Lloyd AXWORTHY

AXWORTHY, The Hon. Lloyd, P.C., O.C., O.M., B.A., M.A., Ph.D.

Personal Data

Party
Liberal
Constituency
Winnipeg South Centre (Manitoba)
Birth Date
December 21, 1939
Website
http://en.wikipedia.org/wiki/Lloyd_Axworthy
PARLINFO
http://www.parl.gc.ca/parlinfo/Files/Parliamentarian.aspx?Item=19dd9722-bc3e-4711-ac9e-913b7fd56106&Language=E&Section=ALL
Profession
administrator, professor

Parliamentary Career

May 22, 1979 - December 14, 1979
LIB
  Winnipeg--Fort Garry (Manitoba)
February 18, 1980 - July 9, 1984
LIB
  Winnipeg--Fort Garry (Manitoba)
  • Minister of Employment and Immigration (March 3, 1980 - August 11, 1983)
  • Minister responsible for the Status of Women (March 3, 1980 - September 21, 1981)
  • Minister of Transport (August 12, 1983 - June 29, 1984)
  • Minister of State (Canadian Wheat Board) (June 30, 1984 - September 16, 1984)
  • Minister of Transport (June 30, 1984 - September 16, 1984)
September 4, 1984 - October 1, 1988
LIB
  Winnipeg--Fort Garry (Manitoba)
  • Minister of State (Canadian Wheat Board) (June 30, 1984 - September 16, 1984)
  • Minister of Transport (June 30, 1984 - September 16, 1984)
November 21, 1988 - September 8, 1993
LIB
  Winnipeg South Centre (Manitoba)
October 25, 1993 - April 27, 1997
LIB
  Winnipeg South Centre (Manitoba)
  • Minister of Western Economic Diversification (November 4, 1993 - January 24, 1996)
  • Minister of Employment and Immigration (November 4, 1993 - January 24, 1996)
  • Minister of Labour (November 4, 1993 - February 21, 1995)
  • Minister of Foreign Affairs (January 25, 1996 - October 16, 2000)
June 2, 1997 - October 22, 2000
LIB
  Winnipeg South Centre (Manitoba)
  • Minister of Foreign Affairs (January 25, 1996 - October 16, 2000)

Most Recent Speeches (Page 1436 of 1440)


November 6, 1979

Mr. Lloyd Axworthy (Winnipeg-Fort Garry):

Mr. Speaker, 1 thought this moment would never come. I should say to hon. members opposite that while some of my colleagues have some concern, I have another prurient interest in this first instalment of the love letters between Fabien and Joe. The reason why we would like to have them tabled and appended to Hansard, 1 suspect, is that they will become a great best seller, particularly when we see the second instalment as we have heard the disclaimer of the hon. member for Beauce (Mr. Roy) of unrequited satisfaction, and we hope to see the second letter from the Prime Minister (Mr. Clark) by about 9.30 p.m., so that we know exactly what the love letters in the second instalment really have to say.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
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November 6, 1979

Mr. Axworthy:

If you want my picture, Mr. Speaker, you are welcome to it. I do not care.

I want to say a few words on this motion of non-confidence. First, 1 should like to start by speaking about the purpose of the non-confidence motion. We have heard certain allusions to the motives for this non-confidence motion today. The Prime Minister simply said it was a ritual. If that was a ritual, then he has gone to an awful lot of effort to make a deal on that ritual.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
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November 6, 1979

Mr. Axworthy:

The hon. member opposite does not know much about housing. By the first month in 1980 housing starts in the country will be down 30 per cent. That information comes from every industrial spokesman. The minister of housing said that he knew there was a problem, but he had no fiscal room; he had no money to spend. Why is the Minister of Finance laying $575 million on the table for a program which will not provide additional home ownership opportunities? In fact the HUD AC group indicated that 875,000 families have been eliminated from the housing market. Not only has the government failed to add new opportunities, it has taken opportunities away from close to 900,000 Canadian families. How can the government be treated seriously? How can Canadians accept the government at its face value? How can Canadians accept the government's word when it engages in contradictory policies which have no sense or substance?

One cannot justify the lack of action, protection and cushioning in a period of intense interest rates when one knows that the Minister of Finance is sitting on his bundle of money which he is prepared to spend foolishly.

