HOUSE OF COMMONS

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Prayers

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THE BUDGET

FINANCIAL STATEMENT OF MINISTER OF FINANCE

Mr. Julian Reed (Halton-Peel, Lib.): Mr. Speaker, I will be dividing my time with the hon. member for Lanark-Carleton. It is a privilege for me to speak to the 1996-1997 budget. If I can make some small contribution to the debate-

An hon. member: It will be small.

Mr. Reed: My hon. friend from the Reform Party is alluding to the fact that my contribution will be small, and I agree, but it will be a contribution of some use.

I will dwell a little in the history of where we were, how we got to be the way we are and where we may be going. It is necessary to put this budget and previous budgets into of context to address the financial situation of the country.

In my previous incarnation as a member of the provincial legislative assembly in Ontario, I remember deficit budgeting in its infancy. Every province was guilty of deficit budgeting, as was the national government and virtually all governments in the western world.

One of our senators has described that era as one of mutual seduction, when it was a very popular thing to believe that money came from government; that somehow or another there was an infinite well which could do almost anything.

The political stripe of the government of the day really did not matter. As was described, it was simply a case of mutual seduction.

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By the time the government changed in 1984 the national debt had risen to $166 billion, over a period of 14 or 15 years. Then in the following eight years the national debt climbed from approximately $166 billion to $400 billion.

There was a realization during those years that this could not go on indefinitely, that a halt had to be called, and yet there seemed to be an absence of political courage to do something until we were on the edge of precipitous financial situation not only in the country itself but in each province. Every province has gone through the same experience, as my colleagues will remember.

In 1993, when the Liberals came to power, there was a feeling of frustration, a feeling of anger among the voting population and a feeling that government was somehow incapable of getting hold of the finances of the country. Expectations were low. It was a case of whether this ship could be steered through rough waters to safe harbour.

We were very fortunate to have the gentleman who is the finance minister at the present time appointed to that position. I think it was a cup that he might rather have passed by because the position of finance minister in this country is very often the kiss of death politically.

He set out on a course and he stated his course clearly at the beginning. He would take the economy in two year short term projections with a goal ultimately of getting rid of the deficit, paying down the debt, and certainly beginning with that portion which is held offshore.

It was a recipe that some people felt could not be achieved because previous finance ministers had continuously failed to achieve the targets they had set out. My honourable friends will recall previous finance ministers as much as $10 billion off their targets.

When our finance minister began this quest there was a lot of scepticism that he would achieve it, but achieve it he did and exceed it he did. Then he brought in the next budget, and achieve it he did and exceed it he did.

Today we thankfully head down that path of reduced deficits. I am not prone to quote other people's writings when addressing the House but I think an article in the Ottawa Citizen from April 13 is worth noting: ``The federal government appears to be sitting pretty

on its deficit target for the fiscal year just ended. The finance department said Friday the deficit for the first 11 months of the year was $23.2 billion, down $4.6 billion from the same period in the previous year. The finance minister set a deficit target of $32.7 billion for the year ending March 31, 1996''.

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I know some of my friends in the Reform Party feel this target or this goal is spread out too far. I can tell my hon. friends that had we not done that, had we took the slash and burn direction the Reform Party wanted we could have precipitated a recession of disastrous proportions. It was a matter of walking the tightrope and balancing the situation, moving toward the targets but at the same time not throwing out the baby with the bath water.

What has that accomplished? There is a renewed confidence from the international community in Canada today. Canada is now poised for the greatest growth of all the G-7 countries. Sometimes we tend to look inward too much and we do not look out to see ourselves as other countries see us. It is useful to do that from time to time. Then we can get a picture of where we stand in relation to the people we trade with, to the people we compete with, to the people who pay their taxes in their country, and so on.

In terms of taxation I know we all feel we are taxed excessively in Canada. If we compare ourselves to other members of the G-7 it is not exactly so. There are countries whose levels of taxation, especially income tax, are even higher than those in Canada.

I would be the last person to suggest we should keep a high tax regime and I will be one of the first people to recommend to the hon. Minister of Finance that once the targets of zero deficit are achieved and we begin to pay down the national debt that it reflect in a sharing of that good fortune with the shrinking of taxation. The freeing up of money will be one of the essentials for our future.

Now that we are at the point of a deficit of 3 per cent of the gross domestic product, beginning with 5.7, it now means we are approaching that point at which our growth rate is greater than our deficit. That means the deficit can be paid down more quickly now than it could initially. That ratio is very important. However, it is important to remember that what we have tried to do is have a fair and balanced approach to what we are doing, and I am sure we have succeeded in the minds of most Canadians, although not in the minds of everyone.

We have deliberately tried not to leave segments of society out in the cold but we have tried at the same time to impose a balanced responsibility on every citizen so that we are all sharing the load. After all, we all created the load in the first place. For those of my colleagues who are probably young enough to benefit from certain kinds of government largess, we are now in a position where we have to make it right.

Mr. Jack Ramsay (Crowfoot, Ref.): Mr. Speaker, I appreciate the spirit in which my hon. colleague has couched his remarks. He is a fine gentleman but I surely take issue with some of his comments.

(1115 )

The member talked about the seduction of governments which led us to this debt. To me that is absolute nonsense. Every family, every organizational group whether it be a church or community organization and every business in this country knows that we have to live within our means. They have done that for the last 25 years while this and previous governments have sunk this country into an enormous debt hole.

We talk about seduction. I think it is clear in the minds of millions of Canadians that it was a simple buying of the Canadian vote in election after election. That was the difficulty they had in pulling away from that kind of overspending and government waste.

We look at whether or not this government could have reached a balanced budget far earlier but in fact it has not even set a date for that. All we have to do is look at the provinces the hon. member referred to. All have placed themselves on track for a balanced budget. Provinces such as Alberta, Saskatchewan and Manitoba have reached the point where they are now in a position to debate what they are to do with the surplus. They are deciding whether to reduce taxes or to plug some leaks in some of their programs through further expenditure of money and so on.

We are now approaching a debt of $600 billion. At the present interest rate, it appears that our interest payment on that debt is going to be somewhere near $50 billion a year.

I would like my hon. friend to address that issue. Can we deal with a $50 billion interest payment per year and still protect our social programs including our transfer payments to other provinces?

Mr. Reed: Mr. Speaker, I would first like to respond to the question of seduction since we are both here seducing each other. I want to reinforce the fact that it was an era of mutual seduction. It worked both ways. I will leave a little story with my hon. friend to show an example of that.

In 1977 I ran in an election in Ontario. One of the issues my party brought to the fore in no uncertain terms was the deficit in Ontario at that time by the Tory government. We made speeches in the House prior to the election being called on the subject of government waste, excessive government spending, the largesse that was going on hither and yon which was piling up and accumulating the debt.

When we got into the election my leader hammered this message out for the first couple of weeks until the premier was asked about

the comments that were being made. He answered the reporters with two words: ``Dr. No''. That was the end of it.

The Deputy Speaker: I am sorry to interrupt my friend. Time has expired.

[Translation]

Unfortunately, there is no time left for the hon. member for Bourassa to ask his question. Resuming debate.

[English]

Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, it is a pleasure to make some comments on the March 6 budget of the government.

As I enter the House each day I like to look at some of the Canadians who come to this place. I wonder what they are thinking about when they come here. I wonder if they are as much in awe of this place as I was when I came to the House, to think of the things that happen in this place. I see young people, grade school children who have come for a visit. I see some older children, parents and grandparents. They are Canadians.

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Like every member of Parliament I would like to be sure when I speak in this place, that no matter what the age might be of Canadians who are listening to the speech in the gallery, they will think that something good, productive or constructive was said. From time to time statements are made in this place which are more or less one sided. It makes me think of the cliché that if one is not part of the solution, one must be part of the problem.

During the debate we have had on the budget there has been a lot of talk about Canada's national debt which is about $600 billion. It is not an amount which people are insensitive to. No one in this place is insensitive to it. This amount was accumulated over the last 25 years. It reflects the amount of money Canadians took out of the system more than they put in. It is the amount of money we contributed to improve the health care plan and social programs in this country. In that accumulated sum, $350 billion of that is benefits to Canadians.

Governments do not have money. Governments manage the money of Canadians. That $350 billion has grown as a result of interest and compound interest. The balance of that $550 billion to $600 billion of national debt represents interest.

It is in our best interest-excuse the pun-to look at ways we can get our fiscal house in order to not only bring the deficit down but to eliminate it, the shortfall of revenue over expense every year. We have to get to the position where we are creating a surplus so that the surplus can be used to discharge that long term debt.

If Canada had a balance sheet in which all its assets and liabilities were disclosed, we know the liability would be a long term debt of some $600 billion. However, the Fraser Institute and the United Nations have said that Canada is the second wealthiest country in the world on a per capita basis. The reason they can say that is that Canada has a wealth of assets.

According to the Fraser Institute, with our resources excluding land value, Canada is worth about $3 trillion. There really is a dowry or an equity in this country. The money we owe to foreigners and other Canadians for the national debt is not just money that was given away. It was invested in this country. It was invested in our people, our youth, our health.

I see the health minister. I know Canada's health program is the strongest element within Canadian society which holds the country together. It creates the unity within this country and will keep the country united. We have a strong health care system which we are committed to. In good times as well as bad we will not compromise the five principles of the Canada Health Act.

Confidence and stability are the principles which must be reflected in budgets. I hope the people who come here and who listen will feel that in recent years Canada has demonstrated a stability within its affairs, that government has generated a level of confidence, that the right things are happening.

When this government came to office the amount of deficit represented something like 6 per cent of our GDP. The finance minister in his first budget brought it down to 5 per cent of GDP. In the next budget he brought it down to 4 per cent. In the current fiscal year which ends on March 31, 1997, it will be down to 3 per cent. The last time the finance minister addressed the issue of the long term outlook for the deficit he said that in the subsequent year it would be down to 2 per cent.

We are so very very close to delivering a balanced budget. It is something we want to do and I do not think there is disagreement on that. The only disagreement is over the velocity at which it happens.

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Some would suggest we have to balance the budget at all costs regardless of the impact on seniors, regardless of the impact on health care, regardless of the impact on jobs and youth. I do not agree. Our budget has to be a compassionate budget. It has to be responsive to the important needs of Canadians, and it has to be done in a fair and equitable way. Are there spending mismanagement or problems in a corporation? Of course there are. In a government? Of course there are. There are always things we can improve upon. We have to look for the things we have improved upon.

I want to talk a little about the national debt because it is not in isolation. There are assets and good things in this country which we have not invested in. They will be with us and are for our children in the long term.

I say to all the young people: Canada is the best country in the world, one of the richest countries in the world and it is going to stay that way. Canadians have demonstrated that we have the know how, that we can operate in a global economy, that we can act responsibly and that we can work together in a proud, generous, tolerant and prosperous nation. This is what makes the United Nations look at Canada and say that is why we are the best country in the world.

Seniors are a tremendous asset to Canada. They led us in bad times through the depression. They led us through the war times. They led us at times when we needed the help. The Prime Minister has said on many occasions that we will never, never abandon Canada's seniors.

In his speech on March 6 the finance minister said: ``We believe that the right to a secure retirement should be available to all and not become the preserve only of those who are well off''. That is an important commitment.

The seniors are affected in this budget by the creation of what is called a seniors benefit. It is a replacement for the current benefits for seniors, including old age security, the guaranteed income supplement and the age and pension income credits. It is a single tax free benefit to begin in the year 2001.

Some of my constituents have asked why 2001. The important aspect of that is it is going to take time to phase in and allow people to arrange and manage their affairs so that when they do retire they have had an adequate opportunity to make provisions for all their needs.

The Prime Minister committed not to reduce the pensions of today's seniors. The plan we have honours that commitment and goes well beyond it. Canadians who were 60 years of age and over on December 31, 1995 and their spouses whatever their age are guaranteed to receive pensions amounting to no less than previous entitlements. That means they are going to have an opportunity to either stay under the existing plan or go under the new seniors benefits. That is being sensitive to seniors. Many will receive more under the new plan. GIS recipients will receive $120 more a year and seniors will be able to choose the benefit that maximizes their pension.

Most future seniors will also be better off because the new system targets higher benefits for those with lower incomes. Seventy-five per cent of single seniors and couples will receive the same or higher benefits and nine out of ten single senior women will be better off.

The seniors benefits will be fully indexed to inflation and will treat senior couples equally through separate equal cheques for each spouse.

There are so many good things about the budget I would like to talk about but my time is coming to a close. To finish, I would like to say a little word to the family. I spoke on Bill C-10 not too long ago. During that speech I said that if the family is strong, the deficit will be gone. I urge my colleagues to work with me to consider ways in which we can improve the tax status of families that stay together and stop worrying about the tax benefits for those who decide not to stay together.

[Translation]

Mr. Osvaldo Nunez (Bourassa, BQ): Mr. Speaker, both my hon. colleague and the speaker before him have stated that eliminating the deficit is one of this government's priorities. I agree. But I cannot, unfortunately, agree with the procedure, the mechanisms and the means used to accomplish this.

