March 20, 1984

GOVERNMENT ORDERS

BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH


The House resumed from Thursday, March 15, consideration of the motion of Mr. MacLaren that Bill C-21, an Act to provide borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.


PC

William Hillary (Bill) Clarke

Progressive Conservative

Mr. Bill Clarke (Vancouver Quadra):

Mr. Speaker, once again we have a borrowing Bill before us. As usual, C-21 takes the normal form of two pages, one of which is blank. Once again, it is a record-breaking borrowing Bill.

Bill C-21 requests authority to borrow $29.5 billion. It is the largest borrowing Bill that we have ever seen and it is not the first one introduced into this Parliament by any means. In fact, during the first session Parliament approved Bill C-30, Bill

C-59, Bill C- 111 and Bill C-151, all major borrowing Bills. In addition to those, there were the supplementary borrowing Bills C-125, C-128 and C-143.

The exact size of this Bill does not merely reflect a matter of detail but a matter of perspective. I attempted to bring the huge size of this Bill into some perspective. In doing so, I first referred to the 1983 edition of the taxation statistics which contain the analysis of 1981 individual tax returns. It is the latest one that is available.

If one looks at Summary Table 2 of that book, one will see that the number of individual tax returns filed totalled 15 million and the total federal taxes yielded from all of those individuals was less than $25 billion. Therefore, this Bill seeks to borrow an amount that exceeds the total amount of federal personal taxes paid by Canadians in 1981 by several billion dollars. That is a staggering admission for the Government to make and it is a staggering figure for anyone to absorb.

Another perspective can be found in the Public Accounts of 1983. At page 2-10 of this book, the non-budgetary appropriations for the fiscal year ended March 31, 1983 are shown as $28.5 billion. Once again, this borrowing Bill seeks to borrow more than $29 billion which is over $1 billion more than the total amount appropriated for non-budgetary purposes in the preceding fiscal year.

One other comparison concerns the statements of assets and liabilities which is also found in Volume III of the Public Accounts at page 2-9. One can see at that page the liability for unmatured debt, and in the case of Canada Savings Bonds outstanding at the end of the 1982 fiscal year the liability of the Government of Canada was just under $25 billion. This Bill seeks to borrow an amount exceeding the total of all of Canada Savings Bonds that were outstanding at the end of March, 1982.

It is an amount that is almost equal to the total amount of all Treasury bills which were outstanding at the end of March, 1983. That amount at the end of the 1983 fiscal year was $29 billion, almost the same as the amount the Government is seeking to borrow now.

The reason I am making these comparisons is that we must put borrowing authority into perspective. It should be known that the borrowing sought now exceeds these already enormous amounts.

There is another aspect of borrowing authority which I would like to address for a moment. Why is it necessary to have a borrowing Bill every year and sometimes more than once a year? The Government knows there will be a deficit every year when it brings out a budget. At least we know that is true with the present Government. Each year it projects the

March 20, 1984

Borrowing Authority Act

amount of the deficit which we know will have to be covered by borrowing. I realize that there is a technical aspect to this that I cannot explore in the time allotted to me today, but I suggest that the House would be much better served if the borrowing authority were included in the approval of the Budget which presents to the House expenditure estimates and the projected amount of the deficits every year. Of course, the House votes on that and approves the estimates and the amount of the projected deficit.

I am not certain if it would require a change in the Financial Administration Act but changes should be made. It would certainly be beneficial to the House and the country. If this were done it would have avoided the introduction of seven borrowing Bills in the first session of this Parliament. The House is aware of how those Bills often tend to drag on. All of these borrowing Bills, approvals and deficits have added up to a huge amount of money being borrowed and therefore owed.

The total debt outstanding at the end of March, 1983 was estimated at $160 billion. That is comprised of $115 billion in unmatured debt as shown in the public accounts and an estimated $45 billion which is owed by Crown corporations and therefore is a contingent liability, if not a direct one, of the Government of Canada. At an average rate of interest which can be gleaned from the public accounts, the $160 billion requires levies of over $17 billion-it was $17.6 billion in 1983-just to pay the interest on the outstanding debt.

To put that amount into perspective, I return to the summary table of the tax book and find that that amount of federal taxes is reached when we take the total federal income taxes paid by the vast majority of the 15 million individual taxpayers. It is not until we collect the income taxes of every Canadian earning $40,000 or less that we collect an amount of $17.6 billion. If we told the 95 per cent of Canadian taxpayers who earn less then $40,000 that their total contributions to the federal coffers would go to cover the interest on the national debt, I think they would come here and have some harsh words with the Minister of Finance (Mr. Lalonde) or perhaps his Parliamentary Secretary. That is a shocking statistic as well.

Fortunately for the Government opposite, Canadians at this moment are saving money at an alarming rate. It is alarming for a number of reasons, one of which is that it is three times the savings rate at the moment in the United States of America. Also it is alarming because it demonstrates the frame of mind of Canadian taxpayers at the present time. Even with the present high rate of savings, the borrowing Bill will absorb 93 per cent of all projected savings of Canadians in the coming year.

Why is that an alarming statistic from Canada's point of view? The reason is that Canadians are afraid to spend their savings because they know very well that they may need that money if they join their brothers on the unemployment lines, in which case they will be in danger of being unable to feed, house or clothe their families. We know the trouble Canadians have had holding on to their houses in recent years. Fortunately for this borrowing Bill, there is a crisis of confidence today which is forcing Canadians to save at the highest rate possible. However, more importantly, we must have as soon as possible an opportunity through an election for Canadians to state that they want a different force or thrust from their government, a thrust which will restore confidence in Canada and encourage Canadians to spend their money and rejuvenate the ailing economy, and many of those unemployed Canadians will become contributors to society instead of being a drain on it.

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PC

Claude Girvin (Girve) Fretz

Progressive Conservative

Mr. Girve Fretz (Erie):

Mr. Speaker, I should like to share a few thoughts today with the House regarding the supplementary borrowing authority the Government is seeking through Bill C-21.

