Alex Shepherd

[Supply, March 22nd, 1994]

Madam Speaker, I will give the hon. member a brief example. The erection of a building will create technological innovation for my riding. I do not believe once the building goes up the function that goes on there will suddenly not have an ongoing factor. It is just the reverse. I believe infrastructure spending will continue.

By the way, why do we not talk about Japan? Japan has a surplus and it still has unemployment.

[Supply, March 22nd, 1994]

Madam Speaker, I thank the hon. member for his question. Basically he is quite right. There is only one taxpayer in Canada. The question is how to best utilize our economic resources so that we create employment. The infrastructure spending program, as I just mentioned, has an expansionary effect. In other words as people go back to work they start paying taxes and reducing the deficit. Clearly we cannot continue with such high levels of unemployment. The real way to reduce our debt is to get a lot of people back to work.

I am always amazed hon. members to my left invariably talk about the federal deficit as if it were some kind of unusual phenomenon of the Canadian federalist system. The province of Quebec has a debt. The province of Ontario has a debt. France has a debt. The United Kingdom has a debt. There is nothing unique about the federal government deficit. They all have debt. The problem is that we have to deal with it.

Trying to turn this whole system on its head and blaming the federal government for the fact that we have to pay interest on our federal debt is not a realistic argument.

[Supply, March 22nd, 1994]

Madam Speaker, it is always a great delight to follow my hon. colleague, the member for Burin-St. George's.

Concerning this motion brought forward by the hon. member for Mercier, lack of vision and lack of concrete measures relating to jobs, I have to speak against it.

I want to talk about unemployment. Unemployment in this House has been regarded as something bad, something unfortunate, something systemic of our capitalist society and something that is wrong about where we are going in our life.

I would like to give a little history lesson, going back to the 17th century when people did not understand the concept of unemployment, when people worked seven days a week and basically dropped dead from work. There was no such thing as unemployment. They had to survive by working day in and day out.

By the 19th century we were into the industrial revolution. Things were not necessarily any better but there was a better standard of living. People started to live longer. By the time we got to the 20th century and the Second World War we discovered that we had developed all kinds of new technologies, all kinds of things that made our businesses and our lifestyles more liveable. We discovered that we did not have to work the long hours we did in the past.

Around that same time the labour force participation rate in Canada went up. In other words, more people, mainly females, joined the workforce. We had a huge increase in the supply of labour, all at the same time that our technologies were becoming innovative.

Now we are abreast with the 21st century. This is a knowledge based society. New technology has come to the fore: computers, computer graphics, laser technology, all kinds of new innovations that have made this the knowledge based society.

What has this done? This has created even further unemployment. I wonder if people could put their eyes on the concept that unemployment is merely a factor between needed productive hours and productive capacity. By that I mean we need x number of labour hours to produce our output. The reality is that these relationships have been changing over time. As we become a more technological society, we suddenly discover we need less labour input.

I question whether this is a failure of our system or whether it is something to be proud of. Are we evolving into a society in which we have to work fewer hours?

I can remember when I was very young my parents working six days a week. During my working years we have all worked five days a week. The question is do we need to work as many hours as we do and why are we working as many hours as we do? Maybe we are chasing a materialistic society. Maybe we are chasing all kinds of things that we do not really need.

The reality is unemployment has continued to go up from the 17th century right up until today. We can look at a number of features if we want to focus on the unemployed; those 1.559 million people currently out of work in Canada, plus a certain number of those on welfare, who could be gainfully employed.

As a consequence we have a huge mass of people not working. At the same time we have people in our workforce who are working 60 hours and 70 hours a week. Clearly the problem with unemployment is not that it exists but that it is concentrated in a small group of people. Unfortunately it is getting larger.

What is the solution to this problem? The problem is that unemployment is concentrated in the youth, the unskilled and in those who have watched their skills change. This is probably a growing sector of our unemployment. Those people possibly in their forties who started off in the job market believing that they had a job for life have found that structural unemployment has caught up with them and put them out of a job.

