April 22, 1993

NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

Mr. Speaker, on the last question which was put by the member for Winnipeg St. James, there are statistics which are collected on discouraged workers. Those statistics have some problems associated with

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them because in a sense they require people to do a kind of a psychoanalysis of themselves. I think the best approach, the most honest approach is to ask what do we know, what has been shown to us by the economic history of our country? Take a large province like the province of Ontario. We could take the province of Manitoba too but in some ways it is a little fairer to take the province of Ontario because it is a large and relatively diverse province.

We can ask ourselves what do we know from history, not from people being asked to analyse themselves, but what is the record as far as the percentage of people who want to participate in the labour force?

We can find that out by looking over recent years and discovering a level of participation which has been achieved. Within the last three or four years the level we have seen has been upward of 70 per cent in the province of Ontario.

The province of Ontario has a somewhat different structure of its economy from the provinces of Newfoundland and Prince Edward Island.

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

Steven W. Langdon

New Democratic Party

Mr. Langdon:

Because it is a manufacturing area, because there is less primary production, but there still is a fair amount of primary production too in Ontario. You are getting a fairly balanced picture I think with that figure.

When you apply that figure and say okay that is a fair measure of what Canadians across the country would like to see as their level of participation in the labour force, you will also get a measure of the potential labour force we are really talking about in this country.

You measure the actual unemployment rate plus the difference that you get between the present participation rate and the 70 per cent participation rate. As I say you come up with extremely dramatic figures. It is a 17.1 per cent as an unemployment rate right across the country.

The point that is interesting is that it does not even take into account the number of people who are in part-time jobs who would like to be in full-time jobs. If you took those into account you would probably be looking at an unemployment rate of at least 20 per cent in this country and that is staggering. Across this country

April 22, 1993

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we are failing to meet our potential by a 20 per cent level.

From a human point of view, as the Catholic bishops talked about it, that is appalling. Even from the point of view of a hard-headed economist, which I used to pretend to be, it is a gross waste of human resources to have that many people who want to work, especially at a time when you have underemployed capital equipment, not working.

We have a real problem in this economy and the problem is not the financial deficit. The problem is that we are not coming at all close to living up to our human potential or our economic potential.

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

Mr. Speaker, the hon. member's motion is one of those sweeping statements opposition members are so fond of making. With all due respect, I would like to suggest that opposition members take a good look at some of the very concrete efforts made by our government to get the Canadian economy on the right track.

The hon. member's motion gives the totally false impression that our government has been waiting around without doing a thing. Canadians know that is not the case. We are making very specific and concerted efforts to deal with Canada's economic problems and to encourage businesses to invest in this great country of ours.

Our government offers a number of programs that are starting to show good results. The situation cannot change overnight. There are no instant solutions, but we are making progress.

I realize that some people think economic growth depends on the government. However, the vast majority of Canadians realize that the true source of wealth and prosperity in this country lies in the determination of Canadians, of people confident in their ability to work hard and take the risks inherent in any business venture.

In other words, we cannot legislate prosperity. Prosperity is the result of market forces, and the private sector is in the best position to create it. That is the philosophy behind the agenda the government formulated when it came to power in 1984 and which it has been following ever since.

Since 1984 we have concentrated on implementing the fundamental changes that were necessary to build a more competitive, more market-oriented economy with less government intervention and a more effective and efficient economy that would stimulate investment and job creation.

We privatized more than 20 Crown corporations. This has helped reduce the number of federal employees by

90,000 since 1984.

We took steps to eliminate or restructure 46 federal agencies, boards and commissions.

We embarked on a wide-ranging regulatory review to eliminate all federal regulations that constituted undue barriers to private initiative or were no longer in the public interest. For instance, Agriculture Canada reviewed 58 sets of regulations. Fifteen were eliminated, in whole or in part, and four are being sunsetted and 38 will be modernized.

We are working on reducing overlap and duplication in federal departments and in areas shared with other levels of government.

We deregulated the financial services sector to promote competition and give financial institutions a chance to be more effective, both on Canadian and international markets.

We revamped Canada's bankruptcy laws to make them fairer and more equitable.

We improved and liberalized the investment climate in this country. For instance, we eliminated the Foreign Investment Review Agency and created Investment Canada, which has a far more concrete, positive and dynamic perspective, to attract investment to this country instead of thwarting them.

We deregulated the transportation and energy sectors which included eliminating the disastrous National Energy Program with its punitive taxes and rigid constraints on investment.

However, our efforts to create a climate conducive to private sector activity go far beyond tax reform and deregulation.

As far as inflation is concerned, we applied the basic economic principle that sustained economic growth goes hand in hand with price stability.

April 22, 1993

Inflation must be low, if we are to enjoy low interest rates. Lower capital costs stimulate investment by high-growth businesses, competitive businesses that create the jobs Canada needs.

We have taken vigorous steps by clearly setting publicly stated objectives and by applying a policy of wage restraint throughout the federal government in order to reduce inflation.

We have been successful. In 1992, inflation averaged

1.5 per cent, the lowest figure in 30 years. As a result we saw a spectacular drop in the bank rate which went down

8.5 points from its peak level in May 1990. Interest rates are now at their lowest levels in 20 years.

For a business that borrows $100,000 repayable over 10 years, this drop in interest rates will mean a savings of about $475 per month.

Consumers also benefit. Some mortgage rates are now as low as 5.75 per cent something we have not seen in 35

years.

I would also like to point out that the difference between the prime rate in Canada and the United States has fallen to 0.25 per cent, from 4.75 per cent in May 1990. The Bank of Canada rate has also fallen to 5.56 per cent, more than 3 per cent below its recent peak last November.

We have completed our efforts to make Canada a welcoming country for business people by reducing barriers to foreign trade, in particular by submitting to this House a bill to extend the benefits of free trade between Canada and the United States to the whole continent with NAFTA.

