April 14, 1978

LIB

Maurice Dupras (Parliamentary Secretary to the Secretary of State for External Affairs)

Liberal

Mr. Dupras:

They may have two to date. There is one who refused to give unanimous consent yesterday so that we could all start campaigning and live up to the mandate Canadian voters gave us in 1974. His refusing unanimous consent is hard to understand. Does this mean the right hon. member for Prince Albert (Mr. Diefenbaker) is apprehensive about the next campaign? Or is it his contention that the present government is doing so well now that its mandate should be extended? Those questions are worth asking. Anyway, in the Province of Quebec as in most of the other provinces, Canadians support this government. We had evidence of that. People appreciated the government's action when, for example, we introduced compensation payments for oil products, which allowed the Eastern consumers in Quebec, the Maritimes, the Atlantic provinces, the province of my hon. friend from St. John's East (Mr. McGrath), to buy oil at Canadian prices. And that does credit to the generosity and understanding of the people in Alberta. I say the same thing in the province of Quebec, Mr. Speaker. This is further evidence of the great benefits of Canadian confederation: a part of the country, a part of the population is willing to provide temporary assistance to another which does not enjoy similar economic benefits.

All the same, this program was first endorsed by the people in Alberta, by their government, to the benefit not only of the Atlantic provinces but of Quebec as well. The figures which were released this morning suggest that by the end of 1978, the province of Quebec will have received $3 billion under the petroleum compensation program. That is quite an amount of

The Budget-Mr. Dupras

money which not only helped people who drive their children to school or to deliver the goods they manufacture but which has contributed to keep our industry competitive, the agri-food industry which is so sick in the province of Quebec and elsewhere, and all eastern industries which have enjoyed a Canadian price as well as the rest of the country.

There are also all the Quebec-Canada programs under which agreements have been entered into with the province of Quebec. I refer more often to the province of Quebec that to other provinces, because I am trying to make my colleague from Joliette (Mr. La Salle) aware of the advantages of the Canadian Confederation. First of all, he is not convinced of that and I would ask him to commend the generous policy of the Canadian government to his colleagues in his party. That is his weakest point. Indeed, he does not manage to uphold the generosity, the openness of mind shown by the Trudeau government for the economic development of the province of Quebec.

I said a few moments ago that agreements representing investments of $200 or $300 million for the province of Quebec have just been signed. These agreements provide for road construction, the creation of parks to stimulate the tourist industry and a set of other measures which I hope will help eradicate the unemployment that plagues mainly Quebec. One could have foreseen, Mr. Speaker, that following the election of a separatist party in 1976, unemployment would strike very hard in my province. No matter how much money the federal government may inject in industry and the public sector for job creation, if the provincial government does all it can, through ill-advised measures, to thwart economic development, there is not much we can do. It seems also that people are encouraged to refuse the kind of work only people from foreign countries, mainly the Caribbean islands, are prepared to do.

Also, Mr. Speaker, if the current slide of the Canadian dollar is deplored by several sectors of our economy, I know of some industries in my riding that are pleased with it. Of course, I would not say that the dollar must stay low or under the 90 cents level compared to the U.S. dollar. But I dare not think of the problems and the unemployment we would have if the Canadian dollar had not been devaluated. In fact, the dollar has not been devaluated, but was subject to the law of supply and demand, and the value of the dollar today, as the Prime Minister pointed out during the question period this morning, is based on the productivity and performance of the Canadian economy.

This allows Quebec industries, some in particular such as fine paper, to recover the markets lost during the strike in the fine paper industry in 1976. This also allows other industries to develop business in the U.S. and in Europe with the hope of retaining such business when the dollar regains its true value which, when compared to the U.S. dollar, is certainly not 100 cents to the dollar. But in the short term, Mr. Speaker, this had definite advantages for Canadian products in that it promotes our exports and job creation.

