1980-11-13

[Stage Direction]
The House resumed from Wednesday, November 12, consideration of 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, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, and motions Nos. 5 (Mr. Rae), 12 (Mr. Lambert), 13 (Mr. Lambert), 16 (Mr. Rae), 19 (Mr. Lambert), 20 (Mr. Lambert), 21 (Mr. Lambert).
Mr. Gordon Taylor (Bow River):: Mr. Speaker, I was making the point when I concluded yesterday afternoon that there are times when a government-


Mr. Skelly:: On a point of order, Mr. Speaker, I regret very much interrupting the hon. member, but I would like to place a question before the Chair. I do not really comprehend what we are doing. It is my understanding that we are considering a series of motions, Nos. 5, 7, 8, 9, 12, 19,-


Mr. Bussieres:: And 20 and 21.


Mr. Deputy Speaker:: In reply to the hon. member's query I understand that we are considering motions Nos. 5, 12, 13, 16, 19, 20 and 21 which have been grouped for purposes of debate. Does that answer the question for the hon. member?


Raymond John Skelly: In terms of some of the particular amendments they could be argued on their own merits. Indeed, the debate which is taking place seems to be dealing with motion No. 5. It strikes me that some of these motions should be debated on their own merits. Would the Chair entertain a motion to consider these motions in sequence, rather than simultaneously?


Mr. Deputy Speaker:: The purpose of the Chair, of course, is to serve the House. The Chair has made these suggestions for the convenience of hon. members in terms of the debate. It is my understanding that Madam Speaker in this place the other day made the suggestions and invited comment at that time. No comment was made. However, if it is the wish of the House to change what has been suggested by the Chair with
respect to these motions, then certainly an order could be made and considered.
At this time we will proceed under the present order and, in the meantime, perhaps conferences might be held between the spokesmen of the parties of the House to determine if they wish to make any amendments. At this stage the House is following the suggestions which were made by Madam Speaker and which were accepted at the time.


Mr. Lambert:: Mr. Speaker, the order was made the other day. I do not know whether the hon. member was present, but certainly the leader in this debate of his party was present at the time. It is my understanding, as I believe it is that of the minister, that having made those suggestions they were then made a House order. Otherwise, there is no way in which we can proceed if, as we go along, some hon. member wishes to initiate some changes on his own.


Mr. Deputy Speaker:: The hon. member's point is very well taken. I am now informed that it is an order of the House to proceed in this manner.


Gordon Edward Taylor: Mr. Speaker, I believe there is some distinct advantage in doing things this way because a member may speak on a number of items that are of concern to him, as did the hon. member for Broadview-Greenwood (Mr. Rae) recently.
In my remarks I want to deal specifically with the prohibition against a provincial government going into the banking business. In my concluding comments yesterday I pointed out that there are times when free enterprise does not satisfy the population. I believe in free enterprise, Mr. Speaker, but if it becomes a monopoly then it is just as bad as any other type of monopoly. As an illustration of my point I used the instance of Alberta, where in the hungry thirties the insurance companies did, in reality, become a monopoly and charged prohibitive rates. At that time thousands of people could not afford to buy fire insurance on their homes. The government endeavoured to get the insurance companies to change their rates, but without success, so it went into the insurance business itself in competition with the companies. As a result, the people had free choice; they either went to the Alberta government insurance office or to one of the private companies.
The fact that the rate charged by the Alberta government was considerably lower brought thousands of applicants to its offices which did a rousing business. Within a short time the other companies found that in order to stay in business they had to lower their rates to be comparable with those charged by the government. Eventually the Alberta Insurance Office

November 13, 1980
Bank Act
became the private insurance company which is today called the Alberta General Insurance Company, a very efficient operation which does excellent business.
I used that example to show that there are times when free enterprise is not free, but becomes a monopoly. In such circumstances, I believe that a government has an obligation to ensure that there is competition. It is the life blood of a free enterprise system; without competition there certainly is no free enterprise.
We are now dealing with competition in the banking business. This is possible. I hope it will succeed because the keener the competition, the less cost to the consumer. I also believe that the credit unions, caisses populaires, the treasury branches of Alberta and probably similar institutions in other provinces, are providing competition to the banking system, even though they are not covered by the Bank Act.
I want to emphasize two points, Mr. Speaker. First of all, there are disadvantages in the Bank Act. Had the treasury branches of Alberta been covered by the Bank Act they would not have been able to provide lower interest rates during the 1978-79 and 1980 seasons to farmers, developers, producers, and builders in the province. Because they were operating under the auspices of the Alberta government, however, their rates did not increase with the Bank of Canada rates and there was no obligation for them to do so. Consequently, they provided a service to the people. That is one of the reasons that many businesses in Alberta continued to thrive whilst there were widespread bankruptcies in other provinces.
If free enterprise gets to a point that it wants to charge all the market will bear, then I think a government has a responsibility to act, whether it be in the area of banking, insurance, transportation or anything else.
I recall another instance when competition resulted in exactly what I am trying to indicate here, and that is that a provincial government should have the right to enter the banking business if it chooses.
At one time the cost of transportation between Fort McMurray and Drumheller was exorbitant. There was only one way for freight to travel, and for most passenger traffic as well, and that was by train. The rates charged by the railway company were exorbitant. In Fort McMurray, people paid four or five times more for milk, sugar and potatoes than was charged in Edmonton. As soon as the highway to Fort McMurray was completed and truckers were able to provide competition for the railway, prices came down. In other words, Mr. Speaker, the railway was charging what the market would bear, and in my view that is not an aspect of free enterprise; it is an aspect of monopoly.
The same thing happens with our banks. If banks become a monopoly, all charging the same rates and not competing with each other, it may well be that the people of a province would approach the government to establish competition in the banking business. I cannot see why a provincial government, composed of responsible people elected by the citizens of a province, should be barred from the banking business.
There is another point that I want to make, Mr. Speaker. Originally, the banking business was handed over to private entrepreneurs by government. Since that time it has prospered, and it is not difficult to understand why. Banks provide a service, but they also have some tremendous benefits not available to trust companies, credit unions or treasury branches, such as the expansion of credit. Through this expansion of credit banks have been able to make big profits. I do not think there is any dispute about that. I have argued many times that some of that expansion of credit which comes about because of the growth of business in a community and an increase in the gross national product of the country, should be plowed back into the community through low interest loans for the building of schools and hospitals. If the banks were to adopt this suggestion they would not be subject to the criticism of making tremendous amounts of money through the privilege granted them by government of expanding credit, based on certain rules. No other business has that privilege.
The treasury branches in Alberta do a great deal of business. One of the best features is that they lend out the money of depositors. When I deposit money in a treasury branch, Mr. Speaker, I sign a paper stating that they may lend my money. They make a profit on the daily operation as a result but, Mr. Speaker, they cannot make any money on the expansion of credit because that privilege is not open to them.
A previous government in Alberta applied formally for a banking charter for the simple reason that the treasury branch could then expand credit. It was held that this would be of benefit to the people because it would mean higher payments to those on welfare, higher pensions and expanded benefits for the disabled-indeed, better service all the way around beause there would be more money available. The privilege was not granted, however. I cannot see anything wrong with that, Mr. Speaker.
I should like to ask the government to reconsider the prohibition against any provincial government entering the banking business. Surely we want this country to enjoy freedom of choice. We do not want free enterprise monopolies any more than we want government or other types of monopolies. A monopoly is a monopoly, Mr. Speaker, and the only way to break one is through competition. I suggest that monopolies can occur in the banking business; they have in the past and they can in the future. Let us keep this weapon of free enterprise. Competition is the lifeblood of the free enterprise system.
I want to conclude by repeating what I said in my opening remarks, Mr. Speaker. I believe a government, whether it be federal, provincial or municipal, has a responsibility to reflect the thinking of the greatest possible number of people who elected it. If the people of a province elect a government to create a bank in competition with the banking system, and I do not mean a monopoly, surely that provincial government should have the right to do it.
November 13, 1980

[DOT] (U20)


Raymond John Skelly: Mr. Speaker, I wish to take part in this phase of the debate. 1 was pleased to hear the remarks of the hon. member for Bow River (Mr. Taylor). They reinforce many of the points made in committee and recognize a very important sphere of activity.
When looking at the series of amendments today, the one which typifies this is No. 5. By including prohibition in the act, the government is having the Crown become involved in the business of banking. That was a very serious error. Also, it is inconsistent with many of the things they are doing. The resolution before us states:
Notwithstanding subsection 7(2), letters patent incorporating a bank shall not be issued
(a) to Her Majesty in right of Canada or in right of a province, to any agent or employee of Her Majesty in either such right, or to any corporation owned or controlled by Her Majesty in either such right;
Not only is this completely wrong, but it is inconsistent with the government's behaviour in many other areas. We have a very late but definite recognition of the need for a publicly owned oil corporation to explore, develop, refine and distribute petroleum. We have had some terrible experiences in this country with the private sector such as the monopoly control, seven sisters' approach in the oil industry. 1 suggest the industries which mobilize capital in this country have the same sort of concentration and control. It has worked to the disadvantage of many regions of this country.
The member from Alberta spoke with his very knowledgeable background about some of the serious problems that have occurred in that province. Until recently, the hardship in that province was extreme. The people of British Columbia have had the same experience from a very concentrated profit oriented group responsible to a small number of individuals in this country. They have not been accountable. Their goals have not been enunciated with regard to the aims and wishes of the charters that allow them to exist.
The government should not include prohibition in the act. They should leave it silent. If governments of certain provinces wish to become involved in the mobilizing of capital within their provinces, they should be allowed to do so. It will provide competition. We must recognize that in this country there is a small population and a very large area. We have the potential for tremendous economic benefits as a result of our resources and opportunities for development.
If in certain regions of this country the private sector fails, the co-operative sector has the opportunity to move in. Later I will refer to some areas where there has been a determined effort by the co-operative sector to do this. But there are areas in which the co-operative sector cannot function effectively. We must recognize that in those areas there is a very definite role for the public sector to play.
1 ask the government to reconsider this. It would be a simple matter to delete those sections and allow the act to remain silent on this. If governments in British Columbia, Alberta, Saskatchewan, Manitoba or the maritimes wish to become involved in the creation of a bank or financial institution, and
Bank Act
mobilize capital to become involved in certain regional developments which would enhance the lives of their people, we must recognize that the public sector can be involved effectively and this should be allowed to occur.
I wish to give a couple of short examples where public sector activity might have been of assistance in the province of British Columbia with regard to the chartered banks. In the small community of Sayward, banking services were terminated because the Canadian Imperial Bank of Commerce felt it could no longer do business there. It simply moved away and left that logging community without banking service. The nearest banking service was over 60 miles away. The same situation occurred in Bella Bella, Ocean Falls and other areas. The bank said it could not make a profit in those areas and, therefore, would no longer provide the service. What happened? These people were left with the closest banking service some 350 miles away. The bank just up and left, telling a community to do the best it could.
In many of these communities there are not enough individuals to become involved in an effective co-operative scheme. We need a public sector banking system which can spread the profits. If one area is lucrative, profits can be used to provide service to people in other areas. This would be a benefit. If the capital can be mobilized and put to use in an underdeveloped area, that area will eventually develop. It will attract other individuals who will begin an enterprise, and the communities will develop and flourish.
Rather than taking the attitude of the chartered banks toward some of those communities and going to where they can make a fast buck, this is where we should be concentrating. The banks are not concerned about whether small communities along the coast or northern Vancouver Island wither and die. They still do what they want. This problem is not only in the remote rural areas. A bank close to Victoria was closed. It was a small branch serving a small community.
The public sector should be allowed to become involved in the banking industry. It could provide tremendous benefits for Canadians, especially in those regions where the traditional chartered banks have no interest and are not providing the benefits.
I wish to summarize those few remarks. First, by putting this prohibition in the legislation, the government has created a contradiction. It recognizes that this country is a mixed economy made up of the private, co-operative and public sectors. There are no other rational options because we have a small population spread over a large area. Ministers recognized that in oil and in other areas.
Second, the private sector is not the be all and end all. We have recognized the difficulties there. Certainly this House agonized over such matters as Chrysler and Massey-Ferguson. We see a withering shipbuilding industry in some areas of this country and the failure of the private sector to become involved constructively and thrive.
We must recognize there is a need for public sector involvement, not only in industry and transportation, but in the

November 13, 1980
Bank Act
raising of capital for projects deemed to be desirable by the people of this country.
I would like to conclude my remarks on that aspect and open up one other. This forms part of a series of amendments to this legislation. This is a very important part. I find this difficult, especially as a result of some discussion in committee where the parties over there terminated consideration by the committee. In effect they imposed closure in support of the Liberals on the committee and, I think, left many of these questions to be discussed in the House. I would like to suggest that we look not only at this one but at the process of incorporation as being very important. It is a thing we consider to be serious. The exclusion of the public sector is a very serious error, and it is an inconsistency.
I think the question of financial disclosure was not properly addressed, as well as the business of consumer protection. Our opposition to foreign banking is clearly known. As well, there are some very serious questions about the operation of Canadian banks in foreign countries. These are very serious questions.
I would suggest that one of the most serious questions is that of competition. There is a feeling that this is simply pro forma debate. I caution everyone that our members feel very seriously about this. In fact, in committee we are given to understand that this would not be just pro forma debate but, in fact, would deal with these serious questions which the committee had considered long and hard. We understood they would come to the House and there would be some movement on issues which we felt were important and which the government did not seriously oppose.
One of the key areas is the area of competition between financial institutions in Canada. The government has mentioned this. There are some improvements to be made to the co-operative sector which could be easily handled and which would strengthen the process of competition and, in that process, would give a better deal to Canadians. I would urge the government to break this wall of silence. Let us sit down and hear something from their side with respect to what can be done to ease some of these concerns so we may proceed with this debate and bring it to a conclusion.


Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, before us is a series of amendments dealing with the government or government agencies being involved in the business of banking. The House must appreciate that under the British North America Act the control of banking, banks, interest rates, interest and so on, are all matters of federal jurisdiction. Consequently, it is important that the federal government exercise that jurisdiction.
One of the problems we face with respect to the regulation of credit, the terms of borrowing and lending, consumer protection and the rest of it, is that the federal government over the years has not bothered legislating. Ministers have not bothered to take their responsibilities seriously under the British North America Act. Consequently, we have had credit
unions and trust companies develop to national size. They are totally free to do as they wish, and almost conduct the business of banking-indeed, they do conduct banking-without any control by the federal government. In other words, the federal government has abandoned its constitutional requirements. In the last 12 years we have seen an increase in the number of foreign banks coming into Canada and doing business in the banking field without any control by the federal government or the inspector of banks. We have seen them operating under provincial legislation as provincial financial management companies and the like. It is about time that the Government of Canada exercised the obligations and responsibilities it has under the British North America Act.
In the amendments we are discussing now the federal government is at least coming to grips with the problem. It is starting to do something. Specifically, it is prohibiting provin-cially-owned Crown corporations and provincial governments from using the device of letters patent to incorporate what amounts to a bank. In our constitution, surely the subject of banking is a matter of federal responsibility. Surely, if we are to have any separation of powers in this country it is important that this act recognizes that the provincial governments should stay out of the business of banking, regardless of whether or not they have been successful with respect to treasury board branches. They are not in that field. They have other jurisdictions to look after.
In a country there are certain responsibilities which must be handled by provincial governments, and certain responsibilities which must be handled by the federal government. In this country the federal government is responsible for banks and banking. Therefore it must be clear that provincial governments and their agencies should be excluded from banking.
If, as the hon. member for Bow River (Mr. Taylor) says, there are requirements for government to get into the business of lending and advancing money for projects, plus handling credit in various parts of Canada, then there is no question that the Government of Canada has the authority to do so. But it should not have that authority in the Bank Act. This is really an act to control private corporations in banking. If the Government of Canada is to be in the banking business, then we should have an act from the minister which incorporates a special bank in the commercial lending field owned by the Government of Canada. If that is necessary, we will do it. In fact we have done it.
We have done it through the Federal Business Development Bank. We have done it with respect to financing export trade. We have done it in a number of locations, in a small way, through Canada Mortgage and Housing Corporation and the like. These are the kinds of activities into which the government has entered. A further example of this is the financing of wheat sales through the Bank of Canada.
The job of the Government of Canada, Mr. Speaker, is to control banking and to control it properly. If there is a need for a government or government agency to go into the business of banking, then it should be a matter for the cabinet to produce legislation in order to create another banking institution. That
November 13, 1980

should not be an institution under this Bank Act. If the government were to go into the business of banking, then why should it be tied up with this legislation which is really designed for private banks?
More important, we have a number of Canadian Crown corporations which have developed the habit of expanding their jurisdictions over the past many years. As a result we have companies in the railway business that all of a sudden decide to become developers. We have companies which are in the airline business that decide to become travel agents. Corporations such as these were never designed to go into those other businesses. That was never contemplated. It is about time we prohibited those Crown corporations and agencies from expanding further. Indeed, it is important that this government introduce legislation which will control the expansion of its own Crown corporations. Thus it will have some control over where those corporations go. This act and the sections which are proposed by the government specifically prevent the Crown and Crown corporations from becoming involved. I suggest the minister consider the motion by the hon. member from Edmonton that deals with further limiting the government's ability in this area. This is set out in motions Nos. 19 and 20.
It is important we treat this act for what it is. It is an act which is to operate as a charter for those people in the private banking business. It is not an act designed to extend credit, to create more banks, or to allow other government agencies into the business of banking. If that is the intention then a separate type of statute is required. Surely, if it is the intention of the Government of Canada to go into banking in a commercial way, it has the power and authority, and properly could produce a separate charter with separate powers. Perhaps much broader powers would be needed for the creation of a Government of Canada commercial bank. At this stage I would be opposed to that type of proposal.
There is nothing to prevent the Government of Canada from setting up a bank if it wants to, but surely not under the Bank Act because the government is just passing this act to control the private banking field. Let us not have this act as enabling legislation for provincial Crown corporations to apply for letters patent and so further extend provincial jurisdiction into federal jurisdiction. One of the great problems we have in our Canada is the overlapping, duplication or triplication of governments involved in the business of other governments. I commend the attitude of the minister and the government in preventing, through their amendments or this act, provincial governments and their agencies from being involved in banking.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I am glad to be able to share some of my thinking on motion No. 5. The effect of motion No. 5 would be to delete section 8 which reads in part as follows:
Notwithstanding subsection 7(2), letters patent incorporating a bank shall not be issued
Bank Act
(a) to Her Majesty in right of Canada or in right of a province, to any agent or employee of Her Majesty in either such right, or to any corporation owned or controlled by Her Majesty in either such right;
It seems that in some very important ways the Bank Act we are being asked to approve today in 1980 is already out of date, and yet this will form the basis of our banking system for the next ten years. Indeed, if it takes as long to revise the Bank Act the next time around as it has this time, it will be more than ten years.
We feel that the Bank Act looks to the past rather than to the future. Last Friday the hon. member for Broadview-Greenwood (Mr. Rae) put it this way:
Instead of looking forward to the problems which in a sense are simply here today in a very small and growing form and seeing where these tendencies will take us, there has been a tremendous tendency in this legislation to look at problems which grew up in the early 1970s and late 1960s and to respond immediately to those rather than to look at the broad framework for the future.
The ideological framework of the present Bank Act denies the reality of Canada. The banks have been trying to create Canada in their own image, centralized and ignoring the regions, especially the growing economic needs of western Canada. This reminds me of the way in which in an earlier generation the banking system of Canada systematically drained and bled the maritime provinces, so that the present crisis in eastern Canada is to a large extent the result of the banking system which drained these areas of the necessary capital they needed to develop themselves.
One of the basic matters which the banking system should recognize and deal with is the fact that we have a mixed economy. Perhaps one of the best testimonies to our mixed economy was given by the hon. member for Bow River (Mr. Taylor), who is not what we might call a socialist. He explicitly pointed out that he was not a socialist, but in speaking yesterday he said, and I quote:
Let me give an illustration, Mr. Speaker-this is not in the banking field but it is something similar. During the depression years premiums for fire insurance on homes in Alberta became exorbitant. Hundreds of people could not take out insurance, as a result. The government of the day was not socialist but it offered to form an insurance company in competition with the other insurance companies because it thought it could be done at a reduced rate. It was done, and the Alberta Insurance Office came into being. It was swamped with hundreds of thousands of applications. It did so well that all the insurance companies had to reduce their rates in order to stay in business. It was competitive, Mr. Speaker.
I submit that that points to the reality of Canada and to the fact that we do live in a mixed economy. We do not live in an economy which in any sense corresponds to the traditional free enterprise market economy about which people sometimes like to talk. In the short time I have been a member of Parliament I have seen the government called upon to intervene and to bail out corporations which thought they could do very well on their own as long as they were making profits, but as soon as there is some difficulty they come to the government with their hands outstretched, asking for money.
Very obviously we live in a mixed economy, and the present Bank Act ignores this fact. It ignores the direction in which Canada must move and the direction in which other major industrial nations of our world have been moving, that is, not

November 13, 1980
Bank Act
just in having mixed economies but economies in which there can be public participation.
By deleting the provision which prohibits provinces or provincial corporations from incorporating or having bank charters issued to them, motion No. 5 restrains in an undue fashion the public sector. It prohibits the growth of the economies of western Canada.
A few years ago the government of British Columbia under Premier Barrett wanted to use the financial resources of the province for public goals. This provision makes that very difficult, if not impossible. It is important that the provinces have an opportunity to use their financial clout so that they can mobilize capital for regional and local goals. I pointed earlier to the fact that the present banking system is largely responsible for the draining of capital invested by the people of the maritimes, that this capital was invested in the maritimes and that it was drained off to use for resource extraction in the west. The people in the west are tired of their region being treated merely as a hinterland and they themselves as hewers of wood and drawers of water.
So I ask, why should the governments of the provinces, which are elected by the people, not have the right to be involved in the banking business to see that some of the financial institutions which operate in the provinces are serving the needs of the people of those provinces?
I urge hon. members to support this amendment. I urge that as we deal with other amendments we recognize that we have to move beyond an ideological base which is rooted in the past. We have to begin to deal with the needs of Canada as we move into the 1980s, and we have to remember that this Bank Act will be serving our needs-or not serving our needs, whichever way we choose-for the next ten or more years. I urge that we pass this amendment and not unduly restrict the provinces.


Mr. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, I would like to make a few comments on the series of motions which has been put before us with regard to government ownership, whether it be federal or provincial, of banks as a specific form of financial institution. The hon. member for Cowichan-Malahat-The Islands (Mr. Manly) has just indicated that the provincial governments need a vehicle, and he has selected banks as that vehicle, for stimulating and encouraging economic development in the regions. I suggest that there is a large number of good reasons why the chartered banks should not be that vehicle and also that there are a great many other financial institutions through which the provincial governments can have the effect that is desired by the hon. member opposite.
Certainly one of the most fundamental features of chartered banks, of the banking system in Canada, is that the banking system has the ability to create money as a result of the acceptance of its liability, the demand deposit as a means of payment of debt. This is also true, frankly, of other institutions, such as credit unions, caisses populaires and certain trust companies. But the fundamental feature of a bank and of banking, the reason why it is an area of federal jurisdiction, is that the banking system can create money. As a result, the Bank of Canada was established to control the degree to which money is created by the banking system.
From the perspective of the federal government, if the federal government were to become an active participant or an owner of a chartered bank, there is clearly the possibility of a fundamental conflict of interest because it is the Bank of Canada, another federal agency, which controls the reserves made available to the chartered banking system and thereby the degree to which the chartered banking system can create money. Here we could have a federal government bank amongst private sector banks. This creates the possibility of differences of treatment arising. This bank could be subsidized. For example, it might not be covering its own costs and, as a result, there could be extremely unfair competition and the possibility of conflict of interest between the Bank of Canada and one of the chartered banks, such as a federal bank.
The second area of great concern to me is that the chartered banking system under the Canadian Constitution is a federal area of jurisdiction. I know that in other parts of this act there is a provision for provincial governments to participate in the formation of new banks under very strict limitations. The concern I have about further enlarging the possibility for participation by provincial governments in the chartered banking system is that if we were to allow, for example, a provincial government to own a chartered bank, under the assumption that that chartered bank would live by the existing rules contained in the act, we could find a difficult potential situation where a provincial government might say, "Being a provincial government ourselves, a provincial agency of the Crown, it is not possible for the federal government to regulate a provincial government, and as a result we do not have to comply with the provisions of the Bank Act because that is a federal statute and federal statutes cannot regulate provincial governments per se."
Those arguments are currently being brought out with regard to the new national energy program, with respect to agencies of provincial governments in the oil industry. The question of whether or not the federal government has the power to tax those agencies could be raised also with regard to whether or not the federal government has the power to control reserve levels, through the Bank of Canada, of chartered banks owned fully by a provincial government. That could lead to some very difficult problems with the implementation of the monetary policy in this country as well as the control of the money supply in a more specific sense.
So I can see from the questions with regard to ownership of chartered banks by the federal government that there are potential major conflict of interest problems. From the point of view of provincial governments, there are not only conflict of interest problems but there are also fundamental questions of

November 13, 1980

constitutional jurisdiction and the ability of the Bank of Canada to be able to continue to control monetary policy.
Finally, I should like to say quite honestly that clearly the hon. members opposite do not have a fundamental grasp of the nature of the Canadian financial system and of the nature of the range of financial intermediaries which are currently operating within our financial system, and the possibilities that arise therefrom for provincial governments to participate actively in the general area of financial intermediation.
Clearly provincial governments have had a great influence on the growth and development of the credit union and caisses populaires movement, and over the last decade credit unions and caisses populaires have grown faster than the chartered banks. Trust companies have grown at least as fast, and in some cases faster, than chartered banks, and provincial governments have a direct input into the trust company industry since certain of the trust companies are chartered by the provincial governments. Those are two vehicles that the provincial governments have available to them to stimulate the growth and development of their regions. In addition, there are provincial treasury branches. We know of them in Ontario, in Alberta, and in other provinces. So these institutions are available, and venture capital firms, such as the Canada Development Corporation at the federal level and the same thing at the provincial levels, are available.
There are any number of ways in which provincial governments can have an impact on the growth and development of the regions of the country. Certainly they do not need to have access to ownership of chartered banks to facilitate their economic goals. As I stated, there are a number of reasons for this, the last one being that it is simply not necessary to achieve the objectives which the provinces wish to achieve. There is no benefit that I can see in allowing governments, provincial or federal, under this legislation to become actively engaged in this particular area of endeavour, namely, banking from the perspective of a chartered bank.
[ Translation]


Pierre Bussières: Mr. Speaker, after the extremely serious, sound and well-founded remarks the hon. member for Ottawa Centre and Parliamentary Secretary to the Minister of Finance (Mr. Evans) has just made, I shall be very brief.
In view of the group of amendments we now have before us, I feel we are confronted with two extreme positions, namely, on the one hand, the proposition of the NDP who would have governments directly involved in the activities of the financial institutions known as banks under the present act and, on the other, the proposition explained by the hon. member for Edmonton West (Mr. Lambert) who would have provincial government action completely excluded from those same institutions.
In this bill, according to clause 114, our government took what could be called a half-way stance.
Bank Act
I presume, Mr. Speaker, that the hon. member for Broad-view-Greenwood (Mr. Rae) of the NDP is the spokesman for his party on the Bank Act. He will say the position of the government is timorous. I say to him that, on the contrary, it is a wise position in that it avoids the excesses and dangers pointed out by the hon. member for Ottawa Centre, while at the same time being generous in that it allows the governments who may feel the need to do so to invest in up to 25 per cent of the shares of a new bank to help it get started; of course, those governments will be subject, for a period of ten years, to the same regulations as any other shareholder, that is they will have to decrease their portfolio to 10 per cent.
We reject the two extreme positions which is why we call upon hon. members in this House to reject the group of amendments now before us.


Mr. Deputy Speaker:: We are now on motion No. 5. Is the House ready for the question?


Some hon. Members:: Question.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Pursuant to Standing Order 75(11), the recorded division on the proposed motion stands deferred.
We are now on motion No. 12. All those in favour of the said motion will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.


Marcel Joseph Aimé Lambert: On division.


Mr. Deputy Speaker:: I declare the motion negatived on division.
Motion No. 12 (Mr. Lambert) negatived.

November 13, 1980
Bank Act


Mr. Deputy Speaker:: We are now on motion No. 16. All those in favour of the said motion will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.


Mr. Rae:: On division.


Mr. Deputy Speaker:: I declare the motion negatived on division.
Motion No. 16 (Mr. Rae) negatived.


Mr. Deputy Speaker:: Now the Chair will put motion No. 13 to the House, and this may dispose of motions Nos. 12, 19, 20 and 21 which are consequential to it. All those in favour of the said motion will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Pursuant to Standing Order 75(11), the recorded division on the proposed motion stands defered.
According to a House order, motions Nos. 7, 8 and 9 shall now be grouped for debate.


Bob Rae: Motion No. 7
That Bill C-6, an act 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 amended in clause 2 by striking out lines 24 to 27 at page 33.


Bob Rae: Motion No. 8
That Bill C-6, an act 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 amended in clause 2 by striking out lines 45 to 47 at page 33.


Bob Rae: Motion No. 9
That Bill C-6, an act 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 amended in clause 2 by striking out lines 48 and 49 at page 33.


Raymond John Skelly: Mr. Speaker, we are getting to the point where some of my previous remarks bear repeating, but the question in this one is different than we have been looking at, the basic question. It was very interesting to have both government members coming on line so clearly. The arguments of the parliamentary secretary were
rather circular. I wonder whether he actually accepts them as being serious but, as we have seen, they are quite prepared to put them on the record. I hope they will consider that this is a different option and relax their very narrow ideological view that the public sector be excluded.
Basically our proposal in motion No. 7 is to delete section 35(1) which reads:
The following persons are disqualified from being directors of a bank:
And subsection (j) reads as follows:
a person who is an officer or employee of a corporation owned or controlled by
Her Majesty in the right of Canada or a province;
It is a somewhat interesting situation where the government will often go out into the private sector. Almost exclusively in many cases it will go into the private sector and sometimes the public service to recruit people who have expertise in certain areas in order to develop public corporations. Occasionally the government goes out to recruit retired politicians, as we have seen in one notable corporation, but by and large it recruits people to handle public enterprises who have skill in the area.
A very large number of corporations are owned by the government. I can point to Air Canada, which is a very successful Crown corporation, CN in some respects, and Petro-Canada which is developing and I hope one day will be a very strong leader in the field of energy development within the country. We have seen the government move into things like de Havilland, Canada Air and various other industries. Very definitely the government is involved in the public sector. There is no dispute.
Conservative members no longer sit on the Treasury benches because they failed to recognize that the country has a strong feeling about a mixed economy and successful public enterprises which represent the interests of people, that is, the interests of people generally instead of a very narrow group of people. By and large Canadians feel that a mixed economy is very valuable. The reason they do not sit there any longer is that PetroCan did them in. Their willingness to put that organization to the sword touched the people of this country. It probably took the Liberal members a long time to wake up to the reality that Petro-Canada was necessary, and on doing it, retouched the responsive chord and now recognize even more seriously that it must expand. We would make the same argument that this is also necessary in the sector of the economy where we want to mobilize capital. These projects are very important.
They have totally rejected the concept that our prime capital mobilizers is the banking industry, the concentrated, tightly-controlled mobilizers of capital. They say the public has no place. When one considers the matter, those are very strange and contradictory remarks. However, motion No. 7 allows for another option. It would allow us to have on boards of directors of banks people who are involved in a public corporation, and these people, albeit through a rather circuituous route, are accountable to the people of Canada, not merely to a small group of private shareholders whose interests can often be
November 13, 1980

totally different from the interests of the people of Canada. There is no reason for this prohibition.
Many corporations within the country have surplus funds at times, and with connections and certain expertise these surplus funds could be invested through such an organization. There are also projects which require large amounts of capital which must be raised other than through the public purse. For example, let me again refer to Petro-Canada, the nemesis, in this case, of the Tory party when it was the government. That organization will need a tremendous amount of capital at some point to undertake some of the projects which have been outlined. I presume that Petro-Canada will undertake exploration and we will see drilling rigs offshore and in the frontier areas of the country, and eventually we will see the company distributing oil and natural gas in eastern Canada.
The government intends to pay for these activities from the public purse by a tax at the gas pumps. Perhaps a more effective method would be to sit one of the directors of that corporation on the board of a bank. From this position funds could be mobilized from the private sector.
I find the placement of this prohibition in the legislation a very strange contradiction. The expertise is certainly available and the philosophy is consistent. By and large, the prohibition is rigid and ideological. Perhaps a far better approach would be to allow the legislation to remain silent, or merely delete it. If it were deleted, the banks themselves would be in a position to determine whether or not it is in the interest of the institution to be informed on what certain of our key Crown corporations, such as Air Canada, CN or Petro-Canada, are doing.
It strikes me that the clause is inconsistent with the philosophy put forward by the government. It is not required in the act because the banks in appointing directors would naturally control the appointments.
Since we are dealing with motions Nos. 7, 8 and 9 simultaneously, I will comment on all of them together, although they are slightly different in their intent. Not only do we exclude directors of Crown corporations in motion No. 7, but in motion No. 8 we disqualify any agent or employee of Her Majesty in the right of Canada or the provinces. The government's position was made quite clear that it opposes public input to the boards of directors of banks and accountability to the public for the actions of some of these institutions. Instead of opening these institutions to the public and allowing some degree of opportunity for public input, the government closes the door and says, "No, the act is fine". It feels that the inspector general can handle this matter better. Of course the inspector general reports to the minister, but the minister in any cases is not obliged to report to the House or to any other body. The supervision seems to be no more than bookkeeping as opposed to policy.
This debate allows us an opportunity to let a little more light into these areas. My party would like to see this prohibition clause deleted from 35(1 )(m), which reads:
Bank Act
The following persons are disqualified from being directors of a bank:
(m) a person who is an agent or an employee of Her Majesty in right of Canada or in right of a province.
Motion No. 9 refers to a minister of the Crown. As we proceed up the ladder from Crown corporations to agents and employees and finally to ministers of the Crown, in the final analysis motion No. 9 is consistent with the government over-all philosophy and I do not feel that I need to elaborate further.
The ultimate decision as to whether or not people in these positions could make a contribution to the board of a bank should be left to that bank, particularly with regard to the areas of Crown corporations. The government should look seriously at deleting motion No. 7, but I am pessimistic. The government does not want public sector involvement or accountability in the banking system. I am pessimistic that it will see the light, but I appeal to the government to remove that prohibition.


