1993-02-23

Mr. Charles A. Langlois (Parliamentary Secretary to Minister of State and Leader of the Government in the House of Commons):: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 22 petitions.
[Editor's Note: See today's Votes and Proceedings.]



JUSTICE AND SOLICITOR GENERAL


Mr. Blaine A. Thacker (Lethbridge):: Mr. Speaker, I have the honour to present, in both official languages, the first report of the subcommittee of the Standing Committee on Justice and the Solicitor General, on recodifying the general part of the Criminal Code.

Pursuant to Standing Order 108(l)(a) and (b), the order of reference of June 13, 1991 of the Standing Committee on Justice and Solicitor General, and the order of reference of February 17, 1993 of the House, your subcommittee has considered matters relating to the recodification of the general part of the Criminal Code and your subcommittee agreed to make recommendations for a recodified general part of the Criminal Code.
Pursuant to Standing Order 109 the subcommittee requests a comprehensive response to this report within 150 days.
Mr. Speaker, you will know that we have been striving to complete this report for well over a year. I would particularly like to thank our distinguished clerk, Richard Dupuis, his assistant clerk Nancy Hall and their secretary Georgette Dubeau, legal counsel for the subcommittee, Mr. James O'Reilly, senior analyst from the Library of Parliament, Mr. Phillip Rosen, and the research officer, again from the Library of Parliament, Marilyn Pilon.
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BILL C-289 REPORT OF LEGISLATIVE COMMITTEE

Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, I have the honour to present, in both official languages, the report of the legislative committee on Bill C-289, an act to provide that Remembrance Day be included as a holiday in Public Service collective agreements.
[Editor's Note: See today's Votes and Proceedings.]



UNEMPLOYMENT INSURANCE ACT


Mr. Rey Pagtakhan (Winnipeg North) moved: for leave to introduce Bill C-408, an act to amend the Unemployment Insurance Act (maternity benefits for adoptive mothers).


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


Rey D. Pagtakhan: Mr. Speaker, this bill would give women who adopt children the same rights to maternity leave as women who become pregnant. It would also permit a claimant to take an extended period to care for a child with a physical, psychological or emotional condition when a child is less than six months of age upon arrival at the claimant's home.

February 23, 1993
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Today the current system financially penalizes adoptive parents even though they provide very useful roles and service to our country.


The Acting Speaker (Mr. DeBlois):: Mr. Pagtakhan moves that the bill be now read the first time and printed.
Pursuant to Standing Order 69(1), the motion is deemed adopted.
Bill read the first time and printed.


PETITIONS
Blaine Allen Thacker: Mr. Speaker, pursuant to Standing Order 36, this petition is hereby certified correct as to form and content. It contains 28 signatures but represents over 3,000 signatures which I have received on behalf of people who are opposed to the importation of the killer cards.


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, it is an honour to present a petition on behalf of a number of residents of central British Columbia who are dedicated in their opposition to the plan to divert part of the North Thompson River in an effort to sell the water in the San Diego, California area.
The petitioners are of the opinion that the North America free trade agreement will facilitate this. This concerns them obviously and they ask that the government take whatever steps are necessary to ensure that Canadian waters will never be diverted into the United States.


Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, I would like to table a petition from residents of Val d'Or, Sullivan, Barraute, La Motte, Saint-Dominique-du-Rosaire, Saint-Felix, Villemontel, Senneterre and the Senior Citizens Club of Val-Senneville, all in the riding of Abitibi. Your petitioners say that films depicting violence on television are dangerous and therefore unacceptable because they act as a stimulus for violent behaviour.
The petition also says that all toys that incite children to play violent games are unacceptable and their manufacture should be banned. It is also pointed out that the freedom of the press should be restricted when reporting on acts of violence, and that the repeated broadcasting of news about acts of violence on television, on all channels and on radio may act as a stimulus for similar violent behaviour.
Therefore your petitioners humbly pray and call upon Parliament to pass the appropriate legislation in order to eliminate violence in our society and thus protect our children and give all citizens a better quality of life.


Ms. Beth Phinney (Hamilton Mountain):: Mr. Speaker, I have several thousand signatures to present today on petitions. This will make over 1,400,000 signatures we have received from across Canada from people who are in support of the parents of Nina de Villiers. They feel that many people in Canada are vulnerable with little protection under the current criminal justice system, the Criminal Code, and that women, children and disabled persons are particularly at risk.
These signatures request that Parliament recognize crimes of violence against the person as serious and abhorrent to society. They ask the government to amend the Criminal Code of Canada, the Bail Reform Act, 1972, and the Parole Act accordingly.


Rey D. Pagtakhan: Mr. Speaker, I would like to present this petition on behalf of Canadians from Winnipeg, the maritimes and other areas. Apparently meningococcal disease has taken many lives of children in Canada. A test kit that can detect all types of this disease in its early stages now exists.
These petitioners pray that Parliament call upon the Department of National Health and Welfare to ensure that this test kit is fully developed so that our citizens may fully benefit from it.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I have two petitions to present this morning. The first comes from people in my constituency who are most concerned about the question of child poverty in this country.
February 23, 1993

In their petition they note that the House of Commons unanimously passed a motion in 1989 expressing its concern for the more than one million Canadian children currently living in poverty. They also note that the House of Commons established the goal of eliminating poverty among Canadian children by the year 2000.
The petition indicates some of the continuing realities of poverty for children in Canada. It concludes with the petitioners who have signed it praying and calling upon Parliament to take the actions necessary to reaffirm that 1989 commitment to seek the elimination of poverty among children in Canada by the year 2000 and to develop a plan for the implementation of this commitment.


Steven W. Langdon: Mr. Speaker, the second petition is from people in the town of Essex in my constituency who organized a series of events including a petition last year to promote pride in being Canadian.
They indicate in this petition that they believe it is appropriate to encourage all Canadians to take pride in a united, strong and independent Canada. They suggest that through the "Proud to be a Canadian" project brought forward by Kinsmen and Kinette clubs throughout Canada an opportunity should be provided for Canadians to nurture a strong relationship with our heritage and our flag, to encourage stronger ties among all Canadians for the further advancement of Canada as a leader in world circles, and to promote our tremendous pride in being Canadians.


Mrs. Marlene Catterall (Ottawa West):: Mr. Speaker, I too have pleasure in presenting a petition from my riding that reminds the House that we unanimously passed a resolution on November 24, 1989 expressing concern for the more than one million Canadian children living in poverty and setting the goal of eliminating child poverty by the year 2000.
The petition reminds us all that child poverty represents increasing costs in the health care system, the justice system, social welfare, school dropouts, loss of productivity and, more important, loss of human potential.
The United Nations convention includes a moral and legal obligation to do as the petition asks and to
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implement plans to eliminate child poverty in the next seven years as we have said we would do.


Mr. John Manley (Ottawa South):: Mr. Speaker, I too have two petitions reminding the House of the unanimous resolution of November 24, 1989 that the House express its concern for the more than one million Canadian children currently living in poverty and resolve to achieve the goal of eliminating poverty among Canadian children by the year 2000.
The petitioners remind the House of the enormous cost for Canada of allowing unalleviated this poverty to continue. They ask us to work toward achieving the goal of eliminating child poverty by the year 2000.


QUESTIONS ON THE ORDER PAPER
Charles A. Langlois: I ask, Mr. Speaker, that all questions be allowed to stand.


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


Some hon. members:: Agreed.



GOVERNMENT ORDERS


Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance) moved: that Bill C-92, an act to amend the Income Ikx Act, the Canada Pension Plan, the Income Ikx Conventions Interpretation Act, the Ikx Rebate Discounting Act, the Unemployment Insurance Act and certain related acts, be read the second time and referred to a legislative committee in the Economics envelope.
He said: Mr. Speaker, I have the pleasure of presenting for consideration to the House second reading of Bill C-92, a bill that proposes to amend the Income Ikx Act and various other acts.

February 23, 1993
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This bill will implement a number of important measures that were first announced in the February 1992 budget. It delivers on a key undertaking of this government to cut spending so that we can cut taxes and foster growth and competitiveness. As well, the bill includes a number of technical amendments to the Income Tax Act.
I see my hon. friend across the way grinning because it seems like we never stop introducing and implementing technical amendments. While this package is rather comprehensive in that light we hope that it will remove quite a backlog that has accumulated over time.
The budget measures in many respects reflect the views of Canadians in the very comprehensive cross-Canada consultation process that I conducted prior to the February 1992 budget. In the course of that the message that I received very loud and clear was the fact that Canadians expect their governments to cut spending. They want the deficit controlled. They want measures taken to stimulate growth and encourage job creation. They want to see investments made that will produce wealth and in a productive way stimulate and generate growth and wealth for the economy.
Most of all, they want a lower tax burden because Canadians believe that they have been overly burdened with the level of taxes. This bill reflects that and reflects those principles outlined in the budget of February 1992.
As well, the technical amendments contained in the bill reflect the constructive input which we have received from taxpayers and their advisers over the past few years. The aim of these amendments is to maintain and enhance the equity and efficiency of the tax system. This represents an important element of the tax system and our commitment to strengthen the Canadian economy by removing impediments and distortions caused by the tax system.
As I said, while this is a fairly large package it does remove a backlog that has accumulated for quite some time. Our hope is to proceed with this on a more regular basis so that we will not have to deal with such a large number of initiatives and perhaps will deal with it on a more frequent basis in a much more manageable way.
In outlining the measures in this bill I would like to begin with a description of some of the tax reductions
that are being proposed. First, Bill C-92 would give legislative approval to the 1 per cent reduction in the surtax on the personal income tax that came into effect on July 1, 1992.
As well, there is the additional one percentage point reduction that came into effect on January 1, 1993. With these measures announced in the budget, the surtax declines in two stages from 5 per cent of the basic federal tax to 3 per cent.
In this connection, all 14.6 million Canadian taxpayers will benefit from these reductions. For example, the single taxpayer earning $30,000 would receive a reduction of federal tax of $76 in 1993. A one income couple with two children and earnings of $50,000 would receive a reduction of $162 in federal tax this year.
These steps are expected to reduce federal revenues in this fiscal year, 1992-93, by some $500 million. The total impact over the period 1992-93 to 1996-97 is expected to amount to $6.6 billion. I should point out that these reductions are being covered by cutting expenditures elsewhere in government consistent with the theme of what we heard as we travelled across the country.
As well, these tax reductions reflect a central aspect of the government's philosophy on how best to foster growth. We believe that Canadians can make better and more productive use of their money than governments can. Our philosophy is that the more money we can leave in people's pockets the better it will be for our economy. That is a constant theme that we have followed and will continue to follow to the very best of our ability.
In addition a number of changes are implemented here for Canadian business. The goal of these initiatives is to assist companies in the manufacturing and processing sector as they restructure their operations and take advantage of the opportunities presented by the new age of globalization and the challenges presented by the increasing competitiveness in world markets.
The manufacturing and processing sector, as we are all aware, accounts for about one-fifth of Canada's domestic product. The economic health of this sector is therefore vital to the over-all health of the Canadian economy. It is also a sector that has perhaps been exposed more to international competition and adjustment in restructuring than any other sector.
February 23, 1993

All sectors of course have been exposed but this one has in a particular way been exposed. As a result of the exposure it is expected that the manufacturing and processing sector must become more productive and more competitive. In the course of that it means the challenge of producing more goods with fewer people.
That is an adjustment we have seen witnessed in the agricultural sector. We now see it happening in the manufacturing sector. That is part of the evolution of a vibrant world economy. Our goal and our aim is to assist in the process of facilitating that adjustment process. It is also to ensure that our Canadian industry is competitive, that it can compete in world markets, because so much of our vitality depends upon the export sector.
This exposure can only grow as trade and investment barriers continue to fall throughout the world and as technological advances make it possible for companies to have increasing flexibility as to where they locate their production facilities.
This does indeed provide challenges and opportunities for Canadian firms to expand and grow, building on their success to date and building upon our ability to compete. Currently 40 per cent of the manufacturing and processing output of these firms is exported. That clearly demonstrates the importance of the export market. It also forces a discipline on Canadian industry and governments to ensure that they have the appropriate structure, the appropriate financial environment and the appropriate investment environment in place so that companies engaged in this very important sector can extract the maximum of productivity and efficiency.
It is with this in mind that we propose to reduce the tax rate on income, the income tax on corporations derived from the manufacturing and processing, from 23 per cent to 21 per cent in two stages. The first decline takes effect on January 1, 1993. The second one is scheduled for January 1, 1994. The tax reduction complements two other measures announced in the budget. The first is a commitment to negotiate with other countries with respect to the deduction of withholding taxes. The second is an increase in the allowable capital cost allowance for manufacturing and processing equipment.
In that case we reduced effective budget night, February 25, the capital cost allowance. We increased it from
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25 per cent to 30 per cent. When taken all together, the three corporate tax measures would mean that a Canadian manufacturing company not subject to the withholding tax would be subject to a significantly lower statutory tax rate in Canada than its competition in the U.S., 35 per cent versus 39 per cent, again demonstrating the thrust of this budget to improve the competitiveness for the Canadian sector.
For a company that is a subsidiary of the U.S. parent, total income and withholding tax would be less in Canada than it is in the United States.
We took these steps to provide incentives that would encourage investment and build a healthy economy and of course to create jobs, to secure the stability and the strength of those existing companies and to nurture and encourage other companies to become involved and take advantage of the newly emerging economy.
We know that from time to time we have to adjust our investment measures to ensure that they reflect the fiscal reality of the government, that they respond to economic conditions and that we get the best value for the taxpayers' dollars that are provided through these incentives.
To this end Bill C-92 proposes to target the lifetime exemption for capital gains toward more equity investment. In other words it will try to encourage more investment in firms that produce well, that generate jobs and generate economic activity.
The Income Tax Act therefore will be amended to no longer provide the $100,000 lifetime capital gains exemption on real estate purchased after February 1992 and to restrict it on real estate purchased before March 1992.
For the greater certainty of this particular measure, I would like to clarify some important points. First, this change does not apply to real estate used in active business. Second, it does not affect the $500,000 exemption for qualified small business shares and qualified farm property. Third, it does not affect the exemption on capital gains from the sale of principal residences and I think that is veiy important. The thrust of the lifetime capital gains exemption is left intact. What we are doing here is providing a measure which would hopefully encourage more investment in equity, more investment in productive enterprises that would generate jobs and generate growth.

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The bill also proposes to modify the rules of the labour sponsored venture capital corporations, which are investment funds set up by labour organizations to purchase shares in small businesses. These changes include an increase in the maximum credit for investments in these funds from $700 to $1,000, an increase in the size of the company in which the funds may invest and a relaxation in the eligibility criteria for the fund sponsorship.
I should say that this too has been a very useful and encouraging kind of measure which brings ordinary workers more into the opportunity of investing in their own corporations.
There are some other measures I would like to refer to such as the home buyers' plan. As we have seen, economic growth has been strengthened by the home buyers' plan which was announced in the 1992 budget. This measure allows home buyers to withdraw up to $20,000 in existing funds from registered retirement savings plans and to use the money to finance the purchase of new or existing homes.
Where the home is being occupied as the buyer's principal residence, there is no tax on the withdrawal. The withdrawal is repayable to the home buyer's RRSP in equal instalments over a 15-year period.
Since this plan was announced, the response from Canadians has been impressive and so far there have been some 130,000 withdrawals under this plan. This initiative together with the reduced CMHC down payment requirement from 10 per cent to 5 per cent has helped in increasing housing starts in 1992 by some 7.7 per cent over 1991.
This has been an initiative that has been utilized. It has certainly helped people to get into homes. There is perhaps nothing that generates more economic spin-off than the home building industry. We not only have the activity of the building of the home, but indeed we have the spin-off in terms of equipping the home with furnishings and appliances. It does have a very positive impact in improving domestic demand. A one year extension of the plan was announced in the December economic statement and legislation to implement this extension will be introduced shortly.
Another change that was proposed in this legislation is to modify the tax system so that it treats common law
couples in the same way as married couples. The broader definition of spouse that is currently used in the Income Tax Act for provisions relating to pensions and other retirement plans will be extended for all other purposes under this act. Under this broader definition the term "spouses" will include both married and common law spouses.
I would like to now turn to some of the technical amendments of the Income Thx Act that we are proposing in Bill C-92. First of all we propose to reverse the ordering of the credit currently provided for the large corporations tax in the special Part VI tax on financial institutions against the corporate surtax and income tax. This will allow foreign parents of Canadian companies to obtain recognition abroad for a larger portion of the Canadian taxes for which they are liable and provide an added incentive for them to continue investing in the Canadian economy.
Second, we propose to amend the Income Ihx Act so that once the bill is enacted the government can collect a portion of taxes in cases where there is a dispute. This provision will apply only to disputed taxes of companies that are liable to the tax on large corporations. Individual taxpayers and small companies will not be required to pay over disputed taxes until a court has ultimately ruled on the question of liability of those taxes.
As well, we are proposing certain changes to the 21 year rule for trusts. These changes were initially announced on February 11, 1991. One measure will ensure that the 21 year period cannot be refreshed by transferring trust assets to new trusts. Other changes would ensure that capital gains consequences will be substantially the same whether individuals make a gift of property directly to their children or make the gift to a trust for the children's benefit.
In this connection there are a number of issues and misunderstandings that I would like to address because there has been, even on the floor of the House of Commons, some questions raised about this issue and some interpretations about it which are not correct. These misunderstandings essentially fall into three categories. First, it has been suggested that wealthy individuals are able to avoid taxes by setting up trusts. This is simply not the case. When property is transferred to a trust, any capital gains which have accrued on property must be recognized at that time.
February 23, 1993

Furthermore, trusts or their beneficiaries are subject to income tax each year on income generated in the trust just like any other taxpayer. Gains accruing while property is held in a trust are treated as accruing for the benefit of the trust beneficiaries, an approach which reflects the legal reality of these arrangements.
Second, it has been suggested that the distribution of trust property to beneficiaries within the 21 year period results in an unintended tax deferral. Again, this is simply incorrect. This is not the case. Such distributions are treated on a roll-over basis, recognizing that trust property is being held for the beneficiaries and should be treated in the same way as if it had been transferred directly to them. The 21 year rule was never intended to prevent this treatment of trust distributions.
Third, it has been suggested that substantial sums of tax revenues will be forgone as a result of these changes and this too is unfounded. Most trust property in the absence of these changes would have been distributed to beneficiaries before the end of the 21 year period and in such cases capital gains would be payable by the beneficiaries when the property was sold or ultimately on their death. The proposed changes will not alter this result.
I think this is very important because it is an important mechanism in terms of administering estates and administering people's holdings. Some may not have the capacity to do it on their own and so the set-up in the trust of this nature is very important.
There are a number of other technical measures which I do not intend to go into in detail. The explanatory notes provided by the department will clearly explain these measures. For hon. members who wish to become more familiar with these, I would suggest that they refer to the explanatory notes prepared by the Department of Finance. That includes the Net Income Stabilization Account program which was established in the Farm Income Protection Act; the disposition of capital property on death; the evaluation of employee stock options after death; the tax status of employees of the United Nations and agencies; the filing of information returns by non-profit organizations; rules for amateur athletes; trust arrangements and, finally, regulations permitting supplementary pension plans to be treated as retirement compensation arrangements.
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To conclude, the tax measures which were announced in the February 1992 budget, including those before us today, form a key and integral part of the action plan of the government to implement an economic agenda supported by Canadians in every part of the country. This plan includes action to bolster economic activity by cutting personal income taxes, action to boost the housing industry through the home buyer's plan and action to encourage productive investment that will create jobs and provide for incentives to the manufacturing and processing sector, to provide further incentives for R and D and to provide and improve investment instruments and facilities so that more people can invest in productive enterprises that will create jobs and create wealth.
This bill gives legislative effect to measures that will directly benefit Canadians and to strengthen the economic recovery now under way. As well, we are moving second reading of the bill at this time to give taxpayers and their advisers the assurance of the government's commitment to these measures. I think that is a very important signal.
With these measures in mind and in the interests of all Canadians, I hope and I urge that all members of the House will support this bill.


Mrs. Diane Marleau (Sudbury):: Mr. Speaker, I am pleased to rise and speak on this bill, Bill C-92, which as you can see is an extremely complex and thick piece of legislation. It has an awful lot of technical changes and an awful lot of provisions in it, many of which, by the way, we support. We think there are many good things in this bill.
The problem we have is with the complexity of the bill, the length of the bill and with the innumerable measures. I have to be very honest with you, Mr. Speaker, it is very much a question of trust. When you look at a bill like this and you realize the vast implications of some of these measures, you have to wonder if you trust this government to be telling you absolutely everything up front? I have to be very honest and say to you that I know the Canadian people have lost a lot of their faith and trust. As a result of that, they are not sure they want to support all of these initiatives, as I am not sure that I want to support all of these initiatives. If I had a lot of faith, perhaps I would.

February 23, 1993
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I also would like to remind the people sitting in this House today that in 1982 when a Liberal government introduced a complex bill such as this, the then Conservative opposition filibustered. If you recall, Mr. Speaker, the bells rang for a full two weeks in this House because they felt they could not support one bill dealing with that many complex issues. At that point the bill was split up into a number of more digestible parts.
I want to remind this government of this. It took such drastic measures to ensure that things were dealt with in a clear and open manner, insisted upon it and for that matter paralysed this House for a full two weeks. As one of the finance critics I follow those bills more closely than I do some of the others. I am sure the government is doing it with many of the other bills we see before this House.
The government continually brings in a whole mishmash, a whole host of measures, some of them extremely complex. Some of the bills we support whole-heartedly. However, there are others which the government is trying to sneak in so it can say to the people of Canada: "We offered them what they wanted but they voted against it". We honestly have to oppose the things we think are wrong.
It has been a method of this government to continually bring in a number of measures which would not be supported by the majority of Canadians and to include them in a bill, perhaps such as this one, that a number of Canadians would support.
I say to the people of Canada there are many things in this bill that I personally support but I want many more explanations before I will whole-heartedly support it. I am sure there are many things in it that I would not support were I to know expressly what they meant in the long run.
Therefore, I will be forced not to support this bill. I think it is a question of absolute honesty and ensuring that all details included in this package are absolutely transparent and for the good of all Canadians.
Some of the measures included in this bill are things we ourselves had been pushing this government to bring forward. I remind all Canadians that we had been asking
for quite a while that Canadians be allowed to use their RRSPs to purchase homes. That measure of course is included in this particular bill. That is something we believe in and which has been brought forward. It has helped. It has caused some stimulus, perhaps not as much as we would have liked it to.
We believe that the recession has been such that some of these measures were not as efficient as they might have been had the recession not been so deep, had people not been quite so worried about whether they would have jobs tomorrow. Therefore they have put off buying homes. In that particular instance I hope the date is extended so people can use their RRSPs to purchase their first home.
When it comes to reductions in the individual surtax from 5 per cent to 3 per cent I really do believe this government was honestly trying to give Canadians a break. One of the things this government fails to take into consideration whenever it brings in such a measure is the fact that more often than not other levels of government move in and take over the vacated place.
Over the last years this government has consistently reduced transfer payments to the provinces and the provinces are also in a terrible cash crunch. In the case of Ontario no sooner had this reduction been announced than the NDP government moved in and took it over.
In effect Canadians have not had a break-at least the people in Ontario and I cannot speak for other provinces but I would suspect it is pretty well happening in other areas. Ontario took up the slack and absolutely moved in and that is the end of the benefit to the people in Ontario. I was wondering if there were other provinces that did the same thing.


An hon. member:: British Columbia.


Diane Marleau: British Columbia is doing the same thing.
While we have the Minister of Finance before us I would like to determine whether there is any way before bringing in measures such as this that he could work in tandem with the provinces to ensure that the benefits flow to those intended to receive them.
February 23, 1993

It is absolutely important when we bring forward such a measure that we know it will actually happen. This is not happening. It is true that our coffers will lose that much but the provincial coffers will take it up. It is not to say the provinces do not need the money. I am sure they do, as we do for that matter.
We are all battling the deficit. Perhaps we should have kept the tax room instead of giving it to the provinces. That is a consideration when realizing that they move in right away. It is extremely difficult to negotiate with the provinces. I understand that. Somewhere, somehow we have to get our act together. When we do something at one level we have to ensure it is supported by other levels of government.
I am going to get off base just slightly here because I like these figures. I realize the NDP has just come out with its policy on replacing the GST. One of the things it said was that it would increase the tax on wealthy Canadians.
I notice that Canadians who would have the reduction in the surtax over a five-year period would have had a saving of $6.6 billion. What that says to me is if the surtax is increased by 2 per cent, the supposed windfall a tax on wealthy Canadians would bring in is perhaps not as large as might be necessary to replace the GST.
If this is something that would bring about a cost, in this case of $6.6 billion and if it is reinstated, then it would stand to reason that the only moneys found would be $6.6 billion approximately over the next five years. The GST net is now bringing in close to $16 billion and that is only for one year.


An hon. member:: $15.4 billion.