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To me, the social costs of eliminating the deficit are unacceptable: 45,000 public servants laid off, cuts made to social programs, including health and pensions. Having said earlier that you believed that seniors represented an important segment of our society, why are you making more cuts?

The most unacceptable are the cuts to unemployment insurance. There is a $5 billion surplus, and this is not tax money, but contributions by workers and employers. How can there be any justification for using this money, which belongs to businesses and their workers, to eliminate the deficit? Does this not pose a problem of ethics and legitimacy? Does this not represent a misappropriation of funds which have been put in place by legislation not to solve a deficit problem but to provide benefits to the unemployed? That is my question.

[English]

Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I understand the member's comments and his preamble. He really got down to employment insurance reforms.

The word insurance has not been operative in the past. It is an insurance plan. That means premiums should be paid into the program by all who participate in the plan and be sufficient to cover the benefits paid out. It has not happened in the past. It is not sustainable for the future. Change is necessary.

The member is part of the problem, not part of the solution. I would like to hear from him how the system might be improved so that it will be an insurance system which is not a burden on Canadians who do not draw on the plan. We all participate and support the plan. My wish is that the one million unemployed Canadians will get jobs and never, ever have to use employment insurance benefits.

Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, appreciate the awe that the member and all Canadians feel for this place. However, what governments have done and the irresponsibility they have shown in handling taxpayers' money causes me to feel disdain for this place.

Governments have been totally irresponsible. Finance ministers since the early 1970s have said that they realized that the deficit must be dealt with. John Turner in 1975 said: ``I come now to specific measures. None is more important than the control of public expenditures''.

When the Prime Minister was finance minister in 1978 he said: ``Significant reductions in deficits can be expected''. They did not happen. Many previous finance ministers promised to deal with the problem of overspending. It did not happened. Canadians cannot feel awe for this place with these kinds of actions on the part of governments when dealing with taxpayers' money.

The member also spoke about the trillions of dollars in assets that Canada has. That kind of thinking is terribly upsetting to me. In Mexico assets meant very little when it did not deal with its overspending problem. The United States took over its oil reserves for the next number of years because Mexico needed the money. The United States along with other countries through the International Monetary Fund provided the money.

This finance minister, with the ever growing interest payments on the debt increasing to $50 billion, has not dealt with the problem.

The Deputy Speaker: I think the member has received a question. Briefly please, he has about one minute.

Mr. Szabo: Mr. Speaker, I repeat, there are people who are part of the solution and people who are part of the problem.

We can spend all day long talking about history. We are here to talk about the future of these young people, the future of the working people today and the future of our seniors. We have to take positive steps. Now is the time to start. I ask the member to join the rest of the members in this place to start looking toward the future rather than lamenting the past.

(1135)

[Translation]

Mr. Benoît Sauvageau (Terrebonne, BQ): Mr. Speaker, I will be speaking today on the budget, if my Liberal colleagues will give me the chance. There is a place where people may discuss respectfully.

Therefore, with the opportunity afforded me, I would like to show that the 1996 budget does not represent, as they like to say, any additional savings, that it really does not add anything new and that it represents the end of the plan to put the country's finances in order. In this budget, the minister is not cutting expenditures and this year's deficit at all. On the contrary, there is in fact an increase in expenditures of $104 million.

The Minister of Finance is demonstrating the government's indifference. It is as if there was no waste, no duplication and no tax inequity. It is all forgotten; out of sight out of mind.

The government is dumping $7 billion of its 1996-97 and 1997-98 deficit on the provinces. Furthermore, it artificially reduced the deficit by taking the $5 billion surplus from the unemployment insurance account, which is funded entirely by contributions from companies and individuals. It is unacceptable to see the burden of the social programs left to the provinces and to those who forced to depend on them. In matters of employment, the government is deceiving the people, and particularly young people. It claims to be creating jobs and improving the economy, but clearly its measures are either inadequate or totally ineffective.

The Minister of Finance cut funding to student job programs by $26 million over the past two years. And then, all of a sudden, perhaps because of an election year or an election on the horizon, he changes direction. He doubles to $120 million the amount of aid to student programs-an increase of $60 million. Nevertheless, the government is hitting young people by cutting funding to post-secondary education.

The government will reduce funding by $150 million in 1996-97 and by between $400 million and $500 million in 1997-98. This will inevitably lead to an increase in education costs, hence the demonstrations by young people and university students in recent months and years against these draconian cuts. In the end, the students will be the ones paying.

For more than two years now, the Bloc has been calling for an investment fund to promote defence conversion. The Liberals promised $200 million per year over five years starting with 1994, for a total of $1 billion. They made this commitment in the red book and during the election campaign. As is too often the case, this promise was then forgotten. The Minister of Finance is proposing $150 million in 1996-97 and maybe $200 million in 1997-98. We would not be surprised if the $200 million figure was revised downward, as is too often the case.

Furthermore, for two years, the Bloc Quebecois has been calling for a major reform of the business tax system. The government has come forward with the proposal to set up a committee made of tax experts, several of whom would come from businesses already benefiting from tax shelters. We, in the Bloc Quebecois, joked that this was like choosing members of the Hell's Angels because they know how organized crime operates.

It seems obvious that the only purpose of such a committee is to ward off criticism and to pretend to examine the issue. We can already anticipate the conclusions of this committee. They will not contribute anything new. In any case, the members of this inner circle are both judges and judged. We, in the Bloc Quebecois, want fair and equitable reform. To this end, we have been asking since we came to Ottawa for a parliamentary committee to analyze federal policies concerning business taxation.

Regarding these same subsidies to businesses, last year the government substantially reduced assistance to the dairy industry, which is mainly concentrated in Quebec. This year, it is simply abolishing it altogether.

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Is the Minister of Finance really aware of the negative impact this measure would have on Quebec agricultural and dairy producers? We already know the answer is no. Does he know that these cuts are excessively dangerous, that Quebec is still the federal government's poor relation? Recently, civil servants who had nothing better to do got this great idea, they would go after raw milk cheese. They had a brainstorm over the Easter break. It would give them something to do. They said to themselves: Let us throw another monkey wrench in there. More often than not, the agricultural sector is the one that has to pay.

The Bloc Quebecois demands that the government get its fiscal house in order by seing to it that those who do not pay their fair share do so.

Mr. Speaker, I must ask you if this is a questions and comments period. If not, I would ask my colleague to please be patient a few minutes before making his clever comments.

When will the government act in a real fair and responsible manner? We have now been waiting for two and a half years.

Last year, unpaid taxes amounted to $6 billion and the government was not even able to do better than the year before. There are lots of funds that the government could recover. But because of its ineptitude, its incompetence, the government too often does nothing at all.

The last estimate of the finance department shows that, as far as business taxes are concerned, the government forgoes nearly $10 billion. When will members of Parliament undertake a thorough review of business taxation? Before anything else, the government must put an end to that type of evasion, that tax dodging.

Part of the deficit reduction is due to the country's economic situation, which is relatively good, not because of the Liberals, but because all G-7 countries are currently enjoying a good situation.

Undeniably, the government is making political hay with this. It is true that exportations are high, interest rates are low and unemployment insurance premiums are higher than payments. However, if the economic context was to change, either because of higher interest rates or a stronger pressure on the unemployment insurance system, the impact would be immediate and catastrophic for public finances. I am convinced we would then see a major change in the Liberal government's attitude.

I am a member of the Standing Committee on Foreign Affairs and International Trade. As such, I would like to stress that we will have to examine what seems to be the main problem of new exporters, that is financing, whether it is easy to obtain financing. Above all, we will have to establish parameters in order to facilitate access to foreign markets for small and medium size businesses.

According to what he said on page 78 of his Budget Plan, the finance minister seems to be aware of that problem. I would like to know how much of the $50 million injected into the Business Development Bank and the $50 million added to the working capital of the EDC, will go directly and through concrete measures to small and medium size enterprises trying to export?

Government must recognize that Canada is made up of regional markets: atlantic, Quebec, Ontario, the prairies and British Columbia, which are separately integrated into larger trade and economic continental entities. For British Columbia, the northwest United States and the Asia-Pacific area are natural markets.

For Quebec it is another matter altogether. Its favoured markets are North America, 80 per cent of its exports, and Europe, 12 per cent. We should note that for Quebec European markets are three times as important as Asian markets. It is up to individual companies, and not the federal government, to determine, on the basis of their strengths and the nature of their productions, what their export targets should be.

The federal government should limit itself to providing support. Again the priority in the area of assistance to exporting companies should be a better access to financing.

I would like to stress that we believe Quebec and Canada have lost something when they renegotiated the agreement on lumber with the United States. The fact that we agreed to reopen an agreement already in force will probably serve as a precedent for the United States, which will demand the same in other disputes with Canada.

To conclude, I would like to quote an article by Jean-Robert Sansfaçon, published in Le Devoir on Thursday, March 7: ``While Ottawa continues to pretend that it reduced the deficit by cutting expenditures from $120 billion in 1993-94 to $106 billion in 1997-98, a more thorough analysis shows that at least 5 of these $14 billion come from a normal reduction in the number of unemployment recipients due to economic growth, and another $6 billion come from cuts in transfers to the provinces for health, social assistance and post-secondary education. We know that a new recession would make the unemployment insurance fund surplus melt like new snow and, therefore, increase the budget deficit of the government. Like last year, the victims of this budget are the provinces, especially provinces like Quebec''.

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This is the reality: The federal government is not assuming its responsibilities, it is transferring to the provinces the burden of making most of the cuts called for in this budget.

Mr. Ronald J. Duhamel (St. Boniface, Lib.): Mr. Speaker, I listened carefully to the speech of my colleague. I wanted to make two or three brief comments and ask a question.

After this budget was brought down, I looked carefully at the comments made by influential people within the country, that is, business people, men and women who work within the major unions and journalists. The great majority of them had positive comments to make. I am extremely surprised that my colleague was unable, unless I misunderstood him, to put greater emphasis on a number of things that are well accepted, well thought of and that are helping. I believe he mostly emphasized what he thought were the negative aspects.

Perhaps my colleague would be willing to respond to this. Why did he not mention any positive aspects in his speech, when we consider all the positive comments that were made?

Mr. Sauvageau: Mr. Speaker, I am pleased to respond to the comments made by my hon. colleague. Simply because it is difficult. Regarding the quality of the French used in the budget, the nice rhetoric used to hide the drastic cuts imposed on the people of Quebec and Canada, I could indeed admit that it is well written. It is written so that transfer payments to the provinces can be cut by $7 billion. At first glance, it almost appears to be well written and appealing.

However, if we look at it more closely, as Jean-Robert Sansfaçon did in the March 7 edition of Le Devoir and as several other analysts and columnists did as well, if we look at the figures instead of the quality of the French used in the budget, how can I praise the government for cutting transfer payments to the provinces by $7 billion over two years? How can I praise the potential increase in tuition fees for students in Quebec and the rest of Canada? How can I praise the government for cutting transfer payments while maintaining national standards? How can I praise the government for cutting transfer payments for health care? How can I praise the government for practically robbing the UI fund of $5 billion?

That is why I would rather comment on cuts, on the government's inaction, instead of praising the quality of the French used to try to hide cuts from the people of Canada and Quebec.

[English]

Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, I congratulate the speaker on his comments concerning the fact that this Liberal government is passing the spending cuts on to the provinces.

All the cuts that the finance minister has passed on to the provinces still are not enough. Would the member comment on why he might think that the Liberals have not done the job in terms of cutting spending?

(1150)

[Translation]

Mr. Sauvageau: Mr. Speaker, I am pleased to answer the question put by the hon. member from the Reform Party. In my opinion, the Liberals have not done their job as far as cuts are concerned, they dumped it all on the provinces because it always looks better to have cuts done by a neighbour rather than doing them yourself.

The Liberals were also negligent because, if I am not mistaken, they were offered the possibility of a parliamentary committee to determine priorities regarding corporate tax cuts-you did so yourself.

But they simply refused because it was easier to say: ``We will keep our money, but we will impose cuts on those who put money in our wallet, namely the provinces with their taxes''. Why did the Liberals neglect their job? Simply because they wanted to make the provinces responsible for the cuts and make them out to be the bad guys. It is as simple as that.

The Deputy Speaker: The hon. member for Lac-Saint-Jean.

Mr. Claude Bachand (Saint-Jean, BQ): Saint-Jean, Mr. Speaker, not Lac-Saint-Jean. The hon. member for Lac-Saint-Jean will be joining us at 2 p.m. this afternoon, and we are very proud that he is doing so.

First of all I would like to reassure our friends opposite by saying that, while the budget may contain very few good news, and there is no doubt that there are few, they must not forget either that it is the role of the opposition to assess the budgets brought down by government.

Very seldom does a budget earn government praise for the outstanding job it has done in preparing the budget. In my opinion, it would not exactly be the place of the opposition to say so. We are here, in this democratic system, to point out those budget items that we totally disagree with and to suggest amendments, so that democracy can prevail.

