Debates of Feb. 29th, 2000

The Budget

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I am very happy to answer the member's questions. I know she is very concerned about the shipbuilding industry. It is a big industry in Saint John and I am aware of the high tech aspect of it. The member will find that there are certain ways we assist the shipbuilding business, if not directly then indirectly through the whole concept of scientific tax credits that go to some of the home based industries which supply that industry.

On the defence issue, I am very aware of the Sea Kings. I have had the fortune or misfortune to be inside them from time to time. Even some of my constituents are flying them. They often send me e-mail messages and so forth. I share the member's concerns. I know the Minister of National Defence does as well. I am certain we will free up some of those resources in the near future.

About the medical aspect of the budget, I do not believe it is all about money. Money is part of the health care problem, but we have a bigger problem. It is not this budget alone. It will be continuous budgets. All the health ministers in the country have to sit down together and find a holistic way to deal with the health care sector. We have one of the poorest users of high technology in the health care sector in the world. We have to deal with that too.

[Diane St-Jacques, Progressive Conservative, Shefford, QC]

Mr. Speaker, I appreciate the opportunity given me today to address this House and share my comments on the new budget by the Minister of Finance.

I wish to indicate that I will be splitting my time with my colleague for Brandon—Souris.

After hearing the budget being read, and after examining the main thrust, I have reached the conclusion that it smacks of pre-electioneering, and I will explain why.

I believe that the Minister of Finance has missed an excellent opportunity to table a budget that could have been a best-in-career for him. He had sufficient money available to him to ensure that this budget was one that would help Canadians get their heads above water again, able to catch their breath a bit, particularly after the years of austerity we have been through.

This is, of course, a budget that will please a number of people, because there is a little bit for everyone, but it is my sincere belief that it is simply smoke and mirrors, throwing around some big money. But in reality, after scrutinizing the amounts carefully, we are in a position to judge that, given the crying needs of Canadians, only minor reductions are being offered in the short term. The real gains will be felt only after several years. What is more, Canadians will not see the fulfilment of most of the promises made in this budget before the next election.

The tax relief will depend on the government's ability to manage the economy and the money given to it by taxpayers.

That being said, I must give a good mark to the Minister of Finance for fulfilling his promise regarding the Canada child tax benefit, which will increase by $70 per child, including indexation, in July 2000.

In the spring of 1998, I tabled a motion which was supported by this House. That motion asked the Minister of Finance to index the national child benefit, so that inflation would not make children and their parents even poorer. This measure meets my expectations, and I am pleased to see that my efforts bore fruit.

However, there is a fly in the ointment, I would even say two. First, it will take several years to reach the overall amount since, as is the case with the majority of the measures in this budget, the results will become significant only in 2004. Second, the government did not take any measure to prevent the provinces from clawing back these new investments from the poorest in our society.

I have always believed that the best way to help children was to help their parents. They are the ones who are in the best position to look after the most vulnerable members of our society. Therefore, it is important to make sure that parents have more money available to them, because it will benefit their children.

Unfortunately, in the budget, despite the reductions in income tax, which will appear only a few years down the road, low income Canadians will continue to pay tax even if they earn only $8,000 a year, and believe me, there are a number of them in this situation.

An increase of only $100 the first year would bring Canadians only 33 cents worth of relief a week—not much relief for the families.

This affects me closely, because I am one of those who believes that, from an economic standpoint, it is the children that replenish an economy's stock of human capital. Society as a whole has a vested interest in ensuring this human capital has every opportunity to develop so as to expand the level and quality of community life.

If we are going to spread the fulfilment of these promises over a long period, I wonder whether we will manage it. In the meantime, a lot of water will flow under the bridges, and we never know what can happen in the intervening years.

In Canada, right now, if there is one area where the situation is alarming, it is that of health care, and all the provinces are in the same position, that is, a pitiful situation. It is this government that has brought about the current crisis by taking $17 billion away from cash transfers to the provinces. This was the start of the deterioration of health care in Canada.

The budget provides for a $2.5 billion increase for health care and education. This is a derisory and disappointing sum given the urgent and essential needs in this area. I fully agree with most of the provincial governments when they say that this sum is much too small.

In addition, there is no long-term enrichment of the CHST cash transfer floor, which would give the health care system a boost.

