Hon. John C. Crosbie (Minister of Fisheries and Oceans and Minister for the Atlantic Canada Opportunities Agency):

Madam Speaker, if there is overcapacity in the Canadian airline industry and it is agreed on all sides that there is, the overcapacity was not caused by the Minister of Transport or the Government of Canada. We did not put a gun to anyone's head in the airline industry telling them to go out and purchase more aircraft or to acquire more equipment. These decisions were made by those individual airlines.

Now it ill behooves them to say that the problem they have caused should now be entirely resolved and all the problems overcome by the leadership of the government. The government provided a regulatory framework within which they should operate. If they have not operated successfully, they should examine the mote in their own eye.

Mr. John Manley (Ottawa South):

Madam Speaker, the government has to play the hand it has been dealt, if it does not want to deal with the problems that are there, that are real and that are costing Canadians their jobs, why does it not get out of the way and let somebody else have a go at it?

It is not just the airlines. The Minister of Transport has been sitting on a report from the Rivard commission since the end of January that is telling him that the same problem is created for the railways.

Is this government going to sit back and let the railways go out of business the same way it has been

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sitting back and letting the airlines suffer? Does it have a transportation policy?

Hon. John C. Crosbie (Minister of Fisheries and Oceans and Minister for the Atlantic Canada Opportunities Agency):

Madam Speaker, the railways have a problem now caused by differences in the economy, in geography and in the way goods are carried. It is caused by billions of dollars in public funds going into roads so that their competition in the trucking industry has put them in a very difficult position, and so on. That is the reason for the problems of the rail industry.

With respect to the question of overcapacity, what does the hon. member want? He talks about jobs. Does he want us to order the airlines to let thousands of people go to meet his demands that the overcapacity be reduced? Why does he not adopt a policy of some specificity and tell us whose jobs are to go and how they are to go? Just whose capacity does he want reduced?

Mr. David Barrett (Esquimalt-Juan de Fuca):

Madam Speaker, my question is for the Prime Minister. Yesterday the leader of the New Democratic Party released an economic paper outlining specific proposals for an alternative to the government's policies. The fact is the New Democratic Party was prepared to put it in writing while the Liberals are still hiding on all the major issues in this country.

Yesterday in response to the document produced by our party, the government House leader said that he was opposed to our position of abrogating NAFTA and the free trade agreement. We still do not know where the Liberals are.

When the government House leader made that statement was he aware that another 250 jobs were lost in Oshawa in the radiator plant as a direct result of that continuing free trade agreement?

Right Hon. Brian Mulroney (Prime Minister):

Madam

Speaker, I am in the process of reading the NDP economic plan.

It is good bedtime reading. It would put you to sleep.

Mr. Mulroney:

It is not going too badly. I am getting there.

February 19, 1993

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I have to say, with due respect for the leader of the NDP and my friend who just spoke, that while there is lots in there that I as a Progressive Conservative would disagree with, I commend the leader of the NDP for having the courage and the principle to bring forward a plan as opposed to the Liberals who indulge in shell games, hypocrisy and evasion of responsibility.

It happened that unfortunately the leader of the NDP brought out recommendations for example with regard to the cancellation of NAFTA on the very same day that Canadian exports jumped to $157 billion, the highest in history. Our merchandise trade balance with the United States reached $17.7 billion and trade exports to the United States are $20 billion higher today than when the free trade agreement was signed.

Mr. David Barrett (Esquimalt-Juan de Fuca):

Madam Speaker, that is cold comfort for the 250 people who have lost their jobs in Oshawa. It is cold comfort for the two million people who line up every week in this country at food banks and the 1.5 million people who have been unemployed since this government was elected and continued that chronic unemployment.

I do not expect specious answers from the Prime Minister. We do not know whether or not he is keeping his job. That is not what Canadians are concerned about. What we want to know is how can we get Canadians back to work when our jobs are going to the United States and will go to Mexico if we continue these foolish trade policies.

Right Hon. Brian Mulroney (Prime Minister):

Madam Speaker, my hon. friend asks a very key question: how do we keep and build very good jobs? The answer has to be with an economy with low inflation.

Inflation is now at 1.5 per cent, which is the lowest in 30 years in Canada. I suspect it has a lot to do with low interest rates which in 1992 averaged their lowest in 20 years.

More important than that, it has to do with increased productivity, which is up by 2.6 per cent, and the lowering of unit costs compared with the United States. In the first three quarters of 1992, our unit costs were down 6.6 per cent, which means that this combination of activity indicates very clearly that Canada has become strongly

more competitive, therefore in a position to sell more abroad and create value-added jobs at home.

Mr. David Barrett (Esquimalt-Juan de Fuca):

Madam Speaker, I do not suppose there is too much time in Question Period to get into debate. However, I want to make one point before I ask my question.

The unit costs have dropped simply because there has been a transfer of manufacturing tax off the corporate structure and on to the backs of the Canadian people through the GST. That is why the unit costs have dropped and that is where the Canadians are paying the subsidy.

There is 11 per cent unemployment in this country. In some regions it is up to 16 per cent. Does the Prime Minister think it is good enough for the Canadian people to hear nothing from the Liberals and sophistry from the government as they attempt to plan their lives in the face of all of these promises and still have no results?

What can he possibly say in terms of specific answers for jobs for Canadians now, not pie in the sky?

