March 22, 1993

PC

Thomas Hockin (Minister for Science; Minister of State (Small Businesses and Tourism))

Progressive Conservative

Mr. Hockin:

The member wants to hear that these things are happening. We do have net growth in the economy.

They had three things in common. First, they were exporting 80 per cent of what they were producing. Second, they had some new technology, a new piece of machinery that caught them up with everybody else or put them a little ahead. The third characteristic, which is kind of sad, was that they did not want anybody to know that they were doing well. They did not want any publicity.

I heard the other day that 80 per cent of all new jobs in Canada are never advertised. People do not want to advertise they are expanding. I asked to bring the television cameras and the media with me to cut the ribbon and I was told they just wanted me and no publicity. They say this because there is nothing in it for them to get a lot of publicity.

The point is good things are happening. It is hard to get that message out. It is small and medium sized enterprise that is growing and doing well.

There is something more to this motion than simply small business. It is the over-all climate that has been put in place for economic growth in Canada. I do not think the next election-I have some advice to give my opposition friends-will be about framework policies, trade agreements and tax reform. They were for the elections of 1984 and 1988. The next election is going to be community by community, town by town, main street by main street and about how job creation is being stimulated. That is really what the election is going to be about. We are not going to be talking about these great big issues any more.

Those frameworks are in place so it is going to be what will happen in the detailed way. In the detailed way community by community, street by street, company by company, it is our view in the federal government, the Conservative Party, we should not do it through excess subsidies. We should try to stimulate growth in more

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intelligent ways. Probably the best example is the Small Businesses Loans Act which will lever tremendous activity with very little federal government resources, just a lot of intelligence and good marketing.

Let me conclude with this point. In one quarter of 1992 the real GDP in Canada grew 1.4 per cent. It was the sixth consecutive quarter of growth and the strongest since the second quarter of 1991. At 2.1 per cent inflation remains subdued. In fact our inflation performance was the best among the G-7. Exports have grown by 14 per cent since June 1991. Corporate pre-tax profits are rebounding from their deepest slump in 60 years and are up 30 per cent from their 1991 levels. Business bankruptcies are down, not up, 3 per cent from the levels a year ago. Cross-border shopping is down. All these changes augur well for a much stronger economy in the new term.

What this country needs, what this Parliament needs for the next she months is a celebration of this good news, these positive new forces. The economy is improving. It is the exact opposite of what the motion suggests.

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LIB

Dennis Joseph Mills

Liberal

Mr. Dennis Mills (Broadview-Greenwood):

Mr. Speaker, I want to start by saying to the minister that we in the Liberal Party of Canada supported his efforts in amending the Small Businesses Loans Act so that the

960,000 people who really drive this economy could get that support. We are happy to see him stand in the House today to commit that after Thursday the bank managers, the 7,500-odd loan officers, credit unions and small businesses of this country from coast to coast to coast will know the act is in place.

It has been a tradition in the House and in government for the last 15 years that after second reading things are promoted in newspapers and on television and radio. To use the Senate as the reason for not communicating the Small Businesses Loans Act is not a good argument. At any rate I want to go on to something else.

The minister talked about entrepreneurial spirit in this country. I think the entrepreneurial spirit is fantastic. I support him in that regard. He also talked about the fact that we are not giving out as many grants today as we did a few years ago. I think he forgot an area where we are giving out billions of dollars in grants.

Because the government has not addressed the tax preferences that have built up in the tax act, not just in the minister's regime but in previous Liberal regimes, it has not really addressed the issue of tax grants to major corporations. The minister knows as well as I do that there are close to $40 billion or $50 billion worth of tax expenditures or tax grants. Many of them have not had accountability as to whether or not they are meeting their public policy objective, namely job creation or keeping certain sectors vibrant.

I would like to hear the minister say in the House today that it might be a good time to review tax grants that have been given through the tax act mostly to foreign multinationals.

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PC

Thomas Hockin (Minister for Science; Minister of State (Small Businesses and Tourism))

Progressive Conservative

Mr. Hockin:

This is always a murky area where allegations fly around. There is always a bit of truth to them and there is a lot of untruth to them.

On the hon. member's question, no government has spent more time or effort pruning the tax system of loopholes and boondoggles for business than this government. They have just about all been removed.

When we took over we had the scientific and research tax credit which was a terrible leakage. It was brought in by either the Turner government or the Trudeau government before it. Billions of dollars was going down the drain. We closed that. We have worked at closing a whole host of other loopholes. We continue to do so. As a matter of fact we have to because we need the revenues.

What we have not done is introduce a minimum corporate tax as has been suggested by a lot of people because frankly it would just hurt small business. People say they want to make sure that every corporation pays tax. It turns out that small businesses with loan loss carry-forwards from before that finally make a profit can apply their loan losses of previous years against the year's profit. We believe in that. We do not believe in taxing it back.

