1980-05-06

ROUTINE PROCEEDINGS


Mr. Peter Lang (Kitchener):: Madam Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the fact that the British commandos were able to conclude successfully the six-day siege at the Iranian embassy in London and rescue 19 of the hostages in a daring raid, 1 move, seconded by the hon. member for Victoria (Mr. McKinnon):
That this House convey congratulations to the commandos who took part in the operation at the Iranian embassy in London, and to the British government for their courageous stand against terrorism.


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


Some hon. Members:: Agreed.


Hon. Erik Nielsen (Yukon):: Madam Speaker, I was on my feet. The motion is debatable. All I want to say is that the hon. member for Victoria (Mr. McKinnon) had agreement from the other side that his motion, which was in like terms, would be seconded by the other side. Normally, the practice we follow in the House is to recognize an opposition member before recognizing members on the other side.


Some hon. Members:: Hear, hear!


Mr. Lawrence:: You do it again and we will debate it.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Howard Crosby (Halifax West):: Madam Speaker, I rise under the provisions of Standing Order 43. In spite of Nova Scotia's long-standing claim to ownership and control of submarine resources and the historic and legal basis for the claim, the Minister of Energy, Mines and Resources (Mr. Lalonde) has unilaterally and publicly proclaimed that the provincial legislation exercising these rights of ownership and control is unconstitutional. I move, seconded by the hon. member for South Shore (Mr. Crouse):
That this House condemn the action of the Minister of Energy, Mines and Resources in proclaiming that the Nova Scotia legislation is unconstitutional, thereby usurping the authority of the Supreme Court of Canada and wilfully undermining the function of the Minister of Justice and the negotiations for settlement of the offshore resources dispute.


Madam Speaker:: Such a 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, 1 rise, under Standing Order 43, on a matter of urgent and pressing necessity.
In light of the increasing tanker traffic on the British Columbia coast and the growing concern of B.C. residents that there is inadequate legislation and clean-up equipment to deal with a spill, I move, seconded by the hon. member for Comox-Powell River (Mr. Skelly):
That this House go on record unanimously calling for a west coast marine pollution act with regulations capable of dealing with oil spills.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

May 6, 1980


TOURISM
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Madam
Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to move a motion dealing with an important matter of pressing necessity.
Considering that eight years ago already the federal government promised to take part actively and financially in the development of the Rideau Centre in Ottawa-Vanier; considering that the municipal and regional governments have decided to build the convention centre in the Rideau Centre; and considering the importance of the announcement made yesterday by the federal government that it would take part in the building of a commercial centre in Vancouver, I move, seconded by the hon. member for Nepean-Carleton (Mr. Baker):
Considering the urgency and the importance of a federal contribution to the convention centre in Ottawa, the House urge the federal government to undertake imperatively some negotiations with the various levels of government to ensure a financial participation in the construction of the convention centre and thus guarantee the development of the Rideau Centre.


Madam Speaker:: The House has heard the motion of the hon. member. Under the provisions of Standing Order 43, the presentation of such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PARKS CANADA
Mr. Bill Domm (Peterborough):: Madam Speaker, I rise on a matter of urgent and pressing necessity, under the provisions of Standing Order 43, concerning the move of Parks Canada to Peterborough which has been cancelled.
In view of the fact that the last Progressive Conservative government obtained Treasury Board's approval to negotiate a lease arrangement in Peterborough, and that the present government has cancelled the move resulting, regrettably, in the eviction of retail merchants and professional persons from the old Eaton's building in downtown Peterborough, I move, seconded by the hon. member for Durham-Northumberland (Mr. Lawrence), whose riding lost Eldorado Nuclear through a similar political flip-flop a few weeks ago:
That this government guarantee the full financial recovery of expenses incurred under the relocation policy to all businesses evicted from their premises to make room for the Parks Canada regional office which no longer intends to locate in Peterborough, and that the government further advise the House where they propose to obtain the many millions of dollars lost in this flip-flop political decision, and exactly how much this political reversal of the Parks Canada regional office move back to Cornwall and a minister's riding has cost Canadian taxpayers.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SMALL LOANS ACT
Mr. Gordon Taylor (Bow River):: Madam Speaker, I rise on a matter of urgent and pressing necessity under section 43 of the Standing Orders:
Whereas the Liberal government in October, 1976, indicated that the Small Loans Act would be repealed; and whereas the Progressive Conservative government later indicated that it was prepared to repeal this legislation; and whereas the Small Loans Act was passed in 1939 to serve an entirely different purpose and era; and whereas this bill will now force the registration, federally, of some 4,400 credit unions and caisses populaires, all of which are presently administered well under provincial legislation, I move, seconded by the hon. member for Simcoe South (Mr. Stewart):
That the Small Loans Act be repealed at the earliest possible time.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CORPORATE AFFAIRS
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 Public Utilities Income Tax Transfer Act 1966-1967 specifically authorizes the rebate of 95 per cent of the corporate income tax paid by investor-owned utilities to the province within which the investor utility provides the utility service, and since the federal government has apparently acted in an
May 6, 1980

Oral Questions



ORAL QUESTION PERIOD

[Stage Direction]
illegal manner since, without any changes to the act, it has advised some investor-owned utilities-one being Calgary Power-that as of April 1, 1980, it will rebate at the rate of 50 per cent rather than 95 per cent, causing utility rate increases of 6.5 per cent, I move, seconded by the hon. member for Red Deer (Mr. Towers):
That this House direct the government and the Minister of Finance to immediately rebate 95 per cent of the tax paid by investor-owned utilities in the ten provinces and in the Northwest Territories to the respective provinces and the Northwest Territories, and that this House rejects any changes to the Public Utilities Income Tax Transfer Act until such time as the matter is fully discussed and decided upon at a federal-provincial conference of first ministers in a manner similar to what was done at the conference of first ministers in 1965 at which time the decision to rebate 95 per cent was adopted.
['Madam Speaker, in a question from the hon. member for Waterloo (Mr. McLean), he mentioned seven companies. It probably should have been seven varieties. There are over 300 varieties of corn seed sold in Ontario. We found seven varieties on which we issued orders that they be withdrawn from the market. Because of the economics of this and the concern, 1 thought it should be put on the record.']
Madam Speaker:: Such a motion would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
* *
*



Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity, especially for the employees involved.
In view of the fact that the clerical and regulatory group of employees of the Unemployment Insurance Commission have been working without a contract since last November, and in view of the fact that the Treasury Board has presented to them an offer which is obviously totally unacceptable to them and borders on insult, I move, seconded by the hon. member for Calgary West (Mr. Hawkes):
That the Treasury Board negotiators and those board officials earning more than $30,000 a year take a 10 per cent cut in pay until such time as the contract is signed.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


TAX ON NATURAL GAS EXPORTS-GOVERNMENT POSITION
Hon. Bill Jarvis (Perth):: Madam Speaker, my question is to the Deputy Prime Minister and Minister of Finance. Is the government considering imposing or discussing with producing provinces a tax on the export of Canadian natural gas which would bring to the federal government treasury all or part of the difference between the domestic gas price and those prices now received from the United States for Canadian gas exported to that country?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, as far as I, myself, am concerned, I have had no discussions with respect to a tax such as the hon. member suggests, and certainly no decision has been taken along those lines. If one were to be taken, obviously it would be a tax change that would be announced in the usual way. But by saying that I am not even suggesting that the hon. member ought to expect it.


An hon. Member:: What is the usual way?


William Herbert Jarvis: Madam Speaker, the Minister of Finance, of course, will be familiar with the statement attributed to his colleague, ihe Minister of Energy, Mines and Resources, in a March 4 article by John Howse in the Calgary Herald, in which his colleague was reputed to have said that he was considering this alternative. One would like to know whether that alternative has been discarded.
Is there some other form of federal tax or levy on the income stream generated by the transportation and exportation of Canadian natural gas; and, if so, would the minister tell us, in general terms at least, the nature of such contemplated tax or levy?


Allan Joseph MacEachen: Madam Speaker, I have no such tax or levy under consideration.


William Herbert Jarvis: Madam Speaker, may I then ask the Minister of Finance whether he is considering a more general form of energy or resources export tax which, for example, might add electricity, natural gas or, indeed, any other Canadian resource to the already existing export tax on crude oil?


Allan Joseph MacEachen: Madam Speaker, in a sense the hon. member is asking for specific information with respect to specific taxes. He has raised the possibility of an export tax on energy. Obviously, that is a possibility which could and can be considered by the government, but no decision has been taken on that matter.

May 6, 1980
Oral Questions


FORMULA OF OIL PRICING AGREEMENT
Mr. Harvie Andre (Calgary Centre):: Madam Speaker, my question is to the Deputy Prime Minister and Minister of Finance. Was the Minister of Energy, Mines and Resources stating government policy yesterday at a Halifax news conference when he stated that in order to subsidize the generation of electricity from oil in Atlantic Canada, as was provided for by the previous Conservative government, Ottawa could only do this if there were a rich oil pricing agreement? If the Minister of Energy, Mines and Resources was stating government policy in that regard, could the Minister of Finance indicate to the House what a rich oil pricing agreement is?


Allan Joseph MacEachen: Madam Speaker, it is obvious to me and to the hon. member that one of the sources of additional revenue which has to be contemplated by the Government of Canada, as was the situation with the former minister, is through an oil pricing agreement.


Mr. Crosbie:: A revolutionary development.


Harvie Andre: Madam Speaker, through this minister and others, the government is deliberately or otherwise appearing totally confused on this whole energy policy issue.


Mr. Collenette:: You are confused.


Harvie Andre: In his budget statement, the minister said the pricing agreement would save a billion dollars-a specific figure. The minister was unable or unwilling to give a specific formula to the House in terms of that pricing agreement. The minister's colleague, the Minister of Energy, Mines and Resources, said the government would be collecting as much revenue from the oil pricing agreement as was required in the December 11 budget. The Minister of Finance continues to refuse to tell the House where that money is going to come from.
Can the minister at least inform the House when there will be an end to this confusion, with its detrimental effects on both consumers and producers? Will he at least tell that to the House, if he will not be a little more specific in terms of some of the details?


Allan Joseph MacEachen: Madam Speaker, on the question of the $1 billion to which the hon. member has referred, and to which I referred in the statement I made in the House of Commons, I said that the implementation of a blended pricing arrangement could result in a saving of as much as a $1 billion. The hon. member may understand that that was an illustrative figure of the possibilities that exist in this particular field.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: The hon. member referred to confusion and he asked when the confusion will end. The hon. member is doing his own bit to create that confusion. But I want to tell
him quite seriously that the uncertainty which exists at present will be ended when it is possible to reach a pricing agreement or establish a pricing regime, and that cannot take place until there have been full discussions with the concerned provinces, and in that particular pursuit the Minister of Energy, Mines and Resources is engaged at the present time. So I think it is rather unproductive, or futile, at the present time to pick up every possible speculation, every possibility, and bring it up in the House as if it were a final decision of the government.


Some hon. Members:: Hear, hear!


THE CANADIAN ECONOMY
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, my question is also for the Deputy Prime Minister and Minister of Finance. It concerns our economic relations with Japan.
In light of the fact that there is such a substantial imbalance in our trade relations with Japan, not in a monetary sense but in the sense that we export, by and large, raw products to Japan and import about $2 billion worth of finished products, is the minister in a position to tell us what specific proposals have been put to the Japanese delegation led by their prime minister, who is now in Canada, to correct this imbalance and ensure that Canada's manufactured goods have access to Japanese markets?


Allan Joseph MacEachen: Madam Speaker, the Government of Canada, certainly through negotiations which we had in connection with GATT, pressed very hard, as did other countries, to secure additional access to the Japanese market for additional processed Canadian goods. As my hon. friend knows, there was very strong resistance at that time. None of the industrialized countries, including the European Community, achieve the access to the Japanese market that was required. These points, obvioulsy, were repeated in the discussions yesterday with the Japanese prime minister.


Bob Rae: Madam Speaker, I appreciate the answer of the Deputy Prime Minister. We are aware of those discussions. I have a supplementary question with respect to the use of non-tariff barriers by the Japanese.
We know that Canadian manufacturers are being hurt by the Buy America policy in the United States, and we know that there are discussions under way at the moment concerning those laws. I should like to get an assurance from the Deputy Prime Minister as to the representations being made by the Canadian government with respect to Japanese non-tariff barriers, since we are leaving ourselves open to tremendous penetration by Japanese exporters if we are not able to have access to Japanese markets for our manufactured goods.


Allan Joseph MacEachen: Obviously, one of the tasks which this House will have to undertake before the end of this session is
May 6, 1980

consideration of the changes that have been made to the international law on the subject of non-tariff barriers. For the first time we have, and will have, some additional instruments at our disposal in order to meet the kind of threat to which the hon. member referred, and we will be able to discuss these in detail at a later date.


Bob Rae: Madam Speaker, I should like to ask the Deputy Prime Minister a supplementary question with respect to our relationship with Japan in the auto industry. It has been mentioned many times in this House that the Japanese are establishing, and have established, auto plants in the United States for the North American market. This clearly affects Canada's interest in the auto pact.
1 should like to ask the Deputy Prime Minister, in light of the competition that this places on manufacturers in Canada, not only of assembled cars but also of auto parts, can he tell us what specific proposals have been made to Japanese government and to the Japanese auto manufacturers to ensure that as well as building plants in Marysville, Ohio, and in California, these manufacturers will also be considering Canadian sites for the production of their cars for the North American market?


Allan Joseph MacEachen: Madam Speaker, I cannot tell my hon. friend directly what particular representations were made on the question of auto parts and automobiles, but I think he will realize that at the present time Japanese cars produced in Japan are probably selling in Canada at a lower rate than they are in the United States in the absence of these particular plants to which he has referred; at least, that is a complaint 1 have received from interested parties.
What we would be interested in is whether there is any possibility of providing some anti-dumping assistance, and that has not yet been available to us based upon a study of the facts.


INDUSTRY
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question was intended for the Minister of Industry, Trade and Commerce, but in his absence I will direct it to the Deputy Prime Minister.
This morning, on a television program, Mr. Douglas Fraser-the head of United Auto Workers in the United States- stated that the Chrysler Corporation could go bankrupt if no agreement was reached this week. He went on to state that one of the key elements in reaching an agreement in the United States was the position the Canadian government would take; time was clearly of the essence because of the problems of that corporation.
My question to the Deputy Prime Minister is, can he assure the House that an agreement will be reached this week; and, if
Oral Questions
not, what contingency plans does the government have in place?


Allan Joseph MacEachen: Madam Speaker, I cannot guarantee the hon. member that an agreement will be reached this week. It may be that the gentleman to whom my hon. friend was referring was using some pressure tactics in order to get a quick decision out of the Government of Canada that might not be fully in the interests of Canadian workers and Canadian production.
Obviously, as my hon. friend knows, the Minister of Industry, Trade and Commerce is working to reach an agreement which would provide the suitable guarantees for Canadian jobs and production. I would not advise my colleague to enter into any agreement that would not have that result, even under the pressure from the Auto Workers in the United States.


Mr. Hnatyshyn:: Bankruptcy!


Michael Holcombe Wilson: Madam Speaker, I want to impress upon the Deputy Prime Minister that the pressure is not just from the head of the Auto Workers in the United States; the pressure is from the marketplace, the pressure is from the banks and the pressure is from the individuals who will be directly affected by any bankruptcy of Chrysler Canada.
My supplementary question is this: Is the government considering any alternative plans? Time is running out. What alternative plans are in place? Does the government regard the bankruptcy of Chrysler Corporation as one of those alternatives?


Allan Joseph MacEachen: No, Madam Speaker, we are not working in this situation in expectation of a bankruptcy.


An hon. Member:: You will prop it up.


THE CANADIAN ECONOMY
John Carnell Crosbie: Madam Speaker, my question is to the Deputy Prime Minister and Minister of Finance. While Chrysler is one aspect of a depressed Canadian economic situation-if we just leave aside the auto industry for the moment-will the minister advise the House what steps the government is taking to increase real domestic output, manufacturing output, and employment in Canada this year, particularly in view of the forecasts by the Conference Board that real domestic growth will be down .6 per cent and manufacturing growth in Ontario will be down 4 per cent in this present year?
What steps is the government taking-forgetting the auto industry-generally to help battle this depressed economy and
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May 6, 1980
Oral Questions
to overcome unemployment and those other things forecast that I have mentioned?


Allan Joseph MacEachen: Madam Speaker, I am surprised the hon. gentleman would describe the current situation, or the situation that is projected for another year as a depressed economy, because the forecast which I gave two weeks ago in respect of output is not much different from the forecast which my hon. friend made last December in his formal budget.
I would remind him that the magnitude of the current deficit, with which he is quite familiar, is rather a strong stimulative factor in the present circumstances and it will be my obligation, when I consider a budget presentation, to take into account what further steps may be necessary in order to stimulate demand.


John Carnell Crosbie: Madam Speaker, the Deputy Prime Minister and Minister of Finance, as usual, is as forthcoming as the sphinx. I am not asking the minister to compare his forecast with mine. His forecast is worse than mine and the facts are going to be even worse because of his lack of action. I am asking him what are this government's plans, that is, this government that got itself elected on February 18 promising economic miracles, promising it was going to lower the interest rates, promising there would be made-in-Canada interest rates, and promising a new industrial strategy?
My question is: What steps is the government taking to overcome the depressed conditions in these industries and, I might add, is the minister satisfied with the present level of the value of the Canadian dollar, and should it remain around its present position? What is his future conduct with reference to the value of the Canadian dollar as an assistance to our manufacturing exports? Can he deal with these questions? Try to give an answer. You are now in the government again. You are the Minister of Finance. Try to give us an answer.


Allan Joseph MacEachen: Madam Speaker, I have no objection to the hon. member framing his own questions, but I do object when he starts framing the answers.


An hon. Member:: We have to get them somehow.


Some hon. Members:: Oh, oh!


An hon. Member:: We don't get them from you.


John Carnell Crosbie: Somebody has to help you.


Some hon. Members:: Order.


Allan Joseph MacEachen: May I answer the hon. member's final question which I extracted from that onrush of hyperbole that preceded the question, and that is in respect of the external value of the Canadian dollar. My hon. friend knows that the Canadian dollar is reacting to market forces at the present time. He knows, as well, that one of the reasons the export performance in Canada has been as healthy as it has been is the decine in the value of the Canadian dollar.
He should also bear in mind-and this has been one of the objectives of the governor of the Bank of Canada-the dollar should not be permitted to decline to the point where it makes possible the importation of additional inflation which his leader described as the number one problem during his speech three weeks ago. Today, the number one problem, according to the hon. gentleman, is declining output. Three weeks ago the number one problem referred to by his leader was rampant inflation. I wish they would get together.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Madam Speaker, I want to remind the hon. gentleman that it is now his position as well as his government's to deal with all those problems. Rampant inflation is one, and increasing unemployment is another. They are contradictory problems.


Some hon. Members:: Order.


John Carnell Crosbie: My final supplementary question-


Madam Speaker:: Order, please. I recognized the hon. member for the purpose of asking a supplementary question. He must now ask his question.


John Carnell Crosbie: My further supplementary question is this, Madam Speaker: Is the Deputy Prime Minister and Minister of Finance satisfied with the present level of the value of the Canadian dollar, and is his policy to keep it at the present level of value or is he prepared to allow it to rise? What is his position in that regard?


Allan Joseph MacEachen: Madam Speaker, the Canadian dollar has fluctuated rather widely in the last two months.


John Carnell Crosbie: So have you.


Allan Joseph MacEachen: The governor of the bank has permitted that fluctuation to take place, and I believe that is a comment in itself to the hon. member.


ENVIRONMENTAL AFFAIRS
Mr. Lyle S. Kristiansen (Kootenay West):: Madam Speaker, my question is addressed to the Minister of State for Science and Technology and Minister of the Environment. It is in relation to the Kootenay Lake water quality study, long being conducted by the inland waters directorate of his department.
In view of the importance of this long-delayed report to both the fishery and tourist industry in and around Kootenay Lake, which is already facing closure, and having regard to the effects which the report's findings may have on international negotiations regarding possible Columbia River treaty mitigations, current Kootenay River flows at Libby Dam, and B.C. Hydro's plans for the Kootenay River diversion, would the minister kindly inform the House as to the current status of
May 6, 1980

this report and when we can expect the official report to finally see the light of day?


Hon. John Roberts (Minister of State for Science and Technology and Minister of the Environment):: Madam Speaker, I am informed that the report should be available publicly by the end of this month.


Lyle Stuart Kristiansen: Madam Speaker, it is certainly reassuring, after more than a year, to hear that. In view of the fact that the release of this important report was originally scheduled for the spring of 1979-later, assurances were given by officers of the department, in committee, that it would be available for publication on July 1 of last year-and having regard to widespread suspicions that the report is being altered or tampered with to suit the designs of either B.C. Hydro or the B.C. government, will the minister undertake to launch an immediate investigation in order to ascertain the real reasons for this unconscionable delay and to determine whether the report has, in fact, been altered to suit the needs of B.C. Hydro's latest plan of attack on the interests of the people of Kootenay West and Kootenay East-Revelstoke?


John (Moody) Roberts: To the best of my knowledge, Madam Speaker, the assertions of the hon. member are false. As I said to him in my first answer, my expectation is that the report will be published by the end of this month. He can then make whatever judgments he himself would like to make.


CULTURAL AFFAIRS
Mr. Serge Joyal (Hochelaga-Maisonneuve):: Madam
Speaker, my question is directed to the Secretary of State. As his predecessor in that portfolio, the Hon. David MacDonald, had set up a committee made up of representatives of various fields of cultural activity, committee whose purpose was to re-evaluate the Canadian policy in that particular sector, and because of the favourable reaction to the creation of that committee of the various groups interested, can the minister tell the House whether that committee is still active, when it will present its reports, and whether he intends to refer the report of the committee to the House Standing Committee on Communications and Culture?


Hon. Francis Fox (Secretary of State and Minister of Communications):: Madam Speaker, 1 thank the hon. member for his question and take the opportunity to advise him that the committee in question is still at work and holding hearings; it continued holding hearings during the last few months. I had the opportunity of meeting the committee and taking part twice in its sittings this last month. However, the committee is not in a position to present its report to the Secretary of State
Oral Questions
and will not be for a few months yet. At this point, I intend to encourage the committee, once its preliminary report is completed, to hold public hearings throughout the country, in order to complete its preliminary report precisely in light of the recommendations that may be made to it by the various interested groups from all over Canada, and have the report referred later on, as completed, to the parliamentary committee.


AGRICULTURE
Mr. Gus Mitges (Grey-Simcoe):: Madam Speaker, I direct my question to the Minister of Agriculture. In view of the fact that harmful drug and antibiotic residues are still being found in meat and meat products passed for human consumption, with serious consequences for those consumers who are allergic to specific drugs and antibiotics, what action has been taken by the food production and inspection branch of Agriculture Canada to ensure the absence of such harmful drug residues from meat and meat products emanating from abattoirs under federal inspection?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, I have checked into the matter of the inspections and I feel that I must disagree somewhat with the hon. member's statement about harmful side effects. Recent figures which I have viewed show that several thousand such tests have taken place, none of which has concluded that there are harmful residues present in the different meat products which have been inspected.
My department is continuing its vigilance of the product. I feel confident that everything possible is being done. We are not letting up on the program but are actually stepping it up.


