February 17, 1993

NDP

Howard Douglas McCurdy

New Democratic Party

Mr. Howard McCurdy (Windsor-St. Clair):

Well, Mr. Speaker, the fact is that the prospectus of the company involved indicates clearly that the Mexican bank will be involved in it.

About this there is no doubt: the Mexican Minister of Commerce has been in Montreal selling cheap Mexican labour. In the meantime the president of ACOA-sup-ported Canadian Helicopters Ltd. says he is very much attracted by the cheap labour in Mexico, the lax labour standards and the lax environmental standards in the Mexican work place.

Does the government-

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?

Some hon. members:

Oh, oh.

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NDP

Howard Douglas McCurdy

New Democratic Party

Mr. McCurdy:

I have all day, Mr. Speaker.

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An hon. member:

No you do not.

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PC

Gerald R. Ottenheimer (Speaker pro tempore)

Progressive Conservative

Mr. Speaker:

That is sometimes a pious hope here. The hon. member will put his question, please.

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NDP

Howard Douglas McCurdy

New Democratic Party

Mr. McCurdy:

My question for the Prime Minister is: Does this government not realize that NAFTA is going to launch a tremendous Mexican sting operation, which is already evidenced, to come up to Canada to sell cheap labour in Mexico even at the expense of some of the poorest parts of this country?

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PC

Michael Holcombe Wilson (Minister for International Trade; Minister of Industry, Science and Technology)

Progressive Conservative

Hon. Michael Wilson (Minister of Industry, Science and Technology and Minister for International Trade):

Mr. Speaker, the next time my friend, the Secretary of Trade from Mexico, comes to Canada I am going to ask my friend to join us. The hon. member has just taken what was said totally out of context. What we did do yesterday was visit Canadair Challenger operations, SR Telecom and the AMF operation which re-manufactures rail cars and diesel engines.

In each case these companies are actively selling successfully into Mexico, generating jobs back here, generating work for people who are paid Canadian salaries and able to compete against what my hon. friend refers to as low salaries in Mexico.

The point of the matter is that my friend should get his facts straight and should put out a balanced position as to what the attitudes and policies of the Mexican government are. I think we were very successful yesterday in helping create jobs for Canadians in Mexico who will take advantage of the North American free trade agreement.

February 17, 1993

Oral Questions

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PUBLIC DEBT

LIB

Paul Edgar Philippe Martin

Liberal

Mr. Paul Martin (LaSalle-Emard):

Mr. Speaker, my question is for the Minister of Finance.

In 1984, when this government took office, the net public debt was 46 per cent of the Gross Domestic product. Today it is more than 62 per cent. Yesterday, the C. D. Howe Institute told us that we are on the verge of a financial crisis. For example, the European Community has set a threshold of 50 per cent for its new members.

Given that this debt is the result of its policies, what exactly is this government's objective and when does it think it will reach this objective?

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):

Mr. Speaker, the plain fact of the matter is that this government has been operating in the black since 1987. What has been the drag is the inherited debt we took over from the Liberal government. If there had not been a debt inherited, today we would have a surplus of $20 billion.

We have cut the deficit from $38 billion. As a percentage of GDP we have cut it from 8.7 per cent to about 4.8 per cent. We are on a fiscal track which will bring the budget into balance as soon as we can get some growth into the economy.

The fact of the matter is the problems with Canada today result from the inherited debt that was left by the Liberal government. When the Liberal Party suggests that it has a plan for deficit control, its record was an average increase of program spending of 14 per cent over the last 15 years. We have cut it to below the rate of inflation.

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LIB

Paul Edgar Philippe Martin

Liberal

Mr. Paul Martin (LaSalle -Emard):

Mr. Speaker, the problem is not the inherited debt of a decade ago. It is the nine years this countiy has lost under this government.

This government loves to cite the C. D. Howe Institute. Let me cite from the C. D. Howe report referring to this government: "When the economy was booming in 1988, they increased spending and cut taxes; when we went into a recession, they increased taxes and cut

spending. They have made the booms worse and the busts worse".

What will it take for this government to stop blaming others? What will it take for this government to realize that we are indeed in a crisis and it is a direct result of eight to nine years of gross economic mismanagement by this front bench?

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):

Mr. Speaker, if the hon. member wants to quote from the C.D. Howe report, I can do that too.