April 14, 1978

The Budget-Mr. Dupras

Naturally, there are other causes for the fluctuations of the dollar, if one considers, for example, the performance of the tourist industry in Canada, with a deficit of almost $2 billion in 1977, and this could double in a few years if drastic measures are not taken. Mr. Speaker, we should be very happy with the provisions contained in the budget which will indeed help promote the tourist industry.

This leads me to consider the provision contained in the Quebec provincial budget which removes the 8 per cent tax on hotel rooms. The budget brought down by the Minister of Finance aimed at stimulating the economy and creating jobs. The removal of the 8 per cent tax on hotel rooms will only attain those aims in a few years. Allow me to explain, Mr. Speaker. The tourist industry has suffered, especially in Montreal and in Quebec City, from the lack of major conventions. As we all know, conventions are prepared years in advance so that the people who will be holding conventions in 1980 and 1981 have already signed agreements and made reservations either in North America or in Europe. So this tax cut is only window-dressing, because if you look at the facts, it is very impressive, as it will not really prompt Canadians to visit the province of Quebec unless other corrective action is taken and other measures adopted.

There are two other things, Mr. Speaker, which I could say about the Quebec budget, since they are trying by that new scheme to undermine the strong conviction held by the Canadian people that the Canadian confederation is really working well for all Canadians throughout the country. More than ever in Quebec, the people have such a conviction, as I realized Wednesday last, Mr. Speaker, at my nomination meeting. My fellow citizens, my constituents, are looking to the Canadian government which they consider as their own, with which they can hold a dialogue, a government that listens to its electors and the people of the province.

One only has to consider, for example, the treatment given to the Quebec Council of municipalities at its last convention, where all kinds of tactics were used to keep the Minister of State for Urban Affairs (Mr. Ouellet) away, because he had indeed developed a credibility with the civic authorities who found out that this federal minister listened to their grievances and tried by every possible means to help them disprove the arguments put forward by the Quebec premier.

Mr. Speaker, I would like to comment briefly on the decision of a distinguished member of the opposition not to seek re-election. It is no wonder that the hon. member for Don Valley (Mr. Gillies) has decided not to run again.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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PC

Walter David Baker (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Baker (Grenville-Carleton):

Why don't you make your choice for Canada and quit too?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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LIB

Maurice Dupras (Parliamentary Secretary to the Secretary of State for External Affairs)

Liberal

Mr. Dupras:

I would make the same decision if I were a member of that party. The hon. member for Don Valley can count on my admiration.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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PC

Allan Bruce McKinnon

Progressive Conservative

Mr. McKinnon:

Like John Turner and Donald Macdonald.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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PC

Walter David Baker (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Baker (Grenville-Carleton):

Macdonald and Basford are doing the same thing.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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?

An hon. Member:

And Mitchell Sharp.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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LIB

Maurice Dupras (Parliamentary Secretary to the Secretary of State for External Affairs)

Liberal

Mr. Dupras:

I know it has not been easy for the hon. member for Don Valley. I know he has had difficulty convincing his colleagues about a few economic matters.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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PC

Walter David Baker (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Baker (Grenville-Carleton):

Why don't you partake in public service and quit?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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LIB

Maurice Dupras (Parliamentary Secretary to the Secretary of State for External Affairs)

Liberal

Mr. Dupras:

That is wishful thinking. I know the hon. member for Grenville-Carleton (Mr. Baker) would like me to quit, but I was re-nominated.

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Subtopic:   THE BUDGET
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PC

Walter David Baker (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Baker (Grenville-Carleton):

You are good for comic relief.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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LIB

John Napier Turner

Liberal

The Acting Speaker (Mr. Turner):

Order, please. The hon. parliamentary secretary has the floor.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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LIB

Maurice Dupras (Parliamentary Secretary to the Secretary of State for External Affairs)

Liberal

Mr. Dupras:

Thank you very much, Mr. Speaker. I would like to end my remarks by saying that the Leader of the Opposition (Mr. Clark) needs help. I know he is seeking help from his provincial colleagues. He has consulted them and tried to learn their views on the budget.

