May 3, 1983

GOVERNMENT ORDERS

THE BUDGET


The House resumed from Monday, May 2, consideration of the motion of Mr. Lalonde that this House approves in general the budgetary policy of the Government.


LIB

Eymard G. Corbin (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Corbin):

The Chair should inform Hon. Members that when the debate was adjourned yesterday there were six minutes left in the period allotted for questions, comments and answers following the speech by the Hon. Member for Moose Jaw (Mr. Neil). Therefore I should inquire at this time whether there are any further questions or comments before recognizing another Hon. Member.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

Gordon Edward Taylor

Progressive Conservative

Mr. Taylor:

Mr. Speaker, I have a question for the Hon. Member for Moose Jaw (Mr. Neil). The Hon. Member has had extensive experience in banking. He carries a law degree and is also a farmer. It is very thrilling to see the emphasis which the Hon. Member for Moose Jaw puts on farming. I enjoyed his remarks very much indeed but the Hon. Member for Moose Jaw did not have time to deal with the Western Grain Stabilization Fund. Does he have any suggestions as to how we can make the Western Grain Stabilization Fund a little more palatable to the western Members?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

Douglas Charles Neil

Progressive Conservative

Mr. Neil:

Mr. Speaker, at the present time the Western Grain Stabilization Fund pay-out is based on a five-year average. It does not appear there will be a pay-out this year. The farmers in the west are suffering from financial difficulties because of low grain prices and high input costs. If the Government were prepared to bring in an amendment to the Act which would base a pay-out on a three-year average rather than a five-year average, there would probably be a payment of $150 million this year which would be quite an injection of money into the economy of western Canada. This would not only help the farmers but the machinery dealers and the whole economy of western Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

Gordon Edward Taylor

Progressive Conservative

Mr. Taylor:

Mr. Speaker, I do not have a further question for the Hon. Member for Moose Jaw but because of his extensive knowledge of agricultural matters I would like his comment. At the present time many farmers in the Province of Alberta, I suppose all through western Canada and perhaps right across Canada, are having such a difficult time on the

land that they are taking other jobs to keep their farms viable and ongoing. When a farmer works out he puts himself in a position under the Income Tax Act where he can claim only a $5,000 loss. Does the Hon. Member for Moose Jaw have any suggestions with regard to the Income Tax section?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

Douglas Charles Neil

Progressive Conservative

Mr. Neil:

Mr. Speaker, it appears to me that many of the farmers who are taking extra jobs are doing so because they are having difficulty meeting their financial commitments. It would require just a simple amendment to the Income Tax Act to enable farmers to benefit from the write-offs of their usual expenses in farming. I can understand the situation of hobby farmers not being entitled to claim their full deduction of expenses in their farming operations, but certainly where a bona fide farmer is doing his utmost to raise money to keep his farming operation going, the Government, I think, is obligated to bring in the necessary amendment to enable him to write off his normal expenses.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Garnet McCallum Bloomfield (Parliamentary Secretary to the Minister of National Revenue)

Liberal

Mr. Bloomfield:

Mr. Speaker, I have a question for the Hon. Member.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Eymard G. Corbin (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Corbin):

Order, please. The Hon. Member is not in his seat; therefore I cannot recognize him.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Donald James Johnston (Minister of State for Economic Development; Minister of State for Science and Technology)

Liberal

Hon. Donald J. Johnston (Minister of State for Economic Development and Minister of State for Science and Technology):

Mr. Speaker, it is indeed a privilege to rise today to express my support, optimism and enthusiasm for the budget which was presented in the House by my colleague, the Minister of Finance (Mr. Lalonde). The budget offers strong medicine, not only to deal with the acute problem of unemployment today, but also with the chronic problem of slow productivity growth that Canada has experienced over the past decade.

Technology development is central to both these issues. I am confident that the proposals I present today for a technology policy for Canada will restore our ability to confront the demands of the 1990s with a healthy, productive and vigorous economy. I am pleased that the budget has dedicated over $700 million for technology development in the next two years. Never in the history of the country has such an effort been made to enhance the Canadian technology base.

Technology is changing many dimensions of our lives at an unprecedented pace. Communications, automation, new materials and consumer electronics are all having a profound effect on our livelihoods and on our view of the world. Some of

May 3, 1983

The Budget-Mr. Johnston

these changes we welcome; some we resist. But either way they represent a force that we cannot ignore.

