Manitoba Hansard — 18 September 1989 (Sitting 31A, 34th Legislature, 2nd Session)

34-2-31a

Manitoba — Debates (Hansard)

LEGISLATIVE ASSEMBLY OF MANITOBA Monday, September 18, 1989. The House met at 1:30 p.m. PRAYERS ROUTINE PROCEEDINGS TABLING OF REPORTS Hon. James McCrae (Attorney General): Mr. Speaker, I am tabling today the 66th Annual Report of the Manitoba Liquor Control Commission for the fiscal year April 1, 1988, to March 31, 1989. INTRODUCTION OF GUESTS Mr. Speaker: Prior to oral questions, I would like to take this opportunity to draw Honourable Members' attention to the Clerk's Table, where we have with us today Mr. Smirle Forsyth, who is a Clerk Assistant of the Ontario Legislativ e Assembly.

On behalf of Honourable Members, we welcome you here this afternoon. ORAL QUESTION PERIOD Goods and Services Tax Premier's Intervention Mrs. Sharon Carstairs (Leader of the Opposition): Mr. Speaker, it is good to be back. It is time for this Government to once again be held accountable . This Government ran a campaign on the theme of management , but good management is not letting the federal Government walk all over you . Good Government and good management is not firing, pushing aside the head of day care because you do not like the message that the day care director delivers .

Good management is not underspending in health so elective surgery becomes emergency. Good management is not giving personal staff salary increases of 15 percent to 24 percent. Good management is tackling difficult issues head- on and finding solutions. The question on every Manitoban's mind and is the perfect example of poor management of issues exhibited by this Premier (Mr. Filmon) is why did this Premier, in his meeting with the Prime Minister on the 27th of August, not raise with the Prime Minister Manitoba's absolute rejecti on of the 9 percent GST? Hon. Gary Filmon (Premier): Mr.

Speaker, it is good to be back and I am delighted to hear that the Leader of the Opposition (Mrs . Carsta irs) has not changed her tune or her position, so that makes it a lot easier for us. We know exactly what she is going to say, exactly what she is going to do. We know about her negativism, and we know about her wrongly-placed priorities in Manitoba. *

(1335) As a "for instance," I recall approximately three months ago-maybe it was four-that she said the most important thing I ought to be doing is to meet with the Prime Minister to tell him about our concerns for economic deve lopm ent and job creation in Manitoba, specifically as it applies to Portage la Prairie, Mr. Speaker. So when I had the opportunity to meet with the Prime Minister of Canada, what did I talk about first and foremost as a priority? -(interjection)- I talked about- Mr. Speaker: Order, please. The Honourable First Minister. Mr. Filmon: Mr.

Speaker, we talked about economic development and job creation for Manitoba and specifically what could we do to help the people of Portage la Prairie. Now of course the Leader of the Opposition (Mrs. Carstairs) has already abandoned the people of Portage la Prairie. She does not care about them . She does not care about them. She has got a new political issue that she thinks will get her more attention and more publici ty, but I do not have those problems with consistency .

I went to talk to him about economic development I went to talk to him about jobs for people in Manitoba and the people of Portage la Prairie, and we got an announcement very shortly thereafter . A combine plant, 200 jobs - Mr. Speaker: Order, please; order, please. The Honourable Leader of the Opposition . Mrs. Carstairs: Mr. Speaker, he had an hour-or-so meeting . He raised Portage, that the GST is going to have a bigger effect on economic development and jobs in this province than any single action of the federal Government, that on the GST the Prime Minister was going to read his press clippings.

Well, the Prime Minister is so busy reading his own press clippings he does not have time for his. Mr. Speaker, the First Minister (Mr. Filmon) betrayed Manitobans by not raising this issue and he betrayed them again in his inaction on cutbacks to VIA, his inaction on cutbacks to UIC, and his inaction on early grain payments to farmers. When will this First Minister take the opportunities that are given to him, and they are given to him rarely, to speak up and out on behalf of the people of Manitoba? Mr. Filmon: Well, Mr.

Speaker, I knew precisely that we had to get the attention of the federal Government so I went to the Premiers' Conference in Quebec City, and even though some of the leaders were Liberals there, I thought that some of those Premiers might join with us and come together in consensus to have a communique saying to Ottawa that we were opposed to the goods and services tax, that it was unacceptable. After some discussions all of the 10 Premiers agreed 1032

Monday, September 18, 1989 on that and 10 Prem iers , it seems to me, are a lot stronger than one Opposi tion Leader, or third Party leader, who go bleating away here in Manitoba. We got all 10 Premiers to agree on a communique that did catch the attention of t he federal Government and the federal Finance Minister, to tell them that it was unacceptable in every province of this country . That is the way to fight the federal Government on issues. Mrs. Carstairs: Mr. Speaker, then he blew it by not takin g that comm unique directly to the Prime Minister when he had the opportun ity.

Government Management Secrecy Mrs. Sharon Carstairs {Leader of the Opposition): Mr. Speaker, good management is not intimidation. That may be acceptable in non-democratic countries; it is not acceptable here. First of all, it was the foster parents . Now it is the day care workers. Why is this First Minister's Government unwilling to debate issues with individuals affected , but practises secret representat ives at meetings and secret polls? Hon. Gary Filmon (Premier): Mr. Speaker, I am not sure what exactly is the genesis of that question , but I will tell the Leader of the Opposition (Mrs .

Carstairs) this, that we as a Government have made a stronger commitment to day care than any previous Government here . In two budgets , in the space of less than 16 months , we have increased day care funding in this province by 45 percent, $13 million of new funding. That is a commitment to quality day care. We said we were going to work with them on quality, we are going to work with them on accessibility, and we are going to work with them on flexibility and we are willing to work with all elements of the day care community.

We are not willing to pick favourites and choose only one aspect of day care, like the NOP were . We are willing to put our priorities behind a quality day care system accessible to people throughout this province, of all walks of life, of all backgrounds, regardless of where they live, we are going to provide quality , accessible day care to them . That is why we made an increase 45 percent over two budgets in less than 16 months, 13 million additional dollars, Mr. Speaker . That is our record. We will stand by it. Mrs. Carstairs: Mr.

Speaker , it will be interesting to the people of the Province of Manitoba that they also stand by their record of sending spies to meetings. Day Care Standard Reduction Mrs. Sharon Carstairs {Leader of the Opposition): Mr. Speaker, last spring, the Minister of Labour (Mrs. Hammond) - Mr. Speaker: Order, please; order, please. I am having some difficulty hearing the Honourable Member's question. The Honourable Leader of the Opposition . Mrs. Carstairs: - was prepared to reduce workplace standards . Now the Family Services Mini ster (Mrs . Oleson) is prepared to reduce day care standards.

Why is this Government prepared to allow the deterioration of standards in a province, particularly in fields where vulnerable citizens are affected? Hon. Gary Filmon (Premier): Mr. Speaker, I reject that statement compl etely. We will not allow the reduction of standards for quality day care in this province, period, paragraph. Family Services Staffing Mrs. Sharon Carstairs (Leader of the Opposition): The Community Services Minister (Mrs. Oleson), in her responsibilities in her department has consistently chosen economic security people over Community Services people . It is no wonder she is in trouble .

She does not have her Deputy Minister; she does not have a director of Research and Planning; she does not have Communication; she does not have Finance; she does not have Human Resources, any of them staffed by people from Family Serv ices. They all have come from Economic Security. Now it is Mary Humphrey. Who is to be the next person in Family Services who is to be the scapegoat of this Minister and this Government? Hon. Gary Filmon (Premier): We do not need scapegoats because we are proud of the fact that we have increased funding to day care by 45 percent in two budgets in a space of less than 16 months .

We are proud of the fact that we have put 13 million of additional money into day care . We have made a commitment to day care , to quality , access ible, flexible day care that will serve the needs of all people of this province. I tell you, Mr. Speaker, that we will ensure the people of this province get the day care that they need and , in fact, that day care workers will indeed get the improvements they deserve as well. We will work at it on a long-range basis, on a planned basis, because we know that it takes good management and sound plann ing to achieve that, not like the Leader of the Oppositon (Mrs.

Carstairs) getting her issues out of this morning's paper. Mrs. Carstairs: But his own Minister of Community Services (Mrs . Oleson) said she could not do that . She said she had to go year to year, she could not possibly be involved in long-term planning because that is not the way the budget worked . Family Services Minister Resignation Request Mrs. Sharon Carstairs (Leader of the Opposition): Can the First Minister (Mr. Filmon) tell this House today if he is prepared to protect vulnerable adults, vulnerable children in our community and get the resignation today of the Minister of Family Services (Mrs .

Oleson)? 1033

Monday, September 18, 1989 Hon. Gary Filmon (Premier): Mr. Speaker , I regret the fact that the Leader of the Opposition (Mrs . Carstairs) believes that it is good politics to stamp on and stomp on an individual Member of Cabinet to try and get personal in her attacks and her slights against individual Members. Some Honourable Members: Oh, oh! Mr. Speaker: Order, please. The Honourable First Minister. *

(1340) Mr. Filmon: The Member for Concordia (Mr. Doer) will have his turn to flop in just a minute. Mr. Gary Doer (Leader of the Second Opposition): I think the record is clear in terms of the Government's inability to deal with their federal counterparts on any major issue affecting Manitobans . It is becoming embarrassing in its extreme to watch changes such as the UIC, Via Rail, Regional Development Grants, the change in our Medicare system, our post-secondary education.

All of these changes are done without a whimper from the Filmon Government , the Conservative Government of the Day, the Premier of the Day, and the Ministers in the Government that are more concerned about being in complicity on environmental issues and other issues as a Conservative club rather than standing up for Manitobans . Goods and Services Tax Finance Minister Position Mr. Gary Doer (Leader of the Second Opposition): My question is to the Minister of Finance (Mr. Manness). Given the concern of all Manitobans on the goods and services tax , does the Minister of Finance (Mr.

Manness) still stand behind his position that "Michael Wilson is a person of high credibility and integrity ," and secondly that "he, as Minister of Finance, will not fight this project tooth and nail with Ottawa"? Hon. Clayton Manness (Minister of Finance): Mr. Speaker , I remember the first quote, that dealing with the credib ility of the Minister of Finance federally . Certainly events have occurred over the last three or four weeks, and indeed the last three or four months, that call into question the statement that I made at that time . The second quote, I have no memory of, I do not recall. Mr.

Doer: Well, I am pleased to see that there is some slight difference now between the Minister of Finance (Mr. Manness) and his absolute and total trust for the federal Minister of Finance, but I would quote from his press conference on August 8 asking whether he was going to "fight this tooth and nail with Ottawa" and he said "no" at that press conference, Mr. Speaker . Finance Minister's Position Mr. Gary Doer (Leader of the Second Opposition): My question to the Minister of Finance (Mr.

Manness) is how can we trust him to fight as the lead Minister at federal/provincial finance meetings when he has taken a position of total trust with Michael Wilson, and he has not stated that he would fight th is position tooth and nail on behalf of Manitobans, in terms of the damage of $629 per family that this tax will do? How can we trust him? Hon. Clayton Manness (Minister of Finance): Mr. Speaker, I trust my father implicitly and explicitly, but I do not always agree with my father. I trust Members of this Legislature, but I do not always agree with them. That is the real world.

With respect to the transcript that came out of that meeting, I would like to see the questions and the answers provided in their full context, because I have a letter before me that I wrote to the federal Minister of Finance dated August 14 in which I raised several concerns and weaknesses with respect to the proposed goods and services tax. That is well known to the Leader of the NOP (Mr. Doer). He chooses not to accept them, and I say to him I could also dig up a number of facts in the past where his Government was a strong supporter of sales tax reform. Cost to Manitobans Mr.

Gary Doer (Leader of the Second Opposition): Mr. Speaker, I would ask the Minister of Finance whether he would be willing to table the tax, and in terms of our analysis-or table the letter-given the fact that we have made statements on the effect of this tax on the average family . We have made statements of this tax in terms of the inflation rate in this province . We have made statements on the interest rates that he does not feel will hurt farmers in this province-that is another direct quote from his press conference.

