Some hon. Members:
Subtopic: THE BUDGET
Sub-subtopic: FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
As I learn my parliamentary responsibilities in the ten standing committees of the House, and listen to question period, I hear many pleas from the other side of the House to spend money. 1 cannot recall, in two months and three days, a single suggestion of how to save money or how to raise the increased taxes to pay for what they propose to spend.
Mr. Speaker, the information provided to me as a member of Parliament, which is relevant to this budget and to the Public Accounts of Canada, is a stack of information which in reality is about 12 inches high. It is difficult material to comprehend. It was made available to us yesterday. If it is difficult for a member of Parliament to comprehend, 1 can imagine how confused the Canadian people must be in many cases about the provisions of the budget and about the state of the economy in Canada.
I would like to try to pin it down to some fundamental aspects that we should be debating with great gusto. The New Democratic Party is clearly on record as favouring a larger deficit. The Liberals talk about our "bizarre fixation" with the deficit.
I would like to ask the Canadian people to look at their family budgets. If one makes $500 a month and spends $600 a month, 1 ask the Canadian people: how long can you continue to do that? If you make $500 and you spend
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$600, how long can you continue to do that? If you make $2,000 but each and every month you spend $2,400, how long can you continue to do that? One year, two years, three years, four years-we have now had seven years in a row of that kind of spending. When we stand on this side of the House, and the finance minister stands up and says, "we must reduce the deficit," that is what he is talking about.
In the absence of the kind of controls which we on this side of the House are proposing, we have a future, but it is a bankrupt future. In the presence of the kind of expenditure controls and taxing policies proposed on this side of the House we have a rosy future. But we must begin to pay our way.
1 ask the people of Canada to consider what happens if they take their Chargex card, or oil company card, and spend each month 20 per cent more than they make. Sooner or later you have to pay it back. You have to begin paying the interest on it and your expenses rise. The situation in Canada today is such that the federal government will be borrowing something in the order of $12 billion. That is the size of our deficit. The finance minister stood up in this House last night and talked about the cash requirements of the government. 1 wonder how many Canadians really understand those words, the cash requirements of the government.
1 would like to draw an analogy. Out west we have a tradition called the auction sale. 1 think it exists in all parts of the country. We make great use of it. The auctioneer tries to get a big crowd with a lot of money, to compete for what he is selling. That is his job, to get the best price he can for his customer. 1 draw to the attention of the Canadian people that money is a commodity. It is like a car or a sofa, a commodity. It is in limited supply under any responsible government.
The way we auction money in the world is on the basis of interest rates. What you are doing in Canada today with a $12 billion debt is forcing the Government of Canada to go out and borrow in that restricted money market $600 for every man, woman and child. You are putting pressure on that auction market. If the government were not borrowing that much, the lenders would have it to lend to the private sector. There would be less competition. Ultimately we would have lower interest rates, the kind we can all live with.
The government is an unfair competitor in that auction sale for money and for resources. It, and it alone, has the power to tax. It can determine what it spends and what it raises. None of us in a free democracy have that choice. The government makes that decision on our behalf, and it has been making some terrible decisions over the years.
I would like to go to another feature of the budget. 1 saw over television last evening the president of the chamber of commerce from my area, Calgary.
Another barefoot boy.
He was one of the people who was very critical of the government for its budget. This criticism was based on
the fact that we were not cutting budgetary expenditures quickly enough. I bring to the attention of the House that close to 80 per cent of the budgetary expenditures laid out in the documents before us are a consequence of legislation passed by this House or agreements signed by the previous government. 1 wish to illustrate the three most important parts of those expenditures.
The first is interest on public debt. We are approaching the point where 20 cents out of every dollar we raise through taxation is used to pay the interest on the debt created by government. I ask members opposite who want this bigger deficit, who want this government to borrow more money, how much social good could be done if we had that 20 cents of every dollar to give to the senior citizens of this country. Let's not be dreamers, let's be doers.
Let me come to the second large item which accounts for more than 30 cents of every dollar. That is the transfer payments to persons: unemployment insurance, old age pensions, family allowances, and social assistance of various kinds. Thirty cents out of every dollar goes to those kinds of people. This government has decided to leave the indexing provisions in place. Those allowances which go to the disadvantaged of this country will increase at the same rate as the cost of living. They are protected by this Minister of Finance and this government. That is a point we should make with clarity.
