imposed the GST on provincial governments, despite their objections.
It is true that these changes do not portend any brave new world. They are a bunch of technical changes that will facilitate certain matters and perhaps make the tax grab a little bigger here and there and that kind of thing. The deed was done two or three years ago when the GST was rammed through this House. This is just sharpening the guillotine blade. That is all it does. This is not the policy instrument, it just sharpens the guillotine blade to make sure the head is completely severed rather than doing a clumsy job as in the past couple of years.
Let us be clear, whether they cut my head off cleanly or clumsily they have decapitated me. Whether or not we have another 350 pages of amendments and technical changes is not the real issue here today. I am sure that as we get to clause by clause it will become the issue because the rules require that.
Surely at this point in time the issue is very much the principle of the kind of legislation and the kind of tax reform and taxation measure which this bill is based on. That is why I have used my time to remind us of what this tax was supposed to do. It was supposed to be simple, but I think we can lay that promise to rest. It has gone the way of a lot of those other promises. When the government says simplicity it does not necessarily mean simplicity. When it says fair it does not necessarily mean fair. Do not take my word for it. Ask almost any Canadian who has been paying the GST over the last couple of years.

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This is the administration that has increased taxes on Canadians 38 times since 1984. Do not forget that the GST is just one of them. Is it any wonder that the public has no real confidence in the fairness of our tax system? One of the effects of the machinations of the Tories on these issues, on tax reform, other than destroying confidence, has been a larger underground economy than ever before. If there is one area in which this government can take some backhanded credit for improving the economy it is the underground economy, which is the people who have found it convenient to engage in peddling services and goods in such a way that there is no record of the sale and therefore no particular need to collect the tax.
These machinations by the government have undermined consumer confidence. This undermining of consumer confidence is one of the reasons that the recession we are gripped by continues and has deepened.
There will be an election some time in the fall or some time between now and the fall. I suspect it will be in the fall. It is very likely there will be a change of party in power. That is certainly one of the possibilities. I will not be partisan on that point because I see my time is up. However there will be a change and somebody will have to deal with this.
In conclusion let me say how we in this party propose to deal with the issue. We have said we would wipe out the GST. We intend to do that. We are not going to be like our friends in the NDP who think it can just be cancelled and $15 billion will come out the sky from somewhere. Nobody in this party has said if we became the administration we would have what we used to call in high school the big rock candy mountain where everything was free.
There will be taxation. That will come as no surprise to any Canadian. There will be taxation. What we have said and continue to say is that it will be fair taxation. To do that we have said that during the first year of our mandate we will consult Canadians, which is more than this administration has done.
I see my time is up. I wish I had a little extra time to explain to the minister because he is a doubter. He may
not vote for us anyway, but I want to tell Canadians who were not consulted last time that this time they will be consulted.


John R. (Jack) Whittaker: Madam Speaker, I have listened with rapt attention to my hon. friend from Burin-St. George's. I have a couple of comments and questions for him.
I noted during his speech that he talked about how the GST had led to massive numbers of bankruptcies throughout Canada. As I travelled across Canada on the GST hearings I noted this was one of the things we ran into. People were predicting the problems the GST would cause them as small business people and people who had to deal with the tax on an ongoing basis.
Another thing became clear to me, particularly in the province of Newfoundland, the Northwest Territories and Yukon, that the cost of living in these three areas of Canada was substantially higher than many areas in central Canada and in my western province of British Columbia.
I wondered from his perspective whether it has been shown that the cost of goods and services is often higher. In some cases in the Northwest Territories, for instance, it was quoted as high as 58 per cent above what it was in centres such as Edmonton and Toronto. In St. John's, Newfoundland the predictions were that the cost of living was some 21 per cent higher. It seemed to me this was an unfair tax.
I have looked at Bill C-112 and I have not been able to find any amendments to make the tax fairer for people in these regions who are already paying more than their full share of taxation, who are already in some cases the most impoverished people in Canada with the highest unemployment rates. Yet this government through its GST legislation appears to be hitting them harder than those in the rest of Canada with a consumption tax.
I would like the member's comment on that. I would also like his comment on whether there is anything within the particular bill that would lead us to believe they will use any of their amendments to help with the education of Canadians through removing taxes on books and publications for educational purposes, or even for casual reading.

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Is there any amendment to help people in the educational area and to help the people in Newfoundland, Labrador, Yukon and the Northwest Territories?


Roger Simmons: Madam Speaker, I thank my friend from Okanagan-Similkameen-Merritt. He rightly zeroes in on two important issues that flow from this debate.
The cost of living differs from place to place in this country, as he has so kindly drawn to the attention of the House. It is different in Newfoundland, in the Northwest Territories and in certain more geographically remote and less populated parts of the country. In normal times that places an extra financial burden on people who make their lives and their homes in those places, such as in my province of Newfoundland and Labrador.
That problem, as my friend from Okanagan-Similkameen-Merritt has rightly implied, was aggravated with the introduction of the goods and services tax. The way it is manifested now, to respond to his question, is that I find people are saying to me quite candidly that they want to buy an item but with the extra 7 per cent GST they cannot afford it. They are delaying purchases or they are avoiding purchases.
I will give one example arising from a conversation I had in the last few days. Many people in rural parts of the country rely on all-terrain vehicles and/or snowmobiles or ski-doos as we call them, which is one of the trade names, to get their firewood, in some cases to get their water supplies and for transportation itself. I was talking to a person a few days ago who wanted to buy a ski-doo for about $4,500. Some cost more than that, as we know. He wanted to buy the ski-doo but the extra 315 bucks federal tax on it made the difference between his being able to afford that item and not being able to. For him it is not a luxury or recreation vehicle; it is a work vehicle. That is the way he hauls his wood. That is the way he gets his water. That is the way he goes to work in some cases. That is the way he travels. That is his transportation. That is his wheels, as we say.
The short answer to my friend from Okanagan-Similkameen-Merritt is that the GST for those people already clobbered by a high cost of living clobbers them to the point where they are foregoing purchases really necessary to their lifestyle, to their way of living.
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The second point he raises relates to books. I have always thought that surely even a government so ruthless as this government must have some limits. I thought that books would have been the limit. When that furore arose at the time debate on the bill was in progress, I thought the government would have at least had enough political moxie-if no conscience at least enough political smartness-to smarten up on this one.
The government said in one mouthful: "We want to help Canadians become functionally literate". In the next mouthful it said: "But we are going to tax your effort to become literate. We are going to tax books for leisure reading, casual reading, in the main flow of education at universities and so on. We are going to tax books". That has to be knee-capping of the worst order. A government that perhaps has no sensitivity should at least have had some sensitivity to its own survival, some basic political smarts.
I thank my friend from Okanagan-Similkameen- Merritt for his question. I am as appalled as he is that on the matter of books the government did not see fit to act differently. I can confirm to him that after the fact, two years into the GST measure, this tax on books is an inconvenience. It is dissuading people from pursuing as aggressively as they would like matters related to education and literacy.


John R. (Jack) Whittaker: Madam Speaker, I rise today to put my comments with respect to Bill C-112 on the record. Sometimes I can say it is a pleasure to rise to speak on bills. However, with respect to Bill C-112, rather than it being a pleasure it is a somewhat painful experience.
After going through some of the amendments in this massive bill I recalled the arguments of the government as it was bringing in the GST. Under the manufacturers' sales tax and the federal sales tax regime there were so many interpretations of the former taxation rules and laws the government wanted to change them for a number of reasons, one being simplification.
We have already had some simplification as a result of its amendments. Now we see in 348 pages of amendments a further simplification of the goods and services tax, further exemptions and further deletions.

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Previous speakers have spoken on some of the things not included in this bill that have been requested by thousands of Canadians. I refer very specifically to the deletion of taxation on reading materials. We have just come through literacy day, literacy week and literacy month. The government pays lip service to doing what it can to increase the literacy of all Canadians. The statistics are clear. Those who are functionally illiterate are often the ones who have to take the lower paying jobs and have a harder time surviving in the job market in Canada.
Essentially the government has placed a taxation on education on the one hand with the GST. The majority of Canadians would shake their heads to realize that on the other hand it is putting money into trying to increase literacy in Canada, paying it lip service.
Do not get me wrong, Madam Speaker. More money has to be put into trying to educate Canadians and to ensure that we are the tops in the world with respect to literacy, job availability and income. We can do that through ensuring that the majority of our population, wherever they live in Canada, has equal opportunity to education, to learn to read at least functionally, and to survive in today's modern and technical world.
When we look at Bill C-112 we expect to see a small amendment to encourage people to read rather than the addition of a 7 per cent penalty on learning. We look through the bill to see whether it is one of the amendments and we see the changes mentioned earlier. We can now get a six-pack of yoghurt tax-free and the tax on bull semen is rebatable although not tax-free. However we still have a 7 per cent penalty on education through the taxation on reading materials.
Even though I speak of that specifically I do not suggest for a minute that the goods and services tax is a tax that should have been passed in Canada. Almost 85 per cent of the people of Canada did not originally want the GST. Now that they have seen it, they would like to see the GST scrapped. That is something that we should be discussing, not 348 pages of amendments. We should be discussing legislation that does away with the goods
and services tax, that repeals this regressive taxation of Canadians.
What has the GST done for Canada? Why was it put into effect? I do not deny the fact that it was time to get rid of the manufacturers' sales tax.
The argument was that we had to be more competitive on international markets by getting rid of the manufacturers' sales tax. We had to bring in fair taxation. The government chose its version of a value added tax in order to help its wealthy friends, those who were pushing it, who saw it as a benefit to themselves.
When the GST was brought in there was supposed to be a drop in certain retail prices. I recall in one of the hearings a manufacturer of auto parts, a person who very truthfully sat before the finance committee and when asked if Canadian consumers would see a drop in the price from the plant gate as a result of the saving on the
13.5	per cent manufacturers' sales tax answered no. He said it would not be passed on because of the administrative costs of the goods and service tax for business and for other sundry events that would occur. He told us that if anything was left over it would be built into profit.
I think over the period of time we have had to look at it and particularly when you talk to auto parts dealers, that is exactly what happened. They got new price lists that simply were the old price lists with increases of 7 per cent for the GST.
This tax has not only hurt the small business community but in some cases in many border towns it has destroyed many businesses.
Walking up Bank Street in Ottawa you see every few blocks a number of stores that have closed down, with signs in their windows saying "Bankruptcy Sale, Going Out of Business" or "Bankruptcy Sale, Pre-Closing Sales". Some of these businesses have been established for a long time.
When you talk to these business people, a number of factors have pushed them to the conclusion that they must go out of business or that they are now to the edge and must declare bankruptcy or the receivers will move