Would the Minister of Finance tell us how much this tax is now going to cost the average family in this province , how much this tax is going to cost in terms of the inflation of this province , and what are the projected interest rates that will be in this province on January 1, 1991, with the introduction of this tax? Can he tell us that so the people of Manitoba have straight goods on this goods and services tax? *

(1350) Hon. Clayton Manness (Minister of Finance): Mr. Speaker, without accepting any of the wandering

preamble of the Leader of the NOP (Mr. Doer), who happens to be all over the map on most issues, let me say for the record that we are now, as we were asked to do by the Premier 's communique , we are attempting to measure many of the elements of the impact of the goods and services tax on certa in sectors of the economy of the Province of Manitoba and ultimately upon the fiscal standing of the province. Again, as I said at that August press conference that we sense that the impact upon the economy as a whole would be in the realm of $200 million to $250 million. That is a ballpark estimate . Bearing in mind that as that 1034

Monday, September 18, 1989 money is withdrawn from the Manitoba economy, the federal Government for the most part directs it back by way of agreements and programs to the province in a whole host of area s, but nevertheless that is the outside measurement that we have today. The sectoral analysis will continue and once they are completed, we are prepared to share them with the people of Manitoba. Mr. Doer: The analysis the First Minister (Mr. Filmo

n) has produced to us in the House today is the same analysis he had , I believe, on August 8. Mr. Speaker, it is based on the Minister of Finance's (Mr. Manness) paper which has now been called into questio n. The integrity of his paper has been called into question by Wood Gundy ; it has been called into question by the Accountants Association of Canada ; it has been called into question by the Housebuilders Association . They say that the house costs will be three times that of what is in the technical paper. I would ask the Minister of Finance (Mr.

Manness) why after six weeks he cannot tell Manitobans what the ballpark figure is going to be in terms of our Manitoba economy, how many jobs it will cost, and why he is using the old figures based on Michael Wilson's paper and not an independent Manitoban look at the effect of this tax on our economy? Mr. ManneH: Mr. Speaker, I reiterate what I just said. We were mandated by the Premiers, indeed I was mandated by the Premier of Manitoba (Mr. Filmon) , to try and find out specifically the impact on the province with respect to all its sectors, indeed with respect to the fiscal part of it.

We inherited from the former Government the same economic analysis

section that was in place when they were there. We have the same resources at work, the same people at work . We have the same models at work and indeed the lack of models at work, because we do not have a large model that can measure the Manitoba economy and allow us to plug in a few variable changes and give us the final answer . We do not have it. I wish we did .

Nevertheless we are trying to use whatever tools we have to provide the answers, not only to ourselves in the sense of trying to build the policy question as to the hard way in which we are going to fight aspects of this tax but also to share those answers with all Manitobans. Family Services Minister Resignation Request Ms. Avis Gray (Ellice): My question is for the Premier (Mr. Filmon) . The Premier has indicated in this House today that his Government has a stronger commitment to day care than any other Government in Manitoba. Some Honourable Members: Hear, hear! Mr. Speaker: Order, please. Order .

The Honourable Member for Ellice . Ms. Gray: Thank you, Mr. Speaker. Wait until they hear the next part, then they will really clap. If his Government has a stronger commitment to day care, then I would suggest to the Premier (Mr. Filmon) that the three major associations representing day care in this province are angry with this Government . We have had more rallies over the last two years of parents and children and child care workers on the steps of the Legislature.

We have had more letters and phone calls from child care workers and parents, and we have a possible work stoppage of child care workers in this province which is unprecedented. So if that is his stro ng commitment to day care in this province -(interjection)- then I would like to see- Mr. Speaker: Order, please; order, please. Is th is thing working? The Honourable Government House Leader (Mr. Mccrae), on a point of order. Hon. James Mccrae (Government House Leader): Mr.

Speaker, this is the resumption of our Session, and I can understand some Honourable Members wanting to tell all that they have to say for the duration of the Session in the space of one

preamble. I would suggest that Honourable Members on all sides of the House should be reminded that briefer questions do lead to briefer answers. *

(1355) Mr. Speaker: I would like to thank the Honourable Government House Leader . The Honourable Opposition House Leader, on the same point of order . Mr. Reg Alcock (Opposition House Leader): I would ask that the Government House Leader (Mr. McCrae) provide the same advice to his own Members. Long answers also produce long questions, and I think we should start the Session with an attempt to have a little control on both sides. Some Honourable Members: Oh, oh! Mr. Speaker: Order, please. Order . I would like to thank all Honourable Members, and I think it is advice that we should all adhere to .

The fact, as the Honourable Government House Leader (Mr. McCrae) has pointed out, shorter questions and shorter answers, and the House would tend to move along that much more smoothly . The Honourable Member for Ellice kindly put her question now. Ms. Gray: My question for the Premier (Mr. Filmon) is, will the Premier intervene today to resolve the day care crisis that is looming in this province by removing the Minister of Family Services (Mrs . Oleson) and by ensuring that we will have good child care in this province? Will he do that today? Hon. Gary Filmon (Premier): Mr.

Speaker, one thing I will assure the Member for Ellice and all Members of this Legislature is that we will do everything in our power to ensure that we have a quality , accessible, flexible day care system in Manitoba that meets the test of the needs of all the people who use day care and depend upon it for the care and well being of their children. That is why we made a commitment of a 45 1035

Monday, September 18, 1989 percent increase in two budgets over a space of 16 month s. That is why that increase of $13 million over those two budgets was there to show our firm comm itment to day care. The greatest commitment that has been made by any Government in this province in terms of overall increases in expenditure because we believe that that kind of quality system of day care must be provided for the people in this province who must have it, and we are carrying through with that comm itment, Mr. Speaker. Mentally Handicapped Service Reduction Mr.

Speaker: The Honourable Member for Ellice, with her supplementary question . Ms. Avis Gray (Ellice): The other issue is services to the mentally handicapped. Can the Minister (Mr. Filmon) indicate to this House tod ay if he supports his Minister of Family Services (Mrs. Oleson) who writes parents and says services to the mentally handicapped are a priority for this Government, and on the other hand, she has already prepared a budget where there are no volume increases and serv ices to the mentally handicapped? Is that policy with the Tory Government? Hon.

Gary Filmon (Premier): It is a policy of this Government that services to the mentally handicapped are a priority. Indeed we have taken- Some Honourable Members: Oh, oh! Mr. Speaker: Order, please . I am sure the Honou rable Member for Ellice would like to hear her answer. The Honourable First Minister. Mr. Filmon: My Minister of Family Services (Mrs. Oleson) met last week with people, representatives from various communities and various groups that serve the mentally handicapped in this province .

They came away with an understanding that the Minister did have some news for them in terms of the specifics of budget questions that they asked , and that that would be provided as soon as we come before the House with Estimates of Expenditures so that she can provide the information to them on these areas. It remains a priority area . We remain committed to providing these services for the needs of the vulnerable in our society, Mr. Speaker. Family Services Minister Premier's Support Mr. Speaker: The Honourable Member for Ellice, with her supplementary question . Ms.

Avis Gray (Ellice): I have a final supplementary to the Premier (Mr. Filmon). Can the Premier indicate to this House why he continues to support a Minister who time after time makes decisions at the beginning of the year, and then after much lobbying and community pressure from the Opposition and the community then realizes that she made a mistake and goes back and changes her mind? Can the Minister indicate why he supports a Minister who does not have the management capabilities? *

(1400) Hon. Gary Filmon (Premier): Mr. Speaker, I am sure that the Member for Ellice (Ms. Gray) is very anxious to demonstrnte her management capabili ties. I am sure that she may have some to show , but at this point in time there has been no evidence of that. She can work on the questions first, and then maybe some day she will have an opportunity to work on the answers. It may be a long time away, but she can keep working on that. The fact of the matter is that the Minister of Family Services (Mrs. Oleson) will continue to meet with, to discuss important issues with all elements of the community.

She is an individ ual who is very sincere, very dedicated and I do not think that she deserves the kind of ill treatment she is getting at the hands of the Member for Ellice or her Leader. Mr. Reg Alcock (Osborne): Mr.Speaker, she is getting the treatment that she has earned . We were patient with her for a long time. Mr. Speaker, before I begin my question, I would just like to comment on one thing . The Minister of Finance (Mr. Manness) did reference a letter , he did not table it. Some Honourable Members: Oh, oh! Mr. Speaker: Order, please; order, please. The Honourable Minister of Finance (Mr.

Manness) did not quote from any letter. Therefore, I do not believe the Honourable Member for Osborne (Mr. Alcock) should be asking the Honourable Minister of Finance to table such a letter. The Honourable Member for Osborne with his question . Goods and Services Tax Federal Support Funding Mr. Reg Alcock (Osborne): I am pleased, Mr. Speaker , to hear the Minister of Finance (Mr. Manness) talk about fina lly doing some studies, because when I asked him this question in June, he said that he was relying on verbal assurances from the Minister of Finance .

I was also interested to hear his comment that the impact would be between $200 million and $250 million, and that money would come back through federal programs. Does he have assurances from the federal Minister of Finance that we will receive that sort of increase in our federal support in this province? Hon. Clayton Manness (Minister of Finance): Mr. Speaker, I am trying to refer to those dates in June 22 and 23 when the Member did ask me some specific questions on this matter. 1036 With respect to additional funding, I did not make the claim that there would be additional funding.

I am saying that the federal Government, I never did ever

Monday, September 18, 1989 make the claim that there would be additional funding to $300 million. I am saying that there are right now , that the federal Governmen t is making commitments in a number of areas including EPF funding, including some of the other agreement areas, and the basis of that funding for the most

part is borrowed funds, borrowed funds of which there is an itinerant high cost of public debt cost . The point that I was trying to make that this money would probably, in some respects , be coming back but at this time not to be borrowed to be done so. Mr. Alcock: Mr. Speaker, $200 to $250 out, maybe some back. The reference, by the way, is June 9 for the Minister of Finance (Mr. Manness). Cultural Industry Impact Mr. Speaker: The Honourable Member for Osborne (Mr. Alcock), with a supplementary question. Mr.

Reg Alcock (Osborne): Several studies show us that the impact on cultural organizations will be severe, and small social service agencies . These organizations are largely funded by Government. Can the Minister of Finance (Mr. Manness) offer them any assurances that they will not have to cut their operations, that they will not suffer significant losses and be unable to operate as a result of this tax? Hon. Clayton Manness (Minister of Finance): Mr. Speaker, we can provide no assurances because it is not our tax. This Government has one direction with respect to taxation, and that is to reduce it.

That is to reduce the personal tax rates that all Manitobans pay by $60 million, to reduce the payroll tax from $300 thousand to $600 thousand, and to reduce taxes wherever it can. The Liberals of this province have an opportunity to vote once on tax measures that are not federal in nature, that are provincial in nature, and have chosen to vote against it. Mr. Alcock: Yes, and they have one way on day care staff salaries and another way on their own staff salaries . They got lots of different positions, and lots of different issues. Individual Family Impact Mr. Reg Alcock (Osborne): Mr.

Speaker, the Minister of Finance (Mr. Manness) has given us a figure of between $200 million and $250 million as the estimated impact on the Province of Manitoba . We have all sorts of studies coming out now that show the impact on a family. What do his studies show about the impact on an individual family in Manitoba? Hon. Clayton Manness (Minister of Finance): Mr. Speaker, the simplistic arithmetic calculations as to the impact on the family are such if there is a $300 million impact on the economy , and there are 300,000 families in Manitoba, then the cost is obvious. So, Mr.

Speaker, -(interjection)- well he asked the families, the Member was asked the number of families in the Province of Manitoba. So, obviously, as I have said at the press conference that all taxes, whether they are levied federally or provincially, reduce disposable income and as such they are a cost to the economy . That is why this Governmen t is fighting so hard to reduce the tremendous tax levy, the high tax regime that was in place left to us by the former NDP Government, and we would ask for support from the Liberals to continue our course in this respect. Machray Day Care Centre Premier Invitation Ms.