Constantine George (Gus) Mitges: Madam Speaker, 1 would like to thank the minister for his answer. However, according to a recent report which I have received, approximately 14 per cent of all inspected meat and poultry sold for human consumption in Canada contains drug residues. Certainly this is indicative that the present testing for residues is either insufficient, inaccurate, or both.
Will the minister take the necessary action to make available to the food production and inspection branch of Agriculture Canada whatever else may be needed in manpower, equipment, etc., to step up and increase this important service in all federally inspected abattoirs?


Eugene Whelan: Madam Speaker, I have before me, in my briefing books, thousands of these tests. 1 will make them available to the hon. member if he does not already have the information. If he, after viewing these reports, still feels that there are some things which are not being done properly, and

May 6, 1980
Oral Questions
if he can prove his statements, I will be glad to review the matter.


FINANCE
Mr. Peter Ittinuar (Nunatsiaq):: Madam Speaker, my question is to the Deputy Prime Minister and Minister of Finance. The chairman of Dome Petroleum has been quoted recently as saying that Dome has been given assurances that some kind of incentive will be granted to encourage frontier exploration.
Instead of giving such assurances to Dome Petroleum-a company which had a 50 per cent increase in profits in the first quarter of this year-will the minister assure the people of Canada that any new measures which he introduces will not allow such companies to make windfall profits at the taxpayers' expense?


Allan Joseph MacEachen: Madam Speaker, the hon. member is obviously referring to the cancellation of the super-depletion allowance. He also knows that an announcement was made by the Minister of Energy, Mines and Resources and myself to the effect that that particular allowance would be replaced, or that consideration would be given to replacing it with an expenditure program. When this program is in place, it will not be necessary for the hon. member to worry about windfall profits through that particular source.


Peter Ittinuar: Madam Speaker, super-depletion is another name for incentive for these oil companies. The chairman of Dome Petroleum has also been quoted as saying the company is confident that their profit picture will follow the upward trend set in the first quarter of this year. Will the minister table documents in the House which will prove that the oil companies do, in fact, need such extensive incentives and tax breaks?


Allan Joseph MacEachen: Madam Speaker, the proposal to which I have referred deals with the replacement of the super-depletion allowance which was intended to encourage frontier exploration through a new expenditure program. It seems to me that that would take care of the concern which the hon. member had in his mind when he began his questions.


LABOUR DISPUTES
Mr. Dave Dingwall (Cape Breton-East Richmond):: Madam Speaker, my question is directed to the Minister of Labour. In view of the fact that Local 684 of the International Association of Machinists and Aerospace Workers has been operating without a contract since December 31, 1978, and whereas a
partial walk-out occurred on Friday, May 2, 1980, can the minister inform the House as to the steps his department has taken or is apt to take to facilitate the negotiations between Local 684 and the Cape Breton Development Corporation?


Ramon John Hnatyshyn: Bring back Andy Hogan.


Hon. Gerald Regan (Minister of Labour):: Madam Speaker, I thank the hon. member for his question. The conciliation commissioner, Judge Nathan Green, has been meeting with the parties to obtain briefs with relation to pension positions, and will be meeting directly with the parties this week to give his findings in an effort to settle the dispute.
Judge Green was appointed after the conciliation officer was unable, despite lengthy negotiations, to achieve an agreement between the parties. A maintenance unit of some 50 employees is involved in this industrial dispute.


AGRICULTURE
Mr. Walter McLean (Waterloo):: Madam Speaker, I, too, have an infectious question for the Minister of Agriculture. It concerns head smut in hybrid corn. This is not a smutty question.
As the minister will know, this new disease was discovered last year in Norwich county, which suffered crop losses as high as 35 per cent. The disease is a potential danger for all corn crop areas. Testing has been done at the University of Guelph. Chemical treatment is apparently available, but it has only a 40 per cent effective rate.
Will the minister inform the House what specific action he undertook with regard to corn smut when he met with the corn industry and, in terms of the infected corn, will he tell us what action will be taken?


Eugene Whelan: Madam Speaker, the disease mentioned by the hon. member can cause severe economic losses to corn producers. There are certain varieties of corn which are more susceptible to this disease than others. It can cause anywhere from 10 per cent to 40 per cent loss in crop production.


An hon. Member:: Answer the question.


Eugene Whelan: My department has been running tests on the seed corn, and those companies which have the varieties with corn smut spores on them have been told to withdraw that seed corn from the market. However, in case there are some infected corn seeds on the market, the crop losses which could be suffered by those producers or the growers of commercial corn who buy that corn seed will be covered by crop insurance.


Walter Franklin McLean: Madam Speaker, in view of the horrendous danger this disease presents to farm crops, will the minister, then, not order the seven identified hybrids to be taken from
May 6, 1980

the market by the four companies that are marketing them? "Yes", or "No"?


Eugene Whelan: Madam Speaker, the hon. member mentioned earlier a meeting which I held with some of the representatives of the seed corn industry, both producers and companies. We are standing by our instructions to these groups, that those known seeds which are infected with the head smut spores be withdrawn from the market.


RAILWAYS
Hon. Stanley Knowles (Winnipeg North Centre):: Madam Speaker, I had intended to put my question to the Minister of Transport, but he seems to have eluded us momentarily. In his absence, I shall put it to the Minister of Labour. It is a question which concerns both ministers. The question arises from the report of Dr. Noel Hall on Canadian Railway pension plans which was submitted a few years ago to the then minister of labour, now the Minister of Indian Affairs and Northern Development.
In view of the fact that neither the Canadian National Railways nor the Canadian Pacific Railway has taken any substantial steps to meet the recommendations of Dr. Noel Hall for improving the pensions of railway workers, will the Minister of Labour or the Minister of Transport-now that he has returned to his seat-make representations to these railway companies to consider this report, bearing in mind that both railways have received many advantages and many benefits from the taxpayers of Canada?


Gerald Augustine Regan: Madam Speaker, l thank the distinguished and honourable gentleman for his question. I must say to him that, while it has not appeared that there have been dramatic results on the recommendations of the Hall commission of a number of years ago on pensions in the railways, nevertheless both the Canadian National and the Canadian Pacific have made changes in the time period involved which have improved the pensions.
Those changes perhaps are more attributable to negotiations with the unions involved than anything else, but some of them do reflect the goals that were laid out in the Hall report.


Stanley Howard Knowles: Madam Speaker, may I say to the Minister of Labour that the view of our railway pensioners is slightly different from the view of the Minister of Labour.
However, as a supplementary question, may I ask either of the ministers-no, I think I shall ask this one of the Minister of Transport: In view of the fact that Dr. Hall made, as a major recommendation, the proposition that the Canadian Pacific Railway should at least bring its pension standards up to those of the Canadian National Railways, will the Minister
Oral Questions
of Transport carry that recommendation to the Canadian Pacific Railway, perhaps with more effectiveness than was done by the Hon. Otto Lang.


Hon. Jean-Luc Pepin (Minister of Transport):: For today, Madam Speaker, I can only promise to do my best to bring about this accomplishment.


An hon. Member:: Not good enough.


PARKS CANADA
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, I would like to address a question to the Minister of the Environment who is responsible for Parks Canada. As the minister is aware, a dissident group is presently illegally occupying land in Kouchibouguac Park, New Brunswick.
The dissidents have exhausted every legal avenue in an attempt to regain this land. They have threatened to exercise force in their efforts to realize their goals, and already there has been violence. What positive measures is the minister taking to resolve this conflict once and for all, and what is he doing to ensure the safety and protection of those brave souls who might venture into Kouchibouguac Park for recreation?


Ramon John Hnatyshyn: Bring in the British commandos.


John (Moody) Roberts: Madam Speaker, this is a very tense, difficult and delicate situation. I am anxious not to say anything which might exacerbate the present difficulties.


An hon. Member:: Move it to Peterborough or Cornwall.


John (Moody) Roberts: I have been in continuing discussion with the premier of the province. We have been discussing, together, a variety of approaches which we might take to release tensions in the area.
I cannot say much more to the hon. member than that at the present time. I cannot assure him that I will very soon be able to say much more. I can assure him that we are very concerned about the situation. It does have our attention, and continuous discussions are taking place with provincial authorities.


Robert Alfred Corbett: Madam Speaker, the minister's response is small comfort, I am sure, to those who live and work in the region and must depend upon it for their living.
I would ask the minister if he has taken into his confidence his colleague in the other place, the former premier of the province, who engineered the Kouchibouguac situation-or the deal betweeen the federal government and the provincial government-and also whether he would be prepared to go to Kouchibouguac, perhaps in the company of the minister of fisheries from New Brunswick-who has been strangely silent

May 6, 1980
Oral Questions
on this particular matter-in an effort to get the matter resolved.


An hon. Member:: Wear an armoured vest.


John (Moody) Roberts: Madam Speaker, these are very interesting suggestions and I will give them the weight of consideration which they deserve.


John Carnell Crosbie: Take Romeo with you.


SUPPLY AND SERVICES
Mr. Bud Bradley (Haldimand-Norfolk):: My question is for the Minister of Supply and Services. Since the new fighter aircraft contract has been announced, and since the minister is reported as saying he would table the contract two weeks ago, could the minister inform this House when, in fact, the new fighter aircraft contract will be tabled?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, as I have advised members of the opposition, it is my intention to table the contract as soon as practicable.


An hon. Member:: You said that two weeks ago.


An hon. Member:: Same old secret bunch.


T.A. Bud Bradley: Madam Speaker, through fear the same old bunch is using the same old time-frame. Could the minister possibly inform this House how soon "as soon as practicable" may be?


Mr. Blais:: Madam Speaker, 1 thought that my reply was clear.


An hon. Member:: You are wrong.


CONSUMER AND CORPORATE AFFAIRS
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, my question is for the Minister of Consumer and Corporate Affairs, and it pertains to the rate increase by the B.C. Telephone Company to sponsor a $300 million capital investment program.
The president of Gentel, the owner of B.C. Telephone, says that the capital equipment is not required and the rate increase will, in fact, involve a reduction in service and local lay-offs. Could the minister undertake to investigate the basis for this rate increase and the relationship between the B.C. Telephone Company and its suppliers, especially AEL Microtel, and
intercede in those hearings if irregularities do appear from the investigation?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, my reply to the first part of the question is yes. As to the last part, I am not sure that the recommendation made by the hon. member is appropriate. In any case, I am still prepared to consider it.


INDIAN AFFAIRS
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, my question is to the Minister of Indian Affairs and Northern Development.
Last week I asked the minister if he would be kind enough to inform this House whether or not there were negotiations under way regarding the British Columbia cut-off claims. He told us that he intended to discuss the matter with the Indian leadership at the all chiefs and elders conference last week, and that he would have a specific answer for us this week. I now ask the minister for that specific answer, please.


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Yes, Madam Speaker, with respect to the B.C. cut-off claims we have undertaken-and I have undertaken-to get the negotiations again under way as quickly as possible in an endeavour to resolve the question.


Lorne Everett Greenaway: Madam Speaker, I have a supplementary to the same minister. Would the minister be willing to give the standing committee a reference on this matter, so that we could discuss it fully in a non-partisan and productive atmosphere as was intended by the previous government?


John Carr Munro: Madam Speaker, I am certainly prepared to take that course under consideration and discuss it with my colleagues; but I would indicate now that, with negotiations getting under way, I would like to get the views of the parties with respect to that particular suggestion.


INQUIRY WHETHER COST OF LIVING INCREASE WILL BE CONSIDERED IN REVISING SALARIES
Hon. Roch La Salle (Joliette):: Madam Speaker, my question is directed to the President of the Privy Council, a Commissioner of Internal Economy of the House.
May 6, 1980

Considering that the employees of the House are very concerned by the fact that no decision has been made about the review of their salaries, could the minister tell the House today whether he intends to make public a study which should normally have been tabled on April 1, as today is already May 6? If so, would the increase in the cost of living be taken into account were the review favourable to the employees of the House?


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, I shall find out whether there is a basis to the concern which my hon. colleague has referred to. If such is the case, I shall find ways to remedy this situation.


Roch La Salle: Madam Speaker, first of all, I would like to ask the President of the Privy Council if he intends to recommend a study on the issue to the other commissioners. I think this is now a great concern to House staff.


Yvon Pinard: As I have said, Madam Speaker, I will try to ascertain if that concern is justified. If that is indeed the case, we will take the appropriate measures and the hon. member will be advised in due course.


TRANSPORT
Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, my question is to the Minister of Transport, if I can get his attention. Seven months ago the SOMPS report, a discussion paper, was released in this House. What discussions have taken place in southern Ontario with regard to transportation, and does the minister have any vehicle by which the public can participate in those discussions?


Jean-Luc Pepin: Madam Speaker, extensive discussions have taken place with the public at large, and my hon. friend is aware of some in which my officials and officials of the department of transport of Ontario have answered questions from the public. Discussions are ongoing in my department, and I hope within the next month or so to be able to present a set of views on the whole of this issue.


John Horton McDermid: Madam Speaker, I have a short supplementary. There are two contentious items in this report that must be resolved in the very near future: one is terminal 3 and the other is a fourth runway for the Toronto international airport. Would the minister care to give us his position on those two items?


Jean-Luc Pepin: Madam Speaker, that is exactly what I was
trying to avoid.
Oral Questions


Some hon. Members:: Oh, oh!


Jean-Luc Pepin: In due course I will address very clearly the two aspects mentioned in the question.


AIRPORTS
Hon. Lincoln M. Alexander (Hamilton West):: Madam Speaker, now that we are talking about airports, and now that the minister has included Hamilton with Malton in answer to a question raised by the hon. member for Hamilton-Went-worth, has the minister now had an opportunity to discuss the expansion of Mount Hope airport with his colleague, the Minister of Indian Affairs and Northern Development?
Can he now tell the people of Hamilton why he so blatantly broke the promise which his government gave to the city of Hamilton whereby it committed $100 million to the upgrading of the Mount Hope airport?


Some hon. Members:: Hear, hear!


Jean-Luc Pepin: Madam Speaker, I feel I have answered this question a number of times. I hope there will be a debate one day on airport matters where this question can be aired. As recently as last week I thought I had put to rest these promises that had been made. With respect to the promises made by my hon. friends on the other side, it was just an agreement in principle by the cabinet and never saw the door of the Treasury Board. That is important to underline at this time.


Lincoln MacCauley Alexander: That is nonsense. I have listened to the minister flim-flamming the opposition with respect to that question. This has been going on for some eight or nine years.


Madam Speaker:: Order, please.


Lincoln MacCauley Alexander: I am just coming to the question, Madam Speaker. Either the minister has not been briefed, or he does not know what his job is all about. I would ask the minister this question: Can I have a firm commitment from the minister that he will bring down a decision one way or the other, so that we can remove the doubt and the haziness as a result of the incompetence of this government by the end of July, because I understand that is how long we are going to sit? Can I have that commitment, so that the people of Hamilton can know just what is going on? Is the minister capable of giving me that answer?


Jean-Luc Pepin: Madam Speaker, I did give a firm promise the other day that a commitment would be made with respect to the Hamilton airport. I did say that. I also said there were a number of matters to be elucidated before a decision could be made on the amount of money that would be needed. I thought I had the sympathy of most members of the House when I said

May 6, 1980
Order Paper Questions
very emphatically that the expenditures would be made for the development of the Hamilton airport that will be needed.


POINT OF ORDER
Eugene Whelan: Madam Speaker, in a question from the hon. member for Waterloo (Mr. McLean), he mentioned seven companies. It probably should have been seven varieties. There are over 300 varieties of corn seed sold in Ontario. We found seven varieties on which we issued orders that they be withdrawn from the market. Because of the economics of this and the concern, 1 thought it should be put on the record.



ROUTINE PROCEEDINGS


Jean-Luc Pepin: the first reading of Bill S-3 (from the Senate), to amend an act to provide for the appointment of a port warden for the harbour of Quebec and to amend and consolidate the acts relating to the office of port warden for the harbour of Montreal.
Motion agreed to and bill read the first time.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David Michael Collenette: Madam Speaker, the following questions will be answered today: 116, 322, 342 and 630.
[ Text]


Mr. Cossitt: 1.	In each of the past six years, what was the total number of public servants working in the Hull, Quebec, area?
2.	What is the total at the present time?
Hon. Donald J. Johnston (President of the Treasury
Board): 1. During the last six years, the number of public
servants working in the Hull area-Quebec-was as follows:
December 1974	3,988
1975	4,812
1976	5,341
1977	5,709
1978	14,511
1979	13,904
2. In March 1980 the number of employees working in the Hull area-Quebec-was 13,822.
Note: The data reflect the number of employees on strength reported by departments and agencies in respect of which Treasury Board is the employer- Part I, Schedule 1 of the Public Service Staff Relations Act-and who are working in the greater Hull area defined at this date as comprising: Aylmer, Lucerne, Deschenes, Gatineau, Templeton-Ouest, Village de Templeton, Pointe-Gatineau, Hull, Buckingham, Buckingham Sud-Est, Masson, Hull, Municipalite de Hull-Ouest, Pontiac, Eardley, Ons-low-Sud, Quyon, Val-des-Monts, Portland, Wake-field-Est, Perkins, La Peche, Municipalite de Wakefield, Village de Wakefield, Ste-Cecile-de-Masham et Masham-Nord.
Source: Personnel Applications Centre
Department of Supply and Services Master Support File and Incumbent System Report B0095 December of each year


Mr. Herbert: 1.	In each of the past three years, how many tax returns of the approximately five hundred largest corporations in Canada, were audited?
2.	What was the amount of the additional assessment resulting from the audit?
3.	What amount of the additional assessment was contested?


Hon. William Rompkey (Minister of National Revenue):: There are no statistics maintained which would permit ready retrieval of the information requested. It could only be obtained by a long and costly review of the files.


Mr. Herbert: 1.	How many former prisoners of war are receiving pension benefits from the Department of Veterans Affairs or its boards and commissions by the (a) theatre of operation (b) level of benefit of the veterans concerned ?
2.	How many applications for benefits are outstanding from former prisoners of war?
3.	What is the estimate of the number of eligible former prisoners of war who have not submitted applications for benefits?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: 1. (a) Prisoners of war of the Japanese-	1,048
Prisoners of war of another power- 5,343
6,391
May 6, 1980

(b) 50 per cent-1,042 20 per cent-1,699 15 per cent- 735 10 per cent-2,915 6,391
2.	4.
3.	It is estimated that less than 180 former prisoners of war may not have applied. The above figures include escapers and evaders.


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


Daniel Joseph MacDonald: As of April 25, 1980-15.


David Michael Collenette: I ask that the remaining questions be allowed to stand.


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.


Madam Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, May 5, consideration of the motion of Mr. Bussieres (for the Minister of Finance) that Bill C-6, to revise the Bank Act, to amend the Quebec Savings Banks Act and the Bank of Canada Act, to establish the Canadian Payments Association and to amend other acts in consequence thereof, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Bill Kempling (Burlington):: Madam Speaker, I have just a few minutes to finish the remarks I began last evening, when 1 spoke of the difficulties faced by many businesses in Canada in financing their operations, particularly small and medium-sized businesses, and the ends to which some of them have to go. This whole matter of financing a business is not very well understood. I am sorry to say I do not think it is very
Bank Act
well understood by the banks as well as some of the people in business.
Before foreign exchange rates began to fluctuate, we had situations where it was easier and cheaper to finance inventories outside of Canada than in Canada. In other words, suppliers came to potential Canadian customers asking them to give them a year or two order for a product and they would put that inventory on the shelves at approximately half the rate that was available in Canada. There is an area here where the Canadian banks could move in and perform a service to help many of our businesses retain that sort of financing within Canada.
When you commit yourself to a year or two years' supply at fixed financing terms to someone outside the country, it leaves the businessman with not too much flexibility. It does not give him an opportunity to look around. He is enticed into this type of arrangement by the fact that he can get very low interest rates. I notice as well with the EX-IM Bank in the United States that many times American suppliers will come in and in fact supply a product that is already made in Canada. However, the financing rates are considerably lower than what can be had here. Consequently the Canadian consumer will make his purchase from the United States rather than from a Canadian supplier because he can get cheaper financing.
As we consider this act-and I repeat that I hope we can handle it with a reasonable amount of dispatch in the days and weeks ahead-I hope we will be able to leave the banks free to enter into more types of financing of inventories. I would like to see a consortium of our banks get together to handle collectively some exporting for the small and medium-sized business sector of our economy. There is an opening there.
In my business experience, I have done a little bit of exporting. On a couple of occasions I had to go to a finance company in order to export to a customer in the Caribbean. There is an opportunity here for Canadian banks to move into that area and stimulate that part of our economy which employs the largest number of people in our labour force.
That, Mr. Speaker, concludes the remarks I have to make. As I say, I hope we can move with a good deal of dispatch and see this bill passed on to the other House in good order.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, it is a privilege, indeed an honour, to be able to discuss this afternoon the bill before us.
Bill C-6, which will revise the Bank Act and amend the Quebec Savings Banks Act and the Bank of Canada Act as well as establish the Canadian Payments Association, is clearly the most important piece of long-term legislation with which this Parliament will have to deal. It will establish the legislative framework within which the Canadian banking system will develop over the next ten or, as we have seen lately, perhaps 13 years. Thus, it is of crucial importance that we consider very carefully the provisions of this bill and their long-term implications for the development of Canada.