Mr. Speaker, the Leader of the Opposition really needs help, and it is not his lack of understanding of the special problems in Quebec nor his support of a separatist budget which will earn him votes in Quebec.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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PC

Alexander Bell Patterson

Progressive Conservative

Mr. Alex Patterson (Fraser Valley East):

Mr. Speaker, it is a pleasure to participate in this debate this afternoon. While training for my profession I was counselled not to depend upon the size of a listening audience but to make my presentation as though the whole world were listening. Today I have the opportunity to speak in this debate. I am not sure how many people will listen to me, but there are certain things I would like to say anyway.

Back in October, 1977, when the Minister of Finance (Mr. Chretien) bootlegged a mini-budget into the throne speech debate, the response of this party was that the minister was only tinkering with the system to avoid a full-fledged budget debate. In fact the minister declined to call his mini-budget a budget. He called it an economic statement. Nevertheless, there were some similarities, and perhaps the mini-budget of last October was more like a real budget than the one we are discussing today.

We on this side felt that the minister's response last October to the economic realities of the country was completely inadequate. Since last October whenever we on this side of the House have called for firm and decisive action, the minister's response has been to say that we have to wait until we see the results of the measures introduced last October. We have been told we have to wait until the results of those measures trickle down and it becomes obvious as to the extent to which the

April 14, 1978

proposals are effective. At one point the minister even tried to insult the intelligence of the Canadian people by suggesting that the measures announced by his predecessor, Mr. Macdonald, on March 31, 1977, had not yet taken effect. I suppose if those measures did not take effect, certainly the ones introduced last fall could hardly be expected to produce results today.

The minister has made his first legitimate budget statement in this House, and as my leader pointed out so aptly yesterday, it was the minister's first and last budget. We find ourselves in the same situation we were in previously. The minister has tinkered here and fiddled there, with the same lack of commitment and the same ignorance of economic reality. The same thing happened in March and in October of 1977. It has been said that Nero fiddled while Rome burned, and I think possibly it would be appropriate to say that in this instance Chretien tinkered while Canada tumbled.

Nothing illustrates more the utter bankruptcy of this government's policies than the tumble of the Canadian dollar on the world money markets. This has been more pronounced even since the minister made his budget statement a few evenings ago. The morning after the budget announcement, the dollar sank to a low of 87.57 cents. Then it continued to tumble downward to its current level of 86.79 cents in terms of the U.S. dollar as of noon today. This indicates in a frighteningly dramatic way that the international community of economic experts have no confidence whatever in the government's ability to meet the serious problems facing our nation at present.

While I am on this point may I just say that Canadians should be outraged at the way this government has handled the decline of the dollar. It is bad enough that the dollar has fallen, but in the long slide from its former level to its current level Canadians have lost between $1 billion and $1.5 billion. This is money wasted, and I say Canadians should be outraged. On the one hand, the Prime Minister (Mr. Trudeau) says we have a floating dollar, and this was stated again by the Minister of Finance, and on the other hand the Minister of Finance pours $1.5 billion down the drain to keep the dollar from floating. It is precisely this kind of indecision and dishonesty on the part of the government which causes lack of confidence in the Canadian dollar.

I believe it is time the Prime Minister and his government came clean with the Canadian people on this issue: do we have a floating dollar or do we not?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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LIB
PC

Alexander Bell Patterson

Progressive Conservative

Mr. Patterson:

If we have a floating dollar, then why go to the trouble of trying to prop it up and, by this means, keep it from floating? Someone said yesterday that the dollar has been floating. It has been sinking until today, and if you want to see it, you have to wear goggles and a snorkle. Perhaps we should consider that. Perhaps it is time to put away the

The Budget-Mr. Patterson

wishy-washy economics of expediency and introduce some basic directional changes.