I sat here in absolute amazement when the Prime Minister said, "I have got secret information". This is the man who believes in openness. He has secret information indicating that because of the awful job the Liberals have done, he can project the deficit going up to $14 billion.

It is no secret why the deficit is going up to $14 billion. It is the Conservative government which decided to spend $2.3 billion on its mortgage deductibility plan. It is the Conservative government which talked about spending $2.7 billion on the national deficit to buy back Petro-Canada. We know what is causing the deficit; it is their initiatives. It is time the government stopped trying to pawn it off on the previous government. We are asking the government to become concerned about the present and not the past, rather than engaging in frivolous leaps into the fuzzy future about which the Prime Minister likes to talk. He said that we will have oil by 1990, but the people are concerned about what they will pay for oil in 1980. They are concerned about the fact that if the $4 increase goes into effect, they will be paying an additional $300 a month for fuel oil. That is what they are concerned about.

When we asked the Minister of Energy, Mines and Resources (Mr. Hnatyshyn), the living example of altruism and obtuseness, what exactly he will do, he said, "I think I have something in the way of a taxation policy". That comes as big news. The minister is providing no assurances. He is providing no security for the people who must face the prospect of substantial heating bill and gas consumption increases because of that $4 increase. In my own province the $4

November 6, 1979

Severe Economic Hardship

increase will pull close to $200 million out of the provincial economy. That is $200 million which we can ill afford.

What answer do we receive from the first minister and the Minister of Energy, Mines and Resources? They say, "Don't worry, we will make a deal with Mr. Lougheed". 1 know what kind of deal will be made. Mr. Lougheed has said what the deal will be. The only deal Mr. Lougheed will accept is: when he gets all the money he will lend it back to Manitobans at a 12 per cent interest rate. That is the deal Mr. Lougheed wants. It is an interesting example of Tory economics. They take the windfall rents off those resources, transfer them to one province, and lend the money back to other provinces at exorbitant interest rates. How can that so-called energy package be justified? It is a package which has become unstrung and untied very quickly.

The question of pricing is really the key issue at the heart of our non-confidence motion. There is no credibility or acceptance on the part of Canadians concerning the government's energy package, because they know the facts. They know the facts when it comes to those interesting allocations that we will give oil companies.

During question period today, the Minister of Energy, Mines and Resources and the Prime Minister said that we must rely upon the multinationals to supply us with energy. I have an interesting column which indicates that multinationals are spending their profits, not on exploring for new energy, but for tomato greenhouses in southern Ontario. I have nothing against tomato greenhouses in southern Ontario, but why are they spending the excess profits from natural resources to build subdivisions in Alberta, tomato farms in Ontario, and fast food restaurants along the 401 ?

How can the Minister of Energy, Mines and Resources gain any kind of acceptance on the part of the Canadian public when they know that the excess profits now being earned are not being turned back into exploration and development but are being diversified for takeovers, acquisitions, mergers, and new commercial ventures which have nothing to do with energy problems? They call that an energy package; they call that an energy policy? Of course the minister is now prepared to accept that because he has his deals in, he has his arrangements made, yet we know that kind of transfer of wealth, with all the tomato farms in southern Ontario, is only going to the treasuries in New York, Chicago, Geneva and wherever else.

When we are talking about the deficit problem in this country, what is a greater addition to the deficit than additional excess profits to multinational oil corporations which are immediately transferred out of Canada? How do we justify those kinds of profits when this minister gives us no assurance that he is prepared to step in to ensure that the profits will not be used for these extraneous, superfluous purposes, but will in fact be used to gain self-sufficiency? There is no assurance of that kind forthcoming, and again the actions speak much louder than the words.

We note the same kind of arrangement when we consider the pricing arrangement as far as energy is concerned, particularly in terms of development itself and public accountability. I listened again with frank amazement to the first minister today who said we can be sure that the government will set up an institution to take public moneys and reinvest it in energy development. That sounded to me like a pretty good description of Petro-Canada. Why are we going through the silly exercise of ripping Petro-Canada apart, selling off bits and pieces and adding to the public deficit $2.3 billion, in order to set up another institution which is going to do the same thing? Surely members opposite, even those from Alberta, must be able to figure out that this can cause serious duplication and wasted effort.