May 6, 1980
Bank Act
Mr. Speaker, the Canadian banking system plays a central role in the performance of the Canadian economy. It develops in large part the major payments mechanism facilitating transactions in our mixed market system. In holding the great majority of Canadian chequing accounts and savings deposits the banks assume a special responsibility in managing the nation's money supply. But the banks' most important function in terms of long-range development of the Canadian economy is to provide for the allocation of financial capital among alternative investment opportunities.
The Canadian economy is faced with a number of very serious structural problems as we enter the 1980s. Our balance of payments has deteriorated to unprecedented levels. Our SI 1.5 billion trade deficit in finished manufactured goods portrays a colossal failure on the part of the government to implement a foreign trade policy and domestic industrial strategy consistent with the long-term development of our economy. We are becoming increasingly dependent on the export of primary resources that provide expanded opportunities for the employment of foreign capital in Canada while our manufacturing sector, which provides the greatest opportunity for increasing the employment of Canadians, slips slowly into oblivion, I am sorry to say. The key, high-technology sectors of our economy continue to be dominated by foreign interests. As a result, research and new-product development is inadequately funded. But more important, there has been no attempt to rationalize the Canadian industrial structure to make these industries more competitive in the world economy.
The solutions to these problems are clear to most Canadians. We need efficient, world-scale industries. We need to increase Canadian control in order to stop the drain of financial resources out of Canada. We need to encourage import substitution and to develop efficient capital markets to provide the financial support required to rationalize and to modernize Canadian industry. The Canadian banking system can play a key role in achieving these national objectives and that is what makes the revision to the Bank Act before us for debate today so crucially important.
As the major financial intermediaries in the Canadian economy, the banks receive deposits and lend out huge amounts of capital. Will the Bank Act ensure that these pools of capital will be used to support Canadian business, to promote Canadian industrial development and reverse the trend toward foreign domination? I have my doubts, Mr. Speaker, but let us consider for a moment the proposed legislation.
Revising the legislation governing the Canadian banking system appears to be a ritual engaging this House every ten years or so. In my reading of the record one of the most clearly stated objectives of this ritual in the past has been to increase the level of competition in Canadian banking. This time around it appears that the Minister of Finance (Mr. Mac-Eachen) has decided that competition can best be promoted by allowing foreign banks access to the Canadian economy.
This seems a rather curious decision to me. What is even
more curious is why the chartered banks have not objected,
indeed, why they have agreed so readily to allow foreign banks access to the Canadian capital market. The government thinks such access will increase competition in this highly concentrated sector of the economy. But, Mr. Speaker, the banks know better. And so, too, should the members of this House, especially those members more experienced than I, and in particular those members who have debated this very act over the past few years. As a new member of Parliament representing the concerns of my constituents about the effectiveness of federal government policy, I find it difficult to reconcile the objective of increasing competition in the banking system as expressed by some members of this House with the actual performance of the banks themselves.
In 1954 the four largest chartered banks held $8.7 billion in total assets. This represented 76.8 per cent of total chartered bank assets. By 1979-25 years later-the assets held by the same four banks had grown to $182.6 billion, representing 77.7 per cent of total chartered bank assets. Therefore, over the past 25 years there has been virtually no change in the concentration of assets among Canadian chartered banks.
The credibility of our legislative commitment to ensure greater competition in banking is most seriously questioned by the performance record of the chartered banks in concentrating corporate profits. In 1954, the four largest chartered banks received $51.8 million in profits before taxes. This represented 70.6 per cent of all chartered bank profits before taxes. By 1979 the pre-tax profits received by the four largest chartered banks had grown to $1.1 billion, representing 80.6 per cent of all chartered bank profits before taxes.
In spite of the well-intentioned objectives expressed by so many members of this House, Mr. Speaker, the chartered banks in Canada are no more competitive today than they were 25 years ago. Indeed, a strong case can be made for them being less competitive today. I am afraid that the hon. member for Edmonton West (Mr. Lambert) was all too correct when he suggested the other night that what we were doing here in debating this bill was akin to laying down the rules for the manufacture of horse collars in an age of jet propulsion, rockets and advanced electronics. Still, we are told that this new legislation will increase competition and the chartered banks are on record as agreeing with this. I want to suggest that the kind of competition the banks are talking about is definitely not the kind of competition I have heard discussed by members of this House. But I will return to that point later.
First let me say something about the source of this new competition in the Canadian banking system. The new Bank Act will allow foreign banks to establish banking subsidiaries in Canada. This section of the bill provides very little in the way of federal leadership. In fact, it validates and formalizes a trend which has been growing for some time. Once again, like the banks' involvement in auto leasing, we act after the fact rather than before. We are followers, not leaders. Foreign banks have significantly expanded their activities in Canada over the past decade. The Minister of State, Finance (Mr. Bussieres) very briefly indicated the number of financial affiliates of foreign banks the government has been able to identify.
May 6, 1980

The minister also indicated that the total assets of these affiliates reporting to the Bank of Canada exceeds $6.4 billion.
Mr. Speaker, there are a number of things that are very disturbing about this entire question of foreign banks operating in Canada. First, we seem to be responding after the fact in providing a legislative framework for the activities of foreign banks in the Canadian economy and, furthermore, we are justifying this belated action on the grounds that subsidiaries of foreign banks will increase competition in Canada. However, the government has not provided the members of this House with any comprehensive information on, or analysis of, the activities of currently operating financial affiliates of foreign banks in this country. We in fact know very little about their activities.
I must agree with the comments made in this House last evening by members sitting on the Conservative benches that these foreign banks will not necessarily be operating in the best interests of Canada or Canadians. The question whether these foreign banks will be offering services in small communities throughout Canada and especially northern Canada was posed. Will these foreign banks or their subsidiaries be offering services to the small entrepreneur in the Canadian context? Will they be providing financial services to everyday working Canadians? I suspect not. 1 suspect, as the hon. member indicated last evening, that these will be metropolitan banks, perhaps skimming off the best deals in the resource and industrial sectors, and that they will do little for the new small Canadian banks becoming established in Canada today, such as the bank in my own province, the Bank of British Columbia. Of course, credit unions and caisses populaires are already under undue disadvantages as compared with our chartered banks. No, I do not feel we need the Bank of America in Canada today.
Frankly, 1 am concerned about the deterioration of our economic performance in the 1970s, and it appears that we can expect these trends to continue, at least in the early 1980s. Regional disparities and structural weaknesses in our economy have become worse, not better, over the past few years. Our manufacturing sector continues to decline, employing only 19 per cent of the nation's labour force in 1979. In 1970, nine years ago, 21 per cent of Canada's exports were manufactured goods. Today they represent 10 per cent. Our balance of trade deficit in manufactured goods stood at $3 billion in 1970, whereas last year it was $11.5 billion. In the past five years $13.8 billion in dividends and interest payments were drained out of Canada. An additional $8.5 billion left Canada in management consulting fees, patent fees and licence and copyright fees.
I suggest that these are very serious matters. Yet we are asked to approve those provisions of Bill C-6 which would allow for the expanded activities of foreign banks in the Canadian economy without knowing the role financial affiliates of foreign banks have played or can be expected to play, first, in improving or contributing to a further deterioration of
Bank Act
our manufacturing sector; second, in facilitating foreign penetration in Canadian industry; and third, in improving or contributing to a further decline in our balance of international payments. These are questions of concern to all Canadians, and this legislation fails to address these concerns.
We are told that we are debating the question of competition in Canadian banking. I suggest that we are debating much more than that: we are debating the future of the Canadian manufacturing industry and the future of our balance of payments. As all of us in this House know, major changes are now required in our manufacturing industry in an effort to improve the status of our balance of payments situation in Canada.
To return to the point concerning the differences between our conception of competition and that of the chartered banks, the Minister of State for Finance, in moving the motion for second reading of Bill C-6, indicated that this latest revision of the Bank Act would have the effect of increasing bank competition and thus lead to better service for consumers and business borrowers requiring credit. There are, of course, no a priori reasons, let alone historic evidence, to indicate that these results will follow automatically. The large Canadian chartered banks are today among the world's largest. They have already achieved the economies associated with large scale banking enterprise. The challenge to us is to ensure that those economies are passed on to Canadian consumers and Canadian businesses. Unfortunately, Bill C-6 will fall far short of this objective.
The point is that the large Canadian chartered banks have little to fear from a handful of specialized subsidiaries of foreign banks. The chartered banks know this, and that is why they support this legislation. The kind of competition the chartered banks are looking for in this bill is the leverage that it will afford them in gaining access to foreign capital markets.
This was stated quite succinctly, if not unwittingly, by the Parliamentary Secretary to the Minister of State for Science and Technology (Mr. Simmons) when he said just last week, and I quote: "It will mean that our banks will have access to foreign markets." It remains to be seen how this increased activity of our chartered banks overseas will benefit Canadian consumers, home owners and businesses.
I suggest that we are debating much more than a series of revisions to the Bank Act in this the Thirty-second Parliament. We are debating what may in effect become an international charter for the large scale banks in Canada, a proclamation of the increasingly international ambitions of our chartered banks and what may be a growth commitment to international allocation of financial resources on the basis of greatest profit.
The chartered banks have been granted a privileged position in our economy by the people of Canada. They exercise a tremendous influence over the allocation of financial resources in the economic system and thus have a profound impact on our ability to achieve important national goals. As representatives, it is our responsibility to ensure that the legislative framework we provide for the activities of the chartered banks

May 6, 1980
Bank Act
promotes behaviour consistent with the achievement of our national goals.
One cannot overemphasize that the chartered banks should be encouraged by this House to provide funding for socially responsible areas. The banks ought to assist us in our attempts at developing an industrial strategy for Canada. The banks should assist us in obtaining the national goals of a serious, well rounded employment strategy for Canada, regional development, improvements in transportation and communication, and a move toward more Canadian control in the affairs of Petro-Canada, a principle and concept that in the last election the people of Canada indicated they supported, and supported very seriously and strongly.
Will the banks assist us in developing a serious housing policy for Canada? Will the banks assist us in providing opportunities for small entrepreneurs, encouraging them and enabling them to enter into new and foreign markets? Will the banks assist our agricultural sector? Will they provide assistance to the native people on reserves across the country to enable them to take advantage of opportunities that they are creating every day?
In considering the entire question of competition and the banking system I am somewhat surprised that the government has placed its emphasis on increasing the role of foreign financial institutions in Canada, for if there has been one source of increased competition in the Canadian financial capital market during the 1970s we have just come through, it has come from the growth of wholly Canadian non-bank financial intermediaries, particularly credit unions and caisses populaires.
During the 1970s public confidence in big business fell significantly, but that was not the case with credit unions. Between 1967 and 1977 the total assets of banks and trust companies grew at an annual compound growth rate of 15 per cent and 16 per cent respectively, but the assets of credit unions increased by 19.2 per cent. In 1967, 4,308,000 Canadians belonged to credit unions or caisses populaires. Their membership represented 56 per cent of the labour force in Canada. By 1978 membership had nearly doubled, to 8,318,000 Canadians, or 78.4 per cent of Canada's labour force.
This growth performance among credit unions has occurred in spite of numerous legislative obstacles which have hampered the development of non-bank financial intermediaries. For example, the Financial Administration Act prevents the federal government from maintaining deposits with credit unions. Through that act the federal government discriminates against credit unions in favour of chartered banks. Chartered banks are also favoured by the provisions of the Small Businesses Loans Act, the Farm Credit Act and the Fisheries Improvement Loans Act, all of which require credit unions to register individually in order to be able to provide services under those acts. [DOT]
All members of the House, I am sure, are aware of the
inequity created in the marketplace by the Small Loans Act in
that it does not apply to chartered banks. By imposing a 12 per cent interest rate ceiling on loans under $1,500, obviously it severely limits the flexibility of credit unions to provide revolving credit to their members. Chartered banks are, of course, unhindered by this legislation and can provide this service through direct loans or through their credit card operations.
The point is, Mr. Speaker, if we are really serious about promoting Canadian enterprise and increasing competition in the financial capital market, then we should not be making it easier for foreign banks to operate in Canada. We should be considering a comprehensive revision of all financial legislation that inhibits the establishment of more Canadian banks, the expansion and diversification of credit unions and caisses populaires as well as the development of alternative financial institutions such as postal savings banks.
Mr. Speaker, over the past few years, and especially since becoming a member of Parliament, I have become increasingly aware of the many problems individual Canadians, and especially Canadian businesses, have had in dealing with the chartered banks. This is an area of banking we tend to dismiss as unimportant, but I would suggest it requires far more attention than it has received in the past or will receive in this legislation.
The chartered banks are monolithic, secretive institutions. We need to know more about their operations, but information is often not available or very difficult to obtain. In general, chartered banks are too nervous with small companies, and often loans are recalled prematurely. If a business requires additional short-term credit instead of increasing the loan, some banks prefer to use overdrafts which end up costing the small business in the range of 25 per cent to 30 per cent. Numerous cases exist where a businessman was making regular payments and a demand loan was called by his bank. These factors along with highly variable interest rates make it especially difficult for businesses to plan for even the near future, let alone do any long-term economic planning.
Decisions by the banks to alter the terms of credit or call in a loan add to the uncertainty and risks of small business. A significant number of bankruptcies could be avoided if there were better communications between small companies and banks and if banks were required to be more accountable for their decision to withdraw financial support to business ventures.
In a recent study of consumer satisfaction with financial services, 21 per cent of more than 1,000 respondents indicated that in the previous two years they had one or more experiences with financial or insurance services with which they were highly dissatisfied. Sixty per cent of those reporting dissatisfaction indicated they had had five or more bad experiences during that time period. This does little toward improving the investment climate for entrepreneurs interested in Canada's future.
Among the highly dissatisfied purchasers of financial services who cited financial institutions as most unsatisfactory, chartered banks received the highest percentage at 32.6 while credit unions received the lowest percentage at 4.3. Trust
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companies, credit card services and consumer loan or finance companies fell in between these extremes.
The most frequently cited reasons for consumer dissatisfaction with financial services were as follows:
The service was provided in a careless and unprofessional manner.
And the person-
-was treated like an object rather than as an individual.
Another survey of 16,000 businesses across Canada, although indicating that Canada's chartered banks are providing better than reasonable service to a majority of small and medium-sized businesses, highlighted a number of serious problems. For example, many small and medium-sized businesses are not receiving the quality of service enjoyed by older, established businesses. About 75 per cent of the operators of firms in business more than ten years believe their bank managers understand the nature of their enterprises, versus only 65 per cent of those in business less than four years. Again, I suggest, this does very little toward encouraging the new ideas and energies to enter the marketplace.
The survey also indicated that local bank managers are not visiting clients on a regular basis. Sixty-two per cent of the businesses surveyed had never been visited. This kind of contact undoubtedly plays a significant role in the bank manager's understanding of the small businessman and his problems.
In Saskatchewan, for example, 77 per cent of the respondents had been visited and 78 per cent were confident their manager understood the nature of their business, while in Ontario only 60 per cent of the businesses surveyed had been visited by their bank manager, and in that province only 69 per cent of the respondents believed their bankers understood clearly their operations.
These are all more or less serious problems facing small and medium-sized business in Canada. But a somewhat different problem exists in the very special relationship our chartered banks have cultivated with big business, and in particular the multinational corporations that dominate the Canadian economy. In a very real sense it has been easier for a Kaiser Resources Ltd. to borrow hundreds of millions of dollars from Canadian chartered banks to finance the takeover of an Ashland Oil Ltd. than it has been for many independent Canadian manufacturers to obtain financing for their own industrial expansion.
The historical record is all too clear on this crucial point. The chartered banks in Canada have played a central role in the sell-out of the Canadian economy. Who would better realize this than the present Minister of Industry, Trade and Commerce (Mr. Gray), author of a very important report seven years ago on the foreign takeover of Canadian industry. We on this side of the House congratulate the hon. member on his present appointment and look forward to his proposals for redressing this historical error in our country's industrial underdevelopment.
I am afraid that Canadians hold a fairly low opinion of their chartered banks, perhaps not as low as the oil companies but low nonetheless. Oh, they know they are financially sound,
Bank Act
secure and very profitable, but they seriously question whether the chartered banks are conducting their business in a way that fulfils the public trust which we have placed in them. My colleague the hon. member from Comox-Powell River (Mr. Skelly) has pointed to the much broader commitment to disclosure among large banks in the United States and the glaring deficiencies in the legislation under debate which, although it is an improvement, falls short of what Canadians expect in the way of reasonable information and protection.
My colleague the hon. member from Broadview-Greenwood (Mr. Rae) has raised the serious question of interest rate spreads and price discrimination by the chartered banks. How is it, Mr. Speaker, that in 1980 we can pass legislation that is silent on the "rule of 78" and other such discriminatory practices?
The banks tell us that without a penalty on the prepayment of loans and mortgages, their profits would be squeezed, that they might even lose money! Yet credit unions have been operating without penalties for years and they manage to survive. Indeed, they have grown and become more popular.
I fear, Mr. Speaker, that the Canadian people have every right to be concerned about what we do here today. I have been discussing the financial leasing provisions of the new Bank Act with many automobile dealers in my riding. Recently I was in receipt of a letter from the Canadian Federation of Independent Business indicating that in a survey which they recently conducted with over 55,000 independent business people, 67 per cent were against the idea of banks becoming involved in the automobile leasing business. They are concerned, without having seen the regulations to be prescribed by the governor in council, that this may not only create a conflict of interest for the banks, but may also seriously reduce competition in certain segments of the leasing field over the long run.
Evidence would indicate that in the field of leasing we can expect to be falling behind those activities in the state of California. I understand that nearly 40 per cent of the automobile business in the state of California is now done through the leasing business. You can see that this, then, will probably be increasing in Canada in the years ahead. We can see that banks are interested in getting a piece of that action, and I suggest we would not be doing the independent dealers any good by following suit. Although the banks have indicated that becoming involved in the traditional leasing business is not their aim, I think either yesterday or the day before evidence was discussed in the House by other members that indeed it would appear the banks intend to get into it in much the same way as traditional leasing companies.
The hon. member for Edmonton West has pointed to the failure of this act to define the business of banking. I would suggest that it also fails to define clearly what the government means by competition in the banking system.
I previously mentioned that the chartered banks shared a dubious distinction with the oil companies-Canadians distrust them both. It is clear that we know little more about the

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internal dynamics of the banking system than we do about the oil industry. Because of the privileged position of the chartered banks in the Canadian economy, Canadians have every right to know more, to have a better understanding of the role that our chartered banks play in the Canadian economy.
Other countries view the central role of their banks in the economy far more seriously than we have in the past, particularly if this bill is any indication. The provisions of Bill C-6 restricting public participation in the ownership of chartered banks denies the public an opportunity to participate actively in the banking industry. Such participation would not only provide a new source of competition in Canadian banking, but, to use a much-used phrase, it would provide a window on the banking industry which would allow Canadians better to assess the performance of their banking system.
I am sure this proposal will cause some concern for the members to my right and, of course, will barely arouse the members across the way who are determined to bring Canada's banking system into the nineteenth century with this legislation.
The proposal to promote public participation in banking is anything but unique. In West Germany the local levels of Government wholly own nearly all the savings banks. There are 675 such banks in West Germany with a total of over 20,000 local branch offices or agencies. While most of these savings banks are of a small size, taken together their liabilities exceed all but the four largest commercial banks in West Germany.
The West German banking system is two-tiered in nature. The top tier contains large commercial banks which are privately owned. These banks engage mainly in wholesale banking, lending to large businesses and owning equity in large industrial corporations, and financing these activities by issuing debt obligations. Retail banking, accepting chequing and savings deposits and making small personal loans and mortgages, is the almost exclusive preserve of the publicly-owned savings banks.
In France nearly all of the commercial banks operating at a national level are majority or wholly owned by the government. Following World War II the three largest banks in France-the Societe Generale, the Banque Nationale de Paris and the Credit Lyonnais-were nationalized by the government.
In the United Kingdom the government, through its department of national savings, operates the National Savings Bank. This bank has over 20 million active savings accounts representing deposit liabilities of close to three billion pounds. The bank has no premises, a marked contrast to our marble towers of Bay Street, but it operates through local post office branches throughout the United Kingdom. All other commercial banks in the United Kingdom are privately owned.
This very brief survey of different banking systems simply serves to highlight the narrowness of purpose, the neglect of national economic priorities and the lack of vision represented by this latest revision of the Bank Act. 1 began my comments
by comparing the Bank Act to the laying down of rules for the manufacture of horse collars. It will be a great disappointment to the Canadian people that after years of parliamentary deliberations, after hundreds of thousands of man-hours spent debating this bill, they cannot at least expect better horse collars.


Some hon. Members:: Hear, hear!


Gordon Edward Taylor: Mr. Speaker, I take great pleasure in saying a few words on the Bank Act. 1 will not attempt to give any high-faluting essay or speech on this very complicated act. Rather, I will try to speak in the language of an ordinary citizen and state what we expect from a banking system in this modern age, and to check whether or not we are now satisfied with what we are receiving from our banking system. I will do that by referring to a number of items.
First I want to deal with the matter of agriculture to the extent it is affected by the Bank Act. This act is of concern to many farmers because a section of it deals with loans to borrowers and security for such. That section is used largely by banks when making loans to packers and farmers. When I refer to "farmers", I include ranchers and various forms of agriculture. I cannot understand why the act sets out priority of rights to certain farmers and denies rights to other farmers who are also producing food for the benefit of the people. For instance, it provides priority of rights to growers of perishable products which are direct products of the soil and to the producers of dairy products. The formula which can be worked out from that would indicate that the maximum loan probably would be in the vicinity of $20,000.
I have a question for the hon. minister which I hope he will pursue to ascertain a reasonable answer or else change the legislation. Why leave out livestock producers, as one example? Why not include all producers, if we are to include any, and give them all the same privileges under the Bank Act? This making fish of one and flesh of another in such a vital matter as credit is not right. It will hurt the country and those deprived of those priorities such as livestock producers.
There should be no upper limit. Surely the banks can determine if the value is there, if the security is there or if the equity is there, without our telling them that they have to put on an upper limit in regard to loans to agriculture. An upper limit of $20,000 certainly is not satisfactory for the livestock business or for many other forms of agriculture. A level of $250,000 might be more sensible, but why should there be any upper limit? Are the banks themselves not able to determine the extent to which they can lend? Doing this by blanket legislation will hurt many operations. I cannot see why we, sitting in the House of Commons, think that we can make loans better than those who are doing it day by day and checking the security being offered.
Another item which bothers me very greatly is the security offered to packers in this country. They use the word "procedure" and not the word "purchase". Packers take in hundreds of cattle, probably thousands of cattle or sheep or hogs, but let us deal with cattle for the moment. They "procure" them but
May 6, 1980

they have not yet secured "ownership" of them. They still belong to the farmer until he is paid for those cattle; they still belong to the livestock dealer, the livestock operator or the rancher. But under the present wording of the act, the packer may use the cattle of other people to secure a much larger loan than he normally could secure. If there has to be foreclosure, the foreclosure is then on the cattle that did not belong to the packer. He procured them but he has not yet purchased them. 1 suggest that we change the word in the act, because there is a great principle involved, to the word "purchase". Once the packer has purchased the cattle, then he should be able to use them as security or equity or for any purpose he sees fit. Surely he should not use my 1,000 head of cattle or the livestock of any other producer for his own security before he has paid us for them. This is not fair when it results in foreclosure.
1 suggest we will be increasing the number of such foreclosures by encouraging bankers, and probably many others who have procured the product but have not yet paid for it, to follow this practice. I would like to see the word "purchase" put in the act, or perhaps there is a better word. This item should certainly be discussed very carefully in the committee.
Another thing that bothers many individuals in this country is the trend toward monopolies. I enjoyed the address by the hon. member of the New Democratic Party who just spoke, but I completely disagree with him regarding the nationalization of banks or of anything else. 1 have yet to see the apple tree that grows more apples because it is nationalized. I suggest that the nationalization of an apple tree would result in the producer getting less, because there will be more civil servants working out rules and regulations as to how an apple tree can be kept, who can pick the apples, when, where and why.
Nationalization has its place, but this country was built, with all due respect to hon. members of the NDP, on the free enterprise system, the credit system and on the system of individual effort, not on nationalization and not by the government. It was built rather as a result of thousands of individuals who were willing to risk their shirts, using everything they had, in fact, sometimes only the strength of their backs, to go out and develop this country. Now because we have so much development it is suggested that we should start nationalizing this and that.
The banks can do a job without nationalization. Certain changes should be made, and I hope some will be made, but I am concerned about the trend we are moving toward, and that is the back door way of putting monopoly in our banks. There is a danger in this bill that this may very well take place.
Let us look at the part of this measure which is supposed to provide for competition. I heard a banker say, not longer ago than today, that this item was being put in so that banks could compete with automobile dealers and other businesses. Surely that is not why we are bringing competition in under the Bank Act. My understanding is that this will provide competition
Bank Act
with and among other people doing the same business-the lending of money and the accepting of deposits. Surely we are not going to stretch the meaning of this word "competition" to enable bankers to compete with ice cream parlours.
When you walk into some of our drugstores today you do not know whether you are in a general store, an ice cream parlour, a restaurant, a hardware shop or a drugstore. They have everything in them. We should not start this with our banks. When there is a good thing going, such as with ice cream, under this legislation they could get into the ice cream business. I do not blame bankers for wanting to get into these businesses, but they are not in that field. Bankers see a good thing in the leasing of automobiles, trucks and heavy equipment so they now want to get into the leasing business, the actual merchandising of these products.
Let us follow this through. If banks are allowed to do this, they could get into the leasing business, dealing with perhaps just 100 trucks. They could fix the rates for leasing those 100 trucks, and that rate could go up or down as the banks see fit, within limits, with the result that the people who own the merchandise, garages and small dealers, would have to adjust accordingly. This could very well reduce their margin of profit to the point where they could not stay in business.
When a bank lends money to a dealer today it does so on the basis of the trustworthiness of that individual, the type of business he is operating, his assets, etc. If a man is in the business of leasing these pieces of equipment to individuals, whether it is one truck or 100 trucks, the banks base their loans on something else entirely. In this way the banks are interfering with the livelihood of others because they could well reduce their own interest rate to the point where the small operator could not stay in business.
Most of these small operators do business in small towns rather than in big places like Ottawa, Toronto, Edmonton, Calgary, Red Deer, although they are there too. They operate in places like Strathmore, Airdrie, Drumheller, a small city of 7,000 people, Rumsey, Claresholm, that type of town right across this country. If these people cannot continue in the leasing business and make a reasonable profit, they will move out of those small towns. If they cannot meet their requirements and their commitments, what will happen? I suggest there will be foreclosures and the banks will take back the vehicles. Where will these people then go? I suggest they will move to the big cities and again there will be a trend toward monopoly and centralization.
Even if someone is able to meet all his requirements and commitments, who will carry out the repairs and maintenance now being done by these automobile dealers in our small centres? If we want to put another nail in the coffins of our small towns let us continue with this proposal, because it is just another step to drive those people in our small towns out of business.
I saw this happen in relation to the machinery business. They started with one thing and then went on and on, and the first thing we knew was that in order to get parts we had to go to the big cities of Calgary, Edmonton or Regina in the west.