My colleagues on the other side of the House want to make all Canadians believe that the FIA is a failure. They would no doubt have them believe that the earth is flat. Let me remind them of some basic facts about the FTA.

These are actual facts and not myths that I will mention. Last year Canadian businesses sold a record $122.3 billion of goods to the United States. That was done by people, workers who have confidence in their abilities, optimists, builders. With them we will continue

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to make our mark on the world market and will remain a very great country.

Our total merchandise exports rose to $157.5 billion, an increase of nearly 21 per cent since the agreement took effect. In 1991 the increase was 11 per cent, the largest annual growth since 1984. These results continued in January because we had a monthly trade surplus of $22.8 billion, the highest since 1985.

Our success should not make us rest on our laurels. Given the persistent weakness in the world economy, growth and job creation in Canada are not as strong as we would all like.

No company, no industry and no country can escape the challenges of the outside world. In no way can the government stifle the forces of change, as the hon. opposition member's party very soon realized when it took power in Ontario.

Everywhere, in Canada or abroad, businesses are going through a period of thorough change and restructuring.

For many companies and their employees, the process is painful. It has forced some companies to downsize and many others to slow down job creation since cost control is essential to greater competitiveness.

Nevertheless, the difficulties accompanying this process must not make us forget that the thorough changes that industry is undergoing today are nothing new for Canada. This is far from the first time that Canada must adjust to fundamental economic changes.

In the 1940s, agriculture provided one quarter of the jobs in Canada; now it is less than 4 per cent. However, we produce more and better food and commodities and all Canadians, including farmers, enjoy a much higher standard of living than their parents did. The same process is going on these days in manufacturing.

Therefore when we are faced with economic changes it is more important than ever to understand what they mean for Canada and what they do not mean. For example, the current decline in employment in manufacturing is not a symptom of fundamental decline in the economy. It does not mean that the FTA was a mistake either.

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In fact, the proportion of jobs in manufacturing in Canada has been decreasing since the early 1950s. That did not prevent this sector from nearly tripling its production in the same period.

At the same time we have witnessed remarkable growth in high-technology industries and the service sector in Canada. These industries will be the base of the economy in the 21st century by selling their know-how right here and throughout the world. We can be winners in the new economy. We have tangible proof of that.

The electronics industry employs more people than the pulp and paper industry in Canada.

Today there are more jobs in communications and telecommunications in this country than in the oil and mining industries combined.

In Alberta more people are employed in financial services, including insurance and real estate, than in the oil and gas industry.

That is a fact. An economy is never static. Job content, job supply, corporate structure, types of business, sources of wealth, all these are constantly changing.

This means there is only one way to ensure financial success and it is only open to those countries which do what must be done to grasp new opportunities when they arise even, and especially, when hard choices have to be made.

One area where hard choices have to be made is the way taxpayers' money is spent, taking into account the need to invest in the future and at the same time control government spending.

With regard to investment, we are working toward building a better future for all Canadians by favouring investments capable of adding value to our natural resources and human resources as well. For instance, last year we changed the rules relating to R and D tax incentives to better reflect how businesses spend their money in that area. These changes will translate into an extra $250 million in assistance over five years. And we are currently contemplating other changes to provide another $400 million.

We also know that to make the most of our R and D efforts we must rely on an increasingly skilled labour force. To face this challenge we are increasing manpower adjustment and training assistance. During the next fiscal year we will spend $3.8 billion on that, over 65 per cent more than in 1990-91.

In addition, we have lowered the tax rate on manufacturing in Canada so that Canadian manufacturers can better compete with their American counterparts. We have implemented extensive measures to help the key small business sector.

However, such investments must not be made at the expense of increasing government deficits. Concern for the public debt at all levels has become a common theme with most of the people who were consulted throughout the country as part of the budget preparation process.

More and more Canadians understand how the money borrowed to cover deficits at all levels of government is now strongly pushing interest rates and taxes upward. People are realizing that we simply cannot let that get in the way of growth, investment and job creation.

To curb these pressures, our government has taken drastic measures: bringing the rate of spending growth below the rate of inflation; putting reasonable limits on the growth of federal transfers to the provinces; implementing the Spending Control Act which sets strict limits on the annual growth of most program expenditures; cutting by nearly 50 per cent the deficit as a percentage of the Canadian economy. Since 1984-85, we have reduced our program expenditures by $118 billion.

If it had not been for these measures, the deficit would now have reached $82.5 billion, two and a half times what it is.

In spite of these measures, compound interest on the national debt we inherited continues to put a strain on government finances. Added to this, the recent economic slump has dealt our finances quite a blow, especially on the revenue side.

That is why, in his economic statement back in December, the Minister of Finance announced a wide range of measures to further reduce federal expenditures by $8 billion during the current fiscal year and the next two.

For instance, there will be a two-year freeze on the salaries of cabinet ministers, members of Parliament and civil servants. Incidentally, this is the fifth time since

April 22, 1993

1985 that ministers and members of Parliament have had to accept salary restrictions or reductions.

The operating budgets of the departments have been reduced by 5 per cent, based on the levels anticipated for the next two years.

For National Defence alone, the salary freeze and the operating budget reduction will translate into savings of about $1.3 billion for taxpayers.

We have taken carefully targeted measures regarding the unemployment insurance program. Working Canadians cannot afford to subsidize those who quit their jobs without just cause.

Finally, we are reducing by 10 per cent federal grants and contributions.

Through these measures we do what is necessary to meet the challenge of public finances in Canada. We must not only live according to our means. We must also repair the damage done when we lived above our means.

Real, basic progress toward the solution of the problem posed by the national debt must be based on the two pillars which we want to strengthen in the budget to be tabled next Monday.

Economic growth and increased revenue will not be enough to solve the problem. Governments must control their expenditures.