If they want to take big business and make an exception for it, that is an argument I would like to hear the House debate. We have to remember that small business is allowed two, three or four tax expenditures I believe in. The first one is loan loss carry-forwards. The second is that if a business is part of a grouping of companies it does not tax twice; it taxes once. If it is sending profits or

dividends to another member of the corporate family then it is taxed by that other member rather than taxing it and the other member. That is the second source of tax expenditure. I do not think any country in the world would want to double tax, to have a double corporate tax, for small and medium sized enterprises.

What would be the other big exemption? Financial institutions, the banks, insurance companies and trust companies somehow have been escaping tax because they can make loan loss provisions that are too generous or have various schemes. We have changed that. We are the first government that has actually made sure financial institutions pay their fair share of tax.

I was told the other day by a chairman of one of the biggest life insurance companies in Canada that he pays eight different types of taxes. There are three or four different types of federal taxes that he pays. That is what this government did. We now have a corporate tax structure that has been pruned of most of the loopholes that were not fair. We have left a system that will stimulate enterprise by especially exempting small business from a whole host of taxes.

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LIB

Joseph R. (Joe) Comuzzi

Liberal

Mr. Joe Comuzzi (Thunder Bay-Nipigon):

Mr. Speaker, I appreciated listening to the minister's comments a short while ago, particularly as they related to FEDNOR in northern Ontario. By and large the FEDNOR board has proven itself very knowledgeable about the particular industry from a regional perspective. Although we have some dispute in some of the areas of loans, by and large it is a very good program.

I was interested in what the minister was talking about in the small business venture. The minister has been here for eight or nine years, I have been here for only four years and a few months. If there is one thing in the thrust that this House is showing with respect to how we are going to get this economy going, it is going to come down on the back of the small business person within this country, not only in northern Ontario but throughout Canada. On that area we are ad idem with respect to how this Parliament should really operate on an ongoing basis.

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I was particularly interested in his comments on Windsor and the announcement made this past week. I know the minister is from London. Windsor is about 100 kilometres up the road. Having gone to school in Windsor at Assumption College, the university and the law school and so on one becomes veiy close to the city of Windsor and has many friends there.

I would like the minister to comment on the $900 million that was announced by Chrysler with respect to versatility on the van production. The van has proven to be a magnificent vehicle for all of Canada and the United States in production.

Chrysler will be more versatile in its production methods to compete with some of the competition presently on the road. Even though it has not created any new jobs I would be interested in the minister's comments. If we do not have them I would be prepared in the future to listen to him through his department as to how it secures and builds a confidence within Windsor and other communities.

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PC

Charles Deblois (Assistant Deputy Chair of Committees of the Whole)

Progressive Conservative

The Acting Speaker (Mr. DeBlois):

Order please. Time is running out and I must give the floor to the hon. minister.

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LIB

Joseph R. (Joe) Comuzzi

Liberal

Mr. Comuzzi:

I will put my question and then I will sit down. I would like to hear about the confidence it builds and the security that it builds in those people who are employed and what effect that will have on the small business community in Windsor.

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PC

Thomas Hockin (Minister for Science; Minister of State (Small Businesses and Tourism))

Progressive Conservative

Mr. Hockin:

Mr. Speaker, I want to thank my hon. friend for asking that question.

It is important we recognize that the investment is very important and positive and will create confidence. I was making the point that so many big business investments just maintain jobs but they also maintain confidence and I think that is very important.

I have been told this investment will entice suppliers to make long-term commitments. These are suppliers next door, suppliers in Canada, suppliers in southern Ontario, Essex county, Kent county, Middlesex county, Elgin county and maybe stretching all the way up to Toronto. They will be enticed to make investments and to deepen their intentions to produce in Canada rather than Mexico or the United States.

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There were lots of indications of suppliers being around who are going to make reinvestments and grow as a result of this investment. Therefore they can bid for work in the United States because their whole operations will have risen up to the kind of performance level where they can export at lower prices.

I think the hon. member has suggested an important point. A large investment such as Chrysler does give confidence to small and medium sized suppliers. It makes them more competitive. This means jobs are created because they can export and so on. That is one of the good results from that announcement.

I also have to tell the hon. member that Windsor is a hard-working town. Ever since I was a kid, people of this town have worked hard. Windsor has always been an up and down kind of economy. It is a boom and bust economy that rotates around the automotive part of the economy. This will help give them confidence.

I actually salute the Chrysler people who won the Canada awards of business excellence in 1991 for quality. This great big banner is hanging outside the front door. They are very proud of it. They are just as proud of it as a small little company that wins that award. They are an example to the rest of Canada.

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GOVERNMENT EXPENDITURES RESTRAINT ACT, 1993 NO. 2 NOTICE OF ALLOCATION OF TIME TO CONSIDER REPORT AND THIRD READING STAGES OF BILL C-113

PC

Thomas Hockin (Minister for Science; Minister of State (Small Businesses and Tourism))

Progressive Conservative

Hon. Tom Hockin (Minister for Science and Minister of State (Small Businesses and Tourism)):

On a point of order, Mr. Speaker. An agreement could not be reached under the provisions of Standing Order 78(1) or (2), with respect to report stage and third reading of Bill C-113, an act to provide for government expenditure restraint.

