1993-03-29

Mr. Rene Soetens (Ontario) moved: that Bill C-363, an act to amend the Excise Tax Act (limitation on rebate), be read the second time and referred to a legislative committee in the Economics envelope.
He said: Mr. Speaker, I rise today with pleasure to lead off debate on Bill C-363. It is a very simple bill as members of the House will know by looking at it.
It is a one paragraph bill and I will read it for the record. It states that subsection 120(8) of the Excise Tax Act is repealed and the following substituted therefor under limitation section 8: "No rebate shall be paid under this section unless the application therefor is filed with the minister before 1993".
What does that mean? It is very simple. When the Government of Canada set out to change the old manufacturers' sales tax, the old federal sales tax, the replacement tax was called the goods and services tax. I know that all members of the House are aware of the new tax.
Part of the implementation of the the GST was a rebate mechanism so that businesses across Canada could look at their inventories and determine how much federal sales tax was in their inventory. In the old system of federal sales tax or manufacturers' sales tax, when a retailer bought merchandise from a manufacturer, built into the purchase price was the existing federal sales tax. The government established a rebate system. There
were a few other numbers, but primarily 8.1 per cent of a retailer's inventory would be eligible for a rebate.
When the tax was implemented on January 1, 1991 the rebate was available to companies for their year-end inventory but they had to file within one year of year end. Basically they had to file in 1991 for their end of
1990	inventory. Businesses generally filed throughout 1991.
However, at the end of 1991, people checked their returns from previous years and discovered that some people had not filed for a number of reasons. Perhaps it was a very small business and its accounting systems were not up to the standards of large corporations. Or, if it was a partnership, one thought the other had filed the return when it was not done. Maybe it was found in a subsequent audit.
I should point out that in my constituency I had three businesses come to me concerning this situation. One was a very small business which was eligible for about $8,000 in rebate. They found, having done their own returns the previous year, business had grown a little bit. In 1992 they hired an accountant. The accountant looked back at their 1991 returns and mentioned to them that they had missed out on their inventory rebate because it had not been filed.
This company had an inventory just under $100,000 and its sales were in the range of $300,000 a year. It had missed out on its $8,000 inventory rebate because its owners did not have the expertise to file in the first year. The accountant filed on their behalf but they were not eligible for the rebate.
Another company had a larger inventory. Again it was not a huge company but was eligible for an $80,000 rebate. Its owners thought they had filed in May 1991 but it was nowhere to be seen. They inquired in October
1991	concerning their rebate. They thought they had filed for it in May 1991. There was no record of the rebate, possibly through some sloppiness within the company. In January 1992 they sent in their rebate application and missed the deadline by 12 days. This is another company that was unable to get a refund of that inventory rebate.

Private Members' Business
Who does this legislation affect? It certainly does not affect General Motors of Canada, the large manufacturing companies or the large retailers. They all have the accounting systems, the professionalism, to make sure their rebate applications were sent in on time.
This helps small business, those people who simply because of size did not have the resources to file their applications at the right time, or in some cases through sloppiness did not file, or they were too busy trying to deal with the recession, employ people and sell the goods they had to go back and file later.
The reason I am bringing this bill forward is to make it possible for an extension for all those who did file in 1992, only to be told they had filed too late. We have the records of who all those people are, I am sure, within the Department of National Revenue. This would provide an opportunity for all those small businesses to get an infusion of money they were eligible to have given back to them in the form of a rebate, to receive it back into their businesses as cash flow.
The government prides itself on its activities with small business. In fact the Minister of National Revenue, in releasing a document on March 18, 1992, talked about a tax fairness package. I would like to quote from a press release that was issued in relation to that tax fairness package.
Speaking at the Macdonald Cartier Club, Mr. Jelinek noted that "the Fairness Package demonstrates my commitment to a simpler and fairer tax system. It will allow for common sense in dealing with taxpayers who, because of personal misfortune or circumstances beyond their control, are unable to meet deadlines or comply with rules."
"We must now concentrate on making the system more open-We cannot expect Canadians to have to dig through our policies and directives to discover what their rights are. It is up to us to take the initiative to reach out and make sure people know and understand how to take advantage of benefits offered by these new measures."
My private member's bill fits right into the comments of the Minister of National Revenue. Some small businesses could not meet the requirements of the government. They were only given 12 months to apply for a rebate. In keeping with the minister's perspective, I think we should have made it possible for small businesses to apply for their rebate at least for another year.
I have another comment in June 1992 by the Minister of National Revenue. It is a press release as well, and I will quote from it:
"Many of the improvements have been made possible through new technology, which has been a cornerstone in our ongoing effort to increase competitive opportunities for business and to improve and simplify service to all taxpayers" -
Again a lot of the companies I am familiar with that missed out on the inventory rebate were doing the kinds of things the minister was suggesting: getting more modem, getting more technology, getting more up to date. In doing that they discovered that in some cases they were ineligible for the rebate on their inventory.
If this bill were in isolation, if this bill said: "We are going to extend from one year to two years the returns that are eligible, and nowhere else in the system can you qualify for a rebate after more than one year", I could understand the government not being in favour of this kind of legislation. It would be a fundamental change. The fact of the matter is the change is in this legislation.
Look at some of the other legislation people take advantage of in Canada, for example the tax fairness package mentioned by the Minister of National Revenue. If someone is eligible for a refund on income tax and for some reason has missed a deduction, a credit, or simply has not filed, that person is eligible for a rebate going back to 1985. Some seven years in back taxes can be claimed if you are eligible for a rebate.
On the income tax side, businesses can file for three years back for their income tax return and be eligible for a refund of the income tax they owe simply by filing. They have three years to do this.
If a business pays excise tax in excess of what it should and in doing its auditing checks its accounts and discovers it has overpaid its excise tax, it can file for a rebate of that extra payment. It has two years in which to file a claim.
In fact, in the GST legislation if a business finds at the end of a year that it has overpaid the amount of GST or has not claimed back the credits it is eligible for, it can claim those credits as the legislation allows back four years. I appreciate the legislation is not four years old, but as this legislation improves or as it extends in time all businesses will be eligible for a rebate of the credits on
March 29, 1993

GST for up to four years. Yet for some reason we have put in place a one-year limitation on the FST rebate.
My private member's bill changes that limitation from one year to two. Some might argue that we should go back three or four years, and certainly I do not have a problem with that based on the other record. It seems to me that the businesses with which I have had contact have missed the opportunity to claim the refunds.
My private member's bill is really quite simple. It does that. It allows businesses, basically small businesses, to go back for another year to claim a rebate on the inventory that they have truly paid for, that they can verify under all the rules and procedures that have taken place.
I hope that members will speak in support of this piece of legislation. Unfortunately I believe it will not be coming to a vote. Nonetheless the merits of the legislation are really very straightforward and I hope that all members of this House will see fit to support it.


Mr. Dennis Mills (Broadview-Greenwood):: Mr. Speaker, I am happy to have the opportunity to speak on Bill C-363. I support the idea that the rebate period should be extended on the manufacturers' sales tax, or the inventory portion of the FST.
I have to use this bill to illustrate again that the GST is a poorly designed tax. It is a poorly designed tax and this bill further demonstrates the point, because we are adding a further paper burden on small business.
I compliment the hon. member on the notion. It should be a standard procedure. I do not know why he does not go with the normal three years as people were converting from the old tax to the GST, which to this day I do not support. It created red tape and it made bureaucrats out of most of the small businesses in this country.
This is another example of where the government did not really realize the difficulties that small businesses have to cope with.
The hon. member kept talking about the Minister of National Revenue talking about tax fairness. Last week the deputy minister of revenue appeared before the public accounts committee. He talked about the fact that the gross GST revenue is somewhere in the neighbour-
Private Members' Business
hood of $30 billion but after the credits, the costs and the conversion from the old tax to the new tax there is approximately $15 billion in net revenue. That is what the net is on the GST.
The Department of National Revenue has no cost benefit analysis of the GST. The Department of National Revenue has no sectoral analysis of the GST; in other words how much money was taken in from the tourism sector in this country before the GST and after the GST or how much money was collected in terms of general revenue in the retail industry before the GST and after the GST.
I want to talk about the cost to small business. The Department of National Revenue mentioned in committee that the departmental work cost $150 per registrant. That is what it cost the Treasury for the 1.6 million registrants.
However it has done absolutely no analysis of what it cost small business. We have a bill this morning in which a respected member on the finance committee is recognizing the paper burden, the added work that is taken on because of the transfer and the GST.
I would not be surprised if the cost of the GST to small businesses was somewhere in the neighbourhood of $1,500 to $2,500 per business a year. I do not think that is an unreasonable cost.
If we multiply that cost by the 1.6 million registrants it would mean that there is effectively no net positive take from the GST. The GST has really been a big loser.
The bill this morning further illustrates that the design of the GST was not a good one. When they were taking into account all the transfer conditions and difficulties they should have understood that small businesses would not immediately understand all the complexities of the GST and would not understand all the forms and rebate mechanisms.
I also have had many small businesses in my riding- and when I say many I mean four or five-come to me in the last four to five months on this issue. With the GST they have to take on added accounting responsibility and their accountants have discovered that they have been short-changed on the rebate mechanism from their inventory.

March 29, 1993
Private Members' Business
The department right now is not honouring them. It is saying that they are beyond the one-year period of eligibility for the rebate. Needless to say, when we have an economy such as we have today our small businesses are having a heck of a time getting cash, especially from the banks.
I still have not seen anything from the government on advertising the Small Businesses Loans Act. The minister said last Thursday when it received royal assent that we would see something immediately, but I have not seen anything yet.
However here is another example where the government has at least had a bit of a deathbed conversion in the sense that it is recognizing that there are a lot of small businesses that missed the opportunity because of the complexity of the GST in converting from the FST and converting their inventory into the new mode.
I compliment the member for catching this. It is very important that we correct it. I cannot wait for the day when we can deliver to Canadians a system that is simple, fair and efficient. The government has designed a tax, the GST, from which the gross revenues are $30 billion and the net revenues are $15 billion. That is before a cost on the underground economy which is estimated to be somewhere in the neighbourhood of $20 billion to $30 billion.
That is not counting the cost of the damage it has done to the general lack of confidence in the country which has exacerbated the unemployment insurance and welfare conditions in this country. It is not including the fact that individual businesses must incur added costs as a result of the GST process.
When we figure all these things in my calculations show that the GST is the biggest loser in terms of a tax that has ever been perpetrated on this country. I cannot wait for the day when that GST is just washed away.


Mr. Jack Whittaker (Okanagan -Sitnilkameen-Merritt):: Mr. Speaker, I rise today to speak on Bill C-363. My party and I are pleased to support the member's amendment to the Excise Tax Act to ensure that there is a better break for small business. The small business community was caught somewhat short when the GST was brought in.
In his remarks the member pointed out quite well that it was the small business community, those who often do their own books or have to hire an accountant to do books, that had missed out on deadlines with respect to the inventory rebate. It is important we ensure that the small business community is given all the advantages it can be given in this time when we in Canada are looking for the small business community to lead the recovery after the long and deep recession we have been in.
The member has pointed out in this particular amendment, on the back of the bill we spoke to the week before last on more amendments to the GST, and there were almost 300 amendments to the GST bill in that particular bill, that there are many problems with the goods and services tax. These problems are starting to raise their heads. Perhaps they had not been thought of and should have been thought of through a more in-depth look at where this bill was going.
The cost of this particular legislation to the small business community has been devastating. While the member for Broadview-Greenwood has pointed out that there have been no studies done by Revenue Canada with respect to the cost to the small business community, a recent survey conducted in the past year by the Canadian Federation of Independent Business of its members pointed out that the cost to small business has been excessive.
If we are to continue with this foolish goods and services tax that over 82 per cent of all Canadians said they did not want and still do not care for, we have to look at the cost of administration to the small business community. Right now in almost every province the small business community gets an administrative fee back from the collection of the provincial sales tax.
In the case of the goods and services tax the burden of the administration of this horrible tax falls on the small business entrepreneur himself or herself. That cost is substantial. The cost to the small business community is not just in the administration of that tax but also in the fact that in border communities people go cross-border shopping to get their goods and services where they do not have to pay tax.
Recent studies done in my riding and in other parts of Canada by various organizations have shown that it is the taxation level that has to a great extent caused people to

go across the border to shop. The burden of the added 7 per cent goods and services tax has been one that people simply are not willing to pay anymore. A study done in my riding showed that the majority of people going across the border were doing so to escape the goods and services tax.
This has fallen off substantially over the last little while because of the dropping exchange rate. It is a positive step to ensure that the exchange rate is lower. It helps our communities along the border to ensure they remain competitive among the people who would normally shop there.
The member for Broadview-Greenwood commented with respect to the public accounts committee on which I sit how in discussing the administration of the goods and services tax people in our ridings and across Canada often ask what has been collected and how much of this money is going toward debt reduction. From looking at the public accounts and speaking to the officials of Revenue Canada it appears that over $29 billion has been collected from the goods and services tax. Of that amount over $14 billion has been returned in rebates of various kinds and natures, bringing the level down to something in the area of $15.3 billion that is netted out.
Revenue Canada officials tell us that net does not take into consideration the administration costs for the government, so we are looking below the $15 billion mark; in other words approximately a 50 per cent recovery for the amount that we are collecting from the people of Canada on the goods and services tax.
It is not a very efficient tax. It has been pointed out that there are 400,000 small businesses that did not have to register for this, businesses with under $30,000 a year in gross revenues, that in fact have applied. There are various reasons why the small business community may want to apply to ensure that it gets tax rebates for major capital expenditures, but for the most part it appears that these people could be weeded out with a proper push by the Revenue Canada taxation people to ensure that they understand exactly what the tax is all about and whether in fact it is to their advantage.
Private Members' Business
In talking to a number of community organizations throughout the province of British Columbia, a number of them registered for the goods and services tax because they felt they had to do it. The misunderstanding of community organizations was with businesses grossing under $30,000 and in most cases not having major capital expenditures where they would be getting rebates.
This is a burden to not only them in filing but also to Revenue Canada taxation. I think we also have to look at that area of the goods and services tax to try to get the numbers of people who have registered down and get the efficiency rate of Revenue Canada up.
Over all I think we have recognized that the small business community is the community to lead us out of the recession. The government has taken steps toward this in the Small Businesses Loans Act, but I think the government must also look at the devastation that it has wreaked upon the small business community with legislation like the goods and services tax at a time when the government was warned that we were heading into a recession and that the goods and services tax coming on stream when it did would cause nothing but devastation, would increase the inflation rate, and would cause problems for the small business community with people not wanting to purchase from it. I think that has proven correct.
We have to look at what we should do in place of the goods and services tax to kick-start the economy with the small business community. We have to bring in fair taxation where all Canadians are treated on an equal basis of fairness. We have to look at a phase-out of the goods and services tax starting first of all with things like books. They should never have been taxed in the first place. Placing taxation on education is simply unbelievable. It was stupid at the time and it is stupid now.
I would suggest that with a proper phase-out of this tax we can bring in tax fairness to all Canadians, a tax that is progressive, not regressive, and ensure that the Canadian people get back on track, that the unemployment rate of over 11 per cent is dropped substantially to single digit numbers and that all people in Canada feel they are part of the Canadian economy and part of the recovery.

March 29, 1993
Private Members' Business
We have to go one step further than this member has gone in ensuring that the small business community has the opportunity of getting rebates by doing away with the tax totally.


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, I would like to take this opportunity to comment on the bill introduced by the hon. member for Ontario. On January 1, 1991 the new legislation on the GST came into effect. At the time, our government allowed businesses with inventories on which they had paid the manufacturers' sales tax a period of 12 months starting January 1,1991 to file for the rebate which could then be passed on to the consumer.
I am referring to all businesses registered with Revenue Canada at the time that had already paid the tax. As a result of these claims the government paid out $2.5 billion in rebates. The government felt that during this 12-month period businesses had been given ample time to file their claims considering that the purpose was to enable businesses to pass on the savings to potential customers.
If today the government were to extend the deadline beyond December 31, 1991 I do not think that purpose would be served. I doubt the few businesses that failed, for whatever reason, to file for their rebate would pass the savings on to consumers who purchased the goods during the past 24 months. And that is not what the government intended.
The rebate was suppose to have the effect of reducing the price of certain goods, and that is exactly what happened. Finance Canada said when we were arguing in favour of the GST that there would certainly be a 1.25 per cent increase in consumer prices once the GST was put in place and, as you know, this included services. However, as a result of the business inventory rebates the increase was not 1.25 per cent but 1.1 per cent, an advantage for the consumer.
That was one of the benefits of the GST and I take credit for qualifying the government's position on proposals for changes. I would also like to mention that the GST has had a positive impact on exports of Canadian products to foreign markets. Before the GST was introduced the tax component of our exports was as much as 13 per cent. After the GST was introduced Canadian exporters, according to the Canadian Manufacturers Association, had a competitive edge equal to 1.6 per cent of their total sales. The result has been better penetration of foreign markets. This is one of the major advantages of the GST which is also responsible for increased sales of manufactured products to the United States since 1989-90 and during the present decade.
The same applies to capital equipment costs which are major inputs that must be recouped by Canadian manufacturers. The Canadian Manufacturers Association claims that the price of equipment used to manufacture products has gone down 4 per cent as a result of the GST. That 4 per cent represents $3.5 billion.
Retailers have confirmed that the price of most of the products they sell has gone down as a result of the GST. Because of the positive impact of the GST Canada's total GNP for one year increased by $9 billion, which means about 60,000 new jobs. According to an article in the Toronto Star of December 31, 1992-a newspaper that can hardly be accused of supporting the government's policies-even the Canadian Federation of Independent Business, which speaks for small business and fought the new tax tooth and nail, is starting to get used to the idea of a new tax system in Ottawa. The Federation says its members have spent millions of dollars to put the GST in place and are not prepared to accept any more changes.
It was also said that the GST would be an inexhaustible source of new money for the government and that was one reason why people should object to the tax. That is not the case. The GST has raised about 15 or 16 billion dollars annually, even less than anticipated. We are not seeing phenomenal amounts flowing into the Treasury as a result of collecting the GST.
Mr. Speaker, I will conclude my remarks with a comment from the Free Press of February 13, 1993, which says that although it is not perfect the GST is about the best tax we could have. It is visible. It is hard to evade. Even millionaires and their lawyers have to pay 7 per cent more on all goods and services. People said the GST would penalize the little man but the opposite is true. The GST penalizes on the basis of what you buy, and
March 29, 1993

since the wealthy buy more they will pay the lion's share of the GST.
For all these reasons I believe it would be inappropriate to make these changes and focus the energies of an increasingly expensive bureaucracy on a new accommodation for the sake of a few businesses that had 12 months to take advantage of the opportunity given them by the government to file their claims. That is why I recommend the status quo.


Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, this whole matter of the rebate under the goods and service tax was discussed in the finance committee hearings during 1989. It would have been discussed more fully had the New Democratic Party and the Liberal Party not boycotted the hearings dealing with the bill.
The boycott by the member for Okanagan-Similka-meen-Merritt indicates the attitude that created all sorts of problems in this legislation. The reason we need the changes we now have before the House in legislation is that we could have done a better job in putting the bill through had members on the opposite side of this House put their minds to the whole matter.


John R. (Jack) Whittaker: Shame.


Donald Alex Blenkarn: The member of Okanagan-Similka-meen-Merritt is now saying "Shame". He is the member who came to committee meetings but did not do much in the way of input.
With the goods and services tax we changed one consumption tax for another. The new consumption tax called the goods and services tax came into effect on January 1, 1991. Prior to that all goods in the hands of retailers bore some degree of federal sales tax. It was difficult to determine what the federal sales tax was.
Some people bought from a wholesaler; some people bought directly from the manufacturer; and some people bought from a company that imported goods into Canada. In some cases the goods went through two or three hands before they came to the retailer. The goods were all taxed originally at the manufacturers' gates at 13.5 per cent by and large, but what the amount of the manufacturers' tax was on the shelf of a retailer was difficult to determine. After a great deal of discussion
Private Members' Business
the government came to the view that 8.1 per cent of the gross inventory of a retailer could be said to represent the former manufacturers' sales tax. That was the rule of thumb.
In some cases there was substantially less tax. In other cases there was substantially more tax. In order to be fair in transferring the system, in moving from one system of taxation to another system of taxation, business people were given a year if they wanted to claim on a deduction basis, from their monthly or quarterly tax remittances 8.1 per cent of their inventory held for sale. Businesses were also given $1,000 to set up their books.
My friend speaks of businesses that did not bother doing all that. They should have done it, but they did not do it. The question is: How long should the system of government stay open to look after people who do not do what they are required under the law to do?
Remember this is a one-shot matter. This is not like failing to file income tax, not paying taxes on time, or not doing something on time where there will be penalties and so on, something that can still be done. This is a situation of determining what is the final amount one should get back, deducted from inventory, and inventory ought to be available for it to be proven.
When someone comes in a year later and makes a claim, how do we audit the inventory? How do we go back to check whether the claim is correct? What kind of staff is the government supposed to have, to keep on tap to look after problems that develop a year later or over a year later?
The problem is that when changing from one system to another we need fixed rules as to when the change takes place. The matter was discussed in the committee I chaired of making recommendations concerning the report of the government or working out the goods and services tax in the first place.
At one point the government's view was that it should not give any rebate at all, that the tax should be imposed and the old buried manufacturers' tax would stay in the system and we would not bother giving any rebate at all. We felt in committee that was unfair, that people ought to get a rebate, and the matter was argued out. The

March 29, 1993
Private Members' Business
member who is proposing the bill was on that committee. We argued it out.
We came up with a year. We came up with this system. It is a rough and ready system. It did give a rebate for those who filed but they had to file. They had to claim. They had to claim the $1,000 accounting claim too. They had to do a lot of other things. They had to get a number. If they did not do that, too bad. There was a lot of advertising. There were lots of public discussions. The papers were full of it. The opposition made sure the papers were full of it day after day.
It is surprising how people could say they did not hear about it or they did not know they had to do it a whole year after the goods and services tax came into place.
This is a very important tax system. It is a tax system that works exceptionally well. It is one of the great advantages in our economic system that is leading us out of our recession. It has made it possible for our businesses to be more than competitive with the Americans. It indicates why the American ways and means committee is now studying our tax system and will be using it.


Dennis Joseph Mills: Fifteen years from now.


Donald Alex Blenkarn: It is too bad the member opposite does not understand the goods and services tax and how we do not add the cost of tax to our exports any longer or penalize people who manufacture in Canada any longer. But we do not. This system is working well.
I understand the desire of my colleague who has brought in Bill C-363 and the reason for the claim. However I have to say to him when changing over from one system to another there comes a time when one has to say: "That is it". Unfortunately that is it as the far as the one year is concerned.
Therefore, may I say that I do not believe we could accept the member's bill as a piece of legislation at this point. We have had a full two years of the goods and services tax. There have been very substantial rebates. The tax is in place and working well. It did not lead to the inflation that was suggested; indeed, that has been eliminated. After all, the rebate system was designed so that the money could be put back into the economy during 1991 when the change-over was taking place.
1992	is beyond the year period. By 1992 all of the inflation had been absorbed as a result of this tax and so the need for the rebate had also been absorbed.


John R. (Jack) Whittaker: I rise on a point of order, Mr. Speaker. I would like to take this opportunity to set the record straight with respect to the comments of the member for Mississauga South where he advised that the members of my party had boycotted. We have not-


The Acting Speaker (Mr. DeBlois):: I am sorry, but it is a matter of debate. It is not a point of order.


John R. (Jack) Whittaker: I would like to set the record straight. We have never boycotted any committee meeting.


The Acting Speaker (Mr. DeBlois):: Order please. I simply remind hon. members that differences of opinion expressed in the House of Commons are not necessarily points of order. Therefore, since little time remains in the debate, I must recognize as soon as possible another member who wishes to speak. The hon. member for Edmonton Southeast has the floor.


Mr. David Kilgour (Edmonton Southeast):: Mr. Speaker, I will stop before the time runs out on this debate so that one of the government members no doubt will get up to talk and debate the bill out.
In reply to the point we just heard from the member for Mississauga South, it was a biscuit maker from Toronto who pointed out to me that the GST was going to have a significant impact on their export sales. I remind the member that the manufacturers' sales tax did not apply to exports before.
He might be interested in hearing how it was going to adversely affect the export sales of this biscuit manufacturer. In just a couple of sentences, it was believed that if the GST hit domestic biscuit sales the demand for biscuits would go down an estimated 15 per cent. This would mean cuts to staff, cuts to employment. Therefore the cost per export biscuit would go up significantly and would make their sales to the United States in this case less competitive. This would be as a direct result of the goods and services tax which those opposite always cite as being a panacea.
March 29, 1993

Government Orders



GOVERNMENT ORDERS

[Stage Direction]
Let us have no more of this drivel that the GST helped our export sector. For those who may not know it on that side of the House, as I said before the manufacturers' sales tax never applied to exports.
Just to pick up on the point made by the member for Broadview-Greenwood, we understand the GST is now raising about $30 billion a year. There are about two million registrants. I think I can fairly say that my friend from Broadview-Greenwood knows the small business community better than anybody on that side of the House. He estimates that it costs about $3,000 per registrant for having the privilege of collecting the GST. If we deduct the credits, the family credits and the input credits, the revenues are about $15 billion. If we take off the other $3,000 times two million registrants that is about $6 billion. Basically, in terms of being useful to the economy, we get down to about $9 billion which this abomination is creating for our economy.
The hon. member mentioned the underground economy which has nourished under this. I bet that a good number of the members on that side of the House know people who live more and more through personal corporations. They buy cars for personal use. I know Revenue Canada does not like that. However, they have a personal corporation and can buy a car, use it for personal use and claim the import tax credit. However, most Canadians do not have personal corporations for one reason or another.
This tax is making it harder for fairness, which has never been a concern for members on the other side of the House.
['Mr. Speaker, from March 28 to April 18 the Body Shop retail chain will be conducting a national campaign to\ncombat child poverty. Its 105 stores will be displaying giant posters declaring that child poverty is a national disgrace. Their staff will be initiating letter-writing campaigns and encouraging community schools and city officials to become more involved in alleviating child poverty. In short, they will be devoting money and time to help reduce child poverty in Canada.\nAll of this comes at a time when the federal government has been busy looking at ways to redefine poverty rather than to solve it.\nIn 1984 over four million Canadians were living in poverty in this country and more than one million of them were children. According to the most recent statistics, still more than four million Canadians live in poverty and still more than one million of them are children.\nThe Body Shop is to be congratulated for its efforts to broaden awareness of poverty issues in Canada and for taking concrete action where the present government has only provided rhetoric.\nThis government should listen very carefully to this socially conscious business and act now to alleviate child poverty.']
The Acting Speaker (Mr. DeBlois):: Order, please. The time provided for the consideration of Private Members' Business has now expired.

Pursuant to Standing Order 96(1), the item is dropped from the Order Paper.



[Stage Direction]
The House proceeded to the consideration of Bill C-92, an act to amend the Income Tax Act, the Canada Pension Plan, the Income Thx Conventions Interpretation Act, the Tax Rebate Discounting Act, the Unemployment Insurance Act and certain related acts, as reported (with amendment) from the Standing Committee on Finance.

The Acting Speaker (Mr. DeBlois):: There are four motions in amendment set down on the Notice Paper for report stage of Bill C-92, an act to amend the Income Tax Act, the Canada Pension Plan, the Income Tax Conventions Interpretation Act, the Ihx Rebate Discounting Act, the Unemployment Insurance Act and certain related acts.

Motion No. 1, standing in the name of the hon. member for Sudbury, will be debated and voted on separately.

Motion No. 2, standing in the name of the hon. member for Mission-Coquitlam, will not be selected as it is identical to Motion No. 1.

Motion No. 3, standing in the name of the hon. member for Sudbury, will be debated and voted on separately.