Judy Wasylycia-Leis (St. Johns): Mr. Speaker, I would like to ask the Premier (Mr. Filmon) a question on day care. The Minister of Family Services (Mrs. Oleson) has clearly shown little understanding of the issues of child care and little ability to manage this policy area. Now, the Premier over the last few days has really shown also no appreciation of the professional, emotional, human physical demands that a child care profess ion al is accustomed to.

Today the Premier , himself, received a request from the Machray Day Nursery from Pat Wege, the director, to spend a day at that day care centre and to get an understanding and appreciation of the work of the day care profession. Is the Premier aware of this rather generous request, considering the Premier 's qualifications do fall somewhat short of those required of a day care worker? Is he aware of the request and what is his response to that request? Hon. Gary Filmon (Premier): Mr.

Speaker, under no circumstances do I undervalue or undermine or believe that the work of day care workers is not a very important work nor a very valuable work to people in this society. I indicated at our news conference on Friday that day care workers deserve more and that as long as we were in Government we would do everything we could to improve the circumstances of day care workers. We began by having to address many, many problems that were left for us by the former NDP administration of which the Member for St. Johns (Ms. Wasylycia-Leis) was a vital part.

If there has been neglect in the day care system, if there has been a problem in the day care system with respect to salaries, it has not happened in the last 16 months. All of these circumstances preva iled very strongly when that person was in Government. She chose to do nothing about it; she chose to ignore the problem. We have increased spending by $13 million additional, by 45 percent in two budgets, over a space of less than 16 months. We are making our commitment to day care, and we know that it is valuable to society and we are going to continue to support it, Mr. Speaker. 1037 Ms.

Wasylycia-Leis: A supplementary to the Premier (Mr. Filmon) . It is actually the Premier's comments and this Government 's record that has riled the day care

Monday, September 18, 1989 community and made the cns1s of a withdrawal of service much more looming on the horizon day by day. I would like to ask the Minister, since the Premier did not hear my question-and I will table for him a copy of the letter from Machray Day Nursery-I will put it directly to the Premier, if he is prepared to respond to this request from Machray Day Nursery to spend a day as a child care professional at Machray Day Nursery which points out our centre is open Monday to Friday from 7:30 a.m. to 6 p.m . Staff work a seven-hour day, with a 50 minute morning break and a one-hour lunch break.

Sorry, no afternoon break . You are advised to dress casually and bring your own lunch -(interjection)- Mr. Speaker: Order, please . Order. Ms. Wasylycia-Leis: I have attached copies of job descriptions so you are better able to understand your role . Mr. Speaker: The Honourable Member has asked her quest ion. The Honourable First Minister (Mr. Filmon). Mr. Filmon: Mr. Speaker, I know that the Member for St. Johns (Ms. Wasylycia-Leis) wants to make light of this or try and make a political -(interjection)- yes, yes, indeed.

If she took the issue seriously she would have done a great deal more when she was in Government, but she totally neglected and abandoned all of the interests of the children, the familie s and the people who need day care in favour of political grandstanding. Let me tell the Member for St. Johns (Ms. Wasylycia Leis) that not only have I spent time, considerable time, in day care centres with children , with people who work there because I care about day care centres, Mr.

Speaker, close family relatives and friends have worked in day cares and been directors of day cares, and I have spent time there getting to learn a lot about them . When I was on the board of our church we started the first day care in the River Heights area , and I spent the time getting to know how it operates and what it has to do, long before this person , this political operative, who came to us from the Pawley administration , and all she wants to do is create political hate. Long before she had any conscience or understanding of day care I was involved in day care, Mr. Speaker. *

(1410) Mr. Steve Ashton (Thompson): Mr. Speaker , I realize there is no rule in Beauchesne that prohibits Members from making cheap shots. Certain ly if there were, the First Minister (Mr. Filmon) would be thrown out of this Chamber, I think, about every five minutes. I would ask, Mr. Speaker, that you would caution the First Min ister to deal with the question that was raised, which is identified in Beauchesne as being whether the response was an answer to a question and keep answers brief and to the point, something the First Minister has not done during the entire Question Periods. Mr. Speaker: Order, please.

I would like to thank the Honourable Member for Thompson. The Honourable 1038 Member for St. Johns with her final supplementary question. Ms. Wasylycia-Leis: Thank you, Mr. Speaker. I remind the Premier (Mr. Filmon) that it was the NOP administration that put Manitoba on the map for putting in place the best day care system in North America , and it is this Government that is tearing it apart , ripping it apart- Mr. Speaker: Order, please; order , please . The Honourable Member for St. Johns . Ms.

Wasylycia-Leis: The Members of the Government seem to have forgotten it was this Governmen t that brought in the Salary Enhancement Grant Program. Mr. Speaker: Order, please. Order . Day Care Workers Salary Negotiations Mr. Speaker: Would the Honourable Member for St. Johns kindly put her question now. Ms. Judy Wasylycia-Leis (St. Johns): Yes, thank you. My question to the Premier (Mr. Filmon) is, will he act where his Minister of Family Services (Mrs.

Oleson) has failed to act, will he avert a looming work action on the part of day care workers, something that my Liberal friends to the right of me refuse to support? Will he commit to the day care workers of this province a larger increase than 24 cents an hour? Will he call a meeting of day care workers and negotiate a three-year phase in settlement to achieve salary levels recognized by this Minister and this Government when it comes to day care and the MANSIS Report? Hon.

Gary Filmon (Premier): I have indicated that it is our commitment to work towards greater salary levels for the day care workers of this province, because we are concerned about the salary levels they were left with by the former administration . In order to address that, Mr. Speaker, we have increased the salary enhancement grants in two budgets by 38 percent, two budgets. We have made a commitment and we have said we are going to go further . But if this Member, the Member for St.

Johns, believes that she is helping out parents and children by exhorting the workers to go on strike and withdraw their services , she is wrong. That is not the way to help families; that is not the way to help workers; that is not the way to help children . Mr. Speaker: Order, please ; order, please . Goods and Services Tax Labour Impact Mr. Paul Edwards (St. James): Mr. Speaker, my question is for the Minister of Labour (Mrs. Hammond) . In the last Speech from the Throne , this Government recognized the changing labour environment in this province and made a commitment to dealing with it.

Monday, September 18, 1989 Instead, the budget revealed a mere $60,000 in new funding for the Labour Adjustment Branch , which was a pittance and an insult to the workers of this province . There was absolutely no strategy which came forward. Now this Minister 's federal cousins are going to put the nail in the coffin with a federal sales tax which in effect in this province is a tax on jobs. Mr. Speaker, we cannot afford a do-nothing Minister. We need a strategy, we need a strategy now. I assume that this Minister has taken the time to calculate the effect on Manitoba jobs.

What are the results of her calculation? Hon. Gerrie Hammond (Minister of Labour): We in our department are doing everything that we can to assess what is going to happen to workers with the new tax, but at the same time we do recogniz e that one of the areas we are able to help in this province is by reducing taxe s and by reducing the payroll tax . That in itself will create more jobs in Manitoba than any other . Labour Adjustment Strategy Mr. Speaker: The Honourable Member for St. James has the floor . Mr. Paul Edwards (St. James): It has been five months since that tax was announced.

When is this Minister going to get on the job and find out what the effect on Manitoba workers is? We knew, we knew in 1982 . Mr. Speaker: Order, please; order . I have recognized the Honourable Member for St. James for a supplementary question. Would the Honourable Member kindly put his question now? Mr. Edwards: Mr. Speaker, has this Minister got any plans to help Manitoba employers weather this storm, or is she going to bury her head in the sand like she has done with the effect of free trade in this province? Hon. Gerrie Hammond (Minister of Labour): Mr.

Speaker , our Government is doing everything possible to make Manitoba a good place to work in and to continue to be . We are working on reducing the payroll tax, we are reducing the provincial tax , and there are 13,000 more workers at work in Manitoba now than there were a year ago. Mr. Speaker: Order, please. Time for oral questions has expired. MATTER OF URGENT PUBLIC IMPORTANCE Mr.

Gary Doer (Leader of the Second Opposition): I would move that the ordinary business of the House be set aside to debate a matter of urgent public importance, namely, the effect of the goods and services tax on Manitoba, seconded by the Member for Logan (Ms. Hemphill). Can I read the WHEREASes, Mr. Speaker? Mr. Speaker: Order, please; order, please. Before determining whether the motion meets the requirements of our Rule 27, the Honourable Member for Concordia (Mr. Doer) will have five minutes to state his case . The Honourable Member for Concordia . Mr. Doer: Mr.

Speaker, I can see where the Member for Tuxedo (Mr. Filmon) is going to vote in a few minutes. We will see in a minute where he stands, I guess, on this tax. Mr. Speaker, this is obviously within the criteria of an urgent public matter. We have received on August 8, the technical report of the Finance Minister, the federal Finance Minister . This is the first opportunity since that date to discuss the actual details of that report. We did debate this issue on the first budget date in May when we had the general impacts of the federal budget before us.

We were pleased at that point that you supported our emergency resolution. But I think we should really focus in not on all these little simplistic House issues, we should deal with the effect on Manitoba families, Manitoba communities, and the effect on this province, because when we look at all those impacts I think that all political Parties should put aside their differences and vote with Manitobans to have an emergency debate on the impact on all of us on this insidious and dishonest tax that is being proposed in the federal arena that would impact every Manitoba family . Mr.

Speaker, it will cost every Manitoba family $629 on average. That is the analysis not only that has been conducted by our research department, by independent bodies such as Wood Gundy, by chartered accountants organizations, by other groups such as the other organizations , and everybody is demonstrat ing the clear and concise possibility for families. That is a matter of urgent public importance. Mr. Speaker, Mr. Wilson's figures have already been disputed by every major reputable organization . The inflation will not be 2.3 or 2.5 percent as he said in his paper .

It will be close to 3 percent or over 3 percent. Every independent organization has said that, and that will have a very, very urgent impact on the people of Manitoba. Again that is why it is worthy to place this before the Assembly today . *

(1420) Thirdly, Mr. Speaker, we know when inflation goes up that the federal Government under the present and former policies on interest rates, they will jack the interest rates up. That is why I do not know why the Minister of Finance could say this will not have any negative impact on farmers. Clearly, any farmer I speak to, and I know that the Minister of Finance (Mr.

Manness) speaks to a lot more than I do on his day-to-day basis, but any farmer I have talked to knows the devastating effect of interest rates, and that is a matter of urgent public importance to be debated in this Legislature today as well. 1039 Mr. Speaker, the Prime Minister and the Minister of Finance are asking us to come up with an alternative and there is an alternative. In 1950, the amount of taxes the corporations paid in this country amounted to 37 percent of the proportion of total taxes in this

Monday, September 18, 1989 country . In 1984, when the Liberals left office, that proportion of taxation was down to 11 percent. Since that time it has gotten worse, not better . There are more and more loopholes in our tax system and it has now gone from 11 percent of the portion that corporations pay down to 9 percent. That is unacceptable. There is an alternative, Mr. Speak er. The $30 billion in deferred taxe s in 1985 that was owed to the people of Canada by corporations should be paid at a minimum corporate tax, rather than a consume r tax, should be impl emen ted in this count ry.

We believe this is a matter of urgent public importance . We believe that all Members of this Chambe r should vote on this matter of urgent publi c notice. We do not believe it is a partisan issue. We believe we should all stand up with Manitobans and vote for this emergency debate. I look forw ard to the votes of all Members of this Chamber to deal with the impact on families , communities and Manitob ans. That is the important issue, not partisan politics today, Mr. Speaker. Mr.

Speaker: A spokesperson for each of the other Parties will also have five minutes to address the posit ion of their Party respecti ng the urgen cy of the debate on this matter. Mr. Reg Alcock (Osborne): So, Mr. Speake r, the Member for Concordia (Mr. Doer) wishes to deba te the effect of the goods and services tax on Manitoba. On June 21st, when we wanted to debate the impact of this tax on Manitoba, he voted with the Governmen t against us. When we wanted to debate this tax before the technical paper was written in stone, before it came out, they vote d against us. Now, that debate was very important then, Mr.