Under the provisions of Standing Order 78(3), I give notice of my intention to move a time allocation motion at the next sitting of the House for the purpose of allotting a specified number of days or hours for the consideration and disposal of proceedings at the said stages.

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ALLOTTED DAY, S. O. 81-THE ECONOMY


The House resumed consideration of the motion of Mr. Bevilacqua.


NDP

Steve Butland

New Democratic Party

Mr. Steve Butland (Sault Ste. Marie):

Mr. Speaker, first of all I want to congratulate the minister for his speech. I think he was very sincere in what he said and I encourage him to make an important announcement tomorrow. Certainly he has my support.

Having said that though, he talked about the celebration the country should embark upon. I was just wondering what exactly the details of that celebration would be when I look at the state of the economy as of March

1993. I see the unemployment rate is still above 11 per cent. I see the welfare rolls are at 3.8 million. I see the number of people living in poverty is at 4.2 million. Not to worry, because I understand one of the government members has suggested we just move the poverty line higher to make it harder to qualify as that would make fewer people below the poverty level. Bankruptcies were at 5,401 in January. The good news is they are starting to drop. They were 18 per cent below the level of a year ago but last year, with 76,139, was still the highest in Canadian history.

Economic growth was 0.9 per cent in 1992, a bit of good news: inflation was 2.0 per cent in January. But we have suggested all along that the government wrestled inflation to the ground and wrestled the entire economy to the ground as well.

Before we get into fits of euphoria, as the minister has suggested perhaps we should do, I would ask him to take a look at the real statistics. Thke a look at the real world in Canada. I do not think the euphoria will have spread to ordinary Canadians.

Coming from Ontario, these are indeed difficult times. The Ontario New Democrats are also taking the brunt of criticism from just about everybody. I want to say that some of the statistics are never brought forward. I want to take the opportunity of putting them on the record. The federal government in some sense of misguided co-operation has continually short-changed the province of Ontario. The numbers and statistics bear out this fact.

The province of Ontario contributes 43 per cent of national taxes but gets 30 per cent in return. Ottawa pays 50 per cent of social assistance in other provinces but only 29 per cent in Ontario, even though the province has more than one million people on welfare. The federal contribution to health and post-secondary education is down to 31 per cent, compared to 52 per cent three years ago. Ontario has also been hit hardest by the economic policies of the federal government. It has lost 80 per cent of the manufacturing jobs. They have disappeared in this recession.

The motion before us suggests that we should condemn the government. However, I suspect that Canadians are tired of politicians and political parties on a continual bent to condemn one another for their actions or for their lack of activity. I suggest it certainly behoves us rather than condemning and severely criticizing one another to get together and attempt to work together to get this country out of this severe recession, if not depression, we are presently in.

I appreciate that this may be perceived as a scatter-gun approach, but I wanted to hit upon just a few government policies that have not been highlighted for quite a while.

I want to talk about the Hibernia project. We supported it but we believe it has been misguided in many of its guidelines that the federal government forged for the Canadian people. In this $5.2 billion megaproject for Canada, Canadian content has not been guaranteed. It is probably one of the few countries in the world that could forge such a megaproject and not have Canadian content assured.

About one and a half years ago Algoma Steel in my riding said: "We are shut out of the steel contract in Hibernia. A Korean firm is going to get it. There is no doubt in our minds that they dumped the product on the Canadian scene".

Algoma Steel is in difficulty. I went out to St. John's and I received a good audience and a good explanation. I was told at that time: "We are still on target. We are going to have 65 per cent to 70 per cent Canadian content". The then minister told me not to worry, Canadian content was going to be on stream.

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As it turns out, they took a review of Canadian content in the Hibernia project. However six months later various Canadian manufacturers and specifically MIL Davie shipbuilding of Quebec said that not only could they not get involved but they could not even bid on the contracts. They were being shut out completely from the market.

The Algoma Steel situation was never resolved to our liking. We could have brought charges of dumping, but that is costly and we do not have the time nor the moneys to proceed.

As we proceeded, we found the target for Canadian content was just that. It was not written in the contract. As time progressed, the amount of Canadian content decreased from that 65 per cent to 75 per cent down to 55 per cent to 60 per cent.

We found out just a couple of weeks ago that the minister admitted to being foiled over Hibernia contracts. He admitted that he could not get the major oil consortiums to allow Canadian bidding on the Hibernia project. Here is a Canadian megaproject and we could not negotiate appropriate Canadian content. There is one misguided policy.

The minister who spoke just prior talked about the next election. He said that it will not be about major frameworks. He said that it is not going to be about free trade agreements. It is not going to be about NAFTA because the frameworks are in place. The election is going to be fought community by community, neighbourhood by neighbourhood, household by household. I happen to agree with that latter comment.

However, to suggest that the frameworks will be insignificant is not acceptable. If the framework above is faulty, one must accept the fact that the structure below that framework is also faulty and will not survive.