Motion No. 4, standing in the name of the hon. Minister of Finance, will be debated and voted on separately.
I shall now propose Motion No. 1 to the House. [Translation]


MEASURE TO AMEND
Mrs. Diane Marleau (Sudbury) moved:: Motion No. 1.
That Bill C-92 be amended in Clause 42

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(a)	by striking out lines 41 to 48 at page 86, lines 1 to 45 at page 87, lines 1 to 48 at page 88, lines 1 to 15 and lines 39 to 47 at page 89, lines 1 to 45 at page 90, lines 1 to 47 at page 91, lines 1 to 47 at page 92, lines 1 to 50 at page 93, lines 1 to 48 at page 94 and lines 1 to 22 at page 95; and
(b)	by striking out lines 36 to 47 at page 100, lines 1 to 48 at page 101 and lines 1 to 13 at page 102 and substituting the following therefor:
"(11) Subsections (2) and (5) apply to the 1991 and subsequent taxation years."
\ English]
She said; Mr. Speaker, I move this motion which deals with clause 42 of Bill C-92. It has to do with the 21-year rule on private trusts.
I was very careful to allow the part of the amendments to private trusts to stand. It is very important that the private trusts not be allowed to be refreshed so that the extension of the rules will not be allowed to go on in perpetuity.
On the other hand, it is very important that we keep the 21 years. One of the reasons it was put in place back in 1972 was definitely to ensure that at some point family trusts which had been set up would be subject to capital gains taxation. This was a way of deciding at what point the assets would be valued and capital gains taxation would apply.
The government was trying in many ways to remove this 21-year rule in committee. I studied it very closely. I became more and more convinced that in effect the government was trying to give a break to a class of wealthy Canadians. They certainly have already had a very good break on taxation by not paying any tax on substantial capital assets.
We know if the properties were to accede to the beneficiaries of the trusts they would not have to pay capital gains at this time. However many of these trusts were set up so that the parents could retain control. At the same time on their death no capital gains would be levied. In essence it would defer taxation on capital gains for a very long time; perhaps as long as 60, 70 or 80 years.
We believe that by removing the 21-year rule this is exactly what will happen. We do not think it is right. We think it is a massive tax loophole. In committee we were told there were other loopholes and we strongly believe
that all tax loopholes have to be closed. The fact that there are still some around does not justify keeping, extending or creating a better tax loophole. Therefore we are very much opposed to extending the 21-year rule.
In committee we asked many questions. We wanted facts and figures. The finance department told us it did not have any. I have a great deal of difficulty believing it is impossible to come up with ballpark figures on the amount of revenue the government is deferring indefinitely if it strikes down the 21-year rule.
We all know that whatever the finance department decides to do it generally has all the statistics and all the facts and figures and can go on ad infinitum with facts and figures to back up its argument. Suddenly, however, for some reason when it comes to this particular clause it claims to not have any information and is extremely vague. My only feeling is that the finance department has somehow decided not to look into it because the revenue implications would be quite horrendous.
I ask the government to consider who it really should be representing. Should it be a handful of wealthy family trusts or should it be the people of Canada?
I was in Hearst over the weekend to attend a nomination meeting for one of our Liberal MPs and I met many people. Somehow I know they would not understand why a clause such as this one or a move such as this one would be made when they are suffering the bulk of taxation. They are, by and large, the ones who have been subjected to the GST and the many increases the government has put forward.
I really take offence at seeing a minister of this government make fun of what I am saying here today. It just shows a type of insensitivity to Canadians, that somehow these people have forgotten whom they represent. Do they represent the average Canadian out there or do they represent a select few? I do not wonder; I know they have somehow forgotten. It is high time they were reminded.
I am pleased to see the hon. minister acting a little bit more seriously while we are discussing these kinds of tax loopholes.
When I was in committee the Conservatives talked about setting up these trusts because some of the beneficiaries were disabled. I want to say that these
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trusts generally were not set up to look after disabled children. If a trust is set up to look after a disabled child one does not put in assets which appreciate so much as one puts in revenue generating types of instruments. This is so that the disabled person can have a good and adequate cash flow to keep them going.
At any rate, I know that if this government really wanted to look after disabled people it would not be worrying about this 21-year rule. It would be allowing these trusts to pay the capital gains on the appreciation of their assets. It would have substantial revenues whereby it could do things for some of the disabled people it pretends to be so interested in helping.
I fail to understand why the government is insistent on abolishing the 21-year rule. I want to ask every member of the House to consider the serious debt and deficit implications we have. After all the rhetoric we hear about dealing with the debt and the deficit, the government talks a great line, turns around and forgoes revenues at this time having to do with these trusts. These represent substantial amounts of revenue that would help address the problem of the debt and the deficit.
I can only ask once more for the government to allow my amendment to stand and to vote in favour of it so that the same people the government purports to want to help really can be helped. At the same time we would address the debt and the deficit. It is more than time that we stop just talking. We should actually do something about it. Closing this loophole would be a tremendous step.


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, today we are addressing very serious legislation that exposes in many respects the priorities of government. I want to begin by saying that we are dealing with Bill C-92 which includes private family trust tax legislation.
To understand what we are doing we have to go back to the year 1972 when the Liberal government of the day introduced what is called the 21-year rule that required private family trusts be assessed capital gains after 21 years of the money being in family trusts. They would then pay tax on their increase in wealth at that time. In other words it was a method of deferring taxes on capital gains for 21 years.
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We recognize that no capital gains tax has ever been levied under this 21-year rule and that all private family trusts that existed on or before 1972 would be subject to tax for the first time in January 1993. However, the government has introduced the legislation which we are debating now to eliminate the 21-year rule. It means that a trust set up today for a young child could go tax-free until the child dies, which could be 80 years from now. In other words it would defer the tax for up to 80 years in some cases.
What are we talking about here? What is an example of a family trust? Because of the privacy rules which we support naturally we do not have information on specific families or individuals. That is the way it should be. Available court records show the trust established by Samuel Bronfman for his daughter had a value in 1969 of $70 million.
Today that trust would have had a value of well over $600 million if it had been kept in very conservative investments for that length of time. What we are talking about here are massive amounts of money on which taxes are not paid until the end of this period. Any tax expert would tell us that this means taxes will not be paid, period.
I want to say what some professionals have said about the tax initiative raised by the government that we are debating today. Sidney Goldstein of Goldstein, Goldstein and Goldstein in Ottawa had this to say:
There is no question that it represents a massive windfall for existing trusts.
Kathryn Bush of Blake Cassels had this to say:
A cynical person might suggest that pressure from influential political supporters also should be listed as a reason for the draft legislation.
Neil Brooks, whom we all know, is the associate dean at Osgoode Hall Law School at York University. He had this to say:
The government has given Canada's wealthiest families notice that it intends to give them a gift worth several billion dollars.
Arthur Drache of Fraser and Beatty had this to say:
If legislation now before Parliament is not passed before the end of the year, thousands of trusts would be hit with massive tax bills.
It is helpful because a lot of us are not tax experts. We do not have degrees in tax law or belong to firms that are into estate tax planning and so on. We rely on experts

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and that is why we have committees. I look across the aisle at one of my favourite politicians, the hon. member for Mississauga South. He sat in on a very important meeting of the finance committee a few weeks ago where experts were invited to speak.
One of the two experts, Mr. Neil Brooks, had this to say, and I am quoting from the transcript of the finance committee hearings:
First of all, this amendment will clearly result in a number of Canada's wealthy families paying less tax this year than they otherwise would. There just cannot be any question about that.
The amendment will allow Canada's wealthiest families to defer paying tax on their accrued capital gains substantially beyond what any other tax avoidance technique now permitted by the act allows them to do. This change will usher in a new era of tax planning by the use of persona] trusts to avoid the deemed disposition on death. Over time it will have substantial revenue consequences.
Instead of creating one more loophole by which people can avoid or defer the deemed disposition of capital gains on death, the government should be closing the existing loopholes. The act now contains a number of loopholes which allow a person to freeze the value of their property, but maintain control over it and avoid paying tax on gains that accrued while they controlled that property. The government should be closing the existing loopholes that permit estate freezing.
My final comment is that this amendment is bad tax policy because there is absolutely no theoretical tax justification for the amendment that is being proposed. It will only benefit high income
people.
Professor Neil Brooks was followed by Mr. Sidney Goldstein. He is the senior partner in Goldstein and Goldstein, Barristers and Solicitors, and acts as a tax adviser and planner to his clients. He had this to say:
Having said that and given the view that there was some affiliation with Tories, I too am questioning the appropriateness and purposes of this proposal.
In other words, he was saying that his usual dispensation is to be supportive of Conservative government initiatives as a friend of the government, but this was going too far to tax his comments that he simply could not speak positively about this initiative under any circumstances. He went on to say the following:
I endorse most of the comments Professor Brooks has made. Deferral is a very powerful and very valuable benefit. One of the arguments that has been made here and in various publications is that the proposal just shifts when the tax is going to be paid. Whether you pay it now or later, the same amount of tax is going to be paid, but that is not true.
In other words, the usual explanation is that while this is simply deferring when tax will be paid, here is one of the most senior tax advisers in Canada saying that is patently untrue. This is not a fact. Again, humble people like myself simply have to take advice from these experts. He goes on to say:
The proposal here, and I second Professor Brooks' comment, is more generous than any other proposal in the act. The deferral is until the last of a class of persons dies potentially. That is likely to be a significantly longer period of time than if each individual child received their own share directly and paid tax as each of them died, sold property or left the country.
In other words, he is just saying that here is the ultimate in tax loopholes and tax boondoggles. He goes on to say:
In my own practice and based on my professional contacts and various direct information-ignoring the speculation of what major estates in the country might benefit -the potential tax benefits from this proposal are in the millions of dollars. I do not act for the Desmarais, the Bronfmans or the Thomsons, but I do act for people who have substantial real estate holdings and substantial portfolios of publicly listed shares and they will benefit significantly from this proposal.
I could go on reading from the transcript of the finance committee hearings, but perhaps I will simply wrap up by saying that two of the most experienced and respected tax advisers in Canada have said this has to be the loophole of loopholes. This has to be the ultimate granting of a gift to those who need it least. This is a tax giveaway to the most wealthy families in Canada.
On the one hand the government is saying it has to charge GST on children's books and Bibles. On the other hand it is giving the wealthiest families the ultimate tax loophole. Does it not tell us a great deal about how our tax system has evolved? It is a mess. It is a disaster. It is the disaster of disasters.


Donald Alex Blenkarn: Mr. Speaker, first of all I want to say the amendment of the hon. member for Sudbury has some advantages in that it does not totally wipe out the tightening of the system concerning trusts.
The current act is so full of loopholes that it enables a trust to continue to roll over and over. Just by simply changing the trustees under the existing statute the 21-year period is revived. The government has settled that issue with people who have existing trusts by cutting
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back on the deferral period to the deferral allowed for the first generation removed from the settlor and the tax applies on the death of the first generation.
Currently, because of the ability to roll it over and over with each succeeding change in trustees, the 21-year rule that is supposed to be a terrible rule that will prevent the government from collecting all sorts of money is a massive loophole for the wealthiest families, as my friend from Kamloops said. We have closed that massive loophole. I am at least pleased that the member for Sudbury has recognized the government's positive action in that regard.
We have made arrangements for these trusts to terminate when the youngest or the last person or whoever is immediately the beneficiary related to the first generation from the settlor dies.
There are two kinds of trusts. There are trusts set up in wills and most of the trusts that are dealt within this statute really are trusts set up by people who die. When they die the capital gains is paid on their assets and then their assets are put in trust for the beneficiaries. The trust can run until the death of the beneficiary if the beneficiary is one beneficiary removed from the testator and that is the end of it.
It does not require winding up a trust in a 21-year period but it allows the trust to run its normal course. That seems to me to be very fair. As I said, most of these things are put together by people in their wills. They are testamentary trusts.
Some trusts, however, are set up by people who want to do major inter vivos settlements. When a person does an inter vivos settlement he or she has to pay capital gains tax on all assets that have been put in trust. To the government that is a bonus because it gets its capital gains tax in advance when the settlor sets up the trust. The government does not have to wait until the settlor dies.
Some people suggest this is a great advantage to the settlor. I suppose an advantage is an advantage if it is perceived to be an advantage. It may not be an advantage at all because the settlor is paying tax to the government sooner than he or she would normally have to pay it. To the government that is an advantage. To the government the sooner a person pays tax the better, as pointed out by my friend from Kamloops. This might be perceived by some to be a great tax loophole but frankly on balance it
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is no loophole at all. It is just the payment of tax perhaps earlier than the government might normally expect it.
I recommend this statute be left as is. We did not hear in committee, despite the evidence of Mr. Goldstein and Professor Neil Brooks, any real justification for changing it. The member for Sudbury who has made the amendment we are speaking to now recognizes the advantage of the changes proposed. I suggest we carry on recommending the advantages of all the changes rather than just being selective. I think the statute should pass as is and the amendment should be defeated.


Dennis Joseph Mills: Mr. Speaker, one of the problems the government does not seem to be recognizing is the perceived unfairness of the current tax act that exists in this country today. It is that perceived unfairness that is causing a great deal of difficulty.
There are many aspects of the tax regime which are not fair, but the perception is so much greater than the reality. It is that feeling or perception which is causing this malaise in attitude within our country that affects every aspect of a person's life. When people in a working environment do not feel they are being treated fairly it affects the quality of their work whether it is physical labour or creative work. The tax design of this country, the Income Thx Act, is one of the main culprits in causing this feeling that the system is not treating individuals fairly.
When people feel they are not being treated fairly it not only affects their work habits, but in the case of the Income Tax Act it causes a tremendous cash economy to develop. In 1985 the then Minister of National Revenue, the current Minister of Communications, said the underground economy at that time was close to $40 billion. He estimated-I am sure he got this advice from his officials in the Department of National Revenue-that the lost revenue to the Treasury on that underground economy was somewhere in the neighbourhood of $9 billion.
Today they say the underground economy is somewhere in the neighbourhood of $100 billion. If we use the minister's formula from that time we could say there is probably something in the neighbourhood of $15 billion to $18 billion in lost revenue to the Treasury because people feel they are not being treated fairly and the

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underground economy, the cash economy, is exacerbated.
These trust funds are one of the prime reasons why people feel the current Income Tax Act is not a fair piece of legislation. When we have an Income Tkx Act where family trusts or trust funds have not had any tax burden over a 21-year period, how could anybody possibly think it is a fair system?
I realize this started off as a Liberal initiative. It has gone through successive regimes including nine years of a Conservative regime. It seems to me that they have a tremendous opportunity to do something special in tax reform, something that would cause people to think that even though they have been insensitive on the GST in the area of family trusts they have the courage to address a very tough issue.
The problem with the family trusts is that no one knows how much money is in those family trusts. We hear estimates ranging from $10 billion to $30 billion in trust funds that have been sitting around untaxed for 21 years. Now the government wants to extend it for an indefinite period of time.
I have been approaching the issue of comprehensive tax reform with a very specific idea, the single tax plan. Corporations and individuals would be taxed at a single rate of 20 per cent. After seniors, families with children and charitable organizations got their tax credit people would pay 20 per cent. Under the single tax system interest bearing amounts on these family trusts would be in the loop. It is an air-tight system. That is what Canadians want today. They want an air-tight system. They want a fair system. They want a system that is efficient. They want a system they can understand. More than anything they want a system where everyone is accountable.
This trust provision in the Income Tkx Act is wrong if for no other reason than there is absolutely no accountability. No one really knows how much money is in the trusts and how much money is being made. The fact it has gone on for 21 years without any accountability is wrong and I certainly think it needs to be amended.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I rise today to speak to the elements of the legislation that we are most concerned about in Bill C-92, and that is the whole question of the private family trust tax and the fact that the government has chosen to continue it for yet another period of time.
Changes to the legislation concerning taxation of private family trusts was first proposed by the Minister of Finance in draft legislation on February 11, 1991. Despite considerable criticism from the professional community, these technical amendments were introduced in draft legislation released in December 1991. Finally the legislation was brought to the House by notice of a ways and means motion June 19 last.
The legislation has been around for quite some time. We have been aware of it and have been watching it move through the process.
The current legislation which this seeks to amend covers private family trusts. It goes back 21 years to the 1972 tax reform brought in by the former Liberal government when the federal estate tax was eliminated and the capital gains tax introduced.
This change left a potentially enormous tax loophole. Capital gains taxes are levied only when gains are realized, usually when property is sold or at the time of death. Because trusts never die it means a private family trust could entirely escape paying taxes on assets held within the trust.
The Liberal government introduced a 21-year rule which required that private family trusts would be assessed capital gains after 21 years and pay tax on their increase in wealth. Clearly the government set the rules. It said for 21 years the trusts had a tax holiday but at the end of that they had to start paying their fair share.
Income tax is paid by the beneficiaries of the trust when property is distributed to them from the trust. No capital gains tax has ever been levied under this 21-year rule, and all private family trusts which had expired on and before 1972 would be subject to tax for the first time in January 1993.
Under this bill the government is proposing to essentially eliminate the 21-year rule. Trusts would be allowed to defer the 21-year rule until all the exempt beneficiaries have died. An exempt beneficiary can include a
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child, spouse or parent of the trust settlor but not any individual of generations subsequent to that of the child. In other words no grandchildren.
This means that a trust set up for a young child today could go tax-free until that child died, which could be 80 years or more from now. It means the billions that are presently sheltered in private family trusts will not have to be subject to tax until the last exempt beneficiary dies.
This constitutes a tax loss of billions of dollars. While trusts will be allowed to accumulate wealth tax-free for many more decades, the government will be deprived of those revenues to reduce the debt and deficit, let alone the revenues necessary to improve lives of all other Canadians.
We do not know for sure how much is held in private family trusts. Almost no public information is available about the amount of wealth that is held in these trusts. Tax privacy laws which we support prevent Revenue Canada from providing information about any single trust and it does not provide any information about the aggregate amount of assets held in private trusts.
Sources within the financial industry have estimated the total value of assets held within trusts at $70 billion. This estimate seems fairly reasonable as it represents only 3 per cent of the $2.4 trillion total assets held by persons in unincorporated businesses in Canada.
How much revenue does the government lose from this particular change with the extension of the trust? It is difficult to estimate just how much tax revenue the government will lose but a very cautious estimate demonstrates what potential revenue is at stake. If only 1 per cent of the $70 billion in trusts was subject to tax next year a marginal tax rale of 30 per cent would raise over $200 million.
It is only fair that people who have these trusts are expected to contribute to the running of the country because that is really what it is all about.
I have a number of quotes from tax professionals. Sidney Goldstein of Goldstein, Goldstein and Goldstein in Ottawa says:
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There is no question that it represents a massive windfall for existing trusts.
Kathryn Bush from Blake Cassels says:
A cynical person might suggest that pressure from influential -


An hon. member:: You just read those.


Iain Francis Angus: I know and I thought they were so good I wanted to read them back into the record.
Let me start again. She said:
A cynical person might suggest that pressure from influential political supporters also should be listed as a reason for the draft legislation.
Again that was Kathryn Bush. Neil Brooks, someone who has been referred to in this House before and will be from time to time, said:
The government has given Canada's wealthiest families notice that it intends to give them a gift worth several billion dollars.
Finally Arthur Drache of Fraser and Beatty said:
If legislation now before Parliament is not passed before the end of the year, thousands of trusts could be hit with massive tax bills.
The government argues that these changes are necessary for a number of reasons. First, it has argued that the 21-year rule might interfere with trusts established by parents for the benefit of their disabled children.
The reality is that any trust set up for a disabled child will have annual allocations of the gains from that trust in order that the child may progress through school and through life. They would not be set up to provide a lump sum at some point in the future. Their needs do not get delayed for 21, 25 or 30 years. Their needs are now.
Any trust set up to ensure that the child of a wealthy person or a not so wealthy person is looked after financially will be designed in such a way that they would not require this particular rule.
As Sidney Goldstein argued:
If the government were really concerned about the needs of disabled kids, a better solution would have been to declare a special exemption for the disabled.
Second, the government has argued that unless the rules are changed some trusts may not be able to pay the taxes without the selling of assets, perhaps including a controlling block of shares in a private company. This

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argument is probably the most valid of those offered by the government but it still makes little sense. Private trusts have had a full 21 years to plan for this tax, much more than ordinary taxpayers get.
One of the complaints we hear from time to time about governments of all stripes is that they change the rules. Here is a rule that has been in place for 21 years. Everybody knew what the rule was. A good financial planner would have considered that and have planned accordingly for the end of the 21-year rule this year.
Taxpayers in this situation could utilize the $500,000 small business capital gains exemption to avoid selling assets. The government also says that it is closing a loophole with this bill by preventing rollovers from one trust to another. It is true that a clause in this bill does close a potential loophole and we do support that, but it does not mean that the government has to create another massive loophole.
Although it may be onerous for the beneficiaries of some trusts to pay taxes in one shot after 21 years in capital gains, there is a provision to pay taxes from a 21-year deemed disposition in up to 10 annual instalments. That is in subsections 159(7) and 159(6.1) of the act. This will provide some relief for trust beneficiaries with modest incomes who do not wish to dispose of the assets at this time.
The law is clear. It provides some flexibility for those people who are not the wealthy family trust holders but of more modest means who perhaps could not afford to pay the kind of taxes that might be owed to the people of Canada.
In conclusion, this particular section of the bill indicates the reality of tax reform in Canada. It is tax reform for the very wealthy. It is tax oppression for the not so wealthy. That is why we in this party oppose the provisions in the extension of the 21-year rule. We want real tax reform which would ensure that those who have a lot of money begin to pay their fair share of running this country.


Mr. Mark Assad (Gatineau-La Lievre):: Mr. Speaker, I never thought I would have to rise here to protest against such a flagrant government bill. It is the worst fiscal injustice I have heard of since I have been in this House.
In recent years there have been all sorts of tax increases, especially the GST, which hit the middle class. All these taxes hit the middle class hard and today Bill C-92 would exempt family trusts. This means that the richest families in the land, those with the most money who enjoy the best that this world has to offer, would be exempted.
Twenty-one years ago the government here in this House decided that it would change the tax system. Taxes would not be collected on family trusts for 21 years, but after 21 years all gains on the family trusts would be taxed. Indeed in the past few years the great law firms in this country representing its wealthiest families have been putting pressure on the government to extend this 21-year exemption until the youngest children have died. This could be 20, 25, 30 or even 40 years in some cases.
How do we explain this change in attitude? Twenty-one years ago it was literally a gift to the wealthiest families with huge fortunes.
Now it wants to remove it. I have great difficulty understanding what inspired this change. Look at the situation our country is in with our middle class saddled with the heaviest tax load in the industrialized world. Still we are now dealing with a bill that would exempt the richest families in the land.
How can such a thing be justified? In committee we had experts like Neil Brooks, vice-dean of Osgoode Hall law school, with whom I spoke several times. He has a great reputation; he is a great tax expert who knows tax law. As you know, Mr. Speaker, I do not claim to be a tax expert, far from it, not when there are thousands and thousands of pages written on it. It is really complex and I for one am convinced that this law is deliberately complex.
For example, take the experts who appeared before the committee. They showed that it was indeed a gift, literally a huge tax break. But for whom? For the richest families in the country.
We have so much data clearly establishing that it is not justified. As you know, the richest families have the services of great experts available to them. They can put tremendous pressure on the government, for example through lobbyists here in Ottawa, to defend their cause. They can afford it. A middle-class person who earns his
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daily living most definitely cannot afford the services of a tax expert. Earning his or her living takes all his time.
However, the wealthiest families in Canada enjoy advantages. I could quote figures; we do not know if hundreds of millions or billions of dollars could be saved in that way. At a time when we have an accumulated deficit of over $400 billion, we find a way to exempt the most fortunate class in our country. That is very strange and unjustified.
I hope Bill C-92 will raise many questions in Canada. The committee has already met, but I hope a great many people will start asking more and more questions as to why a government which has asked so much of the middle class would exempt the richest citizens. There is no justification for it.
The witnesses who appeared before the committee literally said that the government's arguments are phoney. There is no justification and these arguments are just stalling for time until they come to the House to pass the bill on third reading with their majority.
I know that on this side of the House the Liberal Party of Canada and the New Democratic Party will vote against it, that is sure. In a few months there could be a change of government, a hope I share with many Canadians. The Liberals will then form the government and we should rescind this bill which the present government wants to pass and tell the richest families in Canada: "You were exempt for 21 years. Now it's your turn to do your part. This country has been very generous to you; it is only right that you now pay your share".
I say to government members who cannot justify this bill that you will pay the price come election time. Canadians everywhere will ask: How can you justify Bill C-92 which exempts the richest families in the country? You have no justification. It is shameful.
I realize that we should always use parliamentary language, but you should be ashamed. If you are not ashamed, I wonder if we can expect the worst. I would like all those listening to the debates in this House to ask Conservative members the following question: How can you justify such a shameful measure?


Mr. Francis G. LeBlanc (Cape Breton Highlands - Canso):: Mr. Speaker, I want to say a few words on this amendment to Bill C-92 as it pertains to the extension by the government of the 21-year rule for private trusts.
The context in which I would like to frame my remarks, which are in support of this Liberal amendment changing this piece of legislation, is that of ensuring that Canadians appear to pay and do pay their fair share of taxes. It is also in the context of the very real fiscal difficulties that we all know the federal government faces at the present time.
The decision by the government to extend the 21-year rule is one on which we are still being denied information that is necessary for us to have a full understanding of what exactly is involved. To many Canadians this decision appears to grant a very important loophole allowing the wealthiest in our society to continue to avoid paying tax on a very sizeable portion of their assets, namely their family trusts.
It is incumbent upon any government today that is serious about controlling expenditures and the deficit and that wants to ask Canadians to make a real sacrifice, as this government has done through the imposition of numerous and sizeable increases in taxation, to ensure that those in Canada who have sizeable assets are taxed appropriately on those assets, and in particular on the capital gains that accrue through the accumulation of those assets.
The 21-year rule was implemented 21 years ago to allow those families who fell into that situation a very long period of time to get their affairs in order and dispose of their assets. That 21-year period, in the opinion of members on this side of the House, was plenty of time for those families to deal with the business of financial planning.
This government has extended that period at a time when Canadians are generally feeling overburdened by taxes. There is a very strong suspicion afoot in this country that the wealthy do not pay their fair share of taxes and ordinary Canadians are being asked to assume, through increases in income taxes, through various forms of charges and through the GST, sizeable increases in

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their tax burdens. It strains the credibility of any government when this is allowed to happen.
It would be an act of good faith on the part of this government if it were to accept the Liberal amendment and the principle that this 21-year period has expired and the people who fall under the situation covered by this provision in the tax law should be required to deal with the inheritance or estate taxes which they are legitimately required to pay.
For the government to fail to do this will not only increase the lack of credibility it has acquired among Canadians over the last eight years but will strain the credibility of future governments because a main issue facing all Canadians is the apparent unfairness in the Canadian tax system.
That is a serious credibility problem for governments in Canada today. It is a problem of which all governments must be very mindful. Any provisions, and there are many in the tax laws in Canada, that appear to confer benefits to those who are wealthy and who have got gains through the accumulation of wealth or assets, while at the same time other Canadians are being asked to bear a higher burden of taxation, will put additional strain on the fabric of government programs and on the tolerance of Canadians to government demands to finance its operations through taxes and other forms of charges to the Canadian public.
It would be an act of good will and generosity, but more an act of credibility on the part of this government if it were to accept our amendment dealing with this trust provision. I hope government members will allow this amendment to be incorporated into this piece of legislation. It would make the legislation more palatable to those of us on this side of the House who support other aspects of Bill C-92, some of which were actually introduced on the recommendation of the Liberal opposition. We were pleased to see that the government paid attention to our suggestions.
In this day and age when Canadians are so distrustful of the additional financial burdens governments are asking them to bear we cannot allow this provision to go unchallenged. We cannot allow this 21-year rule to be extended to those families. We are still unclear concerning the amounts involved because we have not been told the relevant facts concerning the revenues involved in these trusts, but we certainly know there is enough suspicion out there. There are enough grounds for suspicion. We cannot allow the government to proceed with this measure without airing before the Canadian people what is involved in these trusts.
We on this side of the House urge the government to accept this amendment to Bill C-92.


