1980-05-05

ROUTINE PROCEEDINGS


Hon. Allan B. McKinnon (Victoria):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
In the report of the Fyffe Task Force on Unification tabled by the Minister of National Defence (Mr. Lamontagne) on Friday, there were clearly identified nine major problem areas in the Department of National Defence and the armed forces. Furthermore, the task force made 30 concrete recommendations for the minister to implement in order to rectify these problems.
Bearing in mind the sanctimonious statement of the Minister of Employment and Immigration (Mr. Axworthy) last Friday when he claimed that the other parties did "not have the same respect for the role of the members of Parliament as we on this side", I move, seconded by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie):
That the Minister of National Defence make an order of reference to the Standing Committee on External Affairs and National Defence to examine the task force report on unification and to allow the minister, his senior officials and other interested parties to appear before that committee to explain how best to implement the 30 recommendations contained in the report, so that the serious problems in the armed forces can be rectified.


Some hon. Members:: Hear, hear!


Madam Speaker:: Such a motion requires the unanimous consent of the House. It there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FORESTRY
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In recognition of the fact that over one million Canadian workers are either directly or indirectly employed by forest-related industries, that forest products' shipments exceed $21 billion annually, $12 billion of which is earned through the exports of finished and refined products, and that our forests provide a basis for a multi-billion dollar outdoor industry, I move, seconded by the hon. member for Carleton-Charlotte (Mr. McCain):
That this House recognize the importance of our forests to our country's social and economic well-being, that it pay tribute to the workers and professionals who manage our forest heritage in the week of May 4 to May 10 which- sponsored by the Canadian Forestry Association-has been designated as National Forest Week, and that the government in the course of this week address particular attention to the difficulties which are presently experienced by our forest industries.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


HOUSING
Miss Pat Carney (Vancouver Centre):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
In view of the fact that Canada is suffering from an acute shortage of rental accommodation which seriously affects many families and single parents in urban centres, and since the minister responsible for the Canada Mortgage and Housing Corporation has stated that this problem of rental housing ranks second in priority with his ministry, I move, seconded by the hon. member for Vancouver East (Mrs. Mitchell):
That the House instruct the minister to consider the shortage of rental accommodation as top priority and undertake immediate steps to alleviate the urban rental housing crisis.


Some hon. Members:: Hear, hear!

May 5, 1980


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SOLAR ENERGY
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, I, too, rise under the provisions of Standing Order 43. Whereas the supplies of non-renewable fossil fuels, primarily oil and natural gas, are being depleted, but that there are still many forms of renewable energy provided by the sun, pollution-free and inexhaustible, and whereas the national chairman of the Solar Energy Society of Canada said in celebrating "Sun" day on Saturday, May 3, "The government makes all kinds of noises about conservation but doesn't do anything about it", I move, seconded by the hon. member for Skeena (Mr. Fulton):
That this government should produce less talk on conservation and more action, and that as a first step allow federal tax rebates and incentives for solar hot water systems like the successful California programs of this type in the United States.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


VETERANS AFFAIRS
Mr. Tom McMillan (Hillsborough):: Madam Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the fact the Government of Canada has announced that it intends to move the site for the relocated Department of Veterans Affairs from the Charlottetown waterfront to uptown, the centre of that city, and in view of the fact that the change in site will involve a very substantial breach by the federal government of a binding agreement between the federal government, the government of P.E.I. and the government of Charlottetown, through the Charlottetown Area Development Corporation, and in view of the fact that the uptown site is vigorously opposed both by the government of P.E.I. and the city council, I move, seconded by the hon. member for Malpeque (Mr. Gass):
That this House condemn the federal government for changing the site for the Department of Veterans Affairs in Charlottetown without consulting either the province of P.E.I. or the city of Charlottetown; and
That the House petition the government to proceed immediately with the relocation of the Department of Veterans Affairs on the basis of the waterfront site, the one the province of P.E.I. and the city favour.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIR TRANSPORT
Mr. Les Benjamin (Regina West):: Madam Speaker, under the provisions of Standing Order 43, I rise on a matter that is urgent, pressing and disgraceful.
In view of the fact that Liberal cabinet ministers have chalked up an amazing 82 flights in government JetStars during just eight weeks in office, I move, seconded by the hon. member for Regina East (Mr. de Jong):
That this House condemns the continuation of the "old Lang sign", "fly-mc-at-public-expense" policy, and that the difference between economy air fares on commercial airlines and the cost of LearStar jet flights be recovered from the travel allowance of cabinet ministers and government departmental officials concerned.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


METRICATION
Mr. Doug Neil (Moose Jaw):: Madam Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the concern of farmers in western Canada regarding metrication, particularly the use of the units tonnes and hectares in the grain trade and in agriculture generally, I move, seconded by the hon. member for Swift Current-Maple Creek (Mr. Hamilton):
That the minister in charge of the Canadian Wheat Board and the Minister of Agriculture adopt the policies of their predecessors, namely, that both the imperial and metric systems be used in the grain trade and other agricultural fields where the previous Liberal administration had insisted on "metric only".


Madam Speaker:: This motion requires the unanimous consent of the House. Is there unanimous consent?
May 5, 1980


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Jim Hawkes (Calgary West):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the information given to this House by the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) on April 21, that more than one million Canadians will be unemployed this year, and in view of the fact that on that evening he introduced taxation legislation which will raise prices but failed to introduce any legislation designed to increase employment opportunities for Canadians, I move, seconded by the hon. member for Annapolis Valley-Hants (Mr. Nowlan):
That this House direct the Minister of Finance to reintroduce the employment-generating taxation measures that were contained in the December 11, 1979, budget.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FISHERIES
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the fact that the salmon fishery on Canada's west coast is one of our most valuable national resources, and since the Fraser and Thompson Rivers form the last of the major, unobstructed salmon migration and spawning systems in North America, I move, seconded by the hon. member for Vancouver-Kingsway (Mr. Waddell):
That this House direct the Minister of Fisheries and Oceans and the Minister of the Environment to use their considerable powers to provide assistance to communities in the Thompson drainage basin interested in establishing land disposal sewage treatment systems which would eliminate the present threat to this most valuable fishery.


Madam Speaker:: Such a motion can be presented only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is to the Secretary of State for External Affairs. In light of the conflicting news reports on the situation at the Iranian embassy in London, I wonder if the Secretary of State for External Affairs can provide any information to the House of Commons with regard to those tragic events.


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, the information I have is also somewhat conflicting: I have three or four different reports and none of them quite squares with the others.
As far as I have been able to put it together, there were several explosions which took place in the embassy, and it was subsequently stormed by British troops. 1 believe that the loss of life occurred during the explosions, and not during the storming, but I am not entirely certain of all the details at this point.


INDUSTRY
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is directed to the Minister of Industry, Trade and Commerce.
In view of the tragic loss of the V-6 engine plant from the Chrysler Canada development plans, in view of the widespread problems in the automobile industry in this country, and also in view of the concerns that 1 expressed last Friday on alternative investment proposals, is the minister having second thoughts about the viability of Chrysler Canada?
Is he still prepared to proceed with the massive support program that has been speculated about in the press recently, and would he be prepared to make a full report to the House of Commons about his views on the viability of Chrysler Canada?


Hon. Herb Gray (Minister of Industry, Trade and Commerce):: Madam Speaker, we still consider it worth while to try to reach an agreement with Chrysler Corporation on assistance for Chrysler Canada to assist it to retool and re-equip, provided we get the kinds of guarantees we think are in the Canadian interest with respect to such matters as jobs and production.


Michael Holcombe Wilson: A supplementary question, Madam Speaker. I must say I was expecting a little bit more from the minister in his answer as to whether or not he is going to provide a report to the House on the long-term viability of Chrysler Canada.

May 5, 1980
Oral Questions
Over the weekend there was a report saying on the current status of the negotiations, and this is a quote from one of the minister's aides, "it is just a matter of time before one side or other gives in".
Does the minister feel it is realistic for Chrysler to give in, when the United automobile workers in the United States have indicated that a pledge to the Government of Canada to guarantee jobs is totally unacceptable to U.S. workers?


Herbert Eser (Herb) Gray: Madam Speaker, I would ask the hon. member to rely on quotes from myself, not from anonymous aides. I certainly will be prepared to make reports to the House from time to time via the question period.
I do think it is quite realistic to expect that, in return for assistance provided by the Canadian government to Chrysler Canada, we do have a fair deal for the country with, as I have said before, provisions in it regarding our concerns with respect to Canadian jobs.


Michael Holcombe Wilson: Madam Speaker, I am somewhat amused at the minister's response. I have been waiting for about two weeks now to get anything like a report from the minister to this House on the status of these negotiations. They are very important ones, and the answers to date have been practically non-existent.
Is the negotiating position of the minister, with regard to these job guarantees, related in any way to his disappointment in not achieving the objectives that he set out to get in the Chrysler negotiations, things such as the engine plant, world product mandate, support for research and development, support for parts workers-anything along these lines?


Herbert Eser (Herb) Gray: Madam Speaker, I would question the premise of the hon. member's question. 1 do not think he should assume that I have failed to achieve any of my objectives until one sees the final conclusion.


An hon. Member:: What are your objectives?


Herbert Eser (Herb) Gray: We are still working, as I have said, for a fair deal for Canada with arrangements with regard to key matters, such as jobs and production. So I do not think the hon. member's premise is correct; and we are continuing our efforts.


ECONOMIC DEVELOPMENT PROGRAMS TO IMPROVE EMPLOYMENT IN AUTOMOBILE INDUSTRY
Mr. Otto Jelinek (Halton):: Madam Speaker, my question is for the same minister. In view of the massive lay-offs within the automotive industry as a whole, not only in Windsor-if I could remind the minister because he seems to forget from time to time-but in other parts of Canada as well, including Oakville, Brampton, St. Catharines, St. Thomas, and the list goes on, could the minister tell this House what economic development programs, other than the bungled-up financial aid to Chrysler which is taking so long, he and his government are considering in order to ease the over-all impact of these lay-offs in Ontario and across the country? And when, exactly,
will this government begin to take specific and concrete action in order to remedy these problems?


Herbert Eser (Herb) Gray: Madam Speaker, we have already begun to take specific and concrete action. We have had a series of talks with the presidents of the major motor vehicle manufacturers. We have met with the special trade representative of the United States to get his agreement on behalf of the United States to high-level consultations on the operations of the auto pact, and we expect the first meeting to take place before the summer. These are two examples of very concrete action.


An hon. Member:: Which summer?


Herbert Eser (Herb) Gray: This summer; this year. You may want to forget this year after what happened to you on February 18.


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: I am working actively for the interests of auto workers throughout the country and the communities in which they live. I am continuing those efforts. In one particular regard, I hope that we will soon be able to announce decisions on special loan guarantees or financing facilities for auto parts companies requiring assistance to take advantage of opportunities to build parts for the new generation of automotive technology.


Mr. Lawrence:: You said that a month ago.


Herbert Eser (Herb) Gray: This is a very important priority, and for myself and the government the interests of auto workers and the communities in which they live, in every part of Ontario and across this country, are very important to us.


Otto John Jelinek: Madam Speaker, notwithstanding the minister's answer, there has been no action; it has been just hot air. The fact remains that an estimated 22,000 Canadians within the automotive industry are either now out of a job or will be in the near future, and because unemployment insurance benefits alone will amount to a further $3!4 million a week, or $200 million a year, as a result-not to mention other negative side-effects- would the minister consider temporarily removing the 9 per cent federal excise tax on North American-built automobiles in Canada, in order to stimulate this ailing industry and reduce the number of lay-offs expected to take place?


Herbert Eser (Herb) Gray: Madam Speaker, this is a question very much within the responsibility of my colleague, the Minister of Finance. I think that the question should be directed toward his seat.
May 5, 1980


REGIONAL ECONOMIC EXPANSION
Mr. Edward Broadbent (Oshawa):: Madam Speaker, I have a question for the Minister of Finance who, as we all know, is the Deputy Prime Minister. On Friday, his colleague the Minister of Regional Economic Expansion called regional disparities in Canada "a national disgrace". He went on to state that the financial resources of his department are stretched to the limit, and said there was "barely enough to honour the commitments made even by the previous Liberal government".
Given this extraordinary statement by his colleague, I wish to ask the minister why the Minister of Regional Economic Expansion is forced to make public the lack of government financial support for DREE, and why his government is now providing inadequate funds to fight for regional development in this country.


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, the Minister of Regional Economic Expansion is obviously taking his work very seriously, and is obviously carrying his pleas beyond the rooms of the cabinet. To that 1 have no objection.
I would point out that there is a very substantial amount of funds already available within that department. I happen to be a representative of a client in that area of the Department of Regional Economic Expansion. There is no one more sympathetic to his requirements than I am. At the same time, the hon. member must realize that we are operating under a policy of fiscal restraint at the present time, and it is not possible to escalate projected expenditures in the way that each of us might like individually but which in total would have a very damaging effect on the size of the deficit, inflation and the Canadian economy as a whole.


John Edward Broadbent: Madam Speaker, contrary to what the Minister of Finance says, the minister responsible says that there are inadequate funds, and points out that whereas in 1970 some 2 per cent of the federal budget was allocated to DREE, with the present government that has dropped by some 50 per cent in amounts as a percentage of the total federal budget.
Given this reality, and given the promise in the Speech from the Throne that the government plans, "a program of action would be designed to promote national development and policy that provides jobs, stimulates growth and builds regional strengths", how can the government do as it promised without the money being there to do that job?


Allan Joseph MacEachen: Madam Speaker, the job can be done by increased expenditures if, at the same time, the government either increases revenues or, alternatively, cuts out existing programs or, additionally, increases the deficit. There is no magic way to the destination the hon. member has described for the House.
Oral Questions
It is from among these options that the government must choose in order to reach, not only the objectives of the Minister of Regional Economic Expansion but other ministers of the government who are putting forward increased spending programs which cannot be met at the present time unless we increase projected expenditures much beyond the present projection, which was thoroughly criticized as being extravagant by members opposite.


John Edward Broadbent: Madam Speaker, the Deputy Prime Minister cannot have it both ways: he cannot claim there is not enough money to do the job, and simultaneously build up false hopes in Atlantic Canada that the job is being done. That is what the government is trying to do.
Since the Premier of Nova Scotia and the president of the Sydney Steel Corporation have just recently expressed grave concern that unless the $50 million promised by this government-and the minister has already told us he is from the region-to Sysco is soon forthcoming, 400 more jobs are going to be lost, is the minister at least going to live up to his party's commitment made in the recent campaign to provide that money for people who want jobs, not hand-outs?


Mr. Crosbie:: "The Sysco Kid."


Allan Joseph MacEachen: Madam Speaker, if I were inclined to be political-


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: -I might refer to what appeared to be inactivity on the part of Premier Buchanan, during those months of federal Tory regime, in seeking out the $50 million which had been decided upon by the preceding Liberal government.
Let me tell the hon. member that I have had meetings with Premier Buchanan-or, at least, one meeting and some conversations by telephone-and that I have invited him, on behalf of the government and the Minister of Regional Economic Expansion, to submit concrete plans to the government. These will be considered in the light of the commitment which was made by the government and repeated by the Prime Minister during the last election campaign.
We shall seek to live up to that commitment within a program which will produce some results at the Sydney Steel plant. But it will not be the intention of the government to provide funds which will not in the long term bring about some solution to the important problems at that plant.


Some hon. Members:: Hear, hear!
702

May 5, 1980
Oral Questions TRADE


INQUIRY WHETHER CONFERENCE OF PACIFIC RIM COUNTRIES WILL BE CONVENED
Pat Carney: Madam Speaker, my question is addressed to the Deputy Prime Minister and it concerns the conference on the Pacific rim initiated by the former administration and postponed because of the election. Since the Minister of State for Trade has indicated an interest in holding this conference, and in light of the visit today by Prime Minister Ohira of Japan, himself the author of a report on the Pacific rim, would the Deputy Prime Minister inform us whether a new date for the conference has been set?


Allan Joseph MacEachen: Madam Speaker, I regret I cannot give that information to the hon. member today but 1 will certainly get it and forward it to her.


Pat Carney: 1 should like to direct my supplementary to the Secretary of State for External Affairs. Since our senior diplomats and trade commissioners serving in the Pacific rim have advised us that the conference should be broad in scope and not restricted solely to trade, will the minister advise the House whether other aspects of Canada's total relationship, including political relations, defence, aid and immigration, will be included in the agenda of the conference?


Mark R. MacGuigan: Madam Speaker, the question assumes that a conference and its agenda will be announced. We are not in a position to confirm this at the present time. 1 can say, though, that we have been holding the widest discussions with Japanese authorities today on all matters dealing with the Pacific community.


FINANCE
Mr. Blaine A. Thacker (Lethbridge-Foothills):: Madam Speaker, my question is addressed to the Minister of Finance and, if you will permit, I should like to follow it with a brief question to the Minister of Agriculture. In view of the widely recognized fact that the capital gains tax is daily destroying family farms and small businesses, particularly on their transfer from parents to children, and in view of the fact that the Crosbie budget of December 13, 1979, provided capital gains tax relief from that date and a parliamentary committee to review the whole question, why did the minister completely ignore in his budget of April 21 both relief from capital gains tax and measures to set up a parliamentary committee to review the whole question?


Allan Joseph MacEachen: I have not ignored the subject matter, Madam Speaker. In fact, 1 explained in my statement that
these proposals made by the former minister of finance were not being proceeded with at the present time, but that in the meantime we would produce a discussion paper which would go into the whole question of capital gains and the role it plays. It occurred to me it would be better to have discussion prior to new measures, instead of introducing new measures and then having the discussion.


Blaine Allen Thacker: My supplementary is to the Minister of Agriculture. The farmers of western Canada look to him for leadership.


Some hon. Members:: Hear, hear!


Blaine Allen Thacker: The Minister of Agriculture holds a position in which we look to him for leadership. He said during the campaign that valuation day should be, not December 31, 1971, but December 31, 1974. My question is this: Why did the hon. gentleman permit the Minister of Finance to bring in a budget without including that provision?


Hon. E. F. Whelan (Minister of Agriculture):: First of all, Madam Speaker, we are the only nation in the world which permits a farm to be passed on to a son or daughter, who are operating that farm, without payment of any tax whatsoever. That law was passed by a Liberal government. The United States does not allow it, nor does Great Britain. No other country in the world allows that. A Liberal government passed that legislation.


Some hon. Members:: Hear, hear!


Eugene Whelan: 1 have the utmost confidence in the Minister of Finance; that is why I allowed him to do what he did.


Some hon. Members:: Oh, oh!


Hon. Marcel Lambert (Edmonton West):: Madam Speaker, a supplementary question to the Minister of Agriculture. Will the minister not admit that he himself voted to impose capital gains tax on all farmland in the original instance?


Some hon. Members:: Oh, oh!


Eugene Whelan: Madam Speaker, it was a vote we on this side of the House supported. We have been pressured since that time by many farm groups, recognizing that if a farmer is going to sell to someone else other than a son or daughter they might need some special concessions. We said we would consider that, and we are doing so.