We also need a consistent and co-ordinated action plan at the national level. We will not get anywhere if a level of government reduces its taxes while another level does the opposite.

The solution is simple. Growth, investment and longterm job creation depend on the ability to control deficits in the public sector. Our government intends to play the active role of national leader as regards budget co-ordination and economic co-operation. This includes eliminating the barriers to domestic trade, a necessary measure to strengthen our economic union and truly improve the well-being of Canadians.

I spoke today of the challenges which we must face in order to control the rapidly changing economy of the

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21st centuiy. This economy can be compared to a new and promising country, in the sense that it offers vast possibilities to the pioneers who are ready to face the unknown in order to take advantage of all this untapped potential.

Canadians can take advantage of these possibilities and they will do it successfully by creating the new quality jobs that go along with the latter, provided we preserve and strenghten the foundations of a competitive and highly productive economy put in place by our government.

However, we will miss out on these possibilities and we will find ourselves facing even greater economic problems if we opt for the solutions put forward by the members of the opposition. These policies would lead us to greater debt and tax burden, while preventing us from doing trade with our main business partner. To implement such policies would be tantamount to returning to the past, ignoring the present, and giving up on the future.

This is not the road Canada must take. On the contrary, according to the OECD, the policies implemented by our government have put us on the right track to enjoying the strongest growth among the largest industrialized countries, this year as well as next year. Canadians deserve that and nothing less.

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

James Scott (Jim) Peterson

Liberal

Mr. Jim Peterson (Willowdale):

Mr. Speaker, today in Canada we face what I think are very desperate economic circumstances.

We have seen how Canada has been deindustrialized over the past four years. We have seen the loss of 319,000 manufacturing jobs or 15 per cent of all Canada's manufacturing jobs. Unless one is blind, one cannot attribute this entirely to global forces beyond our control. If that were the case, how would we explain that during the same period of time the United States lost only 7 per cent, not 15 per cent of its manufacturing jobs? In Ontario we have lost 185,000 manufacturing jobs or 18 per cent. In Quebec the figure is 115,000 or 19 per cent of its manufacturing jobs.

April 22, 1993

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In Montreal's east end the unemployment rate now stands at 25 per cent. This is terrible. Everywhere else in Canada, the rate is 11 per cent.

One million five hundred and forty thousand Canadians are actively seeking work, but as the Catholic Conference of Bishops told us this is only the tip of the iceberg. Their estimate is that close to four million Canadians are now seeking full-time employment and cannot get it. This includes our official unemployment figures. It includes those who stopped looking for jobs because they just are not there and those part-time workers who seek full-time employment. This is indeed a desperate situation.

Why do we find ourselves in this position? We have seen a Conservative monetary policy which has emphasized controlling inflation at the expense of growth and jobs. We have seen a Tory fiscal policy over the past eight years with 33 tax increases, including the GST, making us a much higher tax jurisdiction than our major competitor, the United States. Yet, have they been able to bring the deficit under control? No. Our national debt is not the $165 billion that it was when they took office in 1984. It is now $450 billion, much of that now controlled by foreigners so that the interest payments made on our debt go out of Canada, that are reinvested abroad and produce no tax revenue, not even withholding tax revenue as it is paid to foreigners.

We have seen a trade policy brought in. Our party is not against liberalized trade. We know that it has benefits. We have always been the party of freer trade, but they gave us a trade deal without programs for adjusting to the new realities to help our workers compete. They have given us a trade program without definitions of subsidies or anti-dumping.

What happens? New investment to service the North American market has not come to Canada because Canadians are now facing unprecedented trade harassment. On the Honda issue alone there was no binding arbitration available. What manufacturers will want to establish themselves in Canada when even if we can win a trade dispute one or two years down the road through a binational panel they are still subject to that harassment of preliminary duties and everything else?

We have seen in the province of Ontario how its introduction of new labour legislation has created a chill on investment. We have also seen that because so much of Canadian manufacturing and production is controlled by foreigners that when there is a global downturn in the economy, Canada suffers more than others. Head offices abroad will close down Canadian branch plants before they will sacrifice workers in their home jurisdiction.

As Mickey Cohen, former deputy minister of finance said a short time ago in Toronto, we now face the incredible problem where we are a high wage nation but we could be doomed to being a high unemployment nation. This is one of the incredible challenges that we face. Not in the nine years of Tory management of our economy have we had the comprehensive view of Canada's role in a global economy and how we could maintain high wage, high value added jobs with a high level of employment as well. What is the legacy? Not only the deindustrialization and the high levels of permanent unemployment we face but also since 1989 Canada's ability to compete has fallen from fourth to eleventh place in the world.

Since 1984 when this government took office our trade surplus has gone from $19.8 billion down to $7.4 billion. In 1984 we had a $1 billion surplus in high tech trade; today we have a $30 billion deficit in high tech goods and services. What does this say to our young people who want to enter the Canadian work force? Why are we falling behind so quickly on a global basis?

Even worse perhaps is that our manufacturing productivity is now growing under Tory economic policies at only two-thirds the rate of that of our major competitors, the G-7 countries.

Is despair the only thing we can offer close to four million Canadians who want high paying permanent jobs and do not have them? I believe there are some solutions available to us. What we have to tackle immediately is investing in Canada's human resources. We have to deal with the 40 per cent of Canadians who today do not have either the literacy or the mathematical skills to deal with the requirements of modem jobs. We have to deal with an education system that is producing a 30 per cent high school drop-out rate and yet there are no skills training as an alternative for these young people. We have the Mexican challenge where our new potential trade part-

April 22, 1993

ner is graduating four times as many engineers and scientists as we are in Canada. We have the incredible problem where our level of research and development, 1.37 per cent of our gross domestic product, is less than half that of our major competitors. It is a level that is falling rather than rising.

These are areas where we need the long-term investments by the public and private sector working in close co-operation to recreate the human capital base which is so critical to giving us those high wage, high value added jobs in the future. This has not been done. This issue has not been taken on by our government.