Diane Marleau: It was $15.4 billion for 1991-92. I just want to remind the NDP there is a very wide gap between what it has said and what it has to replace. It is very important that people realize this.
One of the other measures the NDP talked about was that it would bring back an inheritance tax. I am not sure if I have my figures correct but I know the United States has these kinds of taxes. The population of the United States is much bigger than ours and its wealth tax or inheritance tax brings in approximately $500 million a year. If I am not mistaken that is about the sum total it brings in.
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I want to again remind the NDP that the odds of bringing in a vast amount of money from an inheritance tax are not there. One of the reasons it was stopped was that the cost of collecting it was far greater than what actually came in, especially when the capital gains tax was brought in.
In essence, that is a tax on wealth. I am not saying that an inheritance tax would not bring in some money. It certainly would. The amount would certainly not be of the magnitude of $15.4 billion, absolutely not. Therefore we would have to look even further to bring in that kind of revenue in one year.
One of the things that happens when an inheritance tax or a wealth tax is brought in is that a lot of jobs are created for estate planners. If the NDP members are friends with the estate planners and lawyers then they should feel free to bring in all of these estate taxes. They would be their friends for a long time.
I do not believe that is exactly what the NDP members had in mind. I think what they had in mind was to bring in a tax which would bring in some revenues.
I am going through these things because it is very important to realize there has to be a reasoned assessment of how much cash will be brought in. That is because we do have a debt and as Canadians we have to be responsible for tackling that debt.
Another thing the NDP has said is that as a first step it would close loopholes. That of course would bring in billions of dollars. I do not know how much it would bring in. I really cannot say.
I have to give some credit to the Conservatives. As much as it pains me I do. They also have been trying to close loopholes. As soon as a new tax change comes into play lawyers and accountants quickly find a way around it. It is almost a whole industry and it is difficult to control. We absolutely have to continue to close those loopholes.
On the other hand, I do not believe that $15.4 billion in taxation will be found after closing those loopholes. I may be wrong but I would be very surprised if that happened. As a matter of fact if revenues of that size were involved in closing loopholes I have a feeling that this cash-strapped government would have found a way of getting a hold of those moneys by now.

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As much as they like big business and trans-nationals, I think they are also concerned with our debt, at least this is what they say. I have to believe that this is true because it is something we all face together.
I digressed a little bit because but I thought it was essential to explain this.
I also believe that the NDP plan touched upon the 21-year rule on family trusts. I must thank the minister for explaining the 21-year rule and for making it so clear that there are really no vast amounts of money hidden.
I have seen some of the householders which have been sent around. I have one here which gives an example of a trust of about $70 million established for someone in 1969. Today that trust would have a value of over $600 million. If it had been kept in very conservative investments such as Canada Savings Bonds then it would have gone completely tax-free for those years. This was in a mail out one of the NDP members sent out to the riding. I have to say that is false. Obviously the minister explained that trusts pay taxes so let us not mislead the Canadian public. Trusts do pay taxes.
We are trying to get at the capital gains. Capital gains happen to either a piece of property or for example shares in a corporation that one may hold for 20 years. Obviously that piece of property or those shares may have appreciated in value.
For example, a house is bought for $20,000. Ten years later the house is worth $200,000 and 15 years later it may be worth $150,000. No taxes are paid on that until the house is actually sold and it is not taxable if it is your principal residence. However, you could own an apartment building somewhere and it would appreciate in value that much. Obviously you would not be taxed on the increase in value until that asset was disposed of.
The same thing happens with trusts. The question I have on trusts is as to why we are extending the 21-year rule. That is not clear in my mind. If I trusted more perhaps I would believe it is simply to allow for some trusts to look after disabled individuals for example, but there has to be more to this than meets the eye.
I know if we had not announced that we were extending the 21-year rule these trusts would have been split up and dispersed. There would have been no capital gains taxation by the way because capital gains are not
paid on a trust when the assets are disbursed to the beneficiaries. It is as if they had held them and had owned the stocks the whole time.
The only time capital gains comes into play on these properties is when the beneficiaries die or if the assets are left in that trust. At the end of 21 years then obviously the capital gains would come into play. Knowing the people who would have charge of these trusts, I do not think they would want to pay the taxes. Therefore, had we not extended the 21 year rule, these trusts would have been distributed to the beneficiaries. A few would have sat on the assets and insisted on paying the capital gains taxes.
I have worked enough in the field to say that nobody likes to pay taxes. Whether you are rich or poor, you will do your utmost to ensure that you plan ahead so you do not have to pay these taxes.
Why are we extending the 21 years? I realize it is an arbitrary number. Somehow I am not clear on why we are doing it. I really wonder if it has to do with control.
I want answers to those questions and I will ask them in committee. I have very grave reservations about why we would leave it. It has been opened up for an extended time, until the last beneficiary dies which could perhaps be another 40 years. Why are we doing this?
Again I remind the House that if the trust is distributed to the beneficiaries and they live another 40 years, they do not pay capital gains on it for the next 40 years, or until they sell or die. I think it is very important to make it absolutely clear that these things must be understood. You can really mislead people into believing there are vast amounts of tax dollars we are not tapping. There are not, unless the government is keeping things from us, which it may well be doing. I have already said that it is a question of trust.


An hon. member:: That is an unfortunate statement.


Diane Marleau: I have to agree that it is an unfortunate statement, Mr. Speaker. However, there is an unfortunate state of affairs in this country. We no longer trust what is happening in our parliamentary institutions and I do not trust the government. I am an elected MP, here to represent my people and I worry about sleight of hand. I am worried because of the complexity of some things.
February 23, 1993

Why are all these measures in one bill? Why wait so long after the budget was presented to actually bring this bill forward? I have to wonder if it is in the hopes that we will forget what it contains and will be so busy with other things that we will just pass it without asking questions. There is no hope of that.
I will outline some other things which are included in this bill that we should be considering, such as the expansion of the definition of marriage for income tax purposes to include common law relationships. I think we should expand that definition. However, we have no way of knowing really if it is going to happen or not. We are saying to Canadians: "You can now file as married and we trust that you will". I trust that many will. However many will not because they may not even be aware of the changes in the legislation for one thing. I am of the opinion that the legislation may not be definitive enough about how it will be applied. Again, these are questions that I will have to clarify.
There are measures that will assist Canadians with disabilities. I think that is a very laudable endeavour and we should assist Canadians with disabilities.
The reduction of the manufacturing corporate income tax rate is a good idea. Our industries have been decimated. They need all the help they can get. I hope that the provincial governments will not come in and undo whatever measures we have brought forward at this level. In this way we hope to help the manufacturing sector compete and be able to expand its base and operations because we absolutely, desperately need the jobs in this country. The healthier our manufacturing base is the better it is for us.
One of the other measures that really irritates me is the disallowance of the capital gains exemption on capital gains accrued after 1992 on real estate held for investment purposes. There will no longer be that $100,000 capital gains which could be used against this particular kind of purchase.
A person investing in foreign bonds or foreign shares will be able to use the $100,000 capital gains exemption on the sale of them. We should ensure that the moneys we allow under that $100,000 capital gains be investments made solely and completely here in Canada. This particular policy should not penalize Canadians who are
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investing locally and purchasing an apartment building or something of that nature versus someone who is investing offshore. It is absolutely essential that we continue to encourage Canadians to invest in Canada in every way we can.
I hope when we go through this bill that some amendments can be made to ensure that Canadians invest their money here. It is the only way we can ensure a viable corporate infrastructure. If we do not invest in our own companies and ventures, how can we expect others to invest in Canadian ventures? It is essential that this be looked into.
The reinstitution of the small business development bond program is certainly a good idea and I support that initiative. We wonder what form this government will continue to take. There are so many technical changes in this particular bill that I am forever worried about it. All you have to do is read any one page and even the explanations. The Minister of Finance said to read the explanations and I would like to read some to you. They are very complex.
This is just one and it concerns the trusts. "Every trust shall on each of the following days be deemed to have disposed of each property of the trust that was capital property other than depreciable property, or land included in the inventory of the trust for proceeds equal to its fair market value on that day and to have reacquired the property immediately thereafter for an amount equal to the fair market value and for the purposes of this act those days-".
It goes on. It is written in very small text and it is extremely complex.
One of the other measures in here also deals with trust. The government is stating it will tighten up the rules so one trust cannot transfer assets to another trust.
I want to ask something that is very important to me. I was under the impression that now, before this legislation is passed, trusts could not dispose of an asset by transferring it to another trust without incurring capital gains. Perhaps this is a loophole it is closing but I was under the impression this was not possible and any kind of transfer of asset would call the deemed realization. It would be as if it were sold, capital gains would come into play and it would be taxed.

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Not only are trusts taxed but the trusts that are set up by someone who is alive, that is not an estate trust, are taxed.
Any incomes they have are taxed at the top rates. They do not have the graduated rates. Only estate taxes would be taxed at the graduated rates. That is where a trust was set up at the behest of someone who has passed away.
I am extremely anxious to go through this bill and ensure that everything being said to us is really included in it. It is going to a very long and difficult process. I worry that it is going to be rushed as with everything else that happens in this House. We wait and wait to introduce a bill and then we bring in closure. We say "we absolutely have to have this bill today. We cannot go five minutes past this time". Even though it was introduced in the February budget and here we are at the end of February 1993, a full year later, this government will come and say: "Rush, rush, rush, we have to have it".
Again it is a question of trust. Why would the government wait so long to introduce a bill such as this if it contains only good things? It would not even have to worry about rushing people if the bill is as good as it is reported to be.
The government could and I am sure members of a committee would be quite happy to facilitate the discussion and hurry the bill through if it is as good as it says it is.
The government waits and waits. The first reading of this bill was on November 26,1992 and the changes were introduced in the budget of February, 1992. The government will say we did not sit during the referendum.
We could have sat during the referendum. There was nothing preventing us from sitting here in the House of Commons, one, two or three days a week. Perhaps we could not have sat full time but we certainly could have spent more time looking after the affairs of the nation during the referendum campaign. The opposition would have been willing to spend some time in the House of Commons during that time. Of course we do not say what happens in this House. That is always in the hands of the governing party. In this case it is in the hands of the Conservative government.
Why did we wait so long? Please do not bring in closure. Do not rush this bill through committee. Just
recently I had the opportunity of sitting on a committee where exactly the same thing happened. Rush, rush, rush, we had to have this bill out of committee within two days. There was next to no time to hear witnesses. We had to cut back on everything because we were in a big rush and had to hurry up and get the bill through. The government wanted to bring in closure and ram everything through because, as the government says, it controls everything.
If this bill is the bill the government says it is, then do not rush it through. We should be given the time to really study some of the clauses in here so we will know exactly what the effects of them are.
At times there are many things we wonder about. We wonder whether we should be going ahead with some of these tax cuts in light of what has happened with the provincial governments. Maybe we should question that. It may be too late but these are things we really have to consider. We cannot act independently as if we live in a vacuum here in Ottawa. Many things happen across the country while we stand here deliberating or sit here listening.
We must work in tandem. I say this over and over again. I have worked as an accountant most of my life and have been involved in the financial aspects of many organizations, including municipal governments. I have always been very conscious that debt is a bad thing. When I was at the municipal level I helped bring in some policies which really enhanced the position of our municipality. These kinds of problems are really near and dear to my heart, but I insist that this level of government stop behaving as if it were the only one.
Recently this government announced it would freeze grants in lieu of taxes to municipalities. The municipalities really count on these grants in lieu of taxes. The government is going to freeze them to the same rate as they were in 1992.
Mr. Speaker, if you are sitting here by yourself and not worrying about what happens around you, you might say: "Well, it is not so bad. You know, it would not be that bad. I mean, we are cutting back expenditures", but municipalities are facing not only cutbacks from the federal government, but cutbacks at the provincial level. The municipalities have nowhere else to go. A taxpayer is a taxpayer. He or she is a Canadian.
February 23, 1993

We can cut back and say: "Look at the good job we've done managing our debt". Meanwhile the municipalities are burdened with these excessive taxes and responsibilities which many of them are going to find more and more difficult to meet. Have we then done our best for the people of Canada?
I would say to you, Mr. Speaker, we have not. We must work in tandem with all other levels. I cannot stop talking about what has happened in Ontario and British Columbia and will continue to happen probably in other provinces. As soon as we give one group a tax cut which it asked for and desperately needs, another level moves in. If we cut back on transfer payments then the province has no choice but to cut back to the municipalities or cut spending.
Ontario obviously has not cut spending despite the allegations of the treasurer of Ontario that its deficit would be under $10 billion for the year. I am saying deficit. That is only for one year, ladies and gentlemen. A deficit is the amount spent over and above what is raised in taxes.
I read just recently that the province of Ontario is looking at a deficit in the neighbourhood of $13.9 billion. I say to you, Mr. Speaker, shame. I think it is absolutely a horrendous amount of debt to add to the already heavily burdened people of Ontario and Canada because everyone pays, not only the people of Ontario. It affects the economy across the country.
I know the government consults with a lot of people from single interest groups. They say: "I want, give me and let go of the other ones". The government should consult not only with these single interest groups, because we must consult with everyone, but with all Canadians and other levels of government to ensure that whatever is brought forward in the next budget we do not have the kind of scenario that is happening now.
The debt is the debt of all Canadians, whether it is held at the federal, provincial or municipal level. One may say: "Well, municipalities are not allowed to run deficits". No, they are not, but they do borrow for capital projects. Many municipalities have borrowed quite heavily for municipal capital projects. I think it is important to remember that.
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We can no longer afford to behave as if we are one level and the others do not count. We have to sit down together and work together to solve this economic crisis.
I want to thank you, Mr. Speaker, for being so patient with me. I will say to you in ending that I wish it were different. I wish I could trust this government and believe everything it is saying, but I must respond and say this government has lost the faith of all Canadians. Therefore I cannot support this piece of legislation at this point.


Mr. Bill Blaikie (Winnipeg TVanscona):: Mr. Speaker, we were just treated to a delightful rendition of what is wrong with the Liberal Party as far as trying to figure out where it stands on things. The member who just spoke with respect to the private family trust tax changes began by praising the minister for making it absolutely clear that what the NDP had said about these tax changes was not true. She then went on to say that she did not trust the government and that she had some doubts herself about whether this was an appropriate change to this legislation.
Whatever your position, if you are with the government you had something there that you could take from the Liberals and run with; if you are suspicious of the government and do not trust these changes, you also had something that you could go with. This, of course, is characteristic of what we see time and again from the Liberal Party when it comes to this issue as well as many other issues. I am thinking particularly of this but there are many other examples such as the North America free trade agreement and the Canada-U.S. Free Trade Agreement, and the need to abrogate the one and not get into the other.
Bill C-92 is a bill about tax changes. I would like to speak to what is in the bill. I want to concentrate first on the whole question of the changes to the tax laws affecting trusts. Changes to the legislation concerning the taxation of private family trusts were first proposed by the Minister of Finance in draft legislation on February 11, 1991. Despite considerable criticism from the professional community, these changes were then included in draft legislation of technical amendments, released in December 1991. The legislation was introduced into the House by notice of a Ways and Means motion on June 19, 1992.

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Current legislation covering private family trusts goes back 21 years to the 1972 tax reform when the federal estate tax was eliminated and the capital gains tax was introduced. This change left a potentially enormous tax loophole. Capital gains taxes are levied only when gains are realized, usually when a property is sold or at the time of death. Because trusts never die, this meant that private family trusts could entirely escape paying taxes on assets held within the trust. So 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. Income tax is, of course, paid by the beneficiaries when property is distributed to them from the trust.
No capital gains tax has ever been levied under this 21-year rule. All private family trusts which existed on or before 1972 would be subject to tax for the first time in January 1993.
The government is now 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 child, spouse or parent of the trust settler, but not any individual of generations subsequent to that of the child. 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 from now. It means that 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 the deficit.
What are private family trusts? One thing on which I would agree with the Liberal member who spoke earlier is that there is a great deal of confusion and uncertainty about this whole issue and that it is sometimes difficult to understand. I would like to take the House through it in so far as I can and explain how I understand this issue.
What are private family trusts? A private family trust is a legal instrument used to pass on assets to the beneficiaries of the trust who are often the spouses, children or grandchildren. Even a simple private trust I am told costs
thousands to set up. I would not know because I do not know anybody who has one.
How much in assets are held in private family trusts? There is almost no public information available about the amount of wealth held in private trusts. Tkx privacy laws prevent Revenue Canada from providing information about any single trust, and this is probably as it should be. It also does not provide any information about the aggregate amount of assets held in private trusts.
This would certainly be useful information for the public and for Parliament in particular when we are trying to debate this kind of issue. We do not really know the amount of money that we are talking about.
Sources in the financial industry have estimated the total value of assets held in such trusts at $70 billion. This estimate seems fairly reasonable as it represents only 3 per cent of the $2.4 trillion in total assets held by persons and unincorporated businesses in Canada.
The member before me referred to NDP householders that cited this $70 billion. We are certainly not suggesting that there is $70 billion in revenue to be garnered by the government. The $70 billion figure is, as I have said, an estimate of how much money is tied up in these trusts.
What are some examples of private family trusts? Again, we are not really able to say because tax privacy laws prevent information being released about any individual trust. I am told that court records show the trust established for instance by Mr. Bronfman for his daughter had a value of $70 million in 1969.
That is the trust that is referred to in the literature that was quoted by the hon. member previous which would have a value of over $600 million if it had been kept in veiy conservative investment since then.
How much tax revenue will the government lose from this change? With so little information available, it is difficult to estimate just how much tax revenue the government will lose. 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 of 30 per cent would raise over $200 million. That is not to be sneezed at, especially when times are tough.
February 23, 1993

What do trust tax professionals say about this change? "There is no question that it represents a massive windfall for existing trusts." This is from Sydney Goldstein of Goldstein and Goldstein, Ottawa.
Another quote from Katherine Bush of Blake Cassels: "A cynical person might suggest that pressure from influential political supporters also should be listed as a reason for the draft legislation".
From Neil Brooks, the Associate Dean of Osgoode Hall Law School: "The government has given Canada's wealthiest families notice that it intends to give them a gift worth several billion dollars".
From Arthur Drache of Fraser and Beatty: "If legislation now before Parliament is not passed before the end of the year, thousands of trusts could be hit with massive tax bills".
Why is the government proposing this change? The government argues that these changes are necessary for a number of reasons. First, it has argued that the existing 21-year rule might interfere with trusts established by parents for the benefit of their disabled children.
Exploitation of the needs of disabled children is immensely cynical and makes little sense in this context. Anyone structuring a trust for a disabled child would design it so that the child had an ongoing income and not a lump sum payable at some point in the future as would be the case with most of the trusts affected by the 21-year rule.
As tax lawyers Sydney Goldstein and Katherine Bush have argued, if the government was really concerned about the needs of disabled kids a better solution would have been to declare a special exemption for the disabled. This argument about the disabled is just so much political cover with the government grasping at some compassionate looking straw in order to justify what it is doing for other reasons.
Second, the government has argued that unless the rules were 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 argument has some validity but it still falls short of the mark, it seems to me. Private trusts have had a full 21 years to plan for this tax, much more than ordinary taxpayers get. Besides, taxpayers in this situation could
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still utilize the $500,000 small business capital gains exemption to avoid selling assets.
The government says 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 support this, but it does not mean that the government is justified in creating another massive loophole. There are other ways that this could have been dealt with.
Why was the 21-year rule set at 21 years, you might ask? The period of 21 years was apparently chosen in order to be consistent with trust tax law and to be consistent with the then current age of majority.
Will not application of the 21-year rule be hard on widows who do not have funds to pay tax, for instance, on income producing real estate held in a trust? Although it may be onerous for the beneficiaries of some trusts to pay taxes in one shot after 21 years on their capital gains, there is a provision to pay taxes from a 21-year deemed disposition in up to 10 annual instalments in subsection 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 asset at this time.
Again, I repeat, it is not uncommon for Canadians of all walks of life to experience difficulty in paying their taxes. Why this particular difficulty should be addressed when the difficulty of so many ordinary Canadians in paying their taxes is not taken into consideration at all is what mystifies us.
Twenty-one years is an arbitrary amount of time. Do these changes not make trust tax more consistent with the taxation of capital gains which is only collected upon disposal or death of recipient? People mig'ht ask this question about our position on this legislation.
It is true that the 21-year rule is an unsatisfactory and relatively arbitrary rule which is inconsistent with taxation of capital gains and was probably designed to fail. It is not hard to imagine that when the Liberals brought this in in 1972, they at the same time figured that at some point the very people who were concerned at that time would bring concerns to them in the future and have this changed. If the aim is to make trust tax more consistent with capital gains tax then realized capital gains should be taxed when the trust settler dies as well as when the last beneficiary dies. However, such a change would eliminate many of the tax advantages of setting up family trusts.

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In addition and perhaps more important, all the substantive changes which affect the taxation of private family wealth have allowed substantial tax breaks because they have not been retroactive. Change may be needed to improve poor legislation, but why have the transitions resulting from the changes always allowed big tax breaks by grandfathering?
Financial officials argue that there will be no revenue loss because if these changes do not go through, most trusts will dispose of their assets through rollovers or other mechanisms to avoid the tax anyway. Is this true? This is a hypothetical argument because these measures may or may not be easily available depending on the type of trust, but just because there are avoidance mechanisms does not mean that the government itself should roll over and play dead by opening up a big loophole.
Instead, the government should use the anti-avoidance provisions of the tax act or act to close these loopholes. It is not enough to simply argue that these people will find other ways not to pay taxes. That may be an unfortunate truth about our tax system, that a certain class of people will always find a way not to pay their taxes and that lawyers will always find ways to exploit whatever changes are made. However it has more to do with original sin than it has to do with tax law and has more to do with lawyers than it has to do with tax law. Surely the government could find some way to address these problems without simply conceding defeat in the manner in which it has in this particular bill.
Financial officials say that trusts are not used to avoid tax because in many instances there are measures that individuals can take outside setting up trusts to only pay capital gains taxes when an asset is sold or upon death of the owner and therefore avoid the 21-year rule. How valid is this argument?
Trusts provide many advantages that these other mechanisms could not provide. If the 21-year rule is so onerous and inequitable compared to other mechanisms, why would thousands of people who have set up trusts since 1972 and before these changes were proposed, if the existence of the 21-year rule presents such a tax disadvantage? This argument defies common sense and the logic of our experience with this particular provision.
I hope the hon. member in the Liberal Party had an opportunity to listen to what I said. Perhaps I have
helped to clarify the situation for her. For all these reasons the NDP has tried consciously to bring attention to bear on this particular change. We think it points out the basic moral flaw in the government's approach to deficit reduction, that not all Canadians are being asked to bear the burden of deficit reduction equally and that some Canadians have a special access to the government, that they have the ear of the government with respect to their particular tax problems.
In this case we see that those who have had a concern about the 21-year tax rule have successfully gained the ear of the government and have had this exemption extended by virtue of the legislation we now have before us in the form of Bill C-92.
We take offence at that because we think this simply illustrates the larger picture of how this government has proceeded with respect to tax reform. Tory tax reform has meant more taxes for ordinary working Canadians, for low and middle income Canadians, and has meant special breaks for big business and for wealthy individuals. This particular measure we are debating today says that louder than any other particular measure this government has taken.
I would like to speak to some of the other elements in the bill. One thing that struck me, again talking about the capital gains tax but in another context, is the elimination of the $100,000 capital gains tax exemption with respect to real estate and leaving it in place for equity investments.
We are not in favour of the $100,000 capital gains tax exemption in any event, except of course with respect to the question of principal residences. We continue to favour the larger capital gains tax exemption with respect to the sale of farms, for instance.
However, there may be a way in which a lot of ordinary Canadians have been blind-sided by this particular change. It is not something that I think there is a particular policy on within the NDP, and I have not heard anybody else raise it for that matter. For a lot of working Canadians that I know the only other investment they have in their lives apart from their principal residences may be their summer homes, their cottages at the lake, and this particular bill subjects the sale of their cottages to a capital gains tax.
February 23, 1993

I wonder whether that is what the government really intended. I know that it has received a great deal of mail on it from cottagers and it has not seen fit to change the bill. It strikes me as unfair within the larger context of our tax system.
If we are not going to treat all capital gains equally and if we are to leave equity investments alone so that people can invest in business, make money and not have it subject to capital gains at the same time as dinging a whole lot of ordinary working folk whose only other investment in life might be their summer cottage, there is an inequity that ought to be addressed either by trying to treat all capital gains more equally and not making exemptions which create injustices by leaving some things taxed while other things are not, or by considering this one particular problem a lot of people have and finding a way to give a tax break to people who are not speculating in recreational real estate.


The Acting Speaker (Mr. DeBlois):: I am sorry to interrupt the hon. member but his time has expired.


William Alexander (Bill) Blaikie: Mr. Speaker, I rise a point of order. Due to the length of time the first two speakers for the other parties had, I wonder if might beg the indulgence of the House to have a few more minutes to finish my remarks.


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


Mr. Danis:: Mr. Speaker, we have no objections to giving a few more minutes to the hon. member. However we would not want that to be seen as an indefinite time. I am sure he gets the message.


The Acting Speaker (Mr. DeBlois):: Some minutes for the hon. member.