FINANCIAL ASSISTANCE TO OFFSET LOSSES OF PRODUCERS
Mr. Stan J. Hovdebo (Prince Albert):: Madam Speaker, my question is directed to the Deputy Prime Minister and Minister of Finance. In view of the continued decline of Canadian export wheat prices to 92 cents per bushel lower than on
May 5, 1980

December 28 because of the decision of the Carter administration to embargo grain shipments to the Soviet Union, can the Deputy Prime Minister announce to the House today any immediate steps to assist Western farmers, thus honouring the commitment made by the Prime Minister during and since the election campaign that producers will not be the only persons to subsidize economically the United States government's embargo policy?


Allan Joseph MacEachen: Madam Speaker, I am not in a position to announce any immediate steps today but I shall take the hon. member's representation under consideration. I wish to assure him that whatever commitment was made in this respect by the Prime Minister will be lived up to, as will all the commitments we made during the election campaign.


Stanley J. Hovdebo: The North American market under the embargo differs considerably from the world market. The Argentine price is $1.36 higher per bushel than ours. Would the government, as a gesture of faith, assure the farmers that the initial price of grain will be established near the embargo price of $4.25 at which it is presently set?


Allan Joseph MacEachen: I will bring the hon. member's representation to the attention of the minister concerned.


AGRICULTURE
Mr. Marcel Dionne (Chicoutimi):: Madam Speaker, my question is directed to the Minister of Agriculture.
Hog producers recently proved that, because of low prices, they are having a hard time solving their financial difficulties.
Can the Minister tell the House whether or not an offer has been made to them? How much will Quebec producers get and what percentage of them will be affected by that measure?


Eugene Whelan: Madam Speaker, announcement was made this morning, concerning stabilization payments. We had to make that announcement according to law because it is a named commodity under the stabilization legislation. Approximately $4.07 a hog will be paid to the hog producers. Over 90 per cent of all hog producers will be covered in all areas. A maximum for individual producers will be paid on 5,000 head of hogs, which will amount to some $20,000 for each producer. Up to three family units will be eligible to be paid.
However, no payment will be made to anyone who cannot
prove he is a hog producer. If someone is managing a hog
operation from some plush office in Calgary, Winnipeg, Mon-
Ora/ Questions
treal or Toronto, he cannot expect that payment from this minister.


NATIONAL DEFENCE
Allan Bruce McKinnon: Madam Speaker, my question is for the Minister of National Defence. The report of the task force on the merits and disadvantages of unification identifies nine major problem areas in the present structure and organization of the Department of National Defence and the armed forces. Will the minister refer the report to the Standing Committee on External Affairs and National Defence so that the minister and his senior advisers and others can appear before it to study its 30 recommendations; or, if the minister does not intend to accept the recommendations, can he explain to the people of Canada how he intends to correct the serious problems identified by the report?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, I listened very carefully to the former defence minister, and 1 regret his gloomy and negative attitude toward the armed forces when he said in his motion that there were serious problems in the armed forces. The task force report itself says that the morale of the forces is reasonably good, and I think he should realize that it has been improved since.

Madam Speaker, had the former minister of national defence read the press release carefully, he would know that, as I said in the release, 1 did not intend to comment on the thirty recommendations of the task force simply because I want to establish a group to review all these recommendations so that we will know exactly what the cost of implementation and the effects on the organization of the forces would be, and also to study the recommendations so that a decision, either positive or negative, can be made. Madam Speaker, I think that the quarter of a million dollars that this task force cost could have been used more appropriately than to fund a group to tell us things we already know.


Allan Bruce McKinnon: Madam Speaker, I was merely quoting the language used in the task force report itself, and I did read the minister's press release in which he said he would "appoint a review group to examine in detail the factors which may have given rise to, and the considerations which would be germane to, the disposition of the recommendations." I recognize the language well.
Could the minister indicate if he personally has read the report? Second, in his press release accompanying the task force report the minister indicated that he plans to have a review group. Is it true that Major-General St. Aubin was offered the job of heading such a review group but resigned

May 5, 1980
Oral Questions
rather than carry out the dirty work required of him, which was to suffocate this report?


Mr. Lamontagne:: Madam Speaker, the former minister's allegation is totally false. Major-General St. Aubin resigned his post simply because he had the opportunity to pursue another career path outside the forces.

\ English]


NATIONAL REVENUE
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, my question is directed to the Minister of National Revenue. I might mention in passing that from what the Minister of Finance said today, it sounds like DREE again stands for "department for re-election expenses."
On the one hand, this so-called new Liberal government talks about helping small businessmen and, on the other hand, harasses them with new customs regulations like B-32 actions. Is the minister aware of what is going on in his department and the effect that this has on companies which can be forced to close their doors within 30 days because of the implications of that regulation?


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, I want to thank the hon. member for giving me notice of his question.
It is true that we have up to a two-year period to re-examine duty and tariff classifications. This is because we need the time to do research in the host country to make sure we are being fair. We do give the importer notice of this reclassification and, if he feels aggrieved, there is an appeal procedure.
It is not the intention of this government to harm small business but, rather, to encourage it, as my hon. colleague is doing. I will take the hon. member's question as a representation and make sure that we apply the law fairly.


Benno Friesen: Madam Speaker, is the minister aware that it is possible to get three different classification judgments on one item by three different officers? If that happens within his department, how is it possible after two years to pass on those extra expenses from those extra tariff charges which now have to be affixed to the cost of the product? How can that be passed on by the company in order to recoup its expenses and still make a profit so that it can pay that tariff?


Bill Rompkey: Madam Speaker, I understand the difficulty which the hon. member presents but, as I say, we need that time to make sure that the duty and tariff classification is fair. There are a number of people who have the authority to reclassify, including the deputy minister and the dominion customs appraiser.
I just want to say to the hon. member again that I certainly will take his representation very seriously and make sure we are applying the law fairly and in the best interests of small business.


SEARCH AND RESCUE
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, my question is for the Minister of National Defence. A freighter, the Lee Wang Zin, sank off the coast of British Columbia more than four months ago. At the same time 52 people in a two-week period died in the waters of British Columbia.
Would the minister explain why his department refuses to upgrade the search and rescue capability on the west coast of B.C. to a minimum acceptable standard and why he has cut back the improvements promised under the search and rescue helicopter program?


J. Gilles Lamontagne: Madam Speaker, I think on the contrary that our search and rescue program has been improved in recent years and we are continuing to improve it all the time. I admit that it might still not be as perfect as the hon. member would like to have it, but I can assure him we are doing everything we can to provide adequate service to the people in British Columbia and on the east coast.


Raymond John Skelly: Madam Speaker, the minister has in his possession two reports, one from the Ministry of National Defence and one from the Ministry of Transport, which analyse this particular accident and make recommendations. I wonder if the minister could explain why he is not prepared to submit to the House and to the public the outcome of those two reports?
[ Translation]


Maurice Lamontagne: Madam Speaker, of course I am not aware of all the details in those two reports. I have them and I can assure the House that all the recommendations in those reports will be implemented as soon as possible in order to provide the Pacific coast with the service the hon. member would like to have.


REGIONAL ECONOMIC EXPANSION
Mr. Alexandre Cyr (Gaspe):: Madam Speaker, my question is for the Minister of Regional Economic Expansion.
May 5, 1980

In April, 1978, the Government of Canada signed an agreement with the government of the province of Quebec providing $76 million for tourist development, including $11.6 million for the lower St. Lawrence and Gaspe areas. People in the Gaspe are now worried about the delay in the development of the Gaspe park. Could the minister contact his counterpart in the province of Quebec to get the work going and the necessary supplies for the development of the Gaspe park, harbours for inshore and educational fishing in Anse-au-Griffon and Anse-au-Beaufils, as well as for the outdoors base in Pabos Mills?


Hon. Pierre De Bane (Minister of Regional Economic Expansion):: Madam Speaker, I understand quite well the concern of the hon. member because it has been over two years since the Department of Regional Economic Expansion made available to the government of Quebec over $6 million to develop tourist infrastructures in the peninsula and, according to the latest information 1 have, the government of Quebec will be spending only a few hundred thousand dollars during this summer. I would be very happy to convey the representations the hon. member is asking me to pass on to those people but, busy as they are with the referendum, 1 doubt very much that they will show any concern over the happiness of the people in the Gaspe or elsewhere in Quebec.


INCLUSION OF NORTHUMBERLAND IN EASTERN ONTARIO SUBSIDIARY AGREEMENT
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, in view of the rather stinging rebuke administered to him in the House by the Minister of Finance with respect to his cry for assistance from this government, 1 would like to ask the Minister of Regional Economic Expansion whether he accepts that rebuke and now considers that the complaints that he made last Friday were justifiable and ones about which he feels strongly.


Pierre De Bané: Madam Speaker, what I said last Friday was in answer to the hon. member for Northumberland, who was asking me to include his riding in an agreement signed by the previous administration, which forgot his riding. I was telling him that there are two ways of doing it, either enlarging the territory, which would dilute the $50 million which was for that part of Ontario, or increasing the budget.
With regard to increasing the budget, I said I would like to know where the official opposition stands on that score, because the official opposition wants to restrain public expenditures. I said I would like to know from the hon. member's side of the House where they stand on the question: Should we increase the budget of DREE or, as they have been saying for months, should we restrain public expenditures?
Oral Questions


SCIENCE AND TECHNOLOGY
Mr. Gordon Gilchrist (Scarborough East):: Madam Speaker, it was interesting and notable today in the House to hear-


Some hon. Members:: Question.


James Gordon Gilchrist: In view of the fact that the Prime Minister of Japan placed such stress on research and development, and during the Conservative administration stability was introduced-


Some hon. Members:: Question.


Madam Speaker:: Order, please. Will the hon. member pursue his question.


James Gordon Gilchrist: The objective of the present government of 1.5 per cent of the gross national product for research and development is commendable. In order to ensure this, it will have to sustain the program introduced by the Conservative administration which funded a five-year plan. I would ask the Minister of Science and Technology-I apologize for not having addressed him earlier-if he is prepared to tell the House that he will sustain that five-year program and the funding for the first year so that the scientific community will be able to plan a long- term development strategy.


Hon. John Roberts (Minister of State for Science and Technology and Minister of the Environment):: Madam Speaker, I will do more than that; 1 will increase the funding considerably above the figures put forward by the Conservatives.


Some hon. Members:: Hear, hear!


James Gordon Gilchrist: Madam Speaker, my supplementary question is directed to the same minister. Reports have revealed the existence of a series of papers produced by government departments proposing financial assistance and other support measures to be provided to certain high technology industries in the context of a national industrial policy. Due to the crucial need for such an economic blueprint, when will the government make the studies public so they might be inspected and given open discussion by the science community and this House?


John (Moody) Roberts: Madam Speaker, it is my intention to make available all the relevant discussion papers. Perhaps I could check the hon. member's question, or perhaps he might deal with me directly to indicate exactly with which areas he is most concerned. It is my intention to make publicly available all the background material.

May 5, 1980
Oral Questions YOUNG OFFENDERS


JUVENILE CORRECTIONS FIELD-INQUIRY AS TO GOVERNMENT ACTION
Mr. Svend J. Robinson (Burnaby):: Madam Speaker, my question is for the Solicitor General. There exists a very serious crisis in the province of British Columbia and elsewhere with respect to the provision of psychiatric containment facilities for juveniles who have come in conflict with the law. This crisis is so serious that a number of juvenile court judges have recently publicly condemned the situation. Also, detention centres are grossly overcrowded. I would ask the Solicitor General what action he intends to take in co-operation with the provinces involved, particularly the province of British Columbia, and whether he is prepared to convene an early meeting with the attorneys general of the provinces involved to deal with this very serious crisis in the juvenile corrections field.


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, I am familiar with the situation and I have asked for a meeting with the attorney general of British Columbia while I am in the province at the end of this week. I am looking forward to seeing him and discussing this matter and some other matters with him.


Svend Johannes Robinson: Madam Speaker, as the Solicitor General is no doubt aware, there have been no revisions of substance to the Juvenile Delinquents Act since it was introduced in 1908. Also, there was no reference in the Speech from the Throne to any such amendments. Could the minister indicate to the House what steps he intends to take to bring in amendments, which are long overdue, to this outdated legislation to deal with the whole area of young offenders and the law?


Robert Phillip Kaplan: I should like to thank the hon. member for his question. It gives me the opportunity to inform the House that I am working on such legislation, which I intend to bring forward to my colleagues in cabinet in due course. I have been looking forward to presenting totally new legislation to that which was first brought in in 1908, and it will see the light of day soon.


NATIONAL CAPITAL COMMISSION
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Madam Speaker, my question is for the Minister for Public Works who is also responsible for the National Capital Commission. Some weeks ago the minister complied with numerous requests made by concerned community groups and representatives at all levels for an environmental impact study on the Vanier arterial project and the surrounding communities it affects. This
arterial is being built by the regional government of Ottawa-Carleton. In his letter to me dated April 25, the minister said:
The commission will invite RMOC to participate with it in establishing the terms of reference for the review and in taking any appropriate action that may be required.
Since the construction by the regional municipality of Ottawa-Carleton is going ahead, can the minister say what action he has taken to invite the RMOC to participate in the terms of reference of this study which is so important, and whether the reactions of regional government have been negative, why, and what he intends to do about it?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, I have seen the reports that the region is not interested in participating. However, I have asked officials of the commission to check with officials of the region because I think it will be virtually impossible to draw the terms of reference of such an environmental impact study, particularly in light of the fact that the region itself is the contractor, not the NCC. I hope that when they realize the practical difficulties, there will indeed be some consultation.


ASSISTANCE FOR ATLANTIC CANADA TO MEET PROPOSED INCREASE IN OIL PRICES BY SAUDI ARABIA
Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, I should like to direct my question, in view of the absence of the Minister of Energy, Mines and Resources, to the Minister of Industry, Trade and Commerce. In view of the report that Saudi Arabia is considering increases in their crude oil price from approximately $30 Canadian to approximately $36 Canadian, has the government any emergency program or measure in mind to cushion the impact of this increase on Atlantic Canada similar to the aid contemplated for our car manufacturing industry, for example, since Saudi Arabia supplies some 37 per cent of Canada's oil imports and an increase of this nature will have serious implications on our electricity charges and on industry in our part of the world?


Mr. Roy MacLaren (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Madam Speaker, the Minister of Energy, Mines and Resources is in the maritime provinces at the moment. In the range of his discussions there, he will be touching upon the issue, and others, which the hon. member has raised.


Lloyd Roseville Crouse: Madam Speaker, according to news reports, decisions are now being finalized relative to the allocation phase among provinces and industries concerning the rationing of energy in Canada. Can the minister inform the House what consultations, if any, have taken place between the representatives of the fishing industry and representatives of the agricultural industry, and assure the House that no restrictions will be imposed by this new plan which will in any way affect supply of fuels and lubricants to fishermen and farmers?
May 5, 1980


Roy MacLaren: Madam Speaker, the concerns and the interests of farmers and fishermen in the matter of energy allocation are being taken into account in any contingency plans that are being made.


PARKS CANADA
Mr. Bill Domm (Peterborough):: Madam Speaker, we are all enthused by the remarks of the Acting Prime Minister. My question is directed to the Minister of the Environment and it stems from the remarks of the Acting Prime Minister. In light of the Acting Prime Minister's statement to address regional disparities and show fiscal restraint, I wonder if the Minister of the Environment has any solution to offer for the lack of regional attention and the lack of fiscal restraint shown by the cancellation of the move of Eldorado and, at three o'clock this afternoon, the cancellation of the move of Parks Canada? What effect will this have in that region, namely, Peterborough? Is there any plan that this government has to offset the negative effect this will have on the economy of those areas, not to mention the taxpayers who have footed the bill for the intended move and now are expected to foot the bill for the move back?


John (Moody) Roberts: Madam Speaker, the hon. member refers to his great concern about the economic impact of this move on the region. My concern is primarily for the morale and the interest of the workers of Parks Canada.


Some hon. Members:: Oh, oh!


John (Moody) Roberts: It is on that basis that I took the decision which I did.


Some hon. Members:: Hear, hear!


William Henry (Bill) Domm: Madam Speaker, I choose to differ with the opinion of the Minister of the Environment on the position which he takes. My supplementary question to the Minister of the Environment is this: Is he not aware that the employees of Parks Canada in Cornwall were notified in 1973 that any locations there would be temporary, and that the impending move to Peterborough was in fact a recommendation of the former Liberal government, acted on by the Conservative government, and now reversed with a complete disregard for the taxpayers of Canada?


An hon. Member:: Or for the morale of the workers.


John (Moody) Roberts: Madam Speaker, the fact is that the hon. member, in putting his question to me, focused it entirely on the economic consequences for the city of Peterborough and
Privilege-Mr. Nielsen
that region. The fact is that I have gone to speak to the workers in Parks Canada in the Cornwall regional office, which I doubt the hon. member has done, and I can assure him that I believe the decision we have taken is the one which most meets the needs and interests of the people in Parks Canada. Regrettably-[DOT]


An hon. Member:: It meets the needs of Ed Lumley.


John (Moody) Roberts: Regrettably it is a decision which, no matter how it was taken, would adversely affect the interests of some of the employees of Parks Canada. That was inescapable. But the basis upon which I have taken the decision is to try to minimize the economic damage and inconvenience to those who are working so faithfully and loyally for Parks Canada.


Mr. Baker (Nepean-Carleton):: Why did you make the decision in the first place?


John (Moody) Roberts: That was the basis of the decision, and I believe it was the right basis for the decision.


Some hon. Members:: Hear, hear!



PROCEEDINGS ON ADJOURNMENT MOTION


Madam Speaker:: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Etobicoke Centre (Mr. Wilson)-Industry-Aid to Chrysler Canada-Impact on economic development of Canada; the hon. member for Vancouver Centre (Miss Carney)-Cultural Affairs-Funding of Vancouver Art Gallery; the hon. member for Winnipeg-Birds Hill (Mr. Blaikie)-Health and Welfare-Reported mercury poisoning of northern Ontario and Quebec residents-Action to prevent.


PRIVILEGE
Hon. Erik Nielsen (Yukon):: Madam Speaker, I gave you notice under Standing Order 17(2) today of my intention to raise a question of privilege. Since it concerns the remarks made by the Prime Minister (Mr. Trudeau), and since he is not in his seat, I would ask that the question stand until tomorrow.

May 5, 1980
Order Paper Questions
[ Translation]


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, on the same question of privilege, if the hon. member wants to have an answer today, 1 can comment on his question of privilege on behalf of the Prime Minister.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Yvon Pinard: for leave to introduce Bill C-25, to amend the Radiation Emitting Devices Act.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 253, 257, 382, 615 and 636.
I ask, Madam Speaker, that the remaining questions be allowed to stand.


