May 26, 1983

GOVERNMENT ORDERS

SUPPLEMENTARY BORROWING AUTHORITY ACT, 1983-84 (NO. 2) MEASURE TO ESTABLISH


The House resumed from Tuesday, May 17, 1983, consideration of the motion of Mr. Cosgrove that Bill C-151, an Act to provide supplementary borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.


LIB

Roderick Blaker (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Blaker):

My understanding is that the floor is free at the moment. I will therefore recognize the Hon. Member for Peace River.

Topic:   GOVERNMENT ORDERS
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PC

Albert Glen Cooper

Progressive Conservative

Mr. Albert Cooper (Peace River):

Mr. Speaker, 1 am pleased to have the opportunity to enter into debate on this borrowing Bill. It is obviously an important subject for the House to consider. It is one which I think has become increasingly important to Canadians from coast to coast because, more and more, what the Government does with its money, how it obtains its money and the way it spends it, is having an increasingly dramatic effect on our lives, whether we be farmers, businessmen, housewives or Canadians in virtually all walks of life. It has now come to the point where it has become very significant to us. That fact was driven home to me last night as I was returning from Toronto. I was speaking with a cab driver about the impact taxes are having on his life, on his job and all the other effects.

This is, in fact, the seventh borrowing Bill with which we have dealt in this long session, one which seems to be going on forever and ever. We are wondering whether this session will ever end. I understand the total borrowing now amounts to some $77 billion, somewhere in the neighbourhood of $77,300 million, which is an awesome amount of money. At one point we would have considered $1 billion as being a figure we could hardly imagine, yet today it is becoming quite commonplace. I understand, in fact, that at this point the Government already has some accumulated borrowing authority in the neighbourhood of $16 billion. I understand that comes from a certain amount of carryover. We find out that what the Government really needs this time is in the neighbourhood of $10 billion. What the Government is asking for, however, is around $14 billion. As a result there is a surplus amount of $2 billion for this year or perhaps for the next year. The question that

remains is why there is this surplus and why these requests have been averaged. Is it in fact nothing more than a type of hiding or delay?

When one looks at the projected Government borrowing requirements for the next while, to the year 1987, one sees that the Government will be looking for some $93 billion. That is an astounding amount of money. Perhaps that is why we are seeing an increased borrowing at this particular time rather than for the amount that is actually needed. Is it because the Government does not want to startle Canadians with those high figures and is trying to average it out over time and create a nonchalant feeling about the significance of a billion dollars? Perhaps it is the fact that it will end up creating a need for less the next time. In other words, simply forestall and delay the borrowing requirements over a period of time.

Obviously we and all Canadians want to warn the Government that we are concerned about deficits. I would like to refer to a recent article in the Ottawa Letter, Voi. XVI, No. 20, page 156 which describes this concern rather dramatically:

In a Gallup Poll released May 12, an overwhelming 85 per cent of Canadians think that the federal government should introduce economy measures to lower the huge federal deficit. No matter which party they support politically, those surveyed were of the same mind. Eighty-nine per cent of Conservative supporters chose economy measures as the best deficit-fighter; 85 per cent of New Democrat supporters wanted economy measures; and 82 per cent of Liberal supporters in the survey wanted more economy measures. Only 3 per cent of those questioned in the late March survey wanted higher taxes to fight the deficit-

That is something that I believe all of us can understand and identify.

-and 5 per cent suggested that borrowing abroad would be the best solution.

Essentially, the fact is that Canadians are becoming very concerned about deficits because they see it having a dramatic impact upon them. I think that fact is demonstrated very well in this recent Gallup poll. Only 3 per cent of Canadians want to see an increase in taxes in order to solve the deficit problem. That is a natural reaction. Once people see the relationship between the deficit and their own tax burden, they obviously will want to have that deficit cut back. I suggest that is the situation today and why we in the Opposition, when we discuss a borrowing Bill, want to warn the Government of the serious situation which exists when it allows the deficit to grow.

We find that deficits will have an inflationary pressure on the economy. It will tend to stimulate inflation which I believe is a generally accepted view.