William Alexander (Bill) Blaikie: Mr. Speaker, of course you realize that when the time is extended it is indefinite, but I will not take advantage of the House. I just have a few more things I want to say.
I want to finish up my point about the way in which the particular capital gains tax change in this bill affects a lot of people in my riding, for instance those who have cottages and who are very concerned about it. When we
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stack that up against the break the government is giving to people with these large trusts it is pretty hard to defend and I have no intention of defending it.
There is another thing I feel I must respond to. The member from the Liberal Party, obviously not wanting to take too much time to elucidate Liberal Party policy on these matters because there tends never to be any, spent a lot of time attacking the NDP. It seems only just, in the course of natural justice, that I should be able to respond to our accusers.
The member did something which I think is typical of people who have been critical of our over-all approach to tax reform and deficit reduction, particularly when it comes to eliminating the GST, and that is to pick one thing we have listed as a total package that should be brought in to replace the GST and say: "This is not going to replace the $15.4 billion or $15.6 billion that the GST brings in".
The Liberals do not like to talk about the GST, except in the context of the NDP, because they do not have a policy for how to replace the GST. They had one for about 48 hours when they were considering the business transfer tax and a tax on groceries, but that has been deep-sixed. Now we are just supposed to wait until a Liberal government is elected and there will be consultations. Then we will find out what will replace the GST.
We have come forward with a plan for replacing the GST and it is a multifaceted plan. As the member rightly recognized, no one measure is going to replace all that money. But when we consider a number of loopholes that could be closed and the economic growth that could be generated by the elimination of the GST and by other measures to stimulate employment and therefore raise revenues and take people off welfare and UIC, when we consider the expense the GST is to the government both in terms of the cost of collecting and the money the government pays in GST, it all adds up. We believe it is sufficient, along with some of the other tax changes we have proposed, to cover the cost of eliminating the GST.
I have raised a couple of things in the House time and again that I can never get any answer to. In fact whenever I raise these things it is as if I am in the Bermuda Triangle of Parliament. I asked the Minister of

February 23, 1993
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Finance a question about a specific tax loophole and he answers a question I have not even asked. I cannot get him even to acknowledge the content or the substance of my question. This happened to me just last week after President Clinton had made his statement with respect to tax reform and I asked the Minister of Finance if he would consider eliminating or reducing the business entertainment tax deduction. Many times before I asked him to do so and he or his predecessor has always risen and said that we have to stay competitive with the United States, that we cannot do that.
Now that the United States is looking at eliminating that particular exemption, I thought this might be an opportunity for the Minister of Finance to reflect on whether or not Canada could now move in this direction and collect some of that $1.1 billion forgone in revenue every year as a result of that particular tax loophole.
What did the minister do? He got up and said: "I know what the NDP wants to do. It wants to get rid of the $100,000 capital gains tax exemption for small businesses". Does this have anything to do with what I asked, anything at all to do with what I asked? Absolutely nothing.
I guess we know our place. The Minister of Finance stays and listens to the Liberals respond to his speech but when members of the NDP get up he takes off. The Liberal member said all those nice things about the Minister of Finance and how he cleared up all the misgivings about the trust tax exemption. It is no wonder he stayed to listen. He probably felt good. He did not expect to feel so good when NDPers got up.
There are ways in which the GST could be eliminated. We have laid them out in a paper we are making available to Canadian people. We would finally like to have a policy debate in this country, not just speculation about who is who in the polls. We would like to have a debate on just exactly what are some of the possible solutions to our problems.
With that, I will not abuse the good will of the House any more and I thank hon. members for their attention.


Diane Marleau: Mr. Speaker, I heard many things during that speech but one thing struck me and I want to know exactly where the NDP stands on it.
The member spoke about how their party was against the $100,000 capital gains exemption being given to Canadians but then he said that he really wanted the capital gains exemption to be in place for people who own cottages. Now that it is being cancelled he would like it to stay in place, because in the past if one owned a cottage and sold it one could use up some of the $100,000 capital gains exemption. This particular piece of legislation closes that loophole.
I thought I overheard the member say that he really wanted the $100,000 capital gains exemption in place. Does that mean that he really approves of the $100,000 capital gains exemption, or what? I would like that clarified because in my mind the NDP has not been in favour of the $100,000 capital gains exemption. I believe it was in favour of the $500,000 capital gains exemption on sale of family farms and those kinds of things, but I did not think it was in favour of the $100,000 capital gains exemption. I wonder if he would clarify that point for me.


William Alexander (Bill) Blaikie: Mr. Speaker, I am quite glad to answer that question. One of the peculiarities of the rules of the House-perhaps it is something we should look at, at some point-is that the first speakers for the government and the Official Opposition do not get questioned on their remarks but we get questioned. We welcome the questioning because we like to make clear what we are saying.
I am sorry the hon. member misunderstood me. The point I was trying to make was that what the government has done with respect to the $100,000 capital gains tax exemption was take a measure which we were critical of, as she rightly pointed out, and make it in some senses more unjust.
It has changed it from a policy we object to in principle to a policy we object to in practice because it is so selective with respect to who benefits from it and who does not.
Traditionally, we have been more in favour of capital gains taxes than any other party in this House. That is not a secret. We have always been willing to make exemptions where we thought it was just. Certainly the exemptions we always defended had to do with the family farm and principal residences.
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I am asking the government to consider, as I am asking others who have policies with respect to capital gains tax, whether or not the blind siding of the family cottage in this recent change is against the spirit of the kind of exemptions the NDP has always defended when it comes to family property.
Maybe that cannot be done. I do not know. In the context of what is now exempt and what is not, it strikes me as unfair that people have to pay that kind of tax on the family cottage when people who are making equity investments and other things the government regards as economically productive do not have to pay that kind of tax.
As with so many other things let us have a system which treats everything equally as much as possible. If we are to get down to picking and choosing what is exempt and what is not, I am simply saying that when we consider what is exempt, including family cottages strikes a lot of Canadians as unfair. I cannot blame them for seeing it that way.


Nelson Andrew Riis: Mr. Speaker, I want to ask the previous speaker a serious question. I cannot believe what I heard could possibly be the truth. I want to seek clarification.
I understand by listening to the hon. member that back in 1977 the Liberal government of the day introduced legislation to give a special tax break to the wealthiest families of Canada. The assumption was that not paying taxes would allow them to make other investments and therefore help other folks indirectly. It is commonly known as the trickle-down theory or what I like to call the tinkle-on theory.
That was introduced by the Liberals. For years and years the wealthiest families in Canada were able to benefit from it. This is what I am hearing. This tax provision was to expire in 1993, but the present government has decided this should not be stopped now. This incredibly lucrative tax gift loophole to the wealthiest should be extended for a period of time.
The government wants to extend it until the person in whose name the family trust is arranged dies or, in other words, for an entire generation for the wealthiest people of the country. I am sure people listening to this debate cannot believe this is accurate.
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I want to ask my hon. friend who obviously has studied this bill carefully and knows the provision we are discussing if this is actually true. Have the Liberals, followed by the Conservatives created the ultimate crass tax loophole where the only beneficiaries will be the very wealthiest people of Canada?


William Alexander (Bill) Blaikie: Mr. Speaker, it is true. The hon. member for Kamloops points out that there has been a certain kind of collaboration between the Liberals and Conservatives on this issue as there often is when it comes to legislation or policies which benefit the corporate elite in this country, either institutionally or individually. At a certain point there is very little difference between the Liberals and the Conservatives. There may be a kind of feigned difference from time to time for electoral purposes, particularly when it comes to the Liberal Party. It likes to sit a little to the left of centre prior to election time to help give the impression of being an alternative to the Conservatives. But when push comes to shove on the free trade agreement, NAFTA, the trust tax exemption and a variety of other issues there is no difference. The record speaks for itself.
To those Canadians who find the extension of this 21-year rule offensive, not once was the existence of this exemption and the legislation to extend it raised in the House of Commons by a Liberal member. Not once did this matter cross the lips of a Liberal member until today when the legislation was before us almost as a fait accompli. Even then the member who spoke praised the Conservative Minister of Finance for clearing up all the misleading information that the NDP has allegedly been spreading in its householders about this particular legislation.
What more could we ask for in terms of helping us understand who is who, and on whose side particular parties are in this country? It was clear today when there was this sort of-I am trying to think of a polite way to describe the relationship between the Liberal member and the Minister of Finance-cosy mutual admiration society when it came to putting down the NDP version of what is going on here.
I can tell you what is really going on. The Liberals and Conservatives, and not for the first time in Canadian history are once again joining forces to make sure the people with money who really run this country are looked after.

February 23, 1993
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Hon. Herb Gray (Windsor West):: Mr. Speaker, in rising today to speak on second reading of Bill C-92 I have to begin by saying this bill, as presented by the government is an example of how the Conservatives approach governing and the public process. They do so in a way that can only create cynicism and distrust for themselves and, unfortunately, for large parts of that process itself.
If you look at this massive bill you can see that within it are measures that can justify a large degree of public support and I am going to talk about some of them. But there are other measures, the 21-year trust rule in particular, for which the government has not made a case and for which one cannot in my view make the same arguments for public support.
In the Liberal emergency program for economic renewal that we announced in January, 1992 the Liberals called for a change in the law so people could use their RRSP funds toward down payments for homes. The obvious purpose was to encourage the building of more homes and help give a kick-start to the economy. For that purpose we also called for the allowing of a lower down payment for homes.
In this emergency economic renewal program the Liberals called for the creation of an immediate major national infrastructure program. The federal government, together with the provinces and municipalities would provide funds to enable our towns and cities across this country to immediately begin thousands of projects of renewal of national and local infrastructure to improve sewage, water and pollution control systems, roads and bridges. The projects would repair and improve the fabric of our country as a way of contributing to the improvement of our over-all competitiveness while at the same time put thousands of people back to work.
In the budget of February 1992 we saw that the government had accepted some of these Liberal proposals. It said it would ask Parliament to amend the law to allow the expenditure of RRSP funds toward the purchase of new homes, thereby encouraging a renewal of active home building in this country. The budget statement also said the government would allow the lowering of down payments for homes.
Other things we had proposed in our emergency economic renewal program should have been in that budget but unfortunately were not. The budget did not include a national infrastructure program. If that program had been set out in the budget of February 1992 it would be well under way by now. Tens of thousands more people would be working than is the case today, on projects of renewal of infrastucture in towns and cities across this country. Thousands more people would be working to produce the raw materials and equipment needed to carry out these projects of community works and infrastructure renewal.
This has not happened because the government absolutely refused to include in its budget of February 1992 the kind of national infrastructure program and national community works programs we called for in the emergency economic renewal program we announced in January 1992.
In the December economic statement the government adopted some of the language but unfortunately not the substance of the kind of infrastructure program called for by Liberals in their economic program of January 1992. Liberals talked about it back in 1988 in their election platform.
In the December economic statement the government talked about bringing forward certain projects that had been discussed for many months previously, programs that might have been undertaken earlier but about which nothing had been done such as the expansion of Pearson airport. Another example is the upgrading and renewal of highways in Atlantic Canada and in particular New Brunswick.
The other day we saw an announcement by the Minister of Transport that runways would be extended and added at Pearson airport. However, there is no date for the commencement of that work. More startling still, there is no indication of where the funds would come from to enable that expansion of runways at Pearson airport to be carried out.
When it comes to the very necessary renewal of highways in New Brunswick, as far as I can recall there still has not been any final agreement to move forward on this project. There has been no final agreement by the Conservative government to provide adequate financial support to the provincial government of Premier McKenna. When it comes to the projects talked about in the December economic statement, as far as I am aware
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not one of these projects has actually gotten under way in the sense that there are shovels in the ground, cement being poured and more people working.
If, even in December, the government had adopted the Liberal program of community works, by now many of these projects I have talked about that communities have on the shelf across this country would be under way with people working. Instead they are condemned by the Conservatives to nothing more than the unemployment line, the welfare line and the bread line. Our towns and cities across this country have thousands of projects on the shelf which have been developed and have had environmental reviews, but cannot be proceeded with because they do not have the funds. If we had had a community-based program, as I have already said, then there would have been people working, projects would have gone ahead and the recovery from this Conservative induced recession would be a lot further along a lot more vigorous and a lot stronger than is now the case for many months to come.
The government, in this bill, is trying to implement some tax cuts it talked about in the budget statement, but these tax cuts are extremely modest to say the least. That is why, in replying to the February budget, I talked about these tax cuts being such that the Minister of Finance could be described as two-buck Maz for all they amounted to for the ordinary citizen in this country.
These tax cuts do not even begin to offset the more than 36 tax increases put into effect by this Conservative government since it took office in 1984.
We know that the average middle income family has been hit by close to $2,000 in tax increases by this Conservative government since 1984. By the way, to the extent that there are some very modest tax reductions in the February budget that this bill is supposed to put into place, these have likely been largely wiped out by provincial tax increases unfortunately. These tax increases have been caused by the cutbacks such as the capping of transfer payments by this Conservative government to the provinces and the cutbacks in amounts that would otherwise go to maintaining adequate standards of education, medical care, health care and other basic provincial services.
This Conservative government, in offloading its responsibilities to the provinces, has caused them to either cut back in services or increase their own taxes, or both, in a way that is certainly unfair to average Canadians but
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can be attributed in terms of blame directly on to the shoulders of this Conservative government.
One of the proposals in Bill C-92 is to extend the rule with respect to certain trusts and the exemption of the assets in these trusts from capital gains tax, which was a rule that was initially to be in place for 21 years.
If one studies the history of this measure in Bill C-92,1 think one will see something very questionable and suspicious about the way this government has proceeded. This measure, the extension of the 21-year rule, was not in the budget of February 1992 that this Bill C-92 is supposed to implement.
The measure instead was announced by itself in a press release that came out in February 1991 that at that time received very little attention. As I have said, it was not mentioned in the February 1992 budget but it is found in this Bill C-92 which is supposed to be for the purpose of implementing this February budget. It is presented in a way that buries it behind the many other measures in this Bill C-92. Some of these I have been talking about and deserve a measure of support.
When one looks at the press release that the government issued at the time it tabled the Ways and Means motion, which is the basis for this Bill C-92, one will see something rather peculiar. This press release, entitled: "The Explanatory Note for the Notice of Ways and Means motion" talks in brief about the terms of the budget measures which the Ways and Means motion includes and says that it is for the purpose of implementing the budget of February 25, 1992. It then goes on to say that the Notice of Ways and Means Motion also includes a large number of income tax measures: "primarily of a technical nature which were released to the public in draft form on December 20, 1991 and in a number of other releases over the last year". Presumably, in this case, this refers to 1992.
There is no reference whatsoever to this complex and potentially far-reaching proposal to extend beyond the initial 21-year period the special rule regarding the taxation for capital gains purposes of the assets in certain kinds of trusts.
Why was this was not mentioned? What is the government trying to hide here? It did not refer to this proposal in the budget, it did not refer to it in the press release describing the Ways and Means motion. This proposal that was first mentioned in a separate release in

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February 1991, turns up in this Bill C-92 hidden behind dozens of other measures.
If this trust proposal had been in the budget, I submit that it would have received a lot more attention and scrutiny. If this measure had been in that budget-I am talking about the budget of February 1992-the government would have been obliged to set out information on the revenue effects of extending this rule.
The Minister of Finance has not in the press release of February 1991 or in the notice accompanying the Ways and Means motion and not even in his speech today, if I am not mistaken, given any information whatsoever about how much revenue the government would obtain from taxing the assets in these family trusts if the 21-year rule is not extended. No information is been provided about how much revenue is being lost to the government by extending beyond the 21-year period these special provisions for family trusts.
Surely this is a basic, fundamental and necessary piece of information in order for Parliament and Canadians generally to make up their minds on whether this measure is in the public interest. In the absence of that information, I do not see how this measure can be supported by this House.
We tried to get this information directly from the Department of Finance. It could not or would not give it to us. As I said, by not having it in the budget, it was not set out as was the information about the tax implications of all the changes in the February 1992 budget.
Why has the government not done this? What does it have to hide? Does the government expect us to believe that it did not consider this aspect, that it did not work it out in deciding whether or not to proceed with this measure? The information is there for the public to look at, although sometimes it is hard to obtain. It is there on all the other proposals in this bill but it is missing when it comes to the extension of the exemption for capital gains purposes of assets in these family trusts.
Why is this? The government is certainly giving the appearance of trying to hide something. It gives the appearance of trying to sneak something through and avoid full and proper scrutiny.
The government is not acting in a way which deserves the trust and confidence of this House or the Canadian people. We need to know the tax implications of this measure. As I have said, without it I do not see how this measure can be supported.
The government has not made the case it must make in order to command the support of the House for this measure. That is so even though it is contained in a very large omnibus bill that may have in it other proposals that deserve to one degree or another the support of this House and the public.
By proceeding in this way this Conservative government has tainted all of Bill C-92. We are talking about a basic question of fairness to people who have not been able to avail themselves of these family trust provisions, to ordinary taxpayers who have had their taxes raised some 36 times since this Conservative government has come to office, to unemployed people who are having their unemployment insurance benefits and their eligibility for these benefits cut by this Conservative government and to Canadians who are not getting the levels of services from their provincial governments they deserve because of cutbacks in transfer payments to the provinces by this Conservative government. On the basis of fairness the government should have given us answers and it has not done so.
We have heard also about the changes in the capital gains exemption in this bill. The government has not explained why it has changed this exemption so that people have to pay capital gains tax on their cottages, but others who are able to trade and make capital gains on foreign stocks or bonds still have that full $100,000 exemption.
I say again that this government is proceeding with Bill C-92 in a way that invites cynicism and suspicion. Certainly on that basis I do not see-whatever else there may be in it that is worthy of support-how the bill as a whole can be supported. What we need more than anything else is an election to have a new and better government for this country. I say that it will be a Liberal government.
February 23, 1993


Diane Marleau: Mr. Speaker, I would like to take this opportunity to congratulate my colleague on his remarks concerning Bill C-92.
I honestly believe that he is absolutely right that Canadians no longer believe that this government is always being open and fair in its information insofar as it will tell us or disclose exactly what it is doing.
We tend to be faced with a large amount of what I like to call bafflegab or creative accounting in some instances that leads us all to worry and to feel as if somehow there has been a sleight of hand and that we have no idea really what is going on.
Many of the provisions of this act would obviously hurt certain ordinary Canadians. As my colleague mentioned the removal of the capital gains exemption on family cottages. For many people that is perhaps the total amount of their savings. When they sell this they can no longer claim that first $100,000. It is hitting a lot of average Canadians.
Let us be fair. Most wealthy Canadians have had the opportunity to claim that $100,000 exemption already. This particular kind of clause does not affect the wealthy Canadians. It affects the average family groups and Canadians who may have a cottage that they have held in the family for maybe 20 or 30 years and it will cost them dearly. On the other hand, others may be able to apply for this exemption. Perhaps my hon. colleague would like to add to this.
Furthermore, I made the point that this government must start co-operating with other levels of government and not just act as if it is in a vacuum and the problems that are faced here are not faced at other levels. Perhaps the hon. member would like to add to these particular points.


Herbert Eser (Herb) Gray: Mr. Speaker, I think my hon. colleague has made some very useful points. The government operates in such a way that even when it says it wants to help the ordinary person, it ends up by giving the ordinary person the back of its hand.
I do not think that ordinary people who wanted to see the wealthy bear a fair share of the tax burden expected that in responding to this concern they would find the government saying that they had to pay capital gains on the family cottage. At the same time they did not expect to see large family trusts under the guise of being dealt
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with more fairly being put in a situation by the government whereby it is quite possible that amounts that otherwise should be liable to tax would not have to face tax.
As I have said, even when this government claims to be operating in a way that restores a greater degree of fairness to the system, when you get beneath the surface it is found not to be doing that at all.


Nelson Andrew Riis: Mr. Speaker, I listened with interest as always to the speech by my hon. friend from Windsor. I want to ask a question of the hon. member, who was presumably intimately involved in 1977 when this provision in the tax law was first introduced, the 21-year exemption. I direct this question very seriously. I am not trying to make a political question out of this, but a serious fact finding mission.
I stand to be corrected, but it is my understanding that when this provision was introduced it allowed wealthy families to place money in trust that would not be taxed until the 21-year period had expired. I would call it a 21-year tax loophole or tax break for, again, some of the wealthiest families in Canada. They would be the obvious ones who would take advantage of this.
Is it what I say it is? If so, how does my hon. friend say it was justified at the time? It seems to me to be such a boondoggle but there must have been some serious logic behind it when it was introduced in 1977.


Herbert Eser (Herb) Gray: Mr. Speaker, I am sorry that I cannot assist my hon. friend to the extent he would like because I was not a member of the cabinet in 1977 and I was not as closely connected to the subject as I might otherwise have been.
The issue we have to deal with is what do we do now? Whatever justification there may have been for an initial 21-year period, I submit the government has not made the case it should have for its extension. I presume that those people who availed themselves of this 21-year rule did so with the expectation that at the end of that period the tax would apply. Again, as I said, the government has not made the case I think it should have.
I think the issue today is what we do in light of the expiry of the initial provision. I only repeat that the government has not made the case it should have in order to deal with something which could have quite far-reaching consequences.

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Mr. David Walker (Winnipeg North Centre):: Mr. Speaker, I would like to thank my colleague from Windsor for his contribution to this debate. It seems to me that from an historical perspective as he alluded, we have to go back to the Carter royal commission that the Liberal government set up in the 1960s when they tried to treat a dollar as a dollar. Part and parcel of that was giving some people a chance to adjust to this concept.
Of course there were tremendous battles against the Conservatives in the late 1960s and early 1970s to make taxation more fair and perhaps giving a lenient period of time for a number of families to adjust to the new taxation system. As my hon. friend has pointed out very appropriately, we have now reached the point where families with large amounts of money have had an opportunity to adjust. The time has come now to make capital gains a part of the over-all taxation system.
I would like to ask the member from his experience in opposition and in government to perhaps comment on the concept of a dollar is a dollar for taxation. There are a number of issues facing us as Canadians with the high rates of taxation. It seems to me that in the discussions we had on the child benefits package, the government was quite delighted to point out the fairness of targeting people and to make sure that only those in need received it. On the other hand we have this quiet piece of legislation which the Official Opposition has been very vociferous about and very determined. The government has backed away from this principle of allowing taxable dollars to flow into the system appropriately and to be taxed as it is for other families. I think we have to keep our eye on this particular issue to ensure there is tax fairness for everyone.
I wonder if the member could comment on tax fairness for families nowadays.


Herbert Eser (Herb) Gray: Mr. Speaker, my hon. colleague has opened a subject about which one could speak at great length in ways I am not sure you would permit.
When we look at the tax system and tax reform, a basic concept we have to keep in mind is fairness. Here we are talking about fairness as between families who were able to avail themselves of these trust positions and those who did not or were not able to do so.
In that context we are talking about something which is a form of estate or wealth tax, the deemed capital gains tax on death. As members of the House know, under our tax law, when somebody passes away it is considered in that tax law as if all that person's capital assets had been sold as of the date of death at fair market value thereby creating a tax liability. So even though that property in fact had not been sold and even though the deceased person's estate may not have the liquid assets within it to pay the tax, it thereby requires the property to be sold in ways that might cause some degree of hardship for the heirs.
Therefore I think we have to bear in mind, with this deemed capital gains tax on death already in existence, what the acceptance of the government's proposal will mean as between those who have availed themselves of extensive family trust provisions and those who have not or are not able to do so. A basic issue as with all aspects of taxation is the issue of fairness.


Mr. John A. MacDougall (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, as I sat here today doing duty, as most members have to do once a week, I had some thoughts on some of the information that has been given by the other side.
I felt I would take a few minutes and try to set the record straight on some of the information presented that has implied that this government since 1984 to the present has really not done anything in order to change Canadian taxation.
I would like to start off with a comment that was made by the previous speaker in regard to infrastructure.
Prior to coming to Ottawa in 19821 had the opportunity to be a municipal councillor in a community of about 2,000, involved in an industrial commission for a number of years and the Chamber of Commerce. With an election upon us this year I find it interesting to hear that through the wisdom of our friends from the other side they will cause the infrastructure problems of Canada to be reborn.
I find that quite interesting because if we go back in history to the time when they were sitting on this side of the House, they were the party at the time that cancelled the tripartite position between municipalities, provinces and the federal government.
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If we go back over time we see some of the ways they tried to generate or stimulate the economy in the early 1980s. Industrial parks were built. The money that was put into these parks was supposed to stimulate industries and create diversification in the economy across this land.
You can see now why we are sitting with the deficit that we have in this country. Those parks that were set up with those dollars spent on infrastructure are still sitting there. The only thing they have today is 10-years worth of growth of trees and shrubs and grass.
That is one reason why each Canadian today is paying for the deficit and misspending of this previous regime over the last number of years. I can tell you that that is the type of spending that Canadians are not interested in.
I wish that the Liberal Party would be straightforward with Canadians. It should really try to tell us where it is going to get the hundreds of millions of dollars that are out there that it wants to put into infrastructure. I believe if municipalities and provinces want to set their priorities and their priorities are infrastructure, then it certainly should be part of the priorities they are setting out and setting some of their other concerns off to one side.
I just want to put on the record today some of the pieces of legislation that we have been able to put forward working with both the previous Minister of Finance and the finance minister today and working with our colleagues. When we got started in 1984, while much of the deficit reduction initiatives had been taken on the expenditure side, over two-thirds of the improvement in the operating budget between 1984 and 1991 was due to program expenditure restraints.
All tax bases have increased in order to bring the revenue and spending into line. Over-all federal government taxes have increased from 16 per cent of GDP in 1984 to 17.6 per cent in 1993.
I would like to just take a few minutes and go through some of the specific tax increases and the areas to deal with. On the personal tax side there is movement to partial indexing, imposition of a general surtax, imposition of an additional surtax on high income earners,
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elimination of federal tax reduction and an increase revenue from 6.6 per cent of GDP in 1984 to 8.2 per cent in 1993.
On the corporate side, there are revenues from base broadening under tax reform greater than the cost of rate reductions, imposition of a new large corporations tax raising an additional billion dollars annually, paid by large corporations regardless of their profit position. Revenues have declined from 2 per cent of GDP in 1984 to 1.3 per cent in 1993 due to lower corporate profits.
With regard to sales and excise tax, increases in the manufacturers' sales tax rates prior to the revenue neutral switch to GST, net revenues collected from GST by law must go directly to the public debt and ultimately to reducing the debt.
Let me just take a moment to say how important that is. We have a tendency in governments whereby individuals like to hide if they have the opportunity. Let us hope that in a very few months this same management that is in place today will continue. One of our greatest concerns with the tax that was raised through the GST, in the sum of roughly speaking $15 billion, some other party in power could come in and act like a bunch of drunken soldiers. Rather than taking this money and putting it against the debt, it could end up spending it in areas where I do not believe taxpayers want to see their dollars spent at the present time.
The other part, Mr. Speaker, I should tell you about is changing from the manufacturers' sales tax to the GST. We hear that the Liberal Party is going to scrap the tax. Very good, it is nice to hear. What are they going to do? Are they going to go back to the manufacturers' sales tax?
Let me tell you this, Mr. Speaker, as someone who has come out of the industrial hardware industry where I had to rely on either importing or exporting products. From the manufacturer's side of it and the opportunity and enhancement that has taken place since the start of the GST, it has certainly been able to give our competitors outside of the country a much more severe period of time in order to invest in products that are constructed here in Canada. For our exporters it certainly has increased and figures will show where the increase affects exporting of manufactured goods has certainly been a benefit to Canadians.

