Mrs. Terrana

Mr. Speaker, I can see the concern and I know it is only 10 per cent of what we need.

With the infrastructure program it is not just roads and the infrastructure we need. Some moneys are also set aside for arts centres. Fifteen per cent of it is earmarked for other programs.

I would like to say that this is another opportunity to increase jobs. I would also like to say that we cannot get 1.2 million jobs on the first budget and we cannot get the deficit down while trying to do some work in the area of the economics of the country.

Mr. Paul Crête (Kamouraska-Rivière-du-Loup)

Mr. Speaker, I would also like to thank the hon. member for the quality of her maiden speech. Many of us here have had to make this first speech, and it is always a rather moving experience.

I have a comment about a remark she made in her speech on the change of direction brought about by the new government. We, on this side of the House, do not agree at all that there has been change, considering some significant items in the budget. For instance, this is the record deficit. Never before had the government forecast a $39 billion deficit. There is also the increase in the number of weeks of work needed for entitlement to unemployment insurance benefits coupled with a reduction in the number of weeks people can get these benefits. To me, this looks much more like a continuation of the previous Conservative government's policy.

That is why Canadians and Quebecers find it very hard to accept the results of this budget. During last week recess, people told me this was another case of all talk and no action, since after telling us for two months how serious the situation was, the government ended up with no real cuts. It is just business as usual.

I have a second brief remark. The hon. member said that she wanted to work with Quebec members at building a united Canada. I would invite her to work at making sure that Canada and Quebec set up structures that would make them able to face global competition in the years ahead. In that regard, Canadian federalism no longer represents the kind of structure that will allow us to be competitive in the global market.

Mrs. Terrana

Mr. Speaker, first of all, I would like to comment on the second remark of my colleague. The fact that Quebec has tried to separe from Canada for many years did have an impact on our economy. It is well known that problems are not limited to Quebec but affect the whole country. I believe that, as we say in Italy, united we stand, divided we fall. I do not know how they say it in France, but we say that unity is strength.

As to the first remark on a new direction for our country, I must say I am convinced there is indeed a new direction. This is our first budget, and it was tabled only four months after the government came into office. It is the first of two phases, and the second one will come next year. It will then be possible to discuss the budgetary content because we will have all the findings of the consultation process. The opposition may find that we are right in what we do and do it in the best interest of this country.

Mrs. Sharon Hayes (Port Moody-Coquitlam)

Mr. Speaker, on behalf of the whip of the Reform Party, I would like to advise the House that pursuant to Standing Order 43 our speakers on this motion will be dividing their time.

I am more than pleased to address an area of concern that is very real to Canadians. Last week I spent time in my riding of Port Moody-Coquitlam, the first extended opportunity I had to meet with individuals and groups since the budget was introduced. I was met with three main areas of concern, two of which I would like to touch on today.

The first topic is the budget. The other is immigration. Both deal in very real terms with the concern of ordinary Canadians about the future directions and opportunities of Canada.

Most Canadians view the budget of February 1994 as a stop-gap measure, an attempt, however feeble, at holding the line on the deficit and yet it has not done too much damage in their own backyard. Predictably those whose livelihoods have been directly affected through base closures or wage freezes or other means are angry. Others who have watched our nation's economy closely through the last several decades are angry.

I put to it the House that this budget is a failure and that all Canadians should be angry.

Canada's debt and deficit situation is now at a point at which it is affecting every individual and every business through exorbitant taxation. Every personal paycheque is slashed by taxes and reduced buying power. Our debt load of over half a trillion

dollars, among the largest per capita debt of the industrialized world, will destroy trade, jobs and our standard of living.

The deputy finance minister admitted yesterday that the tax burden on individual Canadians and corporations is higher in Canada than in any other major industrial power except France. One-third of every dollar we pay in taxes disappears to debt servicing. Those moneys are not there for our country's needs.

Allow me to illustrate. Every second eats up $1,300 in debt interest payment, enough to employ two Canadians for a week. In six seconds you could feed a family of four for a year. In the 10 minutes I have for this speech the debt will have increased by $780,000. It will take an average Canadian 20 years to earn that much.

Remember, this money is not owed just to ourselves as some may like to think. It is a fact that our largest export as a nation is Canadian dollars owed to foreign lenders each year.

Yet with this budget government spending for the coming year has actually increased by $2 billion. As with so many previous budgets there will supposedly always be more revenues, better economic conditions to bring our debt problems in order. Not so then and not so now.

The problem is too severe to be left to the future because it is that future that will inherit not the promises but the crushing load of today's inability to face the problem. Spending must be reduced and Canadians must be prepared to face the problem squarely and honestly.

This current situation demands that all areas of expenditure and human capital be addressed. That is why the budget debate is an ideal time to examine the issue of immigration.