Mr. Steve Butland (Sault Ste. Marie):: Mr. Speaker, I am happy to speak to the amendment to Bill C-92 and to talk about family trusts. A great deal of public mistrust is befalling private trusts. If it is a matter of trust of which we speak here today. Certainly if the general public of Canada really knew what this debate was about cynicism and condemnation would perhaps best describe what is going on here.
Once again the people are not aware. It is not a simple issue. It has gone to committee. Despite the representations from credible witnesses the government has seen fit to proceed.
We want to talk about what this means and to which people in our country. Let me suggest that the 21-year rule pertains only to the very wealthiest people in our country. Our country has one of the highest concentrations of wealth in the hands of the fewest in the world. Comparisons are made. Even though one of the ministers previously said there are not enough millionaires in Canada, and I suspect that is an unfortunate circumstance, most people are not that concerned about the accumulation of millions of dollars. They are concerned about their everyday household expenses and in trying to cope.
The very wealthiest people in our country have been given 21 years to get their financial house in order. It came to roost that this legislation was going to run its course. The government said: "We had best extend that 21-year period because for the wealthiest of the wealthy in this country 21 years is not long enough. Let's give them another 10, 15, 20, 30 years to ensure that they can keep all of their assets in these private trusts". They are conducting business as usual but they have set aside these private funds that are not taxable.
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How many are there? We are not sure. Some suggest there might be as many as 22,000 family trusts. We cannot be sure. Revenue Canada says because of privacy we are not allowed to track those statistics. Give or take a thousand or so I suppose there are about 15,000 of these family trusts.
The one example we have, I gather the only one that we could get our hands on, is about 20 years old. At that time it was valued at $70 million. That is not bad. I guess it has tripled or quadrupled in value now. The government is saying: "It is not time yet to force these people to pay any taxes on the accumulation of wealth in that private trust. Let's extend the period for another 10, 15 or 20 years".
The rationale given is cynical at the very best. It is particularly cynical to those average Canadians who every year have to get their house in order. They have one year. If they do not get it in order, the GST rebate will be taken from them. Any returns on their income tax in March will be taken by the government.
However, for these people the reason given is they might have to hire a lawyer. We all know that lawyers are expensive. For the very wealthiest people in the country it is a very sad story that they would have to hire a lawyer to get their house in order. Another reason is that they are not quite ready yet to pass on control of some of their interests to their children. The children are not quite ready yet to take possession of power and money, so we had best give them more time.
Another reason was that these people might have to sell some of their interests. Would that not be a shame. If multimillionaires had to sell some of the interests they had in different corporations that would be terrible, would it not? People in my constituency have had to sell their homes because they do not have jobs. It is not too much to ask these people to get their houses in order.
Finally, the most cynical rationale of all is what if these fabulously wealthy people have a disabled child? Should they not be able to provide for this disabled child? I say yes, absolutely they should be able to, but after 21 years and multimillions of dollars there must be another way of providing for that child. I wonder how many disabled children there are born of the wealthiest families. Maybe I best not dwell on this issue because I realize the
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sensitivity of it. The very fact that the government would proffer this as rationale for extending the 21-year rule makes it extremely cynical. It is cynicism at its apex for sure.
What did the witnesses say? I know the member for Mississauga South tried to discredit it. He said one of the witnesses has an NDP affiliation, God forbid. He could not have any expertise on tax affairs because he has some affiliation with the NDP. One of the witnesses said he had previous ties with the Conservatives, but he said he agreed with Mr. Brooks that there are some problems with this. He said that anybody in their right mind with $100 million would say if there was a chance for deferral they would defer their taxes for another decade. I probably would too. Most people are like that. They are a little bit full of self-interest.
There is a tremendous lobby by these people to say: "You are going to create a great deal of problems for us wealthy people, so you had best put the legislation in as quickly as possible. Don't pay attention to any tax experts who might come forward, regardless of their political affiliation, whether they are New Democrats or Conservatives". They say you should not hear there are loopholes. We consider this a loophole that you can drive tandem trucks through. Do not concern yourself with that, just go forward and put on a good face.
I listened to the member for Mississauga South. He put on an awfully good face because he has some expertise in this area. He used the appropriate vernacular, with which I am not familiar, and he used all the appropriate jargon. If people were watching they would ask: "What in the world is he talking about?" I am not so sure anybody would understand, nor would they want to understand.
It is sophistry at its worst to try to convince people that this is okay, don't sweat it. We are going to lose a couple of hundred million dollars of taxes every year from the richest people in the country. Do you think they would want to come forward and say they want to help? These are the people who are saying the debt in this countiy is going to kill us, that the government has to get its house in order. For sure, people in glass houses should not throw dollars. It is unbelievable. No doubt they are the loudest out there saying: "The government is out of control and it spends too much money. Canada is a hard country to do business in".

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I would like the government to read Controlling Interest, written by Diane Francis, not a big friend of ours, but a very revealing book indicating that the country is controlled by a very few wealthy families. Here we are discussing legislation that will do nothing but protect them. We have protected and coddled them for 21 years. The government says: "It is not long enough, folks. Let's give them another 10, 20 or 30 years. We will collect the taxes at that time".
I am sure I have not shed a great deal of light on this issue, but I certainly feel better for it and I want to say this to any Canadians out there who might be watching: It is the absolute hypocrisy of cut, cut, cut on one hand and this kind of absolutely terrible, horrendous acceptance of a tax and the loophole-the word is used too often but you know what I mean-on the other. It is totally unacceptable tax legislation that this government is proffering.


Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, I am pleased to stand in the House to speak at consideration of report stage of Bill C-92, an act to amend the Income Tax Act, the Canada Pension Plan, the Income Tax Conventions Interpretation Act and so on.
This omnibus bill includes numerous technical changes. There are quite a few areas of the bill that I definitely do agree with. There are some very positive aspects of it but there are two areas that I and my party disagree with.
We on this side of the House have put forward two amendments to Bill C-92. The first is a motion to amend clause 42 to remove the extension of the 21-year rule on private trusts and maintain present law. The second is a motion to amend clause 47 which is to remove the provisions that disqualify passive businesses from the capital gains exemption.
I will explain briefly what these two motions are about and why we are objecting to those two particular aspects of the bill.
The government's position is that it wishes to extend the 21-year rule because it wishes to remove the arbitrary nature of the 21-year figure. The government has tried to justify the extension of the 21-year rule for private trusts by emphasizing the plight of disabled children as the beneficiaries of these trusts. The government believes that this extension will not result in any forgoing of tax revenue. Therefore it sees this as a revenue neutral measure. Obviously we on this side of the House do not agree with the government on that analysis.
We heard testimony during the review of Bill C-92, more specifically with the 21-year rule on private trusts. Other members of this House have quoted Mr. Brooks and the five salient points he raised during the hearings. I would like to mention those too because I think they probably best summarize the main reasons as to why we are objecting to this clause in the bill.
The 21-year rule extension on private trusts will clearly result in a number of Canada's wealthiest families paying less tax this year than they otherwise would. Canada's wealthiest families will be able to defer paying tax on their accrued capital gains substantially beyond what any other tax avoidance technique now permitted by the act would allow them.
Instead of creating one more loophole by which people can avoid or defer the deemed disposition of capital gains on death, the government should be closing the existing loopholes that permit what is described in the trade as estate freezing. Not one reason the government has put forward for making this change holds any water.
The 21-year rule extension is bad tax policy in the sense that there is no theoretical tax justification. It will only benefit high income people. In addition, it is bad economic policy. It will in effect lock more investments into private trusts on which large capital gains will accrue. People will be reluctant to sell their investments even though they might indeed be bad investments because of the large tax liability that is accruing over time.
Those five points I just went through were made by an expert witness, Professor Neil Brooks, associate dean of Osgoode Hall Law School at York University. He is a tax lawyer and an estate planner. They were not made by someone who does not know what he is talking about. He is very familiar with the tax laws of this country and he is most concerned that this government would be moving in that direction.
I would like to move on to the Liberal Party's motion, the amendment to clause 47, to remove the provisions that disqualify passive businesses from capital gains exemptions.
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This issue, unlike the other one, was not discussed extensively in committee. It has been put forward because the bill continues the capital gains exemption on ownership of foreign assets. However it discontinues the capital gains exemption on passive business which is real estate.
If this government were saying to Canadians that it wanted to eliminate all the capital gains in this country for everyone on every issue, whether it was stocks and bonds or offshore investments or real estate, then I could agree with that. Or, if the government were making it so that everybody would receive the $100,000 exemption, then I could agree with that. However, what it is doing is taking away the $100,000 capital gains exemption from that small real estate investor.
Let me use the example of a retired person who receives a pension and owns a $200,000 semi-detached home. He or she pays the rent on their own side of the house. They have the other side of the house rented and that is what is maintaining their lifestyle in their retirement years. If they decide to sell their whole unit they will not receive the $100,000 capital gains exemption. Therefore, when I say that the small-term investor is the one being hurt through the real estate market, there are many senior citizens in particular who will be severely hurt by this measure.
However, the argument put forward to support the Liberal amendment is that this capital gains exemption on passive business must continue to give ordinary Canadians a break. I feel very strongly about that. I have had representations from many people in Nepean. Interestingly enough they were all senior citizens. They are the ones who need it the most. Their investment in real estate and apartment buildings must be supported.
The government is favouring Canadian foreign investment as it tends to foster employment and generate greater revenues in passive business. That appears to be the whole reason for wanting to go that particular route.
I could go on at great length on this. I would like to support this bill, I really would, because there are areas in Bill C-92 that I can agree with. But in these two particular areas I just feel it is so regressive. If the government would consider removing these two clauses
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from the bill then I am sure most of us on this side of the House probably could support it.
It is a shame that I must vote against a bill because of two particular clauses. I urge the government to reconsider those two particular aspects of the bill and to consider removing them.


Mr. Maurice Foster (Algoma):: Mr. Speaker, I am pleased to have an opportunity to speak on Bill C-92 today and the amendment put forward by the hon. member for Sudbury. She has done a great job on behalf of our caucus in exposing some of the weaknesses in this bill.
Clearly in 1971 when the capital gains tax was brought in there was provision in it for private family trusts to be able to operate for 21 years without having to pay capital gains taxes on the appreciation of the assets in those family trusts. This was a very generous arrangement. However that time has now passed. It is time these family trusts were paying taxes on those assets. These are not trusts for the poorest and the weakest in our society, but they are family trusts for the strongest and most powerful, the richest families in this country.
The government has somehow suggested the capital gains on the capital appreciation in these trusts are being maintained to assist handicapped children. These are massive funds and estimates have been as high as billions and billions of dollars. Of course, the government keeps the exact amount secret.
The hon. member for Sudbury has put forward a proposal to end this arrangement and to have these very wealthy families pay taxes on the capital appreciation. Surely that is a fair and reasonable situation. After all, they have had the appreciation on these trusts for the past 21 years and now is the time that this should end. I would be very surprised if they have not had an opportunity to arrange for these circumstances during the past 21 years because until the government brought down its budget in 1992 there was no expectation that the government would knuckle under and extend this.
We have to look at what has happened in the last eight and one-half years. There have been 38 new taxes imposed on Canadians. It is interesting that most of

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those taxes, practically all of them, have been regressive consumption taxes.
The consumption taxes, whether it is the GST, the sales tax which raises billions of dollars, or the excise tax on fuel, hurt low-income families and are more onerous on low-income families than on rich families.
What we have here is a pattern of activity by the government where it is imposing more and more regressive consumption taxes on low-income families. At the same time these private family trusts, which are mainly held by the richest and most powerful families in our nation, get a free ride on all the capital appreciation on the assets in those trusts. Nobody is able to identify exactly what those assets are worth or at least the government will not tell anybody. Clearly this is a tax which is designed for the rich and the powerful as most of the policies of the government are.
The free trade deal was designed to assist multinational corporations. Parent corporations in the United States with branch operations in Canada could shut down their Canadian branch plant operations while keeping the warehouse, but maybe not even that. Therefore, the jobs are lost in Canada and the benefits go back to the United States.
The rich get rich and the poor stay poor or even get poorer. It is the same way with the GST. The government talks about the GST being there mainly to assist the manufacturing industry in this country. The one thing the government never talked about was the windfall profit of some $4 billion to $5 billion which the manufacturing industry gained. Still in spite of it many of them moved to the United States.
We have a clear pattern of regressive sales tax hitting low and moderate income Canadians while at the same time opening the floodgates for the rich and powerful.
The hon. member for Sudbury has proposed that this end. I hope the government will consider it. Clearly there has been a very generous arrangement for the past 21 years, ever since the capital gains tax came in. Even at that, tax is only paid on the income from capital gains. Only three-quarters of it is brought into income.
This is the time to pass the amendment put forward in Motion No. 1 to end this whole arrangement now and
treat everybody the same. The rich and powerful would pay capital gains on those private trusts, the same as any other taxpayer in this country. Those with fewer resources and less means have to pay taxes on whatever capital gains they have. In most cases there is very little there.
It has been well documented that private trusts in this country are a way that rich and powerful families move from generation to generation and maintain the control of large corporations without actually having to pay the corporation tax, generation after generation. This amendment is designed to end this arrangement and have private trusts treated like any other citizen, on a fair and equitable basis.
I hope the government will accept this amendment. I think it is fair and just. It may not be in keeping with the government's general philosophy about taxpayers, but it certainly is one that would command the support and respect of practically every Canadian.


René John Soetens: Mr. Speaker, I rise to participate in this debate. Listening to the hon. member's comments I will very quickly come to the 21-year rule in trust, but I am somewhat concerned.
He is talking about how unfair it is because it has created a special privilege for some, in his definition, high-income Canadians. He thinks everybody ought to be paying, but in the next breath he talks about the GST and how unfair that is. I guess it is unfair because everybody is paying and he would prefer that we establish some system whereby not everybody has to pay the GST. Therefore, he is going to have to decide: Does he want to treat everybody the same as we are doing under the GST, or does he want to treat everybody differently under different rules for different people? He is going to have to make that decision.
We cannot talk about it the way he was proposing. What we have here is this whole discussion of trusts and what has been established. If the member feels that the trusts which were established with the income tax changes back in 1972 were unreasonable or very beneficial-I am not sure if the member was in the House at that point but I would be interested in seeing how vigorously he voted in favour of that particular special privilege that had been put in place for these supposedly high-income Canadians.
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What we are dealing with here is the establishment of some new rules on the trusts. The loophole was created in 1972 by the Liberals. If a trust was created 21 years ago and some time between then and now to avoid the 21-year rule you wanted to transfer the trust from one management group or one trustee to another, simply creating a new trustee and a new trust exempted you of the 21-year rule and you had another 21 years to deal with it. Therefore, what we are doing is taking away that opportunity to simply roll the trust from one trustee to another thereby avoiding the capital gains.
Somehow there is this idea that this is a massive scheme to avoid capital gains tax by the rich. However, what I have not heard mentioned today is that if any person in Canada wanted to establish a trust the rules that go into this can include people who own cottages. I live in the greater Toronto region and I know there are lots of people who own cottages. They would like to put a cottage into a trust so that should something happen to them their children would have a system whereby they could share the ownership of the cottage for their generation. This piece of legislation is going to allow that to happen without families having to reach into their pockets 20 years from now to pay capital gains.
How does this happen? In order for an asset to be put into a trust an evaluation has to be put on the asset going into the trust. The person establishing the trust has to pay the capital gains tax on the assets that are being put into the trust. Therefore, if there is one million dollars in assets that one wants to put into a trust, one has them valued. One discovers that one bought them for $500,000, one has now valued them at $1 million and you put them into the trust. In order to put them into the trust one has to pay the capital gains tax on the $500,000 increase in value. Therefore there has not been an avoidance of tax. In fact it seems as if there has been a prepayment of tax because normally one would not have to pay the income tax on that capital gain until such time as one actually sold or disposed of the asset.
What is happening is that if somebody wants to put an asset into a trust they have to pay the capital gains accrued to date up front.
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There is this idea that once this thing is in a trust that one avoids tax. Let us come back to that million dollar asset that I talked about. We have now had the person pay capital gains tax on that. Let us presume that that is an income-generating asset. Whether it is shares in a company or a small business, that trust has to pay income tax on the money that the trust has earned every year. For argument's sake, they are earning $200,000 a year inside the trust so they have to pay income tax on the money that the trust is earning every year.
This idea that we are escaping the tax system by the creation of a trust is really very fictitious because in fact each and every year the income tax is paid by the trust.
Why would somebody want to put their assets into a trust? I have given you the example of someone who owns a cottage and who may want to put the cottage into a trust so that all the children can use the cottage for their lifetime and not have to worry about dividing it four ways and who is going to retain ownership.
It could also be a small business where one has three or four children who are working in a small business. Who owns the business on the death of the original owner? Here it is possible to put the shares of the small business into a trust for the benefit of the four children collectively but one does not have to divide the ownership. The ownership of the company is 100 per cent retained by the trust and therefore it is not a divided ownership. That is very beneficial. That ownership can stand there until, under these changes, the death of the immediate family.
Say that one wants to establish a trust for one's children, and say that the last child in the family dies at whatever age. Let us presume that they want to pass the company on or the trust on to their children. They have to again revalue all of the assets of the company and pay the capital gains tax on the revaluation. The business entity or the trust stays in but they have paid the tax. They pay the tax going in on the trust. They pay all the income tax that the trust should pay during the years of income and at the end of the trust they have to pay any additional accrued capital gains tax as well. They are caught all three ways.
What is not mentioned is that there could be a situation where someone of our age, Mr. Speaker, decides to put our assets in a trust for our children. You and I are certainly going to live another 40 or 50 years, we hope. What we are going to do is pay capital gains tax on our assets today that in fact we do not have to pay for

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50 years if we simply kept ownership of them. What we are going to do as small-business owners is lend the Government of Canada, interest free and up front, the capital gains tax that we do not have to pay for 40 or 50 years. Nobody has mentioned that.
Why would a small business person want to do that? Again I have referenced the idea of trying to keep a small business holding together as one unit. I think it is a very important item that is on the agenda. If people want to take money out of a trust, if the trustee decides they are going to pay the beneficiaries, then of course there has to be some valuations and tax will be paid.
All the way through it seems that what has really been allowed with this rule is some reasonable asset planning for individuals from a small cottage holding to a large corporate holding. However, to suggest that this 21-year change or this trust is only for the benefit of the extremely well off I think is doing a disservice.
Yes, it is of benefit to them but in fairness this will benefit every Canadian who owns a cottage, every Canadian who owns a small business and every Canadian who may have some shareholdings that they would like to leave to their children as a unit rather than divide them up.
I am not sure why the opposition members would be opposed to this opportunity. They would prefer to leave the system the way it was 21 years ago when they created it where trusts would never have to pay tax, trusts would never have to pay capital gains tax and trusts would never have to declare their holdings to the government. At least here with this legislation some very clear time lines have been put in place and ultimately all Canadians are better served when the rules are clear rather than what existed prior to this legislation.


Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, I too am happy to speak on this bill. I listened with a great deal of interest to my former colleague but still parliamentary friend from Ontario who gave a very learned dissertation in his most capable way on parts of this omnibus bill, Bill C-92.
The very lucid explanation he gave of parts of the bill is part of the problem that members face about Bill C-92. This bill is one of these omnibus bills which cover a multitude of matters. It is a regular smorgasbord of amendments to tax laws, unemployment laws, child benefit laws, the Tax Rebate Discounting Act, the pension plan and the income tax conventions.
Obviously in this bill there are an awful lot of good things that pose a dilemma to opposition members about confronting the bill as to how they are going to vote. One has the wheat with the chaff and it poses a dilemma. This is one of the reasons why my learned friend from Mississauga, when he used to be even more vocal and constructive in opposition, was so consistently against- this is the preamble to the report stage-these omnibus bills.
On this matter we are dealing with an amendment right now. There are other ways and there is another amendment that will take care of the problem outlined by my friend from Ontario in terms of protecting ordinary people's trusts in cottages and other matters like that. He spent the most time trying to explain away the pernicious part of this bill of extending this 21-year deferral to pay taxes another 21 years. That is a further generation.
I was in the House in 1972.1 must say I would have to check the record to see how I finally voted on the bill because I was in Her Majesty's Loyal Opposition and very much so. This matter came forward from the opposition that day which was then the Conservative Party. The records will show that the then opposition, the Conservative Party, railed against the amendment brought in by the then government, the Trudeau government, setting up this 21-year deferral on taxes on estates.
This is of course what poses so many problems for the public out there. They see a party being very vociferous against a provision when it is in opposition and then it gets into power and either the advice of the bureaucrats or the pressure of the interest groups becomes so profound that it does a fundamental parliamentary flip flop.
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This is what has really caused disillusionment about the system. Here I am speaking but I have not checked on just how I voted in 1972 when this matter was brought up.
However, whatever I did then I knew it was a controversial section of protecting trusts of some of the heavy, large and very important people who are fundamental to the country but who get an unfair tax advantage. This was so controversial that certainly no matter how I voted or what I said in 1972 part of the reason that the matter flew in 1972 and got through the House was that it was only going to be a one-term deal.
At the end of 21 years, January 1, 1993, after it was brought in in 1972, all the people who had these heavy trusts would have had time to do their estate planning to make sure that when the law was changed in January 1993 they would not be able to complain of some unfair tax problems or disadvantages that they were going to be confronted with.
Lo and behold, the present government brings in this provision to in effect extend the 21-year rule. This defers for another 21 years this whole business of taxing estates and trusts. As I say, one can avoid the problem of ordinary Canadians trying to set something up to protect their families so that their children will not be confronted with certain taxes upon the death of the person setting up the trust. A cottage was the example used by my friend from Ontario.
We are talking about the fundamental trusts of an awful lot of important families and groups of people in this country control who a large part of it. Frankly I have been a little surprised that this has not received more attention in the media of the day.
Of course, not being completely a naive person in this House I started to put together the subject matter of the bill, especially its 21-year extension, with how it is going to help a lot of very important Canadians who happen to own television stations and/or newspapers. I started to put two and two together I suppose in an over simplified way. I can appreciate why something that is so fundamental to the trust structure and/or corporate family structure of this country has not received public attention. However, that may be one of the reasons.
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I agree with some members from before and certainly with the member from Ontario who is a very competent tax expert and specialist. He has been a very important player in the committees, more so than I. There were experts who appeared before the committee who supported Her Majesty's Loyal Opposition. There was the point of view of the member for Sudbury on this whole business of the 21-year extension.
That position was bolstered certainly by several professors. Sometimes one has to shake down the professors and the economists in their predictions and/or on tax law. When one gets something as precise as tax law rather than economies a layman has to pay attention.
There were professors who appeared before the committee when this matter was before the committee. They gave evidence on the 21-year rule. There was Professor Neil Brooks, an Associate Dean of Osgoode Law School at York University and Mr. Sidney Goldstein of Goldstein and Goldstein who is a tax lawyer and estate planner in Ontario.
Prof. Brooks had a definite confirmation without getting into any red herrings about family cottages and some little family trust that some responsible parent might try to set up to help make sure that his children do not get caught in paying for some estates. There are ways to do that. As I said, one of the amendments we are going to be debating after this one helps to do that in terms of protecting the children of ordinary Canadians to have a small asset.
We are talking about Canadians who are not ordinary who have many assets. Prof. Brooks along with Mr. Goldstein said unequivocally before that committee that the 21-year rule extension on private trusts would clearly result in a number of Canada's wealthiest families paying less tax this year than they otherwise would.
I see you are giving me the two-minute sign, Mr. Speaker and I always obey your admonition. There is so much one can say on such a large bill. The amazing thing about this in the last one minute and three quarters that I have left under this 10-minute rule is that there have been no figures supplied to the committee or to this House on how many millions or billions we are involved with here.

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The range goes anywhere from $10 billion to $20 billion. I have to agree with my friends in the NDP from time to time on several matters. The hon. member for Winnipeg Transcona asked the Minister of Finance months ago about the omnibus bill and this section on the 21-year deferral. It was the first time I fully appreciated that the matter was back on the floor of the House and we were again going to try to perpetuate trusts of very important people for another 21 years down the road.
Goodness knows what the then government might have done to it then. The change was supposed to have taken effect 21 years later in January 1993. This bill of course makes it retroactive and extends it for another 21 years.
There are good things in the bill but there are many other matters in it which I have some question about. I was here in 1972 when the bill was sold on the basis of only 21 years and the family trusts were going to pay the same basic tax as other Canadian taxpayers. That is why I had no reason to vote against it. If this was so fundamental, surely the government should have told us how many dollars were involved.
In conclusion, there was something else that was strange before the committee. I am not a member of the committee but I read some of the committee evidence which said this change was not going to cause the problems and would not really be that much of a fundamental change. It was just shifting it down the road for another 21 years.
Mr. Speaker, you have indicated my time is up. I frankly think with this type of provision going in as silently as it is today for the members who support it their time will be up if they do not watch out.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, this amendment has been moved to strike out the section of Bill C-92, which extends the 21-year rule for family trusts.
There is no question this is one of the most important pieces of legislation that will face this House of Commons this year. The extension of this family trust provision represents a colossal give-away to some of the wealthiest families in this country when the government
is talking about its deficit problems and claiming it has serious revenue difficulties.
Here we have something that hands out millions and millions of dollars to those who are already wealthy. This has no logic economically or in terms of fiscal management. If we thought there might have been some logic associated with it all we had to do was listen to the arguments of the Department of Finance and the assessment of those arguments, not from Neil Brooks but from Sidney Goldstein.
He noted at the start of his comments as a witness in committee that he was speaking as someone who had supported the Conservative Party, yet here is his assessment of what the Department of Finance had said: "The rationales given by the Department of Finance are very strained". He went on to say: "Many of the arguments presented relating to this proposal somehow don't hold water as soon as you look at them. There are other far simpler ways these problems could have been solved. There are other ways of drafting these proposals that would have resulted in a more limited impact. That leads to the question of why this proposal is being put forward in this fashion".
Mr. Goldstein is a man who works with people who frankly are trying to use the family trust provision to avoid paying tax. This is his assessment, honestly put to the people of Canada by somebody who has no partisan axe to grind, put as a Conservative testifying to this committee. I quote again from the committee testimony:
In my own practice and based on my professional contacts and various direct information -ignoring the speculation of what major estates in the country might benefit-the potential tax benefits from this proposal are in the millions of dollars. I do not act for the Desmarais, the Bronfmans or the Thomsons,
some of the large family holders of wealth in this country,
but I do act for people who have substantial real estate holdings and substantial portfolios of publicly listed shares, and they will benefit significantly from this proposal.
So much for the myth which the Conservatives are trying to put to us that this is simply a housekeeping measure to try to stop people from shifting from one 21-year trust to another 21-year trust. Here is an expert in the field who calls himself a Conservative and says
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very clearly to the people of Canada that this is going to cost all of us as taxpayers millions of dollars.
We also saw testimony from Neil Brooks, one of the foremost tax experts in this country, to that same committee. I know my friend the former finance committee chairman has quarrelled with Mr. Brooks every time Mr. Brooks has appeared before the Finance Committee. I find it interesting, however, that my friend from Mississauga South did not say anything with respect to the comments of Mr. Goldstein. Those comments came from a Conservative. They came from somebody who deals in the area and they made it very clear that this particular provision is a waste of millions of dollars to the people of Canada.
Mr. Brooks went somewhat further. He said and I quote his final comment:
This amendment is bad tax policy because there is absolutely no
theoretical tax justification for the amendment that is being proposed.
It will only benefit high-income people.
In other words, there is nothing here that is going to help growth in the country. There is nothing that is going to lead to extra jobs for people in Canada. There is nothing that is going to create greater fairness in the burden of taxation for people across this country. Instead, this is the extension of a give away which the Liberal Party started. It is now being extended so grossly that it will give millions of dollars of extra benefits to some of the wealthiest families and some of the families who are simply wealthy in this country.
Why did things like this happen? Why should such a piece of legislation be brought before the House of Commons? The tax system is messed up badly and as we who talk to our constituents know it has increasingly hit middle income, working income people. Instead of correcting those problems in our tax system the government is bringing forward a set of proposals to help those people at the very top whose share of national market income in this country in the last six years under this Conservative government has gone up from 23 per cent to 26 per cent. They are already very wealthy. They have already received tremendous tax breaks and the government is giving them more tax breaks.
I am afraid there is something fundamentally rotten at the heart of our political system that it gives tax benefits
Government Orders
to those who are wealthy instead of those who really need them. It concentrates the benefits at the top instead of among middle income, working Canadians who are so hard pressed.
The people on the Conservative side must surely now recognize it is time to change such an unfair, rotten, unjust approach and withdraw this amendment.


David Kilgour: Mr. Speaker, this party is going to oppose Bill C-92. There are things in it which we agree with but we disagree with the part of the bill we are talking about now.
Bill C-92 is a measure of a government that believes Parliament should not help the weakest members of society do better but make life easier for the richest members of Canadian society. We should perhaps call it the comfort bill for family trust holders in Forest Hill Village, Rosedale, Upper Westmount, Park Lane Circle and perhaps parts of Shaughnessy in Vancouver. Sony, I forgot the British Properties.
We believe the government is being deceitful by including this change in an omnibus bill which includes measures we support. The vast majority of our fellow citizens are subjected to an inheritance tax in the form of a deemed capital gains tax on death. There is no reason why those very few Canadians who are fortunate enough to have family trusts should have preferential treatment.
Those Canadians who are fortunate enough to take advantage of the 21-year rule were given 21 years to get their affairs in order, I put through you Mr. Speaker to the member for Mississauga South. Was it not enough time? There is no reason to extend what was more than generous deadline. Of course extending the 21-year rule is unfair to all of those who do not have family trusts.
We heard a lot this morning about Neil Brooks and what he said. He basically raised five points to the committee. The 21-year extension on private trusts will clearly result in a number of Canada's wealthiest families paying less tax this year than they otherwise would.
Second, Canada's wealthiest families will be able to defer paying tax on their accrued capital gains substantially beyond what other tax avoidance techniques now permit and the act would allow them to defer paying tax on capital gains.