All of our reputable domestic economic analysts were in agreement prior to the budget's introduction that a complete structural turn-around was necessary in our economic and fiscal policies to restore confidence in our national economy, get the country working again, and stem the tide of spiralling inflation. In this task the minister has failed miserably. All he could do was just to tinker around with it. I think we could say that Macdonald the thumper has been replaced by Chretien the tinker.

I say that structural changes are necessary in this country, but there appears to be no desire on the part of this tired, aging, weak government to put any direction into our national economy. The government has been preoccupied with many other matters, in fact so preoccupied that it has no time or desire to pay attention to the critical economic matters facing us.

I remember that for months the government trumpeted the idea that, after all, the major problem in Canada was national unity and that, if we were to achieve national unity, it was going to be by the implementation of linguistic policies, and everybody had to accept that. The responsibility and the blame were placed upon the English speaking people of this country, and the result was a great deal of resentment. But in later times, when things began to get pretty tough and the Prime Minister came alive, he and some of his ministers began to say that, after all, the most important problem facing Canada was the economy. I am not just sure what they think is the most important problem. The Prime Minister has been too concerned with the language policy and with other matters concerning the contractual link with the European Economic Community. He and his ministers have been determined to change the social structure of Canada and to change the moral values of this nation. They have been too busy with these things to take care of the fundamental problem that confronts us, namely, that if we cannot solve our economic problems we will not have the occasion to take care of our country in the long run.

We come to the conclusion then that after looking at the picture as it has developed, an exodus of supporters of the government has begun, and an exodus of cabinet ministers, which is very significant. My friend, the hon. member for Labelle (Mr. Dupras), was talking about the ones who have decided not to run for the Conservative party this time, but I ask him why has John Turner left, why has Paul Hellyer left, why have many others left, such as Don Macdonald, for instance? Were they unimportant individuals? Did they not count in the make-up of the cabinet or in the make-up of the party? Where did they go and why did they go? How can the government go to the people and tell them "return us", when many of their most important, influential and able ministers could not stand it and left?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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?

An hon. Member:

They are left with their disabled.

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April 14, 1978

The Budget-Mr. Patterson

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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PC

Alexander Bell Patterson

Progressive Conservative

Mr. Patterson:

It is quite evident where the lack of confidence is. They just could not see themselves supporting the lack of policies that had characterized this government, so they pulled out and said they were not going to waste their time.

I should like to call attention to some of the promises that were made by this government. I think of one in the 1974 election campaign, about transportation. I know that there is a reference to transportation in the budget speech, but if it does not mean any more than the promise that was made in the riding of Fraser Valley East some years ago, then nobody can look forward to getting any results from it. I just mention the fact that at that time the Prime Minister stated that there would be a rapid transit system put through the Fraser Valley to Vancouver. I know that this promise was made in order to try to prop up the Liberal candidate, but when I raised the issue in the House of Commons I was told that such a promise had not been made. Well, I will leave it to the people of Fraser Valley East to decide whether or not the Prime Minister made this promise. Certainly it was made in the Fraser Valley, it appeared in the papers, and yet we have not seen it fulfilled.

The agricultural community in Fraser Valley East and in other parts of B.C., as well as in some of the other western provinces, have given up hope that the government will fulfil its 1974 promise to adjust the freight rates so as to bring justice and fairness to the movement of goods between eastern and western Canada. I am glad the Minister of Transport (Mr. Lang) is here because this matter has been brought to his attention on a great many occasions. Those engaged in secondary industries and in the processing industries are facing insuperable problems because of the fact that the freight rates are loaded against them. The result is that they are suffering economically because no attempt has yet been made to take any remedial action in this regard. Conferences have been held, promises have been given and glowing statements have been made regarding what was going to be done in order to assist in the development of western Canada and the development of secondary industry, but we have not seen them yet.