Mr. Herbert: 1.	To the knowledge of the government, do airlines pay a standard scale of fees to agents in Canada for selling tickets?
2.	Are agents obligated to sell airline tickets at the same price as the airlines?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: 1. Generally, the answer is yes. In the case of international and transborder travel to the United States, the scheduled airlines have established, via their international and North American industry associations, standard rates of sales commission to travel agents. In practice, these commissions can sometimes vary according to sales volume, although this is not recognized by most of the airline industry as a legitimate procedure. For domestic travel, Canada's scheduled airlines have not established standard commission rates via their domestic industry association. Nonetheless, a uniform commission rate for such travel has resulted among the major airlines. The case of charter air travel is different, as commissions are paid by the charterer (tour operator) rather than by the airline. Commissions for charter travel differ from those for scheduled travel.
2. Section 112(10) of the Air Carrier Regulations (Consolidated Regulations of Canada 1978, c.3 states: "no air carrier, or any officer or agent thereof' shall offer air transportation at a toll or condition different from those set out in the air carrier's tariff on file with the Canadian Transport Commission (CTC), unless prior exemption has been received from the CTC. The CTC does not have direct jurisdiction over travel agents, however, and the legal applicability of this regulation to the actions of travel agents has not been fully ascertained. In the case of charter air travel, the airlines are not allowed to sell tickets directly to the public. Retail prices are set by the charterer or tour operator. Although travel agents normally abide by such prices, it is not certain whether they are legally required to do so.


Mr. Herbert: Is the government considering establishing a royal commission on broadcasting?


David Michael Collenette: The government is not considering at this time establishing a royal commission on broadcasting.


Mr. Herbert: Is Canada presently limiting the export of coal and, if so, for what reason?


Herbert Eser (Herb) Gray: The Government of Canada is not limiting the export of coal. The Department of Industry, Trade and Commerce and other departments are actively supporting the coal industry in its efforts to expand and diversify export markets.


Mr. Howie: How many lawyers are employed on staff in the Department of Supply and Services?


Hon.   J.-J. Blais@Minister of Supply and Services: There are no lawyers employed on staff in the Department of Supply and Services. The Department of Justice has, however, assigned a total of 14 lawyers to provide the day to day legal counsel required by the department.


Mr. Howie: How many persons engaged in public relations, publicity or media relations, are employed on staff in the Department of Supply and Services?


Hon.   J.-J. Blais@Minister of Supply and Services: Two.
May 5, 1980


Madam Speaker:: The questions enumerated have been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, May 1, consideration of the motion of Mr. Bussieres (for the Minister of Finance) that Bill C-6, to revise the Bank Act, to amend the Quebec Savings Banks Act and the Bank of Canada Act, to establish the Canadian Payments Association and to amend other acts in consequence thereof, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, when I rose on this matter last Thursday, I had only two or three minutes before the time of adjournment, so at that time 1 made some reference to some of the comments made by the New Democratic Party. I hope they will look at those comments because I think they are important when we think about this piece of legislation, which has been before the House of Commons on so many occasions already, a piece of legislation which really forms, as the hon. member for Edmonton West (Mr. Lambert) said, the charter and the basic working documents on which our banks operate.
The committee which thoroughly studied this bill when it was labelled C-15 in the Thirtieth Parliament was a committee that is no longer representative of this House in that at least ten members of that committee are no longer members of this House; and looking at the members who formed that committee, four of the members who remain as members of this House are now ministers of the Crown in the government in this Thirty-second Parliament. In all probability they will not be taking part in committee hearings. Nonetheless, before this bill goes to committee I think it is important that every member of the Standing Committee on Finance, Trade and Economic Affairs thoroughly study the hearings and the representations made by various witnesses called by that committee, because it strikes me that the committee has done an excellent job in determining and making recommendations concerning this act.
Unfortunately there have been a number of economic changes in Canada since the spring of 1979. At that time we were appalled at prime rates being charged by the chartered banks of 12 per cent. We were appalled at that level of interest rates. Since that date and in less than a year interest rates have gone to 16.5 per cent, have been higher than that, and
Bank Act
perhaps have settled down to that, but are still in excess by 33 per cent above what they were at the time the committee heard witnesses from the banks and other Financial institutions.
There are a number of matters which perhaps should be studied by the committee before this bill is finally passed into law. In that sense I think we should study very carefully the past testimony and then hear from the officials of the ministry as to why certain of the recommendations made by that committee were not followed through when the bill was presented as it is presented now. Second, we should hear witnesses with respect to specific issues which seem now to have arisen that perhaps were not of concern or serious concern to the committee when it studied the bill in 1979.
I might suggest that those concerns are with respect to the activities of foreign banks. I think there has been a bit of a change in attitude. Certainly this government, in presenting its statement in the Speech from the Throne, indicated that it wished to take a much stronger pro-Canadian stand. Perhaps the government should explain very carefully to us in the finance committee why the strong pro-Canada stand indicated in the Speech from the Throne is not repeated in the suggested terms respecting foreign banks as set out in the bill.
A number of concerns have been expressed very dramatically recently with respect to automobile leasing and I would say with respect to other types of consumption-oriented leasing. The activities of the banks have been to some extent shown up over the past year. I want to deal rather in detail with respect to this leasing problem and to make the suggestion that it is imperative that the committee, in studying the act, thoroughly reconsider its position with respect to leasing.
Concerns have been expressed by Canadian cattlemen and there are certain other concerns regarding liquidity, and particularly with the problems which minor trust companies are having in this country today. It may well be that we should examine the extent to which banks should be entitled to stay in the mortgage field or in the long-term finance field, in view of the liquidity problem that massive changes in the interest rate structure such as have taken place over the last year in particular might create, impairing the safety and the ability of our banking system to continue to serve us well.
I might say at the outset that it is my view, and the view of members of this party, that the banking system in Canada is one of the finest banking systems in the world. It is important that that banking system be viable, that it grow, that it continue to serve Canadians and serve them well.
The committee dealing with this matter a year ago made reference to the need to define what is banking. The hon. member for Edmonton West made many remarks with regard to that matter and he was severely criticized by the hon. member for Burin-St. George's (Mr. Simmons) in debate. It was unfortunate that the hon. member for Burin-St. George's had not even had the Bank Act or any of the committee's reports. Indeed, he really did not know what they contained
710

May 5, 1980
Bank Act
and admitted to this House that he was speaking largely from ignorance. However, that is the hon. member for Burin-St. George's.
With respect to the definition of banking, it is, indeed, surprising to me, as it must be to all members of this House, that under Section 91 of the British North America Act the federal responsibility in respect of this whole issue is clearly defined in five separate paragraphs, including banking, the incorporation of banks, the issuance of paper money, interest, legal tender, bills of exchange, promissory notes and, indeed, even savings banks. These represent specific federal powers. It is a specific list of federal powers that certainly must encompass all of the concerns in respect of money, money management and financial management at every level.
However, the response to the insistence by the House that a definition of "banking" be included in the bill was this. The House had insisted that there be a definition of banking. The ministerial comment was that a narrow definition would overly restrict the activities of banks and their development, and a broad definition could result in some extension of banking legislation into areas of provincial jurisdiction. Having read what is clearly in section 91, I do not see how the provinces have any jurisdiction whatsoever in this field, save perhaps in a minor way under their property and civil rights powers.
What has happened is that this federal government has refused over the years since confederation to really develop its powers under section 91 of the BN A Act. It has let other jurisdiction into the field, more or less by the incorporation of provincial trust companies and a provincial mix, if you want, of mortgage and investment corporations, lending and land corporations, and a whole stream of other types of institutions which, by their very growth, have become what are commonly called "near banks". They take deposits, they issue current accounts, they cash cheques on demand, they treat themselves entirely as banks and they operate totally unregulated by this government.
To suggest that to define banking would unduly interfere with provincial legislation is to indicate that this government is prepared to abandon its true field, as set out by the fathers of confederation in the British North America Act. Yet, at the same time, the problems that we have in respect of national unity in this country really boil down to an intrusion into provincial powers by this government when we legislate on health and welfare matters, on cultural matters and on a whole host of matters which, on anybody's analysis, must be matters of provincial jurisdiction. We should be using the jurisdiction we have and that is properly identified with this government to legislate on matters of economics, to make sure the money supply is controlled, and to make sure we are doing the things we are supposed to be doing.
The other day the governor of the Bank of Canada, Mr. Bouey, issued a release to the major banks asking them not to make loans to enable U.S.-based companies to do an end run around U.S. credit controls.
One of the most important reasons the federal government is
in charge of financial matters of this nature, with powers set
out in section 91 of the BN A Act, is in order that the federal government can have fiscal control throughout the country. With the abrogation of federal responsibility, with the refusal to define "banking", and with the refusal-because we might get into someone's way-to act sensibly and in accordance with the constitution, we have allowed all sorts of situations in which the federal government can no longer fulfil its function. While the federal government can direct the banks, it cannot direct the trust companies, preventing them from making fancy transfers of foreign exchange from this country.
One of our problems in respect of interest rates is that there seems to be no way we can control foreign exchange matters. We wind up with problems concerning the balance of payments, and we have a situation in which we are told we cannot have our interest rates differ unduly from those of the United States. The reason, of course, is that we have refused to come to grips with the real constitutional requirement of having the banks and the entire financial structure totally under federal control. We have sat back and said we cannot interfere with matters of provincial jurisdiction. I think it is about time we started interfering with this matter and took ourselves out of some other matters where we should not have been in the first place.
The same question was asked in respect of what is a deposit. In this regard the minister's response was that it has not been possible to find a definition that is sufficiently flexible to account for present and future variations. Isn't that fine? We cannot even define a deposit! The reason is that the government says a deposit cannot be flexibly defined. It is obviously necessary, if we are going to control banking and determine what a bank can or cannot do, and if we are going to determine what those not licensed can or cannot do, that we define the word "banking", the business of banking and what is a deposit. We have to do that and we should do it now.
1 want now to deal for a moment with some of the problems concerning automobile dealers. I thought perhaps for the enlightenment of the House I would read four short lines of poetry as follows:
Through the open window's space Behold, a camel thrust his face.
"My nose is cold," he meekly cried,
"Oh, let me warm it by thy side."
That is just about what has happened in respect of our banking system and how it has managed to creep into almost every field of endeavour. We have been told in regard to leasing that it is important that the bank be available to use the leasing structure in order to finance massive capital purchases, and that this was the same as making regular, ordinary loans, just as they make commercial or household loans. For a moment let us consider the household lending field.
In the previous act banks were permitted to go into consumer lending activity. They went into it with full force. That was to make it easier for the ordinary person to borrow the money he needs in order to operate his home. Unfortunately, it became more than just that. There has recently been a flood of plastic cards across the country and there are big signs which
May 5, 1980

say "Yes" or "We candu". I do not know whether the Minister of Energy, Mines and Resources (Mr. Lalonde) had something to do with that "Candu", but the Royal Bank now has "Candu". The effect of all these monster advertising programs is that the banking system has tended to become a merchandising system. The Bank of Commerce now talks about a "boots and saddles" loan or they advertise "Can't we get you a new car?". The question is whether this is banking or merchandising-whether Visa, Master Charge and the others are just merchandising or a form of advertising of the goods and services produced by the business community.
We must consider the question of leasing, Mr. Speaker. It appears that the banks have decided to get into this field and a number of us are concerned about that. I can easily see how important it is that people who need to buy large capital items like dump trucks, front-end loaders, airplanes and such things, should also have the opportunity to lease them. This is the type of financial transaction that we expect from the banks. But then the question arises, are we going to be able to lease suits, chainsaws, automobiles, pleasure sailboats, surf boards-that sort of thing? Leasing could have the effect of encouraging some people to go further into debt. I am not at all happy that leasing the type of things I have mentioned is an activity that the banking community should be involved in. It is really merchandising.
The banks have stated in their presentation-and clause 193 of the bill sets this out-that they can only be involved in financial lease. This gives rise to the question of when a financial lease ends and when a maintenance or repair lease, for instance, ends. What distinction is made between an ordinary consumer item and a large capital item that might be used in business?
1 think it is essential, Mr. Speaker, that we examine the way financial leasing is being handled by a leading company, a subsidiary of the Royal Bank of Canada called RoyLease Limited. In the old act there was no provision for a bank to hold a company like RoyLease, although they were permitted to do so by a special order in council, more or less, pending revision of the Bank Act. Now all of the major banks have some sort of leasing arm and it is perhaps unfair to single out RoyLease. However, the hon. member for Broadview-Green-wood (Mr. Rae) has already mentioned this company and certain letters that have come into our hands which indicate that, while a bank is prohibited from going into maintenance leasing agreements-a situation where the renter of a car has maintenance included in his rental payments-that has not prevented RoyLease from insisting upon specific arrangements with specific garages.
This is what has been done with Mr. Lawrence Myers of Forbes Chevrolet-Oldsmobile Ltd. in Dartmouth, Nova Scotia. RoyLease insisted on an agreement for a 20 per cent discount on parts and a 10 per cent discount on labour. This was to be done through a special Visa card with a RoyLease sticker on it. The letter ends:
Bank Act
If this is acceptable to you, please sign and return this proposal to: Mr. Karl S. Aboud,
Automotive Services Manager,
RoyLease Fleet Leasing Service,
I Place Ville Marie.
This type of thing indicates that the banks in Canada are prepared to go beyond the normal and agreed "no maintenance" condition and "no licensing" condition and so on in a financial lease. It indicates that they are prepared to use tactics which may be described by some as strongarm tactics with respect to maintenance and purchasing.
The camel appears to have gone into the tent, Mr. Speaker. Automobile dealers express concern that while they are forced to borrow money from the banks in the normal commercial manner in order to finance inventory and receivables, the banks then force them to turn over their list of customers and list of receivables like any other business. The dealers are concerned that once the banks have the names of the customers and the amount of the lease of the vehicle, their customers will then become the banks' customers and that they, the dealers, will not be able to do anything about it because they still have to operate on a line of credit from the banks and co-operate with the banks or be left out in the cold.
We must address this question, Mr. Speaker. Surely there is a conflict of interest when the lender can also be the merchant. These are the most powerful lenders in the country. A current statement shows that at the end of February the Royal Bank of Canada had assets of $55.7 billion, the Bank of Commerce had assets of $49.3 billion and the smallest of the big five had nearly $30 billion in assets. And they should be big and powerful institutions, Mr. Speaker, capable of financing the commerce of Canada, but that should not be an excuse for getting into the merchandising of everything in the country.
It occurs to me that the camel in the tent has a cold nose, Mr. Speaker. Unfortunately he is a pretty big camel. Indeed, one camel is the size of $55 billion, so when he gets into the tent there is not going to be room for the automobile dealer! Maybe the end result will be that more and more consumer items will be financed by our lending institutions.
This brings me to our concern with residual values, Mr. Speaker. Certain draft regulations were produced by the former government regarding leasing, but unfortunately they are not contained in Bill C-6 as presented by the government. We were surprised that these provisions are not in the bill as they were in the previous one, Bill C-14. The committee had insisted that leasing regulations be posted and contained in the material presented to the House. We are sorry that the regulations are not there and we will be insisting that they be included, because they determine how leasing will operate.

May 5, 1980
Bank Act
[ Translation]


Mr. Deputy Speaker:: Order. It being six o'clock, I do now leave the chair until eight o'clock this evening.
At six o'clock the Elouse took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. Deputy Speaker:: Order. When the debate was adjourned at six o'clock, the motion that Bill C-6, to revise the Bank Act, to amend the Quebec Savings Banks Act and the Bank of Canada Act, to establish the Canadian Payments Association and to amend other acts in consequence thereof, be read the second time, was under review and the hon. member for Mississauga South (Mr. Blenkarn) had the floor.


Donald Alex Blenkarn: Mr. Speaker, before the break for supper I was referring to the regulations propounded with respect to Bill C-14 before the previous Parliament, and those regulations stipulated that a lending institution, a bank, must provide in its leasing arrangements that the residual value of the leased equipment could be no greater than 20 per cent of the cost of acquisition of the property by the leasing corporation. Those regulations, and regulations like that, were referred to in a hearing before the Federal Reserve Bank in the United States with respect to bank holding companies in 1976.
In the United States there is an arrangement under the American consumer protection laws, and particularly under the consumer leasing act passed by the Congress of the United States on March 23, 1976, which specifically requires leasing corporations, if they are banks, to make sure that the residual value of the equipment being leased is the fair market value. In the event that at the maturity of the lease the equipment being leased is not the fair market value, the lessor of the equipment is not required to pay, if that is the case. So there is a real control to make certain that the leasing company makes sure that the residual value of the equipment being leased is in fact a fair residual value.
Clearly, the residual value is very important in determining the monthly rentals. If the residual value is estimated as being much higher than it reasonably could be in the normal case, then the rent charged can be considerably less than fair, and the American law makes that provision to protect the lessee of the equipment. One of the things we must concern ourselves with if we are going to allow the banks to get into the leasing field is to have regulations that ensure that the rental charged by the bank is a fair estimate. Our suggested regulations in October or November of last year with respect to the previous bill mentioned a residual amount not greater than 20 per cent of the acquisition cost.
I want to refer to what is in fact happening. I am taking some details out of a RoyLease lease with respect to a Chevrolet automobile where the original purchase price in the lease is quoted at $7,074.60. At the end of 24 months the vehicle is supposed to have a value of $3,256.74, or about 40 per cent of the value. That is the kind of lease that is being ordered by the Royal Bank of Canada through RoyLease in contravention of the regulations that were supposed to be in place with respect to this bill when this bill was before the House in the last Parliament. Indeed, it is not until the vehicle has been in the possession of the lessee for 36 months that the residual value of the vehicle is down to $1,345.16, which is just less than the 20 per cent requirement.
The point I am making is that the regulations as propounded in October or November of last year that have not been propounded by this government, and I make that point very clear, must be propounded by this government before this bill is to pass. However, those regulations have not been complied with by RoyLease, at least in determining how automobile leases should be worked out. They are talking about residual values considerably in excess of 20 per cent in their proposals to customers. What we have to look at is the kind of protection that Americans provide with respect to their consumer leasing act. That type of protection to lessees of equipment should be provided in our statute and in our regulations.
The next item I want to deal with is with respect to foreign banking. The details of foreign banking are set out in sections 302 and following. These banks are to be called schedule B banks. The minister was quite proud when he presented the whole matter to the House. He said that in no case will foreign banks be allowed to dominate more than 8 per cent of the total business of banking in Canada. Hon. members will recall I made some comments with regard to what is banking. The act does not define that. How the heck do you determine what is 8 per cent of the total?
When we brought the Mercantile Bank into Canada, it was not supposed to get even close to 1 per cent of the total amount of banking in Canada. That was the suggestion by Mr. Edgar Benson, minister of finance at the time. At the present time the Mercantile Bank has 1.5 per cent of the banking in Canada, so the growth factor is almost uncontrollable.
The practical matter is that once a bank is given a licence to operate in Canada, there is no practical way the Minister of Finance or indeed the Minister of State for Finance can in any way limit the percentage of business or percentage of gross assets that bank can have in Canada. Once you let the camel in the tent, it is totally impossible to tell how far the camel will go in the tent.
This government has made a great pretence of looking at a redefined Foreign Investment Review Agency, but we have a particular provision with the pious hope that you can limit foreign banking to 8 per cent. What has been the pious hope in the past? The pious hope with every business in the past is that Canada has been very poor at controlling foreign investment. We have an act that in fact authorizes and even encourages
May 5, 1980

foreign investment. It is in ministerial discretion. Although the minister is to ensure that no bank increases its percentage of business beyond 8 per cent, I doubt whether that is totally possible to enforce.
Once banks get in the position of taking business, they will continue to increase it. The minister can be as pious as he wants about 8 per cent, but once he starts making bilateral deals with other countries about banks coming in and doing business in Canada, what is he going to say to an applicant from Japan, for example? Will he say that we already have 9 per cent foreign investment in banking so you cannot come in, or is he going to say we will amend the act to make it 10, 15 or 20 per cent. The answer is that there is no way, unless we are going to have total government control over the expansion of competing banks, for the Minister of Finance or any minister or government to regulate a particular bank specifically to a particular size of the market place.
The whole concept is to bring foreign banks in to improve competition. This particular suggestion of 8 per cent is totally unworkable and the minister knows this. It is there because it may be interesting to talk about today when we have not yet got there, but eventually we will get 8 per cent, 10 per cent, 15 per cent or 20 per cent, and the statute will go on to 50 per cent, we know where it will go from there. The answer is that there is no way of controlling this percentage, and the minister should know that. He has no regulation that will allow him to discriminate from one country's bank to another country's bank and so on.
One of the other problems that involves foreign banking was brought to my attention by an officer of the Canadian Imperial Bank of Commerce with whom I had lunch, with respect to this.