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in because they cannot pay the loans they have incurred in order to stay in business.
When you talk to them it is the cost of the administration of the GST that is always mentioned. People no longer come in and buy some of the articles because the 7 per cent GST has put the articles out of the range of some low income earners.
For those with higher incomes, 7 per cent on an article they may want to purchase will not make that much difference as to whether they buy it or not. If they want it and they have the money they will purchase it.
People on fixed incomes have to watch money carefully to ensure they have food and clothing for their children and a roof over the heads of their families. That 7 per cent is a major chunk out of their income.
The government will argue that they get a rebate, that each quarter they get some money back. What you find in talking to some of these low income people is that the rebates often go in the fall, for instance, to purchase something for the children so that they have something new to wear to go back to school.
As winter comes along the children need winter boots and overcoats. Often they are forced to purchase these things not at the regular price but at second hand stores and taking hand-me-downs. The 7 per cent on top of that makes a lot of difference to them.
What can we get out of this bill? Who does it help? I suggest it has helped those who have pushed it, such as large business corporations. Those with a lot of money are getting more as a result of this. The middle income class once again is getting the shaft.
I recall a prediction that the manufacturers' sales tax was supposed to bring in $18.5 billion in net revenues to the government coffers in 1991. In the public accounts I see that the GST has brought in gross revenues of slightly over $28 billion but of that $28 billion over $13 billion is paid out in administration and tax rebates. There is slightly over $15 billion in revenues as a result of this, a $3 billion shortfall over what was originally anticipated with the manufacturers' sales tax. Why is that?
It seems that what has happened is that the cost of administering this was much higher than we had been led to believe. The monetary and fiscal policies of this government have driven us into the deepest recession probably in Canadian history and people are not purchasing. Part of the reason they are not purchasing is the
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high interest rates we had until recently, high dollar, import goods and the GST.
I live in the border town of Osoyoos, British Columbia, and I watched the effect of the goods and services tax on the business communities in our area. As the dollar rose, more and more people flooded across the border, purchasing a lot of goods and many services where they did not have to pay tax. A survey was done of those crossing the border over a two-week period and well over 80 per cent of those surveyed said they were shopping in the United States because they were fed up with taxation in Canada and specifically the goods and services tax was the straw that broke the camel's back. They were not going to pay it and they did not care what the effect was on Canada. They did not want this tax. They could see that large corporations were benefiting and that they as low and middle income earners were hurting.
Almost 30 per cent of the population of the Okanagan Valley is over 65 years of age. Those on fixed incomes said they could not afford the extra 7 per cent they had to pay out for their goods and in some cases their services. They went across the border to get the goods they felt were cheaper.
It had a devastating effect on the small business community of Osoyoos but we watched it tremor up through the Okanagan Valley so that when you went up to Kelowna, some 80 miles to the north the merchants there said that even they were feeling the effect of the goods and services tax and cross-border shopping.
What is the solution? The Liberal member for Burin- St. George's says that the Liberals would wipe out the tax. I would suggest that that is the Liberal position today, but as we have seen the Liberals have changed their position several times. When the GST was introduced by this government the Liberals were split. They could not decide whether they liked it or whether they did not like it. They could not decide whether to bring in alternatives or not. What they finally said was: "We just do not like it. We have no alternatives but we are going to watch this tax".
Later on, after it was brought in, they said: "Well the people of Canada do not like it, perhaps we should get rid of it and maybe we should bring in this little sneaky tax, a tax that will be hidden". They looked at that aspect and how to change it but they knew that would not be popular because it would tax everything, including food, it would be a hidden tax and people would not truck with that. Therefore they said that they would not go along with that.

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All of a sudden they said: "Maybe we would make some amendments to the tax". Today they are saying: "We will wipe out the GST".
However I was pleased to see the member finally come around to the position of the New Democratic Party when he said that it would be phased out. I just hope that the Liberal Party will recognize that the phase-out period must be specified and the alternatives that they have to the tax must be specified before an election is called.
I am also pleased to see that the Liberals are finally talking about fair taxation, something that they did not understand when they were in government prior to 1984 and certainly something that the Conservative government has had no inkling about over the last nine years of their short stay in power.
What has happened over the period of time with this tax and who are these amendments in Bill C-112 going to help? I would suggest the same thing once again; that it is not going to help anybody but the large business community. It is not going to help education. It is not going to help the people in Newfoundland and Labrador, the Northwest Territories or Yukon in equalizing taxation and equalizing the cost of living for them.
One other point I would like to make is not on the GST but another amendment concerning the Unemployment Insurance Act. While a minor amendment, it reminds me of the inequities in the Unemployment Insurance Act which was before this Parliament last week and which increases the power of unscrupulous employers.
It seems to me that we should be seeing some changes in the Unemployment Insurance Act ensuring that employees are treated fairly and that unscrupulous employers are not able to use glitches within the system to blackmail their employees into staying and working for them in circumstances under which nobody would want to work.


Thomas Edward Siddon: Mr. Speaker, I know that the hon. member for Okanagan-Similkameen-Merritt has a large seniors' population in his constituency. I also know he is a man who would want them to be fully and correctly informed about the facts.
In reading the local newspapers in the member's riding and listening to his intervention today, I have been troubled by the fact that he is not telling the whole story. I think it is important that the record of the House show that is the fact.
In fact, under this government since 1985, but in particular during the last three years, we have seen the net disposable income of our senior citizens increase after correction for inflation and taxes. I think he would want his constituents to know that.
In fact, the policies of this government which have brought inflation down to its lowest level in more than 25 years represent a net saving to Canada's senior citizens, the persons most in need of assistance from the government. Those inflation controls have reduced the escalation of all the costs that senior citizens and the disadvantaged in society have to bear because of the policies of this government.
The GST tax credit, which the member did not speak of, puts dollars right into the pockets of senior citizens. He has not recognized that it offsets any negative impact for the vast majority of Canada's senior citizens. In fact, most of them come out dollars ahead because of the GST tax credit.
I should also point out that the exemption of food, pharmaceutical products and rent from tax also helps senior citizens and the disadvantaged in society.
The bottom line is that the tax on manufacturers was penalizing and crippling Canadian manufacturers and killing jobs in Canada. By removing that tax we have created a situation where there is much more competition in the marketplace.
Prices are lower and there is more variety. I defy the hon. member to go to the Canadian Tire stores, the grocery stores, the shopping centres in his constituency. He will find more variety, more sales and better choices for consumers of higher quality products than ever before. This is because we removed the tax on Canadian manufacturers. He would be irresponsible in suggesting that we do not have to make that tax up in another way, which most Canadians now have come to understand and accept as necessary to avoid creating a mortgage for our grandchildren to pay.
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The question is simply this: Why does the hon. member not tell the senior citizens and the disadvantaged in his constituency that the disposable income of Canadians is $1,500 greater per capita today than it was three years ago?
During the life of this government the disposable income of Canadians, the additional money they have to spend, has increased. That applies more to senior citizens than to the average middle-income Canadian. It is time he told his constituents the truth and the whole truth and not embellish the truth the way he has done.


John R. (Jack) Whittaker: Mr. Speaker, it is a real pleasure to speak to one of my part-time constituents, the Minister of Indian Affairs and Northern Development. He has a residence in Kaleden which is in my area. I hope he will be able to vote for me in the upcoming election. I know he realizes that I have been telling the truth about this government and that I have done a good job in this area. He even hears that from members of his own party in Penticton which I am always heartened by.
Let me just point out to the minister as well as to the people in my riding and the rest of Canada that what the minister has not told us is that since this government came into power Canadians are paying approximately $1,858 more every year in federal taxes than they were in 1984.
Look in the estimates to see what this government has done with respect to seniors. It has chopped the Seniors Independence Program and cut the New Horizons Program by 40 per cent, a program that has been well used by seniors in Okanagan-Similkameen-Merritt as well as the rest of Canada.
He talks of inflation control. Just last Friday in my riding office I was speaking to a senior woman who brought in her old age pension cheque. She explained to me that she had received an increase in that particular cheque of $2.17 over the previous period. I tried to do what the government would do. I explained to her that the inflation rate had dropped and that the Old Age Security was tied to the inflation rate.
She mentioned to me something I already knew and which I would like to pass on to the minister and the government. That rate is based on the food basket and other things. In her area the cost of her housing has gone
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up something like 15 or 16 per cent over the last year, yet she received an increase of 1.2 per cent. Her heating and utility bills have gone up substantially. The cost of food and related things has gone up. Therefore, her cost of living has gone up 12 to 15 per cent over the past year. However, she was receiving based on the cost of living index across Canada an increase of something like 1.3 per cent on her Old Age Security cheque.
That is the reality of what is happening to the seniors community in my riding and I would suggest the seniors community across Canada.
I dealt with the tax rebates and I know exactly what happens. If the minister were to look at the statistics he would see that often the tax rebates in some cases and in some income levels, yes, are up and above what would normally be paid out in taxes. I do not deny that. My point is that as predicted what is happening is that as these quarterly payments come in people are so up against the wall they are using them to purchase necessities of life.
Recently because one woman had to call in a plumber she did not have sufficient money by the end of the month to buy food for her three children. The GST rebate is being used for things such as that.
The minister mentioned that passing on the taxation was a mortgage for our grandchildren. Let me point out to Canadians and to this minister that under this government our national debt has more than doubled. We are now $460 billion behind the eight ball. Look at the budgets over the last two years. We see predictions of a year and a half ago that our deficit this year would be $22 billion. In October last year, a scant eight months after the last budget, we saw that the prediction was $34 billion.
Now we are hearing sounds from the Minister of Finance that our yearly deficit will be over $34 billion because of this government's monetary and fiscal policies even though the interest rates have dropped, saving this government a couple of billion dollars in interest. This government can still not face up to the fact that it has made a mess of its tenure in office. It has made a mess of the finances of this country. This government is leaving a negative legacy for our grandchildren.