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On the other side of it, I think Canadians are fed up with dealing with the old federal sales tax where a government on budget day can come in and say: "We are going to increase the federal tax by 1 per cent. Thank you very much". In the first two days after a budget people say: "Well, there they go again" and then they have a tendency to forget about it.
Doing it this way with a tax that is shown, Canadians have an opportunity to see whether or not the government manages the tax dollars the way it should. I think the vast majority of Canadians still may not be happy with the GST, but at least they know what they are dealing with. From the other side, all we can hear is: "Give me two years after I am elected and maybe I will see what I can do".
Whether we are talking about companies or whether we are talking about individuals, I do not think Canadians want that uncertainty.
I remember a number of years ago when we were in opposition. We were talking about the fact that maybe it was a time for Canadians to look at wage and price controls. Most Canadians will remember that Mr. Stanfield, our leader at the time, mentioned that we would be looking at a six and five wage and price control.
During the election we heard from the other side: "Don't worry, be happy. We would never do anything like that". Going back in history what happened within a very few months of the Liberals being brought back into power? Wage and price controls.
I also remember in 1980 the federal election was fought on gas pricing. The minister at the time from Newfoundland brought in an 18 cent a gallon hike. Furore hit the country. How could they ever think of increasing the price of gasoline by 18 cents? If we go back over history it was not 18 cents they increased it by, it was not 20 cents, it was not 25 cents, but the meter kept running to well over 30 cents.
Members of the party on the other side are going across the country today stating they are going to do something with the GST. What frightens me, my constituents and many Canadians is that we know the track record of the gang on the other side. They will bring in either a hidden tax or a higher tax. Canadians are not prepared to listen to that.
I would like to move on to some of the other areas of increased economic efficiency such as reform of all the tax bases designed to increase economic efficiency, thereby increasing growth and output.
Elimination of sales tax embedded in business inputs and the tax bias which favoured imports improves the ability of Canadian businesses to compete in both domestic and foreign markets.
With respect to corporate tax, elimination of investment tax credits and fast write-offs for specific investments allows for a lower rate of tax which is the best incentive of all. It has led to greater neutrality between different business sectors which allows businesses to make investment decisions based more on market criteria and less on tax considerations.
With respect to personal tax, elimination of tax preferences, conversion of many deductions into credits and lower marginal rates means decisions are guided by market criteria and not the tax system.
With respect to fairness, there is the introduction of an alternative minimum tax to ensure that wealthy individuals pay tax; the introduction of a large corporation tax to ensure that all large corporations pay tax regardless of their profit position; the lowering of tax rates as a result of tax reform; the conversion of many personal income tax deductions into tax credits; and restructuring of the child benefit system;
I heard the hon. member from the other side complaining earlier about the fact that someone who is on pension and bringing in over $120,000 a year should not be taxed. I have a real problem with that. The system should be there to help those in need. That is certainly what we are trying to do in this country: help those who require help. That is the fairness Canadians want to see in this tax system, a system that is going to be fair to those who need the support.
There is also the enhancement of the refundable sales tax credit to Canadians with modest incomes with the introduction of the GST in 1991. My constituents and Canadians in general are certainly not too pleased but they know they have the opportunity of having a cheque from the government on a quarterly basis and they certainly look forward to that. I can say they call my office if the cheque happens not to be there on that given day.
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However, enhancement and competitiveness is something that has to be dealt with realistically. One of the problems we seem to face on the other side is that competitiveness is something they are not that concerned about. The fact is that they feel as an old government with old policies they want to go back to those days.
It is a competitive changing world out there that we are dealing with today, whether we are talking about the United States, Europe or Asia. This government has been ensuring that the opportunity is going to come through tax reform. Enhancing that competitiveness is the income tax reform, lowering the statutory tax rates to keep in line with the rate reduction in other countries.
The 1992 budget announced reductions in the tax rate of manufacturing and processing profits and raised the depreciation rate of equipment used in manufacturing processing to help the sector readjust.
I want to talk about that for one moment. One of the key factors we are facing in our country is the restructuring of our industries through modernization, upgrading, new technology. Coming from a resource sector in northern Ontario, let me say that we have gone through some very difficult restructuring times.
We must ensure we can be competitive. For example, in the forest industry-my colleague behind me has a very keen interest in the forest industry in his region of British Columbia-it is important when suddenly the purchase of a new debarker machine for a sawmill operation can be considered. That is going to enhance the opportunity to lower the over-all cost of operation.
That is really what this is all about, being able to help individuals but also being able to help the corporate side to ensure there is a profit. Some people in this House believe that profit is a bad word, that a company should not be making profits.
In order to remain sustainable and develop and enhance the opportunities for a single employer, profitability has to be ensured with the opportunity of that profit being put back into the company in buying new equip-
Govemment Orders
ment and enhancing the opportunity of steady employment. This is the very key portion of what we should be looking at.
The other part is encouraging individuals in risk taking by the introduction of lifetime capital gains exemption.
If you happen to be in the agricultural business, if you happen to be in small business, most of those people work seven days a week, 24 hours a day. They are the key factor of the future of our country. Whether there are two, five or 25 employees, whatever it may be, the small individual companies are the heart and soul of the country.
After years of dedicated work those businesses should have the opportunity to gain a capital gains for the number of hours they have worked. A lot of times it is the husband and wife, or a ma and pa operation. They have worked years and raised a family. Then all of sudden they decide either through normal retirement or because of health or whatever that they want to move on and start a new way of life.
A key factor we should be looking at for Canadians is the opportunity for doing what they believe is correct in investing in and for governments investing in small business.
The other part is the introduction of tax credits for labour-sponsored venture capital corporations. We all recognize we can no longer afford to have labour sitting on one side and management on the other and government sitting in another separate area.
These days, it is critical in order to ensure the opportunities for our children and grandchildren that the enhancement of all sectors be working together. Looking around the world it is certainly taking place in other countries. Labour, management and government are sitting down and looking at joint ventures.
Some have been recognized already in northern Ontario and other parts of the country. It is going to be imperative that government, labour and industry look more at this type of co-operation ensuring that there is stability and also the opportunity of ensuring that jobs are going to continue to be enhanced in Canada.

Government Orders
There is the tax assistance to small business. Canada continues to have one of the most preferential tax systems for small business in the industrialized world. In December 1992 the economic fiscal statement included short-term measures to help small business create jobs and create investment.
One of the contentious issues we seem to be facing here on an ongoing basis is that all of a sudden we have made some major adjustments to the Unemployment Insurance Act.
My riding of Timiskaming is going through some difficult times. We are facing about 30 per cent unemployment in my area. From those announcements in December until last Friday, I have had one call. The vast majority of people on unemployment are those seeking employment and they are saying: "Well, it is about time".
It is about time that changes were made. This would assure the small business side and those out looking for employment and those who are employed that we can no longer afford paying for people taking holidays in Florida, paying for people to go moose hunting or paying for people who are just tired of what they are doing and want to sit home and receive unemployment.
Unemployment insurance was never intended to fill in when people decided they no longer wanted to work. It is a safety net that is there to help the individual Canadians who need help. That is really what we are trying to do. We are trying to ensure there is a safety net for Canadians who need help.
When a person who has been working for a small business gets up in the morning and decides that he does not really feel like going to work, he is going to quit, thank you very much, the dollars that have been gone to help train that individual always come back on that small business.
It also means that the small business will be very reluctant to hire new people. Perhaps it has had one or two bad experiences. It has hired people, trained them at a cost of thousands of dollars. All of a sudden the guy says: "I don't like it any more. I am gone". That is the message we are getting.
If you look at the small business investment tax, if you look at the RRSP eligibility investment and changes of the $500,000 lifetime capital gains exemption to small business shares, these helped firms and the public.
I have tried to give members an overview of what the government has tried to do. It is difficult when you are put in the position we were in 1984. You walk in and the cookie jar is empty. You have everybody wondering how you are going to help people.
The only way we are going to continue to have a country that is viable is for Canadians to come together. Nobody likes to pay tax. Nobody wants to pay tax. However everybody in this House today and a vast majority of Canadians are very fortunate. Our lifestyle has been great. If we are going to continue to give a comparable lifestyle to our children and our grandchildren, we must get our house in order.
I really hope that Canadians will question in the next number of months those who are going to be campaigning and offering all these goodies. Exactly how are Canadians going to pay for these goodies? Are they going to slash or are they going to tax? That is the question that Canadians should be asking any candidate who is making promises.


Diane Marleau: Mr. Speaker, I noticed the hon. member for Timiskaming talked about the unemployment insurance bill more than he talked about this particular income tax bill.
I know the riding that he represents as I was bom and raised in it. I also know of the high unemployment rate that people are suffering there. To be very honest, I do not know too many people who would quit their jobs because they feel like spending the winter in Florida collecting unemployment insurance.
Furthermore, if anyone does that and if the Unemployment Insurance Commission finds out about it, there is an extremely heavy fine right now in place. The fine runs as high as 200 and 300 per cent of whatever money that was paid out.
The money paid out by UI has to be returned over and above the extremely heavy fine. Let us quit trying to make Canadians believe that there are hundreds and thousands of people who are quitting their jobs because they can afford to go south to Florida.
Yes, there are many people who can afford to go to Florida and that is their choice. I do not know that many of them are the ones who are quitting their jobs to go there, certainly not in the riding he represents. There are not a lot of very wealthy Canadians in that particular riding. It had some very tough times over the last 20 years or 30 years. It is not just in the last few years that those people have been having difficulties.
February 23, 1993

On another track, I want to ask the hon. member whether he has considered the fact that the government of which he is a member has decided that ordinary Canadians who purchased a cottage 20 years ago for perhaps very little money, when they sell this cottage they can no longer claim the $100,000 capital gains exemption.
I know that in his riding there are many examples of ordinary Canadians-not wealthy Canadians, although there are wealthy Canadians who own cottages-who have not made a lot of money. They have paid a lot of taxes and continue to pay a lot of taxes.
Those people may have purchased cottages for next to nothing because there are many of them in those regions. I know some people who bought cottages 20 years ago for $400. Now the cottage may be worth $25,000 or $75,000. They will no longer be able to get a capital gains exemption when they sell their cottages. These are people who have not made vast sums of money or profits at any other venture. They have not been able to claim the $100,000 capital gains exemption, whereas wealthy Canadians by and large have already arranged their affairs to take advantage of this $100,000 capital gains exemption.
What does the member tell the people in his riding, those same people who bear the brunt of all taxation? What does he tell them?


John Alexander Frances MacDougall: Mr. Speaker, I do not have many constituents in my riding who have $100,000 cottages so I do not think that is much of a problem.
There are people in my riding with cottages that they bought. Maybe they are second and third generation. Maybe some of them bought them for $8,000 or $12,000 and are very fortunate today that those cottages may be worth $50,000 or $60,000.
They may say: "I do not like paying tax. Maybe I hate paying tax". They also look at the fact that the government does not have too many avenues by which it can afford to tax Canadians. They may not like it, but Canadians also recognize that this government or any government today does not have too many options. One
Government Orders
of the options may be taxing a cottage at $75,000 but the return, it having been bought at $12,000, will still be sufficient. The fact is many cottages in our area are transferred in families.
I think that is a boondoggle. Over all Canadians recognize that the government is in difficulty. Canadians recognize that we can no longer spend for tomorrow. What we are now doing is paying for the errors of the last 25 years.
That is a greater concern of Canadians. They want to make certain that the fiscal management of this country is in shape. They have greater concerns about where we are starting. Whether we are talking about municipalities, school boards, provincial or federal governments, all governments have to start to get their taxation in order. Canadians can see debt that is sitting out there. That is what Canadians are more concerned about. They do not want to pay more tax, but they want to ensure that their children have the same opportunities that have been given to them.


Steven W. Langdon: Mr. Speaker, the member from Timiskaming is providing a fantastic set of answers. He is suggesting that the legislation is somehow motivated by a desire to bring down the deficit.
At the heart of the legislation is a massive giveaway which tax experts have estimated is billions of dollars of money that would have been received this year by the federal government if it had not moved as it is moving with this piece of legislation to permit family trusts to continue to be exempt from taxation for years and years into the future.
I have a question for the member on something that does not come from myself but from The Financial Post which is normally quite supportive of the government. On this particular scandalous giveaway of tax moneys the government should be receiving, resulting in other Canadians having to pay more taxes, The Financial Post has been very blunt. It has indicated that there could be substantial sums at stake in allowing trusts to defer capital gains taxes further. "Taxpayers should be told how much revenue is at stake and who will benefit most by allowing trusts to defer capital gains taxes for many years beyond the 21 years presently allowed".

February 23, 1993
I ask the member to stand in the House of Commons and tell us how much money is being lost to the finance department of this country. How much extra taxes will have to be paid by Canadians as a result of the government's legislation in front of us today that will extend for up to 80, 90 and 100 years the period during which family trusts do not have to pay a penny in capital gains tax, regardless of how much extra value the assets they hold accumulate during that timeframe? How much money is the government giving away?


John Alexander Frances MacDougall: Mr. Speaker, I do not have those figures in my back pocket. I can tell the hon. member that in 1985-86 my colleague from Mississauga chaired the finance committee. We heard from Canadians from coast to coast, from companies and from unions with regard to tax reform. The finance ministers between 1984 and the present have certainly done everything they possibly could to tie up, snag, stop or gag tax evasion, tax adjustments.
I guess I should say that the hon. member was part of the finance committee. I would imagine that somewhere in his briefing notes he has that information.
I believe the department is doing everything it possibly can in looking at ways to get tax dollars from Canadians. I would imagine over that period of time it has certainly looked at that area and at this time is not in favour of moving forward.


Mr. Simmons:: Mr. Speaker, could we agree to call it one o'clock?


The Acting Speaker (Mr. DeBIois):: Is there unanimous consent to call it one o'clock?


Some hon. members:: Agreed.


The Acting Speaker (Mr. DeBIois):: It being one o'clock I do now leave the chair until two o'clock, pursuant to Standing Order 24(2).
The House took recess at 12.56 p.m.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Guy St-Julien: Mr. Speaker, Ottawa and Quebec have just signed an agreement under which $40 million will be used to promote sustainable development in the agrifood sector.
The agreement will provide financing for a number of programs involving research, technological innovation and training. The minister and member of Parliament for Bellechasse said it was now up to the farmers to submit projects to the regional committees. After all, they were familiar with the problems.
According to Quebec minister Yvon Picotte, the regions would be in charge of the programs, since agricultural conditions vary from region to region. The minister said this was an example of co-operative federalism, with duplication kept to a minimum. Administration was kept to a minimum, to ensure that funds provided under the agreement budget would be spent on the projects submitted by fanners.
Mr. Speaker, that is what Quebec farmers have been calling on the federal and provincial governments to do.


PARLIAMENTARY MAILING PRIVILEGES
Miss Deborah Grey (Beaver River):: Mr. Speaker, according to a secret Conservative Party document now being circulated to its campaign workers, top strategists are encouraging Tory members of this House to abuse their parliamentary mailing privileges.
Today's Globe and Mail reports that the document reads thus: "Using their mailing privileges means they, the MPs, could be in direct personal contact with all of their voters over the next few months. We still have some time so I would encourage you to encourage your incumbents to do as much as they can now".
What an absolutely disgusting and morally bankrupt use of taxpayers' funds. Mailing privileges are just that, a privilege and not a right for government members for their own personal election campaigns.
February 23, 1993

Canadians are fed up with the despicable antics of this government perpetually lining its pockets at the taxpayers' expense. I am quite confident that the people of Canada will severely punish the Conservative Party for this act of thievery in the coming election.


IMMIGRATION CENTRE
Rey D. Pagtakhan: Mr. Speaker, it is no secret that we have in our country a sinking ship, the Mulroney government.
Aboard the ship sails the first mate, the Deputy Prime Minister who happens to come from Vegreville, Alberta. Coincidentally Vegreville will also be the home of the newest national immigration centre, a huge electoral lifeboat.
The name for this style of politically inspired public policy is called pork barrelling of the worst kind.
Transferring the immigration centres across Canada to Vegreville would reduce face-to-face access by citizens and their advocates to government service and would put in peril through the mail-in approach for applications the safety and security of the immigration system itself. It would uproot the employees and impose undue hardships on their families.
I call on this government to rescind this ill-conceived plan. Public policy should be based on what is right for the citizenry and not what is politically necessary to re-elect the Prime Minister's deputy.


NORTH AMERICAN FREE TRADE AGREEMENT
Mr. Ross Stevenson (Durham):: Mr. Speaker, in discussions about implementing the North American free trade agreement I urge this government to insist that the Government of Mexico implement an acceptable environmental green plan so that its future economic development will be in harmony with all that is considered necessary and desirable for the future well-being of the entire North American continent.
In that way Mexico would answer those genuine concerns that are being expressed here and in the United States about the possible undue exploitation of Mexico's people, its resources and its ecology.
The North American free trade agreement offers a greater future for all the participating countries but it must be accompanied by environmental commitments that will ensure proper sustainable development.


LABOUR RELATIONS
Ms. Joy Langan (Mission-Coquitlam):: Mr. Speaker, the 15-month lockout by Nationair of its workers has been lifted. Members of the Canadian Union of Public Employees are voting as we speak in this House.
The commitment and solidarity of these CUPE members in the face of an employer that is more interested in busting the union than in finding a fair collective agreement is to be admired and applauded.
One has to wonder just how much sooner this labour dispute could have been settled had Nationair not been permitted to use scab labour. Four hundred and fifty flight attendants stood on picket lines and watched as scabs took their jobs.
Months of negotiations and conciliation failed to persuade Nationair that collective bargaining is about fairness not union busting. It is obvious the use of scabs prolonged and embittered this dispute.
The ongoing dispute at the Royal Oak mine in Yellowknife also demonstrates that without a ban on the use of scabs in this country unscrupulous employers will never come to the bargaining table committed to finding a fan-settlement.
The only result from the use of scab labour is a poisoned labour relations climate.


POST-SECONDARY EDUCATION
Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, Canadian university and other post-secondary students have been facing some very difficult financial problems in recent years due to the constantly increasing costs which they as students have been experiencing.
Moreover, the opportunities which they traditionally have had to finance their studies through summer employment have diminished due to the economic reces-

February 23, 1993
sion which has impacted on so many countries. Many, if not most students, depend to a significant degree on government guaranteed student loans to finance their studies, loans plus interest which must be repaid after graduation.
Regretfully, however, the maximum amount which can be loaned annually to students has not increased since 1984 despite the huge increase in cost which they have had to incur since that date.
Consequently, I would urge those who are currently reviewing Canada's student aid program to increase significantly the maximum amount which can be loaned to post-secondary students. I would also urge that the 3 per cent administration fee be abolished.
*


THE ENVIRONMENT
Marlene Catterall: Mr. Speaker, in the introduction to the green plan the Prime Minister said: "As Canadians we are the trustees of a unique, beautiful and productive northern land".
Where is that sacred trust now as the government prepares to dilute, dissolve or dismember environmental regulations if they interfere with competitiveness or cut into profits? Where now is the 1990 green plan promise to review and update regulations that did not do enough to protect the environment?
Protecting clean air, water and land is important to Canadians. The environment however is obviously on the chopping block of short term economic gain, blind to the duty we hold to future generations.
This government is showing clearly that it does not understand the message of sustainable development, that conserving our resources is the only way we can have prosperity. It cannot even read the balance sheets of corporations that are saving hundreds of millions of dollars by cutting their use of water, energy and chemicals that they flush down the drain.
The government has put an urgent priority on cutting environmental regulations but no priority on improving them.



HOUSE OF COMMONS PAGES

["Mr. Speaker, the current government and its Liberal predecessor have created a tax system which favours those of wealth and privilege. For example, the government has decided to extend the most famous of all Liberal tax loophole, the one protecting Canada's most wealthy families who have family trusts.\nThis means that billions of dollars presently sheltered in private family trusts will not be subject to tax until the last exempted beneficiary dies. A fund set up today for a young child would go tax-free for 70 years or 80 years. In our judgment this is very wrong. This is another case where the Liberals created the loophole and the Tories are now widening it. The Liberals feigning ignorance are now crying foul.\nFebruary 23, 1993", 'Unlike the two old time parties, the New Democrats believe Canadians deserve a fair tax system. Our plan should raise revenue for necessary government investment in services without overtaxing working Canadians. It would help to provide proper incentives to stimulate the economy.\nProviding a special tax which helps only the wealthiest of families in Canada is wrong. It is time for a fair tax system for all Canadians.']
Mr. Doug Fee (Red Deer):: Mr. Speaker, last night 10 of the fittest members of this House put partisanship aside and accepted a challenge from the pages to compete in a game of basketball.
Although the pages are younger, stronger and in far better physical condition, experience, pride and a desire to win kept the MPs in the game. Indeed, the MPs would have won except that an unnamed member was intimidated by the enthusiastic verbal support given to the pages and he missed two free shots at the closing of the game and it ended in a 38-all tie.
Mr. Speaker, your office has always done an outstanding job selecting young Canadians to serve as pages. Without exception in my memory they have been a credit to themselves and to this House. They are intelligent, articulate and hard working. This year they also appear to be outstanding athletes.
On behalf of all members, I want to indicate what a privilege it is to know them and how satisfying it is to be able to compete athletically and not to lose.


Mr. Douglas Young (Acadie-Bathurst):: Mr. Speaker, I wish to congratulate our friends in Madawaska-Victoria on Unitel's choosing Edmundston as the location for its customer service centre.
I want to thank Bob DeGrace and the task force that prepared the submission of the Chaleur region and the Acadian peninsula and presented it to Unitel.

Purolator, Federal Express, Cameo and now Unitel, another chapter in the New Brunswick success story.
Four hundred new jobs in the telecommunications sector is a tremendous breakthrough and is really a tribute to the competent, highly motivated bilingual work force that is available in northern New Brunswick.
As Bathurst Mayor Ken Frenette said: "All the applicants have learned a lot from the Unitel exercise". The experience we gained will serve us well as we continue to work together to demonstrate that New Brunswick indeed is open for business.
February 23, 1993



Mr. Jacques Vien (Laurentides):: Mr. Speaker, I would like to tell you about a development project that will generate 1,000 permanent jobs in my riding. Intrawest Corporation, the largest Canadian resort developer, which owns the Blackcomb ski centre in British Columbia and has owned the Mont-Tremblant ski resort since August 1991, will invest $413 million over the next five years to make the resort into an international four-season tourism centre.
I am pleased to announce to my constituents in Laurentides that this project will create 5,500 full-time jobs during construction, which begins in April, and 1,000 permanent jobs after that.
I close by pointing out the managers' enterprising spirit and the $20 million in government money under the Canada-Quebec tourism development agreement. This project will stimulate the economy in the region and in Laurentides.


FEDERAL TRANSFERS
Mr. David D. Stupich (Nanaimo-Cowichan):: Mr. Speaker, the federal government is being something less than honest when it talks about cutting its expenditures, controlling them by cutting back on federal transfers to the provinces. The bulk of these transfers go to post-secondary education, health care and social assistance.
Every one of those programs is important. They are similar from one province to another throughout Canada, although not necessarily equal. These are all very important parts of what it is to be a Canadian, that we have these services available.
The government says that it is saving taxpayers' money when it knows full well that every dollar that is cut back from the provinces has to be raised by the provinces by raising taxes or some other method.
It knows there is not the flexibility there to cut back on expenditures. The federal government in saying this is
called saving the taxpayers' money is being something less than forthcoming.


NORTHUMBERLAND STRAIT BRIDGE
Mr. Bill Casey (Cumberland-Colchester):: Mr. Speaker, in the debate yesterday about the fixed link, one of the members in opposition suggested that the construction benefits would all be realized in other countries.
In fact the bridge will be constructed mainly on Prince Edward Island and a staging area will be established at Borden. It will be built in components and floated into place. Construction will be of concrete and by far the majority of labour and materials will go to people in the maritime provinces.
The main benefit will be on completion when the unemployment rate will begin to be equalized with the mainland maritime provinces.
Currently the unemployment rate on the P.E.I. side of the strait is 35 per cent higher than the New Brunswick side. This will change when the bridge is complete, the impediment to trade is eliminated and thousands of new jobs are created.


MUNICIPAL TAXES
Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, the city of Nepean condemns the announcement of the Minister of Finance that the Conservative government will no longer recognize the municipal formula for grants in lieu of taxes to Canadian municipalities for municipal services to federal facilities.
The chairman of the RMOC said: "This change in policy not only violates the longstanding federal practice of honouring municipal tax rates, but it also represents intrusion into the municipal domain of setting property tax rates. This action contravenes the fundamental principle of fair and equal taxation treatment for all property owners receiving identical municipal services. The Government of Canada as a property owner proposes to disregard its responsibility for paying its fair share of costs associated with providing municipal services. The result of this action will be to shift the tax burden to other property owners within the municipality".

February 23, 1993
By refusing to adhere to the municipally set rates, this government is clearly demonstrating its dishonesty, its treacherousness and its arrogance. The federal government should pay equal taxes on its properties the same as all other property owners.


