Mr. Dan Heap (Spadina):
Mr. Speaker, on Wednesday, October 14, I asked the Minister of Finance (Mr. MacEachen) on behalf of the Spadina voters who sent me here if he would instruct the Governor of the Bank of Canada to lower the interest rate structure to a tolerable level. The minister's reply was disappointing. He merely saluted the worn-out dogma that high interest rates are anti-inflationary. Is he still asking Canadians to believe that he will cure high prices by pricing
money higher than this country has ever seen before in order to cool down inflation? This was the policy of the late Conservative government, to concentrate spending power in the hands of a few, a policy that pleases those few and only those few.
This is still Conservative policy, as shown by the fact that when the leader of the nominal opposition asked questions on this last week, he was careful to avoid asking that the interest rate be brought down. He just said, let's have a review. He asked that there be subsidies to home owners rather than a new interest rate and investment policy that would bring health back to our economy.
What is disappointing and new is that the Liberal government, through the Minister of Finance, has also completely surrendered now to the philosophy of making the rich richer and the poor poorer. This present government and the one before it proved this policy to be a failure.
Inflation ran at 10 per cent in 1977. In four years, while inflation rose from 10 to 13 per cent, interest rates were going from 12 to 15 to 18 to 20 per cent and beyond. They had nothing to do with stopping inflation.
The government's new energy prices, up one third from last year, are sure to push inflation higher still. Will the minister care if interest rates rise to 25 or 30 per cent? The question is, how long can we wait for the minister's dogmatic policy to cure inflation? In fact, his cure is worse than his disease. His high interest rates are not cooling down demand as much as they are choking off production and supply and making inflation worse.
The number of officially unemployed jumped in one month, September, by 18 per cent. That is, 144,000 more Canadian men and women are not allowed to work productively. Does the minister like that cure for inflation? The Spadina voters clearly do not.
Small business bankruptcies jumped in that same month by 26 per cent. Spadina is the major small business centre for Ontario, if not for Canada. We have retail stores, specialty service shops, hundreds of textile and clothing manufacturers and distributors, the printing trades, the office furniture and supply trades, the restaurant and entertainment establishments and many more small and medium-sized businesses. Does the minister take pride in driving them into bankruptcy at a rate now increased by 26 per cent?
We have, I admit, very little farmland in Spadina, but our people do like to eat. We are told by the National Farmers Union that farmers now no longer spend 15 but 30 per cent of their income on carrying charges. No wonder grocery prices are rising faster than any other part of our cost of living. The banks take their share before we eat.
Does the minister plan to price food absolutely beyond the reach of Canadian working people? That might cure inflation in a sense, but not many of us would be around to enjoy it. There is, of course, one small group who are not suffering. The assets of the five largest banks in Canada went from $42 billion in 1970 to $260 billion in 1980, a fivefold increase.
October 22, 1981
Their profits went from $362 million in 1970 to $1,186 million in 1980, an increase of two and one quarter times. During that time, this Liberal government, whose Minister of Finance tells us about his daily conversations with the bankers, generously reduced their effective tax rate from 46 per cent to 16 per cent, less than a bank teller pays. How did the banks respond to that handout? Those corporate welfare bums increased the spread between the rate they pay to their depositors and the rate they charge their borrowers by 50 per cent.
The working men and women, Mr. Speaker, and small business operators of Spadina have recently shown this government that they are not the docile and stupid voters that this government thought they were when it sprung the Spadina byelection. If the minister persists in feeding his friends, the bankers, by starving the people who produce the wealth in Canada, the rest of the Canadian voters will soon send them the same message.
Topic: PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic: REQUEST THAT GOVERNOR OF BANK OF CANADA BE INSTRUCTED TO LOWER INTEREST RATES