Speaker. Mr. Speaker: Order. Order, please. This is a very serious issue and I am having some difficulty in hearing the remarks being made by the Honourable Membe r for Osborne (Mr. Alcock). Mr. Alcock: This is an imp ortan t issue. It is a vitally important issue to this country and to this province , and it is as important today as it was then that we debate this. The Memb ers of my caucus will be asking you to use your discretion under Rule 27 to permit this debate to proc eed. You have the ability to call upo n the House to vote on this matter, and we would urge you to do so, sir.

We thought that it was time then to send a message to Ottawa, it is that much more important to do it now. We missed a very important or very vital opportunity. We cannot miss this one. We have to tell Ottawa and the rest of the country how Manitoba feels about this horrible, destructive tax. Hon. James Mccrae (Government House Leader): Mr. Speaker, aside fro m the fact that the Minister of Finance (Mr. Mannes

s) and the Premier of Manitoba (Mr. Filmon) have made very clear, both publicly and to federal officials, the positio n of the Manitoba Government on the goods and services tax, there are other problems with relation to the motion the Honourable Member for Concordia (Mr. Doer), the Leader of the New Democratic Party, wishes to raise in the House today. The fact is, under our rules, Mr. Speaker, the urgency of the debate on this or any other matter which is the subject of a motion under this rule , urgency of debate is the criterion to be decided in decid ing whether a debate should be allowed or not allowed .

I do not believe either Honourable Member, either the Honourable Member for Concordia (Mr. Doer) or the Honourable Opposition House Leader (Mr. Alcock), has dealt with the issue of the urgency of this debate . Both Honourable Members know, Mr. Speaker, that the tax proposed by the federa l Minister of Finance is to come into effect on January 1, 1991.

Both Honourable Members know that at this point there is no federa l legislation in place for this Legislature or even for federal parliamentarians to react to, so thos e Honour able Members are suggesting that in that kind of vacuum we should be debating that today in this House. Both those Honourable Members, I suggest to you, Mr. Speaker, know full well the rules of this House having been around, in the case of the Honou rable Membe r for Concordia (Mr. Doer) since 1986, and in the case of the Opposition House Leader (Mr. Alcock) since the recent election .

However, in the Opposition House Leader's case, he should know as an Opposition House Leader what the rules are. Mr. Speaker, I also say it is passing strange that the Honourable Leader of the New Democ ratic Party (Mr. Doer) should wax so indignant abou t a tax at anothe r level of Government when we all remember, and it is still very fresh in our minds, the 1987 budg et of Mr. Kost yra when he was Minister of Finance in this province, a budget that Mr. Kostyra used to goug e Manitobans with the worst and largest tax increases in the history of this province. Some Honourable Members: Oh, oh! Mr.

Speaker : Order, please . Orde r. Mr. Mccrae: We know what prompted Mr. Kostyra's budget in 1987, and what prompted that budget was the mismanagement of the economy and the fisca l matters of th is province by his predecessor, the Honourable Vic Schoeder, who was affectionately known around this place as "Dr. Debt", and who raised the def icits in this province to levels never befor e experienced.

We have to wonder about what kind of credibility can we place in the Leader of a third Party in Manitoba who finds himself in third Party status today because of his and his own Party's handling of the finances of this province in the past, then asking this Legislat ure to discuss someth ing which is not even the subject of legislation at this point, something that is in the contro l of another level of Governmen t. As I say, Mr.

Speaker, the position of the Progressive Conservative Party and the position of the Governme nt of Manitoba has been made clear , and ver y appropriately so, I suggest , by the Minister of Finance (Mr. Manness) and by the Premier (Mr. Filmon) . The Honourable Members of this House must recognize that a Government has a responsibility to marshal! and 1040

Monday, September 18, 1989 to order as best possible the business of the House with as much co-operation as possible with other Parties in the House . I suggest there are ample opportunities for Honourable Members to discuss this matter in the House in such orders of business of the Estimates, Grievances in the House, daily Question Period. If Honourable Members cannot make their point, as they tried earlier today in Question Period, it is really not our fault. I would suggest we would welcome a debate like this at an appropriate time, but there is business to be done in this House .

Honourable Members should set their minds to the business of this House and let the Minister of Finance (Mr. Manness) and the Premier (Mr. Filmon) do their work, as they have been so effectively doing since they took office. Mr. Speaker, there is one other matter that comes to mind, and that is if you look at today's Order Paper, there is another opportunity for Honourable Members through Addresses for Papers and Orders for Returns to get the kind of information they want regarding issues relating to the goods and services tax or any other matter. *

(1430) I see by today's Order Paper that the Honourable Opposition House Leader (Mr. Alcock) is making use of that vehicle, and I credit him for that, but surely both Honourable Members must recognize the position the Government is in, and that is that we are here to respect the Rules of the House, and Honourable Members opposite ought not with such frequency to attempt to use the Rules in a manner which is improper. Mr. Speaker: Order, please; order, please . The Honourable Member for Concordia (Mr. Doer) did provide me with the required notice.

I have listened with care to the comments of Honourable Members respecting the urgency of debating this matter today , and I thank them for their advice. As Honourable Members know, Beauchesne Citation 389 provides that for a matter to be considered as a matter of urgent public importance, it must be so pressing that the public interest will suffer if it is not given immediate attention. Similarly, Beauchesne Citation 390 provides that there must be no ordinary opportunity which will allow the matter to be brought on early enough.

As I stated when ruling against a similar motion on June 21, it is my understand ing from the federal budget papers and from federal-provincia l Government sources that the tax referred to by the Honourable Member will be not implemented until January I, 1991. Additionally, our Rule 27(5)(

d) stipulates that this type of motion must not anticipate a matter with reference to which a Notice of Motion has previously been given and not withdrawn. Notice of an Order for Return on today's Notice Paper in the name of the Honourable Member for Osborne (Mr. Alcock) does address the subject of this motion, in my opinion. Therefore, it is my view that the conditions referred to in Beauchesne have not been met and a specific rule of this House would be contravened. Consequently, I must rule the matter out of order as a matter of urgent publ ic importance. The Honourable Member for Thompson . Mr.

Steve Ashton (Thompson): With regret , Mr. Speaker, I challenge your ruling . Some Honourable Members: Oh, oh! *

(1440) Mr. Speaker: Order, please. Order. The ruling of the Chair has been challenged. Therefore, the question before the House is: shall the ruling of the Chair be sustained? All those in favour of the motion will please say yea. All those opposed will please say nay. In my position the yeas have it. The Honourable Member for Thompson. Mr. Ashton: Yeas and Nays, Mr. Speaker. Mr. Speaker: Call in the Members . The question before the House is: shall the ruling of the Chair be sustained? All those in favour of the motion will please rise.

A STANDING VOTE was taken, the result being as follows: YEAS Burrell , Connery, Cummings, Derkach, Downey, Driedger (Emerson), Ducharme, Enns, Ernst, Filmon, Findlay, Gilleshammer, Hammond, Helwer, Manness, Mccrae, Mitchelson , Neufeld, Orchard , Pank ratz, Penner, Praznik. NAYS Alcock , Angus, Ashton, Carr, Carsta irs, Char les , Cheema, Cowan, Doer, Driedger (Niakwa ), Edwards, Evans (Fort Garry) , Gaudry, Gray, Harap iak, Hemphill, Kozak , Lamoureux , Maloway , Mandrake, Minenk o, Patterson, Plohman, Roch , Rose, Stor ie, Taylor, Urusk i, Wasylycia-Leis, Yeo. *

(1450) Mr. Clerk (William Remnant): Yeas, 22; Nays, 30. Mr. Speaker: The ruling of the Cha ir has been overturned. My ruling having been overturned , the question before the House is shall the debate proceed . All those in favour of the motion will please say yea. All those opposed will please say nay. In my opinion the yeas have it. Mr. Steve Ashton (Thompson): Yeas and Nays, Mr. Speaker. Mr. Speaker: Order, please. Order. Call in the Members. The question before the House is shall the debate proceed . All tho se in favour of the motion will please rise . * (1500) 1041 ,

Monday, September 18, 1989 A STANDING VOTE was taken, the result being as follows : YEAS Alcock, Ang us, Ashton, Burrell, Carr, Carstairs, Charles, Cheema, Chornopyski, Connery, Cowan, Cummings , Derkach, Doer, Downey, Driedger (Emerson), Driedger (Niakwa) , Ducharme , Edwards, Enns, Ernst, Evans (Fort Garry), Filmon, Findlay, Gaudry, Gilleshammer, Gray, Hammond, Harapiak, Helwer, Hemphill, Kozak, Lamoureu x, Maloway, Mandrake, Manness, Mccrae, Minenko, Mitchelson , Neufeld, Orchard, Pa nkratz , Patterson, Penner, Plohman, Praznik, Roch, Rose, Storie, Uruski, Wasylycia-Leis, Yeo. Mr. Clerk (William Remnant): Yeas, 52; Nays, 0. •

(1530) Mr. Speaker: Order, please . I declare the motion carried . The Honourable Member for Concordia. Mr. Gary Doer (Leader of the Second Opposition): It is hard to make minority government work sometimes, it sometimes takes kicking and screaming to get onto the major issues facing Manitobans but we are pleased to have the vote, and the vote in favour of having this very, very important debate.

It is unfortunate that it has taken us two votes to do it but I am sure, over th e next period of time, we can ta lk about the devastating effe ct of thi s tax on Mani to bans and Manitoba communities and the ir families. Mr. Speaker, I was disappointed today when the Minister of Finance (Mr. Manness) did not have his own breakdown of this tax on Manitoba fam ilies . We have done our own analysis and came out with the figure $629 per average family in Manitoba that has been supported by the chartered accountants ' groups .

It has been supported by a number of other independen t analysts in terms of the effect of that tax on the province. Mr. Speaker, it is an analysis that it is done without using Michael Wilson's techn ical paper because every organization that has looked at that technical paper has said it is discred ited, it has no integrity, it is not honest. The figures are not complete and it understates the maj or imp act of this tax in a number of major areas. Yet the Minister of Finance (Mr.

Manness) today rose in his place, said he does not trust Michael Wilson any more but is still using the $250 million figure that he produced on August 8 as the effect on Manitoba families, Mr. Speaker. You cannot do that, Mr. Spea ker. This is a matter of urgent importance, and he and his Government must have an immediate review of the effect on Manitoba families. (Mr. William Chornopyski, Deputy Speaker , in the Chair) Mr. Deputy Speaker, we could provide our analysis to the Finance Minister (Mr. Manness).

He has already said he does not believe our figures, but it has been already verified by a number of groups-and the effect 1042 on this tax in 1991, as the way it is proposed, is $629 per average Manitoba family, not taking 300,000 people and dividing it into $250 million , because that does not include the offsets and it does not include the fact that most of us believe the effect of that tax will be close to double the $200 million or $250 million, and the Minister of Finance knows that.

I am waiting for him to confirm that in this House shortly with the "indepe ndent analysis" that he has promised us to provide. Mr. Deputy Speaker , we have had two different positions from the Minister of Finance (Mr. Manness) and the Premie r (Mr. Filmon) . We still have not resolved that issue in this House .

When the Minister of Finance was challenged on this issue he said, "You know, I like Michael Wilson, this tax is not a bad tax ." We have a few technical questions, we await his letter to see whether he is going to fight this to the hilt like his Premier said we might do or whether he has just asked a few of these little technocratic questions.

We will be very interested to see when he tables that letter whether he is taking the position to figh t this tax or whether he is just asking a few administrative matters, a few technical points, and whether he is going to talk about the devastating effect of this tax on families and communit ies. We will be very interested to see how far into the barricades he is going to go with the letter he has sent on behalf of all Manitobans on th is tax. •

(1540) We are getti ng between 800 and 1,000 cards a day on this tax and I think that is important to say no to the 9 percent tax. But I also agree with the Prime Minister on one small area, and when the Prime Minister says we should have an alternative to this tax Canadians should have an alternative-I agree with him . We should have an alternat ive tax . We do have an alternative, Mr. Deputy Speaker.