Bob Rae: Mr. Speaker, I do not understand the position taken by the government. I think it will prove to be quite shortsighted in the areas of protecting the interests of consumers and, indeed, of the public interest on the boards of directors of our corporations. It is important we remember that when the government initially considered the question of who would be qualified to be a director, many concerns were expressed about our peculiarly closed banking system and its closed brotherhood of directors. We have a system of interlocking directorships between our banks and our large corporations which gives a tremendous advantage to those corporations and a lie to the notion that we have a genuinely competitive and open system. In fact it is a highly closed system.
My party has made a number of proposals to deal with the realities of the situation. First, we suggested that the governments of Canada and of the provinces should be able to create their own financial institutions and banks, if that is the area in which they would like to get involved. It was rejected by the government. On the motion about which my friend, the hon. member for Comox-Alberni (Mr. Skelly) has just spoken, we said, "All right, if you're not prepared to allow the federal government to form a chartered Crown bank or the provinces to form federally Crown banks or chartered banks, why don't you at least give us the ability to have appointed to the boards of directors of chartered banks people who are in a sense agents of Her Majesty?" Of course it would all depend on the decision that it is something which must be done in the public interest. The government has said, "No, we are not going to do that either".
To anticipate such a reply to the suggestions we have made, we said, "Let's restrict the ability of bank directors to sit as directors of other companies and the ability of other companies to appoint directors to the boards of chartered banks. Let us attempt to break the stranglehold which the old boy network has on our banking system." Again the government has said no to every one of those amendments. The amendments deal with very fundamental principles which attempt to

November 13, 1980
Bank Act
introduce elements of democracy into our economic and industrial system.
1 read an article the other day which was written by the Prime Minister (Mr. Trudeau) before he became Prime Minister. 1 would recommend it to the minister, to the parliamentary secretary and to others who are interested. The title of the article is "Economic Rights", and it was published in the 1962 McGill Law Journal. The article describes the failure of our economic system to introduce any elements of democracy; it gives a graphic description of the cost to the average working person of the absence of those elements of democracy. It also describes what the author called an erroneous concept of property by which absentee directors and absentee shareholders are able to withdraw capital at any time, which withdrawal would have a drastic impact on people who are affected by plant closures and lay-offs.
I find it ironic that a Bank Act produced by a government headed by the Prime Minister, the author of that article, would contain absolutely no elements of economic planning, no elements of industrial or economic democracy, and nothing to ensure any of the rights of which he spoke before becoming Prime Minister. I think it is sad that the government would have so little imagination that basically it is only prepared to say that the business of banking is to be left to the bankers-to the same economic elite that has run this country for 300 years.
Any opportunity that the people have to take greater control of their financial institutions, any opportunity introduced by our party that would provide for competition from popular institutions such as caisses populaires and credit unions, has been rejected by the government, and any opportunity to provide for the protection of the public interest because of the activities of government has been consistently rejected by this government.
This is a statement, if you like, of the extent to which the party opposite has fallen prey to the embrace of the economic elite, the embrace of the economic establishment, and the extent to which it has rejected every single progressive proposal made by this party regarding the Bank Act.


John Leslie Evans: Mr. Speaker, quite frankly 1 have never heard such rhetorical garbage in my life as that just put forward by the hon. member for Broadview-Green-wood (Mr. Rae). It is absolutely the most ideological piece of information ever passed on in this House.
If the hon. member for Broadview-Greenwood was interested in promoting the expansion and development of the Canadian financial system, if he was interested in promoting competition, then I think he would suggest a far different range of options than those he has proposed today. What the hon. member and his colleagues have put forward are ways in which government agencies-which some would argue are not necessarily the most representative agencies of the people from
a democratic point of view, bureaucrats-would put people on the boards of banks and thus make them much more democratically representative institutions. I hear no argument to justify this contention. To say that putting members of government agencies, bureaucrats and public servants, on the boards of banks would make them more democratically representative of people, is not necessarily true.
The reason the hon. member for Broadview-Greenwood put forward this amendment in the first place, I think, is because it was necessary in conjunction with his previous series of amendments which concerned the ownership of those institutions by governments. If governments could own the institutions but were precluded from having members on the boards, then who would sit on those boards? That is what this amendment was intended to accomplish and not all the other things the hon. member put forward. In fact hon. members opposite have forgotten why they proposed the amendment.
Given that the will of the House appears to be that governments will not be allowed to own financial institutions which are called banks in this country, then there is no need to allow government agents to sit on the boards. They are not going to be able to own shares or take part in the ownership of chartered banks in Canada.
The same argument that arises with respect to potential conflict of interest in the ownership of banks by governments, arises with the placing of government agents on the boards of directors of these institutions. The conflict of interest is precisely the same.
Hon. members opposite decry what they consider to be the fact that we have no control whatsoever over the behaviour of banks in this country. That is utter nonsense, Mr. Speaker. We are now debating passage of a bill that provides massive control over chartered banks in this country.


An hon. Member:: Absolute rubbish.


Bob Rae: You do not even believe that yourself.


John Leslie Evans: We have an act that regulates the behaviour of these financial institutions, and at the federal level we have the office of the Inspector General of Banks established to ensure that banks operate in the public interest.


An hon. Member:: What a tiger.


John Leslie Evans: Mr. Speaker, I hear hon. members opposite harping and screaming from their socialist prospective. I say that this is the alternative we have chosen in the past, and it is the alternative we are continuing to choose today. I am afraid they will have to put off their socialistic desires until some later date.
I would suggest to you, Mr. Speaker, that the real concern of this government and of this country is for the expansion, the increase in the dynamic nature of Canadian financial markets and Canadian financial institutions. This government is pursuing a course of action that will lead to the increased competition that we all want very badly.
November 13, 1980

Through the Bank Act we have provided for the entry into this country of institutions from other countries. Hon. members opposite have fought that, of course, and they will fight it again when the motions are put forward shortly. It is known, however, that these institutions will promote competition with Canadian chartered banks.
Over the last ten years we have seen the massive growth of credit unions and caisses populaires. We want to encourage that and to see it continue. There is some discussion about whether it might be appropriate to have a federal credit union act which would allow credit unions to expand beyond the borders of one province as the chartered banks may. This would expand competition.
The act provides for the chartering of banks through letters patent and makes it easier for new banks to be formed. This measure was fought by hon. members opposite but it would stimulate competition by allowing banks to be formed and to compete with the existing chartered banks' structure in a much more direct manner than has been the case in the past. The requirement in the Bank Act that chartered banks may only be formed through an act of Parliament, which in many cases has taken years, has seriously deterred the formation of new banks. That is why there is a provision to allow the creation of new banks by letters patent. This measure would increase competition but it is opposed by hon. members opposite who have absolutely no interest in competition. They want to put their fingers in everything in an attempt to exercise control from their perspective, which, in some cases and, indeed, maybe in all cases, is not necessarily in the interests of the country.
The government has made a commitment to introduce a new savings trust and loans companies act. This act would allow the Quebec Savings Banks, federally incorporated trust companies and federally incorporated loan companies a broader scope in the financial markets. It would allow them to expand and thus increase competition in the financial market. It is our perspective, and I think that of a good many members opposite, that if we can enhance competition there will be a better financial market, more competitive rates, and the best possible service to the consumer. That is how we intend to go about this, not by allowing the federal government or any government to permeate every aspect of our lives.
There are sound, logical and good long-term reasons why we do not accept these amendments, Mr. Speaker, and why this motion is not acceptable to the government.


Marcel Joseph Aimé Lambert: Mr. Speaker, 1 have been listening to the Parliamentary Secretary to the Minister of Finance (Mr. Evans). Indeed it is unfortunate that it is not possible to get a playback of the representations which were made before the finance committee in early 1979 by the present Minister of Industry, Trade and Commerce (Mr. Gray) on this particular point. If there ever was an interventionist in all sorts of business, it was by that minister.
As a matter of fact, at the time the New Democratic Party had more or less abdicated any role in the determination of the
Bank Act
contents of this Bank Act, and the representations with regard to the so-called consumerism and all the trappings that go with it came out of the mouth of the now Minister of Industry, Trade and Commerce. It is rather remarkable that he would, in any way, approve within cabinet the acceptance of the present bill. Of course we know very well what he said when he was the finance critic in opposition regarding interest rates. He said that he would resign if they were allowed to go up. Interest rates are much higher now than they were then, and he is still holding on to the reins of office. He also wanted to put representatives of consumer associations on the boards of banks, whether they were shareholders or not. In that case certain individuals would have a right somehow or other either to engage in public snooping or do what a do-gooder does.
A very interesting section concerns officers of Crown corporations as to who may or who may not be directors of banks. In subclause (j) at page 33, the subject of amendment No. 7, it is said that an officer or an employee of a Crown corporation cannot be a director. Those are clearly defined individuals. Amendment No. 8 covers a person who is an agent or an employee of Her Majesty in the right of Canada or in the right of a province. In other words, a public servant cannot be a director of a bank. In amendment No. 9 it is the minister of the Crown in either the right of Canada or the right of a province who cannot be a director of a bank.
A few moments ago we had a debate on the question of whether a provincial government or the Government of Canada could own a bank; in other words, on whether a charter could be granted to a government for the organization of a bank, and someone said no. A government is prohibited from owning any shares in an existing chartered bank, but there is an anomaly carried forward in this act. My amendments are designed to eliminate that. I do not think the government members fully understood when they said no to my amendments in the previous debate. This act does allow a government to be a participant in a new chartered bank up to the extent of owning 25 per cent. That has never been changed and it has not been eliminated. I find it very strange that the government of a province or the Government of Canada could take part in a newly chartered bank but none of its employees, none of the employees of a Crown agency or a Crown corporation, nor could a minister, represent the government on the board as representatives of those banks. I ask hon. members then who would?
I invite the parliamentary secretary to turn his attention to this particular part. Who would represent the interests of that provincial government which is entitled to invest in the incorporation of a new bank? The parliamentary secretary will remember that during the committee hearings I moved to strike that particular part out, but the government majority blindly went ahead-I say blindly-but perhaps it was blithely went ahead in the spirit that since the government has introduced this bill it is omniscient and therefore it must be right. But in the existing dealings, there is a trap. I must say that having seen the way the government went along, if it wanted to walk into the trap it created for itself, it was fine by me. All
4634

November 13, 1980
Bank Act
public servants, all representatives of Crown corporations are banned from representing a provincial government which may wish to participate in the incorporation of a bank. But then, who is to represent the government on the board? It will have to have some individual, or excuse itself from the board. There is no provincial government which would invest one bent penny in a chartered bank.
Is it a case of the government, for cosmetic reasons giving into an alleged provincial demand which existed back in 1973 when Dave Barrett was the premier of British Columbia? At that time he was making loud noises about wanting to redirect the investment in his province. He did try, but with disastrous results. But on the other hand, does the government want to withdraw from the province any right of participation in the direction of the affairs of that bank? It is a cynical exercise. I think I was being far more honest myself when I just simply said, "No way." Neither will a government, provincial or federal, be entitled to own a bank or be granted a charter of incorporation, either by way of letters patent or by way of a private bill, as was attempted with the original Bank of British Columbia. No employee of a Crown corporation or public servant, whether federal or provincial, can serve as a director. In fact no provincial or federal government can buy any shares directly in any of the existing chartered banks. Nor can it nor should it be able to take any interest in a new bank.
The act now states that a provincial government can invest up to 25 per cent in a new bank, but no public servant, cabinet minister, employee of a Crown agency or corporation, can represent the bank. Who is going to represent the bank on the board of directors? Who will be the registered shareholders, nominees or agents of the bank? That is a cynical exercise. Under the act as it is going to go through, I suggest there is not one provincial government which would invest, as I said, a bent penny in any chartered bank about to be founded. I am sure there are some bank shares held by provincial government interests through pension funds, but they can have no direct influence. Nor can they invest in bank shares for purposes of conducting business activity. It is more of a passive investment for investment's sake. That is as it should be.
I do not think any pension fund should preclude its directors from making the best possible investments. In the main, bank stocks are good investments. From time to time the odd one goes for a bump and there may be some losses over a short period of time. We have seen that in the last few years. It would be more logical, and members opposite would be more honest if they supported my amendments which preclude provincial and federal governments from any interest in any chartered bank, existing or in the future. I hope the House in the majority will be persuaded to that view. I know there are some contrary views.
May I say this in passing. I recognize the views of my friend from Bow River. He is not alone in our caucus holding such views. He and I are of about the same generation. I worked in a chartered bank during the depression years. A lot of the
hard-heartedness and what have you is a lot of folklore which somehow or other has gained credence.
I worked in a branch in rural Alberta. Outside of the current and savings ledgers, the thickest one we had to look after was the ODWOs, the register for overdue debts written off. Branches were amalgamated, maybe five into one, because there had been a period of rather rapid expansion and competition among the banks in the twenties, and they were a little on the shaky side. When the depression came, it obviously restricted the activity and the cost of operating a great number of branches. There was improved communication.
In the twenties there was not one gravel road north of Edmonton. They were all dirt roads. There were not many cars and they were not that efficient. Therefore, every little hamlet had a branch of a bank or agency because the farmers' grain tickets had to be cashed. There were certain cash requirements and there were savings accounts.
After 1925, we had more cars and more gravel roads. Therefore every hamlet no longer required a branch of a bank or an agency. This was given considerable impetus in the thirties with declining business and the necessity to reduce costs. Only after World War II did we see in some towns a resurgence or re-entry of a branch of a bank. We saw more competition in the towns which for decades had only one branch. We found branches of three or four banks. Mind you, there was a greater population, more money circulating, and more business being carried on.
Some of the major chartered banks are now on to a retrenchment of branches. Some will close as many as 60 or 80 branches across the country this year. Those are decisions that are being made. In some spots it has not turned out as well as anticipated. Others are better business spots. If the government wants to get into a particular funding purpose, it can pass legislation and create an agency. What is wanted in Alberta is more of a liberalized Alberta trade corporation to help small businesses, what may be called a lender of last resort. That is where the need is.
There is a need for advising agencies. We have the Federal Business Development Bank with an advising agency. However, it charges $30 to open the file and a $7 an hour consulting fee. Some small businessmen have complained that when they went to ask for advice about their business, it cost them $100 to find that out. That is not the purpose of a publicly funded business advice agency or a lender of last resort. If there is a public social purpose to be served, it should not be on a fee basis as is done at the present time.
My view is that credit unions have developed to the point today where they have their own mortgage companies, and that is an anomaly or an anachronism. Credit unions were founded to get away from mortgage companies. But now they have their own mortgage companies and their own trust companies. They were supposed to allow the little man to wriggle out from under a trust company.
November 13, 1980

We are preventing the banks from getting into the car leasing business, yet the credit unions are forming their own car leasing companies. There are not many needs unfulfilled at the present time. There are both federal and provincial trust companies, chartered banks, and then we will have a great number of class "B" banks offering a variety of services. It seems to me that the whole spectrum is more than filled. We do not need any government-owned banks, or even banks in which governments have an interest which would allow them some direction in the operations of those banks. I would certainly hope my amendments will receive the support of the House and that they not be defeated.


Mr. Doug Anguish (The Battlefords-Meadow Lake):: Mr. Speaker, I rise to support the amendments before the House, specifically the one which would delete the provision whereby a member of a Crown corporation could not sit on the board of directors of a banking institution or a bank.
I would like to make a few brief remarks on what the member for Ottawa Centre (Mr. Evans) said this morning in the House. He referred to not wanting all these bureaucrats getting onto the boards of directors of banks and that they could not do a good job there. I am reminded of when the member for Ottawa Centre was the director of investigation and research with the Department of Consumer and Corporate Affairs-


John Leslie Evans: On a point of order, Mr. Speaker, I would like to keep the record as clear as possible with respect to what is about to be said by the hon. member. I was director of research and evaluation for the consumer side of the department. I was not director for investigation and research. That position is held by Mr. Bertrand, who is the director of investigation and research.


Douglas Keith Anguish: Mr. Speaker, I would like to thank the hon. member for clearing that point up for me. The area I wish to concentrate on deals with the fact that with the hon. member himself being a bureaucrat I imagine he would say he would not be able to make any meaningful contribution to the people of Canada, just as the other bureaucrats he referred to would be unable to either. That is a point with which I disagree on behalf of the people who are employees of Crown corporations, even though 1 would not necessarily disagree that the hon. member for Ottawa Centre is making any meaningful contributions since he has left the bureaucratic role within government. I think there are many people in Canada who could make very substantial contributions-


John Leslie Evans: On a point of order, Mr. Speaker, I think that is a misinterpretation of what I said. If the hon. member would refer to Hansard he will see that I did not say that bureaucrats could not make a valuable contribution. I said, with reference to democracy, that there was no necessity-


Mr. Deputy Speaker:: This appears to be an exchange between the hon. members and it is not a point of order.
Bank Act


Douglas Keith Anguish: Thank you, Mr. Speaker. I can see that the hon. member for Ottawa Centre is as confused about his remarks as I am.
As I was saying, I think there are some very important people who are involved with some of the Crown corporations, federally and provincially, who could provide meaningful input to the boards of directors of any bank within this country. I am reminded of Wilbert Hopper, who is chairman of the board of Petro-Canada. 1 think of Donald Harvie, who is the deputy chairman of Petro-Canada, and the Hon. John Aird of Petro-Canada. I believe they are people who could make meaningful contributions.
I would like to consider some of the other Crown corporations, for example, Canadian National. I see no reason why Mr. Spicer, who is the executive vice-president of CN, could not make a meaningful contribution as a director on the board of one of the banks. There are many others who could make meaningful contributions. I do not personally know any of the people I have just mentioned. But I certainly know some of the employees of Crown corporations in the province of Saskatchewan personally, and I believe they could make a very valid contribution to the board of directors of any bank.
I think of David Dombowski who was the president of the Saskatchewan Potash Corporation and who was involved with that great corporation from its conception until just a few months ago. He has now taken over the role as the president of Sask. Oil, which is a very important Crown corporation in the province of Saskatchewan.
I think these people have some real expertise and that they might look at the banking industry with a different perspective than the people who are there now, who are strictly profit motivated and who have very little consideration for service to the general public. Many of the Crown corporations fill both of those roles and have those mandates in mind. In some of the Crown corporations they are there to make a profit and, as well, they are there to see that there is some consistency of service provided to the people who have to deal with those Crown corporations. The people on the boards of directors of banks seem to be strictly profit motivated. They have little consideration for the type of service that the people of Canada have to put up with, who are the recipients of that service. I would like to deal with the hardships that many of the people suffer at the hands of the banks. An example of this is the interest rates, which in no real way are tied to the Bank of Canada. The people who serve on the boards of directors of many of the banks have never had to suffer the hardships caused by high interest rates because they are financially secure people. 1 know there are some people on the boards of directors of banks whom you could consider average, everyday individuals, but certainly the majority of the people who control the banks on the boards of directors are quite elite individuals. They have never had to borrow money from a banking institution, at least during the time that they were on the boards of directors. They have not had to meet the basic necessities of life, such as purchasing a house or buying a car or doing renovations to their homes. They do not really

November 13, 1980
appreciate the service aspect of a bank, which is to make such things as providing transportation and the purchase of a home attainable for all Canadians. As I have said, consideration of some of these things would put a different perspective on the board of directors of a bank. They could provide a very meaningful contribution.
I see the time is fast approaching when we will be taking a recess, but I would like to say that the Bank Act has been going nowhere. I think the government must make a firm stab at explaining where we are going with the Bank Act. November 30 is rapidly approaching and we are still without the changes which are needed. I think the government and the Parliamentary Secretary to the Minister of Finance had better make some pretty substantive changes to the Bank Act, instead of a few comestic ones. I would like to say that it seems to be going nowhere, in our view. I think they should start listening to some of the things that the members from the opposition parties are putting forward. They should listen to the amendments that have been put forward. They should listen to the amendments that have been put forward by this party and other members in the House of Commons. In particular, they should consider the item which 1 have talked about today, that is, the deletion of the provision which prevents officers and employees of Crown corporations from holding positions on the boards of directors of banking institutions.


Mr. Deputy Speaker:: It being one o'clock I do leave the chair until two o'clock p.m.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, I rise under the provisions of Standing Order 43. In its current issue the respected magazine The Economist ridicules the government's new energy policy in an article entitled "Wildcat Canada resigns from the world". It is already clear that a number of Canadian-owned firms, the ones which are supposed to benefit from the energy policy, are moving their operations and jobs to the United States where each barrel of oil they find there now brings them four times what they can
earn in Canada. I therefore move, seconded by the hon. member for Oxford (Mr. Halliday):
That this House direct the Minister of Energy, Mines and Resources to develop a new energy policy concerned more with creating Canadian jobs and Canadian self-sufficiency and less with his ideology and the development of energy self-sufficiency in the United States of America.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CONSTITUTION
Gordon Edward Taylor: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Whereas the Progressive Conservative Party has made it abundantly clear several times that we want the constitution patriated based on the Vancouver formula to which ten provinces agreed last September, whereas the Prime Minister (Mr. Trudeau) has stated in this House that the Progressive Conservative Party wanted the constitution patriated without the consent of the provinces, which is a complete fabrication, and whereas the position of the Progressive Conservative Party favouring the patriation of the constitution with the Vancouver formula, including the consent of a majority of the provinces, was made very clear in a debate in this House on October 28, 1980, I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That this House urge the Prime Minister and the Liberal party to desist from spreading this false information.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL GALLERY
Mr. Simon de Jong (Regina East):: Madam Speaker, I also rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In a period when Canada is concerned about her national identity, one of our major cultural institutions is being eroded by budget cuts, inadequate housing and internal political struggles. The National Gallery's operational budget has been cut by some 30.7 per cent in the last two years. While we learned yesterday from the Acting Secretary of State that the gallery's acquisitions budget
November 13, 1980

has been restored, this information had not been conveyed to the gallery. The autonomy of the gallery and other national museums has become seriously eroded, leading to the resignation of the director of the National Gallery. I therefore move, seconded by the hon. member for Skeena (Mr. Fulton):
That the government restore the operations budget of the National Gallery at least to its 1978 level, that the government act quickly to find suitable permanent premises for the National Gallery and that the minister institute an immediate inquiry in the deteriorating relationship between the National Museums Board and the National Gallery and other museums.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


METRIC CONVERSION
Mr. Bill Domm (Peterborough):: Madam Speaker, I rise under Standing Order 43 on a matter of urgent and pressing necessity. On-again-off-again metric conversion in the retail food stores in Peterborough, Kamloops and Sherbrooke has caused major financial hardships to merchants in those areas. In light of the present government's flip-flop on this issue, 1 move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That some of the estimated $9 million metric conversion annual budget be directed to the retail food merchants to assist them in their needless costs of purchasing metric scales and now converting these same scales back to imperial.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ACCESS TO INFORMATION
Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to move a motion of urgent and pressing necessity. Considering that the Minister of Justice (Mr. Chretien) rejected the request for the publication of the results of the last three polls out of 16 made on behalf of the Canadian Unity Information Centre; considering that before the members of the Joint Committee on the Constitution of Canada, the Minister of Justice confirmed his intention to make them public when he will deemed it advisable; considering that Canadian taxpayers have subsidized those polls and that they are entitled to obtain their results, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the House ask the Minister of Justice to publish immediately the results of those last three polls.


Madam Speaker:: The presentation of such a motion under the provisions of Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, I too rise under the provisions of Standing Order 43 and hope to receive the unanimous consent of the House to the following motion. Since the Prime Minister admitted at his press conference on November 7 that he had discontinued the practice of exchanging with the Soviet Union reports on high level bilateral discussions following visits made to other countries, exchanges pursuant to the friendship protocol he signed in 1971 with the Soviet Union which has not yet been repudiated, I move, seconded by the hon. member for York North (Mr. Gamble):
That the Prime Minister provide the House with a detailed report on the nature of the exchanges he used to have with the Soviet ambassador on the "substance" of his various international discussions and "reciprocal intentions" as they applied to Canada and the U.S.S.R. in the field of international diplomacy.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EMPLOYMENT
Mr. Jim Hawkes (Calgary West):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the fact that the disastrous budget will create an unemployment crisis of over 1,200,000 people in this country, and in view of the fact that direct employment creation programs of this government will create only 7,000 person-years of employment this fiscal

November 13, 1980
year, I move, seconded by the hon. member for Mississauga South (Mr. Blenkarn):
That this House direct the Minister of Employment and Immigration to reread the June debates of this House and to meet with his ministerial predecessor so he can learn how to create the maximum number of jobs for a minimum dollar amount.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CALL FOR REVIEW OF UNEMPLOYMENT STATISTICS-MOTION UNDER S.O. 43
Mr. Joe Reid (St. Catharines):: Madam Speaker, under the provisions of Standing Order 43, I rise to move a motion of urgent and pressing necessity. Unemployment might be down in the Niagara peninsula according to Statistics Canada, but the social services department of the regional municipality of Niagara does not believe it. The number of persons on welfare in Niagara increased by 28 per cent in September compared to August of this year. The number on welfare in September of this year was up almost 9 per cent over that of the same month a year ago. The number of applicants for assistance so far in November compared to October has increased 42 per cent. 1 therefore move, seconded by the hon. member for Simcoe South (Mr. Stewart):
That the Minister of Employment and Immigration review with Statistics Canada its method of calculation and determine what the real unemployment rate now is in this country and, instead of taking shelter under the Canadian community development program, he initiate programs of significance which will get the people of Canada working again.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ENVIRONMENTAL AFFAIRS
Mr. Jim Fulton (Skeena):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the position taken by the Most Reverend E. W. Scott, Primate of the Anglican Church of Canada, calling for the withdrawal of the special order in council permitting Amax corporation to dump its effluent into Alice Arm and to declare a moratorium upon development of the resources until technology is developed to dispose safely of the tailings, and in view of the support given to this intervention by the Canadian Conference of Catholic Bishops, chaired
by the Most Reverend Remi J. De Roo and the refusal of the Prime Minister (Mr. Trudeau) to meet with the Primate regarding this issue, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House call unanimously for a comprehensive environmental impact assessment and public hearings on the Amax project and go on record as supporting the positions of the Anglican and Catholic churches of Canada.


Madam Speaker:: Presentation of this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


MULTICULTURALISM
Mr. Bill Yurko (Edmonton East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. As the B and B Commission report and the Pepin-Robarts commission report recognize the active presence and practice of many world cultures in Canada, and furthermore, as federal governments past and present of different partisan views have appointed ministers of state responsible for multiculturalism, I move, seconded by the hon. member for Rosedale (Mr. Crombie):
That this House officially recognize that Canada is a country in which many world cultures are actively practised and that a general statement to this effect be included in the government resolution on constitutional patriation.
I hope the government will consider seriously the need for such inclusion.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ENERGY CONSERVATION
Donald Alex Blenkarn: Madam Speaker, I rise under the provisions of Standing Order 43. The CHIP-DIPP program has been successful to some extent in conserving energy supplies used for domestic heating. The government announced in the budget the off-oil-on-gas refit programs, otherwise known as the "take gas" program, but the government has yet to figure out how to operate this program, what criteria are expected, and has delcared that it will not have regulations ready until well after the heating season. There-
November 13, 1980

fore, I move, seconded by the hon. member for Brampton-Georgetown (Mr. McDermid):
That the government amalgamate its CHIP-DIPP program and its "take gas" program into a realistic program to save oil, oil likely to be scarce because of the inability of the government to negotiate with producing provinces; and that the government produce rules and regulations for this program and the necessary legislation before December I, 1980.


Madam Speaker:: Presentation of this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EMPLOYMENT TAX CREDIT
Mr. John McDermid (Brainpton-Georgetown):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas the Minister of Employment and Immigration (Mr. Axworthy) talks about the number of new jobs created in Canada in answer to the very real concern of youth unemployment; whereas none of these new jobs went to the youth of Canada, since there are 2,000 fewer employed today than a year ago in the 15 to 24 age group; since he said that the Clark government cancelled programs which he reinstated; and since these programs for the young people of Canada do not work, I move, seconded by the hon. member for Mississauga South (Mr. Blenkarn):
That the House direct the Minister of Employment and Immigration to reinstate the enriched employment tax credit plan which would provide three times as many jobs in the private sector for the same price as his make-work projects and to reinstate the national youth service program which would provide meaningful work experience for the youth of Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: Np.
S)



ORAL QUESTION PERIOD


Hon. David Crombie (Rosedale):: Madam Speaker, I have a question for the Minister of Employment and Immigration. The minister will know that the historical average record of his department in the creation of jobs for young Canadians under the age of 25 years has been approximately 72,000 each year
Oral Questions
for about the past ten years. The minister will also know that his own record after eight months in office is the creation of between 6,000 to 10,000 jobs, the latter figure is seasonally adjusted. The minister's record amounts to about 20 per cent of the record of his predecessors-an abysmal record. The minister knows as well that, as a consequence of the budget, of the 150,000 new unemployed, many will be Canadians under the age of 25. What new programs can the minister offer young Canadians under the age of 25?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, first of all I question the data which the hon. member is using. He seems to be acquiring the magical quality of some of his colleagues, particularly the hon. member for Calgary West, of simply using figures to fit his argument. Those are not the accurate figures on the nature of youth employment in this country. As I pointed out in the House yesterday, since this time last year the government has created over 233,000 jobs in Canada. During this past decade, while the Liberals have been in office we have had the highest rate of job growth and employment of any country in the industrialized world, and it is a record we intend to keep.
We have also had to face the fact that more young people are coming into the market in Canada than in any other country. We have tried to keep pace with this influx. In particular response to the difficulties faced by young people, we introduced new programs during the spring and summer which provided opportunities in new technology so that graduates from universities and technical colleges would have an opportunity to use their skills in jobs which were applicable to their training.
We also took the basic philosophy that we had to use the resources of the government and focus those resources on areas where unemployment was most severe, areas where there was chronic high unemployment or industries were failing. We devoted our resources to the areas where the need was greatest to ensure that there were employment opportunities. We intend to keep that philosophy because we believe that the government should help those who need help the most.


David Edward Crombie: Madam Speaker, the minister, of course, knows that 10,000 jobs in relation to a record of 72,000 jobs for each of the last ten years is not a record to be proud of, and words alone will not help those people. I would like to talk about the minister's record in relation to an entirely different group of people. During the time this minister has been in office the unemployment rate for handicapped people has been 80 per cent. If the minister refers to the budget of his colleague the Minister of Finance, he will find there is no relief there for those people. What will the minister offer those people in this country who are looking for a way finally to get something from this government with regard to its promises of independent living? There is an 80 per cent unemployment rate for handicapped people in this country.


Lloyd Axworthy: Madam Speaker, I would point out that the 80 per cent rate to which the hon. member has referred ic the same 80 per cent rate that was in existence when he was

November 13, 1980
Oral Questions
minister of national health and welfare and had direct responsibility for the disabled and handicapped.


John Horton McDermid: What are you going to do?


Lloyd Axworthy: Before criticizing, I suggest that the hon. member look at his own record during his tenure in office and he will see the absolute failure of any action being taken on his part or on the part of his government.
The government indicated in the announcement of the job-creation programs that it would be putting forward a special employment program for the handicapped and disadvantaged. I will be making announcements to that effect in a few weeks.


David Edward Crombie: Madam Speaker, people will become very weary of constant excuses which say, "Blame the other person". I suggest the minister might turn to Hansard for December 13, 1979. At page 2342 the record sets out the intentions of the former government with respect to handicapped people.
I have a final question, Madam Speaker. The budget introduced by the Minister of Finance for which the Minister of Employment and Immigration was partly responsible has been condemned by almost every social planning council in this country. That includes the National Welfare Council and the Canadian Council on Social Development. The great concern of all the social planning councils of this country is this. As unemployment increases-the 150,000 that this minister has already accepted from the Minister of Finance-will the minister impress upon the Minister of Finance and the Minister of National Health and Welfare that social programs should not diminish? We cannot have it that way. Unemployment, for which the minister is responsible, should not go up while social programs go down. Will he speak to the Minister of Finance and the Minister of National Health and Welfare and see if he can press his views upon them?


Lloyd Axworthy: Madam Speaker, I have had a number of very useful and interesting conversations with the Minister of Finance. I think the budget that was introduced by him two weeks ago indicated his commitment to ensuring that proper attention is paid to the problems of employment in Canada. I would remind the hon. member, to begin with, that the Minister of Finance did not fall into the trap proposed by the Minister of Finance of the former government, which was to restrain and cut back on government expenditure so severely that unemployment would have been increased to well over 1,100,000 at that time. In the election campaign and in the budget we deliberately said we would not break the deficit on the backs of the unemployed.
Beyond that, the minister announced in the budget that the major emphasis of this government was in the area of economic development-to provide for permanent, long-term jobs throughout Canada, and that the major area of investment in public expenditures would be in the area of developing major projects, not short-term projects, for the unemployed.


