Mr. Mark Assad (Gatineau -La Lievre):

Madam Speaker, in the absence of the Minister of Employment and Immigration my question is directed to the Minister of Finance. Fifty per cent of our exports are manufactured products, mostly in technologies such as communications.

Could the minister explain the lack of additional worth-while investments in technology, research and development and retraining for the skilled labour force needed to maintain and improve the best sector of our economy?

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

Madam Speaker, the federal government has taken a number of initiatives to enhance the competitiveness and productive capacity of the processing and manufacturing sector.

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I am sure the hon. member is aware that the February budget set out a number of initiatives to improve the capital cost allowance. We are following that up with an additional $400 million in support of further research and development. In the budget we have provided additional support for incentives for investing in high-tech equipment and the sophisticated computerized information-based type of equipment that has a very short shelf life.

We are trying to work with this important manufacturing and processing sector which is tied in very much to the newly emerging economy to try and make those adjustments and to strengthen and improve their productivity and competitiveness.

It is most important to maintain a favourable tax environment for investment. What we have been trying to do is bring down interest rates and inflation. I hope my provincial colleagues who still have to bring in budgets will bear that in mind when they bring them forward.

Mr. Mark Assad (Gatineau-La Lievre):

Madam Speaker, the minister's answer goes against what major intervenors have told us about the economy and the need for investing more in areas where we perform best. I think that is rather surprising, and I hope they will note the minister's reply.

My supplementary is as follows: Dramatically high levels of unemployment in Quebec are creating despair and a lack of confidence in economic recovery.

What does the minister intend to do to stem this tide of pessimism and improve opportunities for the unemployed who have their pride and who want a chance to find a job?

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

Madam Speaker, I have no doubt about that at all.

We have put in place an economic policy framework that has delivered the lowest inflation in 30 years and the lowest interest rates in 20 years.

Mr. Barrett:

Highest unemployment.

Mr. Mazankowski:

We have put in place a number of incentives for the small business sector, programs to invest in people to improve their skills upgrading and their retraining and a number of incentives with respect

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to infrastructure, all being aimed at bolstering economic activity and creating growth and jobs. This is the over-all objective of the Government of Canada.

I advise the hon. member that Canada's growth rate compared to the other G-7 countries is far above and beyond the potential there. We are going to have the best rate of growth in the G-7 this year and next year and the best rate of employment growth as well.

Mr. Barrett:

And more food banks.

Mr. John Manley (Ottawa South):

Madam Speaker, my question is for the Minister of Finance as well.

The release of the unemployment statistics this morning confirmed what most people in Ontario already knew, which is that the recession is certainly not over in Ontario. Surely having 575,000 jobless in Ontario is not what the minister meant in his budget speech when he said: "The fundamentals are improving".

My question for the Minister of Finance is very simple. What is happening in Canada's industrial heartland? What is happening in Ontario?

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

Madam Speaker, I think the hon. member should be encouraged. The manufacturing sector in the recession and during the course of the restructuring period has taken a real battering but manufacturing jobs have increased by 28,000, up by 4 per cent in the last six months.

Surveys indicate that there will be a 33 per cent increase in manufacturing production. Exports are strong. Construction spending is on the rise. Infrastructure projects are coming on stream. The energy sector is bouncing back and that has a direct effect on the economy of Ontario. The drilling activity is up by about 100 per cent. The lumber sector is strong.

The incentives to business, in particular the small business sector, are having a positive effect. Retail sales are strengthening and consumer confidence is strengthening. That was not undermined by the budget that I brought down. So there are some encouraging signals.

I am as disappointed at the hon. member about the employment statistics for last month but I think it has to be taken into context.

Mr. John Manley (Ottawa South):

Madam Speaker, let us put it in context: 3,000 jobs were lost yesterday in the GM plant in Scarborough; 250 jobs lost in Oakville at the Mack truck plant. These are the kinds of high-quality, high-paying, value-added jobs that we need in this countiy. That is what is behind the statistics that we heard this morning.

Last year the finance minister promised in his budget that unemployment would go down to 9.7 per cent in 1993. The failure of the government to produce anything other than a continuing stream of optimistic statistics is what has left so many people in Ontario and elsewhere without jobs and without hope.