How are we going to change our unemployment rate? Our unemployment rate, as I mentioned, is merely a factor of required labour hours. Either we increase the number of labour hours by increasing our business activity or we change the labour hours to some extent. I will leave the debate about changing labour hours for another day.

Basically our other orientation is to increase the number of required labour hours by increasing productivity. Within that parameter of increased labour hours we also have to look back at the pool of the unemployed, the people who are unskilled, those people who have structural change in their lives where their skills have disappeared and the youth who possibly have dropped out of school at a very early age and similarly are unskilled. How could we address increasing the number of labour hours? We can do it in two ways. We can increase our productivity.

The government has enacted legislation regarding a reduction in payroll taxes. It would reduce the costs of businesses to employ people. It would create an incentive for businesses to employ more people and to expand in our society. It would create a demand for more labour hours. This is something our government has done, and I go back to the original motion, in terms of concrete measures.

We have implemented an infrastructure spending program to create assets, to create productive resources. One municipality in my riding has agreed to increase the size of its arena. It has an employment policy to employ local workers. People who are unemployed will be working. There is a promise of work. The infrastructure spending program is what I call seed capital because it has a tendency to grow. If a job is created for one person working on the arena, he goes downtown and buys more products. He consumes more. He creates more jobs. It is a way to increase productivity.

We have addressed to some extent the need of small and medium sized businesses to have access to better capital. We have done it in a number of ways. We have talked about implementing a code of ethics with the banks to allow small businesses better access to capital markets. We will also implement other programs to deal with access to equity capital markets. Once again it will give business an incentive to create new jobs.

Another initiative of ours is the information highway. It is another aspect of 21st century technology; it brings Canada into the 21st century. It is the second stage of our technological revolution.

Finally, we have to increase the opportunity for wages and employment. We have to look at the pool of unemployed people. Do not mistake what I have said. I did not say it was good that all these people are unemployed. I am saying that unemployment may be with us for a long time. It may be an asset if we handle it properly.

To effect skills so that people who are unemployed today have better access to the job market when expansion occurs we have the youth corps. It will teach some skills to young people who are currently unemployed and have dropped out of the high school system. We have implemented an apprenticeship program to give young people and others job experience. It will give better skills to those people whose skills have shifted over the years.

The original motion refers to lack of vision and lack of concrete measures. That is not so.

[Supply, March 22nd, 1994]

Madam Speaker, I would like to thank my hon. colleague for his speech and assure him that I come from the small business sector as well. I am a chartered accountant and worked many years with small businesses and I even have two or three of my own small businesses still in operation. Much to his chagrin, that is just not the case on the government side of this House.

The hon. member made a comparison between Hong Kong and Canada. That is very easy to do. He talks about a 15 per cent income tax rate, but he did not really tell us about whether Hong Kong has a medicare system or whether it has other kinds of social welfare systems that the people of Canada have learned to expect and live with.

I wonder if the hon. member could mention some of those points.

[Borrowing Authority Act, 1994-95, March 7th, 1994]

Mr. Speaker, I would like to speak in support of the budget. The budget is about jobs. It is about opportunity. It is about a new path away from the past, the path of unemployment, of poverty, of stress. It is about a new path for the future which involves new technology and growth for our economy.

It is about new initiatives such as the Canadian investment fund. This fund will be sponsored by the banks as well as governments in a supportive partnership to find and finance new technology for new jobs.

It is about a technological network, where we encourage the use of technology and people getting these technologies together to create new wealth.

It is also about a study into our pension funds, how we invest our money, and how we can utilize that money in our economy.

If we reduced unemployment by 4.5 per cent we would create $70 billion, more than enough money to pay off our deficit, to create a surplus, to put people back to work. That is the long term goal of the budget.