We also find that the Government is now projecting deficits of over $25 billion for the next four years. We can begin to see

May 26, 1983

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and forecast the kind of pressure that will place on our economy. I understand the Government currently has in the neighbourhood of $115 billion in unmatured Government debt. That is debt that has not yet come due but will in the near future. We are now arriving at a situation where the debt load itself is adding to the deficit significantly. Presently, $1 out of $3 in revenues that come to the Government are going to service the debt itself. Every third dollar coming into the Canadian Government is going out to pay the deficit with which it is currently faced. Half of this year's deficit comes from financing deficits accumulated over the past few years. This becomes even more significant when you think about the fact that over the next four years we are projecting high budget deficits of over $25 billion per year. Government spending is now 26 per cent of the Gross National Product which is having a very significant impact on the Canadian economy and all Canadians. Eighty-four per cent of the savings of those who put their money into a savings account for a period of time is going to be needed to meet the financial requirements of the Government.

Therefore, the Government will be in a situation where it will be forced to grab a very large chunk of available funds that would normally be allowed to go into the regular economy to stimulate it, and create the jobs and the opportunities which all Canadians want. I am thinking particularly, as youth critic for my Party, of the young people who so desperately need employment opportunities at this point. The unemployment rates for our young people are running between 23 per cent and 25 per cent. The projections of the Canadian Conference Board indicate these rates will continue in that fashion well into the 1990s. This is a very serious situation and it demonstrates the future of our country and our economy.

Speaking of the future, this is one of the big concerns that we have with this borrowing Bill. Essentially, the Government is borrowing against the future of our country. Our young Canadians must realize that their future is in a sense being mortgaged to finance the present situation, which has a significant impact in the country. It destroys investor confidence which in turn does not create jobs. Those people who are unemployed are forced to collect Unemployment Insurance, putting a further drain and pressure on Government spending. It forces a whole cyclical approach.

When confidence in the country's future is destroyed and you start to borrow against it, pressure is put on interest rates. Interest rates become a very important factor when you are trying to turn an economy around. This is significant to a small, struggling business that employs, three, five, six, or eight people. Interest rates are one of the biggest expenses people in small business are forced to face in the every day existence and survival of their business. With those high interest rates and the pressures associated with it, jobs are threatened. Once again, the whole cycle starts rolling again.

Then there is the pressure that is put on the dollar. That has a particular impact on Canadians because we tend to import many things on which we rely for our day to day living; for

example, food in the winter and clothing. This in turn puts pressure on the Canadian economy.

Instead of trimming the fat of Government spending, this Government continues to carry on in much the same tradition that we have seen over a period of time. There is the whole idea of the pork barrel. We saw that recently in the Gillespie coalgate affair. We have seen the Prime Minister (Mr. Trudeau) hire his friends; for example, the architect for the American embassy. We have seen mismanagement in some of the Crown Corporations. The most significant one of late that has been the topic of discussion in all our newspapers is Canadair. There are some concerns with Canadair. Canadair should be a topic of discussion before Parliament. We have to discuss those types of issues and address the very serious problem as to whether or not the taxpayers' dollars are being well spent and well invested.

Another area of Government expense that I find most aggravating is what we call advocacy advertising. We saw that most glaringly in two recent examples. The first one occurred during the constitutional debate. We saw the beautiful geese flying across the water. The Canadian taxpayer was paying for that. It was an advertisement advocating a particular position which was not yet the position of the Canadian people or of Parliament; it was simply the position of the Government, the Liberal Party. We saw it very recently, in the last few weeks, in terms of the advertising of the Crow rate issue. We know what is happening today in this regard. The Government is spending a significant amount of money to put forward its position on the Crow rate at the expense of taxpayers. We have to look very carefully at some of the areas in which we could begin to trim Government spending.

