April 22, 1993

LIB

Alfonso Gagliano (Chief Opposition Whip; Whip of the Liberal Party)

Liberal

Mr. Alfonso Gagliano (Saint-Leonard):

Madam Speaker, toward the end of his speech, the hon. member talked about the rhetoric of the opposition. In fact, throughout his speech, he accused the opposition of making negative comments about the government.

I would like to remind the hon. member that last week, while the House was not sitting, two important reports were released and they did not come from the opposition. In its report, the Canadian Conference of Catholic Bishops made alarming statements about the economic, financial and social situation of Canada.

Then Statistics Canada showed us the real picture which was especially revealing for us in Montreal. For two years now we have been asking the government to tell us how it will revitalize our area. I hope I will have enough time to go through some statistics since the questions and comments period is quite limited.

I would like to refer my hon. colleague to an article by Paul Durivage published in La Presse on March 9. The three sources I just mentioned have nothing to do with the opposition. I am referring to one journalist, the Catholic Bishops of Montreal, and Statistics Canada which is a government agency.

I have a copy of Paul Durivage's article which appeared in the March 9 issue of La Presse and I quote:

According to Mr. Jacques Pelletier, senior market analyst for Canada Mortgage and Housing Corporation, since 1990 there are 4 per cent fewer jobs in the area.

The retail market is flat. Last December, of all the metropolitan areas, it was still in Montreal department stores that sales were the slowest.

As for home building, last year was the worst on record since 1982 in Metropolitan Montreal.

The slump in the building industry is closely connected to a high vacancy rate which has been consistently increasing since 1986 to reach 7.5 per cent today. For the last thirty years, there have never been so many empty dwellings in the Montreal area.

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Many office spaces are also vacant. In the hotel industry, the

Association des hotels du Grand Montreal, which keeps track of the

number of beds occupied in the 45 biggest hotels of the city, sees no

visible sign of recovery.

These are telling signs. I have a few very interesting graphs under the caption "A city for rent". Unemployment rate, the curve is going up; housing starts, decreasing; office space vacancy rate, on the rise; hotel occupancy rate, decreasing; retail sales, decreasing; inflation rate, decreasing.

This is this government's track record. So, instead of blaming the opposition for reminding the government every day of the misery that prevails elsewhere, the government had better deal with the real problems people face instead of creating systems which, in the long and the short run, will only benefit its friends.

Instead of blaming others, this government, which was elected in 1984 on the promise of jobs, jobs, jobs, should explain why after nine years we have the kind of numbers which were released by Statistics Canada. Do you know that in Canada we have 1,537,000 unemployed workers and 2,700,000 Canadians on welfare? We have close to four million Canadians who, one way or another, have no job and live below the poverty level, thanks to our Tory government.

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PC

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

Progressive Conservative

Mr. Robitaille:

Madam Speaker, understandably the hon. member for Saint-Leonard who represents a Montreal area riding shows a great deal of interest for Montreal, but I find it unbelievable that he should try to blame the conditions he described on the policies of our government.

Everyone knows we are just coming out of a recession which has been very hard, not only on Canada, but also on many other countries throughout the world. Clearly, the recession has had an impact, but to say that during that period of recession and global restructuring the government did nothing to help the situation is morally dishonest.

The hon. member talks about all the jobs lost in the Montreal area. Twice in this House we had legislation which benefited greatly the Montreal area. There was the bill on patented medicines which has brought millions of dollars of investment to the Montreal area and has resulted in more than 8,000 new jobs being created.

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What did opposition members do for the Montreal area? They voted against that bill and their colleagues in the other place filibustered.

And now they want to advise us on how to create jobs in that area, when we know how well the Liberal government did. At the time they closed all the oil refineries in Montreal. Come on, be serious. The problem in Montreal goes back to the Liberals. When they were in office they never bothered renewing the economic structures.

The hon. member raised the issue earlier of the escalating reduction of housing starts. He was giving a lot of statistics, but he should have mentioned the record level of exports to the United States which is responsible for a lot of jobs; the latest statistics which show an increase in consumption in Quebec and Canada; the establishment of employment centres this last few months; the lowering of interest rates which stimulates construction; more affordable mortgage rates; and growth rates which should be among the highest in the country this year.