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When a farmer needs parts he needs them now, not tomorrow and not the next day. The farmer cannot depend on the sun shining every day; he needs the services immediately. I suggest that the minister take a careful look at this idea of permitting our banks to get into this business of leasing, as this is something that could lead to monopolies and the destruction of our small cities.
This is not the kind of competition we expect in relation to banks. We do not expect that they should be in competition with automobile dealers and other merchants with whom the banks now do business, but rather with other banks.
This country is pretty well served by those in the garage business and in auto dealerships. They give a pretty fair deal to our people, providing maintenance and help when it is needed in this day of stress. When a farmer's truck breaks down in the midst of harvest, the small dealer in our towns will on many occasions lend the farmer his own or another truck. It is a service which our farmers and our people appreciate. Let us not kill small business in our towns. I am afraid that if this clause is put into effect it will lead to more bankruptcies.
There was discussion the other day about the figure of 546 bankruptcies in 1978. I wonder how many of those bankruptcies occurred due to foreclosure. I wish that figure were available. Sometimes foreclosure is made without heart, even though there are many warmhearted bankers. In many cases a little consideration and a little help would keep these small businessmen in business.
When I have a complaint with my garage or automobile dealer, I contact the consumer affairs department of the provincial government and they look into the matter for me. If there is provision in the Bank Act for the banks to take over leasing, to whom do I complain, other than to my MP or my MLA, who may not have the wherewithal to carry out the research necessary to determine if there is gouging or something of this nature.
Let us not mix up our jurisdictions. I suggest that the banks stay in the business of lending money and otherwise stay out of small business. Banks on the whole are doing very well today. They are not on the poverty line. There should not be any provisions in the Bank Act which will be detrimental to small business, small towns or small cities. The amount of money made by our automobile dealers and such businesses is not out of line. This clause seems to be a good thing, but the small dealers in our small towns sometimes bid on large contracts in order to stay alive and to remain in that small town. I would like to say that all leases are not necessarily foolproof, even though they may be arranged by banks, and there will be some incidents of foreclosure. Let us not kill our small towns by putting this service in the hands of our bankers.
Then there is the matter of credit cards. More and more banks want to get into the credit card business for the profit it offers. I suggest that the charges for credit cards are unfair in many cases to the customer who pays cash. Hon. members should not think that it is only the rich who pay cash. Many of
our hard-working people buy things only with the money they may have available from their pay cheque. These people live from pay cheque to pay cheque and do not rely on credit cards. They do not mortgage their future with credit cards. When we provide for the extravagant use of credit cards, somebody is paying for them and in many cases it is the cash customer. This matter should be reviewed very carefully and if it is the cash customer who is paying, then remedial action should be taken.
The next point I would like to mention is the matter of interference by banks with individual accounts. I do not think this procedure is widespread. However, some four or five years ago I had a small savings account at one of the chartered banks. I did not use the account because it was a savings account which was held in trust. After I had had the account for some two or three years, I took my bank book in to get it balanced. At that time I noticed there was a service charge of $2. When I asked the clerk about the service charge, after indicating that I had not used the account and that the money had simply sat there for the use of the banks for two or three years, the clerk said, "You are being charged because you did not use the money." 1 instructed that clerk at the desk to take my book back to the manager and to tell him to take the service charge off. I felt that he had no authority under the Bank Act to charge me that $2. The clerk came back after 15 minutes and returned my book to me without the service charge. I forthwith removed my money from that particular chartered bank.
That is gouging, Mr. Speaker. Why should I be charged a service charge when I do not use my account and after the bank has had the use of my money? It was not a current account. Too often banks are using every possible excuse to charge for their services, and sometimes the charge is exorbitant. I recently saw a sign on a bank which said, "Fifty cents to cash a cheque, unless you are an old age pensioner". I would like to know what is the tremendous amount of work involved in cashing a cheque. Banks do not cash a cheque unless they are certain that it is good.
The Bank Act should protect the common people or working people who must transact their business with a bank. Just recently there was an article in some of the papers with regard to deposits. An individual wanted to deposit a large number of pennies. He went to several chartered banks, but they wanted to charge him for taking his money, which the bank could then use. Finally, the treasury branch of the Alberta government said to this man, "Bring it to us, we will take it at no charge". The treasury branch is not under the same authority as the chartered banks. Why should the banks be able to charge someone who wishes to make a desposit, whether it be in the form of a cheque, dollar bills or in pennies? There should not be a charge for making deposits. That is taking advantage of people. The Bank Act should protect not only millionaires or those who need large volumes of credit, but the common people, the ordinary, everyday people of this country, the backbone of this country. This is a matter which needs some attention.
May 6, 1980

Our banks should have as their primary purpose the service of extending credit to develop our resources. Wherever there is a situation which will benefit a community, a province or our nation, then our banks should be right in there to see what they can do to help. If that attitude were taken-it is taken by many bank managers, but unfortunately they are given orders which will not allow them to carry out what might be best for the community-it would benefit the whole nation. The bank managers know the needs of the communities they serve.
In connection with competition among foreign banks within the country, 1 would like to suggest that if foreign banks come into Canada they should provide more than just competition; we must make sure that they are coming here for the benefit of Canada and Canadians. Such banks would be expected to make a reasonable profit, but they should not be coming here to do great things for another country at the expense of the Canadian people. If the Bank Act is worded to cover this area, it will be of tremendous help.
I would like now to say a word or two about something which I am sure is mysterious to most people, and it may even be mysterious in some cases to the people within our banks. That is the expansion of credit. The government gave the right of banking to private companies and also gave them the right to expand credit under certain conditions. These banks can expand credit seven, eight, ten or even 13 times. When that credit is expanded, the money given to an industry and then returned, it is taken off the books. The loan has been repaid. Sometimes not even one dollar bill changes hands; it is all done by chequing and book entries.
I know the Canadian government has made use of this expansion of credit on a number of occasions, and properly so, although I would not say every time the government used this method it was for a purpose that I would support; but nevertheless it has been used. I would suggest that now is a good time to make sure that the banking fraternity is going to serve this country. We can do this by making sure that at least one half of the expansion of credit that takes place, because of the buoyancy in this country, is lent at a very nominal interest rate for the building of schools and hospitals.
This is not going to be in competition with anybody else and it is going to provide needed classrooms and needed beds across the country. If we could adopt a policy where only a portion of that expanded credit is used for this humanitarian benefit of building hospitals and schools at a very low interest rate, it should cut down a little on the banks' profits. Bank statements I have read do not show that they are in an impoverished condition. They can expand that credit only because they have the support of the people of this country. If there was a run on a bank and we lost confidence in our banking system, banks would go bankrupt tomorrow. Yet it is years and years since a bank has gone bankrukpt or closed its doors. I hope it is just as many years before it happens again.
I think the banks should become good corporate citizens, and, if necessary by law, a portion of the profits from expand-
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ed credit should be used to build hospitals and schools. Low interest loans should be given to our school boards and hospital boards right across Canada. This would be a tremendous load off the shoulders of the men and women carrying the burden of the hospital and school administrations. In my view, we have a wonderful opportunity to make sure that this Bank Act is going to work for the benefit of Canada and Canadians. Let us not throw away this golden opportunity.


Mr. Vic Althouse (Humbolt-Lake Centre):: Mr. Speaker, it is a pleasure to address this House on Bill C-6, to amend the Bank Act. This is an act where we grant a very special privilege to a corporate group in our society, namely the banks. We are granting them the privilege to do business in our country and we are laying down the rules by which that business will be transacted until 1990. With the passage of this bill, Parliament will be allowing the existing Canadian banks to continue for another ten years pretty much as they have done in the past.
There are some exceptions. We are told that in this act we will be encouraging competition in banking, that is, unless a province decides it wants to get into the banking business. I think that is fair because the British North America Act has stated clearly that banking is the business of the federal government to legislate. We are saying in this act that subsidiaries of foreign banks may be allowed to operate in this country if the minister is satisfied that the bank in question has the potential to make a contribution to competitive banking in Canada and if we are able to provide reciprocal arrangements with the foreign banks' own governments.
I am afraid that perhaps we have not spent as much time as we should on this act regarding the competition in our banking system that we have right here at home. I refer to our trust companies and credit unions, the so-called "near banks". We submit that these are the Canadian alternative to the banking system and the only real source of competition that exists in this country today.
What has the federal government done to promote this kind of competition and improve the competitive position? In my view, the programs have not been overwhelming. For instance, the Financial Administration Act prevents the deposit of federal government funds in financial institutions other than chartered banks. The Canadian Wheat Board Act permits elevator and grain companies authorized by the board to borrow from chartered banks but not from credit unions. The Livestock and Livestock Products Act requires livestock commission agents to keep a shipper's trust account in a chartered bank, not a credit union. The Bills of Exchange Act defines a cheque as a bill of exchange drawn on a bank, again not a credit union.
When it comes to presenting government services, we note that the credit unions clear government cheques and orders at no cost. In Saskatchewan, this amounts to about 40 per cent of the clearances. In Quebec, the caisses populaires clear approximately 13 million items each year, worth about $2 billion. These figures I have quoted are 1977 figures so the volume may be increasing. Yet neither credit unions nor caisses popu-

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laires receive compensation for their work. Granted, the banks do not charge for clearing government orders, but they at least have access to government deposits. For instance, by the end of 1978 these totalled approximately $6.7 billion. These deposits provide a considerable source of compensation for the chartered banks and, as I have already mentioned, credit unions do not have access to similar government deposits and therefore have no source of compensatory earnings.
Credit unions and caisses populaires also sell and redeem Canada Savings Bonds for the federal government which result in a net outflow of funds for which they are not compensated by federal government deposits. We say that a means ought to be found to compensate credit unions and caisses populaires for services rendered to the government. This could include balances allocated to credit unions and direct payment on a per item or lump sum basis for services rendered. I realize that not all of these impediments are created under the Bank Act; they are created under a number of other acts, but they do indicate the bias of this and previous legislation against the credit union movement in favour of banks.
In presenting the act to the House, the claim was made that we are going to be increasing competition. These claims ring a bit hollow when we look at the real promise of competition that exists here and now in the lending of money and the attendant service transactions that are not allowed to grow and develop to their full potential. This government talks about bringing into Canada foreign banks to provide competition. It almost shouts "Ignore our Canadian institutions, bring in the foreign competitors." That unfortunately is the policy which this country has been following, and we say it is about time it came to a stop. The credit unions do have a role to play here. In most western European countries, financial legislation has recognized the need for co-operative Financial intermediaries to have broad international powers similar to those accorded to the banks.
In order to serve the financial needs of the various credit union members around the world, these legislative changes have been allowed. Some examples include the DG Bank in West Germany, Rabobank in The Netherlands, GZB Bank of Austria and Credit Agricole in France which, although cooperative banks, have international investment powers in other banks.
If Parliament is going to be looking at sections of this act which provide for a Canadian Payments Association, I think it is a credible step in the right direction because it will allow credit unions to become involved more fully in the banking system of this country. The credit union movement will benefit from the proposals in the bill to create a new Canadian Payments Association through which, for the First time, nonbank financial institutions that accept chequable deposits will be permitted to participate directly in the clearing system. The credit union movement appreciates this kind of legislation because it will be in keeping with the government's stated intention to provide more equitable competition within the Canadian financial system. It will allow credit unions to have
equal access to the Canadian Payments Association in order to protect their future competitive position, especially since the CPA will become the focus for the evolution of electronic funds transfer systems that are being developed in this country.
Although the present clearing system, controlled exclusively by the chartered banks, appears to work efFiciently, there is really no indication that it is cost-effective from the point of view of the credit union system, and so they welcome the Canadian Payments Association as a clear improvement over the old system.
Direct access by near banks to the clearing system has been recommended by the Commons finance committee in its 1967 report on the Bank Act, by the Porter Royal Commission on Banking in 1964 and by the Economic Council of Canada in its 1976 study of deposit-taking institutions.
As considerable time and effort has been devoted during the past number of years to preparing for the proposed participation by credit unions in the Canadian Payments Association, we think this part of the legislation should move ahead as quickly as possible.
Parliament will be granting the privilege and responsibility of this act to the banks. It has always been Parliament that has granted charters for new banks in this country, that is, until we pass this act. After that, issuance of letters patent for any new banks will be carried out by the cabinet. I think that right should have remained with Parliament.
There are many reasons for thinking this, but I will just say that the recent history in this country of regionalized representation which we have had in the past several governments indicates that we should leave the power within the hands of Parliament. Since the impact of any of these decisions falls on the whole of the country, such decisions should rightfully be taken by representatives from all parts of the country, and this can only happen if they are taken by Parliament itself.
I do not know if the item I am going to deal with now arises from the pleas of producers of livestock that they have been ignored or whether it is a simple case of oversight. I am referring now to section 178 of the proposed act which deals with the manner in which banks' claims against processing institutions are developed. To put it simply, section 178 lays down the ground rules whereby some producers of agricultural products are protected. The section I refer to is section 178(6)(b), which gives priority to claims by growers of perishable products of agriculture that are direct products of the soil. It also gives the same kinds of rights to producers of dairy products. However, it ignores producers of livestock. Producers of livestock do not have a similar kind of protection in the event that a processing plant goes broke or bankrupt and the bank has to move in and seize the assets of that processing plant.
The problem has been dealt with quite extensively in committee. Committee hearings were conducted in 1979. The committee heard recommendations to provide for changes to
May 6, 1980

the act and it made recommendations that such changes occur. We noted in the last election that Liberals, Conservatives and this party all agreed that the change should be made. Unfortunately, it was not included in the changes made previous to the act being presented to the House. I have written a letter to the Minister of Finance (Mr. MacEachen) asking him to correct this situation before we get into the committee stage so that the bill will treat all sorts of agricultural producers equitably in the event that a processing plant does have its assets taken over by a bank. It is a problem that does occur occasionally.
I will just deal with a few years. In July, 1973, City Meat and Sausage Company in Montreal went under with losses to producers. In September 1973, Coleman Packing Company went under and the producers lost money. In October, 1973, Fawcett and Cristie, in Moosomin, Saskatchewan, went under and the producers lost money. In January 21, 1975, Burkmey-ers Meat Products Limited of Burlington went under and the producers lost money. In February, 1976, the same happened to Essex Packers Limited.
Producers lost money in all of these cases because the way that the act is now written, section 88, now 178, provides that the banks get prior claim if the product that the processor is handling is a livestock or a livestock-related product. That is not the case if it is a fruit or vegetable product or a dairy product. There is a hole in the act. That should be corrected in the interests of justice and basic equity to all producers delivering products.
In order to back up this kind of producer, there are a few housekeeping things that need to be done. Instead of talking about loans to processors and manufacturers of agricultural products for the "procurement" of products, banks should grant loans for the "purchase" of products. It does not seem to be a very big distinction. What we see happening with the product, whether it is livestock or poultry moving into the plant, is that the company which owns the plant takes out a loan against that livestock without paying the farmer. If the plant does in fact go broke, then the bank collects all of the assets that are in the plant and the livestock producers are left in the lurch. That is not the case with dairy producers or fruit or vegetable producers. I am sure we will get this provision changed when we are in committee. I urge that it be corrected before the bill comes back for third reading.
As well as changing those sections of the act, we should look at releasing the amount of liability that is mentioned in the act. It has been increased. The Conservative Bill C-15 referred to a formula that would pay $64 times a particular index that was quoted. This one uses the figure of $100 times that particular index.
There are a number of problems here, and probably the solution would be just to have no limit and give the producers an unlimited amount of protection. The problem with basing it on an index is that occasionally we change the basis of the index. In 1970 we got to the point where the index of agricultural products was approaching 200, so when we got into a
Bank Act
new decade we said, "Let's turn that back to a base of 100." This could happen again in the 1980s, and because it is written into the act it would substantially reduce the amount of protection that is available to producers.
I urge the government and the House to make these small, though important, changes to the act, that we give them very real consideration, that we bring them forward in committee and that we speedily process them in order to bring about the kind of equality and justice that should exist in that section of the act.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: 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 Red Deer (Mr. Towers)- Metrication-Request metric commissioners be relieved of duties; the hon. member for Prince George-Peace River (Mr. Oberle)-Transport-Movement of grain-Allocation of hopper cars to British Columbia Railway; the hon. member for Skeena (Mr. Fulton)-Environmental affairs-Acid rain- Canada-U.S. discussions.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Bussieres (for the Minister of Finance) that Bill C-6, to revise the Bank Act, to amend the Quebec Savings Banks Act and the Bank of Canada Act, to establish the Canadian Payments Association and to amend other acts in consequence thereof, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, in my remarks to this House on April 21, 1980, in response to the Speech from the Throne, I stressed the need to view government economic policy as trying to form a stable and certain economic climate. This would be an economic climate which would stimulate growth, encourage investment and have the effect of creating new jobs.

May 6, 1980
Bank Act
This was a commitment which the government took on. When the Minister of State, Finance (Mr. Bussieres) introduced Bill C-6 for second reading, he was taking a step toward that commitment. At this time it is extremely important to the creation of a stable environment in the nation's financial sector that the Bank Act be revised and implemented as soon as possible.
Further extensions of this bill would be indeed regrettable. The current revision of the Bank Act began in September, 1974, which means that a large sector of Canada's financial community has been unable to engage in comprehensive planning for almost six years.
With the help of two parliamentary committees and as a result of the consensual reports which they submitted, we arrive at our current point, consideration of Bill C-6 at the second reading debate.
Let me make it clear that I am not asking for passage of this bill because of any deadline which may exist. I feel that this bill is the result of a careful review of what at this time would be good for Canada and good for Canadians.
[ Translation]
Our responsibility lies in strengthening and developing the Canadian financial system by promoting efficient and fair competition.

In this process we must not lose sight of Canadians who must function and live within our economic structure. If aspects of Bill C-6 will make it harder for Canadians to live within their means, it is our responsibility to redress those negative aspects. Speaking generally, I do not believe this is the case with Bill C-6.