Technological innovation in the work place may create new jobs and new wealth, but it may also eliminate existing jobs. This Government is determined to show leadership in supporting the development of new technology that will be to Canada's best advantage. We are also determined to have all Canadians share in the benefits that new technologies will bring. Changes are always upsetting and can often be painful. On the other hand, we must realize that we have no choice. We must keep pace with developments and change when the world changes. If we want to continue to enjoy the high standard of living we have today, we must be ready for the opportunities tomorrow will bring. Canada is not the only country that is faced with this climate of uncertainty.

At the Economic Summit held last June in Versailles, this issue was of such priority that a special working group was established to address the world-wide concern about technological change and development. The group reached a consensus on many issues, especially on the awareness of the profound effects of technological change on all nations. Its final report emphasized the theme that technology, while not a panacea for our economic ills, is a powerful instrument which can forge a better future for us and for our children.

Any period of transition such as the one we are now experiencing through technological change is exacting and stressful. The working group emphasized the need for a special program to promote the flexibility, adaptability and mobility of labour. Its report is optimistic that technological innovation will build the jobs of tomorrow. Canada has been quick to respond to this challenge, and, over the past few months we have been examining how a technology policy can best work for us. We have had to take a hard look at the nature of technology itself and to take an equally hard look at how technology interacts with our Government and with our economy.

Technology is all-pervasive. It touches each and every aspect of our lives. Any policy that addresses technology development must recognize this. To be fully effective, a technology policy for Canada has to act with and through economic, fiscal and industrial policies. Technological advances give the lifeblood to our manufacturing and resource industries, but a technology policy also has to influence, and be influenced by, our social policies. It has a profound effect on employment, our health, our environment and even our general lifestyles.

Nor can technology policy be considered in isolation from science policy. The basic research fundamental to scientific progress has often provided the inspirational source for remarkable leaps in technological development. The time has passed when we can comfortably address each of these areas separately. If we are to compete in this increasingly competitive world, and still maintain our standing of living, we must

have a forum that can address technology development as an integrated policy with separate but synergistic components.

Because, as I said, science policy and technology are allpervasive and because at the federal level science and technology range across programs in all major Departments-Communications, Environment, Agriculture, Energy, Fisheries, Health and Welfare, National Research Council, to name a few-I am pleased to report that the Prime Minister (Mr. Trudeau) has established a special subcommittee of Cabinet on technology development which will be dedicated to achieving the integration of policy elements and to advancing technology development in all sectors. Each Minister of the subcommittee has the authority, the resources and the influence to bring about the required changes through creating new programs or through adapting existing ones to specific policy areas. Each Minister contributes a unique and essential point of view to the continuing development of a technology policy for Canada.

The first task of the subcommittee has been to confirm our policy direction for technology development in Canada. This has been done. Our objectives are set. Indeed, some of these objectives have already been translated into action in the budget. We have also, however, established a policy framework which will maintain the budget momentum, guide our progress and concentrate our energies on long-term objectives. It is this technology policy which I would like to present to my colleagues in the House of Commons today.

The first objective of the technology policy is to strengthen the Canadian economy through the creation, application and diffusion of state of the art technologies. Second, we intend to manage the process of technological development so that Canadians are aware both of the opportunities and the problems that may arise. Well-informed Canadians will make the right choices for themselves and for this country. Third, we must ensure that the benefits of technology development are shared equitably among all Canadians in every region. Last, but by no means least, we must encourage a social climate that places a premium on scientific and technological excellence, curiosity and innovation. These are the values that will guarantee our progress.

[ Translation]

These are the general objectives for technology development in Canada and they set the parameters of the party by which we shall be guided. A detailed technology policy, however, must also consider the contribution that each sector of our society can make to technology development and the impact of technological change on every aspect of our lives. In this respect, the Federal Government has specifically defined the objectives related to each particular sector. Here are a few of the objectives that illustrate the extent of the present Government's commitment to our technological future.

Our objectives relating to the business sector reflect the primacy of the private sector in initiating innovation and new

May 3, 1983

investment. We will support the initiatives of the private sector by encouraging an over-all business environment that supports investment, innovation and enterprise. Our commitment here can be seen in the tax structure we have established to encourage investment in research and innovation. Canadian tax incentives for research and development, even before this budget, have been among the world's richest. We can look at Japan, West Germany, United States, France, Great Britain or Sweden and we find that, with the single exception of Singapore, Canada has the most beneficial over-all tax structure for research and development. Tax benefits for industry in terms of forgone revenue to the Government are calculated to be over $200 million in 1983.