I intended to call attention to another matter yesterday, but because of lack of time I did not raise it. Again this morning I was unable to do so. I should like to make reference to the dairy situation in the province of British Columbia. Representations were made by the Fraser Valley Milk Producers Association a few days ago. They pointed out the need for some changes as far as dairy policy is concerned. They pointed out that the provincial market shares of the national quota of 100 million cwt are as follows: British Columbia, 3.1 per cent; Alberta, 6.7 per cent; Saskatchewan, 2.5 per cent; Manitoba, 3.9 per cent; Ontario, 31.4 per cent; Quebec, 48 per cent; the maritime provinces, 4.3 per cent.

As far as British Columbia was concerned, even though there might be some justification for it when the quotas were established in 1971, changes have taken place. The population of British Columbia has grown tremendously. The consumption of fluid milk has grown and is continuing to grow. British

Columbia is self-sufficient, as far as fresh milk is concerned for the fluid trade, but it produces only 20 per cent of its industrial milk needs. The document went on to indicate that approximately nine million cwt of milk is produced in British Columbia. About six million cwt is sold on the fresh market, and the balance of three million cwt is the market share quota of British Columbia. This is the total allowable amount of industrial milk which can be produced in British Columbia, as established by the Canadian milk supply management committee several years ago.

Another statement referred to the fact that it is important that the market for semi-fluid products be allowed to grow and that milk production in the province of British Columbia be allowed to expand in a relative fashion. Also the document indicated that industrial milk plants at Abbotsford and Sardis should be increased to enable them to maintain viable plants with trained staff in order to meet the needs of the dairy industry in British Columbia.

I should like to ask the Minister of Agriculture (Mr. Whelan) the following question: In view of the fact that fluid milk consumption in British Columbia is increasing, and in meeting this demand there will of necessity be an increase in the production of milk, will he consider the desirability of recommending the granting to that province of a higher percentage of the provincial market share quota, or through another mechanism, in order that the industry will be permitted to expand within its industrial production? I think this request is very valid. Because of the changing circumstances and situations, provision must be made for the expansion of that industry in British Columbia.

Another question I should like to ask is: As surplus milk must be of sufficient volume to allow for the maintenance of an adequate processing facility and trained staff, and as all such milk produced on the lower mainland of British Columbia and Vancouver Island is processed by the two Fraser Valley milk producing plants in Abbotsford and Sardis, will the minister call upon the Canadian Dairy Commission to call a meeting of the national supply management committee at the earliest possible moment to resolve this problem which is affecting seriously the British Columbia dairy industry?

The agricultural producers of British Columbia are working under enough handicaps, some of which I have pointed out. The time has come when greater attention must be given to some of these matters, rather than the matters which seemingly take up so much of the government's time.

As we are considering the other matters in this debate, and as we look at the various needs which have been brought to our attention, it is incumbent upon the government to make a serious attempt to remedy the situation which has developed and which is continuing in this nation. Some semblance of reality must be brought into the entire picture. The government has not acted in a manner which will produce the results we require or solve the problems facing us. Instead of spending so much time on other matters, the government should give attention to the basic problem of dealing with the fundamental issues before us. Budgets to help solve those problems should

April 14, 1978

be brought in. They should meet the needs and answer the requirements of Canadians. In view of the promises made and not kept, how can the Prime Minister expect anyone to believe the promises he has made now and will make in the future?

May I now say something about the sales tax cut announced by the Minister of Finance. Yesterday the Prime Minister told a press conference that negotiations had been ongoing with the provinces for weeks and weeks on the issue of sales tax cuts. He reprimanded the Quebec minister for coming up with a new suggestion on 24 hours' notice. The actual truth is the four western premiers felt so strongly about the lack of consultation by the federal government in this move that they issued a joint statement last night criticizing the Minister of Finance for his unilateral action. Where is the truth in what the Prime Minister told the press yesterday? There is a misunderstanding somewhere. Someone is not stating the clear facts. I prefer to believe what the western premiers have said. The consultation referred to was far from adequate. Their representations are worth careful consideration by the government in this respect.

