The Rt. Hon. John N. Turner, P.C., M.P. Former Prime Minister of Canada, Leader of Her Majesty's Loyal Opposition
Chairman: James K. Warrilow President, The Canadian Club of Toronto
John Napier Turner is a man of many talents, who has given much to Canada during his years of public service.
He distinguished himself early, while still a student at The University of British Columbia-by winning a Rhodes scholarship, and has remained in the public eye ever since. After studying law at Oxford, and French in Paris, John Turner returned to Canada to complete his law studies. He first practised law in Montreal with Stikeman Elliot.
In 1962 he entered the House of Commons, and was appointed to the cabinet in 1965. A string of important portfolios soon followed, including Solicitor General, Justice, and Finance.
In 1975 he resigned and returned to private practice on Toronto's Bay Street.
Then, in 1984, some newspapers reported it, "Bay Street's golden boy made the shift from 'Bay Street to Main Street"' by winning the Liberal leadership contest, and the Prime Minister's job.
After his government was defeated in the September '84 election, John Turner continued to show his true mettle to the Liberal Party and the country. The characteristics that come readily to mind are: determination, commitment, integrity, and above all, staying power. In his youth, John Turner was a champion sprinter. With time, I think he has become more of a long distance runner.
In his private life, I'm told our speaker loves nothing more than to take his wife Geills, and four children on canoe trips in the Arctic.
Please welcome the Right Honourable John Turner.
John N. Turner
I would like to share with you some of my concerns about where the Mulroney Government is leading us, and to offer a few words on my agenda for the future of this country.
You know, perhaps better than most Canadians, that what is essential to the business community is stability and predictability in public policy. Without that stability and predictability in the marketplace, you will not be able to make the investments which stimulate growth and generate the jobs we need to move closer to our potential.
Today, I will summarize an agenda for reaching that pot-, ential-for fulfilling a Canadian dream.
But first, I would like to talk about two short-term initiatives of the Mulroney Government that complicate Canada's future. They inject uncertainty into our political and economic picture because they are being mismanaged.
In two critical areas, tax reform and trade, the Mulroney Government, rather than creating stability and predictability, is creating uncertainty and confusion. Business is having trouble knowing where to go and where to invest.
The Mulroney Government talked about free trade without knowing what it meant-or where it would take them. They are now talking about tax reform-and they don't know where that will take them either.
When Finance Minister Michael Wilson appeared before this audience last month, he had some difficulty explainingfirst, why his Budget deficit projection of only seven months ago was out by $2.5 billion-and second, why the Mulroney Government, which originally had deficit reduction as its primary goal, was now telling Canadians that, in Michael Wilson's words ". . . a higher-than-expected deficit this year is not inconsistent with either our five-year fiscal plan or our fiscal principles."
So, in other words, `We will do everything to bring the deficit down-but if it doesn't work don't worry! It's all part of the plan!' Canadians are now asking this government, `What plan? Are you going to raise personal and corporate taxes if deficit reduction fails? What is your agenda? You say one thing then turn around and do another, and tell us everything is still on track.
And now, the Conference Board of Canada has challenged the Minister of Finance's projections-arguing that the deficit will be as much as $8 billion higher than the Minister has forecast by the end of 1988. With that kind of record at targetting-how long would anyone last on your staff?
Is it any wonder that we are skeptical when the Minister talks about the government's commitment to tax reform?
If you look at the record of this government so far on tax reform, it is not very encouraging. When they were elected, they said their objective was to make the tax system `simpler and fairer. But the reality is that, in two successive budgets, the Minister of Finance attacked lower and middle-income groups and gave tax breaks to millionaires. Individual tax rates have gone up, while corporate rates have gone down.
Those budgets widened the gap between the rich and poor, and encouraged rather that hindered the growing problem of the concentration of economic power in fewer and fewer hands.
Fairness? Under the two Wilson budgets, those earning $15,000 a year face a cumulative tax increase in four years of 23%; while those at $100,000 have an increase of only 2%.
Fairness has not been the over-riding principle in the last two years. Why should we believe that suddenly it is now? We have seen hopeful rhetoric about the need to change the tax system, but no concrete proposals.