We have every reason to have confidence in the future of the country, to have confidence in the policies of the government. We know that the hon. member and his colleagues do not like the fact that we can now see the light at the end of the tunnel, that things are looking up. Obviously, in the context of forthcoming elections this is not good news for the hon. member.

He can say anything he likes in this House. He will not change the fact that we are coming out of the recession and that economic recovery is in progress. All economic indicators are positive. We are on the right track. The people in his riding, like the rest of the Canadian people, have confidence in the future, confidence in their ability, and are determined to recover the jobs lost and to reduce unemployment.

We are on the right track and we certainly do not need any lecture on how the federal government, our government, should commit itself to the economic recovery of Montreal, especially given the track record of the Liberal government in that area.

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LIB

Alfonso Gagliano (Chief Opposition Whip; Whip of the Liberal Party)

Liberal

Mr. Alfonso Gagliano (Saint-Leonard):

Madam Speaker, today the hon. member for Essex-Windsor has put forward the following motion:

That this House condemns the government for policies that have

decimated the economy forcing company closures resulting in job

losses for Canadian workers.

I want to say right away that I support this motion without hesitation because every statistic under the sun shows that Canadians are worse off economically since the Tories took office.

The previous speaker may criticize the opposition but the facts are there and opposition members are not alone in condemning the government for its economic policies. Last week the Canadian Conference of Catholic Bishops asked the government to act. The bishops begged the Conservative government to do something about the high unemployment rate in this country. They said that the economic policies of the past decade had put an undue burden on the workers in this country.

According to the bishops, Canada is experiencing a social crisis that is unprecendented, with one-quarter of its labour force shut out of the labour market. If the government finds it hard to believe opposition members or Canada's bishops, let us take a look at the figures published by the government's own agency, Statistics Canada.

If it compares today's figures with 1988, the government will see the economic situation in this country has worsened. In 1988 there were 789,000 Canadian families with one member unemployed. In 1992 there were 1,132,000, an increase of over 43 per cent. In 1988 the unemployment rate was 7.5 per cent. In 1992 it was 11.5 per cent. Today more than 1.5 million Canadians are unemployed. In November 1988 the youth unemployment rate in this country was 11.8 per cent. Today it is up to 16.7 per cent.

The situation is just as depressing in Quebec's main urban centres. Between March 1992 and March 1993, the unemployment rate went up in Chicoutimi, Jonquiere, Trois-Rivieres and Montreal, where more than 225,000 people get unemployment insurance benefits.

Consider the number of jobs lost since January 1989 in the manufacturing sector. Canada has lost 319,000 jobs in this sector. The hon. member told us that exports had gone up. That is all very well, but according to Statistics Canada, since 1989 we lost 319,000 jobs in the manufac-

April 22, 1993

turing sector, a sector that is vital to our economy. This means 15 per cent of all the jobs in this sector.

In Quebec 115,000 jobs were lost in the manufacturing sector during the same period. This represents a loss of 19 per cent in a sector that is extremely important to the economy of Quebec and the Montreal region. Meanwhile, in the United States only 7 per cent of the jobs in this sector disappeared.

These are Statistics Canada figures, not mine. The hon. member said earlier that we had just come out of a recession that was caused by the international economic situation. It may have been caused by the international economic situation but why did our neighbour to the south lose only 7 per cent of its jobs, while we lost 19 per cent and Canada as a whole 18 per cent? If we are supposed to blame these changes on the international economic situation, why is Canada being penalized more than other countries? I think the conclusion is obvious and that, as the motion says, the Conservative government's unsound economic policies are to blame.

Job losses and high unemployment rates result in pauperizing the population. Montreal is a case in point. Last week one of the headlines read "Montreal: Poverty Capital". That is where we are after nine years.

Figures released last week by Statistics Canada showed that Montreal has set a new record for poverty. In 1990, 22 per cent of the population was living below the poverty line.

Last November in Montreal, food banks distributed

800,000 pounds of food, or nearly 20 tons per day. As a matter of fact, the amount of food distributed by Mois-son Montreal, the only food bank in the city, is ten times greater today than it was in 1985.

In 1990 in the whole province there were 269,000 families and 403,000 individuals living below the poverty line for a total of 1,200,000 people.

That is the true portrait of a decade of unhealthy economic policies and mismanagement by the Conservatives.

It is easy to blame the opposition, to say that the opposition voted against this measure or that measure. We voted with the government on measures we thought

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made sense, but we voted against any economic measure that put the country in an impossible situation.