We talk in the budget about a new code of ethics for the banks and how they deal with small businesses. We have heard constantly of how small business enterprises are having difficulty raising capital. Why should this be? After all, that is what banks do for a living. One thing we have not focused on very effectively is that the government is competing in the capital markets with small business. A $500 billion deficit means the government competes in the market for the same supply of funds to finance small businesses.

People have not realized how our economy has changed over the years. When we think of British Columbia, we think of the forestry. There are more people employed in medical research in British Columbia than in the forestry. When we think of Nova Scotia, we think of the fishery. There are more people employed in teaching in Nova Scotia than in the fishery. The banks we talk about have only 6 per cent of the capital base of the country.

In some ways we are going at this in the wrong way. I suggest that we need to take the studies that are mentioned in the budget to review pension funds and how the savings of Canadians can be more effectively used to support the economy. The budget refers to research and development initiatives, more expenditure on things like the space program. This will put Canada into the 21st century.

My hon. friend, the minister of state talked earlier today about the information highway and how this is going to bring Canada into the 21st century, linking up our small communities, linguistic groups and things of commonality throughout this country, making this nation strong and whole again.

Why does the government have to get involved in all these things? Why has this become a problem? Why have we come to this point in our history where we are living through this deep recession? I suggest it is partially the psychology of Canadians in general. We have not invested in our own economy.

The economy is probably typified more than in any other country in the world by foreign ownership. Canadians have allowed foreigners to control major sectors of their economy. I am talking about automobile manufacturing, aluminum smelting, big sections of the forestry industry and on and on it goes. What has the effect of this done to us? We have not had significant investments in research and development. We have short changed our future by allowing others to take over the role of investment.

Fortunately the world has changed in a very effective way for Canada. We are now seeing the end of what I and many have called the smokestack economy. The larger companies in our economy are getting smaller every day. Many of us in our ridings feel this very much as these companies shed employment. These are the things that make the headlines in our local newspapers. However, this is also an opportunity. It is an opportunity for Canadians to take control of their economy once again.

Why is it that someone living in a home on a particular street is complaining about receiving 5.5 per cent interest rate on a guaranteed investment certificate and someone else in a company is laying off workers because they cannot get capital to finance their business. This is the dilemma and the strange aspect that affects Canada today.

Why is it our small businesses cannot get access to equity capital? What is it that prevents them from raising funds in the open market? It is very costly to get access to our market exchange. Many TSE and other stocks are foreign owned.

For the small businessman it is almost impossible to jump from his small business entrepreneurial investment and get access to registered stock exchanges.

What is the solution to some of these problems? I suggest that the budget has started us on the path to a new definition of access to capital and how Canadians have to take control of the economy into their own hands.

We have a number of institutions we can utilize to create new capital and confidence for Canadians by investing in the economy. The National Research Council, as members know, is very interested and has been very involved in new technology.

My review and discussions with some people at the National Research Council leads me to the conclusion that 75 per cent of all inventions the council has created over the years are still resident in Ottawa. We are not involving this kind of technology in the marketplace. I am happy to say that the industry ministry has talked about departmentalizing and moving some departments out into the areas where businesses are affected. I believe that the National Research Council could be an effective method of certifying processes.

Another agency we now have is the Federal Business Development Bank. I believe it can act as a secondary marketing tool creating pools of minority interests in small businesses to sell these pools to registered retirement savings plans and other pension funds. In this way Canadians will have some assurance and liquidity from the aspect of investing their money in Canadian small businesses.

How many times have we as members of Parliament watched some of our clients come before us, our constituents, and talk about the fact that they have a good process, that everybody wants it, that it is marketable, but they cannot receive funding for it and they have to go south of the border? What happens to most of them is they fail. We have to do better.

I believe that the budget is only the first step in the long process of creating new capital for Canadian businesses and ending our drudgery with unemployment.

[Governor General, March 7th, 1994]

Mr. Speaker, our Governor General has come under criticism recently. I believe that the people of Canada want and deserve a greater voice in choosing our head of state.