This bill is extremely long and very complex. It lays down the framework and the basic rules within which chartered banks, the Quebec savings banks and the Montreal City and District Savings Bank were set up, operate and are controlled. [English]
There are countless issues in Bill C-6 which one can address. I want now to turn to five or six specific issues.
First, I want to consider the fact that Bill C-6 does not include a definition of the business of banking. The hon. member for Edmonton West (Mr. Lambert) raised this point in his remarks to the House, and I welcome the opportunity to ease his concern. Surely the goals of flexibility and control are the ones we should be striving for in Bill C-6. I do not see how a definition of the business of banking would help us achieve either of these goals.
It should be noted that the hon. members of the former Standing Committee on Finance, Trade and Economic Affairs also had no definition of their own for the business of banking, although they grappled with this issue for some time.
The hon. member for Edmonton West has called for a bill with a 25-year duration, which would allow the authorities administering this bill to discharge their duties. However, since
1974 when the current revision began in earnest changes have already occurred in the Canadian economic system due both to international and domestic circumstances. Our ability to control our banking system must rest on constant review, at least every ten years, of both the charter of the banks and the regulations which have been established to control corporate development.
The government has chosen not to define the business of banking in its present review because of the evolving nature of the banking system and the obvious federal-provincial implications of any comprehensive definition. Just as today's banking institutions are quite different from those of earlier years, an attempt to define the business of banking at this point may overly restrict the evolution of the business in the future.
Ten years ago we could not have predicted the growth of the credit card system on its current scale, expanded services in the form of multi-branch facilities and flexible banking hours. Let us not limit the growth of the banking industry inadvertently by imposing long-term restrictions now.
I would further like to stress the need for competition and openness in the banking system, but at the same time these requirements depend on a structure in which to operate. That is the logic of Bill C-6, and when hon. members argue that banking will be over-regulated as a result of Bill C-6, I am confused. It seems to me that while the ground rules will be established in the Bank Act and in the proposed Canadian Payments Association Act, some details of the new banking legislation can be better dealt with in the form of regulations. This approach will provide the flexibility which is essential in a rapidly changing economy.
The number of regulations offered have been kept to a minimum. The added flexibility provided in the regulation approach and the discretionary powers given to the Minister of Finance (Mr. MacEachen) and the inspector general of banks will also enable the authorities to deal equitably with the many more participants in the system in the future.
The hon. member for Edmonton West has offered this House a critique of the regulation approach which would rest on minimal regulation, tighter definition and a longer duration of the act. I would say to him that his approach locks us into a box when our goal should be flexibility leading to financial accountability and responsibility.
The third issue I would like to address is financial leasing, and here is an area where, as I said earlier, it is important to match the intent and the practical application of the bill. The intent of Bill C-6 was to permit chartered banks to enter the business of financial leasing, defined in the regulations to ensure that bank leases were the functional equivalent of credit. The draft financial leasing regulations which were released would have permitted the banks to do leasing only through subsidiaries and the property to be leased would have to have been acquired specifically for the leasing transaction. In addition, the lease would have been on a full pay-out and non-operating basis.
May 6, 1980

The white paper noted that financial leasing was clearly a banking activity and that the participation of banks in the area would be beneficial to the financial system. It is the intention of regulations to ensure that all leases are the functional equivalent of credit and tied to specific equipment. Banks will only be able to acquire the property to lease at the request of the prospective lessee, and the banks will be disallowed from directing lessees to particular suppliers.
Specific interests, such as automobile dealers, have raised objections to allowing banks into financial leasing. Their concerns are legitimate and should be given additional consideration.
We owe a debt of thanks to our colleague, the hon. member for Broadview-Greenwood (Mr. Rae), who has raised the potential conflict between the intent of the financial leasing provisions of Bill C-6 and how they would operate in practice. The information which the hon. member brought to the attention of this House was new and casts doubt, not on the principle of the financial leasing provisions of Bill C-6, but on the practical implications of this issue.
In light of the situation raised by the hon. member for Broadview-Greenwood, I believe that the Standing Committee on Finance, Trade and Economic Affairs would want to examine carefully the thrust of the financial leasing provisions of Bill C-6.
Other equally difficult issues can also be considered in committee-for example, the priority protection position demanded by the Canadian Cattlemen's Association.
Fourth, I would like to address myself to the entry of foreign banks into our economy as federally-incorporated enterprises. One could justifiably ask why foreign banks should be permitted to commence banking in Canada. Foreign banks are already engaging in business in Canada providing services which are available now from domestic banks and raising money for the purpose of borrowing in the Canadian money market.
[ Translation]
Foreign banks have intensified their activities considerably in Canada since the Bank Act was last revised. Most of those activities were handled through affiliated financial institutions set up under provincial charters. About 100 such Canadian establishments have been identified in which foreign banks have interests and which seem to deal in financial activities. Some 50 foreign banks are shareholders in those companies. About half of them are American while the others, except for seven of them, come from member countries of the European Economic Community.
In addition, there are 50 offices which act as agents for foreign banks, almost 30 of which represent Canadian bank establishments. Total assets of Canadian businesses affiliated with foreign banks and which report to the Bank of Canada now amount to over $6.4 billion.
Bank Act

At present, these foreign bank subsidiaries are not subject to the Bank Act. Foreign banks should be encouraged to set up subsidiaries under the Bank Act because of the additional competitive and innovative forces they can bring to bear in the relatively highly concentrated Canadian banking system. They are to be encouraged, too, because of the additional financial support which they, with their world-wide connections, can bring to the development of our resources, industries and trade. There is also the further consideration that if we provide a basis in law for the operation of foreign banks in Canada, we can expect our own banks to obtain reciprocal recognition in other countries which is necessary if they are to extend their participation in international markets.

The time has obviously come to give foreign banks the opportunity to do business in Canada under the terms of our federal banking legislation. The result will be greater competition on money markets and that will benefit Canadians. At the same time, the provision included in the bill will guarantee that our banking system will remain predominantly Canadian. [English]
To accommodate foreign banks in Canada, Bill C-6 has dropped the five-branch limit of foreign bank subsidiaries and has rejected the annual licensing approach suggested by some of the Canadian banks. The government has recognized that the five-branch limit suggested earlier was too restrictive on the operations of affiliates of foreign banks which might be interested in incorporation under the Bank Act.
In addition, with the authorized capital limit proposed in the new legislation, the branch limit would seem to serve no useful purpose. In this way, as the Standing Committee on Finance, Trade and Economic Affairs has pointed out, subsidiaries of foreign banks will not be restricted to locating their operations only in the largest Canadian cities.

Both committees recommended that the ceiling be abolished and the committee of the House proposed that ministerial authorization be dispensed with. Considering those recommendations and the representations received by the committees and the government, the bill embodies the recommendation of the committee of the House in eliminating the ceiling altogether. However, ministerial authorization will still be required to help in obtaining reciprocal treatment as well as some regional distribution of foreign bank subsidiaries.

I am aware that some jurisdictions prescribe annual licensing procedures for foreign banks. The Bank Act accepts the principle of licensing which will allow the government to maintain tighter control over the performance of foreign bank subsidiaries. Initial and renewed licences will be valid for a period of up to three years. It is believed that licences for three-year periods will allow adequate control over financial subsidiaries of the foreign banks.

May 6, 1980
Bank Act
Foreign banking in Canada is already a reality. It is our task to integrate foreign bank subsidiaries efficiently and adequately both to protect our domestic structure and to allow the entry of new competitive institutions.
I would now like to turn attention to the issue of competition, which has been raised a number of times in the House, and its relationship to Bill C-6. One of the major objectives of the Bank Act revision is that of maintaining and improving the competition which now exists both within the banking system and more generally throughout the Canadian financial market.
Equitable and vigorous competition within a framework of law and regulation, and subject to the basic control of the central bank, provides a number of benefits to the many consumers of financial services. Promoting competition is, of course, not the sole objective of the banking legislation and therefore in many cases provisions designed to encourage competition will also be shaped by other objectives, such as ensuring that organizations under Canadian control continue to play a dominant role in the financial sector.
A competitive environment is the most effective way of providing customers of the financial system with a wide choice of high quality services at the lowest possible costs, whether the customer be the ordinary wage earner who simply wants a convenient chequing account or a small businessman who will want a variety of payment and credit services.
The greater the degree of competition, the greater will be the degree of choice which customers will have between banks and among various types of financial institutions, the greater will be the incentive for banks and other financial institutions to offer innovative new services, and the greater will be the tendency for loan rates to be low and deposit rates to be high in relation to prevailing interest rate levels.
The bill presently before the House is the result of extensive discussions with all interested parties which began with the release of the white paper in August, 1976. Two of the major proposals in the white paper which were particularly aimed at increasing competition were as follows.
First, one group was designed to increase competition by providing easier entry of new or existing Canadian-owned institutions to the banking system. Second, a second group was designed to strengthen competition in the financial markets by constraining the business powers of banks in some areas such as data processing and underwriting of corporate securities while at the same time extending the powers of the banks to include financial leasing and factoring.
Let me now turn to outlining some of the parts of the bill which are designed to achieve these objectives, firstly with regard to promoting competition within the banking sector. In discussing the specific provisions of the bill I will divide them into two broad classes-those which promote competition within the banking system itself, and those which have an influence on either the competitive balance of the financial markets as a whole or on the interaction of the banking system with non-financial business.
As my colleague, the Minister of State for Finance, noted in his speech on second reading of Bill C-6, a number of measures are proposed to encourage an increase in the number of banks. Increasing the number of institutions offering banking services tends to widen the choice available to consumers and encourage such benefits as innovation, variety of services, and attractive borrowing and lending rates.
There are a number of provisions in the bill to encourage the establishment of new Canadian-owned banks. These facilitate both the incorporation of banks by letters patent and the conversion of an existing financial institution to a chartered bank. There are also proposals which would permit both provincial governments and non-deposit-taking Canadian financial institutions to play a role in establishing new banks.
Let me just make a few remarks on each of these in turn. As members are aware, under the existing Bank Act new banks can be established only by a special act of Parliament. This procedure applies only to chartered banks and is thus likely to be unfamiliar and to some extent a discouragement to any group of individuals contemplating the formation of a new bank. In addition, the procedure is more difficult and expensive than the letters patent route and, given the uncertainty of the parliamentary timetable, can involve risks as to timing which may be an additional negative factor in some instances.
The proposals permitting both provincial governments and existing non-deposit-taking financial institutions to play a role in establishing a new bank are intended to increase the range and types of organizations which may stimulate entry to the banking system. As the House is aware, one of the principles in the existing legislation is that Canadian banks should not be subject to domination by any particular individual shareholder or group of associated shareholders. Under the existing act, shareholdings by individuals or associated groups are in most cases limited to 10 per cent of the voting shares of a bank. At the time of the establishment of a new bank, however, entrepreneurs may be discouraged if they cannot obtain sufficient shareholdings to have an important influence on the early management of the bank and to reap an adequate return for their effort as the bank becomes a mature and successful enterprise.
The present act, therefore, permits those financial institutions which do not directly compete with the banks but which might nonetheless have some special expertise to hold up to 25 per cent of the shares of a new bank. It is also recognized that provincial governments may in some cases have a particular interest in encouraging the formation of banks with regional interests, and therefore similar provisions apply to shareholdings by provinces. These types of organizations are permitted to maintain up to 25 per cent of the voting stock of a bank for up to ten years. This provides adequate time for the bank to become firmly established, and after that period the pattern of ownership of shares must return to the 10 per cent limit which applies in most other circumstances.
May 6, 1980

It is, of course, true that when new banks are established they will inevitably be small and will take some time to grow to a size where they will be major competitors with the existing chartered banks. Therefore, the bill contains proposals to facilitate the conversion of existing financial institutions to chartered banks. This opens up the possibility that existing Canadian financial institutions with significant financial resources and an experienced staff will be able to enter the banking system and from the outset make an important contribution, and therefore further promote competition.
I might also mention that this bill provides additional flexibility in the ways in which banks may raise capital, by and large permitting them to make use of the full range of instruments available to other corporations. This will make it easier for new banks to raise the necessary capital to support rapid growth, as well as benefiting existing banks.
In addition to encouraging an increase in the number of banks under Canadian control, the bill will also permit the controlled entry into the Canadian banking industry of the subsidiaries of foreign banks, as I described earlier.
I would now like to address those aspects of this bill affecting the competition between the chartered banks sector and other financial institutions or other types of businesses, which is the second area that I mentioned earlier which has a great deal to do with the competitive thrust of Bill C-6.
In discussing the contribution which Bill C-6 makes to improving competition, it is important to note that it is competition in the financial markets as a whole rather then merely within the banking system as such which is important. For the individual consumer requiring such services as chequing accounts, savings accounts, consumer loans or mortgage loans, the competition between the individual banks is supplemented in a very important way by the operations of the credit unions, caisses populaires and trust and mortgage loan companies.
The Canadian Payments Association Act, which forms Part IV of Bill C-6, ensures that these institutions will be able to participate directly in the cheque clearing system, and equally, if not more importantly, ensures they will have a choice in the evolution of the payments system in Canada.
Since the provision of payments services provides an important first contact in attracting customers, the role which the Canadian Payments Association gives to non-bank deposit-taking institutions to participate in and influence the evolution of any new payments service will help to ensure that these organizations will continue to be in a position to provide vigorous competition to the banking system.
The government also is developing new savings bank legislation which will expand and strengthen the powers of the trust and mortgage loan companies. An important objective of this new legislation will be to ensure that trust and mortgage loan companies will have adequate and updated powers so that they may continue to play an important role in the financial markets. It should also be noted that the bill limits chartered bank mortgage holdings to 10 per cent of their Canadian dollar deposit liabilities and debentures, unless these mort-
Bank Act
gages are held in a subsidiary operating under the same rules as existing trust and mortgage loan companies. This will help to ensure more equitable competition between the banks and the specialized mortgage lenders without interfering with the significant contribution that the chartered banks now make in supplying funds to the mortgage market.
Vigorous competition in the financial markets also requires that the banks offer a full range of financial services to their customers. In some smaller centres a chartered bank may be the only type of financial institution and thus unnecessary limitations on the chartered bank powers will represent a particular inconvenience to people living in those regions. At the same time there must be concern that the banks are not given powers which would give them an unfair competitive advantage with respect to some other financial or non-financial businesses.
It is the types of considerations which I have just mentioned which have shaped the proposals in this bill affecting the business powers of the chartered banks. The banks' powers have been expanded to permit them to enter both factoring and financial leasing, as I mentioned earlier, two forms of business financing which have developed since the 1967 revision of the Bank Act and which highlights why it is necessary to have decennial reviews of this legislation. Permitting the banks to enter these markets will widen the range of choice and further competition in markets which to date have been largely dominated by foreign-controlled firms.
At the same time, legislation and regulations, particularly with respect to leasing, have been carefully designed, as I have mentioned, although we have noted that there could be some possibility for change. In particular, banks in that area are not permitted to offer non-financial services already provided by existing industries.
Other changes to the banks' powers have, by and large, resulted in stricter or more carefully designed limits on the banks' activities. One of the basic principles which has existed in the Canadian banking legislation for some time is that banks should not directly or indirectly engage in any other trade or business. This prevents a situation arising in which loan customers of a bank find that they are selling a better service in competition with their banker. Bill C-6 defines quite carefully the range of services which banks may provide and also prohibits banks, with certain limited and carefully controlled exceptions, from holding more than 10 per cent of any other Canadian corporation. For example, in the sale and distribution of securities, banks are controlled so as to avoid any potential conflicts of interest and to ensure that the securities market continues to provide a viable alternative to the banks as a means of raising funds-


Mr. Deputy Speaker:: Order, please. It being five o'clock p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, public bills.

May 6, 1980
Holidays Act



PRIVATE MEMBERS' PUBLIC BILLS


Mr. Hal Herbert (Vaudreuil) moved: that Bill C-201, to amend the Holidays Act, be read the second time and referred to the Standing Committee on Labour, Manpower and Immigration.
He said: Mr. Speaker, if I appear to have little enthusiasm this afternoon, it is because I have a major preoccupation, and that is the Quebec referendum. I must admit that my mood changes from day to day as I see what is happening in my chosen province. I find it an extraordinary coincidence that of the 300 or so bills on the order paper, this one should have been drawn first out of the hat and is the subject of discussion this afternoon.
Last evening, at one of the many meetings I am attending at the present time trying to present the advantages to Quebec by remaining in confederation, 1 was questioned on the ability of federal members of Parliament to do anything about changing our constitution. When we talk of renewed federalism, we talk about our faith in our country as it is presently constituted, but we cannot seem to do anything about it. This gentleman said to me, "If you want to make any change at all, you have to get the agreement of all the provinces." How true that is. He spoke of the English insensitivity.
I must admit that in the many meetings I have been attending in the last few weeks, it is abundantly apparent that we English have lots of logic which we use to try to convince our Francophone colleagues in Quebec, and on their side those who want to promote the separatist cause-the independence of the province of Quebec-that they are extremely emotional. It is very difficult to combat emotionalism, so the argument at the present time is logic versus emotion.
I made a choice. During the last war when I came to this country to train in the air force, I was stationed here in Ottawa. I liked what I saw. I enjoyed the people. I enjoyed the opportunities that were available. So, when the war ended, I decided to come to Canada and to become a Canadian. Of all the provinces in Canada, I chose Quebec. 1 did not choose Quebec because it was English. I chose it because I liked the way of life in the province of Quebec. But 1 chose it because it was one of the provinces of Canada, and my first choice was this country-surely the richest, one of the most beautiful countries in the world. We have tremendous natural resources. We have everything to make us very proud. But maybe that is our problem. We suffer sometimes from a lack of pride in our country, and particularly in Quebec I find that a lack of pride is one of the difficulties.
I have pointed out that in the province of Quebec the
provincial government already has complete and full authority
for education, culture and language-the items which are
probably the most important when we talk about the powers of the provinces-but always they bring up the point that when one is a minority one cannot always have one's own way. The problem is that everyone is a minority in some way or another. Whether it be the Francophone minority in Canada, or for that matter the Francophone minority in North America, the Francophone minority in the English provinces or the Anglophone minority in the province of Quebec, we are always in a minority position in some area and therefore we have to make compromises.
It was back in 1946 that the change I am suggesting in this bill was first proposed and the bill got as far as the Senate. Since then the bill has twice got into committee, and as late as last year it was killed in this House on third reading.
When I speak of logic, one could very easily argue that there is not much sense to bringing forward this kind of bill today because for most Canadians July 1 is presently celebrated as Canada Day. Incidentally, just last week when I was talking about this bill and the fact that it has been drawn out of the hat as the first bill, an individual said to me, "Why are you talking about making July 1 Canada Day when it already is Canada Day?" It is this kind of irritation that is causing us so much difficulty. It is an emotional thing. Obviously the people in Quebec look at it as another example of what we federal members are not able to do-to say on July 1 that we want to celebrate our national holiday using the name of our country, as every other country would surely want to do.
The secretary of state of the previous Conservative government used the words "Canada Day" in the literature from his department. The Canadian Broadcasting Corporation uses the words "Canada Day". Most newspapers throughout the country use the terminology "Canada Day". The previous Liberal government on a couple of occasions-and one of our ministers who is present in the House today is well aware of this- introduced a bill to change the terminology so that we can legally use the words "Canada Day" on July 1.
I am making a plea this afternoon. I understand all the arguments of the persons opposed to this change. They are all on the record and I am sympathetic to their arguments. But it still does not change the fact that surely there should only be one designation for our national holiday.
The proposal in this bill is to simply change the wording in section 2 of the Holidays Act so that our national holiday will be celebrated on July 1 as Canada Day. I ask hon. members of this House to express their agreement with what we are trying to achieve this afternoon by passing this bill on second reading, so that once again it can continue its progress through committee and back to this House for third reading.


Some hon. Members:: Hear, hear!


William J. Yurko: Mr. Speaker, I am pleased to get up in my place and speak on this private member's bill requesting that the July 1 holiday be changed to Canada Day from Dominion Day.
May 6, 1980

I find myself, Mr. Speaker, living in a country which is not sovereign, which has a constitution that goes back over 100 years which is resident in another nation. Ever since I decided to get into politics in 1967, after living for half a dozen years in the United States, I have constantly been intrigued by the fact that this nation called Canada, celebrating Dominion Day on July 1, has a constitution resident in another country, thereby being a nation not sovereign in law or in fact. We have had to journey to our mother country to change the most basic law of this nation.
1 have attempted to review the events that occurred during our attempt to change and patriate the constitution over the last 50 years. In all instances it seemed to me that when we talked about the constitution, the first step was patriation and the second step was to seek or find the evolution of an amending formula. On that score there was not unanimity.
We then became involved in changing the distribution of powers, our institutions of Parliament and other institutions throughout the land, and always there were two sides. Some people have said, let us work on this process a step at a time. The moment we started, other people said, let us evolve a total package with a whole new constitution; let us find a process of constitutional convention, or some type of gathering, such that we can put together a whole new constitution that this nation can adopt and be sovereign in law and in fact. They have suggested we do that in such a way that the Parliament of Canada and the ten provinces can agree on this new constitution; but history has shown that this package was always too big to swallow.
Some have said we should go back to the beginning and start step by step. The moment we started for the second time some province or some party said, let us evolve an over-all concept with a whole new constitution, and the process started all over again.
This has been much like a tiger chasing its own tail around and around for 50 years or longer. 1 believe we are coming back to the same process, a process in which we will again be chasing our tail in relation to the evolution of a new constitution.
A series of events has occurred in the last 50 years during which time we have seriously tried to patriate the system or find an amending formula to revise the constitution. One of the most dramatic events that has evolved during that time is the referendum event in Quebec. That event in Quebec is not something that has cropped up quickly out of nowhere; it is something that has come up after years of consideration, after years of discrimination and difficulty in terms of self-expression by different peoples in this country.
After the Quebec referendum, irrespective of the vote, I believe that the Parliament of Canada and the provinces of this nation will have to undertake something constitutionally meaningful to indicate to the people of this country that there is a willingness, a desire and a requirement to make Canada
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truly a nation in every way. It is my belief that the necessary step will be patriation of the constitution.
In my estimation, and in my recognition of the law of the land and the partners in this federation, one thing this Parliament can do, with or without the approval of the provinces, is to patriate the constitution so that our constitution becomes a Canadian constitution, with Canada becoming a whole nation.
If an amending formula cannot be found during the course of patriation, then an amending formula does exist-unanimity among the provinces and the federal Parliament on changing any aspect of the most fundamental law of Canada. So there is an amending formula and that formula is unanimity. This country can patriate its constitution and become a whole nation, with an amending formula involving unanimous agreement among the provinces and the federal government on any change to the constitution.
The question has always been, is the formula too rigid; is it so rigid that the process of constitutional change becomes very difficult? One then must seek a new formula, a formula in respect of which we do not have unanimity. The Victoria charter came close to finding a formula. The Fulton-Favreau formula also came close. The provinces were unanimous then for a short period of time.
A formula that is workable can and will be found by a nation that is intent on finding a formula to amend its basic law. The point is that the first step must be taken, and the first step in my estimation will have to be taken at the earliest opportunity after the Quebec referendum. This Parliament will have to express to all the people of Canada in the strongest possible terms that it wishes the nation to become sovereign with its own "made-in-Canada" constitution, if you like.
It was my intention to speak as a member of a third group of people in this nation other than French or Anglo-Saxon. In some parts of this nation this third group of people, made up of those from countries all over the world, represents 50 per cent of the population. We have a vital interest in this nation remaining a single, whole nation called Canada.
On occasion, I have expressed a distaste for the term "ethnic" or "ethnic groups". Who are these people? I know that Canada is a nation of minorities. In national totality the French are a minority group and the Anglo-Saxons are a minority group. We are all minority groups. Canada is truly a nation of minorities. Some extra privileges have been given to some of our minorities. For example, there is language. We have adopted as our national official languages the languages of two of our major minority groups, and that is as it should be.
These two minorities acquired a pre-eminent position in Canada resulting from the great expansionary empires which in the past conquered much of the world. Interestingly, one could speculate that Spanish might have been our official language if Columbus had strayed a little farther north, and the same can be said of other explorers.
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Most of the remaining minority groups came to this country as refugees from turbulence, poverty, oppression, and all of them were seeking land, opportunity, freedom and eventually equality of humanism. Above all else, they sought, first, a strong nationhood and, secondly, roots.
Many came from areas of turbulence where nations crumbled and borders changed which, in turn, caused plunder, loss of human rights, human dignity, economic opportunity, broken families and loss of the privilege to hope and to dream. Most of them knew first hand the consequences of crumbling nations and passed such concerns on to their children and their children's children.


An hon. Member:: What of the others?