We believe the billions and billions of dollars that have been let go by successive federal Governments in creation of loopholes should be plugged and it should be plugged in a fair and equitable way for all Canadians. The Auditor General , in 1986, identified some $35 billion in 1985 that was written off. Diane Frances, in her book, in 1985, identified a $30 billion in defe rred taxes the corporations have not paid in the 1985 year. Thirty billion dollars, that is equivalent to 15 percent of a national sales tax as proposed by Michael Wilson, because it is a $3 billion tax per point on the tax system.

We believe strongly that many of the taxes, federally and many of the taxes even provincially, should be reformed. The taxes provincially are too high and the taxes federally are too high and those taxes are too high on families, they are too high on families, Mr. Deputy Speaker, and we need a minimum corporate tax as part of tax reform . We need to get rid of those loopholes . In 1965, again, Canada had the 12th fairest tax system in the economic commun ity. The OECD countries, Canada had the 12th fairest tax as evaluated in Brussels by an independent body.

By the time 1985 has come along, again an independent study, Canada was 24 out of 25 for fairness in taxes . Only Turkey, the country of Turkey, had a more unfair and regressive tax system .

Monday, September 18, 1989 I would suggest, Mr. Depu ty Speaker, under this 9 percent tax that Canada will have the dubious and dishonourable place of having the most insidious and worst tax system in the free world of economic countries. The Minister of Finance (Mr. Manness), from his place, again indicates why he supports this tax, he is talking about the European countries . Many of these countries , many countries have a minimum corporate tax and have much lower taxes on families and individuals than the Canadian system .

I would recommend to the Minister of Finance instead of express ing his support for the value added tax system and concept that he is expressing from his seat and he has expressed at press conferences, he should start fighting, with Manitobans, to fight this tax and go to the alternative of a minimum corporate tax to deal with the deferral of tax payments and the actual loopholes in our tax system that are driving families into a state of not having the disposable income that they deserve . This is not just a consumer issue, and I believe it is, but it is going to increase inflation.

It will increase the labour management stripe in this country . That has already been made as predictions by many people in the country, and it will also increase inflation by approximately 3 percent , a figure that is much higher than again the figure the Minister of Finance (Mr. Manness) of Manitoba has used because he has really only parroted back the position of Michael Wilson in terms of the 2.3 percent. He has not looked at some of these other independent studies or his own independent studies that show well over 3 percent for inflation in this country and in the Province of Manitoba. Mr.

Deputy Speaker, we also have made the claim that when inflation goes up interest rates go up, and when you look over the last 10 'years , whether it was the federal Tory Government or the federal Liberal Government, that interest rates have been tied to dealing with inflation . The old Phillip 's curve is the model that the Government uses and they squash economic development and job creation with an insidious increase in interest rates. That, too, costs families and farmers millions and millions of dollars .

We have calculated the amount of money that farmers, small business and families owe in this country to be about $640 billion and when you look at that amount of money in Manitoba , it is billions and billions of dollars . Therefore, when interest rates go up to deal with inflation, again something when we predicted, the Minister of Finance (Mr. Manness) said no, but when now we have Wood Gundy and other organ izations saying yes, the Minister of Finance does nothing about it.

He is, again , in complicity of a Tory club, really, in terms of this tax, and he is not standing up for Manitobans , in terms of the effect. We could go on and we will go on with all our speakers. It hurts women more than men. It hurts rural communities more than urban communities , it hits northern communities even more than rural and city communities, it hits services and people receiving services more than it hits other people .

Why do we have a system where transactions with stockbrokers are excluded, but when we go to the drugstore or when we go to other consumer items , homes and other issues, you get clobbered by this new Wilson-Mulroney tax? We believe it is an insidious tax, it is a horrible tax for families and, yet, we should talk about tax reform , but we should talk about a minimum corporate tax and the removal of loopholes in terms of deferred taxes in our tax system . If we returned our tax system to the 1965 position where corporations paid at 20 percent of the tax, Mr.

Deputy Speaker, we not only could get rid of this 9 percent tax but we could get rid of some of the taxes that Manito bans pay provincially , because we would have much higher income at the federal level which would translate into more income in the - (interjection)- That is right. That would translate into more tax income for Manitobans , more revenue for Manito bans . Let us talk tax reform, but let us not talk of consumer tax, let us not talk about the 9 percent tax, let us talk about a minimum tax in this country, and let us all join together to fight for that, not fight for this insidious and ridiculous tax.

Thank you very much , Mr. Deputy Speaker. Mrs. Sharon Carstairs (Leader of the Opposition): I am delighted to join in participation of this debate, but you know I rise today with some sense of wonder at the change of positions that we find ourselves in, in this particular House . Let us go back a little while and take a comparison with Meech. First there were the Liberals, then there were the NOP with a Leader that did not quite mean what he said but he came all the way over, and then we had the Tories. Well, today we see another miraculous conversion.

First it is the Liberals in June, then NOP voted against an emergency debate and then we have them saying oh, yes, we are over on the side, we have to come along on this train ride. Then very reluctantly, today , even the Conse rvatives voted in favour of having a debate on the issue - Mr. Doer: A point of order, Mr. Deputy Speaker . 1043 Mr. Deputy Speaker: The Honourable Member for Concordia , on a point of order. Mr. Doer: If the Le ader of the Oppos ition (Mrs .

Carstairs) would read the May 19 Emergency Debate Resolu tion, which we proposed, she would clearly see the goods and services tax was on a month before she proposed the second debate on the same issue. I think she should be honest about it. Mr. Deputy Speaker: The Honourable Minister of Finance, on point of order . Hon. Clayton Manness (Minister of Finance): Mr. Deputy Speaker, the Government voted with the House on the second vote because it was clearly the wish of the House that the emergency debate proceed . They disputed the facts . It is not a point of order . Mrs.

Carstairs: Let the media recall that on the 21st of June the NOP voted against an emergency debate, and this afternoon, before the House Leader (Mr. "

Monday, September 18, 1989 McCrae) presumably got the whipping on , many of the individuals over there voted nay when the voice vote was cast. The reason we wanted the debate on the 21st of June was because we wanted the Premier to be well briefed on the position of Manitobans, well briefed before he went to the Premier's Conference in August which was already scheduled .

We were not given that opportunity to present, in th is House , the views of Members of the Manitoba Legislature, perhaps if we had the Premier would have had the courage to raise it with the Prime Minister , courage which he lacked on the 27th of August. Today, we hear from the Attorney General that the Premier and the Finance Minister (Mr. Manness) are doing their best . Well, Mr. Deputy Speaker, we do not think their best is near good enough because the phrases that come out of their mouths are so soft.

They are so afraid of damaging their reputation with the feds-although I do not know what reputation they had since every time we turn around Manitoba gets it in the neck-that they will not speak clearly on this particular issue . For the NDP this afternoon to talk about tax reform-I mean , I sat in this House in 1987 with the biggest tax rip-off of the taxpayers of this province that ever existed, and then of course, they do not like sales taxes. They do not like taxes that are sales taxes because they believe them to be regressive .

Well, I too believe them to be regressive and, therefore, I want to know why it was an NOP Government that raised it in 1983 and an NOP Government that raised it again in 1987. This general sales tax, also referred to as the value-added tax, also referred to as the National Sales Tax-its bad by any name-is a tax which is a windfall revenue for the Government of Canada and the impact will be felt by small business and families in this nation of ours. The only ones who will receive benefits from this particular tax are big businessmen and big business corporations.

They will find that the shift is very much in their favour as they operate their corporations, many of which are multinational and the profits of which go south of the border. *

(1550) What have critics said in the past about value-added taxes? They have said consistently that when they are introduced prices would take off, that consumer spending would plunge , that imports would increase, that unemployment rates would rise dramatically . That was what the critics said in Britain and, Mr. Deputy Speaker, every single one of those scenarios took place. Prices did take off. Consumer spending went down; inflation went crazy.

In some of the nat ion s that were surveyed by the international monetary fund, 63 nations, every single one of them saw an increase in inflation, every one of them, from a low of .67 in West Germany to a high of 6.5 percent in New Zealand, which is one of the most recent advocates of the value added tax. But it is the families, Mr. Deputy Speaker, that are going to suffer. Michael Wilson has the gall to stand up and talk about the fact that he is going to return money to low income families. He has not even indexed that payment to low income families.

The result is that the average family in the first year will get money back to the tune of about $415, but within four years that will have declined to $356 per average family. An Honourable Member: You do not worry about inflat ion. Mrs. Carstairs: So these- An Honourable Member: You do not care about inflation. Mrs. Carstairs: I care about families , unlike the Minister of Finance (Mr. Manness) in this House, who only seems to care about the bottom line economics of inflation. Inflation most hurts those low income families .

Those who earn high income levels can in fact deal and cope with inflation, because they do not have to spend every iota of their funding on their housing, on their clothing, on their food products. They have the luxury of putting money away. They even have the luxury in inflationary times, because usually with inflation comes high interest rates, of putting the money in the bank and cushioning themselves for those inflationary effects, but the low income family never does . It is the low income family that is going to be hit with inflation.

It is the low income family that is going to be hit with the de-indexing, and the middle class is going to be hit, Mr. Deputy Speaker . That is the impact of this tax . This is the message that this Government must take to Ottawa , that for Manitoba it is an unacceptable tax and it must be reformed. Mr. Deputy Speaker: Before I recognize the next speaker I want to caution all Honourable Members that if you speak before you are recognized you are not going to be recorded . The Hansard people have been instructed not to record until such time that you are first recognized. The Honourable Minister of Finance. Mr.

Manness: It is a pleasure to rise at this particular time and try to lay before the people of Manitoba certain views with respect to the goods and services tax and the federal Government . Let me reiterate, Mr. Deputy Speaker, this is not a tax of the provincial Government. This is a tax that has been conceived, this is a tax that is being implemented, this is a tax that is being defended by the federal Government. It is not one that I stand in my place and defend today. I never have and I never will. Mr.

Deputy Speaker, I have enough trouble defending my own taxes of which I am the trustee, I suppose, on behalf of all Manitobans . I do not plan to stand here today and defend Michael Wilson's tax . I never have and I never will. Mr. Deputy Speaker, the gall of the NOP is unbelievable. When we took over Government we had the second highest taxation regime in the country. All of our efforts in good management have been trying to reduce the level of taxation in this province. The gall of the Liberals surprises me also, because our best 1044

Monday, September 18, 1989 efforts have manifested within two budgets to try and reduce payroll tax for the creation of jobs, to try and reduce personal income taxes so again people have more disposable income and ultimately cause jobs to be created . They have voted against. Yet today on issues where they have no vote , they bring it forward and try to make it appear as if it is our tax. It is not, and I will say for the record, I will say that the gall of the Opposition Parties in this issue is beyond surprise to me. I do not really understand what it is they are trying to do.

Still, many of the points made by leaders opposite today, there are some points that I agree with. I wish I had the time to rebut some of the ones that I do not. I do not, Mr. Deputy Speaker. I propose to read from a short proposed text because I think it is important that we clearly put on the record the Government's views on this matter . Let me also say though that in due course, in future debates, I will take the opportunity to rebut some of the matters, particularly as brought forward by the Leader of the NDP.

Since the federal Government released its technical papers on the goods and services tax last month, Canadians have been closely examining the implications of these proposals. There has been a great deal of concern expressed about the GST by consumers, industry associations and provincial Governments, including the Province of Manitoba. It is clear that the proposal must be modified to safeguard the interests of consumers, business and provincial and local Governments.

But whatever problems there may be with the proposal now on the table, one fact is clear, the federal sales tax system must change and there is common agreement by all Parties on this, Mr. Deputy Speaker, we are not different. People and Parties of all political stripes have said for years there must be fundamental change to the manufacturing sales tax . The status quo is not an option. Some Members opposite do not seem to have a firm grasp on why change is necessary. Let me review the facts.

The federal sales tax now in force, the manufacturing sales tax, is applied on production , as is our retail sales tax which comes under criticism over and over again because we are -(interjection)- taxing the bases . The Members says, another Tory tax . One that they never changed one bit when they were in Government, Mr. Deputy Speaker. This causes many problems. Goods which go through several stages of production are taxed several times. This is known as tax cascading, it increases the ultimate price of goods, the goods that consumers pay.