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I have this to say to the government: Shame on you, good-bye after the next election.


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


Some hon. members:: Question.


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


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 45(6), the recorded division stands deferred until six o'clock p.m, Monday, March 15, 1993.


CUSTOMS TARIFF
Bernard Valcourt: that 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, be read the second time and referred to a legislative committee in the Economics envelope.


Mr. John A. MacDougall (Timiskaming -French River):: Mr. Speaker, I am very pleased to have the opportunity to rise in the second reading debate on Bill C-102. It is an important bill which will give legitimate legislative effect to excise and tariff measures announced over the past 18 months.
The primary purpose of this bill is to implement a range of measures developed in response to serious problems Canada is facing in the areas of cross-border shopping, tobacco smuggling and tobacco tax evasion.
The bill also contains routine administrative and technical tariff changes. I will take a few minutes to review a few of the proposed changes in the legislation.
There is the broad series of measures to address the problems of tobacco smuggling and tax evasion. These measures were announced in February and April 1992.
Last week I was in my riding of Timiskaming-French River. I was talking to a grocery store owner. Until a very short time ago he averaged around $3,000 a week in cigarette sales. As we all know, the government and individual Canadians are very concerned about the health factors of smoking. This gentleman indicated it was not that individuals had stopped smoking. It was more a matter of the number of cartons of cigarettes coming into northern Ontario that had been smuggled across the border and the resulting tax evasion. His sales had dropped from $3,000 to something under $1,000 a week.
One regrettable aspect is that as a small businessman he has lost those sales but for Canadians there are all those taxes that were not paid. It is also regrettable that those cigarettes are still being purchased but they are being purchased at a very reduced price. In fact, it is somewhere around $4 a package under the table.
I applaud the government and the minister for taking these steps. For all Canadians, both those who may have the habit of smoking and those who do not, it is only fair that there should not be a break. There should not be an opportunity for the evasion of taxes by smuggling cigarettes into this country. I believe the proposals in both these budgets made a great step forward.
The adjustment to the excise tax rate on cigars to ensure that cigars are not taxed at a lower rate than cigarettes was announced in September 1991.
I really want to applaud the government and the finance minister on the elimination of the excise tax on ethanol and methanol portions of motor vehicle fuels. This is to encourage the development of fuels made from renewable feedstocks announced in the February 1992 budget. Again, I must say that it is a step in the right direction. Until this morning I was Parliamentary Secretary to the Minister of Energy, Mines and Resources. The individuals within the energy sector I have talked to over the past four and a half years were certainly very pleased to see that the taxation was taken from that.
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Let me again refer to the great riding of Timiskam-ing-French River where we are looking now at the opportunities for getting an ethanol plant into that region. It is a region that certainly has a heavy base of agricultural products. We can look at using corn stock, grains, artichokes, sugar beets or whatever. We will also be able to use wood products and wood waste. That is another resource which is abundantly ready for us there.
Until the changes which took place in the February 1992 budget it was next to impossible to get anyone interested in investing in either ethanol or methanol. It certainly shows the vision of this government. It is a vision of ensuring the expansion and opportunity for the rural parts of this country. The fact is the finance minister listened to the people in the industry and the agriculture community in the rural parts of Canada. They stated that we had to have a resource that we could develop and enhance and that was ethanol and methanol.
Another item I would quickly like to review is the removal of customs duties from about 25 consumer products announced in the February 1992 budget to help address the cross-border shopping problem. That is another indication of how the government has listened to consumers and retailers, and to members of our caucus who were greatly concerned that changes be made.
Finally, there are the technical changes to the Customs Tariff to respond to industry concerns and meet our international obligations announced in the April 1992 economic statement, and some minor consensual amendments to the Criminal Code and Customs Tariff related to last year's gun control package.
I could certainly go on for a great deal of time on these subjects. The changes we are looking at are correct and are aimed at helping individual Canadians and those involved in the business side, or Canadians over-all, in regard to customs and excise.
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I hope that we can see quick passage of Bill C-102 this afternoon because it certainly takes a correct step forward for all Canadians.


Fred J. Mifflin: Mr. Speaker, in speaking to this bill which, as the hon. member for Timiskaming-French River said, is an act to amend the Customs Thriff, the the Excise Act, the Excise Tax Act, Customs Act, Criminal Code and a related act, one would have difficulty in speaking about this or any other method of taxation without the total perspective of where we are coming from.
I think most of us in the House at one time or another in the last four and one-half years have made many presentations, addresses and statements and have asked many questions in Question Period on the economy. I had some indication I would be speaking on this today and I want to put it into the perspective of where we are going with the business of raising money in Canada and spending it.
I thought I would go back to 1984 when the government took power. I want to have a look at some of its promises and aims and I want to look at how they may have been achieved. That might take a long time but I promise that it will not take as long as it might seem. I am not going to go through every budget. I am not going to read every single aim for every single year.
It might be instructive for the House to recall the first budget that the Conservative government put forward on November 8, 1984. I would like to put on the record what the four aims were. The first aim was to put our own fiscal house in order so that we limit and ultimately reverse the massive build-up in public debt and the damage and impact this has on confidence and growth.
The second aim was to redefine the role of government so that it provides a better framework for growth and job creation and less of an obstacle to change and innovation.
The third aim was to foster higher investment, greater innovation, increased international competitiveness and a positive climate for the growth and birth of new enterprise.

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The final aim was to bring about these changes in a way that is fair, open and consistent with the basic sense of compassion, tolerance and justice that is characteristic of Canadian society.
When that presentation was made the deficit was believed to be $35 billion and the national debt was $168 billion.
In the budget the following year, May 1985, the four aims were slightly different but in principle fairly similar. They are much shorter so I am going to read them as well. The first aim was to create a tax structure that gives greater encouragement to individual enterprises, risk taking, entrepreneurship and investment. The second aim was to improve the fairness and equity of the tax system. The third aim was to reduce the deficit in the short run through the imposition of temporary surtaxes. The fourth aim was to put in place a revenue structure that would generate resources growing slightly faster than the growth in the economy, thus providing continuing help in the reduction of the deficit over the medium term.
That was in 1985. The annual deficit was about the same at $35 billion, but the national debt had grown beyond $168 billion. I will spare the House going through every budget, 1986, 1987 and 1988. Those were years when growth was big. The country was growing and the western economies were growing. We went through 1989, 1990, 1991 and 1992. On December 3, 1992 the Minister of Finance, a new Minister of Finance, introduced his mini budget, as it was called, which said how terrible it was that the deficit was still $35 billion and that the national debt, despite these great aims and despite the efforts in years of growth, had miraculously more than doubled from $168 billion to, at the time, around $450 billion.
I do not know where to go from here. This is the aim and it has been the same for eight and half years. Now we are told that we are not going to have a budget because there is a leadership race on. We are told that it probably would not be a good thing to introduce a budget. We might have a financial statement.
The reason we may have a financial statement is the same reason we had a mini budget in December. In the words of the finance minister, it was to bolster the faith of the international community which wants to kick us out of the G-7 because of our deficit and debt record. The finance minister says we might have to have some
kind of a financial statement and another projection of what the deficit and debt is going to be because we do not want the international community to think that we cannot pay our bills.
I am not surprised that at a minimum the finance minister would want to reassure the international community that we can pay our bills because when the budget was introduced in 1984 we owed roughly 42 per cent of what we made. Our accumulated debt was around 42 per cent of what our Gross Domestic Product was. More important, we owed only 9 per cent of that amount to foreigners.
Today we owe close to 70 per cent of what we make. Our accumulated debt is 70 per cent of the goods and services that are produced in this country, but more important, 30 per cent of that is owed to foreigners. Is there any reason why they should not be concerned that we may not be able to pay our bills? Is there any reason why, at a minimum, as the finance minister says, that we should not have some kind of a statement, never mind the leadership race? We owe it not only to Canadians but to the international community. We owe it 30 per cent of what we make.
We owe the international community a statement to reassure it, to tell it that maybe the deficit will be the same as it was eight and a half years ago and that the national debt will be a little bit more than 70 per cent of what we are worth. We are going to tell it not to worry because we are going to do something that is incredible. We are not sure what that is, but we certainly look forward to it whenever that day happens.
This is serious stuff. Somewhere in Vancouver, I have not seen this, Mr. Speaker, but perhaps you have, I am told there is a clock in Vancouver called the doomsday clock. It shows how much our national debt is increasing. According to this clock it goes up over $1,000 a second. Imagine making that kind of money. That money is owed to foreigners.
I am as concerned as the government is about this problem. On this side of the House we have been criticizing its policies. In general terms one would have hoped that when the economy was increasing and booming in those years I have mentioned, 1984 to 1988-89, the government would have been able, as its aims were in the two years I have mentioned, to reduce the debt and deficit. It was not able to do that.
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If the government was unable to reduce the annual deficit and the accumulating debt when times were good and when we were making more, when our gross domestic product was increasing at roughly 3 per cent a year on average over that period of time, how in the name of everything holy with the world recession and our own recession, which at the government's own admission was made in Canada and exacerbated by the ugly and hated goods and services tax, are we going to be able to reduce it? The government has run out of tactics. It has run out of tricks. Now the only thing the government does is blame it on the Liberals, after eight and one-half years.
Maybe it could try to after the first or second year, but as a Liberal I certainly do not believe that I should take credit for something that the government could not do in eight and one-half years.
As if to add insult to injury, all this took place when Canadians were subjected to 38 tax increases. I like numbers because numbers are objective. I distinguish numbers from statistics. These numbers that I have in front of me indicate things like compassion for the individual, tolerance and justice, job creation, growth, a better tax system, temporary surtaxes.
In 1984 personal income taxes as a percentage of total budgetary revenues for the Government of Canada represented 41.2 per cent. This is a Statistics Canada figure. Last year that figure increased to 47.7 per cent. That is an increase over this eight and one-half-year period that I am talking about, this critical period, of 15 per cent for individuals.
What happened to big businesses? What happened to corporations? The percentage of the budgetary revenues they paid went from 13.2 per cent of the national collection in 1984 down to 7.2 per cent last year. That is a decrease of 50 per cent.
I am still talking about taxes. I am talking about the effect that this goods and services tax and the 37 other taxes have had on Canadians. 1990 and 1991 were the last two years for which I can get figures. In 1990 individuals in Canada paid $92.7 billion in taxes. The following year they paid $104.6 billion, which in any man's mathematics is an 11.5 per cent increase in one year in what individuals paid. What about corporations? In 1990 corporations went from $14.6 billion down to
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$12.4 billion. In other words they had a decrease of 15 per cent.
I could give more figures but I wanted to use those two examples to let everyone know that the Canadian individual on surtax, on real tax, on income tax, on petroleum tax, on cigarette tax, is taxed to death. We are now at the point where if an individual is taxed any more he or she will not be able to contribute to the economy in the best possible efficient manner.
This is hard to explain without graphs but basically we have passed the break-even point where individuals contribute efficiently to the economy. In other words they are paying so many taxes they will not be able to have disposable income to spend in the economy so that the economy can be assisted and helped.
Add to that phenomenon the $100 million that we are losing through the underground economy. That is an estimate. It could be $200 million, it could be $75 million, but it is a lot of money.
This is all related to putting people back to work. I believe the government has attempted in its policies to rectify this serious situation, has tried to create growth and has tried to better the unemployment situation but it has not succeeded. If it were to create a better situation for jobs it would certainly better the situation for the debt and the deficit.
The figures that I have say that for every 100,000 unemployed Canadians getting back into the work force, the federal government would collect $360 million in income tax, providing we do not increase the income tax any more.
For the same 100,000 people getting back to work the government would save $900 million in support payments, welfare and UI that it now costs. For every
100,000	people that go back to work the government in fact is better off by $1.2 billion. If we put a million people back to work, which is three-quarters of what we have unemployed right now, basically we are looking at $12 billion that would help with the deficit this year alone.
Last year we had 77,000 corporate, mostly small business, and individual bankruptcies. That is incredible. It is a record high in a year when the jobless rate was at a record high, over 1.5 million Canadians without work.