Of course we would like to encourage entrepreneurs to get out and enrich the country, which would essentially increase revenues to Government, by creating opportunities and employment. Instead we find the Government stifling them by continuing policies such as the National Energy Program, which is of particular interest to myself. In my riding unemployment quadrupled as a result of the National Energy Program. What happened was that a number of small Canadian firms that were struggling in the oil industry for ten years to 15 years and had increased their employees from two or three to perhaps 15 or 20, supplied welding material, cars, trucks, oil, gas, or whatever were the particular needs of the oil rigs in the area. But when the National Energy Program came in, all this suddenly ground to a halt. The net result was that unemployment in my area went up four times because of one program that instead of increasing revenues, which seemed to have been the Government's purpose, actually resulted in lost tax revenues and unemployment in my area rising.

We have concerns for small-businessmen. There are many things we could do in order to create opportunity for them. I receive constant mail about the paperwork they are required to do. It is becoming so complex and technical to operate small

May 26, 1983

businesses that business people are now spending a lot of their funding on high-priced accountants and advisers, which money could be going to create a stable situation in their business opportunities and thereby create more jobs.

I see my time has just about run out. In an attempt to wrap up, I want to emphasize that the whole business of Government borrowing and spending is a very serious matter. It is becoming very serious to all Canadians. They view it as being a personal issue. Again 1 refer to that Gallup poll. People now see it as being a significant issue. They are now relating it to themselves personally. They are now seeing that unless the deficit is dealt with, very soon the Government will have to raise taxes and as a result all Canadians will have to pay.

I want to conclude by saying that it is an important issue. The Government will have to look at its spending and encourage the private sector because it is the only way we will be able to raise revenues in the country and, as a result, reduce the pressures on the deficit.

Topic:   GOVERNMENT ORDERS
Subtopic:   SUPPLEMENTARY BORROWING AUTHORITY ACT, 1983-84 (NO. 2) MEASURE TO ESTABLISH
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LIB

Paul James Cosgrove (Minister of State (Finance))

Liberal

Mr. Cosgrove:

Mr. Speaker, I would like to ask the Hon. Member for Peace River (Mr. Cooper) a question. He referred to supporting and encouraging the entrepreneur and assisting the private sector to maximize profits. Bearing in mind the advice given to Canadians by the Catholic Bishops in the document entitled "Ethical Reflections on the Economic Crisis", in which they called for economic policies that realized the needs of the poor as a priority over the wants of the rich and indicated that the rights of workers are more important than the maximization of profits, is the Hon. Member satisfied that his plans to help with the profits of the private sector will guarantee that the economic benefits will indeed be shared by poor people? Does he not see some value in the borrowing authority before us today which will help the Government with its policies to assist the unemployed, for example natives?

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PC

Albert Glen Cooper

Progressive Conservative

Mr. Cooper:

Mr. Speaker, I was also very interested in the Bishops' statement and read it with great care. I found the area the Minister referred to very interesting. It caused some thought. The more I read on in that report, the more I become aware that one of the things the Bishops put forward was the fact that many people have to be able to create opportunities that will help themselves in their own situations. I refer to one example the Bishops put forward, the whole area of encouraging co-operatives, encouraging co-operative investment in communities. We see that in housing and employment.

In my area a grocery store was put together by the farming community. A group of farmers got together. This has created significant employment. They provide a good product at a reasonable price. It is working very well.

The Minister used the words "profits of those companies". 1 do not think that is necessarily what is significant. What you are doing is looking after the well-being of the corporation. That will translate into security of employees, which is very significant. The Bishops related to that very well. If the

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Minister reads further in that statement, he will find it in there.

Topic:   GOVERNMENT ORDERS
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LIB

Paul James Cosgrove (Minister of State (Finance))

Liberal

Mr. Cosgrove:

Mr. Speaker, is the Hon. Member therefore in agreement with the increased allocation the Government has given toward co-operative housing, which now carries a total financial cost of $500 million annually in support of co-op housing? I will put my question another way. I take it the Hon. Member agrees with that part of the Government's initiative that supports co-op housing and that it is a cost that will have to be shared by all Canadians in the future.