Another area of expenditures which accounts for approximately 20 cents out of that dollar is the transfers to provinces and other jurisdictions. Those are agreements which come up for renewal in 1982. If the Prime Minister continues on the course which he has started, which is working within a federation-not trying to run the whole show, but working with the provinces-I am optimistic that by 1982 the fiscal arrangements which we as a federal government have with the provinces can be arranged. Somehow they can be made more equitable so that the federal government will have more freedom of choice in its expenditure pattern.
These are the major features, interest payments on public debt 20 cents out of every dollar, transfer payments to persons 30 cents out of every dollar, transfers to provinces 20 cents out of every dollar. There are other agreements which account for the remaining 10 per cent. There is very little room in a federal budget for a new government to make significant changes because the agreements which have been signed are historical and long range.
Why didn't you say that during the election?
We did say much of that during the election. We said we wanted information, we could not get it and we could not tell. However, these were the directions. This budget is consistent with the directions 1 talked about during the election campaign.
Members opposite would have Canadians believe there will be no change in what they are going to find in their income tax form when it arrives at their houses next January. Let me just run over a few of them. I have used the context of a man and wife with a couple of children. 1 simply say that Canadians
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should look at this tax form. Their personal exemptions this year compared to last year will be $530 higher. The mortgage deductibility provision will allow many of them to deduct $375, and the energy tax credit will amount to $240 for many of them. Those are three of the major ways in which each individual Canadian family will be helped. That comes to almost $1,200, which is $100 that is non-taxed each month. Those are significant changes to all Canadians, and they should be identified. On that one they do not have to trust members on this side or the other side of the House. They can look at their individual tax forms and determine for themselves.
What have we done in terms of raising taxes? Members opposite would have you believe that we have really clobbered the Canadian people. That, I suggest, is simply not so. The group which will be hardest hit in terms of tax increases are the corporations.
The group of corporations which will be most affected by changes in tax legislation are those corporations which are engaged in the oil and gas industry. Those are the corporations, some 700 of which have headquarters in the city which 1 represent in this House of Commons, and I know that the chief executive officers and employees of those companies do not welcome the kinds of tax changes which will affect them, because the world for them will be significantly different after last evening than it was before. However, at the same time, the people in that industry-my friends, my neighbours, and the people who live around me-are Canadians first. 1 should perhaps back up from that and say that they are human beings first, the same as the rest of us.
Hon. members opposite talk about multinationals as if there were no human beings inside those corporations. Well, my friends and neighbours laugh, love, and breathe the same as hon. members of this House of Commons and those who work in the automotive industry and every other industry in this country.
1 said that they are the same. They are in some ways. In some ways we do not do justice to what may in fact be the best example of pioneering left in Canada today, but there is a branch of that industry which is very seldom talked about and should be talked about more, and that is the exploration end of the industry.
Living in this part of the country, Ottawa, is a new experience for me, but when you live in this part of the country you come into contact with the oil and gas industry because someone drives a truck up to your home and puts fuel oil in your tank, or you drive your car to a service station and somebody puts gasoline in your tank. Let me tell hon. members that the oil industry begins out in the field in 40 below Fahrenheit weather with a wind-chill factor of 120.
What are we doing out in the bush country day after day in that industry? We are drilling a hole one mile, two miles, three
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miles, or perhaps four miles deep in the ground. How are we drilling it? The same way one drills a hole in a piece of wood. There is a drill down there except that that drill is going down through a narrow pipe. Sometimes it runs into granite, and it does not last very long. You are down there two miles in your search for oil and gas, and you have to bring up that whole two miles' worth of pipe to change the bit on the end of that drill. It comes up in 30-foot lengths. It is steel, and let us remember that the wind-chill factor is 120 below. That is where the oil industry begins, and that is what we are talking about when we are talking about oil self-sufficiency. It is human beings out in the bush in very difficult circumstances.
I would like the public record to show that by October 1 of this year in the province of Alberta alone there had been 19 industrial deaths in that industry. It is an industry which employs approximately 7,500 people when it is flat out. There were 3,500 time loss accidents. It is a hazardous occupation, full of risk for those who choose to invest in it, but a risk of life and limb for those who choose to work in it. Let us not forget that.