On its own it has been relegated to an untouchable topic associated too easily with suspect motives and easy labels. Our financial and human resources must be opened up for close inspection in this area as well as others.

As the Globe and Mail stated on its 150th anniversary, the biggest story of the nineties will be whether we learn to live within our limits in a world already stressed by our excesses.

Our world has become a place of movement, of capital and humanity. Recent reports in the media remind us that the economic and migration issues are not ours alone.

Bosnia is one of almost 50 identifiable areas of civil war. Up to 22 million people in Africa will need emergency food this year. There are 20 million refugees worldwide, plus another 24 million people displaced inside their homelands. One-third of the world's labour force, more than 820 million people, is either not working or is living below a subsistence level.

This dilemma only intensifies as it becomes too apparent that there are no easy solutions. The 1991 Geneva Convention cannot adequately address these developments. International co-operation must be pursued quickly to deal with shared long term solutions.

Canada has one of the most generous immigration policies in the world. We accept more refugees as landed immigrants than any other nation in the world per capita. On February 2, 1994 the Minister of Citizenship and Immigration announced the target for this year's immigration level set at 250,000 or 1 per cent of our population. Per capita it is double that of Australia or the United States, the other two countries which receive the largest amounts of immigrants.

We pride ourselves on our humanitarian and multicultural policies. Yet according to a recent Vancouver Sun article recent studies on immigration demonstrated that federal planners cannot know for sure what impact these new arrivals will have on Canada. Reports and studies are mixed. Even the much quoted Canada Council report of 1991 recommends an immigration target of 1 per cent of population only after 25 years.

Historically, Canada's immigration rates have been erratic since the 1970s, ranging from a low of 84,000 in 1985 to more than 200,000 in the last three years. Typically, rates have reflected economic trends with numbers dropping in harder economic times. Historically, the largest flows have been in response to definite need as when record numbers came in the early 1900s to populate a vast western prairie.

Studies seem to indicate immigration has been economically neutral, neither helping nor hindering the economy to any large extent. That would seem to depend on the receiving conditions and the adaptability of the immigrants to the needs of the country. Both these factors have changed dramatically in the past few years.

Canada and Canadians are facing a tremendous economic challenge as we adjust to new world market conditions. Our debt puts us at a growing disadvantage. Domestically, new technologies demand major shifts in a struggling labour force. Jobs are no longer there not only for the untrained but neither for the student nor those in middle management careers.

The present unemployment rate is 11.4 per cent and much higher if we take into account those who no longer are looking or are underemployed. Add to this an immigration policy that will introduce 2.5 million new people in the next 10 years. More than half of the new arrivals coming as refugee or family class immigrants will not have the skills needed in the new economy.

The independent class of immigrants with job and language skills dropped from 54 per cent in 1954 to 27 per cent in 1992. The family reunification class increased at the same time by a similar amount. Immigrants who spoke no English or French used to be only 10 per cent of new arrivals. Last year that soared

to nearly half with over 100,000 of Canada's 250,000 immigrants with no official language capacity.

I saw a living example of such proportions in a Port Moody school last week. Fully half of the students in that school are in the ESL program stream. Students there take their seat in the classroom having arrived two or three days earlier in a brand new land surrounded by brand new sights and sounds.

Immigration decisions made here in Ottawa are being lived out in the burgeoning budget needs of local school boards and the stress of overworked teachers. Language training for new immigrants currently costs the Canadian taxpayers over $100 million a year.

The life and the blood of our nation are its people. Government can seek to prescribe remedies to all kinds of our country's ills through tinkering with this one factor. Will immigration really save our pensions? Will immigration save our dwindling revenues?

Increasingly, we see the band-aids that must be applied to the serious side effects of these choices, whether it be the rising racial prejudice, immigration dependency on social services, perceived welfare abuse and criminal activity among new arrivals, or the stress in our education system.

It is time to go back and honestly review the doctor's prescription. Basic immigration policies and assumptions must be opened to re-examination.

Last week I met with representatives of a Chinese immigrant service organization. Their greatest concern was not in supporting the cultures of those they represent. Their role is to help give new arrivals the tools to make a new life in their new chosen home. For that they need more and more resources to meet the escalating demands of greater numbers and greater needs. They see their main goal as effectively integrating these new Canadians in a prosperous new country. Present immigration policies are ruining their effectiveness. Present economic policies are ruining their hope for a prosperous country.

We have a responsibility therefore to ask ourselves the following question: What drives government policy that invites record numbers and new classifications of new arrivals into an unpredictable future?