I think that, should this House become Liberal through and through, Canada would be next to impossible to live in. It seemed noteworthy to me. In fact, I have a few points to raise, which are not exactly positive either. I think that raising negative points in assessing a budget is good for democracy and something that must be done.

The budget can be considered from two points of view. There is what I call the macroeconomic view and the microeconomic view. I often look at what impact the budget will have on the people of my riding. That is what I would like to share with you today. I will not be telling you anything you do not know already by saying that the riding of Saint-Jean has always been, in my words, a disaster area. We will recall that, with its very first budget, this government closed down the Collège militaire in Saint-Jean. This keeps going on. The hon. member for Terrebonne mentioned a few similar points.

Let me tell you about the issue of milk subsidies, which is very important in my riding, where there are many milk producers. These people will be faced with a 15 per cent cut in their subsidy. This amounts to an annual dead loss of about $1 million for the riding of Saint-Jean. There will be $1 million less in Saint-Jean's economy, in addition to the $32 million loss suffered with the closure of the military college. And all this will keep going on, because the milk subsidy reduction is not just a one time cut: it will be implemented over a number of years until there is no subsidy left.

Therefore, the riding of Saint-Jean will not just lose $1 million this year: it will lose $1 million this year, next year, the year after, and so on until there is no subsidy left. This will result in a $4 to $5 million cut for the riding of Saint-Jean, without compensation. Once again, there is a double standard.

The government says that it will put an end to the Crow benefit in western Canada. Of course, this measure will have an impact on producers, who are told that they will get $2 billion to make the necessary transition, diversify their economy, etc. However, no such assistance is provided in the riding of Saint-Jean and in Quebec, among others, who is the primary milk producer in Canada with 40 per cent of the country's milk production. Once again, Quebec is being targeted and more specifically the riding of Saint-Jean.

The military college is not the only institution to be closed. This year, it was announced that Saint-Jean's employment centre would also be closed. Thirty second and third line employees from the employment centre are to be redeployed throughout the Montérégie region and will have to move. These people are wondering whether they will follow their jobs. They are wondering whether they will move to Saint-Hubert or Longueuil.

In the meantime, industries and the jobless go to the Saint-Jean employment centre where there is only first line staff to take note of their plight and concerns. However, when the time comes to follow up on these cases, the employees are no longer there.

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The second and third lines of service have gone somewhere else in the Montérégie area. This is utterly deplorable. We could understand it if the unemployment insurance account were in deficit. We could understand even more if the government were contributing to the unemployment insurance account, but this is not the case, in either instance. The government is not contributing to the account, and the account is showing a $5 billion surplus every year. Not only was there a $5 billion surplus this year, there will be one next year also with the new proposed measures. They want to dip even deeper into that account, not to take care of the unemployed but to help wipe out the government deficit.

In Saint-Jean, an area still facing closures, it is hard to accept-and this is an acid criticism levelled at the government-that it could say: ``Listen, we have to cut unemployment insurance; we know that you need it, but unemployed people will get better benefits''. Yet, just the opposite is happening.

The customs office in Saint-Jean is closing down. There were two customs officers. The Saint-Jean office was the oldest inland customs office in Canada, but it just closed down. The industries in Saint-Jean that are experiencing difficulties in matters of customs clearance have been told: ``Listen, we will do it by computer. Also, you will send your files to the officers in the Lacolle customs office, who will come if there are are problems''.

In that regard, I can tell you that all the industries in the riding of Saint-Jean are opposing this measure. The area is like a sieve, in any case. The Richelieu River flows by the city of Saint-Jean. In Notre-Dame-du-Mont-Carmel, we have a customs office on a wharf that extends 300 or 400 feet into the river, which is about one mile wide. I am convinced smugglers go by on the other side of the river. All the customs officer can do is call in the RCMP. But the RCMP has not been spared by the cuts, and it takes a few hours before it starts going after the smugglers. So, anybody can go through. The government loses large amounts of money customs could collect. That is just another disaster for Saint-Jean. Saint-Jean is once again under fire, and the customs office there was closed down.

The Fonds de solidarité and the CSN Fondaction, which is just starting out, are also under attack. The minister told us these funds have proved their value, and they no longer need the same level of incentive. Let me remind the minister that the CSN Fondaction is just starting out and that the Fonds de solidarité is the pride not only of Saint-Jean, but of Quebec as a whole.

The Fonds de solidarité, the CSN Fondaction, and the Caisse de dépôt are all part of the distinctiveness of the Quebec society. That is what the distinct society is all about. We should not keep trying to water down its meaning, and try to replace it with the concept of principal homeland of the French language, which is the new buzzword.

I am sorry, but the distinct society has always been a reality, and it means what it says. Concerning these funds, I feel it is important to point out that they are a feature of the distinct society. They are a way to handle the economy in Quebec which is clearly distinct and different from what is going on in the rest of Canada. It thought it was important to mention it in passing because it was sheer nonsense for the Quebec Liberal Party to say, during the week-end:

``We will no longer talk about a distinct society''. For now, we will talk about a cultural homeland and, next year, if English Canada still has a problem with that, we will just use the expression homeland. And then, we will water it down until there is nothing left. Let me say that the Bloc Quebecois will closely watch how things evolve on this issue and will oppose any such proposal.

On the last point, Mr. Speaker, I beg your indulgence.

[English]

Mr. Speaker, I will speak to you in English because I am taking some courses in English at the language school base militaire in Saint-Jean. They say my English has improved. I have a very nice teacher, Brenda Hunter. She told me that if I want to follow these courses next year I had better say a few words in English in the House, not reading but expressing myself without any notes.

I decided that for the last part I would denounce the measures in the budget concerning the language school in Saint-Jean. Earlier there were almost 150 teachers in Saint-Jean and nowadays there are around 75. The numbers are falling. The Department of National Defence is trying to extinguish the language school in Saint-Jean and we do not know why.

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Why are more people not coming to Saint-Jean to take these courses? We have a most modern laboratory and some very competent and knowledgeable teachers who do a great job. That is why I have to say once again that it is a scandal to try and close down a very important and very effective institution like the one in Saint-Jean.

Mr. Speaker, I think you will agree that my first words of English in the House were not too bad.

[Translation]

Finally, we consider this budget to be totally unacceptable. I feel that I have been fully mandated by the constituents from Saint-Jean to vote against this budget, but my colleagues across the way need not be afraid since we have come up with some positive amendments. That is what I call democracy.

I will, of course, be very pleased to vote in favour of the amendment put forward by the Bloc Quebecois in order to make the changes needed in the budget. I hope my colleagues opposite will support this very important amendment. If not, they will have to understand that the constituents in my riding have mandated me to vote against this year's Liberal budget.

[English]

Mrs. Rose-Marie Ur (Lambton-Middlesex, Lib.): Mr. Speaker, I will be sharing my time with my hon. colleague from Winnipeg North.

I am pleased to take part in the debate on the government's third budget, one which gives credence to the three main goals of the agenda since it was elected: job creation, economic growth and deficit reduction.

First, I would like to commend the Minister of Finance for respecting the will of the voters which was clearly expressed regarding taxation. Canadians did not want a tax hike because they believe they are already paying their fair share of taxes.

Given the delicate state of the Canadian economy at the present time, the federal government could have opted for harsher measures. In fact, some provincial governments such as the present Ontario government have chosen this path which I believe does nothing but increase the economic problems we face.

The Liberal government rejects any solutions based on narrow minded ideologies. Instead, the guiding principle to making the changes that have to be made are based on pragmatism and fairness to all levels of society. As an example, the Canadian health and social transfer will be characterized by secure and stable funding over the next five years.

It is important to remember that the government will legislate a floor to provide a sound guarantee that cash transfers will never fall below the $11 billion mark at any time during the five-year period. This guarantee demonstrates the Liberal government's strong commitment to secure Canada's health system, social safety net and to build a renewed social and economic union.

The government recognizes that Canada is a rich country, rich in natural resources and its people. It also recognizes that it is the government's responsibility to create opportunities for present and future Canadians and that is what it has done. The challenges that face our youth are clear. The youth unemployment rate is roughly double the national average. Approximately 45 per cent of the new jobs created between the years 1990 and the year 2000 will require more than 16 years of training and education.

This budget provides an additional $165 million over three years to help students and their families deal with the increased costs of education. This will be done through increased education tax credits and an increased limit on parents' contributions through their children's registered education savings plan. Eligibility for the child care expense allowance has been broadened to help more parents undertake education or retraining.

Funding for summer student jobs has been doubled. An additional $315 million over three years will be provided in addition to the

existing fund to create new youth employment opportunities. We are committed to a new domestic Team Canada style partnership between businesses and governments to create entry level jobs for Canada's youth.

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Canadians know direct job creation must come from the private sector, but it is incumbent on the government to make sure the economic context is the best possible and favours the continuous economic growth necessary for job creation.

Deficit control requires, among other things, that inflation is kept low. This contributes to reducing pressures on interest rates and helps control the other costs of doing business. It makes Canada more competitive in foreign markets.

We can also see dividends from the ability to control the deficit and inflation. Short term interest rates have diminished by three percentage points since last year's budget. This means a saving of $2,400 a year on $100,000 mortgage. Increased competitiveness means a strong increase in exports with a record export surplus of $28 billion.

Canada's trade performance in recent years has been remarkable. Exports have soared. The Team Canada approach has proven to be a major success with $20 billion in new business deals resulting from three major trade missions led by the Prime Minister to Asia and Latin America. We all know exports are vital to job creation in Canada. Every billion dollars in exports sustains 11,000 to 12,000 new jobs. Continued progress begins with further fiscal improvement and the 1996 budget delivers.

The steps proposed in the March 6 budget consolidate and extend the first two budgets and further contribute to the economic and financial objectives. The government is maintaining its focus on reducing program spending because the debt is a problem created by government and the solution has to focus primarily in our own backyard. That is why of the fiscal actions taken from 1994-95 to 1998-99, a full 87 per cent have been through expenditure savings. Together the three budgets will contribute $26.1 billion in savings for 1997-98.

However, the 1996 budget goes beyond the bottom line calculations. As Liberals we know that financial reform must never be an end in itself. The steps taken to get our fiscal House in order are a means to an end. What is the end? It is lower interest rates, better job growth and the maintenance of cherished social programs. These steps are a means to ensure the Canada that all Canadians want can be preserved.

Many seniors have asked us to address their concerns about security for their grandchildren and security for themselves. I am pleased to see a new tax free benefit for seniors that will replace the old OAS and the GIS benefits and will ensure the long term stability and sustainability for seniors' pensions. These proposed improvements to seniors' benefits reflect what the great majority of my constituents in Lambton-Middlesex have been asking for, as indicated in a survey I conducted last November.

The seniors benefits will help those who need it most while streamlining the program. It will make the system fair. It will guarantee that all current seniors, in fact those who are 60 years of age now, and their spouses will receive no less than the current pension benefits. Most seniors will receive the same or more money under the proposed new system.

I am very pleased the Minister of Finance made a decision not to allow charter banks to sell insurance from branches. This issue was a major concern to my constituents. Keeping the status quo means that Canadians will continue to have many choices depending on where they live and what their particular needs are.

As the member for Lambton-Middlesex, I look forward to working with my colleagues to help implement the government's commitment to bettering the lives of rural Canadians, a commitment that was renewed in the February 27 throne speech. This year's budget will build on this foundation through a number of initiatives to provide for economic growth and new opportunities for the agri-food sector.

For example, the government will create a single food inspection agency to be responsible for all federally mandated quarantine and inspection services. This initiative will reduce overlap and duplication by consolidating resources now in the three federal departments of agriculture and agri-food, health and fisheries and oceans, and will lead to an annual savings of approximately $44 million starting in 1998-99.

While phasing out the remaining dairy subsidies starting August 1, 1997, the government has made a commitment to supply management as part of a long term dairy policy intended to maintain a strong and viable Canadian dairy industry. This will include a strong defence of Canada's position in the NAFTA dispute settlement process. We are also committed to finalizing arrangements with the provinces for cost shared safety nets, including a whole farm income stabilization program, currently NISA, crop insurance and province specific companion programs.

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Another major announcement of the March 1996 budget was the decision by the government to sell its fleet of 13,000 grain hopper cars. It is extremely important that the terms and conditions of the sale are established for the maximum benefit of Canada's farming community. As stated in the budget, the federal government will consider all proposals put forward for the acquisition of the cars.

In a country as diverse as ours, it is a real privilege for all of us to be able to be part of a team that sets objectives and goals, and meets them. We do not just talk about them. We meet them. We have set the challenges for the years to come. Through the Minister of Finance and all who are involved in the process, we will continue to meet each and every one of these challenges.

Mr. Elwin Hermanson (Kindersley-Lloydminster, Ref.): Mr. Speaker, I have a short question. The member for Lambton-Middlesex talked about the sale of 13,000 hopper cars, which is an extremely important issue in my riding and in my area.

Most of the time, when one wants to buy a used product such as a car, one goes to the lot and asks the sales person what the price is. He or she will say that the price of the car is $5,000, $3,000 or $10,000.