March 29, 1993
Third, instead of creating one more loophole by which people can avoid or defer the deemed disposition of capital gains on death, this horrible government should be closing existing loopholes that permit what is described in the trade as estate freezing.
Fourth, the government has not put one reason forward as to why making this change holds any water.
Fifth, said tax expert Neil Brooks, the 21-year extension is bad tax policy in the sense that there is no theoretical tax justification. It will only benefit high-income Canadians.
In addition, this bad economic policy will in effect lock more investments into private trusts in which large capital gains will accrue. People will be reluctant to sell their investments even though they might be bad investments because of the large tax liability that is accruing over time.


Mr. Speaker:: I regret 1 must interrupt the hon. member.
It being two o'clock p.m., pursuant to Standing Order 30(5) the House will now proceed to statements by members, pursuant to Standing Order 31.


STATEMENTS PURSUANT TO S. O. 31
Mr. Greg Thompson (Carleton -Charlotte):: Mr. Speaker, this government has just passed new legislation that will encourage banks to increase their participation in small business financing.
This bill, which will make it more enticing to lend to small businesses, includes an increased ceiling on loan size from $100,000 to $250,000.
As well, businesses with yearly sales of $5 million will be eligible to apply, as opposed to the previous limit of $2 million. Even better, the federal loan guarantee has now been raised from 85 per cent to 90 per cent. A new addition of a retroactivity clause will make it possible for owners of small businesses to apply for loans six months after making a purchase.
Once again this government is taking positive steps to encourage entrepreneurship. I am hopeful that the banks will recognize these efforts and participate fully in this respect.


ATLANTIC CANADA OPPORTUNITIES AGENCY
Mrs. Coline Campbell (South West Nova):: Mr. Speaker, I rise to bring to the attention of this House the plight of the people in the Annapolis basin area who are seeing their way of life threatened by actions of the minister responsible for ACOA.
The minister gave an ACOA grant without seeking any input from the people who already use the Annapolis basin: the clam diggers, the scallopers, the ground fishermen, the weir fishermen, the lobster fishermen, and the rockweed workers. These people do not need aquaculture, they need policies that will protect the existing industries in the Annapolis basin.
The minister obviously listens to the provincial minister of tourism when there are grants to be given out in Annapolis West, as was seen with the rock quarry and now with the announcement of a grant for aquaculture.
Giving out grants without knowing the effects shows the total disregard this Tory government has for the existing rights of those who live and fish in that area.
I call on the minister responsible for ACOA to put on hold the grant for aquaculture until public hearings have been held to determine the effect of such a grant on those people who earn their living from the Annapolis basin.


PUBLIC WORKS
Mr. Bill Casey (Cumberland-Colchester):: Mr. Speaker, the construction association of Prince Edward Island has joined the growing number of people and organizations urging the government to meet the requirements of the recent court decision regarding the fixed link and then begin construction without delay.
The association points out that a full 80 per cent of its workers, 3,700 people, are currently out of work with little hope for the future.
March 29, 1993

Islanders for a Better Tomorrow, another group representing business, labour, industry and the views of a clear majority of Prince Edward Islanders, has said: "Our main industries, our businesses, our working people, our unemployed and our children cannot afford to have this opportunity slip away due to the misguided efforts of a small and dwindling minority. Their supposed concern for the environment has proven to be selective and opportunistic. Decisive leadership and immediate action is therefore required on this project by the Minister of Public Works and the Parliament of Canada".
I once again add my voice to this call for action to proceed with this project which is extremely important to all of Atlantic Canada.


MAGIC TUESDAY
Dennis Joseph Mills: Mr. Speaker, I am proud to announce that tomorrow, Tuesday, March 30, is Magic Tuesday in my riding of Broadview-Greenwood. On Magic Tuesday all the proceeds from food sales in local restaurants go to the Children's Wish Foundation, a foundation that looks after kids who are terminally ill.
Tomorrow if people are in Toronto or are going through on a business or tourism trip they should go to the Danforth and go to either the Astoria Shish Kebob House, the Athenian Garden, the Ilissia, Mr. Greek, Omonia, Ouzeri, the Palace Restaurant on Pape, the Pappas Grill, the Patris Dining Lounge, or Philoxenia. All of the great Greek restaurants in Toronto welcome people on Magic Tuesday.


REGIONAL DEVELOPMENT
Mr. David Bjornson (Selkirk-Red River):: Mr. Speaker, I rise today to commend the government on its progressive attitudes toward regional development.
It was only three weeks ago that I rose to voice my concerns about the direction the Community Futures Program was taking. As a result of a meeting between the Minister of Employment and Immigration and representatives of the Triple S group from Selkirk I can tell the House that cause for concern has changed. The minister listened to a fair and balanced presentation
which has resulted in continued funding for the Triple S community futures group.
As I said in the beginning, I commend the government for funding success and working to eliminate failure.


AGRICULTURE
Mr. Vic Althouse (Mackenzie):: Mr. Speaker, almost five years ago the Minister of Agriculture closed the border to imports of American honey-bees.
This move was a surprise for many bee keepers who had relied upon imports of queens and starter colonies from California on an annual basis. The varroa mite and the tracheal mite were found in U.S. bees. As they had not existed in Canada to that date the closing made sense. Chemical control is being used in the United States but mites have since found their way into several regions of Canada.
The border closure order is in effect until this fall, which is too late for next year's planning. Bee keepers need to know now what the government's intention is. Will the border be allowed to open when the five-year closure order dies this fall or will the ministry extend the order to keep it closed?
The futures of jobs and a competitive honey industry in 1994 depend on an early decision.


HARASSMENT
Mr. Ross Belsher (Fraser Valley East):: Mr. Speaker, I rise in the House to address the problem facing women who are persistently harassed, intimidated and threatened by men.
Men who are former partners or social friends sometimes pester or threaten women to the point where they become confined to their homes in fear of the harassment that awaits them when they go about their daily lives.
Over half of the states in the U.S. have laws giving police a tool with which to lay serious charges against anyone whose pattern of harassment poses a credible threat of physical or psychological harm.

March 29, 1993
Police officers who deal directly with persons involved in stalking incidents throughout the U.S. and Canada support such legislation because it gives them a more effective tool with which to protect women.
I think it important to note that this is an issue that overwhelmingly affects women. I understand that the Minister of Justice is considering a number of legislative options. I urge him and the government to act quickly and address the issue of stalking before the problem increases.


NESTLE CANADA
Mr. Bob Kilger (Stormont -Dundas):: Mr. Speaker, management and factory workers at the Nestle plant in Chesterville are currently involved in a legal lock-out.
Last Thursday workers rejected a contract offer from the company which included a proposed continental work week. On Saturday the company implemented a lock-out.
As negotiations have currently ceased, management and labour are now faced with a situation which may impact on the future viability of the plant which employs 220 people in this community of 1,500 people.
Seventy per cent of the plant's production is exported to the U.S., and various economic pressures are being placed upon the plant to remain competitive in the U.S. marketplace and maintain its presence in Chesterville.
It is hoped that the management and workers at Nestle's Chesterville plant will be able to reach a mutually acceptable resolution to this dispute at the earliest opportunity.
* * #


PEARSON INTERNATIONAL AIRPORT
Donald Alex Blenkarn: Mr. Speaker, the whole concept of the environmental panel review of major national programs is on the line because of the refusal of the Government of Canada, particularly the Minister of Transport, to follow the decision of the environmental review panel dealing with the Pearson airport expansion.
That environmental review panel rejected the government's view concerning the location of the north-south runway and the extent of that runway. Notwithstanding
the total rejection of the government's proposal, the Minister of Transport has decided to proceed with the government's proposal in the government's way.
If the government is going to put the country to the expense of environmental review programs then the government has an obligation to follow through on them. If the environmental review panels will only be followed if they suit the government then the whole concept of the environmental review process is a ridiculous waste of taxpayers' money.


SOCIAL PROGRAMS
Ms. Mary Clancy (Halifax):: Mr. Speaker, almost nine years ago the Prime Minister said the words that will haunt him to his grave. He said the Conservatives believed that Canada's social programs were a sacred trust.
Eight years later, Canadians have witnessed an unparalleled assault on the social programs by this government, on every front. The Tories went on a search and destroy mission. They whittled away at everything from medicare to unemployment insurance and penalized the poor, the weak and the sick.
We know where the PM, that is the puppet master, stands. But where does his hand-picked successor stand on Canada's social programs?
The Minister of National Defence told journalists on the weekend, and I quote: "It is time to recognize that we must target our social services". What does that mean? Which programs does the minister plan to target?
For the past four years she sat at the cabinet table cheering on the GST, the Mulroney trade deal and the de-Confederation of Canada. The minister is for multi-billion-dollar cold war attack helicopters and against our social programs. That is her sacred trust, and it is a disgrace.


EDUCATION
Mr. Doug Fee (Red Deer):: Mr. Speaker, during the government's consultation on the prosperity initiative one subject that came up many times was the need to
March 29, 1993

reconcile our educational system with a rapidly changing world.
One man in Red Deer is already grappling with this problem. Dr. Joe Freedman became involved in the educational system the way many of us do, as a concerned parent, but his concern about the quality of education prompted him to go one step further and undertake a comprehensive study of the Canadian educational system.
Dr. Freedman's report, entitled "Failing Grades", reviews major studies in the field of education. His conclusion is that Canadian students perform poorly in comparison with students in other industrial nations. He says that part of the solution is national co-ordination of educational policy.
Dr. Freedman's report deserves a serious second look. He has sent his video and report free of charge to every school superintendent in the country. Hopefully, they will receive it in the spirit in which it was delivered, as the work of a concerned parent who wants what is best for our country and its children.


THE ECONOMY
Steven W. Langdon: Mr. Speaker, last weekend at Laurentian University there was general consensus among economic experts that the government has its fundamentals all wrong.
Pierre Fortin from the Universite de Quebec a Montreal charged that through its pursuit of zero inflation the Bank of Canada has driven the dollar too high so that foreign investors demand compensation in the form of higher interest rates.
John Smithin from York University said: "Experience seems to show that the economic slow-downs required to reduce inflation to a very low figure are much more severe and long-lasting, particularly in their impact on unemployment, than the public was originally led to believe".
Lars Osberg from Dalhousie blamed the Bank of Canada for costing the Canadian economy $70 billion per year with its pursuit of zero inflation.
When will this government leave this path of economic destruction and look seriously at the full employment solutions proposed by the New Democratic Party?


VIOLENCE AGAINST WOMEN
Mrs. Edna Anderson (Simcoe Centre):: Mr. Speaker, the Secretary of State for External Affairs and the Minister Responsible for the Status of Women recently announced that as a result of a Canadian initiative the United Nations Commission on the Status of Women adopted the "Declaration on the Elimination of Violence Against Women".
The declaration states that violence against women impedes women's enjoyment of human rights and fundamental freedoms and calls on governments to exercise due diligence to prevent and punish acts of violence, whether perpetrated by the state, within the general community or within the home.
At the United Nations several delegations praised Canada's recent adoption of guidelines on women refugee claimants fearing gender-related persecution. These guidelines are the first of their kind in the world.


UKRAINIAN CANADIANS
Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, in 1988 the Minister of State for Multicultural-ism and Citizenship indicated his willingness to negotiate with Canada's Ukrainian community for redress of its claims arising from internment during World War I.
To date, the minister and his cabinet colleagues have procrastinated and delayed, notwithstanding the adoption of a resolution by this House urging action by the government. Today Mary Haskett is in Ottawa. She is the last survivor of the Spirit Lake Internment Camp in Banff National Park.
She has written an open letter to the Prime Minister and I quote from it: "I may be the last survivor of Canada's first national internment operations. What happened to our family, to many of our friends, can never be undone. It was unwarranted. It was unjust. But

March 29, 1993
Oral Questions
I believe that you, Mr. Prime Minister, have a unique and historic opportunity to show understanding and compassion for those who fell victim. Before you leave office I appeal to you to honour the Ukrainian Canadian community's request for acknowledgement and redress. Do what is right and just".
I urge the Prime Minister and his government to listen to these pleas and settle this issue.


EDMONTON SURVEY
Mr. Scott Thorkelson (Edmonton -Strathcona):: Mr. Speaker, recently I sent questionnaires to my constituents to get their feedback on federal issues. Already thousands of surveys have been returned to my office. The high rate of response demonstrates my constituents' awareness of federal issues. They care about what goes on in Ottawa and they keep themselves informed.
When asked what federal issue is currently of greatest concern, one of the most common responses is the debt. Other issues of concern include the Young Offenders Act, the environment, and accountability of elected officials.
The overwhelming sense I am getting from these surveys is that the federal government must continue to reduce its spending. Edmontonians are prepared for the hard decisions that must be made, but they want their elected officials to share the burden. In particular my constituents think that the MP pension plan should be reviewed. They also feel that too much financial support is given to special interest groups.
Finally, the majority of respondents support the GST. They recognize that the GST is necessary but they insist that revenues continue to apply exclusively to debt reduction.
My constituents clearly want to be involved in the political process. We must make every effort to be responsive to their concerns.


CHILD POVERTY
Mr. Chris Axworthy (Saskatoon -Clark's Crossing):: Mr. Speaker, from March 28 to April 18 the Body Shop retail chain will be conducting a national campaign to
combat child poverty. Its 105 stores will be displaying giant posters declaring that child poverty is a national disgrace. Their staff will be initiating letter-writing campaigns and encouraging community schools and city officials to become more involved in alleviating child poverty. In short, they will be devoting money and time to help reduce child poverty in Canada.
All of this comes at a time when the federal government has been busy looking at ways to redefine poverty rather than to solve it.
In 1984 over four million Canadians were living in poverty in this country and more than one million of them were children. According to the most recent statistics, still more than four million Canadians live in poverty and still more than one million of them are children.
The Body Shop is to be congratulated for its efforts to broaden awareness of poverty issues in Canada and for taking concrete action where the present government has only provided rhetoric.
This government should listen very carefully to this socially conscious business and act now to alleviate child poverty.



ORAL QUESTION PERIOD


Hon. Jean Chretien (Leader of the Opposition):: Mr. Speaker, my question is directed to the Acting Prime Minister.
On the weekend two of his colleagues implied that the government and the party they may lead some day plan to cut social programs, especially medicare. On the other hand, on Friday the Minister of Finance, who was touring the country, announced that the government did not intend to drop the helicopter purchase program which to date will cost $5.8 billion.
I would like the Minister of Finance to tell me if he had a choice between cutting social programs and maintaining the $5.8 billion helicopter purchase which option he would choose, helicopters or maintaining social programs in Canada?
March 29, 1993


Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):: Mr. Speaker, we have been attempting to put in place the appropriate fiscal measures so that we can preserve and maintain the social safety net that we and Canadians have all been very proud of and wish to retain.
The difficulty we have is with the growing percentage of our revenues being allocated for debt servicing costs. It imposes very direct pressure upon our ability to finance social programs.
We have been attempting to take steps to stimulate growth, to encourage investment and to encourage job creation while at the same time contain expenditures and reduce the deficit as a percentage of GDP. That is what we have been doing and we have been quite successful in that regard.


Joseph Jacques Jean Chrétien: It is
apparent, Mr. Speaker, that the Minister of Finance has no intention of commenting on the choice that the government has to make and that he does not want to cancel the famous helicopter program.
On Friday the Liberal Party indicated that there is a very urgent need at this moment for the government to get involved in the conversion of the national defence industry. Commenting on that proposition the Minister of National Defence said that it was a very "poor excuse for policy" and full of "bogus terminology".
I would like to know from the Minister of Finance if it is the view of this government that making sure there is a smooth transition from the military industry to a peacekeeping type of industry is not the priority of this government. The Americans have been moving into that field for some time now.


Hon. Harvie Andre (Minister of State and Leader of the Government in the House of Commons):: The hon. Leader of the Opposition is commenting on why the government is not following the American example.
One of the reasons of course is that 60 per cent of the U.S. industry in the general defence sector is actually on defence projects. In Canada 70 per cent of our defence
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industry sector actually is in civilian production, not military production.
The Liberal Party said the DIPP program should be diverted to civilian use. In fact 80 per cent of DIPP expenditures are now diverted to civilian use. The reality is the problem that he is addressing is not the same problem in Canada that it is in the United States.
This is an important industry. As long as we are going to have an Armed Forces, and we will require one for the foreseeable future, I think it is appropriate that Canadian industry be able to supply at least some of the equipment the forces need.


Joseph Jacques Jean Chrétien: Mr. Speaker, is the minister aware that there was a subcommittee of this House that produced a report last October indicating the need to move in that field quickly? Five members of that committee were members of his own party. They presented a unanimous report to the House of Commons. Why is the government not listening to the House of Commons rather than just dismissing some very important problems in Canada?


Harvie Andre: Not at all. We take reports of committees of this House of Commons very seriously. An example is the unanimous report of the House to get rid of the MST and replace it with a GST.
Another example is the unanimous report of a committee of this House, including Liberals and the NDP, to go ahead with the EH-101 helicopter contract. In terms of the report the hon. member was talking about, we do concede that primarily as a result of the referendum campaign this was put aside in view of other priorities, but it is the intention of the government to table a response to this report very soon.


NATIONAL DEFENCE
Hon. Lloyd Axworthy (Winnipeg South Centre):: Mr. Speaker, I have a question for the Minister of Finance.
In his financial statement last December the government made a number of major defence cuts which severely limited our capacity to provide full-time professional peacekeeping forces. As a result 50 per cent of our peacekeepers are now reservists who have had to have a rush training.

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Oral Questions
Now the Minister of Finance says he refuses to cut helicopters but he is going to make other defence cuts, once again clearly endangering the capacity of this country to provide full, effective and efficient peacekeeping sources. In fact, we do not have a defence policy.
I ask the Minister of Finance if this government will table a new relevant defence policy before it brings forth a budget so that we will have a defence policy made for defence priorities and not simply by the Minister of Finance?


Harvie Andre: Mr. Speaker, to begin with, as I understand the position of the Liberal Party the EH-101 should not be proceeded with and instead we should update the ancient Sea Kings and Labradors.
The EH-101 calls for an expenditure of $350 million a year for 13 years. Updating the Sea Kings and Labradors would require about the same annual expenditure each year for the next six or seven years, after which we would end up with 40-year old helicopters nowhere near the equivalent of the EH-lOls and unable to go out in really bad weather for search and rescue.
In terms of reservists the hon. member should take some time to meet some of our reservists because our reservists are first class, well trained and are not put into positions where they are in danger for lack of training. We have had a total force concept in place for a number of years and it is working rather well.


Lloyd Axworthy: Mr. Speaker, it may come as information and I am sure it does to the hon. minister that in fact the United States marine corps and air force and the Japanese defence force are now flying updated Sea Kings with adequate and efficient capabilities to provide for search, rescue and anti-submarine warfare at one-tenth the cost of the EH-101 helicopters. It is about time this government began to understand the real priorities of this country.
I come back to the Minister of National Defence. Six months ago after extensive hearings the committee reported that there should be a major program of defence conversion. I want to quote from that committee: "The aim is to foster a leading edge, civilian as well as military, high technology in areas such as surveillance monitoring, verification, sovereignty protection and peacekeeping". That report was endorsed by Conservative members of the committee.
I ask the Deputy Prime Minister: Why did the Minister of National Defence speaking on behalf of the government reject this report in her statement on Friday? Why does this government not listen to a committee of the House of Commons including its own members?


Harvie Andre: Mr. Speaker, there was no rejection of the report. As I indicated, the report has not been responded to yet by the government.
In terms of conversion, as I indicated in response to the hon. member's leader, the Liberal Party has not even identified the problem, let alone the solution.
When it comes to the question of whether government should decide what industries should be pursued, we happen to believe the private sector can make those decisions better than government. We do not think there is any evidence anywhere in the world to show that governments do a good job of selecting winners as opposed to the private sector.
The hon. member might define what peacekeeping technologies are other than spy satellites. We are already involved in the satellite business to a high degree. How much more does he want?


Lloyd Axworthy: It's in the report, Harvie. Read the report.


Harvie Andre: The report has been read.
If the member is talking about environmental industries, he should check the record. He will see that the Canadian private sector is responding very vigorously to the opportunities in the environmental sector.
What the world has learned, but apparently not the hon. member, is that the private sector makes better decisions on priorities than governments.
March 29, 1993


DAYCARE
Hon. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is directed to the Deputy Prime Minister. Today Statistics Canada published figures showing there is a real crisis in daycare in this country. More than half our children urgently need quality daycare. Parents can find none at an affordable price. Nevertheless this government remains adamant about not wanting to establish a national program that would provide quality, affordable day care and it remains intent on spending $5.8 billion on helicopters. Why not spend this money on our children? Do it, and do it now.


Donald Frank Mazankowski: Mr. Speaker, to listen to the hon. member one would draw the conclusion that the government is not spending any money on children and does not consider children as a priority.
For the record and for all hon. members, perhaps it is timely to put on the record the kind of support that the federal government is providing to support children. Income support programs for 1993 in the form of a child tax-


Mr. McCurdy:: You cut it out in B.C. and Ontario.


Donald Frank Mazankowski: Mr. Speaker, they ask the question and if they do not want the answer-


Ms. Mitchell:: Thlk about child care.


Donald Frank Mazankowski: I will get to that. In terms of income support the child tax benefit provides $5.1 billion; social assistance, $1.5 billion; CPP child benefits, $280 million; GST credit, $750 million; the employment support program, UI maternity and parental care, $1.4 billion; child care expense deductions, $300 million; child care under the CAP training program, $400 million, for a grand total of $9.3 billion per year. That is the amount for this year.


Audrey Marlene McLaughlin: Mr. Speaker, it is clear that this government backed down on its promise in 1984 and 1988 to bring in a national child care program. The only conclusion Canadians can make is that this government agrees with the Conservative MP for Fraser
Oral Questions
Valley West who said essentially: "I see day care centres as little more than temporary orphanages".
I want to ask the Deputy Prime Minister if he is in agreement with that and if he feels that having over 600,000 children in unlicensed child care facilities is building a future for this country.
Will the Deputy Prime Minister build a real legacy for Canadian children and make sure that in the next budget his government brings in a national child care program?


Donald Frank Mazankowski: Even the hon. member acknowledges the fact that we have a serious fiscal problem. It is encouraging to note that the leader in the province of Ontario is starting to recognize that fact.
Notwithstanding that, we have tried to appropriate a fair amount of money toward support of children, toward the support of maintaining the social safety net.
If the hon. member is suggesting that $9.3 billion which is directed to aid in support for children is an insignificant amount, then she and I are on different wavelengths.
While the hon. member suggests that she can spend $130 billion over the next five years and still bring the deficit down by $11 billion, I cannot follow her mathematics in that regard.


Audrey Marlene McLaughlin: Well, Mr. Speaker, I cannot follow this government's logic.
This government says yes to cold war helicopters, yes to not taxing the wealthy's private trusts, yes to a business lunch deduction that costs Canadian taxpayers $1 billion but it says no to the children of Canada. By not putting in real programs it says no to making sure that Canadians get back to work.
Why give the rich a free lunch while there are children with no lunch? Will the Deputy Prime Minister look seriously at addressing the needs of children in this country and at the need for a national child care program so that their parents can participate in training, education and the work force?


Donald Frank Mazankowski: Mr. Speaker, this government is not turning its back on children. It has improved the

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Oral Questions
programs for children step by step. A $9.3 billion program in support of children is certainly not an insignificant amount.
In terms of creating opportunities for job creation and new economic activity and growth, the hon. member is criticizing the small business sector. We have provided a number of initiatives and a number of incentives to help the small business sector. We have provided a number of incentives and initiatives to advance infrastructure and improvements in our infrastructure system. We have advanced a number of initiatives in terms of skills upgrading. All of this is in the name of providing an investment in people, in plant and equipment, and in an invigorated economy.


WESTRAY COAL MINE
Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, my question is for the Deputy Prime Minister.
Approximately 11 months ago, 26 miners lost their lives at the Westray coal mine. A provincial inquiry has been stalled. The Nova Scotia government has lost $12 million. The federal government has lost $80 million. The families of the deceased miners are without answers as to how this tragedy occurred.
In view of the importance of the subject matter I ask the Deputy Prime Minister if he has now sought a progress report on the investigation from the commissioner of the RCMP. If so, will he share that information with the House? If not, why not?


Harvie Andre: Mr. Speaker, I am not at all sure that would be an appropriate thing for the government to do in terms of trying to direct the RCMP or to put pressure on it with regard to the matter. I am sure the RCMP will do its usual diligent job in that regard.


David Charles Dingwall: Mr. Speaker, as usual the hon. minister opposite wishes to twist the question.
What we are seeking from the Government of Canada is to ascertain from the commissioner of the RCMP
where this investigation is going. Twenty-six men have lost their lives.
In point of fact, when we asked for information on the Westray disaster we received very little. The government would not tell us its role in the funding of this particular disaster. We had to go to the access to information provisions. We got 18 blank pages, 18 censored pages. That is what we received from the Government of Canada.
Will the minister responsible explain to Canadians why the government is covering up the information contained in those documents?


Harvie Andre: Mr. Speaker, as the hon. member knows the Access to Information Act contains restrictions on what can be released.
For example, personal private information cannot be released because of the protection of the Privacy Act. There is commercial information which again is covered by other pieces of legislation and we simply cannot release it.
However, as the hon. member should know, all of this information has been given to the commission of inquiry in the province of Nova Scotia. The government is pleased that the legal obstacles to that commission have been removed. The commission will now be able to perform its function with access to all of the available information.


Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, I have a question for the same minister on the same subject.
The minister knows that with respect to the Westray file $80 million of public funds have been lost by the federal government. Twelve million dollars of public funds have been lost by the Nova Scotia government. More important, 26 lives have been lost. Eighteen pages have not been lost; they have been hidden. They concern not personal information but public information about what cabinet knew, when it knew and what advice was made available.
Does the minister recognize a year later, a year after 26 lives were lost, that now is the time to come clean and give the people of Canada, and more important the

people of Pictou county, all the information with respect to this terrible and tragic mine disaster?


Harvie Andre: As the hon. member knows, it was indeed a terrible disaster. This whole House was very sympathetic with the losses suffered by the families. The mine was proceeded with at the strong urging of everybody in Pictou county because of its economic benefits.
The disaster occurred. The mine is regulated by provincial jurisdiction, as the hon. member knows. The province has decided, I think quite properly, to proceed with an independent commission of inquiry. This government is co-operating 100 per cent with that commission of inquiry. It has provided all the information available to the commission of inquiry. I am sure the hon. member would not want to be accused of taking partisan advantage of a tragedy that has occurred and will let due process establish the truth.


Brian Vincent Tobin: Mr. Speaker, there are the 18 pages missing under access to information on the request for information on financing, on funding, on cabinet information, what information was in its hands when it made decisions about providing $80 million. Not only is that information missing, but specifically the CANMET report which was made public by the government last June and which we understood at the time was a complete document is missing seven additional pages, as we now see under the access to information request. Seven additional pages are missing in the CANMET report dealing with the suitability and advisability of proceeding with development of this mine and in fact, safety issues.
Given that it is not the provincial government and not the mine but the federal government that is burying or hiding 25 pages of crucial evidence about what cabinet knew and what advice was given to cabinet before $80 million of federal public funds were made available, does the minister not believe now, one year later, that it is appropriate that all evidence be laid on the table and that the cover-up end?


Harvie Andre: Mr. Speaker, no matter how loud the hon. member may raise his voice, that does not permit the government to break the law in respect to access to information.
Oral Questions
The hon. member would be suitably and quite properly outraged if the government were to release his income tax files. Why does he not have the same concern for the privacy that might be violated through taking the kind of action he is suggesting we undertake?


ENVIRONMENT
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is for the Minister of the Environment.
I would like to question the minister regarding the ever-shrinking green plan. I would like the minister to explain why he has never publicly challenged the cuts from the green plan which has shrunk from the original Bouchard promise of $6 billion over five years to $5 billion over five years, to $3 billion over five years, to $3 billion over six years, to a 36 per cent cumulative cut for the coming year.
Would the minister tell Canadians why he has accepted these kinds of cuts to Canada's fragile environment in silence?