I urge all members of all parties of this House to be truly humanitarian and truly compassionate by giving our immigration policies a responsible scrutiny and careful assessment. As members of Parliament we are watchmen at the gate for those who live in this land as well as for those who will come to join us. We must therefore seek out those policies that are proven, which will strengthen and create opportunity and unity.

Mr. Peter Adams (Peterborough)

Mr. Speaker, I listened to the member's remarks with great interest. I must say I heard very much of a mixed message. I do not know where she gets some of the literature she cites.

In the province of Ontario, which I know best but I am sure the figures are roughly the same, its population would have decreased every year of the last 10 years if it had not been for immigrants. The population of the province of Quebec would have decreased even more quickly. What is perhaps more important for us all is that while that was occurring, the population of the province of Ontario would already have been close to 25 per cent senior citizens. That is one aspect. How she thinks that works into the mix of our economy I do not know.

The other matter is that the immigrants-by that I mean new immigrants, not established immigrants like myself-in my riding are almost invariably contributing members of our community. They are people who often take jobs well below their qualifications and work very hard in those jobs. They rent first of all and then buy small houses and improve them. They see that their children get educated.

Also in the hon. member's figures she mentioned immigration of 1 per cent. She knows this country has never had 1 per cent immigration. There have been targets of 1 per cent. There is a target at the present time but there has never been 1 per cent immigration.

She mentioned Bosnia. She mentioned unemployment. She mentioned compassion and humanitarian feelings for people in other countries. Does she realize that in her lifetime the world population will double and will then double again? That assumes, by the way, that she lives an average life and I hope she lives longer. What are we supposed to do in this country while the world population doubles and redoubles?

For the member's information 1 per cent of our population, which is the target for immigration we have at the moment, represents at this moment one day's increase in the world population. Do we move into a bunker and let the world population grow around us and try and live as increasingly aging and wealthy people not reaching out to help these people in other countries?

Mrs. Hayes

Mr. Speaker, I thank the member for his comments and questions. Actually I am getting a mixed message from the member as well.

As we look at the immigrants who do come to this country, the thrust of my talk and feeling is we need to give them opportunity when they arrive here, as well as provide opportunity for Canadians who are here already. That should be our bottom line.

I did not say anything about a 1 per cent immigration rate before this time but that is our target. I think we agree with that as the established government target.

There are no studies indicating that 1 per cent is where we should be at. What I do see though and I referred to this in my speech are the surfacing problems. In today's Globe and Mail over one-half of Canadians perceive we are accepting too many immigrants. That tells me there is a perception problem which needs to be addressed.

Why is that perception there? The immigrants that do come to this country tend to come to three urban centres. They come to places that are already stressed. They come to places where jobs are not available. They come to expectations we cannot provide because we have not been able to assess how we are going to accommodate these people.

The hon. member has admitted in his question the reasons our immigration policies are what they are. The government wants to provide pension funds because of its own mismanagement of funds in the past. Those pension funds will not be there if present trends continue. Is it fair to the immigrants if we bring in the possibility of reduced employment, fewer jobs for the Canadian population?

I would agree that immigrants are necessary and immigration is a positive force in our country if it is done wisely. Where is the proven wisdom in our present policy? That is what we need to challenge.

Mr. Ron MacDonald (Dartmouth)

Mr. Speaker, to be quite frank, I find the statements by the member to be quite troublesome.

The member quoted a poll from today's paper which clearly shows there is a problem. Perhaps the problem is accentuated by the fact that people who claim to be leaders in the community stand in places like this and in provincial legislatures and allow the perception that immigrants are a drain on the Canadian society to be put out there without any type of substantiation whatsoever.

It is very dangerous to stand in the House of Commons and give a speech that lends credibility to an argument that has absolutely no foundation in fact. The problem is not that immigrants are becoming an undue burden on our major cities. The reality is that more immigrants with different skin colours are coming to Canada from places like Asia. That seems to be the problem I hear. I would like the member to comment on that.

Mrs. Hayes

Mr. Speaker, I would like to comment certainly on what the hon. member has said.

You say that I have no substantiation in that I repeated something in the paper. The substantiation I have is that it is in the paper. The public perception is there. What are we going to do about it? I would challenge you on your substantiation of the numbers that are now used for the immigration policy. There is no basis for those numbers in the world, except Canada, or in proven studies.

I would please ask members to try to say "the member" rather than "you". It is supposed to lower the temperature and I think we will all benefit if we use that method.

Mr. John Duncan (North Island-Powell River)

Mr. Speaker, I rise to participate in the debate following the first budget presentation in this, the 35th Parliament. My constituents expect me to bring some new perspective and sanity to how government spends the taxpayers' dollars and to what effect and purpose.

My west coast riding covers one half of Vancouver Island's coastline as well as one half of the mainland coastline of British Columbia.