Businesses who export are at a competitive disadvantage because the price of their products includes the manufacturing sales tax. Their competitors in most other industrialized countries do not face a similar tax . Mr. Deputy Speaker, we are an exporting country. The price of our goods has to compete with the price of the goods of other nations and, indeed, if our manufacturing sales tax is built into those products when it is not in other nations, obv iously we are at a competitive disadvantage. Imported goods are generally taxed on a lower base than domestically produced goods.

The existing tax cost jobs in Manitoba and across the country. The multiplicity of tax rates in effect today causes confusion and equities. The manufacturer sales tax is 13.5 percent. We pay it on our cars, we pay it on our fridge, we pay it on our TV. The federal tax on construction materials in our homes is 9 percen t; the federal tax on alcoholic beverages and tobacco was 19 percent; the telecommunications tax is 11 percent. Because the base for the manufacturer sales tax is narrow, the rate is higher than it need be.

For many years there has been agreement among-again I reiterate-all political Parties that it was necessary to replace the manufacturers sales tax. In 1966 the Carter Royal Commission on Taxation recommended a national retail sales tax.- (interjection) Hear, hear, the Member says. During the late 1970s and early 1980s the Liberal Government recognized the necessity of replacing the existing sales tax. Mr. Turner, Mr. MacEachen and Mr.

Lalonde, when they were Finance Ministers, all produced papers which set out the problems of the manufacturing sales tax and sought solutions which have shifted the tax to wholesale or retail level. The NDP, both federally and and when they were in Government here in Manitoba , have also ackn owledged the need to change the manufacturing sales tax. Most economists of all political Parties agree that a general sales tax in the long run will be benefic ial to Canada-more particularly , Manitoba . It is the transition period that is so upsetting and subject to criticism. Mr.

Deputy Speaker, the Member also talks about the Wood Gundy Report, and I quote from Wood Gundy. First item, why politicians are tend to wont to do, quoting out of con text: " The Government's blueprin t for the goods and services tax holds out the promise of substantial long-term benefits for the Canadian economy. Before realizing these benefits, the economy would first undergo a painful transition." So, Mr. Deputy Speaker, let the Member from Concordia (Mr. Doer) be honest. Why did he not read the whole quote? So we do know the transition area will be problems.

This Government is disturbed with those problems and this Government has made its case known strongly to Ottawa through the transition period. When our Party took office , we continued participation in the same process initiated by the former NDP Government. Manitoba, like most other provinces, took a positive and constructive approach to transforming an ineffective sales tax system into one which better serves Canadians .

As the Minister of Finance, I am compelled to try to eradicate inefficiencies and redundancy with respect to collection and make sure there is some fairness with respect to our businesses and consumers . We were disappointed when the federal Government terminated that process last spring and announced that it would proceed on its own . We believe that progress was being made and that discussio ns should be continued to find a consensus among federal and provincial Governments.

We also believe tha t a federal retail sales tax, operating in addition to existing provin cia l syst ems , would cause confusion , unnecessary duplication, inefficiencies and administrative chaos . * (1600) 1045

Monday, September 18, 1989 Mr. Deputy Speaker, now that we have reviewed the details of the sale tax proposal, we have some very serious concerns. We are particularly concerned about the potential inflationary effects on the 9 percent rate. We are also concerned that the GST will have negative effects on some sectors of the provincial economy, and I named them . It will endanger our tourism industry by increasing costs ; it will make housing more expensive; it will make life more complicated for the province's farmers.

The inflationary effects of the task may result in a high-interest policy which would be damaging to many Manitobans. As I said, Mr. Deputy Speaker, there are many points that the Opposition Leaders have brought forward that we do not disagree with. Meeting the administrative demands of a whole new retail tax system will place unreasonable demands on business. In addition, the new system will cost nearly a billion dollars to administer. I have one page left, Mr. Deputy Speaker, with your permission. The Government needs to have assurance that GST will not have an adverse effect on provincial finances.

We have said repeatedly that the federal tax should be visible at the point of purchase. We do not wish to reap excess revenue, any additional revenue, by levying the provincial sales tax on top of the GST. However, the province should not be saddled with higher program costs and reduced revenues from sales tax and personal income tax . Likewise, other levels of Government and non-profit institutions must be protected from adverse effects. Let me say that within the area of municipalities, universities, schools and hospitals may face higher costs for which they will need compensation.

The federal Government had been silent on rebates to this point in time, and yet we are waiting for the details to the federa l commitment for compensation to municipalities, universities, schools and hospitals. This Government believes it is vital that the federal Government resume discussions with the provinces about the future in goods and services tax. Too many uncertainties exist about the present proposal for it to become law.

By resuming discussions, as we were asked to do in some respect by the Premiers of this country, who asked us to try and help work toward a better system, inequities and redundancies can be eliminated from the federal sales tax plan. There are many questions still to be answered about the fiscal effects on the GST on Manitoba. It is not as simple as the Leader of the NOP (Mr. Doer) would make one to believe.

We are committed to invest the time and the good will it will take to achieve an effective national reform of a badly flawed manufacturing sales tax which Parties of all political stripes in this country have agreed to. I only hope that the Parties, that the Opposition Members in this House will see fit to try and work through this dilemma in a constructive fashion rather than just to try and score some political points. The Leader of the NOP (Mr. Doer) challenges me to table my letter. I am prepared to do so this week. I have no problem with that. Mr. John Angus (St.

Norbert): Will the Minister permit a question? Some Honourable Members : Leave . Mr. Angus: My question is very brief. Will the tax that you have just discussed be on top of the provincial 7 percent, or before or after, and will it be hidden or identified, something that sits within your purview? Mr. Manness: Mr. Deputy Speaker, let me say, as have said on many occasions, the essence of the remarks I have made, the federal sales tax has to obviously cross many hurdles which are, I guess, going to be assisted by Mr. Wilson and his attempt to get him through those hurdles before that tax comes into being.

Right today there is not a goods and services tax in place . The commitment that we have made to Manitobans is that if this tax sees the light of day we will exercise all of our energies to make sure that it is visible. Everything within our power to make sure that it is visible will be done. Mr. Deputy Speaker, let me also say that right now we are collecting roughly $35 million as a result of ourselves, as a province, taxing on top of the federal tax, particularly in all goods.

Now, if the Members opposite then are saying that in the fact that we forced the federal tax to be visible and, therefore, we then will tax alongside, are they also suggesting that we should give up $35 million of revenue on the sales tax side, on the provincial sales tax side? We have always said we do not want to enhance our sales tax revenue by one dollar but, surely, we should not be expected to lose $35 million should the federal Government bring forward this tax.

I talked about this dilemma openly, and Members like to shoot at me and say, well, we do not know where we are going, but that is part of the dilemma that we have. We will force visibility to the extent that we can. Our retail sales tax provincially is visible. We sense that if the federal Government is going to move into what I sense is provincial jurisdiction in a conventional sense, then darn it, they can very well make that visible too. In doing that, we should not have to lose $35 million, and that is what we are trying to work around right now. Mr. Doer: One question, just a short one?

Some Honourable Members: Leave. Mr. Doer: I am pleased he is going to table the letter. Would he please give a copy of the letter to the Page to make copies for us? It is very important for us to know as we proceed in this debate, and the Minister has asked us to proceed in the debate in the most constructive way possible. I think that letter would help us in being constructive and I would ask him if we can get a copy today so that we can work on it. Mr. Manness: Not today. You will have it this week. Mr. Doer: I beg your pardon? Mr. Manness: You will have it this week. 1046

Monday, September 18, 1989 Mr. Doer: You could give a copy to the Page. We will just get a copy of it. I am sure it is on the -(interjection)- Mr. Deputy Speaker, my question is to the Minister. Would he table a copy now, give us a copy now? Really, if he wants us to be constructive I think that is a valid challenge to us. We have to know what are the issues that we have to be dealing with in terms of being constructive, so I respect the Minister's challenge to us to be constructive.

I would ask him in the spirit of constructiveness and openness to give us a copy and table it now so we can work on it in a positive way without guessing. Mr. Manness: Mr. Deputy Speaker, I made an undertaking to provide that letter to this House this week. I will do so. Let me assure the Leader of the Second Opposition (Mr. Doer), the essence of that letter and the parts of the GST with which we have great concern as of the beginning of August are for the most part totally covered within that letter. He will not be disappointed in the stance that the provincial Government has taken with respect to the GST. Mr.

Jerry Storie (Flin Flon): Mr. Deputy Speaker, have to say to begin with that I am pleased the Members of the Government decided to support in the final analysis the debate that we have entered into. It is an interesting process. We have become accustomed to watching the Premier and many of his colleagues do flip-flops on occasion. On most occasions they have had the common decency to wait a period of weeks or a period of months before they have changed their positions. We have now seen a new record in terms of flip-flopping from one position to another, a matter of about 20 minutes .

We heard nays from the Government side when the question was raised as to should the debate continue. They do not want to have this debate and frankly, we would be surprised if there was anything but half-hearted attempts to debate the merits of this proposal. The fact of the matter is, and the Minister of Finance (Mr.

Manness) is as guilty of this as any Member of the front bench over there, that their position has changed substantially as a result of public opinion and as a result of this forum, not because of any principled opposition to the federal Government's proposal, not because of any principled opposition to the nature of this tax. Mr. Filmon's opposition to it is clearly an opportunistic move, just like his opposition now to Meech Lake was. The First Minister (Mr. Filmon) now tells us that he is going to whole-heartedly oppose the introduction of this sales tax.

He has sat meekly in his chair with his hands conveniently placed under his seat. There has been no frantic phone calls to the Prime Minister, no attempts on the part of this Government to remove this province from the grips of the tyranny of the federal Government.

The fact is that we have lost $60 million in benefits from unemployment insurance that have been taken out of this province, $350 million as a result of the cancellation of the child care commitment, about $70 million annually to the province, about $41 million lost in revenue to our post-secondary education institutions as a result of reductions in EPF, about $101 million that translates into in terms of our health care, $40 million withdrawn as a result of the Forces bases being closed in Portage La Prairie and in Winnipeg, millions lost as a result of the VIA cutbacks, millions lost because this Government has not been able to renew regional development agreements whether they be forestry agreements, mineral development agreements, northern development agreements or transportation agreements, hundreds of millions of dollars . •

(1610) So, this Government has been a disaster at protecting the interests of Manitoba . Now perhaps we have an opportunity as legislators to do something collectively to protect the citizens of Manitoba. I want to make it clear, and there should be no doubt in anyone's mind about the motives behind the conversion of the Conservative Government with respect to this tax, the conversion is a direct result of the thousands of coupons that are being mailed daily to the New Democratic Party Caucus office opposing this tax. The Minister of Finance (Mr.

Manness) spoke at some length about the desire of all Parties to substantially alter the manufacturers sales tax, that 13.5 percent tax that is applied to the production of goods across the country. There can be no deny ing that there is some need of reform, and the reform particularly has to affect those manufacturers who are designating their product for export . That is a legitimate goal, a legitimate goal. But the fact of the matter is that what the Conse rvativ e Government, what Michael Wilson calls tax reform, is nothing but a tax grab. You do not double or tripl e your revenue and call it tax reform . Mr.

Deputy Speaker, it takes no imagination whatsoever to devise a way of reforming the manufacturing sales tax in a way that is more consistent and more fair. My Leader, the Leader of the New Democratic Party, has outlined several ways in which the Government could recoup equal or greater revenue by simply changing some of the loopholes, elimi nating some of the capital gains exemptions, changing some of the provisions which affect the distribution or the collection of tax on wealth in this country. There are alternatives, and the alternatives are two, to name a number.

The first one, of course, would be the elimination of the manufacturer's sales tax on export products alone. That would not cost the federal Government anywhere near the $9 billion to $12 billion that is going to be collected through this general federal sales tax. Mr. Deputy Speaker, they could eliminate the manufacturers sales tax altogether and recoup the interest by simply closing some of loopholes my Leader referred to.