I agree with my leader, the Rt. Hon. Joe Clark, who said that the measures announced by the Liberal government were piecemeal.

The Progressive Conservative Party has long urged that health care funding be restored to its pre-cut level, and that the cash component of the CHST be restored to the 1993 level. Right now, the CHST falls more than $4 billion short.

A one-time payment from unused funds will do nothing to help the long-term stability so vital to our health care system. The government does not understand, or is simply not listening to the demands of the provinces with respect to health funding.

In conclusion, the Minister of Finance has used the budget to try to keep everyone happy: taxes have been cut a bit but are still too high; there is some additional CHST assistance, but not nearly enough. Even with tax cuts, corporations will still be in fourth place among OECD countries. And there are some significant oversights in this budget: there is almost nothing for the most disadvantaged members of society, the homeless, and social housing.

This is a small budget whose positive effects will not start to be felt for two years. Strangely enough, that is probably when an election will be called.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, it is with a great deal of pleasure that I stand to speak to the budget that has been placed before us. I would certainly like to respond to some of the comments made by the member for Chatham—Kent Essex.

We do not necessarily have to debate this budget. Over the last four months pretty much everything that was in the budget tabled yesterday had already been tabled to the Canadian public in the newspapers and by other leaks that happened in the finance minister's department. Actually there was only one thing that was mentioned yesterday that we did not already know. I am told that a lot of the newspapers had already written their stories before the Minister of Finance tabled his budget in the House. It is rather interesting and rather strange that the finance minister cannot keep the secrets that his ministry would normally keep. In saying that, some things have dribbled out over the last little while with respect to the budget.

May I make a comment to the member for Chatham—Kent Essex. I will try to be rational. Unlike the member for Chatham—Kent Essex, I will try to stop the hyperbole and certainly the rhetoric and deal with this rationally.

Prior to this, the government continued to say that there was this huge deficit and it had to come in here and be the saviours for all Canadians. I hope the member does not hurt himself by patting himself on the back so much, but I would like to put on the record the reason the budget is now balanced and why the Liberal government can take credit for it.

From 1989 to 1992 this country suffered through the worst recession it has ever suffered through. Timing is everything. The government then in power did its best and it put forward the blueprint of which this government is now taking advantage to balance its budgets. The blueprint was a control of inflation that had been taken out of the realm of possibility by the previous Liberal government. We controlled inflation. We put an interest rate policy in place which was necessary. We put the GST in place which, if memory serves me correctly, was to be scrapped before this budget but it is still there. It was put in place so that the dollars generated could retire the deficit and it did.

By the way, the other thing that was put in place and which took us out of a horrendous recession and brought us into the economy of North America was the North American Free Trade Agreement. The government, even when it took power in 1993, was going to scrap that agreement as well. That is the backbone of our economy.

So the Liberals should take much solace in the fact that they are in government today and balancing the budgets because of the government that went before them.

Let us talk about the budget. I would like very rationally to tell Canadians not to rush out and spend the horrendous savings they will have on taxes. Do not to spend it now because they are not there today. Let us talk about the tax cuts. First of all, give credit where credit is due. In this budget, the only thing the finance minister did that was not leaked was to stop bracket creep. Good for him. Thank you, finance minister. I do appreciate very much on behalf of Canadians that he went to that length.

Let us talk about the taxes that will be seen by Canadians at the present time. Please Canada, listen very carefully. In 2000-01 Canadians will take advantage of some $4.6 billion of tax relief. This does not take into consideration the increase in the CPP requirements the government has put in place. The total tax relief that is shown here is not what will be in the pay packets of Canadians. Do not rush out, Mr. and Mrs. Canada, and spend that money just yet because it is not quite there.

Canada has to wait effectively until 2004-05 to take advantage of a full $22 billion of tax relief. That is five years. It is not today. When we hear about $58 billion of tax savings, take it with a grain of salt Canada because it is not here today.

By the way, I can live with the taxation the government has been putting in place, or the tax relief. What I cannot live with is the health care situation that it has caused in the first place and is now not prepared to fix for Canadians. Please Canada listen.

There will be $2.5 billion put into health care. Remember that. What we do not know is that it is over five years. In the 2000-01 fiscal year there will be $1 billion one time only and then half a billion dollars a year for the next four years. When Canadians hear $2.5 billion is going to health care, please listen to how it is being distributed because it still is not at the same level it was in 1993 when the government took office.