In the case of the producer coalition which wants to buy the 13,000 hopper cars, the Minister of Finance or Treasury Board or the Minister of Transport or whoever is responsible will not tell the farmers what is the asking price for the cars.

Does she really think it is fair to ask producers to come up with a proposal to buy the cars when they are not told what is the asking price for those cars? They have not been given the details of how those cars will be administered and allocated after they have been purchased.

Mrs. Ur: Mr. Speaker, I appreciate the question. This is certainly a concern that was expressed to me in my riding while we were home for the Easter break.

The government is proposing to meet with all concerned parties. We have to understand that these hopper cars were bought by taxpayers' money Canada-wide. It is very important how the consultation process goes with the producers as well as with the Minister of Finance, with the minister of agriculture. It is not just the west but it is the east as well that has to share in the burden of this.

I have seen allocations that perhaps the cars are worth $300,000 or $400,000. In due time when these people sit down and negotiate terms of where the hopper cars are going to be sold, it will solve itself.

It is all well and good for farmers or commodity groups to bid on these. We have to work collectively on this. There is not much point in owning hopper cars if we are not compatible with the railway system.

Mr. Rey D. Pagtakhan (Parliamentary Secretary to Prime Minister, Lib.): Mr. Speaker, I am pleased to speak today on the 1996 budget which was tabled in Parliament March 6.

It reflects the priorities of the government. It ensures that the need to be more frugal will never come before the need to be more compassionate and fair. It strikes a delicate balance between fiscal reality and social responsibility.

The government has met its deficit reduction targets and is on its way to surpassing them without raising taxes. At the same time, it is protecting and preserving our valued social programs like medicare and pension programs for seniors.

These twin goals have been achieved through good governance. The response from the Canadian public has been positive. The day after the budget was delivered last month, newspapers across the country carried headlines expressing optimism and support.

In my home town, the Winnipeg Free Press gave the finance minister high marks for meeting his deficit projections. ``Too many finance ministers before him have promised honey and delivered vinegar''.

This achievement in fiscal responsibility and stability has contributed to Canada's strong economic performance and therefore job creation. Since 1993, when the Liberals took office, nearly 600,000 jobs have been created nationwide.

In addition, the merchandise trade surplus has increased and short term interest rates have decreased, decreasing the amount of mortgage payments which citizens have to pay. Inflation has fallen sharply. All of these have boosted investor confidence in Canada.

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The deficit targets of 3 per cent of GDP for 1996-97 and 2 per cent for 1997-98 will be achieved. In 1997-98 the financial requirements of government will fall to $6 billion or about 0.7 per cent of GDP, making it the lowest since 1969 and the lowest of any central government in the G-7 countries.

All of these achievements will translate into job creation, which remains the number one priority of the government. I am pleased that we have created over half a million jobs since 1993. However, we know this is not enough and that is why our efforts of job creation remain our overwhelming commitment.

Budgeting is more than putting our fiscal house in order and more than deficit reduction. It is more than balancing our revenues and expenditures. Financial stewardship is only a tool to the primary purpose of government which is to serve citizens.

Canadians value our nation's social programs. We worry when we hear of hospital closures, cuts to education funding and reductions to social assistance for the less fortunate in society. Canadians wonder how universal medicare, access to post-secondary education and social assistance can be sustained given all the pressures on our system.

Therefore in order to ease the mind of citizens and to reaffirm the government's commitment to health, education and social assistance, the 1996 budget provides the stability and subsequent growth to its transfers to the provinces by legislating a new

five-year funding arrangement for the Canada health and social transfer program beginning in 1998-99.

Entitlements over this period will grow from $25.1 billion to approximately $27.4 billion. More important, there will be a new cash floor for transfers of at least $11.1 billion in all years thereafter. This will give the federal government the leverage to maintain our valued social programs.

For the province of Manitoba, where I come from, the major transfers in terms of the Canada health and social transfer and the equalization payments which later on will replace the established programs financing will exceed $2 billion in 1996-97 and are expected to total roughly $1,875 per person in 1995-96, about 48 per cent of the national average. We see there is a significant transfer of money from the federal government to the province of Manitoba.

Just for comparison, per capita Manitoba will be getting less than Newfoundland, P.E.I., Nova Scotia and New Brunswick but it will be getting more than Quebec, Ontario, Saskatchewan, Alberta and B.C.

That defines for us the character of our nation: those who have more share with those who have less. It also defines our Canadian identity.

Secure and growing funding for our transfer program will ensure the federal government's capacity to uphold the five principles of medicare: universality, portability, accessibility, non-private, public administration, and comprehensiveness; as well, the principle that no residency requirement can be imposed on social assistance recipients who move from one province to another.

These measures will enable the government to keep its deficit reduction targets while protecting the future of our social programs. This type of balanced approach tells us how the government is very fiscally realistic and at the same time very socially responsible.

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Canada currently spends approximately 10 per cent of GDP on health care. Other nations spend more but do not provide universal access to their citizens. Indeed we are fortunate in Canada. We enjoy universal access. It is one of the most envied health care systems in the world. However, we realize we must do all we can to protect our system. We must ensure that each and every health care dollars is spent wisely.

To this end we would like to know in which new technologies and techniques to invest, which old ones to retain or abandon and how to organize health services to get the maximum benefit from available resources. This is our commitment. Because of this the budget has allocated health services research funds to the tune of $65 million.

As well, the budget has increased assistance to those in need with the new child support taxation measures to benefit our children, the future of our nation. We have not forgotten our seniors. We are committed to introducing a new seniors benefit program that will ensure sustainability by targeting those who need assistance most without affecting the benefits received by current seniors.

The government cannot do it alone. That is why the government has challenged the private sector. We know that a measure of success in any country is when citizens try their own initiatives and at the same time commit and challenge themselves in the service of the country.

Imagine a country that is number one in which to live, according to the United Nations. Imagine a country where interest rates have decreased over 300 bases points since early 1995, a country where deficit targets have consistently decreased from 6 per cent, to 5 per cent, to 3 per cent and to 2 per cent until the budget is balanced. Imagine a country where financial requirements will fall to $6 billion or .7 per cent of the GDP from $30 billion or 4.2 per cent in 1993-94, the lowest since 1969 and the lowest in any central government of the G-7 countries. Imagine when the drop in program spending has been dramatic, from 16.8 per cent to 12 per cent. That country is Canada and budget '96 reflects the soul of this country.

[Translation]

Mr. Osvaldo Nunez (Bourassa, BQ): Mr. Speaker, my hon. colleague mentioned that job creation is a priority for this government. I think that this government has failed miserably as far as job creation is concerned.

These last few weeks, I have worked on the issue of the closing, in Sainte-Thérèse, Quebec, of the plant operated by Kenworth, an American firm. More than 800 workers stand to lose their jobs and more than 800 Sainte-Thérèse families will be affected. This is utterly tragic for these families which are faced with a very limited future.

I say to my hon. colleague that, true, jobs have been created, but tens and hundreds of thousands of others have been lost. The jobs that are created are precarious, temporary and poorly paid. These days, business executives specialize in laying off their employees. The more they lay off, the more efficient they are.

In the federal Department of Citizenship and Immigration, immigrants complain that they can no longer meet a public servant or talk with one on the telelphone, that their calls are always answered by machines. They do not get answers to their problems.

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I would like to ask my colleague what concrete job creation initiatives are found in this budget, apart from the creation of a few summer jobs for students?

[English]

Mr. Pagtakhan: Mr. Speaker, it is indeed sad that downsizing has to happen but it is an essential component of good governance.

It is indeed sad that some jobs have been lost, but at the same time we have the new economy. Therefore we have to adjust our country and our citizenry to that new economy. We must realize that when we have created over half a million jobs, and I hope the member would agree with me, that some who have been laid off in their previous jobs would have found new jobs among the new jobs created. This is the reality of our times.

In terms of specific projects, the summer student program is there for our youth and I would not like to belittle that, as the member may suggest, as only because the unemployment rate among our youth is among the highest compared to any other age groups. We have to focus on our youth.

It does not mean we have not focused as well on job creation for those beyond the youth age. Jobs have been created for them. We have the Team Canada spirit where the government in partnership with the private sector would create jobs. When we work co-operatively and in collaboration with each other we will create more jobs.

As I indicated during debate, of course the government is not happy that we have created only this much. We will continue to do more, but if we can work together we will achieve that goal.

Mr. Jim Abbott (Kootenay East, Ref.): Mr. Speaker, I will be sharing my time with the member for Okanagan Centre.

It seems that when people put together a budget, and certainly it should be no different for a government, a budget should be reflective of a plan. As we take a look at the affairs of the government day after day we see they are disorganized, in disarray. Most of all we have a strong sense of disappointment that the Liberals are effectively betraying the trust given to them by Canadians in the 1993 election.

None is anymore true than in the case of the heritage minister. The heritage minister has been going around Canada making verbal droppings of different ideas that she has. She has no organization, no plan and no idea of what will be happening next. Let me give some examples.

Before she came on board, this has been a problem within the department of heritage right from the word go. Probably the most classic example would be the so-called Juneau commission that was examining the affairs of the CBC, Telefilm Canada and the National Film Board.

It started off in May of last year with the idea of having its report complete by September. It did not complete the report by September. It said it would be completing it by November. We were rather curious to see how many dollars it had already consumed to the end of its original report period. It had consumed over $900,000 in that period of time.

The committee went past its November deadline and said it would deliver its report in January. Again we went to access to information and we discovered that the $900,000 had ballooned to $1.6 million. Within that $1.6 million was an entry for $60,000 for the three commissioners. I think it was instructive that in the original set of numbers of $900,000 there was no money for the commissioners, no money at least reported at that point, and suddenly out of the $1.6 million there is $60,000.

Then the committee came forward with its report in January, and what a report it was. It was absolutely brilliant, saying that Canadian who chose not to watch the CBC and who get cable would really enjoy paying an extra cable fee, an extra cable tax to cover the costs of the CBC which they did not want to watch in the first place. Or if they did not want to get cable, maybe it would be a good idea if we were to charge them some kind of a levy or tax on their video rentals. Apart from the fact that it really did not accomplish anything we know the report is going to end up on the shelf and nothing is ever going to happen to it, and what did we pay? We paid $2.75 million for that report.

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What was particularly instructive was how the heritage minister's friends made out, the cultural elite who were doing the report. In the first instance in September there was no mention of any fee for the commissioners. In November there was mention of $60,000. In January when this wonderful tome finally came forward, it cost the Canadian taxpayers $300,000 for the part time work of these commissioners.

We dug a little further and of course we were making noises about the fact that it did not seem right that these people should be getting $100,000 for about seven or eight months of part time work. One of the commissioners suddenly piped up and said: ``Oh, I did not take anything'', which makes it even worse. Now there are two commissioners digging into the pockets of Canadian taxpayers for $150,000 each for seven months work. Not bad work if one can get it I guess. That is typical of this government. It takes care of its friends and keeps on going through these reports but it does not have any plan.

When the heritage minister took over the portfolio what happened with respect to Radio Canada International? Radio Canada International performs a valuable function for Canada. It has approximately 125 employees and its budget is approximately $16 million. It is of interest to note that in order to get the short wave

out, almost $1 million of the $16 million is consumed in hydro power alone. It is really quite an enterprise. However, it has 125 loyal employees who were told in November last year that their services would no longer be required as of April 1.

The heritage minister loves to do these little droppings all over the place. She said that we were going to save Radio Canada International, which was good news. Except she got her portfolio in the latter part of January and then she had to figure out where the money was going to come from.

She went to the CBC. We are going to be talking about the CBC in just a second. She ended up taking $8 million from the CBC. Then she scavenged around with a tin cup and came up with another $8 million for a total of the $16 million.

There is no plan. Radio Canada International is still in the state it was previously. Radio Canada International has a reprieve of one more year with absolutely no idea of how it is going to be kept on the air or how it is going to keep this valuable service going.

It has been my position as Reform Party heritage critic that we have to look at privatizing and look at other ways of funding valuable functions like Radio Canada International other than from the pockets of taxpayers, other than going into debt. However there is no plan.

I should note that members of the staff and management of Radio Canada International are to be highly commended for staying on the job doing their work and keeping the faith while the minister kept them waiting for a full five and a half months from the time they were told they were no longer needed. Only two weeks before they did not know where their next mortgage payment would come from, she said she had scrounged around and had come up with some dollars.

What about the CBC? The minister is particularly noted for what I call her Canadiana. She loves to say that she is going to give us a much more wonderful Canada. I must admit that along with a lot of Canadians I am becoming increasingly sceptical of whether the government will be able to do what it says it will be able to do. What the government says and what it does very frequently do not match up.

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An example is the Canadian Broadcasting Corporation which the Reform Party has said should be privatized. The Liberals have said out of one side of their mouth they are going to keep the CBC as a public broadcaster funded with public funds, but they have already cut $227 million. They now have to find $150 million more by 1998. It is no wonder that without any kind of direction or a mandate the unions today are in a position of being able to take a strike vote the week of April 22, next week.