My riding generates major wealth. Its contribution to our gross domestic product is one of the country's highest, if not the highest. It is a resource based economy. We have five pulp mills with the two fastest papermaking machines in Canada, logging, three major mines, sawmills, fisheries and a highly developed tourism industry.

My constituents contribute in a big way to the wealth of this country but do not enjoy the level of services provided in other parts of this country. It is not a question of more government employees. We already average 8,000 federal, provincial and municipal government employees per riding in Canada. What is required is downsizing, better deployment of employees and priorizing of services.

The federal government has cut jobs such as lighthouse keepers and federal fisheries officers, the very people and institutions which deliver services in the field in an irreplaceable way. We all know that reductions in services and employees should be in middle and upper management, not in the field.

There are indications that the federal government is considering closing the fisheries offices in small coastline communities in my riding. This policy is totally contradictory to the government's pledge for example to maintain rural post offices in Canada and is detrimental to hands-on enforcement and habitat measures. These policy decisions send a strong negative signal to these rural communities. It also sends a signal to the people who ask if the federal government has the competence to manage this resource".

It is the only resource managed by the feds and they cannot even get it right. The sports and commercial fisheries ask: "Where are the enforcement, habitat and budgetary priorities of fisheries and oceans going?" The demise of the east coast fishery is on the minds of everyone.

Let me now turn to the budget document. It is very disappointing to me and my constituents to deal with the fisheries issues I have just articulated in the face of increased federal spending.

At the same time the government projects 8 per cent growth in revenue after a drop in revenue last year. This is absurd.

Allow me to put the national debt into a constituency perspective. The Powell River area's cost of servicing national debt allocated on a pro rata basis is $17 million per year. This money is blown out the window. The entire cost of local services provided by the Powell River area for police, fire, garbage, water, sewer, sidewalks, streets and all those other valued local services also runs at $17 million per year. If this does not point out the profligacy and penalty of federal spending, I do not know what does.

Incidentally, similar national debt comparisons can be made for other local governments in my riding such as Campbell River. Our local B.C. governments do not run deficits by legislation. The debt and deficit are weakening confederation and the federal government is in danger of becoming impotent. This government had better get its act together on spending decreases. No tax increase during the life of this Parliament is essential.

Allow me to turn to the Department of Indian Affairs and Northern Development. Most government departments had a 3 per cent cap in the growth rate of departmental budgets in the last Parliament. The department of Indian affairs has enjoyed exclusivity from this policy. The budget of this department should be frozen at 1993-94 levels at the very least.

Since the 1988-89 fiscal year, the departmental budget of Indian affairs has increased $1.6 billion, averaging a $275 million increase every year. This fiscal year departmental spending is projected to increase $396 million over fiscal 1993-94, representing an increase of 8.6 per cent. Compare this with the Environment Canada total operating budget of $737 million. The Department of Indian Affairs and Northern Development increase is almost half of its total budget.

Is there anyone who believes that these spending increases are sustainable or can be attributed to demographics? According to the Department of Indian Affairs and Northern Development, there are 997,000 people in the aboriginal population in Canada. Total federal aboriginal spending now exceeds $7 billion or $28,000 per family of four. I ask if this spending has brought our aboriginal peoples any closer to self-sufficiency.

The myriad of programs and services provided by other government departments for Indian affairs confuses an already complex situation regarding programs and their delivery.

One does not have to look far to find examples of a lack of accountability within the Indian affairs department. For over 20 years the Auditor General has been raising concerns over the management of programs and delivery of services by Indian affairs. In his 1993 report, the Canadian aboriginal economic development strategy is cited as a function where lack of appropriate performance and evaluation information impedes the necessary accountability within the aboriginal communities and between the government and Parliament. This has cost the taxpayer approximately $1 billion since 1989.

The Auditor General went on to say that the department could not demonstrate that it was meeting the strategy's objectives.

As another example in 1992-93 Canada's status Indians and Inuit received non-insured health benefits totalling $422 million administered by the Department of National Health and Welfare. The Auditor General's 1993 report states that the cost of this program could have been reduced by $85 million or 20 per cent if the benefits had been provided in accordance with national program directives and principles.

The Auditor General concludes that the information provided to him on the program continues to fall far short of reasonable and adequate disclosure.

It is evident that reforms must be initiated. A Department of Indian Affairs and Northern Development budget freeze at 1993-94 levels would stimulate activity in priority setting in a long overdue way. The current situation stifles creativity.

Hon. Anne McLellan (Minister of Natural Resources)

Mr. Speaker, I am pleased to rise today in support of the first budget of this government announced on February 22 by my colleague, the hon. Minister of Finance.