Our health care system depends on two major factors. One is the inflationary factor and the other is the aging population coming into the system. The dollars presented in this budget do not take those into consideration. No, the Liberals are not doing a wonderful job nor are they doing us any favours on health care.

Let us talk about a couple of other areas where the government continues to pat itself on the back. Let us talk about defence quickly and then agriculture.

On defence, a white paper that came from this government said that there was a requirement for $750 million just to implement the quality of life for our military. There is $5 billion necessary for capital expenditures and equipment such as the Sea Kings. I do not know if the EH-101 ever comes to mind when mentioning defence. Certainly the dollars that have been presented in this budget do not even come close to what is required by the Department of National Defence.

In agriculture the same is true. There was one line in this budget and by the way, that one line in the budget had been announced previously. It is interesting that the Prime Minister would announce a day or week previously that a $240 million one time ad hoc payment would go to Manitoba and Saskatchewan in agriculture. What the government did not do was give us the long term vision for the industry. There does not seem to be a long term vision on anything which was presented in this budget on agriculture.

A plank of the Liberal platform in the 1993 election was infrastructure for municipalities. It was dear and close to my heart at that point in time. The member for Saint John was the mayor of her city just before that time. It was a wonderful program, but let me tell Canadians about it. With the infrastructure program we have right now, it does not mean there will be $2.5 billion put into it. In fact this year, 2000-01, it will be $100 million. Next year it will be $350 million and then $500 million from that point on. It is a five year program for $2.5 billion.

Let me say right now that it is not enough. The government takes more than $4 billion a year out of the excise tax on gasoline alone and it will put $100 million into an infrastructure program for next year. It sounds like it will be an election plank. Canadians are not that silly. They understand the games that are being played. They cannot be bought with their own money. They cannot be bribed with their own money.

I like the program, but I am very concerned, because now all of a sudden what are the criteria? We are talking about a green infrastructure program. We are talking about programs for health that will have more benefits to Liberals perhaps, like the present ones at HRDC. I am very concerned as to how those dollars will flow.

Certainly, there are a lot of good things in the budget, but overall unfortunately it falls very short of where it had to be.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, the member for Brandon—Souris talked eloquently about some legacies of the Progressive Conservative government. I would like to talk briefly of the other legacies of the Progressive Conservative government that this government is eliminating. Try for example the 3% surtax in the income tax system and try the 5% surtax which the government will eliminate by 2004.

Canadians might be confused by some of the member's comments so I would like to clarify a couple of points.

First of all, the $58 billion in tax relief that we will implement is an absolute minimum. If the surpluses are larger than what we expect, we can actually exceed that number by a great deal. The other point is that the tax cuts that we are implementing, that we are legislating in this budget are worth a cumulative $43 billion over five years. It is not about a promise in the future; it is being legislated in this budget. It is $43 billion. The five year plan on personal income tax reduction will deliver $39.5 billion in personal income tax cuts. Of that, $35 billion is being legislated in this budget. This is not a promise. This is not a dream. This will happen. In fact, $58 billion is an absolute minimum and it does deserve repeating.

Members opposite keep talking about the health and social transfers to the provinces. Let me try, as many of my colleagues have tried, to clarify this. In 1993 the total transfers to the provinces were in the vicinity of $37 billion. In 1999-2000 they are $38.5 billion and they will continue to rise. We have restored the CHST to the provinces. With respect to any problems in the health care system or education, I think members should look to the Tory governments in those provinces.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, I appreciate the hon. gentleman giving credit where credit is due to the Progressive Conservative Party in trying to balance the budget. It was Mr. Trudeau, if we go back in time, who took the deficit from $18 billion to $200 billion. That is quite a multiple. Certainly, as I said, there was a blueprint that was put into place.

Let us talk about the CHST. In the government's own documents that have been tabled, the CHST for 1999-2000 is $29.4 billion. It will rise to $32.7 billion with the increase from a previous budget of $2 billion and $2.5 billion a year in 2001 and 2002, and the $500 million in previous years.

The health care system still will have less money in it in the year 2004 than it had previously. It does not matter which numbers we look at when we take into consideration the inflationary factors as well as the aged in our communities.