Let us take the first minister at his own words. Let us have a reversal of his Petro-Canada stand and let us have a windfall profit tax. Let us take the money from that tax and put it into PetroCan so it can invest in new oil developments, tar sands, offshore developments, and renewable resources. That is a great, sensational idea. But, let us do it with the instrument we have and let us not waste time, the taxpayers' money, the efforts of this government and the time of this House wrecking apart a vehicle and a mechanism which is already in place.

Again, how can the government ask people to take it seriously? That is why the two-by-four has to come over the head so we can bring them back to their senses and make them realize what they are really doing. If the first minister is honest and forthright in what he is saying, and I accept that he is, then we say go ahead and do this and we will support him. If the government puts the money into PetroCan, the money it gets from the windfall profit tax, there will be no argument from this side of the House.

We also think there has to be substantial concern about the recycling of those additional, excess profits. There should be a very clear statement about this rather than the fuzzy vagueness we have heard so far about the need for consumer credit. We should recycle this right across the country to ensure that the consumers do not have to bear the full brunt of those increased prices.

It is only a national government with a full range of instruments at its disposal that can undertake that kind of activity. Perhaps the fact that frightens us the most on this side of the House is the same fact that was noted in the report of the Economic Council of Canada, that increasingly the ability of the federal government to manage the economy and to make decisions work in the interest of a number of regions in Canada is being evaporated and eroded by the giveaways and the erosions of the federal structure. That particular process has proceeded faster and further in the last six months than in the last 16 years in this country.

This Prime Minister and this government have given away more power, more jurisdiction, more authority and more instruments, and are talking about doing so even more, than any other government in the history of this country. Yet they turn around and say they want to manage, they want to be tough and they want to be strong. One needs something in his

November 6, 1979

hands in order to do that. One needs some tools to do the job. We cannot get by on empty rhetoric and words. If the first minister of this country thinks he can get by with his acts of friendly persuasion, without having any leverage, anything to call to account and anything to take to the bargaining table, then he is in for a sorry surprise.

I was in the provincial legislature for six years.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
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October 30, 1979

Mr. Axworthy:

What happens with soapbox artists, Mr. Speaker, is they are able to produce a lot of noise but no light. That has been their basic practice in this House. As long as they can keep yelling, screaming, pounding and clapping, no one will really bother looking at what they have to say, which usually adds up to nothing anyway.

What should concern members of this House is not so much what is happening with the rump group in the corner, but that many of the same bad habits are being picked up by members opposite. They think in this time and age the only way to combat the purities of the left wing is to ascribe a purity to the right wing.

We had a perfect example in the speeches last night when we were raised to elevations by the theological purity of the hon. member for Edmonton East (Mr. Yurko) regarding the free market, that wonderful mechanism that has done so much for so long. As a result we have this basis of total domination

[Mr. Axworthy.)

versus the free market. It is beginning to sound as if this is a college common room. We are not talking about practical things any more.

We have the theorists and philosophers on the right now combining with the theorists and philosophers on the left. I am afraid that theology is not what is in order in Canada today. We need hard economics. The only exception to that is the Minister of Finance (Mr. Crosbie) who does not believe in theology but thinks he is Johnny Carson. He thinks that rather than worry about economic policy, he should practise his new comedy routine.

The question we have to pose is, when do we get serious about the economic conditions of this country? When do we start looking at taxation policies which are going to make some practical sense? If I still have a moment or two, perhaps I can provide some illustrations to these philosophers to the left and the right. I do not want to confuse them with the facts; I know that would interfere with their particular sort of music.

It is important to recognize certain facts about the way the economy has been working in this country. Let us deal with these gentlemen on the right. They seem to feel there is an enormous burden hanging around the necks of the Canadian taxpayer, that everyone is walking around overburdened by this enormous government expenditure. They like to parade in front of us glorious examples, such as a country like West Germany which is so free of these kinds of burdens and whose economy is so forceful.

I wish to point out that according to a recent report by the OECD the percentage of expenditure in Canada of government taxation related to the gross national product is less than in West Germany. How does that fit with the facts that are constantly paraded before us, that the amount of taxation that is dispensed in this country is less than in West Germany? It is only one percentage point above that of the United States, the home of free enterprise. Therefore, this enormous burden we have been told about simply does not exist in terms of the facts.