This budget deserves the support of this House because it provides a solid framework which will both stimulate economic growth and set the course for long term fiscal restraint and responsibility. As the member for Edmonton Northwest, I am very encouraged by this budget. It addresses those issues that the residents of my riding raised with me during the election, issues of job creation, deficit reduction and meaningful reforms to Canada's social programs.

In addition, there are several announcements concerning the activities of my department, Natural Resources Canada, that I wish to highlight.

First I wish to discuss aspects of the budget which affect my constituents in the riding of Edmonton Northwest. The unemployment rate in Edmonton Northwest is high. However, with this budget the government will help restore hope and prosperity not only to the residents of Edmonton but to all Canadians.

A key component in restoring this hope and prosperity will be the creation of jobs by the private sector. In my riding as in many others these jobs will be created primarily by small businesses.

For example, mine is a riding of small businesses. There are over 5,000 such businesses creating employment in my riding.

This budget recognizes the importance of small business, supports its further growth and encourages its natural creativity and initiative. For example we have cut back on premiums for unemployment insurance. That will save businesses $300 million a year which they can now reinvest in new jobs. The government will consult with banks for the first time to develop a code of conduct for small business lending.

The budget also creates Canada business service centres in every province to facilitate contact with our government. It establishes the Canada investment fund to streamline badly needed access to venture capital for small enterprises.

In addition this budget addresses the badly needed reform of our social programs. Our social security system was designed for a different era and no longer meets Canadians' needs. We have hundreds of thousands of Canadians who are unemployed, underemployed or stuck on social assistance, who see unfairness and disincentives in the system and who live in poverty.

We will undertake this reform of Canada's social programs through a wide ranging process of consultation involving other levels of government, the private sector, members of Parliament and their constituents. There will be numerous opportunities over the next few months for constituents in Edmonton and elsewhere to participate in this process and I encourage them to do so.

Now I would like to turn to another key component of the budget, deficit reduction.

As stated by my colleague, the Minister of Finance, the budget reduces the deficit from $45.7 billion in 1993-94 to $39.7 billion in 1994-95 and $32.7 billion in 1995-96. In terms of spending cuts this is the most significant budget we have seen in this country in 10 years.

One of the key components of the deficit reduction program is major cuts in defence spending, some $1.9 billion over the next three years. The budget contained the announcement that 21 defence facilities across Canada would be closed or restructured. While these decisions were not easy they are an example of the tough choices this government has promised to make to get our spending under control.

In Alberta alone the net saving which will be achieved through cuts in defence spending is approximately $44 million annually. We in Edmonton with a proud and long military tradition know that we must do our part to ensure an efficient and effective yet streamlined military force.

At CFB Edmonton several operations will be transferred out, including the search and rescue squadron to Yellowknife and the air transport squadron to Trenton and Winnipeg. These and other operational changes will result in a net saving of approximately $36 million annually.

At the same time the Lord Strathcona Horse Brigade will be transferred from CFB Calgary to CFB Edmonton. By reducing the transit time to the main training area for these troops at Camp Wainwright and by closing the Harvery barracks, this move represents a saving of $6 million annually to taxpayers. In addition, the closure of CFB Penhold will achieve another $2 million in annual savings.

The government believes that our defence infrastructure has far exceeded for many years any probable and reasonable defence needs. The announcements of reductions reflect the realities of the nineties that with the end of the cold war Canada's military presence must be rethought and reconfigured.

The budget also focuses on achieving greater equality in social conditions for all Canadians. In this budget we see investments made in women's health care issues, the well-being of children, young Canadians and aboriginal peoples. These issues are very important to me as they are to many in my riding.

I am very pleased to note several announcements which follow from our promises to Canadians in the red book. The budget provides funding for a centre of excellence for women's health, a prenatal program for low income pregnant women, an aboriginal head start program, a new youth service corps and youth internship and apprenticeship programs.

I believe these programs are long overdue in terms of responding to the needs of these groups and individuals. The introduction of these initiatives demonstrates that this government is committed to the equality of all Canadians.

Further, these programs represent a key step toward meeting the challenge which the Minister of Finance identified in his budget speech, the challenge to construct responsible social programs which are affordable.

Several aspects of the Minister of Finance's announcements will have a direct effect on the women of this country. For example, I would like to note that the package of reforms to the unemployment insurance program will help the women of Canada. As the Minister of Finance said, it is often women who bear the brunt of social stress and economic dislocation.

He said that during our budget consultations a number of issues were raised regarding disparities in the tax and income support systems.

Specifically, while the unemployment insurance benefit rate will be reduced to 55 per cent, the rate will be 60 per cent for individuals with modest incomes who support children or older parents. Many of those people are single mothers. There will be amendments to the provisions governing workers who quit their jobs voluntarily or are fired for misconduct. This acknowledges the concerns of the many women who voice their opposition to

the introduction of these provisions by the previous government.