Robert Phillip Kaplan: Who paid for lunch?


Donald Alex Blenkarn: He said-


Mr. Deputy Speaker:: Order, I regret to interrupt the hon. member but his allotted time has expired. He may continue only with the unanimous consent of the House. Is there consent?


Some hon. Members:: Agreed.


Donald Alex Blenkarn: I thank hon. members of this House. Unfortunately, I was interrupted three times. I can promise hon. members I will not exceed in the true sense the full 40 minutes allotted to me. I appreciate the opportunity to continue.
As I was saying, the matter concerning foreign banks was brought to my attention by an official of the Canadian Imperial Bank of Commerce. He said that what in fact will happen is that the foreign banks will skim. They will come into Canada and take the good business, the easy-to-get business. He said that the foreign banks will not put an office in Inuvik, Frobisher Bay, or some small community that really needs banking services to cash old age pension cheques and so on. You will only find them in the big cities. They are going to take the easy-to-get business. They are going to skim. The foreign banks are not going to make the small business loans. I spoke
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about that a week ago Monday. I am not sure that that act is worth anything.
The foreign banks will not make that kind of loan. They will not make the student loans. They will not do all the little things required of them. They are not going to pay any attention to the Minister of Finance when he wants certain things done in Canada. They are going to skim.
There is no provision in this act and the regulations concerning foreign banks to make them do the things that are socially acceptable in Canada. It is not possible to enforce such regulations. When they get in here, they take the easy-to-get business, the big business, the big buck deals that pay big bucks for them. They can repatriate their profits, but there is nothing in the act to make them do the socially acceptable things. In act after act passed by this parliament with respect to farmers, with respect to small business, with respect to students, requiring banks to advance the various easy or guaranteed loans for which we have provided, what will make the foreign bank advance those loans? That is skimming, and if we allow foreign banks in the country, surely we must provide in the charter that such banks take a fair share of the social responsibility which the large banks in this country have willingly accepted.
If we look at the Bank of Commerce, if we look at the Royal Bank, or the Bank of Nova Scotia, we find that they have willingly accepted social responsibilities. If new banks are to come into this country they must be particularly required to accept such responsibilities. It has been said that the schedule II banks will attempt to discourage the suitcase banker. It is said in the statute that we can stop his activities by not allowing him to conduct business. Unfortunately, the act does not define banking, so a company can come in here as the XYZ financial corporation, incorporated, say, in the province of Ontario, and since there is no definition of banking the company can do almost everything except call itself a bank.
There is nothing in this statute, despite the restriction on the offering of guarantees, which in any way inhibits the ability of a person to come into Canada and effectively carry on banking. The minister might argue that some of the sections-and I quote them to him-stop foreign banks. The truth is that there is more than one way to become involved in banking. There is one way well open to Canadians to become involved in banking, and that is to lend money to Canadian corporations and the interest can be repatriated to the lender in a foreign country without withholding tax. It is very simple to incorporate John Brown Financial Services Limited in the Province of Ontario, having the money that supports John Brown Financial Services lent to John Brown Financial Services on a floating charge debenture with a high interest rate, and immediately the foreign bank is in business; it hasn't got a foreign shareholder, the owner is a nominal Canadian. But, in fact, that foreign bank would be able, under the laws of this country, no matter what this act says, to do banking business in Canada, so this in no way inhibits that activity.

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1 said at the outset of my speech that the government has power under section 91 of the British North America Act, repeated and repeated under five separate headings, to control every aspect of banking. We refuse to define banking and refuse to interfere in the activity of foreign lenders coming into Canada and tearing our financial system apart for their own benefit. We refuse to use our federal powers in this area, and this bill does nothing to control the foreign banker who decides, for whatever reason, not to be registered as a section B bank. This is a serious defect in the bill and I say it is essential that we re-examine the whole subject of the Bank Act with respect to foreign banks.
The last thing 1 want to talk about briefly is a problem 1 have foreseen in the last year. Some ten years ago we allowed banks to become involved in the mortgage business. The mortgage business, by and large, involves long-term lending, and long-term lending should be backed up by long-term borrowing. Unfortunately, the activity of the banks is such that the banks have not engaged significantly in long-term borrowing though they have, in the mortgage field, engaged in long-term lending. The consequence is that the banks are presently receiving a return of about 10.25 per cent on their mortgage portfolios and are paying in excess of 12 per cent on their savings accounts, while charging business at a prime rate of 16.5 per cent and usually one or 2 per cent over prime- 17.5 per cent or 18 per cent or so. The banks are thus suffering a negative return on their mortgage capital and, as a consequence, are forced to charge more than perhaps they should charge on business in short-term loans.
It is essential in this review that we look at the long-term lending practices of banks to make sure they are balanced by long-term borrowing. There is not quite the same balancing of long-term borrowing against long-term lending in the banks as there has been in the trust companies. What we did when we allowed banks into the mortgage lending field was purportedly to save the consumer interest on mortgage loans. There has been no proof of that. The banks have cut mortgage rates by maybe a quarter of a per cent. We have in effect hurt the liquidity of our banking system and, by that action, increased the rate the business community must pay for the business loans that banks are really there to make to give us the employment we need, to finance the inventories, the receivables and so on. So it is important, when we analyse this activity over the last year with the enormous increase in interest rates, that we look very seriously at how the banks have used their mortgage accounts, how they have used their consumer loans accounts, and how in all probability the business community has in fact had to pay rates of interest in excess of what they should normally have had to pay, in order to balance the losses the banks were taking on their mortgage portfolios.
My suggestion is that the banks should restrict their mortgage business. Perhaps we do not need the amount of mortgage money we did need at one time in order to finance construction. It might well be that insurance companies and trust companies could solve that problem. It might well be that
the banks should no longer be in the mortgage business. The fact of the matter is that the banking business deals in short term deposits, demand deposits, deposits on three days' notice or whatever, and that money is being lent on long term, and the banks are not in the business of lending long, any more than anybody else is when they have to borrow short. This whole matter may seriously impair the liquidity of our banking system and while at the present time our banks are limited in the amount of mortgages they can take, if we continue to allow the expansion of long-term lending by the banks based on short-term borrowing we are likely to impair the liquidity of our banking system.
Again I want to emphasize that the banks have done a good job in Canada. Our banks are worldwide institutions which lend credit to Canadians throughout the world, and when Canadians say they bank at the Bank of Commerce or the Royal Bank of Canada, or the Toronto-Dominion Bank of Canada, those banks are well known. We are not in the situation in which the Americans unfortunately find themselves, with banks in every state and every city of all names, sizes and descriptions. We have institutions of which we can be proud. It is the job of parliament to make sure that those institutions are guided and developed and that they work in the interest of all Canadians.
In my view the chartered banks exist to provide a safe depository for funds of individuals and concerns and, within the limits of prudent banking practice, to make loans available to facilitate production and trade in Canada. That is the job of the banks. It is not the job of being a merchant or of promoting the sales of individual products or services. It is a job of providing a depository for funds and making sure that those funds are available for business and trade.


Robert Phillip Kaplan: Mr. Speaker, as I listened to the hon. member opposite I wondered whatever happened to that initiative to have installed at the front of the House a large bell that 20 members of Parliament could approach, and ring.


Mr. Ittinuar:: It should be over here.


Robert Phillip Kaplan: If it were down there, I would want there to be 35 members who could ring it.
It reminded me of one of the main reasons why I wanted to participate in this debate, and that was because in a past Parliament I had the honour of being chairman of the finance committee, and such a large degree of consensus developed over the long period of time that this matter was before Parliament in one way or the other that I was hoping to be able to see the bill move very quickly through this procedure and finally lead to the decennial revision of the Bank Act only eight years after the period in which the revision ought to have occurred. Instead of it being a decennial revision we are having something like 18 years between revisions. That is undesirable. It was one of the reasons why I was hoping that the bill would move rather quickly.
May 5, 1980

The trouble is that banking is a subject of enormous interest and importance to the Canadian people. There is hardly a Canadian who does not for most of his life deal with one of the chartered banks and, if I may say so, the banking system of Canada is not, in my opinion, entirely satisfactory. Every Canadian has his own criticisms of it. Some of them are unjustified, but some of them are very much justified. It is a highly concentrated industry. It is an industry which offers the consumer very little real choice between the various institutions which are the chartered banks, and so each member who comes to this House has his own life experience with banks, he has all of the experiences of his constituents, he has all of the advice of the various groups which have made submissions to us, and it is very easy to have a long and serious debate at any time on the subject of banking.
What I would like to suggest, however, is that the time for that type of debate really should be regarded as being over, in view of what has happened with this set of banking proposals before Parliament. I was hoping that a degree of restraint would be shown by all hon. members which would permit this piece of legislation to go very quickly to committee and, having gone through the committee, to become law very quickly.
I ought to add that restraint is more to be expected from members who have been around for the last seven or eight years than from many newly elected members-and I think particularly of members in the NDP caucus which has so much new blood-who have not had a chance to participate themselves in the consideration of this particular Bank Act revision, and the enormous temptation that they will feel to consider it a brand new bill requiring all kinds of new consideration and prolonged hearings. In my opinion that would be a disservice to this piece of legislation and a disservice to the process which has preceded it. It would be a mistake.
Parliament first began and the government first began considering this revision back in 1974 when a white paper was put forward. It received an enormous amount of public interest. Many briefs were submitted. Letters were written to members of Parliament. Eventually legislation was brought forward which took account, at least, of the great deal of criticism which was made of earlier drafts, and then it was referred to the committee which, as I mentioned, I had the honour to chair. At the same time-in fact, even earlier-it had gone to the Senate and received very full consideration there. I believe three reports were prepared by the Senate.
In the years I have been a member of Parliament I cannot remember a major piece of legislation of this kind which was the subject of so much co-operation and participation by members of Parliament. I can recall in camera meetings of the House of Commons finance committee at a time when we were expecting an election to be called from moment to moment, and yet members of Parliament, with all of the priority of an impending election call, were willing to take time to come to in camera meetings of the committee where their constituents would never find out about their contributions and their efforts, and all because of the shared belief that we had that what we were doing was important, that it was important to
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deal with a decennial revision on a timely basis and to deal with the provisions and the briefs which were before us, and that Parliament and our country would be served by getting the job done, getting on with it and getting our report out.
It was not very long after our report was submitted that the government fell, and we looked forward in the next Parliament to seeing what the new Conservative government would do with the report of the parliamentary committee. Respect was paid by that government to the work which had been done by members of Parliament in the finance committee, and the legislation which was brought forward was right in line with our work and with our recommendations.
Now, of course, the Liberal government has returned, and we have just heard the hon. member for Mississauga South (Mr. Blenkarn) criticizing the bill, as we heard last day when we heard the hon. member for Edmonton West (Mr. Lambert) criticizing the bill. One wonders where they were in committee and in their own party when the legislation was brought forward at that time. The criticisms that they brought, as I said, are valid, are interesting and deserving of consideration, but surely we have reached the point where at least the Conservative party and the Liberal party should recognize a common commitment and a shared responsibility to see the legislation move forward, and not to re-open a great many old considerations.
I would like to deal in particular with the situation of foreign banks because I know there is much public concern about what is perceived as the entry of foreign banks into Canada. Those of us who were on the committee know perfectly well, as do most other Canadians, that in one way and another foreign banks are already here. When he spoke, the hon. member for Edmonton West was quite right in criticizing the absence of a definition of banking.
We undoubtedly have power in this Parliament to deal with the whole subject of banking, but the answer to that is that it is too late for the Parliament of Canada to assert that jurisdiction in the field and to define banking in a very broad and comprehensive way. The constitution does permit us to do it, but if we were to do it, our law would be paramount-that is, as I understand it, what happens in constitutional law-and we would overtake the operations and bring under federal control the operations of a number of institutions which are presently regulated by the provinces because, until now, the federal government has not asserted jurisdiction to cover the field completely.
The caisses populaires, the credit unions, many provincial trust companies which, in effect, carry on operations which could be defined as banking, and many other provincial institutions, would come under federal jurisdiction. I submit to the hon. member for Edmonton West and the others who hold the view that there should be a broad definition of banking in the act that, if we were to do that, we would create a minor, but important, constitutional confrontation with the provinces.
In the original legislation brought forward by the then minister of finance, the present Minister of Justice (Mr. Chretien), monetary control was proposed to be asserted over

May 5, 1980
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provincial institutions. That was found to be extremely objectionable to all the provincial governments, and eventually in the course of negotiation and on the advice of the governor of the Bank of Canada, the legislation was modified to withdraw from the confrontation and to assert less control over banking than I believe-and most constitutional experts believe-the federal government has. Now here we are-after having seen the bill revised, brought forward, approved, recommended on, and eventually a bill which deserves consensus having been brought forward-finding members going back to the fundamental argument that there should be a broad definition of banking. Surely it is too late for that kind of criticism.


Donald Alex Blenkarn: That is nonsense, and you know that.


Robert Phillip Kaplan: If we had asserted a broad definition of banking many, many years ago, foreign banks would not be present in Canada in the way they are now.


Donald Alex Blenkarn: If you had exercised your jurisdiction, they would not be here either.


Robert Phillip Kaplan: If jurisdiction was going to be exercised, it should have been exercised back in 1930 when the caisse populaire and credit union movement first began to be established. That would have been the time to settle, as between levels of government, where the responsibility for banking ought to lie.


Donald Alex Blenkarn: That is an excuse.


Robert Phillip Kaplan: I have no doubt that if we had acted and defined banking back in the decennial revisions which took place back in those days, if they were here in Canada the foreign banks would be here on our terms, not on the terms which have been established by the various provincial governments. The credit union movement would be under federal control. But I regard that as a non-starter and I can hardly imagine that being put forward as a serious proposal by any members with any experience in federal-provincial relations, least of all members of the Conservative party who had the opportunity to provide a broad definition of banking when they were the government and who did not do it, for the very good reasons which I have just described.
The parliamentary committee recommended, and the Conservative and Liberal governments have responded positively, that the bill include a number of safeguards about the foreign banks. My friend opposite criticized the dangers of having the 8 per cent limit and wondered how it would be enforced. I think the 8 per cent limit will be easier to enforce than the controls which exist at present on foreign banks provincially. They are not really being controlled by this Parliament, and will be if this legislation moves quickly through Parliament. As I said, I hope it will.
There are other provisions which have been added to the legislation over the last two years of its consideration by this House to control the operations of foreign bank subsidiaries in
Canada. As I said, in my view these controls make the foreign banks more subject to federal regulation than they presently are, and it will make it easier to have a handle on their operations in this country than it presently is.
In order to allow the government to maintain a tighter control over the performance of foreign bank subsidiaries, the new bill provides for the licensing of such subsidiaries, which was the recommendation of our committee, with initial and renewal licences for periods of up to three years. The original bill did not propose any licensing or any review other than the decennial review of the Bank Act.
The new measure also redefines the proposed limit on the over-all size of foreign bank subsidiary operations in Canada. I think, frankly, the new proposals are more workable than the proposals that were put forward in the original legislation proposed by this government. It strengthens the prohibition against foreign banks operating in Canada except as subsidiaries, so as to encourage them to bring their Canadian operations under the supervision of the Bank Act.
It would remove the Bill C-15 ceiling limiting a foreign bank subsidiary to no more than five branches, but any branches in addition to the first would require ministerial approval to ensure the protection of Canadian-owned banks and to promote a wider regional distribution of such branches. This really is the answer to the criticism of the hon. member for Mississauga South that the foreign banks will come in and will skim the cream. I would assert that even in the areas where there is cream, more competition would be in order and would give a break to Canadian business and to Canadian consumers in giving them more choices of where to go. The formulation that is proposed in this legislation will permit the Minister of Finance (Mr. MacEachen) to say to a foreign bank which wants to come to Toronto, to Calgary, to Edmonton and to Montreal, "Have you looked at some other places where there is less competition than in these areas? Have you considered taking the responsibility of serving some of the regions in Canada which could benefit from it?" I do not think the response would always be negative.
I think that there are very good reasons why some foreign banks should go into some of the areas of this country where there is less economic activity because in those areas there is less competition. I think foreign banks will be able to offer quite a lot of new alternatives to the Canadian consumer and to Canadian business and they will cause important changes to take place within the Canadian banking system.
I know that during my years as a member of parliament we have seen the incorporation of some new Canadian-owned banks. When you look at the banking community and see how much concentration there is and how small is the number of banks in the field, you want more competition to take place. Of course Canadian competition would be better, if we could find a way of encouraging more Canadian banks to be established and to go into business.


Donald Alex Blenkarn: How do you help small Canadian banks?
May 5, 1980


Robert Phillip Kaplan: I am just coming to that point. The trouble is that in ten years of hoping and waiting, we have found that new Canadian banks are few and far between because it is very difficult to establish an institution that can compete with these giants which are already in the field. That is one of the justifications for giving the foreign banks more status here. If there were new Canadian banks, if there were an easy formula for creating another ten or fifteen substantial banks to offer competition with the banks to which the hon. member has referred, with the Toronto-Dominion Bank, with the Bank of Commerce, and so on, that would be another matter. But there is a lot of difficulty in establishing a new bank and competing with such enormous institutions. It is much easier for some large foreign banks to come in. They are in a better position to stand up to the heavy hitters that are presently in the Canadian economy. I am not worried about competition injuring the major banks which are here in Canada. I do not think foreign competition which will come in will damage them very substantially, if at all.


Donald Alex Blenkarn: It will squish the little Canadian banks.