A report from Canadian Press today states that if no deal is reached between the CBC's three unions and management a strike or lockout involving 7,000 employees could happen as early as May. They are presently fighting over the issue, as it were, of contracting out, in other words, how much information or programming will be done in house by these unions for the CBC.

This question cannot be resolved because of the lack of direction of the heritage minister and the lack of direction of the government. This is the reason I and many Canadians are so sceptical that the government will be able to do what it says it is going to do.

Last Friday the minister announced a $10 million program. I should explain that this comes out of a $120 million slush fund set up by the finance minister. This $10 million program is called Young Canada Works. It theoretically is going to put 1,900 people in the age bracket of 16 to 30 to work. It is going to involve high school and college students. Of those 1,900 it would be fair to speculate that this summer about one million people are going to be looking for work. That means one person in five hundred is going to be able to take advantage of the program, but how much of a program is it?

Let us make it clear. The Canadian Museums Association in a news release it also put out over the weekend expressed some happiness that this was in place. However, the association should know that the Deputy Prime Minister, Canada's heritage minister, has no idea where the funds are coming from for any of its projects either. What she has basically done is she has slipped her hand into this $120 million slush fund and has come out with $10 million.

This is going to be shared with other institutions. It is going to be shared with Young Canada Works in both official languages, Young Canada Works in national parks and historic sites, Young Canada Works for urban and aboriginal youth, and Young Canada Works in heritage institutions.

The point of my submission is that this government has no plan. The minister is out of control. She has no idea of what she is doing. This budget and the way the minister is administering her heritage department is disgraceful.

Mr. Jesse Flis (Parkdale-High Park, Lib.): Mr. Speaker, the hon. member for Kootenay East began his debate by stating that the government has absolutely no plan and that the budget should be reflective of the government's plan.

I refer him to the throne speech we began this session with. The throne speech did refer to our commitment to jobs and growth, youth, science, technology and trade. The throne speech referred to security for Canadians. A secure social safety net is very important for the people of Canada. The throne speech referred to a modern and united country. Federalism is constantly evolving. There were

promises made in the throne speech about a first ministers meeting which will be coming up probably in June of this year.

I now refer the member to the budget. The purpose of the budget is to spell out the government's plan in detail and the implementation of the government's plan. Beginning with our platform in 1993 we fulfilled certain commitments halfway through our mandate. Now we are showing Canadians how we are going to meet the rest of our commitments in the latter half of our mandate.

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I would like the hon. member to read the throne speech and the budget speech again. I think he will be assured and he can assure his constituents that this government has a very clear plan for the future growth of this country.

Mr. Abbott: Mr. Speaker, the member unwittingly makes my point. My point is that there is no connection between what is contained in the throne speech and the budget and the activities of the minister. For example on the issue of the fly flag program of the Minister of Canadian Heritage, the Reform Party would say ``buy flag, fly flag''. In other words, let us have some responsibility. Let us spend $2 on a little flag and let us fly the flag. Let us spend $30 on a larger flag let us fly the flag. Let us take some responsibility for that.

The minister wants to go back to 1967 and as a consequence she has come forward with a plan. Her fly flag program was running before the civil servants in her ministry had any idea where the flags were going to come from. Calls were coming in and they had absolutely no idea what they were doing or how they were going to do it. Is it going to cost $2 million, $4 million, $6 million? I do not know and neither do her officials. She came up with $150,000 out of thin air for a lacrosse project. It goes on and on and is absolutely astounding.

The Liberal member has underscored my point. Yes we have a throne speech and yes we have a budget, both which have nothing whatsoever to do with what the minister is doing on a day to day basis.

Mr. Ronald J. Duhamel (St. Boniface, Lib.): Mr. Speaker, I am surprised my colleague has attacked the Deputy Prime Minister and minister of heritage, with her knowledge and vision of Canada, her commitment to this nation, her boundless energy, her tremendous creativity. I applaud her flag program. I cannot see the value in attacking it.

I am also disappointed the member would say the minister does not have a plan. The minister does have a plan. Either the hon. member does not understand the plan or he is simply quibbling about the fact it is not his plan and therefore he is unhappy.

I would ask my colleague to tell us what his plans are. He suggests he knows what he would do. Let us hear it.

Mr. Abbott: Mr. Speaker, it is rather silly to say let us hear the Reform Party plan. In 30 seconds we are supposed to have a plan.

Every time we end up talking about the heritage minister and the fact that she does run willy-nilly on these things, suddenly I am attacking her commitment to Canada. I would suggest that kind of rhetoric is really unfortunate. To question the commitment to Canada of anyone in this House, save 53 members, is beyond the pale.

We should be able to point out that the minister does run around indiscriminately making all sorts of announcements which her officials then have to run around picking up after her, without my being questioned as to whether I question her credibility to Canadians. Of course she is proud to be Canadian and is committed to Canada, as are the majority of people in this House and I.

The minister is lacking in credibility on the promises she made on the issue of the GST. She is also lacking in credibility by continuing to come forward saying let us do this with the collection fee for the CBC, or let us do that with respect to the CRTC. There is no plan which is exactly the point.

The Department of Canadian Heritage has the ability to be a tremendous fixer of Canada, a cement builder for Canada. It can glue things and permanently pull things together in Canada. As long as this minister continues to fly off in all directions at once we will never see the full value of the Department of Canadian Heritage, and this is a shame.

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Mr. Werner Schmidt (Okanagan Centre, Ref.): Mr. Speaker, I draw the attention of the House on this debate to perhaps a little different approach. I focus it in the words of a professor at a university who was referring to Aristotle, the great teacher and great philosopher about democracy and how it should operate. He said people in government exercise a teaching function. Among other things we, the people, see what they, the government officials, do and think that this is how we should act.

Whether we like it or not the position of legislators in this and many other countries and how they act is somehow interpreted by the people that they should act that way as well.

If we examine this budget from that context and look at the message it sends to the people, in particular to young people, I suggest that there is very little to be proud of. Let us take a few moments to reflect on some of the messages the budget sends.

The first message is if you cannot afford it, borrow it. The second is if you do not want to pay for it, borrow it and tax future generations and/or spread the burden on to others in society. How have Canadians responded to these messages not only in this budget but in previous budgets? This is not a new trend in Canada.

For example, if you cannot afford it, borrow. Personal debt in Canada, including credit card debt, is at an all time high. There is some indication that less than 10 per cent of the disposable income of Canadians is discretionary. In other words, they do not have much flexibility to spend that little bit of income they have left over after they are taxed. Is it any wonder our retailers are crying that people are not buying? Our economy is dying because they cannot buy. How can they? They have borrowed to the maximum. Almost all of their discretionary income is going to paying those debts so they do not have money to spend.

Then the retailers and the other business people ask how can they get them to buy more. They have various schemes like do not pay until next year, do not pay until two years from now, and most recently, do not pay anything until three years from now. That is dangerous.

The second message was if you do not want to pay for it, borrow it and tax future generations and/or spread the burden on others in society. There is a very strong situation today, and some legislation has been introduced in the House, that students do not repay their loans. Is that good? No, it is not. Can we blame them when they look at their government and say the government is not living up to its promises? It borrows to pay the interest on the debt that is outstanding. The students see this and say there is a double standard. The government says to the student ``you pay'' but when it comes to its own debt it just keeps on borrowing more.

Abuses to the UI system are examples of how we distribute it around to other members of society. Quit a job that one has to work at for 365 days and get a job where one can be employed for 12 weeks and then collect pogey for the other 40 weeks of the year. Who pays for that? Not the individual who incurred it; it is someone else.

The example Canadians see that is set by the federal government in this and previous budgets is one which no one should follow if they want to be in control of their own financial future. The budget is the major policy document of a government and as such ought to be the best example of how Canadians should operate. It does exactly the opposite.

There is another part to this. The budget as it was proposed to us says it is not necessary to tell the whole truth; just tell the people what they want to hear. The deficit is going down which means we are getting closer to balancing the budget. That is good, is it not? So far, so good.

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However, do not tell them the debt is actually increasing. Do not tell them the interest is actually increasing. Do not tell them it will continue into the future because there is no plan to eliminate the deficit. Nor is there a target date as to when the budget will be balanced. Do not tell them there will be less disposable income as a result of this budget because taxes will have to increase to pay for it all.

Do not admit that in the election campaign the government promised to kill, slash, eliminate the GST. Instead, quote page 22 of the red book which does not promise to eliminate the GST but to harmonize it.

Do not admit the verbal promises of the Prime Minister and the Deputy Prime Minister went well beyond the provisions of the red book. Instead, when called to account, they declare: ``I am not responsible for what I said. I am only responsible for what is said in the red book''. That is quite an example, is it not? It is the wrong example for our young people.

Do not tell them there will be a direct and negative impact on social programs, particularly medicare, education and seniors' pensions. In other words, there will be less money available for these programs.

At the same time, we have the government telling us it is really serious about looking after seniors, making sure their pension benefits will continue, that they will be at least as well off as they are today. How can it be serious about a statement like that when the message the budget sends is different?

At the heart of this comes another issue, freedom or liberty. Probably the most serious implication of this and previous budgets is that this important policy document, especially in our senior government, is the absence of wisdom and responsibility in that budget.

It is not wise to spend more money on government programs than the government collects in revenue. It is not responsible to incur debt in one generation which a future generation will have to service and ultimately repay.

How different the attitude that was just published about Albertans. They were asked in a recent poll what the government should do with the surplus. They said to the government pay down the debt, do not reduce taxes. That is wisdom. They understand that as the debt is paid down, the interest to service that debt comes down. That means even if the taxes are kept at the same level, they will buy more. That is wisdom. That is also responsible.

From that perspective, the Alberta position is the correct position. The position of the federal government says keep on borrowing. It is dishonourable and it is an example that we as Canadians should not follow in our own lives.

The burgeoning debt is the problem. It is the issue. It stands at $581 billion today. We have an interest bill of $47 billion. In the four years, as indicated in the 1996 budget, this contemporary federal government has added over $100 billion to the federal debt.

Why is that important? As has been already indicated, it increases the service costs, particularly the interest payments. Any dollar that is added to the debt will change the amount of interest paid.

Each point of interest has an impact as well. Supposing the interest rates should rise, and it looks like they will, each point rise in the interest rate itself adds $1 billion immediately to the total interest bill.

How much is $1 billion? There is a very interesting bit of arithmetic that somebody did not too long ago. I wish I had the time to figure these things out. Somebody sat down and figured it out. If one counted a number at the rate of one per second consistently, each second there would be a complete number. It would take just short of 32 years to get to $1 billion. That is how much would be added to the interest if the interest rate rises 1 per cent.

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Each time that happens it increases the amount of money that future generations will be expected to repay. At present levels of roughly 30 million people in Canada and a federal debt of about $600 billion, that is $20,000 per person. Any child born today comes into the world with a $20,000 debt they will be responsible for in order for us to liquidate that date.

That is what we are doing but is that what Canadians wanted? I do not think so. The number one requirement, which the government hit right on the head when it went into the election, is to create jobs, jobs, jobs. That is exactly what we wanted.

We had over this last week a very interesting development on Friday afternoon and it raises some very interesting questions. For example, airlines in Canada must be 75 per cent owned by Canadians in order to fly but bus lines transporting people on the highways do not have that restriction. What kind of sense does this make? Is this a matter of Canadian culture and Canadian identity or is it about competition and preferential treatment of some over others?

What is it we want to preserve? A viable economy? A Canadian culture? Preservation of our social programs? I say it is all three. We want all of these. Our job should be to establish and maintain a culture which rewards entrepreneurship, innovation and research and ensures a level, competitive and honest workplace and marketplace.

Governments lead by example. I implore the Prime Minister that the government change the example so we can follow it because it reflects wisdom and responsibility, not this last budget which reflects the exact opposite of wisdom and responsibilities; it is neither wise nor responsible.

Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, following on the point of not being wise or responsible, that is a fairly substantial indictment.

Earlier I spoke about being part of the solution rather than part of the problem. When the government took over after the last election, the financial year ended in March 1994 and the government had a deficit of 6 per cent of GDP.

The finance minister in his first budget brought in the concept of two year rolling targets. We have achieved 5 per cent in the first full year of deficit to GDP; 4 per cent in the second; 3 per cent will be the percentage at the end of March 1997; and a commitment by the government, by the finance minister, to further reduce that to 2 per cent deficit to GDP.

We are getting very close to delivering to the people of Canada a balanced budget. We have hit the targets. We have set them. They have been realistic and balanced in a way which will not impact negatively on seniors, on our health care system which keeps the country together, on young people, on jobs and on economic growth that we have been experiencing.

The indictment this member makes tells me he is spending more time lamenting the past rather than looking forward to the future.

Mr. Schmidt: Mr. Speaker, I find it rather interesting that the member opposite would suggest that the meeting of the target of 2 per cent of GDP is a desirable goal for the deficit.