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It is not me saying that. It is not this side of the House saying that. In a recent CFIB, the Canadian Federation of Independent Business, survey conducted in 1992 when concerns about taxes and regulation continued to be the dominant issues, of those people who were surveyed 82 per cent said their main concern was over taxes and 72 per cent said their concern was on regulations. Eighty-eight per cent stated dissatisfaction with the federal government's progress and expenditure reduction that was promised on November 8, 1984.
As I said in this House before, people turn to me and say I am from Newfoundland and that I should know the reason we cannot do anything with our deficit, that I should not have trouble understanding it. After all, a lot of money is spent supporting people on social services and unemployment insurance. Canada cannot afford to spend that kind of money on social programs any more. They are wrong. Not only are they a little bit wrong, they are dead wrong. They have not checked their figures. They have not done their homework.
Canada's social spending is one of the lowest in the world as a percentage of our gross domestic product. I am quoting Statistics Canada figures. Our social spending is 21.5 per cent of our gross domestic product and this compares with an average of 25.6 per cent, almost 20 per cent higher, for all the other industrialized countries in the OECD.
Many of the European nations that we have a lot of respect for financially, whose debts are much lower and whose financial management is considered to be more successful, have high standards of living and successful economies, spend considerably larger percentages of their gross domestic product on social programs. Let me give you some of the figures: Belgium, 37.6 per cent; Holland, 36.1 per cent; West Germany, 31.5 per cent; France, 29 per cent.
The only industrial countries in the world where social spending is lower than Canada's is the United States, with an expenditure of 20.8 percent and Japan at 17.5 percent. But I am not going to talk about Japan.
We know about the current debate concerning socialized medicine and medicare in the United States. A large proportion of their people cannot afford to be sick. The reason their bills get so high and that old age is such a problem in the United States is that when people are in their middle age they are afraid to go to see doctors because they cannot afford to pay the horrendous bill that is facing them, so they wait until it is absolutely
necessary to see a doctor when they are older. However, by the time they get to see the doctors they still cannot afford it but they have to go because they do not have a choice. When they get there the financial impact is disastrous.
I have relatives in the United States and they tell me that it is their children and in some cases their grandchildren who have to pay exorbitant sums of money, and I am talking about tens of thousands and hundreds of thousands of dollars, that in Canada would not cost you a penny other than your contribution in taxes.
Mr. Speaker, I say to you that whatever the reason for the almost incredible situation with debt and with our deficit we are in, it is not because of social spending.
I want to make this one point before I finish my presentation. I will give one example that I have been involved in to give the House some idea of what it means to the well-being of this country.
I am going to make reference to the EH-101 helicopter program. This is a program that is currently under a lot of fire and is being looked at from many angles. It has come under scrutiny in the last two months because of the Auditor General's report, because the minister showed some ambivalence toward it and because now defence analysts are looking under doormats and through cobwebs for every little thing here and there.
Some of the scrutiny is not exactly accurate, some of it is biased against the program. Certainly one of the jobs I have as defence critic is to sort out the wheat from the chaff. Quite frankly, I am disappointed that there are some areas where the articles written against the program are just not accurate. They are biased against the program. I do not think that is necessary and I do not support it.
On the expenditure of the money involved, the Minister of National Defence, and I hope she is not using this as a ploy, on three occasions that I am aware of and perhaps more has said in the House in opposition to our questioning of the expenditure on these helicopters at this time in our history and our economy that she does not understand what all the fuss is about because in 1990 everyone agreed that the EH-101 helicopter, the Merlin helicopter, was a suitable replacement for the Sea King. It was agreed by all members of the Standing Committee on National Defence and Veterans Affairs. This happened in 1990, and now she says: "I do not understand why all of a sudden you are now saying we have a problem with the program", quite apart from the fact that the geostrategic situation has changed tremendously
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in the period we are talking about. The cold war was pretty cold in 1990.
However I want to focus on the point that I am making on the management of the economy of the country. The deficit at that time was projected to be around $18 billion that year. Let us say it was $20 billion. As 1993 is upon us and as this program is under scrutiny, the deficit is not $20 billion, the deficit is $34.5 billion. If the deficit were what the government had projected it to be in 1990, we could have had not this program but two and one-half of these programs at the same cost. I think that illustrates the difficulties one has in making projections and making promises and trying to do things you do not end up achieving.
Where are we spending money we do not need to spend? I just talked about the $100 million in the underground economy. I just talked about $12 billion if you put one million people back to work.
I was horrified in November when the Auditor General's report stated, and it was substantiated by the Auditor General himself, that hundreds of millions of dollars in corporate tax revenue was lost through offshore tax schemes.
When this first came out the finance minister himself-I was in the House when it happened and I am sure he was doing it with the best information he had-denied that was the case. He said there was something wrong, that we do not lose money through these offshore tax schemes. We tax everybody the same. He did not say that but that was the proposal, that was the information that was involved.
It was a couple of days later at a session of the public accounts committee where the finance officials admitted-I think it was a Tuesday after the Auditor General's report which I believe came out on Wednesday or Thursday of the previous week-they had checked their books and now believed that hundreds of millions of dollars were being lost.
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In fact my hon. friend from Broadview-Greenwood suggested it was in the vicinity of $2 billion. Well you can add that $2 billion to the $12 billion and there is $14 billion. That is half the deficit right there.
There was $8 billion in grants and loans to businesses which the businesses themselves have said does not help them. Here is $8 billion more, add that to the $14 billion, that is $22 billion.
Where else do we go? Well, we have a cabinet. I do not make these decisions, it is an observation. We have 36 ministers with their staffs and the overheads to run this country. The United States with 10 times the population is run with 15 cabinet ministers. I suggest there might be some rather large savings there. Some might say I am nickel and diming. Well, I am up to $16 billion without even sitting down with a pencil and paper.
Let me mention another area. My colleagues have gone on about the goods and services tax. I am not going to drive that home any further, but I do want to say that at a time when the recession was with us, when the economy was bankrupt, the idea of a consumption tax that was not in harmony with provincial taxes would not have been introduced by anybody with any financial moxie whatsoever.
Not only did this government insist on doing it but it brought in extra senators, invoking a part of the Constitution that had not been used in 125 years at the cost to the taxpayer of around $30 billion.
I have only one other comment I want to make on the goods and services tax and the economic state that our country is in.
I find it passing strange, I really do, that the government could talk about a goods and services tax in the campaign election of 1988. It was not really identified as a goods and services tax, but was referred to by pessimists as a hidden tax. It was not discussed. It certainly was not introduced as a goods and services tax. It was going to be revenue neutral. It was just going to be a restructuring of things. We were not going to make any money on it. It was going to be simple.