No health and safety laws in Alberta.
The hon. member opposite talks about health and safety laws in Alberta. We have a tradition in Alberta and in Alberta governments of listening to the people, not telling them what is good for them. We have just gone through a commission in which we looked at health and safety aspects. That will be done again and again. If there is any chance to improve the climate, I think we will be out in the forefront of those who seek to provide the kind of improvement which is necessary.
Mr. Speaker, all public policy is biased. There was never a government invented which could make a decree of any kind which did not show bias in favour of some and against others. Any document such as a federal budget should be judged in the light not only of its details as they impact on particular individuals but also in the light of what it attempts to do and the fact of whether it will accomplish what it intends to do. In his own words and in his own way, the Minister of Finance expressed his view of the budget as a budget which would rely on the initiatives and the sense of enterprise of Canadians. I reviewed the budget and came to some different words which may have relevance for our deliberations, but I think the budget addresses itself in two primary ways to the Canadian condition. What it attempts to do and what I think the policies of this government collectively attempt to do, is bias the universe for at least a period of time in favour of ownership. That is the first thing it does, and if one really looked inside the tax changes as they are going to affect Canadians, 1 think one could see that.
The most publicly visible part to this point is the mortgage deductibility plan, which encourages Canadians to own homes and makes it a little more possible for them to finance the costs of those homes.
One of the provisions which is in the same category is the provision related to spouses in small unincorporated busi-
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nesses. For years, husbands and wives have been running small businesses and working long hours. The tax system has not encouraged that. The tax system has discouraged that. In terms of signalling a change in direction, that small provision, which is not at high cost to the taxpayers of Canada, is simply an expression of willingness on the part of this government to acknowledge the importance of husbands and wives working together to create businesses and economic futures for themselves. Owning a business and spending the 16 to 18-hour days which small business frequently requires is not everybody's cup of tea, yet as a government we still wanted to encourage ownership.
The provisions in this budget which address themselves to the issue of common stocks and related matters, 1 think, are an encouragement to all Canadians to invest in enterprises inside Canada. If you do not feel competent to run your own business, then this government wants to encourage you to put up part of the money and put it into the hands of somebody with the skill and drive to go out and make it grow through some other means. That is what the common stock provision is, and that relates to the issue of ownership.
The debenture bonds which will help relieve small business from the high cost of interest rates are interesting in two ways. It is a budgetary provision which is targeted to the principle of ownership, and it is a time limited provision. It is a step we need to take in this particular economic climate, but it is one which we hope a year or two down the road can disappear because it will no longer be needed as the government will be borrowing less money. The cost of money will go down, and we will all benefit from that.
The provisions related to capital gains on farms are another example of what I call the ownership philosophy which characterizes the budget which we heard last night.
The second major issue to which this budget addresses itself is something which professional economists would call the infra-structure concern, and we see its expression in the energy package. We see some words dedicated to the starting of an energy bank. In my city the words "energy bank" conjure up an image of oil and gas and their exploration. I want to say to the people in my riding that the words "energy" and "energy bank" in the Canadian context are much broader than that. We are talking about bringing substitute energy sources on stream so that individuals and corporations can have the kind of fuel which is indigenous to the regions of this country in economic terms so that they can go out and get the job done in the region.
Is my time up, Mr. Speaker? I will conclude very shortly. I have one idea which I would like to lay out for public debate and I hope that people will communicate with me on it. I think there is something psychologically damaging about the concept of unemployment insurance. I would like to throw out into the public arena of policy debate the whole concept of employment insurance. I believe the key word in both instances is insurance, and I think the steps in last night's budget move us closer
to the reality of the insurance principle. But I think there is something psychologically damaging to the recipients of insurance payments when we say to them, "You cannot work, you cannot do things that are socially useful the way your friends and neighbours do." I would like us to begin to engage in a debate on a fundamental change in relation to that program in the direction of employment insurance. I would caution members of the House and members of the government that such a fundamental change should not be entered into hastily, but I think it is an issue that we might well support over the next year or two. Thank you for your attention.
Mr. Dennis Dawson (Louis-Hebert):
Mr. Speaker, it is a pleasure for me to participate in this debate on this budget which is the first and, I hope, the last one of the present Minister of Finance (Mr. Crosbie). It would have been more interesting even for the new member to speak on a budget with positive points. The hon. member even admitted to participating a few years ago in drafting the economic policy of the Progressive Conservative party, so I think he might have been better off keeping his mouth shut.