While I realize that the Governor General is the Queen's representative, I also note that the Queen generally accepts the advice of the elected Government of Canada.

In order to heighten the legitimacy of this office, I believe that the time has come for the Governor General to be elected by all the people of Canada. I note that the vast majority of the industrialized countries that are our trading partners elect their heads of states.

Currently our system is one of appointment which I feel has outlived its usefulness.

Electing the head of state would be an excellent opportunity for the people to be involved in our nation's affairs and, at the same time, would make the office directly responsible to all the people of Canada.

[The Budget, February 24th, 1994]

Mr. Speaker, I would like to speak in favour of the budget as presented by the hon. Minister of Finance.

My hon. colleague has spoken of the five and one plan. Tonight I only want to deal with a two and one plan, that is, two expenditure cuts with one expenditure increase.

First, I would like to discuss the actions the hon. Minister of Finance has taken with regard to the federal civil service. I am sure that our civil service across this country is basically hard working and shares the commitment of the government toward a prosperous Canada. There are those who feel that the continued freeze of $500 million in 1994-95 fiscal period and the further $620 million in the 1995-96 fiscal period is a great hardship.

I would like to point out that this only represents a reduction in the federal civil service payroll of 2.2 per cent.

I know that many of us are all too well aware of reductions much more significant than this by national and international companies based in our own ridings. I would like to refer to a study done by the Canadian Federation of Independent Businesses which undertook an analysis of the 1991 Canada census data.

It discovered in all sectors of employment that the federal civil service had the highest paid workers in all classification for all sectors studied in all urban areas across this country. On average, the federal civil service is paid 13.9 per cent higher than similar classifications of the private sector.

What sort of a message does this send our workers and taxpayers?

I have been unable to find similar parallels in any other country in the world. At a time when we are negotiating international trade agreements such as NAFTA and GATT with the objective of making our private sectors more competitive, we discover that the federal government is over burdened by an inequitable wage system.

I note that the finance minister has attempted to deal with this very serious situation by proposing payroll freezes in the hopes of curtailing layoffs. Having said that, I acknowledge the planned layoffs which are to occur in the military, being well over 17,000 jobs.

Not only is the civil service pay structure out of step with the private sector, many of my constituents inform me of great difficulties in dealing with the personnel of the civil service who often do not return phone calls, often have work hours which are inconsistent with the concept of service. I know that there are many individual conscientious civil servants but it would appear

that there is much that we have to do in improving service in the federal civil service.

I would now like to address the second of my points dealing with the expenditure support of the budget. This is the area of social programs.

The Minister of Human Resources has often stated Canada's social programs were designed for another time and another place. There is a tremendous structural change sweeping our country. This change means that my generation, a generation that thought our career paths were set for life, now finds itself without jobs and uncertain of the future.

We have to reach out to these people and give them hope but also give them the tools to find alternate employment. It is not good enough to talk about retraining and train people for jobs that either do not exist or will not exist in the near future.

The government has to show leadership in planning the training needs of the future. This is why the federal government must retain its discretionary spending power in this area across this nation to set national training standards.

What does this say about our present social welfare system? It says that it is no longer sustainable. It says that we are creating social ghettos in which we subsidize people to do nothing, fostering a loss of self-respect and dignity. We must do better.

Our benefits under the unemployment insurance system in this country are in excess of 20 per cent of the average of the United States and indeed all G-7 countries. I have always believed that money restored energy. It is a human's way of taking work and converting it into a liquid commodity.

For instance, if I pay someone at the front door of this place $25 he or she will use their car and expend natural resources and time to drive me to the train station. To take money and give it to people to have them simply subsist is an insult to human intelligence. We must use unemployment insurance and other forms of transfers to individuals to assist them to rise up and take control of their lives. I am talking about using these funds to send them to learn new skills so that everyone can benefit from the new challenges of an evolving economy.

I now want to talk about the final point in my support of the budget and that deals with the area of small and medium size businesses. Much talk has been made around this place on this issue and much discussion has been made about the relation of these businesses with the banking community.