The net effect of the budget of the former minister of finance, and the mini-budget of October presented by this Minister of Finance, has been rising unemployment and spiralling inflation. If the House is sitting in the coming weeks and months, we will continue to hear the old song by the Prime Minister and the Minister of Finance that the measures have not taken effect yet and that we should give them a chance to work through the system. How long do Canadians have to wait? How long does it take to bring about economic sanity? One gets the impression the government is just biding time, waiting for something to happen. They used to blame the weather for our economic ills. Then it was world conditions. For a while it was women and young people who were the cause of our problems. At his press conference yesterday, it is my understanding the Prime Minister announced it was the world again. The government can go on biding its time, but the situation will not improve, not under this administration.

The only solution is to proceed in the manner the country has been looking for, which is an election. An election will result in a change in administration and bring in a government headed by the hon. member for Rocky Mountain (Mr. Clark), who will meet this challenge and bring sanity, guidance and leadership to the country. My leader spoke very eloquently yesterday in outlining some of our party's policies to meet the challenges of our country, including a five-year development strategy to achieve some of those structural changes to which reference has been made. He referred to our proposal to put more investment into food production and food processing, to accelerate the development of our nation's oil sands and heavy oil reserves, to construct a reversible pipeline from the west to Atlantic Canada, to rebuild the fishing and ship building industry in Atlantic Canada, and to upgrade the loading facilities in the port of Vancouver.

My leader also referred to permanent tax cuts of $300 per person to help stimulate demand and production. He referred

The Budget-Mr. A. Lambert

to our policy to freeze public service hirings and thereby cut the public service. He expressed the importance of sunset laws which should be introduced. He referred to a freedom of information act that would be brought in by a Conservative government.

He also outlined our policy to assist small business, which is the backbone of our economic system, and to approve income tax to a limit of $5,000 per year to encourage Canadians to invest in Canadian small business. In view of the fact that small business activity is the backbone of the Canadian economy, providing at least 60 per cent of the job opportunities in the nation and contributing a huge slice of the tax revenue to the public coffers, and in view of the contribution that has been made by the small business sector of our country, I believe this government ought to take the challenge more realistically and come up with something that will be of advantage and benefit to those who are struggling to keep their operations going, sometimes having to work double shifts themselves in order to meet demands made upon them by governments in the way of statements, records, reports and so on. There ought to be some realistic programs outlined which will bring some assistance to these hard-pressed businessmen who are struggling to make a go of it in Canada.

These are good policies and a few of them have been outlined here this afternoon. They are economically sound and are needed to put this country back on the road to recovery. Again I suggest that the only solution is an election. This will decide how many of those wonderful people from the other side will be back here. I think a lot of them will run but will not be back. We will miss them, sure, but there will be others who will take their place, who will be able to contribute in a superior manner to the debates and discussions that go on in this place, and make their contributions to the preparation of policies that will be of tremendous value and importance to the economy of this country.

Mir. Adrien Lambert (Bellechasse): Mr. Speaker, on this quiet Friday afternoon I would like to comment briefly on the speech made Monday night by the Minister of Finance (Mr. Chretien) when he introduced the new budget. While I was listening to him, I got the impression that he was a member of a new government because, at the beginning of his speech, he was more or less condemning his predecessor's policy. Is not that playing fair? He said that our gross national product has gone down from 5 per cent in 1976 to 2.6 per cent in 1977. It is a fact everybody is aware of, but to recognize it in his speech, particularly in his first real budget speech takes, I think, a lot of courage.

He also said that the number of unemployed young people has increased. We now have over one million unemployed in Canada. We should not be proud of that. It is a crying shame to have so many healthy people without work. There is a saying that applies here: idleness is the mother of all vices. No wonder delinquency is on the rise in Canada. An able-bodied

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April 14, 1978

The Budget-Mr. A. Lambert

man who is idle will sooner or later get into mischief. This is human. All the same, I should like to emphasize the good points of this budget, because it has its good points. It would be unusual if it were all bad. For example, pension plans have been improved. I think this is a beneficial measure which will benefit a number of people who have the means to invest in a pension plan. But obviously, for the great number of unemployed, it will not change much.