Does the hon. member not recognize that we have an aging population that will put more demands on the health care system? The government says constantly that money is not the necessary answer to the health care system. Possibly, but money is needed because there are more people accessing the system. If only the government could understand that perhaps its priorities could be put into the right area as opposed to the wrong areas.

I will have an opportunity to sit on that side in the not too distant future. The member for Chatham—Kent—Essex talked about the telephone booth and the two members. In 1984 the Liberals had 40 seats. History does repeat itself.

[Rose-Marie Ur, Liberal, Lambton—Kent—Middlesex, ON]

Mr. Speaker, I will be sharing my time with my hon. colleague from Mississauga South. The budget just presented by the government takes action on what matters. Tax cuts, proper investments and supporting our families are just some of the actions we have taken in response to the concerns of Canadians, including my constituents in Lambton—Kent—Middlesex, about what matters to them.

Lambton—Kent—Middlesex is a rural riding in the heart of southwestern Ontario. The largest municipality has a population of 12,000 citizens. How will this budget affect my constituents? How will it impact on families with children, people who work in the fields, in the factories or in our small business sector, the lifeblood of our rural economy? Leaving more money in the pockets of families is a pre-eminent method of relieving the day to day obligations of the most successful and powerful contributor to our nation's future prosperity, the family.

The middle class family is a big winner in this budget. It is payback time after the many years of cutbacks and financial constraints endured through the efforts of all Canadians. Their contributions to Canada's fiscal success can now be addressed by personal tax relief measures totalling $58 billion, including restoring full indexation to the tax system retroactive to January 1, 2000, lowering the middle income tax rate by 3% and raising the middle income tax threshold to $35,000.

A special emphasis on the needs of families has been shaped by this budget in its tax reduction plan. Increasing the child tax benefit by $2.5 billion a year by 2004 to more than $9 billion annually means the maximum benefit for a family's first child will grow to $2,400 from the current level of $1,805. As the Minister of Finance has stated, providing children with a safe and nurturing environment, investing in their health and education, and promoting secure families are all critical to children's sound development and ability to learn.

Relative to the current tax system a family's personal income tax will drop by an average of 21%, a significant event after many decades of tax increases and lower disposable income. Our senior citizens as well will see all their benefits indexed to inflation. Low income seniors could see a tax reduction of 84%, verifying our defence of those who have built this nation and provided our solid foundation, our senior citizens.

We have entered the era of budget surpluses, never to return to the dark and gloomy days of deficits spiralling out of control, a dangerous national debt dooming our grandchildren's future to one of hostility and lack of hope.

I truly believe that this is a watershed budget. We have turned on to the path moving forward with confidence toward a healthier, more prosperous future with taxes being reduced and the national debt on a permanent downward track. Collectively all Canadians have achieved a financial turnaround of historic proportions by eliminating a $42 billion deficit in four years.

Maintaining sound fiscal management, showing value for the use of the hard earned taxpayer dollar and showing respect for that same dollar is how we are governing Canada. We are taking action on what matters.

We are taking action on health care, which is of critical consequence in rural areas. Lambton county in my riding has the fewest doctors per capita in the entire province. Chatham-Kent is also on the list of underserviced communities. Many residents must travel to the cities in the region for specialized care, creating burdens on those institutions as well.

Our commitment on behalf of Canadians is to increase transfer payments to record levels, $31 billion this year alone and rising to $43.7 billion by 2004. I hope Premier Mike Harris will actually spend this new money on health care. Last year Ontario received an extra $1.5 billion in transfers and the premier said emphatically that he would spend every cent on health care. Unfortunately the premier's actions did not match his words. Only about half the $1.5 billion was spent on health care, with $700 million spent elsewhere, perhaps to pay for tax cuts. I implore the premier to follow the federal Liberal government's lead and take action on what matters.

Infrastructure is also of interest in my riding. The multi-year plan to improve highways and municipal infrastructure will be of great benefit. The former Canada infrastructure works program resulted in $23 million in projects in my riding, helping to build much needed medical centres and firehalls, to name just a few.

A major overhaul of Canada's border control is also welcomed. Southern Ontario has seen troubling incidents of illegal migrants, dozens at a time, using Canada as a conduit for their attempts at U.S. entry. My constituents will be pleased that millions of dollars will be invested wisely to help the RCMP, Canada Customs, and the Department of Citizenship and Immigration with extra resources to monitor the movements of high risk people and goods and to improve the immigration and refugee determination system by making it more effective and efficient.