I would like to draw the attention of the House to the fact that these institutions account for less than 6 per cent of all deposits in this country. As a consequence, castigating this sector, the banking sector, is much like trying to fix a leaky row boat to cross the Great Lakes. It will not do the job even if we do fix it.

I note that the minister has elected to study pension funds and how they can be used to more effectively finance small and medium size businesses. Clearly, this is the right direction.

The minister has also pointed to a number of government initiatives in the budget. These include Canadian investment fund, business network strategies and the establishment of business service centres for one stop shopping for government services. One feature of these initiatives is the electronic highway.

The railway bounded this country in our history, then roads made it easier for people to communicate. Finally, the telephone first operated in Canada so that we could even more effectively deal with each other. Our diversity and the fact that we are spread fairly thin across this great nation turned us into the world's expert in the field of communication.

While we have squabbled about our internal problems, as my colleagues to the left of me continue to do, the real world is passing us by. We need to get on with the fourth stage of our nation building. The ability to link each individual in the country by means of an electronic highway, regardless of language or culture is our challenge.

I am proud to note that the government has provided funding for this worthwhile project, recognizing that it, together with the initiatives for the small and medium sized business sector, will set the agenda for a new tomorrow for all Canadians.

[Cp Rail, February 7th, 1994]

Mr. Speaker, those of us who are proud Canadians are offended that CP Rail has decided to change its company logo into what in effect looks like the Canadian flag becoming or being subsumed into the America flag.

It is not just Canadians who are offended by this logo. This logo has also been challenged in the United States for defaming the American flag.

Regardless of CP's rights as a private company to choose any logo it wants, Canadians should have a voice in this matter. CP Rail is a company that Canadian taxpayers have helped to establish through subsidies, outright gifts of land and other means. I note that most of the track in eastern Canada is owned by CN and more precisely, the taxpayers of Canada.

Currently CN, which displays the Canadian flag on its trains, and CP are in negotiations for consolidation of rail service in eastern Canada.

I would like to bring this matter to the attention of the House so that we can convey our desire to have the Canadian flag and not the offensive logo of CP Rail flying over taxpayers' property in eastern Canada.

[Pre-Budget Consultations, February 1st, 1994]

Mr. Speaker, basically what I was trying to say by the whole tenor of my speech was that we have to get back to focusing away from pure subsidization of consumption.

What I am proposing is that we need some other kinds of incentives to our young people rather than just being in receipt of consumption income. We should have to earn it somehow. Basically one earns that by being engaged in education or by pursuing a better career, which are useful aspects to one's society, or by being involved in the labour market.

In my campaign during the last election I ran into many young people who are abusing the system. It is not acceptable. We talk about our commitment to youth. We are sending some terrible signals to our young people. We are telling them it is acceptable to do this. What we have to do is give them encouragement to get back into the job market and to give them their dignity and self-respect back.

[Pre-Budget Consultations, February 1st, 1994]

Mr. Speaker, I do not think it is unusually small. Indeed the finance department's estimates are that this is a $650 million loss of revenue had those exemptions not been available in the last taxation year 1991, I believe.

It is significant, but what we need to do, getting back to the government's agenda, is to re-focus on where we want those exemptions to exist. Currently I suspect the lion's share of those exemptions are in stock trading and investment real estate transactions.

Basically, our problem today is clearly that the small business sector is under siege and one of its biggest problems is capital. I would not say the banks of this country are failing the small business sector, but their debt type of financing is not what the small business sector is looking for. It is looking for equity and equity participation and we must spend a considerable amount of time to formulate these markets.

What I am suggesting is that we have a significant shift in our taxation system which recognizes that we need to have the underpinnings of the small business investment there and that

we expend one. However, as the Minister of Finance has mentioned, if we are going to do one thing we have to pay for it and the way we are going to pay for it is to reduce the $100,000 exemption on other forms of investment.