INQUIRY RESPECTING ACTION TO STIMULATE CONSTRUCTION INDUSTRY
Frederick James (Jim) Hawkes: Madam Speaker, my question is also for the Minister of Employment and Immigration. The minister responsible for housing programs in this country yesterday did him in and increased the unemployment rate once again. According to the October labour force survey there were 45,000 fewer jobs in construction than one year ago. The construction industry has sent him a letter expressing real fear about the cutbacks in the near future.
Hidden in all that is the issue that I want him to address. The construction industry requires on-the-job training to meet our long-term need for skilled workers. They are the first to be laid off, and our training programs disappear. I would ask the minister to tell us what he intends to do to stimulate the construction industry so that we can provide this country with the trained labour force it is going to need in the 1980s?


Lloyd Axworthy: Madam Speaker, I would first point out to the hon. member that while there has been a downturn in residential construction, primarily as a consequence of the changing formation of population in this country, meaning fewer families and people in the housing market, there has been an upturn in non-residential construction. Greater investment is going into the capital goods, non-residential area. We are very sensitive to the need to ensure that there is training for the longer-term prospects in those areas.
As the hon. member will probably know, since he is a member of the parliamentary task force that is looking into the question of skill shortages, this department spends close to $800 million per year on a wide variety of training programs, many of which are operated and managed through provincial institutions. We are continuing with those programs and in fact have added money to ensure that disadvantaged groups, such as native people, will have greater opportunities in the non-residential construction area. In that way they will be able to take advantage of the major boom going on in western Canada. In those cases we are attempting to respond to the question.
As I said yesterday, we are awaiting with some degree of interest the proposals of the parliamentary task force, so that-


Some hon. Members:: Order, order!


Madam Speaker:: Order, please. I must say the questions are rather long as well, and I therefore sometimes feel I have to allow for longer answers; but I should like questions to be shorter.


Frederick James (Jim) Hawkes: Thank you, Madam Speaker, I shall attempt to oblige. The training program that the minister spoke about for natives provides three months of training but these people do not have the basic education to allow them to take advantage of the program. What does the minister intend to do specifically to restore the budgetary cuts for basic skill training for the hundreds of thousands of Canadians who cannot
November 13, 1980

read or write adequately, as has been testified to before our committee? What does the minister intend to do about the mobility grants for trained people so they can move to where the jobs are? Two categories of people have testified that his programs do not work. We need programs that work. What will he do?


Lloyd Axworthy: Madam Speaker, the hon. member has often reminded this House that he has a number of advanced degrees, and as he knows the responsibility for basic education comes under provincial jurisdiction. If there is a failure, it is in the basic provincial educational systems which do not ensure people have the skills of basic reading and writing.
I believe, Madam Speaker, the responsibility of this government is to provide for industrial and institutional training, but the provinces must recognize their responsibility as well.


MUNICIPAL AFFAIRS
Mr. Cyril Keeper (Winnipeg-St. James):: Madam Speaker, my question is for the minister responsible for CMHC. Yesterday he informed this House, by a means which prohibited full debate, that the government was terminating the community services contribution program. On October 24 the minister assured the House that he recognized the need for this program, which generates $1.5 billion in construction each year and assists municipalities to provide essential services and rehabilitate older neighbourhoods all across Canada. In light of the minister's assurance, will he explain to this House why the government is ending a program for which there is an obvious and acknowledged need?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, as I indicated yesterday, the decision to terminate the program when it runs out of funding in March, 1982, is a difficult one. It is one which involved a number of hard choices. For example, what is the appropriate responsibility of this level of government? What is the appropriate level of responsibility of the provincial or municipal governments? Should the federal government be funding the construction of municipal buildings? We have to ask ourselves, does that make sense in this day and age?
In response to requests from members opposite for additional funding for such good programs as native and rural housing-


Mr. Paproski:: Answer the question.


Paul James Cosgrove: -rehabilitation programs, spurring of the industry through the MURBs provision of the budget; we have to ask ourselves whether there are other programs to which the government should respond that have a higher priority. Those are some of the reasons, Madam Speaker.
Oral Questions


Cyril Keeper: Madam Speaker, the communities will certainly feel the effects of that decision. My supplementary question is for the same minister. The federal budget reduced the government's commitment to social services, threatening health care, post-secondary education and assistance to disabled persons. It also increased costs to workers and employers under the unemployment insurance plan. Yesterday the community services contribution program was cut. Will the minister tell this House if this comprehensive assault on essential programs is part of a government strategy to relinquish its responsibility for the federal deficit and place that burden on local and provincial governments?


Paul James Cosgrove: Madam Speaker, the hon. gentleman is wrong on two counts in his preamble. First, there was no reduction in the budget assigned to social policies or programs of this government. That is incorrect.


Mr. Clark:: There was.


Paul James Cosgrove: Second, as I indicated, the program was not cut; it was a shift in priorities. If indeed we are to respond to other expressed and urgent needs, we have to transfer funds into another area. So on both counts there was no cut.


Cyril Keeper: Madam Speaker, my final supplementary question is directed to the same minister. Given the Liberal government's demonstrated mastery over the years of giving with one hand and taking away with the other, and in the light of the disappointing record of Liberal governments' long-term commitments to people, what newly discovered social priorities will he be announcing shortly to utilize the dollars he is now expropriating by breaking his commitments to local communities throughout Canada?


Paul James Cosgrove: Madam Speaker, I do not apologize at all as a minister of this government for having taken the initiative in response to social needs by increasing 5,000 social units this year early in the life of this government. Nor do I apologize for addressing the rehabilitation program which is important to the housing industry and to the generation of jobs in that industry. Nor do I apologize for having assisted the industry in getting started with the MURBs provision which was incorporated in the budget. All of these are important considerations. All of these are important areas, such as native and rural demands for increased assistance, that I will take into account as we review the budget and look at other priorities.


HOUSING
Donald Alex Blenkarn: Madam Speaker, we have heard from the minister of housing; we know there is 10 per cent unemployment among skilled labour in the construction industry. My question is for the Minister of Employ-
4642

November 13, 1980
Oral Questions
ment and Immigration. The minister knows that his colleague, the minister of housing, cannot do very much with Canada Mortgage and Housing Corporation because the corporation is broke. He had to use the money from the program he cancelled the other day, the community services contribution program, to bail himself out. What will the minister do to put to work those people who are highly skilled in the construction industry to supply the need for rental housing? The minister knows the concern-a 1 per cent vacancy rate in Toronto and two-tenths of 1 per cent in Vancouver. What is he going to do to put these people to work so he will not have to pay them unemployment insurance?


Lloyd Axworthy: Madam Speaker, I want to resist repeating exactly what my colleague the minister of housing has already stated. He has indicated very clearly to this House that the budget introduced several measures which will stimulate housing construction. Perhaps most important is the reintroduction of the MURBs program which will provide a major incentive for the redevelopment of rental housing. Further, as the minister indicated, the proposal to cut the community services program was not to pay off other programs but to reallocate the money in a way more effective and productive than the community services program has to date. That is the responsibility of the government-to use money wisely and well.


Donald Alex Blenkarn: Madam Speaker, the minister and the minister of housing talk about the MURBs program. That is a program to build high rise pads for the rich.


Some hon. Members:: Hear, hear!


Donald Alex Blenkarn: In any event, that program is only a $15 million stimulus to the economy. What program is the minister going to introduce, other than the fool MURBs program, to put these people to work and build the housing which Canada Mortgage and Housing Corporation in their report to the minister of housing says is necessary?


Lloyd Axworthy: Again, Madam Speaker, this is a question that might more accurately be placed with the minister of housing. I remind the hon. member that while he seems to be quite exercised about MURBs, several of his colleagues from the Vancouver area campaigned on the very platform of reintroducing the MURBs program. Their caucus should get their act straight and understand what they are trying to do. They cannot divide on the same issue. Either they want them or they do not want them. If one part of the hon. member's caucus wants them and the other does not, then we as a government are at least prepared to make a decision, which obviously they are incapable of doing.


NATIONAL ENERGY PROGRAM
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is to the Minister of Energy, Mines and Resources. I draw to his attention the fact that not everybody is being critical of the energy policy he just brought out. I have an article entitled "Thank you, Canada" which states "Trudeau may inadvertently have done more for U.S. energy production than all the regulations and all the bureaucrats in the U.S. department of energy".
In view of the distinctly changed environment in the United States as a result of the election of Governor Reagan and the distinct contrast between the environment there and the environment in Canada, will the minister advise what changes in the energy policy he is proposing to make to bring the economies of our two countries closer together and encourage Canadian companies and Canadians to spend their money in Canada and help the energy supply in Canada?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, policies in Canada are determined by the government and Parliament of Canada. I submit an election in the United States should not be the criterion in determining what is in the interests of Canada.


Michael Holcombe Wilson: Madam Speaker, surely the minister understands that we have a free flow of capital between this country and the United States. When you have a substantially better environment in one country than another, capital and people move. How is the minister proposing to stop the exodus of drilling rigs, production and exploration companies from moving their money south of the border where it will help security of supply in the United States and hurt the security position in Canada?


Marc Lalonde: Madam Speaker, I want to reassure the hon. member that the government is not considering any step to stop the free flow of capital or goods. As far as the policy announced by the government is concerned, we are convinced that that policy is in the interests of Canada, and that the measures that have been announced will contribute significantly to increasing ownership and control of that industry by Canadians. We are convinced it is high time that Canada should move in that direction.


SMALL LOANS ACT
Mr. Henri Tousignant (Temiscamingue):: Madam Speaker, my question is directed to the Minister of State for Finance. In a newspaper article it is alleged that, under Bill C-44 to amend the Small Loans Act, small borrowers will be swallowed whole.
November 13, 1980

Could the minister tell the House whether the aim of this bill is indeed to slaughter small borrowers or simply to enable them to continue to borrow according to their needs, and in peace?


Pierre Bussières: Madam Speaker, hon. members will recall that they voted unanimously to repeal the so-called Small Loans Act. If the government, after consultations between several ministers, namely the minister of education and the Minister of Finance, was prompted to propose to the House to repeal the Small Loans Act, it was at the request of financial institutions which are above all concerned with and interested in consumer protection, namely the caisses populaires on one side and the credit unions on the other side. Because of the representations of those institutions which saw their financial activities jeopardized by that outdated, obsolete piece of legislation, the government proposed to repeal the Small Loans Act. Far from harming consumers, this will precisely enable institutions such as caisses populaires and credit unions to adapt their consumer loan services.


PUBLIC SERVICE
Mr. Rod Murphy (Churchill):: Madam Speaker, this week the Canadian Advisory Council on the Status of Women released a report called "Women in the Public Service: Overlooked and Undervalued". My question is to the President of the Treasury Board. Since it is a fact that women constitute 60 per cent of the clerical and support staff in the public service, while only a few of them have senior management positions, and since the advisory council estimates it will take over 66 years to achieve equality in the public service at the present rate, what action is the government willing to take now to indicate that it has any commitment at all to equality in the public service?


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, the hon. member may have forgotten that the affirmative action program has been instituted in at least three departments, namely, Employment and Immigration, Secretary of State and Treasury Board. 1 am very pleased to advise the House that substantial progress has been made. The three ministers, including myself, met earlier this week to review progress to date and we are still in stage one; the hon. member will remember there are three stages to the program. We hope that the findings which we make in terms of these departments will be useful in providing similar affirmative action programs across the public service. So I am very optimistic. I might also add that I met with Mrs. Anderson yesterday and advised her of the various steps we are taking to improve the representation of women in the public service.
Oral Questions


Rodney Edward Murphy: Madam Speaker, I expected the minister to respond in that manner. In 1972 there was a cabinet directive encouraging managers to promote women. Nothing has really happened since then. That was eight years ago. We know that there is an affirmative action study in three departments out of 100 different departments and agencies in the federal government.
With that in mind, considering the fact that there are five outstanding complaints before the Human Rights Commission right now with regard to the public service and that at the present time there is no commitment from the government to do anything other than make a study among three departments-and only three departments-when and how will the government undertake a comparative wage study to make sure that women receive the right salaries for the work they are doing, rather than having the government drag it to the human rights tribunal in order to get action?


Donald James Johnston: Madam Speaker, the hon. member said he expected me to respond in the way I did. I thought my response was very positive indeed. I think we have taken very major initiatives in this regard, and to denigrate the affirmative action program which we are instituting in these three departments is really doing a disservice to the government and the efforts that have been made in this connection.


An hon. Member:: Have you met Gordon Fairweather?


Donald James Johnston: Yes, I have met with Mr. Fairweather. The hon. member will also be interested to know that in Treasury Board we are taking initiatives to seek out, through our own means, where there are infringements of the rule of equal pay for work of equal value. There are complaints. There are five complaints, as the hon. member suggests, before the Human Rights Commission. Steps have been taken between my department and the commission to settle those complaints. Those negotiations are proceeding. We are taking initiatives, 1 suggest, on all fronts; and I am sure that it will not be 66 years before we see very major breakthroughs in terms of representation of women in the public service.


INDUSTRY
Hon. George Hees (Northumberland):: Madam Speaker, my question is for the Minister of Industry, Trade and Commerce. The Minister of Finance stated in his budget that the government would be spending $350 million during the next four years, divided equally between the economic development envelope and the social security envelope. This means that $44 million a year will be spent on economic development. Would the minister tell the House what happened to his "new industrial policy", which he outlined in great detail to the Toronto Star and which appeared in a very big spread on September 28? In this article the minister said the government would be spending $2.75 billion over the next four years, which means

November 13, 1980
Oral Questions
that it would be spending $687 million a year on industrial development.


Hon. Herb Gray (Minister of Industry, Trade and Commerce):: Madam Speaker, the hon. member is mistaken. I gave no interview to the Toronto Star in which I said there would be that level of expenditure.


George Harris Hees: It is all in here in great detail.


Herbert Eser (Herb) Gray: I think the hon. member should read the paper more carefully. It is a speculative story. I should tell the House that if the hon. member would read the budget more carefully he would find instead of $44 million a year, totalling $350 million over the next four years, the budget provides some $6.5 billion, which is a 22 per cent increase in the economic development envelope. That is quite apart from the $8.5 billion in the energy initiatives program. It is a far cry from what the hon. member is saying. It is an expenditure that will involve tens of thousands of jobs and strong industrial development right across this country, unlike the decline which would have come about if his government had stayed in office.


Some hon. Members:: Hear, hear!


George Harris Hees: Obviously, Madam Speaker, the Minister of Industry, Trade and Commerce has not talked to the Minister of Finance and has not learned the very sad news that all he is going to get to spend on economic development this year is $44 million-no matter what he is trying to dream up. I ask him which of the many programs he outlined in great detail-and the Star says the minister said he would do this, this and this; it is all down in black and white, in positive terms-is he going to spend his $44 million on? Does he not think that in future it would be a good idea to sit down and talk to the Minister of Finance ahead of time before he outlines his grandiose dream schemes, so that big brother can tell him just exactly what he is going to allow him to do and what he is not going to allow him to do?


Herbert Eser (Herb) Gray: I again ask the hon. member to read the article. It is a speculative story. All the same, I think he will find that what is said in the budget indicates that I have, in fact, talked to the Minister of Finance.


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: He has agreed with me that instead of the paltry amount which would have been provided for industrial development if this House had approved the Crosbie budget, he has put aside some $6.5 billion in the economic development envelope alone. This does not take into account the other $8.5 billion in the energy initiatives program. This means a very substantial increase-billions of dollars-in funds for industrial development. I want to emphasize that means tens of thousands of jobs across this country, with very substantial industrial development. This is something that would not have happened had the hon. member's government stayed in office.


EXTERNAL AID
Mr. Ron Stewart (Simcoe South):: Madam Speaker, my question is for the Right Hon. Prime Minister. On the day of the election in Jamaica, the Leader of the New Democratic Party sent a message to the left-wing, pro-Castro prime minister Manley of Jamaica extending to him "all best wishes for today" and he signed it "Ed". In view of the Prime Minister's close friendship and personal relationship with Prime Minister Manley at the time, who through his policies has pounded the Jamaican economy into bankruptcy, in view of the fact that Canada sent Jamaica some $100 million prior to Manley's 1976 election and, since 1968, millions of dollars, in an abortive attempt to socialize that country, is the Prime Minister planning to send the same amount of aid to the new moderate prime minister of Jamaica, Mr. Seaga?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, if the prime minister of Jamaica wishes to address any request to this government, I am sure he will have more dignity than to address it through the mouth of a backbencher who spreads such falsehoods.


Ronald Alexander Stewart: Madam Speaker, I expected that same type of arrogant reply which the hon. gentleman has been giving for 12 years. As the Prime Minister and Mr. Manley were both with Mr. Laski at the London School of Economics, did the Prime Minister send a message of good luck to the now deposed Mr. Manley, or was it included by proxy with the message sent by the Leader of the NDP?


INQUIRY AS TO ANNOUNCEMENT OF INITIAL PRICES
Hon. Don Mazankowski (Vegreville):: Madam Speaker, my question is for the Minister of Transport in his capacity as minister responsible for the Canadian Wheat Board. Given the fact that current prices for export Canadian red spring wheat are in the vicinity of $7 and $8 and the export price for durum is in the vicinity of $8 and $9, and given the fact that the current initial price which has been prescribed by the Canadian Wheat Board is between $4.25 and $5 per bushel respectively, I would like to ask the Minister of Transport when we can expect this government to announce an adjustment in initial prices, and will it also be accompanied by an interim payment?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, it is generally considered that it is wiser first to see if a trend will last before drawing conclusions from it. Second, it is also agreed that it takes time before the money comes into the Canadian Wheat Board account. That is why the minister in charge of the Wheat Board prefers to wait before readjust-

November 13, 1980
ing initial prices to see if the trend will last and, second, to let the money come in before he starts distributing it among farmers. That is the position.


Donald Frank Mazankowski: Madam Speaker, given the fact that this trend has continued since the last adjustment which was made in July, would the Minister of Transport prevail upon the minister in charge of the Wheat Board or do something to jolt him into action? Because the farmers are needing this money very desperately-and it is their money.


Jean-Luc Pepin: Madam Speaker, again I have to repeat that should the Wheat Board do that now, it would have to borrow the money from the banks. The logical thing to do is to wait for the money to come in before he starts passing it around.


HOUSING
Bob Rae: Madam Speaker, my question is directed to the Minister of Finance and it concerns mortgage interest rates. The minister has said on a number of occasions that he regards the high interest rates from which Canadians have been suffering-Canadians now have to pay over 15 per cent on first mortgages and 17 per cent and 18 per cent on second mortgages-to be a temporary phenomenon and that he does not anticipate having to make any changes in public policy to take account of this problem.
In light of the speculation in financial circles that in order to be able to provide five-year mortgages they will have to move to a floating mortgage system, does the minister contemplate any changes in the Interest Act which would make this possible, and is he still seriously putting forward the proposition that high mortgage rates are in fact simply a temporary phenomenon?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, 1 do not recall having made a blanket statement that the current levels of interest rates are temporary. What I have said and repeat today is that as far as interest rates are concerned we have been on a roller coaster for the past several months. We had very high rates which dropped considerably, and they have risen again. Today, for example, the auction of treasury bills showed a slight decrease in the bank rate, and maybe that trend will continue in the future; but I do not think the situation is firm enough at the present time on which to base a long-term policy. It is quite uncertain, and I think that uncertainty has been reflected over the past six months. Certainly over the period I have been Minister of Finance no one has been able to predict with any accuracy the performance in the future of interest rates. If hon. members in the New Democratic Party have a better crystal ball than others, I will be glad to use it.
Oral Questions


ASSISTANCE TO LOW AND MIDDLE-INCOME CANADIANS
Bob Rae: Madam Speaker, 1 think we on this side of the House all agree that it has been extremely difficult to predict many things since the Minister of Finance has taken over as Minister of Finance. There are no crystal balls on this side.
My supplementary question is directed to the minister responsible for CMHC. The minister will know that housing starts are down to the lowest level since the mid-1960s. The minister will also know that there is no certainty at all in the interest rate picture, and we can foresee rates of 15 per cent, 16 per cent and 18 per cent over the next number of months and, indeed, years. The minister has announced a cut in a program from $400 million to $250 million and now to zero. The city of Toronto housing department has just issued a report saying it cannot-


Madam Speaker:: Order, please. The hon. member is asking a supplementary question, and I urge him to be more brief.


Bob Rae: Is the minister in a position, since he is saying he is simply changing priorities, to announce any housing policy which will provide any guarantee to low and middle-income Canadians that they will in fact be able to renew their mortgages and to buy first homes over the next three or four years?


Paul James Cosgrove: Madam Speaker, first of all the public should be aware-and so should the hon. member if he is not-that the trend in housing starts is up. The trend for October was back to starts of 187,000. The trend since June has been upwards. The Minister of Finance has indicated, on the other hand, that the trend today for interest rates is down. We have indicated that we are watching that. We indicated in the Speech from the Throne that we are concerned that people renewing mortgages would be faced with challenges and that we would be prepared in hardship cases to take a look at them on an individual basis.


NATIONAL ENERGY PROGRAM
Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, my question is to the Prime Minister, and it follows a question I asked him on October 31 with respect to possible court action to test the validity of the natural gas tax. I note from the press that the province of Alberta has instituted proceedings in the court. According to the answer given to me by the Prime Minister, there was to have been contact between the Government of Canada and the government of Alberta with respect to the institution of action. Was there contact between the government of the right hon. gentleman and the government of Alberta prior to the institution of any legal action by the government of Alberta?

November 13, 1980
Oral Questions


Marc Lalonde: Madam Speaker, I had the opportunity to talk to the minister of energy of Alberta a few days ago. I tried to reach him, without success, last week, but 1 reached him yesterday morning. He told me at the time that the government of Alberta was considering what legal action should be taken, but that that was under the responsibility of the attorney general and minister of justice. I indicated to him that the Minister of Justice of Canada would certainly be very interested in exchanging views with his colleague from Alberta. I also indicated to him our previous declaration to the effect that we were ready to co-operate with the province of Alberta in expediting this case.
In the papers today I noted that the government of Alberta has indeed decided to refer the matter to the court of appeal, and it asked two specific questions. To my knowledge, however, there has been no consultation whatever with the Government of Canada as to the wording of those questions nor to which courts they should go.


Walter David Baker: Madam Speaker, since the Minister of Energy, Mines and Resources is answering this question, and in the absence of the Minister of Justice, would the minister consider communicating with his colleague to see whether it might be appropriate for there to be some early consultation with respect not only to the questions but also to where the action may be brought? I have in mind a reference to the Supreme Court of Canada, where the Alberta action would ultimately go in any event so that the question could be settled expeditiously and the matter could be out of the way in terms of the discussions which are supposed to take place between the Government of Canada and the government of Alberta.


Marc Lalonde: Madam Speaker, I will certainly act upon the representation of the hon. member. We indicated that we were ready to expedite this process, but it appears that the government of Alberta had decided on its own to go to the court of appeal with the questions which have been indicated. But if the government of Alberta would be willing to go directly to the Supreme Court, I am sure we would be quite accommodating, and I will raise the matter with the Minister of Justice.


ROYAL CANADIAN MOUNTED POLICE
Mr. Jim Schroder (Guelph):: Madam Speaker, I have a question for the Solicitor General, I would like to refer to a report in this morning's The Globe and Mail concerning statements attributed to that minister. On what basis did the minister make the statement that former solicitors general were never informed that the RCMP had been breaking the law since the 1960s?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, I have, of course, seen that article and I am glad to have the
opportunity to indicate that it does not accurately reflect my views. These questions are before the McDonald commission now. Evidence is available to the McDonald commission on which it will be basing its conclusions; and the government and in particular I are awaiting the report of the McDonald commission on this and other matters.


BUSINESS OF THE HOUSE
Walter David Baker: Madam Speaker, I rise on a point of order. I would be grateful if the government House leader would indicate the business of the House. I am particularly interested today in having him establish for us his priorities among the freedom of information bill, the bill respecting judges' salaries and the postal corporation bill. Could he give us some indication of what is the order of his priorities with respect to those pieces of legislation?
[ Translation]


Mr. Pinard:: Madam Speaker, as the hon. member is aware, beginning next Friday, November 21, we shall have either one or two debates on the proclamations tabled yesterday by the hon. Minister of Energy, Mines and Resources (Mr. Lalonde). For this purpose, as I mentioned last week, we have set aside the last six sitting days in November, which means that we can plan only for the period beginning today and ending next Friday, November 21.
If we complete consideration of the bank bill in time, that is before next Friday-and I have every reason to believe, following the consultations that I have had with the House leaders of both parties, that we can expect to get third reading of this bill probably next Monday or Tuesday-we shall have two days to complete the second reading debate on the Post Office bill, begin the second reading debate on the bill concerning the salary of judges, and to try to refer to a committee the freedom of information bill. When we have debated the proclamations, we of course plan on holding the last opposition day, and we shall then sit in committee of the whole for six consecutive days, but on this matter, my colleagues opposite know that we plan on holding these sittings in the first week of December. I shall be able to confirm this within the next few days.


Mr. Knowles:: Madam Speaker, the only comment I wish to make is that I did not understand that that was the order of priority for the three bills coming between the Bank Act and the debate on the proclamations. My understanding of those three bills was that the first one was to be the Post Office Corporation Act and the second one was to be the Freedom of Information Act, leaving the judges' salaries bill at the bottom of that list. I am a little surprised to hear the government House leader put the judges' salaries measure ahead of the
November 13, 1980

freedom of information bill. I hope that the understanding I have is correct, that of those three bills the order will be the post office bill and the freedom of information bill, followed by the judges' salaries bill if there is any time left for it.
[ Translation]


Yvon Pinard: Madam Speaker, I have taken it for granted that, following the request of the New Democratic Party, there will be no second reading debate on the freedom of information bill as I thought they were in a hurry to have this bill referred to committee. 1 must repeat that this bill is still a priority for us and that if members opposite insist on debating it, we shall do so immediately after the debate on the Post Office bill, provided this can be done before November 21. However, I must repeat what I told the hon. member yesterday, that we also place great importance on the bill concerning the salary of judges and that, if we cannot come to an agreement with his party, we intend to call this bill within the next few days.


Mr. Beatty:: Madam Speaker, 1 rise on a point of order relating to the House business. This time last week I asked the government House leader whether, in order to facilitate discussion in this House on second reading of Bill C-42, the postal crown corporation bill, the minister would be prepared to send clauses giving regulatory power to the Crown corporation to the Standing Joint Committee on Regulations and Other Statutory Instruments, as requested in the report of that committee which was tabled in the House in July. As reported at page 4521 of Hansard, the government House leader responded to my question by saying:
Madam Speaker, ! will consult with the Postmaster General (Mr. Ouellet) as soon as possible. But in any case we would much prefer the bill to be sent to committee right away, if possible.
Has the minister spoken to his colleague, the Postmaster General (Mr. Ouellet), and is the government agreeable to following the request of the Standing Joint Committee on Regulations and Other Statutory Instruments, namely, that the regulation-making authority be sent to that committee on second reading at the same time as the miscellaneous estimates committee looks at the substance of the crown corporation bill?


POINT OF ORDER
Pierre Bussières: Madam Speaker, I rise on a point of order to correct an unfortunate slip of the tongue that I made in replying to the question asked by the hon. member for Temiscamingue (Mr. Tousignant). I stated that in the discussions I have held I had
The Constitution
consulted the minister of education, and 1 want it clearly understood that 1 meant that I had consulted our excellent colleague, the Minister of Consumer and Corporate Affairs (Mr. Ouellet), in preparing the bill to repeal the Small Loans Act.


Yvon Pinard: I had
no opportunity to obtain confirmation from the Postmaster General (Mr. Ouellet) for the simple reason that I did not explain to him the whole problem, because I was busy planning the business of the House. My colleague knows that there has been no sitting during four days, and as soon as I came back I attempted to reach an understanding with opposition parties concerning the televising of proceedings in committee, which required all my time.
I now intend to contact the Postmaster General today about this and hope to be able to come back to my hon. colleague with an answer later today or tomorrow.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Mr. Andre Bachand (Missisquoi) moved: for leave to introduce Bill C-620, to change the name of the electoral district of Missisquoi.


Some hon. Members:: Explain.


André Bachand: Madam Speaker, the reason for this bill is that my constituency's name does not correspond to reality. Formerly it was Brome-Missisquoi, it was changed to Missisquoi yet all my constituents still call it Brome-Missisquoi.


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

Yvon Pinard: Madam Speaker, after having had consultations with my colleagues, the House leaders on the other side, I am glad to report that we have come to an agreement with regard to the broadcasting of the proceedings of the Special Joint Committee on the Constitution. I think there is now unanimous consent to allow me to move a motion which, in accordance

November 13, 1980
Order Paper Questions
with our understanding, will be approved without debate. Therefore 1 move, seconded by the hon. member for Nepean-Carleton (Mr. Baker):
That, further to the resolution of this House of January 25, 1977, as subsequently implemented, this House approves the television and radio broadcasting of the proceedings of the Special Joint Committee on the Constitution on the basis of the same principles and practice, mutatis mutandis, governing the broadcasting of the proceedings of the House of Commons, including the concept of "electronic Hansard", provided that any subcommittee of the said committee, shall not be broadcast by television, but shall be broadcast by radio, except the subcommittee on agenda, which shall not be broadcast;
That it be an instruction to the committee that it undertake the aforementioned action as soon as physically possible without disturbing the proceedings of the committee now undertaken or planned;
That it be an instruction to the committee that all decisions concerning the implementation of this order shall be taken only by the committee's subcommittee on agenda; and
That a message be sent to the Senate asking their honours to unite with this House in the aforementioned actions.


Some hon. Members:: Hear, hear!


Madam Speaker:: Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[ Translation]

[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. 403, 1,211, 1,420 and 1,554.
I ask, Madam Speaker, that the remaining questions be allowed to stand.


Mr. Herbert: How many employees were engaged by Crown corporations on March 31 (a) 1977 (b) 1978 (c) 1979 (d) 1980?


David Michael Collenette: Crown Corporations" means the corporations named in schedules B, C and D of the FAA
(a)	(b)	(c)	(d)
Agriculture Canada
Agricultural Stabilization and Agricultural Products
Board	65	66	64	53Canadian Dairy Commission	52	63	57	58Canadian Livestock Feed Board	20	21	21	20Farm Credit Corporation	638	624	626	615Communications Canada	Canadian Broadcasting Corporation	11,342	11,931	11,972	12,032Canadian Film Development Corporation	19	19	22	19National Museums of Canada	994	1,007	1,055	955Social Sciences and Humanities Research Council	-	-	105	105Note: Established on April 1, 1978	Teleglobe Canada	1,121	1,218	1,238	1,293Energy, Mines and Resources	Atomic Energy Control Board	123	147	180	184Atomic Energy of Canada Limited	5,834	5,999	6,563	7,066Eldorado Aviation Limited	49	49	54	42Eldorado Nuclear Limited	1,095	1,308	1,572	1,647Petro-Canada	479	667	2,068	2,408Uranium Canada Limited	-	
Note: UCAN is managed by seven directors, six of whom are senior public servants. All administrative services are provided to UCAN without charge by EMR's employees.
Environment Canada National Battlefields
Commission	23	23	23	21
Finance Canada Canada Deposit Insurance
Corporation	4	4	4	4
Fisheries and Oceans
Canadian Saltfish Corporation	30	32	31	33
Fisheries Prices Support
Board	-	-	-	_
Note: Functions under the Act are administrated by employees of the Department of Fisheries and Oceans.
Freshwater Fish Marketing
Corporation	239	290	287	343
Note: Increased number of employees (d) is a result of extremely successful winter fishing.
Health and Welfare Canada
Medical Research Council	38	37	39	36
Note: These include inderterminate and term employees.
Indian and Northern Affairs Canada Northern Canada Power
Commission	359	310	304	298
Industry, Trade and Commerce
Canadian Commercial Corporation	-	-	28	24
Note: CCC separated from DSS in October 1978. For years 1977 and 1978 functions under the Act were assumed by employees of DSS.
November 13, 1980

Canadian Patents and Development Limited	26	23	25	24
Note: (a), (b) and (c) employees seconded from the staff of NRC.				
Export Development Corporation	272	322	380	436Federal Business Development Bank	1,855	2,062	2,207	2,464National Defence	Defence Construction (1951) Ltd.	217	249	249	213Prime Minister and Privy Council Offices	Economic Council of Canada	132	138	204	150Public Works Canada	Canada Mortgage and Housing Corporation	3,816	3,960	3,848	3,805Note: Contract employees are included.	National Capital Commission	1,050	1,162	877	874Regional Economic Expansion	Cape Breton Development Corporation	4,044	4,365	4,488	4,474Science and Technology Canada	National Research Council	2,987(1)	3,039(1)	2,983(2)	2,976
Note 1: Includes employees subsequently transferred to NSERC and CPDL.
Note 2: Includes employees subsequently transferred to CPDL.
Natural Science and Engineering Research Council	-	-	51	55
Note: NSERC was established on May		1, 1978.		
Science Council of Canada	59	59	59	60
Supply and Services Canada				
Canadian Arsenals Limited	413	405	341	411Crown Assets Disposal Corporation	67	67	69	78Royal Canadian Mint	574	611	671	638Transport Canada	Air Canada	20,511	20,314	21,527	23,000Canadian National Railways	76,412	75,330	74,035	71,326National Harbours Board	2,116	1,956	1,776	1,718Northern Transportation Company Ltd.	184	168	131	137Pilotage Authorities	Atlantic	106	93	91	90Laurentian	84	83	78	81Great Lakes	128	132	135	157Pacific	54	54	55	60St. Lawrence Seaway Authority	1,269	1,249	1,206	1,205The Seaway International Bridge Corporation	20	20	21	21Via Rail Canada Inc.	2	109	3,498	3,574
Note: Became a Crown Corporation on April 1, 1978.
Order Paper Questions


Mr. MacKay: For the current year, how many of the survey interviewers employed by Statistics Canada, under subsection 5(1) of the Statistics Act, were selected through the process commonly referred to as the political or ministerial referral system in the constituency of (a) York South-Weston (b) St. Boniface (c) La Salle (d) York-Scarborough (e) Louis-Hebert (f) Duvernay (g) Montmorency (h) Lambton-Middlesex (i) Winnipeg-Fort Garry (j) Charlesbourg (k) Saint-Maurice (1) Essex-Kent (m) Matapedia-Matane (n) Laprairie (o) Chambly?