I wonder if the member recognizes that doing that means a perpetuation of a deficit on a continuing basis. If the gross domestic product should rise, which I hope it will and it looks like it will, it will automatically allow the government flexibility to increase that deficit which means the end result is not a decrease in the government debt but an increase in the government debt.

The very point the hon. member is making is the exact opposite of what he is trying to prove. It it true that there is less of a deficit today than there was last year, and that is commendable, but the point is that even $1 of deficit is too much because it increases the debt. When will the government recognize that to be wise and to be responsible means to tell the truth, the whole truth, not part of it? Tell the people the implications of this debt. Tell them the implications of the interest rates and how it will increase the debt. That is the whole story.

(1300)

Am I supposed to suggest that everything about this budget is bad? I did not say that. I said tell the truth, tell it the way it really is rather than telling part of the story. That is the issue.

The member makes a big point about being on track and having reached the targets, et cetera. There was a target. It was to eliminate the GST. I ask him, where is the elimination of the GST? That was the promise. That was the promise they campaigned on. Where is it?

Mr. Jesse Flis (Parkdale-High Park, Lib.): Mr. Speaker, I cannot let the hon. member's incorrect statements go unchallenged.

I refer him to the budget speech. He complains about what was and was not said to the public. The Minister of Finance said: ``The new funds that government must borrow from financial markets each year will be cut to $6 billion, 0.7 per cent of GDP in 1997, the lowest among all G-7 central governments''. The minister went on to say: ``The debt to GDP ratio, the size of the debt in relation to Canada's economy, will finally begin to decline in 1997-98. The economy will grow faster than the debt''. There are the statements in black and white made publicly in the House of Commons.

How can the Reform members, speaker after speaker, say that we are not open and honest with the public?

Mr. Schmidt: Mr. Speaker, my point has been proven again. I quite agree the government is going in the right direction. But it does not matter how long we proceed or how much slower we proceed to the edge of the waterfall, the waterfall is coming. If we slow down the canoe by paddling backwards slower or faster so that progress toward the edge of the precipice decreases, we are still going to come to the edge of the precipice sooner or later.

With all due respect to those statements, the fact still remains that the debt is increasing and our interest costs are increasing. Unless we change that direction we will not get our debt under control.

Hon. Anne McLellan (Minister of Natural Resources, Lib.): Mr. Speaker, it is my pleasure to speak in support of the 1996 budget brought down in the House on March 6, 1996 by my hon. colleague, the Minister of Finance.

Let me say at the outset that I believe this is a good budget for all Canadians. It has particular relevance to many aspects of my portfolio as Minister of Natural Resources.

[Translation]

The difficult decisions we took and the measures that we announced create an environment conducive to economic growth and job creation.

[English]

The variety of measures announced by the hon. Minister of Finance affecting the natural resources sector result from a series of intensive consultations with the provinces, with industry and with stakeholders in Canada's natural resources sector. We listened to the views of Canadians and we delivered.

The announcements by the Minister of Finance solidify my department's progress to focus on sustainable development and jobs and growth in the energy, mining, forestry and earth sciences sectors. This progress is critical because these sectors make a substantial contribution to Canada's overall economic growth, to job creation and to the trade surplus.

In addition, the work of my department reflects the federal government's core responsibilities in those areas where national effort and co-ordination are necessary.

[Translation]

First, I would like to talk about the budget announcements regarding renewable energy and energy efficiency. Canadians who work in the renewable energy sector have a vision of the future. They work hard to ensure that Canada is at the leading edge of developments in this important sector.

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[English]

In the spirit that environmental health and economic development should complement each other, the federal government's green power procurement policy and the tax changes in the 1996 budget emphasized the commitment we made in the red book to renewable energy and energy efficiency industries.

The income tax changes will provide a level playing field for certain renewable and non-renewable energy investments. The creation of the Canadian renewable and conservation expenses, or CRCE, will provide renewable energy investments with similar treatment to that afforded to non-renewables.

This will attract new investment to the Canadian renewable energy industry. Officials in my department will join their colleagues at Finance Canada to begin consultations with stakeholders to determine the types of expenses that will be included under this expenditure category. I expect this work to be completed this fall.

I should point out that I have been gratified to receive many letters from individuals and associations in the renewable energy sector who expressed their thanks to the Government of Canada for these progressive announcements in the 1996 budget. These announcements respond to the needs of the Canadian renewable energy industry. We listened and we delivered.

For this reason, I am working with my colleague, the hon. Minister of Finance, on a process for consultations on proposals for tax measures to promote energy efficiency investments. I expect to join my hon. colleague in making an announcement on the timetable for consultations very shortly. The objective for this process will be to recommend measures for implementation in the 1997 budget.

In the meantime, I am committed to ensuring we play a role in further progress by Canada's renewable energy sectors. For

example, in the very near future I expect to release a renewable energy strategy. This strategy will continue to emphasize the importance of R and D and stronger market development activities.

Success by Canada's renewable energy sector, both at home and abroad, will contribute to economic growth and jobs. In addition, the renewable energy sector offers significant potential to help Canada move toward its international climate change commitment to stabilize greenhouse gas emissions at 1990 levels by the year 2000.

Let me now move to more traditional energy forms. In this regard I would like to speak about Alberta's oil sands. Let me remind members of the House that the oil sands deposits in Alberta are estimated to contain more recoverable oil than all the reserves of Saudi Arabia, more than 300 million barrels. The national oil sands task force has estimated that in the next 25 years new investments totalling approximately $25 billion will help create approximately 44,000 permanent new jobs in the oil sands industry.

The federal government recognizes the potential of the oil sands industry to spur economic growth and create jobs. However, to realize the potential of this enormous resource, the oil sands industry requires increased investment.

To send positive signals to the investment community, the 1996 federal budget provides a generic tax treatment for all oil sands projects. In short, the tax treatment previously accorded to oil sands projects using mining methods has been extended to cover all oil sands projects. Tax incentives that were available for new projects and major expansions will now include investments in environmental efficiency improvements.

The Government of Canada has made these changes for three reasons. They will promote economic growth Canada-wide. They will increase domestic oil supply and they will stimulate job creation.

The fiscal changes made in the 1996 budget, along with recent changes to Alberta's royalty framework, will establish a clear, consistent and attractive regime for oil sands investors. These changes will encourage them to invest in Canada rather than competing projects in other countries.

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The importance of this attractive framework for the economy of Alberta can hardly be overstated. There is no other industrial or resource opportunity that compares in size to the oil sands. Oil sands development offers the promise of major growth in investment and income well into the next century.

I should point out these benefits will not be restricted to Alberta. Studies conducted under contract to Industry Canada demonstrate the procurement benefits from oil sands development will flow to more than 50 different industrial groups. Simply put, jobs will be created across the country.

Moreover, the changes in the 1996 federal budget affecting the oil sands industry reflect many of the recommendations by the national task force on oil sands strategies. Again, we listened and we delivered.

Let us move to other changes announced by the Minister of Finance that provide benefits for Canadian mining and oil and gas industries. In mining, investment in Canadian mineral exploration has been rising. In fact, 1996 will be a banner year for mineral exploration. The Government of Canada shares the excitement in this increased exploration activity. We are working hard to ensure a bright future for mining by living up to the commitments made in the Liberal mining policy.

[Translation]

The mining industry, including the Prospectors and Developers Association of Canada and the Association des prospecteurs du Québec, were asking for changes to the flow-through share system.

[English]

They requested that eligibility rules for these shares be tightened to ensure that the benefits are delivered only where they are most needed to support new grassroots exploration activity. The 1996 budget delivered.

In addition, the Minister of Finance announced an extension of the 60-day rule for flow-through shares to one year. As a consequence, mineral and metal and oil and gas exploration activities will be more efficient. The risk to investors will be reduced and greater efficiencies will likely lead to more discoveries. These new mineral discoveries will provide new opportunities for economic growth and jobs in Canada and increase the benefits of jobs and growth in existing mining communities in both rural and urban Canada.

I would like to move to other budget announcements, in particular those concerning Atomic Energy of Canada Limited, or AECL. AECL's budget will be reduced from $174 million in 1996-97 to $100 million in 1998-99. AECL will focus on maintaining a viable and competitive Candu business at a reduced cost to the federal government. AECL will capitalize on its business potential and will continue to make a significant contribution to Canada's economic growth and the creation of high skilled jobs in an area of advanced technology.

Nearly 20 per cent of Canada's electricity is produced by Candu reactors and the foreign sales of Candu technology bring important economic benefits home to Canada. For example, the projects to build three Candu reactors in South Korea are bringing more than $1 billion in contracts to Canadian companies.

The magnitude of the budget cuts required difficult trade-offs. One of these trade-offs was funding for basic science activities that are not directly linked to the Candu program. However, the

Government of Canada is committed to seeking alternative sources of funding and other institutional arrangements for some of the key basic science activities that AECL has conducted until now.

[Translation]

Let me tell you that the decision of the federal government to withdraw from the financing of R and D programs concerning fusion in Ontario and Quebec was a very difficult one to make but that fusion is not presently a priority of the federal government. Actually, we believe it will take some 30 years before fusion technology can be marketed. The Government of Canada must clearly focus its resources on short term priorities.

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Moreover we believe that Ontario Hydro and Hydro-Quebec can financially support R and D fusion projects on sites where this sector is a priority.

[English]

The federal government is determined to deliver good government at a lower cost to the taxpayers of Canada. My department continues to play a leading role in this effort among all federal departments and agencies. Let me make a few comments about the budget's announcements with respect to the operations of my department. All members of this House will recall that the results of the first phase of the federal program review dramatically reduced the size and the budget of Natural Resources Canada and many other departments.

The results of the second phase of program review have identified further reductions in my department's budget of $14.6 million or 3.3 per cent in fiscal year 1998-99. Both programs and staff levels will be affected. While detailed decisions will be taken during the next 18 months, present estimates suggest a reduction of between 75 to 100 positions in 1998-99. These further reductions together with cuts announced last year will result in a reduction of roughly 60 per cent of the resources in my department.

These reductions will be reflected in a more focused role for NRCan in the natural resources sector, a role that emphasizes science and technology, the regulatory and policy regime, international trade and market access and knowledge of Canada's land mass.

Program review is a continuing commitment to get government right. We will continue to examine what we do and how we do it. The objective is to keep looking for a more efficient and effective contribution to a stronger federation. This is critical to meeting the future challenges that face Canada, challenges that include maintaining the federal contribution to jobs, growth and sustainable development in the energy, forestry, mining and earth sciences industries. NRCan is achieving what we promised in the speech from the throne. We are withdrawing from areas where others can function more appropriately.

As a result the work of my department reflects the federal government's core responsibilities in the areas of international trade and investment, science and technology, aboriginal matters, federal crown lands, national statistics and environmental issues. These are areas where national effort and co-ordination are necessary.

In addition, my department is already engaged in many partnerships with stakeholders in the natural resources sector, including the provinces and the private sector, to explore further changes in the way it fulfils its federal responsibilities. In fact, I believe my department is setting an example for other federal departments and agencies. NRCan's approach to partnerships is an excellent model for efficient and effective federal activities that reflect the objectives set out in the speech from the throne.

In conclusion, this is a good budget for all Canadians and it is particularly a good budget for the natural resource sectors. The announcements by the hon. Minister of Finance concerning our resource sectors result from serious, meaningful and productive consultations with all stakeholders.

The income tax changes will have positive benefits for these sectors throughout Canada. These changes will increase prospects for investment, stimulate economic growth and create jobs for Canadians. In addition they will stimulate investment in key areas that are critical to Canada's progress toward sustainable development. The reason for this is simple. The Government of Canada listened and the Government of Canada delivered. We will continue to listen to all Canadians and we will continue to deliver.

Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, I listened with interest to the minister's comments about Canada and about Alberta in particular.

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In Alberta there is a great deal of pride developing. We have our deficit at zero. We now have a surplus budget. We now have a plan to take care of our debt. That is very positive particularly in the resource industry. We have a very positive feeling that things are moving forward. When is the minister's government going to develop that same plan at least to get the deficit under control and then show that vision that something further is going to happen?

On a second issue, the many businesses in my province of Alberta and her province of Alberta are very concerned that those provinces which have socialized their utilities are still going to receive the advantages of the federal government's tax deduction. Those provinces that have privatized and have a free enterprise efficient utility industry are now not going to get that refund. The effect of that on all business, in turning one province against the other and not creating a level playing field is of great concern to

many of my constituents and I am sure to many of hers and many others in provinces like Alberta. I would like her to commenton that.

Ms. McLellan: Mr. Speaker, I thank the hon. member for his many questions. Let me see if I can remember them all as I work through them.

First of all the hon. member talks about a plan in relation to deficit and debt reduction. It is very plain that if the hon. member reads the three budgets that my colleague, the hon. Minister of Finance has brought down over these past three years he will see a plan. I would suggest probably for the first time in many years one sees a plan, a clear blueprint, in relation to how we will deal with the deficit and the debt in this country.