In the short term there is still a great deal that we could be doing as federal politicians in Canada. First of all we have close to one million small businesses in Canada. If only half of those small businesses over the next two years could add one more employee we could get rid of 500,000 unemployed. We know that the biggest problem that these small businesses face is that many of them have not had access to the capital or the bridge financing or the financial means necessary to get through this made-in-Canada recession.

This is why the Liberal Party is proposing new means for helping these small businesses survive and expand.

Second, why is it that Canada exports so much of its raw natural resources, its primary resources, and buys back finished goods from our foreign competitors? This is why we propose the immediate establishment of a primary industry's enhancement council that will work with our primary industry manufacturers in food, forest, sea, mining, energy, whatever, to produce more value added goods here in Canada, more downstream goods. Add the value here. Do not give away our resources holus-bolus to our foreign competitors so they can create jobs with them.

This is why, in order to deal with the decline in our manufacturing productivity, we are calling for the establishment of a manufacturing productivity council which will use private sector consultants to go to our small and

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medium size manufacturers to show them world class techniques for expanding their productivity and exports.

This is not a give-away program because the manufacturers will repay the government for these studies out of enhanced productivity, enhanced profits and enhanced exports. It would be a self-funding program with no bureaucracy because we are not going to use bureaucrats. We will be using the best private sector knowledge that is available.

This is why we have called on the government to work in close co-operation with the Canadian Manufacturers Association which has initiated a program for Canada called The ISO-9000 Series program. It is a program adopted throughout the European Community in order to bring up the quality standards of European manufacturers. Yet this government has refused to enter into a cooperative joint venture program with the CMA to bring these same quality standards to Canada.

The situation, if allowed to continue, is going to create more and more desperation. There is hope. There are things we can do. Let us adopt a comprehensive economic strategy so that our young people and our unemployed workers can wake up tomorrow with hope.

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

Alan Redway

Progressive Conservative

Hon. Alan Redway (Don Valley East):

Mr. Speaker, I was most disturbed with the hon. member's comments about a made-in- Canada recession. He knows, as I know and as Canadians and people around the world know that we are dealing with a global recession.

Last summer in May and June I had the privilege of having a student from the University of Michigan working in my office. I am going to have another one this summer. Last summer's student, Robert Tyson, went back to the States and last October wrote a letter to the Prime Minister and sent me a copy. In it he says:

I also believe that the criticism your government receives for the poor world economy is unfair. Over here things are just as bad. My own father is one of hundreds to lose his white collar job from a company that has not let workers go in living memory. This occurred despite his 20 years of seniority. My college friends and I have had difficulty finding summer jobs, succeeding only where friends or family members could pull strings for us.

It is humorous to come back to the United States and hear all of the same complaints about the North American free trade agreement but to hear them coming from Americans. I understand that Canadians are

April 22, 1993

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afraid that their jobs will move south to America but Canadians should

know that Americans are just as afraid that their jobs will move north.

The hon. member should recognize that the United States has lost more than one million manufacturing jobs since January 1,1989. He should see Canadians as others see us.

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

James Scott (Jim) Peterson

Liberal

Mr. Peterson:

Mr. Speaker, I am a little bit disappointed that the hon. member who in the past has had the courage to recognize the facts and speak them directly to his own government is using anecdotal evidence and not over-all facts and figures to deal with this issue.

If he is correct that Canada is just part of what is happening in the United States, why is it that Canada has lost 15 per cent of its manufacturing jobs over the last four years? The Americans have lost only 7 per cent.

Why is it that the level of unemployment in Canada is officially 11 per cent, probably double that unofficially, and in the United States it is only 7 per cent? Why is it that Canada went into this recession induced by our high interest rate, high dollar policy at least six months before the United States and is coming out of it after the United States?

This is not a normal function of what is happening in Canada in relation to world events. What has happened to us is a made-in-Canada recession, deliberately set by this government.

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

Maurizio Bevilacqua

Liberal

Mr. Maurizio Bevilacqua (York North):

Mr. Speaker, I rise to address the House on this motion because I believe that the unemployment created by this government's policies is an issue that we should be discussing as the government is apparently unwilling to deal with the problem. It is a fact that this government's policies have led to plant shutdowns and unemployment. As my party's employment critic I receive newspaper clippings from the Department of Employment and Immigration. A large part of those clippings is stories about layoffs and slow-downs.

We are supposed to be in a recovery. However, someone should tell that to the 112 people laid off recently at Pacific Press in British Columbia, the 415 people who lost their jobs at the Northern Telecom plant in London, or the 2,500 GM workers who are going to be laid off when GM closes its Scarborough plant this spring.

The Conservative government may not like to hear it but Canada has lost 325,000 manufacturing jobs since 1989. We have had double digit unemployment for two consecutive years. The OECD, the Conference Board of Canada and many others are predicting that we will continue to have double digit unemployment through this year and into the next.

Let there be no mistake. We are facing an unemployment crisis in this country the likes of which we have never had to deal with in the past. Officially, there are presently 1.5 million Canadians who cannot find work, but that does not include the hundreds of thousands who have given up looking and have fallen out of the system.

Last year, for example, more than a million Canadians exhausted their UI benefits before they found work. That is a 41 per cent increase over the year before. Last week the Catholic bishops raised the alarm by claiming that the real jobless figure is 3.9 million. This, to me, is a tragedy. We have been urging this Conservative government to focus on putting Canadians back to work but I must say that our appeals have fallen on deaf ears.

The Conservatives are paralysed because the unemployment crisis is a direct result of their policies and in order to solve that crisis they would have to admit that they made a mistake and would have to change course. That is something that they are not willing to do.