Everyone within the federal Depa rtment of Finance knows that there is between $30 billion and $40 billion worth of exemptions on an annual basis, and it does not take a genius to know th at the only reason the Conservative Government, the only reason Michael Wilson, the only reason Clayton Manness, the only reason Conservative Finance Ministers across this country are not supporting those kinds of amendments, 1047

Monday, September 18, 1989 those kinds of reforms , is because corporations would have to pay their share. Mr. Deputy Speaker , you will have noticed I am sure that in the emergency resolution that was presented we state that from the period 1950 to 1984 the share that corporations pay, by way of income tax, has shrunk from 37 percent to 11 percent, and it is a sad reflection on the nature of the present Conservative Government that since 1985 to the present day those contributions have continued to shrink from 11 percent to 9 percent.

What that means to the average Manitoban, the averag e taxpayer across this country, is that the little person, the wage earner in this country, is paying substantially more than his fair share . So, Mr. Deputy Speaker , let us not have any rhetoric from Members opposite about fair share and the GST being fairer for Canadians. It is only fairer if you assume there is no other option; it is only fair if you assume that corporations should not be paying their fair share; it is only fair if you assume that the 9 percent the corporations currently contribute to the overall income tax revenue is their fair share.

Well, New Democrats across this province and across the country do not believe that. We have never believed that. There is a substantial difference between the phony opposition that we see from Conservative Members in the Manitoba Government to the GST and the real opposition that is felt by the New Democratic Party because the GST is inherently unfair and because the federa l Tory Government has been going in absolutely the wrong direction for the last four years, simply like following the tradition of the Liberal Party in the previous dozen years. Mr.

Deputy Speaker , the income tax system has not been getting fairer . The share of corporations has been getting smalle r and average people are picking up the tab while Conservative Members from across the country speak with a great deal of sincerity, feigned sincerity about the need for tax reform in the coun try, feigned sincerity . The fact is that it is no secret that Mr. Wilson is going to spend some $12 million to $20 million promoting the Government sales tax, the general sale tax, in the country. It is no secret as well, Mr. Deputy Speaker, that while Mr.

Filmon will put on a front and oppose the sales tax, he will do very little, if anything, in a concrete way to oppose this sales tax .

It will be a public relations gesture and all we can hope is that with the continued support of the New Democratic Party Opposition that the message gets across to average people , because the only way we are going to stop this sales tax is if there is a tax revolt, a tax revolt in a positive way where people are mobilized by a concern over the imp osition of this tax to contact their Members, the ir Members of Parliame nt, Conservative Members of Parliament, and make it known to those individuals in no uncertain terms that this sales tax is not only punit ive to the average family, it is going to be punit ive to the country as a whole .

Mr. Deputy Speaker, I would like to speak for a moment on the impacts of this tax on northern Manitoba , and I was sparked to make these remarks as I heard an individual, an independent businessman , speaking on a national radio program about the impact of this tax on his small business. It struck me as extremely ironic that Mr. Wilson could say that the y were not taxing food. Well, I want to tell you that the imposition of this tax, if it is imposed in Manitoba, will affect the cost of living in northern Manitoba . It will affect the cost of our food and our gas and our clothing and our living arrangements.

It is going to affect the cost of living for everybody . The unfortunate part of it is, because we live in a remote part of the province and people from across Canada are going to feel the same impact , the imposition of this tax is going to be compounded upon the people whom I serve in the Flin Flon constituency . It is a horrendous tax, it cannot be supported, and I only wish that the opposition that was expressed by the First Minister (Mr. Filmon) was real, because then we would see some action and not just rhetoric. Thank you , Mr. Deputy Spea ker. Mr. Richard Kozak (Transcona): Mr.

Deputy Speaker, I welcome the opportunity to repeat and explain my Party's violent objection to the federal Conservatives proposed goods and services tax. I am pleased that the New Democrats have decided to share in many of my comments . This represents something of the deathbed conversion on their part, as they themselves raised Man itoba 's prov incial sales tax rate in 1985 and 1987 and refused a Liberal demand for a debat e on the goods and services tax this June . I hope their short memory is some consolation to them .

I am pleased that the provincial Conservatives have decided to share in many of my comments, although flip -flops on policy matters are a trademark of this Government . We are witnessing today the first major flip-flop by the Minister of Finance (Mr. Manness) , who has said, and I quote, "I agree with it wholeheartedly. I think it is a fairer system of taxation. The Government remains very committed to a consumptio n tax where those who consume more pay more.

There is the potential for inflation, but I feel that cou ld be quite minimal and short term ." The Minister went on over a six-month period before the Premier (Mr. Filmon) pulled out the rug . I suggest to the Minister that each successive flip-flop in the future will be easier than the last. In short , Mr. Deputy Speaker, although I welcome the belated support of the other Parties , I am proud that the Liberal Party has been unequivocal and vocal in opposition to the goods and services tax right from the start . The federal Conservatives called the present manufacturers sales tax a silent ki ller of jobs.

This is a powerful slogan but entirely wrong and it must be refuted . It is based on the fact that a 1984 survey indic ated that the average effective tax rate for domestic goods was 33 percent higher than the tax on imports competing with domestic products . However, Canada has a floating exchange rate and this should prov ide full compensa tion. The Canadian dollar is not compensating . In fact, it is at 84 cents U.S. compared to its fundamental value below 80 cents U.S., only because the high interest rate policy of the Bank of Canada is totally out of step with the more moderate policy of the U.S.

Federal 1048

Monday, September 18, 1989 Reserve Board. Jobs are indeed being killed, but by the Bank of Canada not by the federal manufacturers sales tax . *

(1620) Canada's real gross domestic product growth in the second quarter of 1989 was only 0.2 percent. Canada's current account deficit, our balance of world trade in goods, services and investment income was a record $5.7 billion in the second quarter . " It looks like we are well on the way to a trade-led recessio n," says Jeff Ruben, Senior Economist at Wood Gundy. None of this , Mr. Deputy Speaker, demands an end to the FMST, only directions from Brian Mulroney to the Bank of Canada to lower interest rates, or adjustment of FMST rates on foreign and domestic goods to end the import advantage. Mr.

Deputy Speaker, the goods and services tax is a tax that only the largest corporations could love. The GST is essentially a product of 17th Century mercantile theory aimed at promoting exports at the expense of consumers and small business. The French Revolutio n is the proof of where this totally inhumane theory leads.

Like the simpler measures outlined above, the GST would address deterioration in Canada 's growth and trade balance, but would have the added consequence of reduc ing the tax burden on capital intensive corporations that ship in bulk, largely to export markets, while increasing the tax burden on ordinary Canadians. It will benefit the largest, most capital-intensive corporations in that capital inputs like plant equipment and machinery will have the federal tax on them rebated . This has not been the case under the FMST, and obviously improves corporate profit margins or permits price reductions .

Smaller businesses, although generally more labour-intensive, would also benefit somewhat from tax rebates on capital inputs, but they often , as in the case of farmers, have limited capacity to cope with the paper burden.

According to the British Committee on Enforcement Powers of the Revenue Departments, "It is the fear induced in ordinary decent trading citizens that they might inadvertently have done something wrong, or done, or omitted to do something, which could land them up before the magistrate like a serf before a czarist court, which is at the root of the unpopularity of this tax." It will benefit the largest corporations, Mr. Deputy Speaker, the primary industries that ship in bulk, because they are characterized by low distribution margins.

For these corporations with distribution margins less than 50 percent of the factory gate price, the fact that the GST will apply to the distribution margin as well as the factory gate price is more than offset by the reduction in tax rate from 13.5 percent to 9 percent. Benefitting from the impact of capital input tax rebates and a much lower tax rate on a slightly higher tax base, corporations such as auto makers will be able to boost profit margins or reduce prices. Reduced prices, Mr.

Deputy Speaker, of course, are highly unlikely unless these corporations wish to increase their U.S. market penetration with lower prices and fear U.S. anti-dumping regulations. However, smaller corporations, Mr. Deputy Speaker , as in the case of shoe manufacturers, will not be so lucky. In the case of a pair of shoes that increases in price from $20 to $100 between the factory gate and the retail outlet, the federal tax would rise from $2.70 to $9.00. Less tax on the output of big corporations ; more tax on the output of small corporations .

It will benefit exporters because they will recoup their federal tax on all inputs which they cannot do presently. Mr. Dep uty Speaker, which businesses have the most to lose? All small service industries in the print ing and publishing indust ry will have to raise their previously tax-exempt prices by nearly 9 percent or accept lower profit margins. Most retailers will have to raise prices by up to 9 percent or have profits squeezed . Consumer resistance will hurt sales and tax will be paid to the federal Government up front, even if customers are given extended credit.

The bottom line , furthermore, is inflation and recession , Mr. Deputy Speaker . Consumer sticker price shock will undoubtedly have a negative impact on sales that may tip our already fragile economy over into recession and, if this does not occur , a wage price spiral, admitted by this Government, this federal Government , may make it possible to take extreme measures, such as retaining high interest rates in our economy and possibly introducing wage-price controls. Mr. Deputy Speaker, we will be left also with a regressive tax system. We will be left with high administrative costs to operate this tax.

We will be left with tax evasion problems. Out of pure revulsion, I suggest that we send a clear message to Brian Mulroney . Thank you, Mr. Deputy Speaker. Mr. Jay Cowan (Churchill): It has been said, Mr. Deputy Speaker, that a week is a long time in politics. I believe Harold Wilson coined the phrase and used it quite frequently. We have seen today that a half hour can also be a long time in politics.

I want to reflect a bit on what happened earlier in this House today because I think its significance is that it shows how the Conservatives have responded to this crucial issue for Manitobans with hesitancy and with ambivalence and begrudgingly and being forced, kicked and dragged screaming into the issue in order to not have to confront head-on their Conservative cousins in Ottawa, because earlie r in the day when Mr. Speaker put the vote, "should the debate now proceed," we heard many audible nays, negative votes on the other side of the House from the mouths of Conservative Ministers and backbenchers.

That is why the House Leader of the New Democratic Party called for ayes and nays , because we felt that if they cou ld say nay from their seat and try to prevent the debate in that way they should at least have the political courage, the wherewithal! and the consistency to be able to say nay on the ir feet. 1049 An Honourable Member: What a bunch of baloney . Mr. Deputy Speaker: Order, please.

Monday, September 18, 1989 Mr. Cowan: All that shows to me is that the Conservatives think better on their feet than they do on their seat, and they do not think very well in either instance. When they came back in the Chamber after the House Leader marched down to the Ministe r of Finance's (Mr. Manness) office when they left the Chamber to avoid voting immediately on that question, when they came back into this Chamber , Mr. Deput y Speaker, they came back cleansed . They came back cleansed and united . They had undergone in a short one-half hour period a miraculous conversion.

Some would call that a flip flop. Some would say that the Conservative Government once again flip-flopped, but they would only say that out of expe rience . They would only say that because they have seen so many flip-flops on the part of the Premier and this Conservative Governme nt that they have come to expect it. So let us give them the benefit of the doubt . Let us believe that they had in fact undergone that miraculous conversion .

Now just a few moments later they are all of like mind, and for most of them it is a different mind than they were a half hour ear lier, because they did indeed vote against the resolution, and they vote one by one to the person in favour of this debate on this very imp ortant matter, this matter of crucial interest to Manitobans. A remarkable conversion indeed, but the innocence of that conversion, if indeed it was sincere and not a cynical attempt to be positioned in voting against this debate , was short-lived and soon repudiated by the Minister of Finance (Mr.

Manness) when he took his feet to enter into this debate. For it was not lon g after he began his comments that he transformed a remarkable conversion into a much more predictable Conservative cop-out. *

(1630) What tha t shows me, Mr. Deputy Speaker, is that you can lead a Conservative to an idea but you can not make them understand it. The fac t is they have been kicked dragg ing and screaming into this debate, but the fact is they still suffer that torn soul that rests partly here in the Manitoba provincial Conservative Party and partly in the Conservative Party in Ottawa in power. So the Minister of Finance (Mr. Mannes

s) tries to extricate himself from a difficult circumstance by saying that it is not his tax. For that reason we should not be critical of the Conservatives here in Manitoba , but in making that statement he shows clearly that he misses the point of this resolution entirely. He tries to duck his responsibility to stand up for Manitobans against this wrong-headed tax, but he misses the point entirely . The point as is outlined in the resolution for the emergency debate, as put forward by the Leader of the New Democratic Party (Mr.