William J. Yurko: They are still to come. Most, therefore, want a strong central government and will support such a government. They know that when boundaries change minorities suffer most.
My ancestors' roots are from a part of the world where boundaries changed often and nationalism was born and died with equal ease. I therefore tremble at referenda which have implications for changing boundaries in the long term. Indeed, separation is a form of national treason. But for the freedom, the almost absolute freedom, which we enjoy in this nation called Canada, it would not be tolerated in most nations. Such is the breadth and depth of the freedom which has evolved in this nation. I therefore support the member's view of having a national day called Canada Day.
If I may be so bold as to attempt to speak for 30 per cent of the people of this nation who are neither French nor of Anglo-Saxon background, I would say that we want a strong country, strong regions and a strong federal government. Hon. members will note that I did not say a strong central government. We do not want to witness the disintegration of our country called Canada. This is our home where we have replanted our roots.
However, I can understand the burning desire of peoples of like culture and like language to congeal a nation of their own. For nationalism as the hon. member across the way has indicated, is a highly emotional matter. It is the most fundamental social instrument for perpetuating a culture, a language and a guaranteed place in history, because a nation guarantees roots and linkage with the past, as I said earlier.
In today's world, interrelated by technology and economic nationalism, there has evolved a new dimension which is called "economic well-being". Economic well-being requires access to a much larger pool of resources of technology and inter-relationship. This is provided in this modern age through something which we call a federation-federation of peoples, of areas, of groups, of governments. That is the new instrument of social organization which at the same time can provide the protection of language and culture, like ideas, like peoples, like emotions, as well as integrate the benefits of technology in such a way that the whole enjoys a much higher standard of living than each little area identified by boundaries called nationalistic boundaries or nations.
Federations can be structured and are structured. The Canadian federation is one of the oldest in the world today; I believe it is the third oldest federation. Federations can be structured in such a way that they safeguard a people's roots, language, culture, emotion and attachments. Our Canadian federation is one of the finest world examples, though it is very young. Certainly it needs revision and updating, but this is possible if we only have enough courage to make a beginning and to call our nation Canada, we have enough courage, as the hon. member across the way has indicated, to have Canada Day, a day for Canada.
Quebeckers, like the rest of us, are among the most privileged people of the world. We have land, resources, freedom, and we are progressing extensively toward equality of opportunity and humanism. It is a grand federation of co-operation, association, compromise and progress. The intent is not to homogenize cultures and languages, though at one time it was. Our roots are safe. Our future is bright. We would be committing a crime, in my estimation, against civilization itself if we allowed this federation to disintegrate or in any way break up this grand alliance of people from nations all over the world.
Why should Quebeckers try a new experiment which may be very chancy? This fuzzy and unacceptable experiment in social organization, in power politics called sovereignty-association, is a gamble of imponderable proportion for Quebeckers even if it were possible. That is my opinion. It is an egotistical, political power excursion by a few that could turn into a nightmare. It is a formula for fractionalization, a formula for constriction, a formula for human recession. It is a mirage, in my estimation a backward step.
Let no one think that new nationalistic borders will be fixed for long if this nation splits. Those new borders will be subject to constant change brought about by negotiation, coercion and even by force. Changing borders brings hardships. What can possibly be gained by national disintegration that cannot be gained within the federation?


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: Is the House ready for the question?
The hon. member for Prince George-Peace River (Mr. Oberle).


Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, the bill before us as it is proposed by the hon. member for Vaudreuil (Mr. Herbert) is neither a novel idea nor is it the first time that the House has had the chance to debate this question.


An hon. Member:: Let it go to committee.
May 6, 1980


An hon. Member:: Filibuster.


Frank Oberle: I take strong exception to the insinuation from the other side that it is my intention to filibuster a bill. It is my right to speak on this matter and I do not wish to be intimidated in this fashion. I certainly do not make it a practice, and I have not made it a practice in the past when the same matter was discussed by a member on this side which was talked out on the other side of the House.
I have some constructive comments to make about this bill because I share with the hon. member, who has proposed it, a very special kind of love, a very special kind of commitment to Canada, my country, because, like him, I too came here after the great war and I too have certain expectations about this country and my future here that Canadians who are born here have never felt.
The hon. member proposes that with the referendum in Quebec now is the time for the necessary inducement and impetus to remind all Canadians that we should make a very special and public commitment to Canada in terms of naming a particular day in the year Canada Day.
As you know, sir, and as all our friends and colleagues know, it will take quite a bit more than that kind of an expression from the House of Commons to convince people in the province of Quebec that they should vote either No or Yes in the forthcoming referendum. In fact it will take quite a bit more to convince Canadians in other parts of our great country, in the west, in the north, than that kind of an expression in the House of Commons to convince them that Canada as it exists today-the status quo-is an acceptable proposition for the future.
Some of us here in the House of Commons who are not yet as fluent in the two official languages have some difficulty in understanding and in interpreting the utterances of those who call themselves leaders in this referendum debate. I, for one, do not quite understand why oui should mean no and non should mean yes. I have difficulty translating that because, when I learned my French in school, the meaning was quite ' different. Why should it be now, just because there is a referendum in Quebec and people there say they will not go for the sovereignty-association situation why will that be sufficient indication for those who live, those who enjoy and are proponents of the status quo, to sit down after 50 years and talk seriously about a new form of federalism? I do not have the faith in the people on whom we would have to rely to begin these discussions, and that if the people in Quebec vote No in the referendum, it would be the impetus required to get these discussions under way. Nor do I think the problems being debated in Quebec today are isolated to that province.
There are other Canadians in other parts of our country who are as equally concerned and who feel equally alienated and discriminated against as do people in Quebec. They are not just the people of western Canada who have legitimate concerns over the way they have been treated by confederation. There are people in the north who are suffering the hardships of frontier and remote living, without any indication from the
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federal government that it is determined to strive to give them a greater degree of equity and fairness. There are natives who strive to become members in the partnership of founding nations and races.
For instance, there are people of German descent-and 1 know this will sound strange to you, Mr. Speaker-who feel that they have made a contribution to the founding of this nation. They were Empire Loyalists. Indeed, one of our great provinces, the province of New Brunswick, is named after the Braunschweig regiment which fought for the honour and integrity of Canada. Many of those soldiers who were on loan to Her Majesty the Queen settled in Canada in Lunenburg and other great traditional places in Canada. These people were of German descent who fought for this great country and who had a dream and a vision about this great country. Indeed, they had the same kind of vision that I had when I came here and that my friend, the hon. member for Vaudreuil, had when he chose this country to live in and bring up his family, and to help build on the natural strength that we inherit here in Canada. These people also feel that they have a right to say something about this nation.
What is wrong with the status quo? What is wrong with the constitution? What brought on these feelings of alienation and separatism which the hon. member wants now to correct with a bill in the House of Commons which would choose one day in the year to be Canada Day? How did these things happen in the first place?
Those of us who came to this land probably made a more thorough study of history than those who were born here. For example, Sir John A. Macdonald was a federalist as convinced and convicted as is our present Prime Minister (Mr. Trudeau). He wanted to keep everything in the centre: education, culture, and language. He wanted to regulate it all here. He was a Conservative, of course, one of the great Fathers of Confederation. But he was more of a political realist and he was a statesman who had a vision about Canada which this Prime Minister does not share. He was a realist, because he knew that Canada would never have been possible in the first place if he could not have given guarantees to the two founding nations that their culture, language and integrity would always be protected, if guarantees could not have been issued to those who joined confederation later, or to those who were initial partners, that the right over language, education and resources would always be an inalienable right and would be entrenched as such in the constitution.
The feelings of alienation and the feelings of separatism are not because of any great historic event. The feelings of separatism have come about because here we now have a new statesman who has a new vision. I respect him for it. He has one of the great minds of our time, there is no question about that. But he wants to turn the clock back 113 years and he wants to go back to the beginning.
What a great nation this would be if it would have been possible in those days to convince all the Fathers of Confederation that we should have culture, education and language under federal jurisdiction. If that had happened, there would

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not be ten different history courses taught in the country today. All children graduating from school would be fluently bilingual and this would have been so for the last 100 years. All children would learn just one history course. How easy it would be to stimulate a truly Canadian identity. However, that was not to be. To think that one could turn the clock back 113 years now is just playing with disaster. To think that one could bring in a bill to declare July 1 as Canada Day which would free us of all these feelings of alienation and would once again remind people to celebrate Canada as a nation, is equally naive.
As I have said, I have the same kind of love and patriotism for my country. The problem in our country is that our love has never been tested. We have never been challenged from the outside, other than in the great war when we emerged as a nation. But since then we have never been challenged from the outside, and our love for our country has never been tested.
Let there be no doubt about the one third of Canadians of whom my friend from Edmonton has spoken, who have an equally great commitment and love for our country. I will never forget the time the Prime Minister asked me to accompany a group of German Canadians who were visiting the great city of Berlin to attend an international choir festival. All of them, of course, were Canadian citizens, and all of them post-war immigrants. I will never forget the time we were boarding a ship on the Rhine River. All of us were in a cheerful mood. One got the idea, because there were two Canadian members of Parliament, one of Liberal persuasion and myself, to persuade the captain to hoist a Canadian flag. Lo and behold, when the proposition was advanced to the captain, he did indeed hoist the Canadian flag, which we presented to him.
This group of German Canadians were standing there singing "O Canada" as we were boarding the ship. Tears were streaming down their faces, so deep is their love for their country. They are new Canadians. I often wonder whether Canadians who inherited this country by birth should not take a lesson from them. I, as a new Canadian, have something to which 1 can compare this country. I can appreciate the natural advantages we have here, in a much different way.
I compare the situation to the province of Quebec. We often talk about the family home that needs rebuilding when we talk about restructuring and rebuilding the constitution. We talk about the family. I am a father with four children. If you tell one of your children all the time that the others are much better, that he cannot do it on his own and if he wants to run away from home he will starve to death, eventually he will begin to believe that.
1 wonder if our friends in the province of Quebec and our compatriots there are sick and tired of people who call themselves leaders in this referendum debate telling them that without Canada they would wither away. They have this dissent and distrust. It destroys the soul of people. I wonder if that is not the major impetus, and the people in the province of
Quebec are finally coming to their senses and saying let us find out how good we are in comparison to others.
I wonder how much we can trust those who are happy with the status quo. They have many other incentives to ensure that Quebec stays in confederation because their own political future would be in question. If Quebec votes No in this referendum, why would that be sufficient reason after all these years to sit down and have all the premiers finally come to the bargaining table, just because Quebec has said it does not want sovereignty-association? Why would that, all of a sudden, be sufficient reason to sit down and agree to a new form of federalism? I do not have the faith in the present administration in Ottawa, or indeed in any of the other statesmen who represent the provinces, that they will come together.
The Prime Minister said we should not take any steps before the referendum to confuse the issue. Even though I support the hon. member's bill wholeheartedly, I wonder whether it would confuse the issue. I do not know if the Prime Minister is right. I would have liked him to come out and say, "If you vote No, here is what we will do, and we have the agreement of the provinces to do it."
There are two things we could do, to which all the provinces would obviously agree. They have already stated that. We could patriate the constitution; bring it home. Each of the provinces at a point could designate a minister and staff to support that minister to move to Ottawa, to stay here and consult with his government on a daily or weekly basis. He would begin the process of reforming the constitution and achieving a new arrangement under confederation. Many of us have talked about this at length. It could form the nucleus of a new upper house, a house of the provinces, following the example of other countries whose constitutions are not as old as ours but are much more functional. Maybe that new arrangement could become the nucleus of a house of the provinces which has been proposed by members from both sides of the House. Let these people sit down and spend six weeks, eight weeks, one, two or five years, and not come out of the meeting room until they have something that is palatable and meets the legitimate needs and aspirations of people not just in the province of Quebec but in western Canada and the north as well.
As much as I support the hon. member on his bill, I do not think, nor would the Prime Minister think, it is the right time to approve such a measure in the House today or before May 20. It would be viewed in the province of Quebec as another candy: "Please stay in it. After all, we are going to celebrate Canada from now on and we are doing that on July 1." That is not the kind of answer the people of Quebec want. The people of Quebec want the equity and fairness to which we are all entitled as Canadians.


Jean-Jacques Blais: Mr. Speaker, will the hon. gentleman permit a question at this time?


Frank Oberle: Yes, Mr. Speaker.
May 6, 1980


Jean-Jacques Blais: Mr. Speaker, is the hon. gentleman aware that in the province of Quebec and in all areas of Canada there is a very strong love and admiration for this country and that there is a great deal of desire to see the name Canada survive, not only in terms of being the nomenclature attached to this country, but being a receptacle which incorporates all of the values and all of the realities of this country? Is the hon. gentleman aware of and has he paid any attention to the debate taking place in the province of Quebec at this time?


Frank Oberle: Mr. Speaker, I have stated my position. I am very much aware of the love for Canada which exists in all parts of the country, including the province of Quebec. I am very much aware, as are all members of this House and all Canadians, that there are 18 per cent or 20 per cent in the province of Quebec who would probably wish to pursue a separatist option. The vast majority of people in the province of Quebec have a very firm and unequivocal commitment to Canada. Of course I am aware of that.
However, I am concerned when we see what is happening in the referendum debate. Why do we give so much credence to this ambiguous situation, this red herring that the premier of the province of Quebec is dragging across the floor-negotiate sovereignty association? Let us interpret this term. It confuses me. The hon. member or some of his colleagues who come from the province of Quebec are saying that if Quebeckers vote Yes in the referendum, that will be the end of Canada. I understand the premier of Quebec wants to hold another referendum, that he is merely seeking a mandate to negotiate something called sovereignty association.
Will the hon. member's colleagues who come from the province of Quebec all resign on May 21? Of course not. If the verdict is Yes, we will sit down and negotiate. Of course we will negotiate. We will have to. We will have to take the premier of the province of Quebec at his word that he will hold another referendum whether the outcome is Yes or No.
I would like my friend to answer the question: what are they going to do on May 21? Does he believe that a Yes verdict out of the province of Quebec will be the end of Canada? I do not believe that. Like him, I have great faith in our compatriots in the province of Quebec, our fellow Canadians, 80 per cent of whom would never tolerate a split up of this country.
What we have to do is see this referendum for what it is. I would have preferred a massive campaign telling Quebeckers to stay away from voting instead of participating and giving the question credence, such as we have. There are people throughout the country today who actually believe that if there is a Yes verdict, the country will split up. I do not believe that will be the case, nor do I think my hon. friend does.


John (Moody) Roberts: Would the hon. gentleman accept another question?


Mr. Deputy Speaker:: I believe the hon. member's time has expired. He may continue only with unanimous consent. Is there unanimous consent?
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Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: The hon. member for Bow River (Mr. Taylor).


Gordon Edward Taylor: Mr. Speaker, a poet once said a rose by any other name would smell as sweet. Sometimes we are inclined to place too great an emphasis on a particular word. Also, I think it is wrong for any of us, at this time particularly, to be questioning the patriotism or the love of country of people anywhere in this great Dominion of Canada.
The word "Dominion" was chosen at the suggestion of Sir Leonard Tilley in the early days of our country. I think most of us admire the wisdom and the foresight of our forefathers who wrote the constitution in the first place. I admire their wisdom in not choosing a phrase such as "the Kingdom of Canada", for example, which would have indicated we were copying only one group-the British with their Kingdom of Great Britain. Sir Leonard Tilley suggested that the word "Dominion", which originally came from the French language, would mean a great deal to this country. It seems to me that the love which was envisaged by Sir Leonard Tilley and the Fathers of Confederation has, indeed, developed for the phrase "the Dominion of Canada". The suggestion was that it would tie in, too, with the strength we derive from the faith we place in an omnipotent God.
Canada is known around the world as a Christian country and we endeavour to practice that Christianity by recognizing the rights and freedom of choice of others. There exists, for instance, that splendid organization known as the Organization of Christians and Jews, in which we come together over many issues; we do not enunciate differences but, instead, we enunciate and build on areas of agreement. I believe Sir Leonard Tilley had this in mind.
Canada was founded by the British and by the French, but Canada today consists of more than the descendants of the British and French. People from countries all over the world came here. Many of them came to enjoy freedom of religion which they had not enjoyed in their own lands. The words "Dominion of Canada" indicate the importance we attach to freedom of religion, because the very words which were chosen are taken from the scripture, Psalm 72, which says, "He shall have dominion also from sea to sea, and from the river unto the ends of the earth".
Hon. members should recognize that when we talk about the Dominion of Canada we indicate our faith in an omnipotent God, and those who do not wish to see this have the freedom, of course, not to do so. For myself, I look upon that choice of words as being very important; they show the faith we have in an omnipotent God in this country, freedom of religious choice, in a country whose people subscribe to many religions involving a belief in God.
A second thing which I believe Sir Leonard Tilley must have had in mind when he recommended the word "Dominion" and

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saw it accepted by so many people in the early days, was the great future which lay before this country because people from so many nations would come here to make Canada their home and help develop this dominion which would stretch from sea to sea.


Jean-Jacques Blais: On a point of order, Mr. Speaker, for the information of the House, "Dominion" is quoted in the Oxford dictionary as meaning "domain of feudal law, territory of sovereign or government." I do not see any biblical connotation there.


Mr. Deputy Speaker:: I must point out that there is no point of order there.


Jean-Jacques Blais: I apologize.


Gordon Edward Taylor: The minister should have known that was not a point of order. When we say "Dominion of Canada" there is no thought of feudalism, no thought of submitting ourselves to other people. In any case, merely changing the name is not going to change anything else; this country will continue to be Canada, made up of the same people as before. The hon. member seems to think that by eliminating the word "Dominion" we are somehow going to change the whole outlook of people in this country. I believe he should get in touch with what people are thinking. I have spoken to people in every province and I have yet to hear a single person say, "Let us change the name to Canada Day and do away with the word Dominion". I will match the loyalty of the people of Alberta to that of any other province. We are just as loyal. None of us should be judging the loyalty of others or suggesting that, for some reason, we are practising feudalism in this country. We are not practising feudalism. We have no relation to feudalism, and the minister should know that. We are a nation-


An hon. Member:: A colony.


Gordon Edward Taylor: We are not a colony. If the hon. gentleman thinks this is a colony he should resign from the position he holds. He has been named a minister of the Crown. You are one of the Queen's ministers-


Mr. Deputy Speaker:: Would the hon. member kindly address his remarks to the Chair?


Gordon Edward Taylor: I am, sir. I am answering people who do not have the courtesy to listen to what we have to say. We listened to their side. I think the points I am making are just as important and well thought out. "Dominion" does not mean feudalism and it does not mean "colony", and I question anyone who says it does. The people who formed this country chose the word "Dominion". They included representatives of both nationalities and they did not think of Canada as a colony. The word "Dominion" means we are a nation from sea to sea. I should like to repeat what a great Canadian once said-


David Michael Collenette: On a point of order, Mr. Speaker, I wonder
whether it is the intention of hon. members opposite, before
the hour of adjournment at six o'clock, to do what they did in the last session and allow this bill to get to committee, or whether they intend to talk it out.


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Bussieres (for the Minister of Finance) that Bill C-6, to revise the Bank Act, to amend the Quebec Savings Banks Act and the Banks of Canada Act, to establish the Canadian Payments Association and to amend other acts in consequence thereof, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
The Acting Speaker (Mr. Ethier):: Order. When the debate was interrupted at five o'clock the hon. Parliamentary Secretary to the Deputy Prime Minister and Minister of Finance (Mr. Evans) had the floor.


John Leslie Evans: Mr. Speaker, as I was almost concluding when five o'clock came along, I am now at the conclusion of my comments. I would like to summarize the main points I have made in the area of competition about which I was speaking.
First, it is an important objective of this proposed legislation, Bill C-6, to promote and support the vigorous competition which now exists both within the banking sector and in the financial markets as a whole. This will lead to an important benefit for both individuals and businesses, which are the customers of the banking system.
Second, there are a number of proposals in the bill which ease entry into the banking system, help support competition between banks and non-bank financial institutions, and which ensure that the competition between the banks and the nonbank sectors of the economy takes place in a fair and equitable manner.
Third, in developing the various proposals in Bill C-6 designed further to promote further competition, such other
May 6, 1980

objectives as maintaining a dominant role for Canadian controlled companies in the financial sector, ensuring the continuing soundness of the Canadian banking system and avoiding as much as possible conflicts of interest situations, have also been taken into consideration.
I would like to conclude by indicating that this particular piece of legislation has now been considered for a period of six years from the inception of its consideration in 1974. It has gone through two House committees and a Senate committee. Reports have been written. Members from both sides of the House have examined the issues very carefully and put forward their recommendations, and I think it is imperative that we come to grips with this particular issue and move this bill forward as expeditiously as possible, referring it to the finance committee, getting it back to the House for third reading, and undoing the uncertainty which now exists in the financial community with regard to when and whether this piece of legislation will be moved forward into reality for our Canadian financial institutions.