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PC

Barry D. Moore (Parliamentary Secretary to the Minister of National Revenue)

Progressive Conservative

Mr. Moore:

C-91 for Montreal.

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LIB

Alfonso Gagliano (Chief Opposition Whip; Whip of the Liberal Party)

Liberal

Mr. Gagliano:

For Montreal. I can see I just woke up the hon. member opposite.

The figures are there. For two years I have been asking the government to do something for Montreal. What has it done? Nothing. What has it done for Montreal, the poverty capital! We used to have this advertising slogan in Montreal: A city with pride. Today, it is a city with unemployment. This is where the Tories got us. They just keep blaming that on the opposition. I could go on at length, but I will remain brief because I want to share my time with my colleagues.

What are the Tories' economic policies? The free trade agreement with the United States. Now they want to force on us a trade agreement with Mexico. During the 1988 elections, they promised to continue to negotiate after the elections for a new definition of subsidies. They are now proposing another agreement with Mexico. But what was to be defined under the Canada-United States Free Trade Agreement has not even been defined yet.

Just think of the 37 tax increases, the GST and the absurd monetary policy. Just think of the exaggerated war the government waged on inflation. They waged such a war that now the whole economy is on its knees. Earlier the hon. member talked about the economic policies the government had put in place to help small businesses, to help them take off, thanks to low interest rates. Yes, they are low, but try to borrow from a bank. During the adjournment, I talked with bankers in my riding who told me they had so much money they did not know what to do with it. I told them to lend it to people. There are businesses with projects that want to take off. Why do you not lend them money? The situation is so precarious that they do not want to take chances. What is the use of low interest rates, of policies to encourage businesses to get loans from the bank when the over-all economic situation is so bad that banks will not give these loans?

Let us think about the cuts to the unemployment insurance system. As we are going through one of the worst crises in our history, instead of fighting unemployment, what is the government doing? It is attacking the unemployed, those who are not responsible. They are the victims, not the people responsible for the crisis.

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That is what the government is doing, attacking the unemployed.

After nine years in office, after 37 tax increases, after the GST, when the national debt has almost tripled and the annual deficit is the same as it was in 1984, the government finally finds out that it has to address the deficit and the financial crisis. But when we said "stop spending, cut the $5.8 billion helicopter project, lead the way", it said "no, this is sacred; we will not touch that."

During the leadership race, for example, where do you think the candidates will want to make cuts to reduce the deficit? Once again on the backs of the unemployed, the sick, those who live in poverty. Again they will cut social programs. I will never forget this old man who once told me: "Remember every time we have a Conservative government, destitution prevails". Tory times are bad times. The Conservative government proved it once again and still does today. However, I hope-and I really should not say I hope, because I lost all hope in this government-but on Monday, we will finally have the budget and we will be waiting to see what will happen. As I was saying I lost hope. On Monday the Conservative government will probably make cuts to give us the impression that it wants to reduce the deficit but again, it will be the poor and those who earn the least who will foot the bill.

Madam Speaker, you are indicating that my time is up, so I thank you.

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LIB

Robert (Bob) Kilger

Liberal

Mr. Bob Kilger (Stormont-Dundas):

Madam Speaker, in my own constituency of Stormont-Dundas, the city of Cornwall provides a tangible example of the negative impact the government's economic policies have had on our communities across Canada. The unemployment rate in Cornwall now exceeds 20 per cent.

In the last two years more than 20 plants have closed and more than 2,500 jobs, manufacturing jobs-in other words, good jobs here at home-have disappeared. Yes, I will hear a question after a few comments.

In Cornwall, as in several other communities in eastern Ontario, the number of welfare recipients is rising at an unprecedented rate because of the many plants closing and jobs lost.

Many of the plant closures can be directly attributed to the previous high dollar and high interest rate policy of this Conservative government. The Canada-U.S. Free Trade Agreement also took its toll on the local economy and the lingering recession accounted for the rest.

In addition, the fallout from the NAFTA deal is already having a damaging impact on plants in Canada. Many plants are being forced to implement restructuring measures regardless of the cost to their employees in order to remain competitive.

The current dispute at the Nestle plant in Chesterville is a prime example in my riding of what is happening in Canada today. More and more businesses are taking steps to reduce worker benefits in order to retain domestic and export markets. Workers are being told they must give up previously hard-won labour benefits or face the loss of their jobs.