If members of parliament eat at least once a day they are supporters of agriculture. We know that the return of farmers from the marketplace is getting lower and lower while the grocery stores and the middle men reap the profits from our world-class food system. The extra billion dollars announced in January by the minister of agriculture is welcome news. I look forward to further discussions on farm aid as we work toward an appropriate national farm safety net system that treats all farmers equally.

Factoring in the costs of production as the old GRIP accomplished would be right and proper. Having spoken with Ron McDougall, Ken Bee, chairman of the Ontario Soybean Growers Marketing Board, Don McCabe of the Ontario Corn Producers, and Ron Martin who is with the Ontario Wheat Growers, I acknowledge their concerns. These gentlemen, among others, are urging the government to extend the market revenue insurance plan beyond the next two years to help in long term financial planning. They have made a number of excellent suggestions as well to improve the national safety net program.

In a recent speech by Philip Shaw of Dresden, Ontario, writer of “Under the Agridome” in the Voice of the Farmer publication, he points out that a first rate and viable safety net is absolutely essential if farmers in Ontario and elsewhere in Canada are to sustain a long term agricultural outlook. I agree with him. Let us work together and put these ideas into action on behalf of our primary producers.

On behalf of my constituents I believe the budget sets a course for a better future by taking action on what matters. We are resolute in sustaining sound financial management by keeping the budget balanced, putting a curb on reckless government spending, continuing our prudent approach to budget planning, lowering our national debt and offering tax cuts across the board, helping families, farmers and rural communities.

The economic outlook is for continued strong growth with the unemployment rate at its lowest level in 24 years, with disposable income on the rise, and with consumer and business confident, upbeat and optimistic. Canada is a nation of winners and the budget sets Canada on the track for future victories so that upcoming generations will build on the success of the best nation in the world.

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, I was more than a bit interested to hear the hon. member talk about rural Canada to some extent. It was nice to hear but talk is terribly cheap. Unfortunately a lot more about the budget neglects the rural and remote areas of Canada rather than looks forward to helping rural Canada.

The Canadian Private Woodlot Owners Association has been asking for the last 10 years and has been very adamant for the last five years that the federal government find a way to incorporate sustainable development of woodlots and sustainable forestry practice into the Income Tax Act. There is nothing in the budget for sustainable woodlot management.

There is absolutely nothing in the budget for the mining communities in remote areas of Canada and in the rest of Canada in terms of flow through shares. There is no talk at all about flow through shares for exploration companies in the mining community.

There is absolutely nothing in the budget for real tax relief for farmers who need serious tax relief for over $500,000 of capital gains. There is very modest tax relief from 75% of capital gains down to 66 and two-thirds, and of that one can only claim 50%. I would say there is a lot more in the budget that does not help rural Canada than does.

She talked about infrastructure. For the first time in eons we mention wharves and infrastructure which the government decided to divest itself of. Wharves are mentioned but there is no mention of how the government plans to put money into wharves and put infrastructure money into the ports and harbours of Canada. There are a lot more unanswered questions about assistance to the rural and remote areas of Canada than questions that are answered in the budget.

[Rose-Marie Ur, Liberal, Lambton—Kent—Middlesex, ON]

Mr. Speaker, my colleague went through examples of what was missing from the budget. He can rest assured that what was written in the budget certainly reflects some of his concerns. If we turn to some of the action taken under environmental technology in our sustainable practices, some of the concerns he outlined in forestry or mining are addressed in the budget in dollar allocations regarding new technologies and new research and development.

As to the infrastructure program, it was a great success in my riding. Many of my constituents asked to support their concerns in Ottawa about the infrastructure program for firehalls, for example, as I have stated. We had built with the province and the municipality a health care centre which would not have been able to be built if we did not have that program.

It is a step in the right direction. Do we have all the dollars there that the member is asking for? I do not think so, but we are stepping in the right direction.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I listened to my colleague's comments with great interest. One of the key features of the budget was the commitment to a $58 billion tax reduction package. As we pointed out, the personal income taxes of Canadians will come down an average of 15%. If we combine that with the 10% which we implemented previously in the last two or three budgets, there is a total tax relief package of about 22%.

I know this will be a very positive development in the ridings of all members. Could the member give us an impression of what this kind of tax relief package will do for her constituents?