I believe that any agenda for tax reform must be based on three very clear principles: fairness, simplicity, and efficiency. We have closely watched the U.S. example, and I believe that we must, of course, take into account the changes being implemented in that country, but without jumping on the U.S. bandwagon. But nor do I propose going in the opposite direction. We should note that the Minister of Finance has been doing just that by giving a $500,000 capital-gains exemption while the Americans are moving to tax capital gains as income. Moreover, the Americans are proposing to lower personal income tax rates while the Minister has imposed surtaxes on income.
There are too many contradictions and too many unanswered questions in the approach of the Mulroney Government to tax reform.
For example, he has talked about imposing a Business Transfer Tax, something which was not mentioned in the Throne Speech, and something about which we have heard very little. It would be a massive tax on consumption which would replace the sales tax, and at the same time broaden the base. This kind of tax is not only regressive, it is almost invisible-you wouldn't know you were paying it. Unfortunately, this government is an expert in introducing hidden taxes. What effect would this have on low-income Canadians? On small business? On the housing and construction industries? On the service industries?
The promise to reduce income-tax rates is very attractive. But we must know which deductions and exemptions are going to be eliminated to replace lost revenue. The Government has a duty to tell Canadians which exemptions they are looking at. Will it be the basic personal exemption? The exemption for senior citizens? The exemption for dependent children? The RRSP deduction?
Those are tough choices. They are choices only a government in power can make, because only a government in power has at its disposal the information on what those exemptions and deductions amount to in terms of foregone revenues.
I believe that there are a number of tax shelters and tax expenditures that also have to be examined.
In making our tax system more efficient and more fair, we should be asking ourselves if those many exemptions still encourage the kinds of activity we want to encourage.
I believe that the reform of our tax system must also go hand-in-hand with the reform and strengthening of our social programs because any changes in the tax system will have an important impact on how we operate those programs.
We in the Liberal Party are seriously examining the concept of a Guaranteed Annual Income which will support those most in need with dignity and encourage an end to the welfare cycle. I do not say that this will be accomplished overnight. The provinces will have to be involved at every stage. Decisions have to be made about how best to achieve the results we want while maintaining or enhancing current levels of support for those most in need.
But I do not want us to fall into the trap of simplicity at the expense of fairness.
There must also be stability in the tax system. Once changes are made, they must stay in place for some time.
I can assure you that I and my party intend to concentrate on proposing means to put equity back in the tax system, and that we will not lose sight of the goals of fairness, simplicity and efficiency in pursuing that quest.
The other area where I believe that the Mulroney Government is creating confusion and instability is in the free-trade negotiations with the United States.
We do not support their initiative. We believe that the negotiations have been ill-timed, ill-managed and ill-prepared. The Government has sent us into a hyped-up comprehensive bilateral treaty negotiation with the United States without any debate in Parliament and inadequate consultation with the provinces.
I don't believe that there will be any comprehensive freetrade agreement. No Canadian Government can risk opening up the Auto Pact, dismantling our agricultural-support programs, or not protecting our cultural industries.
I doubt whether we can get an overall agreement with the United States that will adequately protect our interests. But to walk away now-as the Prime Minister keeps hinting-may
unleash damaging countervailing action against us. The Prime Minister has painted Canada into a corner.
But the talks are still on. If they continue, we believe they must satisfy the following four concerns:
1) We should have a standstill agreement-a suspension of unilateral countervail action during the negotiations. No further harassment as we have seen on lumber. Any agreement on trade with the United States must contain a severe restriction or elimination of countervail action by the United States-without which there is no security of access for Canadian products. As the lumber case shows, without an agreement on countervail, we should continue to be subject to actions which would devastate whole industries.
2) I have proposed that joint Canada/U.S. Trade Tribunal, appointed by Congress and the House of Commons, be established to mediate disputes.
3) We must have agreement with the provinces on a ratification formula. The reduction of non-tariff barriers to trade-most of which are at provincial and state levels-requires provincial involvement and consent.
4) We must have an adequate phase-in and adjustment period for businesses and workers who would be dislocated by any such agreement.
I have argued that while the United States is our largest and most important trading partner, it is not our only trading partner. The bilateral approach should be simultaneous with a multilateral, international approach. I believe this government, with its primary focus on the United States, is overlooking a key area in which our voice-Canada's voice-should be made stronger.