Robert Phillip Kaplan: What I see is that real competition will be provided and Canadian business and the consumer will get a better deal out of it. That is the main objective. We would like to see more domestic Canadian institutions grow and flourish. In fact the bill contains new provisions for facilitating entry into banking by new Canadian institutions. Let us hope that some major Canadian corporations that have a substantial financial base go into the banking business and offer to compete with the major banks. It has not happened in the past to any degree at all, but there have been some such cases. It will be easier for them do that under the legislation that is proposed. But I do not think that will provide enough competition or enough choice for Canadian business and for the Canadian consumer.
I should like to conclude now, Mr. Speaker. I will not ask for the indulgence of the House to continue unduly because I am trying to set an example of speaking briefly, recognizing everything that has been done by the last Parliament and the Parliament before that and the Parliament before that, as well as by all of the committees that have looked at the act and all of the briefs that have been submitted. Let us not think that now is the time to re-invent the wheel. We have legislation before us that many will criticize-there are many things you can say about it, many differences of opinion about it. The point is that if we go through a very long exercise, we will end up with something that will also be subject to criticism in many ways.
I think the interests of Parliament and the interests of the country are best served by regarding this legislation as something which is essentially in the nature of housekeeping, as something that members of Parliament should recognize as having already been worked on. Let us get this through and get on to some of our other business which is newly before this Parliament.


Some hon. Members:: Hear, hear!
Bank Act


Mr. Dan McKenzie (Winnipeg-Assiniboine):: Mr. Speaker, I wish to speak briefly on Bill C-6 and the Bank Act. As the hon. member for Edmonton West (Mr. Lambert) pointed out last week, if we do not get this piece of legislation through, the banks will not be able to open their doors this coming July because it will not be legal for them to do so. The way the Solicitor General (Mr. Kaplan) was going on, I thought he was going to blame R. B. Bennett for this delay in the Bank Act, but it is actually the cause of the previous Liberal government in the Thirtieth Parliament which procrastinated with the Bank Act. The Liberals in those days seemed to be having some problems with the caisses populaires in Quebec. I hope they have cleared up their problems so that we can get this piece of legislation out of the House and into committee.
Now I wish to speak briefly with regard to credit unions, caisses populaires, and some of their concerns with regard to the Bank Act. I see they have received some very well-deserved recognition this week in the April edition of Focus, in which an article stated the following:
Credit where it's Due
Caisses populaires and credit unions have worked hard to rise from grass roots to riches.
The emergence in recent years of credit unions and caisses populaires as major competitors with the banks and other financial institutions for consumer deposits and loans has given the movement a unique "banking" status.
In fact the Toronto-based Canadian Co-operative Credit Society Ltd., which provides financial and support services for 2,200 credit unions and caisses populaires outside Quebec, had examined the possibility of seeking a federal charter to form a full-service bank of its own.
The Bank Act, however, in its present form, Bill C-6, does not provide the mechanism to fit the credit unions into the federal regulated banking system. That was said by George S. May, the chief executive officer of the CCCS. The article continues:
Besides, the credit unions have developed "almost the same powers" as the banks, so the organization concluded there is really no reason to look further into forming a chartered bank.
Without reading the whole article, I should like to refer to the brief warning of Mr. May contained in the last paragraph, which reads as follows:
Commenting on the decade ahead. May says credit union expansion is not likely to be as marked as it was in recent years. Because of wildly fluctuating interest rates and our failure to conquer inflation, he says, "for any financial institution it is a time for consolidation, to take a conservative approach to growth."
We hope that the credit unions will have a hearing at the committee meetings. Many of us will be meeting with credit union members this week to hear their concerns. This should also help us in committee when we are considering Bill C-6. The credit unions have prepared an excellent document on some of their concerns and wishes. I should like to read a couple of them into the record. In the credit union document entitled "Banks and Banking Law Revision Act", they have stated the following:
The credit union system has supported the proposals encompassed in the government's banking legislation and urges their early adoption.

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The credit union movement would benefit from the proposal in the bill to create a new Canadian Payments Association through which, for the first time, non-bank financial institutions that accept chequable deposits would be permitted to participate directly in the clearing system.
The credit union movement supports rapid passage of the new legislation for the following reasons:
(a)	It is in keeping with the government's stated intention to provide more equitable competition within the Canadian financial system;
(b)	Credit unions require equal access to the CPA in order to protect their future competitive position, especially since the CPA will become the focus for the evolution of electronic funds transfer systems;
(c)	Although the present clearing system, controlled exclusively by the chartered banks appears to work efficiently, there is no indication that it is cost effective from the point of view of credit union system;
(d)	Direct access by near-banks to the clearing system has been recommended by the Commons finance committee in its 1967 report on the Bank Act, by the Porter Royal Commission on Banking in 1964 and by the Economic Council of Canada in its 1976 study of deposit-taking institutions.
As the credit union movement has devoted considerable resources during the past four years to preparing for its proposed participation in the Canadian Payments Association, further delay would cause additional hardship and inconvenience.
They are experiencing enough problems right now with high interest rates which are the direct cause of the Liberal-NDP coalition in the Twenty-ninth Parliament when all limits on spending were lifted. Of course this caused the spiral and the eventual result today of high interest rate problems due to the high interest rate policy of the coalition in the Twenty-ninth Parliament.
The document continues:
In addition, other less controversial legislation, guiding the market behaviour of such financial institutions as trust and investment companies and credit union centrals, is being seriously delayed pending resolution of the banking legislation. It is time to get on with this work.
I will sit down now. 1 hope we will get on with this work in committee in the very near future.


Some hon. Members:: Hear, hear!


Raymond John Skelly: Mr. Speaker, it is a great pleasure for me to take part in this debate as a new member of Parliament, although almost a veteran after 11 months, of course. Perhaps the question that concerns me as much as anything else, to begin with, arises from the previous Liberal speaker who suggested that there may be an attempt by new members of Parliament to hold up this particular piece of legislation. When the bill was first introduced they mentioned a great deal of concern about how this particular bill had been introduced three times in three different parliaments. They stressed a need to push the bill through, a great urgency to get rolling with it. I would suggest that many of the people who sit here feel that the real need is to take a very careful look at this particular legislation.
Our feeling is that there are some important changes here which will substantially alter the business of banking in Canada. In addition, we have had three elections, and certainly there have been some very significant changes in the composition of the House of Commons. There are new people here representing new ideas. Who knows? It may just have
been the Bank Act presented by Liberal and Conservative governments that was a determining factor.
There are new situations in the world which would justify a more careful look at this particular piece of legislation. We have seen interest rates take dramatic and unacceptable rises. We have seen oil prices driven up far beyond what they were when this particular legislation was introduced. We have seen the decline of the United States as a major and dominant economic force. We have seen the national debt go up astronomically. We have seen bank profits increasing in spite of economic recession. I would suggest that these are all relatively new things since that particular bill was introduced, and that what it really justifies is a new and more careful look.
A need for a new approach is important also. We have looked at the question of the philosophy of banking in this country as represented by the other two parties, as a very serious matter. But I think the members in these particular benches feel that this legislation should be dealt with effectively and efficiently. There is the question of some very objectionable sections in it that might, by informal discussion, be dealt with, rather than in the typical confrontation that has taken place in many parliaments here.
1 was very pleased to hear not many weeks ago when they discussed the banking legislation that the government would be open to amendments. I think this was a move forward. If in fact this legislation is to go forward quickly, I would suggest that perhaps there should be some discussion about the more objectionable features in it and an openness toward those amendments. I am sure as we move forward to committee that the matter will be considered seriously. If this kind of a procedure is followed, no doubt good legislation will develop which can be accepted by the majority of members in this House.
Maybe the reason we take such a vital concern in this piece of legislation, whether there is a fear on the benches opposite that this will be held up, is that from our point of view banking is a privilege, as indeed is any other corporation in this country. Through the corporate procedure risk is reduced in order to earn a profit, but banks seem to have the best of both worlds-a zero risk and excellent profits. 1 do not personally recall when the last bank failed, and I do not personally recall when the last bank failed to pay a dividend. But I am quite certain that all of us here are concerned about the social responsibility of those corporations, particularly whether we should allow foreign corporations into this country.
In our opinion, banking is one of the safest activities. We have made it that way in the Parliament of Canada, and for that privilege we expect a return to the people. We want some control on bank profits. We want banks to align their financial power with social goals that are held by Canadians. Banking, from our point of view, has tremendous power in shaping the Canadian economy. All corporations, all goods that are produced, and all services depend upon these particular banks. All employment and the shape of the economy in the future will be determined by these banks, and we are seriously concerned
May 5, 1980

that this legislation be given adequate consideration in this House and in the committee.
As a previous Liberal speaker mentioned, banks touch everyone and everyone has personal experience with them, but not all satisfactory. When the banking committee sits here in Ottawa members often hear from bankers and occasionally from other organizations, but they do not reach the people who live in Comox-Powell River, northern Canada, or in many other places throughout this country. We are concerned that when this legislation is considered it be given adequate consideration by all members of the House. We do not see the urgency in passing this legislation, but we do see the need for careful planning for the future and a thorough examination of this particular piece of legislation. Governments have changed and members have changed. Of course, 1 did mention the accessibility of the particular committee which studies this to all the people in the country.
I think perhaps one of the themes is that we could proceed quickly by co-operation. I mentioned previously the possibility of informal discussion about objectionable procedures and about agreements on some amendments. I also believe that this particular piece of legislation, since there will be extensive debate on it and work in the committee, will probably set the tone for the Thirty-second Parliament, and I would suggest that we all see a sense of importance in this legislation, with a willingness to co-operate and see it through. We should do that with the theme that we need a thorough examination, and in that regard I would suggest the government probably has two particular options, a plan (a) and a plan (b), if you will.
Plan (a) is what we have seen so often in the past; forced passage, forced sittings, Committee of the Whole rather than, as was suggested the other day, allowing the opportunity for members to question expert witnesses, and then, eventually, closure. It is kind of a war measures approach to passing legislation. Again, the urgency concern that has been expresed on the other side of the House worries me. We may find this to be a reaffirmation of the old arrogant, inflexible government approach.
The government's plan (b) could be another option, a new look. We would suggest that the present legislation be extended for a period of six months. We suggest that the government should lay all its cards pertaining to this piece of legislation on the table and allow an opportunity for serious consideration with a fair hearing. Through this process of co-operation we might find that we could do a better job in order to represent the people who are very concerned about this legislation.
This business of holding off and having the government lay all its cards on the table is of great concern to us. Bank profits have been a concern in the past. It is my understanding that the Department of Consumer and Corporate Affairs is studying mechanisms that might control bank profits. Apparently that department is seriously concerned and is looking at the whole question of interest rate spreads. It is very important
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that we have access to the material that is generated by those studies before we pass this particular legislative item.
The Post Office is studying the possibility of becoming involved in some banking services. It is my understanding that this has been done in other countries. We have had experience in this country with post office banking during wartime.
Im my particular riding, and this might be of interest to hon. members opposite, banks have withdrawn from communities. There are now communities in my riding and in other ridings where banking services are not provided to the people. The banks have closed branches and they are not accessible to the people. There are only about 7,000 bank branches in the country, but there are 8,000 post office outlets. It might be relevant for the Post Office to become involved in some banking functions, providing competition through the public sector. This would also provide involvement through the federal government.
By and large I think the main concern is that we want all the cards laid on the table. What is the federal government considering, and what plans does it have in this area? We should have that information before we put that stamp of approval on this piece of legislation.
Another area of concern involves foreign investment guidelines. The Minister of Industry, Trade and Commerce (Mr. Gray) has suggested we are going to seek guidelines for the performance of foreign corporations. I would like to see these guidelines clearly spelled out, indicating how they will apply to foreign banking institutions. If we are going to become involved with foreign banking operations within this country I think it is premature to pass this particular legislation before we know what kinds of goals for economic nationalism we are going to define, and what kinds of guidelines for the performance and operation of foreign corporations will be brought forward in this country. We should have all the cards on the table.
1 notice that the Solicitor General (Mr. Kaplan) has dashed away, but even some of the things he might want to report to this House on, such as the activities of foreign banks involved with the Central Intelligence Agency, or activities in foreign countries, we might consider questionable.
There are certainly a great number of things the government is looking at now that should be laid before Parliament before we become involved in making a decision on this legislative item. There appears to be a great deal more information that members could have in order to deal with it effectively.
There are many areas in this act which we, in our party, feel could be improved. For example, I think of alternatives to incorporating banks by letters patent. That should be the subject of serious concern. We are concerned about the possibility of deleting the power of the banks to become involved in other areas of enterprise. We are seriously concerned about the control of corporate concentration in the banking industry, and we are particularly concerned about the prohibition on bank directors from sitting on the boards of directors of other corporations, or possibly holding other elected offices. We are

May 5, 1980
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concerned about provisions for making more effective disclosure of financial information, and we are concerned about a policy and a procedure being developed to assist banks to help Canadians attain important national goals.
We listened to the previous speaker outline what a tremendous role banks have played in helping Canadians achieve those social goals, and how foreign corporations might fail to do this. I suggest to you there are many people in this country who feel that the social obligations of banks have not been met. I suggest that banks provide one of the classic illustrations of this failure. It has often been said by small businessmen, fishermen and farmers, that in order to obtain money from the banks you first have to prove that you do not need it. They really do not serve the kinds of needs we are looking at.
We would like to see programs to assist with regional development and assist in decentralization of economic decision making. We would like to give some powers to the provinces to become more involved in banking. We would like to provide mechanisms for consumer protection, and the involvement of consumers in the decision-making process.
As the hon. member for Broadview-Greenwood (Mr. Rae) suggested, we would like to see a fair labour relations program followed by the banking industry, that last bastion of reaction in this country. We would, of course, like to see greater assistance for small businesses, farmers and fishermen.
We have a great deal of concern about the structure of the Canadian Payments Association. Finally, we have a very, very serious concern about and an objection to allowing foreign banks to function within Canada.
Perhaps just a comment or two about each one of these points might be appropriate. First let me refer to incorporation by letters patents. This, undoubtedly, is of great convenience and would allow foreign banks quicker access to Canada with the formation of new banks here. There is a serious need for competition in this field, considering the structure of the five major banks and the stranglehold they have on the Canadian economy. 1 would suggest that at the same time this procedure allows for a loss of accountability for the people of Canada. The function of banking, rather than being considered by the elected representatives of the people, then becomes less direct. It is streamed by the director general of banks through the Bank of Canada, through the minister of finance, through cabinet, and eventually to Parliament. With so many other things to take into account it seems there is a tendency to move away from the elected representatives of the people to consider the basic businesses that affect them. That is concentrated in the hands of cabinet and the prime minister's office.
Then there is the whole question of information to consider. There appear to be attempts to get safeguards to provide people with the information they need if we were to allow the incorporation by letters patent. I suggest this has been difficult in the past and to date we have not seen much action on the whole question of freedom of information. I suggest, Mr. Speaker, that it may even be a little premature to consider this
bill until the freedom of information legislation has come before us. People must be able to obtain the information they need in order to make judgments about the whole incorporation procedure.
When this legislation was introduced several days ago I recognized the phrase "trust us-we will round it out and flash it up in the regulations." I do not believe that history will bear out the fact that this is what happens. One would have been very naive indeed to trust some of the former governments of this country! As far as the entire procedure of incorporating by letters patent is concerned, Mr. Speaker, I should like to say to the government-non, merci. The charter by Parliament will safeguard the interests of the people.
Then there is the question of involvement in interests other than banking. This subject has been dealt with at great length, Mr. Speaker. There is some fear that leasing will put banks in a position to establish a beachhead in other businesses and then that beachhead will become the next area for expansion. We will see them in one area now, in another area later, and see them gradually expanding their business interests. Banks are probably the most efficient corporations that exist, but that is only because they happen to control access to money. If we allow them, they will eliminate competition; they will expand their business. Their profits-which are already enormous in the eyes of many people-would allow for cross-subsidization and the destruction of competition.
This tremendous market power should be checked; this capability to destroy a competitive system and loss of protection to consumers should be checked. We feel it is a conflict of interest to allow banks to consider loans to their competitors. Considering loans is the primary function of a bank-not going into other areas of enterprise.
Another matter to be concerned about is corporate concentration. It is interesting to note that the Bryce commission, which paid lip service to the task of examining corporate concentration in Canada, came to some of the most amazing conclusions. These corporate apologists, however, even singled out the banks for special consideration and critical comment.
In spite of the ease with which the government is allowing banks to form, or hopes that they will form, increased competition is virtually impossible because of the size of the market already controlled by the Big Five. From 1920 until the present, bank assets ran 80 to 90 per cent; in 1976 the Big Five controlled $108 billion of $121 billion in assets. It is difficult to see how any corporation no matter how easily it forms- except possibly the large multinationals-is going to enter the banking business and supply serious competition to the entire business.
In 1976 the Big Five had a majority of the branches throughout Canada. There were 7,018 branches altogether and the Big Five controlled more than 6,000 of them while all the other banks together had less than 1,000 branches.
It is very difficult to see how any corporation can be competitive in the banking industry in Canada. No matter what we do to provide competition, it is still akin to a closely
May 5, 1980

controlled economy. As I understand the theory of workable competition in a free market economy, it is that many small firms have easy access to the market place in order to compete, and that competition will not have any influence without limiting the size and scope of the activity of these major corporations. That is impossible.
There are some things to be said about the control of corporate concentration in this industry, Mr. Speaker. In 1976 a white paper dealt with the whole question of disclosure and the Bryce commission paid special attention to banks and the question of disclosure. It advocated greater disclosure in order to meet the needs of the people.
The United States is far less timid than we in this area. When we want information about a Canadian corporation, we no longer attempt to find out from the government or the corporate headquarters in Canada; we ask in the United States where they have adequate disclosure facilities and are not afraid to ask corporations to show what they are involved in. If Canadians want to find out the salary of the chairman of the CPR they can get the answer from the United States where they are not afraid of disclosure and where the provisions that apply to banks are much broader than in this country. I do not know what we or the banks have to fear, Mr. Speaker, so 1 urge that the provisions for disclosure in this legislation be dramatically expanded.
The Bank of America, for instance, has voluntary guidelines and some of the principles they are prepared to follow are worth noting. Customers for deposit services of the Bank of America are entitled to the information necessary to understand, evaluate the terms, conditions, availability and safety of the services provided. Borrowers are entitled to know the standards for credit eligibility and all information necessary to evaluate the credit extended, including all charges, and the methods by which they are calculated, as well as the conditions and obligations involved.
Investors in securities of the Bank of America corporation and its subsidiaries are entitled to the information necessary to judge the quality of their investments, the adequacy of the management and the value of their holdings. Employees of the Bank of America's companies are entitled to the information necessary to make informed decisions about their pursuit of personal objectives within the organization. Customers for the specialized financial services provided by the Bank of America are entitled to information needed to evaluate the terms, conditions, and quality of the services offered.
The vendors, suppliers and other businesses with which the bank deals are entitled to the information necessary to make sound business contracts with the corporation. This includes information about policies and agreements, transactions, competitive practices, non-discrimination practices and standards of fairness. The Bank of America believes that the public is entitled to the information necessary to judge the value and adequacy of the bank's contribution to economic and social well-being and its adherence to legal and ethical standards.
It is interesting to note that this government and its predecessors do not seem to recognize the necessity to provide
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citizens of this country, the employers and users of banking services, with the kind of information that is supplied in the United States. That is very disappointing, Mr. Speaker; it is objectionable and should be changed.
While on the subject of corporate concentration and attempting to control it for fairness and equity in the marketplace, the whole question of bank directorships should be considered. For many years the problem of interlocking directorships has been a matter for serious concern. We find that there are bank directors on the boards of all major corporations in this country. We are disappointed that this legislation will not prevent that state of affairs. As we see it, it would probably be desirable to bar bank directors and bank managers from the boards of other corporations. This criticism has been met with the argument that such people provide tremendous insights when operating a business or providing financial services. I would suggest to the government that such advice can be obtained in a banker-client relationship. In that particular relationship, if you provide those services through a client-relationship, you do not run the risk of conflict of interest or coercion. Therefore it would probably be advisable if we provide greater privilege and power to bankers to eliminate the conflict of interest or coercion.
Moving from the subject of corporate concentration, which is of particular concern, to one of social responsibilities, there is a very serious question about social responsibilities of the banking community. We have heard a number of previous speakers attest to the great job they are doing, and certainly if the measurement strictly of profit is an indicator of great success in our society, then possibly the Big Five are tremendous successes; and we have guaranteed that for them. I have mentioned previously that in return for giving that guarantee and privilege, we would like to see the exercise of responsibility.
In some of the areas there are many national goals that we all look forward to achieving in this House, as do a great many Canadians. I would suggest maybe a few of them have been preached by many sides, the Conservatives and the Liberals, as they in turn form governments. We talked about a national goal and an industrial strategy in this country. We talked about an employment strategy. I have heard representatives from both parties stand up and say they had a goal of putting Canadians back to work. We agree with these goals. They are both vitally important goals, that is to say, getting that industrial strategy under way and getting employment created. As early as today we heard about the need of regional development to provide funds in this country, in northern Canada, in western Canada, in Atlantic Canada and in Quebec. This was to provide support for areas that through a period of time have not developed in a balanced manner. Regional development is an important national goal.
Then we come to transportation and communications. Apart from the tongue in cheek double-tracking escapade during the last election campaign, there is certainly a great need for