[Rose-Marie Ur, Liberal, Lambton—Kent—Middlesex, ON]

Mr. Speaker, I can assure my colleague that in Lambton—Kent—Middlesex the reduction in income tax was certainly well received.

I received calls today in my riding office complimenting the Minister of Finance once again on the direction he has taken with the budget. I think that was reflected in question period today when our hon. finance minister did not have to stand often. Obviously the opposition did not have many questions to ask, and that is reflective of a good budget.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, on February 16 I asked the Liberal government what action plan it had put together to defend our economy from the OPEC cartel and Canadians from the impact of record energy prices.

With the cost of home heating fuel doubling, just heating a house this winter will eat up all of the minuscule tax breaks Canadians received from the Liberals yesterday. Record gas prices, record diesel fuel prices and the energy component of our economy is very, very serious in terms of pricing.

When I asked my question, the U.S. energy secretary and the U.S. president had just announced a series of measures designed to help Americans, especially in the northeastern states, to deal with the sudden run-up in costs of these essential energy commodities.

The U.S. president said that he was deeply disturbed by the trouble this was causing Americans and that his administration was monitoring the situation on a daily basis. With his energy secretary he announced 17 different measures, including assistance for low income earners to pay their heating bills, loan assistance for truckers and so on. Moreover, the energy secretary held a summit with oil companies, state government officials and affected stakeholders in Boston on the very day I raised the issue in the House.

The contrast between the U.S. administration and the Canadian Liberal government on this matter should be the cause of grave embarrassment to the government and to the Minister of Industry. Instead of concern, we got partisan scorn. Instead of caring, we got buck passing. Instead of an answer, we got hogwash.

First, the industry minister said “If it is so important, why do provinces like Saskatchewan not do something?” Not to defend the provinces, but their fuel taxes do not go up when gas prices go up or when diesel prices go up or when home heating fuel goes up, but federal taxes like the GST and the BST do go up.

If the minister really advocates the provinces regulating energy prices, he should say so. Otherwise he is just passing the buck again.

Next the minister suggested that the government had in fact already been discussing this issue with the provinces and territories. I checked. The council of energy ministers has not had the issue of gasoline prices on its agenda since the summer of 1998. It was not on that agenda because the federal government put it there; it was there at the request of the Yukon NDP energy minister in 1998.

Also, the ministers responsible for consumer affairs agreed to fund a study on competition in gasoline pricing, but the minister picked the same consultant who wrote a previous study for the big oil companies, and now everyone else is boycotting. Who is going to read the study? Is it going to be credible? Not likely. It will be taken seriously by no one except the Minister of Industry and the Minister of Natural Resources, who are so cozy with the oil patch they never even noticed how badly consumers are hurting from these price hikes.

In my question I expressed concern about the potential impact of rising energy prices on the inflation rate, a concern echoed by many commentators, including, on that very day, the governor of the Bank of Canada.

It is true that the data for January which was released the following week showed the overall or headline inflation rate down from 2.6% to 2.4%, but energy costs rose by an annual rate of 28.5% during that month. Those costs remain a source of concern in our economy, which relies so heavily on energy, which is the underpinning of our economy.

Because of these concerns and because Canadian consumers are hurting, I asked what the government's plan was to defend Canadians from this crisis. To its shame it had none. It was barely aware of the problem. It had no intention of showing leadership and finding a solution. It just passed the buck and hoped the problem would go away.

I wonder if the parliamentary secretary today can tell us whether his government has finally seen the light. Can he tell Canadians what action plan has been put together to defend our economy, to defend Canadian consumers, business people and farmers from the OPEC cartel?

[John Cannis, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, let me begin by saying that the embarrassment should be on the provincial governments, which have the jurisdiction, if they so wish, to regulate prices.

The minister, myself and the entire government are aware of the frustration felt by all Canadians concerning gasoline and diesel prices, as well as home heating prices. We are not passing the buck. Let me state from the outset that it was this Liberal government which started the task force to look into this issue, of which the member is well aware.

The Prime Minister, the minister and the entire government have shown great concern on this matter. That is why the minister asked the petroleum industry to meet with him to explain the reasons for the recent fuel increases.

I know that the hon. member is aware that gasoline pricing is under provincial jurisdiction. He knows that very well. There are specific examples in P.E.I., in Quebec and in Ontario where prices have been regulated.