What are some of the things the government has done that have led us to this unhealthy situation? First, there was the high interest rate and high dollar policy. This had a number of negative effects on our economy. A prolonged period of high interest rates made it very difficult for smaller companies to find financing and many of them were forced to give up. The combination of a high dollar and high interest rates alone had a disastrous effect on this economy.

The bankruptcy figures tell us a very sad story of this record. In 1992, 14,317 businesses declared bankruptcy

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yet the government still talks about an economic recovery. In 1991 the number was 13,496. In all, over 200,000 businesses and individuals have followed a dead-end route to bankruptcy. It still talks about an economic recovery.

How many dreams have been lost in this country? How many lives have been ruined? How many jobs might have been created in the small business sector if this government had created the environment to bring prosperity to Canada? It has denied opportunity to the Canadian people and to Canadian business.

I know that in my riding and throughout Canada businesses have been treated harshly. I have met with people who are confused about what this government was doing. They felt that their entrepreneurial spirit had subsided. Now they are crushed. Hope and ambition have been replaced by despair and embarrassment.

Another policy mistake the Conservatives made was to enter into the free trade agreement without proper safeguards for Canadian interests. We have seen what happened with the absence of subsidies and dumping codes or the absence of adjustment programs. These people opposite are are the same people who said that jobs were going to be created and that prosperity was going to be part of the Canadian fabric. They said: "Yes, there will be some adjustment in our industrial sector but do not worry as we will have adjustment programs to ease the pain that Canadians would feel". Where are they? Where are those programs that have left 45 and 55-year old factory workers out in the cold? Where is the hope for our young people? Where are all those promises that have been made? They will have to live up to that record.

Canadians have been asked time and time again by this government to make sacrifices for the national debt, the economy and for our children and the future. We did. We paid higher taxes. We have fewer services but what kind of thanks did we get in return? We have a high national debt, record bankruptcies and over 400,000 young people unemployed. This is the thanks we got after we played its game and sacrificed our lives for this government.

Let me be very clear that we have honoured our part of the deal. We have said yes, we will accept the higher tax rates provided it can reduce the deficit. We will accept fewer services provided it can reduce the deficit and the national debt. We will pay the price provided it

can create the environment for small business to prosper.

What has it done for small business people throughout Canada? It has not gone to the banks and said: "You have not only an economic contract with this government, you are not only a financial institution, but you have a social obligation to bring about change in this country and to give the type of capital that small business people throughout Canada need in order to generate those jobs".

What have these people across the aisle done? They have been silent. They have been too busy playing up to the pressures of interest groups and have forgotten about the individual Canadian out there trying to make a serious go of it and provide a better future for their children and young people throughout Canada. That is what they have done. However, people have caught on that this government has been nothing but a government that responds only to interest group pressures.

It has not created an environment where small business can prosper. It has not given more hope to young people. It has not given hope to the single mother who is compelled to stand in front of the local food bank for a daily meal. It has divorced itself from the responsibility of government. It has abdicated its responsibility to bring about positive change.

The only thing we have to show in this House and across the country is the 1.5 million unemployed Canadians. We have 30 per cent of our high school students dropping out and this government has been silent because that is the Conservative style. The Conservative style of governing is hands off: "Let the market forces dictate what happens and as far as we are concerned we can stand back and watch the people get hurt". That is what it has done and that is, I guess, what it is proud of because I have not seen anything coming from this government since I have been here that has given me, as a young Canadian and as a parent of two children, any hope for the future. That is the Conservative reality of Canada.

I have a very simple message here. If any members on the opposite side are listening, there are people hurting in this country that need your help. There are people out there who have lost hope. I think it is high time that something was done about it. We have paid our part of the deal. We have sacrificed long enough. We have co-operated. Now it is time. We want to see results and

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we want to get Canadians back to work and hope back into Canadians' lives.

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

Douglas Grinslade Lewis (Solicitor General of Canada)

Progressive Conservative

Hon. Doug Lewis (Solicitor General of Canada):

Mr. Speaker, I am sure that the House recognizes the tension that my hon. friend feels in view of the very substantial nomination fight that is going on in the Liberal Party in his particular riding. I can understand why he would want to come here and make dying gasps and last-minute speeches in an effort to try to establish some credibility.

I think what the House should hear is some facts instead of histrionics and bombastic speeches and accusations without one shred of evidence that would stand up anywhere. I would suggest to my hon. friend that before he goes out on the campaign trail he must get some facts because that kind of stuff just will not last and take the strain of a campaign such as he is going to face and such as he is already showing the effects of.

I would like to ask my hon. friend this. If we are blaming free trade for everything, as my hon. friend is, how does he account for the fact that since the free trade agreement came into effect our merchandise exports to the United States rose to record levels in 1989 and 1990. They eased back to somewhat less than record levels in 1991 but in 1992 our merchandise exports to the United States were at or near record levels in every month of that year. In the first nine months of 1992 our merchandise trade surplus with the U.S. ran at an annual rate of over $16 billion. That is up 16.6 per cent over the same period in 1991.

My hon. friend will know if he is being honest with himself and with the House that every billion dollars in exports creates or maintains 15,000 jobs. Canada's exports to the United States increased by $31.3 billion in 1989-91 when compared with 1986-88.

I would think that my hon. friend would recognize that the whole world is going through some restructuring. One cannot blame our government for the recession in the United States or in Japan. These folks do nothing but blame. However, one day when it comes to election time they are going to be called on for some ideas of their own. To sit there and simply criticize the government is

not going to wash when they get out there in the real world. My hon. friend knows that.

Does my hon. friend not give some credence to the fact that things are changing? For example when General Motors shuts down the Lumina line in Oshawa in the fall of 1993 it will come back a year later having retooled and will produce the same number of cars with 1,400 less employees. That is a fact of life.

My hon. friend, in the histrionics and bombastics of his speech, does not want to acknowledge the facts of life that things are changing. We have to adapt and we have to enter into agreements like the free trade agreement and the NAFTA in order to put ourselves in a position to capitalize on those opportunities. That is what we have done.