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PC

Albert Glen Cooper

Progressive Conservative

Mr. Cooper:

Mr. Speaker, what the Minister is effectively trying to do is turn my argument around. 1 talked about Government fat, the need to trim it and the need to look very closely at Government waste. There are programs which have some legitimacy, significance and importance. None of us disputes that fact. That does not destroy my essential argument, which is that there is fat in the Government's budgets that should be trimmed. I referred to a couple of examples. Something we would like to look at is Canadair. We would like that brought forward for parliamentary debate. Also, let us look at the Gillespie coalgate affair. Let us look at the architect chosen to do the embassy job in the United States. It is that kind of thing that is Government fat. There is no point trying to compare a legitimate Government program with one that is waste and saying that if you accept this, yoou accept the other. That is not the case and the Minister should recognize that.

Topic:   GOVERNMENT ORDERS
Subtopic:   SUPPLEMENTARY BORROWING AUTHORITY ACT, 1983-84 (NO. 2) MEASURE TO ESTABLISH
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LIB

Paul James Cosgrove (Minister of State (Finance))

Liberal

Mr. Cosgrove:

With respect, Mr. Speaker, the Hon. Member cannot have it both ways. If he says he relies on the statement of the Bishops as to what the Government can do, he cannot disavow what the Bishops say. The Bishops say:

In our view, it is important to increase the self-sufficiency of Canada's industries-

The Government is doing that with Canadair. The support of technology in that industry is one of the more significant ways in which the Government supports private industry to be a leader in the industries of the future. How can the Hon. Member complain about that when the Government is doing exactly what the Bishops asked it to do?

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PC

Albert Glen Cooper

Progressive Conservative

Mr. Cooper:

Mr. Speaker, 1 just heard the comment made that Canadair is not a leader, it is a laughing stock in terms of what it is doing in advances. If the Minister wants to talk about the Biships' statement, he should look at the speech that I made in that regard. I thought their statement was very significant. I have given a great deal of thought to it. I made a speech, which is on the record of this House, in which I stated 1 felt it was significant.

I am not disputing some of the solutions put forward by the Bishops. At the same time, I am not saying that is justification for the Government to go ahead and not look at the waste that is in its budgets. The Minister will have to accept the fact that there is a certain amount of waste.

There are legitimate programs. One program that is very important now is Unemployment Insurance. Everyone in this

May 26, 1983

Borrowing Authority

House can relate to an individual Canadian who is now collecting Unemployment Insurance and who comes under that program. It is a legitimate program. It costs money. I am not saying that that makes it wrong, but the point I am trying to get across to the Minister and to the Members on that side is, let us look for the waste. There is waste. The Minister would not have to look very far, I am sure, even in his own Department, to begin to find some of that waste. That is what we want to address because that is how we will ultimately reduce the deficit.

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LIB

Roderick Blaker (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Blaker):

Questions, comments? Debate.

Topic:   GOVERNMENT ORDERS
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NDP

Lynn McDonald

New Democratic Party

Ms. Lynn McDonald (Broadview-Greenwood):

Mr. Speaker, Bill C-151 on the borrowing authority shows that the Government has no shame. It lacks wisdom, it lacks decency, it lacks respect for ordinary people, it lacks compassion for the unemployed, the elderly and especially elderly Canadian women who have spent their lives raising our country's children and face retirement without a decent pension. The Government now shows a lack of ability even to blush.

The approach taken in the borrowing authority Bill is the big lie: It is better to borrow an outrageous amount of money than to reveal economic incompetence bit by bit by borrowing billion by billion. The Government has even admitted that it does not need all of the money immediately. It needs the money for so-called contingencies so it will not have to raise the delicate issue of our economic problems closer to election time and so it will have cash on hand for the projects which Liberal Cabinet Ministers will be announcing. At these announcements, there will be fanfare, there will be the opportunity for political speeches and the opportunity to operate the traditional Liberal pre-electoral pork barrel.

The borrowing authority is the logical accompaniment to the budget. The budget announced a series of projects. These projects are of modest proportion but they will afford splendid opportunities for Cabinet Ministers to make public appearances and to give the appearance that they are doing something for the economy. The appearance is there, yes, but the reality is not.