I want to assure the member that from a competition point of view we want to ensure that the prices are determined by market forces. If it is found that there is collusion, the Competition Bureau, as it has in the past, will step in to rectify the situation and take appropriate measures.

Let me point out for the benefit of the member what has happened. For the record, crude oil prices were under $11 per barrel in 1998 and briefly exceeded just over $30 a barrel in February 2000.

Hopefully these will be some of the concerns which will be addressed at the OPEC meeting in March.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, on October 15, 1999, I asked the Minister of Foreign Affairs how he explained Canada's slowness in defending the Timorese, 78% of whom had voted in favour of their independence on August 30.

Canada, which sits on the security council, let the Indonesian militia and paramilitary plunge this poor region into a bloodbath. This is a region where a small people had been suffering from a permanent intrusion by Indonesia since 1975, when it was abandoned by Portugal.

What is of concern about Canada's slowness to act was that the minister knew since February, because a group of NGOs, including the Council of Churches, had met with him and told him that the Indonesian police and army were the accomplices of the militia and that intimidation tactics were beginning to be used.

The minister knew that the two leaders of the community, Ramos Horta and Xanana Gusmao, had called on the international community for help, because they knew that violence was about to erupt.

In fact, during the summer the international community was alerted because an intimidation campaign was going on to prevent the Timorese from voting for their independence. Opposing forces said “If you vote for independence, there will be a bloodbath”. Indeed, on September 4, when the results of the referendum were released, the carnage began.

Need I point out that Indonesia had, for over 20 years, occupied this country, that the UN organized the referendum and that it was the responsibility of the international community to ensure that this small group of people, which had faced so much, could exercise its right to self-determination?

Only Canada, of all the countries concerned, did not want to apply economic sanctions, and it made no preparations to intervene either, so that Canadian forces arrived there only on November 3.

We know now that the three weeks following the referendum gave the army and the militia the opportunity to force half the population to leave the country, kill many and destroy much of the country, so that today the Timorese are suffering.

[Robert Bertrand, Liberal, Parliamentary Secretary to Minister of National Defence]

Mr. Speaker, I am sure that everyone in this House will join me in expressing our gratitude and admiration to the more than 650 Canadian Forces personnel who have participated in the international force in East Timor.

As the UN assumes the peacekeeping duties from INTERFET, our aviators, our sailors on HMCS Protecteur returning to Esquimault this week, and members from the light infantry group from the 3rd Battalion, Royal 22nd Regiment of Valcartier still in theatre can reflect on a job well done.

These women and men have made a vital contribution to improving the desperate conditions of the East Timorese and enhancing the security of South East Asia.

Though they had one of the furthest distances to travel, they responded in good time and our Hercules aircraft were among the first of the multinational force contributors to arrive in theatre.

During their deployment, CF members provided armed security and helped to re-establish civilian institutions, including schools, churches and a police academy, in often extremely demanding conditions. They also touched the lives of thousands of displaced persons and returning refugees.

Ensuring the safety and well-being of our CF personnel is one of the highest priorities of the government and DND.

[Bill Casey, Progressive Conservative, Cumberland—Colchester, NS]

Mr. Speaker, my question is a supplementary to the question asked of the Minister of Transport. I direct my question to the very distinguished Parliamentary Secretary to the Minister of Transport.

Last summer the Minister of Transport announced that there was a crisis in the aviation industry. Not many people knew that, but he announced there was a crisis and therefore, by his very announcement, it was determined that there was a crisis. We went through a whole lot of turmoil, debate and negotiation.

As a result of the announcement that there was a crisis in the industry, the transport committee held endless meetings almost around the clock hearing from people in all facets of the aviation industry: air traffic controllers, pilots, the airlines companies and ticket agents.

At that time we were told that there was no crisis in the industry, that there was a crisis in a company in the industry. It completely proved that the department and the minister were wrong in their interpretation of the situation. As we know, it went on and on.

In any case, we ended up by adopting the dominant carrier structure that we have now, with Air Canada having virtually 80% to 85% of the entire industry totally under its control.

The minister recently tabled legislation that would help control the situation and provide protection for different parties in the aviation industry both from the consumer's point of view and from the industry's point of view.

I would like the parliamentary secretary to provide us with the position of the government on ownership restrictions as far as foreign ownership goes, restrictions as far as maximum ownership by any one single party.