The budget has significantly enriched this package. It has, for example, introduced important changes to the investment tax credit which will particularly benefit small firms and significantly broaden the application of the tax credits. The budget has also made proposals which, as a former tax lawyer, I am particularly pleased to see as they simplify the research and development tax incentives and make them more effective. These proposals are expected to contribute a further $100 million in industrial incentives for research and development. They have been put forward in the form of a paper for consultation which calls for comments by July 1, 1983, to ensure early implementation of the proposals.

Another federal Government objective in relation to the business sector will ensure that current industrial support programs for technology development continue to be effective and that Canadian firms have access to the most productive, up to date technologies available. In support of this objective, the Government will spend $20 million over the next two years to expand the National Research Council's Industrial Research Assistance Program. In particular, the Field Advisory Service and the Technical Information Service will now expand their current services to include small and mediumsized businesses, greatly assisting the diffusion of needed technologies to all companies across Canada. This is one part of the $100 million that the Government has committed to new technology initiatives over the next two years.

As far as labour is concerned, the federal Government's main objectives concern our ability to predict the effects of technological change in order to minimize its negative aspects. Mr. Speaker, I am convinced that most people will welcome the realization that new technologies will do away with many boring and repetitive tasks. I have every reason to believe that people are eagerly waiting for a chance to get one of the interesting and better-paid jobs that will be created as a result of new technologies. In fact, under the heading of training assistance, the Budget has earmarked an additional $155 million for human resource development programs.

The Budget-Mr. Johnston

Another objective of our technology policy is to encourage labour-management mechanisms on all levels to encourage joint planning for technological change. We will also support organized labour in its study of issues brought about by this change and its preparation and efforts to deal with them. The federal Government has approved $10 million to be spent over the next two years to encourage business and labour to establish a centre for productivity and employment growth. Negotiations with respect to the establishment of this centre will be led by my colleagues, the Hon. Charles Caccia, Minister of Labour, and the Hon. Ed Lumley, Minister of Regional Economic Expansion.

The federal Government would also like to foster a core of excellence within the university structure which conducts research relevant to industry. To support university research and enhance its contribution to technology development, the federal Government will increase the funding of the Natural Sciences and Engineering Research Council by almost $27 million over the next two years.

It is also an objective of our technology policy that industry become more aware of the research done in universities, and at the same time that science in the universities and federal laboratories be better attuned to the opportunities in the industrial world. The federal Government will spend $9 million over the next two years to strengthen joint university-industry research and technology efforts.

[ Translation]

This Government intends to make sure that R&D carried out in federal laboratories will support the requirements of industry within the framework of our economic objectives. Our programs and policies will be designed in accordance with these objectives. We shall be examining federal research programs to find out whether there are certain areas in which they could be better attuned to the needs of industry. The communications sector is one in which we are particularly interested. Canada has a world reputation for excellence in this field, and so that we may continue in this direction, my colleague, the Hon. Francis Fox, who is in the House today, the Minister of Communications-

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Eymard G. Corbin (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Corbin):

Order! This is the second time the Hon. Minister has mentioned the name of one of his colleagues in the House. I must remind him that he should refer to his hon. colleagues by their title, the name of their riding or their position and not by their own name.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Donald James Johnston (Minister of State for Economic Development; Minister of State for Science and Technology)

Liberal

Mr. Johnston:

I apologize, Mr. Speaker.

The Minister of Communications (Mr. Fox), who is in the House right now, has proposed establishing a non-profit corporation that would belong to the Government and others and would carry out R&D in the related fields of telecommunications, space technology and information processing. A task force, consisting of representatives from industry, the universities, and Government, will be established to assess the

May 3, 1983

The Budget-Mr. Johnston

viability of this proposal. We have earmarked $250,000 for conducting this study.

The federal Government is also determined that Canada meet the challenge of the emerging new technologies.

To make sure that Canada benefits fully from new developments in the increasingly important field of biotechnology, the federal Government is committing $22 million toward implementing a national biotechnology strategy. This strategy will support research networks-involving Government, universities and industry-which will concentrate on using biotechnology to improve the use of Canada's resource base and industrial development.