Hon.   J.-J. Blais@Minister of Supply and Services: Statistics Canada reports: (a) None; (b) None; (c) None; (d) None; (e) None; (f) None; (g) None; (h) None; (i) None; (j) None; (k) None; (1) None; (m) None; (n) None; (o) None.


EXTERNAL AFFAIRS-SECURITY SERVICE
Mr. Cossitt: 1.	In each of the past Five years, what was the total number of persons working, directly or indirectly, for the security service of the Department of External Affairs?
2.	What is the anticipated number for the (a) current (b) following year?
3.	How many such persons are stationed (a) in Canada (b) abroad?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: 1. 1975-185; 1976-188; 1977-198; 1978- 189; 1979-194.
2.	(a) 156; (b) 156.
3.	(a) 55; (b) 101.


SUPPLY AND SERVICES-OPINION POLLS
Mr. Howie: 1.	Since April 1, 1980, were contracts awarded by the Department of Supply and Services for the conducting of opinion polls and, if so, to whom and in what amount?
2.	Were public tenders called and advertised and, if not, for what reason?


Hon.   J.-J. Blais@Minister of Supply and Services: 1. Yes. During the period April 1, 1980, to October 10, 1980, the following contracts were awarded by the Department of Supply and Services for the conducting of opinion polls.
Name of Contractor
No. of	Total
Contracts	Value
Sorecom Inc.
Goldfarb Consultants Crop Inc.
Inci Inc.
Cdn. Gallup Poll Ltd. Complan Research Assoc. The Canadian Public Affairs Consulting Group Traveldata International
3	$ 34,390
3	306,200
2	116,700
1	12,000
2	23,105
1	12,335
I	35,000
1	85,600

November 13, 1980
Bank Act
2. No. In all cases, the firms were selected by the user departments based on the various firms' expertise and a record of excellent past performance on previous opinion and market survey programs.
[ Translation]


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of 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, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, and motion No. 7 (Mr. Rae), motion No. 8 (Mr. Rae) and motion No. 9 (Mr. Rae).
Madam Speaker:: When the debate was interrupted at one o'clock, motions Nos. 7, 8 and 9 were under consideration and the hon. member for The Battlefords-Meadow Lake (Mr. Anguish) had the floor.


Douglas Keith Anguish: Madam Speaker, I was speaking about the amendments to the Bank Act before the noon break. I referred to my support for the amendment to delete the section restricting employees of Crown corporations from being placed on the boards of directors of banking institutions. I tried to express that these people could offer a great deal to the banking institutions of the country because of their expertise in running corporations, in some instances large ones. Not only would they be profitable enterprises, but at the same time they would have some degree of service to the public.
It made me think back to the time when I first had to acquire a mortgage for myself and my wife to take over a home. At the time of the purchase, the cost of the home was approximately $38,000 and the interest rate was locked in at 12.75 per cent over a 25-year amortization period. Over that 25 years the cost of owning that home would be well in excess of $100,000. Certainly most of the cost is eaten up by the
interest rates of the banks, and they have very little concern for the service they are actually providing.
I should like to go back further than that time, to a time when I was involved in adult education in the province of Alberta. At that time under some of the life skill programs we looked at budgeting for individuals and families and tried to get people involved in adult education to learn more about basic education and ways of living. When we talked to them about budgeting, we were talking about it over the lifetime of a person, that an average Canadian could expect to have an earning power of somewhere in the area of $200,000 to $250,000.
Since that time and over the last ten years, this has changed quite extraordinarily. For example, if one wants to buy a home today in the area of $60,000 to $80,000, by the time it is actually paid for it would amount, at today's interest rates and the way banks handle mortgages, to more than the expected earning power of individuals in 1970-71. Certainly it does not provide a very good picture for Canadian families who are looking at buying first homes, something which should be a very basic necessity of the people in our country.
It is time to make the banks more responsive to the needs of individuals and families. Not only should they be oriented toward maximizing their profits on the money of people who have savings accounts within their banks, but they should be able.to attain some level of service similar to that provided to the Canadian public by the boards of directors and employees of Crown corporations. Also I mentioned the names of individuals who could work very effectively on the boards of directors of some banking institutions.
1 think other sections should be deleted, and I support the amendment to the section which indicates that public employees cannot hold positions on the boards of directors of banks. There are some very good public employees who could provide meaningful input on the boards of directors of banks. These people have dealt with the banks and can look at them in a somewhat different perspective from the view of the usual corporate elite who control banking institutions.
Although some of the people involved on boards of directors could be considered common, average individuals, certainly the overpowering balance is not with that group. It is with a group which has not had to deal with banks in the same manner as average Canadian citizens have to deal with banking institutions. Public employees could have a meaningful input because of their training as public employees and the expertise they have acquired in working for the Government of Canada, in this instance, or for various provincial governments across the country. They could provide a scope of experience which very few people have in the private sector and in banking institutions. Their perspective is more from the point of view of the private sector; certainly that is dominant. Some input or training from the standpoint of public employees of Crown corporations could be very beneficial to the understanding of how governments operate and how organizations are structured to serve the public. This would be beneficial to our banking institutions and their boards of directors. I would not
November 13, 1980

want to see the government discriminate against these people by not allowing them to have that meaningful input.
Before my time expires, I should like to reiterate what I told government members prior to the noon break. We want to see some substantial changes in the Bank Act. We have talked about a few of those changes today and others have been talked about by members of the opposition. 1 think they are very necessary and the government will have to pull together some of these recommendations, changes and amendments to form an effective Canadian banking community to serve the people of this country in the manner to which they are entitled. The deadline is coming very close. November 30 is not that far off; we are only a few weeks away. The government must incorporate some of these very substantive changes, not just the cosmetic ones it has proposed, in order for my party and perhaps other members of the opposition to support the Bank Act as it now stands. Before we as members of Parliament can support the Bank Act, we want to feel that Canadians are receiving what is justly due them from banking institutions and be satisfied as to the level of service they should be receiving. Unless those changes are made to the Bank Act, I think November 30 will come more rapidly than even members of the government expect.
We will propose other changes and amendments-and I imagine members of the Conservative party will propose some as well-to make the Bank Act the responsive document it should be. It should serve Canadians so that they are not dealt with harshly. The people who control the banks should be average Canadian citizens who are not interested in maximizing profits alone, so that the people who are required to deal with banks can attain the necessary level of funding they require to buy homes and purchase automobiles or other forms of transportation which are so necessary to our Canadian way of life.
With those comments, I would ask the government to give very careful consideration within the next couple of weeks to some of the amendments proposed by my party to the Bank Act so that we may in good conscience consider supporting the government on this act, the reform of which we have talked about in this House for many years.


Pierre Bussières: Mr. Speaker, I shall be very brief. I just want to point out to the previous speaker that the changes made at the committee stage were not only "cosmetic", to use his expression, but substantial changes which happened to have been suggested to us by colleagues in his party, namely the hon. member for Broad-view-Greenwood (Mr. Rae) and the hon. member for Comox-Powell River (Mr. Skelly), and by the hon. member for Edmonton West (Mr. Lambert) as well as by the Liberal members sitting on the committee.
In-depth changes have really been made in the present legislation. Indeed, the committee made the corrections needed
Bank Act
to have an act that could best serve the common good; it proposed those amendments some of which had elements of substance. I am convinced that if the hon. member went to the trouble of reading the other motions to be put before us, he would see that the government as well is proposing amendments which are much more than mere cosmetic additions, again to use his expression, mere applications of make-up on pale cheeks or lipstick on pink lips.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I am puzzled why the government is so hesitant to support this very simple amendment, which provides that officers or officials of Crown corporations be permitted to sit on the boards of directors of banks. There are many Crown corporations in this country. Many of them were established years ago by both Liberal and Conservative governments and they are now large, successful organizations. To name a few, there is Ontario Hydro, which was established more than 50 years ago by a Conservative government and which is one of the largest, most successful organizations in this country. Then there are the telephone systems of the provinces of Manitoba, Saskatchewan and Alberta. In Manitoba the publicly-owned telephone system was established by a Conservative government headed by Sir Rodmond Roblin, I believe, back in 1908. These are very efficient organizations and their senior officials are doing as effective a job for their companies and the people they serve as any private corporation.
Under the legislation as it exists today, the president of CNR, for example, could not be a director of a bank, but the president of CPR is, in fact, a director of a bank as well as a host of other companies. Mr. Sinclair, the president of CPR, is also the head of Canadian Pacific Investments, CP Air, Cominco, Canadian Marconi, MacMillan-Bloedel, Seagram Company, Sun Life, and I could go on and on. I see no reason why senior officials of Crown corporations which are playing an increasingly useful and vital role in the life of the provinces and the country as a whole should be discriminated against in a way in which the directors and senior officials of private corporations are not.
The only reason I can find is the one which we in this party know so well, that the disposition of both the Liberal party and the Conservative party is that anything which is done in the private sector is good and most things done in the public sector are bad. If the minister wishes to make the banking system work more effectively, I suggest he encourage the heads of some of the Crown corporations which I have mentioned, and many more which I have not mentioned, to participate in the activities of the banks which play such a major role in our country.
I know I speak for the members of my party when I say we have a good deal more faith in the objectivity, the unbiased approach, the goodwill and good thinking of officers of Crown corporations than we have in the officers of the privately-owned corporations who, quite properly, are more interested in protecting their interests and the interests of their shareholders. I urge the minister and the government to give serious and

November 13, 1980
Bank Act
favourable consideration to permitting this amendment to be added to the bill.


Donald Alex Blenkarn: Mr. Speaker, I had not intended to speak on these three amendments. The amendment contained in section 35(1 )(n) on page 33 of the act refers to ministers of the Crown "in right of Canada or in right of any province". Clearly, the mover of the motion should agree that it would be a conflict of interest if a minister of the Crown were to sit on the board of directors of a private bank.
As I pointed out earlier, this statute directs the control of private banks. If there is to be any effective conflict of interest legislation at all, a minister of the Crown must be prohibited from being a director of a private bank. Indeed, any sense in conflict on interest guidelines for ministers of the Crown would make that subsection unnecessary. On the other hand, if it were taken out it would indicate that the government is allowing ministers of the Crown to be directors of a private corporation, and I am sure that my friend in the New Democratic Party would not want that to be the case.
Clause 35(1 )(m) deals with an agent or an employee of Her Majesty the Queen in right of Canada or a province. In this case I have some sense of agreement with the NDP. But surely an employee of the Crown directly would be or could well be in conflict of interest if he or she were to take a position on the board of directors of a private bank. After all, it is the duty and obligation of government to regulate these private corporations referred to as chartered banks. It strikes me that it would be improper for a person who is an employee of the government, particularly of Her Majesty, to be also an employee of a bank. Surely, Her Majesty would require that employees who are likely to be appointed directors of banks work exclusively for Her Majesty. In all probability the type of people who are likely to be appointed directors of banks would not be junior employees. They are people who qualify, in accordance with bank charters, shares and so on in a bank, to be a director, people who would lend expertise to the directorship of the bank. Therefore, they are likely to be people in a senior position in government. It would strike me as improper that they should be directors. With respect to these two amendments, Mr. Speaker, I cannot support them as I think they are improper.
I should like to deal now with Crown corporations about which a great many sensible things have been said already. There are some major Crown corporations where the government has deliberately tried to divorce itself from the control of policy. It may be to the advantage of those Crown corporations to be represented on the board of directors of a bank much the same as any other independent business corporation might be represented.
There is a very large oil company in this country called Petro-Canada. Can we say that a senior officer of Petro-Canada may not be a director of a bank, whereas a senior officer of Imperial Oil or some competing company may? That certainly would give more rights and privileges to private
companies than to Petro-Canada. As members of the New Democratic Party know, I do not greatly favour the massive development of Crown corporations but it has been the policy of this and preceding governments to impose certain large obligations on Crown corporations, some of which compete directly with the private sector. Air Canada is a corporation that the government claims it is not trying to direct. If that is so, then perhaps an officer or employee of Air Canada could be a director of a bank. That is particularly so when some Crown corporations like Air Canada or Canadian National Railways go to the marketplace to borrow fairly large sums of money. It could be to the advantage of those corporations to have representation on the board of directors of a bank and, of course, it could be to the advantage of a bank to have on its board of directors representation from a Crown corporation which may be one of its major customers. It may be advantageous to the government if it were to rethink the question of Crown corporations and this amendment, rather than just vote it out completely.


The Acting Speaker (Mr. Ethier):: Is the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Ethier):: The question is on motion No. 7 in the name of the hon. member for Broadview-Green-wood (Mr. Rae). All those in favour of the motion please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Ethier):: All those opposed, please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Ethier):: In my opinion, the nays have it.


Stanley Howard Knowles: On division.


The Acting Speaker (Mr. Ethier):: I declare the motion negatived on division.
Motion No. 7 (Mr. Rae) negatived on division.


The Acting Speaker (Mr. Ethier):: The question is now on motion No. 8. All those in favour please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Ethier):: All those opposed, please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Ethier):: In my opinion, the nays have it.
November ! 3, 1980


Stanley Howard Knowles: On division.


The Acting Speaker (Mr. Ethier):: I declare the motion negatived on division.
Motion No. 8 (Mr. Rae) negatived on division.


The Acting Speaker (Mr. Ethier):: The question is now on motion No. 9. All those in favour please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Ethier):: All those opposed, please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Ethier):: in my opinion, the nays have it.


Stanley Howard Knowles: On division.


The Acting Speaker (Mr. Ethier):: I declare the motion negatived on division.
Motion No. 9 (Mr. Rae) negatived on division.


Bob Rae: Motion No. 10
That Bill C-6, an act 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 amended in clause 2 by striking out lines 22 to 24 at page 34 and substituting the following therefor:
"director of the bank."


Bob Rae: Motion No. 11
That Bill C-6, an act 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 amended in clause 2 by striking out lines 41 and 42 at page 56 and substituting the following therefor:
"corporation."


The Acting Speaker (Mr. Ethier):: Perhaps I should indicate to the House that these two motions are grouped for debate but will be voted on separately.


David Orlikow: Mr. Speaker, this is a very important amendment, in our view, because we recognize the crucial importance of the banks in the economic life of our country. The big five banks have between them assets of over $200 billion which they themselves control or control in association with other major corporations in this country.
If we look at the corporate structure of this country and consult the Financial Post Who's Who of directors, we see how the interlocking directorships operate, how virtually all the large corporations are tied in with one or more banks and how senior officers of those corporations are also directors of the largest banks. They can use their position and influence with the banks to get the kind of financing they need to increase corporate concentration in this country.
As an illustration of this, Mr. Speaker, 1 would point to the Thompson interests which have expanded in recent years. It
Bank Act
has taken over one of the oldest companies in the country, the Hudson's Bay Company and has taken over many newspapers, including the Toronto The Globe and Mail and others in the FP chain. It was able to shut down the Winnipeg Free Press, a newspaper in my city which was just about as old as the city itself. It is no coincidence that Kenneth Thompson is a director of the Toronto-Dominion Bank. If he needed financing to help him in these acquisitions-which I suggest is not necessarily, to put it mildly, in the interests of the people of Canada-it would be to his advantage to be a director of the Toronto-Dominion Bank.
What we have seen in recent years because of the kind of business and financial system we have in the country and because so many of the larger corporations work together, having directors on each other's boards, is a continual increase in the acquisition of smaller Canadian-owned companies by larger companies and multinational corporations. That has not been good for the country, Mr. Speaker. We have witnessed the worsening of regional disparities, accompanied by increasingly high unemployment. In fact, at the present time we probably have the highest rate of unemployment of any of the western industrialized countries.
In his budget the Minister of Finance (Mr. MacEachen) told us that things are going to be worse, that there will be another 1 per cent unemployment in 1981. That means another 100,000 people unemployed, Mr. Speaker. It means that the real number of unemployed people in this country will be over one million in 1981.
We have seen the percentage of the work force in Canada that is engaged in manufacturing-and there is no industrial country whose economic welfare is not very largely determined by the strength of the manufacturing sector-consistently decline year by year. In 1970, 26 per cent of the work force in Canada was engaged in manufacturing. By 1979 that figure had dropped to 19 per cent. In 1970, 21 per cent of our exports were manufactured goods; today it is just 10 per cent. In 1970, Canada had a $3 billion deficit in manufactured goods and last year that deficit was $11.5 billion.
It is not surprising why the makers and shapers of our economic life are busy gobbling up one company after another, not because it adds anything to the productivity of this country but because it gives them more power and clout. So why would they be concerned about manufacturing? I ask the minister what benefits did the people of Canada get because the Thompson interests bought the Hudson's Bay Co.? What benefits did the people of Canada get because the Bronfman interests bought Brascan? Not one per cent more in the way of increased productivity was produced by any of these acquisitions. Part of the reason for this kind of thing is because the system we have encourages top officers of Canada's largest corporations to be directors of other corporations. It particularly encourages them to be directors of banks. I have evidence here.

November 13, 1980
Bank Act
I know some members will just push aside my argument by saying it is just another socialist argument. But I want members to think about what I have been saying today. Even in such a prestigious newspaper as The New York Times, there was an article commenting on the recent merger activities in Canada. Regarding Canada's banks and their interlocking directorships, the article reads as follows:
The concentration of banks is so great and the alliances of companies with specific banks so strong that a single bank can find itself financing both the suitor and the sought. Such was the case last fall for the Bank of Commerce when Brascan went after Woolworth's.
The banks with their corps of 60 or 70 directors each and their circling clans of corporations also provide the detailed intelligency system so vital in the fraternity that is Canada's business establishment. This, and a system of interlocking directorates, provide the tips, the data, the shared experiences and, above all, the connections that smooth Canada's merger movement.
It is no coincidence, for instance, that Consumers Gas and Hiram Walker both use Toronto-Dominion, where Hiram's chairman, H. Clifford Hatch, is a director. Many in this network grew up at the same elite schools together, such as Upper Canada College. They join the same clubs, such as the Toronto, Ontario or Albany Clubs. Their children marry within the network.
It did not take a great deal of work to look into some of the people involved in these kinds of interlocking directorships. What we see is the close connection between the banks and some of the largest corporations in this country. Some members in this House may have had an opportunity a couple of weeks ago to see a segment of the television program called "The Canadian Establishment", produced by the CBC. In Saturday Night one of the producers wrote an article in which he complained about the difficulties he had in getting people to agree to be televised. I thought as I watched the program that these people should have paid the CBC for showing them in such a favourable light.
A whole hour was spent on Ian Sinclair, chief executive officer of CPR. He is also a director of the Royal Bank. Let us take a look at some of the other corporations of which he is a director. They are as follows: Canadian Pacific Investments Ltd; Canadian Pacific Air Lines; Midland Simcoe Elevator Co; Cominco Ltd; Canadian Marconi; MacMillan Bloedel Limited; Marathon Realty Co; Sun Life Assurance Co; Union Carbide Canada; and the Chase Manhattan Corp. This latter one shows the connection with the international banking community.
Let us look at some of the other members of the board of directors of the Royal Bank of Canada. The chairman is W. Earle McLaughlin. I am not going to take more than the time I have to put the entire record in Hansard, but I will read just a few of the corporations of which Mr. McLaughlin is a director. They are as follows: Sun Alliance Insurance Company; the Algoma Steel Corporation; Allied Chemical Canada; Canadian Pacific-of course, along with his friend Mr. Sinclair-General Motors Corporation; Power Corporation; Standard Brands.
The vice-chairman of the Royal Bank, Mr. Jock Finlayson, is a director of the Royal Bank of Canada Trust Corporation; PanCanadian Petroleum Ltd; Royal Insurance Company, and Sun Life Assurance Company.
Let us look at the Canadian Imperial Bank of Commerce whose chairman and chief executive officer is Mr. Russell Harrison. He is a director also of Canada Life Assurance Co; Dominion Realty Co; Falconbridge Nickel Mines Limited and Royal Insurance Company.


Donald Alex Blenkarn: These are all good companies.


David Orlikow: They are all good companies; that is just the point. But I would hate, Mr. Speaker, to be the head of a small company trying to complete with one of these large companies. These are the people who my friends in the Conservative party are supposed to represent, namely, the small businessmen. But what are they doing? The Tories are mocking me because I am saying that these big corporations are using their connections with the bank and taking unfair advantage of the small companies.


Donald Alex Blenkarn: What evidence do you have of that?


David Orlikow: The hon. member for Mississauga South (Mr. Blenkarn) asks what evidence do I have.


Donald Alex Blenkarn: You do not have a tittle of evidence.


David Orlikow: Instead of his constant asinine braying, if the hon. member would keep quiet for about 30 seconds I can tell him to look in any newspaper in Canada where he will find articles about bankruptcies. Bankruptcies are at an all-time high rate in Canada. Part of the reason why small companies are going bankrupt is because they cannot compete with the giants. The giants have the support of the banks, and that is who the member for Mississauga wants to represent instead of his constituents.


Mr. Kempling:: That is all socialist rhetoric.


David Orlikow: Let us take a look now at the Canadian Imperial Bank of Commerce. Let us see how its directors interlock with most of the giant corporations in Canada. As I said, Russell Harrison is the chairman and chief executive officer of that bank. He is also a director of Canada Life Assurance Co; Falconbridge Nickel; Royal Insurance Company. Mr. Lawrence Greenwood, the executive vice-president, is a director of Kinross Mortgage Corp, Imperial Life Assurance, and of Liberty Mutual Insurance Co. Mr. J. D. Leitch is a director of Upper Lakes Shipping Ltd; American Airlines Inc; Dominion Foundries and Steel; Massey-Ferguson. I am not objecting to Massey-Ferguson getting the Financing it needs to stay in operation-


Donald Alex Blenkarn: I hope not.


David Orlikow: The hon. member says he hopes not. But I wonder how objective Mr. Leitch will be as a director of the Canadian Imperial Bank of Commerce if he is asked to advance money in the form of a loan to Massey-Ferguson when he is also a director of that company. I wonder which hat he wears. I wonder how he can protect the interests of the
November 13, 1980

depositors in the bank and see that their money is not advanced for a bad loan.
Then we have W. F. McLean, a director of Canada Packers Limited, Canadian General Electric Company, the Steel Company of Canada. From my own city, we have George Richardson of James Richardson and Sons, the Fludson's Bay Company, Green Valley Fertilizer, Marine Pipeline, Fludson's Bay Oil and Gas, and Inco Limited. Those are just a few of the directors of the Canadian Imperial Bank of Commerce.


Steve Eugene Paproski: Did they donate to your campaign fund?


David Orlikow: I am sure they donated more to the hon. member's than to mine. I have not seen any of that money, nor do 1 want to.
We now come to the Bank of Nova Scotia. Cedric Ritchie is a director of Empire Realty, Canada Life Assurance, the United International Bank and Olympic Trust. The deputy chairman, George Hitchman, is a director of Algoma Central Railway, Empire Realty and Jannock Corporation.
I do not know whether the next one has resigned or not, but the new Lieutenant Governor of Ontario, that great Liberal fund raiser, the Hon. John Aird, was a director of the Bank of Nova Scotia and also the director of Algoma Central Railway, Consolidated-Bathurst, Domglas Incorporated, the Molson companies, National Life Assurance Company and Petro-Canada. Somebody slipped. I do not know how he can be a director of Petro-Canada and a director of a bank under the provision which states that a senior officer of a Crown corporation cannot be a director of a bank.
We now go to another of the big five, the Toronto-Dominion Bank. The chairman and chief executive officer, Richard Thomson, is also a director of Cadillac Fairview, one of the largest real estate corporations, Prudential Insurance Company, Eaton's of Canada, and Texas Gulf. J. Allan Boyle is a director of Aetna Casualty, Excelsior Life and Jannock Limited.
Looking at the Bank of Montreal, we see that the chairman and chief executive officer, Fred McNeil, is a director of Canadian Canners, the Dominion Life Assurance Company, and the Seagram Company. Among his directors is Charles Bronfman who, as we all know, has tremendous interests in a whole range of corporations.


Steve Eugene Paproski: He has a friend over on that side.


David Orlikow: I am sure he has friends in most parts of this Parliament.


Steve Eugene Paproski: Didn't he take somebody for an aeroplane ride, or was it just for a ride?


David Orlikow: Let us summarize this. We see on the board of directors for Canadian Pacific the following directors of banks. From the Royal Bank we see Mr. McLaughlin, as well as Mr. Bank Act
Pare and Mr. Pratte. From the Bank of Nova Scotia, we see T. G. Rust, F. H. Sherman, R. D. Wolfe-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but his allotted time has expired.


Bob Rae: Mr. Speaker, I wish to thank the hon. member for Winnipeg North (Mr. Orlikow) for putting on the record the simple fact that we live in a highly concentrated economic world where fewer and fewer actors control the capital markets. Over the past few years we have seen the phenomenon of far greater merger and corporate concentration activity than before.
The hon. member for Winnipeg North mentioned the relationship between Massey-Ferguson and the Canadian Imperial Bank of Commerce. It is no secret. In fact any information 1 have is what has been made available to us through the newspapers, to the effect that the Canadian Imperial Bank of Commerce has loaned hundreds of millions of dollars to Massey-Ferguson. It is no secret that when this kind of thing happens, it creates a relationship between a lending institution such as a bank and a company like Massey-Ferguson. It is an intensely close and almost dependent relationship.
It is because of our concern regarding what happens to the financial system when there are these close interlocking directorates close links, and the large loans that are involved, as well as the size of the transactions and the companies, that we have put forward these two amendments. It is not possible for us to go on in this way. The government just accepted the principle contained in motion No. 11. There was an argument from the government side two parliaments ago. They were prepared to accept the principle that bank employees should not be directors of companies incorporated under the laws of provinces and the laws of Canada. They accepted that principle.
They never dealt with the problem that directors of corporations are the directors of banks and that the presidents and chief executive officers of our largest companies are also the directing influence of our chartered banks. As the hon. member for Winnipeg North pointed out, there have been countless studies ranging from the one mentioned in the New York Times back to the studies of Professor Porter in the sixties, to Professor Wallace Clement in this decade. They document beyond a shred of a doubt the fact that we in Canada live in an economic system where there are a relatively few important actors who have tremendous economic power and the ability to control the system in a way that simply cannot be disputed any longer.
My friend mentioned the size of the chartered banks. The banks have assets of over $200 billion. The five chartered banks control almost 95 per cent of business and industry. That is what we are talking about. We are talking about companies making loans for hundreds of millions of dollars. We are talking about decisions affecting the investment future of our country which are made by a relatively small group of people, in fact far fewer in number than those who make up the House of Commons of Canada.

November 13, 1980
Bank Act
In that context we should not continue with the Liberal-Tory illusion. The Parliamentary Secretary to the Minister of Finance (Mr. Evans), in regurgitating Milton Freidman, said earlier today that government should not be directly involved, that we should not be meddling in the banking industry, and civil servants do not know anything. He said they should not be involved and bureaucrats should not be involved. That is a remarkable statement by someone whose constituency consists of the Public Service of Canada. It is astonishing that he should make that kind of attack on the public servants of Canada. That is what we heard. It is on the record. He said we do not want to have the bureaucrats and the public servants of Canada involved in these kinds of decisions. That is the view which is contained in this bill.
The view is that there will be no control over the ability of chartered banks to place their top officers on the boards of directors of the top Canadian companies, which are the largest companies. These are companies which get larger and larger. Just as pike get larger from eating minnows so, too, our largest companies get larger and larger by eating smaller companies. They do not get larger by creating new jobs but simply by taking over other companies. That is the state of economic activity in Canada today. There are no controls on this phenomenon. We had the government Royal Commission on Corporate Concentration.


David Orlikow: That was a hoax.


Bob Rae: As the member for Winnipeg North says, that was something of a hoax. Nevertheless, it is interesting to note that even that Royal commission pointed to the problems created by having as concentrated a banking system as we have, and by having the very peculiar situation in which we find ourselves in Canada. We find the level of concentration, the degree of power and the degree of control, are so great.
I think it is remarkable that the government would choose to maintain the mythology that there is a competitive system out there and that the interests of smaller businesses are served just as well as the interests of large businesses by this system. They say there is no competitive advantage to be given to large companies, and the member from Mississauga asked us to give an example. I will give him an example. The very fact of life is that those companies which get the lowest rates of interest are the biggest companies in Canada. This is something he knows, as well as everybody else in this chamber knows.
What companies are paying the prime rate, Mr. Speaker? It is not the small companies. It is not the companies which provide for the employment of most Canadians which get prime rate or prime rate plus one. Let us not fool around. Those companies which get prime rate or prime rate plus one, or which manage to take advantage of the government's open door policy on income debentures, which existed before 1978, were the largest companies in Canada. They are the companies that are getting the advantage of close to prime rate, and not the small business communities. There is nothing in this Bank
Act which protects the interests of small business to see that they have equal access and equal representation on the boards of directors.
When you talk to members from the small business communities and those groups which made representations to this finance committee, they will point out the difficulties they face because of the fact their views and their representations are not being taken seriously and their bona fides are not accepted with as much currency as those of the largest companies of Canada.
I am aware that the government has changed its mind with respect to motion No. 11. I know there were very strong representations made to it by the banking, financial and the large business communities, who said that they want to have these people on their boards. Well, if one had confidence, what would happen would be those large corporations would diversify. Those large banks would diversify their directors and they would be genuinely participating in the life of the whole community rather than simply confining themselves to the economic interests of the few and the large companies that they really serve. Then, if that were to happen, I would say it would be fine. But all the evidence which has accumulated in the last ten years points to the fact that the old boy network has replaced the consumer as king of the marketplace. That hard fact has not been recognized by the government.
I am disappointed that they moved away from the principles contained in motion 11.1 am very disappointed that they are not prepared to accept motions Nos. 5 and 10. They should be prepared to put in some countermeasures to ensure that the interests of the consumer and the small businessman are protected so that we can unlock the tyranny which is caused by these interlocking directorates. Thus we can get at the problem of competition. It will not be solved by simply waiting. We have been waiting for a long time for the kind of competition legislation which has been promised. It is promised on an almost regular basis every six months by the Minister of Consumer and Corporate Affairs in order to fend off the questions which inevitably follow the corporate mergers that take place at regular intervals. The problem will not simply be solved by doing that. The Bank Act has a role to play in regulating competition and in ensuring that this corporate concentration is stopped.
If the government is not prepared to accept these amendments then one would have thought that they would be prepared to put in others. But they are not prepared yet to take on the chartered banks and the kind of corporate power which they possess. I think that fact should be exposed and it should be seen for what it is.


Pierre Bussières: Mr. Speaker, I would like to explain very briefly why we shall oppose the two motions introduced by the hon. member for Broadview-Greenwood (Mr. Rae). If we examine these motions, we see that one of them would prevent members of the boards of major financial institutions from becoming mem-
November 13, 1980

bers of the boards of banks. The other amendment has the opposite effect in so far as it states that a member of the board of directors of a bank could not become a member of the board of a Canadian business firm.
Members of the NDP have talked at length about the possibility of conflicts of interest. They have given the example of a bank linked with a well known business company. However, I should like to remind the House that when the director of a Canadian company is a member of the board of directors of a bank which is asked to consider a loan to this company, the provisions of clause 52 of the bill state clearly that this director shall abstain from attending the meetings concerning this application for a loan.
This is a provision which removes-


David Orlikow: I would like to ask the minister a question. I wonder if the minister is aware of the fact that, according to an editorial which appeared a few weeks ago in The Globe and Mail, four directors of Massey-Ferguson were also directors of the Canadian Imperial Bank of Commerce, which loaned to Massey-Ferguson something in the neighbourhood of $400 million. Does the minister think that they played no part in the decision of the bank to loan that money to Massey-Ferguson? Does he think that even if they went through the charade of not voting on that loan, they did not have some influence on the other directors of the bank?