Tradition demands that the Government obtain parliamentary authority in order to borrow new money. This Bill certainly involves that. It involves plenty of new money, in fact $29.5 billion. I think that is enough to boggle the mind, and this year we did not even have a Budget leak which needed plugging.

Can we believe it, the Government is actually coming to Parliament to ask for $29.5 billion. I think we should ask ourselves why it needs this money. Is it because the Department of National Revenue is not working hard enough to collect money from ordinary taxpayers? No, I do not think that is the reason. I believe they are gouging taxpayers more and more, especially those whose incomes are barely enough to see them through. These are the people who cannot take advantage of tax deductions such as the impending $15,000 deduction for RRSPs which benefits those people with incomes of $86,000 or over per year.

Meanwhile, as a Member of Parliament I am faced in my constituency with dozens of cases of small-business people and low-income earners who have literally been hounded for their last dimes. Obviously the revenue end is doing its best. In fact it has been carried to the point of absurdity.

Why, then, is there a need for more money? The answer is government extravagance. With regard to the deficit, we are making the same progress as a man falling down an elevator shaft. There seems to be no shame; the deficit just continues to increase. I know what we will be hearing in the next few days from the gang across the way. We will hear that there are heavy demands on the public purse due to unexpected requirements such as pre-election gimmicks and Budget tricks. We may also hear from government back-benchers justifying the borrowing authority and the embarrassing and frightening deficit on the grounds that it is inevitable spending, that somehow they have done their best and that we over here should accept it. Their best is just not good enough.

Figures abound to confirm the fact that government spending has risen much faster than the Consumer Price Index or the Gross National Product. I think the term "gross national deficit" should be implemented as part of our language. The deficit is gross. It is inexcusable, as are the attempts by the Government to justify the recent increases in interest rates to prop up our sagging dollar. This is happening because inves-

March 20, 1984

tors lack confidence in the Government and in the country. We have a government over there which needs to be defeated.

The Auditor General works for the benefit of Canadians by keeping tabs on the spendthrifts in the Government. Yet now there is talk of reducing this mandate by effectively reducing his powers to control spending and irrational acts of financial suicide. What a shame. If there is criticism, stifle it rather than listen and make appropriate changes: that is the attitude of the Government. That is why it is doomed, doomed, doomed; it is going down to defeat.

Last year it was indicated, supposedly in defence of government spending practices, that Cabinet committees were taking responsibility for expenditure management following the guidelines set out by the Lambert Commission. But then again, the moon is made of green cheese. It is difficult to see any indication of the implementation of any such guidelines. Indeed, I think guidelines is almost a dirty word in the Liberal caucus. After all, if there were guidelines the key players in the Gillespie affair would have had to resign, apologize and repent. That is why they prefer to operate without guidelines.

Speaking of guidelines, the six and five program is supposed to be credited with stopping inflation. I am pleased inflation has been reduced, but the deficit is in the clouds, to the extent that the Government will have to borrow $29.5 billion to cover expenses. Spending is up by 10 per cent, which is double the present five and four program. The Government needs in one year almost as much as all Canadians have saved in their bank accounts, which are losing value each day as the dollar sinks to ever-increasing depths. This Government in its grasping leaves no money for new homes or new jobs. The tremendous borrowing will make banks that much richer and citizens that much poorer. Indeed, the excessive borrowing demands point out the absolute confusion and lack of realism in the Ministry of Finance.

What a legacy to leave to the new, temporary Liberal Prime Minister! Not only will he have to choose new drapes for 24 Sussex Drive but he will have to try to rectify the financial mess left behind by his predecessor. He will have to deal with a wounded, battered and sick economy and a country literally brought to its knees by interest rates that will probably approach 16 per cent as we come to early fall and an election.

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Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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PC

William Hillary (Bill) Clarke

Progressive Conservative

Mr. Clarke:

He will make it worse.

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PC

Claude Girvin (Girve) Fretz

Progressive Conservative

Mr. Fretz:

That is right, he will make it worse. What to do, then, with this borrowing Bill? Why not ask for half as much money, which is all the Government really needs? I am sure Opposition critics would be less critical of a borrowing authority Bill which reflects stability and restraint. Perhaps then the programs which are not absolutely essential will be dropped, especially some of the advertising extravaganzas.

Someone has to bite the bullet. I ask my Liberal colleagues to forget the handouts, to forget the advertising, to forget the slush funds and to remember the needs of the people and the country. Eliminate the costly and frivolous programs which are

Borrowing Authority Act

bringing this country down. Eliminate the costly duplication of services. Another suggestion, a small one, but it is significant: how about turning off lights when they are not needed? When I come into the House of Commons at night and work into the wee hours of the morning, the place is lit up like a theatre stage.

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Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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?

Some Hon. Members:

Oh, oh!

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PC

Claude Girvin (Girve) Fretz

Progressive Conservative

Mr. Fretz:

Members of Parliament may have their faults, but we all know how to turn off light switches. The list goes on and on. I got some laughs just now when I mentioned the lights. If all or many of the lights were turned off in all of the buildings during the night, we could probably save thousands of dollars.

Think of the incredible bailout of Canadair. Think of Mais-lin. Think of the Crown corporations with their hands out. The waste is incredible. So why do we not take the bull by the horns and stop spending? Then the deficit will drop and totally unreasonable requests for money such as we have here today would become a thing of the past. Bill C-21 gives further proof to the notion that the Government no longer believes in accountability or moderation. Here we have an administration that really needs only $15 billion, yet it comes to Parliament and asks for $29.5 billion. The Bill is yet another reminder that the Liberal philosophy as espoused by this Government is to spend, spend, spend, with no end in sight.

Listen to their spokesman, the Hon. Member for Ottawa Centre (Mr. Evans), who on February 22, 1983 made a statement which was referred to recently by my colleague the Hon. Member for Simcoe South (Mr. Stewart). The Member for Ottawa Centre said:

A deficit is no more and no less than an increase in future tax liabilities... I believe that the best way to stimulate the economy and maintain the income support programs that are necessary in our economy is to use the deficit.