Doer), is that this provincial Government has not effectively fought for Manitoba's interests in fighting against the goods and services tax . Those words are carefully chosen and carefully crafted to reflect the actual circumstance of the day. They have not fought effectively and that lack of an effective fight has indeed put the interests of their political Party ahead of the interests of Manitobans and their families.

I believe they have not effectively fought against the goods and services tax, against the imposition of this negative tax, because they have not the political will to do so, and that lack of political willpower, as witnessed so many times over the past number of months and again witnessed in th is Chamber today , betrays a lack of political courage , and that lack of political courage endangers all Manitobans.

Today they have been brought by a forced vote in this House kicking and screaming into this particular debate, and yet having been dragged that far they still refuse to fight for Manitobans and their families. Having made the half step haltingly, they still refuse to go the full step and stand up and fight for Manit oba families against their Conservative cousins and counterparts in Ottawa. We have seen the Minister of Finance (Mr. Manness) step lightly around the real issues, as he tries to do from his seat right now.

He has entertained us today in a clumsy political dance that betrays his lack of resolve to stand up for Manitobans against Ottawa Conservatives, and what was most interesting about his comments today was his delayed response to make public the letter he says he has sent in opposition to his Conservative counterparts in Ottawa on August 14. Now, since August 14, the New Democratic Party and others have asked consistently and rep eatedly for a copy of that letter, and on every occ asion the Minister of Finance has refused to make that letter public .

For over a month now he has had that letter in his possession and he has refused to make that letter public. If he went today standing on his feet and said he was going to table that letter, followed through with a commitment to do so immediate ly, one could say, well, perhaps it was an oversight on his part that he did not make it public, or perhaps it was that he wanted to wait until we got back in the House and use t he first opportunity to give that letter to Members of this Chamber today, but the fact is -(interjection}- now, when asked when he will table it, he says, this week. Do you want to know why, Mr.

Deputy Speaker , I think he will not table that letter today, yet will table it later in the week? I think , and I could be wrong , it is only conjecture, I think he has two letters, and I think he is going to table a weak and tepid and timid letter that was drafted and sent on August 14- Mr. Deputy Speaker: A point of order, the Minister of Finance . Mr. Manness: There remains to be only one letter that was sent on August 14. Mr. Deputy Speaker: Thank you for that point of order. The Honourable Member for Churchill. Mr.

Cowan: I have no quarrel with the record or what the Minister said, but I am just going to repeat it so that we all understand. He said there was only one letter sent on August 14. Now, in his haste to defend his reluctance or his refusal to take that letter and make it public , I think he has jumped the gun a bit, because I was not suggesting that there were two letters on August 14. I think t here is another letter this week. 1050

Monday, September 18, 1989 I think we are going to see, later in the week, a very tepid and timid letter that was sent on August 14, and then I think we are going to see a letter as well , a stronger and firmer lette r that was sent , and that second letter will -(interjection)- Mr. Manness: Come and look at it. *

(1640) Mr. Cowan: I will be glad to look at it. Would you send it over? The Minister of Finance (Mr. Manness) from his seat says, and holds it up, will you look at it, which shows that all he has to do is to provide it to that Page who is sitting not 10 feet away from him, and that Page would have to walk-not 40 feet to me-and we would have a copy of that letter, and yet he smiles and refuses to do so. What is he trying to hide? I think that second letter is going to be firmer and he is going to try to use it as a subterfuge, to hide the tepid nature of that first letter. It is a very curious circumstance indeed.

I wanted to talk a bit about the subterfuge and the reluctance of the Conservatives here, and the ambivalence and the unwillingness to fight this political fight, but I also want to talk a bit about the goods and services tax, and I want to put it in this context. My colleague, the Member for Flin Flon (Mr. Storie), has suggested that this goods and services tax will have a very negative impact on Northerners; indeed it will, Mr. Deputy Speaker, and it will probably have a more profound impact on Northerners than it will on most people in this province .

For that reason the New Democratic Party stands firm and has always stood firm against the imposition of this goods and service tax, but it will also have a negative impact on seniors . Mr. Deputy Speaker: I almost hesitate to interrupt the Honourable Member, however, the Honourable Member 's time has expired . The Honourable Minister of Northern Affairs . Hon. James Downey (Minister of Northern Affairs): I have to start my comments today by saying how disappointed I am in the speaker who just spoke previously.

He did very little in any way to convince any Member of this Chamber, or any Manitoban , to follow his position in what he is trying to accomplish here today. Mr. Deputy Speaker, one really has to point out what the objective of the New Democratic Party and the Liberal Party is in the exercise that they are carrying on here. They, both Parties, were such dismal failures in the first Question Period back after some six, eight, ten weeks of recess, and made such a poor showing they truly had to do something to try to get the imagination of the public of the Province of Manitoba.

If one were to watch the performance of both Parties today, I think the majority of the people in Manitoba would agree it was a dismal attempt to ask questions about current issues of the day, and/or ask in a responsible manner what the activities of Government have been at the summer period of time, and particularly evident by the Member for Churchill (Mr. Cowan) 1051 standing trying to give the Tory Party, the Conservative Party, a lesson as to how not to flip-flop in the great flip-flop.

If he were to look at the back of his Leader's neck and the hole in his jacket from the House Leader, his trainee, trying to get the Leader of the New Democratic Party to sit down and not carry ori with his speech so that he could call for Ayes and Nays. No flip-flop on the part of the Conservative Party, we agree with and support the Rules of the House. You, Mr. Deputy Speaker , truly ruled the motion out of order on a matter of not being urgent because of the time frame-other opportun ities to debate it. So it was on a matter of supporting the Rules of the House that we voted the way we did in the first place.

Secondly , we do not have any trouble in debating any issues as it comes to relating to taxes in this province or in this country, with either the New Democratic Party, who were the biggest tax gougers that this province has ever seen and are in the political position they are in this province, followed by the wishes of the people of Manitoba in the last election; and if they were to put us to the people today would even be in a worse situation as it comes to seats in this Legislature. Mr.

Deputy Speaker, for the life of me I cannot understand how the Liberal Party can stand in th is House and debate anything when they voted against tax breaks to the people of Manitoba in the recent budget, lower taxes than we have seen in years , doing exactly what the people of Manitoba wanted, and they voted against it. Do they lust for power that badly, do they really lust for power that badly that they voted against lowering of taxes for the taxpayers of Manitoba? Well, one would have to say, yes.

Even more, is there lack of putting the truth on the record as it relates to the federal situation and why we are in the disastrous situation we are financially in this country . Who was it that put billions of dollars of debt on the taxpayers of Canada? Pierre Elliott Trudeau and his ill-conceived direction economically of this country.- (interjection) Who is the Liberal Leader supporting in the national leadership-one of Pierre Elliott Trudeau's henchmen . Yes, Jean Chretien . Yes, Mr. Deputy Speaker, that is who she is supporting and that is who put this country into a disastrous financial situation.

I do not suppor t the national sales tax, but when 30 cents out of every dollar of revenue goes to pay interest on our debt , what are you r alternatives? What are the Liberals' alternatives, what are John Turner's alternatives, the rump of the Liberal Party? What is the New Democratic Party's solution? They do not even have a Leader. Neither of those two Parties nationally can get a Leader. I am proud to say I am a Conservative. At least we are prepared to deal with some of the tougher decisions in this province and this country. Mr. Deputy Speaker, you had something to say? Mr.

Deputy Speaker: The Honourable Minister of Northern Affairs has the floor. Mr. Downey: Let us deal with it. I said I am not supportive of this tax, and our Government's position

Monday, September 18, 1989 has been well put forward by our Minister of Finance (Mr. Manness) and our Premier (Mr. Filmon). Yes, but what I am asking you- An Honourable Member: What positions? Mr. Downey: Well , no positions. We have at least Leaders to put positions forward. Who have you put forward as a Leader in the New Democratic Party? No one. Who have you in the Liberal Party put forward nationally as a Leader, and what policies have you? Yes, I ask you those questions. Come forward with the answers. It is easy to sit in the back rooms and the back benches as you are and not take a position .

An Honourable Member: What is your position? Mr. Downey: My position is opposed to this tax, but it sure as hell is not supportive of the way in which the taxpayers' dollars were raked from them by Trudeau, raked from them by the New Democrats of Manitoba. What did they do with it? Frittered it away in the sands of Saudi Arabia . Yes, it is that kind of policy the people of Manitoba voted against , and voted for a responsible leadership that they are getting under the leadership of Gary Filmon and the Finance Minister of Clayton Manness.

Yes, and we are prepared to stand here and vote for tax cuts for the people of Manitoba at the same time the Liberal Caucus and the Liberal Party vote against it. Not because they did not want to, it is because to their own political advantage, they thought, to vote for higher taxation. Yet today they want lower taxation. They cannot have it both ways. I cannot believe it. I cannot believe that the Liberal Party can put themselves forward as a credible alternative to the taxpayers of Manitoba. Mr. Bob Rose (St. Vital): Try us. Mr. Downey: "Try us," he says. That brave Member for St. Vital (Mr.

Rose) says, "try us." They are on the same position. The Liberals and the New Democrats are on the same position on this. They have the chance to vote against us. Are they going to? Are they really committed to what they believe in? They have the chance of going to the people of Manitoba. Are they going to do it? I am asking you , Mr. Deputy Speaker, is that what your intentions are? Are we going to have these kinds of actions all through this fall session? Are we going to get down to dealing with the responsible duties as elected Members of the Legislature?

Are we going to get down to the serious matters within Manitoba? Yes, it is serious, you bet it is serious . It is serious because Pierre Elliott Trudeau, supported by the Liberal Leader of Manitoba, put the country in this situation. That is one of the reasons that it is serious . Thirty cents out of every one of your revenue dollars that go to the federal Government goes to pay the interest. (Mr. Mark Minenko, Acting Speaker, in the Chair) That tacked on top of what we have based here in Manitoba is very, very difficult for the people of Manitoba to tolerate. Mr.

Acting Speaker , I think, and I say this seriously, that Members of this Legislature put our position of opposition forward as to what is happening. That has been done and will continue to be done, but I would suggest as well that we get on in dealing with tax reductions for the people of Manitoba which we and the former critic for the Liberal Party is clapping, but he voted against it. I cannot read him that clearly. I can hear him but I cannot read him.

I cannot understand why the Liberal Party would not stand up and support the Conservative Party against the dastardly position that the New Democratic Party put us in, in the past six years in this province . I invite them to do so at every opportunity . Yes, I expect them to take shots at the leadership of the Conservative Party and the Conservative Party nationally, but I think they would have a lot more credibili ty if they at least elect a Leader that could have some policies to show us what they believe in would be the answers, both for the Liberal Party and the New Democratic Party.

It is awfully easy to come and do your posturing here in this House, but what have you for an alternative? An Honourable Member: You would not posture . Mr. Downey: Mr. Acting Speaker, I did not hear what the Member for St.- An Honourable Member: He says you would never posture . Mr. Downey: He is right, I would never posture . What I will do is stand here and tell the people of Manitoba what really has happened in the history of this country as it relates to the Liberals .

Of course, the New Democratic Party are either five years ahead of themselves or five years behind themselves , but they are always on time when it comes to taxing the taxpayers. They knew how best to do it in this province . They should be able to speak very effectively on it. Thank you, Mr. Acting Speaker. *

(1650) Mr. Herold Driedger

Document details

Collection	Manitoba — Debates (Hansard)
Citation	34-2-31a
Type	hansard
Volume / chapter	34th 2nd hansardpdf 31a.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	4f7f7c871c5dba91058cd3fb56e8d56f9d977d2c

Source file is stored in the law ingest library (pdf).