Hon. Jean J. Charest (Minister of the Environment):: Mr. Speaker, I cannot agree with the premise on which the member bases his question in terms of what had been said previously. One thing we have to establish is that the green plan itself, which is a sustainable development plan for Canada, is more than just the amount of money in the plan. Neither is it exclusively everything that we are doing in the area of the environment or sustainable development.
What we see in terms of expenditures over the last two years, for example, is that we have spent close to half a billion dollars in the area of sustainable development, specifically under the confines of the green plan. From year one to year two there has been a 36 per cent increase in spending.
If the hon. member wanted to look at the projected spending for the next year, he would also find there is a projected increase in spending of 23 per cent. That is a very substantial increase in spending in a period of fiscal restraint.


James Ross Fulton: Mr. Speaker, I am glad to hear the minister talking about sustainable development because I am sure he has now read with care the ruling of

March 29, 1993
Oral Questions
the trial division of the Federal Court in relation to the fixed link to Prince Edward Island.
Not just the people in P.E.I. or New Brunswick but I think Canadians generally would like to know the position of someone who aspires to be the leader of his party and is presently the Minister of the Environment and therefore responsible for environmental assessment. Will the minister rise in his place and say today publicly that at least he supports a full, proper, public environmental assessment of the bridge proposed between Prince Edward Island and New Brunswick?


Jean J. Charest: Mr. Speaker, the hon. member knows very well that with regard to the environmental assessment process of the federal government which is now an Order in Council, we have had 54 court rulings over a period of time. The hon. member participated directly in the discussions. The government brought forward new legislation to deal with the issue of environmental assessment. In fact, we recently signed an agreement with Alberta for a one-window approach in this area.
That being said, we are actively discussing the ruling of the Federal Court in regard to the fixed link. We are going to have some discussions on how to approach it. There are legal considerations. There are two main points in the ruling: one relates to the environmental assessment itself and the other deals with a constitutional issue. We will want to examine those issues and come forward with a decision on how to proceed as rapidly as possible.


Mrs. Marlene Catterall (Ottawa West):: Mr. Speaker, my question is for the Minister of the Environment.
No amount of creative accounting can disguise repeated cuts to the green plan. In December last year in the mini budget the Minister of Finance announced and the Minister of the Environment confirmed there would be $440 million this year in green plan spending. We now know that the government plans to spend only $351 million. That is another cut of 20 per cent, $90 million from the green plan.
Will the minister now confirm that the $90 million has gone out of the green plan and into a slush fund for pre-election spending?


Jean J. Charest: Mr. Speaker, only my Liberal friend could in the same question accuse us of cutting and creating slush funds at the same time or simultaneously.
What I can answer and offer in terms of a response to my friend is a report we put out today, as we had committed to do, on the progress of the green plan itself. The numbers speak for themselves.
For the first year $210 million has been spent. For the year ending in a few days $286 million extra has been spent. That is close to half a billion dollars. If you project that in terms of its increase, it is a 36 per cent increase. If we look into the next year, we have an increase in funding of 23 per cent. That is the expenditures of Canadian taxpayers' money in the area of the green plan and sustainable development. I think it is a very, very substantial increase in spending.


Marlene Catterall: Mr. Speaker, my supplementary question is for the same minister.
The figures do, indeed, speak for themselves. When the green plan was announced in December of 1990, the government promised $3 billion over five years, or $600 million a year. In the plan's first three years the government has met less than half of that commitment.
I refer to the C.D. Howe Institute report of 1991 where it predicted that: "The green fund is likely to be used as a war chest for the Progressive Conservative government's campaign plans".
I ask the minister, why is the green plan left dying on the vine to store up a pre-election spending binge by his government?


Jean J. Charest: Mr. Speaker, the green plan, which is Canada's sustainable development plan, is recognized throughout the world as being one of the most innovative sustainable development plans that has been produced. There is good reason for that; it is in our interest to do that. Given the fact that our economy is based on natural resources, we are one of the industrialized countries in the world that lives the most off our environment.
In the area of the environment over all, the government is recognized as having done a lot. That is what President Clinton was able to recognize. I am sorry that
March 29, 1993

my hon. friend cannot do that. Just in the last year we dealt with the issue of CFCs and climate change. New regulations came forward in the area of the pulp and paper industry. We also brought forward new legislation, Bill C-42, the Wild Animal and Plant Protection Act. Bill C-13 came forward in the last year. We increased surveillance over the last year 40 per cent from where it was the year before.
We attended the earth summit in Rio de Janeiro. My hon. friend was there with us. We signed and ratified two international conventions, one on climate change, one on biodiversity, the first country in the world to do that.
I know you are very interested in this, Mr. Speaker, and I am glad you are asking me to go on. All of this was done by the government in the last year throughout the-


Some hon. members:: Oh, oh.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, my question is also for the Minister of the Environment, whom I wish well in his bid for the leadership of his party.
There is a widening gap between the government's preaching abilities and its actions. Both at home and abroad there has been a litany of broken promises.
Why has the government broken its commitment made in Rio by cutting and suspending aid to the poorest of the poor nations of this world? Why is the government so reluctant in refusing to ratify the Law of the Sea Convention? Why has the government missed the deadline for assessing 33 persistent toxic chemicals listed in the Canadian Environmental Protection Act? Why is the government failing to produce a national strategy for stabilizing greenhouse emissions? Why-


Mr. Speaker:: That is certainly a collective question. I hope that the minister will be able to answer it expeditiously.


Jean J. Charest: Mr. Speaker, let me address a few of those issues.
As far as toxic substances are concerned we have a priority substance list that includes 44 substances. An agreement was reached after an extensive stakeholder
Oral Questions
period dealing with that. We have dealt with 20 of those substances. We published reports on six.
In the area of climate change we have signed an international convention and ratified it December last. We have also made a commitment to producing by next spring our national report on climate change. We are working on an economic instruments paper concerning tradable permits to be able to put forward the solutions and the tools we need in the area of climate change. We have maintained our commitment to stabilization of 1990 levels.


Mr. Speaker:: I think we will try another question.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, perhaps the minister may want to answer the following supplementary question.
Why does the finance department review the environmental regulations from a competitive perspective? Why is the government of which he is a member not allowing the environment department to conduct a review from a sustainability perspective as well?


Jean J. Charest: Mr. Speaker, I think my friend is referring to a process by which different departments were reviewing the regulations from a competitiveness perspective.
I want to stress that in our department we have worked a lot on the regulatory process. There is a recognition that we have to regulate better. Among the things we have to do for example is complement our regulatory approach with a voluntary approach and also through economic instruments.
We do have a stakeholder process assisting us to develop regulations so that they are presented in the most sustainable way possible for our economy.


IMMIGRATION
Margaret Anne Mitchell: Mr. Speaker, my question is for the minister of immigration. It concerns procedures for applying the new guidelines for women refugee claimants who face gender discrimination.
The minister is aware that 35 women who fear persecution as a result of their gender are to be deported because they arrived in Canada before the new immigra-

March 29, 1993
Oral Questions
tion rules took effect. Will the minister declare a moratorium on the deportation of these women and their children and allow them to remain in Canada on humanitarian and compassionate grounds?


Hon. Bernard Valcourt (Minister of Employment and Immigration):: Mr. Speaker, when we review a case all factors are taken into account. That includes the principles behind the guidelines on gender persecution which were issued on March 9, as well as any new information which is available concerning a rejected claimant's current situation and the situation in his or her home country. This is the process that takes place and it ensures fairness to all rejected refugee claimants.


Margaret Anne Mitchell: Mr. Speaker, I would hope that the minister, instead of just rubber stamping the previous opinions of local officials, which is what happened last week, would re-evaluate cases according to these new guidelines.
For Canada to deport women back to countries where they and their children face discrimination, depravation and danger is both cruel and inhumane. Why will the minister not use his ministerial powers and discretion to allow women like Amina Mohamed and these 34 other women who face gender discrimination to remain in Canada on humanitarian and compassionate grounds? Why will he not do this?


Bernard Valcourt: Mr. Speaker, between myself and my office literally hundreds of immigration cases are reviewed on humanitarian and compassionate grounds each year.
Some of them are accepted and some are refused. I have no intention of listing those cases. For this fiscal year, the policies and decisions of the government have resulted in more than 73,000 cases being approved on humanitarian and compassionate grounds alone.
That is almost equal to the total number of immigrants that the Liberal Party of Canada let into Canada in 1984.


FISHERIES
William D. (Bill) Casey: Mr. Speaker, my question is for the minister of fisheries. It refers to the lobster fishermen in the Northumberland Strait.
For more than two years the lobster fishermen in the Northumberland Strait have voluntarily accepted a larger carapace size for lobsters. During that time they have asked the DFO to also accept that larger carapace size in regulation.
Last week DFO announced that it would not accept the larger carapace size. Would the department reconsider its decision and if not, why not?


Hon. John C. Crosbie (Minister of Fisheries and Oceans and Minister for the Atlantic Canada Opportunities Agency):: Mr. Speaker, the question of lobster carapace size is one of divided opinion in the maritime provinces, particularly between certain lobster fishermen located in New Brunswick and Nova Scotia as compared to lobster fishermen in Prince Edward Island.
About one year ago, with the agreement of the three provincial governments involved, we appointed a firm of consultants to do an in-depth study of the situation, whether this is a step that should be taken. We have the report of that study now but we have not had sufficient time to consult with all interested groups before the season opens on April 30.
While over all the report recommends that we should allow an increase in the carapace size-


Mr. Dionne:: Time.


John Carnell Crosbie: This is an important issue before anybody in the Liberal Party bellows time. Although the report points out that there are positive advantages to proceeding in this way, there would be a short-term decrease in employment in processing.


Mr. Speaker:: I think we really must press on.


CHARITIES
David Bjornson: Mr. Speaker, my question is for the Minister of Finance and it deals with the annual minimum disbursement quota of registered foundations where they have to spend 4.5 per cent of their assets.
As everybody knows, for the last two years interest rates have been very quickly dropping, to the point where the income of these charitable foundations is very low. They do not have the resources they normally would have.
March 29, 1993

Is the minister planning on making changes in the way the government directs these foundations to disburse their assets?


Donald Frank Mazankowski: Mr. Speaker, the hon. member is correct in what he says, the allocation of 4.5 per cent of the value of the assets of charitable organizations are to be devoted to charitable purposes.
I should tell the hon. member that there is no direct relationship between this formula and interest rates. In other words, this formula does not track interest rates. I will take the hon. member's submission as a representation but I am not contemplating any changes at this time.


INDIAN AFFAIRS
Mr. Robert D. Nault (Kenora -Rainy River):: Mr. Speaker, in the absence of the minister of health, my question is for the Deputy Prime Minister.
Last week aboriginal leaders met in Ottawa at a National Suicide Prevention Workshop to discuss the growing crisis of youth suicides in their communities. Tragically at the same time two youths in one of the communities that I represent committed suicide within a day of each other.
The minister of health heard that the communities need both human and financial resources to design and implement their own crisis intervention programs.
We have been talking in this House, at least myself and many others, since 1988 about the crisis of youth suicide in aboriginal communities. I would like to ask the Deputy Prime Minister if it is time for action or is it still time to talk and talk and study the issue some more?


Mrs. Barbara Sparrow (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I would like to offer our deepest sympathies to the families of the two youths who took their lives last week in northern Ontario.
This cannot be resolved just by governments. There is a major problem with suicides specifically in our aboriginal communities. We are working with the aboriginal communities, the people and the band leaders to resolve some of their difficulties.
Oral Questions
However, all we have to do is just look back at the last few decades where most of the programs have been government-driven and have not succeeded. We have to work with the families and the band leaders to put in the necessary social services to give those youngsters some hope for the future.


Robert Daniel Nault: I must say, with all due respect, Mr. Speaker, I have stood in this place many times and asked the same question and I continue to get the same answer, that we cannot just throw money at the issue and we have to let the communities do it themselves. The communities are still waiting for the government to make up its mind whether the issue of teen suicide, of mental health for aboriginal people, is truly a priority of the government.
If this were truly a priority of the government it would have already made up its mind to put this issue to the communities in order for them to create their own crisis intervention program.
I ask the member one last time before we go to the polls: Are we going to talk about it and talk about it or are we truly going to do something about this major crisis?


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I will see that this is at the top of our agenda. We take it very seriously.
As I said before, we will offer social services for mental health and suicide treatment which is what the community wants and what the band leaders want. We will not act unilaterally, as has happened in the past, and see this fail. We are going to succeed. The only way we can succeed is through teamwork. That means the youngsters, the families, the bands, the governments, the communities and all the agencies working together to give those people hope.


BEEF INDUSTRY
David Kilgour: Mr. Speaker, my question is for the Minister of State for Agriculture.
The U.S. market takes about 40 per cent of all beef produced in Canada and about 95 per cent of our beef exports. The Canadian Cattlemen's Association is now very worried that the Price Stabilization Program put in place by the government since 1985 is going to endanger these exports severely.

Privilege
Will the government tell us if it is prepared to accommodate our beef producers by changing the nature of this program?


Hon. Pierre Blais (Minister of Justice, Attorney General of Canada and Minister of State (Agriculture)):: Mr. Speaker, first of all, the National Tripartite Stabilization Program, which has been in place for several years, meets national standards for bilateral trade with the Americans as well as international trade standards. The U.S. government appeared three times before a binational panel on free trade but its claims were rejected. The program meets international regulations.
However, the Stabilization Program is now being reviewed by the parties involved. The provinces are also involved in the program. It is a tripartite program involving the provinces, the federal government and producers.
We are all working together to find ways to improve the program. We have never rejected it. However, any changes should not be considered in the light of problems we have with the Americans because there is absolutely no connection. We have stood firm so far. The program legally conforms to international regulations. We were successful in our claims before international tribunals, and this will happen again.


David Kilgour: Mr. Speaker, that is not an answer to my question.

The minister knows that the Dunkel proposals at the ongoing GATT negotiations call for an end to price-based support for farm products.
Can our beef producers across Canada be assured that their proposals which are compatible with Mr. Dunkel's will be accepted and put into place this year?


Pierre Blais: Mr. Speaker, we have had meetings with the Minister of
Finance and the Minister of Agriculture. We are meeting on a very regular basis. The Liberal Prime Minister at the time never met farm producers during the 16 years he was in power, but we are having meetings on an almost monthly basis now. We do not need any advice on how we should deal with these representatives.
We have introduced two national programs, NISA and GRIP, which are an adequate response to existing needs. We have the stabilization program, in place and these programs are being reviewed regularly. If we can make any improvements in response to current needs we will do so. We will not act unilaterally but in consultation with producers.


PRIVILEGE
Lloyd Axworthy: Mr. Speaker, as you know under Standing Order 109 the government is required within 150 days of the presentation of a report from a standing or special committee to table a comprehensive response.
On September 16 the Standing Committee on External Affairs and International Trade tabled The Future of Canadian Military Goods, Production and Export. It is 195 days or six and a half months since it was tabled. It is far past the required deadline. The government is in breach of the privileges of the members of this House and I would ask them to respond immediately and fulfil its commitment under the Standing Orders.


Harvie Andre: Mr. Speaker, I answered that question in Question Period and acknowledged we are behind on that and gave the reason. It had to do with ministers being very occupied with the referendum debate and simply not getting to it. It will be coming in shortly.


Mr. Speaker:: The House may know that I am seized with a similar problem which I am considering. I think on this I will reserve because I may want to deal with it all at once.
March 29, 1993



ROUTINE PROCEEDINGS


Mr. Peter L. McCreath (Parliamentary Secretary to Minister for International Trade):: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 11 petitions.
[.Editor's Note: See today's Votes and Proceedings.]


PETITIONS
Mr. Jim Karpoff (Surrey North):: Mr. Speaker, pursuant to Standing Order 36, I have two petitions to present. The first one is signed by a large number of people from my own riding and other parts of British Columbia. They point out that generic non-brand drugs are cheaper than brand name drugs.
They call upon the government to repeal Bill C-91 and Bill C-22.


James Capsey (Jim) Karpoff: Mr. Speaker, I have a very large number of petitions pointing out that the new NAFTA agreement will prevent any future government from bringing back generic drugs. This will result in a harmonization of our social policies with those of the United States and will increase our health care costs in Canada.
The petitioners call on this House to reject the North American free trade agreement.


Nelson Andrew Riis: Mr. Speaker, it is an honour to present a petition on behalf of a number of residents of British Columbia in a variety of communities. I will not name these individually.
Routine Proceedings
The petitioners point out their concern regarding the announced intention of a firm in Vancouver to divert the North Thompson River in an effort to sell a million cubic feet of water in the San Diego, California, area. They notice that President Clinton is negotiating a number of side deals and that water was never an exempted commodity in the trade deal.
They ask the Government of Canada to either negotiate a side deal or point out conclusively that water is an exempted category in the FTA and NAFTA.


Mr. Svend J. Robinson (Burnaby-Kingsway):: Mr. Speaker, I have the honour of presenting petitions on three different subjects this afternoon.
First, I have a petition signed by several thousand Canadians from coast to coast to coast pointing out that the Republic of Croatia and the Republic of Bosnia-Her-cegovina have been recognized as independent states by Canada and that they have both met all the necessary conditions for the establishment of diplomatic relations.
The petitioners point out that a number of countries and the United Nations have established diplomatic relations and that in the case of Croatia 61 countries have established diplomatic relations. They point out that the Croatian community in Canada is denied the benefits of diplomatic relations, including representation, trade and export programs and immigration programs while residing in Canada and visiting the Republic of Croatia and the Republic of Bosnia-Hercegovina.
Therefore, they call upon Parliament to establish full diplomatic relations with the Republic of Croatia and the Republic of Bosnia-Hercegovina.


Svend Johannes Robinson: Mr. Speaker, I have another group of petitions, signed by residents of British Columbia, including my own constituency of Burnaby-Kingsway, which notes that the federal government, through Immigration Canada, is in the process of eliminating services now available to the public. The petitioners have expressed particular concern about central processing units for immigration.

March 29, 1993
Routine Proceedings
They note that the New Westminster Canada Immigration Centre provides good local service and this will be withdrawn to a less efficient, less accessible and already overworked Vancouver Immigration Centre. They note particularly there will be problems with accessibility.
Therefore, they call upon Parliament to demand that the government not eliminate in-person services and not close local Immigration Canada offices across the country.


Svend Johannes Robinson: Mr. Speaker, finally I have the honour to present a petition which is again signed by hundreds of residents of British Columbia.
It notes that two Canadians, Christine Lamont and David Spencer, who have been sentenced to 28 years each in a Brazilian prison have suffered miscarriages of justice, cruel and unusual treatment in Brazilian prisons and discrimination in sentencing and parole. The cumulative effect of these irregularities provides ample ground for the government to seek a remedy and that the remedy in question is expulsion in accordance with Brazilian law.
Therefore the petitioners call upon Parliament to urge the Secretary of State for External Affairs, who is in the House today, to request the Government of Brazil to expel Christine Lamont and David Spencer and return them to Canada
I certainly hope this plea will be listened to by the minister.


Dennis Joseph Mills: Mr. Speaker, I have the privilege of presenting to Parliament today, pursuant to Standing Order 36, petitions that have been duly signed by citizens of my community who are calling upon Parliament to provide a remedy for the incidence of violence against women and children.
The petitioners state that the present social climate is such that many women feel intimidated or afraid to report incidents of assault or abuse, that aboriginal, visible minority, immigrant, disabled, lesbian and poor women face additional overwhelming barriers in reporting violence or abuse and receiving help.
Therefore, the undersigned, your petitioners, humbly pray and call upon Parliament to accept legislation designed to eliminate violence against women and children and to encourage and support women to report incidents of assault or abuse and to provide assistance and support for women reporting assault or abuse.
They are also asking the government to develop a law that will concentrate special efforts on the training of police, lawyers, court workers and judges to become knowledgeable about women and child abuse and also to focus public attention on this very important and long-ignored problem.


[Stage Direction]
(Questions answered orally are indicated by an asterisk)
Peter L. McCreath: Mr. Speaker, Question No. 471 will be answered today.


Mr. Proud: With respect to the Department of Industry, Science and Technology, does it administer any grant programs to companies or individuals and, if so, (a) what are they (b) what do they cost individually?


Peter L. McCreath: For fiscal year 1991-92 and fiscal year 1992-93 to date contributions accepted by corporations under Industry, Science and Technology Canada programs are as follows:
March 29, 1993

Privilege
Offers Accepted from April 1, 1991 to date
Assistance for	Assistance for	TotalProgram	PY 1991-92 ($)	PY 1992-93 ($)	Assistance ($)ABDP	44,676,376	28,460,566	73,136,942ABPD-RA	2,884,260	5,322,311	8,206,571ACC	36,091,500	18,226,360	54,317,860AMTAP	2,819,444	3,021,258	5,840,702ARAP	25,000,000	25,000,000C-CTR	10,000,000	10,000,000CTMNO	305,500	305,500DESA-AR	2,264,967	3,132,652	5,397,619DESA-BA	1,790,770	1,000,000	2,790,770DESA-DL	2,125,000	1,385,910	3,510,910DESA-EO	105,048	1,390,353	1,495,401DESA-KJ	3,273,705	3,273,705DESA-MK	225,000	225,000DESA-MM	150,500	2,243,894	2,394,394DESA-OH	1,000,000	1,000,000DESA-SE	737,832	296,793	1,034,625DESA-SG	439,360	1,000,379	1,439,739DESA-TD	132,475	132,475DESA-TE	5,600	136,171	141,771DESA-TF	52,500	952,863	1,005,363DESA-UD	1,046,540	1,046,540DESA-UE	2,393,725	2,876,568	5,270,293DESA-UH	127,036	127,036DESA-UJ	1,468	1,468DESA-WD	193,125	193,125DIPP	352,107,858	40,397,510	392,505,368EAP	695,975	282,950	978,925ETCP	1,900,000	1,900,000ETDP	1,625,601	6,566,700	8,192,301FEDNO	7,493,412	9,032,528	16,525,940GCNPO	1,080,170	873,085	1,953,255ISTCS	306,718,400	36,725,000	343,443,400JSTF	306,331	306,331MSDP	12,688,711	1,899,000	14,587,711SC	137,079	137,079SC-AC	2,642,135	3,195,011	5,837,146SC-FP	1,639,682	2,640,531	4,280,213SC-FPMD	15,810,000	15,810,000SC-FPRD	5,438,911	1,457,729	6,896,640SC-TF	336,775	86,826	423,601ST-BT	12,996,702	836,402	13,833,104ST-IM	1,836,644	5,396,141	7,232,785ST-IT	15,140,075	462,255	15,602,330ST-P	5,322,700	5,322,700TOP	16,721,109	9,415,365	26,136,545TOP-M	787,751	104,000	891,751Grand Total	895,828,544	194,256,390	1,090,084,934Program	Program DescriptionABDP	Aboriginal Business Development and Joint Ventures Program Aboriginal Business DevelopmentABDP-RA	Aboriginal Business Development and Joint Ventures Program Aboriginal Business Development Research and AdvocacyACC	Aboriginal Capital CorporationsAMTAP	Advanced Manufacturing Technology Application ProgramARAP	Acid Rain Abatment ProgramC-CTR	Ontario Cultural & Convention CentresCTMNO	Co-operative Tourism Marketing Initiative in Northern OntarioDESA-AR	Subagreement with Newfoundland Cooperation on Tourism & Historic ResourcesDESA-BA	Subagreement with Quebec Scientific and Technological Development - Can - QuebecDESA-DL	Cooperation on Tourism DevelopmentDESA-EO	Subagreement with Nova Scotia Tourism Development CooperationDESA-KJ	Subagreement with Quebec Tourism Development in Quebec - 1992-97DESA-MK	Subagreement with Ontario Tourism DevelopmentDESA-MM	Subagreement with Ontario Northern Ontario Development Agreement (NODA)DESA-OH	Subagreement with Manitoba Tourism DevelopmentDESA-SE	Subagreement with Northwest Territories Canada/NWT Small Business Development SubagreementDESA-SG	Subagreement with Northwest Territories Cooperation on Tourism & Entrepreneurship DevelopmentDESA-TD	Subagreement with Yukon Small Business IncentiveDESA-TE	Subagreement with Yukon Small Business Support Co-operationDESA-TF	Subagreement with Yukon Tourism Co-operationDESA-UD	Subagreement with Alberta Tourism DevelopmentDESA-UE	Subagreement with Alberta Northern DevelopmentDESA-UH	Subagreement with Alberta Co-operation on Northern DevelopmentDESA-UJ	Subagreement with Alberta Business and Community Development
Program


[Stage Direction]
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Program Description
Subagreement with British Columbia Tourism Industry Development
Defence Industry Productivity Program
Entrepreneurship Awareness Program G&C
Environmental Technology Commercialization Program Environmental Technology Commercialization - G&C
St-Lawrence River Environmental Technology Dvlmt Prog (ETDP) St-Lawrence River Environmental Dvlmt Prog G&C
Federal Economic Develpment Initiative in Northern Ontario
Grants & Contributions for Non-Profit Organizations Program
ISTC Act- Special Assistance
Japan Science & Technology Fund Japan S&T Rind - Industry Component
Microelectronics & Systems Development Program
Sector Campaign Assessment Element
Sector Campaign Automotive Components G&C
Sector Campaign Fishery Products G&C
Sector Campaign
Forest Products Market Development G&C Sector Campaign
Forest Products R & D/Innovation G&C Sector Campaign
Forest Products - Timber Frame - G&C
Strategic Technologies Bio-Technology
Strategic Technologies Advanced Industrial Materials
Strategic Technologies Information Technology
Strategic Technologies Information Technology Precam - Grants and Contributions
Technology Outreach Program
Technology Outreach Program-Advanced Industrial Material
The Acting Speaker (Mr. DeBlois):: The questions as enumerated by the parliamentary secretary have been answered.


Peter L. McCreath: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


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


Some hon. members:: Agreed.



GOVERNMENT ORDERS


Hon. Doug Lewis (for the Minister of Finance) moved: that a ways and means motion to amend the Income Tax Act, laid upon the Table on Wednesday, March 24, 1993, be concurred in.


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


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


The Acting Speaker (Mr. DeBlois):: In my opinion, the yeas have it.

March 29, 1993


Some hon. members:: On division.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The House resumed consideration of Bill C-92, an act to amend the Income Tax Act, the Canada Pension Plan, the Income Tax Conventions Interpretation Act, the Tax Rebate Discounting Act, the Unemployment Insurance Act and certain related acts as reported (with amendment) from the Standing Committee on Finance and Motion No. 1.
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, I am pleased to have the opportunity to participate in the debate this afternoon.
I had quite a bit of time to consider the remarks that I am about to make. Upon lengthy reflection, I want to address a few points. In particular, I want to support my colleague's Motion No. 1, concerning the infamous 21-year rule.
I want to offer my sincere thanks to the member for Sudbury who I know has been very active in condemning this issue as have several other members. The 21-year rule is the Robin Hood in reverse rule. It is designed specifically to give help to those who least need it, which sounds like government policy right away.
As my distinguished colleague from Algoma says, we all remember the GST, which is another example of laws designed to benefit the rich. Let us get into this 21-year rule. What will it do?
Professor Neil Brooks addressed the committee. He is associate dean of the Osgoode Law School. He said that this rule would provide an extension on private trusts that will clearly result in a number of Canada's wealthiest families paying less tax this year than they otherwise would. Let us get all of this straight. What are we doing here?
Many clauses in the bill are good. Some clauses are totally offensive, namely this one, which gives a tax break to the absolutely wealthiest people in Canada. Why does one want to give an additional tax break to billionaires?
I do not know about you, but I do not even know a billionaire. Why do we want to give them this kind of a tax break? I am looking forward to the 10-minute
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speeches that we are having now on report stage for a government member to stand in this House and tell us why this is good for Canada.
Let us have none of this nonsense of saying this is a bill designed to help children or something like that. This is a bill designed to help the wealthy get a tax break at the expense of those at the other end who have been subjected to no less than 37 or 38 tax increases.


Maurice Brydon Foster: Thirty-eight now.