That is wonderful, Mr. Speaker, but who pays for the deficit? Our children and grandchildren. Future Canadians will be burdened with this deficit long after the Member for Ottawa Centre has ceased to utter such nonsense.

Whatever happened to keeping budgets in the black, even at the expense of cutting some of the extras? By the end of this fiscal year the gross debt will be $190 billion. In 1984-85, the cost of servicing the debt will be $20.4 billion or $800 per capita. Surely something must be done to curb this. The Liberal Party is into a leadership race. The Liberals will probably elect a new conductor. But with the same old orchestra, they will play the same old, worn-out tunes. I recommend that an early replacement of this Government is the first step in the right direction.

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Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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PC

Stanley Kenneth Schellenberger

Progressive Conservative

Mr. Stan Schellenberger (Wetaskiwin):

Mr. Speaker, I listened with interest to the Hon. Member for Fort Erie (Mr. Fretz) when he spoke about turning off the lights. Perhaps I might suggest that even with the lights on Members opposite seem to be running around in the dark because they come to us constantly for more and more money.

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Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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LIB

Marcel-Claude Roy

Liberal

Mr. Roy:

Put the lights on.

March 20, 1984

Borrowing Authority Act

Topic:   GOVERNMENT ORDERS
Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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PC

Stanley Kenneth Schellenberger

Progressive Conservative

Mr. Schellenberger:

This time the Government is asking for an astonishing amount. I hear Members over there laughing. It is hitting home that they need bright lights.

This Government is asking us to allow it to borrow $29.5 billion. The Liberal Government is even asking us to allow it to borrow $4 billion more than it projects it needs. The Hon. Member who has just spoken said that perhaps the Government requires only half of what it is asking, but the Liberals are trying to convince us to give them an extra amount extending beyond March 31, 1985.

This is the largest borrowing Bill we have ever had in this House, Mr. Speaker. If the Government put forward its program and said it requires for the benefit of Canadians this much more money than it is taking in, and if the program were outlined and we agreed with that program, with some minor doubts, then perhaps we might say all right, we are prepared to grant that kind of money. In all of the eight borrowing Bills that we have had in this Parliament, most of the amounts requested have been reduced because Members fought this kind of undefined request against asking for huge amounts of money, and against this trusting Government to spend that money appropriately, without a plan being put before Members of Parliament. Any other procedure is not acceptable. Should we accept this Government's word and trust it to spend that money properly? Many of my colleagues have announced areas of concern where taxpayer's money has not been spent wisely. No wonder we are reluctant to approve a borrowing Bill which, by and large, is asking for money that we do not know how the Government will spend. That is a concern.

Then we have the concern that is enunciated over and over again. This Government had the audacity in the Budget just presented to project deficits of over $25 billion for the next four years running. The Liberal Government is not embarrassed to spend almost $30 billion more than it has collected this year. What about the Budgets we have had in the past which have been accumulating debt at an alarming rate? The Liberals are projecting deficits in the future of astounding amounts. As already mentioned, future generations will be burdened with this debt. They are the ones who will have to pay back this money.

This rate of annual borrowing will certainly double the deficit by 1990. The deficit we have now is alarming. That situation is not acceptable. Members of Parliament on all sides of this House are elected to spend properly and wisely the money which taxpayers are required by law to send to this institution. We have an obligation to see that those deficits do not increase at such an excessive rate, that money is spent in a wise and proper manner with scrutiny, and that the powers of Parliament are increased so that as we look at the estimates in committee we have the capacity to question those who are spending this money. We should see to it, in areas where we believe the Government is asking for more money than is required, that we are able to reduce those estimates. Under the present authority in this House of Commons we have the ridiculous situation of completely annihilating a whole spending program in order to make the point that a small part of the

estimates are not being spent properly. That is not acceptable to me as a Member of Parliament and it should not be acceptable to any Member in this House.

The federal Government will owe more than the total accumulated, direct and guaranteed debt of all ten provinces put together after this new borrowing.

There is an astounding amount of borrowing in the country. As of December 31, 1982 the provinces owed $115 billion. The federal Government directly owed $112 billion without considering what Crown corporations have borrowed, and that is anywhere from $45 billion to $70 billion. If this borrowing authority Bill is passed, we will find that our combined direct debt will climb to well over $130 billion.

Today the federal Government is asking to borrow more than twice what all of the provinces are asking to borrow. This year, the provinces will borrow approximately $12.7 billion. The federal Government has indicated that it requires $29.5 billion. The $4 billion that the Government is requesting which is over and above its projected borrowing needs amounts to 31 per cent of the total projected borrowing of all of the provinces in the country. Add to that the accumulated liabilities Crown corporations which amount to $71 billion. Canadian taxpayers are directly responsible for those liabilities and have been asked to give and give to Canadair and de Havilland in order to keep them operating.

I am astonished by the Crown corporations. If a private corporation were losing money at a rate comparable to Crown corporations, it would surely ask the board of directors, the chairman of the board and the chief executive officers to come before a committee to be run over the coals and asked why they are making those kinds of investments and projecting those kinds of payments. That does not happen in the case of Crown corporations. Canadair is losing money, the Government has the audacity to ask for another billion and a half dollars, yet it appoints the same board of directors again. A committee is unable to question those directors in any way. That is unacceptable. No wonder Canadians are questioning the kind of borrowing that Crown corporations are undertaking without proper scrutiny by the House.

What happens with this kind of federal borrowing pressure on the economy? Certainly it causes concern to the ordinary citizen. The ordinary citizen and the ordinary small businessman is competing with the large borrowing arm of the federal Government. Federal borrowing pressure is having a negative effect on the economy. Interest rates are again increasing. I read in the newspapers yesterday that the interest rate in the United States is rising as well. Large government borrowing in Canada is putting extreme pressure on the dollar which is decreasing in value.