Would the minister please explain whether the failure to implement a clear job creation strategy should be blamed on his last budget in 1992 or on the budgets of his predecessor before him?

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

Madam Speaker, the House of Commons is a place for debate and a place for the offering of alternatives. I am not sure whether the hon. member is proposing an alternative which would be in agreement with the leader of his party.

I know what the leader of his party wants to do. He wants to go out and borrow more and spend more and tax more. That is not our philosophy.

Mr. Rod Murphy (Churchill):

Madam Speaker, my question is for the same minister who asked where the Liberal policies are in terms of job creation.

I would like to quote from The Edmonton Journal of this week. It reads: "The NDP plan to create jobs and cut the deficit is more sensible, more humane and more economically sound than the do-nothing budget brought in by the federal Conservatives. Can Canada really afford to ignore the merits of a full employment economic strategy?"

I would like the minister to answer the question of The Edmonton Journal.

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

Madam Speaker, I am not sure what version of the New Democratic Party economic philosophy the hon. member is representing. We have about three or four of them now.

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I can tell him that Edmontonians and Albertans will be very happy to see headlines like this: "Oil patch recovery surprisingly strong; Drilling activity in western Canada jumped 100 per cent from a year earlier".

I can tell him what else they are very happy about. That is the 48 per cent increase in exports to the United States under the free trade agreement which the hon. member and his party opposes. It is creating jobs. It is creating durable jobs which gives us the springboard to compete not only with the United States but with other countries around the world.

Mr. Rod Murphy (Churchill):

Madam Speaker, the minister knows we have 313,000 fewer jobs in manufacturing since free trade. He knows that. The statistics today say that. We have appalling unemployment among women and youth in the regions of this country.

Does the minister not understand that we cannot cut mining agreements, forestry agreements, regional development and the deficit as long as Canadians remain unemployed? Do something, minister.

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

Madam Speaker, the hon. member knows that while there may be fewer people working in the manufacturing sector we are still manufacturing substantially more in terms of production.

It is the same thing with agriculture. We probably produce 11 times as much these days as we did 25 or 30 years ago because of productivity enhancement.

That is what competing and improving productivity is all about. We have to adjust to the realities of the global marketplace. We have to take advantage of the liberalized trade opportunities, in the United States under the North American free trade agreement, in Japan and in other countries.

We have been trying to put in place the kind of economic environment that would allow investment to take place in order to create jobs and compete effectively. Canada is one of the great trading nations of the world and we must trade to survive and we will trade and prosper.

[Translation}

Mr. Guy Saint-Julien (Abitibi):

Madam Speaker, my question is for the Minister for International Trade.

A binational tribunal has rejected the countervailing duties imposed by the Americans and ordered the U.S. commerce department to do its homework again and review within 90 days its decision to impose countervailing duties of 6.5 per cent on Canadian softwood lumber. The Quebec Manufacturers' Association is disappointed with the decision.

Can the minister tell us today that he will do everything in his power to help Quebec forestry producers abolish these American countervailing duties? We know that the Quebec subsidy is so small that it does not justify U.S. countervailing duties.

Mr. Peter L. McCreath (Parliamentary Secretary to Minister for International Trade):

Madam Speaker, it was wonderful news we received yesterday with the success for Canada in the panel.

It is interesting to note an editorial in The Financial Post this morning that says the value of the free trade dispute panel is abundantly apparent in its legal determinations about the merits of the department of commerce case. The final outcome remains in doubt but without the panel we would be at the mercy of politically inspired trade actions.

I want to tell my hon. friend that there is a 90-day waiting period for appeal, which is unlikely to be successful even if it is pursued. Then we will see $200 million coming back into the pockets of Canadians thanks to this panel that was available because of the free trade agreement that my hon. friends over there disparage so roundly.

Mr. Bob Corbett (Fundy-Royal):

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

The federal government is often accused of off-loading its deficit problems on to the backs of the provinces. In recent budget statements the minister stated that transfer payments would not be cut to the provinces yet a

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table in the same document indicated that transfers are to be less this year than last year.

Would the minister care to explain that?