Furthermore, I am very pleased to note that the Minister of Finance announced that he will act on the recommendations of the federal-provincial family law committee which has been studying the issue of tax treatment of child support payments and the related issues of their levels and enforcement.

While these measures respond to the specific needs of Canadian women, they also respond to the pressing need to reform Canada's outdated social security system to ensure that system builds bridges to work and that system encourages independence, not dependence.

The Minister of Finance also discusses in the budget a number of measures which will create economic renewal and revitalization, including the infrastructure program. In Alberta total investment in infrastructure development and enhancement and job creation will be $518 million. The creation of both short and long term employment, particularly in centres with high unemployment such as Edmonton, comes as welcome news.

Moreover, the infrastructure program will improve national, provincial and local competitiveness and help promote improved environmental quality.

For example, I know that the Edmonton city council is considering a number of projects, including the construction of a major roadway interchange along a truck route, improvements to the Gold Bar Wastewater Treatment Plant and the extension of its river valley park system.

Such programs will help to ensure that Edmonton not only remains a good place to conduct business, but also that its citizens continue to enjoy a high quality of life.

I have addressed some aspects of the budget which directly affect my constituents in Edmonton Northwest. Now I would like to turn to issues which deal with my responsibilities as Minister of Natural Resources.

Let me emphasize the fact that Canada's natural resource sectors are industrial cornerstones of Canada's economy. Through our general economic policies and the work of my department this government is committed to ensuring that the energy, mining and forestry sectors continue to provide jobs for Canadians, stimulating the economies of hundreds of communities in all regions of this nation and continuing to contribute to Canada's positive balance of trade.

Before I discuss specific budget announcements affecting these industrial sectors I would like to address two key concerns identified by Albertans in discussions leading up to this budget. First, the federal government's acting unilaterally to impose a carbon tax was of great concern to some Albertans prior to the budget speech. The Minister of Finance did not impose a carbon tax.

In addition, the Minister of Finance did not reduce tax rebates for privately owned utilities.

One of the things this new government will accentuate is a partnership approach with all key stakeholders such as other levels of government, industry, labour, et cetera. Gone are the days when governments could impose solutions without consulting with those who will be most affected.

The goal of the Public Utilities Income Tax Transfer Act, also known inelegantly as PUITTA, is to reduce interprovincial tax disparities and provide a balanced playing field for crown and investor owned utilities and their customers wherever they are located in Canada.

The principal beneficiaries of PUITTA are those provinces with investor owned utilities of which Alberta, Nova Scotia and Prince Edward Island are the main examples. Under the PUITTA legislation the federal government rebates 85.5 per cent of the federal income taxes paid by investor owned utility companies back to the provinces.

The government is not abolishing PUITTA but merely extending the current restraint on its growth. Albertans are not being targeted. Their utilities receive better treatment from the federal government than from their own provincial government.

In 1990 the Alberta government abolished its own equivalent of the federal PUITTA program.

I would like to turn now to the changes affecting class 34, capital cost allowances. First, I should explain that class 34 allowed the right-off of certain equipment used in co-generation, the recovery of waste heat and renewable energy, including active solar heating, small hydro, energy from wood and municipal wastes and wind energy.

In this budget class 34 has been eliminated and we have created a new and expanded class. Class 34 was created in 1976 and was designed to encourage business and industry to reduce energy waste and use renewable energy sources.

On the energy efficiency side many of the standards used under class 34 were based on the technology of the seventies. Since the purpose of the tax write-off mechanism is to encourage the use of leading edge technology the standards needed to be revised, and accordingly the new class does just that.

On the renewable energy side we have created a new class that now has expanded to include three new renewable energy sources. Photovoltaic energy, geothermal energy for electricity

production and methane from landfill sites and sewage treatment facilities are now included in the new class.

The initiatives under this new class will contribute to the government's greenhouse gas emission objectives. In addition, the government is examining a variety of measures under the national air issues co-ordination mechanism. This examination includes several measures to increase the use of renewable energy in Canada.

There has been criticism about the fact that this budget does not do anything to improve the prospects for mineral exploration in Canada. First of all, the Liberal Party of Canada was the only federal party to have a platform on mining during the election campaign.

Let me also point out that this budget was one of the first in years to address the concerns of the mining and mineral industry in this country. The tax changes concerning mine reclamation, which I will discuss in a few moments, prove that this government is committed to the future of this industry in Canada.

The mining policy mapped out by my party notes the serious economic implications of Canada's declining ore reserves due to inadequate grass roots exploration. The Minister of Finance has listened carefully to my concerns regarding the ore reserve and mineral exploration issues.