I think the success of that plan, the acknowledgement of that plan, is clear in the reaction not only of financial markets here at home but financial markets around the world. If my hon. colleague needs reassurance he can find it in the three budgets that my colleague, the Minister of Finance, has delivered.

In relation to the specific question the hon. member raises regarding PUITTA, the public utilities tax, this was a rebate provided initially by both the province of Alberta and the Government of Canada. The Government of Alberta chose to repeal the rebate to Albertans in 1990. I can direct the hon. member to the exact page in the Alberta legislature's Hansard if he would like. Alberta did so specifically because of its deficit and debt situation. As I understand it the Government of Alberta in fact has saved itself $90 million a year by repealing its rebate.

The federal government chose to do the same thing in the 1995 budget delivered by the Minister of Finance. However because the federal government is acutely aware of the importance of level playing field issues, the Minister of Finance has created a task force involving ADMs of taxation across this country. This task force is looking at the whole question of tax treatment of private and public corporations.

As the hon. member is undoubtedly aware, this difference in tax treatment arises because of section 125 of the Constitution Act, 1867. This provides the Minister of Finance with some significant limitations in terms of how we deal with issues of level playing field.

However, the Minister of Finance has chosen to create this task force on which might I add there are not only federal and provincial finance officials but also representatives from industry, which I believe include TransAlta Utilities Corporation, Ontario Hydro and Nova Scotia Power. We are looking at this difficult question of the level playing field and how one creates it in the context of public and private corporate entities. We look forward to the report of that task force in the months ahead.

(1325)

[Translation]

The Acting Speaker (Mr. Kilger): Resuming debate. The hon. member for Témiscamingue. Would the member inform the Chair if he will be sharing his time?

Mr. Pierre Brien (Témiscamingue, BQ): Mr. Speaker, I will share my time with the hon. member for Drummond, who will speak during the second half of the period. Afterwards, there will be a 5 minute questions and comments period.

It is my turn to have my say on the last federal budget that was brought down on March 6. During the next 10 minutes, I would like to address certain elements of the budget pertaining essentially to the new Canada social transfer.

We knew since last year that the federal government planned to merge its old cash transfers to provinces into a single new program, the Canada social transfer. This program is a combination of established program financing and the Canada assistance program.

What the government has done is reorganize various transfer programs, establishing a single program and reducing the global envelope. The amount of funds that will be devoted to the Canada social transfer will be $11 billion. By creating this new package, the government is trying to delude us into believing that, in the field of transfer payments, it did not make real cuts. And to come to this twisted conclusion, it ads up the tax points which were given in the past, and it ads up the equalization payments if that can be helpful in certain cases. In short, the government is twisting the facts.

Let us simply look at the figures, the real ones. When it came to power, this government devoted $17 billion to the old programs, the cost shared program for post-secondary education, the Canada assistance plan and the cost shared health program. The government provided $17 billion; this year, it will provide only $11 billion. At one point it was even almost $18 billion. So, it reduced that amount by 6 or 7 billion. It is simple: 17 minus 11 gives 6. It cannot have us believe that it is giving us more money than before. No matter what numbers you add, no matter how you present it, reality speaks for itself.

At the same time, the government is maintaining the same standards. A few minutes ago, an hon. member on the other side said: ``We guarantee social security because we are still maintain a presence in the health field to ensure a universal system for all Canadians''. What the Liberals do not say is that they ask the provinces to find new ways to give the same services with less money but by applying the same standards. The government

announced its cuts one or two years ago but, in practice, the provinces are the ones that have to live with them.

We see Quebec and Ontario trying to cope with those cuts that were imposed on them. In fact, I am not sure that Canadians are convinced that the federal government is there to ensure an absolute social safety net, as the members opposite claim. The federal government wants to take credit for the good things and pass the bad things on to the provinces. Often in politics, someone will reap the benefits from a situation and have others pay for it. That is the strategy behind the Canada social transfer.

I think that we must be honest with the public and say that the $6 billion in cuts made by the federal government in transfers to the provinces is in money that went to social assistance, health care and education. These are three areas from which the federal government has withdrawn, asking the provinces to make the more surgical cuts.

I now want to deal with the area of post-secondary education. In the case of Quebec, there have been cuts totalling nearly $300 million. The federal government is telling students that it is the institutions and the provincial government which are raising tuition fees, that it has nothing to do with it. Of course, what choice do they have when they end up with $250 to $300 million less? They either have to make substantial cuts in the system or increase tuition fees. For the moment, the Government of Quebec has chosen to try to absorb the cuts without raising tuition fees. But other provinces have had to do it, and Quebec will have to consider doing it also, if the federal government continues to follow this path.

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Students are told that there are no cuts, but there is a $250 to $300 million shortfall that, sooner or later, will inevitably result in increased tuition fees or reduced services. At the same time, the government proposes a student summer employment program. Many of us know about that kind of program. When we were students, we all have looked for summer jobs to help pay for our education and to try to gain practical experience in a field related to our field of study.

In its first year in office, the government maintained the funds allocated in this area. Last year, it reduced these funds by about 40 per cent. This year, it is practically doubling these funds to make the annual cuts of $300 million in the case of Quebec less difficult to swallow. The government will pour $60 million more into the summer student employment program for one year only, so it can say: ``Look what we are doing for you''. It is getting as many political points as it can from these $60 million.

We will see what kind of program the federal government will announce to get more visibility, while cuts are being made in a more indirect way so that somebody else has to deal with them and pay the political price for them.

Figure it out yourself. Take $300 million a year and multiply that by five, ten or even fifteen years if you want, and compare that to $60 million for one year. Will there be more? We will see, but I would be surprised. The government has not said that this was a permanent increase in that program's budget.

So this is a way to make students swallow the bitter pill, to avoid creating too much dissatisfaction among a client group which seriously questions the existence of the federal government and which counts a high percentage of sovereignists in Quebec. The government avoids creating discontent as much as possible among students or tries to make sure they will not be able to clearly understand what is really going on.

I have discussed with some representatives and no one is being fooled. Student associations have a clear picture of what is going on. They too have problems understanding how they come out as winners in such a situation. This does not mean that we should make no financial effort in this sector. We still must have the honesty to recognize what is being done. A budget must not be nothing but words that conceal reality.

In the last two or three minutes I have left, I would like to talk about subsidies to dairy producers. The two regional county municipalities located at the southern and northern ends of my riding, Témiscamingue and Abitibi-Ouest, have numerous dairy producers. The last budget announced a phasing out of subsidies to dairy producers.

This will create a new reality: there will either be a rise in the price of milk or a major income crisis for dairy producers. The federal government would like us to believe that it took this decision in consultation with producers. The government refers to industry and says it talked to industrial entrepreneurs but it never says it talked to producers. This is difficult to accept.

What people accept even less is that at the same time, the federal government has long had an agriculture policy that supported in a very substantial way the grain industry in the West. We had the Western Grain Transportation Act and the Crow rate, known by everyone in the agricultural sector. When the federal government decided to abolish that, generous compensation programs were set up.

For them, there was a transition period, but for Quebec producers, there has just been talk of looking into it, discussing it, but nothing has been done, nothing concrete announced, and no major developments are expected.

How can it be that, when abolition of the Western Grain Transportation Act was announced, compensation mechanisms were already in place? How is it that, when Quebec and eastern Canada are involved-for it is not just Quebec but also part of

Ontario-the thing is impossible, while, when the west was involved, it was an absolute priority?

In the federal government's eyes, right from the start, agriculture has essentially equalled western beef and grain. This is hard for taxpayers in Témiscamingue to swallow, when they are dairy producers or the neighbours of these producers.

This last budget contained something unacceptable to the people in the rural areas of Quebec, and Ontario, and the dairy producers of these areas. The industry is, as we well know, mainly concentrated in Quebec.

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I could have spoken about unemployment insurance as well, as many of my colleagues have done, about making use of a $5 billion surplus, year after year, instead of making less of a cut to the benefits paid to the unemployed or to the amounts workers and employers have to pay into the fund, thus injecting more money into the economy and trying to make use of it to revive employment,

Employment was a recurring theme during the campaign, but there is no sign of government action on it between campaigns. This creates a problem, and it is something I hear about constantly from the people in my riding. It worries them a great deal to see that employment is being taxed, because the surplus is being tapped year after year. That $5 billion represents a lot of money that could have been put to another use, instead of reducing the deficit with it.

These are the elements in the budget on which I wished to speak, the ones I see as the most negative. There are also a number of measures that are not bad, but I am sure that the hon. members across the way will enjoy listing them, so I decided to concentrate essentially on those three.

Mr. Jean-Paul Marchand (Québec-Est, BQ): Mr. Speaker, I am pleased to rise in this debate on the latest federal budget, which smells suspiciously like an election budget, because the measures it contains are not particularly heavy or harsh. We could even say the budget was a sort of pacifier for Canadians, except perhaps for the cuts to the dairy subsidies-a flagrant injustice to Quebecers and milk producers.

Apart from this injustice, the latest budget could be called an electoral budget to mollify Canadians, in preparation for elections this fall or next spring perhaps. The most difficult measures have already been put into effect, in the previous two budgets. When the Liberal government was elected three years ago, the government was widely known to have a big problem, that of the debt and the deficit. They have reached $550 billion and have even been predicted by department and government statistics to go over $600 billion by the year 2000.

It is a huge problem. It is Canada's major problem, which the Liberal government undertook to resolve. It is so serious that Canada has the highest debt in the world in terms of its gross domestic product apart from Italy. Canada has already been warned of the precariousness of its position by the International Monetary Fund. There are leaks everywhere. Technically, we could even say that Canada is bankrupt, so to speak.

This is all to say that the problem of the deficit and the debt is extremely complex, severe and serious. What have the Liberal members done since their election three years ago? Not much. They could have done a lot. They could, for example, have reduced the number of senior officials, because there are a lot of them and their salaries are very high and their expense accounts substantial. There is a lot of waste here.

(1340)

The government has decided to reduce the number of public servants by 45,000, mostly at the lower and middle levels. Normally, some 15,000 public servants retire every year. This certainly does not qualify as a major effort to reduce the size of the public service. The federal government could have cut its spending or at least contained its losses.

As a former member of the public works committee, I know that there are many loopholes for federal funds to slip through, contracts being one of them. Some $10 billion a year is spent on contracts. There is a great deal of abuse and waste in this area. So far, the government has not done much to close these loopholes.

Even the auditor general's numerous recommendations were not taken into consideration in the government's previous budget measures. Senate spending was not cut. Senators' pay could have been reduced to $1 a year rather than the thousands of dollars they receive for doing nothing. The Senate costs Canadians $50 million. This is a rather shameless waste of Canadian taxpayers' money.

The government could have made significant cuts to its defence spending. DND's budget exceeds $12 billion a year. The Somalia affair and other recent events clearly show that DND is not the most effective of federal government departments. Had the Liberal government been seriously committed to reducing the federal debt and deficit, it could certainly have cut the defence budget by several billions of dollars.

It could have tightened up tax measures for corporations. As we know, tax evasion in Canada represents between $3 billion and $4 billion. Corporations shelter their profits in countries like the Caribbean islands to avoid paying taxes. Canada's losses due to tax evasion are estimated at $3 billion to $4 billion. The federal government did not act in this area either.

Another option would have been for the government to crack down harder on the banks. Last year alone, banks made $5.2 billion in profits, record profits, but this government, the Liberal government, collected from the six chartered banks something like $100 million over two years, which represents less than one per cent of their net profits.

The government could also have imposed restrictions or made other changes to family trusts. Again, this is an especially interesting case, in that family trusts benefit the wealthy, Canadian families which are fabulously rich. The Minister of Finance himself is one of the fabulously rich Canadians who can invest their net profits in family trusts to avoid paying taxes for generations and generations. Because of such trusts Canada's wealthiest families avoid paying taxes altogether.

It is estimated that taxation is avoided on nearly $100 billion through family trusts. The federal government could have collected taxes on family trusts to help resolve its very serious debt and deficit problem.

(1345)

I have just listed nine measures this government could have taken to reduce its debt, but it did not see fit to act in those areas. Instead, the government decided to act in two well-known areas. It is worth repeating because it reflects the basic thinking of this Liberal government. It very clearly shows that, in Canada, the rich, the wealthy are spared while the most vulnerable are hard hit.

The only two measures taken by this government to reduce its deficit and its debt were to cut transfer payments to the provinces by a few billion dollars, some $7 billion, by the year 2000. As we know, these transfer cuts will affect education by reducing funds available for education purposes. This means that Canadian youth are directly affected. Health transfers are cut, which means that the sick will be affected.

The other measure soon to be announced concerns changes, cuts to old age pensions, which, as we already know, will affect mostly senior women. Cutting transfers to the provinces is a measure designed to leave the provinces holding the baby by giving the impression that they are the ones making cuts.

The measure to be taken in another area, namely unemployment insurance, is perhaps the most outrageous measure this government has ever taken. It is actually asking the unemployed to contribute to the debt reduction effort. Nothing less. Since 1990, the federal government has not contributed a single dollar to the UI fund. The money comes from the contributions of workers and employers. The federal government does not contribute one penny to the fund.