We in the Liberal party have always recognized and encouraged that international role. We have always favoured liberalized world trade-lowering trade barriers, such as tariffs, quotas, subsidies, and procurement policies-on a world-wide basis.
Under a Liberal Government, Canada was a co-founder of the GATT. We are committed to it. More international trade builds greater interdependence. Greater interdependence provides growth and a better standard of living for ourselves and for our trading partners. It also helps to bring all nations closer together and encourages a climate of peaceful coexistence.
We must also encourage more countries to join the GATT process. That is why we disagree with the Mulroney Government's decision, once again, to follow the lead of the Reagan Administration to object to having the Soviets as a member of the GATT.
While I do not argue that the inclusion of the Soviets, or the Chinese, or other state-run economies would automatically solve all the problems of the international trading system, I do believe that their inclusion would greatly help us in opening up new markets, and give us some leverage to ensure they adhere to GATT rules-particularly in agriculture. It simply makes sense that our largest customers be at the table when agriculture subsidies are being discussed.
I believe that Canada can and should play a more active international role in trade, and not limit ourselves merely to bilateral negotiations.
I have accepted what I believe are two critical tasks. First, to lead the renewal and rebuilding of a great national Party. That process is well under way. We will begin to see some of the results of that at our policy conference in November.
The second is to respond to a feeling I had-and still have, shared by you I am sure-that somehow, despite being given the most abundant heritage on the face of the earth, we are not living up to our potential as a nation.
What should we do? First, we must begin by standing up for our own country.
We need to say we are proud to be Canadians, and to assert our sovereignty. And nowhere should we assert that sovereignty more forcefully than in the current trade negotiations with the United States.
Second, is the need to think smarter and work smarter. How? We need to focus on education and training; mount a national campaign against illiteracy; provide a national apprenticeship program for young people; refine our unemployment insurance rules to promote training and retraining for those displaced by technological change; continue to strive for excellence as a people.
We have seen a few days ago what true excellence is, when our Dr. John Polanyi was awarded the Nobel Prize. We are proud of that.
Third, we need to make sure equality of opportunity really means something in this country. That means moving against discrimination in all its forms. We must also re-establish the Liberal policy of regional equality--everyone, no matter where we were born, or where we live in this country, deserves a fair chance for an education, a job, and a secure retirement.
Fourth, we have to become more competitive as a nation. No negotiations with any country are going to solve our problem if we are not competitive. We need to spend more, and not less, on research and development. We need joint labourmanagement goals for the quality of work, profit-sharing, and more decision-making closer to the workplace. Competition is the best fuel of excellence.
Fifth, we must restore trust and confidence in our public institutions and in those who hold public office. What Canadians tell me is that we have to clean up our act. The brunt of their disappointment is directed at the Mulroney Government, but we on the other side did not get glowing report cards either. We need to restore faith in the integrity of those whom we elect to do the public business of this country.
I am not one of those who believes that because I am a Liberal, I have a divine right to govern.
I believe that public trust has to be earned-not by political rhetoric-but by what we do.
I am dedicated to achieving that. For me, it is the challenge of a lifetime. It is worth doing. And nothing will deter me from reaching that goal.
Appreciation of the meeting was expressed by Nona Macdonald, President of The Empire Club of Canada.
Today, Mr. Turner, you have given us a forceful public accounting of the Liberal Party of Canada and what you their leader represent. The Empire and Canadian Clubs are honoured to have this opportunity to provide a platform for hearing the views of the Leader of the Opposition. Long may we preserve this open, democratic society in which you, Sir, command such deserved respect. We are all aware that you have worked hard this summer and fall travelling throughout Canada to meet your constituents (and so I'm told, try out some of their local tennis courts!) But today, we have been brought to the hard surface of your views on trade and taxation.
We regret that space did not allow for another 500 places at our tables. This sell-out is a tribute to you. It is also an example of team work and co-operation par excellence. A vote of thanks is due your party workers, and the Canadian and Empire Clubs' staff and officers. On behalf of both Clubs, may I extend our appreciation and good wishes to you and Mrs. Turner.