May 5, 1980
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improvement in transportation, for example, the Prince Rupert port. There is needed a whole series of improvements and upgrading in the business of transportation and communications. These are national goals with which most people in this chamber would agree.
Now I would like to turn to increasing Canadian participation and control over our own economy. The last election saw the people who now sit in government in front of Canadians saying once again that Canadians must control and make decisions that affect the economy. There is too great a penetration of foreign decision making in this economy. Canadian nationalism and the economy were a great thing.
We can see parts of the country where housing is now in difficult straits. It seems to me that I read in the local paper about the "AFLOP" program and about zero vacancy rates in the area where 1 live. Housing is a very serious and important national goal which many of us share. The point is that we cannot keep fuelling these programs out of the public purse. The banks control an enormous amount of the nation's capital; they must become more involved and must bring their financial power to work together to achieve those national goals in a rational way.
In this House we have all said that we want to see an expanded and strengthened small business and middle-sized business program. I would suggest that no one is being hammered harder than those particular segments. Throughout the last election, and prior to it, a stream of small businessmen came through my constituency office. There was a tremendous volume of mail about the hardship which was being created by rising interest rates, especially in rural Canada where not only do small businessmen have to carry a large inventory, which does not turn over very quickly, but they must face high interest rates on that inventory. They have to face increasing transportation costs, strictly because of the oil pricing policy. The are faced with these two elements as well as a not too often sympathetic banking industry. In my riding I have had a number of experiences, and I am certain that everyone else has, where the bank has arrived on the doorstep of the small businessman and said, "My auditor just came in today. I have too many loans out. Your loan with our bank is chopped." And that was it.
One business successful for many years, with 80 employees, had the vice- president of the bank from Vancouver along with the local branch manager arrive in the office with no notice and say to the business people, "We are calling the half a million dollar loan that you have out." The gentleman replied, "I run a very important business that serves the coast of British Columbia, not just the 80 people employed in this community and all the services and maintenance we require from this area." The bank representative said "Tough." He was asked why. The bank representative said, "We have no explanation, and we are not required to give one. It is a demand loan. Goodbye. Pay the money." And that was it. That is not a very socially responsible approach. These small businessmen are faced with high interest rates, stifling freight rates, and a banking industry which can come to their doors
and say that its auditors said there are too many loans out, and that they are picked to go down the drain.


An hon. Member:: It is Liberal realism.


Raymond John Skelly: It is not Liberal realism exactly. I am certain members opposite are as concerned about that kind of foolishness as I am. We would all like to see a more socially responsible approach, that those who consume the services of the banks in this country would have more protection, access for appeal and reconsideration, not just a blank "thank you very much, that is a demand loan and we want all the money back today regardless of the consequence on your firm, its employees and services it provides to the people of rural Canada."
We are talking about national goals and, if I may be permitted to stretch it a bit, we all want a Canadian merchant fleet. We have talked at length about that in this House. It almost came to pass. We want to see the shipbuilding industry improved. Again, it should not all be borne out of the public purse. The banks have an obligation to bring their financial muscle behind that program and we should be encouraging that through stated policies in this legislation.
In my particular riding, and in the area of B.C. that I represent along with many other members who sit in this House in two particular parties at this moment, we are concerned about the Indian communities. Time and time again leaders of the Indian communities have come in desperate need for access to capital. They are told by the government to go out and make plans. Those communities that plan properly will be given access to capital to carry out those plans. 1 submit that Indian communities have done a tremendous amount of planning and hoping. They want the kinds of benefits that are available in other communities. Every time they arrive on the doorstep for assistance from the government for access to capital, they are told to go and whistle.
The banks could play a substantial role, with the assistance of public direction, in providing the desperately needed capital in Indian communities. It would be interesting to see the government comment on a situation like that. These communities need housing. They need developments in their infrastructure. Basically they need capital for economic development to put Indian people back to work. It is an interesting side feature that we do not really seriously consider Indian employment in terms of things they are able to develop and promote and improve themselves. We do not even include Indian unemployment in our statistics, and yet it is a most serious unemployment situation in my riding and in the ridings of many people from that area.
There has not been much social responsibility in banking, not because the banks are basically evil or malicious, but the lust for profit is there. If the banks are allowed the opportunity, they will certainly follow the path of least resistance to reach that profit. Development in the areas I have talked about is vital to a balanced development of the Canadian economy. Unfortunately, they are not the most profitable and they even carry a slightly greater risk. Through this particular
May 5, 1980

piece of legislation I think that we could encourage the banks to participate more fully in developing and balancing the economy of Canada.
A further question is the one of consumer protection. We mentioned the whole business of disclosure of information. Perhaps I might be permitted a moment to take a look at the entire question of consumer protection in relation to banking.
Consumers who are users of the banking system can make intelligent choices about the services only when working with adequate information. Under consumer protection we feel that banks must disclose for the individual consumer in that bank, general credit policies and lending guidelines, all terms and conditions for borrowers including related and additional charges, for depositors the terms and conditions of savings accounts or other savings instruments such as RRSPs, all terms and conditions of mortgage lending, general advertising policies, policies of providing information to creditors, credit agencies or others, policy of retaining customer records and maintaining confidentiality.
Another question about consumer protection is the entire business of the credit card industry. It appears today that the banks, through the promotion of convenience credit, have more than 10 million cards in the hands of Canadians. About 48 per cent of the respondents to a Canadian Consumers' Association survey in Toronto in 1975 said they had experienced billing problems with their cards. Only 61 per cent of those errors were corrected within a month. The number of personal bankruptcies in 1978 was 15,800. Did you say good?


Mr. Munro (Esquimalt-Saanich):: No.


Raymond John Skelly: I thought 1 heard him say good.


Mr. Kempling:: No.


Raymond John Skelly: That is acceptable. We are travelling on the same track. Interest rates on Chargex and Master Charge as of April 1, 1980, were 21 per cent and are expected to rise to nearly 26 per cent. Personal indebtedness, ordinary personal loans from chartered banks, not including mortgages, totalled approximately $25 billion. Again we need better information about the cost of those loans. There should be a lot more work on credit counselling by banks.
The whole question comes back again to concentration. That worries me as much as anything. The banks through their involvement with Visa and Master Charge, have compelled many customers to use that. There are services one can no longer acquire in this country unless you can provide a credit card. It is difficult. It is more than the path of least resistance. The next few years will probably see a disappearance of a lot more of the services you can acquire with cash or cheque. If you can present Master Charge, you can certainly have it, if you are willing to become involved in personal debt.
This is fine for most people. Unfortunately, the tremendous
compulsion to use those, the encouragement to spend more and
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more through the use of Chargex and Master Charge and the various other devices, are a serious problem. We will see bankruptcies rise. We will all pay for those costs.
The question of the credit card system will fuel the whole business of inflation. It will increase bankruptcies. As far as I am concerned, and many of the people I have spoken to about this, the banks should be driven out of this area, even though it happens to be one of the most lucrative. This type of credit should be provided as is necessary. Mechanisms such as lower interest rates, compelling them to charge much lower rates, will make it much less desirable to push credit at people, in fact to exploit people with it.
When you go into a major department store they no longer ask whether you will pay cash. They ask, "Can I put it on your charge card?" The financial aspect of that is that it is one of the highest earning departments in any retail store. You might consider requiring a small down payment. I wonder what would happen to inflation and the national debt if we were to attempt to regulate the whole business of credit.


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member but the time allotted to him has expired. He may continue only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


William James Kempling: I thought the time would never come, Mr. Speaker, because listening to the hon. member for Comox-Powell River (Mr. Skelly), I wondered where it was going to end. 1 can only say that he reminds me of the poet who wrote:
He is so pure, as pure as can be,
For he is a member of the NDP.


Some hon. Members:: Hear, hear!


Mr. Knowles:: Author?


William James Kempling: I will take the credit for that. I just want to comment on the hon. member's remarks. I am no apologist for the banks-


Some hon. Members:: Oh, oh!


William James Kempling: You do not have to use that credit card if you do not want to. It is there for your convenience. You do not have to pay the interest if you pay your account at the end of the month. What the hon. member might try some time is going into a store with cash. It is amazing what you can do with cash.
When I go into a store wanting to make a major purchase, I say, "How much is it for cash, and 1 mean cash. I will count it out for you." I recently went to one of the largest department stores in Canada. I wanted to purchase an appliance for my wife. I asked the appliance manager how much for cash. He said it is the same price. I said, "Here is my card. When you

May 5, 1980
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get around to deciding whether you want to sell me for cash or what, and what discount you will give me for cash, call me." 1 had a call within six hours, and the price for cash was considerably less.
I have to chuckle at the hon. member for Comox-Powell River. He talks about having to go through this process all over again. He says there have not been fair and equitable hearings. Let me tell him that I do not recall one member of the NDP turning up at any of the hearings we had, and I sat on all of them. We had representations from all of the banks, including foreign banks. 1 did not see anybody from the NDP. I did not see anyone there when we were examining briefs. They were not there when we did the committee report. They just were not there.


Some hon. Members:: Oh, oh!


William James Kempling: You can holler all you like. Look at the record. It is there. For some new member to come into the House and say that since 1976 this matter has not had an adequate airing in the House of Commons and has not been heard adequately, is a lot of nonsense. It has been heard. I hope that the House will act with a certain amount of dispatch after it gets rid of a couple of items that seem to be bothering us, and let the Bank Act get on its way and into operation. I believe the passage of the Bank Act is more important than the minister's budget, whenever he brings the other half of it down. This is the engine. This is what makes our business operate.
I want to deal with a couple of specific items in the Bank Act. My colleagues covered much of the hearings and the witnesses we had before us, as well as the submissions we received from foreign banks and so forth. I want to deal specifically with one section that we have changed. That is the old section 88 of the existing act which is now section 177 in the bill before us.
When we did some research on this portion of the act. We discovered how it had found its way into the Canadian act. It was lifted out of a British statute that went back to 1815 and had been substantially unchanged since that time. It was a means of allowing a manufacturer or producer to offer as collateral to the bank his work in progress or his raw materials.
A businessman may go into the bank and say to the bank manager that he wants to use section 88. As far as he is concerned, that is a form that the bank has which you fill out and sign. There is a lot of legalese and words in there, which he does not understand and I do not understand. He knows it has to be signed if you are going to pledge the work in progress or raw material as part of your collateral for the loan he is going to give you.
I think the minister is a reasonable person. What we were trying to bring before the committee was that commerce has changed a lot in this country since 1858 and that a large segment of our economy is now engaged in what I call loosely the buy-sell business-they buy material from various parts of
the country and from outside the country and they service and sell it to businessmen. They are faced with a particular problem today because the banks really have no way of taking their inventories as collateral except when they take a floating charge debenture. They allow them actually about 30 per cent of real value. A businessman, say, has $750,000 tied up in inventory upon which he will only get around $215,000 from the bank when it gives him an allowance for collateral purposes.
We find that in most other jurisdictions merchandisers, wholesale or retail, can go to the bank and upon convincing the manager of the quality and freshness of the inventory, can sometimes get 75 per cent or 80 per cent. That is a matter between the banker and a businessman. We have no mechanism for doing this. We suggested, and, fortunately, the members of the committee agreed, that we should amend section 88, and we have now added wholesale and retail services to that section as far as inventory is concerned.
I think few people realize how important it is that the wholesaler or the retailer now has available to him, provided he can get the auditor to verify the value of his inventory and the bank manager has adequate confidence in the businessman and his auditor, a medium of collateral beyond the 30 per cent he would normally get. If we can get this going it will do a tremendous amount for wholesale and retail trade in this country and will help a lot to prevent many of the bankruptcies which are now occurring since, in most cases, bankruptcies come about through lack of working capital.
Another thing a lot of people do not realize is that the cost of carrying inventory in past years used to be borne to some extent by the manufacturer. Today it is not carried by the manufacturer at all because of a change in the style of manufacturing. Hon. members may recall when President Nixon brought in the 10 per cent surcharge on imports and then, along with it, passed Disc legislation which allowed American companies which manufacture and sell to a Disc corporation to retain 50 per cent of the profits they made from exports interest-free, at the pleasure of the President. The effect has been to put into the pocket of the American manufacturers, in this case, a source of funding at no interest; members can imagine what assistance this is to a manufacturing company.
The American supplier utilizes this advantage by taking an order from a Canadian consumer or a Canadian wholesaler and trades it at the bank, using it as part of his justification for getting funds from his bank in the United States. He will take an order to his bank manager, supply a history of his client- how long he has been doing business with him and the history of his payment record-and is then able to get an advance of funds for the operation of his business. Then, when he produces his product, he does not put it in inventory; as soon as it comes out from the production line it is shipped, in this case to the Canadian wholesaler, and it is the wholesaler who carries the cost of the inventory. But you see, Mr. Speaker, the wholesaler has no way to react to these circumstances. He has no source of funds unless he wants to invest his own money in
May 5, 1980

the transaction. He has no way of getting funds through his bank to enable him to carry that inventory. So we were looking again at section 88, and that is another reason why we decided to amend it.
We heard a little rumble a year or so ago about section 177-we heard there were some people in the other place who were not very happy with it. In fact they wanted to change it back to the old section 88. They did not want that wording changed at all. As it turned out, the Canadian Retailers Association heard about the good things in section 177 and the Canadian Federation of Independent Businessmen heard about it too. They descended on Ottawa and wanted to meet with the banking committee in the other place to tell them a few of the facts of life about wholesaling and retailing in Canada. Of course members of the committee backed off when they saw there was some objection. We hope they have seen the light and that when the bill comes before their assembly they will allow it to pass without changing that section or sending it back to us for further debate.
I want to say something about leasing because we have had a number of discussions with the Canadian Federation of Automobile Dealers about leasing and about their concerns, particularly at the present time in the light of difficulties experienced by automobile dealers in coping with the downturn in the economy. A lot of the dealers tell us that about 25 per cent of their income is derived from leasing and they are very concerned that the banks intend to move into this field and take a good deal of it away from them. Indeed, when our hearings were going on, one of the chartered banks told us they were planning to place a leasing officer in every branch across the country and that they were actively going out to seek the leasing business.
As other members have mentioned, the Royal Bank of Canada has sought to line up dealers to supply them with automobiles at a few dollars over cost and perform service for them at a 20 per cent discount, or something along those lines. This is really not the business of the banks at all. So we intend to press the minister to get the leasing provisions amended. This is one of the few points we are concerned about-getting that leasing matter dealt with. We think leasing should stay with the dealers. We believe that automobiles and light trucks up to maybe 16,000 GPW should stay with the dealers, and that the heavy trucks and the large ticket items should be made available to the banks.
I might say that the Canadian Federation of Independent Businessmen has carried out a survey in the last month, I believe. The results were in today, and I understand that 67 per cent of the small businessmen across this country indicated in the ballot that they do not want to see the chartered banks in the leasing field. I think the minister is a reasonable person, and I believe he will listen to that opinion and accept an amendment which would allow the banks to stay out of the leasing field and not get as involved in it as they thought they were. Car dealers have told us that the banks in fact have been raiding some of the leasing companies and taking some of their
Bank Act
personnel, and that they are really ready to go into leasing in a big way. We think this is not a good move.
There was some concern expressed about the computer services that they were going to offer as well. I just bought a computer at my own business about a year ago. I recall going to the bank and telling them that we were buying. We had to talk to them because we were buying the computer, and it was quite expensive. They immediately said, "Well, why buy a computer; use our service". One of the things we have to remember is that we have to be flexible enough to move. We do not have to stay with one bank all the time. My concern was that if I had all my records tied up in the computer system of the bank and I wanted to move to another bank, I would have quite some difficulty doing that, so I chose to stay out of that and to use my own computer. Then, if I choose to go from one bank to another, I will.
I find that Canadian businessmen have a fixation about banks. Many of them come into my office, and they are always blaming everything on the banker. Sometimes it is the banker's fault, but it is not always his fault. Many times it is the businessman's fault. What I tell them is that if they have an idea and they are going to the bank for financing and they have it all written down and laid out so the banker can take it and explain to the people he has to deal with-maybe his regional manager or whoever it is above him who approves loans-he has to have something to pass on to him then. If the matter is explained in a reasonable way and the banker turns the applicant down, he should not become despondent. There are five or six other banks. He should just go to another one. If they all turn him down, he should go back and have a look at the concept of what he is doing. However, because someone turns him down, that is not the end of the line. I have been turned down many times, and sometimes when I have sat back and looked at it, I was glad I was turned down.
The fact is that if you do not try and do not venture, you should not blame the bank. If it turns you down, look at another one, refine your presentation and have another go at it.
The hon. member for Comox-Powell River talked about consumer protection.


Donald W. Munro: He is gone.


William James Kempling: Well, he is really gone then. He talked about consumer protection. My gracious, I think the last bank which went bankrupt in Canada was the Home Bank in Hamilton in about 1921. It was taken over by the Commerce. I do not believe that a depositor in Canada has lost one penny as a result of bankruptcies in banks, so if we are looking at consumer protection from the point of view of the depositor at the bank, we have no worry. Part of that is due to the way banks are run, and part of it is due to the Bank Act and the way it has been administered. I do not find that consumer protection is much of a problem.