There is another point on which I agree, the changes proposed to the incorporated family farms which will allow farmers to enjoy a tax provision which did not apply to them before. Those are excellent measures.

As for the provisions related to industrial development, to energy and railways, they are necessary and will certainly benefit some people, but I am very skeptical as to their ability to deal with unemployment in the near future. What I find amazing with this government is their capacity to bring forward all kinds of minor measures which are good in themselves, along with their incapacity to bring forward any major responsible measures designed to deal with our most serious problems at present: unemployment and inflation. Of course when your hands are tied behind your back by financiers, as I said today to the Minister of Finance, it is difficult to get the job done. That is where the real problem is, in my view.

When it comes to social measures, the government has come up with challenging suggestions. I must say at the outset, as I pointed out a moment ago, that the tax free transfer of family farms has been extended to farms registered as corporations. We have been demanding this for a long time. The government has finally understood the validity of our case. I am sure this measure will encourage young people to go into farming.

We must encourage young people if we want them to maintain their interest in agriculture and save this basic industry that Canada needs. I am seriously concerned, Mr. Speaker, about the declining number of young people who should be interested in farming and in the agricultural industry. Of course, if all our policies result in a massive transfer of our youth from rural to urban areas, it is obvious that time will come when we will find ourselves in a very unfavourable situation in comparison with a number of countries. If we have to import too many food products to satisfy our needs, we will of course become dependent on others. The situation would then be much worse than it is today. On the other hand, I think this policy should help, at least I hope so, in limiting the rural exodus and should be an incentive for our young farmers to keep them interested in this vital activity, farming and farm production in Canada.

I would like to point out in passing-I did so briefly yesterday-that the Minister of Agriculture (Mr. Whelan) has finally told farmers as well as industrial and fluid milk producers what the dairy policy of the government is going to be

for the next few months. I was pleasantly surprised to see there were some aspects which I have been advocating all along and which are finally being implemented in our policy; the period change, the new dairy policy schedule. I received the official release only this morning, I had the opportunity to review it thoroughly and today I made a point of mailing many copies to producers who have been asking me questions on this matter for a long time. I think it is my duty to help inform people of legislation which might be beneficial to them. And it is also my duty to make suggestions to the government. I would like to take advantage of the budget debate to make one, I would like the government to study seriously the possibility of providing in its policy, in its financial policy, a rebate on some farm products or on some Canadian dairy products with a view to promoting the consumption of these products in the country and second, increasing the purchasing power of consumers and needy families. Mr. Speaker, this is nothing new. Through its legislation, through the propositions made to the provinces to pay compensation as an incentive for reducing or even abolishing retail sale taxes, the government is already doing that.

It would be much easier for the government to proceed directly under the federal jurisdiction; the same purpose would be achieved with less confrontation. In fact, Mr. Speaker, this discount will increase the consumer's purchasing power, but he is the one who decides on what goods he wants a discount, because, after all, the consumer is always right and he is the one who chooses the products he wants to buy.

We established that policy, as I already stated in this House, a few years ago, under a minority government that had the good idea to comply with the requests of the people, and it was of particular benefit to the families. During several months, more than $181 million were distributed without any confrontation, but today with the federal approach of urging the provinces to cut their sales tax, we saw what happened in the last 24 hours. The Quebec government has decided to apply that cut in the weakest sectors. In other words, when I buy $1 item in Quebec, I must now pay $1.08, and under the policy announced in the budget, the consumer will pay only $1. Then, this is a discount on the retail price but it has been transferred from the federal to the provincial jurisdiction, and this is the cause of the present confrontation. It worries me so much that I warned today that we should proceed carefully and sensibly, if we want to avoid constitutional crisis.