Don Boudria: My colleague from Algoma says 38 now, and he is always correct on this. We have been subjected to 38 different tax increases by the Conservative Party.
How does it work? It works roughly like this: Canada's wealthiest families will be able to defer paying taxes on the accrued capital gains, substantially what is beyond any other tax avoidance technique. In other words, once they have run out of all this other tax avoidance stuff they can invoke this particular rule. It is kind of like having two goalies in the net. In case the puck misses the first one the rich have this extra large hockey stick which can deflect anything right at the back of the first one. This would allow people to defer the paying of tax on capital gains. This has been described in the industry as estate freezing.
Not one reason for having this bill thus far invoked by the government even addresses, at least not in a substantial way, why it wants to have this clause in the bill or why it is necessary for us to retain it.
This is simply bad policy. It is bad policy because it tells Canadians at the lower end and medium end, and even some at the upper end, of the tax scale that there are ways around taxes providing people can establish these trusts and they are rich enough to know how to make them work.
There are other issues in this bill. One which I want to address very briefly is the capital gains exemption. I happen to be a person who thinks that there should not be capital gains exemptions, period. Even if the government and I disagree on that point the least we could agree on is that the rule be applied consistently to everyone. If the government is going to have the capital gains exemption rule, so be it. However, why does it exempt particular kinds of assets the way it has?
Let me give a parallel. If one plays the stock market on speculative stock on the Vancouver Stock Exchange, for

March 29, 1993
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instance, penny stocks and the like, that is capital gains exempt. Any accrual of capital gains is exempt from tax, up to the maximum of $100,000 providing it qualified. On the other hand, a small investor at home who buys the apartment block next door, or who wants to build an apartment building with three units in it-not one with a bunch of employees that can be written off as a business but just one building next door to that person's house, and we do have a housing shortage in Canada right now-later on when that person sells the triplex then that person would pay capital gains on that.
This is at the same time as we have exempted the investor that I just described a few moments ago and we have exempted someone selling his horse in Kentucky or his painting somewhere in a gallery, perhaps not even in Canada. The accrual of capital gains on the horse or painting I have just described would be tax exempt, but selling the vacant lot or selling the triplex apartment building next door would not be exempt. Why? Why are we doing this to people involved in that particular industry?
Personally I do not own any kind of real estate other than my own home. My constituents are complaining about this. Yes, people in the real estate business are complaining as well, and I have good reason to hear what real estate agents say, with two of them in my own household. However, this is not designed to benefit real estate agents but to plug up a perceived loophole for investors in real estate, not for people who sell it.
Those investors in small real estate units no longer can have this deduction. I and my colleagues say: Have one rule and have it for everyone. If the government wants to do away with the exemption, there was none when this government came to power in 1984 so I cannot criticize that. However, it should not pick selectively as it is doing now because that is wrong.
My colleagues have made all these points in our representation at the committee level. We have introduced amendments and we feel that they are important. Many measures in this bill are good measures but those two, the ones I have just described, are not. In particular, the frozen trust issue or the 21-year rule is bad. It is simply bad and we should not renew those provisions at all. We are clearly sending a bad message to the people
of Canada, particularly at a time of record debt and record deficit, mostly caused by this government across the way. We are sending a message to Canadians that we want to tax the poor more and tax the rich less. That is the long and the short of it and I want no part of it.


John R. (Jack) Whittaker: Mr. Speaker, it is my pleasure to stand today and speak in support of the amendment of the member for Sudbury with respect to clause 42 and the provisions of the private family trust legislation, bringing the family trust to a close and making family trusts taxable at the present time.
Let us start by looking at what a private family trust is. It is a legal instrument used to pass on assets to beneficiaries of the trust, who are often spouses, children or grandchildren. Even a simple private trust costs thousands of dollars to set up, so it is apparent from this definition that private family trusts are set up by those who are eminently wealthy, those with lots of money behind them who are specifically looking for loopholes and ways to legally avoid taxation.
Let us look at the history of this legislation. The current legislation, which is presently drawing to a close, covering the private family trusts goes back 21 years to 1972 during the Liberal administration when it eliminated the estate taxes and the capital gains tax was introduced. This provision then exempted from being taxed for the period of 21 years assets put into a family trust, the idea being that they could escape paying taxes on the assets held within the trust itself for that period of time until maturity of 21 years when taxation would be paid on the capital assets of the trust itself.
What the proposal in this legislation does is extend that exemption from 21 years to the lifetime of the person for whom it is held in trust. The arguments by the government side for doing this are varied and many.
One of the arguments used is that this will help those people who are disabled and that it would be unfair to tax them now. To contradict that particular argument it is very clear that over a 21-year period of time there is a lot of time to have set up the alternatives to paying lump sum taxation. There are provisions within the Income Tax Act allowing the income tax to be paid over a 10-year period.
March 29, 1993

It is fairly clear that if people have 21 years, which is more time than most of us have for various tax provisions, to set up and get ready for a tax it is only reasonable to think that after that period of time provision would have been made within the trust to pay it out. It seems that this change is simply a method of once again rewarding the wealthy and the supporters of the government.
Let us look at some things that some professionals are saying about these particular changes. I would like to quote three of the professionals who have appeared before the committee or who have had things to say about this. The first one is Sidney Goldstein, of Goldstein & Goldstein in Ottawa, who said simply:
There is no question that it represents a massive windfall for existing trusts.
Kathryn Bush of Blake Cassels said:
A cynical person might suggest that pressure from influential political supporters also should be listed as a reason for the draft legislation.
Neil Brooks, the associate dean of Osgoode Hall Law School, said:
The government has given Canada's wealthiest families notice that it intends to give them a gift worth several billion dollars.
Let us look at some of the evidence that was given before the legislative committee on Bill C-92. I refer specifically to the evidence given by Mr. Sidney Goldstein, who said in his introductory remarks:
- given the view that there was some affiliation with Tbries,
Referring to himself he said:
I too am questioning the appropriateness and purposes of this proposal.
He then went on to state further in his evidence:
The proposal here, and I second Professor Brooks' comment, is more generous than any other proposal in the act.
He was referring to the Income Thx Act. He continued:
One of the propositions that was raised here in this committee was that it was really no different from deferring tax by giving everything to your children. Here you're just deferring tax until the last of your children dies, or that's the theory.
The fact is that's not what's being done. The deferral is until the last of a class of persons dies, potentially.
He went on to state:
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- the potential tax benefits from this proposal are in the millions of dollars.
Toward the end of his testimony he stated as follows:
There is no suggestion here that any particular use of these funds for any particular benefit is going to be encouraged as a result of this proposal.
It is clear that this is a tax windfall to these people. There is a cost to the federal government, to our revenue coffers, that amounts to a substantial amount of money.
It is not unlike the arguments of the Ministry of Finance when it is asked about the tax havens and the tax loopholes uncovered by the Auditor General of Canada, which we in our party have been pointing out for a long time. The government simply says that to be competitive we must allow them to exist. Yet when we talk to the officials from Revenue Canada they tell us that there are many ways of closing those tax loopholes. They say there are many things that can be done that will not impede the competitiveness of our international corporations but will make billions of dollars.
It has been suggested to me by one Revenue Canada tax official that billions of dollars in taxes are flowing out of this country as a result of these tax havens. This is simply another example of the government refusing to bring in fair taxation, of the government refusing to attack the wealthiest in this nation to ensure they pay their fair share.
Let me turn just briefly to the comments of Dr. Neil Brooks, associate dean of Osgoode Hall. He said that the amendment in this particular bill, Bill C-92:
-will clearly result in a number of Canada's wealthy families paying less tax this year than they otherwise would. There just can't be any question about that.
In Dr. Brooks' final comment to the committee he stated that the amendment:
-is bad tax policy because there is absolutely no theoretical tax justification for the amendment that's being proposed. It will only benefit high-income people.
That is why I must support the member for Sudbury in her amendment to ensure that the trust provisions that were brought in have a termination point which is the same as when it was set up back in 1972. The time to end that is January 1, 1993. It should be ended. This particular provision should not be allowed to go through to give the wealthiest families in Canada that further tax break. They have had 21 years to prepare for their taxation.

March 29, 1993
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Now I say to those wealthy families in Canada: "Pay the piper. The time has come to help Canada and the rest of Canadians get a fair taxation system on the ground now".


Mr. Hawkes:: I rise on a point of order, Mr. Speaker. Although I have not been a party to it, I understand that there have been some discussions among the parties and there is a willingness to adjourn the debate on Bill C-92 at this time and move to Bill S-8 as the subject matter before the House. That is what I have been informed, and I think there would be unanimous consent for that.


The Acting Speaker (Mr. DeBlois):: The hon. members have heard the terms of the motion. Is there unanimous consent?


Some hon. members:: Agreed.


MOTOR VEHICLE SAFETY ACT
[Stage Direction]
The House proceeded to the consideration of Bill S-8, an act to regulate the manufacture and importation of motor vehicles and motor vehicle equipment to reduce the risk of death, injury and damage to property and the environment, as reported (with amendment) from the Standing Committee on Transport.
Hon. Doug Lewis (for the Minister of Transport) moved: that the bill be concurred in.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. DeBlois):: When shall the bill
be read the third time? By leave, now?


Some hon. members:: Agreed.


Douglas Grinslade Lewis: that the bill be read the third time and passed.


William D. (Bill) Casey: Mr. Speaker, it is my pleasure to add my comments to this debate today after having been a part of the debate for about three years actually through consultation with the Department of Transport, officials and various ministers.
I have taken an interest in this bill because I have a little history in the transportation business having been an auto retailer for almost 20 years and a manufacturer of travel trailers and other kinds of trailers. I have been very much involved with the Motor Vehicle Safety Act in both the retail and manufacturing areas.
For about three years we have had exhaustive discussions with the industry, consumers affairs organizations and organizations representing all aspects of the automobile industry. I do believe that we have as a group exhausted all possible permutations and combinations of possibilities for this bill. There have been many people and organizations involved with this and I was just one of them.
I had a chance to express my views here in the House on several occasions. I think it was nine altogether. I testified at a Senate committee on the bill. I have spoken to three separate ministers of transport on the bill and I spent virtually endless hours with officials explaining my position and my concerns with the bill.
Basically my concerns were that there was a double standard. It resulted from U.S. cars being allowed to be imported into Canada and qualified under a separate standard than cars brought through the Canadian system. There were two sets of rules. One was for imported cars and the other was for non-imported cars. That had a serious effect on consumers and their safety. It also had an impact on the business community where there was a double standard and not a level playing field.
To make a three-year story a little shorter, I would just like to say that through the good work of the committee in amendments and discussion they have come through with some amendments that address all my concerns and resolve them all. They create an opportunity to develop further regulations to implement the principles as outlined in the amendments to the bill. Generally speaking I come away very satisfied with the system. It works. All the organizations that expressed their concerns about the bill have been heard from and certainly there has been a consensus on the result. I think it will satisfy most of the participants.
I personally would like to express my own appreciation to the Department of Transport officials who have spent virtually endless hours with me on this. They have had a great deal of patience and a great deal of understanding in trying to see my point of view, which I did my best to express. I eventually was successful in explaining to them my concerns in such a way that they were able to agree to
March 29, 1993

the amendments that would correct any problem I had with Bill S-8.
The officials have taken a great deal of time to understand my position and also the positions of all the organizations both from the business community and the consumers groups that have expressed themselves.
They have asked me actually to thank the organizations, associations and officials that have taken a lot of time to develop briefs and to make presentations both to them individually, to them as Department of Transport officials and also to the committee. They appreciate the input and the briefs from all aspects. I too appreciate the industry and the associations that have taken a lot of time and trouble to develop these proposals and briefs.
With the amendments to the bill certainly there will be a lot more input required and a lot more co-operation from consumers, consumers' associations and the industry to make sure the principles outlined in the bill and the amendments are implemented in the best possible way with the least possible paper work. This is so that they will affect the industry and consumers in a positive way and in reflection of the principles outlined.
I and the department officials and the Minister of Transport all look forward to that continuing co-operation with the associations. We are most anxious to get on with it when the bill passes and receives Royal Assent.
I would again like to thank the officials for their patience in dealing with me over the years with this issue and I thank you, Mr. Speaker, for the opportunity to speak my piece on the bill.


Don Boudria: Mr. Speaker, I am pleased to have the opportunity to speak on behalf of the national Liberal caucus on this bill.
I want to congratulate the hon. member for Ottawa South who is the Liberal transport critic as you will know, Mr. Speaker, and as I am sure as all Canadians know. I congratulate him for his fine work and other
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Liberal colleagues both in this House and in the other place who have worked toward this bill.
I want to indicate first of all our support for the current piece of legislation. I recognize there is a need to have rules with regard to the importation of vehicles that will be beneficial to Canadians, will not harm trade and certainly not cause major inconveniences for Canadians.
We know that at the present time, particularly since January 1, 1993, it is possible to import from the United States, at least theoretically, any car no matter how new. Prior to the Canada-U.S. Free Trade Agreement cars that were less than 15 years old were effectively barred from entry into Canada. Cars that were older than 15 years were designated as antiques, I think. They were permitted to be purchased providing the duties and so on were paid.
With the advent over recent years of rules with regard to motor vehicle safety such as emissions and so on, it became clear that the newer cars being imported could still have other problems at the border even if they were allowed into Canada under the Canada-U.S. Free Trade Agreement. There is the situation where for instance many U.S. cars do not have metric odometers although some of them do. They have different rules on child restraint devices. It became difficult for people who were importing the vehicle to ascertain whether or not the vehicle they had already purchased could even be made to conform to these new rules.
Now with the national safety mark and with the passage of Bill S-8 there will be a framework at least by which this will be made possible.
Of course we are still concerned with ensuring that cars that come into this country whether new or used-I say that on behalf of my colleagues-are as green as possible. I am not referring to the colour of the dashboard or the paint job but to the requirement for emission standards to be such that they ensure that cars will provide for the cleanest environment.
There is also a section of this bill which provides for what is known as an emission credit where companies can actually bank on the fact that they have produced a large number of efficient cars and then they can trade in

March 29, 1993
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some of these credits for a few gas guzzlers every now and then.
That is not such a bad thing in a way providing that these rules are progressively tightened. This is so that even if one does sell a gas guzzler, the over-all incentive is to produce more and more environmentally friendly vehicles. The idea is acceptable as long as that remains part of the understanding. It must remain not only the over-all objective but it has to be paramount in what is permitted in the legislation.
As one who has sat on the consumer and corporate affairs committee and the government operations committee of the House, I have long been concerned with the actions of some people in Canada whereby the new price stickers are removed seemingly by the retailer or perhaps by middlemen-or middle people if we cannot say that anymore in order to be politically correct-from the vehicles prior to arriving on the lot.
The difficulty with that is that the consumer is given the so-called retail price by people in the industry. He or she has no way to ascertain whether that information is authentic or whether one is getting an alleged $2,000 while the real discount is only about $10 or something.
It is very hard to get that information here in Canada. Increasingly we find cars on lots-I have had the experience many times-where someone very neatly with a razor blade removed all the amounts but not the motor vehicle description.
At the consumer and corporate affairs committee a couple of years ago I had occasion to question an automobile manufacturer who was there. I asked this manufacturer why it is that dealers do this in Canada. In the United States it is an offence to tamper with those stickers prior to the automobile being purchased by a customer.
He said: "Well, they were probably just cleaning the windows''. I said: "Is it not ironic that people clean windows in a strip about one and a half inches wide just where the numbers are and do not clean the rest of the window or the part of the sticker that has the description
of what the car has except for that part which has the amount?"
That was just a little hard to believe. I even suggested to that witness at that time that he should speak at a committee as though he were under oath, not putting too fine a point on it. In other words, I did not believe him.
I want to bring that to the attention of the House. As the automobile industry becomes more and more of a trans-border one-like it or not, that is done-I think it is important for us to ensure that at the very least the consumers on this side of the border get the same kind of protection that the consumers are getting on the other side. This is particularly so when as soon as a car is one day old one can sell it across the border with relative ease at the present time.
It is important that our consumers be given every benefit that consumers are getting south of the border as well. I thought it was a good occasion to bring this issue to the attention of the House. Perhaps there is an off chance that automobile manufacturers are listening to the debate this afternoon. I hope that when they clean windows in the future they do not clean them in strips one and a half inches wide where the numbers are and leave the rest of it there.
In future all the people interested can have a look at what was the manufacturer's suggested retail price. Then they can compare that with the alleged discount that any dealer says he or she is giving on the car. They can find out whether or not the so-called deal or savings they are getting is the one that is being announced by the dealer as such.
With that I will conclude my remarks and again add my words of appreciation to the hon. member for Ottawa South and other colleagues for their fine work at the committee stage and at earlier stages of this bill.


Iain Francis Angus: Mr. Speaker, I am pleased to participate in third reading debate of Bill S-8, the Motor Vehicle Safety Act.
I am a member of the Standing Committee on Transport which reviewed this legislation. We took the bill out of this House and sent it to committee. We thought perhaps one or two witnesses might deal with the specific elements contained within the bill, such as the new rules regarding imported automobiles, the emission credits or
March 29, 1993

the consolidation of the legislation. What surprised me was the number of people who came in to talk about the question of wrecked vehicles being brought across the border and the interprovincial trade of wrecked vehicles. That followed a concern I had raised during debate at second reading, which in turn was prompted by some work the Thunder Bay Automotive Trades Association did in terms of making me aware of the issue.
I want to spend my time today talking about that aspect of the legislation. I think we saw a real willingness by the government and the departmental staff to work with the committee to find the appropriate way to deal with the concerns within the context of federal law. Obviously there are certain matters that are beyond the purview of the federal government. Once a vehicle has been manufactured and sold for the first time at the retail level it becomes the responsibility of the provincial authorities. One of the dilemmas we faced was how to do something in federal legislation that we genuinely wanted to do but found there were some very real barriers to doing.
I think the regulations prescribed by this bill will ensure that used vehicles coming across the border will be brought up to the appropriate safety standards. That is clear in the bill. They will also ensure they are also brought up to standard structurally.
The committee amended the bill. There was some wondering ahead of time whether a bill that started out in the other place would be easily amended in the House of Commons, knowing full well that once it was amended it would have to go back to the other place. But to the credit of the government members on the committee that was not an obstacle. In fact the amendment I am going to read was put forward by them in response to a number of issues that had been raised by me and witnesses before the committee. The amendment provides for some greater flexibility, but also greater certainty with the regulations. I just want to read it into the record.
The bill was to be amended by striking out lines 21 to 33 on page 5 and substituting the following therefor:
(2) except as otherwise provided by the regulations, a vehicle that has been sold at the retail level in the United States and that fails to
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satisfy an applicable requirement of section 5 or 6 may be imported into Canada, notwithstanding that section, if the person importing the vehicle makes a declaration in the prescribed form and manner that before the vehicle is presented for registration under the laws of the province the vehicle (a) will be made to conform to that requirement; and (b) will be certified in the prescribed form and manner to so conform by such person as may be designated by the regulations.
The second part of the amendment was that after line 44 on page 5 the following is added:
(4) a vehicle that is imported into Canada must conform to the standard prescribed for the class of equivalent non-imported vehicle or made to conform to the standard prior to the presentation for registration under the laws of a province.
It sounds complicated but the committee decided- and these amendments were supported by all members in the committee-to make it clear there has to be a process. People cannot just bring cars to the Canada-U.S. border and promise to repair them. The government cannot just hope they do. The government has recognized there needs to be some degree of certainty there.
As members will know, we normally do not see regulations when we are dealing with legislation. One of the problems we have from time to time is ensuring the regulations are actually going to do what they are supposed to do. We have a commitment from the officials of the department that before the regulations are finalized with regard to the question of automobile imports they will come back to us in the transport committee and ask for our reaction.
They have gone even further than that. They have already given us a broad outline of the kinds of things they want to do which will go a long way toward meeting a lot of the testimony we heard from the witnesses.
I just want to report to the House on those specifics.
Safety and emissions regulations governing importation are under the Motor Vehicle Safety Act administered by Transport Canada.
Transport Canada will establish a network of registered certifiers operating under the supervision of a national registrar. The system could be linked to existing manufacturers or dealer networks established indepen-

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dently under a third party contracted to Transport Canada or be a combination of these options.
Just as an aside, one of the concerns we raised was about the person who lives in Red Lake who wants to bring in a vehicle. Does he or she have to come back to Thunder Bay, Dryden or Kenora where there is an authorized dealer, or can he or she have that work done in Red Lake and certified by a licensed authority or designated authority in that community? That is one of the things we are going to be looking at when the regulations come back to us.
A list is published quarterly of U.S. vehicles eligible for importation. Most vehicles will be included. Exceptions will be those U.S. vehicles not meeting Canadian occupant restraint standards and specialty vehicles such as limousines or recreational vehicles where compliance with U.S. or Canadian standards is unsubstantiated.
Canadian entry will require (a) proof of compliance with U.S. safety standards, either by statement of compliance label or letter from original manufacturer; (b) eligibility for importation based on compliance with specified standards, for example occupant restraint systems; (c) completion of Transport Canada documentation requirements including a vehicle description and an affidavit to bring the vehicle into compliance with required Canadian standards.
In addition, one of the items raised because of the testimony before the committee was the little known fact that any Canadian wanting to import a vehicle from the United States must give the U.S. authorities 72 hours notice of his or her intention to do so. We are told that very few, if any, people actually do that. Currently when somebody brings that car to the Canadian border-we all know one does not stop first at American Customs and then cross the river and check in at Canadian Customs, one just starts at the Canadian side-we do not ask about that.
We have asked the departmental officials to take a look at that specific item to see if we can require importers to show proof they have complied with American laws. That is one way to deal with the question of thefts. That is one way to deal with the question of vehicles that have been written off because a number of states can provide a description of the history of that
vehicle. That would assist the Canadian authorities in determining the appropriateness of that vehicle coming across or, at the very least, the degree of work required to bring that vehicle up to Canadian standards.
Getting back to the draft provisional list of possible regulations or the broad concepts, vehicle modifications are performed or may be performed by the importers' choice of company or by registered certifier. Notices of defect may be handled at no charge by a Canadian representative of the manufacturer or by the national registrar for a fee.
Vehicle modifications are inspected and approved by a registered certifier and documentation sent to the national registrar.
An approved copy of the documentation is provided to the importer for the proof of compliance necessary to have the vehicle licensed by a province.
One of the other areas we raised in committee is the question of vehicles that have been structurally damaged. We are hoping the regulations will be some kind of trigger mechanism that will require a licensed mechanic to at the very least take a look under the vehicle to see whether anything has been welded into the vehicle that should not be in a particular place, or whether there have been any welds to the frame. I want to come back to that in a moment.
That is the general direction the department is going to take in terms of the regulations. It has indicated it believes it can be back to us within approximately a month to run through the actual wording to see whether or not we feel it is suitable as it relates to what we have heard.
I want to turn to the question of wrecks. I do so in the context that in part this legislation does allow the federal government to take a look at those things coming across the Canada-U.S. border. Under Canadian constitutional law it really is difficult for us to deal with anything domestically. We know from testimony before the committee by the department officials that a committee of the Canadian Council of Motor Transport Administrators is attempting to develop a protocol nation-wide so that when a wrecked vehicle comes across this information is recorded and distributed to all provinces so they are aware of it. That is the second part of it.
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There is a national committee made up of representatives of each of the provincial jurisdictions as well as the federal jurisdiction which is trying to come to grips with this.
Looking at some of the testimony presented to us in written form, this group was unable to appear. It is the Automotive Retailers Association of British Columbia. Its document was endorsed by the National Automotive Trades Association of Canada. The association which is an affiliation of regional and provincial associations representing Canada's retail automotive service industry in part says: "Our provincial affiliate in British Columbia has forwarded to you a brief which is representative of all of our member associations across Canada. We therefore wish to make you aware that NATA gives full endorsement to the brief submitted by ARA, the Automotive Retailers Association of British Columbia. It speaks on behalf of all of us".
I would like to read the section that deals with what is called rebuilt write-offs. It is entitled "The Nature of the Problem".
Insurance companies classify collision damaged vehicles as "write-offs" when the estimated cost of repairs exceeds the remaining actual cash value of the vehicle, or is greater than the cash value less the salvage value. The term "write-off", therefore, does not necessarily denote an inoperable wreck-nor a piece of junk! Frequently, it refers to a good, late model, low mileage vehicle which has suffered extensive collision damage that an insurer estimates would be uneconomical to repair. If properly rebuilt, such vehicles can provide adequate transportation and good value.
Insurance companies sell write-offs to the following classes of customers:
a)	Licensed auto recyclers or wreckers and used parts suppliers, who dismantle cars and sell undamaged used parts to body shops and other businesses, as well as to private customers.
b)	Licensed auto body shops and professional rebuilders.
And this is the key one:
c)	Private individuals-often amateur rebuilders.
The vehicles sold to body shops and rebuilders are repaired and returned, in most cases, to our roads and highways. Many of these units are rebuilt by qualified technicians using proper repair equipment techniques. As such, these vehicles once again may become an economical and safe mode of transportation.
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However, many other rebuilt write-offs are rebuilt in dangerously unsafe fashion-either for private use or resale, by private individuals or amateur mechanics-who may be unskilled and ignorant and use inadequate tools and equipment. In such cases, frames may be spliced in unsafe places, such as beneath doors or in torsion boxes, which means welds result in rigidity in areas where manufacturers and designers intended a degree of "give" or yield. Also, steering and suspension parts, rods and spindles which arebent and which should be replaced are instead heated and hammered back into shape. The result is crystallisation and metal fatigue-leading to breakage. For example, cast steel spindles which have been heated can shatter on impact! The workmanship involved in so-called repairs of this sort is often of a quality which can only be described as horrifying!
They also go on to talk about the extent of the problem and they sort of ask rhetorically:
Are these examples of shoddy workmanship simply isolated incidents? Just how serious can these shoddy repairs be? Why is this problem receiving so much attention now?
The answers to these questions have a common bond: the changing technology used in the manufacture of today's automobiles.
As oil prices climbed in the early 1970s, auto manufacturers scrambled to produce smaller and more fuel efficient automobiles. Engineers developed new models which employed front wheel drive technology, used high-strength low-alloy steel in structural components and utilized "unibody" or "monococque" construction.
Ibday's automobile is a radical departure from those found on our highways even 10 years ago!
Those that I suspect all of us at one time tinkered with in our backyards trying to keep them on the road.
No longer are we seeing the classic sedan, with its frame construction and heavy sheet metal panels. Today's car employs unibody construction, with no frame in the traditional sense and with considerably lighter sheet metal. With unibody cars, the sheet metal is attached to a subframe and the subframe and sheet metal form the "unibody". This represents the structural integrity of the vehicle.
Tolerances are more closely defined. Repair technicians must now work to tolerances that are within millimetres-with little room for error!
Many collision shops have made large investments in sophisticated measuring and pulling equipment, which allows them to repair vehicles to tolerances defined by the manufacturers. The extensive use of high-strength low-alloy steels has necessitated the use of Mig welding equipment, to retain the integrity of these critical components after welding.
Unfortunately, most amateur rebuilders possess neither the equipment nor the training necessary to properly repair today's unibody vehicles. When proper techniques and procedures are not used in the repair of these highly sophisticated automobiles, the result is often a vehicle which could be described as a potential "death trap"!

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We saw some examples of that. One of the witnesses came before the committee with a video tape of a 60 Minutes program. They had taken a crew to a number of automobile retail outlets in the United States where people were buying cars that in fact were two cars. The cars had been wrecked, the front end had been chopped off and another one welded in its place. These were totally unsafe vehicles. They were not telling their customers that these had been recycled vehicles. In fact it was shown on the tape that people were saying: "It has never been scratched. It has never been repainted". It was more than scratched and it was more than repainted. It was totally rebuilt using the front end of one car and the back end of another. That is the kind of vehicle we are concerned about.
I certainly know from the testimony we heard that members on all sides of the committee were quite concerned about what was happening. But they were also frustrated that we as a federal Parliament could only do so much and that it was really up to our provincial and territorial colleagues to put in place the kind of legislative regime that is possible.
The province of Quebec has a regime in place. If you take a vehicle to the motor licensing branch of the province of Quebec, if it is a used vehicle you have to bring with you a picture that shows it has been examined on a full body frame. That is a special piece of equipment which is available in body shops. The licensing branch knows that it has been inspected by a qualified body mechanic who has an understanding of the structural integrity of the vehicle and therefore can indicate whether the vehicle has been recycled.
We need to have that kind of approach adopted right across the country. I would encourage the Minister of Transport to press his provincial colleagues through the committee of the Canadian Council of Motor Transport Administrators to do that very thing, to really accelerate their work. They will be meeting some time in the next month or two to accelerate their work and to bring together a national standard.
Certainly we have seen in the area of the environment where the federal government has adopted a policy after consultation with the provinces and then the provinces have enacted it in law.
It is important that we do that. It is important that all members in this House contact their respective provincial ministers of transport to put pressure on them to go along.
Finally, and I know I only have one minute, there are a number of other areas where the federal government can take a lead. For example, although it does not have legal jurisdiction there could be a national data bank to which all provinces could send their vehicle registration information and where all police departments could easily pull it out.
We need to work with the provinces to ensure that the environmental controls we put in cars are maintained because at the federal level we can only decide what the starting quality is. We have no jurisdiction on ensuring that they are repaired and maintained. That is up to the provinces. We need a national standard so that we can adopt basically what B.C. has done in terms of its clean air controls and its mandatory inspections, as I understand it, of pollution equipment.
There is a lot more work to be done. My compliments to my colleagues on the committee and my compliments to the government for its willingness to address these areas.