Some of the members I have listened to this afternoon from the government side made much ado about trade agreements, the successes of free trade and the prospective success of NAFTA.

I suspect these people have not left the city of Ottawa. If they have been to Mexico, they have spent too much time in the resorts. They have not seen the reality of the Maquiladora in Mexico. They have not seen the exploitation of Mexican labourers.

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The member for South Shore talked about the productivity of Canadians. We do not dispute that, but let us not underestimate the productivity of Mexicans. Their productivity is increasing and they are becoming more and more competitive with Canadians.

To say that they are malcontents and less than ambitious is not true. They are quite productive and quite efficient and it is at our peril to attempt to compete with them on that playing field when their hourly wages in the Maquiladora could be 80 cents per hour. It is out and out worker exploitation.

For those who suggest that this will open up the Mexican market of 80 million people I ask them what they anticipate the Mexican people will buy from Canada at those wages. I would encourage members on the government side to go down there and deal with the reality of the Mexican Maquiladora area.

I would also tell them to not accept the fact that the framework of NAFTA is going forward with as much haste and as much acceptance in Washington as it is in Ottawa, by the government side. The politicians, labour groups, and environmental groups in Washington are not at all sold on the fact that this NAFTA agreement will go forward. If the vote were held today NAFTA would be deafeated.

Unfortunately this government says that really does not matter and we have to go forward with as much haste as we possibly can. It has changed its attitude toward the parallel accords. At first they were of no concern to us, they were between Mexico and the United States. Then we had to go to the table, we still did not have a strategy in place but we said we had best get to that table.

The Clinton administration has made it abundantly clear. If the parallel accords have no teeth it will not sign the accord and will not support the NAFTA agreement that is in place. The members of the administration are going group by group down to Mexico to see what they are dealing with. That is all I am asking.

I would ask the government members to get down there and see the reality. We met with some of the promoters on the American side in Washington last week. One of the pro-NAFTA people, a patriarch of the American Congress, talked derisively of labour standards. He said: "Parallel accords, whatever they mean;

labour standards, whatever that is; environmental protection, whatever that means. You just cannot negotiate these kinds of things". That is pretty scary talk and a pretty scary attitude.

He also went on to say, and I agree with him on this statement: "If the parallel accords have any substantiveness to them then they will unravel the original agreement and that is impossible. We are not going to open that agreement". The Americans are in a conundrum right now. I am happy for that. I hope the conundrum continues.

I wish that this government would open its eyes to some of the perils of this agreement. It continually trots out very powerful statistics indicating that our exports into the American market have increased. We accept that. They increased before 1988 as well. The government does not trot out statistics which show that our exports to many other countries have declined. Those are the kinds of statistics that we suggest it is not bringing forward and which it definitely should bring forward.

Another issue, perhaps in isolation but once again it is one of those issues that is presently in committee and I hope it will see the light of day in the House very soon, is that of family trusts. It is part of the taxation system in this country that the fabulously wealthy have been able to protect their fortunes for a long period of time. It would appear, after 21 years of protection of the wealthiest people in this country, that new legislation will allow these people to set aside their hundreds of millions of dollars in these family trusts for another 20, 30 or 40 years.

These trusts have gone untaxed for 21 years. We do not know how many of them there are. There were

22,000 family trusts in 1972, the value of which we do not know. We do know that one of them was worth $70 million, and that amount went untaxed year after year.

The suggestion is that 21 years is not enough time for these people to get their income tax house in order, so give them more time. I asked average taxpayers how much time they have to get their tax house in order? They get 12 months to get it in order or else. The government says that it has to extend the rule to protect the family trusts a little bit longer, another 20, 30 or 40 years, because some of these people are going to have to see a lawyer and lawyers are costly. Shame.

The second reason is: What if they have to sell something? What if they have to sell one of their small companies? Would that not be a shame. The third reason, and the most cynical of all, is: What if they have a disabled child? They must have a future. We must protect them for the future because if they are disabled then they may not be able to provide for themselves.

I say that is cynical because if they are setting $70 million aside, as one example, surely they could do a little bit of planning with their finances to ensure that the child does okay when he or she becomes an adult. I think the government threw that disabled child example out there to make us feel bad. It is difficult to even mention this here in the House, but nevertheless that is how cynical one gets when presented with this kind of information. It is not acceptable, not in any way.

We have no idea, because of the lack of information available on these family trusts, how many are out there and how much money is involved in them, but we do know that the scandalous tax system continues. If the government has its way it will continue for another 20,30 or 40 years. That is how cynical one can become.

Yet the government will talk about a UI cheat. He might be bilking the system for a couple of thousand dollars, but here is somebody with literally millions and multimillions of dollars and the government is saying: "That is okay, 21 years was not enough. We will give you a little more time to get your house in order".

It has been a bit of a shotgun approach but I wanted to touch on a few policies that irked me about the government. I do not think it is appropriate that we always condemn one another, but certainly I think the policies are misguided.