What does exist is that there is a large cluster of countries, all of which have a percentage between 30 and 35 per cent of their GNP. Obviously that suggests there are more complicated and more real factors at work in the economy than the hyperbolic situation of this enormous government albatross bearing down upon the backs of the people.

The Tories simply do not look at where the economy is going or what it has been doing. They prefer to deal in the areas of vision and fantasy rather than look at the facts. The facts are here in the Department of Finance report. I suggest that the Minister of Finance, who so conveniently provides memoranda for members of the finance committee, should provide some of the same literature from his department to his own caucus and recommend that they start reading these facts.

On the same kind of account, I listened with a great deal of amusement to the hand-wringing, teeth-gnashing and caterwauling of the NDP last night about how for yeaifs those nasty Liberals had really put it to the poor people. That is the kind

October 30, 1979

of sob story we received about how awful the tax system would be.

I refer members of the NDP to the same report, which points out in terms of lower income groups that they have a much higher degree of discretionary income than almost any other country in the OECD. In fact, it has improved by close to 50 per cent in the past three or four years. When you look at the number of tax exemptions that are available to low and modest income Canadians, they have far more tax exemptions than are available to the West Germans, Americans or those in most any other country.

All of a sudden we have found that rather than have the previous government in the back pockets of the big corporations, as they like to testify, the fact is they have far more discretionary income and there have been far more initiatives taken to lower taxation for those groups. As a result, there is far more income available to the very group about which they are concerned.

A member from one of the Vancouver ridings, I forget which one it is, used a term which 1 do not think is considered parliamentary under the Hansard arrangement. 1 would not want to repeat it. I would suggest to her, if that is so, that she take a course in straight reading of English. I am prepared to do that for her. I know it is not printed in the language that she is prepared to use as it does not include those kinds of phrases, but it does suggest that for the income group under $5,000, discretionary income for a family of four has gone up 8.3 per cent over the past year; and for the income group between $5,000 and $10,000 it has gone up 9.4 per cent in the last year. Again, 1 know they do not want to be confused by the facts. I know that is not the socialist way to live. They do not want to look at what is real or effective. They simply want to go by the theories learned at the knee of some U. of T. professor. It is about time they looked at the facts so that their economic comments could be more effective and useful.

Once we get away from the political dialogues coming from left and right we can start looking at the real problems in taxation policy, and there has been no more real problem apparent than the whole issue of what we should do about interest rates, because those rates are directly related to the tax policies we have in place. When we look at the statements being made by members of the government the first thing we should discount is their constant survival technique of saying "It was your fault." The fact is that many of the measures now being introduced were not the fault of those previous Liberals but are initiatives taken by this government.

I point out one particular concern. We find the Minister of Finance and the Prime Minister (Mr. Clark) pledging that they are going to stand in the trenches and fight the good battle against inflation. They are going to be Horatio on the bridge and get tough and do all the things that are required. They say, "Boy, if it's going to hurt the people it's going to have to hurt because eventually we are going to get a solution." And how do they propose to solve this problem? They

Income Tax Act

are going to cut back government spending. They are going to reduce the deficit.

Well, members on this side may be excused if we have the odd note of skepticism in our voice. Frankly, we do not know what to believe from members opposite. We heard during the election campaign that the best thing for the Canadian economy was to have a bigger deficit, a stimulative deficit. Apparently those words have disappeared from their vocabulary because we do not hear about a stimulative deficit any more. But that is exactly what they are intending to do, because while they are reaming the Canadian public by the increasing acceleration of interest rates, they are doing absolutely nothing to control deficit spending.

How can they with any honesty or candour stand up and say they are fighting the good economic fight when day after day they bring proposals before the House which would have the result of increasing spending and deficits? While they are talking about the need to hold firm and reduce government spending they are proposing an outlay of an additional $500 million through their mortgage tax program. Where will they get the money for that? Is it going to be concocted out of thin air or do they intend to cut back other worth-while programs? In fact, what they will do is increase the deficit, which will increase the inflationary pressure.