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


Some hon. members:: Question.


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


Some hon. members:: Agreed.


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

Douglas Grinslade Lewis: Mr. Speaker, I wish to advise the House an agreement could not be reached under the provisions of Standing Order 78(1) or (2) with respect to the report stage and third reading of Bill C-92, an act to amend the Income Tax Act, the Canada Pension Plan, the Income Tkx Conventions Interpretation Act, the Tax Rebate Discounting

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Act, the Unemployment Insurance Act and certain related acts.
Under the provision of Standing Order 78(3), I give notice of my intention to move a time allocation motion at the next sitting of the House for the purpose of allocating a specified number of days or hours for the consideration and disposal of proceedings at the said stages.


Iain Francis Angus: Mr. Speaker, I rise on a point of order, I just reflect back to when the hon. member was the House leader and we always had agreement. I do not know what has happened in the meantime.


CONFLICT OF INTERESTS OF PUBLIC OFFICE HOLDERS ACT
Philip Derek Lewis: that Bill C-116, an act to provide for greater certainty in the reconciliation of the personal interests and duties of office of public office holders, to establish a Conflict of Interests Commission, to amend the Parliament of Canada Act and to make consequential amendments to other acts, be read the second time and referred to a legislative committee in the Departmental envelope.


Donald Alex Blenkarn: Mr. Speaker, I am pleased to rise on the second reading of Bill C-116, an act to provide for greater certainty in the reconciliation of the personal interests and duties of public office holders, to establish a Conflict of Interests Commission, to amend the Parliament of Canada Act and to make consequential amendments to other acts.
As hon. members will know the bill is really a response to the joint committee's report on conflict of interest that was received by the government in June. That was a unanimous committee report of the Senate and the House working together. This bill to a large extent reflects the unanimity of that committee report.
Each one of us understands the task before us is important, not only because of the direct impact this proposed legislation will have on us personally as parliamentarians but also because of its implications for the operation of parliamentary government in Canada.
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As parliamentarians we have all sought office in this place for one principal reason: to serve the interests of Canadians so that their hopes and desires and those of their children and their children's children are properly and fully realized.
It has been sadly unfashionable and all too common to criticize and call into question the motives of politicians. Unfortunately there are always some people who abuse public office for their own personal gain and do not live up to the trust bestowed upon them when they are elected or appointed to public office. These few individuals are rightly the object of public criticism and censure.
It is nevertheless distressing to all of us as parliamentarians to work within an environment where every action we take as we carry on the duties of our offices is subject to scrutiny in the expectation that we are sinners and we are going to do something wrong and that in everything we do we are hiding something. That is the reason for this legislation.
The problem of conflict of interest is a perennial one. It dates back to the origins of democracy itself. There were such problems in ancient Greece and Rome. These difficulties have persisted over the centuries. Nonetheless the problem of conflict of interest is perennial as are our obligations to overcome it.
Political leaders if they are to act effectively must have and deserve to have the trust and confidence of the people they represent. This trust, which is not to be given lightly, can only be fostered in a political situation where there is a system of openness and accountability.
All the players in such a system must know and understand the rules of the game. The rules therefore must be as straightforward and as direct as possible. To illustrate this point I will use an analogy which Canadians will understand.
Conflict of interest rules should be like the rules in the game of football. Everyone who enters public life seeks to reach and cross over the goal line at the end of his or her career. The goal to which we aspire is to carry out one's duties of office fully, effectively and responsibly and conclude one's career on a high note without becoming involved in conflicts of interest, without casting doubt on one's motives and intentions, without

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ruining one's good name and reputation or that of one's colleagues.
Unfortunately over the years the playing-field has become more complex and the yardsticks keep moving. We often find that our job is to represent Canadians in a responsible manner but we are often attacked as we carry out those responsibilities. As parliamentarians we are busy people with many responsibilities and demands on our time. In such an atmosphere it is often difficult to be aware and reflect on every nuance of a situation to make sure that no conflict might arise.
However we all understand that constant vigilance is required to ensure that we know and understand the rules that will help us avoid conflicts of interest so that we do not stray out of bounds. We must always be scrupulous because the penalties are very onerous. The loss of reputation alone is a very strong incentive not to become involved in a situation where one's conduct of public office or behaviour can be called into question.
Parliament has learned about that reality over the years and in particular about what will and will not be tolerated by Canadians in public life.
The boundaries of the political playing field have become more apparent and real to all of us because of what we have learned and understood from the shortcomings which act as lessons of what not to do.
The bill before us today is intended to make those lines even clearer and to give all members of Parliament, senators, ministers and parliamentary secretaries mechanisms to assist them to keep their personal affairs in order so that these personal concerns will not interfere with their public responsibilities.
In tabling the legislation the government realizes that proposed legislation is not perfect and that Parliament has an important responsibility to examine it carefully to determine if any improvements are required.
Government welcomes the process because government wants more than anything else for Parliament to give this whole problem its greatest and fullest consideration. This is so that Parliament can produce a piece of legislation as quickly as possible on this most important public matter.
Before we begin this work I would like to therefore describe briefly the main provisions of the bill and its importance.
We are aware that very high standards of public conduct are rightfully expected by parliamentarians from all Canadians. Upholding the public trust is a clear priority of this bill. An illustration of this commitment is the obligation of parliamentarians, ministers and parliamentary secretaries listed in the purpose clauses in both parts of the bill. I want to say at this stage that unlike the parliamentary committee report the bill is a two-stage bill. There is a stage of the bill designed for ministers and parliamentary secretaries and the Order in Council appointments made by the cabinet of senior public servants, deputy ministers and the like. That part of the bill goes to a commission and the commission reports to the Prime Minister. The reason for that is that the Prime Minister is responsible and the officials, his parliamentary secretaries and ministers, are responsible to him. He has to make sure that their conduct is above reproach. He has a commission to look after that and it is separate from the actions of parliamentarians, senators and ordinary members of Parliament.
Ordinary members of Parliament will report to a jurisconsult. The jurisconsult will be a person to whom they can report their activities and who will look after their conflicts and who will adjudicate their concerns and will report to the Speaker. The jurisconsult reports to the Speaker who reports to Parliament. The commission reports to the Prime Minister.
Both sections of the statute are similar. In both sections the standard under which people are judged is essentially the same. There are rules which govern parliamentarians in both Houses. Both parts of the bill make it clear that no parliamentarian should advance his or her private interests or those of a spouse or dependents on the basis of information that is not available to the public or use his or her influence to obtain by reason of public office a personal benefit or personal gain.
Both parts of the bill have rules of disclosure of gifts and benefits which will apply to all members, senators, ministers and parliamentary secretaries and of course
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those other persons who are covered by the bill in terms of the commission part of the bill.
All members and ministers and parliamentary secretaries are required to admit to meet basic requirements; to report and disclose their private interests and those of their spouses and dependents to either the jurisconsult in the case of members and senators and to the conflict of interest commission with respect to parliamentary secretaries and ministers; to establish in conjunction with either the jurisconsult or the commission a personally tailored regime taking into account their responsibilities for arranging their assets to avoid conflict; and finally to prepare a public declaration of these interests as either the jurisconsult or the commission sees fit and, in the case of spouses and dependents, relevant.
These rules reflect the political reality that any member of Parliament, senator, minister or parliamentary secretary can appear to have or actually be involved in a conflict of interest. The bill, therefore, represents a comprehensive approach to the ethics of parliamentarians and public office holders and will ensure that Canadians can have confidence in all of their representations.
I should, however, point out that the bill provides that ministers and parliamentary secretaries must satisfy more stringent requirements because of the positions they hold. The government recognizes that potential for conflict of interest is greater for ministers and parliamentary secretaries than for regular members and senators.
Accordingly those who hold these offices will have to disclose their private interests and, where the commission deems it necessary, make a public declaration according to stricter standards than members and senators.
In addition, ministers and parliamentary secretaries will not be permitted to engage in any employment, business or in the practice of a profession outside their official duties. Ministers and parliamentary secretaries will not be permitted to accept any fees.
Finally there are specific rules on post-employment which will apply to ministers and parliamentary secretaries but of course not to parliamentarians.
These different requirements for ministers and parliamentary secretaries reflect the political reality that those members of the ministry exercise broader responsibilities of office and could experience opportunities for influence that do not go beyond those of private members and senators.
I want to take the opportunity in this context to discuss another important aspect of the bill that has in the past given legitimate concern. It is the requirement that spouses and dependents participate on the same terms as members and ministers in relation to the disclosure of their private interests and the treatment of gifts, personal benefits and hospitality which they receive.
The government does not view spouses as mere appendages. The government thinks that the disclosure to the jurisconsult or the commission of private interests required in respect of a spouse might be identical in scope to that required of a member or public office holder.
This is a recognition of the reality that marriage is an economic partnership and that husbands and wives have a direct pecuniary interest in each other's financial affairs.
I want to say though that this matter was a key issue in the debate of the committee. As far as the members and senators are concerned, the disclosure of what is the interest of a spouse will be made by the member or the senator to the jurisconsult. The spouse will not be required to file anything with respect to a minister or parliamentary secretary, on the other hand, because of the higher degree of responsibility. One does not have to accept a ministry or accept being a parliamentary secretary. A spouse will be required to disclose to the commission. The spouse does not have to disclose to the member but they have to disclose in that case to the commission.
This is a difficult and very exacerbating field. The joint committee had a number of sessions and heard a number of representations on the matter. I think that the committee will examine that issue again. I think the committee will find that this way of approaching it is probably realistic.

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The declaration by the member with respect to his or her spouse's assets to a jurisconsult is fine but when it comes to a minister or parliamentary secretary then a separate declaration is important.
In extending the provisions of the bill the government wants to preserve as far as possible the privacy of spouses and their dependents. I think particularly as we move forward with a society where both spouses have their own separate and independent careers that it is important that this conflict of interest bill protects the independence of spouses.
We will perhaps have to examine the legislation again. I believe that the bill sets forth a pretty good regime. It is on that basis that the government has put it forward.
The bill is really an attempt to have the jurisconsult and the commission balance the public interest in disclosure with the right of the minister or private member to privacy and to safeguard against unnecessary public disclosure. After all there is no need for people to know exactly whether one has 100 shares of the Bell Telephone Company or 1,000 as long as you do not have a controlling, significant or major interest. These are very small amounts. To say that a person has a minor interest in certain shares was judged to be sufficient by the committee that reported.
The question of what is disclosed will be in the hands of the commission and the jurisconsult that will make public disclosure. That public disclosure will be available for those who really want to read it.
The concept is that the commission and the jurisconsult will make sure that the public has confidence that members, ministers, parliamentary secretaries and senators are not hiding something, that they are not trying to feather their nests by hiding that nest somewhere. It will be disclosed because disclosure really represents the essence of control on conflict of interest.
My remarks are relatively short today. I believe we can move this bill forward. We intend to have a committee study it in joint consultation with the Senate. It is important that the matter move forward as quickly as possible through the House so that we can get going on the committee work.
It is no secret that this Parliament is drawing to a close. I believe it is absolutely essential that this legislation be in place before the next Parliament. Therefore we have to move ahead. That being the case, I am going to turn the floor over to someone else to make a speech on the matter and perhaps we can get it completed today.


The Acting Speaker (Mr. DeBlois):: Before resuming debate, it is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for New Westminster-Burnaby-Violence Against Women; the hon. member for Notre-Dame-de-Grace-Immigration Offices; the hon. member for Halifax-Economic Statement; the hon. member for Thunder Bay-Atikokan-Public Works; the hon. member for Cape Breton-East Richmond-Westray Mine Disaster.


Don Boudria: Mr. Speaker, I am pleased to have the opportunity to participate in this debate.
As the Official Opposition critic for government operations I want to indicate that this bill is very long awaited. This is a debate which I had hoped we would have had long ago. I am pleased that we are finally having it today.
I want to indicate that on behalf of my colleagues we have no intention at all of delaying this bill. We want it to go to committee as early as possible. We want to co-operate because we feel this issue is important.
I am one of those who believes that what we do as legislators does not only consist of the bills that we pass, it consists largely in the trust that Canadians have in those who occupy the seats in this great institution.

The hon. Leader of the Opposition, in a speech he gave over a year ago right here in Ottawa at the Congress Centre, when he asked me to prepare a report on public morality, told us how proud he was the day he was elected to Parliament. He told us about his father's even greater pride in seeing this son, the 18th of his 19 children, which the Leader of the Opposition is, elected to the House of Commons. The father of the member for Beausejour felt this great honour and pride.
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The member for Beausejour wondered whether his father would feel as proud today, given the debates that have gone on in recent years. He concluded that unfortunately his father probably would not feel so proud, but that it was important to restore the pride people once had in our parliamentary institutions. That is what the Leader of the Opposition said and I agree with him.
Mr. Diefenbaker, a former Prime Minister, some years ago said that there was no greater honour for a Canadian than to be elected by his or her fellow citizens to sit in this, the highest court in the land, the Parliament of Canada. How true that is.
When I was elected on September 4, 1984 how special that day was for me. A week or so later when I came to Parliament Hill, I walked in through the main entrance, the one under the Peace Tower. For me that was symbolically important because, as you may know, I had been a staffer on Parliament Hill. I do not know whether that is still the case, although I should know, but as a staffer there was one entrance that we were prohibited from using. It is not permitted for a staffer here to use the main entrance to Parliament, the one under the Peace Tower.
The day after I was elected it was a special privilege for me to walk in through that entrance, and I walked across that threshold into Parliament as an MP.
Notwithstanding some of the things that have happened over recent years, I still feel this way about this great institution. Perhaps in my case being an MP was a boyhood dream. It is ironic that I came into this building for the first time not as an MP but as a busboy in the parliamentary restaurant. I worked my way up a number of rungs in the ladder, was elected to municipal office and then to the provincial legislature of Ontario. I resigned my position here when I was elected to Queen's Park.
I came back in 1984 to become an MP in this same building where I had once served as a busboy in the parliamentary restaurant. Maybe that even adds more to my pride in the great privilege that was given me by the
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electors of the great riding of Glengarry-Prescott- Russell.
It is important for all of us collectively and individually to do everything we can to restore confidence in this great place. I will not go into all the things that have happened because I do not think today is the day that we should have that partisan speech. I make it often enough when it is my role to question the government on various issues.
Today is the day we should all be getting together to ensure that we do whatever it takes to amend our rules, yes, but also to ensure that those who will be elected in the next Parliament, and those who are here now who will continue to serve in the next Parliament, will do their best to restore integrity in Parliament. That is the first premise. That is what all this is about.
Here we have Bill C-116. How did we get started on a conflict of interest bill? Well, you will remember, Mr. Speaker, that we had a set of rules better known as the conflict of interest guidelines.

In 1985 the Prime Minister replaced these rules with a conflict of interest code. In 1987, unfortunately as a result of the circumstances surrounding the resignation of a minister, Judge Parker recommended that Parliament pass a law. I have here the report of the Parker Commission which recommended conflict of interest legislation for the Parliament of Canada. Of course Judge Parker made several other recommendations and concluded that the minister in question had broken the rules many times, 14 times, if I remember correctly.
For the purposes of our discussion today it is important to note that as the starting point for having a law.

This bill is actually our fourth tentative try at conflict of interest rules. I believe the first bill was Bill C-46, the second one Bill C-114, and the third one Bill C-43.
I must say in retrospect, and I share these comments with the member from Mississauga South, that I am glad Bill C-43 as originally drafted was never enacted because some of its provisions were outright ridiculous. Frankly, I do not know how it was put together but it could not have worked. I am not even sure that it would have

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accomplished what we were trying to do in the first place. Certain of its provisions were absurdly strict and in other areas it did not even do the job.
Our committee looked at that. When I say our committee I mean the committee under the co-chairmanship of the member for Mississauga South and Senator Stanbury, a member of the other place. We had extensive deliberations and it is important for the House and all Canadians to know that we came up with a unanimous report.
It does not mean that everything in the report was the absolute best and what I wanted. I guess the same could be said for the member for Mississauga South or the member for Oshawa. It means that there are some things on which we could unanimously agree, and at least we made those kinds of agreements.
I want to refer to a few things in the bill, notwithstanding my agreement with the bill in general, which I hope we will seek to amend at committee.
First of all, there is a drafting error in the title of the bill. The bill is referred to as the Conflict of Interest of Public Office Holders Act. While of course the member for Mississauga South, the member for Oshawa and I are not public office holders, we are parliamentarians. Because we are not public office holders, the bill should be renamed and the word parliamentarian has to be added to that because it is wrong just from that standpoint.
There are certain provisions in the bill that I would like to see changed slightly, for example the two-year purgatory for civil servants and public office holders generally to lobby their own departments. Under the bill that is proposed it is to be shortened to one year. I know it was the unanimous recommendation of our committee, but we proposed to shorten that to one year and at the same time we proposed to keep the clause whereby cabinet can shorten it even more. The combination of the two means that in many cases the cooling off period or purgatory could effectively disappear.
We should make a choice whether we keep one year hard and fast. I do not think that is the best way. I think the best way is to have it two years with a possible application for exceptional circumstances which is what is there now. That gives a little bit more flexibility, yet gives a cooling off period that will be seen by the public,
and will be in reality as well as one which is more meaningful.
I also want to say a word here to those members of this place who serve on the Board of Internal Economy and perhaps to our good clerks at the table because I understand that they are also clerks of the Committee of Internal Economy.
I think it would be important for us as parliamentarians as we start our committee work to ensure that the definitions that we use in the bill are similar to those used by the Board of Internal Economy. For instance, the definition of a spouse in the bill and the definition of a spouse as the Board of Internal Economy sees it for benefits of parliamentarians and so on is not exactly the same.
We should do our best to ensure that there is uniformity all the way through in both Bill C-116, our conflict of interest act, and the rules as administered by the House and perhaps by the other place as well.
The committee has not yet been officially named, but I hope to be a member of the committee. If we had that, as members of the committee we could have those definitions and reconcile them in the best way to ensure that we have workable legislation.
I guess I have officially informed you, Mr. Speaker, that I would hope the Board of Internal Economy would do this. Perhaps our good clerks could take note of that and consult the Speaker about it. I for one would love to have that kind of information. It would assist me in doing my work as a member of that committee. I hope to be a member of the committee.
This bill is not quite the same as our report. The member across the way has identified the major changes. First, as we will all know, we agreed in our committee that instead of conflict of interest rules administered by an officer of Parliament, known as a jurisconsult, there should be four MPs and senators. That is what is in the bill.
On the other hand, we also agreed that we need other rules for the Order in Council appointments administered by the government.
In the middle is another group of people. They are the public office holders who sit in Parliament, namely the cabinet ministers and the parliamentary secretaries.

What do you do with them? They could go either way because they are both public office holders and they are parliamentarians.
We thought in our committee that they should be dealt with by the officer of Parliament. The government in producing the bill says no, we will put him in the other category. As I say, I do not think I am married to that principle but I do have a concern. The concern is more particularly with the parliamentary secretaries. There are a few of them sitting in the House as we are speaking now.
I see our colleague from Burlington. I think he is a parliamentary secretary. He will understand that parliamentary secretaries tend to change perhaps more quickly than ministers. If you have a parliamentary secretary who will go into that parliamentary secretaryship, if I can call it that, and out of it, and perhaps change over many times in the term of a Parliament that person could have the rules that apply to him administered by the jurisconsult and the conflict of interest commission and his or her file could be going back and forth between the two officers depending on how often he or she enters or leaves the parliamentary secretary position.
You could almost have someone walking back and forth with boxes of files between the officer of Parliament, the jurisconsult, and the commission that will be dealing with the conflict of interest for the public office holders. There is an area there which is of concern to me as to how that will apply.
I have another area of concern as well. Because we are going to have both a commission and a jurisconsult, what happens in the event that someone receives a punishment? For the purpose of my argument, we have a minister who receives or is subjected to some sort of punishment from the Prime Minister pursuant to something that was declared to be improper by the commission. Does that mean that the jurisconsult cannot have a parallel inquiry of the same individual because the individual in addition to being a minister is also a member of Parliament?
What happens in those cases? I am a little unclear as to that. The bill does not describe it well enough or I have not been briefed well enough. I am concerned about what could happen in those cases.
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I think the member for Mississauga South will agree with me that there are areas where it could be confusing at best. I hope that officials from the justice department or wherever who are taking notes as we are debating this will note and as much as possible address them when they come to speak at our committee to ensure that we do not have someone either being- pardon the expression but it is not quite that- almost tried twice for the same offence using two different court systems.
Also there are grey areas in a case where a person was a public office holder and may have committed an offence at the time that he was a public office holder but the offence is discovered by the jurisconsult when he ceased to be a public office holder.
I do not know how that will work. I do not want to throw a can of worms in all of this. I only want to indicate to my colleagues areas of concern so that we can improve the bill and have it work as well as possible.
I want to say a word as well on spousal declarations. Here I am going to give a personal view. My view is that for individual MPs and cabinet ministers it should be obligatory for the spouse to register. That is my personal view and I am going to leave it at that.
I accept what has been decided, that in the case of a parliamentarian the parliamentarian reports incomes and so on for the spouse to the best of his or her ability. If his knowledge of the spouse's interest is negligible we are not going to get much. As I say it is with reluctance that I accept that, great reluctance.
In the case of a cabinet minister it becomes obligatory. That has to be paramount. The reason that is important is the following: We are all here today as members of Parliament. If new rules are applied to us while we are already here as MPs in the case of a cabinet minister it is going to be very easy to make the decision I think. The day after the next election when the new government is elected, and needless to say I hope it is a government led by the now member for Beausejour, soon to be member for Shawinigan and Prime Minister, he may phone a colleague of mine, say the member for Saint-Leonard, and says he would like that member to be a cabinet minister. The member for Saint-Leonard can say he would like to take a moment to discuss it with his spouse to see if they are both willing to file the conflict of interest forms. If one of the two refuses to sign the member can then say: "Sorry, Leader, some other time".

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If they both agree that that is going to be the rule then they live by it.
That is why I think it is particularly important for those who are public office holders to be subjected to that kind of rule. I happen to think, and perhaps I am a voice in the wilderness, that should apply to all MPs and senators as well, but I will leave it at that.
In order to ensure that everyone can live with these rules I have a suggestion. Make the date of proclamation the date of the next election. If someone cannot live with these rules they can pack it in and go home. We can say we do not want them here if they cannot live with the rules. They cannot say they were applied retroactively and they did not know about them when they came here. If you cannot live with the rule then go home. If you can live with the rule run again, be a candidate. When you come here, prior to being sworn in as an MP or within the requisite time after, file the appropriate declarations so that Canadians know that at least there is that level of good faith in living within the rules.
Let there be no mistake. Conflict of interest rules in themselves do not necessarily mean good behaviour.
What you need first and foremost is good intention. I am sure most of us have good intention, but I hope that all of us have the intention to live with these rules.
Some may ask: Is it going to be hard to recruit candidates having these rules? Justice Parker addressed that in the report in which he said that the Centre for Responsive Politics in the United States had undertaken a study of this issue some time ago.
What the centre discovered at the time was that in fact stricter rules actually attracted, by and large, better candidates because people knew that they would be sitting in a parliament or in a legislative body together with other people who were willing to live under tougher rules and who had the intention, at least stated, of living under those rules.
Therefore, Justice Parker had concluded that you are not going to have a problem finding good candidates if you have tougher rules. Providing that the rules are reasonable, you may find it easier. I have just found a
quote here from page 350 of the Parker commission of inquiry report. It said:
I was particularly interested to learn that the disclosure requirements have not discouraged "good people" from entering politics or running for public office. For example, a study of members of the U.S. House of Representatives and Senate conducted by the Centre for Responsive Politics in 1985 found no one who felt that financial disclosure affected his or her decision to seek public office.
Even having said that, it does not mean that we can make all kinds of unreasonable rules. I see our colleague from Oshawa here today. He has served and so have I in another legislative assembly, namely the Legislative Assembly of the Province of Ontario.
I know he chaired a committee after I left which dealt with an issue involving the financial interests of a certain cabinet minister. He and I have talked about it in the past. While I will not pretend to speak for him at this moment, the job of serving on the committee reviewing that was no picnic. I do not think that the member for Oshawa would be the first to rush in and volunteer his services to sit on a committee like that again after the experience that he lived through.
It is tough to sit on a committee involving disciplining one's own peers. It is not something that members will be rushing out to perform. It is a difficult task, perhaps a necessary one. I think the experience of our colleague from Oshawa is rather unique in this Chamber. I look forward to the contribution that he will be providing to our committee.
He has the option of giving us sober second thought from the House because he has dealt with this issue before having chaired such a committee in the Ontario legislature.
I want to take two minutes and speak about those who have said that this bill is a watered down bill on conflict of interest. I beg to differ. This is not watered down compared to the present conflict of interest code. No way. This is as strict and certainly much stricter in the case of MPs. They are not even affected by the present code.
Some will say: "Oh yes, but it is watered down compared to Bill C-43". Some provisions did not make sense, perhaps. Over all, no, it is not watered down. I submit it is not.
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Let me give an example of a clause of Bill C-43.1 will give this one from personal experience because when I read the bill the first time it struck me rather strongly. Bill C-43 said that every time a spouse of a parliamentarian received a fee the spouse would then have to disclose that to the jurisconsult. I looked at my own situation. In my wife's job she does not get a salary, she gets fees. That means every time she received her paycheque she would have to come and register. She is a real estate agent, and as such she is paid fees. I understand that the same would apply to lawyers and perhaps many other professions as well. In the case of people who are even more active in private enterprise they could be registering daily.
What would that have accomplished?


Mr. Gagliano:: My wife is an accountant.


Don Boudria: There we go. My colleague from Saint-Leonard says his wife is an accountant. She would probably have been one of those people registering daily because every time one fills out somebody's income tax form one is paid a fee, not a salary. Therefore she would have been registering all the time.
There were major errors in Bill C-43 and we have corrected them. That does not mean we have watered down the bill. I hope it means we have corrected some of the mistakes. That does not mean that this bill does not have mistakes. We will discover things that are wrong with it at committee. I am sure we will and I hope we do. If we do we will have an opportunity to improve the bill.
Even with everyone's best intentions I am sure there will be mistakes after we have gone through the bill. Hopefully the next Parliament can correct those as time goes by. Perhaps we should do what was done with the Lobbyists Registration Act and have a three-year review put into the bill. We did that with the Lobbyists Registration Act. It was a triggering mechanism that incited all of us to look at the bill again. That is not a bad idea and possibly those of us who hopefully will be reviewing this bill at committee level should consider that.
I want to conclude my remarks on that by thanking my colleagues who served on the committee that produced the report on Bill C-43. I also want to indicate that my
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colleague from Saint-Denis will be speaking shortly. He has given an immense contribution because although he is not the dean of MPs he is the next one to it. He has been here the second longest of all MPs in the House. He is more experienced than many of us, even though he is still a very young MP of course. He will be proud to read in Hansard that I said that about him. The member for Saint-Denis has been an MP for a very long time and his contribution at the committee level was quite impressive and will continue to be. Many members, and members of the other place as well, made excellent contributions at the committee level.
I want to close by thanking the member for Beausejour for making this issue an important one for our party. I happen to think that the issue of reconciling members' interests and the trust that we have in this institution is important for us. I want to thank the member for Beausejour, the Leader of the Liberal Party, for having identified that issue as being a priority issue for him. I say the same as well to the member for Cape Breton-East Richmond, who is the House leader and ultimately has many decisions to make in terms of the interventions we make on various issues, and the Whip, the member for Saint-Leonard, who permitted me to be one of the Liberal members doing the report on Bill C-43. I appreciated that opportunity as well.