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It is so simple that this morning 350 pages were introduced in this House to further simplify it. If that is simple I do not know what the government would consider complex.
My figures say that the manufacturers' sales tax was raised from 8.5 per cent to 13 per cent by this government. It was one of the 38 that I mentioned. It jacked it up and then complained about it. It said that it was too high. This government was the one that raised it, on the backs of the manufacturers. It was discussed in the House this morning.
The government said: "The goods and services tax will make up for that. We will just rearrange things". Then in the midst of the debate the government said: "No, what we will do is use the goods and services tax to help reduce the national debt and the deficit".
The aim was changed but the effect was the same. The manufacturers' sales tax took in $15 billion. Now we are told that the goods and services tax took in about the same: $15 billion. That may not have included the $1 billion or so it cost to introduce the tax. We do not know how much it cost. I would propose that with 350 pages of amendments and efforts to further simplify the goods and services tax we may never know how much it cost to introduce it.
There again is an area that causes great concern. There are other areas that I would like to speak about, such as the transfers to the provinces and the CAP for the wealthier provinces. I would like to discuss the reduction in transfer payments to Newfoundland. It is not a wealthy province and had relied on the federal government for 49 per cent of its income to run the province. That figure has now been reduced to 43 per cent. Over time it has cost the Newfoundland government somewhere in the vicinity of $800 million. This year alone the figure will be $150 million, which is 5 per cent of what it takes to run the whole province. The government cannot tell me that this is not causing a lot of difficulty to people who can least afford it.
I wanted to have on record these remarks on the economy in the context of this bill in front of us. I am sure as it comes up for discussion and further reference, up to and including third reading, and in the minds of those people who look at any subject that refers to taxes and the economy that they will have the macro-economic picture concerning raising taxes to run this country in mind.
I am sure that this side of the House will be ever cognizant of these measures in our resolution to put us back on track and to allow the country to move onwards and upwards in the future.


John R. (Jack) Whittaker: Mr. Speaker, I would like to put a few comments on record with respect to Bill C-102.
It is a bill that was brought about partially in response to the bleeding of the Canadian economy across the border as a result of our high dollar, the goods and services tax and taxation that was perceived by Canadians, and rightfully so, to be too high.
The flood of people going across the border and purchasing their goods and services caused a lot of problems for Canadian retailers. From that perspective, I would suggest that there are parts of this bill that are positive for business people within my community and other border communities such as Grand Forks, Midway, Osoyoos and others where businesses directly felt that bleeding of the Canadian economy.
In this bill there are some 30 measures that reduce various tariffs on various goods coming into the country in an attempt to allow our entrepreneurs, our small business community and our retailers to compete a little more successfully against those businesses directly across the border in the United States.
Although it did little at the time when the problem was at its height it was a recognition that a problem was there and something had to be done. In that way I am pleased that some of these changes have been made to assist our small business community, hopefully making it a little more viable given the high number of bankruptcies we have had over the last two or three years within that same business community. Bankruptcy rates have been far in excess of anything we have witnessed in recent Canadian economic history.
One of the areas of the bill I would like to specifically speak on is that part which affects a specific part of the small business community. Some years back the government encouraged entrepreneurs to make bids on opening up duty-free shops along the border crossings into the United States to try to get a little bit more money
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generated before people left the country and came back into the country.
Within my riding there is a very successful duty-free shop, the Osoyoos duty-free shop run by the Bissonette family. It also runs a similar duty-free shop over in the Cranbrook crossing, at what is called Kingsgate. These shops were set up across Canada. The various bidders on them spent a lot of time putting their bids together and spent a good deal of effort, time and money in setting up their shops once their successful bids were accepted by the government and set into place.
In speaking to other members of Parliament from all sides of the Elouse-Liberals, Conservatives, and New Democrats-who have border communities and dutyfree shops, I am told, and it is confirmed by those entrepreneurs operating the duty-free shops, that a good portion of the income of those shops comes from people leaving the country. As they leave the country to go down into the United States for a month, two months, or whatever, they will pick up their supply of Canadian cigarettes and Canadian alcoholic beverages and take them into the United States duty free.
What was proposed in February 1992, under the original section of this bill, was that because of the valid concern of the Canadian government over smuggling of tobacco products into Canada it had to do something to stem that tide. Canadian cigarettes were ending up duty free in the United States, being smuggled back into Canada and then sold, thereby undermining not only our small businesses but our tobacco manufacturers.
While I do not smoke myself and I would encourage others not to smoke because of a number of reasons- health, safety, and environmental-I also appreciate the right of those who so choose to have the availability of cigarettes for their consumption.
The Department of National Revenue turned its guns on the duty-free stores and said that the smuggling was taking place as a result of people taking cigarettes from the duty-free stores and bringing them back in. Subsequently that was found not to be the case.
A recent letter which I received on February 26, 1992 from the Frontier Duty-Free Association said: "A memo indicates that export of cigarettes and tobacco has increased from 3 per cent in 1986 to 14 per cent in 1991.
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This is a rather considerable figure considering other commodities have increased considerably more. Also, please be aware that in 1986 there were only approximately 10 duty-free shops on the international border whereas now there are 35".
Last week an executive of one of the major tobacco companies in Canada said that of the total amount of cigarettes being exported out of Canada only 4 per cent of the total amount is being exported through duty-free shops, leaving 96 per cent being exported by other means. That shows the small amount that goes through duty-free shops.
The government backed off after negotiations with the duty-free associations and said that because of the co-operation of the duty-free associations across Canada in limiting the number of cartons of cigarettes and tobacco products any one person could take out of their shops it would back off on the duty. It did back off on the duty that was placed, and it was suspended on April 8,
1992.	As I understand it, in this bill the tax can still be imposed by Order in Council should the cabinet consider that action is warranted.
I think at this time it would be helpful to the House, to the minister and to the Department of National Revenue to hear the contents of a letter I received in November of last year from the Osoyoos duty-free shop in which the president, Denis Bissonette, sets out some of the problems involved within the duty-free association.
He states: "On behalf of the Frontier Duty-Free Association I wish to express my very serious concerns about the current efforts being made by the members of the departments of finance and revenue to legislate restrictions on sales being made from Canadian dutyfree shops.
Presently all Canadian duty-free operations are adhering to a one carton and two-tin limit on all sales of cigarettes and fine-cut tobaccos respectively. These items were voluntarily imposed by each Canadian dutyfree operator for the following reasons: one, to gain exemption from the $8 a carton export tax or equivalent from February 12, 1992 and therefore maintain at least some form of a level playing field with our U.S. competitors; two, to demonstrate to the various departments that the Canadian duty-free operators were not involved with the problem of tobacco smuggling into Canada.

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Even though the implementation of the export tax was subsequently suspended by our government the Canadian duty-free operators continue to hold true to their volunteered tobacco limits. This was done on the understanding that once officials from the departments of finance and revenue were reasonably convinced that Canadian duty-free operators were not involved with the tobacco smuggling problem discussions would be held to bring the tobacco sales limits to more constructive levels.
At meetings held with representatives of the departments of finance and revenue on June 23, 1992 and September 28, 1992 it was clearly stated by some of the officials present that they were satisfied that all Canadian duty-free shops were complying to the volunteered selling limits and that they now recognized that the Canadian duty-free shops were not part of the smuggling problem.
Therefore the question is why proceed with legislation to limit the sales from Canadian duty-free shops if it has been demonstrated and recognized that Canadian dutyfree shops are not part of the smuggling problem. At a time when the Canadian duty-free industry as a whole is facing significantly increased competition from the United States the only consequences of such restrictive actions will be to provide U.S. retailers with an additional competitive advantage and subsequent loss of millions of dollars in tourist revenue.
The Canadian duty-free industry plays a key element in the Canadian economy through its employment of hundreds of Canadian workers and the generation of substantial tax and revenue dollars to the federal and provincial governments. The vast majority of Canadian duty-free industry is composed of small to medium businesses owned by Canadian citizens.
The political agenda of our current government has been to energize and support Canadian small to medium businesses to stimulate the employment of Canadians and to promote exports in other countries. The current actions to legislate limits on the sales from Canadian duty-free shops directly contradicts such agenda. Therefore, on behalf of the Canadian Frontier Duty-Free Association I ask for your support on this most critical of issues to presently face our industry".
That sets out in capsule from what the position of the duty-free people is; that there is no need for the legislation. They are willing and have been co-operating and reporting to the revenue and customs departments any substantial increases in sales to any particular people. To proceed on anything that would unduly limit these entrepreneurs, or in fact force them out of the business or into bankruptcy would be wrong.
Let me move briefly to another area that has opened up by the very fact of this bill and the other bill before the House today. This was mentioned earlier by the hon. member from Newfoundland in his remarks. That is the loss of billions of dollars to the Canadian coffers as a result of the offshore tax havens. We have been talking about that in this party for a number of years. In last year's report the Auditor General confirmed that in his opinion hundreds of millions of dollars were leaking from the Canadian tax base as a result of offshore tax havens.
The response from the Ministry of Finance was that in the guise of competitiveness we had to allow these tax loopholes. It is interesting that when talking to Revenue Canada officials there appears to be a major rift between the Department of Revenue and the Department of Finance with respect to this. Revenue agrees it is a major problem. There is a major bleeding of our taxes through these loopholes. There are some 360 very large corporations using various tax loopholes to benefit their profits.
Revenue officials tell us that the loopholes could be closed without hurting our competitiveness. The competitiveness thing is simply a red herring. There would never and should not be taxation or double taxation of offshore income in Canada. If income is legitimately earned offshore and is brought back in and dividends are paid out to the shareholders or the corporation in Canada, there should not be taxation of that a second time if it has already been taxed in the other jurisdiction. Revenue Canada states that and I do not have a problem with that.
March 12, 1993