Along the way, Mr. Speaker, we had that grand report from the task force on PetroCan. What does it advocate? It advocates an additional $2.3 billion deficit. Could there be anything more inflationary than suggesting that the way to solve our economic problems is to add $2.3 billion to the existing $11 billion deficit? This really makes the words of the Minister of Finance turn to ashes in his mouth. How can he tell the finance committee he is fighting the good fight when his colleagues in the government are talking about adding billions of dollars to an already substantial deficit? That goes under the definition of total contradiction. You cannot have it both ways. You cannot be talking and plighting your troth about the need to restrict government spending and then have ministers say that if Petro-Canada were privatized it would be the best thing that could possibly happen.

We listened to the hon. member from Winnipeg-Assiniboine (Mr. McKenzie) give us his version of how the economy works; that is something that is probably a cross between Lewis Carroll and Walt Disney in terms of the way in which it develops fancies about the future. He was saying the Tories were going to strengthen Petro-Canada. They would strengthen it first by cutting it in half and turning it over to the private sector, which would be far better managers but would cease to do many of the things that Petro-Canada does, and strengthen it by adding a $2.3 billion deficit to the public treasury. That is a curious way in which to describe the strengthening of this oil agency. It does not add up according to even the simplest economic axiom the Conservatives appear to be using.

The fact of the matter is there is a substantial opportunity to strengthen PetroCan if the government only had the courage to take it, and the way the government could acquire that courage would be to tackle the question of oil pricing, which

October 30, 1979

Income Tax Act

they keep pushing further and further away from resolution, simply apply a windfall profits tax, and then turn the major proceeds of that tax over to PetroCan so that it could use that money for investment in energy to the benefit of all Canadians. Let us not go through the mental gymnastics in which the hon. member for Winnipeg-Assiniboine and the Minister of Finance constantly engage.

Let us talk about an option which makes some sense. Large pools of capital are being pulled out of the economy of this country and allowed to sit fallow in certain large heritage funds. These funds are not being used for investment in major energy projects, major transportation projects or for major agricultural purposes; they are simply being allowed to go unused. We have the paradox of a government which says they are good economic managers when in fact what they are doing is simply delaying the inevitable and allowing themselves to be used by a provincial premier, one who last evening had the audacity to declare his independence, in effect, from any form of common weal in this country. How the Prime Minister can calmly turn the other cheek to the challenge and threat posed by the statement of the premier of Alberta is beyond me. It simply means that the Prime Minister thinks his way of dealing with the provinces, of avoiding a fight by giving away his lunch all the time, will somehow bring about a peaceful solution. 1 have news for the Prime Minister: he has given away his last piece of lunch, he has nothing more to give. All he has done is set up a self-fulfilling prophecy, because these premiers will go after him with all the more ferocity and all the more ambition, knowing he is not prepared to stand up to them.

It is a form of betrayal of the Canadian people that we do not have a Prime Minister who is prepared to stand up to the Premier of Alberta and say: "It is absolutely necessary that on the matter of oil pricing you do not speak just for 8 per cent of the population; someone has to speak for 100 per cent of the population". I am amazed, Mr. Speaker, that the Prime Minister would allow that kind of declaration of economic separatism to be announced and not be prepared to respond with any form of strength or effectiveness. It was one of the sad moments in the history of this country when the Prime Minister once again backed away from living up to his responsibilities.

There are economic answers available; it is just that the government does not want to tackle them. Let us talk for a minute about a favourite topic of the Minister of Finance who has told us he has some choices available to him when it comes to the problem of high interest rates. He said: "1 have to hold firm on monetary policy but I do have the opportunity to make some choices fiscally". What is the choice he has made? He has made only one choice, and that is to introduce the mortgage tax credit program which he thinks will be salvation for all that ails Canadians. He stands up in the House with a great deal of flourish and says: "Think about the 3.8 million households which will get benefits under this program".

What he does not mention are the other 3.8 million households which will get no benefits under the program. Are

they somehow immune from inflation? Will they somehow be able to avoid the problem of high interest rates? What the minister is really saying is that he only cares about 30 per cent or 40 per cent of the population and that the rest of the population can be forgotten. But it is quite obvious that they, too, are affected by high interest rates.