What is wrong, Mr. Speaker, with borrowing? Of course, it depends on what the money will be used for. We could accept the borrowing if it were part of a long-term economic recovery plan, if the Government would begin to recognize our serious economic and structural problems, if it would begin to solve these problems and if the borrowing would provide money that would go into real, substantial, well thought out job creation programs. We could accept the borrowing if it would mean that people would get back to work and start paying taxes again instead of taking Unemployment Insurance, thereby creating demands for other goods and services and putting more people to work. We could accept the borrowing if it were directed to the recovery of the economy, for that would reduce

the long-term drain on the economy as dividends, interest payments and management fees go out of the country.

If it would save the generation of our children and our grandchildren from having to continue to pay for our economic short-sightedness, we could accept the borrowing. Even if the money would go to increase pensions, for example, or social services, it would be serving the higher purposes of decency and equity. It would not be building a long-term economy, of course, but the economic consequences would at least be partially good because people at the margin would spend their additional income mainly on domestic goods and services. They would be creating employment for unemployed Canadians and unemployment is the major problem that we face at the present time. Unemployment is the problem that we should certainly be addressing.

We could accept the borrowing if it were directed toward research and development, and I do mean serious research and development, not the band-aid measures that were announced in the budget and not in isolation from other institutional changes which are needed. With our branch plant economy, we will never have enough research and development because branch plants are not intended to do research and development and put products on the market which would compete with the home country. But we need to spend more money on research and development if we are to have an efficient and productive economy and if we are to reap economic benefits when we begin to do this.

[ Translation]

Unfortunately, the purpose of the Government's spending program is not to provide for research and development projects, social services, economic recovery and job creation, not according to the budget that was brought down recently by the Minister of Finance (Mr. Lalonde).

What is the purpose of this budget? It is to give handouts to private corporations. Small- and medium-sized businesses stand to benefit very little, despite the fact that, as employers, they are very important to our economy. Once again, the Government is demonstrating its lack of consideration, even contempt, for small- and medium-sized businesses. This is a pre-election budget where expenditures have been chosen for their publicity value. The budget gives Liberal Ministers an opportunity to announce projects, to cut ribbons and open institutions, research centres, improved harbour facilities, and so forth. These projects must be paid for through taxes and loans that will have to be reimbursed later on. This makes the budget even less attractive, because the bills will be paid by low- and middle-income Canadians. The same budget announced tax increases for low- and middle-income Canadians, in the form of capped deductions and postponed sales taxes. The budget grants tax rebates to private corporations and so, the Government is demanding more and more from the average Canadian and less and less from corporations. In the 50's, corporations paid half of the tax bill and individual Canadians the other half. Now, individuals pay 80 per cent and corporations only 20 per cent.

May 26, 1983

The financial burden on individuals has been substantially increased by this Government, and this is entirely unfair and unacceptable. We of the New Democratic Party feel that the responsibility for supporting Government programs should be shared equitably by private corporations and private citizens.

I would like to point out some anomalies in the Government's spending priorities, Mr. Speaker. There could be a very, very long list of these anomalies, but 1 will confine myself to a few examples. First of all, take as an example the Public Service Commission. It does not have enough money to promote women. Women will just have to be patient because now is not the time for affirmative action. Women will just have to stay in the lower-paid jobs and in the dead-end jobs. Yet the number of people earning over $60,000 a year, almost all of them men, increased threefold this past year.

The Government does not have the money to increase Old Age Security. It has even cut it back with the partial deindexing in the six and five program. It does not have enough money to increase the Guaranteed Income Supplement even for single people to bring it up to the Statistics Canada poverty line. Yet the Government cut income taxes for high-income Canadians.

The Government does not have enough money for serious job creation apart from the PR event-type job creation that we have already seen in the budget. Yet the Government is continuing to increase military expenditures. I would not want to suggest that our problems with military expenditures are remotely as bad as those problems of the United States and the Soviet Union, countries where their enormous expenditures on military hardware are a serious strain on their economies. Our mistakes in this area are more modest, but coupled with the seriousness of our structural problems they are grave enough.