May 5, 1980
Bank Act
The hon. member went on to talk about requiring the interest rate to be stated. That is the law today. If the hon. member really knew what he was talking about, he would know that when you go to get a loan it is required that you be told what the interest rate is. It is there in the law now.
With regard to finding out what is on your record, most provinces in this country have legislation which requires banks to show us what is on our records, if that is what is concerning us. In fact most credit agencies are happy to have people come in asking to see their credit records because the credit agencies want them to be as accurate as possible. I do not really follow what the hon. member is getting at.
In his speech the hon. member kept talking about control, control, force and compel. That is the old NDP line that we have heard in this House so many times. They talk freedom and democracy out of one side of their mouths, and control, control, and compel out of the other.


Mrs. Mitchell:: Justice, justice, justice.


William James Kempling: And they spit seeds out the middle.
With this Bank Act there has to be more competition in banking. There is no doubt about that. We are letting foreign banks into the country because our banks are operating outside the country. It is on a kind of reciprocal basis. At least that is the spirit that we adopted in the committee. We felt that we should have reciprocity. If Canadian banks are going to operate in other countries, we should have some sort of reciprocity here.
However, I want to see our banks involved more in exporting, particularly in the small business sector. There is no reason why they cannot get involved in that. They all show export financing in their services, and yet when you go and talk to them about it, they do not seem to have anyone there on the spot who can tell you too much about it.
I think I would rather see them keep out of leasing activities and have them concentrate more on export financing. Our long-term finance market is gone. I would like to see them more into that area.
I noted the small business development bond which the minister smuggled into his economic comments a week or so ago, which he took from the minister of finance of the previous government, which I am sure he got from some other place-I do not think anybody can claim authorship of that idea-but I hope that the Minister of Finance (Mr. MacEachen) will encourage, through the Bank of Canada, the chartered banks of this country to go after this small business development bond.
I hear-and I hope I am hearing wrong-that some people inside the department are not too excited about this small business development bond. I hear that perhaps some of the banks might not be too enamoured because they are holding colectively about $12 billion to $13 billion in term preferreds on which they pay no tax on the interest that they gather on them. Of course this small business development bond is in the same category. Regardless of that, that is the engine which
will drive this economy for the next few years, and I certainly hope that the minister will see the wisdom of encouraging that sort of activity on the part of the banks; and let them keep out of leasing.
Hon. members will recall that when we let the banks into the mortgage field, the thought of the day was that with their vast resources mortgages would be a lot cheaper. The reality is that there is about a quarter-point spread between the mortgages we get from chartered banks and what we get from mortgage companies. When we questioned the banks about that, their reply was that if they go down any lower than that, they will be accused of driving mortgage companies out of business, which is not the way it was supposed to work. Everyone thought that with their vast amount of resources the banks would be able to provide mortgages at lower rates of interest and that that would help the housing industry and help Canadians get housing as they needed it.
I know we are going to present an amendment. I do not know what the progress of the bill will be. I assume it will go to committee. I do not think we are anticipating long hearings, and I hope the minister will look seriously at our amendment on the basis that the general opinion across this country is that the banks should not be in automobile and light truck leasing. They should be out of that field altogether. It should be left to the people who know that business. If they will do that, I think perhaps we can make some progress.
Mr. Speaker, may I call it ten o'clock?


MESSAGE FROM THE SENATE
Mr. Deputy Speaker:: 1 have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill S-3, to amend an act to provide for the appointment of a port warden for the Harbour of Quebec and to amend an act to amend and consolidate the acts relating to the office of port warden for the Harbour of Montreal, to which the concurrence of this House is desired.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Michael Holcombe Wilson: Mr. Speaker, on Friday, May 2, I asked the Minister of Industry, Trade and Commerce (Mr. Gray) why he had apparently completely ignored the request of a successful, growing, Canadian-owned
May 5, 1980

company for aid in expanding its product line. His answer to this question was completely unsatisfactory. He ignored the question, and this, together with similar evasive answers by the minister over the past two or three weeks, has caused me to rise tonight to comment on this issue.
Let me put the matter in some perspective. First, the aid to Chrysler, rumoured to be in the range of $200 million to $250 million, compares with the programs of the Department of Industry, Trade and Commerce and the Department of Regional Economic Expansion in the following way. The total budgetary and non-budgetary estimates for the Department of Industry, Trade and Commerce were $508 million, and for DREE, $562 million. Of that amount in the Department of Industry, Trade and Commerce, $200 million will be by way of grants and contributions. I ask the minister whether he had stopped to consider the impact of this Chrysler aid within his over-all budget. The Chrysler aid represents an enormous part of the budget in two key economic development departments.
Second, Chrysler has had a somewhat checkered existence in recent years. This is the third time that Chrysler has suffered financial problems in the past ten years. Each time the problem gets worse.
Clearly any aid to Chrysler Canada is very significant in relation to over-all Government of Canada industrial development programs. There is also significant risk that Chrysler will be back to the trough again. Thus the decision that the government makes must be viewed with concern since the decision made today may well be the precursor of a similar decision in the future.
1 have tried to obtain from the minister answers to the following questions. Out of what fiscal envelope will Chrysler aid be provided, the economic development envelope or the social welfare envelope? Will any aid to Chrysler have an adverse impact on other economic development programs? Putting it quite simply, will the provision of aid to Chrysler result in fewer economic development dollars being available for other programs? I have pointed out one unfortunate situation, that of CAE Industries, which was ignored completely by the minister. What is the significance of this lack of attention? Is the government considering any alternative ways of dealing with the very serious problem of lay-offs and long-term unemployment in the automobile industry?
The minister today made the ridiculous statement that he would report to the House by the time of the question period. To date he has said nothing to the House by the time of the question period. I have learned more about Chrysler from reading the newspapers. It is essential that we have a full debate in the House on the aid program. What impact will it have on small business? What impact will it have on high technology industry support? What impact will it have on other assistance in Ontario? What impact will it have on other parts of the country? These are all very important questions.
I can understand the reluctance of the minister in commenting on particular aspects of current negotiations, but I cannot understand him stonewalling me on these broader questions. Is there any reason for his attitude? Either the answers to these
Adjournment Debate
questions will arouse unfavourable comment from Canadians at large, or the minister has not directed his attention to them.
Prior to the election, and even since 1971, the Liberals have been calling for an industrial strategy in this country. What is that strategy and where does aid to Chrysler fit in it? It is sad to say that we are facing here one of the most significant economic development decisions that any government has made in this country, and there is no comprehensive economic strategy within which to judge the merits of the decision. I can only discuss the matter in the context of certain statements made by the minister and others on his side in recent days. Industrial strategy usually requires that aid be given to growing companies, to the winners. Chrysler is clearly not a winner. How, therefore, is aid to Chrysler being tailored to ensure that Chrysler will become a winner?
The hon. minister has championed the cause of Canadian-owned companies in his comments on industrial strategy. How does aid to Chrysler fit within these policies? Why has he ignored a growing, successful Canadian-owned company which needed a nominal amount of capital to provide 200 to 400 jobs and some $20 million to $30 million in new business? The inconsistency is alarming. It took a statement by the president of that company that the business had been lost to evoke any reaction from the minister.
Support for small business is, and always will be, a key to any sound industrial strategy. Will the aid to Chrysler inhibit the government from supporting small business? If the money available for small business is not forthcoming because of the aid provided to Chrysler, one can be sure that the outcome will be received in a very negative way by the small business community, and rightly so.
I have asked many questions. 1 have not in any way tried to disrupt the negotiations which are currently under way. The purpose of these questions is to try to understand the framework within which the government is making this very far-reaching decision. It is critically important that this be done prior to the decision being made. It is impossible now for Canadians to indicate whether or not they support in principle the aid to Chrysler, since they do not know what this aid entails.


Mr. Claude-Andre Lachance (Parliamentary Secretary to Minister of State, Trade):: Mr. Speaker, first I thank the hon. member for Etobicoke Centre (Mr. Wilson) for giving me the opportunity of addressing my peers for the first time in this Parliament. I should like to reassure him and say that, contrary to what he seems to think, if anyone in this House cares about developing a coherent strategy for the automobile industry, for very obvious reasons, Mr. Speaker, it certainly is the Minister for Industry, Trade and Commerce (Mr. Gray). Moreover, on Friday, May 2, the hon. member for Etobicoke Centre brought up the matter of the CAE Industries application for a subsidy, so that the federal government would in fact

May 5, 1980
Adjournment Debate
supply almost all the funds and capital investments needed to meet the requirements of General Motors which had offered the two companies the possibility of making automobile parts, specially those for the transmission of the model now being produced by GM known as the new energy-efficient front-wheel X model.
CAE Industries applied under the business development program and I would remind the hon. member-he probably knows that already and I am somewhat surprised that he did not raise that point in his speech-that that program cannot help in terms of direct capital investments, but only in terms of guaranteed loans or in research and development. Therefore, that program can be of no use to CAE Industries because of the terms of reference given by the House. However, the minister, in the name of the government, has stated several times his intention to help Canadian businesses which produce spare parts for the automotive industry and to act in such a manner as to increase Canada's share of the spare parts market. Through the minister the government has been asked for ad hoc help for that company and a cabinet decision is pending. Therefore, contrary to what the member for Etobicoke Centre said, if possible we firmly intend to help that firm but we cannot do so under the business development program which does not meet the requirements of the application for subsidy presented by CAE Industries.


CULTURAL AFFAIRS-FUNDING OF VANCOUVER ART GALLERY
Pat Carney: During the last few days I have been trying to determine, in question period, the intent of this government concerning certain commitments made by the previous administration on the financing of arts and sports projects from Loto Canada funds. I find the answers to these questions uninformative and unsatisfactory.
On April 22, I asked the Secretary of State and Minister of Communications (Mr. Fox) whether it was his intention to honour the commitment made by his predecessor to provide $4 million toward the conversion of the old court house into Vancouver's art gallery. In reply the minister indicated that such financial pledges were merely campaign commitments and that they were being reviewed as such.
On May 1, I asked the minister responsible for sports or the Secretary of State whether the government intended to cash the $6.4 million cheque that had been sent to the federal government by the provinces as the federal share of Loto Canada funds. In reply the minister responsible for sports indicated that the government did not intend to cash the cheque until the legal position of the agreement between the former administration and the provinces on Loto Canada had been established.
In reply to a supplementary question the Secretary of State
reaffirmed that any decision on the art gallery or similar
projects must await the possible jurisdictional dispute between
the federal government and the provinces over Loto-Canada. We might wait forever. The issue is very simple. Will the government meet the commitments of the former administration and put up the funds for these projects?
I am particularly concerned about the federal financing of the Vancouver art gallery. This cannot be dismissed as a campaign promise. The first request for federal funds for the art gallery was made two years ago to the former Liberal administration. Subsequently, nearly $12 million has been pledged from private donations and municipal and provincial pledges, all awaiting confirmation that the federal government will come through with the promised $4 million. If the federal government money is not forthwith coming we are in the ridiculous position of having to return to the private sector the $5 million that it has contributed for the art gallery.
For the record, I would like to read the chronology of the Vancouver art gallery funding. The timing of events is as follows. In 1978 the gallery requested $4.5 million from the Liberal government. The rationale for this request was that the federal government had made similar grants across the country, particularly for Montreal and for the Ontario art gallery in Toronto. Vancouver was the last major city to be without an adequate facility and it was not unreasonable to request funds from the federal government. The amount of the request was in the order of magnitude of those for other galleries, and it is our turn.
At the same time, in 1978, a request to the provincial government was made for a grant, plus the value of the land on which the old court house stands. Subsequently, Vancouver city committed funds from the sale of the present gallery site.
In 1979 the gallery went public to raise $2.5 million. The very successful "Take the art gallery to court" campaign was launched and actually raised $5 million from the enthusiastic citizens of Vancouver between April and August of 1979, of which $2.5 million was set aside for the purchase of Canadian art.
In January, 1980, the former secretary of state, David MacDonald, announced a grant totalling $4 million in the form of $1 million per year. At the end of March, 1980, the provincial government committed $2 million, contingent on federal government funds.
We now have a situation where nearly $12 million has been pledged for both the gallery and the art bank, all awaiting confirmation of the federal government's $4 million. The delay is costly. A conservative estimate is that the delay is costing us about $100,000 per month.
If the art gallery does not go ahead, Vancouver will lose employment opportunities in cultural industries, a show case for major exhibits, such as the King Tut exhibit which attracts tourists, $2.5 million in grants for the art bank, $2.5 million in private pledges, $2 million from the provincial government, the site of the old court house, and $4.6 million from the city of Vancouver.
May 5, 1980

Surely, Mr. Speaker, the time has come to end this uncertainty and proceed with this project now while these pledges are available.


Mr. Peter Stollery (Parliamentary Secretary to Secretary of State and Minister of Communications):: Mr. Speaker, I am happy to have this opportunity to clear up-1 would not go so far as to say misunderstandings-the thinking of the hon. member who just spoke. Her thoughts on this subject are not very clear. I should like to emphasize that we are dealing not with government commitments but with election promises. That is very much part of the problem.
During the election campaign the former secretary of state went across the country promising a great many things. I note there was $3 million for an art centre in Thunder Bay; $500,000 in Vancouver for the Waterfront Theatre, and another $4 million in Vancouver for the art gallery. That was all very nice, but these were election promises and nothing more. At no time did the Conservative cabinet commit themselves to these projects, and at no time did the previous government give the projects Treasury Board or cabinet approval. In fact if the hon. member would take the time to look again at the wording of the former minister's press release she will note that all that was said was that the former minister was "-prepared to allocate up to $4 million" under "-a proposed federal program." There was no commitment on the part of the former government-again, only election promises.
Even more important, Mr. Speaker, is a subject that has been brought up by the hon. member-the question of the fairness of the Loto Canada agreement. Under that agreement $12 million would be allocated to arts and culture. Was this, in fact, the best deal for the cultural community? Had this agreement with the provinces not been made, it is estimated that 30 per cent of the total net revenues from Loto Canada would have been allocated to arts and culture on an annual basis. Loto Canada estimated this amount at $30 million. Even a more conservative estimate, forecasting increased competition in the lottery field, would estimate the yield to arts and culture being no less than $19.5 million per year. In fact the arts and culture community lost financing during the period of the last government.
These figures must be taken into account, Mr. Speaker. The government must be sure that the Loto Canada agreement negotiated by the previous government was the best deal for the people of Canada and gives a fair share to both federal and provincial governments. As soon as the issue concerning the distribution of the Loto Canada funds is resolved, the government will be in a position to reassess the capital project requests that have come from across the country. I must point out to the House that there are over 60 applications outstanding for these funds. The government would be in a far better position to meet those requests if the previous government had
Adjournment Debate
not, through its Loto Canada agreement, reduced the funds that would have been available to the arts community from Loto Canada.


HEALTH AND WELFARE-REPORTED MERCURY POISONING OF NORTHERN ONTARIO AND QUEBEC RESIDENTS-ACTION TO PREVENT
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, one of the observations of a report published by the Department of Health and Welfare entitled "Methylmercury in Canada" about a month ago, states that mercury levels being found in some individuals in northern Ontario and northwestern Quebec are a significant health risk, and that it is probable that some may show early or mild symptoms of mercury poisoning. The report concluded that even though milder forms of mercury poisoning quite possibly are occurring, it is difficult to prove it conclusively.
On April 29, 1980, the McGill University study on the effects of methylmercury poisoning on the health of residents in certain Quebec Indian communities was released. It found that there was an association between some of the neurological findings and estimated exposure to methylmercury. More surveillance of the population was recommended, and I concur, Mr. Speaker. But, in the end, it is not enough to describe a problem well. The politics of description is the classic liberal, social, scientific approach to the problem. Description changes nothing; only action does that.
In reply to my question in the House the other day the minister said she would have to wait until this last report was released. It has been released now, and we on this side of the House expect an answer. Therefore, I ask again what new steps are the minister and her department taking to stop the systematic poisoning of residents in northern Ontario and northwestern Quebec.
Pollution of our environment, especially that pollution already there in damaging proportions, is one of the most difficult, most frustrating and most tragic problems that industrialized countries will likely ever have to face. Make no mistake about it, we will have to face it. To be fair to the government, there are no easy solutions. There is no invisible hand which will correct, what has been for a long time, a serious predicament for the residents of northern Ontario and northwestern Quebec.
The situation as I see it is this: that innumerable studies have shown inconclusive but nevertheless significant evidence that poisoning of the river systems of northern Ontario and northwestern Quebec by methylmercury has affected deleteriously the health of the native population of the area. We have two sets of facts before us that should move the government to meaningful action.
Lirst, we know that enormous amounts of mercury have been dumped and are continuing to be dumped into river systems. Second, we know that mercury poisoning causes certain types of symptoms, many of which have been observed

May 5, 1980
Adjournment Debate
in places like Grassy Narrows, White Dog, and Mistassini. We know from the Japanese experience the fact that Minimata disease frequently appears only after years and years of eating contaminated fish.
1 find myself wondering whether or not this government is going to act only when we do have conclusive scientific findings, when mental and physical abnormalities in children and adults can be proven to be caused by methylmercury poisoning. This burden of proof set-up that finds us in this, as in other environmental issues, waiting to die in order to prove that we are being killed, is morally depraved. It seems that society is willing to accept these risks, as they are euphemistically called, associated with its economic development and standard of living, and this government reflects this willingness to accept these risks. But risks to whom? In this case it is the powerless people who are on the periphery of our industrial society, almost untouched by its benefits but burdened with its wastes. While we unjustly force these people to take the present risks, 1 think it important to remind ourselves that if this madness keeps up we will all be forced to accept these kinds of risks in one way or another.
I wonder what would happen if our response to the problem would be any different if this situation were occurring in any one of our large cities? My guess is that the response would not be all that different. So charges of racism in this question are appropriate on the one hand but overplayed on the other, because no matter who the people are or how well they are integrated into our economy, their health would also be risked for the sake of a system that puts profits ahead of people. For all its ugliness, racism has at least a human quality. But what sort of inhuman system do we live in when nobody matters, when nothing interferes with the system? This indeed brings new meaning to the phrase "systematic poisoning".
I am not hopeful that this government will take meaningful action until it changes its attitude toward the problem of pollution and how to stop it. The government must stop describing the situation and start prescribing for it with courage and foresight. Instead, Liberal and Conservative federal and provincial governments have taken the view that the public should pay for the costs of suppressing industrial pollution because the public benefits from the reduction of pollution.
Liberal and Conservative governments use tax credits and public subsidies as instruments of policy to protect the environment. I submit that this is destroying our environment. It is no surprise that this government is continuing this dangerous path. For instance, witness the latest government giveaway to Great Lakes Forest Products Limited which recently bought out Reed Paper-of $38 million, $25.3 million from the Conservative government of Ontario and $12.7 million from this Liberal government in Ottawa, ostensibly to be used as an incentive grant to help rebuild its facilities at Dryden and Thunder Bay. I wonder if it is merely a coincidence that of the $335 million total program, $35 million will be spent on pollution abatement measures that-and I quote from a DREE press release:
-are expected to result in full compliance with the Ministry of Environment's requirements.
Is not the free market system wonderful? Is it not terrible how the government intervenes in the market place, and then only to bring full compliance after all these many years? We in the NDP believe that the polluter should pay the costs of suppressing pollution to protect the health of people and of the environment.
We must ask ourselves if we want the kind of society that places most of the risks of pollution on people who themselves do not pollute? Is it fair that it is us in the main stream of society who are the ones who generate disproportionately more pollution and the rich even more disproportionately, while governments act not to make the private sector pay the social costs on its activities, but instead pick up all the costs on behalf of the Canadian taxpayer?
Governments must act to redistribute not only the wealth of society more fairly, but also the risks to health and the costs of ill health. To do this, tough and enforced public regulation will be necessary along with compensation to the victims and efforts to rebuild broken lives through the development of alternate employment strategies. Governments that fail to do this by only monitoring the problem are as negligent and as guilty of destroying human health and the quality of life as the polluters themselves.