I want to say to all hon. members that we must not let this bill die on the Order Paper of the House of Commons. I think we have a duty not to rush this bill through without examining it because it is an important bill, but to give it thorough consideration immediately within the next few days or weeks and to report back to the House before Parliament adjourns in June.
I expect, as do other members, that when Parliament adjourns in June for the summer recess, there will no further sitting of this Parliament. There will be an election so I do not think we will come back in the fall. According to most parliamentarians, Parliament will not come back in the fall and an election will be called. It is important for us all to adopt this bill so the next Parliament will have an instrument that will prove to be very useful for parliamentarians.

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As I said earlier, good rules do not necessarily guarantee good behaviour. Idle rules however are there to help us and, more importantly, to restore the confidence of Canadians in this great parliamentary institution, the highest court in the land, the Parliament of Canada.


Mr. Mike Breaugh (Oshawa):: Mr. Speaker, I am pleased to say that we support the principle of this bill. We had a little bit of discussion back and forth about how quickly it ought to be processed. The only thing I would like to say on that is that it deserves due consideration by all the members here. It is not something that should be done quickly. It should not be a one-day wonder but it should not be stalled either.
It should have a reasonable amount of debate. For our part, we have two speakers on second reading. We would be quite happy to go off and work through the committee stage of the bill. For what it is worth, I believe, as others have already said, that this is a bill that ought to be completed some time before the end of June and it ought to be in place and in operation before the next election is held.
I want to start by doing something I never do. I want to thank the member for Mississauga South and Senator Stanbuiy, in the other place, for restoring my faith in the fact that this process works, as someone who has been in politics for a while but is new to this place.
I was somewhat taken aback by what I saw here in my first year or so. It struck me that much of what happens here is not very productive and is not very useful to the Canadian people. In fact, it is downright stupid.
In sitting on this joint committee I had my faith in the parliamentary process renewed somewhat because I found there people from all political parties, from the two Houses, who did what I think Parliaments are supposed to do. They sat down, looked at the problem and tried to find a reasoned and reasonable solution to it. That does not always happen in Parliaments. Sometimes Parliaments do particularly silly and stupid things. Watching this place on television it is sometimes hard to explain just exactly what is going on here at any given moment.
One of the tragedies is that while people see Question Period on television, which I am kind of ashamed of, they
did not get to see the work of this committee, which is what a Parliament really does.
Conflict of interest legislation seems to bring out the best and the worst in people. I do not know why that is. For all those who have a tendency to be pompous, it seems to bring out the absolute worst in them. They give great speeches about the integrity of public office holders and how wonderful everybody who ever got elected is, how they have no faults, how they live hard lives, everybody makes great sacrifices and what a noble privilege it is to serve.
I have been in politics for 20 years at every level and I do not subscribe to any of that. People in public life are people first and last: good ones and bad ones, smart ones and stupid ones, honest ones and dishonest ones, and people who work hard and people who do not deserve five cents for their day's work. They are people and they are in a sense what the original Parliament was on the fields of Runnymede. At Runnymede it was a good idea to watch where one was stepping because it was an open field. They came there on horseback. It is my experience today in any Parliament that I have ever seen that it is not a bad idea to keep an eye peeled for meadow muffins because they are still there. In part that is what conflict of interest legislation is about.
For many in the public I suppose the impression is left that all one has to do is pass a bill like this and all the problems are resolved. I think those of us who have been in politics for a while know that that is not very close to the truth at all. This bill for example does not stop any criminal allegations against anybody nor should it. If somebody is elected and breaks the law then they should expect and get no favour from anybody. They should be treated before the courts of Canada as any other citizen would be treated. This bill is not about that kind of activity. If someone steals or commits a crime under the Criminal Code of Canada then they should be treated exactly the same as every other Canadian citizen. That is the first thing that I think needs to be put on the record.
A conflict of interest bill at its very best tries to define the grey areas of politics. Where did someone exercise a little undue influence? Just exactly how did they do that? Of course it is almost impossible. As someone who chaired a committee at the Ontario legislature and studied every conceivable version of conflict of interest
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legislation, there are all kinds of varieties out there and none seem to do the job much better than any other.
Some jurisdictions I have looked at put a heavy emphasis on paperwork. They seemingly believe that if one fills boxes and boxes of declarations about this and bank accounts about the relatives doing likewise then somehow that alleviates conflict of interest. I do not think it does.
Some jurisdictions that I looked at really went in hot and heavy for great police investigations. In the United States for example it is fairly common practice to have the FBI, the CIA and everybody else go out and conduct field interviews. In other words if one is accused of something or going to be appointed to some great office in the United States then it is common practice that the FBI will knock on the door of your neighbours and ask what kind of a person you are. That information is gathered and then put into files. The files are shown to some members of Congress and not necessarily to others. We have all managed to watch televised proceedings of some of their hearing processes where the flavour of all this kind of comes out. Does it result in a better system than what is proposed here? I am not sure that it does. It certainly has to be more expensive but I am not sure it provides a better system.
Some would advocate that a great bureaucracy should be built up to examine the records of all members of Parliament, everybody who is a parliamentary secretary and everybody who is in the cabinet. I am not sure what useful purpose would be served by that.
I do know this. What has happened in this House is almost the same as what I have seen in every other jurisdiction. Parliaments and legislatures do this kind of stuff reluctantly. It is usually after there have been a series of allegations laid against the members. Frankly it is not usually the ones where there are Criminal Code violations that cause the problem because generally the courts pick that up, go to work and do their job as they normally would. It is the grey areas of influence peddling and who helped make some decision and might profit by that. Allegations in Ontario led to that law. I am
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someone who chaired one of the committees that heard the conflict of interest allegations there.
It kind of comes down to this: A gentleman who was a good friend of mine was a minister of natural resources and he wrote cutting licences for timber firms in northern Ontario. He happened to belong to a family that operated a lumber company in northern Ontario in Kapuskasing. He sat down beside me on the first day and said privately: "Mike, what was I supposed to do? My family runs the only lumber company in town. I am the minister. Why would I not sign the licences? I did not make any money off that". On the last day of the hearings he said much the same thing to me. I do not think he got the message all the way through.
The husband of another friend of mine borrowed some money from the Government of Ontario and she was in charge of a ministry that administered those funds. She did not see the conflict either.
In my household, and I suspect in most, if my spouse borrowed a million dollars and I did not know about it then there would be more than a conflict of interest involved in this. If I borrowed a million dollars and did not go home and tell my spouse about it then there would be a little discussion at the Breaugh's kitchen table that night. However, not every household is the same. Part of what a conflict of interest bill has to try to do is to take the perception of everybody and find a way to sort it all out. Very often the perception of a conflict of interest is just as important as an actual conflict of interest. In other words, it really does not matter if somebody made a million dollars that they should not have. If the rest of the world thinks they made a million dollars then it hurts the process.
It hurts the process in this way. All members of this Chamber are damaged when an allegation is made that somebody here made some money that they should not have. That is unfair. We all know that. There is something that I think is true when those allegations are raised. I have had some interesting discussions over the years with colleagues who love to make these allegations. I have often said: "Do you know that something is wrong here?" They would say: "It sure looks like there is

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something fishy". The end result was: "Let's go fishing and see if we can destroy somebody's reputation". I am not so sure that is a useful exercise for anybody.
One of the reasons that I am an advocate of conflict of interest legislation is that in my books and having studied it in a number of places there are some simple, straightforward things that have to be done. First and foremost there has to be a law such as the one that is being proposed here. Rightly or wrongly and whether it is imperfect or not, at least it lays down in legal form what is expected of the members.
Never mind the rules or guidelines or advisers. Never mind how fancy it gets. What I want is a law. If one believes in it then write it down. That law in my books should be put together in somewhat the way this one was. I am choosing my words a little carefully here.
Say the government had said: "We have had a special joint committee of the House and the Senate study it and draft a bill". Then it brought that bill in here. I would say the obligation is on the members here to read the bill, to understand it, to know what it means and go forward with it. That is exactly the way I think it should be done.
This bill was not done quite that way. I want to make this distinction. This bill is based in part on the report of the joint committee and in part from somewhere else. Most notably I would ascribe it to the cabinet submission called Bill C-43 which was brought forward previously. That is I think one of the problems. The good side is that there is now a law being proposed.
The second thing-I think most experts in the field would advocate this-is some form of disclosure. What do I mean by disclosure? It is public disclosure in particular. It gets a little sticky. It is not quite as simple as it first appears. There is no polite way to say this. Members ought to have a public record of what they own and what their interests are. I have done that and other members in this Chamber have done that in other places at other times. It is no big deal for most of us. For those of us for whom it is a big deal, it is probably even more important that they do a public disclosure statement because they will have more opportunities and more areas where disclosure could be found.
My experience in Ontario unfortunately was this. We insisted on disclosure on a fairly broad basis by every single member of the House. The first year those disclosure reports were made public the press wrote
reams of stories. They were not all factual, sensible or worth really writing about but they wrote them anyway. The news was that here is public disclosure on Ontario's politicians. The second year they wrote a few less stories. By about the third year it hit the norm.
The purpose of the exercise is not to provide The Toronto Sun or The Ottawa Sun with new fodder for columns. It ought to be to provide the public with some access point where they can find out where there might be conflicts for the members. This is a little stickier that it first appears to be.
There is the matter of privacy for the members and privacy for their spouses. I would advocate that somebody who is not elected to this place-a male or female spouse of a member-is someone on whom this House has no right to lay a law or a rule. It is bad enough that they made the fatal error of getting involved with a politician. It is worse yet that they should have to make public every sense of their business dealings. That is wrong. I believe it is wrong. There are some who advocate that they ought to, but I fail to see that. If you leave it up to the member to make the declaration where he or she has knowledge of a conflict or where one might exist, I think those of us who are elected deserve to bear the heat. That is as far as I am prepared to go.
If I know that my spouse has a conflict of interest in some way, the fact that she is married to me makes it a conflict. The woman deserves sainthood in the first place but in the second instance, she does not deserve to be punished again. If there is a conflict, it is my obligation as an elected member to point it out. I think that covers as much as needs to be covered there, but disclosure is important.
The most important thing-this is difficult, and we are going to argue about this a lot-is a clear, straightforward process for resolving conflict. It is not easy to do. It will not be done by burying it under tonnes of paper. It is not done by setting up a huge bureaucracy. It is not accomplished by trying to bamboozle the public.
The jurisdictions where I saw it working well had this as a hallmark, a simple straightforward system with not very many people involved. It had one clear set of rules being given out, one set of advice being given, one person telling the members what they can and cannot do.
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It is as simple and as straightforward as that. It must be able to deal with problems efficiently.
We have a criminal court system which is elaborate to deal with criminal charges and that is fair. I agree with that. What we are talking about is something quite different.
I know that in many places they use some version of what is called in the committee report a jurisconsult. This bill calls for a commission as well. Let me give my version of that.
This is not a person who has to be all-wise or all-knowing. It is a person who must have a reasonable amount of common sense and an understanding of what the public expects from people who are elected. In other words, it must be a person who knows what is right, what is wrong and what is reasonable. That is the hallmark of the job, not an elaborate staff, not a complicated process. In fact, in my experience, it is a fairly straightforward process.
That brings me to the first major problem I have with this bill. I do not want to vote against it because this process may work but I frankly will be surprised if it does. It seems to me it sets up two levels of advice, two sets of rules, a commission on one side and a jurisconsult on the other. I always find it dangerous in politics to set out dual tracks.
This may work. It may be possible that the Government of Canada will do something that no other government in the world has ever been able to do; create two bureaucracies that do not at some point collide like mad.
I think they will. In addition to what is written in this bill there will, of course, be regulations. There will be interpretations of regulations. There will be rules. There will be interpretations of rules. There will be advice to the members. There will be memos written to the members. There will be rulings given. If the rulings are not the same for everybody, this bill is in trouble. That is the first thing where I think this bill may be in trouble. It may not work.
I am willing to give it a shot. I understand, as everybody does, that there is a big difference between a little guy like the member from Oshawa sitting over here, just about Perth, Ontario, in the Chamber and the big wheels who sit right at the front and make all the big
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decisions in cabinet. Behind the big wheels are the little wheels, the parliamentary secretaries.
I do not give out government contracts. I do not decide national policy. I do not decide who gets all the jobs. The opportunities for me to have a conflict are pretty rare. People in the cabinet face an entirely different set of circumstances. Sometimes parliamentary secretaries do. Sometimes they have even less influence over things than I do. But every jurisdiction that I know of which has looked at conflict of interest legislation recognizes that there are some of the players who are going to be in conflict positions much more often than others.
This bill tries to do it by dual tracks. I think the dual tracks are going to collide at some point and will cause a major problem.
To conclude fairly quickly, a couple of things do need to be said. Mr. Justice Parker in a very elaborate report gave us his opinion on the matter. One of my constituents, Michael Starr, and one of his colleagues in the Parliament of Canada, Mitchell Sharp, had their version of what should be done. The joint committee had its version of what should be done. The government has now brought forward a bill.
No matter what might happen, it is better to have an imperfect law than no law. I offer my support, tentative though it might be in spots, because I believe very strongly that whatever the rules are, as long as you write them down, we will all live with them and we will work our way through them.
It is going to be critical that we go through these things on a regular basis. If somebody gets off the hook because a definition put in this bill does not quite cover the act he is alleged to have committed, then the whole thing is a failure. That is one of the reasons why I advocated in committee, as did others, that there be no tight little definition of a conflict of interest, that it should be as broad as possible.
Those of us who worked on the joint committee have an obligation to say our little piece. Nobody wants to delay this process. I hope it is the government's intention to proceed with this legislation and to make it law now. If it has flaws we will try to pick them up as it goes through committee.

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Adjournment Debate
I hope the government will listen to members with other points of view and see if it can do what I thought the joint committee did an excellent job of doing; not trying to find everyone's theory of it all, but something that is practical and will work and will assist us all in restoring a little bit of confidence. I concur with what some others members have said. I am not a great believer in a magic bill that can be passed which will make the world change its view about this place. However, there are things that members here can do, and this bill is one of them.


Donald Alex Blenkarn: I believe you will find consent for the following motion;
That when no further members rise to speak today on Bill C-116, the debate shall be deemed adjourned; and
That notwithstanding any Standing Order on Tbesday, March 30, 1993 the House shall sit between 1 and 2 p.m. for the sole purpose of the continuing consideration of the second reading stage motion of Bill C-116; and
That not later than 1.55 p.m., all questions necessary to dispose of the said motion shall be put without further debate or amendment;
And that any recorded division be deferred until 5 p.m. on Tbesday, March 30, 1993.


The Acting Speaker (Mr. DeBlois):: Hon. members have heard the terms of the motion. Is there unanimous consent to adopt the motion?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.

The Acting Speaker (Mr. DeBlois):: May I suggest to the House that we suspend the sitting to the call of the Chair? Meanwhile we will try to move up the proceedings on the adjournment motion.
The proceedings are therefore suspended to the call of the Chair.
At 5.28 p.m. the sitting of the House was suspended.


SITTING RESUMED The House resumed at 5.37 p.m.
[Stage Direction]
A motion to adjourn the House under Standing Order 38 deemed to have been moved.
Hon. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, this question arises out of the recently announced policy of the government to replace face to face interviews for immigration applications by the mailing in of complex forms to centrally located offices and in particular, to a new centralized office in Vegreville, Alberta which will open in April 1994.
This government proposal has already led to the closing of many local immigration offices which were accessible to people all over the country. They will be replaced as I say by fewer employees in fewer far away offices, in particular in Vegreville.
Faced with that new policy, on February 24 I asked the minister why the government was proceeding with this plan when the pilot projects were a failure and when they showed that this system would be extremely inefficient and would open the door to criminality.
I am informed by some of the people who took part in some of these pilot projects that what used to take three to four days in face to face interviews, getting the appointment or sitting before an immigration officer and going over the immigration application now takes three to four weeks in the pilot projects.
One of the major problems is that many of these people do not speak English or French as their mother tongue. In filling out these forms they make mistakes. The forms are sent back. They are returned again to the centralized office always by mail. Veiy often it takes a long time to settle the problem and get the application form dealt with. These are application forms for work visas, visitors' visas, family class applications and so on.
While it makes it more difficult for legitimate refugees in this new mail-in centralized system, it makes it easier for the criminal element because it is easier for the criminal element to defraud the documents. They do not
March 29, 1993

have to face an immigration officer across the table and it is easier to get through contrived and falsified documents in order to have illegal immigrants enter this country.
What is going to happen as a result of this policy is that more and more of a burden is going to be shifted to the offices of members of Parliament, to agencies, to NGOs and to churches. They will have to help immigrants fill out these complex forms and send them into the offices. In many cases the immigrants will probably turn to lawyers and immigration consultants which will cost them a lot of money.
I ask once again for the government either to cancel this project which is inefficient and leads to criminality or at the very least to postpone it for one year while we have a parliamentary committee look at it objectively and see if it really is in the best interests of the country.


Mr. Bill Kempling (Parliamentary Secretary to President of the Treasury Board and Minister of State (Finance)):: Mr. Speaker, the government announced a series of initiatives for the reconfiguration of the points of service network for the future delivery of the immigration program. These initiatives are totally consistent with the fiscal constraints announced by the President of the Treasury Board on December 2, 1992.
With fiscal restraint messages recently being announced by all levels and political stripes of government, Canadians understand there is a growing need to manage more wisely our limited tax dollars.
The restructured Canadian Immigration Centre network will provide effective client service in an efficient manner while saving the taxpayers money. The advanced use of technology in the case processing centre scheduled to begin operations in April 1994 and the efficient mail-in forms are the key to saving $6.5 million.
Some of the resource savings realized will be allocated to enhance the enforcement aspects of the immigration program thereby strengthening its integrity, something for which many Canadians have long been calling.
Even though it saves taxpayers money, our strategy maintains client service at a high level. Of the existing 64 points of service we will maintain a community presence
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with full-time immigration staff in 51 locales. This is not a rampant reduction of the inland delivery network but a refined structure that maintains a presence in small communities where appropriate, while placing the bulk of our resources in larger communities where there is a high demand for service.
In conclusion, after two years of processing case work by mail in Toronto, Montreal and Vancouver surveys confirm a client satisfaction rate of 84 per cent. Our monitoring has shown no increase in attempted misrepresentation or document fraud over personal service.


Mary Catherine Clancy: Mr. Speaker, in December of last year I questioned the minister of employment regarding changes to the Unemployment Insurance Act.
In particular, I asked him to set out clear guidelines for proving just cause as it relates to sexual harassment. The government it is true has broadened the definition of just cause and has given the board of referees clearer powers to protect the privacy of victims. While this is fine these measures do not change the procedure for proving just cause and in consequence not much has changed for women victims.
Sexual harassment has been grounds for just cause for quite some time but the process of proof is where the failure of the system lies. As I said in December I spent four years as chair of the unemployment insurance appeal board in Halifax. I know what it takes to prove just cause. It is a long and tortuous and potentially costly endeavour and frequently it is very degrading for the female victims.
The system works against voluntary quitters and not for them. All it takes is a telephone call to the employer who will obviously deny that he sexually harassed his employee and that is it. A woman may appeal the decision to the Board of Referees but Employment and Immigrations figures show that the board only overturns the decisions of the UI officer who made the original decision 0.4 per cent of the time.
I am happy to say that when I was chair of that appeal board my ratio of overturning decisions was 25 per cent but gone are those days.

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Adjournment Debate
To add insult to injury the employer is not even compelled to go before the board. He cannot be compelled to go before the board. His appearance at a separate hearing is by invitation which he is of course free to decline.
Under the old rules the complainant could still receive a portion of her UI claim. Under the new rules that this government so typically rammed through this House this will no longer be the case and women victims will lose their UI right off the top.
May I remind this House and the minister in particular that I am not as he said: "spreading lies" by stating unequivocally that women will not be protected under the new legislation any more than they were protected under the old. I suppose that if a woman has the strength, the courage and the money she can hire a lawyer and go through the process of appeal to a judge of the federal court. However, we are talking about women in this particular category most of whom make $20,000 a year or less. They are hardly the kind of clients who can afford to hire a lawyer for this kind of case.
May I remind the minister of another given that women are poorer than men. Women earn on average 30 cents less than men according to the most recent Statistics Canada report on the earnings of men and women. Do I need to again state the obvious? The wage difference between men and women will all but preclude further action by women if their UI claim is rejected.
Mr. Speaker, this piece of legislation is a disgrace.


William James Kempling: Mr. Speaker, the hon. member knows it was this government that first incorporated sexual harassment in the UI Act as just cause for leaving a job. This was done as part of the changes to the UI Act through Bill C-21.
I might add that the hon. member was one of many Liberal members who on October 25, 1990 voted against the government amendment which enshrined sexual harassment in the UI Act as just cause for quitting a job.
The hon. member also knows that CEC employees have a long history and an excellent record of dealing fairly and sensitively with all UI claimants including
those who may have quit their jobs due to sexual harassment.
We will be building on this record of fairness by providing awareness training to reinforce the sensitivity of EIC staff to the issue by issuing guidelines that will ensure that staff continue to give the benefit of the doubt to the claimant and by adopting administrative policies that allow sexual harassment cases to be handled by UI agents of the same gender and by having appeals held in private.
Bill C-113 is about fairness. It is not fair that Canadians should pay UI for people who choose not to work for no good reason. However, if just cause such as sexual harassment does exist one can be sure that the claimant will receive UI benefits. Bill C-113 is also about responsibility. It is irresponsible to continue allowing the UI deficit to increase and we must act on this.
Bill C-113 is about fairness and responsibility and I urge the hon. member to support this bill.


Iain Francis Angus: Mr. Speaker, earlier in this House I raised a question with the Minister of Public Works with regard to what I can only call either Tory mathematics or now the missing $7 million.
The matter arose because of the dispute over the proposal to build the fixed link to Prince Edward Island. As members of this House will know, P.E.I. is currently serviced by Marine Atlantic. As the courts have confirmed, as part of a constitutional requirement ferry service must be provided.
The current funding of Marine Atlantic provides for some revenue from the fare box, in other words the people who use the ferry, and another element around $23 million, $24 million or $25 million a year which comes as a subsidy from the taxpayers of Canada. That is the shortfall between the cost of the service and the fare box.
I rose in this House and raised with the Minister of Public Works the question that if it was only costing the taxpayer $23.5 million to $24 million a year to subsidize the ferry operation, why was the Government of Canada
March 29, 1993

prepared to provide up to $42 million a year to subsidize the owner and operator of a bridge.
The minister responded in the House. When Bill C-110 went to committee, I pursued the matter there with the minister. He gave me sort of a general response and then left it to the officials from Transport Canada to respond in more detail. This is where it really gets interesting. The Director General of Marine Policy and Programs, Mr. Andre Pageot, responded to my questions. Basically what he said was that the $7.7 million was a figure that they made up.
That is not money that goes to Marine Atlantic that it can put away for a day in which it needs to re-equip the fleet or replace a particular ferry. No, the Government of Canada does not put it in a special interest-bearing account so that when Marine Atlantic needs a capital infusion of the $50 million to $60 million that a new vessel would cost the money would be there. No, it does not exist there either. However, it is there to use as a basis for justifying a $42 million subsidy to the owners and operators of a bridge.
The reason that we raised objections to the fixed link is not just because of the environment, although that is a very, very important element. As we saw, the Federal Court agreed with members of the New Democratic Party and with Friends of the Island and ordered a new and proper environmental assessment.
We saw in the House earlier today the Minister of the Environment skating around the issue and not coming out and saying: "Of course we will ensure that there is a full and proper environmental assessment". He sidestepped the issue, just as the Minister for Public Works refuses to recognize the reality that this bridge project is going to cost the taxpayers more than the current ferry service does today or will in the future.
That is what this government has to be held accountable for and that is why we will continue to oppose this foolish waste of taxpayers' money.


Mr. Ken James (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, in reply to the hon. member for Thunder Bay-Atikokan, we want to say that much has been made of the annual subsidy that would be paid to the developer of the bridge between Prince Edward Island and New Brunswick. He should know that the subsidy represents the avoidable
Adjournment Debate
future costs to the federal government of maintaining the Borden ferry service that is projected over the next 35 years.
The amount of money available, as he mentioned, is $42 million calculated in 1992 dollars. This $42 million includes not only the estimated costs of operating and maintaining these ferries, but also the capital costs that would eventually be required to replace these very expensive vessels, a cost, as the hon. member would know, that is escalating year by year.
The member should know that the replacement cost is not assumed by Marine Atlantic and is not included in its subsidy.
Nevertheless it is a very real cost to the federal government, no matter which pocket it comes from. It was and is a future expense that must be taken into account when considering the value of the subsidy for the fixed link.
I thank the hon. member for raising the question.


David Charles Dingwall: Mr. Speaker, on December 1, 19921 raised once again on the floor of the House of Commons concerns that I have had with regard to the Westray coal mine disaster that took place in Nova Scotia.
At that time I repeatedly asked the Prime Minister and ministers of the Crown if they would conduct a federal inquiry. The answer was in the negative, the rationale being that the Government of Nova Scotia was going to proceed with an inquiry.
The fact of the matter is that what I had asked for was a federal inquiry with regard to the role of the Government of Canada and in particular the funding that the government gave to that particular operation.
We now know today, as a result of information made public, that the Government of Nova Scotia has lost $12 million, the Government of Canada has lost in excess of $80 million and 26 miners have lost their lives. As I speak in this Chamber their families are without information, which is presently in the hands of the government, as to what has happened and what is likely to happen with regard to possible criminal charges.

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Adjournment Debate
This is a tragedy of national and international importance. What we found out today is that the government, under the auspices of the Freedom of Information Act, has made available to me a document from 1990 entitled The Funding of the Westray Coal Mine. It is 18 pages in length, but it is censored.
I remind this Chamber that a former President of the United States had an 18-minute gap on his tapes. What we have here is an 18-page gap with regard to the Westray coal mine. It is high time that the parliamentary secretary opposite and all members of the cabinet come clean with the people of Pictou county as to what is contained in that particular memorandum.
There was a CANMET study which was referred to in this House by ministers of the Crown, which the opposition was led to believe was the conclusive information concerning CANMET. We found out today that there are seven additional pages that have been censored by the Government of Canada. Twenty-five pages of important information have now been hidden by the government.
I want to ask the parliamentary secretary to make this information available to shed light on a tragedy in Canadian mining history. He should not stand in his place and give us that holus-bolus argument that somehow it has to be protected because of privacy. Twenty-six men have lost their lives, $12 million has gone down the tubes in Nova Scotia, and $80 million has gone down the tubes federally. Canadians have a right to know. Who is this government trying to protect, and why is it hiding this information from taxpayers in this country and from families who have been distressed over the last 12 months?
On behalf of those families I ask the parliamentary secretary opposite to provide that information so that Canadians will know exactly what happened.
Mr. Ken James (Parliamentary Secretary to Secretary of State for External Affairs) Mr. Speaker, I thank the hon. member for Cape Breton-East Richmond who I know has a very deep and concerned interest in this subject.
What I am going to say to him in some cases I think he probably already knows. For the record, under the Constitution the regulation of the mines is a provincial
responsibility. The responsibility pertains to all aspects of mine plan approval, amendment and ongoing monitoring, including health and safety. The only exceptions are Devco, which is a Crown corporation, and uranium mines.
Following the accident at the Westray coal mine in Pictou county the Government of Nova Scotia established under its jurisdiction a commission of inquiry with a mandate to determine the cause of the explosion and to examine events leading up to the accident. The federal government co-operated with the commission up until the time it was found to be invalid on constitutional grounds. That decision was successfully appealed by both the miners' union and the Nova Scotia provincial government.
In January the status of the inquiry was confirmed as valid by the appeals division of the Nova Scotia Supreme Court, although public hearings were delayed until the provincial charges and the criminal investigation were complete.
Originally, as the hon. member would know, 52 charges were laid by the province under the Occupational Health and Safety Act. In December, 34 of those charges were stayed in order to avoid jeopardizing any criminal charges.
Recently, on March 4, the remaining 18 provincial charges were stayed for similar reasons. Once the criminal investigation by the RCMP is complete and any subsequent charges have been dealt with the commission is free to resume hearings into the cause of the accident.
For its part, the federal government will continue to co-operate with the commission of inquiry established by the province of Nova Scotia to examine events leading up to the accident at the Westray coal mine.
To do more than this is not possible without infringing on the jurisdiction of the province.


The Acting Speaker (Mr. DeBlois):: Pursuant to Standing Order 38(5), the motion to adjourn the House is now deemed to have been adopted. Accordingly this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.01 p.m.
[Stage Direction]
TUesday, March 30,1993