PEARSON INTERNATIONAL AIRPORT
Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, the environmental assessment for Pearson International Airport was completed in November 1992 but not released to the public until last week.
Then the minister advised that he was rejecting virtually every recommendation from the environmental review panel. In particular, the environmental review panel suggested a short 4,500-foot runway parallel to runway 33 for small aircraft.
The minister rejected that proposal and is going to build a full runway. The environmental review panel suggested sound-proofing to retrofit residences and schools and other such buildings. The minister rejected that recommendation. Indeed, the minister has refused to compensate anyone or assist anyone for substantial increases in air noise.
There is no point in the Government of Canada financing an environmental review of a project if the Government of Canada is not going to be bound by that review.


CANADA SCHOLARSHIP PROGRAM
Mr. Ronald J. Duhamel (St. Boniface):: Mr. Speaker, on Tuesday of last week an hon. member from the other side rose in this House to praise his government for the success of the Canada Scholarship Program.
In the heat of the moment and possibly overcome by emotion, it seems the hon. member lost sight of some of the facts. He failed to mention that not only will students be forced to pay income tax on their scholarships, but they have been robbed of the six month interest free grace period. That adds six months of additional interest to those financially strapped students who must borrow to access post-secondary education.

To top it all, the hon. member, who was obviously in a state of uncontrollable excitement, forgot to mention that his government had decided to break its promise to
eliminate the 3 per cent tax on student loans in exchange for six months more interest.
The Conservative government will take nearly $60 million from students of modest means.

Will this government stop erecting barriers for students, our young men and women, and start doing something about it now?


THE ENVIRONMENT
Mr. A. H. Harry Brightwell (Perth-Wellington-Waterloo):: Mr. Speaker, scientists say that human activities accelerating the natural greenhouse effect could cause future climatic changes to occur 100 times faster than during the last ice age. We can do something about this by becoming more energy efficient.
This is an environmental citizenship message from Environment Canada. Yesterday was the commencement of the environmental citizenship messages program.
This new green plan program is designed to use Canada's existing network of 60 weather offices and the Canadian Meteorological Centre to deliver daily educational messages on issues like global warming, waste reduction, water conservation and spaces and species to the media and the general public.
I know that Canadians will listen to these messages.


TAXATION
Nelson Andrew Riis: Mr. Speaker, the current government and its Liberal predecessor have created a tax system which favours those of wealth and privilege. For example, the government has decided to extend the most famous of all Liberal tax loophole, the one protecting Canada's most wealthy families who have family trusts.
This means that billions of dollars presently sheltered in private family trusts will not be subject to tax until the last exempted beneficiary dies. A fund set up today for a young child would go tax-free for 70 years or 80 years. In our judgment this is very wrong. This is another case where the Liberals created the loophole and the Tories are now widening it. The Liberals feigning ignorance are now crying foul.
February 23, 1993

Unlike the two old time parties, the New Democrats believe Canadians deserve a fair tax system. Our plan should raise revenue for necessary government investment in services without overtaxing working Canadians. It would help to provide proper incentives to stimulate the economy.
Providing a special tax which helps only the wealthiest of families in Canada is wrong. It is time for a fair tax system for all Canadians.



ORAL QUESTION PERIOD

['Hear, hear.']
Hon. Jean Chretien (Leader of the Opposition):: Mr. Speaker, in the absence of the Minister for International Trade, my question is for the Acting Prime Minister. We have been informed that the government intends to present the bill on the North American free trade agreement tomorrow, although parallel negotiations with the United States and Mexico are not to begin until next month.
Could the Acting Prime Minister tell the House why they are in such a hurry, when the American government does not intend to proceed with legislation until it has obtained parallel accords on the environment and employment?


Hon. Michael Wilson (Minister of Industry, Science and Technology and Minister for International Trade):: Mr. Speaker, Canada and the United States have begun the legislative process on the parallel accords. We have opportunities to discuss the parallel accords with the Americans and the Mexicans. This process is to begin in mid-March and I think that both processes will proceed at the same time and may not end until the summer.


Joseph Jacques Jean Chrétien: Mr. Speaker, why is the government in such a rush to table a bill that obviously will be amended? In his statement last week the President confirmed to the Congress what Mr. Kantor had said before, that they would not proceed unless they had agreements on manpower and the environment.
Oral Questions
Why would the government like the House of Commons to pass the bill right now when we all know that there will be changes? If there are no changes the Americans will not proceed and we will have lost all our bargaining chips at the table.


Michael Holcombe Wilson: Mr. Speaker, I think my hon. friend must realize that all three countries have signed the North American free trade agreement. What my hon. friend is talking about is what will be the components of the parallel accords.
The free trade agreement itself will be legislated by all three countries as it was signed last December. There may be some variation in what the different countries would like to see in the parallel accords. That process, as I said, will commence in the middle of March and it will proceed in parallel with the work that is going on in legislating the agreement.


Joseph Jacques Jean Chrétien: Mr. Speaker, I would like to direct a supplementary question to the minister.
The minister is admitting that there will be some negotiations starting next month. Last week he suggested that we should have a North American environmental commission to deal with the problems of the environment. He realized that there was a change in the position of the Americans because there was a change in the administration in the United States.
In Canada there is a very good chance that before this bill is approved by the Americans there will be a change in government here and that will change the policies.
Would it not be fair, in the fifth year of its mandate, for the government to slow down a bit and wait to see what the Canadian people will decide about the government? If you are elected you will go all the way, but we know that you will not be elected and there will be some major changes to this deal.


Michael Holcombe Wilson: Mr. Speaker, the drool coming out of the comers of my hon. friend's mouth is not becoming of him. He is not going to win the next election. He will not have an opportunity, as he says, to renegotiate the agreements.

Oral Questions
As I have said before, what is it that the hon. Leader of the Opposition is going to renegotiate? If you are going to renegotiate you have to give to get. The Americans are looking to see some changes in the supply management system. They are looking for changes in the cultural exemption which we have negotiated.
Which of these is my hon. friend willing to give up, because he has to give if he is going to get.


Hon. Roy MacLaren (Etobicoke North):: Mr. Speaker, the United States, as the minister knows, does not hesitate to put forward its values and its ideas in parallel accords.
The three parallel accords to which the minister has referred may not alter the NAFTA text itself but will certainly change the way in which the NAFTA agreement will operate.
Will the Canadian government, not the U.S. government, for its part take this opportunity to propose a parallel accord on subsidies and anti-dumping so as to protect Canadian interests and to prevent the sort of trade harassment that we have suffered from the United States in recent months?


Michael Holcombe Wilson: Mr. Speaker, let me take my hon. friend back to February of a year ago when it was the Canadian government in the negotiations in Montreal that put forward some specific proposals for trilateral agreements on labour and on the environment. It was the Canadian government that put these forward.
We were not able to get agreement from the other parties at that time, but now that the Americans are coming back and looking more productively at this, it has given us a new opportunity to carry forward the proposals we put forward a year ago.
My hon. friend is asking about the countervail and anti-dumping elements. He knows we have a very good proposal on the table right now in the Uruguay round. I know that he and I are both in agreement in hoping that we will see some successful conclusion of this in a very
short period of time. That I think will provide the answers he is looking for.


Roy MacLaren: Mr. Speaker, the best way for the government to proceed would be to embody the GATT text on subsidies in the North American free trade agreement.
The minister knows that it was his government which took the intellectual property provisions and particularly the drug patent requirements out of the Uruguay round text and put them in the NAFTA.
If that is good policy, why is it not equally good policy for the government to take the subsidies text out of the GAIT and put it in the North American free trade agreement, either in the text itself or in a parallel accord?


Michael Holcombe Wilson: Mr. Speaker, in a perfect world I would be inclined to agree with my friend. However, you have to get agreement from the other two parties. The other two parties are saying: "Let us complete it in the Uruguay round". On that basis what is included in the Uruguay round will be included as part of the disciplines the North American free trade partners must follow as well. That is the approach we have decided to follow.



Nelson Andrew Riis: Mr. Speaker, we know where the Conservatives stand on the NAFTA. It would really be helpful to the debate if we found out where the Liberals stood on the NAFTA.
My question is directed to the Minister of Finance who will know-


Some hon. members:: Oh, oh.


Mr. Axworthy (Winnipeg South Centre):: No one cares where you stand. You are irrelevant.


Nelson Andrew Riis: They seem a little bit irritated. I wonder why.
The minister will remember back in 1972 when he sat on this side the Liberal government brought in the family trust loophole to the tax system. He will remember days and days of railing on against this unfair provision.

February 23, 1993

Now that there are probably $70 billion wrapped up in family trusts and now that his government has extended the Liberal program to provide a tax-free holiday for an entire generation, for the wealthiest families of Canada, can he explain if it was wrong back in 1972 how can it be right today in 1993?


Donald Frank Mazankowski: Mr. Speaker, the hon. member should really do his homework on this issue.
What we are doing in the current legislation is indeed closing a loophole which allowed the prevention of taxes being paid on capital gains. That is precisely why this measure will improve that and make it more fair and equitable, as I am sure the hon. member would want us to do.


William Alexander (Bill) Blaikie: Mr. Speaker, the fact remains that many people who know what they are talking about have called this a very significant tax break in the millions of dollars for some of Canada's wealthiest families. Yet the Conservatives want to extend this Liberal loophole as they have done with so many other things, just showing the similarity between the Conservatives and the Liberals when it comes to things that affect the very powerful in this country.
I want to go back to a question I asked the Minister of Finance last week which he did not answer. It has to do with the business and entertainment tax deduction, another loophole which many in this country use to finance their box seats at hockey games, Expo games or whatever the case may be.
Previously the Minister of Finance said to me that he could not change it because we had to remain competitive. The Minister of Finance now knows that the Americans are looking at changing it. I asked him in the House last week if he would look at changing it and he did not answer the question.
Will he now answer that question? Will he look at changing that deduction?


Donald Frank Mazankowski: Mr. Speaker, since the hon. member is influenced by what the Americans do, I should ask him whether he is now in favour of a national sales tax, a
Oral Questions
GST or a value added tax which the Americans are considering as well.


William Alexander (Bill) Blaikie: Mr. Speaker, you just cannot get the Minister of Finance to answer the question with respect to the business and entertainment tax deductions.
Why do we not try again? The business and entertainment tax deduction, is the government thinking of changing it now that it can do so without harming our competitive position with respect to the United States?
While he is at it, if the Minister of Finance is concerned about loopholes, could he explain to the House why the Canadian government voted against Interfirpol, an organization suggested to deal with the way in which other countries become tax havens and put countries like Canada at a disadvantage? Why did the Government of Canada vote against creation of that?


Mr. Speaker:: The hon. member has put his question.


Donald Frank Mazankowski: Mr. Speaker, I know the hon. member is not a great supporter of the small business community and I know he is not a great supporter of the Canadian Restaurant Association.


An hon. member:: Answer the question.


Donald Frank Mazankowski: He will just have to wait and see what the budget holds.


AIRLINE INDUSTRY
John Paul Manley: Mr. Speaker, my question is for the Minister of Transport. Yesterday in response to the report that Transport Canada is failing to collect landing fees owed by some air carriers, the President of Air Canada said:
If that is the way the game is played to keep the field level we would like to play it the same way.
Thousands of Canadians in financial difficulty would dearly love to forgo their taxes as well. Why has the government been discriminating among air carriers in the collection of these fees? When did it become government policy to let businesses off the hook for unpaid taxes and fees owing to the Government of Canada?

Oral Questions


Hon. Jean Corbeil (Minister of Transport):: Mr. Speaker, the government has never let any airline off the hook in collecting its taxes.
Because the airline industry is a cyclical business, we have from time to time accommodated some airline companies that were experiencing problems. We have accommodated some airlines in other ways. Each airline has been treated fairly.
We will continue to do so by being prudent and at the same time compassionate for the jobs of the thousands of people employed in the airline industry in Canada.


John Paul Manley: Mr. Speaker, lots of Canadians would like to see some compassion from the government when it comes to collecting taxes.

The minister's policies are in complete disarray. He has reduced them to some vague statements about capacity and about offering financial assistance through the back door. If he is unable to formulate a policy, why does he not table the review panel report that has been on his desk since January 30?


Jean Corbeil: Mr. Speaker, I find it rather difficult to follow the hon. member's logic. Some time ago he worried about what we were going to do to ensure that a major company did not go bankrupt before all these avenues had been explored. We did what was necessary to give the company ample time to examine the situation and I think that so far this has produced satisfactory results.
As for the report by the National Transportation Act Review Panel, it has been submitted to us. We are now examining the report and we intend to table it in the House as soon as possible.


Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, the minister talks about satisfactory results. But this Minister of Transport is presiding over the disintegration of Canada's airline industry.
The president of Canadian Airlines is asking Ottawa to order reductions in passenger capacity. The president of Air Canada is asking for deferrals in landing fees. The president of Nationair is asking for federal cash assistance from the national government.
The question Canadians are asking is: What is this minister doing? When is this minister going to produce a plan to stabilize, to resurrect, to save the Canadian airline industry from a government-made disaster?


Jean Corbeil: Mr. Speaker, over-all, the airline industry is going through a very difficult period world-wide.
In other countries, for example the United States, many companies have gone bankrupt causing the loss of many jobs in the industry. However, Canada has been able to maintain all the airline companies in a living situation by applying the policy of being compassionate to the people and at the same time being fiscally prudent.


Brian Vincent Tobin: Mr. Speaker, this government's policies are killing our airlines. Unless the minister thinks he is Pontius Pilate will he immediately take all necessary action to prevent a disaster in the industry?


Jean Corbeil: Mr. Speaker, airlines throughout the world are going through a very difficult time. Airlines in a number of countries have gone bankrupt and many jobs have been lost. I must repeat that Canada is very proud of having managed to keep all its airlines alive and protect so many jobs in an important industry that is having a hard time restructuring but is doing so just the same.
We have seen the positions taken recently by the major companies who are starting to realize they had better reduce their capacity because, as they have admitted, there is overcapacity at the present time.


ENVIRONMENT
Ms. Lynn Hunter (Saanich-Gulf Islands):: My question is for the Minister of the Environment.
Our children are inheriting a country which is sick and diseased compared to our country only a generation ago. Canadians do not want to see this environmental deficit grow like the financial one. Under pressure last year, this government passed environmental assessment legislation to ensure a process that is fair, efficient, transparent and allows for a high level of public input.
February 23, 1993

Why did this government choose a cosy, cursory, internal review of the North American free trade agreement that fails these tests? Why is this government determined to ignore its own environmental legislation to ram through the NAFTA?


Hon. Jean J. Charest (Minister of the Environment):: Mr. Speaker, there have been discussions for a certain time within the government and with opposition members on how to proceed to environmental assessments. In fact, I think the members on the opposite side, including the member next to the hon. member for Saanich-Gulf Islands, participated in some very detailed discussions on how we should proceed.
It was made clear from the outset that the policy development within government would be dealt with on a separate track. In fact I think it was in 1990 the government announced a process by which we would do such an environmental assessment.
NAFTA is probably the first major policy initiative to go under such a process with very good and comprehensive results which we have since made public to the hon. member and to other Canadians.


Lynn Hunter: We have heard the government's repeated assurances. The government is obviously too afraid to undertake a real environmental assessment of the North American free trade agreement.
The record of the government is clear: broken promises, cuts to the green plan, environmental legislation completely bypassed. Now in the name of competitiveness, in a ruthless levelling of the playing field, there is a review of environmental regulations to ensure they do not hinder trade.
What mandate does this government have to dismantle the few protections we have when Canadians have expressed their desire for more rather than less protection over this dangerous chemical cocktail in our-


Mr. Speaker:: I think the hon. member has put her question.


Jean J. Charest: Mr. Speaker, one thing on which I can agree with the hon. member is the fact that the government's record in this regard is very clear. It is one of the best in the world, as described by Mostafa Tolba, who was the director of the UNEP until he was replaced by a Canadian. It is one
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of the best records in the world as described by President Clinton only a few weeks ago.
Environmental review of the regulations is happening in about 20 government departments, including Environment Canada. It is something that governments must undertake from time to time. We have done it with a view to upholding and protecting health and environmental standards. I have made that veiy clear from the outset.
To give the issue some perspective, I can say to the hon. member as I had the opportunity of saying to the executive of the Canadian Association of Petroleum Producers at a recent meeting that in this area the government expects in the next few years to be regulating more rather than less. However, we want to do it more efficiently and in a way that meets Canada's environmental competitiveness, and its over-all competitiveness.


MONTREAL'S ECONOMY
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, my question is directed to the minister responsible for metropolitan Montreal. Yesterday in the House, the Minister of Employment and Immigration admitted that the changes affecting unemployment insurance would take practically half a billion dollars out of the city's economy. My question is therefore directed to the minister responsible for that area. What action is he considering to deal with a situation that is intolerable in a city where 250,000 people are out of work?


Hon. Bernard Valcourt (Minister of Employment and Immigration):: Mr. Speaker, the premise of the hon. member's question is completely erroneous. It is based on the conclusions of an erroneous study which attributes this short fall to the proposed changes Bill C-21 and Bill C-113.
However, the study fails to consider that the people of Montreal will have received more than $4 billion in unemployment insurance benefits during the period from 1990 to 1994. Montreal will receive additional amounts totalling $800 million to finance training and re-employment activities throughout that period, and this does not include, for instance, parental benefits for women in Montreal.

February 23, 1993
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New spending on training will do more for Montreal's economy than the passive spending on unemployment insurance touted by the Liberal Party. These measures were not considered in the study, so the premise of her question is false.


UNEMPLOYMENT INSURANCE
Sheila Maureen Copps: Mr. Speaker, the premise of my question is based on the fact that the unemployment insurance changes being proposed and trumpeted by this minister will take $2 billion out of the hands of those unemployed Canadians who need help.
The mayor of Welland is here in the House today seeking help from this government for an unemployment rate of 25 per cent in his community. Communities across the country are reeling. They are asking this government: "Why are you taking money directly from the hands of unemployed Canadians who can least afford to pay?"


Bernard Valcourt: Mr. Speaker, according to the Unemployment Insurance Act, the maximum insurable earnings were going up by 5 per cent on January 1. Find me many Canadians who have had a 5 per cent increase in their salaries today.
In December the government imposed a freeze on the salaries of members of Parliament, judges, the Governor General and ministers of the Public Service in trying to contain the deficit of UI. I know that Liberals do not care about deficits. They mounted one that we still have to pay for today. However, the fact of the matter is that even with these changes Canadian employers and workers will have an accumulated deficit of over $7 billion by the end of 1993 which ultimately they have to pay.


NATIONAL DEFENCE
Mr. Fred J. Mifflin (Bonavista-THnity-Conception):: Mr. Speaker, yesterday in response to my question to her on peacekeeping deployment and training, the Minister of National Defence said that I ought to correctly quote
her cabinet colleague, the Secretary of State for External Affairs.
I am sure she has had a chance to check the "blues" and the minutes of the standing committee on external affairs. She will now know that the information she was given was false, the quote was correct and that she was wrong.
On the subject of peacekeeping operations, I would like to ask the Minister of National Defence: Why at a time when the government claims it has excess base infrastructure in Canada for every kind, size and description of training does the government see fit to deploy 800 soldiers for training for a month in California at a base that I am told is due to close in the near future?


Hon. Kim Campbell (Minister of National Defence and Minister of Veterans Affairs):: Mr. Speaker, as I believe General Mackenzie pointed out when he was asked publicly about this-I use him since he seems to be the authority that hon. members on the opposite side trust most-the facilities at Fort Ord are not replicated anywhere in Canada. They have two advantages for this training mission.


Lloyd Axworthy: They are in California.


Joseph Jacques Jean Chrétien: The beach boys.


A. Kim Campbell: I do not think the safety of Canadian men and women going on missions is a matter of humour.


Some hon. members:: Oh, oh.


A. Kim Campbell: Mr. Speaker, is the hon. member interested in an answer to this question? I think it is an important question.
The facilities at Fort Ord have two advantages. They allow Canadian men and women who are training to be deployed into Croatia to train in a built-up area. It is a facility that replicates an urban landscape. That is where our people will in fact be deployed. It enables them therefore to acquire the appropriate skills.
Right now in Canada we do not have a facility that enables them to train in the climatic conditions they will meet when they are there, namely springtime conditions. Alas I have to confess that even in British Columbia it is not springtime.
February 23, 1993

It is important when we send Canadian men and women into dangerous circumstances that they are trained to meet the conditions of those circumstances and not those in the imaginations of members opposite who have not the foggiest clue about what is really involved in peacekeeping.


Fred J. Mifflin: Mr. Speaker, the minister is right. This is a serious subject and I suggest there are some on this side who do have a clue as to what is going on.


Some hon. members:: Oh, oh.


Fred J. Mifflin: Speaking of clues, I would like to ask the minister about the situation. Peacekeeping has reached an unprecedented level for Canada.
We have two generals with vast peacekeeping experience who are showing concern over the nature and the size of our operations. The Chief of the Defence Staff last November stated grave concern and now one of her cabinet colleagues, the Secretary of State for External Affairs, in her testimony to the committee last Wednesday said that she had concern about overloading the personnel resource system.
When will the minister stop wallpapering her lack of knowledge about what is going on in her department? She should stop giving these weak and arrogant answers, find out what is happening and properly manage defence in Canada.


A. Kim Campbell: Mr. Speaker, that hon. member knows because he was a member of the Canadian Armed Forces that Canada has never developed its policy with respect to the size of the forces based on meeting peacekeeping requirements.
The size of the Canadian Armed Forces and the equipment is based on what is required to meet our own security needs and our own domestic needs such as the support of the civil power.
When we have a request from the United Nations for peacekeeping, we review the kinds of services the United Nations is looking for and if we have available people who can meet those services, we make them available to the United Nations.
Clearly there is a limit on how much we can do. I agree with many who have spoken on this subject that we are
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reaching the limit of the kinds of facilities that we are able to make available to the United Nations.
The question then remains for Canadians to decide where they wish to increase the size of the Canadian Armed Forces, increase our defence budget to meet additional requirements of peacekeeping.
I would be very interested to know whether it is the position of that hon. member's party that we do that.


UNEMPLOYMENT INSURANCE
Mr. Cid Samson (Timmins-Chapleau):: Mr. Speaker, my question is for the Minister of Finance.
The Auditor General found in 1989 that there was an inconsistent application of UI penalties right across Canada. This is a great injustice, which continues today, for claimants when a reason for quitting is considered just cause in one employment centre but not in another.
Before proceeding with Bill C-113, will the Minister of Finance call upon the Auditor General to do an audit of UIC having particular regard to quits and fireds?


Bernard Valcourt: Mr. Speaker, we are attempting to administer the UI regime in a fair way in order to protect the taxpayers of Canada, the workers and the employers who pay into the fund.
I know the NDP stand is that we should pay benefits to a person who voluntarily, without cause, quits his or her job but that is definitely not the position of this government.


Cyril (Cid) Samson: Mr. Speaker, I certainly appreciate the minister's position on wanting to be fair with all Canadians but let us make sure that he is fair with all Canadians, all those employed and unemployed.
My supplementary question is for the same minister. We have been unable to obtain statistics from UIC on reasons for quits and fireds. We suspect that the government has never kept these statistics that are so relevant to Bill C-113.
I would like to ask the minister how he can predict savings to the UI program on such sketchy information. Also I would like to ask again if he will consider authorizing an audit on this aspect of the UI program.

Oral Questions


Bernard Valcourt: Mr. Speaker, Bill C-113 is presently before the House.
According to our parliamentary process, the bill will go to a legislative committee. At that time members will have a chance to ask questions of the officials as to the situation of the UI account, of the bill and everything pertaining to it. I invite him to do just that.


TAXATION
Mrs. Edna Anderson (Simcoe Centre):: Mr. Speaker, my question is for the Minister of Finance.
Presently Canadian corporations are experiencing the lowest profit margins in history, including the Great Depression. In fact approximately 50 per cent of our corporations are operating at a loss.
Recently the NDP proposed to increase the minimum corporate tax. Could the Minister of Finance explain what effect this tax increase will have on the current business climate and the current unemployment situation?


Donald Frank Mazankowski: Mr. Speaker, it is true that the level of corporate profits is at an all-time low. It is true that it is important to maintain in place a competitive tax regime that is consistent with the competitive norms in the industrialized world. While Canada is about in the centre of the G-7 countries, it is still somewhat higher than the United States.
I agree with the hon. member when she asks what the result of an additional corporate tax burden will be. I can only refer to what is happening in Ontario.
I read from the Stoney Creek News a headline which says "Ron Foxcroft temporarily relocates to the United States". It goes on to say:
"We moved to North Tonawanda temporarily until the Bob Rae
government is defeated," said Foxworth.
He is shocked with what he calls the detrimental business
practices of Ontario's NDP government, he said -
"The day after the Bob Rae government is defeated, I'll be back".


AIRLINES
Donald Alex Blenkarn: Mr. Speaker, my question is for the Minister of Transport.
The minister knows that prior to Christmas when an advance was made to Canadian Airlines, Canadian Airlines cut back on the services provided. After that Nationair, which is an airline that does not even pay landing fees and apparently owes the government in excess of $7 million, was allowed to institute service between Toronto and Ottawa, and Toronto and Montreal.
Why did the minister allow those services to be instituted when Nationair owed the government money? Why is that service allowed to continue as long as Nationair owes money to the government?


Jean Corbeil: Mr. Speaker, I am sure the member knows that we have a policy of making sure that competition exists in the airline industry.
The travelling public has benefited from the reduced rates. We cannot know in advance whether a company is going to make money on a certain route or not.