We have two choices to make if we do not control federal borrowing. We either allow the dollar to decrease in value, which is inflationary and we begin to print money, or we allow interest rates to rise. The private sector of the economy simply cannot sustain another increase in interest rates lasting for a

March 20, 1984

long period of time. If that is allowed to happen, small businesses, farms and many people will be thrust immediately into bankruptcy. There has not been sufficient time to recover from the last devastating increase in interest rates.

We have a federal Government which is not able to control its spending and which is asking us to go to market for another $29 billion. An astounding statistic mentioned by my friend, the Hon. Member for Vancouver Quadra (Mr. Clarke), is that the Government is asking to borrow 93 per cent of the money that Canadians are prepared to save this year. That does not leave very much money for others to borrow. I am very concerned about this situation, Mr. Speaker. 1 believe that we as Members of Parliament must thoroughly investigate the needs of the Government before we grant it that kind of money, and that is what we intend to do.

Topic:   GOVERNMENT ORDERS
Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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NDP

James Ross Fulton

New Democratic Party

Mr. Jim Fulton (Skeena):

Mr. Speaker, I am pleased to enter into this debate to make it quite clear that my colleagues and I are intending to vote against Bill C-21 which calls for the borrowing of $29.55 billion. Once I have had a few minutes to outline the reasons why we will do so, I believe that even the odd member on the government side will be puzzled that they as individuals would even consider supporting this kind of a borrowing Bill.

Previous speakers have pointed out that one of the most disturbing things about this Bill is the Government's desire to borrow an extra $4 billion as a contingency fund. I think that in an election year that is a particularly stinky request to be made by a government about to go to the polls. In recent years, this entire Government has demonstrated an incapacity to deal effectively with the problems of Canada. I wish to speak briefly about the failures of some of the projects in which the Government has become involved.

I see that the Minister of National Revenue (Mr. Bussieres) is present. I do not think he likes to be reminded too often of failures like Consolidated Computer into which he and his colleagues put $100 million over a period of 24 months. It went on to the chopping block and the Canadian taxpayers got a couple of hundred thousand bucks back. We must look at the cost per job in that situation and in terms of Canadair. We should also look at the loss to the Canadian taxpayers caused by the office building across the street here which is rented by the federal Government but is empty. The Government is paying $1 million a month to rent empty space. One can only wonder what kind of incompetence is loose within the Government and certainly within the Cabinet.

The Government is coming before us, as pointed out by previous speakers, to ask for borrowing authority which will absorb over 90 per cent of Canadian savings during this coming year. By this time next year, that authority will cost $800 for every man, woman and child in Canada simply to service the interest on the debt. It is phenomenal that the debt is escalating at such a rate that, when including the borrowing of Crown corporations, it amounts to at least $160 billion. As others have pointed out, it amounts to a cost to us of $17.6 billion for 1983 simply in order to service the interest on that enormous debt.

Borrowing Authority Act

I would like to spend a few moments speaking about my own constituency and explaining the problems the Government has created for itself and for all of Canada not only through its borrowing but particularly through its expenditures. My constituency is very large and encompasses over one-third of British Columbia. Over the past two and a half years, it has received more direct federal capital expenditure than any other constituency in the country. One would think that there would be massive job creation and that everyone would be doing just great. One would think that small businesses would be doing fine. However, let me give you two examples, Mr. Speaker, which I think exemplify the kind of shortsightedness with which the Government operates and which exemplify why my constituents, even when receiving the largest direct federal capital expenditure in the country, still suffer from unemployment. In some areas of my constituency the unemployment rate is reaching 90 per cent, and across the constituency it is still running at around 30 per cent.

An example of a major project over which the Government is always crowing is Ridley Island. It seems that the Government is always sending Cabinet Ministers to Prince Rupert in order to cut ribbons and I welcome those Cabinet Ministers. I think that that is just fine. However, I think all of us in the House are somewhat disturbed when we see the Government participating in the purchase of the coal stacker reclaimer from Japan. It is principally Americans who are doing the overseeing of the marine work for the docking facilities. A Swedish company is doing most of the onshore cement work for the grain elevators.

Whereas the people of Prince Rupert had been promised that a large number of permanent, long-term jobs would be created through the Ridley Island development, it now appears that there will be fewer than 150 permanent jobs created by a project that all members of the Cabinet have crowed about all over the country. The benefits simply have not been delivered to the people of my constituency.

Another such example is that one of the largest expenditures on a CN rail line in the whole of Canada for the past 18 months and the coming 12 months is the line from Prince Rupert to Redpass at Smithers. The switching equipment alone is worth over $125 million. Again, because of a Government with almost no ability to look ahead and to plan, all of that switching equipment is being constructed in the United States. If the Government is trying to tell Canadians who are out of work that, having one of the largest railway systems in the world, we cannot construct, provide and instal switching equipment for railways in Canada, something is terribly wrong with the system.

Hundreds of millions of dollars are being spent on Ridley Island and to upgrade the CN rail line but there is still 30 per cent unemployment in the communities where the development is occurring. This ridiculous situation demonstrates the Government's lack of foresight and ability to plan.

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The level of incompetence on the Cabinet benches is so high that it would be irresponsible for members of the Opposition to endorse this kind of borrowing. The Government simply has not demonstrated good accounting practices. The Auditor General of Canada continues to take the Government to task but it has not come forward with proper accounting procedures.

All this has dire consequences for the forest industry in my riding. It provides an enormous volume of wood for direct export to Pacific rim countries. The Watson Island pulp mill and Eurocan are among the largest suppliers of world price pulp in Canada.

Northern British Columbia is now in the early years of what is called the "fall-down effect". The federal and provincial Governments have allowed the forest companies to do what Professor Walters of the University of British Columbia Forestry School describes as the gang raping of the forest resource. According to provincial government cabinet documents, there will be a more severe and earlier fall-down effect than was previously expected. That means that in less than five years we will have to reduce by one-third the amount of wood being cut on forest lands. The federal Government has been negotiating with the Province of British Columbia for a five-year reforestation plan directed at northern British Columbia, the interior and the Kootenays, all of which have been badly managed, overcut and underinvested.