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PC

Patrick (Pat) Anthony Sobeski

Progressive Conservative

Mr. Pat Sobeski (Cambridge):

Mr. Speaker, I would like to ask a very specific question about the NAFTA and one of the reasons that the NAFTA is so important.

Canadian exports of auto parts to Mexico total about $100 million each year. Currently to get into Mexico they must incur a 10 per cent tariff, so a $100 part plus a 10

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per cent tariff is sold in Mexico for $110. Parts producers in the United States also face the same 10 per cent tariff.

If the Government of Canada followed the member's policy and tore up the North American free trade agreement but the United States and Mexico, who originally wanted the agreement, did work out an agreement then after the phase-out period the Canadian auto part producer would be selling his part in Mexico for $110 but the American auto part producer could sell his part down there for $100. Who does the member think the Mexicans are going to buy from? Where does he think investment will go? It will go to the United States. What will happen to the auto parts industry in Canada because the NDP does not want Canadian auto part producers to be on the same level playing field as American part producers? I want to tell the member that when the committee was holding hearings labour unions and everyone else had difficulty in answering that question.

Can the member tell me how by tearing up the NAFTA, by excluding Canada, that will protect those people in his riding, my riding, and Windsor who depend on exports of the auto parts industry.

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NDP

Steve Butland

New Democratic Party

Mr. Butland:

Mr. Speaker, the member has lost the big picture. The problem is that he has isolated something that is a little more complex than he lets on.

What he has not pointed out is that presently General Motors has more employees in Mexico than it does in Canada. This whole concept is the global trading block that will extend beyond Mexico to Argentina and El Salvador. I have seen ads that say: "Come on down to El Salvador and have Rosie sew your garments for you. She makes 33 cents an hour, and not only that but she has a nice personality too. We also have good roads down here". The ads extol the virtues of El Salvador.

He is missing the picture. The only thing these multinationals have an interest in is relocating. They will relocate in the United States in the right-to-work states or further south in Mexico, and the big three have made no bones about it. They can hardly wait until they relocate. They have said that the only people stopping them from relocating are those bloody unions that cause too much controversy and bad press.

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If I cannot answer the member's question I apologize. I have no great expertise, but please do not lose sight of the much bigger picture. I think the member is putting the blinders on and allowing that to happen.

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PC

Kenneth David Atkinson

Progressive Conservative

Mr. Ken Atkinson (St. Catharines):

Mr. Speaker, I listened to the last response with a great deal of interest because of the position I have in my community. We have a lot of automobile parts producers. They are most interested in the NAFTA and are in full support of what it does. As my friend from Cambridge pointed out, tariff barriers coming down on automobile parts going into Mexico will be a great benefit to my part of the countiy.

In addition, in the NAFTA North American content for automobiles is raised to 62.5 per cent. For someone from an area such as mine in which there are the big three auto producers, specifically General Motors, this is important. They have been asking for that increased content and now that is going to be done in the NAFTA.

The current FTA only provides for 50 per cent content. This is an advantage to our area and something that we look forward to. The labour unions were mentioned. This is something that they had lobbied for. They are now not saying anything about because it because they have this part of the renegotiation and they have this increased North American content that is going to help the automobile parts producers in my area. In that way, for my particular area, NAFTA will be a benefit.

I listened to my friend and his response to the question that was asked by the member for Cambridge and I say that it is something quite important to our part of the country which has been hard hit.

I would be interested in my friend's response as to whether we going to build the tariff barriers back up around our country. We know that nearly 30 per cent of our country's gross domestic product comes from selling products to other countries.

What are we going to do if we tear up the FTA and NAFTA? Are we going to build up tariff barriers around this country of 27 million people whose wealth and standard of living depends on trading with the rest of the

world. They are not going to say: "Oh, that is great. We are just going to be happy about that."

Another thing perhaps my friend could comment on is the fact that the auto pact is now part of the FTA. Ripping up the FTA could endanger the Auto Pact. Under the Auto Pact we are a net beneficiary. We consume 9 per cent of the cars in North America and we produce 17 per cent of the cars that are consumed in North America. The Auto Pact is very important to us and anything that would endanger that would cause us and this entire country a great deal of difficulty.

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NDP

Steve Butland

New Democratic Party

Mr. Butland:

Mr. Speaker, I do not want to get into a debate with a member who represents his constituency. Who knows better than he about his constituency? I will accept some of his, I hope, very valid arguments. I am surprised. I want to check some of the statements he has made that suddenly all of the opposition in the area has gone silent. I find it hard to believe that they have now gone into the woodwork. I am not going to venture into a specific debate as I suspect he would not debate me on steel, but I do not know that for sure.

Sectoral agreements in trade are good and we are saying yes to the auto pact. The Canadian steel producers of this country are saying that sectoral trade agreements are what this should be all about. Probably, on balance, we know that there are going to be some net gainers and some net losers. We will proffer the appropriate sectors and the numbers of losers under free trade and NAFTA.

I wanted to ask this question again. Who does the member think will be buying these parts from Canadian producers? Will they be shipped from his area to Mexico to be purchased by the Mexicans? I somehow doubt it.