I know it has caused a lot of grief in his party and that there are very severe differences between the hon. member for Etobicoke North and the U.S. hater from Winnipeg. I appreciate those differences. However, surely when one comes to the House of Commons and one tries to improve the country as a whole one has to deal with facts and not just the rhetoric that my hon. friend got away with for this length of time. It is not, however, going to wash in the next election campaign.

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LIB

Maurizio Bevilacqua

Liberal

Mr. Bevilacqua:

Mr. Speaker, I like the soft approach and the soft voice of the minister because he really thinks it is going to be a soft sell. The reality is that the minister, when he goes campaigning, will have to answer to the promises that were made in 1984 and 1988.

Let us talk about reality. There are 1.5 million Canadians unemployed and 2.2 million Canadians who live on welfare. Is that something he is proud of? I certainly am not.

Is the minister happy with the fact that he has just sat there while there are small businesses even in his own riding that cannot access financing and he has not done a thing to help them?

The minister can talk all he wants but the reality and facts I have outlined in my speech are facts that he knows about. The government gets off on these great thoughts about how it is preparing the economy for prosperity. What prosperity? If one walks through any major urban

centre one sees people on the street, one sees people who do not have food in a country as rich as Canada.

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NDP

Daniel James Macdonnell Heap

New Democratic Party

Mr. Dan Heap (Trinity-Spadina):

Mr. Speaker, I am very pleased to have an opportunity to debate this motion which condemns the government for its policies that have created such disaster in Canada that so many plants, especially in southern Ontario, have been closed. Even the official unemployment rate is at a disastrous level. It is officially 11 per cent, more or less.

Unofficially, according to the Roman Catholic bishops, 3.9 million people are either unemployed, have given up working or have short-time jobs when they really need, want and have been looking for full-time jobs.

It has also been pointed out that compared to the participation rate of three years ago unemployment now would be 17 per cent for Canada, not just 11 per cent, if it were counted more accurately. That is because of full-time jobs that have been lost with no other jobs in their place.

It is the worst we have had in half a century especially considering that 10 years ago, when it was nearly as bad, only about one-third of the jobs were permanently lost and now at least two-thirds of the jobs are permanently lost.

I want to mention a little bit about the riding I represent of Trinity-Spadina. Within weeks of the free trade agreement coming into effect in the beginning of 1989 the Inglis plant, which employed 600 workers, announced that it was closing. For decades it had been making washing machines. Half the washing machines in the Canadian market came out of that plant. It had a good, trained and responsible work force.

Admittedly the company from the United States that then owned it had not updated the machinery but it was still producing for half of the Canadian market. The workers were laid off within the year with no possibility of any kind of replacement in that sort of washing machine employment for them.

I want to speak about the garment industry. It has been blasted by the free trade agreement. Employers and owners of businesses have told me that when they go to the bank to get a loan for an expansion or to get over a short difficult period, people who have been in the business for years, leaders in the market, and leaders in

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style are told by the banks: Not for the garment industry. They know what the free trade agreement has done to the garment industry in Toronto.

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NDP

Margaret Anne Mitchell

New Democratic Party

Ms. Mitchell:

And B.C.

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NDP

Daniel James Macdonnell Heap

New Democratic Party

Mr. Heap:

And in British Columbia and I expect also in Winnipeg.

Many of these employers opposed the free trade agreement and explained to the government the damage it would cause. The government ignored them and now some of them have closed. Those that have not closed are mainly import houses importing from China and Taiwan which have cheap labour.

They are negotiating with Mexico which has cheaper labour than anyone in Asia. It has cheaper labour not only than Japan but than Korea, China, Singapore and so on. They are negotiating with Mexico. One of them has kept about 15 out of 100 employees. He laid off 85. He has 15 just to handle the warehousing and maybe some very short make-up orders.

The printing industry has also been hit, as has the data processing industry which is a very important service industry in downtown Toronto.

The government has simply ignored what is happening. It has done nothing to pick these people up. I want to quote the comments on this from the Canadian Conference of Catholic Bishops. Its base principle, as quoted from the gospels, is Jesus Christ saying:

Just as you did it to one of the least of these brothers and sisters of mine, you did it to me.

In other words, its bottom-line approach for the economy is that it has to look after the poorest. If we look after the poorest, the rich will not suffer.

The bishops spell that out further in a statement well known as the preferential option for the poor. They say:

a) that the needs of the poor have priority over the wants of the rich; b) that the rights of workers are more important than the maximization of profits; and c) that the participation of marginalized groups takes precedence over the preservation of a system that excludes them.

In other words, they are saying that if we look after the poor the rest will do well enough. Particularly, we should look after the ones who are being excluded from the system, such as the women who have been forced out of

April 22, 1993

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their factory jobs into home work jobs for what amounts to about $2 an hour.

Out of this $2 an hour these women must pay for their sewing machine, heat and light, and the rent of their home in which they do the work. They have to pay what the factory owner used to pay. On top of that it comes out of maybe $2 or $4 an hour when we add up the hours they work, sometimes illegally helped by their children. This is what has happened to some of the marginalized people in Trinity-Spadina, especially the immigrant women.

This is what is condemned by the Roman Catholic Church. It is not speaking only out of compassion. The Roman Catholic bishops are not just bleeding hearts. They are saying, as my colleague from Essex-Windsor said, that if two million, three million or four million Canadian workers are not allowed to work they still have to eat and their families still must have homes.

The country is losing money and going into deficit no matter how much this government may lower the taxes on the rich, no matter how much this government may rig its figures. It is the forced unemployment in this country that is causing disaster.

The Roman Catholic bishops point out on page 7:

Despite protests to the contrary, governments are simply waiting for a surge in Gross National Product to restore lost jobs and create new ones-this despite the evidence that new economic growth, as measured by GNP, will be only loosely related to job creation.