Microelectronics is also an important area for Canada's technological future. The federal Government will be establishing an initial fund of $7.5 million over two years to support the development of a national microelectronics design network. The funds will help establish a university-based, computer-linked network of design and testing stations for very large scale integrated circuits. About thirty universities are expected to participate in the expanded design network which will be closely integrated with the current work of industry in the microelectronics field. These facilities will help train the manpower critical to the expansion of the Canadian microelectronics industry and make an important contribution toward the creation of a technologically oriented work force for Canada.

Success in all these initiatives depends on the awareness of science and technology on the part of the public.

I am pleased to announce that the federal Government will sponsor a national "Canada Tomorrow" conference in the fall of 1983 which will highlight the effective management of technological change, especially as it affects the working Canadian and industry and trade in this country. This forum will bring the various sectors involved in technology development together-that is, labour, business, universities and Government-to form a deeper understanding of each other's requirements and concerns.

[ Translation]

The provinces also have an important role to play in the technological development of our country. Over the last few years, our activities in this field have increased tremendously. The federal Government intends to work together with the provinces in order to achieve a co-ordinated and harmonious blend of objectives, policies and programs that will launch Canada's recovery.

The Government's commitment to technology is evident, both in the level of current support to research and innovation and in the strong support which the budget has given to research and technology.

The Special Recovery Capital Projects Program has allocated $290 million over the next four years to establish 15 new or expanded research and training facilities. Projects are expected

to substantially expand research capabilities to serve the forest products, fisheries, agri-food, manufacturing and mining industries. In addition, $ 180 million has been allocated for the accelerated procurement of high-technology electronic and communications equipment.

As part of this program I am pleased to inform the House that my colleague, the Minister of National Defence (Mr. Lamontagne), has just announced today in St. John's, Newfoundland, the purchase of high technology communications equipment for the Canadian Forces valued at more than $67 million. These purchases include: $19.5 million for the search and rescue satellite project which will provide advanced technology to help locate aircraft and ships in distress; $38 million for a military aeronautical communications system which will be installed at various bases across Canada; $5 million for new high frequency receivers to upgrade the current communications networks; and $5 million for new CW20 microwave communications systems at selected bases across Canada. In addition, the Minister of National Defence announced the allocation of over $20 million to improve helicopter search and rescue capabilities in Canada.

As I said at the outset, over $700 million has been set aside in the budget for technology development. This is in addition to the $3 billion that the federal Government had already budgeted for technology support in the 1983-84 Estimates. It also does not include, and I emphasize this, the $200 million of forgone tax revenues for current R and D expenditures, nor the $185 million the new tax changes and proposals would add to that basic figure.

We must now turn that large and important investment into action. Central to this success is the concerted, co-operative and combined action of all sectors. We now have the policy structure and the fiscal support to push forward Canada's technological advance. It is now up to us to take advantage of the opportunities at hand to build towards a prosperous 1990.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

Blaine Allen Thacker

Progressive Conservative

Mr. Thacker:

Mr. Speaker, I have two questions for the Minister. One of the most recent high technology programs which could be brought in by the Government is the long baseline radio telescope which is proposed for across the country. Does the Minister know if that project is going to go ahead? Second, would its headquarters be at the University of Lethbridge, which I gather from the scientific data is the logical place for that headquarters?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Donald James Johnston (Minister of State for Economic Development; Minister of State for Science and Technology)

Liberal

Mr. Johnston:

Mr. Speaker, there has been no decision taken as yet with respect to the baseline array. Much interest has been expressed in the Hon. Member's own constituency of Lethbridge. I myself, as the Hon. Member may know, have met with representatives of that community, including the President of the University of Lethbridge. Of course, it is a very exciting proposal and a very expensive proposal. It is, indeed, one that deserves close study and that is being done, I understand, by the National Research Council at the present

May 3, 1983

time. However, no decision has been taken with respect to that particular project.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PC

Blaine Allen Thacker

Progressive Conservative

Mr. Thacker:

Mr. Speaker, the Minister might comment as to whether he, in his own mind, believes that it is a high technology project and whether it would fit within the 100 projects which the Government has envisaged. However, my second question goes on to another very important research facility in my riding at Lethbridge called the Animal Diseases Research Institute. The Minister knows from his days in the Treasury Board that we have some very top scientists working under very antiquated conditions and in outdated buildings. I am wondering if one of the 100 projects would be new capital spending for the Research Institute in Lethbridge.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Donald James Johnston (Minister of State for Economic Development; Minister of State for Science and Technology)