Federal Government advisers in the Canadian Forest Service say that it should be putting at least $130 million per year into reforesting back-log lands. British Columbia was promised at least 40 per cent of that money and that would mean between $50 million and $60 million per year from the federal Government if the Province of British Columbia would advance the same amount of money. But the Premier and his Minister of Finance have put forward false figures and have lied to the people of British Columbia about the size of the deficit. They say that over three years it is $2.48 billion, but the Department of Economics at the University of British Columbia has confirmed that the real deficit for the province is less than $100 million. The Premier and the Socred Party who are associated with the Tories nationally have simply cooked the books. That is the nicest way of putting it. In northern British Columbia that means that when the provincial government says it has to practise restraint, it fires provincial forest employees and gets rid of public servants. At the same time the provincial ombudsman is pointing out that as high as 10 per cent of the wood cut in British Columbia does not draw stumpage charges because it is not being properly scaled by the government. We are losing on that as well.

Let me finish by saying that in terms of the reforestation agreement, the Government's officials say that it should put in between $50 million and $60 million of federal money. The province will not put up any money so the federal Government says it will not play either. That is not good enough, Mr. Speaker. Last year the federal Government took almost $700 million so it must put forward that $50 million which will

create 2,000 jobs at $25,000 per year in northern British Columbia.

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PC

Gary Michael Gurbin

Progressive Conservative

Mr. G. M. Gurbin (Bruce-Grey):

Mr. Speaker, Bill C-21 would give the Government authority to borrow $29.6 billion. The Minister of Finance (Mr. Lalonde) and the Minister of Agriculture (Mr. Whelan) have indicated that they believe Canadian agriculture is not in serious difficulty at the present time. I would dispute that. Regardless of whether agriculture is doing well or not, I should like to present to the House some calculations which relate the $29.6 billion debt to agriculture.

The average income of a Canadian farmer is $9,000. It would take a farmer 3,288,888 years to repay $29.6 billion. I think it is beyond the physical capacity of most farmers to achieve that goal. Even if it were spread over all farmers in Canada, it would mean 10.5 years. That is to say that all 320,000 Canadian farmers would have to work full-time, using all of their earned net income against the debt, to pay off this single borrowing Bill. They would have no funds left over for clothes, additional food or recreation and they would have to work full-time for the Government for 10.5 years.

The Government is not just any borrower but a special borrower. It has the right to tax people, to tax things that move and things that do not move. It has the right to tax things that keep us warm, things that feed us, things that clothe us. In some cases taxes are imposed on things that would raise questions with you and me, Mr. Speaker.

There have been many questions raised in the House recently about the activities of Revenue Canada. A good example of the extremes to which the Government or its tax collectors might go is the recent effort by Revenue Canada to tax a dead man's clothes by trying to exhume the body and take his jacket off. That situation actually occurred, Mr. Speaker. It is an example of the difficulty and the pressure the Government is under because of past borrowing and of the extremes to which it will go to collect taxes.

What happens to the money that is collected? After using it and putting a very significant administrative cost on it, the Government puts it back into the country using means which it hopes will persuade people to re-elect it. The Government has been very successful in a number of ways. In fairness, I know that the Government at least intends to provide social measures for the benefit of all Canadians. It has been very successful in providing one particular social program which is not discussed very much, and that is spreading the debt.

On the basis of this single borrowing Bill, in 1984 the Government can claim to have achieved a goal never achieved by any other government. It has spread the national debt so that every Canadian, man, woman and child, owes $6,026. That is a very significant social accomplishment. We should not forget that the debt is also carried by senior citizens, the unemployed and the handicapped. Indeed, anyone who might feel that they might have been neglected by society until now will know that they are treated equally and that they share in carrying over $6,000 in debt. Next year they will carry $7,210

March 20, 1984

and on the basis of past performance you can expect the debt to increase year by year.

The Canadian public is getting some pretty sophisticated explanations about why this borrowing is necessary, where the money goes and what the problems are. When the Minister projected the amount of borrowing or deficit financing that would be required this year, he did so on the basis of an interest rate calculated by the Department of Finance. It should be pointed out that with interest rates climbing as they have in the past two weeks, an additional one-half of 1 per cent interest means that our debt increases by $750 million. It is clear that we do not need the $29.6 billion in total that has been applied for by the Government. However, if interest rates keep climbing, as they may very well, those additional dollars the Government is asking for now could quickly be used up.

The Liberal Party has criticized members of the Conservative Party over the months and years particularly for not having any solid solutions or plans. I have one, Mr. Speaker, which I would like to offer to the House for its consideration. It is a very specific proposal to try to deal with this national debt. I would propose, Mr. Speaker, that we have a user fee, not one which most people talk about, but a political user fee. What that would mean, Mr. Speaker, is that any government could borrow as much money as it wanted. At the end of the year it would have to account for the money. It could do that on the basis of, for instance, zero balancing on its accounting, if it likes. At the end of its term of office-although at the end of each year would be better-the government which has borrowed this money so it can buy votes would then have to make an accounting. The political party that formed the Government-the Liberal Party of Canada in this case- would then be responsible for the interest rate which was charged on the national debt at the time.

That is a very interesting proposition, Mr. Speaker, because it would mean that the Liberal Party, if it chose, could spend another $10 billion. However, if it did not take in enough revenue to cover what it spent, that Party would have to pay the interest rate on the money. That Party could use the money as often and as much as it wanted as long as it would take the responsibility at least for paying the interest on that money as time went on.

That is an idea which may not gain immediate popularity with the Liberal Party, in particular, because if that proposition is used as a basis of the responsibility of the Liberal Party of Canada to the Canadian people, I am afraid it would be a very long time before it would be able to meet its obligation and fulfil that responsibility.

I would like to suggest that on the basis of its record, both past and present, the Liberal Party has established a record of performance which, if continued, will in fact bury this country. However, seeing what we are being presented with now in terms of leadership candidates for the Liberal Party, I believe the Liberal Party in fact will be well represented by John Turner ad infinitum.