The key crunch is that Revenue Canada officials tell us that it is not hundreds of millions of dollars that are lost, it is billions of dollars. The member mentioned $2 billion. In fact, revenue officials have told me that it is probably higher than that. Billions of dollars per year are lost in taxes to these large corporations using their shell companies and paper transactions.
In two areas the loophole could be closed in what is called loss importation. That is where there are losses offshore, in offshore corporations. Under the present legislation those losses can be brought forward and offset against the profits of the corporation in Canada. That is a major loophole which amounts to hundreds of millions of dollars right there.
There is another one with Canadian source income that is allowed to be funnelled out through an offshore company. An example of that is the Canada Trust Co. case which is a fairly small one. I believe it is before the courts now. Approximately $30 million of mortgages guaranteed by CMHC were sold to a Shell company in the Netherlands. That company apparently then made the income from these CMHC guaranteed mortgages in Canada. Therefore it was income earned in Canada, taken offshore and declared as income of the offshore corporation and dividended back to the same company. The income lost in that particular case appears to be somewhere in the area of $3 million to $4 million. This is fairly small on the whole scale of things but it is an example of what I mean when I say that these tax loopholes could in fact be closed with major consequences.
Those types of things would help the totality of the Canadian economy. It would assist the regular taxpayer in understanding what is going on within the tax regime, that in fact there is a level playing field and that lower income earners are being treated the same as the huge multinationals and the wealthy corporations and taxpayers within Canada.
I just wanted to mention that and point out that there are many things we can do to try and increase the tax fairness in Canada, to try to ensure that we get back the credibility of our government and the credibility of our parliamentary system.


Lyle Dean MacWilliam: Mr. Speaker, I appreciate the opportunity to make a few comments with respect to Bill C-102. This bill of course
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is seeking to enact several tax and tariff measures that have been announced recently.
Some of the measures are notable, for example those addressing tobacco smuggling and tax evasion. The bill also addresses the excise tax rate on cigars and other tariff reductions in order to reduce the cross-border shopping that has been a problem until recently with Canada's high interest rates and high dollar.
Although the bill has some good points, I submit it does not really solve the initial problem which is the fact that we have the GST in the first place. The government knows full well there are many things wrong with this tax. The tax has been a real burden on the economy. It has been difficult for our small business sector to adjust to the administrative costs of this tax. It has been difficult for consumers to put up with the extra financial burden caused by this tax.
The government would solve all problems at once by simply scrapping this tax, phasing it out, getting rid of it and imposing the kind of tax reform we have been requesting for some time. I think the GST is the real source of our misery here. It is not fine tuning of some of the changes that should be made, but take the whole darn thing, do away with it and bring in a system of real tax reform.
I want to cite some very specific problems which have been brought to my attention with respect to the application of the GST. I want to turn to a very specific situation such as the purchase of a new vehicle. Let me break it down into two arguments.
First I would like to look at a private citizen, a person who does not own or operate his own business, purchasing a vehicle. Then I would like to look at the situation of a business registrant purchasing a vehicle. This is someone who pays the GST, has a small business and uses a vehicle as part of that business. This is to show some of the specific problems that have not been addressed by this particular legislation.
First of all the private citizen who trades in his vehicle on a new one has to pay the full cost of the GST on the purchase of that new vehicle. That is fair enough if the consumer also recognizes that in fact there is essentially a tax credit being applied with the trade-in vehicle. That tax credit however goes to the dealer who purchases that vehicle.

March 12, 1993
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Here is where the problem lies. When that consumer trades in that vehicle he is bartering or negotiating on a fair trade-in value for the vehicle. He or she does not realize that what they are bargaining or bartering on in fact includes the 7 per cent GST. The car dealer will then get a GST credit for that when accounting for the sale of that vehicle on his books.
While the private citizen thinks he is getting 100 per cent of the value ol the vehicle the situation can be seen where the car dealer would negotiate the price of that vehicle down by 7 per cent to accommodate the cost of the GST, pick up the 7 per cent GST credit on the other side and basically walk away from the deal really without having paid anything in terms of the GST.
It is not the car dealer who has borne the brunt of the 7 per cent GST in that kind of situation. It is the purchaser of the new vehicle. The purchaser has paid the full price of the GST on the new vehicle and very likely may have unknowingly paid the 7 per cent GST on the trade-in value he received on that used vehicle.
I ask if that is fair. I really do not think it is. First of all, each individual dealer should be responsible for telling purchasers that the 7 per cent GST is rolled into that trade-in value and therefore they have to negotiate the cost of that trade-in based upon the 7 per cent that is applied. However, that is not happening so people are trading in vehicles not realizing they are essentially paying that trade-in cost.
The other situation is even more difficult. A business registrant purchases a new vehicle and has a vehicle which has been used at least 90 per cent of the time for business. That individual trades in that vehicle. The GST again is rolled into the trade-in value of that used vehicle and the car dealer who purchased that vehicle will of course be given the GST credit. What will happen is that the business registrant will pay the GST on the value of the new vehicle and on the value of the trade.
Here is where the real problem exists. I submit that probably 90 per cent of business owners who trade in a vehicle on a new one do not realize that they will be assessed through the business taxation for the trade-in of that vehicle. This is because as a business they are in fact selling that vehicle to the car dealer and they will be assessed. If the books are audited, you can be darn sure
that Revenue Canada will assess the 7 per cent GST on the trade-in of that vehicle. I want to restate that business owners are unaware that they could be audited and assessed the taxes on that vehicle.
That is a difficult situation because the car dealers are under no obligation to explain to the businessman or the individual citizen when they come in to purchase a new vehicle and trade in their old vehicle that the trade-in price actually includes the GST.
I want to read a letter from a chartered accountant in my home town of Vernon, British Columbia, which I think clearly lays out the argument. As I was mentioning, a business registrant negotiated the trade-in of a vehicle on a new vehicle and then was assessed the GST on the trade of that vehicle. He wrote: "The GST office states that unless a policy directive comes out from Ottawa they have no other choice of action and will not put in writing that the dealer is responsible to reimburse the registrant. They maintain that the only recourse open to the registrant is for him to take the matter to court".
Essentially he is saying that unless the purchaser of the new vehicle, the business owner, goes in and assesses the car dealer for the 7 per cent GST after the purchase goes through, there is no way of going back on it once he finds out. The car dealers are saying that the GST price is rolled into the negotiated trade-in value. Because they do not mention that to the customer, in this case the business customer, the customer has no way of knowing and after the fact has no way, other than through the courts, to reclaim the 7 per cent on the trade-in value due and owing to him.
To go back to the letter, Mr. Beardsell wrote: "This situation is unreasonable and could very easily be rectified by a change in assessing policy. Presently the dealer claims a notational credit of 7/107 on the trade-in received and the registrant is taxed by audit assessment on the trade-in. The government comes out even but the registrant is out of pocket by 7 per cent since the dealer is after the fact stating that the trade-in price includes the GST". He goes on to state: "If the auditor was simply instructed to assess the dealer instead of the registrant when he finds no GST is charged on the trade then fairness would be achieved".
March 12, 1993

The letter points out that a lot of business people are trading in their vehicles and paying the GST, not collecting it from the car dealer, not knowing that they have to, and later being hammered by Revenue Canada for the 7 per cent of the cost of their vehicles. That is simply unfair. It is also unfair that the government does not make clear in applying the GST toward the trade-in and the purchase of new vehicles that the onus is upon the purchaser of the vehicle, if he or she is a business person and uses the vehicle for business purposes, to collect the GST from the car dealer. It is terribly confusing. I am sure the people who will read my explanation of it will be as confused as members sitting here listening to my explanation of it. The whole process is terribly confusing.
With the confusion many people are being unnecessarily penalized by the 7 per cent GST on the trade-in of vehicles because they do not find out until well after the fact and there is no process for them other than through the courts.
This is only one aspect in which the GST has proven to be such a terrible headache. There are many other horror stories in terms of the application of this tax. But, for goodness sake, at least we could make things clear.
The government through its GST offices could clarify the point for the purchasers of vehicles. It could put the onus on car dealers to make sure that when people buy vehicles they know, if they are a private citizen, that the negotiated price of that trade-in includes the GST. They should also know that if they are a business registrant who is selling a vehicle to a car dealer to buy another vehicle from him they have to assess from the car dealer that 7 per cent GST on the cost of the trade-in vehicle they are selling the dealer. If they do not do so, come the end of the tax year they are going to be assessed through Revenue Canada.
How many business people know that? How many business people have been screwed on this? It is terribly unfair.
The government has to bring in some clarification. Tax accountants have been calling for them. I understand the car dealers lobbied to have it this way so that they could get away with this kind of stuff. I am not saying that every car dealer out there is surreptitiously using this little loophole to slide 7 per cent into their pockets. I am not saying they are all doing that, but I submit the option is
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there should any unscrupulous dealer wish to do it. It has to be cleared up.
The government should instruct the car dealers through Revenue Canada that they have the responsibility to make this point very clear upon the sale of any vehicle. They have the moral responsibility and I would suggest the legal responsibility to make it clear.


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


Some hon. members:: Question.


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


Some hon. members:: Agreed.


Some hon. members:: On division.


[Stage Direction]
Motion agreed to, bill read the second time and referred to to a legislative committee in the Economics envelope.

[Stage Direction]
The House resumed from Thursday, March 11, consideration of the motion of Mr. Charest that Bill C-72, an act to establish the National Round Table on the Environment and the Economy, be read the second time and referred to a legislative committee in the Natural Resources envelope.
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, the bill before us today carries the title, an act to establish the National Round Table on the Environment and the Economy.
In the limited time available I will focus on the weak side of this bill which as in many legislative measures also has positive and strong aspects. I will bring to the attention of the House what in my assessment is weak and requires modification.
Clause 4 of the bill outlines its purpose and subclauses (b) and (d) are not strong enough. Perhaps they are not clear enough. When defining the role of this round table to the effect that it advises the government on ways of incorporating environmental and economic considerations, the approach ought to be modified, re-examined and written in a different manner.