Pierre Bussières: Mr. Speaker, the best reply to this question is clause 52 of the bill which states the following:
A director of a bank shall not be present or vote at a meeting of the board or any committee thereof during the time at the meeting when a loan or advance to himself or a firm of which he is a member or a corporation of which he is a director is under consideration-
The law regulates application of the Bank Act and the operations of the boards of banks in our country. Without evidence to the contrary and without confirmed charge that this is not the case, I must conclude that the laws of our country have been followed until now. I believe this is the protection we have given the public in the Bank Act. There has been a lot of talk about concentration in the Canadian banking system. Each time this argument is raised, Mr. Speaker, a great number of financial institutions are forgotten even though they are available to Canadians and even though they are very important in view of the amount they hold on deposit and invest. I need not remind hon. members of the existence of caisses populaires and credit unions. Through their various investment instruments, they participate financially in several companies and play an extremely important and leading role in our society. In my opinion, the type of caricatures that was drawn of administrators and bankers in no way reflects the realities of our society.
Increasingly, Canadians who are developing an interest in finance are people like us who have special expertise in the
Bank Act
field of finance and banking affairs, and their work is excellent. Our purpose as MPs, in studying a bill such as this one, is first of all, to give those people the best possible tool with which to work for the common good of our society, and second, to give them clear guidelines to spare them, in the performance of their work, being faced with conflicts of interest or such situations as might harm the common interest. The hon. member for Broadview-Greenwood did point out that at one time the government did consider going ahead with a proposal similar to the one he is putting forward. However, at the pressing request of Canadian business-I believe the matter was brought up in committee, the hon. member for Edmonton West (Mr. Lambert) can correct me if I am wrong-in light of those requests the government came back and said: Well, listen: it would be detrimental both to Canadian businesses to deprive them of the possibility of benefiting from the expertise of bank directors, and to the development of our Canadian financial institutions to prevent Canadian business directors becoming members of the boards of directors of banks, and so enable the business community to exchange common experiences and enlighten each other. I feel, therefore, that this is in the interest of the development of both our businesses and industries, and finally for the good of our society. We have kept those provisions in the pursuit of that objective and shall therefore have to reject the amendments moved by the hon. member.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I have been listening with a great deal of interest to the previous comments, and there are a number of things I would like to say about them. I feel very privileged to have this opportunity to speak about this very important piece of legislation. We have waited long for it, and we recognize, as previous speakers have indicated, just how crucial this act is to directing the development of Canada economically. I must say, though, that I am quite dismayed in many respects by the lack of interest with regard to accepting what I feel are very appropriate and necessary amendments to the existing act.
It seems that we are debating an act which does not address seriously the concerns of the financial communities of the 1990s and 1980s. The other day a speaker referred to this as horse collar legislation concerning itself with the financial world of the past, recognizing, perhaps, the financial world of the present, but certainly not providing legislation for the next decade unless some very serious changes are included.
I would like to talk about some of those necessary amendments. We are presently addressing ourselves to motions Nos. 10 and 11, but I think first we should recognize the very privileged position in which our Canadian chartered banks find themselves. Our financial institutions essentially direct the economy in certain directions. They decide what types of projects will go ahead, what types of projects will be encouraged in terms of Canada's economic development, and

November 13, 1980
Bank Act
the parts of Canada where there will be support, nurturing and development.
Because of that privileged position and because of the extremely important role the banking institutions play in the development of Canada, we in the New Democratic Party feel that there must be steps taken to ensure greater accountability on the part of our banks and to ensure that the banks are operating in the best interests of Canada and Canadians. I do not think the present legislation begins to address that seriously.
Previous speakers from the New Democratic Party have made comments about conflict of interest situations. As politicians we are very sensitive about the concept of conflict of interest. As previous speakers have indicated, we recognize that when there is a conflict of interest which is obvious, the individual involved is not permitted to vote on that particular issue. That is fine. That covers the bases. There is no question about that, but all of us in this House know-we have all been involved in the political process long enough-that one can be extremely influential in decision-making without having to participate directly in the vote. In many, many ways all of us attempt to influence legislation without perhaps even involving ourselves in a very direct way.
As a member of the New Democratic Party I reflect my party's views, and I feel that we need some public participation in the banking business. We see public participation in the banking business in some of the most progressive and dynamic countries in the world in terms of their economies. I am speaking about countries such as West Germany, which is generally held up around the world as a model of a first-class entrepreneurial economy.
We see public participation in banking institutions and so forth in France. We see public participation in banking in the United Kingdom and in the Scandinavian countries. These are not countries in which economic development is hindered or retarded by public participation. Indeed, as I indicated earlier, we are talking here about some of the most progressive and dynamic economies in the western world.
No such accountability exists in Canada. Banking institutions in Canada do not in any way adequately reflect the views of the Canadian public, nor do they satisfy the interests of the Canadian public.
Motion No. 10 is important with respect to eliminating interlocking directorates. Such interlocking directorates include George Weston Limited, Cominco, Dominion Construction, Bell Canada, Inco Limited, Canadian International Paper Company, Kaiser Resources, Mobil Oil, Westinghouse Canada, Shell Canada, and one could go on and on. When one considers and analyses just who these directors are and what they represent, there is one very serious omission. Being progressive now, we see that some of the banks have housewives on their boards. Although this is certainly a token gesture, we can say that it is a small step toward recognizing that half of the Canadian population happens to be women who have very special sets of interests.
However, there is a group which is not represented in the directorships of the banks of Canada.


An hon. Member:: The NDP.


Nelson Andrew Riis: It is a small group of people who happen to account for about 42 per cent of the employment in Canada, who happen to represent about 930,000 small businesses across the country, who happen to provide the entrepreneurship which is 100 per cent Canadian and who, according to recent reports, have provided some of the most creative programs. They are developing new technologies for this country. They represent the flavour of our Canadian communities because they are part of our Canadian communities. I ask anyone in the chamber to indicate one board which includes a representative of the small business community. Small business is eliminated, and as the previous speaker indicated, one of the points of having these various individuals on boards of directors is to provide their input because they lend a certain expertise.
Has the small business community nothing to add during decision-making times? Once again this government has shown itself to be extremely insensitive to this crucial sector of our country. I know ministers stand up, particularly at luncheons, and tell the small business community that they are the saviours of the small entrepreneur, that they are the people who support the concept of small business in Canada. The Tories have the guts to stand up at these luncheons and make the same kind of comment, that they are the party which supports the small entrepreneur in Canada. I say to them: show me the legislation to prove that. I suggest that if you were to look at the legislation-no matter whether it is legislation of the Tory government or of the Liberal government- you would find that at present there exist 200 programs to assist business in Canada which are sponsored by the federal government. But I would ask people to reflect on how many of those programs are available to the small businessman. Out of the 200 programs, only two are designed specifically for the small entrepreneur.


An hon. Member:: Shame!


Nelson Andrew Riis: That is 1 per cent of federal government programming. That is the kind of support, encouragement, and leadership that the present Liberal government and the previous Tory government were prepared to give to the small businessman in Canada! It is a sorry state of affairs. If the small business community ever wake up and look carefully at that legislation one day, look carefully at the financial structures across our country, it will become extremely clear to them who their friends really are.
I should like to turn now to the topic of competition. There is an illusion in this country that there exists competition among the banks, that interlocking directorships somehow facilitate competition in Canada. Well, we have all been introduced in the last couple of years to the infamous Canadi-

November 13, 1980
an establishment, and anyone in this country who thinks for a moment that competition exists in our banking community, that whether you are a small or a large company your access to capital and funding is the same, is completely mistaken.
I would ask members of the House to address small businessmen in their ridings and ask them what interest rates they pay when they go to banks to borrow money. 1 would ask them then to examine the interest rates that large corporations pay when they borrow from our banks. I say that they would find that the large company or corporation at times borrows at prime rate plus a minute amount, if any, while the small business in this country is paying the prime rate plus 1 per cent, 2 per cent, 3 per cent or 4 per cent. Last week I spoke to a number of businessmen in my riding in central British Columbia who are having to borrow money at the rate of 21 per cent. Can you imagine the kind of productivity and the success that a new business must experience simply to be able to make those kinds of payments? Is that the kind of equality that exists in the financial marketplace? Is that the competition we are talking about?
I think we all know in this chamber that the reason the directors of large corporations are as they are is that certain people have privileged information, certain individuals and certain firms are in a privileged position when they develop. We, as members of parliament, know that in our hearts. The evidence is clear and the analysis is clear. Yet, unless we accept this amendment, we will be perpetuating this inequality.
I would ask members of Parliament when they vote on this crucial amendment to realize fully that it would enable the situation to be turned and to make this country of equal opportunity for both large and small businesses. We are interested in developing and encouraging the entrepreneurial instinct in Canada and in developing Canada as vigorously as we can. The small businessman is not treated equally at all, and all of us in this chamber know that. 1 would ask members of this House, when the opportunity to vote arises, to think of the small businessman, the man on the corner of your street, the small shop down the road, and to think of what the existing legislation provides for them as against the advantages provided to the large corporations.


Raymond John Skelly: Mr. Speaker, these two amendments basically strike at the heart of some of the problems we have in our economy and at the way in which the economy of this country develops. My colleagues have outlined our position. I was very surprised to hear the minister intimate that he thinks all is well. The government opposite keeps telling us that basically there is nothing to fear, that there are housewives among the membership of the boards, that there are everyday people with expertise who are members, such as native Indians, people who live in remote areas, and people who have priorities for development and who need capital to make them eligible for some of the programs to create opportunities for their children. It is no wonder that the government opposite was able to have only two members from western Canada elected. I am prepared to put money on the table that
Bank Act
they will not get their deposits back the next time. 1 do not think this is due to maliciousness on the part of government members or to serious opposition to what is going on. Rather, I think they have their heads buried in the sand-


An hon. Member:: Insensitive.


Raymond John Skelly: -and they are insensitive. I do not want to be provocative. 1 think we can discuss the merits or otherwise of these amendments, but, speaking seriously, I say that I find it very strange that the minister can stand up and say there is no problem, because many people, including many of the members on the other side, have recognized the seriousness of the problem of corporate concentration in Canada. I have heard, in committee and in this House, the Minister of Consumer and Corporate Affairs (Mr. Ouellet) say that one of his highest priorities is to bring forward legislation to deal with this problem, but then the government turns around and reverses this, as was done by the Minister of State for Finance (Mr. Bussieres) in the statement he made this afternoon. I sincerely believe that the minister does not think that, that he recognizes the fact that there are serious problems, that he is locked into this piece of legislation and is scared stiff to make any changes to it that would be appropriate. I would like to take the high road in the analysis of his statement.
At this point I think it might be worthwhile to take a look at Canadian history, since we are talking about the constitution. Many people really think that the BNA Act made Canada and that a 113-year-old document welded together four backward colonies along the St. Lawrence river and in the maritimes. There is a great argument in Canada that this country was welded together by the determination of the Canadian Pacific Railroad, the Bank of Montreal, and what was at that time known as the Liberal-Conservative party, that in fact Sir John A. Macdonald led a party which was known as the Liberal-Conservative party.
It is strange how the wheel of fortune turns, how history moves on and yet things remain the same when we listen to the arguments that both of these groups sitting in the House put forward and we find that they are the same arguments. It is of concern to us. I would suggest that, in fact, when the country was put together the strongest force within the country was the Bank of Montreal and the Canadian Pacific Railroad, and their political arm in the House of Commons, but I would also suggest that this country did not develop in a way which benefited many Canadians.
There has been social hardship and a single-minded concern for making a buck, to take advantage of others, instead of building this country at a pace at which people could benefit. There were some very serious problems then because of corporate concentration, interlocking directorates, and political and economic control of the country by a small group of people referred to as the old boy gang. Frankly, it has been stated before that the old boy gang still runs the country. It is time we did something about it.

November 13, 1980
Bank Act
Really the history has not changed much. The wheel has turned, but we have the same problem at a different level. The interlocking directorates exist and the annual reports of the Bank of Canada are sitting here. No one has to examine those to see that the most powerful corporations in Canada are represented on the boards of directors and vice versa. But an interesting article appeared in The Globe and Mail which indicated that as a result of some of today's problems with Chrysler, Massey-Ferguson, and a variety of other companies which were previously doing well and are now firmly locked on the public trough, the directors of companies should not be permitted to serve as directors of banks from which the companies borrow, nor should the banks be represented on the boards of directors of client companies. That was an editorial statement which appeared in The Globe and Mail. When 1 look at the amendments we propose, I realize those are the things we are proposing.
1 do not want to draw this out too long, but the Royal Commission on Corporate Concentration, which I believe is called the Bryce commission, has largely been viewed as an apologist for the government and the corporations in Canada. It has come forward with recommendations which almost defy logic, yet when we look at the recommendations concerning the power of corporate directorships, it is asking for modifications which do not appear in the Bank Act. So, we have The Globe and Mail and even the Bryce commission, which bears very little credibility in the real world-even they have the timidity to come forward asking for changes in the manner in which we structure the leaders of our industrial and financial corporations. 1 urge the minister to review those and to take a look at the problems. Those interlocking directorates exist, the old boys exist, and really Canadian consumers or the people who depend on them suffer for that. It is not just the consumers who suffer.
For example, today we had a very interesting question for the Minister of Consumer and Corporate Affairs, but unfortunately he did not arrive in the House until the last five minutes of oral questions. We had a question about his role in investigating the unacceptable concentration of the print media. Also we have had many questions concerning his role in investigating oil companies. Over the last seven years the ministry, through the minister, has fooled with this question and not brought it to a satisfactory resolution.
We have George Weston and food chains which control the price of food. We have a variety of organizations which control housing and availability of money for housing. We have the banking industry which is the most powerful and influential of all those groups. They fuel the engines. They make concentration tighter and tighter all the way down the line, always in the interests of a buck. Quite often it is in the interests of efficiency, but always in the interests of a buck, not in the interests of the people they serve. As they make the concentration tighter, there are fewer and fewer opportunities to serve the people.
As the hon. member for Kamloops-Shuswap (Mr. Riis) pointed out, small businesses often get chopped in the process, but it is not just the small ones. So, the corporate concentration exists. It seriously affects our lives. It starts with interlocking directorates, and we have looked at the costs of it. There is a lack of competition and even a lack of an ability to compete, which results in high prices. People pay significantly more for the goods and services they require because of that concentration.
The points I made before also deal with the business of development in the country. There are areas of the country which are not developed because the return is not quite as high as it is in other areas. They kiss that group of people good-bye and say hello to the areas with the most profitable return. The tighter the concentration, the more deliberate that development. We have seen that with banks. As I have stated in the House before, in my particular riding there are communities such as Sayward, the Campbell River area, the central coast area, the North Island area and even Victoria where banks have withdrawn services because there is not the kind of return for which they are looking. To put up branches in downtown Vancouver, Ottawa or Montreal gives them a better volume for less investment. Unfortunately the people in rural areas suffer from the effect of strictly corporate concentration because there is no other competition.
We asked for some public input, public presence and public accountability to remedy that, and it did not happen. It was totally rejected by the government. Now we are asking for this simple thing-after making a series of retreats-which is backed by the Bryce commission, The Globe and Mail and, in fact, the electorate. There are areas in the country where the present government does not enjoy the confidence of the people, and it continues to erode confidence because of lack of action. At any rate, the costs of corporate concentration are very evident and they are growing.
No one would deny that corporate concentration movements are fueled by the banks, the Big Five. We have heard the minister say, "Yes, but the caisse populaire and credit union movements are competing with them". But it is at a much lower level. When we look at the billions in assets which they control, we are not really talking about the same thing. When we look at the concentration of control of those assets, we are not even talking in the same ball park. It is very unrealistic to say that the credit union movement is out there competing at the same level as the banks. That is just not so. Certainly I would appreciate the minister coming forward and saying, "We will unshackle the hands of the credit union movement and allow them to compete in some of the other areas". At any rate, the costs of corporate concentration are very high.
I should like to spend just a moment reflecting on what has been the government's attitude to this. Unfortunately the Department of Consumer and Corporate Affairs is the bulwark upon which we depend to protect us from the less desirable, the evil aspects of corporate concentration. Whether it heads over into an illegal activity or whether it is just contrary to the interests of people, the government moved
November 13, 1980

away rapidly from an effective competition policy and it became involved in a different process. When we look at the funding of the Department of Consumer and Corporate Affairs over the last few years, it has been cut pretty substantially. Also the department's person-years have been cut substantially, yet we see the banks, the oil companies, the food chains growing tighter and tighter with more and more control. The people we expect to police are having resources taken away and personnel cuts. Frankly it is not a movement of a government which intends to protect people against not only illegal activities but against activities which can be viewed as not in their best interests.
That is only one aspect of where the department is being cut back. Either the minister's priority is so low in cabinet or their priorities with that department are so low that we cannot expect any action. Numerous questions referring to the newspaper situation, the oil company situation and other areas have been addressed to the minister in the Elouse, and he says, "Yes, we are looking into it." Manana, always manana, but unfortunately we do not get any hard answer or any protection.
Either the minister's priority is very low or the whole department is a very low priority. There have been cutbacks in person-years and in the budgeting. I suspect in the final analysis they will break it up into its component parts and stick it into the Department of the Secretary of State, just as they did with the secretary of state for urban affairs. Somehow it just disappeared. 1 suspect that in the final analysis it will be the end route for the Department of Consumer and Corporate Affairs. Members on this side believe that that is one of the highest government priorities. We look to energy, finance and a variety of other areas, but members on this side are the only members who stand for their protection. We do not receive any information from the government, and what we get is a department which has been cut back.


John Leslie Evans: Tell me where you got most of your amendments.


An hon. Member:: Don't be so modest.


Raymond John Skelly: If most of the amendments were accepted, there would be more protection in the act for the consumers. We would like to see the government adopt some of these amendments which will provide protection to the consumer. Consumers cannot expect protection from the government through this legislation. We are sincerely hoping that the government will put controls in this legislation which will restrain the movement toward corporate concentration and prevent interlocking directorships and which will have the effect, in the final analysis, of protecting the people.
Because there is a lack of competition legislation and a lack of will on the part of the government to put protective mechanisms into this legislation, the government is merely hanging the consumers out to dry. If the government rejects our proposed amendments which take the form of protective mech-
Bank Act
anisms it will literally have the effect of hanging consumers of this country out to dry.


The Acting Speaker (Mr. Ethier):: Is the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Ethier):: The question is on motion No. 10. All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Ethier):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Ethier):: In my opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Ethier):: Pursuant to Section 11 of Standing Order 75, the recorded division on the proposed motion stands deferred.
We are now on Motion No. 11. All those in favour will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Ethier):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Ethier):: In my opinion, the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Ethier):: Again, pursuant to Section 11 of Standing Order 75, the recorded division on the proposed motion stands deferred.
Motions Nos. 14, 15 and 18 will be grouped for debate and voted upon separately.


Bob Rae: Motion No. 14
That Bill C-6, an act 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 amended in clause 2 by substituting the word "five" for the words "twenty-five" in lines 7, 14 and 19 at page 98.


Bob Rae: Motion No. 15
That Bill C-6, an act 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 amended in clause 2 by substituting the word "two" for the word "ten" in lines 34, 44 and 50 at page 98.


Bob Rae: Motion No. 18

November 13, 1980
Bank Act
That Bill C-6, an act 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 amended in clause 2 by striking out line 36 at page 101 and substituting the following therefor:
"exceeds two per cent of the issued and".
He said: Mr. Speaker, the purpose of motions Nos. 14, 15 and 18 follows from the amendments which have already been put forward. They require a wider degree of dispersal of the shares of our banking institutions. The first motion deals with the peculiar position occupied by the Mercantile Bank of Canada. The other motions provide for a wider dispersal of shares so that no one relatively small group of people, whether they be individuals or companies, can exercise control over one of our chartered banks.
The first motion deals with section 110 of the Bank Act which currently provides a limit on shares held by non-residents, which reads:
A bank shall refuse to register in the securities register of the bank a transfer of any share of a class of shares of the bank to a non-resident
(a) if, when the total number of shares of that class of shares held by non-residents exceeds 25 per cent of the total number of issued and outstanding shares of that class, the transfer would increase the percentage of such shares held by non-residents;
That section is designed to give a particular advantage to one bank in Canada. Our concern in this regard has been on record ever since the deal was sanctified by a previous Liberal government. It deals with the fact that Citicorp Bank of the United States is in a position where in effect it is allowed under the Bank Act basically to control at least two banks. It will continue to control the Mercantile Bank by virtue of this section, and by virtue of the section on foreign subsidiaries it would be allowed to create yet another bank which it will also directly control.
I will not go into debate on foreign banks at the present time because this topic will be discussed when the appropriate amendments are before us. However, I think it is worth pointing out something which has not really been considered by the government, that it is possible, according to most analysts of corporate affairs, for a relatively small concentration of people effectively to control the corporate activities of a company, be it a financial institution or another corporation.
It is worthwhile reiterating the fact, while the Canadian public and the Canadian government are mesmerized by this concept of ownership, that the question of ownership, as it is generally recognized by most people who are attempting to understand our economy, is much less important than the question of control. Ever since economists, social critics and others began analysing the nature of our corporate system and our corporations, and the power which accrues to people who are at the pinnacle of a corporation, they have recognized that the illusion of the sovereignty of the shareholder is just that, an illusion.
The theory that, for example, in the general provision of the act a shareholder may not hold more than 10 per cent of the shares will limit a group from effectively controlling banks, is in fact not the case. Even with only 10 per cent of the shares,
provided they are controlled and provided that control is exercised in a concentrated and direct manner, that can be sufficient to gain control of a corporation, for the very simple reason that so many shareholders are purely passive in their relationship to the company. Those shareholders who chose to take a more active role by virtue of ownership of over 7 per cent or 8 per cent of the shares can and do, in fact, control corporations.
Simply to argue that 10 per cent provides for a sufficient dispersal of shares, in our view does not take sufficient account of the realities of the economic world. It is for that reason that we have argued that the dispersal requirements be changed from 10 per cent to 2 per cent and that in the case of nonresidents the requirement be changed from 25 per cent to 5 per cent. In our view, such a change would provide for a partial recognition at least of the principle that the dispersal of bank shares must be widespread.
We cannot allow small groups of people to exercise unilateral control over these corporations. In the last round of debate, we emphasized the problem caused by the banks exercising their economic control by virtue of their position as lenders. We took the example of Massey-Ferguson-and there are others-where the triumph of financial capital over industrial capital led to the dilemmas facing that particular company. This is something that must be carefully analysed in our attempt to understand the way in which the system works in Canada.
We are now considering another phenomenon and another problem, that is, the relative ease with which a small group of people can exercise control over our banks. The Mercantile Bank is in the privileged position of being allowed to own not just one bank in Canada, but two. In our view it is not in the interests of this country to have one of the largest foreign banks in the world in a sense occupying a special and peculiar place in our banking system.
To sum up, Mr. Speaker, in the last debate we considered the problems caused by the ability of the banks to control the people to whom they lend and how they can do this to benefit the larger companies which happen to satisfy their criteria for loans. In the particular instance we are dealing with, the reverse is the problem in a sense but it is just as serious, that is, concentration of ownership which in turn leads to concentration of control and the fact that the government has to recognize this problem by calling for a widening of the dispersal of shares.


Marcel Joseph Aimé Lambert: Mr. Speaker, I do not have much to say on this motion. I do not find anything particularly objectionable in having a continuation of clause 110, set out on page 98 of the bill, arising out of the whole rationalization of the situation as it was at the time of the Mercantile Bank affair.
If hon. members are not aware of the case, originally this was an entirely foreign company, established by Dutch inter-
November 13, 1980

ests immediately after the war. It was then sold, first of all partly to the National Citibank and then wholly to the National Citibank. The result was the introduction of a grandfather clause which reduced the shares that Citibank owns in the Mercantile Bank to 25 per cent because its capitalization is otherwise artificially held down.
Considering that the shares in Canadian banks are so widely dispersed, I do not honestly think there can be a particular concentration of power in any one person holding 10 per cent in total, in so far as outside interests are concerned, of 25 per cent. This causes some difficulties in a limited sense, in that the bank might not register the shares in excess of these amounts and the person owning the shares unfortunately has them taken away. It is not that just one or two apples in the barrel are bad; the whole barrel is deemed to be bad. In other words, if I own 10.2 per cent of the shares in a bank, I cannot vote my entire 10.2 per cent. The bank cannot register the .2 per cent and I am unable to exercise my 10 per cent, so the strictures placed on the situation by the hon. member for Broadview-Greenwood (Mr. Rae) have no application. They are straw men that he has erected so that he may tilt at them.
1 am quite satisfied with the present situation, Mr. Speaker, and I would therefore ask the House to vote against these two amendments.


Donald Alex Blenkarn: Mr. Speaker, 1 should like to point out to the House what the hon. member for Broadview-Greenwood (Mr. Rae) would have us do. With respect to clause 110(l)(a) and (6), he would insist that the number of shares in a bank held by non-residents should at no time exceed five per cent. I suspect that large corporations generally have a difficult time determining the place of residence of every one of their shareholders. This is particularly so in the case of large chartered banks. To reduce the limit to five per cent so that they can certify at all times that no more than five per cent of shareholders are non-resident would put such a burden on the officers and transfer agents of the banks that the whole thing would be totally unrealistic.
Just recently the Minister of Energy, Mines and Resources (Mr. Lalonde) announced that he would award specific and high grants to companies with more than 75 per cent Canadian ownership. This is the same type of clause here, Mr. Speaker. But at no time did the Minister of Energy, Mines and Resources suggest that a company had to be composed 100 per cent of Canadian resident shareholders.
Shareholders could be Canadian citizens who for reasons of retirement or whatever, leave this cold climate to live in the south. Would the hon. member for Broadview-Greenwood suggest that they should lose their shares because they retire and because their shares happen to put the bank over the five per cent provision? The hon. member does not know what it is about or how the system works, Mr. Speaker. Neither does the New Democratic Party. That is why they propose this amendment which does not make any business sense.
The second amendment, which also applies to page 98, Mr. Speaker, proposes to reduce the number of shares that
Bank Act
individuals or an association of individuals could hold, from 10 per cent to 2 per cent. The minister already has a problem with the Montreal and District Savings Bank and he has filed motions No. 17 and others to deal with this. In that situation, people, in association, came to control up to 43 per cent of a bank and the minister has introduced a provision whereby they will be forced to divest.
It would be very easy for someone to gain more than 2 per cent of the shares in a bank or for an association of people by inadvertence to gain more than 2 per cent. Surely the limitation of 10 per cent is more than enough to make sure that the shareholdings of our banks are broadly distributed. It is true, of course, that holding a large number of bank shares might lead to an opportunity to be elected to the board of that bank.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order, please. 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 Wellington-Dufferin-Simcoe (Mr. Beatty)-Freedom of Information-Directives to ministers; the hon. member for Vancouver South (Mr. Fraser)-Water Resources-Skagit River Valley-Reference by B.C. government of U.S. proposal to flood to International Joint Commission; and the hon. member for Cowichan-Malahat-The Islands (Mr. Manly)-The Constitution-Inquiry whether letter received from National Indian Brotherhood requesting discussions.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions, private bills and public bills.


PRIVATE MEMBERS' MOTIONS FOR PAPERS
The Acting Speaker (Mr. Ethier):: Notice of motion No. 1, the hon. member for Leeds-Grenville (Mr. Cossitt). Shall the item stand? Stand by unanimous consent.


Some hon. Members:: Stand.

November 13, 1980
Power Lines


DISCUSSIONS CONCERNING HIGH TENSION LINES CROSSING OTTAWA AND ST. LAWRENCE RIVERS
Mr. Hal Herbert (Vaudreuil) moved:: That an humble address be presented to His Excellency praying that he will cause to be laid before this House copies of all minutes of meetings, documents, telegrams and letters concerning discussions between officials of the Department of Transport and Hydro-Quebec relating to high tension electrical lines crossing the Ottawa river below Carillon and the St. Lawrence river above Beauharnois.
He said: Mr. Speaker, in response to my request for documents, the Parliamentary Secretary to the President of the Privy Council (Mr. Collenette) told me that the documents in question were so voluminous that it would require an inordinate length of time to prepare them and it would be very costly. He then went on to say "I have, however, sent a copy to the hon. member." He did in fact send me a copy of the documents. Hon. members might ask why I am debating the issue today.
First of all, let me refer to the documents themselves which 1 have in my hands. It is true they number a dozen or so pages, which might be termed voluminous, but personally I do not think there would be any great problem in producing these documents for the public. However, one thing is abundantly clear. These documents are all in the French language. There is no English translation. You may recall, Mr. Speaker, that some three or four weeks ago while we were talking about western grain rates, when documents were not made available to the public, it was because they were in the English language only. The documents referred specifically to the Crowsnest Pass rates for the movement of grain out west, and 1 felt they should be more readily available in the French language to the people in the east, particularly to those in the province of Quebec. As I said then, there was a hidden cost to the treasury, to the people of Canada and to the two-thirds of the population who reside in the east of something in excess of one half billion dollars which was going into the pockets of the western farmers. Although I did not disagree with the particular item, I felt it should be more widely publicized.
Today, the same thing applies. We have a set of documents in French only, supposedly voluminous, but I suggest the reason they were not tabled is because they are in one language only.
Electricity is the lifeblood of modern society and without it much of our technology and prosperity would not exist. Electricity is efficient, convenient, clean and easy to transmit and distribute. By the year 2000, we can expect the demand for electricity to be more than five times the rate of the last few years. By the year 2050, about 90 per cent of all Canada's energy needs will be satisfied by electricity.
New York state saves millions of barrels of imported oil by buying 800,000 kilowatts of hydroelectric power each year from Quebec. The 765 kilovolt transmission line is 157 miles long in the United States running from Massena near Cornwall, Ontario to Marcy, which is near Utica, New York state. New York has a 20-year contract with Hydro-Quebec.
Just over a year ago, the Quebec minister of energy announced increased exports of power to New York state. The minister estimated that New York state was saving over one million barrels of oil a month, and added that the state had imported 823 million kilowatt hours of electricity from Quebec in the previous year.
In 1975, in a document sent to me by Hydro-Quebec, it was estimated that the cost to heat a typical single family, by electricity was $500, slightly more by natural gas and about $200 more by oil. One is well aware of the relative change in the cost of these three heating fuels since 1975 and the difference, particularly with respect to oil, is likely to become even more accentuated.
Initial installation costs varied very little. In fact, at that time, an all-electric installation was fractionally less expensive. About a quarter of Quebec's total energy needs are met by electricity and it is hoped to raise that percentage to 40 per cent by 1990.
Five years ago there was considerable concern that persons living in the vicinity of these high voltage electrical lines were acting as guinea pigs and that the electromagnetic fields surrounding the lines affected both the animals and the human beings within those fields. Two doctors working on a research project at the veterans hospital at Syracuse, New York, arrived at such a conclusion. The Canadian minister of the environment, in answer to a question in 1975, suggested that studies were going on with particular reference to caribou. However, since then, nothing further has been heard from this ministry on the subject.
The only other reference was in the same year when a senior official of Hydro-Quebec returned from Russia with the information that a human being should not be exposed for more than three hours in the vicinity of these high tension lines, and for not more than ten minutes close to the conductors. The minister of communications at that time, in answering a question concerning radio and television interference, stated that there should be no significant interference. However, anyone who has operated a radio or TV set in the vicinity of a line knows that there is interference and, in fact, that there is a black-out area. This significant point is a reference to distance and not to extent. The then minister of transport also indicated that there is no change to flight patterns for small aircraft in the vicinity of these lines. However, once again, anyone who has piloted a plane, as I have, will recognize the potential hazard of high tension power lines. It is apparent that the minister of transport was more concerned with the assurance of adequate clearance over federal waterways for ship navigation purposes than with the hazard created for the users of private airfields.
I might say that in the documents given to me, which were in French, about the only item I found of interest was a rather unusual point stating that the clearance over the Ottawa River was to be 80 feet whereas the clearance over the St. Lawrence River was to be 75 feet. Since I am under the impression that most of our navigation takes its course along the St. Lawrence River, I question why there should be that difference. How-
November 13, 1980

ever, that is quite a minor point. I would say, though, that this was the only point of interest in the documents handed to me, illustrating that the involvement of the federal government in these hydro lines and the potential they afford for the export of electricity is not particularly great.
It is of interest that in 1975 the then minister of energy, mines and resources stated there had been no discussions between his ministry and Hydro-Quebec concerning the export of electricity to the United States and that the only federal involvement would be the regulatory approval by the National Energy Board of the agreement between Hydro-Quebec and the power authority of the state of New York. Thus the ministry of energy, mines and resources took no interest at that time in the amount of electricity to be exported or its impact on the domestic need for energy.
It is also interesting to note that hydro generation in the province of Newfoundland, by virtue of the generation at Churchill Falls, approaches that of the province of Ontario and exceeds that of British Columbia. Approximately 84 per cent of Newfoundland's production is supplied to the province of Quebec. Power from the generating station at Churchill Falls is transmitted at 735 kilovolts to make the journey of more than 700 miles to Montreal and other cities in Quebec. A comparison of Churchill Falls and LG-2, at La Grande in Quebec, indicates a plant capacity of the former of 5,225 megawatts and of the latter, 5,328 megawatts, essentially similar capacity.
As a cheap source of energy, the abundant hydroelectric resources at Churchill Falls, Labrador, should be able to attract both industry and export income to Newfoundland. But at the moment, the province is locked into an agreement allowing Hydro-Quebec to buy most of the electricity generated at Churchill Falls at fixed prices over a very long period of time.
The explosion of world energy prices since the contract was negotiated has given Quebec an unexpected windfall gain on electricity produced in Newfoundland-greater in total than the equalization payments and unemployment insurance benefits Newfoundland receives as a have-not province.
A study carried out by the Economic Council of Canada indicates that profits accruing to Hydro-Quebec from the increase in the price at which electricity is sold and the fixed price paid to Newfoundland for power from Churchill Falls exceeded $600 million last year. The province of Newfoundland estimates that figure at more than $700 million. But it is not just Newfoundland that pays the price. The federal government also loses out because of the amount it must pay to that province from the equalization program, a sum of $334 million last year, and for the other costs of a "have not" province such as increased unemployment insurance payments. These two items together total more than half the total budget of the province.
The president of the Economic Council of Canada estimates that if the price of the electricity transmitted from Churchill
Power Lines
Falls to Quebec were calculated on the basis of the word price for oil, its value would exceed $1 billion.
Thus we are faced with a situation where electricity is sold at a low price by one province to another. In turn, that receiving province sells electricity to the United States. Meantime, in the Atlantic provinces much of their electric needs is being generated by using imported oil paid for at world prices.
I thought it important to air this subject today. That is why I requested the document. I feel it would be preferable for the government in matters of interest such as those I discussed in the last few weeks regarding the grain transportation and today concerning hydroelectric lines and the sale of electricity to the United States to make these documents available to the public in both official languages. Because of that omission, I am pleased to have this opportunity to raise this subject in debate this afternoon.
Mir. Howard Crosby (Halifax West): Mr. Speaker, I want to intervene very briefly in this debate to lend some support to the hon. member for Vaudreuil (Mr. Herbert) and support not only the nature of his motion and the fact he has brought this subject to the attention of the House, but the remarks he made on the matter of an adequate and versatile hydro transmission system in eastern Canada.
First, let me speak to the nature of his motion. Something that impresses me in Parliament and elsewhere is that information becomes the lifeblood of social and technical progress. Without information we cannot pursue those aims and objectives that we legitimately should pursue as members of Parliament. When the member comes to this House seeking information and that information is withheld, the administration is striking at the lifeblood of a member of Parliament. The fact the member has taken an interest in this area and has gained knowledge of the ramifications and the problems involved in a hydro transmission system indicates the extensive nature of his investigations and his knowledgeable background of these matters. With great intellectual honesty he comes with this request.
What is at the heart of all these requests for information is the basic principle of freedom of information in government. It ought to be the right of not only members of Parliament, but other people interested in public affairs to request and obtain information which they need to pursue matters they think are important. This is typical of the kind of problem which arises when, because of restrictions on the free flow of information, one is hampered in pursuing a lawful inquiry. A great many of the problems in this area could and should be resolved by proper freedom of information legislation. We all look forward to consideration of the bill now before the House respecting freedom of information.
With regard to the substance of the matter which the hon. member raised, that of a hydroelectric transmission system in eastern Canada, the hon. member honestly points out the advantages the province of Quebec has gained from a transaction with the province of Newfoundland related specifically to the transmission of hydroelectric power. These are the sorts of
4666

November 13, 1980
Power Lines
things that make confederation and continued co-operation among the provinces difficult. I know that when Mr. Stanfield was the Premier of Nova Scotia, steps were taken by the maritime provinces to develop an integrated grid system for the transmission of electric power. Unfortunately, this system stopped at the Quebec border. Nova Scotia and the other maritime provinces were unable to gain access to vast supplies of electric power available through the Quebec transmission system and the hydroelectric system of the province of Newfoundland.
This has great and important ramifications for the future of energy in the eastern part of Canada. While we think of the great problems raised by the cost of importing oil used to generate electricity, further down the road, as we are able to overcome the problem of electrical generation with oil, we will be looking at developments like tidal power which will be totally dependent for their effective implementation on a hydroelectric grid system.
The importance of this on development of the energy future of the maritimes cannot be underestimated. Without the kind of information which the federal government has at its disposal being circulated, and those interested being allowed to examine the kinds of information, tests and studies that have been carried out in the past, we will not be able to move in this direction. Even today it is argued in Nova Scotia and New Brunswick that the development of Fundy tidal power will be hamstrung by failure to have in place an electric grid system to carry the power which would be generated by this tremendous project.
The hon. member brought a very important matter to the attention of the House when he spoke not only of the failure to bring to public attention the information at the disposal of and in the hands of the officers of the federal government, especially when it relates to electrical transmission, resolution of the electric transmission problem being at the heart of the energy" dilemma from which we suffer so much in eastern Canada. I congratulate the hon. member and support him in his endeavours. I hope all members of the House will support him as well.