There is no level playing-field in the Canada-U.S. Free Trade Agreement and NAFTA provides no relief from the inequality of the FTA. The free trade deal has failed to provide Canadian companies with unrestricted access to U.S. markets and has certainly failed to deliver the jobs, jobs, jobs which the government promised Canadians it would.

I would like to ask my hon. colleague for Saint-Leo-nard if he thinks that this Conservative government, which apparently wants to reduce the deficit at any cost, understands that its economic policies have created an unacceptable human deficit-I repeat, an unacceptable human deficit.

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LIB

Alfonso Gagliano (Chief Opposition Whip; Whip of the Liberal Party)

Liberal

Mr. Gagliano:

Madam Speaker, I want to thank my colleague for his question because he brings into the debate a very important element which is often overlooked. We often talk about figures, percentages and amounts, but not the human deficit. We often forget that behind all these figures and this system human beings are affected.

Today when we talk about the unemployment rate we can say in an abstract sense, that it is around 13 or 14 per cent. But the reality is that more than 1.5 million people are unemployed, not to mention the 2.3 million Cana-

April 22, 1993

dians who are on welfare, giving us a total of close to four million Canadians. Thus, there are four million people in an unacceptable situation, people who do not work and who either get unemployment benefits or welfare payments. Who pays for that? Whether it is the federal, the provincial or the municipal level of government is irrelevant. What is relevant is the fact that human beings who want to work and enjoy a better standard of living are stuck with economic measures such as free trade and the GST.

Let us admit it. When I was sitting on the finance committee which examined the GST for months, all the officials from the Department of Finance, the civil servants, the government members and the minister himself, everybody told us that the GST would create an underground economy.

The underground economy was where the GST would come out and we would have prosperity. But we created a monster. Now we have an underground economy so big that no one can even account for it. It affects people, human beings. We forget that and the government forgets that. The government talks all the time about the deficit but forgets about the human deficit. I have no more hope or belief for this government.

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?

An hon. member:

Did you have some before?

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LIB

Alfonso Gagliano (Chief Opposition Whip; Whip of the Liberal Party)

Liberal

Mr. Gagliano:

It is gone, finished. On Monday do you think the government is going to think about the human deficit before the dollar deficit?

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?

An hon. member:

Never.

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LIB

Christine Susan Stewart

Liberal

Mrs. Christine Stewart (Northumberland):

Madam Speaker, today we are debating the NDP opposition motion:

That this House condemns the government for policies which have

decimated the economy forcing company closures resulting in job

losses for Canadian workers.

It is not difficult to agree with this motion but I would like to suggest that the motion is too narrow. We have to be concerned about more than company closures in this country and the very serious impact that has had on Canadians.

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I have listened to some of my colleagues across the floor. I heard them talk about recovery, the optimistic mood and so on. They are speaking of a country I do not recognize. I wonder how many members on the government side are seriously going into their constituency offices and dealing personally with those Canadians who are unemployed and find themselves in impossible situations today.

My staff in my offices and I find the situation in the constituency very depressing. It is very difficult day after day to address and listen to the problems of people who find themselves in these impossible situations.

The government policies which started off in 1989 with high interest rates following the free trade agreement are deplorable. High interest rates were supposed to be addressing the inflation rate in this country but ended up creating costs of servicing our debt which sky-rocketed. In fact, in trying to deal with servicing the debt, it caused our deficits to rise.

These high interest rates caused incredible problems for companies, small and medium sized business, the backbone of our nation's economy, and for individuals as well. We have seen unprecedented high bankruptcies occur in this country. The bankruptcies of small and medium sized businesses and personal bankruptcies are as much responsible for job losses as are any of the large company closures.

However we have not seen the end of this recession. Day after day we hear of more lay-offs and of government cutbacks in programs, cutbacks which cause more job losses. We heard recently of CN cutting back on many jobs. Ontario Hydro is cutting back on many jobs. The Ontario government is possibly coming out with more cutbacks to public service jobs. The list just goes on and on.

It has not stopped at all in my riding of Northumberland. We have been impacted by the loss of jobs in larger companies that have either moved south or have closed their doors completely not to move anywhere. We have had the loss of thousands of jobs in Northumberland because of the consequences of the recession we have been undergoing. We have also had and continue to have daily many small and medium sized businesses close in my riding.