Now, I do not think that this government will solve the problem through the proposed measures. The federal government will compensate a part of this cut will a $11.5 billion deficit, which means that future generations will have to pay for our present spending because this budget increases our deficit, our national debt, by $11.5 billion. Sooner or later, we shall have to find a means of repaying that debt. This is what I call a debt system. If that system is good, it will give good results, as a good tree bears good fruits and a bad tree bad

April 14, 1978

fruits. You judge a tree by its fruits, everyone knows that, it is in the Scriptures. So we can judge a system by its results.

Mr. Speaker, this system takes us on a very dangerous course. Although in the 1978-1979 budget, there seems to be an effort to protect the individuals and the taxpayers at the same time, the extraordinary thing is that in fact a heavier tax burden is being placed upon them. One just has to look at the budget to see it! In the budget, which has been in effect since April 1 the increase in the personal income tax is of about $1.34 billion; while the increase in the corporate tax is only of about $495 million. We have been asking for a review of the tax structure for a long time now in order to reduce the tax burden on the individual, we have been asking for a fairer distribution in view of the fact that 60 per cent of Canada's revenues are in the hands of multinational corporations while the remaining 40 per cent go to the individuals. It is imperative to strike a balance because it is the little man who is paying for the big shot. We make sure that the rich get richer and the poor get poorer.

That is why I would suggest, in order to bring about a fairer and healthier administration, a measure which comes under federal jurisdiction, namely a cut in the sales tax on building materials. The provinces could not say a darned word about it since it is a matter of federal jurisdiction. In this way, we would increase the income of families and individuals without the risk of a constitutional crisis as the one which is forthcoming. We would give the building industry a boost and that sector of the Canadian economy could start out with greater enthusiasm.

Builders and contractors could use their equipment, workers in every building trade could go to work, and automatically the government could derive revenues from their income tax, according to a well-known formula, and automatically the wheels would start to grind again without anybody being hurt.

Mr. Speaker, there is also another sector involved. I remember, and this was repeated once more yesterday by the Minister of Finance (Mr. Chretien) when I asked him whether he would not be ready to study another method of financing the public sector so that private savings, the savings of private citizens be left to the private sector so it could use them to cover its financing needs, and the federal government in turn could get its financing requirements by creating new money, because the government's purpose is to increase the money supply for those who need it. Since this is a worthwhile purpose, why not, as I said yesterday, at least give serious consideration to the possibility of replacing the debt-oriented system of the public sector by a more social kind of credit system, putting the Bank of Canada to work as it were, increasing the money supply to the extent that discounts would be used by consumers not haphazardly but to the extent those people would buy, to the extent consumption would go up, to

The Budget-Mr. A. Lambert

the extent they would take advantage of the available discounts. There, Mr. Speaker, you have the regulating factor.

Yesterday, the Minister of Finance told me he had studied that in 1963 and he had found it absolutely impossible. Well, how often have I not been told that if this monetary theory were to be used, there would be inflation in Canada. There would be unemployment, there would be chaos. But what is the situation in 1978? Do we have inflation? Do we have unemployment? Do we have chaos?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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?

An hon. Member:

It would be worse.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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SC

Joseph Adrien Henri Lambert

Social Credit

Mr. Lambert (Bellechasse):

An hon. friend over there says it would be worse. Maybe it would be worse, but is it not "worse enough" already? It has also been said this would force the Canadian dollar down. This is said derisively, but there is nothing funny about that. It is awful to know the Canadian dollar now trades at 87.2 cents. It is terrible to see that our dollar is down to 87.2 cents today. Were that to happen under an administration headed by people like me, who believe in Major Douglas' political and economic theory known as Social Credit, we would be charged with all the sins of the world.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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LIB

Monique Bégin (Minister of National Health and Welfare)

Liberal

Miss Begin:

For sure!

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
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April 14, 1978