Mr. Maurice Foster (Algoma):: Mr. Speaker, I would like to say a few words on the motion by the hon. member for Vaudreuil (Mr. Herbert) because it relates to the export of electricity, a commodity which Canada has in some surplus in some of the provinces. I think the question of exports of electricity was of some special significance a few weeks ago before the budget was brought because at that time there was concern, especially by the western provinces, that a tax would be imposed on exports of natural gas. The argument went that if there was a tax imposed on the exports of natural gas from western Canada, chiefly from Alberta and British Columbia, a tax should likewise be imposed on electricity produced across the country, but especially in the provinces of Ontario and Quebec, which consume a very large portion of the natural gas produced. I must say that there seemed to be some logic to this
argument. But in the end the Minister of Finance (Mr. MacEachen) in his wisdom decided not to impose a natural gas export tax and so there was no tax imposed on electricity.
He did impose a tax on all consumers of natural gas, whether in Canada or in the United States. Of course, it was a much lower tax than it would have been had it just been on the exports. It is interesting to note with respect to the tax applied to natural gas that some 44 per cent of the revenues raised come from the consumers in the province of Ontario.
Regardless of which method was used for raising these taxes, whether on electricity or on the export of natural gas, it was clear that the provincial governments were opposed to it in any event. Certainly the provinces vary in the amount of electricity that they produce and export to the United States.
It would be interesting to consider for a moment the amount of electricity which is exported to the United States. Total production in Canada in 1979 was some 335 billion kilowatt hours of electricity. Exports amounted to some 30.4 billion kilowatt hours of electricity, or 8.6 per cent of the total production. It is argued that if this export of electricity did not take place that the cost of electricity to consumers would have been higher because, in essence, it is sold at a profit and it is often consumed in the United States at a time when the demand in our domestic market is not as great.
If we look across the country at the various provinces which produce and export electricity we find that the total value of the exports to the United States in 1979 amounted to some $738 million. In New Brunswick it was $128 million, in Quebec it was $110 million, in Ontario it was $356 million, in Manitoba it was $64 million and in British Columbia $80 million of electricity was exported to the United States. The question of imposing an export tax on this, as in the years from 1925 to 1963, is a complicated one because in some provinces, like New Brunswick where the electricity is generated from oil-fired thermal plants, profitability is not nearly as high, given the increase in the price of oil, as it is in Manitoba or British Columbia where electricity is generated from hydro sources.
The hon. member for Vaudreuil makes a very important point when he suggests we should be considering using electricity more for domestic home heating. Clearly, that is what is implied in the national energy policy program, which was put before the House a few weeks ago by the minister of energy. In that paper we see that if a person switches to electricity-the initial cost of heating a home shows only a very modest increase as between 1980 and 1984, making allowance for increased conservation. For instance, in 1980 the cost of heating a home with oil in a typical Canadian city-we will take Winnipeg as an example-is estimated to be $680 per year. Based on the projected world price of oil, by 1984 the cost of heating that same home will escalate to $1,930 per year.
You will recall, Mr. Speaker, that in the budget presented by the previous government on December 11, 1979, they were proposing to move the Canadian price to 85 per cent of the world price by 1984. If we take 85 per cent of that figure we
November 13, 1980

will see the cost of the average home heating bill. But if we look at what it would cost four years hence to heat with electricity-and this is the argument that the hon. member for Vaudreuil was making-we find the cost moves from $680 today, with oil, to $965 four years from now. If the person improves the insulation in the home and achieves a 25 per cent reduction in the amount of energy required to heat the home, the cost comes to $725, which is very little over the cost of heating with oil today. The important thing is that the national energy program is designed to convert a significant number of homes across the country from heating oil to electricity and, especially, natural gas.
Even staying with heating oil, the price under the national energy program is $1,280 compared to $1,930 at the world price. If the CHIP program is employed and there is a reduction in the amount of energy used then we come out under the national energy program with $960 for heating for the average home. The program was designed to switch to natural gas and to increase the supply available to homes across the country, such as those in many parts of northern Ontario which do not presently have natural gas available. The program will provide incentives to furnish that supply to many communities which are not presently served. Under the natural gas heating regime four years hence the heating costs will be some $710 for a typical home. If increased insulation is applied the cost will be $525, less, in fact, than the cost of heating a home using an oil-fired furnace. So, I think that the argument that the hon. member for Vaudreuil is making, which is that we should be considering using more electricity for space heating, is important, certainly in provinces like Ontario where we have a surplus of electricity and in the province of Quebec where vast supplies are being brought on stream and where there is such an excellent opportunity to use electric heat.
In the period from 1925 to 1963 a tax was imposed on exports of electricity. I understand it was in the realm of .03 cents per kilowatt hour of electricity. Of course, the volume was quite low then compared with what it is now, and the revenues realized were not very great, but today, as I indicated in presenting the figures earlier, some $738 million are realized by domestic utilities which, of course, has a very good effect on the cost of the electricity used in the country.
If we look at the actual production of electricity across the country and the number of exports, it is interesting to note we exported some 30 billion kilowatts of power in 1979, whereas during the same period of time we imported some 1.792 billion kilowatts of power. I understand that in the first seven months of 1980 imports rose to 2.2 billion kilowatts of power. So the question of the export of electricity is a very important matter. It seems to me that as we move to greater use of electricity, natural gas, biomass and waste from forest products for domestic heating, we will probably be exporting less electricity and using more domestically, avoiding these exports.
Power Lines
Such exports could in fact be displacing heating oil along with natural gas and other domestically produced fuel sources because one of the objectives of the national energy program is to reduce the amount of oil used across the country by conversion to electricity, natural gas and other sources, and renewable resources as well, to the extent that heating oil would account for some 10 per cent of the use of energy in domestic heating and commercial and industrial uses. Thus we would save some 375,000 barrels of oil a year if we were able to effect that kind of conversion and the replacement of heating oil by products like electricity and natural gas during this decade. I think that is a very important target. It is one which I hope we can meet because along with conservation it can have a very dramatic effect in moving us away from the use of oil and toward other more plentiful sources such as electricity.
So, I hope the hon. member for Vaudreuil will be given these documents which relate directly to exports of electricity from the province of Quebec to the United States, in particular to the state of New York.


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of State, Small Businesses):: Mr. Speaker, the motion before us today relating to high tension electrical lines crossing the Ottawa and St. Lawrence Rivers deals with a relatively technical subject which involves an element of government regulation. I am very familiar with such crossings, because in the county of Lambton, which is my home county, a similar high tension line crosses the St. Clair River into the state of Michigan, feeding into the Detroit-Edison grid network from the Lambton generating plant, which is a coal-fired generating plant in Ontario.
1 am pleased to note that in this particular instance the government regulation seems to work. The two projects in question required approval by the federal government, and that approval was obtained by Hydro-Quebec in a short time with a minimum of bureaucratic effort.
The legislation which requires approval for the two power lines is consolidated in the Navigable Waters Protection Act. The NWPA, as the act is known, is administered by the federal Minister of Transport (Mr. Pepin) and is designed to protect the public right of navigation.
The act prohibits the construction or placing of any work in, upon, over, under, through or across any navigable water unless the work and the site and plans have been approved by the minister upon such terms and conditions as the minister sees fit. Volume III of the Revised Statutes of Canada, 1927 first interpreted the word "work" to include telegraph or power cables or wire. Such structures from that point in time required the approval of the minister-at that time the minister of public works-where placement of same was contemplated over any navigable waterway in Canada.
In this case, Hydro-Quebec submitted two separate applications to the then minister of transport for approval of a 735 kv transmission line at two separate locations. These applications are described as follows:

November 13, 1980
Power Lines
(1)	An application by Hydro-Quebec for NWPA approval of a 735 kv overhead power line, crossing the Ottawa River in front of Lot 11, Parish of St. Andrews in Argenteuil and in front of Lot 1 of the Village of Pointe-Fortune, in Vaudreuil.
(2)	An application by Hydro-Quebec for NWPA approval of a 735 kv overhead power line crossing the Beauharnois Canal between Lots 83 and 84 subdivided and Lots 13, 14, and 15 subdivided, of the Parish of St.-Louis-de-Gonzague, in the County of Beauharnois.
I will attempt to summarize each case separately. In each synopsis, relevant dates and procedures pertaining to the discussions between the two parties will be listed in order to show the chain of events that led up to the Transport Canada issuance of an NWPA document, approving the Hydro-Quebec works.
In the first case, the Ottawa River crossing on January 9, 1978, Hydro-Quebec submitted an application requesting NWPA approval for the subject overhead power line.
The application was directed to the regional director, Canadian Coast Guard, Laurentian region, who had been delegated signing authority by the minister to approve overhead power lines. In keeping with the usual procedures for administration of this act, the site of the work was inspected by the NWPA investigation officer from the coastguard base at Montreal. A site investigation report dated February 21, 1978, was forwarded from the Montreal base office to the regional office. The report stated the vertical clearance between the lowest point of sag of the line and the high water line to be 92.7 feet.
Recommendations for construction of the crossing were as follows: first, that Hydro-Quebec would advise the Montreal coastguard office of the start of construction, together with a schedule of the work, two weeks in advance of construction to permit the issuance of a notice to mariners; and second, that Hydro-Quebec would be required to paint the towers red and white in accordance with the Department of Transport standards for air traffic obstructions. The requirements for marking of the towers was transmitted to Hydro-Quebec in a letter dated February 27, 1978, from the regional superintendent of airways, Department of Transport. On March 2, 1978, only seven weeks after the application, approval under the Navigable Waters Protection Act was granted by the regional director, Laurentian area, acting on behalf of the then minister of transport. The approval document issued was in the form of a declaration of exemption, which is granted under section 5(2) of the Navigable Waters Protection Act.
Section 5(2) of the act was utilized because, upon investigation of the site and plans, the proposed vertical clearance more than adequately provided sufficient clearance for the type of marine navigation currently utilizing the area. Consequently, the proposed work did not present a substantial interference to the public right of navigation at the site, and a declaration of exemption document was issued.
In the covering registered letter dated March 2, 1978, dispatched with the section 5(2) document, the requirement to advise the coastguard of the construction schedule was brought to the attention of the applicant.
On October 6, 1978, a report from the Laurentian region advised that a construction schedule had been established: construction of foundations for the towers, December, 1978; erection of the towers, March, 1979; and installation of the power line conductors, May, 1979. The construction schedule was later revised on October 26, 1978, to indicate that the lines would be put in place between March 15, 1979, and August 15, 1979.
A notice to shipping which reads as follows was issued in August, 1979:
A report dated October 17, 1979, from Laurentian Region confirmed that the overhead line has been completed as per schedule and conformed to the plans approved under the Navigable Waters Protection Act. Subsequently, on November 29, 1979, the Canadian Hydrographic Service was provided with two copies of the work plans for charting action.
In the other canal crossing, on April 15, 1977, Hydro-Quebec submitted an application requesting NWPA approval for the overhead power line. The application was directed to the district manager, Canadian coastguard base, Montreal.
According to the usual practice, the site of the work was inspected by the NWPA investigation officer at the Montreal base office. A site investigation report dated April, 1977, was forwarded from the Montreal base office to the regional director, Laurentian region, to whom signing authority had been delegated by the minister to approve overhead power lines. The minimum vertical clearance of the overhead power line crossing the St. Lawrence seaway is 160 feet. Recommendations for construction of the crossing were as follows: First, that Hydro-Quebec would advise the Montreal coastguard office of the start of construction two weeks in advance of construction to permit the issuance of a notice to mariners; second, that Hydro-Quebec would mark each tower pylon situated in the water by fixed white lights; and third, that Hydro-Quebec would ensure that construction material or temporary structures used in construction of the line were removed from the waterway upon completion.
In this case, approval was obtained even faster. On May 2, 1977 approval under the Navigable Waters Protection Act was granted by the regional director, Laurentian region, acting on behalf of the then minister of transport. The approval document issued was in the form of a "declaration of exemption", which is granted under section 5(2) of the Navigable Waters Protection Act. As in the case of the Ottawa river crossing, section 5(2) of the act was utilized because the vertical clearance of 160 feet was greater than the standard seaway clearance requirement of 130 feet, which is also the standard minimum vertical clearance for all commercial shipping channels or waterways in Canada. Consequently, the proposed work did not present a substantial interference to the public right of navigation at the site, and a declaration of exemption document was issued. As in the Ottawa river case, all additional requirements were covered in a separate letter to Hydro-Quebec.
On October 26, 1978, a report was received from the Laurentian region indicating that the overhead power line
November 13, 1980

would be placed in position between November 1, 1978, and January 31, 1979. Subsequently, on July 17, 1979, the Lauren-tian region reported that the work had been completed in accordance with the plans approved under the Navigable Waters Protection Act. In a letter dated August 7, 1979, the Canadian Hydrographic Service was provided with two copies of the work plans for charting action.
In summary, in the case of the Ottawa and St. Lawrence river power line crossings to which the hon. member has referred, the application of the Navigable Waters Protection Act was carried out with relatively little dialogue necessary between Hydro-Quebec and the Department of Transport. The applicant, Hydro-Quebec, adhered to the stipulations of the requirements of the Navigable Waters Protection Act in a complete and prompt manner. This compliance was quickly followed by government approval.
I hope I have been able to clarify matters surrounding the hon. member's motion and I trust he will agree that the related events were simple and the procedures adopted were straightforward.
I might add in closing that copies of the documentation concerning these two NWPA approval cases are available from the official Transport Canada files upon request from interested parties.


Harold Thomas Herbert: Mr. Speaker, may I speak in conclusion?


The Acting Speaker (Mr. Ethier):: The hon. member for Vaudreuil (Mr. Herbert) will close the debate.


Harold Thomas Herbert: Mr. Speaker, my reason initially for proposing this motion was the interest which was aroused some six or seven years ago as a result of the expressed intention of Hydro-Quebec to export electricity to the United States. At that time it became apparent that these high tension lines were to cross the constituency of Vaudreuil which I represent. I received at that time many representations from interested persons, in the constituency and outside, on a variety of aspects which I have touched upon in my previous remarks, not only concerning whether or not we should be exporting electricity but also concerning environmental questions, and matters respecting the fact that in the constituency of Vaudreuil there are small airports and therefore these power lines could have some effect on the pilots of small planes. Concern was also expressed about the effect on navigation, and so on.
1 put many questions on the order paper some five years ago and I received a variety of answers. Perhaps my greatest disappointment was when I heard that the then minister of energy, mines and resources had not expressed any great interest in the subject of the export of electricity to the United States. I made a request for these documents to be produced in the hope that they would contain further clarification of the position of the various government departments concerned.
When the parliamentary secretary advised us that the documents were voluminous and as a result, as he said, could be produced only at an inordinate cost and would take an inordi-
Power Lines
nate length of time to prepare, I requested that the subject be transferred for debate, my reason at that time being that unless I did exactly that, I would not have the additional opportunity, as I have had today, to talk about the contents of the documents in question.
Of course, the initial reason for requesting that the documents be tabled was that these papers might be available to the public.
As I said earlier, it has become apparent in this instance, as in the previous instance, that the essential problem was one of translation, not one of the size of the documents. However, having said that, I have received the documents in question in the French language only and I have reviewed them. It has given us the opportunity this afternoon to talk a little about what we are doing in this country on a province by province basis in the field of electricity and about the problem of the province of Newfoundland which is selling 84 per cent of its electrical production to the province of Quebec at what is by today's criteria a very low price indeed, while the province of Quebec is, in turn, exporting electricity to the United States, Hydro-Quebec making in the process a fairly substantial profit. I feel that if we are to maintain a federal state an increased interest in this activity must be shown by the Department of Energy, Mines and Resources.
Having said that, there is obviously no point in pursuing this matter any further at this time. My colleagues and I have had the opportunity to air the subject, and I therefore request the consent of the House to withdraw the motion.


The Acting Speaker (Mr. Ethier):: Hon. members have heard the request of the hon. member for Vaudreuil. Is there agreement to allowing the hon. member to withdraw the motion?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: It is ordered that motion No. 7 be withdrawn.


Stanley Howard Knowles: Six o'clock!


The Acting Speaker (Mr. Ethier):: Is it agreed that we call it six o'clock?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: The hour provided for the consideration of private members' business having expired, I do now leave the chair until eight o'clock p.m.
At 5.50 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
[Stage Direction]
November 13, 1980
Bank Act


[Stage Direction]
The House resumed consideration of 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, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, motion No. 14 (Mr. Rae), motion No. 15 (Mr. Rae) and motion No. 18 (Mr. Rae).
The Acting Speaker (Mr. Blaker):: Order, please. When the debate on motions Nos. 14, 15 and 18 was interrupted at five o'clock this afternoon, the hon. member for Mississauga South (Mr. Blenkarn) had the floor.
Before recognizing the hon. member, may 1 take a moment to indicate that a further grouping of the remaining motions has been made-those listed on the order paper at report stage of 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. The motions seem to be procedurally acceptable and it is the intention of the Speaker to group them as follows. Motions Nos. 22, 23, 25, 27, 28, 30, 38, 39, 40, 41, 42, 43, 44, 46, 47, 48, 49, 50, 51, 53, and 58 will be debated and voted on separately.
[ Translation]
Motions Nos. 24 and 26 can be grouped for debate and a negative vote on motion No. 24 would dispose of motion No. 26. An affirmative vote on motion No. 24 will make it necessary to put motion No. 26. Motions Nos. 29, 31 and 32 will be grouped for debate, and the vote on motion No. 32 will dispose of motions Nos. 29 and 31. Motions Nos. 33, 34 and 35 will be grouped for debate and they will be voted on separately.

Motions Nos. 36 and 37 should be grouped for debate and a vote on motion No. 37 will dispose of motion No. 36.
Motions Nos. 45 and 54 will be grouped for debate and, if required, a vote on motion No. 45 will dispose of motion No. 54. Likewise, motions Nos. 56 and 57 will be grouped for debate and a vote on motion No. 56 will dispose of motion No. 57.
I am sure all hon. members are perfectly clear on the procedure at this moment.
Everything being perfectly clear, the Chair recognizes the hon. member for Mississauga South.


Donald Alex Blenkarn: Mr. Speaker, 1 am not too sure it is all clear, but I thank the Table for giving me a copy of your remarks in advance.
Prior to private members' hour, I was discussing section 110(3) found on page 98 of the bill. In that section the act
provides that any group of shareholders, associated shareholders or a shareholder who holds 10 per cent is all right. But a bank will refuse to register securities where a shareholder holds more than 10 per cent of a class of shares.
The motion of the hon. member for Broadview-Greenwood (Mr. Rae) clearly indicates that he, as the finance critic of the New Democratic Party, fails to understand how banks and large institutions, indeed, large commercial organizations, operate. He suggests that the figure of 10 per cent should be reduced to 2 per cent. Obviously we will get ourselves into enormous problems if that happens. If one is to organize a new bank, it would be necessary for the principal promoters to hold a fair block of stock, and a reasonable block of stock would have to be at least 10 per cent. To suggest that a new institution could be organized with no shareholder or associated group of shareholders holding more than 2 per cent of the stock means that it would be virtually impossible to organize such a corporation. In other words, the New Democratic Party clearly favours the creation of no further banks, no further financial institutions and no further competition in the banking industry.
Earlier today they talked about greater competition. We never could understand where that party stood with respect to financial institutions. The truth is that when it comes to a financial institution they oppose it because it is a financial institution. They do not oppose it for any reason or rationale. They oppose it because it happens to deal with money, because it happens to deal with business, because it happens to deal with some sense.
The 10 per cent is an effective limitation. Indeed it might even be increased to 15 per cent or 20 per cent, but the government has proposed 10 per cent. We are prepared to accept 10 per cent because it ensures that even in the worst situation there would have to be a minimum of ten shareholders holding 10 per cent each. In a public company like a bank that would be an impossibility. But it also ensures that no shareholder shall hold more than 10 per cent.
Turning to section 111(2) we find it deals with the registration of shares. It is found on page 101 of the bill. That section deals with the registration and the voting of shares.
The New Democratic Party amendment says that if a person has more than 2 per cent of the stock of a company the shares would be registered, but that shareholder could not vote even with the shares which he held. This suggestion indicates clearly to all members of this House how little the New Democratic Party understands the business of business, the business of banking, the business of financial institutions or, indeed, the workings of the total corporate organization of this country.
The suggestions made in the amendments put forward by the hon. member for Broadview-Greenwood indicate his total lack of understanding of this act and of the banking industry in general. I suggest that the amendments be defeated forthwith.
November 13, 1980


Raymond John Skelly: Mr. Speaker, I just had to get up and respond in some way to the very uncharitable remarks made by the hon. member who has just spoken and who, 1 know, can on occasion be charitable. I take exception to some of the things he said, particularly the statement that the New Democratic Party does not understand the affairs of business.


Donald Alex Blenkarn: You don't.


Raymond John Skelly: As the hon. member was making his comments I was gleaning from this rather scanty article more information than from his presentation. I would like to refer to it in the context of amendment No. 15. What we are asking for in this amendment is a change in the control of large corporations. We would like to see some accountability. We have stated that representatives of the public are accountable and that there should be representation from Crown corporations, but these ideas were no good because the government cannot become involved.
Now we are recommending a provision which would broaden the shareholding base. Banks are so important that the shares should be held by Canadian citizens. There should be a broader holding of the shares of those corporations. With this amendment we are trying to place an obstacle in the way of a situation which is all too common in this country today, one in which a small group of minority shareholders can control large and powerful corporations. We would like to broaden the base of the shares and insist on ownership by Canadian citizens.
These amendments are simple requests to establish Canadian control over the chartered banks by broadening the shareholder base. So far today we have spent most of the time debating fairly important points relating to corporate concentration in the banking industry. All the resolutions introduced today deal with the question of who controls the banks, how broadly they control them and how well they serve the interests of the Canadian people.
The Minister of State for Finance (Mr. Bussieres) has said many times today that the banks have lots of competition. For example, he has told us that the credit union movement in Canada is in a very strong position to compete with the banks and that, in fact, it is taking business away from the banks. Credit unions are broadly co-operative organizations. Every member owns a share and can attend an annual meeting to elect a board of directors.
The credit union in my community is a very broadly-based organization which represents the feelings of the community. When 1 compare the board of directors of that credit union with the board of directors of the Canadian Imperial Bank of Commerce I come up with some very enlightening facts. This article says that in 1979 Conrad Black was on the board. He was not representing a broad base of shareholders, he was representing Argus Corporation. I am learning from the hon. member for Mississauga South (Mr. Blenkarn) who it is that controls the financial power in this country, and I have been working very hard to learn.


Donald Alex Blenkarn: You will have to work a lot harder.
Bank Act


Raymond John Skelly: Who controls the financial power and thrust in this country? Another director on the board of the Imperial Bank of Commerce is Albert Fairley Jr. who is director of the Sun Life Assurance Company of Canada. It says that Mr. Fairley lives in Birmingham, Alabama. He is providing input from one major corporation to another while he lives in Birmingham, Alabama. J. P. Gallagher, another of the movers and shakers in the big corporations in Canada, is also mentioned. When I look at the board of the Courtney Savings Credit Union, I do not see a J. P. Gallagher, who represents Dome Petroleum or an A. D. Hamilton who represents Domtar or a Sydney Hermant, who represents Imperial Optical. Imperial Optical is a great little company. It is too bad that the Minister of Consumer and Corporate Affairs (Mr. Ouellet) is not here tonight because we could have a most interesting discussion about that company on the side.
What we are trying to get at in this amendment and in the whole series of amendments we have proposed today is who controls these banks. Obviously, these banks are controlled by a very exclusive group who represent very few people, and who thus wind up with interests which are not necessarily parallel with the interests of the people of Canada. The hon. member for Bow River (Mr. Taylor) talked about the situation in his province which is similar to the situation in my province, stressing the need for a broader base and more sensivity to the needs of the people of the western region.
The Canadian Imperial Bank of Commerce also has on its board a representative from LaFarge, a company based in Paris, France. I did not select the Bank of Commerce particularly; I merely wanted to make some remarks to illustrate the problem in front of us. Other members on the board include Albert Powis of Noranda Mines and Gailen Weston from the George Weston group. And here are two more, one from the Sun Life Assurance Company and one from Massey-Ferguson.
When we look at this board of directors we see that it is very exclusive and very powerful. The assets of the Canadian Imperial Bank of Commerce amounted to $50 billion in 1979, and the company recorded an 18 per cent increase in its assets since 1978. That company is doing very well. But we are not looking at $50 billion operating in the Canadian economy, we are looking at the interrelationship between the assets of all those other corporations and the Imperial Bank of Commerce. There are even international ties.
I just do not believe that the interests of Canada necessarily dovetail with those of the Imperial Bank of Commerce. I do not believe the minister when he says that the credit union movement is competing successfully with the Imperial Bank of Commerce because they are not in the same ball game. We are talking about a group of institutions which have a budget which is greater than the budget of the Government of Canada.
I am very skeptical when the minister says that the banks are facing real competition. The Toronto-Dominion Bank has total assets of $28 billion. Again the board of directors includes representatives of the Sun Life Assurance Company. So these companies are not merely associated with one bank,

November 13, 1980
Bank Act
they have their fingers in a couple of banks. That looks like interlocking directorships.
I am glad the hon. member for Mississauga South (Mr. Blenkarn) drew attention to my lack of understanding of business. But I have some questions, Mr. Speaker. Maybe it is time we all acquired a profound understanding of business and how it affects us. One of my colleagues says that Brother Bennett in British Columbia has been teaching us lessons. He subscribes to the same school of thought as the hon. member for Mississauga South.
We are looking at this particular organization with its paltry $28 million, which is a nice increase over last year, and also at the tremendous assets of the corporations around them. I find that CPR and one of its major subsidiaries is represented, as is Imperial Oil. I have forgotten which of these corporate citizens of Canada is concerned in this, but when we are learning the lesson of business that the hon. member for Mississauga South mentions, we notice that one of the advertisements on the program "Hockey Night in Canada" shows a big globe turning around. A man walks out on stage with a brace and bit. He stops the globe, then gets up on a ladder and puts the brace and bit against Canada and screws a big hole in it. That has just got to be Imperial Oil, Mr. Speaker. He screws a big hole in the globe and says, "We are basically working for Canada." 1 think that is some of the most honest advertising that has ever appeared on television. I cannot really tell which is screwing Canada the worst. Imperial Oil is doing us, so is the CPR. They are in a very exclusive club with the banks.
When I look at the Canadian Imperial Bank of Commerce I see Conrad Black of Argus Corporation and J. P. Gallagher of Dome Petroleum. They control $50 billion in assets and have interlocking arrangements through the Sun Life Assurance Company. I have to ask myself who controls the banks, Mr. Speaker. Is there a widespread representation of Canadian citizens or is it entirely Canadian citizens who influence the direction of the banks? To my own question I have to answer no, it is not.
The amendments we have introduced would ensure that Canadians control those banks, that Canadian representation on the boards of directors was much broader and that the sensitivity to Canadian issues was much increased.
I should like to pursue this avenue, Mr. Speaker. We have J. Edgar Kaiser whose daddy, down to the south, was Kaiser Steel and was also involved in oil companies. J. Edgar Kaiser was teaching British Columbia a lesson about business-along with his buddy, Bill Bennett. At one time the people of British Columbia, through their government, owned a large number of forest companies and other corporations that private enterprise had abandoned-along with the jobs and benefits to the community. The government of British Columbia picked up those companies and began to make a tremendous amount of money. The companies were extremely profitable. There were forest companies in northern British Columbia and the Koote-nays; there was Westcoast Transmission and all those other
beauties. When Bill Bennett was elected he decided to teach the people of British Columbia about business-just as the hon. member for Mississauga South suggests. He said, "We are going to take all those corporations that are making money and put them together in a big company called B.C. Resources Investment Corporation. Some of us had another, more affectionate, name for it, Mr. Speaker. He was going to put all the profitable companies together and sell them back to British Columbia. That was our first lesson in business. He was going to give everyone a couple of shares and let them buy the rest. People bought them up at $6 per share. The B.C. Resources Investment Corporation wound up with one of the largest piles of money there is anywhere. However, they procrastinated about what they would do with the money while the people of British Columbia waited for the value of the shares to increase, just like the bank shares.
Eventually, the corporation decided to buy the shares of young J. Edgar Kaiser's business and put in a bid at $44 for a share. It was not good enough and the bid was withdrawn. But several months later they made another bid at $55 per share. In the meantime, Mr. Speaker, even the president of the B.C. Resources Investment Corporation thought it would be a good idea to buy some of the shares and he did. J. Edgar Kaiser also bought some. At $55 per share he decided it was time to let BRIC take over the shares for a tidy sum, not only for the president of that company but for himself and many of the directors of his company. They all made a tidy profit on that deal at the expense of the people of British Columbia who were being taught how the marketplace works by a fellow traveller of the hon. member for Mississauga South. Now they have a big chunk of J. Edgar's business. It was a very expensive lesson indeed.
There is more to that story, Mr. Speaker. Benefits were negotiated by Kaiser. He was allowed to buy back assets at cost; he has been given a 15-year agreement on coal, and he has a commission to sell coal that has already been sold. As a matter of fact, the people of British Columbia were taken to the cleaners by Bill Bennett and J. Edgar Kaiser, Junior.
I am frightened, Mr. Speaker, that the lessons given by companies like Imperial Oil, CPR, and J. Edgar Kaiser's coal operations in southeastern British Columbia are not the lessons the people of Canada want to learn. I suggest that the lesson of Chrysler, Massey-Ferguson and many other corporations are not the kind we need to learn either. In fact, if there was greater public accountability, a broader holding of shares involving more Canadians, there would not be some of these very sharp business deals that fill the pockets of a small number of Canadians-the old boy group that has been mentioned.
I defy the hon. member to say that it is not so; that people have not been hurt. They have been skinned, Mr. Speaker. There are many honest businesses in this country but there are some that need more direction. Some people in positions of power have harmed Canadians and we would like to see an end to that. If we were to broaden the base of shareholding, it would be a step in the right direction.

November 13, 1980
Some time earlier I mentioned what 1 saw as a sort of historical prospective of Canada. I mentioned the CPR link to the Bank of Montreal and the link to the Liberal-Conservative party as it was called at that time-again skinning the people of Canada. The bank was there, funding the skinning, directing the efforts. They built the CPR and certainly that benefit-ted the country. When we look at the political relationships between these companies, however, I think it should be on record that in most of those corporations, and in the people who sat on the boards of the banks we see a cross-referencing of individuals. Those corporations donate to the Liberal party, to the Conservative party. So they have an interest. Also, the banks donate to the Liberal party and the Conservative party. The old alliance still exists.
1 hear some people across the way coming to life, Mr. Speaker. That is good. There are new questions.