The point is that money spent on the military hurts the economy and fuels inflation. Money spent on research for military hardware is money not spent on research and development in the industrial sector. High military expenditure is associated with low productivity in industry. In Canada we need to invest more money in research and development for industry and any diversion from this goal ought to be looked at very, very carefully.

To conclude, Mr. Speaker, the Bill before us is unsound and unjustified and it ought to be defeated. Its intent is to postpone the day of reckoning and to enable the Government to evade its responsibilities. Its hope is that the public will be fooled, that the public's memory will not be long enough to last until the time of the next election and that when the election comes by, the public will remember only the cute projects and the fanfare and will not consider the Government's absolute failure to deal with long-term problems. Certainly my Party will do its best to prevent that from happening by exposing the incompetence of the Government's plan and the ineptness of the Conservatives' response as an alternative. Mr. Speaker, we have serious problems to address in this country. Irresponsible Bills like the one before us now are not going to help.

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Topic:   GOVERNMENT ORDERS
Subtopic:   SUPPLEMENTARY BORROWING AUTHORITY ACT, 1983-84 (NO. 2) MEASURE TO ESTABLISH
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LIB

Douglas Glenn Fisher (Parliamentary Secretary to the Minister of Finance)

Liberal

Mr. Fisher:

Mr. Speaker, could I start by saying that I listened to the views expressed by the Hon. Member on this Bill and the budget and have been very impressed by her contributions. It seems to me that she always expresses her priorities very clearly and has a passionate way of expressing what she sees as priorities for ordinary people. I should like to congratulate her. I do not agree with all her priorities as I believe that our course of action is better than the one she proposes but, contrary to many of the contributions in the House, her contribution is always worth checking to ensure that reasonable alternatives are not being overlooked.

I should like to differ with the Hon. Member on one point- perhaps a somewhat technical one-and 1 should like her opinion on it.

At the beginning of her comments she said that the contingency borrowing requirements in this Bill were unacceptable to her. I should like to point out that the Government has always put those provisions into its borrowing authority Bills. This is not a new idea. We hope that it helps us to come to Parliament less often. It is strictly an administrative move on the part of the Government to try to avoid parliamentary logjams on borrowing Bills.

When we do this we end up, we hope, with better financial management. This gives the Government a great deal of flexibility in its borrowing program so that it can get the lowest interest rate. In this way we can use different financial instruments at different times to borrow at the best rate, whereas last March when the Tories were filibustering this Bill we were forced to borrow on expensive instruments.

I should like to point that out to the Hon. Member and indicate to her that while she raises the concern of contingency, on this side we feel that we are accountable to Parliament for this. We also feel we are accountable to the people and must set up the best borrowing program we can so we can manage their money as cheaply as possible.

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NDP

Lynn McDonald

New Democratic Party

Ms. McDonald:

Mr. Speaker, I am certainly in favour of managing the economy so that money can be borrowed as cheaply as possible. That is a laudable objective. My concern and the concern of this Party is with the amount of borrowing, which keeps going up enormously. I spent most of my time talking about the sins of omission rather than commission. I think it is what the budget is not doing and its failure to address long-term problems that is wrong. It is not just that we are borrowing this rather large amount of money now but that we will continue to borrow because our economy continues to decline and foreign ownership continues to grow. We are losing control of the economy and not beginning to address those problems.

If this were a one-shot effort, that would be a different matter. If we were really beginning to go after the structural problems, it would be a different thing.

Regarding the question about timing in Parliament, I must point out that there is another response to obstruction on the part of Opposition Parties and that is to work in a more

May 26, 1983

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reasonable way with them. If there is obstruction there is usually a reason for it. There are many opportunities for difficulties to be talked out and resolved. Clearly, we are committed to the adversarial system and things get hot and heavy and difficult when there is ill will. Some of this could be prevented by better consultation. Opposition is not always opposed to the objectives of the Government; it is sometimes opposed to the means by which the Government is trying to achieve those objectives.