We talked about barriers. Are we going to build the barriers up again and become protectionist? Free trade is fine. I think anybody who argues against true free trade is misguided. However, what is the problem with striking a social contract among the three countries? Is there a problem with that? They have done it with some success in the European Common Market. However, in the North American trade agreements there is no mention of it. In fact, heaven forbid if one talks about environmental or labour standards. What is that? What a nebulous, airy-fairy obscure thought.

We say: "No, not at all. Let us raise some of the standards of these Mexicans. What is the problem?" Do we have to lower our standards? Absolutely not. I agree with the member and that is probably the only thing we agree on.

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PC

Marcel R. Tremblay (Parliamentary Secretary to the Deputy Prime Minister; Parliamentary Secretary to the Minister of Finance; Parliamentary Secretary to the Deputy Leader of the Government in the House of Commons; Parliamentary Secretary to the Minister of State (Fitness and Amateur Sport))

Progressive Conservative

Mr. Marcel R. TVemblay (Parliamentary Secretary to the Deputy Prime Minister and Minister of Finance):

Mr. Speaker, my hon. friend's motion is the kind of blanket statement that opposition members find so easy to make.

With all due respect, I would suggest that hon. members of the opposition take the time to learn about the very real efforts this government is making with regard to the Canadian economy.

The hon. member's motion gives the completely false impression that this government has been sitting idly by. Canadians know that is not the case. We have been making a genuine, concerted effort to deal with the economy and to give business an incentive to invest in this great nation.

This government has many programs that are beginning to show good results. It does not happen overnight. There is no instant solution but we are making progress.

Because of the Free Trade Agreement, along with other trade initiatives, Canada's exports are up 11 per cent. That does not represent stifled economic growth to me. This government understands economic reality, and we have clearly demonstrated fiscal and economic leadership.

During the last two decades inflation has been the most intractable problem for many nations. However, in Canada our government has conquered this killer of jobs and economic growth. Under our government inflation is now around an acceptable two per cent. The approach we have taken is a no-nonsense approach. It is an approach that avoided quick fixes, and instituted real change so this magnificent country can enjoy long-term gain.

Tkx reform has enabled Canadian business to compete around the world without being saddled by a manufacturers' sales tax. The result is that other nations see Canada with a disciplined government that puts good fiscal management ahead of soft policies designed to win

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popularity contests. We have the respect of those other nations and the confidence of foreign investors.

Over the past few years this government has been building a solid framework that will enable business and labour to successfully compete in the new, technology-driven, global economy. For example, let us just consider some recent initiatives the government has undertaken to help small businesses. I trust that my hon. friend realizes that small business is the real driving force behind our economy.

In the economic statement delivered by the Minister of Finance in December the small business loan limit was increased to $250,000. Additional forms of working capital are also becoming available. Rules for investing in retirement savings plans were made more flexible so Canadians will have more incentive to invest in Canadian companies.

We did not increase income tax or UI premiums. We did not increase the small business tax rate and there is no payroll tax for training. We made changes in the unemployment insurance program, changes that were requested by both business and labour. Besides freezing UI premiums, we are providing employers with a UI premium holiday for new companies and new employees in existing companies.

Opposition motions condemning this government imply that we should pretend there is no massive debt and just spend, spend, spend, that we should live beyond our means and place a totally irresponsible financial burden on our children and grandchildren. This government will never take that path. The people of Canada have entrusted us with a solemn responsibility to do what is best for our economic health, and we have every intention of living up to that responsibility.

This government has addressed issues that previous governments shied away from and placed them at the top of our agenda. Not because we enjoyed doing so but because we knew it was the right thing to do. This government has had the courage to acknowledge that we do not have all the answers. We have entered into partnerships with interested parties in some sectors to ensure that we are on the right path for a full and healthy economic recovery.

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We know that partnership with all stakeholders in the economy is the way to go. Last year the steering Group on Prosperity stated in its reports that, and I quote: "Our future prosperity depends on our ability and willingness to draw upon the creative talents of all Canadians. This means becoming an inclusive society, where everyone has a fair opportunity to participate fully and to contribute to the best of his or her ability".

This is much more than a visionary statement. It is a well thought out recognition that if Canadians pull together and believe in one another, we will continue to top United Nations' polls as the greatest country in the world.

The hon. member's motion reflects his concern about Canadian jobs. Perhaps he does not remember the dead-end, make-work projects of the 1970s which did not create jobs but instead increased our debt and ultimately cost us jobs. This government has not continued down that path when it comes to getting workers back to work. We want workers to be able to enjoy a comfortable life and contribute to the growing prosperity of Canada. To that end we have taken a long-term, constructive approach that will produce lasting results.

The Canadian Jobs Strategy created in 1985 emphasized the growing importance of developing workers' skills so they can actually use them in the work place. In the current fiscal year, the Canadian Jobs Strategy budget is a hefty $1.6 billion.