Borrowing Authority Act

Topic:   GOVERNMENT ORDERS
Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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NDP

Derek Nigel Ernest Blackburn

New Democratic Party

Mr. Derek Blackburn (Brant):

Mr. Speaker, I would like to speak briefly this morning in the debate on Bill C-21, an Act to provide the Government with borrowing authority. This Bill, as it is written, allows the Government to borrow $29.55 billion for the fiscal year 1984-1985. Out of this amount, $25.6 billion is for actual expenditures in 1984, plus another $4 billion for emergency spending such as to shore up the Canadian dollar in foreign exchange markets. As we all know, the Canadian dollar at the present time vis-a-vis the United States dollar is slipping. That borrowing authority is also to be used to cover up government mistakes in planning its expenditures.

In total, we are talking about $30 billion. When I first came to this House some 13 years ago, that amount was a lot of money. It still is a lot of money when you consider from where we have to borrow it. I do not believe the Canadian public is fully aware of the reasons why the Government is asking for so much money in borrowing authority. I would just like to give a very brief rundown on some of the major reasons we are debating $30 billion in borrowing authority this morning.

First on the list, of course, has to be the Canadair debacle. Canadair had the largest single loss in one year of a Canadian company. It was in excess of $1 billion. Another debacle, in this Party's opinion, is the Petroleum Incentive Program, the PIP grants which were given to the large oil companies. In one year that has cost the Government in revenue approximately $1.6 billion. The Liberal slush fund, the great porkbarrel of the 1980s, cost $350 million. There are the deferred corporate taxes. The latest figures we have are $22 billion in deferred corporate taxes for 1980. That is going back almost four years.

In addition to that, there was the lowering of taxes for high-income earners, such as doctors, lawyers, accountants and other professional people, which was in the 1984 Budget. If you put that all together, we have lost additional revenue of some $25 billion. That would almost close the gap in our borrowing. We would then be talking possibly in terms of borrowing only $5 billion, using simple arithmetic figures. It is, of course, not quite that simple, but nonetheless it does serve to illustrate the reasons this Government deserves to be defeated at the next election.

This Government has been in power too long. It has become insensitive. Government expenditures are made for the wrong reasons, as far as this Party is concerned, and at the same time it is borrowing to pay for its past mistakes. But what has the Government done with such essential services and worth-while investments as post-secondary education? It has cut back on post-secondary education. It is also cutting back on the rate of financial assistance to the provinces for medicare. We could have one of the best medicare systems in the world. In fact, we did have a very fine medicare system until the late 1970s when the federal Government and the provinces went to block funding and the provinces were no longer accountable dollar for dollar to the federal Government as to how that funding would be spent. Now medicare itself is in jeopardy.

The Government is constantly talking about hundreds of millions of dollars in job creation. Yet the unemployment

2230

March 20, 1984

Borrowing Authority Act

figures are sliding up as each month goes by. The Government does not effectively have a handle on the job-creation program principally because it is not investing enough money in job training and retraining for permanent and meaningful jobs. It is simply sticking its finger in the dike, hoping to hold back the flood waters, hoping to hold down the total figure of unemployment until it can get the next election out of the way.

We are not training our young people, in particular, for high technology jobs. Obviously, there will not be enough high technology jobs for everyone who is unemployed, but certainly the Government is not making the same effort which is being made, for example, in countries like Japan, West Germany, France and even the United Kingdom. The Government says let the private sector do it. The private sector, which is the engine of recovery, is now holding back on investments and on job creation because it is very frightened of what lurks around the next corner as far as the economy is concerned.

One area which my colleague, the Hon. Member for Skeena (Mr. Fulton), mentioned a few moments ago is renewable resources such as reforestation. It is a tragedy that in this country, where we depend so heavily on forestry as a major industry, the Government is doing virtually nothing itself, or to force the provinces, for that matter, to reforest our country. We are destroying our forests and apparently the Government cares very little about husbanding those resources for the future. We could be investing hundreds of millions of dollars, even billions of dollars, for a future return instead of simply throwing money away and seeing it disappear.

A lot of us, Mr. Speaker, and I am including myself, have to be reminded from time to time of why things have got out of whack in the western world, particularly in North America. Massive deficit spending has become the order of the day. My Conservative friends say that is not Conservatism; Conservatives would have balanced budgets eventually. It is the Liberal-Social Democratic philosophy in North America which has led to these massive deficits; it believes in irresponsible spending, spending our way out of recessions and depressions and so on. But it is interesting to note that the only provincial government in this country which consistently balanced its budget in the 1970s was turfed out by the people. That was the NDP Government in Saskatchewan. When the Tories came in, for the first time in seven years, I believe it was, Saskatchewan went into deficit financing. For the last two years they have been running a deficit of about $250 million, which is a lot of money for a small province like that.

However, what got us started first of all was the Vietnam War. The United States had no business getting involved in that country in the first place, for a variety of reasons which I will not go into now with hindsight. But at the time my Party at least stood up against that intervention when many other Parties in this House refused to. That war cost a lot of money. Wars are never successful financially regardless of what the short term might bring. They are devastating to economies, whether you win or lose. In fact, World War II proved that if

you lost you were a heck of a lot better off than if you won. The cost of that war was inestimable, but instead of putting on post-war controls, Lyndon Johnson said we could have guns and butter. But we could not, and what followed was the great inflation. That was followed by the great recession.