I think the Government would do well to assume a little bit more reason on the part of this side of the House, or at least this corner of this side of the House, than it often does.

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LIB

Paul James Cosgrove (Minister of State (Finance))

Liberal

Mr. Cosgrove:

Mr. Speaker, 1 should also like to congratulate the Hon. Member for joining in this debate, unlike other Members of her caucus who are afraid to come to the House to debate, for example, the Crowsnest Pass legislation which would provide $15 billion of investment money to create jobs.

I am interested in the last answer given by the Hon. Member wherein she stated that the Government is going to continue to borrow. I should like her opinion on the special recovery tax element of the budget which is designed to recoup the special recovery spending that will take place in the next two years. For example, does she share the opinion of the Conservative Party that we should not have introduced the tax to pay for that deficit next year? We have allowed a 12 to 15-month period in between. Does she feel we should have extended that or, as they did in Ontario, in addition to providing stimulation, should we have introduced taxes on a selective basis immediately to recoup those deficit funds?

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NDP

Lynn McDonald

New Democratic Party

Ms. McDonald:

Mr. Speaker, it is difficult to deal with one item in isolation from the others. The objections of my Party, which 1 very fundamentally share, are that we have an extremely unfair tax system. 1 refer to the burden between individuals and corporations where individuals are paying more and more tax. It is now 80 per cent whereas in the fifties it was 50 per cent of income taxes. The shift occurred mainly under the Liberals but it started with a Conservative Government, so we cannot blame one Party alone. I think that is an extremely important point. Then, of course, there is the individual level.

Sales taxes are regressive taxes and very unfair taxes. The less sales tax possible, the better. Obviously there are differing circumstances. Where does the burden fall? We feel that there is a great deal of unfairness in the way the Government is having the tax burden shared at the moment.

Topic:   GOVERNMENT ORDERS
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LIB

Paul James Cosgrove (Minister of State (Finance))

Liberal

Mr. Cosgrove:

Mr. Speaker, I take it the Hon. Member is saying we should not have introduced the special recovery tax so as to reduce the deficit within a year and a half. If she says that, I must ask her how she can reconcile that statement with her earlier statement that she was opposed to the Government continuing the deficit.

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NDP

Lynn McDonald

New Democratic Party

Ms. McDonald:

Mr. Speaker, there are other ways of raising taxes. My point was that taxes should be borne equitably by the Canadian population. The shift from corporations to individuals is extremely unfair. The lowering of taxes for

high-income people and the raising of taxes for low-income people is extremely unfair. Earlier, this Party proposed a surtax on high-income people because they can more easily bear the tax.

We have a reasoned proposal. We have not just said that money grows on trees. Clearly it has to be raised, but we want to see it raised fairly. That is not the case right now.

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LIB

Douglas Glenn Fisher (Parliamentary Secretary to the Minister of Finance)

Liberal

Mr. Fisher:

Mr. Speaker, I should like to take issue with the last statement. I hope the Hon. Member accepts the fact that if we drain taxes away from corporations then at various times we are also draining away their ability to create jobs.

Prior to the budget we heard very clearly from people like the Canadian Manufacturers' Association and the Canadian Federation of Independent Business that indirect taxes like payroll taxes, which help low-income people through the payment of things like medicare fees and Unemployment Insurance, might be a good thing to use but that the timing was poor. They pointed out that additional loads imposed on corporations with these kinds of taxes would prevent corporations from undertaking job expansion activities. I think there is a balance on this and 1 am sure that we are reaching for it. At this point in time, however, corporations have told us very clearly that we must choose between taxes and jobs.

Given the performance of the economy, we surely must accept that kind of testimony from corporate leaders. It is not doing any worker any favour if we increase a company's obligations to pay his OHIP but at the same time take his job

away.

Topic:   GOVERNMENT ORDERS
Subtopic:   SUPPLEMENTARY BORROWING AUTHORITY ACT, 1983-84 (NO. 2) MEASURE TO ESTABLISH
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May 26, 1983