BILL C-91
David Walker: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs.
This morning Winnipeggers found out the true meaning of Bill C-91. Instead of the much-promised new money for research, they found out that Apotex, a Canadian-owned generic drug company was cancelling a major project in Manitoba.
Will the minister now admit that the legislation is devastating to the Canadian generic drug companies and that changes must be made immediately to the legislation to protect them?


Michael Holcombe Wilson: Mr. Speaker, I caution my friend to read carefully what the Apotex people said.
February 23, 1993

They have not cancelled that. They have shelved the thing temporarily. They have said this at times before and we have learned to listen very carefully because we have confidence that the project will proceed.


David Walker: Mr. Speaker, my supplementary question is for the Deputy Prime Minister in the absence of the minister of western diversification.
Apotex was sponsored in this project by a grant from western diversification to the tune of $6.2 million. How can one minister recommend a project for government expenditures to the tune of $6.2 million while another minister presents legislation to the House that defeats that project. What exactly are the plans of the government for the development of a technical and sophisticated Winnipeg economy?


Michael Holcombe Wilson: Mr. Speaker, I think my hon. friend misses the point again. The legislation he referred to has brought forward some $650 million worth of investment in various parts of the country.
Manitoba has a $100 million project that is going to be very important to its economy. I think my hon. friend should look at the broad picture and not jump to fast conclusions which have not been borne out in the past.


FOREIGN AID
Lloyd Axworthy: Mr. Speaker, my question is for the Acting Prime Minister.
On Friday Canada will participate in a NATO meeting to discuss an airlift for Bosnia but other countries are also in crisis. For example, the Prime Minister received an urgent request for help from the President of Armenia. Unfortunately our response is very limited.
I ask the Acting Prime Minister to increase Canadian aid. Moreover, will he instruct our NATO ambassador to raise this issue so that the international community will establish an airlift to transport food and energy supplies to Armenia?
Oral Questions


A. Kim Campbell: Mr. Speaker, the Secretary of State for External Affairs is not in the House today. I will take note of my colleague's question and I am sure that the minister will answer him as soon as possible.


Lloyd Axworthy: Mr. Speaker, I say to the Deputy Prime Minister and to the Minister of National Defence, Armenia is a forgotten country. People are starving and freezing. The CSCE has not been able to solve the war. The UN is not taking any interest whatsoever.
Will this country take some leadership, bring this matter before the UN Security Council in an emergency meeting and ask for an end to the economic blockade? Talk to our allies, the Thrks, and say that a corridor has to be opened. We have to find some way of bringing about a cease fire.
Is it not time for Canada to stand up for the poor people of Armenia and show we are prepared to offer leadership to the world?


A. Kim Campbell: Mr. Speaker, I just repeat in English what I said in French on behalf of the Secretary of State for External Affairs.
I am not aware of what steps she has taken to raise this particular issue either in the United Nations or with other countries. She is in Japan today. She has been travelling a great deal. I know that she will be very pleased to respond to the hon. member's question as soon as possible on her return.


THE ENVIRONMENT
Kenneth Ross Stevenson: Mr. Speaker, my question is for the Minister of the Environment.
Will the minister take all necessary steps to persuade the Government of Mexico to adopt an environmental green plan to ensure that its participation in the North American free trade agreement does not cause undue exploitation of the country's people, resources and ecology.

February 23, 1993
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Further, will Canada offer Mexico to help it enact such a green policy, a portion of the funding proposed at the earth summit through the United Nations Development Fund?


Jean J. Charest: Mr. Speaker, my understanding is that the Mexican government has already put in place a national program in the area of environmental protection with a certain number of fixed objectives.
It may be of interest to members of this House to know that Canada signed a bilateral agreement with Mexico in March 1990 in the area of environmental protection. We have since spent $1 million in co-operation with them in different areas, including training. It is a forerunner to the many opportunities there for Canada in the area of environmental technologies.
To complete my answer to the member's question, Canada will participate with many countries in developing green plans around the world. Since Mexico already has one and we have a bilateral agreement we will not use the UNDF plan for that purpose.


AGRIFOOD SECTOR
Guy St-Julien: Mr. Speaker, my question is for the Minister of State for Agriculture.
A $40 million agreement has just been signed with Quebec to promote sustainable development in the agrifood sector.
How can the minister ensure that the regions will control the programs under the Canada-Quebec agreement for sustainable development and how can he ensure that there will be as little duplication as possible in implementing these programs?


Hon. Pierre Blais (Minister of Justice, Attorney General of Canada and Minister of State (Agriculture)):: Mr. Speaker, the member's question is interesting because our government has indeed signed a $40 million agreement with the Government of Quebec. What is especially important is that it covers the environment and agriculture, which are important fields for all provinces,
including Quebec. In fact, it was the fifth Canadian province to conclude an agreement with the federal government.
The decisions will not be made in Ottawa or Quebec City but in each region. In each region of Quebec there will be committees made up of representatives of the provincial and federal governments and farmers belonging to the UPA; those people will receive project submissions from farm groups and approve them. I think $40 million for agriculture and the environment is a good thing.


BREAST IMPLANTS
Joy Langan: Mr. Speaker, my question is for the Minister of National Health and Welfare.
On January 13, 1993 the minister removed silicone breast implants from the market. However, the minister said it would be permissible for women to obtain breast implants on compassionate grounds.
Is it compassionate to put an object that we know is unsafe into the body of woman? Would the minister tell us what his definition of compassionate is?


Hon. Benoit Bouchard (Minister of National Health and Welfare):: Mr. Speaker, the only answer I can give to the member is the one I gave when we discussed this.
Compassionate grounds have been defined very strictly by the medical profession and it will be assessed case by case. Each case will be referred to the department based upon very stringent rules. If there is no relationship to the rules it will be turned down.
I believe we can provide requested information at any time concerning the nature of the rules that will apply. I absolutely would not worry about how it will be dealt with by the Department of National Health and Welfare.


PRESENCE IN GALLERY
Mr. Speaker:: I wish to draw to members' attention the presence in the gallery of the Hon. George Archibald, Minister of Transportation and Communications, province of Nova Scotia and the Hon. Ken Streatch, Minister of Economic Development, province of Nova Scotia.
February 23, 1993


Some hon. members:: Hear, hear.


Mr. Speaker:: I wish also to draw members' attention to the presence in the gallery of the Hon. John Ostashek, Government Leader of the Yukon.


Some hon. members:: Hear, hear.



GOVERNMENT ORDERS


Michael Holcombe Wilson: that a Ways and Means motion to introduce a measure to implement the North American free trade agreement between Canada, Mexico and the United States of America be concurred in.


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


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


The Acting Speaker (Mr. DeBlois):: Call in the members.


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


CANADA LABOUR CODE
Marcel Danis: that Bill C-101, an act to amend the Canada Labour Code and the Public Service Staff Relations Act, be read the second time and referred to a legislative committee in the Human Resources envelope.
He said: Mr. Speaker, I rise today to address hon. members on the second reading of federal labour legislation which will reduce administrative and cost burdens, increase efficiency and competitiveness and enhance labour-management co-operation.
The proposed amendments to the Canada Labour Code are in a balanced package. They benefit employers, employees and government and are also timely. With the
support of this House we can move forward together to increase our investment in people and the ability of Canadian enterprises to be more competitive.
The majority of the amendments I am proposing relate to federal labour standards contained in the Canada Labour Code. These proposals were developed over a two-year period in partnership with federally regulated employer and employee representatives, the very parties affected by the changes. Some 700,000 working Canadians will benefit from these changes to federal labour standards.
The issues addressed in this proposal include streamlining modifications to standards, clarifying the relationship between minimum labour standards and collective agreements, more effective collection of unpaid wages, provision of wage and employment protection for workers injured on the job, greater flexibility in the timing of parental leave and maternity related reassignment.
I am also proposing the addition of a provision to the Canada Labour Code and the Public Service Staff Relations Act. These amendments will serve the public interest by providing an additional mechanism which could assist in the settlement of collective bargaining disputes.

I will give a few examples of the ways in which the proposed amendments to the Canada Labour Code will benefit employers and employees. Streamlining the procedure for modifying labour standards such as duration of work, annual leave and statutory holidays will benefit the employer.
Clarification of federal powers concerning wage and unemployment protection for workers injured on the job and the relationship between minimum labour standards and collective agreements will help save time and money and prevent overlap and duplication.
Pregnant and nursing workers will have the right to request reassignment, a change in their tasks or even a period of leave if their health is at stake. Employees injured on the job will benefit under provisions that guarantee wage protection, maintenance of social benefits and resumption of employment. New parents will be able to take parental leave at the time they see fit, during the first year in which they have an infant in their care.
February 23, 1993

All these changes clearly benefit Canadian workers and testify to the federal government's commitment to investing in the human resources of this country.
These changes will greatly enhance the harmonization of labour legislation in this country. The Canada Labour Code will be more compatible with provincial labour standards will be increased, and employees across Canada will be entitled to similar levels of wages and benefits.
As I said at the beginning of my speech, these very substantial changes are intended to streamline federal labour legislation and help Canada prepare for the challenges of economic globalization. I would now like to offer some examples that will illustrate the tremendous progress we will all be able to make as a result of this bill.

As an example let me briefly describe our amendments with regard to collective agreements and minimum labour standards. These modifications will exempt unionized work places from annual vacation, general holidays, bereavement leave or minimum wage standards where the collective agreement meets or exceeds the legislated standard.
Currently the complainant, subject to such a collective agreement, may call on both the grievance process and Labour Canada for redress. The new amendments will ensure that only the collective agreement prevails for those employees who have access to a third party grievance process. This will eliminate unnecessary duplication.
At the outset I referred to proposed changes in the industrial relations area of the Canada Labour Code and the Public Service Staff Relations Act. The changes will protect the public interest by providing an additional mechanism which could assist in the settlement of collective bargaining disputes in federal jurisdiction. These amendments will allow a vote to be directed among employees in a bargaining unit on an employer's last offer when the public interest is affected.
Housekeeping amendments to the Canada Labour Code will also be made to redress certain discrepancies between the English and French texts. This will ensure clarity and uniformity in the provisions.
In conclusion, I think it is clear from the outline I have provided hon. members that the amendments before this House will have an extensive and beneficial impact on efficiency in the work place while promoting greater co-operation between employer and employee.
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These amendments will also help propel Canada into a more progressive economic climate and foster a more equitable and harmonious work place environment. I trust that with the support of both Houses and the support of my colleagues from the opposition parties we can get this piece of legislation through the House quickly.


Mr. Gilbert Parent (Welland-St. Catharines-Tho-rold):: Mr. Speaker, I wish to commend the Minister of Labour on introducing Bill C-101 and making so many necessary changes to the Canada Labour Code.
I have some amendments and suggestions to make to what the minister is proposing, as will my Liberal colleagues who will be speaking on this bill. I have already sent them to him for his perusal. Over all my party and I are prepared to support the bill in the anticipation that our recommendations will be received in the same spirit as we give this support.
The federally regulated enterprises to which the code applies include privately and publicly owned industries engaged in interprovincial or international rail, road and pipeline transportation, shipping and related services, air transportation, interprovincial and international communications, broadcasting, banks and various Crown corporations.
I will deal specifically with sections of the bill which I think can be improved. Clause 42 would amend the Public Service Staff Relations Act, also known as the PSSRA, by adding a heading and a proposed subsection 19.1. I am suggesting that this clause be amended by striking out lines 6 and 7 on page 28 and substituting the following: "that it is in the interests of the employees of the effective bargaining unit that those employees be-."
After line 20 on page 28 the following should be added: "1.1 For the purposes of determining the interest of the employees under subsection .1 the minister may take into consideration the following: (a) whether the rules of the trade union give the employees an opportunity to vote, to accept or reject an offer of an employer, and where there are no such rules whether this is likely to be prejudicial to the employees; (b) whether there are reasonable grounds to believe that a significant number of employees wants a vote to be held, and (c) whether a vote is likely to end a labour dispute that in the opinion of the minister has lasted for an inordinate length of time."

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I would leave that timing to the opinion of the minister and his advisers who would be involved in this.
Clause 2 seeks to amend Part I of the Canada Labour Code by adding a heading and proposed subsection 108.1 regarding a directed vote on the employer's last offer. This is where there seems to be more of a problem than in other sections of the bill because this was not discussed at any length with the people involved in the negotiations all along. Where notice to bargain collectively had been given and the Minister of Labour felt that the public interest would be served by such a vote, the Minister of Labour could consider or could order a vote among employees in the affected bargaining unit. Employees could vote to accept or reject the employer's last offer received by the bargaining agent on all matters remaining in dispute.
What I am suggesting is that clause 2 of Bill C-101 be amended as follows: by striking out lines 18 and 19 on page 1, and substituting the following: "interest of the employees of the affected bargaining unit that those employees be given the opportunity"; by adding after line 10, page 2, the following: "(1.1) for the purposes of determining the interest of the employees under subsection (1), the minister may take into consideration the following: (a) whether the rules of the trade union give the employees an opportunity to vote to accept or reject an offer of the employer and where there are no such rules, whether this is likely to be prejudicial to the employees; (b) whether there are reasonable grounds to believe that an insignificant number of employees wants a vote to be held; and (c) whether a vote is likely to end a labour dispute that, in the opinion of the minister, has lasted for an inordinate length of time".
Certainly the idea that bargaining unit employees may vote on the employer's last offer is not new in the Canadian labour relations system. Legislation exists in several jurisdictions on this issue. In Alberta, any time after bargaining proposals have been exchanged, either party may make one request during each dispute for the
Labour Relations Board to conduct a vote on the most recent offer.
If most of those voting accept the offer, then it is binding on the parties and must be included in their collective agreement.
The British Columbia Industrial Relations Act provides that before the commencement of a strike or lockout the employer may make one request for a secret ballot on its last offer to be held among bargaining-unit employees. The commissioner of the Industrial Relations Council then orders such a vote.
The act further allows that during a strike or lockout the commissioner may direct a secret ballot vote if he or she considers that it is in the public interest to do so.
Finally, British Columbia's bill 84 includes a provision that would authorize the Minister of Labour to direct a vote on the employer's last offer. I would note here that in this particular case where this act was passed, it was a New Democratic government that passed it. This seems to be the group that is going to give the greatest problem with the passing of this particular section.
I see my colleague is all ready to jump in here and I am waiting to hear what she has to say. I am sure she will have a lot to say and I hope most of it will be substantive.
In Ontario, which is also led by a New Democratic government, after the commencement of a strike, the Minister of Labour may direct a vote among the bargaining unit employees on the employees' last offer if he or she feels that this would be in the "public interest".
For example, in 1991, a legal strike by Toronto Transit Commission employees ended when the Ontario Minister of Labour, a member I believe of the New Democratic Party, directed a vote among the striking employees. A majority of the voting employees agreed to accept the employer's last offer. Further, the Ontario Labour Relations Act allows that before or after the commencement of a strike or lockout, the minister, in response to a request from the employer, will order a vote among the bargaining unit employees on the last offer.
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Finally, there is the Saskatchewan Trade Union Act- where there is also a New Democratic government- that allows it sometimes when a strike has continued for 30 days. A time limit is put on it. The trade union, the employer or the employees involved in the strike representing at least 100 persons or 25 per cent of those in the union, whichever is less, may apply to the Labour Relations Board for a vote on the employer's final offer.
Every affected employee who has not secured permanent employment elsewhere is eligible to vote. The vote is held at the discretion of the board. It may be ordered only once for any strike.
The minister suggests that the amendments proposed in Bill C-101 would serve the public interest through providing-in addition to what I believe he said was conciliation and other mechanisms available under the legislation-a means that would assist in the settlement of bargaining disputes. I agree with him.
I believe that his interpretation of the bill coincides very closely with mine and that, generally, of my party. Nevertheless, neither clause specifies what person or body other than the Canadian Labour Relations Board, the CLRB, or the Public Service Staff Relations Board, the PSSRB, as the case may be, might be charged with conducting the last-offer vote or for what reason or on what basis an entity other than the relevant board would be selected.
The proposed amendments should be entered into the record so that there is no misconception on either side as to precisely what we are dealing with:
B. Proposed Amendments to Minimum Employment Standards.
1. The Relationship Between Collective Agreements and Part III of the Canada Labour Code: Clause 13.
Clause 13 would amend section 168 of the CLCby adding proposed section 168(1.1). This proposal would require that Divisions II, IV, V, VIII (Minimum Wages, Annual Vacations, General Holidays and Bereavement Leave, respectively) not apply to parties to a collective agreement that provided employees with rights and benefits at least as favourable as those provided under the stated Divisions of the Code in respect of length of leave, rates of pay and qualifying periods for benefits. Further, such employees would access the grievance and rights arbitrations provisions of the collective agreement for the settlement of disagreements related to those matters.
It is a generally prevailing principle that minimum employment standards are exactly that -minimum standards. Further it is generally understood that these standards provide a "floor" from which unions often negotiate relatively more generous benefits. The
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proposed change would clarify that collective agreement provisions would prevail over select legislated provisions of part III of the Canada Labour Code in cases where the terms of the collective agreement at least met the code's requirements or annual vacation entitlements, general holidays, bereavement leave or minimum wage rates. Generally, collective agreement provisions exceed legislated provisions in these areas.
The grievance procedure would be used in seeking redress in disputes related to these benefits. However employees in a nonunionized work environment who lack access to a grievance procedure could seek redress through either Labour Canada or the courts.
The modifications for maternity leave as outlined in this bill would cover approximately 700,000 men and women across Canada. We believe in this party that a fairly substantial group, nearly 200,000 additional women, could be covered through an amendment to clause 26 of the bill simply by adding immediately after line 8 on page 17 the following: "Section 206.2 Notwithstanding any provisions in this Part, sections 204 to 206.1 apply to a department within the meaning of the Financial Administration Act".
My colleagues, the MPs for Ottawa West and Keno-ra-Rainy River, will be joining in this debate. My colleague for Ottawa West who is the Liberal critic for the Public Service will deal with this question more clearly and in more depth.
I am quoting the minister: "Bill C-101 in its original form seeks to increase efficiency, competitiveness and prosperity for Canadian workers and also would extend the role of the federal government in fostering a productive and more aggressive labour-management climate." These are all very worthy goals to which I lend my unqualified support.
In general terms, the proposals, most of which were developed over a two-year period through consultation between employee, employer and the Canadian Labour Congress, which spoke for the unions are broadly acceptable. I say that they are broadly acceptable to all parties.
Organized labour however feels that there ought to have been consultation over the issue of the vote on an employer's last offer. I think that possibly if there had been more consultation, we might have been able to arrive at an agreement which was just about like the one that is in here but that option was taken from our hands.

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Organized labour through the Canadian Labour Congress also feels that ministerial direction for a last-offer vote would constitute unwarranted interference with labour-management relations and the international affairs of the union. My colleague will argue further that there could be the spectre of conflict of interest.
At least at this point in the debate on second reading I think that the bill is generally acceptable to my party and that it should be allowed to proceed into committee for further study and clarification and hopefully for the inclusion of the friendly amendments which I, my colleagues and my party are suggesting to the minister today.


Joy Langan: Mr. Speaker, I would like to rise first to say that I am pleased this bill is before the House, but I would like to make a correction.
My hon. colleague, the labour critic for the Liberals referred to the CLC as being concerned about the impact of the clause 1 amendment on the international workings of the affiliated union. I think he meant to say the internal workings of the affiliated union.
These amendments to the Canada Labour Code are ones that certainly this caucus can support and, as my hon. colleague the labour critic for the Liberals said, that the Canadian Labour Congress can support.
What we most support is the proposition of consultation and working together to come up with amendments to the Canada Labour Code that are good for the workers, good for the employers and certainly good for the Minister of Labour. When two groups have come together and come to a consensus conclusion, the likelihood of both sides being willing to work within the system, and the system working, are much enhanced.
Unfortunately the amendments to part I of the code and to the Public Service Staff Relations Act were not the result of consultation. After seeking and getting support for all the other amendments, the minister without warning dropped the part I amendment, the same amendment, into the Public Service Staff Relations Act.
The previous speaker has alluded to what is in it. I would have liked to have been able to refer to the
explanatory notes normally attached to a bill because they probably would have been in lay language and much easier for Canadians to understand than the legalise of a bill. Unfortunately all it says is "New", which suggests to me that it was a last minute addition to the bill and there was not time to work through it.
Essentially it says under "Vote on Employer's Offer":
108.1(1) Where notice to bargain collectively has been given under this Part, and the Minister is of the opinion that it is in the public interest that the employees in the affected bargaining unit be given the opportunity to accept or reject the offer of the employer last received by the trade union in respect of all matters remaining in dispute between the parties, the Minister may
It goes on to set out the conditions. It has been noted that several governments already have this clause in their legislation. The previous speaker referred to Alberta which I found quite fascinating because Alberta probably has the most retrogressive, old-fashioned labour legislation in the country. I found that rather fascinating. I am quite pleased for the workers in Alberta that there is one little sign of light at the end of the tunnel.
He then referred to British Columbia. I think he was referring to the same labour code that the Liberal opposition in British Columbia held up in the House for seven months because it was felt that it was not a fair labour code. Ninety-four per cent of the clauses in the labour code were reached by consensus with labour and management but the Liberals did not like that labour code because it was far too progressive.
It is interesting the hon. member would refer to those items. The Ontario labour code, also introduced by an NDP government, has proven to be and has been called by labour relations experts everywhere one of the most progressive pieces of labour legislation in the world. Both British Columbia and Ontario codes, I might add, have anti-scab legislation along with the legislation in Quebec.
I am confident, Mr. Speaker, that you and the people out there will understand that while both British Columbia and Ontario have this clause in their labour codes, the difference is that the labour movement and the employers were consulted about the wording, about how it would work.
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In this instance we have a clause in the legislation that was introduced without any consultation. It is not so much the merit of the clause but the failure to discuss and the sort of high-handed-I am sure the minister was not high-handed; we have our suspicions about where this clause came from-introduction of legislation without so much as indicating that they were planning on doing it and it being forwarded to the Canadian Labour Congress, the Canadian Federation of Labour and CCU unions.
It is important to remember that if the same level of discussions had gone into part I amendments we would have had a much better bill. It would have been worded in such a way that it would have met the needs of employers and met the needs of the labour movement.
Much like the amendments proposed by his colleague, the minister of employment, with respect to UI, we have a clause that is flawed. The Liberal labour critic has suggested that clause be amended by changing, and correct me if I am wrong, lines 18 and 19 to remove "in a public interest" and include "interest of the affected bargaining unit".
Now we are talking about allowing an employer not only to bully and frighten workers. We are now saying that the test will be those frightened and possibly harassed workers and their desire, whether they think it is in their interest to have a look at that collective agreement and not the test of the public interest. Anyone who has been at the bargaining table knows that those at the bargaining table are not likely to be intimidated either way. For those who do not know what is going on at the bargaining table, some employers have been known from time to time to intimidate workers.
While I look forward to this bill going to committee and the opportunity to discuss amendments, I would think my colleague could come up with an explanation of why he thinks his amendment is not flawed. I am most concerned about it.
Getting back to the part I amendment, the amendment to the Public Service Staff Relations Act, it is very evident that this amendment did not come from a demand of the employer's group. It leaves one to wonder therefore whose agenda is being served by this amendment.
The federal government abandoned negotiations with its own workers with the passage of Bill C-29 one and a half years ago. We now have before the House Bill C-113 that would end the government's obligation to
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bargain with its workers and impose a two-year wage freeze. This is not collective bargaining. This measure gives the employer the upper hand. It need only put out the pretence of bargaining and then sit back and wait for the legislation to go into effect.
This does not improve the collective bargaining relationship. It only adds to the distrust of the motives of the employer by the workers. At a time when morale is at an all-time low in the federal public sector, one would hope that the government would be looking at ways to increase productivity and to improve and create an effective collective bargaining relationship rather than make a bad situation worse.
Unions are an integral part of the collective bargaining process, particularly in the case of the amendment to the PSSR act. The amendment we find in the bill serves notice to that employer that the government through Treasury Board does not trust or respect the bargaining agents of its workers.
To me there seems to be a major conflict of interest when the employer can set the parameters of collective bargaining in law and at the bargaining table. The situation will be one where cabinet will determine the best offer it is going to present and then call on a minister of the Crown to order a vote of the union membership on the offer.
This provision is open to great abuse particularly in the public sector, but it is not confined to the public sector. When this bill was introduced the minister said that he would not abuse it, and I believe him. However the Minister of Labour is not the minister responsible for Treasury Board and the Minister of Labour may not always be the Minister of Labour. Some time in the not so far distant future the Minister of Labour may go on to be the Deputy Prime Minister and somebody else will take his place. This is a cause for concern.
By permitting these types of votes, the government will be giving the employer yet another weapon to break the union and avoid its obligation to bargain with its workers. That is where the greatest concern is in introducing this amendment under the Public Service Staff Relations Act. One can easily imagine the type of public relations campaign an employer could mount to persuade that its last offer was the best it could do. We certainly saw that last week with Nationair. It was the best it could do. The union was being unreasonable; the bargaining committee did not truly represent the interests of the membership; and in fact when push came to shove Nationair was able to come to an agreement.