We really find it mocking to listen to the unemployment statistics for my riding. Those who are working in social services and in the unemployment insurance

April 22, 1993

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offices know the rates are much higher than statistics would say. For example, the statistics say that in my area unemployment is slightly more than 11 per cent. We do not even pay much attention to those figures any more because we know they are so inaccurate. We really do not know how they derive those figures.

It is interesting that one municipality next door to mine decided to do its own census because it was so concerned about the inaccuracy of the statistics. In doing that census that municipality, which I consider to be representative of the 16 municipalities in my whole riding, found it was not 11 per cent unemployment but a 14.6 per cent unemployment rate. What is more, over 6 per cent additional people said they were underemployed. They were not earning enough through parttime jobs or whatever to maintain a minimum lifestyle for themselves.

Food banks, the largest growing economy in this country, are not serving the needs of desperate people. A single father was in my office on Friday. He is trying to support his 17-year old son and has been supporting him since birth. He was asking me: "How can I live on $750 a month?" He can get no more assistance from the social services programs and the food banks are not going to help him. This is what we are talking about when we say the situation in this country is absolutely unacceptable. It is a disaster. People's needs have to be responded to and the government's current economic policies have not helped but have hindered the process.

I am convinced that if we dwell upon the financial debt and deficit and not the human deficit as my colleague was saying before, which to my mind is as serious if not more serious in the long term for the success of our country, if we do not pay attention to that then Canada will very quickly become a Third World country.

Having spent many years in the Third World I see many similarities now. I see people being supported in unemployment programs and so on. People are so frustrated. They are told they cannot take a course to improve themselves because that would take them away from looking for a job, jobs that do not exist.

Today in my office I heard of a woman who has been on unemployment insurance for four months. She has been called back by her employer to work again but it will probably only be for a few weeks. She is going to lose her position in training. Having spent four months at taxpayers' expense to sit in a training position learning something she was eager to learn, she now has to give that up and go back maybe for a couple of weeks to a job from which she will again be laid off. Then she will not be eligible for full unemployment insurance because of the way the economy is. So much of the inefficiency and ineffectiveness in the system must be addressed.

Others have pointed out that we have lost 319,000 manufacturing jobs and that is critical. That is 15 per cent of the total manufacturing jobs in this country and 18 per cent of the total manufacturing jobs in Ontario. We can talk about this recession and this difficulty as being part of a global picture, a global recession. But how is it that Ontario loses 18 per cent of its manufacturing jobs and the U.S. has only lost 7 per cent? There are inequalities. There have to be Canadian reasons for the Canadian economy doing worse than other G-7 members. The government's policies have not been helpful.

We heard last month in this recovery which is occurring in the midst of a recovering economy that consumer spending is down, that consumer confidence is down, that it is still poor. People in my riding are terrified. Unemployed people are desperate. They do not know what they are going to do tomorrow. Those who have jobs are terrified. They are reading articles such as the one appearing in today's paper by the Business Council on National Issues that the country faces a debt crisis. We are all extremely concerned about what is happening. I would say it is the very policies this government has been following over the last years that have been spiralling us down into a greater and greater crisis.

Talking about the economic recovery on the basis of increased exports from Canada to the United States and a trade surplus is not symptomatic of recovery in this country. We cannot depend upon one statistic like that to suggest that our country is out of recession. A recovery with no jobs is not a recovery.

I go on to quote what the bishops are saying, that 3.9 million people in this country are in search of decent jobs. This country needs value added jobs. Much more attention must be paid to the human needs, the trade needs, the job markets in this country. People have to be

April 22, 1993

trained for existing jobs. All levels of government have to work with management and labour to find out what those jobs ought to be. Where is Canada's place and what are its strengths in a global economy? Train people for those specific jobs. Unless we do that we are not going to recover.

Some of the lost jobs have been recovered through the creation of other kinds of jobs, but if you look at the jobs that have been created they are terrible. They are the very lowest paying, low-skilled service jobs. Flipping hamburgers in McDonald's is an example. Those jobs do not bring dignity to people. They are not jobs that are really taking advantage of the education and training the people in Canada have had. People are frustrated with those kinds of jobs.

This government in its policies must put people first. It must have policies that reflect this priority. Instead, we have a government that depends on trade first, debt and deficit adjustment first and big business first. This is not good enough for Canadians and it is not appropriate and right for the future of this country.