That is not so, Mr. Speaker, no, there is nothing in this budget to talk about, nothing to give Quebeckers and Canadians generally the least impression that there is something progressive in that so-called Progressive Conservative party. I would have liked to see the hon. member talk of job creation. Unfortunately, we heard nothing or nearly nothing about that, Mr. Speaker. In a speech that lasted over an hour, there were 30 seconds on job creation. One paragraph out of 25 pages, Mr. Speaker.
Not only nothing in terms of job creation, but in addition there are measures harmful to job creation in Canada. The rise in the price of gasoline, Mr. Speaker, as was pointed out by the critics of this budget, is going to create at least 100,000 more unemployed. If you add to that the other harmful measures in this budget, we will have at least 150,000 new unemployed. I could talk at length about the absence of concrete measures in the budget to protect the purchasing power of older people. There is nothing, Mr. Speaker, absolutely nothing, only higher transportation costs and unemployment. Nothing for pensioners. They will have to pay more to travel within their cities. They will have less purchasing power because inflation will probably reach 10 and 11 per cent. There will be less money for food and less money for clothing.
What about workers, Mr. Speaker? Workers will see in this budget an increase in their transportation costs to get to work, an increase in their contributions to unemployment insurance so that at the end of the week they will end up with a loss of at least 2 or 3 per cent on their regular salaries as a result of the budget measures alone, not to say anything about inflation. Before this budget, these same workers, these same unem-
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ployed, these same pensioners were sure that thanks to these programs their purchasing power would be protected. This is no longer the case, and I shall mention the high interest rates they have to pay on their loans.
The Canadian farmers whom hon. members of this Progressive Conservative government and the Social Credit Party of Canada claim they want to defend will have to pay more for the gas they need to operate their farm machinery and to carry their products to markets and to consumers. The budget will cause all these things farmers need to cost more. They may cost the average farmer between $500 and $800 more a year. This budget was put together by a Progressive Conservative government which claims to be the farmer's friend. This Progressive Conservative government has been supported for the past six months by Quebec Social Creditistes who also claim they are the farmer's friends. Well, Canadian farmers will certainly remember this Progressive Conservative government. In the next election Quebec farmers will remember Social Creditistes who let this government come up with this budget. We hope it will be called soon, Mr. Speaker, even if it implies an election campaign in the middle of winter. Farmers will remember Social Creditistes and Progressive Conservatives.
We could elaborate on the small and medium-size business and on the instability this government has been creating around them for the last six months, but in their case as in the case of other persons, of senior citizens, of pensioners, of businessmen, they will be penalized by the same increases in the cost of transportation, they will be penalized at all levels. Those people are going to remember in the next election.
As my colleague, the hon. member for Broadview-Green-wood (Mr. Rae), emphasized, I hope that Social Creditistes will stop propping up this Progressive Conservative government, as they have done in the last six months, and that they will co-operate with us to defeat it in the weeks to come, not only in this House but in their constituencies.
1 also urge the Social Credit leader to remember his past as a great champion of provincial jurisdiction. That same leader, who claimed that the federal government interfered too much in provincial policies, will remember today that several provincial premiers, that of Alberta and even the Quebec finance minister have told this Progressive Conservative government that the excise tax is an unwarranted intervention in provincial jurisdiction. 1 trust the Social Credit leader will remember that when the time comes to vote on the budget and the non-confidence motions.
I trust that, tormented by his support of the Progressive Conservative party, of the right hon. Prime Minister (Mr. Clark), and tortured by the support he gives the Parti Quebe-cois, he will for a change fight for the interests of Quebeckers and quit supporting this Progressive Conservative party as he has done in the last six months.
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With regard to unemployment, let us look at the performance of the present government. For six months now they have been in power and they keep putting off implementation of their promises which have been changed only to shrink. They keep telling us they are looking into the problem and consulting the provinces. That is all very well, Mr. Speaker, but they should now start to act. Waiting till December to announce the employment programs for the fall, winter and spring is irresponsibility on the part of this government. In fact, we are still waiting because in his budget last night the minister spent only 30 seconds on the problem.