Last year, the federal government took out about $5 billion from the UI fund. It will do the same this year and next year. Over that three-year period, $15 billion will have been taken out of the UI fund and used to reduce the federal government's debt.

This is a disgrace because it is basically a misappropriation of funds. The money in the UI fund should be used to provide training programs for the jobless, but the government has other ideas. This Liberal government is dishonest to the point of reducing the amount that the unemployed can receive, setting tougher eligibility criteria so that fewer people will qualify for UI benefits and, in addition to that, misappropriating money from the UI fund and using it to reduce the debt.

This is a dishonest and unfair measure which is tantamount to a fraud. The government is defrauding those who contributed to the fund, namely workers and employers. It is purely and simply a fraud. That money was to be used for the benefit of the unemployed and to provide training for workers. Instead, this government is using it to reduce its debt.

(1350)

Of all the initiatives that it could have taken to reduce its debt and its deficit, the government opted for two measures which mainly seek to get money from the most vulnerable members of our society, namely the unemployed, the sick, young people and women, while protecting rich people, family trusts, banks and corporations.

In conclusion, this series of measures spread over a three-year period clearly show the spirit of that Liberal government, which seeks to spare the rich and to hit the most vulnerable ones in our society.

Mr. Ronald J. Duhamel (St. Boniface, Lib.): Mr. Speaker, first of all, I have a few comments to make. I wonder how my colleague would define the words ``dishonest'' and ``fraud''. What does he think they mean? Is he prepared to make these kinds of accusations outside the House of Commons?

I only have one question for him. What does he think his cousins now in power in Quebec, his former leader, will cut when the time comes for a budget in his province? Does he think that the organizations that he mentioned earlier this morning and that were supposedly treated so badly by the Canadian government will be cut, yes or no?

Mr. Marchand: Mr. Speaker, there is no question that the way the federal government used the unemployment insurance fund is tantamount to a fraud. It is a fraud to use this fund for purposes other than what it is usually used for. It is a misappropriation of public funds. The money employees and employers put in the unemployment insurance fund is supposed to be used for unemployment insurance purposes. It is not all that complicated. The unemployed are either compensated by directly receiving unemployment insurance benefits or by taking part in training programs. This is why the unemployment insurance fund was set up in the first place.

When the money is used for purposes other than to help the unemployed, it is called fraud. It is dishonest. We are lying to the Canadian citizens, to employees and employers. They are asked to contribute to a fund which is not used to meet their needs, so it is a misappropriation of funds. I do not think we can be any clearer over the fact that the government is guilty of fraud, since it is misappropriating public funds. We, in Quebec, are at least honest enough to avoid all the hypocrisy shown here by the current Liberal government.

Mr. Nick Discepola (Parliamentary Secretary to Solicitor General of Canada, Lib.): Mr. Speaker, since the Bloc's arrival on the Hill, for the past two and half years or so in particular, they have been singing just one song: tax loopholes, trusts, big business. I must point out that, when the entire issue of family trusts was examined, the Bloc's minority report had no suggestion whatsoever for another way of dealing with them.

As well, when we ask the Bloc to offer concrete suggestions on how to bring the $45 billion deficit down to zero, they always tell us to go after the $6 billion in bad debts.

(1355)

Everyone knows that there is no long term reduction to be found in bad debts, only a short term one for the year involved. Procedures have been established for debt recovery.

A surtax has also been levied on financial institutions. The hon. member talks of our dipping into the unemployment insurance fund. This I find totally unacceptable, particularly in a context where, with the possible exception of this year, Quebec has received more from the unemployment insurance fund than it has contributed.

What I want to ask the hon. member is this: Is it not prudent, in a recession, to always create a reserve so as to avoid additional burden on the government? During a recession, we all know social programs increase, thus increasing the burden, and revenues decrease.

I therefore find it unbelievable that the Bloc members keep on telling us we must not touch the $5 billion in the reserve we have created. The precise reason for creating a reserve fund is to avoid a potential recession. Is that not prudent?

Mr. Marchand: Mr. Speaker, perhaps I should have spoken English, because I do not seem to make myself understood in French. Of course it is obvious. You would have to be nearly blind not to recognize that the government is using the money from the unemployment insurance fund fraudulently. In other words, this money is not being used for unemployment insurance but for federal deficit reduction. It is a fraud. It is dishonest-there is no other way to put it.

When they say, as my colleague has just pointed out, that the Bloc has not proposed practical measures to reduce the deficit, I would point out that, on the matter of family trusts, the Bloc suggested they simply be abolished. Some $100 billion is in family trusts in Canada. This money is not taxed. It is set aside for the wealthiest families, the super rich, which includes the Minister of Finance. That was one of the suggestions we made. In fact, I made eight this morning the government has not acted on.

So, the hon. member's repeating the Liberal government's harebrained, hypocritical and dishonest ideology does not stop me from seeing clearly that unemployment insurance funds are being used fraudulently and that the Liberal government has neither the backbone nor the guts to resolve its finances as it could have done had it really wanted to.

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STATEMENTS BY MEMBERS

MACKENZIE

Unfortunately it is not positive. Due to the inaction of the government, the residents of this small, isolated community nestled in the Rockies have lost their northern living allowance. Why are the residents of Mackenzie discriminated against while thousands of people living in cities further south still qualify?

1996 also marks the 10th anniversary of spring weight restrictions for trucks travelling the Alaska highway to Yukon. The continued imposition of the 75 per cent load restriction is unfair and costly to trucking companies and northern residents.

Millions of resource dollars flow out of our region and little is put back. Like the Trans-Labrador highway, the Alaska highway is not even finished yet. Northerners in my riding are fed up with their needs being ignored by the government.

When will the government recognize that the north is a vital part of Canada's economy?

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LEARNING DISABILITIES

ties even though one in ten or 2.9 million Canadians have this type of disability.

Learning disabilities are permanent disorders which affect the way individuals with normal or above normal intelligence receive, store, organize, retrieve and use information. These difficulties show up in five distinct areas: visual, auditory, motor, organizational and conceptual. Such difficulties extend to school, work, social functions and employment and can impede learning to read, to write or to do mathematics.

We can help to increase public awareness of learning disabilities by talking about them whenever there is an opportunity and educating the public to help these individuals live a fuller more productive life.

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PENSIONS

Close to 70 people turned out to provide me with their comments, concerns and ideas about how to improve Canada's public pension system so that it will be affordable, fair and sustainable for future generations of Canadians.

My constituents invested their time and energy to learn about options to change the Canada pension plan and the details of the proposed new seniors benefit. They considered and suggested potential solutions. They participated in round table discussions with their peers and put forth recommendations that I will in turn forward to the ministers of finance and human resources development for consideration in future deliberations.

I thank my constituents for their valuable interventions on the subject of public pensions. I encourage them to keep coming forward with their thoughts and ideas.

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DISTINCT SOCIETY

This became obvious last weekend when the Quebec wing of the Liberal Party of Canada tried to kill the distinct society concept and replace it by stating the obvious and recognizing Quebec as the principal homeland of French language, culture and legal tradition in North America.

The Liberal Party of Canada, led by the Minister of Intergovernmental Affairs, is acting in an arrogant and provocative manner toward the people of Quebec by proposing nothing more than a simple acknowledgement of a fact that has been recognized since the 1760 conquest.

If this is the proposed reconciliation plan, the government is not taking the people of Quebec seriously or treating them with respect. It is reneging on the promises made in Verdun during the last referendum and, when the time comes, the people of Quebec will remember.

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PARKINSON'S DISEASE

Since its formation in 1965 the foundation has been devoted to the support of research into the cause, treatment and cure of Parkinson's disease, a chronic brain disorder suffered by approximately 100,000 Canadians.

Through the various chapters of the Parkinson Foundation of Canada, a number of fundraising events are being planned across Canada to raise money for research, to promote public education and to develop patient and family support services.

Each April the beautiful red and white Dr. James Parkinson tulip, the official symbol of Parkinson's, is sold to the general public and businesses. One of the selling days coincides with Secretary's Day on April 24. Other fundraising events include a national cut-a-thon on the last Sunday in April in which hair salons across Canada offer their time and talent for a small donation.

I encourage all Canadians to do their part in contributing to the search for a cure for Parkinson's disease.

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FOREIGN AFFAIRS

The minister should understand that Canadian support for the UN in Haiti does not mean being a doormat and that Canadian trade with China does not require an annual foreign aid bribe of $162 million. Nor do relations with China require our Export Development Corporation to provide financial assistance for the Three Gorges project, a grandiose boondoggle which will displace 1.25 million people.

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[Translation]

NATIONAL UNITY

This resolution reaffirms with great conviction and sensibility our government's main commitments on national unity. Among other things, federal Liberals in Quebec stated in clause 1.4 of the resolution that the Liberal Party of Canada supports enshrining in the Constitution the principles recognized in the December 1995 parliamentary resolution defining distinct society.

This shows once again the great synergy and ideological cohesion between the rank and file of the Liberal Party of Canada in Quebec and the Liberal government on issues as fundamental as Quebec's place within Canada.

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TEXTILES MONTEREY

The reopening of Textiles Monterey is the fruit of the collaborative efforts and great determination of all stakeholders: the employees, the union, the financial institutions, the FTQ solidarity fund, and the three levels of government. The success of this operation stems from the establishment of a financial network and, above all, a dialogue between local resources.

On behalf of all my fellow citizens of Drummond, I wish every success to the shareholders of the new Textiles Monterey company.

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PUBLISHING INDUSTRY

The performance of Canada Post in the north continues to make it more and more difficult especially for publishing businesses which are a small but a vital part of the economy both in the Yukon and Northwest Territories.

In December publishers were notified one week before a price change occurred. Certainly promotional material could not be sent out and the publisher was left to absorb extra costs. Also in December Canada Post put ads in a number of newspapers but not in the north regarding mandate review. Finally, publishers have recently been informed by Canada Post that there will be a substantial price increase in the coming years.

Clearly publishing is extremely important to the north as a vital business. I call on the minister responsible for heritage to meet with the minister for Canada Post to save this emerging northern cultural business.

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ST. NORBERT ARTS AND CULTURAL CENTRE

The centre is built in an old Trappist monastery that was the centre of the Metis culture during the Red River rebellion. The centre has now been completely refurbished. Thanks to the activities of a large number of people in my riding, it has become home to an international arts and cultural centre. Artists from all over the world are invited to live in residence and work on projects that are enriching the cultural life of this country.

I simply wish to recognize the efforts of these many volunteers.

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THE GAKHAL FAMILY

As a young and energetic couple filled with hopes and dreams, Mr. and Mrs. Gakhal came to Canada in 1970 with their two eldest daughters. They had lived in Vernon for over 20 years. The Gakhals

were contributing members of society and active participants in community life.

This Canadian family was well liked and respected. On Saturday more than 2,000 people attended their funeral service to pay their last respects.

Like many other Canadian families, the Gakhals worked hard to create a good and comfortable life for their family. Karnail and Darshan Gakhal were loving and devoted parents. They dedicated themselves to raising their six beautiful children. They taught their children appreciation of values, principles and the importance of contributing to their community. The Gakhals were close and loving.

(1410)

Today I ask all my colleagues to stand in a moment of silence in memory of the Gakhal family, the second worst tragedy in Canadian history.

[Editor's Note: The House stood in silence.]

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KENWORTH COMPANY

As we speak, almost all concerned are actively trying to prevent the closure of this important plant and to save 850 jobs. But the federal government has yet to take positive steps in this important issue.

Time is of the essence, and I might remind the government that it takes more than wishful thinking to prevent the 850 jobs at Kenworth's from moving to Mexico or to the U.S.

In its speech from the throne and its budget, the government boasted about putting job creation first. It should therefore get directly involved in the Kenworth matter and co-operate with the Quebec government in finding a solution, thus preventing the plant's closure.

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KREVER COMMISSION

We have also learned that the federal government is providing free legal representation for two former ministers involved in this tragedy, while a mere pittance is thrown to the legal requirements of the victims.

These revelations further darken a shadow cast by a growing legacy of mismanagement. This shadow continues to obscure the truth. Sadly, similar scenarios are all too much a part of the continuing Ottawa inquiry process.

And where is the health minister? Instead of safeguarding the mandate of the inquiry, along with others he challenges its legitimacy. Instead of protecting the health of Canadians through an improved blood system, he protects the interests of those who are part of the system that failed.

Two fundamentals are at stake here: the principle of government accountability and the goal of assured health for all Canadians. The minister must change his course of action to safeguard both this principle and this goal.

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RAW MILK PRODUCTS

Moreover, the LPCQ is asking the federal government to withdraw its proposed regulations to prohibit the import and export of raw milk products. These products represent a new and very promising market for Quebec's agricultural sector.

It would be a pity not to let Quebec producers of raw milk products develop their full potential merely because of fear. This is why I join the militant wing of the LPCQ in asking the withdrawal of these draft regulations.

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PRESENCE IN GALLERY

Some hon. members: Hear, hear.

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[English]

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