March 12, 1993
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If we incorporate environmental and economic considerations we do not necessarily intend to mesh the two and integrate the two. Therefore we still treat the environment as a separate entity from the economy. It seems to me the purpose of this round table would be much better defined if it were instead to read under subclause (b): "advising governments on ways of meshing environmental and economic considerations". In so doing we will have said in different words what sustainable development is all about. That is the point I wanted to make.
In subclause (d) the round table should and is doing more than increasing public awareness. It is also promoting the understanding of sustainable development. That particular aspect of the role of the round table ought to be defined in subclause (d) of the purpose portion of the bill.
Finally, it seems to me that since the words sustainable development pop up on almost every page of this bill, particularly in the definitions section, setting the pace for the framework within which this bill is established and for the raison d'etre of the round table, actually the name of the round table ought to be changed and reflected in the title of the bill. Instead of the National Round Table on the Environment and the Economy it ought to be renamed the national round table on sustainable development. That is what this round table is all about.
While this may seem to be semantics I would suggest it is more than that. What is being attempted here is to get across the importance of a concept that has emerged since the publication of the Brundtland report, Our Common Future, in 1987, namely the integration of the environment and the economy rather than their separation. We treat the environment and the economy as separate entities, but when we refer to a round table on sustainable development we automatically, by virtue of the use ol the term sustainable development, integrate the two. I hope I have succeeded in conveying the
importance of the concept of sustainable development and what it is all about.
In receiving this bill and debating it today there seems to be strange behaviour on the part of the government. Having axed the Economic Council of Canada, the Law Reform Commission, the Science Council of Canada and the Peace and Security Institute, we wonder why the government sees the necessity at this stage to give legislative status to the national round table. It almost makes us think of schizophrenic behaviour in a sense, having demolished on the one hand and on the other hand seeing the necessity to make up for its sins and giving the round table a legislative status. The round table can function with or without it, as we all know.
We are glad to support the initiative but we are puzzled when we ask ourselves how it fits into the over-all policy scheme of the government. This leads me to the third point I would like to make this afternoon.
I would like to compress my time so that my colleague from Edmonton Southeast can make an intervention before the adjournment. The basic question as we debate Bill C-72, an act to establish the National Round Thble on the Environment and the Economy, is how much of an impact the round table has had on government policies, on government decisions, since its inception.
The question must be put and not because the round table has been idle and unproductive. On the contrary, the round table has produced a wealth of documents, a wealth of intellectual input as already described in the debate yesterday by my colleagues. There is phenomenal enthusiasm and desire to advance the cause of sustainable development within a clear, cohesive and convincing intellectual framework.
What has been the impact on energy policy, on transportation policies, on agriculture, or most recently on overseas development? What has been the impact of the policy input that has been made available and which the government could have picked up on but by all evidence so far has not? Let me bring a couple of examples to your attention and then I will conclude.
March 12, 1993

First of all I will give you a minute example in the agricultural policies. I learned in March of last year of the decision of the Minister of Agriculture to exempt fertilizers from the GST. It does not make sense. Apart from the fact that the government lends itself to fierce criticism when people would understandably and quite rightly so inquire why exempt fertilizers but not books? What is so special about them?
As we stand here today in debate on this issue it has been a full 12 months since this harmless looking little regulation was announced by the Department of Agriculture in March 1992. Chemical pesticides are exempt from the GST. How do you reconcile it? It may have been only an anomaly, a strange behaviour on the part of the Minister of Agriculture under pressure. I do not know.
In last week's report by the National Transportation Act review commission we find another little item, recommendation No. 6 which reads: "We recommend that consideration of environmental methods not be addressed specifically in the National Transportation Act, but rather continue to fall under environmental protection statutes of general application". This is business as usual, the old outdated approach. It is not the approach the round table is desperately trying to advance on its agenda. In other words it does not make sense.
The mindset of those who have power does not take into account the changing times and the efforts being made by agencies and institutions such as the round table. Therefore the legitimacy of the question is whether it has an impact at the centre, whether it has an impact where it matters.
The most significant and disturbing example that one can raise in connection with this debate is the decision ol the Government of Canada to reduce its aid to developing countries and in particular to the less developed countries.
It does not make sense to learn as we did some 10 days ago that countries such as Niger, Ethiopia, Uganda, Mali and a number of Sahara region nations and others struggling desperately at the bottom of the human resources index produced by the UNDP will be cut by the Government of Canada in the name of debt reduction at home.
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It does not make sense because if you look at the projects in which CIDA is engaged on behalf ol Canada in those countries, in those regions, you will see they are oriented to water, public health, agricultural rehabilitation and to fight desertification. All these are initiatives I am sure members opposite are very familiar with and actually which everybody in this House would want not to abandon, would want if anything to strengthen and expand.
One has to raise this issue in the context of this debate because it raises the question of the fight against poverty, on the issue of helping those who need help the most and within the broader concept of sustainable development which is the kind of development in which we believe at home as well as abroad. The round table has a big stake in the promotion of this agenda, in the movement toward these objectives. When you read that the Government of Canada decides to abolish, as in the case of Niger, a program that over five years amounts to some $12 million in water, in agriculture, in alternative sources of energy and in health, then you wonder what kind of contradictions we are facing and what on earth is going on.
My time is not quite up but I will be glad to share it with my colleague from Edmonton East. This is a very important issue and I thank you for your attention.


The Acting Speaker (Mr. Paproski):: I have another member who wishes to speak also. That is why I am looking at the hon. members. I have the hon. member for Okanagan-Shuswap and I have the hon. member for Edmonton East. I have ten minutes, if we can divide the time equally.


Lyle Dean MacWilliam: Mr. Speaker, on a point of order. For your information, Mr. Speaker, my intention is to speak during private members' hour on the motion that will be before the House at that time.


The Acting Speaker (Mr. Paproski):: I will recognize the hon. member for Edmonton East.


David Kilgour: Mr. Speaker, when we are both from Edmonton it is a little painful to think, Sir, that you do not know that it is Southeast. You have been reading a lot about Edmonton East in the Edmonton papers lately, I think.

March 12, 1993
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To pick up, if I may, where my friend left off, and my friend's sincerity in this House is with only that of the member for Parry Sound-Muskoka.


An hon. member:: It's worth waiting for to hear that, isn't it Stan?


David Kilgour: I would like to pick up the point of the question of cutting aid to countries like Niger and Uganda. I think it is one that all of us should be reflecting upon. Canada's aid has gone down from a peak of 0.5 per cent of GDP and could drop down to 0.3 per cent in the next three years.
It was pointed out this morning by The Globe and Mail, which is not always cited by those of us on this side of the House:
In 1974, when the debt was $25 billion, the federal government spent about one-tenth of its revenues on interest payments. In 1992, when the debt had soared to $425 billion, the proportion had risen to almost one-third.
Under pressure to stop the tide of debt, Ottawa is cutting $4.4 billion from its planned aid spending over five years. This may cause the cancellation of excellent programs such as the Canadian effort to rebuild the health system in Uganda. Unless something else happens and steps in to help health problems that are often lethal, impure water and poor hygiene will remain and people will die.
On the subject of Uganda I might point out to the members that the former High Commissioner of Canada to Uganda, who is a friend of mine, was working on AIDS research in a hospital in London, England when the new government asked him to come as their High Commissioner. He came for four years. He got aid re-established to Uganda. Now I understand that all of our aid to Uganda is going to be ended.
The question about a world in balance is one that is, I think, troubling to all thoughtful members in this House and one I think we all feel is a vital part of sustainable development around the world. The National Round Table on the Environment and Economy, as you know, has produced a series of excellent policy papers, for example, "On the Road to Brazil: The Earth Summit", "Trade, Environment and Competitiveness", "Discussion on Decision-Making Practices for Sustainable Development", "Sustainable Development: A Manager's Handbook", the "National waste reduction handbook", "Preserving Our World: a consumer's guide to the Brundtland Report" and "Toward Sustainable Communities: A resource book for municipal and local governments".
What Brundtland has said, as members know, is that sustainable development has to become a responsibility of all departments of government, probably most of all the Department of Finance which sent money off only recently for a project in the developing world which by any concept of sustainable development and human rights strikes me as at the least simply bizarre.
We have to get it into the heads of the people in the finance department, particularly the international section of the finance department, that they have to take greater account of sustainable development issues like population control around the world if we are to use Canadian tax dollars with some sense of stewardship. This is something that many Canadians feel is not now being done, particularly when the government is proposing to further reduce grants to the poorest nations in the world, quite contrary to CIDA's mandate, in favour of reallocating money to eastern Europe.
I am not saying that money should not go to eastern Europe, but for heaven's sake how can we spend $5.8 billion on submarine-chasing helicopters and yet turn and say to Uganda or Niger or many other nations in the developing world that we have no more money for them, but that we have money for the Rolls Royce of helicopters? It is something that I hope those on the other side will consider more and more. The public of Canada is firmly behind both opposition parties and I am sure members on the government side are saying this is the wrong expenditure at the wrong time and in the wrong way.
I have just a few thoughts, if I may, on the bill itself. I guess one is allowed to speak about the bill specifically when we are discussing a bill.


An hon. member:: That is a good idea, David.