Right Hon. Brian Mulroney (Prime Minister):

Madam Speaker, on behalf of those indulging in sophistry, I cannot speak for the phoneys but I will speak for the sophists today.

To answer my hon. friend, there were some 57,000 new jobs created in December; some 45,000 new jobs created in January and it is forecast that approximately 350,000 new jobs will be created this year.

According to the OECD, employment growth for Canada in 1993-94 will be the highest of the OECD and the G-7 countries. Employment will be strong and durable, providing we keep inflation low, our unit costs low and we continue to strengthen our productivity and trade into new markets being opened by the free trade agreement and by NAFTA. That is the way jobs are created in Canada.

Hon. Lloyd Axworthy (Winnipeg South Centre):

Madam Speaker, I want to ask a question of the Prime Minister.

Yesterday, his minister of employment delivered what can be described as a disgraceful speech before the Empire Club in Toronto where he attacked once again

February 19, 1993

the unemployed and the unemployment insurance system. He said that Canada's social system is like a net that catches fish. Hardly a proper reference to the many thousands of Canadian men and women who are out of work.

In the short time the Prime Minister has left, could he not find himself a minister of employment and immigration who would put his or her energies to putting people back to work and creating training opportunities rather than undermining the unemployment insurance system which is a basic fundamental element of the labour market in this country?

Right Hon. Brian Mulroney (Prime Minister):

Madam Speaker, the unemployment insurance system is precisely that: provided that its objectives are not distorted from providing for insurance against unemployment to insurance for just about anybody who chooses to leave his or her job for no reason or no provocation.

The ultimate original objectives were sound. Around 1971-72 the pattern began which has transformed unemployment insurance from something quite divergent from its original objectives.

The Minister of Employment and Immigration knows all about it. He comes from northern New Brunswick, and he is very sensitive to the questions raised by my hon. friend. He is aware of the value of these social programs to people because they impact so heavily on northern New Brunswick.

As a Canadian and as a minister, he is also aware of the greater damage that occurs when the fiscal strength of the country is drained away by abuses that should not be inflicted on ordinary Canadian taxpayers. He is in the process of trying to clean some of these up and he had hoped to count on the support of my hon. friend. Perhaps that will still be forthcoming.

Hon. Lloyd Axworthy (Winnipeg South Centre):

Madam Speaker, I would like to raise this question with the Prime Minister. He talks about distortions in the system. What is a more damaging distortion of the system than the fact that at present there are hundreds of thousands of Canadians who have already exhausted their benefits and have had to go on the welfare rolls?

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In my own city of Winnipeg the rolls have increased by 400 per cent over the last couple of years simply because the unemployment system under this government has been undermined and has deteriorated.

Does the government know and understand that there is a very specific problem of people who want to work, who do not have benefits any longer, whose jobs are not there because the government policies have trapped them into an unemployment ghetto? When will we have a minister of employment who will begin to seriously address that issue?

Right Hon. Brian Mulroney (Prime Minister):

Mr. Speaker, it would be interesting, apart from the criticism, to hear from a Liberal about a given plan. What are his ideas, apart from the criticism?

We have already indicated that the programs we have are good. They can be amended, they can be strengthened, consistent with the need to strengthen the fiscal framework of Canada.

My hon. friend may have noticed that in the speech by President Clinton the other night, one of the points he mentioned was that if he did not get a deficit reduction program in place of the nature he indicated, some $400 or $500 billion over the next five or six years, he was horrified by the thought that 20 cents of every tax dollar in the United States would go to service the debt. He said: "We must stop this. This would debilitate the economy of the United States if ever we got into the position of paying 20 cents on the dollar."

The day I became Prime Minister I inherited a situation where 32 cents of every dollar went to service the debt. In 1984, for every dollar of tax revenue brought in, we were spending $1.33 in services. It was an unacceptable situation. Whether my hon. friend was in government or in opposition or on the street, he knows full well that he cannot maintain this partisanship in respect of the fiscal needs of Canada.

Mr. David Dingwall (Cape Breton-East Richmond):

Madam Speaker, my question is for the Prime Minister.

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Yesterday in Toronto the Minister of Employment and Immigration continued his vicious attack on the victims of unemployment instead of addressing the causes of unemployment.

In view of the unprecedented levels of high unemployment in certain regions of this country, and I name Cape Breton which has an unemployment rate of 26.4 per cent, I want to ask the Prime Minister how will these changes, these new measures assist the unemployed find meaningful work?

Right Hon. Brian Mulroney (Prime Minister):

Madam Speaker, my friend refers to the unprecedented levels of high unemployment in Canada. I think the numbers, which were indeed too high at 11 per cent last month, were 11.7 per cent under the Liberal government when they turned it over to us in 1984.

The member ought to be more selective in his use of the word unprecedented, as unemployment was substantially higher. Parenthetically it was also higher, with inflation running at 12.9 per cent and interest rates running at 22.75 per cent. All of this has been corrected as well in the structural changes we have brought about.

How are jobs created? They are created by stopping the crowding out of the private sector in regard to interest rates, in regard to public borrowing, by strengthening our inflation rate and by strengthening the fiscal capacity of this nation to generate new economic wealth, which only comes about in one way, and that is by creating real productivity gains. Anything else is a myth. This country will prosper with new wealth only if we enhance our productivity.