After saying that the market has failed the bishops say:

It is Pope John Paul's ardent hope that individuals and communities-including the poorest-will have the political power and will necessary for freely determining and shaping the framework within which the market works, so it can be in harmony with their own cultural and moral values, even at the international level.

The government has to reverse or be reversed.

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NDP

Margaret Anne Mitchell

New Democratic Party

Ms. Margaret Mitchell (Vancouver East):

Mr. Speaker,

I think the remarks my colleague put on the record are tremendously important. They show the ethical and moral reasons that the North American free trade agreement must be defeated.

I would like to comment on his remarks in which he said that the free trade agreement has had a tremendous impact on many of the industries where women are working at very low wages, and more often than not they

are immigrant women. The situation he describes in Spadina is very similar to that in my own riding of Vancouver East where the free trade agreement has largely been responsible for the fact that fish processing plants have been closing. Some of them have moved south of the border. One of the Liberal members mentioned earlier how we must have value added to our products. The trade deal certainly has been prohibiting that in many industries. The export of raw logs is another one.

I agree with the hon. member completely that in the garment industry it is a particular tragedy. Not only do we have plants closing and jobs going and many of the plants leaving the country, but we have this move to home industries. They do not have the standards of work that women predominantly should have. They are really including the cost of all the overhead and having to pay it out of very minimum wages.

I would like him to comment further on that and to explain why the NAFTA agreement will add to this tragedy.

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NDP

Daniel James Macdonnell Heap

New Democratic Party

Mr. Heap:

Mr. Speaker, I thank my colleague for the question because in 10 minutes it was not possible to put everything forward.

The free trade agreement which, as I said, was opposed by the leaders of the garment industry and the majority of the manufacturers in the garment industry in Toronto and I believe in the rest of Canada, has resulted in such changes in the import duties that foreign manufacturers and particularly American manufacturers are able to flood the Canadian market.

Along with the free trade agreement was the high interest rate policy chosen and enforced for two or three years by the government through the Bank of Canada, which is a creature of the government and the Parliament of Canada. The manufacturers told me they could not sell in the United States. Even though tariffs going into the United States were lowered, the difference in the Canadian dollar brought about by the enforced high interest rate meant that they were priced out of the American market. We were supposed to get access to it, but the two policies of this government, the free trade agreement and the high interest rates, blocked them.

April 22, 1993

Even though the interest rates have gone down, some of those manufacturers are not there. When we go down Spadina Avenue we see property for sale and for rent where there used to be hundreds and hundreds of people working in the factories.

The NAFTA will also hit the remaining industries because it will mean that we will be penalized for bringing in cloth, yarn or thread from outside North America. There are many varieties of good cloth to be had from Europe and from some parts of Asia, but the North American free trade agreement will penalize Canadian manufacturers by hindering their access to the American market if they use cloth not made in Canada, the United States or Mexico.

That particularly hits cotton. It is admitted we do not grow cotton in Canada. They do in Alabama, the southern states and Mexico. Canada will be penalized if we have to buy cotton from those places, manufacture it in Canada and try to sell it back into the American market which the government claims it opened for us. We will be penalized more if we try to buy it outside North America.

It is quite possible the whole garment industry in Canada may be doomed by the foolishness of the government.

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NDP

Brian L. Gardiner

New Democratic Party

Mr. Gardiner:

Mr. Speaker, a point of order. I do not know if my colleague from Trinity-Spadina mentioned to you that we were going to split his time in two 10-minute portions. I would like to take my time now if I could.

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PC

Steve Eugene Paproski (Deputy Chair of Committees of the Whole)

Progressive Conservative

The Acting Speaker (Mr. Paproski):

That is no problem. Questions and comments are now terminated.

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NDP

Brian L. Gardiner

New Democratic Party

Mr. Brian L. Gardiner (Prince George-Bulkley Valley):

Mr. Speaker, I am pleased to have an opportunity, short as it is, to say a few words today on the motion presented by my colleague from Essex-Windsor. His motion was essentially on the state of the economy on the eve of the budget, which will be presented by the Minister of Finance on Monday afternoon.

I would like to take this opportunity to say a few words about the general state of affairs of the economy in the country. I would also like to draw some conclusions and comment about the general national state and mention a

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few situations that I think bear some relevance in my riding to the debate we are having today.

There is no question that the time is quickly coming for this government and all Canadians to take a strong look at the choices that are available to address the problems facing our economy. It is important to get the message across that there are choices. They may not be the choices this government has made nor the choices of other critics of this government, but there are real choices and real positive solutions to some of the problems we face in this country today.

I do not think anyone, particularly on the government side, should reject or hide from the fact that we are in a very difficult economic situation. Unemployment in March rose to 11 per cent from 10.8 per cent in the previous month.

Amazingly there are some 1.5 million people in Canada looking for work. Our unemployment rate last year was the highest of all the G-7 countries. My leader, the member for Yukon, has mentioned in her questions to the finance minister that in addition to the unemployed we have the problem of the underemployed. That is often not addressed or dealt with in this House and I think it is important that it be raised, as does the leader of the New Democratic Party.

We have also seen the explosion of the welfare rolls all across the country. The point made by our leader in the House has been in response to the government challenging the opposition to offer alternatives. When we have been presented with that challenge we have offered alternatives.

Alternatives were presented by our party in the extensive debate we had on the goods and services tax in this House. We were the only party to do that. We met that challenge and I suggest that we bested the government in terms of what we said could be done.

With regard to the welfare rolls, a question has been put to the finance minister and he has not answered it. He asked where the money will come from to do the wonderful things proposed by members of the opposition. We have told him where the money would come from but the question is rightfully put to the Minister of Finance: Where will he get the money to pay for the ever-increasing welfare rolls?