David Kilgour: Thank you. I believe this is virtually the first any of us have seen of this bill. We have just abolished something like 46 agencies and other actors on behalf of the government, including the Economic Council of Canada, and now it wants to set up a new one.
I have read the bill quickly and it certainly has the earmarks of many bills that appear in this House. It is interesting to see that the government's definition of sustainable development means development that meets the needs of the present generation without compromising the abilities of future generations to meet their own needs.
March 12, 1993

Private Members' Business
How could we compromise the future of our children and our young people, including the pages, by running up what now appears to be a net federal-provincial government debt of very close to $660 billion?
As Premier Wells said the other day, in the mid-1970s each family's share of our national debt, or mortgage if you like, was about $50,000. Today each family of four share of our national mortgage is about $660,000. What have we done to sustainable development both in terms of our children's futures and in terms of not overtaxing resources and not doing precisely the kinds of things that the Brundtland commission said we should stop doing around the world, including in Canada?
I wish this round table well, as I am sure all members do, but again let me go over to the section on members. "Members to serve three years", and then there is this quotation: "the members shall maintain a broadly representative membership that reflects the needs for concerted actions in all sectors of Canadian society and all regions of Canada to attain sustainable development", and then: "a person is not eligible to be appointed as a member if the person does not have knowledge or experience to assist the round table in fulfilling its purpose".
I must say, Mr. Speaker, because you are from Edmonton and you know that 14 Albertans have been murdered since 1986 by what I would consider to be moronic decisions of the Parole Board. I think you will perhaps agree that the prairie panel of the National Parole Board consists mostly of people whose service to the community has been in the service of the Progressive Conservative Party of Canada. I am thinking of the former campaign manager for the Minister of Constitutional Affairs, former president of his constituency-


John R. (Jack) Whittaker: I rise on a point of order, Mr. Speaker. I am very reluctant to interrupt but I see we are just about out of time. I have had discussions with the other two parties with respect to the vote on Bill C-112 and I ask the unanimous consent of the House to allow that vote to go on division as opposed to a standing vote. I believe all parties in the House have agreed to that.


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


Some hon. members:: Agreed.


The Acting Speaker (Mr. Paproski):: Agreed and so ordered. There is another minute for the hon. member.


David Kilgour: Mr. Speaker, it seems absolutely vital that on this organization we not use it as a patronage dumping ground, that we do what the bill says: We appoint people like the member for Parry Sound-Mus-koka who have a deep and abiding knowledge ol this issue rather than somebody who happens to need a kind of plum to sit on.
I hope that the next Government of Canada, if this thing goes ahead before there is a new election, will take very seriously the need to appoint only qualified men and women to the body.


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


Some hon. members:: Question.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to a legislative committee in the Natural Resources envelope.
The Acting Speaker (Mr. Paproski):: 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.



PRIVATE MEMBERS' BUSINESS


[Stage Direction]
The House resumed, from February 4, consideration of the motion of Mr. Whittaker:
[Stage Direction]
March 12, 1993
Private Members' Business
That, in the opinion of this House, the government should consider
the advisability of developing a healthy small business sector in
Canada by targeting more federal contracts to the small business
sector and establishing a more aggressive "Buy Canada" program.
Lyle Dean MacWilliam: Mr. Speaker, it is a real pleasure to support the motion of my friend and colleague, the member for Okanagan- Similkameen-Merritt.
This is a very important motion for small businesses right across Canada because it talks about the need to assist our small business community with an effective and aggressive buy Canada program.
I want to recite some statistical information relating to Canada's small business sector because I think a lot of people do not understand how important this particular sector is to the national economy. Certainly it is important to the economy throughout the Okanagan Valley which relies very heavily on tourism, the forestry sector and the agricultural sector, much of which employs our small business community.
Over 97 per cent of businesses throughout Canada are small businesses. Small businesses are defined as having under 50 employees. Looking at the figures from 1981 to 1989 over those years, small businesses created almost 82 per cent of the new jobs in Canada.
It is interesting to look at the number of jobs created by the small business sector compared to the number of jobs created over the same period of time in the large corporate sector, particularly the foreign-owned corporate sector. What we find is that with the foreign-owned interests in Canada there is actually a net job loss even though there is a substantial increase in net profits. There was a job loss from our large foreign-owned corporate sector whereas small businesses in Canada, taking the brunt of the responsibility, taking the brunt of the impact of the recession, were the ones still able to produce 82 per cent of the new jobs.
Almost 14,000 businesses declared bankruptcy in 1991 when the recession really started to take a bite. Business bankruptcies in the small business sector are up over 50 per cent since the recession began, with over 3,600 companies going under in the first three months of 1992 alone.
Small businesses are risky. They have difficulty in raising capital, in finding venture capital, in finding high-risk capital for acquisition and for expansion of the businesses. They have difficulty securing loans to maintain their businesses. The banking community is certainly
no friend of the small business community. They continually have to fight the high interest rate policy that this government has followed. Even though interest rates have come down somewhat over the past little while, our real interest rate, which is the difference between the interest rate and the inflationary rate, is still very much higher than it is in the United States. We still have a long way to go to bring that down to some degree of sensibility.
Another thing that has really hurt small business is the imposition of the GST. We know that the GST was introduced in large measure because the government was going to lose billions of dollars of revenue from the imposition of the tariff reductions under the FTA. In the first year alone over $2.2 billion was taken out of the revenues of the federal government as a result of the FTA. Who had to bear the burden of that? It was our consumers and our small business sector.
It needs some help. It is a vibrant sector of our economy, but it is a sector that is also the most vulnerable to the swings in our economy.
I would like to point out that the federal Department of Supply and Services purchases some $8 billion in goods and services on a competitive basis each year and some $3 billion on a non-competitive basis. These bids are solicited from lists of companies or individuals who have registered as potential suppliers. For low-dollar bids, less than $25,000 on a bid, Supply and Services Canada uses a rotational bidding system.
This bidding system requires that procurements be advertised to give businesses better access to government contracting opportunities. The Canadian sourcing policy limits competition for government procurement to domestic suppliers wherever possible. We also have some other programs in place, such as the Canadian content premium policy and the area buy policy, that have helped somewhat.
I want to point out a problem we have had since the free trade agreement was implemented, which has really put the concept of buying Canadian and helping our small business sector into jeopardy. According to the General Agreement on Tariffs and Trade, Canada and the U.S. cannot protect domestic products or suppliers or discriminate against foreign products or suppliers who bid on purchases with a value of over $204,000. That is a pretty high value.
March 12, 1993

The Canada-U.S. Free Trade Agreement dropped that threshold for competitive foreign bidding down to $29,000, which has had a very significant impact on our Canadian small business sector.
Let me point out that American federal departments and agencies are required to participate in a similar program in America. It is called the buy America program and favours suppliers based in the United States and gives preference to U.S. products. It is similar to Canada.
This act is also overruled somewhat by both the FTA and the General Agreement on Tariffs and Trade, but there is a real difference between the limitations placed on Canadian small businesses and the limitations placed on small businesses in the U.S. Let me point out what the difference is.
In the United States the small business administration defines a small business as having up to 500 employees- that is considerably different than the definition in Canada-and up to $3.5 million in receipts. In Canada companies of this size are not considered small businesses. That is a fairly large corporation in Canada.
The U.S. small business act and small business set aside program are not affected by either GATT or the FTA, but the FTA prevents an effective buy Canada program. It affects the Canadian sourcing policy and the Canadian content policy for any purchases over $29,000. In the United States there is a similar situation but the dollar value is not anywhere near as low as Canada's.
Why is the United States allowed to effectively use protectionist trade practices that provide a much greater incentive to small businesses as they are defined in the United States than Canada is allowed to provide to small businesses as we define them in Canada? There is a substantial difference both in the definition and in the allowable limits.
Just to sum up very briefly, this points out one very particular way in which the provisions of the free trade agreement, as they are applied to the small business sector in Canada, have had such a dramatic impact in terms of allowing competitive foreign bids to come in for government procurement. This was one ol the reasons the government wanted to initiate the free trade agreement in the first place. It said that it would allow access to U.S. markets and U.S. government procurement. We see that the programs in the United States have protected its small business sector even under the provisions
Private Members' Business
of the free trade agreement much more so than we have in Canada.
What I am saying is that we have a situation where on the one hand small business in Canada is really under the gun as a result of the free trade agreement. On the other hand, small business in the United States has been given much more latitude and much more protection.
As a result of that, my colleague the hon. member for Okanagan-Similkameen-Merritt has brought in this private member's motion to try and convince this government of the error of its ways. It is hoped this will convince the government that we need some action to help our small business communities, our entrepreneurs from Victoria to St. John's. We need to help them not with a hand-out but with a hand-up. Give them a boost so we can put people back to work in Canada and help our small business community once again become the vibrant job-creating engine it has been in the past.


The Acting Speaker (Mr. Paproski):: Debate, the hon. member for Red Deer. The hon. member has two minutes.


Douglas Fee: Mr. Speaker, I do not think that I will need two minutes. The hon. member for Okanagan-Similkameen-Merritt asked me for an indication as to whether or not I was going to support his motion. He knows very well that I have relatives who live in his riding. Unfortunately one of them voted for him which shows a little bad judgment on her part.
I do think this member has shown a little bit of good judgment in this motion and I have no trouble at all in supporting it. The principle in it is real. The government should be supporting small business because, as the previous speaker indicated, small business is the heart of our economy. It is what makes this country go.
While I have the floor I also want to indicate that the Chamber of Commerce in my riding of Red Deer has connected into a computerized program of electronic bulletin boards. It is making information available to its members. Its members in Red Deer have had access to three times as many government contracts during the past year as they have had in the past two years. It is working. The contracts are available to small business.
I am not sure what the hon. member is intending with this motion but it is certainly not going to hurt us to discuss it a little further and to encourage it. It is a good objective and I definitely support it and will be indicating so later.

March 12, 1993
Private Members' Business


The Acting Speaker (Mr. Paproski):: It being 3.14 p.m., pursuant to Standing Order 93, the time provided for the debate has expired.
Is the House ready for the question?


Some hon. members:: Question.


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


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. Paproski):: It being 3.14 p.m., this House stands adjourned until Monday, March 15, 1993, at eleven o'clock a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 3.14 p.m.
[Stage Direction]
Monday, March 15, 1993