He has also carefully considered concerns registered by organizations such as Save Our North, the Prospectors and Developers Association of Canada and various regional prospectors and developers associations. However, the government's immediate agenda for taking action to stimulate mineral exploration and other desirable economic activity must take into account constraints imposed by the country's current fiscal situation.

I should also point out that this issue is being examined through a consultative process called the Whitehorse mining initiative. This initiative, as I know members are aware, is driven by industry and includes federal, provincial and territorial governments, native peoples, environmental groups and other related stakeholders.

Mining has been a significant factor in this country's economic growth since before its very inception. As I mentioned earlier, the mining industry has demonstrated its commitment to Canada through the development of the Whitehorse mining initiative. Late last September the industry launched an impressive public information campaign called "Keep Mining in Canada" which my department enthusiastically supports.

In this campaign's ten point plan the industry called on government to change the tax laws on mine reclamation funding to encourage investment in new mines. Briefly, mine reclamation is the process of decommissioning and rehabilitating mine sites following closure and the termination of production. It involves restoring the site to the same or better state than existed prior to the development of the mine. As I am sure members can appreciate, this often costly process supports our commitment to sustainable development.

By bringing in changes to the mine reclamation tax fund regulations, the Minister of Finance has created greater equity in the tax system. The government has taken a position that is fair to both small and large companies. Smaller single mine companies are put on a level playing field with large mining corporations.

With the new measure such small companies will be able to take the deduction up front to the extent that they are required by provincial governments to make payments into mine reclamation funds.

In short, the measure the Minister of Finance has taken is good for environmental protection. It has brought greater equality into the income tax system and has increased the cash flow of large and small mining companies.

This measure also represents an annual investment of about $15 million by the Government of Canada in our mining industry. I believe this measure addresses some of the concerns raised by the Keep Mining in Canada campaign. It also supports the improvement of the investment climate without doing something which could prove to be fiscally imprudent.

I should add the perception that this new measure creates a system of double taxation for mining companies is false. While fund earnings are taken into taxable income twice, there is a corresponding deduction for the amount of reclamation expenses. Therefore in reality tax is paid only once on the fund earnings.

Finally I should emphasize several measures announced by the Minister of Finance which have positive benefits for client sectors of Natural Resources Canada.

As I mentioned earlier the reduction of UI premiums is estimated to provide businesses with some $300 million to put people back to work. I believe this will spur job creation in small businesses engaged in energy, mining and forestry activities throughout this country.

The establishment of the youth corps is also expected to provide young Canadians with the opportunity to gain valuable on the job experience in our forestry sector. The apprenticeship program will enable other young Canadians to get valuable experience in all three sectors supported by my department.

The technology network represents a first step toward improving the linkage between federal government research and development institutes, universities and the private sector. That linkage will be extremely important as every country in the world seeks to set up electronic highways to improve its competitive edge.

Besides the potential increase in demand for forestry products the residential rehabilitation assistance program may also increase demand for energy efficient products that have been

developed by industry in co-operation with my department's research and technology arm, CANMET.

The redefinition of Canada's involvement in space will boost our commitment to the continued development of Canada's expertise in remote sensing. As members know the Canada Centre for Remote Sensing which is a division of the surveys, mapping and remote sensing sector of my department was almost single-handedly responsible for the push in the early 1970s to develop our expertise in the field of space.

Mr. Speaker, I see that my time is almost up.

I was just going to ask the hon. minister if she could give me some assistance and possibly indicate as to how much longer she might be.

Ms. McLellan

Two minutes.

Is there unanimous consent for the minister to conclude her remarks?

Agreed.

Ms. McLellan

Mr. Speaker, these last two points I have raised only begin to scratch the surface of my department in terms of its importance in the development of Canada's science and technology expertise.

I can assure members of this House that Natural Resources Canada is committed to greater efficiency in its operations in order to maximize its contribution to Canada's science and technology capabilities which are key to our future prospects for economic growth and job creation.

In closing, as the member for Edmonton Northwest and Minister of Natural Resources, I urge this House to fully support the announcements my colleague the hon. Minister of Finance has made concerning this government's first budget.

Canada faces serious challenges as we move together toward the next century. I believe these measures provide an extremely positive and useful series of first steps to get this country on the road to a more competitive standing in global markets and to get Canadians back to work.

Much has been said about this government's commitment to the concept of sustainable development. It is clear we must move carefully to achieve a balance in decision making between environmental and economic objectives.

At this time our movement toward sustainable development must progress carefully. We know very well that the wrong signals to the marketplace will have a drastic effect on our ability to encourage environmental sensitivity. All Canadians must work to balance environmental and economic objectives. It is that simple.