April 22, 1993

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In Prince George, the major community in my riding, I took the time to look at this situation. If we are going to address these problems we have to know what we are dealing with. In Prince George alone there are some

5,000 people on social assistance. A number of those people are not able to work and will likely never work. In our country where we measure our value by how well we take care of those who are less well off-my colleague from Trinity-Spadina said that better than I did-we clearly have to continue to help those people.

Government has to initiate projects for training but the private sector also has a responsibility. It is not often mentioned in this House because our natural inclination as members of Parliament is to look at the role of government. There is a role and a responsibility for the private sector as well. On matters of research and development and innovation we have some winners in this country, but it is also clear that the private sector has failed Canada in a number of areas as well.

There are reasons for that, such as the branch plant economy we have in Canada and the seemingly endless reliance on being the hewers of wood and drawers of water. We must take advantage of existing legislation and programs to ensure that we do get an opportunity to add value to those wood products in particular-I am interested in that for my riding-and other similar areas. We do have some tools at hand that we can use.

I realize that I only have a few minutes left but one particular example sums this up. In my riding of Prince George-Bulkley Valley I have met with the workers at the Kelly Douglas & Co. warehouse and corresponded with the company owners. This warehouse has been in operation for many years in Prince George. It closed virtually overnight and some 65 people were laid off. A number of them had done nothing else in their lives. They had worked full time in that particular warehouse at good pay but now they were unemployed. The workers have said that the local management was treated as poorly as they had been treated. So what do we do? What does the union do? What does the company do?

This is the classic situation of a good leadership role being played by the union and a poorer role being played

by the company. There are also some serious questions about what to do in our economy.

In this particular case the union has taken a leadership role by working with its members who used to work at this warehouse. It contacted the Canada Employment Centre and is now working with these people-some have done no other work in their lives-to prepare them and help them look for other work. I visited the classroom where they are beii.g trained to prepare resumes and introduced to computers. One person said: "Well, this is fine. I appreciate being involved in this class, but why are the taxpayers paying for this?" I thought he had a good question there. He suggested that the employer should be paying more attention to these workers now that they have been laid off. The union is challenging what this particular company is doing as well through a grievance procedure.

This is the classic situation of the seemingly uncaring employer, but it is also a unique situation because the union has gone far beyond its traditional role and is working to serve its members. There is an increasing concentration of business in larger and larger centres where communities like the ones I represent have fewer and fewer services.

After raising those challenges from that very specific example I now come to some positive solutions and suggestions and, most important, some choices. I want to impress on anyone who is watching this debate, earnestly concerned about the state of our country's finances and eagerly waiting to see what the Finance Minister does with his budget on Monday, that there are some choices. The New Democrats and in particular our leader have made some effort to develop our strategy for a full employment economy. We have met the challenge of presenting alternatives. This is a reasonable plan. It has been given the rubber stamp of approval from independent financial consultants. It can be done. There is a different way of running the economy rather than this government's approach. There are positive solutions that give people meaningful jobs and the opportunity to present and participate in economic planning.

I encourage anyone who is interested in that debate to please write to us. We will send them a copy of it. Then they can certainly get a chance to see what the alternative is and what the challenges and choices are.

April 22, 1993

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LIB

Guy H. Arseneault

Liberal

Mr. Guy H. Arseneault (Restigouche-Chaleur):

Mr. Speaker, we are discussing a very important topic today, the economy. In my neck of the woods, forestry is a major part of the economy and we have been hit quite hard. I know the hon. member representing his party has the responsibility of following the forestry sector for his party. I know he is quite knowledgeable in that area.

I would like to mention to the House that in my area of Restigouche-Chaleur there is a mill in Atholville, New Brunswick that has been closed. We have another mill in Dalhousie that has been closed 50 per cent. Two of its four machines have been closed down. I have been quite concerned about the policies of this government with regard to high interest rates, the high dollar and its effect on industry and more specifically on the forestry industry. I have also been concerned about other policies.

I wonder if the hon. member would care to comment about the policies of this government with regard to the forestry industry.

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NDP

Brian L. Gardiner

New Democratic Party

Mr. Gardiner:

Mr. Speaker, I appreciate the question from the member. We have sat on a number of committees and discussed the concerns of the forestry sector in the country.

He is quite right when he mentions a range of problems and issues facing the forestry sector. We know the challenges faced by all governments and in particular provincial governments that are faced with the day-today management of the allocation of the forest resource to companies. There is a clear challenge there on the question of set-asides and meeting the goals of the Brundtland commission for 12 per cent. That difficult challenge is particular to my own province of British Columbia and is a very important one. It is important to mention on this Earth Day that it is a very difficult time for most provincial governments.

With regard to the high dollar and in particular trade policy, I would just like to comment on two things. The general approach to the high interest rates and the high dollar has been very difficult and has hurt all components of our forestry sector, particularly as it relates to our exports to the United States.

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Of course I must mention the softwood lumber tariff dispute that we have had with the United States. We anticipate a ruling next week from GATT that is discussing the whole subsidy question. This whole issue of the current tariff and what is to be expected is before a couple of panels now and is hanging over the forestry sector. The U.S. lumber lobby has already said that if it loses at any one of these panels it will be launching an extraordinary challenge to the decision, so the whole dispute over softwood lumber is nowhere near finished yet.

One of the problems in eastern Canada is the age of our mills and particularly a lot of the pulp mills. The owners are having difficulty making those very big money decisions about reinvestment into those mills. There is upgrading necessary to improve the water treatment systems of those mills. As one of the most important sectors in Canada there is a great deal more to do.

I am wondering, on the eve of the budget, if we are going to see a forestry minister continue in this House. There has been some debate in the government about doing away with the minister. It would be ironic since one of the first pieces of legislation my colleague and I worked on when we arrived in Parliament was the creation of that department. If one of the last actions of this government was to do away with that department in such an important sector I do not think most Canadians would appreciate it.

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April 22, 1993