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This is an unwarranted and unnecessary invasion by the government into the collective bargaining process. I would ask, if it is going there, the very least there should be is consultation and discussions with both employer and the unions affected by the Canada Labour Code and the Public Service Staff Relations Act.
By tagging on the part I amendment to the code the minister has undermined the consultative process and cast suspicion on his commitment to reform the labour relation system at the federal level.
The minister also missed an important opportunity to bring an end to one of the most disruptive aspects of labour relations, the use of scabs. We are amending the Canada Labour Code with two major disputes in the country where the use of scabs has exacerbated the situation, has been vicious and violent, and the minister has not included anti-scab legislation. There are three jurisdictions in this country that have anti-scab legislation. We have no evidence that shows that the use of anti-scab legislation in any way interferes with or makes worse the collective bargaining process.
The major amendment that both the governments of B.C. and Ontario implemented in their labour code amendments was that of a ban on the use of scabs. The minister is fully aware of the consequences of the use of scabs. In both the CASAW-Royal Oak dispute in Yellowknife where nine people died, who would not have died if scabs had not been underground, and the CUPE-Na-tionair dispute in Montreal, the use of scabs has only served to prolong these disputes and to permanently damage, not only the bargaining relationship between workers and the employer, but in the case of Yellowknife to permanently damage relationships in a very isolated and what was a very closely knit community.
I would say that real reform in part I would be to follow the lead of Ontario and B.C. and add a section outlawing the use of scabs.
In part III of the Canada Labour Code the minister has addressed conditions of working life, hours of work, minimum wages, vacations and holidays, leave for sickness and injury, termination and unjust dismissal. All of these are fundamental to a fairer and more equitable work place.
In effect, this part of the labour code is the collective agreement for those workers who are in the unorganized sector. It is their only assurance of a safe and secure work place. It is the minimum standard. For all Canadians the labour code ensures that myopic and unscrupulous employers cannot take advantage of temporarily hostile economic environments to exploit workers.
The code is a statement of the Canadian commitment to minimum standards of security and dignity in the work place, standards which are necessary to the development of a trained, healthy, motivated and productive work force.
For the most part what we see in this bill reflects this underlying belief in the need to strike an appropriate balance of power between worker and employer. For that I applaud the minister. The bill improves on existing provisions so that they are more closely attuned to the realities of the modem Canadian economy.
Greater flexibility for parental leave reflects the reality of today's working families and the commitment of many women to the work place.
Maternity related reassignment puts the rights of the worker to continue her employment ahead of those of the employer to force her on unpaid leave. While this provision does not go far enough in our view as it extends for only a 24-week period, it is a very important step. The recognition in law of the health effects of the work place on the pre and post-natal child are very important and we applaud them.
There is improved wage and employment protection for those workers injured on the job. We applaud that amendment.
Curiously enough, there is a statement in this bill about the primacy of collective agreements where provisions of those agreements exceed those of the code. That is the part that we find rather odd, that this bill speaks of collective agreements, the result of the collective bargaining process, that it will prevail on issues of leave, rates of pay and qualifying period. But in this same bill we have amendments to the code and Public Service Staff Relations Act that effectively allow the minister to nullify the collective bargaining process, amendments which shift the balance of power to the employer.

On the one hand the minister is acknowledging that yes, the collective bargaining process can protect the rights of workers and employers. On the other he says that he can intrude into that at any time.
The wage recovery amendments set up a non-criminal procedure and will hopefully be administratively more efficient than pursuing these matters through the courts. Corporate directors will be made liable for the payment of wages owed. This is a fine amendment to this code and an important recognition that the contribution of the worker is as valuable as that of the director and the latter should not be able to walk away from a failed business with a severance package not available to other workers.
It is with great sorrow that my caucus and I are forced to oppose this bill that is mostly built on consensus. After the minister had done his work and done it very well, in our view, someone else has come up with another agenda and drafted amendments to part I of the Canada Labour Code and Public Service Staff Relations Act without consultation and in fact taken what was a good, positive step in industrial relations under the Minister of Labour and made it into something that is less than positive in that on the one hand we said we want to consult and on the other hand we said we want to abandon that consultation, putting the minister in a position of having to bring forward a bill that was supposed to have been built on consultation.
I would urge that the government consider the positive possibility of consulting with the labour movement, with employers in this country, so that we can come up with amendments to part I and the Public Service Staff Relations Act and come to third reading of this bill with a bill that everybody has been consulted on and everybody is feeling positive about and indeed, open a new era in industrial relations in this country.


The Acting Speaker (Mr. DeBlois):: Before resuming debate, it is my duty, pursuant to Standing Order 38, to
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inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Cape Breton Highlands-Canso-Fisheries; the hon. member for Don Valley East-Refugees; the hon. member for Kenora-Rainy River-Taxation; the hon. member for Saskatoon-Clark's Crossing-The Economy; and the hon. member for St. Boniface-Transportation.
Resuming debate. The hon. member for Abitibi.


Guy St-Julien: Mr. Speaker, it is with great satisfaction that I rise in the House today. The minister and member of Parliament for Vercheres has just tabled a bill which includes proposals for amending the Canada Labour Code will allow for temporary reassignment of pregnant or nursing employees when their state of health so requires.
Hon. members may recall that I proposed a similar amendment in the House a few years ago following presentations Joanne Moisan made at my office in Val-d'Or in November 1989.
Today, according to the rules applying to all federally regulated employees, an employer may oblige a pregnant employee who is no longer able to perform one of the duties of her position to go on maternity leave.
In other words, today a pregnant employee who wants to go on working does not have the right to ask for a change in her tasks or for reassignment. She may be forced to quit her job unless she is entitled to sick leave or paid annual leave or can start her maternity leave.
Quebec is the only province in Canada that has specific legislation to protect pregnant employees on the job. Some collective bargaining agreements also provide that protection. This bill meets the provisions of the Quebec program and goes even further.
In 1988, the Supreme Court of Canada ruled that the Quebec program did not apply to federally regulated companies. Consequently, pregnant or nursing employees working in federally regulated industries located in Quebec are not eligible for the Quebec program.

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So my question is: why should women who work in a federally regulated sector in Quebec not have the same right to be reassigned which would allow them to stay on the job during their pregnancy?
The proposed changes will help correct the imbalance between the rights of the employer and the rights of a female employee. The employer will have to make every reasonable effort, either to change the tasks of a pregnant or nursing employee or to reassign her if the employee's physician is of the opinion that her present state of health so requires.
Today's bill proposes more flexible conditions to determine when an employee may take parental leave. For instance, employees may choose the timing of their parental leave. The purpose here is to help parents find the best way to combine work with family responsibilities.
Further changes will ensure wage protection, maintenance of social benefits and the return to work of injured employees when possible, while at the same time clarifying federal powers and releasing employers from the obligation to engage in costly legal proceedings against the provinces.
As you know, most employers already participate in provincial workers' compensation plans or private insurance plans. These employers will not have to pay additional costs.
Those who are not in any insurance plan may be sued by workers injured on the job. The proposal would ensure that there is money to compensate workers involved in accidents.
To conclude, I would like to add that the people of my riding and of many other parts of Canada support this bill that will ultimately benefit Canadians. I have personally supported the Minister of Labour on many occasions in his efforts to bring forward this bill.
I wish to say to Liberal and NDP members that our government has the responsibility to better protect pregnant or nursing women employed in federally-regulated companies. Therefore we must legislate on this. Once again, I reiterate my support for the proposed changes and ask members on both sides of the House to support them also.
In closing, I thank all the women in Canada who for years have been asking the Canadian government for justice. I thank Renee Godmer and her staff; I thank Canadian employers and unions for their involvement in
this issue and especially thank the Prime Minister and the Minister of Labour.


The Acting Speaker (Mr. DeBIois):: On a point of order, the hon. Minister of Labour.


GOVERNMENT EXPENDITURES RESTRAINT ACT, 1993 NO. 2 NOTICE OF ALLOCATION OF TIME TO CONSIDER SECOND READING STAGE OF BILL C-113
Marcel Danis: Mr. Speaker, I rise on a point of order. Agreement could not be reached under the provisions of Standing Order 78(1) or (2) with respect to second reading of Bill C-113, an act to provide for government expenditure restraint. 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 second reading stage.


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[Stage Direction]
The House resumed consideration of the motion of Mr. Danis that Bill C-101, an act to amend the Canada Labour Code and the Public Service Staff Relations Act, be read the second time and referred to a legislative committee in the Human Resources envelope.
Mr. Robert D. Nault (Kenora-Rainy River):: Mr. Speaker, I would like to ask a question of my colleague from Abitibi before I get my opportunity to speak on this particular bill.
I know that my colleague from Abitibi has been working very hard on the issue of the place of pregnant women in the work force and the difficulties that they face as it relates to their unborn child and in some instances their child that is an infant.
Would he be able to give us his government's analysis of why the minister put in the bill the employer's last offer amendment which deals of course with a grave infringement on the collective bargaining rights of workers and could he give us a synopsis because, as you well know, we are not allowed to ask the minister questions when he gives his speech. Maybe the member for Abitibi could give us an explanation of the government's rationale as to why this particular amendment is in the bill.
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Guy St-Julien: Mr. Speaker, we all know that for years, many people, especially in Quebec, as I just explained, have known that Quebec is the only province that had what is called precautionary cessation of work. For years in our offices, especially since 1984 and particularly around 1989, women in banking, in some sectors of radio and communications and in transportation, in Canada and in Quebec, often in non-union positions, called us to ask what we could do to have the Canadian government put precautionary cessation of work in the Canada Labour Code. To answer the question of my Liberal colleague who has been involved in this issue since he came to this House, where he represents his constituency very well, we know that it has not been easy.
The Canadian government has had discussions with the unions on the Canada Labour Code. Today we know that several things can happen. Changes and amendments may be made, but it is mainly due to women in our ridings and women not represented by unions in banking and transportation.
Mr. Speaker, I want to tell you that if the minister goes to the legislative committee, he can elaborate on the subject since he participated in the negotiations on the labour code with the unions. I want to tell my colleague that we will follow this very closely and I thank him for his question.


Mr. Gilles Duceppe (Laurier-Sainte-Marie):: Mr. Speaker, I would like to ask the member for Abitibi a question. I suppose that he realizes that the compensation received by a woman who uses the right to precautionary cessation of work will be different depending on whether she is covered by the provincial or the federal code. In Quebec, the only province to offer this provision, a woman worker receives about 95 per cent of her salary without deductions, which is about 100 per cent of the pay that she normally gets. This will not be the case under Bill C-101. So there will still be two kinds of citizens with respect to the right to precautionary cessation of work, those who come under the Quebec code and those under the federal code. I would like to ask him whether he does not think it would have been better to
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adopt the provisions of the Quebec code in full and thus not penalize a worker because she is pregnant or nursing a baby. That is my first question.
Second, I would also like to know from the member whether or not he believes that an anti-scab provision should have been in this reform of the Labour Code, given the very recent long lockout at Nationair, for example. The Quebec law has led to greatly improved labour relations in Quebec, partly because of the anti-scab bill passed there over 15 years ago, and neither the Quebec Liberals nor the employers' association, the Conseil du patronat, challenge it. I would like to have his comments on these two points.


Guy St-Julien: Mr. Speaker, I am pleased to see the Bloc Quebecois member who was always absent when I tabled a motion in Parliament. I am pleased to see you hear this evening, sir.
When he talks about 95 per cent, I remember-


The Acting Speaker (Mr. DeBlois):: On a point of order, the hon. member for Laurier-Sainte-Marie.


Gilles Duceppe: Mr. Speaker, I think that as the debate is beginning today and the hon. member is the fourth to speak in it, such remarks are somewhat ridiculous.


The Acting Speaker (Mr. DeBlois):: I must simply remind both sides of the House that it is contrary to parliamentary tradition and the Standing Orders to point out the absence or presence of an hon. member in this House.
The hon. member for Abitibi has the floor.


Guy St-Julien: Mr. Speaker, you are a good chairman, but I only said that I was pleased to see him. I did not talk about absence or presence.
Mr. Speaker, the member just mentioned the 95 per cent. If I remember correctly, workers' compensation in Quebec was 90 per cent; that makes about $353 a week, which is non-taxable for the recipients. We know that it cost employers in Quebec about $78.4 million in 1990.1 know that there are always things that can apply now. We know that the employee can be reassigned under two or three programs. All these things will be discussed in the legislative committee and I would really like to see the Bloc Quebecois member on it if he can come and serve there.

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As for scabs, I tabled a motion concerning strikebreakers. I am not too familiar with the Nationair situation because Nationair does not serve Abitibi. But I did table a motion on strike-breakers and I am eager to win the draw to be able to discuss the issue more thoroughly. We still remember that the member who started the debate on strike-breakers is a Conservative who has been here for years. He did not present the bill a second time and I presented it on behalf of the Canada Post workers because I am against strike-breakers during strikes.


Robert Daniel Nault: Mr. Speaker, it is my pleasure to be involved in this debate today on Bill C-101.
I would like to make some general comments and then get involved in some specifics. After that I will talk in general terms about some of the problems I see with the bill.
The government and particularly the Minister of Labour have placed us in a difficult position. The minister has introduced a bill which is not unusual to this place and most parts of the bill are good amendments to a particular piece of legislation that we in this House would like to see implemented. He has also put amendments in the bill which are hard for some of us to live with and I will deal with that.
I would like to talk specifically about the good parts of the bill: industrial relations; occupational safety and health and standards of hours, wages, vacations and holidays. I will save the labour relations portion of it for later.
Under the first two parts the government has implemented good pieces of legislation and good amendments to the Canada Labour Code. It is obvious to all who have been listening in this House for the last hour the majority of those amendments being put forward was done so with the consultation and agreement of all parties who were involved in this piece of legislation.
The hours of work part permits the averaging of hours of work over a period of two or more weeks where the nature of the work requires irregular distribution of work hours. Consultation took place relating to that amendment and all parties agree that is a good thing.
The substitution of holidays permits the substitution of any other holiday for a general holiday in certain
circumstances. That is with written agreement of the employer and the trade union and consultation took place in that regard.
Maternity related reassignment and leave is a project that my colleague from Abitibi has been putting forward in this House for many years, as long as I have been here. It is one I have spoken on during his private member's motion in the not-too-distant past.
It is a good amendment because it protects pregnant women in the work force who are looking for maternity related reassignment because of the necessity of caring for their children and when they are in the process of having children. That amendment has been highly touted. It has been consulted thoroughly throughout the labour movement and agreed to by this House.
There is the issue of work related illness and injury. This is very interesting and should be looked at very carefully in committee. Work related illness and injury has always been a bone of contention and I will use the railway industry as an example. It is one that I know very well.
It is a known fact in the railway industry that when there are work related injuries and illnesses employees are subjected to discipline. It is very easy in the railway industry to suggest that an employee maintained an unsafe work practice which caused the illness or work related injury. An individual is given demerit marks in that situation and if enough are accumulated that individual is dismissed.
Under the proposed amendment the regulations of the work related illness and injury proposal are the keys. What are the regulations the Minister of Labour is suggesting? They are important. The possibility of reassignment for the employees and how that will be done in certain industries like the railway will have to be looked at very carefully.
We on this side of the House are very concerned that the Minister of Labour has come forward with an amendment to the Canada Labour Code without the consultation of the organized labour unions and groups in this country. We on this side of the House feel it is very difficult for us to support this bill without some very significant amendments. We feel very let down by the Minister of Labour because he has not given the consultation process an opportunity to work before slipping in the amendment he has referred to as a proposal for a directed vote on the employer's last offer.
February 23, 1993

Let me talk somewhat specifically about the employer's last offer and this amendment as it relates to the collective bargaining process. The collective bargaining process is a very precise science and there are times when it will break down.
I can understand the minister's frustration when we look at the situation that took place in Yellowknife in the mining industry when the minister allowed that particular volatile situation to fester for months and months. Of course we all know about the deaths of the miners in the shaft that particular day because of the lack of scab legislation and the replacement workers who were allowed to work in that particular mine.
The excess infringement on the collective bargaining process is really what we are talking about here. We are also talking about what is best for the public interest as it relates to strikes or lockouts in areas of federal jurisdiction. I have difficulty understanding why the minister is suggesting that he does not have the tools, the ability under the present system to allow the present collective bargaining process to go through its normal course. If the mediation, the conciliation breaks down and in the event of a strike he still has the ability under the current system to bring back to work legislation into this House, as we have seen on numerous occasions.
That is the ultimate test of the public interest and the necessity for the good of all Canadians. We are really talking about the collective will of the people of this House making a decision that a strike or lockout is not for the good of all Canadians and therefore a decision has to be made.
As has been alluded to in this House, there are jurisdictions that have a directed vote on the employer's last offer and there are some different scenarios. Let me just relate to two that I think are good examples of how we may be able to make amendments to this particular issue of a directed vote on the employer's last offer that the minister has thrown on the table for us today.
In Ontario if there is a strike the minister can intervene by requesting that there be a last offer vote
Government Orders
taken by the employees. The intention of that particular piece of legislation in the jurisdiction of Ontario is not to intervene in an offer made by the employer before the continual process is done. It allows the public interest to come forward after there is a prolonged strike, a complete breakdown in negotiations and the public at large is unduly affected by it. There has to be a necessity for the government to react.
The Saskatchewan Trade Union Act and the Labour Relations Board allow for a vote on the employer's final offer after a strike has gone on for 30 days. That is not what we are talking about here. We are talking about the minister having the ability to circumvent the collective agreement during any open period of the collective bargaining process. The employer can say to him: "This is my final offer. We are not going to negotiate any more. We request that you put this to the employees to see what they will say about it". That is a very scary precedent for the government to want to set.
It will set back the labour relations process in this country 20 years if the minister has the kind of powers to infringe in the collective agreement process that has worked very effectively in the past. There is no reason why the minister now should have any more powers than he already has under the particular piece of legislation which deals with industrial relations.
This is a very fragile science, as I said before, if you tip the pendulum one side or the other. It can be argued in the province of Ontario that the provincial NDP has tipped the pendulum too far on one side for the employees which is a bad thing. Then you can take a look at the labour relations situation in a province such as Alberta where the pendulum is too far for the employer's benefit which again is not a good process.
The object of a good labour relations policy in this country is to make sure that there is fairness within the system for both sides. I do not suggest that this minister would use this kind of power, but there may be ministers who will come along and use this kind of power to the detriment of the whole process. I would think before this party could support this kind of legislation that this amendment would have to be looked at very strongly.

Private Members' Business
In conclusion, I would suggest to the Minister of Labour that before he would get support from all members of the Elouse he would have to give us a good explanation as to why he would want this amendment passed.


Marlene Catterall: Mr. Speaker, I am very pleased to join in the debate on this bill. As members and the public I presume have already gathered, what the bill does is make amendments to the Canada Labour Code and to the Public Service Staff Relations Act.
There are many provisions to commend this bill with respect to the amendments to the Canada Labour Code. Regrettably the government has chosen to do what seems to be a growing pattern in legislation which is to take some very admirable provisions that have been worked on long and hard and discussed with all interested parties-the stakeholders in the government's jargon-and bring those forward. Then at the last minute without warning, without discussion with anybody, it throws in something which it knows is unacceptable and in essence hopes those affected by the legislation will swallow the poison with the sugar.
I do not think we are quite prepared to do that. It is regrettable because this bill, between the two acts it amends, affects one million workers in Canada. That is a sizeable proportion of our work force and deserves major attention from members of Parliament.
Up until the point where the government decided to add its bit of arsenic to the bill we had an approach that was a model of the collaborative co-operative approach that the Minister of Labour has been promoting, at least in the private sector. It was an example of the kind of approach that should mark management-labour relations in Canada.
There had been extensive consultation with organized labour, with employers, over the last two years and there had been full consensus around the kinds of amendments that were needed, particularly with respect to minimum conditions of work.
This hopefully is the kind of management-labour relations we are trying to foster in Canada so that we are able to be competitive, to have a functioning healthy management labour climate, so that Canada is going to be able to deliver on its commitments, whether they are government commitments or commitments to the private sector.
I want to particularly congratulate all those involved in the discussions that lead to those portions of the bill on achieving a model of how management labour relations hopefully will function in the future.

I want to congratulate the minister and the others for the proposed amendments which will give greater flexibility to the provisions concerning parental leave thus helping parents to strike a balance between work and-


The Acting Speaker (Mr. DeBIois):: Order, please. The minister of Labour, on a point of order.


Marcel Danis: Mr. Speaker, I believe my hon. colleague for Ottawa West-

-is the last member to make a speech on this bill. I wonder if I could ask the House for unanimous consent to allow the hon. member for Ottawa West, and I know we all want to listen to her speech, finish her speech. I am sure we would all appreciate it if she could complete it today and perhaps afterward we could proceed to a vote. I think particularly of the 6,400 women who could benefit from this bill this year if we had it as soon as possible. However, I leave it in the hands of the members of the House.


Mr. Flis:: Mr. Speaker, how hypocritical. This is the same minister who just minutes ago stood up in this House and brought in time allocation-


The Acting Speaker (Mr. DeBIois):: I do believe that there is no unanimous consent.
It being five o'clock p.m., pursuant to Standing Order 30(6), the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS

["I therefore suspend the sitting until six o'clock, the time for the adjournment motion.\nAt 5.25 p.m. the sitting of the House was suspended."]
Mr. Harb:: Mr. Speaker, I rise on a point of order. There have been consultations among the parties and independent members and I believe you will find that there is agreement to adopt at this point in our proceedings my private member's Bill C-371, an act respecting a national child day, at all stages, including committee of the whole, without debate.
February 23, 1993


Marcel Danis: Mr. Speaker, I am not aware of this so I cannot give consent, but I am ready to check. However, at this time I cannot give consent.


The Acting Speaker (Mr. DeBlois):: There is no unanimous consent.


Jesse Philip Flis: Mr. Speaker, the hon. member did approach me to find out whether he could take time from my private members' hour to do this because there was agreement from all three House leaders. Therefore, I am wondering if the government side would reconsider and live up to its commitment of offering unanimous consent.


The Acting Speaker (Mr. DeBlois):: When the question was asked, unanimous consent was not given. However, if the same hon. member wants to ask for unanimous consent again later, the Chair will entertain his request.



Jesse Philip Flis: That, in the opinion of this House, the government should consider the advisability of removing the postal rate subsidy for all firms using direct mail advertising and not using recycled paper.
He said: Mr. Speaker, in keeping with Canadian interests of implementing and putting into practice programs of sustainable development, I move:
That, in the opinion of this House, the government should consider the advisability of removing the postal rate subsidy for all firms using direct mail advertising and not using recycled paper.
This motion is a result of the complaints I have received from many of my constituents about the huge volume of junk mail placed in their mailboxes. The rules of the House of Commons prohibit me from using props although I hardly need to illustrate the huge volume of paper advertising left on the front doorsteps or shoved into mailboxes every week: flyers, coupons, contests. According to Ed McMahon, he can comfortably retire on the millions he has supposedly won from publishing houses.
Private Members' Business
I received another bundle of junk mail from a constituent, Alan Upton. With this package of junk mail he attaches a letter which says: "Dear Sir, the attached flyers represent 10 days of delivery, month in and month out, year in and year out, to nearly every household in this country. The decimation of trees and landfill required to hide it is monumental and criminal. When in the name of reason will something be done? Or is it beyond the powers of the House? That which is so obvious and so curable continues unabated. Signed, Alan Upton". As he said, this is delivered to every household in Canada.
The challenge is a very serious matter and must be addressed by all departments of government but especially Canada Post. Canadians are alarmed by the depletion of our growth forests and for what? We are cutting down valuable resources needlessly. Should we not be using recycled paper instead?
I am not saying that print advertising should be abolished. When you take into account the flyers carried in daily and weekly newspapers, I am aware that close to
200,000	Canadian jobs rely on printed advertising. It is an integral part of the free market process.
What I am saying is that we need to reconsider our priorities. In just a few short years there has been a tremendous effort to verse Canadian consumers in the three Rs of sustainable development, reducing, reusing, recycling. We should add another R and that is the R of rethink.
One of my constituents, an environmentally concerned citizen named David Alexander, suggested to me that in consideration of this motion we need to rethink our approach to advertising, rethink our approach to distribution. We need new, creative ideas.
How about giving a break to advertisers using recycled paper? A cheaper rate should be available from Canada Post for companies using recycled paper in their advertising materials. My constituents of Parkdale-High Park suggest that we take this idea one step further and provide a lower postal rate to companies using 100 per cent recycled paper products in their advertising, a higher postal rate for companies using less than 100 per cent, with the highest rate being charged for products using no recycled paper content, technically known as post consumer fibres.

Private Members' Business
Currently Canada's booming paper recycling industry must now import used paper from the United States just to keep up with the demand for finished recycled paper products. There is no shortage of public support for this kind of activity.
In all fairness I must mention that Canada Post is often singled out as the sole distributor of junk mail. This is not a fact. According to Canada Post, the corporation only delivers 25 per cent of all unaddressed print advertising. The remaining 75 per cent must find its way to our doorstep through private distributors. It may seem unfair to Canada Post but an example must be set by one of the largest single distributors in Canada.
This motion represents an excellent opportunity for Canada Post to become a corporate leader, a good corporate citizen, in the field of sustainable development.
Some people say Canada Post should be told not to deliver any junk mail. In response, many environmental groups have launched anti-junk mail campaigns. These groups encourage households to refuse junk mail by placing stickers directly across their mail boxes. This is a practical solution because what is junk mail to one householder is precious information to a neighbouring household.
Unfortunately Canada Post will continue to deliver junk mail regardless of any stickers. The corporation maintains that its role is only to deliver the mail and not to scrutinize its contents.
My rebuttal to Canada Post is that I have made the choice whether I want junk mail or not and if I put that sticker on my mailbox I have made the choice. I do not want the third class or the junk mail. The postperson does not have to worry about making that decision. These facts only reinforce the need for this motion.
I must congratulate the corporation, however, for taking the initiative of establishing the multi-stakeholder print advertising committee in June 1992. This committee consists of industry representatives, corporation officials and municipal authorities. According to my research, consumer representation appears to be missing. The mandate of this committee is to examine the environmental impact of waste related to junk mail. This is a worthy effort but it is time for action.
With this motion let us send a clear message to all Canadians that it is the will of this House to take steps toward preserving our environment.
Mr. Speaker, I seek unanimous consent of the House to declare this motion a votable motion. I have given notice to the three House leaders that I intend to do this.