An hon. Member:: Don't wake them up.


Raymond John Skelly: I think they have to be woken up. This is a very serious thing, Mr. Speaker. We cannot deny history. The people were skinned by a bank. There is a strong corporate connection and a political alliance. History requires some depth of thought.
The backbenchers across the way tend to drift off, Mr. Speaker, because they have no role to play. That tie does exist today. It has existed in the past and it exists today in the mind of the hon. member for Mississauga South. One of my colleagues has brought over the Hudson's Bay motto which is "Skin 'em alive!"


An hon. Member:: That is the Liberal party motto.


Raymond John Skelly: I am afraid my Latin is not quite up to scratch these days, but he was kind enough to translate the motto for me.
If we go back to Donald Smith, who was at one time a mover and shaker in the Hudson's Bay Company, we find him propped up over there in the Liberal-Conservative party when they ruled the country. We also find him listed on the board of the Bank of Montreal and the CPR. I think he was one of the people pounding the spikes.


Donald Alex Blenkarn: He built the country.


Raymond John Skelly: He built it all right, skinning them alive.


Donald Alex Blenkarn: Who did he skin?


Raymond John Skelly: He was busy like the member for Mississauga South (Mr. Blenkarn) teaching them a lesson. Thank you for your indulgence, Mr. Speaker. I hope we will all learn some lessons from that.


The Acting Speaker (Mr. Blaker):: Is the House ready for the question?


Some hon. Members:: Question.
Bank Act


The Acting Speaker (Mr. Blaker):: The question is on motion No. 14 in the name of the hon. member for Broadview-Greenwood (Mr. Rae).
Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Blaker):: All those in favour of the said motion will please say yea?


Some hon. Members:: Yea!


The Acting Speaker (Mr. Blaker):: All those opposed will please say nay.


Some hon. Members:: Nay!


The Acting Speaker (Mr. Blaker):: In my opinion, the nays have it.
And more than five members having risen:
Pursuant to Standing Order 75(11) the recorded division on the proposed motion stands deferred.


Bob Rae: Motion No. 15
That Bill C-6, an act 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 amended in clause 2 by susbstituting the word "two" for the word "ten" in lines 34, 44, and 50 at page 98.


The Acting Speaker (Mr. Blaker):: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Blaker):: All those in favour of the said motion will please say yea.


Some hon. Members:: Yea!


The Acting Speaker (Mr. Blaker):: All those opposed will please say nay.


Some hon. Members:: Nay!


The Acting Speaker (Mr. Blaker):: In my opinion, the nays have it.


Stanley Howard Knowles: On division.


The Acting Speaker (Mr. Blaker):: 1 declare the motion negatived on division.
Motion No. 15 (Mr. Rae) negatived.


Bob Rae: Motion No. 18
That Bill C-6, an act to revise the Bank Act, to amend the Quebec Savings Banks Act and the Bank of Canada Act, to establish the Canadian Payments
4674

November 13, 1980
Bank Act
Association and to amend other acts in consequence thereof, be amended in clause 2 by striking out line 36 at page 101 and substituting the following therefor:
"exceeds two per cent of the issued and"


The Acting Speaker (Mr. Blaker):: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Blaker):: All those in favour of the said motion will please say yea.


Some hon. Members:: Yea!


The Acting Speaker (Mr. Blaker):: All those opposed will please say nay.


Some hon. Members:: Nay!


The Acting Speaker (Mr. Blaker):: In my opinion, the nays have it.


Stanley Howard Knowles: On division.


The Acting Speaker (Mr. Blaker):: I declare the motion negatived on division.
Motion No. 18 (Mr. Rae) negatived.


The Acting Speaker (Mr. Blaker):: The House will now proceed to motions numbered 17, 52, 55 and 59, all in the name of the Minister of State for Finance (Mr. Bussieres) which can be grouped for debate but voted on separately.
[ Translation]


Pierre Bussières: Motion No. 17
That Bill C-6, an act 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 amended in clause 2 by adding immediately after line 9 at page 101 the following:
"110.1 (I) Subject to this section, no person shall
(o) hold or beneficially own shares of a class of shares of a bank if the total number of shares of that class held or beneficially owned by such person and by other persons associated with him, if any, is more than ten per cent of the total number of the issued and outstanding shares of that class; or (b) purchase or otherwise acquire shares of a class of shares of a bank if the total number of such shares together with the total number of shares of that class held or beneficially owned by such person and by other persons associated with him, if any, would exceed ten per cent of the total number of the issued and outstanding shares of that class.
(2)	A person who, on the day this section comes into force, holds or beneficially owns shares that, but for this subsection, would be held or beneficially owned in contravention of paragraph (l)(a), may continue to do so for a period of five years after the coming into force of this section.
(3)	Subsection (1) does not apply in respect of any shares of a foreign bank subsidiary that are held, beneficially owned, purchased or acquired by a foreign bank.
(4)	Subsection (1) does not apply in respect of any shares of a bank, other than a foreign bank subsidiary, purchased or acquired by a person pursuant to section 114 or held or beneficially owned by such person as a result of any
such purchase or acquisition until the date that is ten years after the day of such purchase or acquisition.
(5)	The Inspector may from time to time, in writing, direct a bank to obtain from any person in whose name a share of the bank is held or beneficially owned a declaration containing information
(o) concerning the ownership or beneficial ownership of such share,
(b) whether such share is held or beneficially owned by a person who is associated with any other person and the name of that other person where applicable, and
(r) concerning such other related matters as are specified by the Inspector, and as soon as possible after the receipt of a direction from the Inspector under this subsection, the directors of the bank shall comply therewith and every person who is requested by the bank to provide a declaration containing information referred to in this subsection shall forthwith comply with the request.
(6)	Where, in the opinion of the minister, a person holds or beneficially owns shares of a bank in contravention of subsection (I), the minister may, by order, require the person or other persons associated with him, or both, to divest himself or themselves of such number of those shares as is specified in the order within such time not exceeding two years from the date of the order as is specified in the order and in such proportion if any, as, between the person and those other persons, is specified in the order and the person and those other persons shall comply with such order.
(7)	For the purposes of this section, a person is deemed to be associated with another person if there exists between those persons any relationship referred to in subsection 109(2) that, if both such persons were shareholders, would cause those shareholders to be deemed to be associated pursuant to that subsection."


Pierre Bussières: Motion No. 52
That Bill C-6, an act 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 amended in clause 2 by striking out line I at page 315 and substituting the following therefor:
"(2) Notwithstanding subsection 1101(1) and paragraph (l)(a) of this section,".


Pierre Bussières: shares of the bank that, but for subsection (9), would be held or beneficially owned in contravention of paragraph (8)(a), may exercise the voting rights pertaining to any of those shares if the number of such shares being voted at any time by that person and by other persons associated with him, if any, does not exceed ten per cent of the issued and outstanding shares of that class.
(11)	The Inspector may from time to time, in writing, direct the bank to obtain from any person in whose name a share of the bank is held or beneficially owned a declaration containing information
(a) concerning the ownership or beneficial ownership of such share,
(h) whether such share is held or beneficially owned by a person who is associated with any other person and the name of that other person where applicable, and
(c) concerning such other related matters as are specified by the Inspector,
and as soon as possible after the receipt of a direction from the Inspector under this subsection, the directors of the bank shall comply therewith and every person who is requested by the bank to provide a declaration containing information referred to in this subsection shall forthwith comply with the request.
(12)	Where, in the opinion of the minister, a person holds or beneficially owns shares of the bank in contravention of subsection (8), the minister may, by order, require the person or other persons associated with him, or both, to divest himself or themselves of such number of those shares as is specified in the order within such time not exceeding two years from the date of the order as is specified in the order and in such proportion, if any, as, between the person and those other persons, is specified, in the order and the person and those other persons shall comply with such order.
(13)	For the purposes of this section,
(a) "beneficially own" includes own through a trustee, legal representative, agent or other intermediary; and
(h) a person is deemed to be associated with another person if there exists between those persons any relationship referred to in subsection 45(2) that, if both such persons were shareholders, would cause those shareholders to be deemed to be associated pursuant to that subsection.
(14)	Everyone who, without reasonable cause, contravenes subsection (8),
(11) or (12) is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both." "


Pierre Bussières: Motion No. 59
That Bill C-6, an act 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 amended in clause 91 by striking out line 31 at page 446 and substituting the following therefor:
"lion.
(2.1)	Subject to subsection (2.2), section 110.1 of the Bank Act applies to IAC Limited and in respect of the shares of IAC Limited.
(2.2)	A person who immediately prior to the amalgamation under subsection (I) of this section was permitted by section 110.1 of the Bank Act to continue to hold or beneficially own shares of IAC Limited that but for subsection (2) of that section would be held or beneficially owned in contravention of paragraph (l)(a) of that section, may hold or beneficially own the shares issued to him under subsection (2) of this section after the amalgamation during the same period of time as he would have been permitted by subsection 110.1(2) of the Bank Act to continue to hold or beneficially own shares of IAC Limited had the amalgamation nol occurred."
He said: Mr. Speaker, as you clearly indicated, the House is now called upon to proceed to the consideration of motions Nos. 17, 52, 55 and 59, which we shall consider together and
Bank Act
which will be voted on later. I am convinced that, as we consider those motions, we shall recognize many concerns which were expressed this afternoon and this evening on the so-called excessive control over bank shares by particular groups or by a limited number of individuals.
We must remember, Mr. Speaker, and I wish to remind hon. members of this, that these amendments come from a situation described to the committee by the Inspector General of Banks following questions asked to the Inspector General and myself by members who sit on the committee. These questions clearly showed that the principle that an individual or a group must not hold more than 10 per cent of the shares of a bank could easily be evaded since the penalty attached to this provision was that these shares could not be registered and would therefore not carry a vote. We could therefore have a situation where a group or even an individual would hold 25 per cent, 30 per cent or 40 per cent of the shares of a bank.
Of course, the shares over 10 per cent were not registered and did not carry a vote. Therefore, they did not go against the letter of the law, even though they obviously exceeded the spirit of the law. Hon. members who were present at these proceedings, which were held before the House was recalled, in late September or early October as I recall, will remember that the comittee unanimously took the position that some means must be found to strengthen the provisions of the legislation so that not only the letter of the law, but also its spirit could be respected and to specify that there is truly a limit of 10 per cent placed on the shares that an individual or group can hold, and the amendments contained in these four motions meet this requirement.
The first amendment, which is contained in motion No. 17, states that it would be illegal for a person and his associates to hold or to beneficially own more then 10 per cent of the shares of a bank. Moreover, with this amendment, the Inspector General of Banks would have the power to obtain any information necessary to determine who are the true owners of the shares of a bank. This new clause provides a mechanism to require someone to divest himself of those shares exceeding the 10 per cent limit. To protect temporarily the persons or groups of persons who hold more then 10 per cent of the shares of recently established banks, subclause 110.1 of this bill would allow these people to continue to hold their shares for a period of five years, and subclause 110.1(6) would include the possibility of granting an additional period of two years to divest themselves of these shares.
To avoid any misunderstanding, if at the time the legislation now before us comes into force, a person or group hold more than 10 per cent of the capital stock, they would have an initial five-year period to conform to the 10 per cent limit. If after that five-year period that person or group experienced difficul-

November 13, 1980
Bank Act
ties that could be reasonably explained and understood, an additional two-year exemption could be granted.
Such an approach is compatible with the special acts that were passed earlier for the incorporation of banks. Moreover, motions Nos. 52 and 56, that will come up later, protect the persons holding more than 10 per cent of the capital stock of Mercantile Bank and Continental Bank. Certainly, every member here understands that we could not enact legislation that would be unfair to institutions established under agreements that were negotiated under specific circumstances and according to specific understandings. Those understandings the government is determined to respect. The government therefore propose to amend the legislation to insert paragraph 110(1) I just referred to.
I would now like to turn briefly to motion No. 52. It is also linked to motion No. 17 limiting to 10 per cent the percentage amount of a bank's capital stock that may be held by any one person. The proposed amendment concerns paragraph 305(2) of the legislation and would allow Citicorp to detain more than 10 per cent of the capital stock of Mercantile Bank, as I referred to earlier. That provision, it will be remembered, was introduced in 1967 under the last Bank Act revision, and we have no intention of amending it. Citicorp now holds less than 25 per cent of the capital stock of Mercantile Bank, and that percentage could be possibly reduced to 10 per cent to the extent that Mercantile would issue new shares to increase their capital. And I would like to call upon hon. members to view this in light of the historical context I just explained, when the Citicorp-Mercantile understandings were negotiated.
Now, Mr. Speaker, I should like to deal briefly with the other amendment affecting the Quebec Savings Banks which has reached a point where one of the shareholders holds more than the 10 per cent limit of total shares, and this amendment is similar to the general amendment we are seeking to the Bank Act. There is a first period of five years which is granted to dispose of all shares in excess of the 10 per cent limit; wherever special circumstances warrant, a two-year extension could be allowed to avoid causing unduly serious prejudice to the institution.
Mr. Speaker, motion No. 59 is also consequential on the general amendment and concerns the legislation incorporating the Continental Bank of Canada. Its purpose is to make sure that the government's policy to strengthen the provisions concerning the effective holding or owning of more than 10 per cent of total shares of an individual bank are not unfair to the shareholders of IAC Limited following its amalgamation with the Continental Bank. The proposed amendment will provide IAC shareholders with the same rights to own shares and the same duties to dispose of their excess shares as those which are provided to the bank's shareholders under motion No. 17.
The government proposes to amend accordingly the act incorporating the Continental Bank of Canada. Mr. Speaker, I have attempted to reconstruct the context in which we discussed in committee, the obvious difficulty of respecting in every detail the 10 per cent ownership of bank shares, in compliance with the spirit of the law. We have seen, upon examination, what consequences that amendment can have on existing institutions.
The government is proposing an amendment that is intended to be fair in that, on the one hand, it will allow financial institutions to adjust and adapt to the spirit and the letter of the law while, on the other hand, allowing those institutions which were granted a special regime on incorporation, as a result of negotiations leading up to that incorporation, to be treated fairly and reasonably without suffering undue damages. I could have added that penalties have been provided for in the bill. Suffice to say, on concluding, that the provision is strengthened which stipulates that no one person or group of persons shall hold more than 10 per cent of the shares of any given bank; this, I believe, will meet the wishes and the will of the standing committee as well as the spirit of the act as it now stands. Mr. Speaker, I urge all hon. members to support the four motions I have just dealt with.


Marcel Joseph Aimé Lambert: Mr. Speaker, first of all I should like to congratulate you for agreeing to chair our sitting this evening. Since the minister spoke in French, I shall make my few remarks on his proposals in English. [English]
These rather long amendments, particularly motion No. 17, were actually prompted as a result of questioning that 1 started one morning. It took us about two to two and a half hours to get the information. I do not know what the reluctance was. Perhaps it was a lack of knowledge.
It seemed when I started questioning to try and get information about the Montreal and District Savings Bank that there was some sort of either-


Donald Alex Blenkarn: Cover-up.


Marcel Joseph Aimé Lambert: I would not say cover-up. There was some sort of embarrassment or reticence about giving the information.


Donald Alex Blenkarn: Cover-up.


Pierre Bussières: Mr. Speaker, I rise on a question of privilege. I have heard totally unacceptable expressions used about the way both the Inspector General and I behaved as witnesses in committee.
In no way can the Inspector General of Banks or myself be accused as witnesses of not answering the questions of the committee members as fully as possible. Mr. Speaker, I reserve the right to raise the question of privilege about the words used.


Marcel Joseph Aimé Lambert: Mr. Speaker, it is not I who accuses. I talked about a certain reticence and I explained. Perhaps the facts
November 13, 1980

were not too clear and it took a little while to show the government and the Inspector General of Banks that we were aware of what had happened. Also, I think that what we felt at that moment was a certain embarrassment, as a result of a particular situation and that, under the act as it existed, the Inspector General of Banks and the minister were powerless and it seemed in fact that the act was rather like a paper tiger. After all, we all know that when a bank shareholder has more shares than the maximum allowed, the only penalty he suffers is that he cannot vote to the full extent of his shares.
But on the other hand neither the minister nor the Inspector General of Banks could penalize the shareholder because the act simply stated that the bank did not register the transfer of such and such a share since the shareholder had already registered more than 10 per cent of the shares. That is why we say they are powerless. After all, that was the situation and it was well known that the Laurentian group held some 43 or 47 per cent of the shares, which was considerably more than the maximum allowed. So maybe they were a bit embarrassed to admit this but eventually, as the information was made public,
1 think that even government members of the committee expressed some reservations. So it was not only opposition members who openly criticized the situation. I am therefore very happy that the minister came up with this amendment. 1 was wondering if this was going to be put off indefinitely with an arrangement, with negotiations with the Laurentian group. After all, they did come to see us the day after we criticized the situation to explain their position and to say that they needed time. So I am happy that they did not choose two years, as was originally stipulated, but that they added in fact another five years.
However, having said that, I do wish that this amendment and its companion amendment in the Quebec Savings Banks Act had gone further. This amendment envisages that at the end of five years, if it is found that a shareholder holds in excess of the permitted number of shares, the minister may make an order that the shareholder divest himself. It is to be a direct order from the minister. That is going one step further. First of all he is given a period of grace. Then there is a ministerial order that he shall divest himself. And that is all. I would have preferred to see the minister, after having issued an order under the act, be able to sanction a penalty if that order had been frustrated or disobeyed. We give him the power to do that under the act. At the present time the only penalty is the shareholder cannot vote the shares. There are provisions in the act for an offence under the act but there is nothing in this amendment, with the greatest of respect, saying that if the minister's order is disobeyed such action shall be deemed to be an offence under the act. Therefore, the penalty is still the same.
1 would have thought that in the normal progression of things the five-years' grace would allow the shareholder to
Bank Act
hold the shares he has in excess though he could not vote. Well, that is a disability but, apparently, it is not a very serious one. Then the minister gives the offending shareholder two years to divest himself-and it is a direct order. Unfortunately, the amendment says nothing about that. It leaves the minister toothless. In effect, he is a toothless tiger. There is no way that the minister can then act further to do anything to that offending shareholder. Unless I am a poor interpreter of statutes, no offence has been created. I would have thought that just the additional phrase that the disregard of such a ministerial order after the period of two years should be an offence within the act, would bring the penalty sections into play. Perhaps that would provide the necessary whip to get an offending shareholder back in line. Unfortunately, that is something we cannot change.
Perhaps, though, there is a way to make this happen. I suggest to the minister that there is still time to bring an appropriate amendment before the other House. The other House could then accept that amendment and there could be negotiation and acceptance by this House.
I see the minister is getting awfully interested in a note which was just passed to him. Unfortunately, he cannot speak again. Perhaps one of his colleagues or the parliamentary secretary could give us the information.
If I am wrong-and 1 am not insisting that I am right-on first blush that is my reaction to the clause. There is no such thing as an offence simpliciter. There cannot be just a general offence under the act because in no other place are there ministerial orders.
It is an interesting point to raise at this time. I would prefer to see it cleared up as soon as possible, so I will keep talking until the minister can come back and can indicate whether the parliamentary secretary has the answer. I do not want a light opinion given by two non-lawyers that the act covers this situation. It seems to me this matter could be handled very easily through the process of the hearings in the other place, after which it could be brought back here. I trust that would provide sufficient time to have the bill go to the other place and then, if there must be conferences to negotiate any differences, that would be the way to proceed.
The last amendment, which is No. 59, deals with the IAC, as the minister indicated. But there again we have the same IAC and the Continental Bank. That in itself suffers from the same disability because all these amendments refer back to the contents of motion No. 17 which lays out the procedure with regard to an excess of shares. 1 certainly urge the House to accept this amendment, but perhaps my colleagues on this side would wait for the parliamentary secretary, if he is ready-or if he is not, I see that one of my colleagues is quite anxious to take over-and we can get the answer. In any event I think that this is a salutary group of amendments which show the wisdom of some co-operation in examining a complicated text.


John Leslie Evans: Mr. Speaker, I know that this intervention precludes

November 13, 1980
Bank Act
me from speaking again on this particular motion, but 1 think the hon. member has a question which is worthy of a serious comment. The motion we are dealing with here deals with the Quebec Savings Banks Act and, as we found in the last section, No. 14, sets out an offence with regard to the Quebec Savings Banks Act. My information is that the same provision applies in the Bank Act at page 324 section 314, specifically paragraph (2) which reads as follows:
Everyone who, without reasonable cause, contravenes a provision of this act or the regulations for the contravention of which no punishment is otherwise provided by this act is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.


Marcel Joseph Aimé Lambert: All right.


John Leslie Evans: Thank you very much, Mr. Speaker.


Donald Alex Blenkarn: Mr. Speaker, a few minutes ago the minister rose and was rather upset when I may have shouted across the floor, "There is a bit of a cover-up here". Let us talk about that for a moment.
In May of this year before this bill left the House at second reading the Inspector General of Banks became aware that the Laurentian group in Quebec had obtained 43 per cent of the shares of the Quebec Savings Bank. Later in the year the minister and the Inspector General of Banks clearly had discussions, and letters were written in the month of July to that group advising that it was in default under the act, telling the group that it could not vote its shares and, generally speaking, calling the group's attention to the matter.
What bothers me, and what bothered many members of the finance committee, is that when section 110 came before the committee for discussion, no mention of the Laurentian problem and the Quebec Savings problem was brought to the attention of that committee in July. It was not until the hon. member for Edmonton West raised the matter in September- [Translation]


Pierre Bussières: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Blaker):: The Minister of State for Finance on a point of order.


Pierre Bussières: Mr. Speaker, on this point of order I would like to point out to the hon. member that the provisions of the bill provided that an excess of 10 per cent of shares should not be registered by the institution and the shareholders should not have the right to vote. Those two facts were a violation of the law and this is what his colleague said a while ago and what we said before a standing committee. So no matter how many ribbons they may be wrapped in those allegations are still untruths.


Donald Alex Blenkarn: Mr. Speaker, the minister has confirmed that section 110 does provide that shares may not be registered, but when the minister and the Inspector General of Banks had before them a situation, unknown to members of the committee, in which a group in fact controlled 43 per cent of the shares which was known to the minister, the minister, through the Inspector General of Banks, advised the members of that group that they could not vote their shares, and the minister did not reveal this to the committee in July when the section was before the committee. The question was not asked. It was not asked until September when the hon. member for Edmonton West (Mr. Lambert) brought it to the attention of the committee, and then the whole thing opened up. Then all of a sudden we learned from the Inspector General of Banks what in fact was happening. It became apparent that Monsieur Garneau is going to be elected-or has now been re-elected- chief executive officer of the Quebec Savings Bank. Somewhere along the line, even though the Laurentian group cannot vote any of its shares, its nominee as chief executive officer will be elected.
It became quite apparent that whether you were able to register your shares or not, you could still perhaps have some effective control over a bank. It is only as a result of that committee hearing and the intense questioning on that day that these amendments are before the House. I say to the minister very sincerely that he should have advised the committee in July of the problem he was having. The inspector general, on the minister's instructions, should have advised the committee at that time, and the inspector general and the minister should have introduced these amendments in the committee when they knew the problems were there. It was only as a result of the questioning of the hon. member for Edmonton West that this matter came to the attention of the committee. The minister shakes his head, but it might well be said that the minister would not be introducing these amendments were it not for that questioning. The minister again shakes his head. I say to the minister that he has to come clean. In the committee the opposition brought forward a certain matter. That matter is now before the House, and these are reasonable amendments. Let us look at them. What the amendment does, particularly with the Quebec Savings Banks, is say, "You have five years in which to divest your shares." If it does not do so in five years, it probably has another two years. Then what does it say? I read motion No. 55, I suppose it is. Subsection (14) says:
Everyone who, without reasonable cause, contravenes subsection (8), (II) or (12) is guilty of an offence-
Is it reasonable cause if you cannot get a decent market price for your shares? It does not say, "Any one who contravenes regardless of cause is guilty of an offence". It says "without reasonable cause". Has the minister in this amendment said to the Laurentian group that the worst that can happen if it does not get rid of its shares is that it will pay a $5,000 fine and that if it has any reasonable cause perhaps it will not pay any fine at all? Under the subsection you can only be convicted once. It is not a continuing offence. It is a one-offence situation. The maximum fine is $5,000 once, and if there is reasonable cause for not obeying the minister's order you do not pay at all; nothing happens to you. You do not lose your shares. You still keep them. The minister cannot make
November 13, 1980

another order and cannot give you another two years or five years. He is finished.
If you show a provincial judge or a superior court judge that you have reasonable cause for not getting rid of your shares, nothing can happen to you. Perhaps you cannot vote the shares, but you could not anyway. However, that does not matter because you certainly could elect your chief executive officer in the way you want without voting.
This is the section in which the minister proposes to correct that situation. The minister does not come across on the matter. Perhaps he should be given an opportunity to rise and speak again on the issue, but in this particular matter the minister did not explain his problem when section 110 first came before the committee. It was only in the last stages of the committee's hearings in September, as a result of the questioning by the hon. member for Edmonton West, that this matter came before the committee. That is the only reason these amendments are here. They are proper amendments. They are not tough enough and they are not clear enough, but they are proper amendments. I strongly suggest to the minister that he take a look at subclause (14) in motion 55 with respect to Quebec Savings Banks and at the penalties with respect to other chartered banks as well as the other part of the bill in motion No. 17 to make sure that those who attempt to skate around the provisions limiting shareholding by saying, "I don't care whether or not I vote the shares" are in fact committing an offence under the act. I suggest that the penalty attached to the offence be the forfeiture of the shares, because unless you are prepared to put a serious penalty into the act, everyone will find good reason not to dispose of their stock. After all, it may upset the marketplace, or they may not get what they paid for their shares, or they may lose money. This would be terrible! When a person literally flouts a statute of this country, there should be legislation with teeth in it to deal with such a case. This particular statute says that if you flout the statute, you will get five years grace and then another two years, following which maybe you will have to pay $5,000 if you do not have reasonable cause. Is the minister really serious about controlling shareholding? Is he really serious about closing the loophole which has developed as a result of the actions of the Laurentian group? I have talked to the Laurentian group, the minister knows that. 1 understand their problems and I understand how the problem has developed. But what I and other members are concerned about is what happens with respect to other chartered banks. Will a situation arise where somebody is allowed to buy up a majority share of stocks in those other banks, not vote them and not register them? Will an investigation be ordered in five years and then in another two years, following which, unless you can show reasonable cause, you will not even be fined, and if you are fined, you are only fined $5,000 as a licence fee? Is that the kind of penalty the minister wants? Is that what the minister is talking about? Is that how serious he is with respect to the statute?
Bank Act


The Acting Speaker (Mr. Blaker):: Is the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Blaker):: Motions Nos. 17, 52, 55 and 59 in the name of the Minister of State for Finance (Mr. Bussieres) were grouped together for debate but will be voted upon separately. The first question is on motion No. 17 in the name of the Minister of State for Finance. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
Motion No. 17 (Mr. Bussieres) agreed to.


The Acting Speaker (Mr. Blaker):: The question is on motion No. 52. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
Motion No. 52 (Mr. Bussieres) agreed to.


The Acting Speaker (Mr. Blaker):: The next question is on motion No. 55. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
Motion No. 55 (Mr. Bussieres) agreed to.


The Acting Speaker (Mr. Blaker):: The next question is on motion No. 59. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
Motion No. 59 (Mr. Bussieres) agreed to.


The Acting Speaker (Mr. Blaker):: Pursuant to a notification of which 1 informed the House earlier today at 8 p.m., there is a substantial series of motions to be debated and voted on separately. The first is motion No. 22 standing in the name of the hon. member for Broadview-Greenwood (Mr. Rae).


Bob Rae: Motion No. 22
That Bill C-6, an act 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 amended in clause 2 by striking out lines 27 to 32 at page 145 and substituting the following therefor:
"legal representatives, and any individual may examine the records described
in subsection 155(1) during usual business hours of the bank and may take
extracts therefrom, free of charge."


Marcel Joseph Aimé Lambert: Mr. Speaker, I rise on a point of order. I should like to examine the groupings which have been made by the Chair to see whether or not 1 agree with the suggestion that the motions be voted upon separately. Once that is done perhaps we could recommend to the House that an order be made that such should be the procedure to be followed later this evening and tomorrow. I think we do require a House order. It would tidy up the debate. However, I have not

November 13, 1980
Bank Act
had a chance to check the motions grouped, so perhaps the debate could proceed on motion No. 22, as you have proposed, Mr. Speaker, following which 1 could tell you whether we are in agreement with this particular proposal from the Chair.


The Acting Speaker (Mr. Blaker):: Before I recognize the hon. member for Comox-Powell River (Mr. Skelly), may I interject to say that when the hon. member for Edmonton West started to make his remarks, 1 was moving paper around and I missed hearing what he said. I will inform myself immediately on the subject. In the meantime, the Chair will recognize the hon. member for Comox-Powell River on motion No. 22.


Raymond John Skelly: Mr. Speaker, I think this particular motion deals with the question of financial disclosure. As we indicated earlier, we considered it very important as far as support for this legislation is concerned. It was raised throughout second reading and throughout the committee stage. We held informal discussions concerning possible amendments, and the government certainly did not seem to object to the concept of financial disclosure. The question of where and how much always arises in this connection. It might be interesting to see whether the government would be prepared to accept this amendment. I think it is very easy to accept in some respects and it is certainly not controversial. It is consistent with the government's theme in terms of freedom of information. We have had some wide ranging discussions on how much people have a right to know and so on. It is important to keep in mind that basically we should be given free and easy access to information which affects our lives. 1 would like to refer to clause 156 as it presently reads. Basically, section 156(1) states:
Shareholders and holders of bank debentures of a bank, their agents and legal representatives may examine the records described in subsection 155(1) during usual business hours of the bank and may take extracts therefrom, free of charge, and any other person may do so on payment of a reasonable fee.
Our amendment would provide that "any individual . .. may take extracts .. . free." Free and ready access to information is the important aspect. It is consistent with freedom of information, and as I said before, hopefully the government will accept this proposition.
What disturbs us more than anything else about any attempt to limit information available to others is that Canada has somewhat of a history of curtailing the rights of people; their ability to understand what is going on around them is hampered by the close and secretive society in which we live. When we look across the line to our neighbours to the south, we find that basically they have a fairly wide-ranging access to information.
At one time questions were raised about the money made by the president of the CPR in Canada, what he was being paid. While other Canadians had wage and price controls imposed upon them we wondered about the salary of the president of
the CPR. The salaries of other corporate executives, directors and a whole range of people were not available to be scrutinized. But this material was freely available in the United States. As a matter of fact corporations disclose the information automatically when applying for access to security markets in the United States. There is no hindrance whatsoever, and they are required to display a whole range of information. Simple access to the information is made readily available. Another organization in the United States has set out guidelines. Bank America has set out voluntary guidelines for disclosure. This business of financial disclosure is very important. The corporation indicated that it was not just shareholders or an exclusive group of people who had a right to knowledge, but that its employees also had the right to know what was going on within the corporation for which they worked. Compared with the situation in our country, this attitude is, indeed, progressive.
Look at some of the things that went on when many bank employees attempted to organize. They needed information and assistance. I guess the banks are one of the last bastions of a medieval attitude toward labour relations. These employees experienced great difficulty in obtaining information. But Bank America indicated that its employees had a right and need to be informed about the corporation, its corporate policies, decisions of its board of directors and a great many other matters. Also, that bank acknowledged that its customers also had a need and right to know, and it outlined substantial areas in which customers could obtain information. Investors or people who buy securities and shares in banks also have a right to know, and Bank America freely acknowledged this. It is generally acknowledged that shareholders have a right to information, but the impressive thing about the guidelines is that they far outstrip any information available to Canadians from Canadian banks. They recognize the basic principle that there is a broad need and right to know what some of the major corporations are doing. Unfortunately we are just dealing with the Bank Act and the opportunity to place this principle in the Bank Act.
There is a need for Canadians to know the activities of many of the major corporations in the country. Depriving them of that information means they do not have the information necessary to make reasonable and intelligent decisions about matters affecting their lives, whether it is voting in any of the democratic processes or whether it is taking positive action to support or oppose ongoing activities. The issue we are dealing with here is a very simple one, but at its root is the business of disclosure. I can see no basic opposition to government support of this motion, and I certainly hope the government adopts this particular concept.


John Leslie Evans: Mr. Speaker, listening to the hon. member for Comox-Powell River (Mr. Skelly), I had some difficulty with the issue he raised because it is completely covered by the government provision which is contained right now in Bill C-6.
November 13, 1980

Section 156(1) reads as follows:
Shareholders and holders of bank debentures of a bank, their agents and legal representatives may examine the records described in subsection 155(1) during usual business hours of the bank and may take extracts therefrom, free of charge, and any other person may do so on payment of a reasonable fee.
By "reasonable fee", we are talking about the cost of making photocopies. In addition to that, this same information is available in the office of the Inspector General of Banks. Again for the payment of a simple photocopy fee, anyone can walk in, ask for that information and make extracts. That is freedom of information.
The freedom of information bill the government is bringing forward requires the payment of a photocopy fee if one wants that information. If one is a shareholder or a holder of bank debentures, then one can say one has some right to this information without charge, but any stranger coming in off the street will have to pay for the photocopy, which is fair and reasonable. The same thing applies in the freedom of information bill. When photocopies are required, why should the taxpayer pay the shot for information required for personal reasons? In that case a photocopy fee will be charged.
Apparently there is no argument by the hon. member for Comox-Powell River regarding section 155(1) which specifies what information will be made available to the public, shareholders and everyone else. Therefore, the question must be on section 156(1) which is what the amendment applies to. Do people have the right to this information and do they have access to it under the law? The answer to both those questions is yes.
I have listened to the hon. member go on about the principle of freedom of information, access to information, and urging that the amendment he is putting forward should be accepted by the government, but I tell him that what he is requesting is already provided for in the law that the amendment is unnecessary.