1 trust the Minister of Employment and Immigration (Mr. Atkey) will take the opportunity of his intervention to announce concrete measures for job-creation. The only thing they have managed to do is reduce the Canada Works program, freeze funds for job-training programs, create economic uncertainty which penalizes especially the young, those who in the past were encouraged by the former Liberal government to propose programs for their communities which gave them both a chance to get some experience and earn a little money.
As early as June last, young people were told everywhere in Canada that unfortunately there would be no jobs for them in the civil service because the President of the Treasury Board (Mr. Stevens) had decided to stop making jobs available especially to young people, women and Francophones. Those young people, Mr. Speaker, even if they have graduated from college or university during the past six months cannot plan a career in the civil service due to the drastic steps taken by the Progressive Conservative party which are based on Progressive Conservative dogma no longer consistent with the policies of 1979.
In addition, these same young people cannot hope to find a job on the labour market, as we can see from the figures published last month. These show that two-thirds of the newly unemployed in October were young people under 25 and that only one-third of all new workers were young people. There is therefore a gap and it is increasing steadily; it has increased by 25,000 for men between 15 and 24, by 18,000 for women 25 or more and by 4,000 for women between 15 and 24, which means that 22,000 people more have been forced into unemployment by this Conservative government, and that less than one-third of the new jobs went to young people.
This is the first increase in unemployment in over one year and it reflects the difference in the programs of the previous government and those of the new government. Mr. Speaker, it would be appropriate to underline the contempt that this new government has shown towards the House, as exemplified by the actions of the Minister of Employment and Immigration. Last month, the hon. member for Blainville-Deux-Montagnes (Mr. Fox), the hon. member for Manicouagan (Mr. Maltais) and myself asked the Prime Minister and the Minister of Employment and Immigration to give us details about job creation. They replied that no details would be made public
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before the budget speech last evening. Mr. Speaker, 1 could quote the right hon. Prime Minister who said that if we wanted answers concerning the budget, we would have to wait until after the minister made his budget speech. He said the following:
Mr. Speaker, I can repeat for the information of the hon. member that a job creation program aimed at providing job experience for young Canadians will be included in the budget.
This took 30 seconds, Mr. Speaker, and two paragraphs over 25 pages. 1 do not believe that this can be considered as fulfilling the promises or commitments made by the government. That same week, Mr. Speaker, before the Standing Committee on Labour, Manpower and Immigration, the Minister of Employment and Immigration announced that the budget would contain concrete measures, but without giving any details. The next day, he spoke before the Canadian Club in Toronto and gave them scoops on some details he refused to give us as members of Parliament, he refused to give to this House and the committee. That kind of arrogance will destroy the government.
In that budget the minister tried to get rid of the problem by passing it on to private industry, or by blaming rising unemployment on the population explosion. Mr. Speaker, I see no reason why an increase in the population growth rate should penalize the young. It is my view that young people born in times of high birth rate have a right to work as much as those who were born in times of low birth rate.
Mr. Speaker, the same minister announced a program for the placement of 105,000 young Canadians by March 1981. In his budget he repeated this last night, but he brought no concrete measure that could show us he is going to achieve this. All we know is that they reduced the Canada Works projects, they froze the manpower training budgets. In that statement he tried to pass the buck once more by suggesting this will require total co-operation from private industry. What the minister is ignoring is that private industry is waiting for government leadership and this has not yet been forthcoming from this government.
It is wishful thinking to imagine that the tax credit programs will solve every problem, because there must be a tax liability in order to receive credits, and under the current conditions many companies do not pay tax. Where are the programs to help municipalities and co-operatives that do not pay tax, companies that do not have enough money, that do not make enough profits to pay tax, Mr. Speaker? We find nothing in the minister's proposals that could be of help to them.
Since I represent a riding with one university and five colleges, and 56 per cent of the unemployed in my riding are between the ages of 17 and 25, I must say that it is a subject of interest for me. I would not pretend to have found some
miracle solution to a problem which plagues the economy of the whole western world. But I would say that it is our duty to do the utmost to "sensibilize" and to convince the government that we must make a supplementary effort if we are to heal this unacceptable situation.