When the hon. member was writing his motion, did he remember the labour force development strategy that we introduced in 1989? It is a comprehensive strategy that forever abolished useless, dead-end, make-work projects and instead emphasized the importance of investing in the best resource this country has; its people.

That investment must train and upgrade workers' skills and, perhaps most important, it must develop a training culture so that Canadians realize school is not out just because they have left the classroom. Lifelong learning and acquiring higher level skills will be necessary throughout one's entire working life.

Did my hon. friend remember that this government fulfilled its promise to consult with Canadian stakeholders? To ensure that our labour force development strategy is kept on the right track, we brought together representatives of business and labour, educators, trainers, women, aboriginals, persons with disabilities and visible minorities. They are the creative and knowledgeable individuals who make up the Canadian Labour Force Development Board, a body formed in 1991 that has helped us enormously to understand the needs of the private sector and to create programs that will fulfil those needs.

Does the hon. member know that one of the first recommendations made by the Canadian Labour Force Development Board was to substantially increase the use of unemployment insurance for active programming. This idea came from people who work in the community and who fully understand that we must make the unemployed productive members of society again. The unemployed want jobs, not hand-outs.

Did we take that advice? We most certainly did. In 1992 we dedicated $1.95 billion to unemployment insurance developmental uses. That is, three times more than the 1990 funding for active programs and training for UI claimants. All told this year we are spending around $21 billion to help unemployed workers.

I trust that my hon. friend knows that Canada's unemployment insurance program is one of the most generous anywhere in the world. It is a significant burden for both workers and employers, and so, this investment must be made wisely and fairly to ensure our future prosperity.

The Canadian Labour Force Development Board has proven to be a positive force in bringing together the diverse economic interests of Canadians. Discussions are now taking place involving the Department of Employment and Immigration, provincial and territorial governments and private sector representatives to increase the number of provincial, territorial and local labour force development boards.

The people who live in a community are the best qualified to know the needs of that community. These local boards will have significant influence over a sub-

stantial amount of our expenditures on training and adjustments in their communities.

This government understands fully that community involvement is the key to a healthy, local economy. We showed that understanding when we brought in the Community Futures Program to help rural and remote cummunities facing severe labour market adjustments. Community Futures committees reflect the diversity of local interests. They create initiatives from the input of their community, initiatives that the government can then put into action.

Besides local committees', business development centres are another key component of Community Futures. The staff at business development centres have the expertise to counsel and give technical assistance to small business people and entrepreneurs.

Speaking of entrepreneurs, this government also has a Self-Employment Assistance Program that provides income support to UI claimants and persons eligible for social assistance. Rather than pay people to be unproductive, we are helping those with the skills and desire to become self-employed to get their businesses off the ground.

Our government is committed to saving jobs. Is the hon. member aware of other innovative programs like work sharing, which enables employers to avoid lay-offs during temporary slowdowns?

Our local human resource planning program helps employers develop a productive work force. As well, this government recongnizes that some Canadians are willing to move to find employment. With that in mind, we have a mobility assistance program to help individuals seek employment somewhere other than where they are currently living.

There is also the problem of long-term workers who suddenly find themselves unemployed due to industrial restructuring. The Department of Employment and Immigration will spend $300 million to help displaced workers once again become productive citizens.

In this current fiscal year, our $3.55 billion budget has enabled 850,000 Canadian workers to participate in the government's labour market programming administered efficiently and effectively by the Department of Employment and Immigration.

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In the coming fiscal year, we are allocating approximately $3.8 billion for labour market programming. I think even the hon. member will agree that figure represents a significant increase over the $2.1 billion spent in the 1985-86 fiscal year. Of that $3.8 billion, $2.21 billion will provide active training and adjustment measures for UI claimants.

I trust that I have made it clear to my hon. friend that this government is taking all reasonable steps to ensure economic growth and to help workers train for jobs that will give them and Canada long-term prosperity.

Our programs are working. The unemployment rate fell to 10.8 per cent in Februaiy, the lowest it has been in the last year. Since August approximately 156,000 higher paying, full-time jobs have been created.

I say to the hon. member, and to all hon. members, this government welcomes constructive suggestions to keep the economy moving upwards at a steady, healthy growth. Let us pull together to help all Canadians fulfil their potential and ensure that Canada has a prosperous future.

Topic:   GOVERNMENT ORDERS
Subtopic:   ALLOTTED DAY, S. O. 81-THE ECONOMY
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PC

Jean-Marc Robitaille (Parliamentary Secretary to the Minister of State (Finance and Privatization))

Progressive Conservative

Mr. Jean-Marc Robitaille (Parliamentary Secretary to Minister of State (Finance and Privatization)):

Mr. Speaker, I listened very closely to my colleague from Quebec-Est, the parliamentary secretary, who described in detail the importance of the $3.5 billion in funds for training. I will also remind the House of the training measures which the opposition opposed in Bill C-21 and wants to oppose again in Bill C-113.