Another great Conservative then came into office in the White House saying he would bring down the deficit and balance the books as a true Conservative should. Then President Reagan turned around and ran the deficit up to $180 billion in the U.S. That great Conservative, that man who wants to practise fiscal responsibility, the man who our Conservative Party worships, is the one who drove the U.S. treasury almost into bankruptcy. We are paying for it in this country as well as the ordinary American in the U.S. Let us not forget that when you practise monetarism and you have only a limited pool of financial resources, then interest rates are going to start flying high again. That is what is beginning to happen in the U.S. and that is what is happening now in Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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PC

Jennifer Cossitt

Progressive Conservative

Mrs. Jennifer Cossitt (Leeds-Grenville):

Mr. Speaker, since this debate was initiated by the Minister of State for Finance (Mr. MacLaren) on March 7, some ten working days have passed. Ten working days-another $1 billion in borrowed money added to our national debt. That is the rate at which we are spending more than we earn in this country. Yet the Minister is asking us to approve in Bill C-21 not just the outragious and unprecedented sum of $25.5 billion, but an additional $4 billion. At $100 million a day that is another 40 days in the wilderness.

I have followed this debate closely, both in the House and in Hansard. Hon. Members opposite have put a brave face on it as they have sought to defend yet another page added to the volumes of mismanagement and incompetence which are the written record of this Government-written in ink as red as the ties of the candidates for leadership of their once proud Party. But their defence is in vain. There can be no defence of this Government's policies. Yet speaker after speaker has trotted out the same incredible statements of how well they have responded to the recession they created. They have trotted out a catalogue of good deeds and progress towards economic recovery. The Minister declared in his speech:

The Budget of last month gives Canadians every good reason to expect that economic recovery will be followed by solid expansion.

The only expansion I can see, Mr. Speaker, is our national debt, an expansion of over $114 billion in the next five years. That is the sum of the Government's projected financial requirements, $114 billion. Yet we are told economic recovery is assured. Private enterprise will lead the way in creating new jobs. Private enterprise will introduce new world-competitive products that will win us exports and fuel an expansion of the domestic market.

"A principal point in our strategy to facilitate a sustained expansion is policies to promote business investment": so said the Minister just 12 days ago. I wonder if he realizes that as long as the Government keeps drawing huge sums from the investment pool there will be no promotion of business invest-

March 20, 1984

ment. Already, as several of my colleagues on this side of the House have stated, the Government's borrowing is monopolizing personal individual savings. It amounts to 93 per cent of the available $32 billion from that source. Perhaps that is why the Minister suddenly seems so interested in pension reform. Not for the purpose of providing Canadians with adequate financial security in their later years, Mr. Speaker, no. I think the reason the Minister calls the pension reform proposals "imaginative and far reaching", the reason they inspire him so, is that they will increase the savings rate, providing a larger pool from which to finance private investment. The Government has already exhausted the personal savings source.

Has the Government not already squandered enough of our future resources with the $151 billion in debt it has already accumulated? Does it really need to covet our pensions as well?

Of course, according to the Government everything is really under control. We are on the way to recovery. Oh, interest on the debt may be slated to increase from $18 billion in the current year to over $24 billion by 1988, an increase of 36 per cent in four years, but the Government is taking care of it. What about the falling Canadian dollar and the slow but steady climb of interest rates, unemployment rates and the inflation rate? Yes, the Government is taking care of them. But I ask just how is the Government going to take care of this debt and these ever climbing interest charges? Well, according to the fiscal plan of the Budget, our growing economy will take care of it all. Direct personal taxes alone will more than cover the increase. They will rise 53 per cent by 1988, from $37 billion to $57 billion. Of course, how the taxpayers are to find this extra $20 billion is anyone's guess.

The same Budget documents state that disposable income will grow only 2.7 per cent annually between now and 1988. Even compounded that does not come close to 53 per cent. If the tax man takes it, what will that do to consumer spending and the manufacturing sector? Inflation could account for it but we have been promised only modest inflation up until 1988. To reach 53 per cent we would have to have 12 per cent, 13 per cent or even 14 per cent inflation again. Perhaps the 3.6 per cent of unemployed who have been promised work by 1988, given the estimated reduction of the current unemployment rate to 7.7 per cent by 1988, will be able to make up the difference.

I only hope the voters of Canada remember that projection of $20 billion in extra taxes in 1988 when all the possible leaders of the Liberal Party are promising a land of milk and honey if only we will vote for them. But we on this side of the House know Liberal promises. My colleagues have read the list of promises made over the last 16 years by one Liberal Minister of Finance after another. That is why and how we are where we are today.

Were their records different and the extravagances of Mr. Turner, Mr. Macdonald, the present Minister of Energy, Mines and Resources (Mr. Chretien), the present Deputy

Borrowing Authority Act

Prime Minister (Mr. MacEachen) and the present Minister of Finance (Mr. Lalonde) not so painfully obvious to all of us, I, for one, might be able to give my support to the idea of a $4 billion contingency fund. Were the management of the Canadian economy over the past 16 years a shining example of thoughtful, sound and responsible leadership, one might agree that the Government be given such leeway as this $4 billion. However, that is not the case. To give an additional $4 billion to the Government, or even the $25.5 billion, the fiscal requirement specified in the Budget, when at most they face only one-half to two-thirds of the budget year in office, is almost an act of folly in itself.

I am no economist, Mr. Speaker. I have no pretensions to be one. Since entering the House I have learnt enough to know that the Ministers charged with the financial management of our country are no economists either. Unfortunately for all of us, they do have pretensions.

The Government will continue the same old formula; pork-barrel and waste, extravagance and mismanagement. That is why they need the $4 billion contingency fund, to sweeten the election pot and to continue to bail out the likes of Canadair, de Havilland and Canada Post. It may be an acceptable policy to the Members opposite year after year to live beyond their means in the expectation that somehow, something, someone will bail them out.

In the world of the 1980s, Mr. Speaker, regardless of our alliance and close relationship with our neighbour to the south, we are on our own. It is up to us to heed the hard lesson learned of extravagance. It is up to us to put our own house in order. No one else will do it for us. Tacking on an unnecessary $4 billion to the borrowing authority, which is already too high, is not the way to go about it. As soon as the Government realizes this and begins to govern accordingly, we may begin to talk about the roads to recovery and not before.