Mr. Charles Mayer (Portage-Marquette):: Mr. Speaker, it is a pleasure and a privilege for me to rise this evening and take part in this debate.
I have some concerns about Bill C-6, particularly as it relates to livestock producers in the country. What was section 88 in the old act will now be section 178 in the new act. This section pertains to the problem that I think producers can find themselves facing in being unsure of whether they will be paid after the seller disposes of their animals during a marketing process.
The situation now in the country with regard to livestock producers is one of some uncertainty. Hog people are facing declining markets. I think that is well known throughout the country. This is true of cattle people to a somewhat lesser degree. We have seen falling cattle prices in the last few years, and I think some of the uncertainty producers may consider that they could possibly face during the marketing operation of their cattle could be removed by some amendments to the bill.
There are many small producers in the country. There are approximately 100,000 cattle people in the country. The average size of a cow herd is something under 100 cows, depending on the part of the country one is in. In eastern and central Canada the average cow herd probably has 60 or 70 cows. What happens to a lot of producers? They risk a fair amount of effort and energy during the year to raise cattle. They have to put up with uncertainties regarding weather, marketing conditions, and problems associated with disease. When it comes to marketing, if there is anything we can do to take away the uncertainty, it is well worth considering it. I should like to pick up something which the hon. member for Bow River (Mr. Taylor) and the hon. member for Humboldt-Lake Centre (Mr. Althouse) have said, and emphasize it relating to this aspect of the Bank Act.
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What I am mainly concerned about is the cattle business, although the way the act reads, all livestock is in the same position. The reason I speak about cattle is that the physiological nature of the cow means that we can get only one calf from a cow in a whole year. That means that many producers could end up marketing their total year's effort in one marketing operation. A lot of value can change hands in a short period of time. It is not uncommon for a load of finished animals to bring in in excess of $20,000 to $25,000. If it happened that a producer lost this revenue as a result of inadequacies in this act, he could suffer severe hardship. I think there are some amendments we could make to this act to prevent that from happening.
I should like to see two or three changes brought about. I should like to see as much security given the producer under this act as possible so that he can have every confidence that he will be paid. To do this we need to take a look at the kind of securities that the banks take on the processors for financing the processors' operation. I also think that the level of prior claim that is in the bill, which is in the neighbourhood of $20,000 and which has been raised from $7,500 in the old act, is inadequate. In fact I think there should be no level of priority claim as it relates to producers when it comes to marketing their livestock.
The security of being paid is very important because, if you understand the marketing process, the cattle business is carried out largely on trust. Deals representing thousands of dollars are made by telephone or by a handshake. There is a lot of trust in the cattle business. The situation that we have now is such that some of the small processors could be hurt because, if a producer is looking around to find marketing alternatives or opportunities and he is trying to get the best bid he can for his cattle, the last thing about which he should be concerned is the assurance that he will be paid.
Some of the smaller packers may be in a position to bid quite favourably to obtain the livestock. If there is some concern that the producer might have about whether he is going to be paid, that could hurt small processors if they are not known by reputation or are not one of the big three in Canada, that is, Swift, Canada Packers, and Burns. Not only is it a potential problem for small producers, it is also a potential problem for the smaller processors. There are many of them in the country.
Producers take a great risk in terms of variations in the market and in terms of financing their input costs. We all know what interest rates are today. Producers have to buy fertilizer, they have to pay for fuel, for wages, for repairs to machinery, and for operating loans. By the end of that time, if there is some uncertainty associated with marketing, it is not a healthy situation. I think we could improve upon it.
I also think that livestock should be treated the same as the other commodities which are mentioned in this act. I refer specifically to the dairy industry and also to what they call the direct products of the soil. They are given prior claim and a different kind of treatment than livestock. I cannot really

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understand why there should be this difference. I should like to quote a clause from this bill to make my point. Clause 178(6)(b), at page 187 of the bill, reads:
(i)	a grower of perishable products of agriculture that are direct products of the soil for money owing by a manufacturer to a grower for such productsis exempted. It goes on to read:
(ii)	a producer of dairy products for money owing by a manufactureris in the same category. What this means is that if I, as a producer, were to decide to move my product to a processor, that processor could not claim it as his own and use it for collateral or equity in financing his day to day operations. It means that if something then happens to the processor to whom I decided to move my product, the product is not his until I am fully paid. Also, it means that in the case of two or three days elapsing before settlement, if I were to move livestock to a packing or processing plant and if, by the time my cheque went to the bank and was cleared, the processor were put into receivership or bankruptcy, I would be put on a very long list of creditors and have to wait a considerable period of time, and would end up merely taking a certain number of cents on the dollar for my value.
What should be done and what, I hope, will be done is that recommendations will be made which would simply say that a grower of produce, or a producer of agricultural products, would be given the same kind of consideration that dairy producers or direct producers of the soil are given. It is very important that this be done. We all know that we are operating in periods of higher costs. Producers spend, in terms of the cattle business and hog business, a considerable period of production to get their product ready for market. So it is more important now than it has been in the past because of the type of dollars with which we are working.
The United States has brought about this change. In 1976 there were major bankruptcies in the United States and so the Americans brought in their Packers and Stockyard act. I should like to quote a section from that act. It reads:
A burden on and an obstruction to commerce in livestock is caused by financing arrangements under which packers encumber or give lenders security on livestock purchased in cash sales when payment is not made.
To resolve this problem, the Act states-
The act referred to here is the Packers and Stockyard act across the border.
-in effect, that all livestock purchased by a packer, and all inventories of or receivables or proceeds from meat sales, shall be held by a packer in trust for the benefit of all unpaid cash sellers until full payment has been received.
That is something that has worked very well in the United States. Since 1976 there has not been a case there of a producer having lost a cent in marketing his produce. We can observe the results very closely and try to do something similar in this country. What happens is, very simply, that every sale across the border is deemed to be a cash sale unless some other agreement is made so that cash sale, by agreement with the producer, is given some terms of sale. But unless it is deemed otherwise, the cash sale is deemed to be made. In this situation most producers feel that the product is theirs until they are paid for it, but under the law here that is not the case. The
packer having offered as security the value of goods secured but not paid for, awards to the bank the value of such goods in the case of a bankruptcy or receiving order. He does so without the knowledge or consent of the producer.
What we have here are two people thinking that they have title to the same goods and, as a result of the law being as it is, the producer is the one who comes out on the short end of the stick. The packer now has the legal right to do so. The producer believes, on the basis of morality and justice, that he has the right to expect full payment. As I said, this conviction or belief of the producer is not upheld in the law as it was previously written under section 88 nor is it upheld in clause 178 of the new bill.
I think that if packing plants are going to operate, they should finance their operations on their own equity. They should not expect the producers who sell to them to put up their equity so that the packing plants can literally finance their operations on somebody else's goods. It is tantamount to stealing, if this kind of thing is allowed to go on. You can almost make the case that if the situation is allowed to continue, we might find that some of the poorer operators would be allowed to continue in business, when really they are in the kind of condition that will put them out of business financially. They can hang on merely because they can make use of somebody else's equity. I do not believe that this should be allowed to continue.
There are three changes that I should like to see made when this bill gets to committee. We suggest that under clause 178 (6)(b) there should be a reference to a grower of products of agriculture, which would eliminate the specific reference to the dairy industry and the direct producers of the soil. That would include all agricultural products. Also under clause 178.(l)(a), to which the hon. member for Bow River referred, we should change the word "procure" to purchase. That simply means that when a processor acquires something, it is not his until he has actually purchased it and paid for it. Really that is nothing more than common sense. For the life of me I cannot understand why this has been allowed to continue in its present form without some correction before now.
I have in front of me-forgive me, colleagues-the Liberal party agricultural platform which was released from the Liberal National Campaign Headquarters on January 30. In part it reads as follows:
A change in the revision to the Bank Act (section 88) will be made in order to permit better financial security for the farmer, on agricultural produce in transit storage or processing, by providing protection to producers of all agricultural products (not just crop and dairy products) and that protection will be extended to a maximum of $250,000.
This was a campaign promise which was simply not carried out in the present act.


Mr. Deans:: And you are surprised?


Charles James Mayer: I suppose I should not be surprised, but that does not mean I cannot hope. According to the formula the
May 6, 1980

level has been raised from $7,500 to $20,000. I would submit that even going to $250,000 is not adequate. I think the level should be removed completely. What we are talking about here is a principle, not necessarily putting a figure on it. The principle is simply that something is not yours and you cannot use it for whatever purpose you decide until it is fully paid for. It seem to me that should be a very simple principle to accept in law.
This kind of recommendation was made also in the Standing Committee on Finance, Trade and Economic Affairs back on March 20 under recommendation 22, when they said that concern was expressed about the priority of banks over unpaid sellers of livestock in the hands of the processors under section 177(5) of the proposed act, and the adequacy of the base amount of the exemption. That was the act which was then in front of us. Recommendation 22 reads as follows:
That sellers of livestock be added to the list of those claimants dealt with under section 177(5)(b) and that the base amount of the exemption be increased. The proposed indexing method is accepted by the committee, but on the higher base figure.
This is something which has been talked about for a long time, and I would certainly like to see it carried out. Also I should like to refer to what the Minister of State for Finance (Mr. Bussieres) said when he introduced this bill on May 1, as reported at page 623 of Hansard. It reads as follows:
Furthermore, the Senate committee and the Cattlemen's Association have expressed concern about certain other features of clause 178 of the bill. The government will seek to prevent overlapping and confusion in the law and to ensure fairness in its operation.
I would submit that fairness at the minimum is simply ensuring producers that, when they sell something, in fact they are paid for it before it is taken away from them. When the minister says "fairness", I hope he means that, and that he will take a serious look at seeing that these kinds of recommendations and amendments are made in the bill.
The parliamentary secretary said that he would like to see the bill moved forward expeditiously, and I would certainly agree with that. I do not want to prolong the debate. Many things have been covered so far, but I should like to make one brief reference to my concerns over the banks and their intention or hope of getting into the leasing business. This is something that should be looked at very closely. I think the banks are in a little different position than other institutions in the country, in fact they are in the business of allocating money and seeing who gets loans. I think we must look very seriously at whether the banks getting into the leasing business, in competition with some of the other financial institutions and some of the automobile companies around the country, is something we want to let happen. We do not want to see it happen without taking a very serious look at it. I would rather see banks in the position of lending money to people who are in the leasing business and then let the leasing companies go on about their business as they have been.
But my main concern is the two or three things which I find not entirely in keeping with the campaign promises of the Liberals and not in keeping with the recommendations made by the previous finance committee over a year ago. I intend to
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pursue those matters at committee to see that we have some amendments brought in.


Some hon. Members:: Hear, hear!


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, when the minister introduced this bill on May 1, as reported at page 620 of Hansard, he said the following:
-the main purpose of the bill is to strengthen and develop the Canadian financial system through the promotion of effective and equitable competition.
Then he went on a couple of paragraphs later to say the following:
The chartered banks, serving the public from over 7.450 branches, with total Canadian dollar assets at the end of 1979 in excess of $147 billion and foreign currency assets, based on their domestic and international business, of about $82 billion, are central in Canada's financial system.
We agree with the minister's contention that the banks are central to our financial and economic system, but we disagree with him completely when he implies, and in fact says very plainly, that in his view we have a banking system in which there is competition and that this act will serve to strengthen that system of competition. In our view there is no real competition in the banking business.
Probably over 90 per cent of the assets of the banks to which I have just referred belong to the big five banking companies-the Toronto-Dominion Bank, the Bank of Nova Scotia, the Bank of Montreal, the Royal Bank, and the Canadian Imperial Bank of Commerce. Their assets are tremendous, over $200 billion. They control by themselves, or with and through their associations with the other major corporations in this country, all the major business and industrial facets of Canadian life. In our view this bill gives the banks virtually everything they have asked for in recent years. It does so although the banks have not played the part we believe they should have played in strengthening and developing the Canadian economy.
What we have witnessed in recent years is that regional disparities are worsening, but they are accompanied by persistently high unemployment and low rates of job creation. We have the highest rate of unemployment of any of the western industrialized countries plus Japan. The deterioration of the manufacturing factor is continuing. That sector's share of the national work force was 26 per cent in 1970, and it has dropped to 19 per cent in 1979. In 1970, 21 per cent of Canada's exports were manufactured goods. Today they represent just 10 per cent. In 1970 Canada had a $3 billion deficit in manufactured goods trade, and last year it was $11.5 billion.
Foreign domination continues in most of the key sectors of our economy including petroleum, base metals, rubber, autos, chemicals, electrical products, and natural resources in general. Research and development are inadequately funded. We allocate the lowest percentage of gross national product of any of the industrialized countries of the world for scientific research and development. In the past five years $13.8 billion in dividends and interest payments left this country, and a further $8.5 billion left in management fees, patent fees,
774

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licence fees, copyright fees and other similar payments. Our economy is potentially strong in resources, yet it is saddled with persistent and worsening weaknesses which point to the need for a large scale industrial strategy to change that imbalance and to gain control of and give direction to the economy.
What we need are efficient world-scale industries and efficient capital markets to finance the necessary technological and modernization changes. We need Canadian control over the economy to stop the drain of resources to foreign parents.
1 had the opportunity and privilege of spending a couple of days in Japan last October. We had a briefing from our ambassador to Japan during which he described the Japanese industrial strategy and approach to scientific research and development. When I got back to Canada I was able to get a copy of the summary of that program described by our ambassador. Any resemblance between the Japanese system of free enterprise and our system of free enterprise is completely coincidental. No corporation or large business in Japan would dream of expanding without consultation with and approval by the government of Japan, to determine that what was proposed was in the interest not just of the company, but in the interest of the people of Japan and of the country.
There is not the slightest possibility that a Japanese company could have done what International Nickel has done, that is, take the money it had made in Canada in profits, along with loans received from the Government of Canada, to develop mines in Guatemala and Indonesia which are in competition with their Canadian operations and which have led to a very sharp reduction in the work force with major lay-offs in Sudbury and Thompson in my own province of Manitoba. No Japanese company would have dreamed of doing that because it simply would not be permitted, yet it is done in Canada all the time.
We say there is an obvious instrument at hand, the instrument we are debating at the present time, the banking system. By virtue of the chartered banks' self-proclaimed role as the major financial intermediaries in our economy, the banks collect and distribute huge amounts of capital. Under the direction of the government these pools of capital could and should be used to promote economic development which would benefit the country as a whole, while reversing foreign domination.
We have conferred tremendous economic power on the banks because of the way the banking system has evolved in Canada, yet the banks have been left alone to develop their own distribution and investment policies, regardless of the national interest. What the government is proposing with this bill is more of the same.
Because the Government of Canada, and I am talking about the present Liberal government, that short-term Conservative government we had last year, and previous Liberal and Conservative governments, had no industrial strategy, no clearly thought out objectives and no plans to bolster the manufacturing sector, which employs a smaller and smaller percentage of the labour force, the banks are being permitted and encouraged to concentrate on making profits. I do not blame them for doing that because that is why they are in business. I blame governments for not seeing that they do the job they should be doing. They have played an important role in the mergers that have swept this country, and which, I submit, bring no real benefit to the people of Canada.
Let me just give a few examples of what I am referring to here. We have the Hudson's Bay Company gobbling up Simp-sons-Sears, only to find that they in turn were gobbled up by the Thompson interest which then proceeded to buy FP Publishers. Then we had Brascan, with the help and the financial co-operation of the Canadian Imperial Bank, moving to take over Woolworth's, a move which was unsuccessful, only to find themselves taken over by Seagram's.
The last of the illustrations I want to give tonight has reference to Dome Petroleum which has bought up in recent years Kayser Resources, Siemans Oil and Gas and a large part of TransCanada PipeLines, and this company has not paid a nickel in corporation income taxes since its incorporation because of the way in which our tax laws have been written and the way companies like Dome Petroleum can manipulate these tax laws.
Let me add just one more point about Dome Petroleum. It was the Calgary Herald, certainly no radical journal, that had a major article some months ago in which it was pointed out that for every dollar which Dome Petroleum invests in searching for oil and gas in the Beaufort Sea it gets back 97 cents from the Canadian taxpayer in the form of tax rebates. We have a system where the Canadian people pay for the search for oil and gas but the benefits go almost entirely to Dome Petroleum.
Instead of the banks being involved in fostering and helping more mergers, as they have in recent years, their investments should have gone into increasing the productive capacity of this country.
We oppose this bill because there is nothing in it that we can find which does anything to control the exorbitant profits the banks have made in recent years, and which would control the tremendous growth in the assets the banks have benefited from in those years.
Let me try to put some of the figures on the record, and I will try to be as brief as I can. Let me compare the assets and the profits of the five major banks as they were in 1973, and in 1979, six years later.
The Toronto-Dominion Bank in 1973 had assets of $9.4 billion, and by 1979 they had grown to $28.2 billion. Its profits in 1973 were $52.7 million, and in 1979 they had increased to $160.4 million.
The Bank of Nova Scotia in 1973 had assets of $10.3 billion, and by 1979 they had grown to $34.8 billion. Its profits in 1973 were $56.8 million, which had grown in 1979 to $180.9 million.
May 6, 1980

The Bank of Montreal has assets in 1973 of $14.4 billions, and by 1979 they had grown to $38.1 billion. Its profits were $68.5 million in 1973 and they were $228.7 million in 1979.
The Royal Bank had assets in 1973 of $18.3 billion, and by 1979 they had grown to about $57 billion. It had profits in 1973 of $99.2 million, and by 1979 these had grown to $270.7 million.
The Canadian Imperial Bank had assets of $16.1 billion in 1973, which had grown to $45,995 billion in 1979. Their profits went from $92.9 million in 1973 to over $201 million in 1979.
Let me summarize those figures. The increase in assets in those six years from 1973 to 1979 was over 300 per cent, and the increase in profits was over 250 per cent. Let me put just one more figure on the record. In 1975, the year in which the present Prime Minister (Mr. Trudeau) and the Liberal government felt that our inflation had reached crisis proportions, to combat inflation the government brought in the wage and price control program, and profits increased over 1974 by 46 per cent. It is the banks which should have had their profits controlled rather than the workers having their wages controlled.
We believe that the profits of the banks should be controlled and that they can be controlled by the government-because it controls the interest rates-by the interest rate spreads and by surtaxes on bank profits.
We are opposed to this act for another reason. This act would permit and indeed encourage bank directors to hold other business directorships. We believe that that is bad for this country, and we are not alone in this belief. As respected an organization as the New York Times said several months ago about Canada's policy of permitting bank directors to participate in interlocking directorships:
The concentration of banks is so great-
And they are talking about Canadian banks.
-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 Times went on to say:
The banks with their corps of 60 or 70 directors each and their circling clans of corporations also provide the detailed intelligence 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.
That is not my view, although I subscribe to it. That is the view of as important and serious an organization as the New York Times.
We did a little work to see how this system of interlocking directorates really works in this free enterprise system of ours. I would like to put on the record a few illustrations.
Let me begin with the Bank of Nova Scotia. The chairman is Cedric E. Ritchie, who is also the president and chief
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executive officer. Among his other directorships, and I will not list all of them because it would take too long, are Empire Realty Company-there is the real estate industry; The Canada Life Assurance Company-there is the insurance industry; and Olympic Trust of Canada. George C. Hitchman is deputy chairman, and among other companies is director of Algoma Central Railway. So, the railways are represented. E. J. Courtois is vice-president and director of Gaz Metropolitan, which takes care of the gas distribution system in Quebec, Trizec Corporation-the giant real estate developers-Brinco Limited, Norcen Energy Resources Limited and Phoenix Steel, to mention a few. The hon. John B. Aird-and I am sure that my friend, the hon. member for Nepean-Carleton (Mr. Baker) will remember Mr. Aird when he was a Senator and chief fund raiser for the Liberal party-is not just a director of the Bank of Nova Scotia, but is also a director of Algoma Central Railway, Consolidated-Bathurst, Domglas Incorporated, National Life Assurance Company; and I could go on and on.
Let us look at the Toronto-Dominion Bank and the chairman and chief executive officer, Richard M. Thomson. Mr. Thomson is also director of Cadillac Fairview Corporation- another giant in the construction industry; Canadian Gypsum Company, Eaton's of Canada, the Prudential Insurance Company, Texasgulf Incorporated. J. Allan Boyle, president of the Toronto-Dominion Bank, is also a director of Regtor Investments Limited, Excelsior Life Insurance Company, and Aetna Casualty Company.


James Ross Fulton: Is he a Liberal?


David Orlikow: That is not given in the summary. Let us look at the Bank of Montreal. Fred McNeil is the chairman and chief executive officer and is also a director of Canadian Canners Limited, the Dominion Life Assurance Company and Seagram Company Limited, to mention a few. Lucien G. Rolland, the vice-president of the Bank of Montreal, is director of Rolland Paper Company, Bell Canada, Great Lakes Reinsurance Company, Inco Limited and the Steel Company of Canada. There is not a facet of our economy in which the bank directors do not play a major, if not a completely dominating, role.
The chairman and chief executive officer of the Canadian Imperial Bank of Commerce is Russell Harrison. He is also the director of the Canada Life Assurance Company, the Dominion Realty Company, Falconbridge Nickel Mines Limited, and Royal Insurance Company of Canada. Lawrence Greenwood, the executive vice-president, is a director of the Dominion Realty Company, Kinross Mortgage Corporation, Imperial Life Assurance Company and Liberty Mutual Insurance Company.


James Ross Fulton: It sounds like a great big pork barrel, David.


David Orlikow: That is exactly what it is. Each of them scratches the other's back. Another executive of the Commerce Bank is E. F. McLean. He is a director of Canada Packers Limited, Canadian General Electric Company, the

May 6, 1980
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Dominion Realty, The Steel Company of Canada. Then we come to a distinguished citizen of my own city, George T. Richardson, who is a director of James Richardson and Sons, Hudson's Bay Company, Pioneer Grain Company, Hudson's Bay Oil and Gas Company and Inco Limited.
Now I come to that giant of banks in Canada, the Royal Bank of Canada, which has as its chairman W. Earle McLaughlin. He is a director of Sun Alliance Insurance Company, Algoma Steel Corporation, Canadian Pacific Limited, General Motors Corporation, Metropolitan Life Insurance Company, Power Corporation of Canada, and so on. The vice-chairman, Jock K. Finlayson, has a directorship on Royal Bank of Canada Trust Corporation, PanCanadian Petroleum Limited, Royal Insurance Company of Canada, Sun Life Assurance Company, and it goes on.
Now I come to a gentleman who has, along with his company, played a major and, I am sorry to say, not a very productive role in my own city, Ian Sinclair, the head of Canadian Pacific Limited. Along with being a director of the Royal Bank of Canada he is a director of Canadian Pacific Limited, Canadian Pacific Investments Limited, Canadian Pacific Airlines, Cominco Limited, Canadian Marconi, MacMillan Bloedel Limited, Marathon Realty Company, the Seagram Company, Sun Life Assurance Company, and it goes on.
With regard to Mr. Sinclair, I will illustrate something that is quite interesting. The only way in which the people of Canada could find out that Mr. Sinclair has a salary-and I am speaking from memory-of something like $350,000 a year was due to the United States law that when a company sells shares in that country the company must file a statement for the public showing what the officers of that company receive in the way of salaries. We have no law like that, so Canadians can only learn about Mr. Sinclair because of the American law. Mr. Sinclair went to court in the United States to stop that great radical journal, the Vancouver Sun, which thought that its subscribers had ample reason to have that kind of information. He went to the United States courts to try to stop the Securities and Exchange commission from presenting that kind of information.
That is just a short set of illustrations about the kind of interlocking directorships we have in our major corporations and the kind of power which they exert. As the New York Times put it so well, these people work together, live together and play together, and they look after each other's interests. I am not certain that their interests are always necessarily the interests of the ordinary people of Canada. I hoped that a Bank Act would try to plug some of the loopholes, some of the ways in which these kinds of people and these corporations have been able to amass tremendous profits, greatly increased profits, and seen large growth in their assets in recent years at the expense of and through overpayment by the Canadian people.
Let me close by giving some examples of how the bank
directors' corporate connections work. I have been talking
about Mr. Sinclair, Canadian Pacific Limited, and C.P, Investments Limited which has grown so rapidly to such a tremendous size that today's Montreal Gazette reports that the assets are now over $7 billion.
On the board of directors of Canadian Pacific Limited are the following directors of banks; W. E. McLaughlin, P. Pare, C. Pratte and A. M. Runciman who are all directors of the Royal Bank of Canada; T. G. Rust, F. H. Sherman, R. D. Wolfe, who are all directors of the Bank of Nova Scotia; H. J. Lang, J. H. Moore, who are directors of the Canadian Imperial Bank of Commerce; L. G. Rolland, F. S. Burbidge, G. A. Hart, and D. Kinnear, who are all directors of the Bank of Montreal.
Let us look now at Norcen Energy Resources Ltd. This is a major energy corporation. Its directors include E. J. Courtois, who is a director of the Bank of Nova Scotia; A. S. Leach, R. Lavoie, who are directors of the Bank of Montreal; E. C. Bovey, who is a director of the Canadian Imperial Bank of Commerce; and W. O. Twaits, who is a director of the Royal Bank of Canada.
Let us look at another one of our prominent corporations, and that is International Nickel. Included in its board of directors are the following: J. E. Carter and A. T. Lambert, who are directors of the Toronto-Dominion Bank; G. T. Richardson who is a director of the Canadian Imperial Bank of Commerce; L. G. Rolland, C. F. Baird, J. P. Gordon and G. A. Hart, who are directors of the Bank of Montreal; D. G. Willmot and D. W. Barr, who are directors of the Bank of Nova Scotia.