Marcel Joseph Aimé Lambert: Mr. Speaker, I am astounded that we have given this much information to the general public in regard to banks. It seems to me that banks, in so far as they are corporate bodies, are no different than any other organizations. When one looks at section 155(1) on page 144 of Bill C-6, one will see that we allow individuals from the street to go in and get minutes of meetings, resolutions of shareholders and copies of all returns and notices required under the Bank Act. But there is a limit. If there is a constructive purpose other than pure snooperism, they can have access to the information. A right to know does not mean an absolute right to know. In many instances, it is absolute snooperism. In many instances it is the question of a competitor.
When one negotiates with another party, one does not have access to the records of that party. One negotiates from one's own strength, not with one's hand in the opponent's pocket. I find that we have gone extraordinarily far in this area. I can remember when the committee changed the law and added, I
Bank Act
believe-and I stand to be corrected-in the last paragraph the phrase that "Any other person may do so on payment of a reasonable fee". I rather suspect that the committee per incuriam may have kicked open the door rather widely. I have no reservations whatsoever about opposing this particular amendment.


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I would like to make a few remarks about the incredulity of the Parliamentary Secretary of the Minister of Finance (Mr. Evans) with regard to our observations about the generosity of the section as it stands in respect of financial disclosure. I am not an expert on the Bank Act, but I have a hunch that the section as its stands is not the all-encompassing ground for freedom of information which the hon. parliamentary secretary would have us believe. I think we can find evidence of this in the remarks of the hon. member for Edmonton West (Mr. Lambert) who has a feeling of anxiety that somebody might actually know what the banks are doing-that we have actually gone too far.
In so far as the coalition of thought between the Liberal party and the Conservative party can be trusted to be in place,
I am confident that somewhere the government has in the course of the Bank Act addressed itself to the insecurities expressed by the hon. member for Edmonton West and that, indeed, the measures for financial disclosure will prove not to be as generous as the hon. parliamentary secretary has tried to lead us to believe this evening.
I would like to say a word about the importance of financial disclosure within the context of freedom of information. Much has been said about freedom of information, but we have yet to see any impetus on the part of this government with regard to freedom of information. We are still trying to determine whether or not the government is genuine in what it has said about freedom of information.
With regard to financial disclosure by the banks, I think this particular amendment is important, whether or not it is the section described by the government or whether or not our amendment is accepted. It is important for the people- employees, investors, shareholders and everyone concerned-to know about the effect of investment on the quality of our life in Canada and how the investment decisions of banks impinge on questions of international justice. It is very important-and I know that this question will be addressed in more detail on Monday by the hon. member for Saskatoon East (Mr. Ogle)- that the public have the ability to know just what kind of investment decisions are being made by Canadian banks in Third World countries, where Canadian banks are operating, how they are operating and whether they are acting in the best interests of the countries with which they are involved or whether they are acting in their own self-interests at the expense of the people in those countries.


The Acting Speaker (Mr. Blaker):: Is the House ready for the question?


Some hon. Members:: Question.

November 13, 1980
Bank Act


The Acting Speaker (Mr. Blaker):: Order, please. The hon. member for Edmonton West (Mr. Lambert) warned the Chair and other hon. members earlier on that he might want to address himself to the question of certain motions which might or might not be treated in accordance with the proposals made at eight o'clock this evening. I take the point of view that this proceeding will not interfere with the hon. member's right to pursue that matter later, or whenever.
Shall 1 dispense with reading the motion?


Some hon. Members:: Dispense.


The Acting Speaker (Mr. Blaker):: Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Blaker):: All those in favour will please say yea.


Some hon. Members:: Yea!


The Acting Speaker (Mr. Blaker):: All those opposed will please say nay.


Some hon. Members:: Nay!


The Acting Speaker (Mr. Blaker):: In my opinion the nays have it.


Some hon. Members:: On division.


The Acting Speaker (Mr. Blaker):: I declare the motion negatived on division.
Motion No. 22 (Mr. Rae) negatived.


Marcel Joseph Aimé Lambert: Mr. Speaker, on a point of order, before we go to motion No. 23 may I make reference to the document prepared by the officers of the Table on behalf of Madam Speaker respecting the groupings of the motions which are still on the order paper and what would be proposed for the grouping and the voting. I have examined the document and everything seems to be in order. No amendments have been missed. As far as we are concerned we are quite prepared to have this made an order of the House at this time.
I will propose a motion if need be, or it can come from the government side.


Pierre Bussières: Go ahead.


Marcel Joseph Aimé Lambert: Therefore, 1 would move, that the document headed "Further Notice on Report Stage of Bill C-6" dated Thursday, November 13, 1980, with regard to motions No. 22 and on as they appear in that document be made an order of this House.


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Blaker):: It would appear that there is agreement to the motion proposed by the hon. member for Edmonton West to the effect that in the paragraph in the document dated today, to which the hon. member referred, dealing with motions Nos. 22 through 58 and as enumerated within that paragraph shall be debated and voted upon separately and there be an order of the House to pass to that effect-


Some hon. Members:: All of it. The entire document.


The Acting Speaker (Mr. Blaker):: I would like to correct myself. The hon. member for Edmonton West has indicated that his motion states that all of the remaining notes proposed by the Speaker would be dealt with in the manner described in that document. Is it so agreed?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Blaker):: Agreed and so ordered. We will move now to motion No. 23.
Mr. Bill Blaikie (Winnipeg-Birds Hill) for Mr. Rae moved:
Motion No. 23
That Bill C-6, an act 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 amended in clause 2 by striking out lines 26 to 31 at page 171 and substituting the following therefor:
"processing services other than those services directly ancillary to the business
of banking."


Raymond John Skelly: Mr. Speaker, we have two concerns I would like to express. There has been wide-ranging debate on the ability of the banks to become involved in activities which are not traditional banking areas. One example was automobile leasing, and then there was the whole question of data processing. The government in its proposal raises serious questions about what has happened in this area. Serious concerns were expressed by very effective lobby groups which appeared before the committee. These groups had obviously spent a tremendous number of hours and considerable funds working to bring to this committee their concerns about banks expanding to areas which are not traditional to banks. They expressed the concern that the banks, with the financial power and muscle they have behind them, would put their competitors out of business.
I want to use the leasing example, Mr. Speaker-because I think its outcome is positive-to illustrate how important this was. Members of the committee, witnesses who appeared there, the letters that were received, the people who work for auto dealers and the auto dealers themselves, made some very substantial points. They said they could not survive against the banks. They also said that they, collectively, employed more people than all the auto manufacturers in Canada. I do not think too many years will pass before they are the only people employed in the auto industry in Canada, considering the government's present approach to that industry. They did an excellent job of expressing their concerns and I think the
November 13, 1980

government collapsed before the onslaught. The committee felt strongly about their fears and said, "Keep the banks out of that area. It is reserved for a certain group of business people who have successfully given employment and contributed to the community and who deserve some protection in law against the might and muscle of the banks and the banks' ability to effectively destroy competition and take whatever areas of the market they want for themselves."
Our concern with this particular amendment is that it was pushed in through the backdoor, accidentally. These people arrived late and they did not have a strong lobby. There was some correspondence and concern was expressed that the banks were moving into the data processing area almost as a natural offshoot of banking. In the process, new companies were being formed in a new field, individual groups where innovation could occur in services to small communities. Competitive services could be offered at reasonable rates for developing businesses. This was not a substantial lobby; in fact it was not quite as persuasive as some of the more powerful groups which came before us to say, "Do not let the banks get in." The government's amendment, in clause 174(2), reads as follows:
Except as authorized by or under this act and in accordance with such terms and conditions, if any, as are prescribed by the regulations, a bank shall not, directly or indirectly, (j) engage in Canada in providing data processing services other than such banking related data processing services, within the meaning prescribed by the regulations, as are prescribed by the regulations to be services that a bank may provide in Canada.
First of all, Mr. Speaker, the phrasing is confusing. That particular piece of information written into the legislation, can be changed. The regulations can expand or alter its meaning. I put the question tonight, Mr. Speaker: to what extent in the very loose wording of that clause, will banks move into areas currently handled by the people who are now handling data processing services?
A small businessman in the city of Courtenay has an account with the Canadian Imperial Bank of Commerce which is an old friend in our riding. It suddenly suggested that as long as he was doing his banking there, for a nominal charge it would do his payroll and take care of all that nasty stuff that involves unemployment insurance, Canada pension deductions, income tax deductions, and so on.
1 see that the hon. gentleman from Burlington is leaving with his shovel, Mr. Speaker. He has heard this all before. I think the absence of his shovel in this particular place is an improvement.
What we are concerned with is the infringement of banks on areas of small business. The very loose wording of this clause mentions the desire to handle problems but instead of dealing with them firmly in the legislation they are to be dealt with in the regulations-regulations that can be changed later by order in council-regulations that we have not seen-regulations that are not firm at the present time and certainly will not be in the future.
Our concern is that banks are interested in moving into areas traditionally occupied by small businesses throughout
Bank Act
the country. There were representations from data processors. The approach was not as sophisticated and the pressure not as heavy as that of other more effective groups. As a result, I am afraid the protection provided in the legislation is not complete. The minister is shaking his head. I know that he, being of clear heart and sound mind and with beneficence of spirit towards his fellow man, is someone we can all trust and love.
On the other hand, his successors may not see the world in the same way and the regulations may change. In fact, we may find that when they appear in final form these regulations are not exactly what we wanted.
We have an obligation to protect the small entrepreneur, Mr. Speaker. Time and time again I have heard my colleague from Kamloops-Shuswap (Mr. Riis) declare that neither of the other parties in the House has done a good job for small business in this country. There are many problems, such as a 19 per cent interest rate for small businessmen in the data processing area. There are many bankruptcies today and large numbers of small businessmen are facing difficulty.
In the final analysis, this is a very loose provision and I suggest it would allow the banks to move into the area. There will certainly be lobbying and pressure from the banks to allow them to do this. They have already attempted to encroach on the conditions laid down for car leasing when we wanted to protect that line of business. Fears have been expressed that in time the bankers' association may be able effectively to erode the protection which was built in for that business.
There is certainly no protection in this particular clause, Mr. Speaker. Had the government felt an obligation to small business and a responsibility to protect it, I think the clause would have been firmer. The clause that we recommend would be firmer.
This concludes my remarks, Mr. Speaker. I would like to hear an explanation from the minister about this very loose and openended statement.


Donald Alex Blenkarn: Mr. Speaker, once again the hon. member for Comox-Powell River (Mr. Skelly) has demonstrated to this House how confused he is about what businesses do. He spoke about payroll services. If he had been around small business for any length of time he would know that it has long been the business of banks to offer to put a payroll together for businesses. At a time when people were paid in the lawful money of Canada, the banks put it in brown envelopes and delivered it to the business for distribution to its employees.
Subsection (2)(j) refers to data processing related to banking services and to other services that a bank may provide. In other words, there are limits on the kind of data processing that a bank can do for a customer, or as part of its business. The business is described in the regulations and probably that, more than anything, ties the bank's hands. It certainly ties the government's hands in terms of proclaiming regulations. 1 suggest, sir, that the best way we can control the bank's expansion in the data processing field is as described in subsection (j). There was an effort in committee to go over the

November 13, 1980
Bank Act
regulations. I think it was the hon. member for Comox-Powell River who was taking a look at the regulations proposed at that time, and he could really find no difficulty with them. I suppose he would like to see all of the regulations described at the committee set out in the statute. That might be appropriate in some cases, but business conditions change in this country. I suggest that the way the clause right now is probably the best than can be done by any draftsman with respect to controlling the activities of the banks in this field.
[ Translation]


Pierre Bussières: Mr. Speaker, I should like to take a couple of minutes only to indicate to the House the government's concern to protect small business effectively when drafting that clause of the legislation. But the hon. member for Comox-Powell River (Mr. Skelly) did say that the computer sector was changing extensively, that it was developing with startling rapidity.
In the same way, Mr. Speaker, it must be recognized that with the advent of computer techniques in the financial and banking institutions the modes and operating processes of banking activities will change also. For more protection, we have reintroduced within the regulations the flexibility needed to adjust ourselves to that development in order to maintain the protection we want to give small businesses.


William James Kempling: Mr. Speaker, 1 want to say a few words about this matter of the banks and data processing. I recall when the Bank Act was before us several years ago the numerous machinations we went through when this matter came up. A great deal of concern was expressed by members of the committee about the bank putting undue pressure on small business. I believe one of my colleagues has already mentioned this. Perhaps the banks were trying to tie the small businessman's line of credit with the offering and taking of data processing services.
During that period 1 purchased a computer for my own business. We approached the bank and told the bank what we were going to do. The bank told us they would have that service available and offered it to us. We decided not to take it because we wished to remain flexible. We told the bank that at some time we might want to change from that bank to another bank. There were no hard feelings about that and the bank told us they appreciated our comments.
I think we have gone as far as we should go. 1 think what is in the act now is proper. While it is all right in this part of the country in large urban centres to talk about small computer companies offering services to small business, we should also bear in mind that there are parts of the country where the services are not available. There may be many small businesses desirous of using that service from banks. It may be to their advantage to do so and we should not preclude them out of hand from that opportunity. I think the provision in the bill as
it stands is right and proper. From my own experience, the banks take no exception if you do not wish to use this service. I think that is a very mature way of looking at it.


The Acting Speaker (Mr. Blaker):: Is the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Blaker):: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Blaker):: All those in favour of the said motion will please say yea.


Some hon. Members:: Yea!


The Acting Speaker (Mr. Blaker):: All those opposed will please say nay.


Some hon. Members:: Nay!


The Acting Speaker (Mr. Blaker):: In my opinion the nays have it.


Stanley Howard Knowles: On division.


The Acting Speaker (Mr. Blaker):: 1 declare the motion negatived on division.
Motion No. 23 (Mr. Rae) negatived.


The Acting Speaker (Mr. Blaker):: The House will now proceed with motion No. 25 standing in the name of the hon. member for Edmonton West (Mr. Lambert).


Marcel Joseph Aimé Lambert: Motion No. 25
That Bill C-6, an act 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 amended in clause 2 by striking out lines 25 to 29 at page 177 and substituting the following therefor:
"an amount equal to ten per cent at that time of the total domestic assets of the bank in Canada as shown in the compilation of schedule Q of this act."
He said: Mr. Speaker, logically motion No. 24 and motion No. 26 should be discussed together and then motion No. 25. While motions numbered 24 and 26 are really related, motion No. 25 comes at the bottom of the section. This will become clear as I explain it along the way. 1 want to refer to motion No. 25 in part and then I will come back to it later on.
The purpose of these three amendments, Nos. 24, 25 and 26, is to deal with the ability of the banks to lend money on the security of a mortgage on real property. I remember back to 1966 when we were putting in amendments to the act as it exists today. Up to that time the banks had not been allowed to lend money on the security of a mortgage on real property. It was felt that as major financial institutions they should take some part in the financing of home construction in the coun-
November 13, 1980

try. Not all banks were willing to do so, however. As a matter of fact, the banks were dragged kicking and screaming to the table. 1 remember the then president of the Canadian Bankers' Association, a delightful gentleman of Scottish ancestry-I will not name the bank of which he was then general manager-felt that it was quite wrong for the banks to get involved in mortgages of up to 25 years. The banks never lent on anything more than two years. Loans were always liquid. There was no such thing as a loan on a chattel mortgage. The banks were expressly prohibited from dealing on the basis of a chattel mortgage. Nevertheless, the general feeling was that banks should get involved in the mortgage business. We were working from the Porter commission report, remember, and this was one of its recommendations. However, there was a definite limit. One did not forget the bank crisis of either 1932 or 1934 in the United States.


Stanley Howard Knowles: Ten o'clock!


The Acting Speaker (Mr. Blaker):: Order, please. 1 am sorry to interrupt the hon. member but we have now reached ten o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Henry Perrin Beatty: Mr. Speaker, on May 14 of this year 1 asked the Deputy Prime Minister (Mr. MacEachen) if, pending the introduction of the freedom of information bill, the government had issued any directions to cabinet ministers to the effect that they should conduct themselves in strict adherence and compliance with the principles of freedom of information. Although the Deputy Prime Minister answered me in the affirmative, events since that time have led me to doubt the government's sincerity in terms of complying with principles of freedom of information.
Despite the high marks that were given to the bill on its early introduction, subsequent reflection on taking a look at that bill and comparing it with its predecessor from the previous government, C-15, leads one to wonder whether serious changes have not been made which make the bill much more restrictive than its predecessor.
It would take too long this evening for me to enumerate all those problems. Suffice it to say there are a number of changes which will make it more difficult for Canadians to have access to information. First, Bill C-43 will make it harder to discover what documents actually exist. For instance, section 5(3)
Adjournment Debate
implies that if information appears to be exempt from release, it does not have to be listed in information bulletins. Second, the exemption categories appear to go further than the previous bill in protecting information from release. Third, the status, powers and pay of the information commissioner have been eroded considerably. Fourth, and perhaps most important, it does not appear as though the additional powers given to the courts will promote the degree of openness that ought to be expected.
For example, if a judge is deciding whether a document in certain categories ought to be withheld, he cannot decide whether the department head is entitled to withhold it, but only whether he had reasonable grounds for doing so. Finally, and if these changes were not bad enough, the provision in the previous government's bill requiring the freedom of information committee to produce a comprehensive review of the effectiveness of the act after three years has been dropped in this new provision.
My concern about the government's policy on freedom of information is not limited strictly to the changes which have been made in the bill which is currently before the House. My most pressing concern relates to the government's activities in recent days and the attitude exhibited over the course of the last several days over the whole question of freedom of information.
Perhaps the best example 1 can give of how the government has demonstrated that it does not subscribe to the principles of freedom of information was given yesterday in the committee on the constitution. Members of that committee asked the government whether it would make available to the committee, as an aid to study of the government's proposals on the constitution, three polls conducted by the government at public expense which touched on the whole question of constitutional reform.
What I thought incredible was that government members on the committee and the Minister of Justice (Mr. Chretien) refused to agree with the principle that publicly funded polls should not be classified, that they should be made available to the people of Canada. This is a principle which is essential and one which should be respected by the government if it is serious about the principle of freedom of information. This is why we pressed them in committee to agree that those polls be released. The government has refused.
What we have seen in recent days has been a desire on the part of government to use massive amounts of tax dollars to sell its position on various issues, including on the constitutional issue, where the government-


The Acting Speaker (Mr. Blaker):: Order, please. I have listened to the hon. member. He very appropriately used the phrase "as an example". From there on he has been commenting on certain matters before the constitutional committee and some of the proceedings relating to that committee. The problem is that at a certain time he fell afoul of the rule that committee proceedings are not to be commented upon in the

November 13, 1980
Adjournment Debate
House. He would assist the Chair if he would bring to an end the example and move to the point of his question.


Henry Perrin Beatty: Gladly, Mr. Speaker, because whether the government produces the information before the committee or before Parliament is irrelevant. I would be delighted if the government were prepared to come before this House where they were asked to produce the evidence given in those polls which should be of interest to the whole Canadian public, certainly to every member of this chamber.
I have had on the order paper for up to four months a series of questions asking the government for information relating to the government's advertising campaign. To date all of those questions have gone unanswered. The government has not been prepared to come clean with the Canadian people and disclose the amount of money it is spending at the present time to promote its point of view on various issues. We know that at the present time the government is asking Parliament to appropriate a further $17 million for the Canadian Unity Information Office, $15 million of which appears earmarked for programs such as public opinion surveying and advertising sales campaigns, in large part for the constitution. Again, when we have asked for the breakdown of this information the government has been less than forthcoming. This is why, when we are dealing with the issue of whether or not the government is prepared to subscribe to the principle of freedom of information even prior to the passage of the legislation, it is essential that we take note of the government's policy in so many of these areas. In instance after instance the government is not prepared to level with the Canadian people and give them the information which Parliament and the people of Canada are entitled to see, particularly as it relates to the expenditure of public funds. I call upon the government this evening to reverse that policy and to recognize that the Canadian people are entitled to know how their money is being spent and how decisions are being made which affect their daily lives.


Mr. Peter Stollery (Parliamentary Secretary to Secretary of State and Minister of Communications):: Mr. Speaker, I would bring it to the attention of the hon. member that the access to information bill to which he was presumably referring in his rather wide-ranging remarks received first reading July 17 and has not yet gone to committee. I would like to inform him that in keeping with the undertaking made to the Canadian people last July the government introduced a bill containing a package of legislative proposals concerning access to information. The scope of the bill constitutes a vast improvement over attempts of the previous government in the area of public access to information.
Once in force, the access to information legislation will create a right of access to all government records, subject to limited and defined exemptions to protect public and private interests. Government decisions will initially be reviewable by an information commissioner. Denials of access can be referred for judicial review by the Federal Court, which will
have the power to order release if it determines that the records were wrongly withheld.
The new legislation will become a central feature of our institutions. It will make them more open and more democratic. It will make decision-makers accountable for their actions and decisions, be they ministers or civil servants.
The hon. member has raised the question of the government's behaviour now that the bill has been tabled. I would remind him that it has only been tabled. The government is moving, and has been moving, on a number of fronts to provide more open government during the interim period which will lead, hopefully, to this legislation being passed by the House. Thus, the Prime Minister (Mr. Trudeau) has asked that all ministers make special efforts to comply with the spirit of the legislation, bearing in mind the limitations which are imposed by existing legal constraints and the absence of the administrative infrastructure which will ultimately be put in place.
The government has also made public the list of cabinet committees and their composition, to which the hon. member referred in his original question, which I believe was asked on May 14. The government has also tabled the list of polls conducted, or in planning, since March, 1979. Consistent with the spirit of the access to information legislation it has made available the results of the vast majority of these polls and justified non-disclosures on the basis of specific exemptions in the access legislation. The government has undertaken to release these latter poll results when their disclosure will not go against any of the public or private interests which are protected by the exemptions. It intends to live up to this undertaking.
The media guidelines laying down the ground rules by which officials should abide in their dealings with parliamentarians and the media have been confirmed and are being followed.
On a more clearly administrative front, the President of the Treasury Board (Mr. Johnston) and his officials are actively preparing for implementation of the legislation. They are hard at work compiling the index or register of federal government information.
I think that adequately and in full answers the question which was originally asked on May 14 last-not the question to which the hon. member referred this evening.


WATER RESOURCES-SKAGIT RIVER VALLEY-REFERENCE BY B.C. GOVERNMENT OF U S. PROPOSAL TO FLOOD TO INTERNATIONAL JOINT COMMISSION
Hon. John A. Fraser (Vancouver South):: Mr. Speaker, 1 want to address my colleagues in the House tonight on a subject of considerable importance in the province of British Columbia. I think it ought to be of considerable importance to all hon. members from whatever part of Canada they come. It concerns the proposed flooding of the Canadian Skagit Valley in British Columbia, a proposal which has been proceeded with over many years by the Seattle City Light Company in the
November 13, 1980

state of Washington. What Seattle City Light does is propose to move on a 1942 International Joint Commission order, the validity of which is in serious question, to raise the Ross Dam on the American side of the Skagit River and flood about 15 miles of the Canadian Skagit. They have presumed to pay $34,000 a year for the flooded land, but they will receive many millions of dollars of benefit in power.
1 asked a question of the Secretary of State for External Affairs (Mr. MacGuigan) on October 21. In view of the fact that the government of the province of British Columbia has now taken a reference to the International Joint Commission to seek redress in this matter, I asked the minister what steps the Government of Canada is taking to respond to the invitation of the International Joint Commission to put in submissions in support of the application of the province of British Columbia for a review of the order and the consequences of the proposed flooding.
At that time the Secretary of State for External Affairs said, and I quote:
Madam Speaker, the position of the government has been consistent; we believe this problem should be settled by negotiation. We have consistently offered our good offices to assist the province of British Columbia in that regard.
In effect, knowing almost nothing about this issue, the Secretary of State for External Affairs promised to do almost nothing. However, subsequent to that, in committee I had occasion to ask questions of the Parliamentary Secretary to the Minister of the Environment (Mr. Simmons), and he chose to take a very belligerent view and to accuse the province of British Columbia of not being serious in its opposition to the flooding.
This is, of course, contrary to the facts-that is a problem the parliamentary secretary has had before. It is contrary to the facts because after 1972 two different governments of the province of British Columbia consistently to this day have actively and steadily opposed the flooding of this valley and have gone through protracted negotiations with Seattle City Light to find a solution.
As a consequence of the remarks of the parliamentary secretary the minister of the environment of British Columbia sent a telegram to the federal Minister of the Environment (Mr. Roberts) which said the following:
Greatly disturbed by press reports quoting Parliamentary Secretary to Minister of Environment saying province of British Columbia not serious in negotiations regarding Skagit River and not keeping federal government informed.
If reports accurate this is in complete contradiction to facts. We have negotiated seriously and kept you informed at all stages. I must insist on retraction of inaccurate statements made by parliamentary secretary.
Happily, the Minister of the Environment for Canada responded immediately and contradicted completely his parliamentary secretary by stating in his telegram, and I quote:
In reply to your telegram let there be no repeat no misunderstanding that the federal government continues to oppose further flooding of Skagit Valley. We are aware of deep concern this issue poses for British Columbia and recognize your earlier efforts to resolve it. Be assured we support your efforts to have matter resolved. We are now reviewing your "request in application"-
Adjournment Debate
That is the application to the International Joint Commission.
-which is before the International Joint Commission and will offer views on this matter to the commission. My department is fully prepared to meet with and co-operate with yours.
I should add that the British Columbia Minister of the Environment was pleased with that response but not happy with the activities of the parliamentary secretary, and he demanded a retraction. However, I should like to know whether the government can tell me tonight just what steps will be taken to support the application of British Columbia before the International Joint Commission, and whether the government can tell me if those representations will be made by the Department of the Environment alone or in conjunction with the Department of External Affairs.
I realize, of course, that the response of my friend, the Minister of the Environment, is inconsistent with the earlier statement of the Secretary of State for External Affairs, but I put that down to the good work which the Minister of the Environment did in persuading the Secretary of State for External Affairs that this was indeed too important a matter for the government to remain on the sidelines. As a consequence, I commend the Minister of the Environment for his response, but I would like to know tonight whether the department will be making submissions by itself or whether it will be supported by the Secretary of State for External Affairs with the full weight of the Canadian government behind him.


Mr. Norman Kelly (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, during the question period on October 21, the hon. member opposite suggested that the government has changed its position on the Skagit Valley flooding. I wish to emphasize emphatically that this is not the case. Over the past decade, the Prime Minister (Mr. Trudeau), successive ministers of environment and other ministers and officials of the Canadian government have, on numerous occasions, taken the position that the environmental and recreational resources of this unique river valley were too important to be sacrificed to a power reservoir. This view was also embodied in unanimous House of Commons resolutions in 1973 and 1977.
However, we have also been conscious of the fact that in 1967 British Columbia signed a 99-year agreement with Seattle by which the province received compensation in return for the flooding, and that until 1973 British Columbia accepted this payment. The Canadian government, therefore, concluded that the most promising avenue for solution of this problem lay in a negotiated settlement involving these two parties. When direct negotiations between province and city began in 1974, the Canadian government made clear its willingness to render all possible assistance by way of good offices to promote such a settlement. We remain prepared to do so should conditions again appear favourable.

November 13, 1980
Adjournment Debate
Unfortunately, for the moment these negotiations have broken down and British Columbia has filed a "request in the application" with the International Joint Commission, requesting that it annul or rescind its 1942 order giving the city authority to flood the valley, subject to reaching agreement on compensation with British Columbia.
The hon. member asked why the federal government had not supported the province in this request. In fact, British Columbia neither requested nor required any such federal support in making its approach to the commission. The IJC had earlier ruled that it could hear British Columbia's 1974 request on this subject, a position strongly advocated by the Canadian government in support of the province.
The Canadian government believes that British Columbia's request deserves a full and fair hearing and that the IJC is the proper forum for this. The commission has asked for views from interested parties, including the Canadian government, by December 17. We are now preparing our response. We hope that British Columbia's approach to the IJC will be instrumental in promoting a successful resolution of this issue and we will do all in our power to assist such an outcome.
Over the past decade the government has left responsible U.S. authorities, including President Ford, in no doubt that we would view with deep concern any developments which could result in the Skagit Valley being further flooded. We expect that no action will be taken by Seattle until the IJC has had a fair opportunity to consider the full range of subjects raised by the request.


THE CONSTITUTION-INQUIRY WHETHER LETTER RECEIVED FROM NATIONAL INDIAN BROTHERHOOD REQUESTING DISCUSSIONS
James Douglas Manly: Mr. Speaker, on Friday, November 7, I wanted to know whether the Prime Minister (Mr. Trudeau) would meet with the leaders of Canada's native organizations to discuss the constitution. We all know the Prime Minister promised that native people would be able to participate in all decisions about the constitution which directly affected them. We all know this promise was broken and that the native people were locked out of any decision-making process regarding the present constitutional resolution. Native people have expressed fears that their rights are being ignored and denied. Experts in constitutional law agreed that their fears well founded.
In response the government pointed to section 24 of the Charter of Rights which indicated that nothing in the charter denied "any rights or freedoms that pertain to the native peoples of Canada". No recognition, no guarantees; only a statement that the charter does not take away any rights which may exist.
Indian, Metis and Inuit leaders want to sit down with the Prime Minister to explain their position. They want to find out what kind of amendment might be acceptable to the government. When 1 raised this request, the Prime Minister responded by pointing to the $1.4 million the government made
available so that native organizations could develop their constitutional position. But money is no substitute for a meeting which could produce results. With regard to money, I might point out that the government spent some $6 million advertising its position and trying to sell it to the Canadian people. Compared to that the $1.4 million to native organizations is not too substantial.
In addition the Prime Minister raised the "ante" for native people wanting to get into the constitutional game. He demands that the various native organizations representing different peoples should reach not only a common understanding of their rights among themselves, but also that their amendments must be acceptable to all parties in the House and hopefully to several of the provincial governments.
I have not noticed any great concern for such unanimity with any other part of the constitution. The Government of Canada, as successor to the Imperial government of Great Britain, is involved in a compact with native people which predates the compact with the provinces at confederation. It is the responsibility of the federal government to honour that compact and to ensure that the provinces honour it also. We see the double standard of the Prime Minister most clearly when we contrast his concern for educational language rights with his laid-back attitude to native rights.
At his November 7 press conference, the Prime Minister said:
I am convinced that there would never be an entrenched charter of rights. Particularly, there would never be entrenched educational language rights if it weren't done now by the national Parliament the last time, as it were, that we had a possibility of proceeding in this way to amend the constitution. In other words, once we have a constitution in Canada, whether it be with the Victoria formula, or any other formula, we will never get anything saying that all Canadians are equal, because there will always be some provinces-
And he went on to detail the opposition which would come from the provinces.
On October 30, just a week earlier, in a letter to the leaders of national native organizations, he said:
I believe that Canadians, with new-found pride in their own constitution and in their new maturity as a country, will be more than ever generous in considering the needs and wishes of our first citizens. In short, I believe that constitutional change after patriation will become easier rather than harder-
For language rights he considers that it will be impossible to deal with after patriation; for native rights he takes the very laid-back attitude that it will be easier.
On behalf of the native people of Canada, 1 ask the government to treat native rights as seriously as it treats language rights. I ask the Prime Minister to sit down with the leaders of Canada's native organizations to find acceptable ways of recognizing those rights and guaranteeing them in our constitution.


Mr. Ron Irwin (Parliamentary Secretary to Minister of Justice and Minister of State for Social Development):: Mr. Speaker, I would like to assure the hon. member again that the native peoples will be heard at the constitutional discussions. The hon. member has referred to a letter written by the Prime
November 13, 1980

Minister (Mr. Trudeau) on October 30 to the three national native organizations.
In that letter the Prime Minister confirmed that there will be no changes in the constitution directly affecting the native peoples without full discussion with them. The Prime Minister expressed the government's desire to discuss with native groups those matters of special concern to them-aboriginal rights, treaty rights and internal native self-government. He also indicated that there will be a good deal of preparatory work required and that there will be a number of meetings between senior officials and native groups.
On at least ten occasions in the past three or four weeks 1 have heard in this House, and I wish to affirm again, that each of the three groups has been given approximately $400,000, totalling over $1 million, to prepare its case. The Prime Minister has publicly pledged that this will be the first subject at the next first ministers' conference or a priority subject of the federal government.
Naturally, as the hon. member knows, the government has agreed to consultations with the provinces which also have an interest in the matter. I wish to point to the proposed constitution and section 24 which, I am aware, is a reverse declaration
Adjournment Debate
and which clearly states that none of the rights of native peoples will be taken away by reason of the constitution. If my good friend wishes to make some proposals, they should be made in the constitutional committee. What wording would he like to see in section 24? What does he want to do in connection with specific problems which can be handled by the government? Does the hon. member have a position on the problem on Vancouver Island or on the Micmac claim in Newfoundland? Does the hon. member have a position on the four claims in the Northwest Territories or on the one claim in northern Ontario or on the three claims in Quebec?
When the hon. member says we are not treating the problem seriously, I suggest that he is showing concern but offering no solutions. We must sit down and look at individual solutions which have been put forth. Solutions should be put forward, not the same questions day after day. The government takes the problem seriously and is trying to solve it.


The Acting Speaker (Mr. Blaker):: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until eleven o'clock tomorrow morning.
At 10.29 p.m. the House adjourned, without question put, pursuant to Standing Order.


END OF VOLUME IV