Topic:   GOVERNMENT ORDERS
Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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PC

Blaine Allen Thacker

Progressive Conservative

Mr. Blaine A. Thacker (Lethbridge-Foothills):

Mr. Speaker, the Secretary of State for Finance (Mr. MacLaren) should appreciate that this Bill is not going to go through. We are going to debate this Bill until hell freezes over because it is wrong. I have stood up every time a borrowing Bill is tabled and I will stand again and again until ordinary Canadians begin to see the fraudulent nature of the Government.

The amount of $29.55 billion is obscene and it is not going to go through. That is more than all of the income taxes paid by all of the citizens of the country in 1981. It is a row of one dollar bills which goes around the world several times. It is like taking 29,000 millionaires and stripping them to their shorts. That is over 2,000 a month. We barely have 5,000 millionaires in the country and yet we would need to strip 29,000 of them.

That is another way of saying that the money is coming out of the pockets of ordinary Canadians. It is the seniors of the country who are paying the debt through inflation. Our youth are paying the debt. There are now 10 people for every job as compared to when I graduated from university, when there were 10 jobs for every graduate. The youth, the businessmen and the farmers are paying. This Bill is simply not going to go

March 20, 1984

Borrowing Authority Act

through. The Government had better invoke closure and force Canadians to swallow a bitter pill again.

I will give the best example I can think of to explain to Canadians that it is they individually who are paying this debt. In this country individuals do have profit. I know that is an evil word for the NDP. However, Canadians had a profit of about $32 billion. That is their savings, Mr. Speaker. As tough as things are, by being very careful and thrifty, ordinary Canadians were able to put a few dollars in the bank. That savings totals $32 billion. The Government is borrowing almost the entire savings of Canadians. The effect is to force provincial governments, municipal governments and small businessmen who need to borrow a few bucks into the offshore markets. More and more money has to flow out to service that debt. The Canadian dollar then has to drop. The inflation rate then goes up. That drives up interest rates. That automatically means that the inflation tax spreads.

You know as well as I, Mr. Speaker, that inflation as a tax does not affect people equally. It certainly is not progressive, causing people with wealth to pay more. Indeed, quite the opposite. Inflation attacks people on fixed incomes. Those are our seniors. Inflation affects people who want to get into business but cannot afford to because the value of land has gone up. Inflation helps certain people. It helps those of us who own our own homes. It helps those of us who own apartments and land. Inflation does not affect us, Mr. Speaker. It benefits us to an enormous extent at the cost of seniors and their peaceful old age. It affects the youth and their chance of a future in the country. That is why this Bill has to be defeated, Mr. Speaker.

If one were to compare Members of Parliament, one would find that members of the Progressive Conservative Party tend to be business people. They own land and farms. There are more active farmers in this Party than on the Government side, even though it has half again as many members. In a sense, inflation can benefit people with property. Yet it is members of the Progressive Conservative Party who are speaking against this Bill because it is not fair. It is not in the Canadian and Conservative context of fairness. It is quite an irony, but nonetheless there it is.

It was not always so, Mr. Speaker. Canadians must understand this. In 1968 the national debt was just a drop in the bucket even though we had come through a major depression and World War II. By 1968 the yearly budget was balanced. There was no $30 billion deficit. At the same time we had Old Age Security, the Canada Pension Plan, post-secondary education and health insurance. The country was building. There were 10 jobs for every person coming into the labour force. Now, a mere 16 years later, we have a national debt which requires over 35 per cent of the tax revenues to pay the interest on it. This does not reduce the debt, Mr. Speaker; it merely pays interest on it.

We have a post-secondary education system which is in a state of collapse. Our seniors have no sense of security in their old age. Inflation of 10, 12 or 14 per cent reduces a pension of $1,000 a month, which may be satisfactory today, to $500 a

month within five years. In 1968 there was inflation of 3 to 4 per cent. The seniors can handle that because at that rate it takes 20 years for their money to be halved and by that time most of us are gone. That type of inflation can be handled, but inflation of 10, 12 or 14 per cent destroys them. It destroys the future of our young people.

We have a whole class of young people, Mr. Speaker, who are coming through the system being fretful. They do not have a sense of future or a sense that the country is building as it was when we graduated. The effect on their psychological sense of well-being is devastating.

This country was youthful, dynamic and building into a great nation. This country should be a power in the world rather than a second-rate banana republic, which is what the Government is turning it into. Canada should be climbing the mountain. Instead we are wallowing around in the depths of despair. That is what a Liberal Government has done to us. It honestly believes that it can remake the nation in its radical left-wing, socialist view. It believes it can remake mankind in one giant quantum legislative leap. We can see this in all of its programs. We can see this in forced metric which could have been done in one generation if it had been put on a voluntary basis. If it had started in the schools within one generation everyone would have been on metric and it would be no problem. Instead, in spite of the fact that millions of acres in western Canada were surveyed on the basis of one mile east and west and two miles north and south, it is now suddenly 1.6 kilometres. That mileage in western Canada was part of the cultural heritage of western Canada, just as much as the French language is part of the cultural heritage of Quebec.

Our Party stood up to protect the cultural heritage of Quebec. We voted for official bilingualism in this country and would implement that program in a way that is much more fair. But did the ordinary members from Quebec stand up to protect the cultural heritage of western Canada? Not a bit. They sold out western Canada. That is why the 27 seats they held in 1968 are gone and they will never get them back.

Topic:   GOVERNMENT ORDERS
Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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LIB

Henri Tousignant

Liberal

Mr. Tousignant:

Mr. Speaker, I rise on a point of order. I would like the Hon. Member to explain what he just said about people from Quebec selling out-

Topic:   GOVERNMENT ORDERS
Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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LIB

Jacques Guilbault (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Guilbault):

Order, please. There are no questions allowed at this point of debate.

Topic:   GOVERNMENT ORDERS
Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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LIB

Henri Tousignant

Liberal

Mr. Tousignant:

He is misleading the House.

Topic:   GOVERNMENT ORDERS
Subtopic:   BORROWING AUTHORITY ACT, 1984-85 MEASURE TO ESTABLISH
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March 20, 1984