Liberal

Mr. Johnston:

Mr. Speaker, as the Hon. Member probably knows, I have over-all responsibility for the Special Recovery Capital Projects Program in terms of its moving forward and its co-ordination and implementation. I have said in the past, and would reiterate today for the benefit of Hon. Members of the House, that the specific projects will be announced in the very near future, as they become ready for announcement, by the line Ministers responsible in each case. I would hope that all of the projects will be announced within the next several weeks. I would only ask the Hon. Member for Lethbridge-Foothills (Mr. Thacker) to bide his time and await those announcements as they are made.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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NDP

Ian Deans (N.D.P. House Leader)

New Democratic Party

Mr. Deans:

Mr. Speaker, yesterday I asked the Minister's colleague about the whole question of plants which just simply close down and move away without any concern for the community or the workers involved, and there are many examples. The Minister speaks about technological changes which must take place and the new technology which must be introduced into Canada. I do not disagree with him for one moment. However, has he addressed the question of what corporate behaviour we could require from those companies which operate here, which receive considerable benefit from our tax structure and which demand in many ways that communities expend tax dollars to create an infrastructure which enables them to operate efficiently and effectively? And how do we demand from them a level of corporate behaviour which requires them at least to sit down with the people most affected, the Governments, the employees, the municipal officials, to discuss their plans in advance and the way in which they might live up to their responsibility to those communities?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Donald James Johnston (Minister of State for Economic Development; Minister of State for Science and Technology)

Liberal

Mr. Johnston:

Mr. Speaker, I would emphasize that, with respect to this whole question of management of technological change, I doubt that there is any area more important and of more concern to the Government, and obviously to the Hon. Member, than the issue of appropriate measures for labour adjustment. That is why there has been proposed the establishment of a national technology productivity centre, whatever the name may ultimately be, to address the very issues which the Hon. Member raises in his question. I am convinced, and I believe members of the community who are very familiar with technological changes as they are taking place across the

The Budget-Mr. Johnston

western world are convinced, that the pace of change and the capacity of our system to take advantage of change in order to improve our productivity would depend very much on the extent to which we address that very issue.

We intend to move forward and do everything we can, Mr. Speaker, to identify the extent of the problem which, as the Hon. Member probably knows, is a subject of some debate- the extent to which these changes will impact on the workplace in the short term and, perhaps more importantly, in the long term. We see short-term impacts, for example, in the clothing, textile and footwear sectors.

As the Hon. Member knows, we have established the Canadian Industrial Renewal Board which has as one of its mandates attempted to address adjustment, to bring new industries into communities affected either through the reduced activity in plants or through the modernization of plants. Because both have their impact on employment levels; there is no doubt about that.

All I would say, Mr. Speaker, is that the question raised by the Hon. Member is very much on our minds and is specifically addressed in the technology policy paper, and will be specifically addressed by my colleagues, the Minister of Labour and the Minister responsible for DRIE, the Department of Regional Industrial Expansion, as they go forth to try to set the terms and conditions among labour and industry leaders for the establishment and operation of the centre.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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NDP

Derek Nigel Ernest Blackburn

New Democratic Party

Mr. Blackburn:

Mr. Speaker, as the Minister knows, microtechnology, microprocessing and robotronics will be replacing assemblers in many of our industries; in fact, they already have. This is a process which has been going on for a number of years. In fact, Alvin Toffier told us about it five years ago. In view of the fact that it is estimated that some

400,000 assemblers in Canada will be displaced by robotics and microprocessing by 1985, in view of the fact that at the present time there are virtually no facilities for retraining anywhere in Canada which would accommodate a substantial number of employees, and in view of the fact-and I will give a specific example-that in Brantford, Ontario, at Mohawk College, if your Unemployment Insurance benefits have run out, if you are on a retraining program in high-tech, if you are married and have two children, you receive $106 a week to exist on, I would like to know what the Minister and his Department are going to do specifically to address this problem of 400,000 assemblers being displaced by robotronics and microprocessing, with woefully inadequate facilities not only at the present time, but which will continue to be woefully inadequate right down to 1985? What is being done to assist them?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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May 3, 1983