It is not just homeowners who are faced with the problem of escalating mortgages. One of the major problems we are facing today is in the rental market. Many of those rental units were introduced under the ARP program and carry five-year mortgages at 8 per cent which are coming up for renegotiation. The rate will now be 14 per cent, a 6 per cent increase, and they will either have to declare bankruptcy or suffer substantially ballooned rents far beyond the means of most people living in them. Are they to be forgotten? Is the minister excluding that section of the population which for one reason or another decides to rent rather than own accommodation? Is the Minister of Finance saying he is prepared to forget all those who do not have mortgages and therefore will receive absolutely no benefits whatsoever other than the property tax credit, which this year will be $62.50? Is he forgetting those people who are going to find, as they face increases in oil prices which will add up to $300 or $400 on their housing bills, that somehow they are going to be included in this magic mortgage credit program? Who speaks for them? Where are choices being made for them?

The fact is that what the minister is introducing is bad economic policy. He has himself caught in the campaign commitments of his leader and is now trying to wriggle out by putting as pleasant a face on a bad proposition as he possibly can. However, it is bad economic policy because he has committed major expenditures for this year of $575 million. Next year they will be well over $1 billion and ultimately closer to $3 billion over the long term, when he has no ability, according to his own confession, to forecast what the economy will be like.

The Minister of Finance is introducing a structural economic change when what we are in desperate need of are shortterm responses to real and immediate problems. I am sure the minister's economic advisers have told him that he cannot introduce an economic instrument which has a four-year fixed term to it when the economy is gyrating like a crazy top, partly because of the decisions taken by the Bank of Canada, which is under the jurisdiction of the Minister of Finance. The minister is creating a problem and avoiding solutions.

Solutions are obvious and available to him. He could be taking that $575 million and using it to deal with some of the immediate consequences of those 14.5 per cent and 14.75 per cent interest rates on mortgages and prime loans. For example, he could be providing some emergency assistance for those who have to renegotiate their mortgages. He is condemning thousands of Canadians right now because he is not prepared, as I understand it, to make directives to the banks or the lending institutions. Thus these Canadians are locking them-

October 30, 1979

selves into mortgage rates of 14.75 per cent. If those rates go down six months from now, those people will be left in the wash. They will be high and dry up on the shore, because if interest rates recede they will still be paying 14.75 per cent carrying costs. Is that a fair and equitable kind of system? Is this a government which is really concerned about the problems of all Canadians, or is this Minister of Finance simply saying once again that he does not care and that he is not concerned about that group of people?

Is it also true that this Minister of Finance is not prepared to provide any assistance to the housing market? The volume is falling out each hour which goes by. It is in total chaos. Building starts have now fallen close to 30 per cent in the rental field. There is going to be an enormous shortage of rental accommodation come next summer. As a consequence, demand will grow and prices will go up. I think economists would call that counterproductive, and yet the minister says he has choices. Why does the minister not start exercising his choices? Why does he not come out of his comic corner now and start doing something effective to help deal with the economic problems in this country? Let him do something now. Let us not wait. What is going to happen at the end of November?

We are now going through a period in which people daily have to suffer the ravages of high interest rates. It simply is not fair for the minister to say he is going to hold the line and hold tough. It is not the Minister of Finance or the Prime Minister who is holding tough. They are forcing many very ordinary Canadians to hold tough, and those ordinary Canadians are the ones who will continue to suffer under the present circumstances.

So when it comes down to the way in which tax policies can be organized and arranged, there is much left to be said about the present state of our tax system. The only conclusion we can come to when we look at the tax policies which so far have been the product of Tory economic thinking is that the Tories are going to add substantially to the deficits of this country. They will add substantially to extended government spending, to the point where estimates are that maybe the Prime Minister was right in the election campaign that there will be a $17 billion deficit. But it will not be a deficit caused by Liberals; it will be a deficit caused by Conservatives. That is the real issue.

Maybe the Prime Minister does know something. We have asked him questions and he does not want to 'fess up, but maybe he really does know something we do not know. Maybe he knows that a big deficit is coming around the corner. With all the commitments he has made regarding allowing new tax write-offs to professional consultants, his tax credit program and his Petro-Canada proposal, we have already counted up $2 billion, $3 billion or $4 billion in additional government spending. I suppose the unstated proposition is that this government has its spending plans, and it is the unspoken conditions which the government is not prepared to disclose. That is what we are really after. The government pell-mell is going to increase deficits. At the same time it is raising interest rates. If there ever was a crazy quilt economic strategy, this one has to be it.