Mr. David Weatherhead (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the findings of the departmental mercury program across Canada are described in the document "Methylmercury in Canada" which was released in March, 1980, and are supported by the findings of the McGill University study in northern Quebec, which was released on April 29, 1980. Both documents come to the conclusion that while severe methylmercury poisoning or Minimata disease has not been found in Canada, milder forms of mercury poisoning, although difficult to prove conclusively, quite possibly are occurring in certain areas.
There is no specific medical treatment for the effects of methylmercury, and health programs must, therefore, concentrate on identifying those who may be at risk, and on a preventative approach in the form of health education to help individuals avoid taking in a significant amount of mercury. Therefore, the following actions are under way.
First, at risk areas are being identified based on knowledge of mercury levels in native people and fish and sea mammals.
Second, surveillance programs will be continued in these at risk areas so as to assist individuals to modify their diet to keep their mercury levels within acceptable limits.
Third, health education programs will be continued in the at risk areas.
Fourth, it is important that careful balance be established between the advantage of the traditional Indian and Inuit way of life, which can provide an excellent source of dietary protein in the form of fish and sea mammals, and the potential danger
May 5, 1980

to health due to elevated mercury levels in that food source. Medical Services Branch staff are committed to work with communities and individuals to devise local solutions tailored to specific circumstances, needs and lifestyles.
Fifth, for successful local solutions, adequate information on mercury levels in local fish and sea mammal food sources must be available. Medical Services Branch staff will continue to facilitate obtaining this information from federal and provincial departments of fisheries.
Sixth, blood mercury levels estimations will become a standard investigation in the antenatal care of women from communities in at risk areas.
Seventh, the area of Quebec in which the McGill study was carried out is part of the area covered by the James Bay
Adjournment Debate
agreement, and ongoing care in that area will be undertaken by the Cree board of health. The board has already taken action to establish a task force to design the future program. The task force will have at its disposal both the departmental and the McGill mercury reports, and has been offered whatever assistance they may need from this department and le ministere des affaires sociales du Quebec.
1 am sure, Mr. Speaker, that this answers the question of the hon. member.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10.28 p.m.

May 5, 1980


APPENDIX
[Stage Direction]
of
MASAYOSHI OHIRA Prime Minister of Japan to
Both Houses of Parliament in the
HOUSE OF COMMONS CHAMBER, OTTAWA on
Monday, May 5, 1980
The Prime Minister was welcomed by the Right Honourable P. E. Trudeau, Prime Minister of Canada, and thanked by the Honourable Jean Marchand, Speaker of the Senate.
Hon. Jeanne Sauve (Speaker of the House of Commons):: Hon. members of the Senate and the House of Commons are happy to welcome His Excellency Masayoshi Ohira, Prime Minister of Japan, and Mrs. Ohira.

Excellency, we are deeply moved by the honour you do us of addressing this joint meeting of members of the Senate and of the House of Commons.
[ Translation]
I call upon the right hon. the Prime Minister of Canada to introduce our distinguished guest.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Prime Minister of Japan, Mr. Speaker of the Senate, Madam Speaker of the House of Commons, members of the Parliament of Canada.
On behalf of the people of Canada and of their parliamentary representatives, I have the honour to extend to you, Mr. Prime Minister, to Mrs. Ohira, to Foreign Minister Okita and to all the members of your entourage, a most cordial welcome.
This is indeed an historic moment. 1 note with pleasure and pride that you are the first holder of the high office of Prime Minister of Japan to address the Parliament of Canada. Your presence in this Chamber is a living expression of the importance of Japan and Canada to each other, and of the mutual respect and friendship which animates the relations between our countries.

There are present today, Prime Minister, men and women representing the people of every part of Canada. Their presence, as members of the House of Commons and the Senate,
symbolizes not only the unity of our country, but also the traditions of parliamentary democracy which are so deeply imbedded in our way of life.
The people of Japan share this commitment to a democratic system, and in recent years there have been increasing contacts between our parliamentarians. This friendship can only add to understanding between our peoples: and I am inclined to think, Prime Minister, that such exchanges are likely to become more frequent and more valuable for both our countries.
When we look at Japan, Canadians see many things. We see a country of many dimensions and contrasts: the tranquility and timeless beauty of the temples and shrines in Kyoto; the industrial might and dynamism of modern Osaka. We see a country whose economy is the great success story of our times. We see a country whose rapid economic adjustments in recent years attest to the remarkable resourcefulness and adaptability of the Japanese people. Most importantly, we see a friend.
Prime Minister, the inherent strength and breadth of our relationship has made it an increasingly vital force in contemporary Canadian life. Japan has become our second largest trading partner. Nonetheless we remain convinced that the full potential of relations between our two countries is far from being realized. As we begin the decade of the 1980s, I invite our respective people to focus their attention on gaining a better understanding of one another's culture and institutions, so that we may add to the variety and quality of our friendship.
Canada values Japan as a nation which realizes, as we do, that the countries of the world have never been more mutually dependent than they are today. Yet the world lurches from crisis to crisis. The rule of international law is being challenged. The immunity of diplomatic persons and premises is being violated. International economic life is subject to increasing strains and pressures. In our meeting this morning it was very much evident that we shared a strong determination to resolve these problems, and to work more closely together in our pursuit of that goal.
May 5, 1980



We agree that it is no longer possible, if indeed it ever was, for countries to create their own individual solutions to problems which are essentially global. We agree as well that the time when short-term, piecemeal responses could exert any real impact is long past.
Furthermore, the governments of both Japan and Canada are acutely conscious of the leadership demanded of us as members of the Summit group of major industrialized democracies. The world community rightly looks to us for effective solutions to the political and economic crises of our times.
The energy crisis, for example, crosses all international boundaries and has destroyed the myth that geopolitical and economic problems could be treated as if they were distinct, as if they were merely regional.
In co-operation with our Summit partners, we must help the world to build a stronger and steadier foundation for the home occupied by the family of mankind. That is why these few days of bilateral consultations, prior to the Venice Summit meeting in June, take on an added dimension of importance.
In the exercise of our shared responsibility toward the larger global community, both Canada and Japan have a common interest is strengthening relations among all our neighbours in the Pacific world.
During our discussions today. Prime Minister, you were kind enough to share with me your insights into the problems and potential of the Pacific community, your assessment of the prospects for greater co-operation in the Pacific region in the years ahead.
Canada is eager to be a full partner in that progress.
It is Canada's great interest in the Pacific community of nations, of which we are increasingly conscious of being a member, that will help to bring us closer together in the years ahead.
It is our great interest in Japan itself, in the accomplishments of its people, and in our potential for working together to build a better world, that prompts us to extend a warm welcome to you, sir, the leader of the government of a great and friendly nation.
It is therefore a great pleasure to invite you to address this Special Session of the Parliament of Canada, convened in your honour.
His Excellency Masayoshi Ohira (Prime Minister of Japan): Right Honourable Prime Minister, Honourable Speaker of the Senate, Honourable Speaker of the House of Commons, Honourable Members of the Senate, Honourable Members of the House of Commons and distinguished guests.
It is my great pleasure to be here this afternoon. 1 am indeed grateful for the honour you gave me to speak, the first time for a Prime Minister of Japan, before the distinguished members of the Canadian Parliament.
Ever since my last visit to Canada in 1974, I have always
wished to return. On this trip, 1 have mustered my courage to
deliver my speech in English. I ask for your indulgence if my accent does not quite sound Canadian.
I only regret that the time for preparation was a bit too short for me to try to learn French as well. Excusez-moi.
Today, I should like to focus my remarks on the nature of co-operation required of Canada and Japan. While our two nations have diverse and contrasting features in many respects-in their cultural background, historical heritage, land, natural endowment, and ethnic make-up-we have also much in common: we share our belief in democracy and freedom; we are committed to the principle of free and open economy; and we possess similar objectives in our respective efforts to build a just and peaceful international community.
I, therefore, believe that there exists a basis for a broad cooperative relationship to be developed between our two countries beyond the economic relations which are already growing in both scope and intensity every year.
The 1980s saw its opening in turmoil. The events in Iran and Afghanistan highlighted the kind of challenges that we face in the present multipolar world.
We respect the cause of the Iranian revolution and have a sincere desire to expand and strengthen our ties of co-operation with this important country in the Middle East. We cannot, however, tolerate the continued holding of American diplomats as hostage, not only because this unlawful act is unacceptable from any humanitarian point of view, but it constitutes a serious threat to the basic order of the international community.
It is for this reason that, while urging the United States to continue to act with patience and restraint, we have given our full support to the international efforts through the United Nations, repeatedly made our position clear to Iran that the hostages must be released immediately, and, more recently, joined with the nine European Community countries to take certain concerted steps towards Iran to urge them to cease their unlawful act.
Japan intends to act towards the early and peaceful resolution of the hostage issue in co-operation with other like-minded countries as a responsible member of the international community. I know that Canada takes the same position on this issue and should like to pay my sincere tribute to the dramatic and courageous role Canada played in January.
The military intervention by the Soviet Union in Afghanistan is another issue of global significance not only because of its flagrantly illegal character but because of its geopolitical implications as well. Thus, the issue calls for concerted responses by those members of the world community who are seriously concerned about the maintenance of international peace and stability. We take peace seriously and we cannot but condemn what the Soviet Union is doing in Afghanistan. Japan, therefore, has repeatedly called for the immediate withdrawal of the Soviet forces from Afghanistan. We have taken concrete measures to demonstrate our disapproval of such
734

May 5, 1980
Soviet action. We will continue to make our best efforts in concert with other like-minded nations in order to contribute to an early resolution of this serious situation. And here again, I am very much impressed and encouraged by the Canadian initiatives in expressing your deep dedication to the cause of international peace.
New challenges come not only from political issues but also from the economic front.
The first and foremost is the question of energy. Energy holds the key to a healthy and stable development of world economy in the 1980's and beyond it towards the twenty-first century. One of the most immediate tasks facing us is the conservation of oil. This benefits both producers and consumers. Japan has been making an effort to reduce the consumption of oil; between 1973 and 1978, while Japan's gross national product expanded by 19.6 percent, we managed to keep down the growth of the total use of energy to only 5.7 per cent and its use of oil to 0.7 per cent. We are also endeavouring to diversify the sources of oil supply and to facilitate the development of alternative sources of energy. I know Canada is at the forefront in developing new sources of energy, for instance, in the production of synthetic fuel, and utilization of solar energy and biomass. We are watching your efforts with admiration and I believe that there exist ample opportunities for us to co-operate together in this field. It is also my belief that the fruits of our research and development for conservation of energy and for development of alternative sources of energy should be made available to all the countries including developing nations.
Inflation is no less serious a challenge, and an enemy to our economic prosperity. We have recently introduced a comprehensive set of anti-inflation policies and are carrying out a determined fight against inflation. Through its vicious effects, inflation deprives national economies of their vitality and will definitely hamper our efforts to pursue steady economic growth. As inflation is internationally infectious, we should cooperate together with other industrialized democracies to curb this malicious problem.
None of the major economic problems, including the two I have just mentioned, can be dealt with effectively by isolated measures of any single country, but requires concerted efforts by all the major economies. It was precisely out of such spirit of co-operation, that the Summit meeting of major industrialized countries was born. The Japanese Government appreciates your active and constructive contribution in this regard, and wishes to continue our co-operation at the Summit meetings and in other fora.
Our co-ordinated efforts in managing both domestic and world economies are naturally of crucial importance. They alone, however, will not suffice. Progress in science and technology is essential to maintain the dynamism of the economies of the industrialized democracies and of the entire international economy. Canada is one of the countries that have the capacity and potential to lead the world in this most rewarding and yet most demanding field. Japan has also been doing much, and I am therefore certain that co-operation in the
fields of science and technology will further enrich our relations.
Another area of international activities where our co-operative efforts can be very fruitful is economic co-operation with developing countries. Our long-term prosperity hinges, to a great extent, on the future of the developing countries. We know from experience that the development of human resources constitutes the basis for self-reliant nation-building efforts, and we attach importance to strengthening such basis through our assistance. We pledged in 1978 to double our official development assistance in three years, and we believe that we shall be successful in our endeavour. We are also making greater efforts to soften the terms and improve the ratio of ODA toGNP.
Canada, I know, has consistently been playing a leading role in coping with the North-South problem. For instance, the late Mr. Pearson's report, "Partners in Development", set the direction of international economic co-operation.
As an Asian country, we attach particular importance to Asia in extending our economic assistance. In this connection, we highly appreciate Canada's generous policy for the resettlement of the Indo-Chinese refugees, to which we, on our part, are making a substantial financial contribution. This program of yours is a noble humanitarian deed that also contributes to the peace and stability of the Asia-Pacific region.
The Asia-Pacific region contains some of the most dynamic economies in the world today. I believe that to promote co-operative relationships among the countries at the rim of the Pacific will contribute to peace and prosperity of the region. 1 feel that the Canadian and Japanese people have particularly important roles to play in strengthening the ties of friendship and co-operation in this region. I have no doubt that the Asia-Pacific region, which Prime Minister Trudeau once called "The New West", will benefit greatly from active Canadian participation.
We can be proud of the achievements we have made in recent years in the relations between Canada and Japan. The trade between us has grown five times in the past decade, and Japan is the second largest trading partner of Canada. We maintain close consultations on political issues, and the exchanges in cultural and academic fields have also increased, building on the foundation consolidated by the Cultural Agreement signed in Tokyo between Prime Minister Trudeau and the then Prime Minister Miki. But this is only a beginning. The horizons that we share extend much further.
Recent events demonstrate, in a convincing way, the imperative need for closer co-operation and co-ordination among the industrialized democracies. I believe that both Canada and Japan have useful and constructive roles to play as we share a common vision of the world we desire to shape in the new decade and beyond.
Today, I had extensive and extremely fruitful talks with Prime Minister Trudeau on a number of issues of mutual interest. As a result, I am convinced more than ever that Canada and Japan are not just neighbours across the Pacific
May 5, 1980

but are really close friends sharing common concerns and interests.
We are both pursuing prosperity for our own people. But I often realize, and feel that we are not just seeking success or achievement in terms of statistical figures. The rich life that we strive for is a life that rewards us with deeper satisfactions. We strive to create a world where our children and grandchildren can feel proud to be born into.
I know that Canada offers a very rewarding and rich life to its people. 1 am also aware that this is the fruit of your cultural, social and economic heritage, and of your democratic tradition. We, in Japan, similarly benefit from the efforts of our forefathers, and I believe it our duty to enrich this heritage and pass our achievements on to our future generations. Let us co-operate together in addressing this momentous task.
Thank you. Merci.


Hon. Jean Marchand (Speaker of the Senate):: Mr. Prime Minister Ohira, Mr. Prime Minister of Canada, Madam Speaker, Your Excellencies, distinguished members of the Senate and of the House of Commons, ladies and gentlemen.
If 1 may, Mr. Prime Minister, I would like to say on behalf of my colleagues of the Canadian Parliament that it is a great honour for us to receive you here today. The fact that for the first time we have invited the Prime Minister of Japan to speak at one of our rare joint sittings shows how important our relationship with your country is to us. I am certain that the address you have given today will inspire us and encourage us to pursue our efforts to meet the objectives of co-operation that we have set for ourselves.

Mr. Prime Minister, detailed discussions will be held between yourself and the Canadian counterparts of your delegation on bilateral and multilateral issues which are of interest to both our countries. We anticipate great results from these contacts and exchanges, and I am convinced you share our expectations.
The ideals we share give a particular significance to our relations, and carry us forward on the road of an increasingly closer co-operation between our two countries.
Your presence here today is more than an event, it is the living symbol of our common faith in the human values proper to democratic societies. When strong international tensions threaten the world balance, it is most important that, through our concerted efforts in co-operation with friendly nations, we make sure that peace is safeguarded and world order respected.
[ Translation]
Could the noblest objective of societies like ours be anything else but to bring more happiness to mankind? I am firmly convinced that this is our quest, both in Tokyo and in Ottawa. I know, Mr. Prime Minister, that the quality of life is one of the
major concerns of your government. In the post-industrial era, our societies will have to adapt to new technologies which could either enrich or dehumanize the world. Like yourselves, we choose enthusiastically to remain hopeful that life on earth will be increasingly fulfilling for its inhabitants. We shall have to make full use of our imagination and creativity.
In many respects, your nation can serve as an inspiration for us in deciding the best way to react to the need for change while preserving the most valuable elements of our heritage.
I trust that on your return to Tokyo, Mr. Prime Minister, you will transmit to your colleagues of the Diet the best wishes of Canadian parliamentarians and our desire to maintain close, friendly and beneficial relations with your people. The ideals and aspirations we all share are ripe with the best promises for the future. In conclusion, let me extend my best wishes for a pleasant visit and a happy return trip.


Hon. Jeanne Sauve (Speaker of the House of Commons):: Mr. Prime Minister, we are pleased and honoured by your visit. We listened with utmost interest to the message you gave us on behalf of your Parliament. It was an eloquent expression of your and your people's feelings for this country.
There are indeed ties that bind us and make us co-operate in building a prosperous world with institutions emphasizing the principles of fraternity and freedom examplified in Japan.
In today's universe where distance is abolished, we can easily join together and address that common task of uniting men and women with a common humanistic ideal. The main-tainer of a long and rich civilization, your country generously brings us the resources of its culture and thought. It is our wish that such ongoing and increasing exchanges enhance the respect of our fellow Canadians for your people and move them to follow it on the road to arts, science and technology.

The presence among us of your official delegation consisting of hon. members of your House of Representatives and of your House of Councillors is also an honour to us. We wish to express to them our highest respect and esteem. Your Excellency may be assured that we are grateful for the opportunity we are given to meet those who work with you for the wellbeing of the Japanese people. We hope this visit will pave the way to further meetings which will enable us to share our experience of parliamentary democracy and lead us beyond our national frontiers to the exciting world of the universal man.
Listening to what you were saying a few moments ago, I recalled the diversity and beauty of your country, with its dynamic and industrious people. I felt the attraction of a nation rich in history and great achievements.
I thank you for having, through your presence, sir, brought us something of your radiant country.

May 5, 1980
[Translation]	Excellency to express our feelings of sympathy and affection to
Mr. Prime Minister, 1 would like to repeat the thanks of	all your countrymen,
senators and members of this House, and 1 would ask Your Let me now say that this House stands adjourned.

Tuesday, May 6, 1980