In conclusion this budget will rekindle that confidence. It is the kind of confidence this country needs to get hundreds of thousands of Canadians back to work and to fulfil their desire to make a positive contribution to the future of this great nation.

Mr. Nic Leblanc (Longueuil)

Mr. Speaker, I do not think the Secretary of State for Human Resources really understands what the budget does. At least not the way I understand it. I do not see how she, as the Secretary of State for Human Resources, could let the Minister of Finance increase unemployment insurance premiums by $800 million. And since she is supposed to help Canadians who need assistance, I wonder why she let the Minister of Finance raise the minimum entrance requirement and reduce the number of weeks during which claimants can collect benefits. It seems to me that the minister does not have a great deal of influence with the Minister of Finance.

She also talked about research and development. I may remind her that at this very moment, $1 billion more is being spent annually on research and development in Ontario than in Quebec. I hope that from now on she will monitor the situation closely and ensure that funding is distributed more equitably.

She also mentioned infrastructures and the many jobs this will create. I say it will not happen, because increasing unemployment insurance premiums by $800 million means that consumers will have that amount less to spend. The government reduces our purchasing power by $800 million but allocates $1 billion for infrastructures, which means zilch for job creation.

It is clear this budget is not about job creation but job reduction.

Furthermore, corporate taxes will be increased by $1.7 billion and individual income tax by $1.8 million, over the next three years.

If the government thinks this is going to create jobs, I think the reverse will happen. That is why I completely disagree with the secretary of state. And now for my main question, which concerns her directly. Considering her responsibilities in this area, how could she let the Minister of Finance raise unemployment insurance premiums for the current year and reduce unemployment insurance benefits? In other words, how can she let the Minister of Finance do the exact opposite of what she should be doing in her own department, which is to improve the well-being of Canadians?

Ms. McLellan

Mr. Speaker, perhaps my hon. colleague is under some misapprehension as to who I am and what I do. I am not the secretary of state for human resources. I am the Ministerof Natural Resources. There is a difference, although I take the

point that perhaps our greatest natural resource in this country is our people. Having said that I will respond to a couple of the comments made by my learned colleague.

In relation to his concern about unemployment insurance as my comments indicated the reforms of this system are ongoing. There will be a far reaching consultative process with Canadians. In the interim however we have targeted those people most in need to ensure that their benefits are increased. Those most in need with modest incomes, with dependents be they children, elderly parents or disabled family members, are going to see their benefits increase to 60 per cent.

In relation to the hon. member's concern about jobs and job creation this government believes the single greatest engine of job creation in this country will be small business.

I reiterate those steps the Minister of Finance and this government have taken to encourage small business to create more jobs. The Minister of Finance offered small business a challenge in his budget. I have no reason to believe that the small businesses will not take that challenge and create tens of thousands of new jobs across this country.

Mr. John Williams (St. Albert)

Mr. Speaker, in her concluding remarks in answer to the previous question the minister said she had every reason to believe business is going to take up this challenge and create hundreds of thousands of new jobs. Why then do we actually need an infrastructure program which is going to cost the taxpayers another $6 billion?

The minister asked us to endorse the budget that was brought down by the Minister of Finance. In her speech she talked about creating jobs through small business. Why do we need a $6 billion infrastructure program that loads more taxes and more debt on the taxpayer? We have argued for a long time to start reducing taxes and allow business to do its job and that is how we will start creating employment.

In her remarks on unemployment insurance she was taking great credit for the fact that government is reducing UI premiums. Remember however that on January 1 the government increased the UI and now is taking it back. The net result is absolutely zero. For the government to take credit for reducing the UI premiums I think is false on its part.

The hon. minister talks about the budget, taking great credit for reducing the deficit to $32 billion. By the minister's own admission it will drop on its own to $41 billion this coming year.

Why is the minister asking for our support when the Minister of Finance brought down a dismal budget? It has not been accepted by Canadians and Canadians recognize that government has not even started to address the deficit problem, adding another $100 billion in debt.

Will the minister please explain why we should support the budget as brought down by the minister because I do not think we should.

Ms. McLellan

Mr. Speaker, in relation to the infrastructure program and small businesses, small businesses will create jobs. What do small businesses need to create those jobs-renovated and rebuilt infrastructure. They need good public transportation, good roads, good sewer systems, cleaner air. That is what they need to compete with their competitors around the world.

It is interesting that our major global competitors, Germany, Japan and the United States, are contributing billions and billions of dollars over the next 10 years to renovate their public infrastructure. Why? They know it is a public responsibility to provide the foundation, the bricks and the mortar, so businesses can then do the job they do best which is to create wealth and put people back to work.

That is why this government, with its commitment to long term thinking, is making this short term commitment to the renovation of this country's infrastructure.