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PC

Patrick (Pat) Anthony Sobeski

Progressive Conservative

Mr. Pat Sobeski (Cambridge):

Madam Speaker, I have a question for the hon. member. It is distressing she would leave on the record that indeed the free trade agreement has resulted in only creating jobs flipping hamburgers when she admitted in her speech that trade with the United States has improved.

She also mentioned OECD forecasts. The OECD has forecast that Canada will have the fastest rate of growth in the G-7 in both 1993 and 1994.1 just want to put some of these numbers on the record because I know the member will be taking notes. The OECD is forecasting for 1993 that Canada's growth will be greater than 3 per cent, whereas in the U.S. it will be just over 2 per cent, in Japan just over 2 per cent, in Germany just over 1 per cent, in France just over 1 per cent, in Italy less than 1 per cent, and in the U.K. just over 1 per cent. In 1994 it is suggesting that Canada's growth rate will be over 4 per cent, whereas in the United States it will be 3 per cent, Japan 3 per cent, Germany 3 per cent, France 3 per cent and in the U.K. just over 3 per cent.

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These are numbers from the OECD. I was wondering why the member, in her speech, would suggest these numbers are not correct when the OECD itself has indicated that Canada will indeed have the fastest growth in the next two years.

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LIB

Christine Susan Stewart

Liberal

Mrs. Stewart:

Madam Speaker, I am very happy to respond to these remarks.

First of all I did not say that the free trade agreement was creating low-paying, low-skilled service jobs. It is a fact, and I did not relate it to the free trade agreement at all, that this country has lost hundreds of thousands of highly paid manufacturing jobs.

It is also a fact that some manufacturers in this country, particularly small and medium-sized companies, have been able to successfully negotiate their way into the North American market with the free trade agreement in place. But it is also a fact that thousands and thousands of manufacturing jobs have been lost as a result of the free trade agreement. This is something my colleague raised, not I.

What I was saying was that we have lost value added types of highly skilled manufacturing jobs and we have not had the equivalent or better jobs to replace those lost jobs. Instead we have replaced them with low-paying service jobs.

On his point about the OECD and its prospects for Canada having a 3 per cent growth rate in the coming years, et cetera, we have many other forecasts. We have the IMF report of yesterday.

What I am saying is that recovery without jobs in this country can never be considered to be recovery because Canada must put people first. Statistics that say we are earning more money as a country because of our export trade with the U.S. is not satisfactory. The gap between the rich and the poor in Canada is widening on a day-by-day basis and it is totally unacceptable. This government will learn that very soon in this year's upcoming election.

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NDP

Daniel James Macdonnell Heap

New Democratic Party

Mr. Dan Heap (TVinity- Spadina):

Madam Speaker, I thank the hon. member for her comments and her very clear criticism of the effects of the free trade agreement.

I know that on March 31 she along with many of us, with her caucus, voted against second reading of the North American free trade agreement. I would like to

April 22, 1993

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ask her two questions. Does she believe it would have been better if at second reading the North American free trade agreement, or the bill implementing it, had been defeated? If she feels it would not have been better, if it is satisfactory that it was accepted, then why did she vote against it?

If she feels it would have been better if it had been defeated does she regret the absence of her 37 colleagues who, if they were present and voting, would have enabled its defeat?

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LIB

Christine Susan Stewart

Liberal

Mrs. Stewart:

Madam Speaker, I am also very happy to answer that question.

Yes, it would have been veiy good for this country if the North American free trade agreement had been defeated at second reading because second reading does say that in principle we are in agreement with or opposed to a certain piece of legislation.

This party believes that until there are agreed upon parallel agreements we should not be proceeding with a North American free trade agreement because there is a lot at stake for our country in that whole process.

I regret that because of the urgency of the work my colleagues had in their constituencies there could not have been more of us present in the House to vote upon that particular piece of legislation at second reading. There will be other opportunities and the member can be sure that we will express our point of view at every possible opportunity.

I would also like to say it is interesting that yesterday when we had the opportunity in the standing committee to challenge the Minister for International Trade only one of the NDP members was present at the committee meeting and the NDP's critics for trade and external affairs were not present.