Income Tax Act

The government is increasing interest rates while at the same time allowing deficits to rise. How one justifies that contradiction in economic stance I simply do not know, and it is going to be a fascinating experience to watch the verbal exercises of the Minister of Finance as he tries to climb out of that particular maze. That is exactly what he is climbing into. That is the trap he now finds himself in, and it will be fascinating to watch how he manages to get out.

However, I do not think he will get out. I think what he is prepared to do is to make one simple trade-off. To satisfy the economic purists, those Adam Smith theoreticians about whom we were lectured this morning in the Standing Committee on Finance, Trade and Economic Affairs, the minister is prepared to force this country into a serious recession. That apparently is the trade-off this Minister of Finance is prepared to accept.

When we are debating tax bills I think the conditions and features of this economic theory and strategy should be more revealingly disclosed in this House. That is why I welcome this opportunity. I thank the hon. member for Edmonton East for his inspiration. I think he described Mabel the maid's backside ascending to heaven, which is probably the best description of Tory policy I have heard yet since it is simply a fantasy and a vision and has no grounding roots in the reality of the economic world.

As we use this tax bill to sell certain propositions, we say to the Minister of Finance that we would like to see some very immediate short-term steps to cushion the impact of his high interest rates and to help those people in the Canadian economy who are caught and squeezed to the point where they are simply not going to be able to recover. That is the kind of requirement the minister should recognize.

In the area of housing there is a requirement to undertake some immediate rescue operations, to provide for some stability in that market and to take a look at the phony-boloney figures the minister produced today. He said there will be only limited and negligible impacts of high interest rates. My head, Mr. Speaker! That is simply not the case. The escalating costs in these areas are close to 30 per cent to 50 per cent as a consequence of the minister's high interest rates, and he apparently is not prepared to do anything at all about them.

The minister does have choices to make. The problem is that he is refusing to make those choices, and while he refuses to make those choices, the country suffers.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
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October 30, 1979

Mr. Lloyd Axworthy (Winnipeg-Fort Garry):

Mr. Speaker, like other members on this side in the official opposition 1 was quite content to stay satisfied with the well-crafted Liberal legislation which had been presented by the Conservative party. But after listening last evening to the rather poetic description given to us by the hon. member for Edmonton East (Mr. Yurko) on Tory economic policy as being similar to someone's exposed backside ascending toward heaven, I was so inspired by that particular description of how Conservatives carry out their economic analysis that I felt it deserved at least some reply from members on this side. I suppose by way of corollary we could say that if that is a description of the way in which the Tories measure their economic performance, we can say the devil takes the hindmost in these circumstances.

Listening to the debate on this particular tax bill demonstrated to me one very clear reason why it is that this country needs a Liberal party. As we listen to the exaggerations from the left and the right, each expressing his or her own form of pristine power theology, it becomes clear that if this country were to be allowed to polarize between the extremes, such as is being advocated by members in this group and that group, what would happen is that the country would become so totally confused and overwhelmed by hyperbole of these orthodoxies

October 30, 1979

Income Tax Act

that nothing practical or realistic could be done in the way of tax policy.

There is perhaps no more important debate that takes place in this House than the analysis and estimate of how we want to allocate our taxes. It is the basic foundation document of our economic order. It determines very clearly who pays and who gets the benefits in our society. If we were simply to follow the preachments and teachings of those on the left and the right, we would find out we have a society which is carved into two totally discrete, disparate groups in which there is no common ground.

I was interested last night to hear the hon. member for Broadview (Mr. Rae) talk about the two teams of tight money.

I tended to agree in part with his analysis. There are two teams in this House. There is also a group of kibitzers on the left, the armchair quarterbacks who will never be in the game. They say they never have the opportunity to make decisions. They can afford to exercise their particular form of virtue. Someone once said you can have a lot of virtue if you have never been subject to temptation. That is certainly the case with the New Democratic Party. Of course they can express themselves with sanctimonious, virtuous statements about how to run the world. However, when have they ever had the opportunity to do anything about it? They are the classic eunuchs. They are very adapt at talking about sex because they never have to participate in it. They are really the grand observers in our economic order. They know they will never have to govern. If they want to be the kibitzers, the armchair quarterbacks observing the scene and offering their soapbox preachments, that is fine with us, but let us get back to serious debate.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
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