As I mentioned before, we are not the only country to be faced with this situation. Hon. members surely know that youth unemployment in all countries is higher than the national average in each country. But for reasons I have yet to discover, whether they be historical, economical, seasonal or what, Canadian youth are, or at least seem to be, harder affected than the youth in other countries. We have statistics on that. In 1976 there was a 10 per cent unemployment rate for youth in Canada, and it was half that amount in most European countries. Those are the figures of the O.E.C.D. It is even more dramatic in the part of the country I represent which is French. They do not have the same possibility as those in the rest of Canada, the same possibility to pick up their belongings and move away, leave their province or leave their country. That is because of the linguistic situation which does not always guarantee the Francophone his rights all across the country.
In Quebec's case, the difference in language and culture limits the mobility of young people towards provinces offering more job opportunities. Statistics show a lower mobility rate for all Quebeckers. The most recent figures unfortunately date back to the 1966 to 1970 period. The study from which these statistics are taken points to the difference in language and culture as one of the causes for the lower mobility rate.
Thus Ontario, where the unemployment rate is lower, has a higher mobility rate than Quebec even though its net migration is positive. The same study points to the high proportion of young people among the migrants and the importance of economic reasons in the migration phenomenon. Therefore, the difference in language and culture keeps the unemployment problem among young people in Quebec at a higher level than would otherwise be the case.
Some technocrats in our present government and in past governments have found many reasons which explain our present predicament, such as the lack of effective bridges between the world of school and the world of work; the baby boom, or the demographic aspect of Canada; the general weakening of our economic situation and the structural factor of our labour market. These reasons might be acceptable to technocrats and government officials, but I do not think they are acceptable to Canadian youth and Canadian politicians. They cannot explain the fact that as long as 15 years ago youth unemployment was 1.7 times higher than adult unemployment.
Youth unemployment is not the difficulty of a splinter group or minority. At present there are 2.5 million to 3 million young people under the age of 25 in a labour force of ten million people. Since 1966 the number of young people unemployed
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has tripled, to more than 400,000, and the youth unemployment rate has more than doubled to 13.1 per cent in October.
Figures given out by the Economic Council of Canada are not more encouraging. In 1960 the youth unemployment rate was 1.7 times higher than the adult rate. By 1970 it had climbed up to 2.3 times the adult rate. In 1976 it was 2.5 times the adult unemployment rate. Now it is three times that, three times the unemployed rate in the regular work force. Technocrats can probably find the reasons for it, but that does not make it more acceptable for those young people who are unemployed.
But we also have to give the other side of the medal. It is a known fact that youth unemployment causes a company to make major investments. When an employer hires a group of youths, it is a fact that there is an expense cost for him in developing skills training programs. A high rate of turnover in youth is often a major factor which might make an employer hesitate. Also it is a fact that many young people at least seem to be less productive at the beginning of their careers than the rest of the labour market. But I think it is the responsibility of the government to try to minimize these effects, and the Liberal government was doing that already.
1 can talk about the different kinds of youth unemployment programs. For the last few years the Liberal government set up a special Canada Manpower centre for youth co-operation and education programs which were joint federal-provincial initiatives to encourage the development of co-operative and work experience programs in order to facilitate the transition of young people from school and their integration into the labour
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force. Canada Manpower centres on campus play a positive role but there are jurisdictional federal-provincial conflicts. Job exploration and job experience training programs were designed to provide secondary school students with opportunity, based on exposure to the unemployment market, to make an informed and realistic career decision as to whether to continue with the in-school education process or to enter the labour force market on a permanent basis.
Following that, the Liberal government set up the Student Summer Employment and Activities program, Canada Manpower Centres for Students, the Young Canada Works program and the Summer Job Corps. These programs all have budgets which have increased in the last few years. The rise in youth unemployment must be kept to a minimum. We are hoping that the present government will continue those types of programs, not only for now, but for next summer. Also we are hoping that even though they waited for the month of December to announce programs for the creation of jobs for the winter and the spring, they will not wait until the month of July to do the same thing for the summer and fall.
They probably will not be here.
As the hon. member behind me said, probably they will not be here then. 1 hope we, as a Liberal government, will be over there trying to create those jobs.
May I call it six o'clock?
Mr. Deputy Speaker:
It being six o'clock, the House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 2(1).
At six o'clock the House adjourned, without question put, pursuant to Standing Order.
Thursday, December 13, 1979