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PC

Donald Alex Blenkarn

Progressive Conservative

Mr. Don Blenkarn (Mississauga South):

Madam Speaker, one would think in this House there was no recognition that we live in a world of change, unremitting and massive change. This change has been brought to this world of production and distribution by computerization, by satellites, by the transmission of data, equipment and knowledge, by robotization in plants and equipment in factories and so on. These things so dramatically change the way we do things that they have distorted and upset the entire production system of the world.

There are countries growing in this world. South China, for example, had a growth rate of 12 per cent last year. Hong Kong, Taiwan, Singapore and Korea all have veiy substantial growth rates. However they are new countries and do not have the old infrastructure. They are building a new structure and therefore can show new growth.

We have a situation in which we must massively change our structures, and in changing our structures we have massive dislocation. That is the kind of thing that is taking place in all of Europe and all of North America. All of the developed parts of the world are subject to this massive change.

It is strange to me, and it must be strange to those people watching, that the parties on the other side of this House do not recognize that. There is a great loss of jobs in the manufacturing field, but production in manufacturing is up 7 per cent. We produce a lot more goods with a lot fewer people. That is the nature of globalization. That is the nature of what is happening today.

We have to live in today's world, not yesterday's world. Yesterday's world is one in which we tried to be a little self-sufficient in Canada. We had trade barriers, high tariffs that prevented foreigners from bringing goods into the country. Then we could develop a plant here and a plant there which were only designed to produce a whole host of products for the Canadian market, and only the Canadian market. Today those plants are so inefficient in terms of industrial production on a world basis that our tariff rates would have to be well over 100 per cent across the board with massive restrictions everywhere if we wanted to retain much of the industry we used to have.

Our industries now must radically change. Our offices must radically change. Our whole system must radically change in order to exist or our standard of living will completely and totally disappear. This government has attacked change. It has attacked the problem. It has gone after the problem. It is not content to take the old system, the old rules, the old ideas and keep them. We have gone after change. We have gone after it deliberately, directly, and with foresight in order to build a new and better economy.

We have a sound money policy. We have beaten down inflation to its lowest rate in 30 years. Prices do not rise unrealistically any more. Our inflation rate in Canada is

April 22, 1993

the lowest of the OECD countries. That took some doing. That put some blood on the floor. However our inflation rate is down so that our money is sound money.

Why do people buy our bonds? Not because they like the looks of us. They buy them because our money is sound money. It will buy today and tomorrow the same amount of goods and services, and that is the kind of thing people want when they lend money to a country or invest in a country. A sound money policy is essential for Canada.

We have developed a fair tax policy. We have done everything conceivable in the last eight and a half years to change the Income Tkx Act to get away from all the hidden little wrinkles that were in it to let the rich make more, to let the fast operators make more. We have done that deliberately, capably, and competently. Our Income Tax Act is probably fairer today than at any time in our history.

I am not saying that taxes are ever fair. Taxes are never fair to the beholder. Somebody looks at someone else and says: "They have more than I have. Perhaps they should pay more tax than I should". Our tax system today is fairer than ever before.

A corporate tax system has to be not just fair but competitive. My friends in the New Democratic Party would like to put greater burdens on the corporate tax system. They forget that we are in a world of competition, that companies earn their profits where they pay the least amount of tax. If we make our taxes higher than in countries that are our trading partners then, guess what? The profit will not be made here. It will be made somewhere else and transfer pricing provides no possibility of ever following it through. We could never with all the accountants in the country follow through all of the possibilities of transfer pricing.

In the last budget we made our corporate tax for manufacturers on average 2 per cent less than the manufacturing corporate tax rate in the United States. That is a very substantial advantage to those who would set up plants and businesses in Canada.

We have in this country, and have had for a long time, a sales tax system. Lots of people object to sales taxes, to commodity taxes. Before this Parliament began we had a sales tax system which put a 13.5 per cent tax on people

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who manufactured in the country. That tax gave an advantage to foreigners who brought goods into the country because they only paid tax at their plant gate and the cost of bringing goods here was not included in their tax base. Therefore we changed that commodity tax system to the goods and services tax.

That tax may have some problems with it. It may need some ironing out. It may need some work and massaging. A bill was passed by this House just recently to do that. Bit by bit we will have that tax system working very smoothly.

However that tax system is the fairest form of commodity tax system that the world knows. Indeed, 45 other countries in the world have that tax system.