What protections are there for the regional airports? All the airports in Atlantic Canada are really suffering now because of the reduction in flights, reduction in revenues from landing fees and terminal fees. What protection is there for those airports?

What protection is there for consumers who are already feeling the bite of the added burden on Air Canada? Flights have been discontinued and cancelled. It has created chaos in the airports.

What protection is there for employees that are affected by this? What protection is there to guarantee that there will be competition against the dominant carrier in this one line dominant carrier structure?

Would the parliamentary secretary please enlighten us as to the position on those items?

[Stan Dromisky, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, it gives me a great deal of pleasure to respond to at least one of the concerns the distinguished member for Cumberland—Colchester has presented.

In the policy framework released on October 26 I stated that our vision for the 21st century is a safe and healthy Canadian airline industry capable of competing with the biggest and best airlines in the world, serving all parts of the country at fair prices and controlled by Canadians for Canadians.

In that context the Government of Canada asked parliamentarians for their input on among other things whether increasing the current 10% limit on individual shareholdings in Air Canada to a new level would contribute to achieving a healthy Canadian controlled airline industry. The Government of Canada has benefited from the views of parliamentarians expressed in the reports from the standing committees of both Houses in finalizing the legislation which we now have introduced.

The government has decided to raise the individual ownership limit for Air Canada from 10% to 15%. This increase formed part of the exchange of letters outlining commitments that Air Canada made to the government in order to gain approval for its takeover of Canadian Airlines last December. Air Canada has stated that it is satisfied with the government's decision.

The government believes that this increase will allow greater investment while providing Air Canada with the stability it needs during this transition period. This change accords with the government stated intention in the policy framework to ensure that we have a safe, healthy, Canadian controlled air industry that meets our domestic and international requirements and the needs of Canadians well into the 21st century.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, on February 23 I had the opportunity to ask the Minister of Foreign Affairs about a white paper that was issued by mainland China on the previous day. In that white paper Beijing threatened to adopt all drastic measures possible, including the use of force, if Taiwan did not set a date for the discussions on reunification back to communist control.

Incidentally, just six days earlier the vice-president of the Republic of China, Mr. Lien Chan, spoke to the mainland affairs committee. I would like to quote just one paragraph from his statement:

During the past 50 years, the two sides have experienced conflicts and antagonism, wasting excessive resources and manpower. At the beginning of the new century, we should no longer be tangled in these quarrels between brothers, which only hurt brotherly feelings and do nothing good for the international community. Therefore, I would like to propose that the governments and peoples on the two sides of the strait adopt a new way of thinking. Let us show our courage and a sense of mission to permanently abandon to the old century those wars and conflicts which have tied us down for nearly half a century.

The intention of the Taiwanese government is very clear, the government of a democratic nation.

The Minister of Foreign Affairs responded that Canada has always supported peaceful negotiations and that they will again relay that message to Beijing.

However there are no circumstances in which the threat of war is appropriate. I would like to ask the parliamentary secretary if he could explain to the House why Canada's response is not a stronger response. We need to defend democracies. We need to defend peaceful nations that do not want war.

[Denis Paradis, Liberal, Parliamentary Secretary to Minister of Foreign Affairs]

Mr. Speaker, for a long time now, Canada has been urging Peking and Taipei to use peaceful means to resolve their differences.

We believe that the two parties should renew their dialogue as quickly as possible in order to arrive at a better understanding and thus reduce tensions in the region.

Canada continues to avail itself of opportunities to communicate its concerns. During a visit to Beijing on February 21 to 24, the assistant deputy minister for Asia-Pacific and Africa, Joseph Caron, emphasized Canada's concerns directly with the vice-minister of foreign affairs in Beijing. Our ambassador to China further underlined these concerns in a separate meeting with the vice-minister. In both of those meetings we stressed our concerns about the threat of military confrontation and strongly appealed for a peaceful and negotiated settlement. These concerns were also reiterated to the Chinese ambassador in Ottawa.

Canada's one China policy remains unchanged. We do have extensive economic, cultural and people to people contacts with Taiwan. We have used our informal channels to convey our concerns on this issue to Taipei.

[The Acting Speaker (Mr. McClelland)]

It being 6.51 p.m., the House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 24(1).

(The House adjourned at 6.51 p.m.)