Ed Neufeld said: "I was listening to the year-end speech of one of our political leaders," and that happened to be the Leader of the Opposition. "Very gently, he was saying: 'Let's just accept more inflation'. 'Accept more inflation'-there are a lot of people who are-ready to hear that message". As a matter of fact, he wants to abandon Canadian monetary policy. He wants the Americans to run our monetary policy.

I ask the hon. member where has he been on the 12 or 13 bills that we have brought in to contain expenditures? He has voted with his party against every single solitary measure.

It is rather interesting that the Leader of the Opposition did not raise this question. When he was in charge of the cash register as President of the Treasury Board, he increased program spending at the rate of 16 per cent per year.

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LIB

Herbert Eser (Herb) Gray

Liberal

Hon. Herb Gray (Windsor West):

Mr. Speaker, I also have a question for the Minister of Finance.

Yesterday on television he said that his government had not added five cents to the public debt since it was in office. In 1984, when the government took office, the public debt was $168 billion. Now, almost nine years later, it is over $423 billion.

As far as I am aware, we have only had his Conservative government in office in those nine years. So I ask the minister: When is he going to stop trying to fool Canadians and the truth of what has been happening since his government has been in office? That is that it has created an economic mess for Canadians. Canadians simply do not believe him when he tries to blame all this mess on others than himself.

February 17, 1993

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):

Mr. Speaker, let me try to explain to the hon. member. The debt that we inherited was something in the vicinity of $200 billion. The member knows that you have to pay interest on that debt. He knows that interest compounds upon interest and that it accumulated to $400 billion plus.

We have been operating in an operational surplus since 1987. As a matter of fact, I repeat, we have not added one red cent to Canada's national debt. As a matter of fact, we have reduced it by $20 billion plus.

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LIB

Herbert Eser (Herb) Gray

Liberal

Hon. Herb Gray (Windsor West):

Mr. Speaker, I have a supplementary question for the minister.

Surely the minister will not try and hide the fact that he and his government have supported the interest rate policy of the Bank of Canada and that interest rates are a cost of government along with all the other costs.

Why does he try to hide the fact that the public debt has moved from $168 billion to more than $423 billion since his government has taken office? Why does he not recognize that and also recognize that a major way of dealing with it is to create more economic growth and jobs for Canadians?

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):

Mr. Speaker, the hon. member suggests that we should have lower interest rates. That is true.

When he was occupying the government benches, we saw interest rates go up to 22 per cent and 23 per cent. We have tried to do two things. We have tried to contain government expenditures against the wishes of the opposition parties. We have tried to contain inflation. The key to bringing interest rates down is to bring down inflation.

The hon. member is suggesting that we should have higher inflation and that we should spend more. That is not a recipe for lower interest rates. That is a recipe for higher interest rates.

Oral Questions

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TOBACCO SMUGGLING

PC

Lise Bourgault

Progressive Conservative

Mrs. Lise Bourgault (Argenteuil-Papineau):

Mr. Speaker, my question is to the Minister of Justice and Attorney General of Canada. The Criminal Code does not provide for the seizure of goods acquired through profits generated by the illegal sale of smuggled tobacco products because this activity is not recognized as a form of organized crime. In practice, this means that some Mohawks could buy the Manoir Richelieu with the money made from the lucrative black market for cigarettes and open a nice casino which Quebec would otherwise not allow them to own.

So as not to make fools of us all in this House, will the minister urgently introduce a retroactive amendment to the Criminal Code and eliminate this unacceptable loophole which enables criminals to launder the money made by smuggling cigarettes?

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PC

Pierre Blais (Minister of Justice and Attorney General of Canada; Minister of State (Agriculture))

Progressive Conservative

Hon. Pierre Blais (Minister of Justice, Attorney General of Canada and Minister of State (Agriculture)):

Mr. Speaker, my colleague raises the important issue of smuggling. I must remind all members of this House that the Minister of Finance has tabled Bill C-102, which reinforces the legislation on smuggling.

However, it might also be appropriate to remind Canadians who are listening that smuggling is a crime. It is difficult to fight smuggling because people who buy cigarettes, among other contraband items, do not complain. I believe that if all of us in this House made Canadians aware of the danger to society of giving in and buying smuggled goods-and I am speaking to members on both sides of this House-we would probably increase their awareness of the issue. It is quite serious that Canadians snap up smuggled goods so easily.

I thank my colleague for her question and I must tell her-

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Some hon. members:

Order, order.

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February 17, 1993