To say that this is the wrong system, that a VAT tax system is not a good system, is to say that everybody else in the world is stupid and we know better than they do. That is the attitude of the New Democrats and the Liberals because they have not thought it through. They criticize us but they do not think it through.

In this great world of change we also must make sure that we try to train and retrain people for jobs, that we give people adjustment programs. This year we are spending $4 billion on retraining and training people on a national basis. That is infinitely more than was ever spent before, massively more. We have changed the system to try to train and retrain people, to try to get people to adapt to new circumstances, to new job opportunities, to new careers. We are all going to have to adapt to new ways of doing things.

In government we have adapted to new ways of doing things. Changes have taken place in employment and immigration in terms of how one files an immigration form. Those ways are very much changed. They are very much changed to take advantage of the systems that are now available. They are very much changed in the way the post office operates to deliver mail. These are changes that must take place. These changes will continue to take place. They must continue to take place.

We have to be internationally competitive. We cannot continue to do things in the old way because the old way is not good enough. The old way will give us a very poor standard of living. Our standard of living will drop and

April 22, 1993

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drop if we continue with the old ways. We cannot carry on with old ways in a world of change.

We have done a great deal to promote science and technology. In a world of change we have to be brighter and we have to be ahead of other people. From 1984 to 1993 we have increased by 44 per cent direct government spending on science and technology, in grants and so on. Today we spend $200 million a year just on small businesses to allow them special credits in terms of their science and technology development. We have developed a series of centres of excellence across Canada in which we try to bring in scientists and engineers to work on new and important manufacturing and technological development.

Just recently in this House we passed Bill C-91 which gave further patent protection on intellectual property. That bill has been criticized but I have recently attended two major plant openings with major investment in my city of Mississauga. Yesterday Astra Pharma opened a facility and announced another $200 million in further investment in plant, laboratories, and assistance to people in universities to develop new pharmaceutical products. That company is manufacturing painkilling products today for export to the world. It has a world mandate.

With the huge investments in this kind of work, these are not small companies. These are companies that produce high quality jobs for people with doctorate or masters degrees. These are people we need to create a better society. This is not about flipping hamburgers. This is about building Canada. This is about building a better future for all of us. It is a question of the science and technology work we have been doing.

We have a special program for students. The scholarship arrangement qualifies 3,300 young people in our high schools across Canada every year for scholarships at universities. These scholarships are for $3,000 for a four year course at university in science and technology. The students have to be bright to get them but there are 3,300. That is a lot of assistance to young people who are going to help build our nation.

We recognize that if we are going to have jobs we have to assist small business. This House just recently passed a very major change to the Small Businesses Loans Act,

increasing the limit of that loan to $250,000, making it possible for the money in the loan to indirectly be worked into working capital credit because it does not require a 100 per cent guarantee. It does not require that the proprietor put his house on the line, his blood on the line. He only has to guarantee 25 per cent of the loan.

Tell me where you can get a bank loan and only sign for 25 per cent of the capital. They only have to guarantee 25 per cent of it. Banks have come forward and said they are going to put that money up but not at 1.75 per cent over prime as they are entitled to under the act. The Bank of Nova Scotia has come forward and said it likes the statute so much it is going to lend the money at prime. The Bank of Montreal is matching it.

Members talk about not doing things but that is pretty important work. We have a 10 per cent tax credit for small business if they buy manufacturing equipment. That comes right off their tax. In effect, with a tax credit of 10 per cent and a small business tax rate of 12 per cent, small businessmen pay precious little corporate tax if they spend their profits in buying equipment. That is assistance that makes our small businesses work effectively.

In order to encourage businesses to hire people a UI holiday was provided for small businesses that pay less than $30,000 a year in UI premiums. A small business with five, six or ten employees which does not have to pay $30,000 in UI can hire people and not make any UI contribution for this year.

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

Peter Andrew Stewart Milliken

Liberal

Mr. Milliken:

That is after you have raised the rate 35 per cent.

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

Donald Alex Blenkarn

Progressive Conservative

Mr. Blenkarn:

My friend says we have raised the rate. We did not raise the rate. We reduced the benefit a bit but we did not raise the rate.

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

Peter Andrew Stewart Milliken

Liberal

Mr. Milliken:

You raised the rates twice in one year.

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

Donald Alex Blenkarn

Progressive Conservative

Mr. Blenkarn:

We kept the rates where they had been and they would have gone up if we followed the bill the way you wanted us to do.

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