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


An hon. member:: No.


Mrs. Nicole Roy-Arcelin (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, I would like to thank the hon. member for Parkdale-High Park for giving me this opportunity to confirm the government's commitment to public support for the distribution of Canadian publications.
As for the hon. member's motion concerning the advisability of removing the postal rate subsidy for all firms using direct mail advertising and not using recycled paper, however, the answer is quite simple: postal rate subsidies do not apply to direct mail advertising.
Perhaps I may explain the purpose of the postal subsidy program which was created over 100 years ago. Its latest official title is the Publications Distribution Assistance Program. The program is used to subsidize postal rates for newspapers, magazines and books.
Under an agreement, the Department of Communications pays subsidies to the Canada Post Corporation so it can offer rates below the commercial rates to certain Canadian publications.
In other words, the losses involved in offering preferential postal rates to Canadian publications are compensated by the government.
These subsidies go back to the beginning of our postal services, when the government introduced preferential rates for newspapers and, a little later, for magazines. At the time, these publications were among the few means of communication and education, and the government wanted printed matter to be affordable for all Canadians. In fact, preferential rates existed before Confederation. Over the years, classes and rates have become increasingly complex.
February 23, 1993

As part of an extensive series of cutbacks initiated in December 1989 to reduce the deficit, the government decided to gradually phase out the postal subsidy program of $220 million annually and replace it with a $110 million direct assistance program.
On June 27, 1990, the then Minister of Communications announced the government's decision to phase out the Publications Distribution Assistance Program by the end of March, 1994. After that date, the postal rates for these publications will be the same as current commercial rates. However, new programs administered by the Department of Communications will replace the preferential rates.
The decision made at the time was twofold: first, to concentrate on supporting the most vulnerable sectors of the publishing industry, in other words, subscription-funded magazines, small community weeklies and the book sector; and second, to eliminate the support enjoyed by foreign-owned publications, dailies and small circulation publications.
When the announcement was made in 1993 the minister described two major implications of the new program. First of all, there would no longer be any distinction between paid magazines on the basis of content. Furthermore, publishers would no longer be obliged to use the services of Canada Post since they would now be able to use the distribution system of their choice. We are now engaged in consultations with the industry to establish the exact structure and eligibility criteria for the new programs.
Culturally speaking, the Canadian magazine industry is in good health. However, it still needs government policies that provide financial support. Because of the favourable climate created during the past 15 years, the Canadian publishing industry has been able to conquer an increasing share of our market. Today, that share is 40 per cent.
The postal subsidy program benefits this country's publishing companies, advertisers, retailers and last, but not least, readers. That is why it cannot be changed without giving due consideration to our cultural, industrial and social objectives. What are those objectives? To ensure that magazines, small community weeklies and books remain accessible to all Canadians and to maintain conditions that promote the development of Canada's publishing industry. The new programs will target com-
Private Members' Business
panies that are owned and controlled by Canadians and which publish books, subscription magazines or small community weeklies.
Thanks to these programs, Canadian publishers will enjoy the support they need to survive and prosper during the 90s.


Lynn Hunter: Mr. Speaker, I am pleased to participate in this debate this afternoon. I support this motion.
Last year 3.743 billion pieces of junk mail were mailed through Canada's post offices. That represents over 140 pieces for every woman, man and child and infant in the country.
Junk mail is trashing our forests. These unsolicited bulk mailings are a tragic and inexcusable waste of one of our most valuable resources. To make matters worse, Canada Post is engaging in an aggressive campaign to encourage businesses to pump out more and more junk mail and it is doing it with the blessing of the federal government.
My colleague, the member for The Battlefords- Meadow Lake, wrote to the minister responsible for Canada Post in June 1990, urging him to have the government introduce legislation to offer preferred rates only to advertisers using 100 per cent recycled materials.
There is no reason why the government cannot insist that preferred rates are given only to those using recycled materials. It is simply a question of political will.
Just to give an idea, unlike what the government member previously said, there is a subsidy for junk mail. We all know that it costs us 43 cents to mail a first class letter to any home in Canada. Canada Post ad mail rates allow businesses to mail a flyer to every doorstep in the same community for a mere 8.3 cents per flyer, if that is not a subsidy, I do not know what is. That is an 80 per cent reduction in costs. That is some subsidy.
This issue goes to the very heart of the role that Canada Post plays in our society. The Conservative government maintains that Canada Post should act as a private business and profit should be the bottom line. The New Democrats say that Canada Post should provide the best service it can to Canadians with a view to self-sufficiency and not to making a profit.

February 23, 1993
Private Members' Business
To give an example, I recently learned that any mail posted in Victoria on Friday or Saturday is not processed in our community. Oh, no. It is sent over to Vancouver for processing and then sent back to Victoria. We cannot even have next day delivery in our own community. This is a downsizing in service and a downsizing in jobs to the detriment of service in our community.
This is an issue that I, like the member who put forward this motion, get complaints about from angiy constituents. It is particularly so in British Columbia where it is our forests that are being chopped down to provide this junk that arrives in our post office boxes.
There are alternatives. Sixty per cent of the revenue of Canada Post flows from this junk mail. This government could have a vision such as the one put forward by my colleague, the member for The Battlefords-Meadow Lake when in April 1990 he put forward a 55-page vision of Canada Post's new role in Canadian society for generating more revenue. That means more service to Canadians and not less service, which is the way this government is acting.
He put forward some suggestions. To ensure that the corporation moves ahead with the development of more service to Canadians we recommend that additional new direction outlets be provided, new retail products be sold at the wickets throughout consumer's post and financial services offered at all counters, especially in rural and remote areas.
Those of us who represent rural areas of Canada are reminded frequently by constituents in those areas about the downgrading in service in Canada Post and how they feel like second class citizens because of the poor service Canada Post provides.
Offering packaging and wrapping services at postal stations and post offices is another service that could be provided by Canada Post. It could introduce electronic mail services, expand the contracted in-parcel distribution system and extend the hours of federal post offices.
The motion before us is an important motion. We support it as a means of encouraging Canada Post to take one little baby step to stop pillaging our forests to provide junk in our mail boxes. If that is not a wacko idea, I do not know what is.
It is only the beginning. I invite all the people who are watching today and listening to this to write to the New Democrats to find out about their vision of how Canada Post could not only improve service to Canadian consumers but also increase the revenues to Canada Post so that it could be self-sufficient and really serve the needs of Canadians.


The Acting Speaker (Mr. DeBlois):: There being no further members rising for debate, the time provided for the consideration of Private Members' Business has now expired.
Pursuant to Standing Order 96(1), the order is dropped from the Order Paper.


Mac Harb: Mr. Speaker, I rise on a point of order.
It has been established with the associate House leader, the House leader for the Official Opposition, the House leader for the NDP and all the Independents in this House, after consultation on all sides of the House, there is agreement to adopt at this point in our proceedings my private members' bill, Bill C-371, an act respecting a national child day, at all stages, including Committee of the Whole, without debate.


The Acting Speaker (Mr. DeBlois):: Is there unanimous consent to consider the request made by the hon. member for Ottawa Centre?


Mr. Edwards:: Mr. Speaker, this is a very awkward moment for me.
I have been working with the hon. member for Ottawa Centre, as has my colleague, the parliamentary secretary, on this in good faith for a long time. No one has displayed more good faith than the hon. member for Ottawa Centre. He has a sincere desire to see this motion passed and so does every member of this House, I think.
The difficulty I have is this. I am given to understand that there has not been a formal consultation on this particular matter. I thought there had been until just a few minutes ago. I have to say to my friend and to the House that until that consultation takes place I cannot give the consent that he is seeking.
February 23, 1993

It is a bitter disappointment to my friend. I can assure him that I will do everything I can to make sure that this gets revived at the earliest opportunity.


Mac Harb: Mr. Speaker, yesterday I spoke with both the government Whip as well as the associate House leader and both gave me their assurances-


The Acting Speaker (Mr. DeBlois):: Order, please. I think that all the Chair needs to know is whether there is unanimous consent. I see that there is no unanimous consent.
As for what else was said, asking for better co-operation and so on, I ask hon. members to consult one another and when they have come to some conclusion to notify the Chair and the hon. member can again present his request to the House.


SITTING SUSPENDED
The Acting Speaker (Mr. DeBlois):: I therefore suspend the sitting until six o'clock, the time for the adjournment motion.
At 5.25 p.m. the sitting of the House was suspended.


SITTING RESUMED
[Stage Direction]
The House resumed at 6 p.m.

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

Mr. Francis G. LeBIanc (Cape Breton Highlands - Canso):: Mr. Speaker, I would like to return to a question I asked of the minister of fisheries exactly three months ago today.
That question related to scientific advice which was released by his DFO scientists concerning the crisis in the Atlantic groundfish stocks. That advice recommended deep cuts in the order of 70 per cent and in some cases as high as 82 per cent in the cod quotas in the
Adjournment Debate
zones in the Gulf of St. Lawrence and on the eastern part of the Scotia shelf off of the coast of Cape Breton, those zones which surround my constituency of Cape Breton Highlands-Canso.
The advice by the scientists in November followed similar recommendations which were released earlier in
1992	and which led the minister of fisheries at that time to impose a moratorium on the northern cod fishery off the northeastern coast of Newfoundland, accompanied by a generous program of compensation for the 20,000 fishermen and fish plant workers that were affected in those communities.
The November advice led the minister of fisheries a short time later to impose dramatic quota cuts in the Gulf of St. Lawrence and on the eastern part of the Scotia shelf to the tune of about 70 per cent which will throw a large number, hundreds, of eastern Nova Scotians out of work and will threaten the future of several fishing communities in my riding.
On November 23 I asked the minister to provide details of a compensation plan that he would put in place to assist the people and the communities affected by these quota reductions. The minister at that time did not have a compensation plan in place and he still does not have one today.
What he did on December 18 when he announced the
1993	management plan was to tell those people affected that they would have to be satisfied with the existing programs, mainly unemployment insurance, until such time as the seriousness of the crisis would be better known.
The existing programs were not adequate to deal with the cod moratorium and the crisis in the northern cod fishery in Newfoundland and they are not adequate to deal with the crisis in the gulf and the eastern part of Nova Scotia. They are not adequate to deal with the fisherman from Cheticamp who is facing the loss of his livelihood and who at 50 years of age has invested his entire life savings in his boat and in his fish quota which is now worthless.
They are not adequate to deal with the fisherman from Ballantynes Cove in Antigonish County who is a bona fide fisherman who followed that policy in good faith and is now facing the disappearance of his policy' and facing the loss of his licence and again the loss of his livelihood.

February 23, 1993
Adjournment Debate
They are not adequate to deal with the fish plant worker and the companies which employ people on draggers who are now obliged to guess at harvesting plans that the minister told companies and fishermen they had to put into place but which they have not received any guidelines about.
The compensation plan is not adequate to deal with those fish plant workers who are reaching 50 years of age and who are facing premature retirement because of the dissipation of the fish stocks as a result of this government's mismanagement of that resource.
What is needed is a comprehensive fish compensation and adjustment package that will combine a number of elements: income replacement for the fishermen and fish plant workers who are facing a loss of income. There are many more elements which if I had more time I would deal with.


Mr. Jack Shields (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, a number of questions have been asked by the member for Cape Breton Highlands-Canso. Let me reiterate what the Minister of Fisheries and Oceans stated when responding to the hon. member on this very question previously.
The federal government has been responsive in the past and continues to be responsive to the urgent needs of Atlantic Canada. Together with the province of Nova Scotia, the federal government has funded an early retirement program for older plant workers who have been permanently laid off due to plant closure.
The plant workers adjustment program provides income assistance to workers who traditionally have more difficulty finding work, that is those who are between 50 and 64. Similar programs exist with the governments of Newfoundland and Labrador and New Brunswick.
The Minister of Employment and Immigration has made funds available on an emergency basis to workers who are unable to secure sufficient weeks of employment to qualify for UI benefits. Clearly, however, long-term solutions are required to achieve a better balance between the resource base and those in the harvesting sector who are dependent on it for their livelihood.
To achieve this balance, the Minister of Fisheries and Oceans has announced that beginning in 1994 only
professional fishermen with a genuine attachment to the fishery will be eligible for licences. For this year, ground-fish licences that were inactive in 1991 and 1992 will be frozen but may be reissued in future years pending consultation on new licensing criteria. These licensing measures are designed to ensure that professional fishermen who earn their primary income from the fishery are not denied a livelihood.
This spring departmental officials will consult with the provinces and territorial governments, fisheries organizations and the fishing industry to define the criteria for professional status upon which licensing rules will be based beginning in 1994.
For those who leave the fishery there are government programs available through CEIC to assist in the transition to other employment. The Atlantic groundfish industry must be rebuilt. This government is ensuring that this is done in such a way that the needs of those affected are looked after.


REFUGEES
Hon. Alan Redway (Don Valley East):: Mr. Speaker, you have probably received an awful lot of calls and an awful lot of letters concerning Bill C-105, the former unemployment insurance bill that was debated in this House recently. I am sure you received a lot of those and I did as well.
I received far more calls and far more letters concerning a Somalian refugee claimant who is currently living in Toronto, one Kadinga Guran, the wife of General Mohammed Farrah Aidid.
According to a number of television reports the general is one of the most powerful and one of the most ruthless warlords living in Somalia right now. According to these reports he is, in fact, one of the primary people responsible for the horrible situation which we find in Somalia today. What we hear from these reports is that the general, this warlord, has two wives. One of them is the refugee claimant in Canada who is living in Toronto. Another wife is living in California in the United States.
The Toronto family is made up of the wife and four of the general's children. The California family is made up of another wife and another four of the general's children, one of whom apparently is serving in the United States Marine Corps at the present time in Somalia as an interpreter.
February 23, 1993

Adjournment Debate
Again, according to one of these television reports that I happened to see called Current Affairs, the general, the warlord, is a United States taxpayer and he purchased a house in California as far back as 1983. On the other hand, the warlord's wife who is in Toronto is a refugee claimant who, along with her four children, is living in a three bedroom subsidized apartment receiving welfare in the amount of some $1,700 a month from Canadian taxpayers. Again according to these reports the Canadian refugee claimant in Toronto who is apparently here because she fears for her life if she ever returned to Somalia did in fact return to Somalia and visited her husband, the warlord, for about a four-month period, all the while collecting and continuing to collect welfare in Canada. While in Somalia this Canadian refugee claimant was recorded by reporters there making speeches and campaigning to keep the United Nations out of Somalia.
Is it any wonder at all that my constituents and I in fact ask the minister why in the name of heaven our tax dollars are being spent this way. Is this perhaps another Al-Mashat case? Why is it that somebody like this cannot be sent back, deported immediately without any further delay?
Can the minister really guarantee all Canadians, as he tried to when I asked this question in the House, absolutely and unequivocally that the new law, Bill C-86, is going to prevent this sort of thing from ever happening again? Let us hear from the minister tonight. All Canadians are interested in hearing the answers.


Jack Wendele Shields: Mr. Speaker, the hon. member as a former cabinet minister should be aware and I am sure is aware that privacy legislation prevents the government from commenting on a specific case in a public forum. He knows that. He is making cheap political hay with something he is much better equipped than to do.
The member is also aware if there are allegations made against persons in Canada regarding their immigration status, these are investigated by immigration officials.
With regard to the allegations concerning welfare fraud, I can only say to my hon. friend that it falls under the jurisdiction of municipal and provincial authorities.


TAXATION
Robert Daniel Nault: Mr. Speaker, I would like to take this opportunity to follow up on the question I asked on February 10 which relate to grants in lieu of taxes.
The freeze announced on December 2, 1992 in the economic statement was done without prior consultation with Canadian municipalities. Most municipalities had already established their 1993 budgets. The freeze will mean to these municipalities $80 million in lost tax revenues for municipal coffers. Obviously that means municipal taxpayers will be on the hook for those lost revenues.
The Federation of Canadian Municipalities recognizes that something needs to be done in order to address the rapid increase in grants in lieu of taxes. Of course the argument is that since 1987 the cost of the grants in lieu of taxes to the federal government have gone from $215 million to $438 million in 1992.
Any changes in how grants in lieu of taxes are calculated must be done in consultation with the municipalities. In the meantime I would like to see the government remove the freeze and lift the unnecessary burden on Canadian municipalities until the whole issue of the restructuring of the formula and the problems that this formula is creating as far as the federal government is concerned are addressed.
In the House the Minister of State for Finance and Privatization suggested that was not what the municipalities wanted. Of course he was misinformed. I would like to clear the record by reading the press release by the Federation of Canadian Municipalities:
The Federation of Canadian Municipalities will continue to press
the federal government to lift the freeze on its share of municipal
taxes applicable to federal property.
The federal government has a legal and moral obligation to pay its fair share of taxes. The federal government has broken a 40-year tradition by arbitrarily imposing a freeze on grants in lieu of taxes. In the past the federal government resolved its difference with Canadian municipalities through consultation and negotiation. Further I would like to ask the government why it has not introduced legislation to amend the Municipal Grants Act when the department's own legal advice is that amendments will have to be made in order for the freeze to come into effect.

February 23, 1993
Adjournment Debate
The government finds itself in a very interesting situation. On the one hand it is suggesting that there is a freeze to municipalities and that it will not be paying above and beyond what it thinks is necessary in its mind as the federal government which is a cost of $80 million to the municipality. On the other hand it has a legal obligation to change the Municipal Grants Act in order for the whole process to take place.
In order for us to get back to reality in this place, I would ask the government to consider lifting the freeze on grants in lieu of taxes as a sign of good faith and get on with working with Canadian municipalities.


Jack Wendele Shields: Mr. Speaker, for more than 40 years the federal government has voluntarily paid out grants in lieu of taxes on a wide range of federal lands and buildings. However, in recent years the cost of these grants has been escalating at a rate that is simply incompatible with our commitment to normal fiscal management such as seen in most Canadian households.
In the past seven years over-all government spending grew by 32 per cent. By contrast the cost of the municipal grants program increased by a whopping 78 per cent. This sort of continuous upward escalation is clearly not sustainable in the current environment when we are working very hard to contain government expenditures all across the board.
It was for this reason the Minister of Finance felt compelled to announce in his December economic statement that total grants for the coming year would be maintained at the current level of $424 million.
The Minister of Public Works who is responsible for administering the grants program is meeting with municipal leaders with a view to restructuring the program so as to make its application more equitable across Canada.


THE ECONOMY
Mr. Chris Axworthy (Saskatoon-Clark's Crossing):: Mr. Speaker, some time ago I asked the Prime Minister about the economic policy of his government and pointed out that after almost nine years of Progressive Conservative government Canada has over 1.6 million unemployed, over one million children living in poverty,
and over 2.6 million people trying to exist on social assistance.
In addition consumer and business bankruptcies are at record high levels and continue to grow, and the farming community is in the worst crisis in living memory.
My point was and remains that something is wrong when 16 per cent of Canadians are unable because of government policies to play a role in the economy and earn a dignified living.
We hear about a jobless recovery. What does that mean to those 4.2 million Canadians who have no job and have at the present time no hope of any job? What does it say about a government which can talk in terms of a jobless recovery without any pangs of guilt or unsettlement?
All these numbers are worse than those of other developed countries. Perhaps the only country we compare favourably with is the United States and then certainly not on unemployment figures. If we look at countries in Europe, particularly those with social democratic traditions, Sweden, Austria and Norway, for example, they have all done much better than Canada. They have much lower poverty rates, sometimes only 20 per cent of Canada's rates. They have much better rates with regard to inflation and interest. Their currencies are strong. They are experiencing problems but all those countries have records which are infinitely better than Canada's.
The Prime Minister in response to the question said the government would stay the course and we restated the government's old, worn-out nonsense. The government inherited a debt of $160 billion from the Liberals, generated mostly in good times, and almost tripled it. Of course the Liberals did not learn a lesson in Ontario where the last four years of the Ontario Liberal government were the best four years in Ontario's economic history and yet a huge deficit was built there too.
The Conservative government took a debt and almost tripled it. It inherited an unfair tax system from the Liberals who had already begun the shift in tax from rich to middle and low income Canadians, from income taxes to consumption taxes and from corporations to individuals. The Conservatives made it more unfair, adding about $4,000 in taxes to family tax burdens in Canada.
February 23, 1993

Adjusted federal-provincial funding arrangements to ensure that massive cuts to health and education were imposed upon the citizens of our province again was a strategy begun by the Liberal governments in the 1970s and 1980s.
We have increased deficits, increased taxes, reduced services, increased consumer and business bankruptcies and increased problems in the farm community. Yet the Prime Minister says, stay the course.
We know these are not easy issues with easy solutions. However this government wants to continue with a process which has given us such disastrous results. At least this government does have a plan, unlike the Liberals who have no plan at all. We may not agree with the government's plan but at least it speaks out with some plan.
New Democrats have a plan which puts people first. That is all that I ask, that we have an economic system and a government which when making economic decisions puts people first instead of putting people last.


Jack Wendele Shields: Mr. Speaker, it is important to recognize that the government has set out a concrete vision and plan of action to promote economic growth and bring public finances under strong control.
We are continuing to follow that plan. Both the International Monetary Fund and the Organization for Economic Co-operation and Development strongly support the structural framework our government has put in place. In its most recent forecast, the OECD predicted that Canada will lead the G-7 nations in growth in both 1993 and 1994.
Canada has only recently emerged from a prolonged world-wide recession which shook, and in many instances continues to shake, the economies of the world's leading industrial nations. The recession was heightened by industrial restructuring, trade liberalization and accelerating technological changes which are changing forever the methods by which economic success can be achieved. Canada is not immune to these changes.
To meet the challenges of globalization, it is imperative that we raise our level of economic productivity. To do so, we must continue to invest in modern capital, new technologies and worker skills. It means continuing to
Adjournment Debate
implement policies which help to create a stable macroeconomic environment which is conducive to productivity enhancing investment.
For example, the low inflation rate we currently enjoy is a product, among other things, of a disciplined monetary policy and fiscal restraint. It has resulted in lower interest rates and is expanding opportunities for people to work, invest and innovate. We must also continue our efforts to bring our national finances under strong control.
Canada's experience has clearly demonstrated that higher spending and greater deficits will not create lasting jobs. They lead only to higher interest rates in the short term and higher taxes down the road. We remain committed to reversing the debt legacy left to us by the previous government.
Accordingly we will continue to invest in fiscally prudent policies. Both the February 1992 budget and the recent economic statement reflected our commitment to contain pressures on the deficit through spending restraint and spending reallocation.
Only by tightly controlling government expenditures can we expect to establish an economic climate that supports and rewards productive investment. However I want to assure this House-


The Acting Speaker (Mr. DeBlois):: I am sorry, but the hon. member's time has expired.


TRANSPORTATION
Ron J. Duhamel: Mr. Speaker, I rise tonight to question the government concerning a query I raised in the House of Commons some time ago on the Gemini workers in Winnipeg.
It is my contention that the government really has no sound approach to transportation. It has no logical, well laid out transportation policy. We all know that the airlines are in crisis and our rail industry is having serious difficulties as well.
My question was about those 800 Air Canada Gemini workers mostly in Winnipeg whose high-tech well-paying jobs were being threatened by the proposed merger at the time. This has not really been resolved and these people continue to wonder what is going to happen to them.

Adjournment Debate
We need to realize as parliamentarians that one of our main jobs is not only to scrutinize the expenditures that are undertaken by government, but also to try to ensure that those who are working can remain at work. If they cannot remain at work, at what they were trained for, they should be able to go elsewhere and practice the trade or occupy the role or have the programs that are needed so that they can fit into Canadian society.
To me on that particular day, the minister's response showed a lack of understanding of my question. I asked what is going to happen to those Air Canada workers, to the Gemini workers, to Canadian workers? What kind of plan has the government got to make sure that they resolve this to the mutual benefit of everybody?
It also raises other equally important questions. What is it that a government might do in order to protect-and I do not say that in a pejorative or negative kind of way-workers, men and women with families who want to ensure that they keep their job? If they cannot, can they go elsewhere and do it? If they have the skills and training to undertake something else will it give them the remuneration they require in order to support their families and themselves?

Mr. Speaker, that essentially is the most important principle for me: what will happen to those workers? Is the government doing something? If the government has not yet managed to find a solution, does it intend to find one soon?


Mr. Lee Richardson (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, the hon. member opposite dreams of saving the airline industry in one fell swoop. I wish it was that easy. All we have to do is tell the air carriers how to run their businesses or have further government interference in business.
The hon. member opposite is saying that any business should it get into trouble should not have to worry. It can
count on the government stepping in and fixing everything.
Members opposite do not like to hear it but statistics are there to prove it. Deregulation in the transportation industry is working well in Canada. Deregulation brought about new and better service for consumers and Canadian communities alike.
The airline industry has been hit hard by the gulf war resulting in higher prices and an international recession. People stopped flying to the extent they had prior to the recession.
The airline industry throughout the world, not just in Canada, is facing a crisis now. We on this side of the House are working with individual carriers, companies on their individual cases.
The hon. member is fully aware of the number of programs that governments have established over the years in dealing with assistance to companies and also in dealing with individuals should they run into difficulties with their employment.
It is clear that the Department of Transport and the Government of Canada have a policy on transportation that is working well in this country. We are having some difficulty with the recession. These problems too will pass.
I would like to say in closing this means what the minister has been saying all along. We have to look at the issues facing the industry together and we have to work with the industry to help solve the problems.


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 two o'clock p.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.28 p.m.
[Stage Direction]
Wednesday, February 24,1993