My colleague touched on a variety of subjects. One of those which has the greatest impact on our economy is the debt load. We remember very well that when the Leader of the Opposition was in power his government increased spending by 15 per cent a year on average. Our government has brought this rate of increase down to an average of 4 per cent. The Liberals let the deficit rise as a percentage of the gross domestic product from 0 to 8 per cent. We have managed to cut it almost in half, to 5.2 per cent.

I have a question for my colleague. We have seen the waffling of the Liberal Party, which for four and a half years has voted against every spending reduction measure here in this House, just as it opposed the GST. The Leader of the Liberal Party is now trying to take a position on the goods and services tax, saying that he will

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remove it and replace it with another tax that will apply to food as well. That is really shameful! Then he changes his mind and says that he will not remove it but will hold consultations. He is really asking for a blank cheque. Finally, we will recall this great statement from the Leader of the Opposition, "You know, we must not be obsessed with the deficit; the Conservatives are becoming obsessed with deficit reduction".

So the question I have for my colleague from Quebec-Est is this: How do his constituents see the importance of reducing the deficit and how do they react to those who claim that the deficit is not important and that we must not be obsessed with it? I know the people of Quebec-Est very well since I was bom in Quebec City and a large part of my family lives in Quebec City and in your riding, Mr. Speaker. I am convinced that these people are intelligent and very concerned about the future and economic prosperity. How do the people of Quebec-Est react to careless statements about the importance of controlling public spending and lowering the deficit?

Topic:   GOVERNMENT ORDERS
Subtopic:   ALLOTTED DAY, S. O. 81-THE ECONOMY
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PC

Marcel R. Tremblay (Parliamentary Secretary to the Deputy Prime Minister; Parliamentary Secretary to the Minister of Finance; Parliamentary Secretary to the Deputy Leader of the Government in the House of Commons; Parliamentary Secretary to the Minister of State (Fitness and Amateur Sport))

Progressive Conservative

Mr. Tremblay (Quebec-Est):

Mr. Speaker, like me, you have noticed that it is easy to recognize a Quebecer, especially one from Quebec City. His constant smile clearly shows that my hon. colleague from Terrebonne is originally from our lovely region.

Remember the evening of September 4, 1984 when it was announced that the Conservative Party would form the next government with a majority. An eminent member of the opposition said: "Anyway, the coffers are empty". Despite that, I think that we have done things which are worth listening to and repeating again and again and we have been trying to do that for several years. My hon. colleague touched on the important point of labour force training.

When a company or a country is in difficulty, just saying "eliminate the deficit" will not make it go away overnight. It is a long battle and I can say we have been through it on the issue of training. Let me talk briefly about the Challenge Program.

This program was initiated by our government in 1985. Today it gives high school, college and university students an opportunity to have a summer job in keeping with their aspirations. It gives them practical experience to show a future employer when they graduate. When we

visit some companies, we realize that these students are often hired outside the summer period, to replace someone on maternity leave or someone who has suddenly fallen ill or to work certain hours over the Christmas or Easter holidays. Tbday young graduates already have some practical experience.

This is what we are setting up for people who were not students when we took power. My hon. colleague from Terrebonne knows very well that we spare no effort to use all available funds for programs that will give Canada the highly skilled labour force needed for global and world trade.

Many countries now look up to us as an example and envy us. They are implementing initiatives that we began in 1984, but unfortunately they are doing it ten years later. If we follow these programs, we will have benefits and concrete results ten years before other countries. At this rate, Canada will long remain in the much desired position of being the No. 1 country in the world.

Topic:   GOVERNMENT ORDERS
Subtopic:   ALLOTTED DAY, S. O. 81-THE ECONOMY
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LIB

Robert Daniel Nault

Liberal

Mr. Robert D. Nault (Kenora-Rainy River):

Mr. Speaker, I have listened with a great deal of interest to the comments of my friend from Quebec.

After nine years of Tory rule and after looking at the devastation on the economic development side, the unemployment situation, the youth unemployment, people who are going to food banks in places like Montreal and Quebec City, it just amazes me that a member can stand up and say it is the Liberals' fault.

They say they are sorry, they are doing their best but they have only been in power for nine years and are still trying to get it right. They are still trying to figure which programs are going to work as far as the federal government is concerned in Quebec. They are still trying to figure out which programs they are going to use to get people back to work in Ontario.

However, it is still the Liberals' fault. It has to be the Liberals' fault. They say people cannot trust the Liberals because it was all their fault for the last 10 years, 20 years and 30 years. I want to suggest to the last speaker and to the government that, Canadians are not buying that. What they want are concrete solutions.

I would like to ask my colleague from Quebec-Est if he could tell me what the government has done to help the 1.5 million Canadians who are unemployed to get back to work.

I may be mistaken but in my mind one of the highest unemployment rates in the country is in Quebec. I would like the hon. member to tell me, besides his continual spin that it is the Liberals' fault, what he proposes to do about the situation in Quebec.

Topic:   GOVERNMENT ORDERS
Subtopic:   ALLOTTED DAY, S. O. 81-THE ECONOMY
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March 22, 1993