James Ross Fulton: Same old gang.


David Orlikow: I could go on, but as my colleague, the hon. member for Skeena (Mr. Fulton) has just said, it is the same old gang. It is the same old gang who have been controlling and running this country I suppose ever since there was a country. They have grown rich and fat as a result of the work and effort of the Canadian people.
We are not opposed to the profit system. We believe that in the foreseeable future there will be in this country, as in most of the countries of the world, a mixed economy in which there will be a part of it owned, operated, and controlled by the people, and a large segment of the economy which will be owned and operated by the private sector. We are not opposed to that. But we may have what may seem a strange idea to many members of this House, particularly to members of the Liberal and Conservative parties, that is, we believe that the profits should be reasonable and that prices charged to Canadians should be such as they can afford to pay, still leaving a reasonable profit to the company. We do not believe that this Bank Act, which we have before us, does that or attains those objectives for the Canadian people. We believe that when this Bank Act is passed it will be essentially as it has been brought before us, because the Liberal party has a majority in this Parliament. I do not expect my Conservative friends on this side of the House to put up any real opposition to important sections of this bill.
May 6, 1980


An hon. Member:: They have to scratch the same friends' backs.


David Orlikow: Therefore, I assume that this bill will emerge, when it is finally dealt with by Parliament, much as it is today. We do not believe that this bill will meet the needs of the Canadian people, that it will give them the kind of financial system which they need, that it will protect them against exorbitant profits such as the banks have made in recent years, and for those reasons, and for many others which my colleagues will be dealing with, it is our intention to vote against this bill.


Robert Alfred Corbett: Mr. Speaker, it is indeed a pleasure for me to rise and speak on Bill C-6. In my opinion it is time that the Bank Act was improved and changed. Many of the revisions that are presently included in the bill before the House have been before this House of Commons for a good number of years, as was pointed out previously by another speaker.
It is time for improvement, despite the fact that the banking system in this country is probably the very foundation of our free enterprise system, a system that has worked immeasurably well not only for Canada but for all nations in the free world. It is one that I think should be continued under that particular set of rules.
I listened with interest to some of my NDP colleagues, and although it was not included in the last speaker's speech, there have been suggestions that perhaps we should be looking at the possible nationalization of banks in Canada.


An hon. Member:: The Tories want to nationalize the banks?


Robert Alfred Corbett: I would strongly criticize that particular position if indeed it is the policy of the NDP. It is very, very difficult to try to determine what NDP policy is this day. As a matter of fact that party was instrumental in introducing a motion into this House which brought about the downfall of an extremely responsible government last December. The members of the NDP are sitting here on this side of the House as though they were the epitome of righteousness, condemning the very government they put in place and helped to support during the early years of the 1970s. We would see this situation again, I am sure, if the same set of circumstances were in vogue. It has been well said by a colleague that lack of principle is quite obvious.
During this time of repression, I look with interest at the great nationalization nation. 1 suppose the great champion of the nationalizing nations of the world is Sweden. Sweden has recently been in the news and we can now see the nationalization of its industries, including financial institutions, which was supposed to be such a workable situation among businesses, banks and unions and things of this nature that make it all happen, make the economy go around, and create jobs, seems to have fallen apart at the seams. The same thing very nearly happened in Great Britain. Fortunately for Great Britain and the people there, a Conservative government was elected last year or the year before. They are now in the
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process of salvaging what little bit was left after a decade or more of a socialist-labour government, the counterparts of the Canadian NDP.
As was stated by a former speaker, apparently the NDP approach to the solutions of the country's ills is to lower the interest rates. This seems to be the whole thrust of their position, lower the interest rates, get the interest rates down at all costs. It does not matter that it will deter the investment of foreign capital in this country, that foreign investors would obviously not be interested in coming to this country with their investment money which this country of 22 million or 23 million people dearly requires.


An hon. Member:: What is your policy?


Robert Alfred Corbett: The policy of this party when we were in power was to encourage foreign investment for the benefit of Canadians so that the net result would be a better way of life and better standard of living for Canadians. It is unfortunate that that policy did not have an opportunity to be implemented and put into place.
The other interesting aspect of lower interest rates and all of the goodies bundled up into the NDP package seems to be that, if there is not enough money to go around, we will crank up the old printing machine, grind out more dollar bills, hang them on the line, and hopefully we will not need them until such time as they have had an opportunity to dry on the line, and with those dollars we will purchase all of the goodies and provide all of the jobs that we so desperately need in this country.
What they conveniently neglect to address themselves to is what happens to all of the goods and services that are not presently available in Canada because our manufacturing service is not currently manufacturing all the necessities of life that Canadians need in order to enjoy the lifestyles that they have become accustomed to enjoying.
What about the cost of lettuce during the winter months as it comes to us from California, and all the other imported foodstuffs that come into this country? How do we afford them? I know the answer. Just speed up the old printing machine, crank out more dollars, put more dollars in the pockets of the people. It does not matter that they are worthless.
Canada is a marvellous country with probably the greatest future, provided we don't blow it with such frivolous policies as the NDP might force upon us. I suppose one of the suggestions, if everything else is to be nationalized, is that the unions should be nationalized as well and brought under the control of government. I have never heard anyone from that party address themselves to that, but I suspect that would just naturally flow. Unions would become part of the nationalized process as well. Perhaps at some other time we could have some comment on that situation from the NDP.
Last year the net debt of this country was billions of dollars. It is a debt we certainly cannot afford. We have lost more

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man-hours in this country through strikes than any other nation in the world, and the loss to the economy of these dollars is just fantastic. I am very concerned that the irresponsible attitude of the present government, backed up by its cohorts on this side to my left, is contributing not only to labour unrest but to the fact that our production is among the worst in the world of the industrialized nations. It is great fun, and I suppose it makes great political games for the socialists to take on the hustings when the time comes, but this is a very serious business and very serious situation.
1 point that out because I feel that nationalization is not the solution to this country's ills. I believe that the banks in this country have proved to be an immeasurable success with their contributions to this country, and to the very foundations that have made this nation great, and made all free nations of the world great under the free enterprise system. Obviously the banks of this country know their business. They know it very well.
As has been pointed out, the banks are extremely successful. They are successful in the business they are in, the money business. Their profits are more than respectable; in fact, they are questionable. There is no question about it. When profits exceed those amounts that can be rationalized by any thinking person in this country, then we must take a look at the way those dollars are made and at whose expense.
How do they do as well as they do? One reason is not by being a bunch of nice guys. The banking institutions of this country have formulated a policy over the years of obtaining collateral that, quite frequently has to be at least equal to and in a good many instances surpasses that of the particular loan or whatever that company or individual might want to have from them. Of course one of the reasons they have been able to do this is because they have had a corner on the money market of this nation for so long.
We have had relatively few banking institutions in this country as banks are known to most individuals. It is a healthy sign that we, as a nation, are prepared to look at and accept that there is room for competition in the banking industry. As was pointed out by the hon. member for Bow River (Mr. Taylor), the important aspect of competition in the banking industry is that the profits coming into the country through the medium of a bank if it is foreign controlled, are reinvested in Canadian businesses or businesses that are going to accrue major benefits to the Canadian people and the Canadian nation.
The attitude of banks over a period of years on a good many occasions and in a good many instances has been ruthless. They have had an opportunity to charge service charges when profits were in a very excessive position. The inclusion of new banks where profits are going to be reinvested in Canada will be of benefit to the nation.
Banks should stay in the business that they know. I am disappointed that this bill does not deal with that. In fact it seems purposely to exclude it. One of the most important provisions in the new Bank Act that has caused concern is the section that will permit the banks to enter into the auto leasing
May 6, 1980
field, presumably in competition with auto dealers and others now involved. On the face of it one might consider that competition of this kind can have obvious benefits. I doubt if this would be the case.
I have discussed this matter with my hon. friend from Halifax West (Mr. Crosby) and others, and he and I, along with a good many others in the House, have concluded that the public might not benefit if auto dealers, the heart of the business community in many cities and towns, particularly in the rural areas, are jeopardized by unfair competition. So we have to ask: when is competition unfair? Mr. Speaker, it is unfair when the rules are changed without giving all those in the field equal opportunity. The banks already receive many benefits and have no responsibility in the auto business in terms of keeping facilities open. If we change the rules we must be careful of the result. If the result is to bankrupt auto dealerships, the public gains nothing.
The auto industry is presently passing through a particularly strenuous period. Every day we read in the newspaper about auto plants shutting down, the difficulties which Chrysler is experiencing, and the decline in sales. Many dealerships are making only a marginal profit, and some are making no profit at all. Their position, in relation to that of the banks, is very serious. It is my opinion, and the opinion of a great many members of this House, that the public would be much better served if the business of auto leasing were left in the hands of those who understand this business best. It should be left in the hands of those who obviously have the facilities to conduct it; the dealers have the repair shops and, more important still, they have a close interest because automobiles are their primary source of income. I would urge the minister to re-evaluate his position on the question of the banks entering the leasing field and to introduce provisions which would protect a vital and important section of business in Canada.
I should like to deal, as well, with the subject of credit cards and banking institutions-the buy now and pay later plans to which we are so often exposed in this country. I suggest it is not always in the best interests of the public when loans which likely command an extremely high rate of interest are not only available to the public but are promoted. We have all seen the signs in the windows of the banking institutions-"Come to the land of fun and sun," showing mama and papa and what-not basking in the sunlight on some tropical island. The message is, "Don't worry about the cost because you can go now and pay some time in the future when you get round to thinking about it." Mr. Speaker, we know this is not reality; this is not the way things are. This is a cold-hearted world, though people are somewhat prone to forget it. I do not think it is healthy for this nation to be bombarded with advertising of that type and to become a nation of debtors because banks and other financial institutions are determined to increase their profits at the expense of people who might be carried away by an urge to do someting they can ill afford.
May 6, 1980

I would ask the minister to consider some type of regulation which would deal with this type of promotion promising a life in the sun, a never-never land with no need to worry about paying for it. Life does not work that way, and part of the problem we are experiencing today has arisen because far too much of this so-called easy money has been available. We are paying for it now, and we shall be doing so for many years to come.
Another item to which I should like to address my remarks tonight has to do with agriculture. I see the Minister of Agriculture (Mr. Whelan) in his place over there. I am pleased to see him in his place this evening where he can have the benefit of some of the opinions which have been expressed with regard to the farming industry. Attention has already been directed to the difficulties in which producers find themselves when stock and carcasses become the property of the processors, under the Bank Act, before they have actually been paid for.
I suppose there is no single group of individuals in this country who have to work harder than the farmers, or who experience more difficulty in making ends meet. They are having to deal with the burden of rising costs-around 10 per cent last year-and decreasing receipts at the same time in the order of 10 per cent, or perhaps 7 per cent. I urge the Minister of Agriculture to plead with his colleague, the Minister of Finance (Mr. MacEachen), to include some provision in this bill to protect producers when their carcasses, cattle or hogs, are taken over by the processors in the event of a bankruptcy. I agree this is an unusual situation, but I believe we should show some compassion toward these people whose work is so vital to the nation, by dispensing with the provision in the bill which places them in the same class as International Harvester or any other of the equipment companies and suppliers in the eventuality of a processor going bankrupt. When the carcasses are not paid for, the farmer has not received his just due.
There is one other item in the bill which I Find somewhat distressing. It seems that Parliament is to lose the right to grant charters to banks. I suggest this is an erosion of the rights of Parliament. Heaven knows, under the present government, in the last ten years there has been a great deal of erosion of the rights of Parliament, and I question the motives of the administration in including such a provision in the act. As I understand it, we will no longer have the right to debate in this House the issuance of new banking charters in this country. The authority is to be given to cabinet or some extension of the government, and these charters will not be brought before the House for debate.
I do not believe this is a healthy situation. I do not believe it is healthy for the future of the country to have this continuing erosion, because of a government that is now well known to be arrogant in a good many of its directions and decisions. Now to have another erosion of the rights of the members of this House of Commons, to discuss the issuance of bank charters, to the Canadian nation bodes ill for the future of the country, and I ask the minister to take this under consideration.
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Hon. Sinclair Stevens (York-Peel):: Mr. Speaker, in joining for a few moments in the debate on Bill C-6 I must admit that I am partly prompted by some of the remarks from our colleague, the hon. member for Winnipeg North (Mr. Orli-kow)-


David Orlikow: Thank you.


Sinclair McKnight Stevens: -who, in his usual socialistic style, tried to get the best of all worlds. I say that because I find it odd to hear these socialists who sit on our left somehow criticizing the government and telling the government that it is not doing things properly, notwithstanding the fact that the government we now look at across the floor would not be in power if it had not been for our socialist cousins to my left.


An hon. Member:: Socialist cousins? We are not related to you, Slasher.


Bob Rae: I am not even your blood brother.


James Ross Fulton: We have nothing to do with you.


An hon. Member:: Insults.


Sinclair McKnight Stevens: The thing I find so strange about the line taken by the socialists generally, and in particular tonight by the hon. member for Winnipeg North, is how totally out of touch they are with the reality of the world, and how inconsistent they are in their arguments.
For example, the hon. member for Winnipeg North has told us that Canada needs world scale industries. Apparently he took a trip to Japan, which I am pleased he was able to do, and he was quite impressed with the way their industries are working. However, I would not have believed it if I had not been sitting in this House; before the same hon. gentleman sat down, he was criticizing our banks for being too big. He was indicating that somehow or other there was a strange relationship between the boards of directors of banks and the directors of corporations in Canada, presumably all because somehow or other in his mind that is capitalism, and capitalism is a nasty word to a socialist.


Bob Rae: Not a nasty word; it is a nasty system.


Sinclair McKnight Stevens: Let us get something into perspective. We heard that the hon. member for Winnipeg North went to Japan. I wonder if, while he was in Japan, he noted that of the 50 largest banks outside of the United States 18 are in Japan. Japan dominates banking worldwide outside the United States. The reason I mention this is that, included in those 18 Japanese banks, are 13 Japanese banks which are larger than our largest bank, the Royal Bank of Canada. The largest Japanese bank, Dai-ichi Kangyo Bank, had assets in 1978 of $73.5 billion, more than twice those of the Royal Bank of Canada. My socialist friend, the hon. member for Broadview-Green-

May 6, 1980
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wood (Mr. Rae), has indicated-because he always reads faithfully Fortune magazine-that it is all set out in Fortune magazine.


Bob Rae: You are using my copy.


Sinclair McKnight Stevens: Perhaps I am. This is the first time a socialist ever did anything for me.


James Ross Fulton: He is your cousin, Sine.


Sinclair McKnight Stevens: However, as is pointed out in the August 12, 1979, edition of Fortune, Canadian banks slipped in their rating for the second year in a row. We now have only three Canadian banks which are listed among the 50 largest in the world outside the United States. If we include the American banks, we find we now have only two banks which are included in the largest 50 of the world. The reason I comment on this is that I think, certainly in this House and hopefully in the halls of government, a new sense of reality will start coming back into Canada. We seem to have become insular. We make speeches such as the one I heard from our socialist friend, the hon. member for Winnipeg North. At one time he states we do not have what he calls world scale industries, and before he sits down he decries any worthwhile relatively big company we have in the country and also points out how there is a nasty interlocking of directorships. If he did not check into this when he was in Japan, I ask him now to check the interrelationship between the banks and industrial concerns in Japan. What is the interrelationship between the banks and industries in Germany?


David Orlikow: And the government?


Sinclair McKnight Stevens: I think it is time we stopped burying our heads in the sand and trying to play, as I said at the beginning, this House for the best of all worlds. Hon. members to my left brought upon the Canadian public the government we now have ruling this country, and I think it is high time the socialists accepted that responsibility and stopped standing up in this House as if they had nothing to do with the government with which we are now faced.


Bob Rae: It was your incompetence.


Sinclair McKnight Stevens: At the same time that the hon. member for Winnipeg North was belabouring the growth of bank assets in this country-and I want to touch on that in a moment-I noted that he carefully avoided commenting on the deficit that he and his socialist friends assisted the government across from us in running up.


David Orlikow: What about the deficit in Ontario?


Sinclair McKnight Stevens: We did not hear them comment about the fact that during the years they were allied, this Liberal Trudeau regime ran up the deficit, which was merely $676 million in 1974, to $ 12.9 billion by 1978. I am pleased that the Minister of Finance (Mr. MacEachen) is in the House here tonight. He has warned us that the deficit could be over $14 billion in the
current year. Is it not curious that our socialist friend in one speech belabours certain things because he says that that is capitalism, but on the other hand he and his colleagues mute their criticism of their friends in the present Trudeau government who have run up a deficit of a budgetary nature such as the one to which I have just referred?


James Ross Fulton: Let us hear about the difference between you and them.


Sinclair McKnight Stevens: The difference was over $3 billion, and if the hon. member had been in the House that night, he would not have voted with his friends the socialists.


Bob Rae: He was here. We were all here.


Sinclair McKnight Stevens: Speaking about growth in bank assets, I think it is wise that we get it into perspective in two senses. First, I have indicated that, if anything, the Canadian chartered banks are actually losing ground in the world banking community as far as size is concerned. However, second, I suggest that the mere fact that the banks have grown at such a rapid rate should be one of the reasons our socialist cousins should be standing up in this House and saying, "Let us get on with the passage of Bill C-6 so that we can in turn bring the foreign banks under at least some type of control or regulation as contemplated in Bill C-6".
Here are the facts: In 1968, which was the year after the present Bank Act was passed, total bank assets in Canada were $36.7 billion. At the end of last year they had reached $225 billion. Of that amount, in 1968, about 21 per cent of their assets were made up in the form of currency. Today it is approximately 36 per cent. I think it is healthy that we have institutions which have got out into the world market and have been able to increase their assets in that market to the extent I have indicated. So we should be encouraging, not discouraging, those banking institutions in their endeavours to be, 1 suggest, world-scale industrial companies, or banks in this case, of which, as the hon. member for Winnipeg North Centre (Mr. Knowles) said, we needed more.
The reason I will suggest tonight to hon. members that we get on with passing Bill C-6 is that it behooves this House to recognize that the Bank Act is one of the few sunset types of legislation that we have in existence in Canada. It is a good concept, the concept that you pass a bill for a limited term, that you can review it, amend it, and then repass it, presumably with improvements. Initially it was intended that the Bank Act should be passed every ten years after a suitable review in committee and in this Parliament. That review has taken place. There have been prolonged debates with respect to the revision of the Bank Act.
Let me review what has happened since 1975. In that year the Department of Finance asked interested parties to submit briefs, in time, they said, for the preparation of the 1977 revision of the Bank Act. In August of 1976 a white paper was published in which the general principles to be incorporated in
May 6, 1980

the new Bank Act were set out. By the fall of 1976, the Senate banking committee requested and received a special reference to study that white paper. The House requested the same reference but the government refused to pass a motion in agreement because opposition members were not agreeable to limiting the House debate on this issue. That was in the fall of 1976.
In June of 1977 the Senate issued its report for government study. The government again requested submissions from interested parties. Some delay was caused by provincial objections that membership in the Canadian Payments Association required holding reserves with the Bank of Canada, that is, the near banks which, under the jurisdiction of the provinces, would have to hold reserves with the Bank of Canada. The provincial objections became quite loud as they felt that somehow their responsibility for near banks was being jeopardized.
The government of the day then decided to rethink those proposals and came to an understanding with the provinces. Meanwhile, the old bill, that is, the present Bank Act, which would have been extended to June, 1978, was extended once again. The opposition was anxious that a new bill be introduced, yet the government said it needed more time to study the recommendations. By May 18, 1978, we had introduced Bill C-57 which contained most of the broad proposals set out in the white paper but made a major departure from the white paper on the issue of the reserve requirements of the near banks. In June of 1978 the session ended and the bill died on the order paper. On November 2, Bill C-15 was re-introduced, which was substantially in the same form as Bill C-57, and after a very brief House debate it was referred to the finance committee of the House. The committee studied the bill, many witnesses were called and heard, and briefs were received. What I found so odd as I sat listening to the debate here tonight was to hear our socialist friends-


Stanley Howard Knowles: Cousins.


Sinclair McKnight Stevens: -now criticizing this bill, notwithstanding the fact that a representative from that party sat during those committee proceedings, heard the evidence, agreed with the in-camera recommendations that were arrived at, and agreed to the report which was finally tabled in the House.


Bob Rae: Mr. Speaker, I rise on a point of order. I know that the hon. member for York-Peel (Mr. Stevens) would not want to mislead the House. The member to whom he is referring, Mr. Saltzman, filed a minority report at the time that the committee report was reported to the House of Commons last year. 1 am sure the hon. member for York-Peel would not want to imply that that was not the case.


Mr. Deputy Speaker:: The hon. member has not made a point of order. It was a point of debate.


Sinclair McKnight Stevens: Thank you, Mr. Speaker. You certainly know the rules of this House.


Stanley Howard Knowles: But do you know the facts?
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Bob Rae: I got my point across.


Sinclair McKnight Stevens: Mr. Speaker, the point I am making is that again we have an example of our socialist cousins, as my friend, the hon. member for Winnipeg North Centre likes to be referred to, liking to have the best of both worlds, in that while they sat through those committee hearings they accepted substantially all the recommendations and the points that were raised, but now they like to pretend that they are divorced from what went on before and they can stand up on behalf of whoever they stand up for and damn the bill, as they did tonight.
What I am suggesting is that I think the time has come, bearing in mind the long history of this legislation and the committee's reviews, for us to get on with passing Bill C-6. Certainly there are certain points which I hope will be raised in committee and there might be amendments yet to be made to this bill, but I believe it is substantially in a form that is acceptable, in a form that the people of Canada would like to see it passed and, above all, it is in the form that the financial community of the country, the industrial community and the banking community, would like to see it passed to bring some certainty back into this world instead of the uncertainty with which we have been living.
I brought us up to 1978. You will recall that when we formed the government in this country we acted promptly with respect to the bank legislation. We reviewed the reports of both the Senate committee and the House of Commons committee on the Bank Act, and in the fall of last year we introduced Bill C-14, which is substantially the bill we now have before us, namely, Bill C-6. Surely there is no disagreement in substance with regard to the provisions of Bill C-6 either from our side, from the government's side or, I suggest, from the socialists to my left. So why the prolonged debate?
If what we are witnessing is a general frustration that we were robbed of a proper budgetary debate by the Minister of Finance, whom I see in the House at present, if we are sensing in the House a degree of frustration because the theft was made, then let us do what we can to bring the Minister of Finance to account.
For example, I think it was quite proper in a committee of the House today to suggest that the interest rate review that we had instigated while we were in government be continued in a committee of the House. Frankly, I think all members of the Opposition, including the socialist members on that committee, were most startled to see that, to a man, the government members on that committee used their heavy-handed majority to vote down the mere suggestion that a committee of the House should review the interest rate structure and what could be done to achieve lower interest rates in this country, or at least to relieve the people from some of the side effects of our high interest rates.
What I am trying to point out is that surely Parliament is not functioning properly when we have before us a bill such as Bill C-6 which has been debated, or at least reviewed, since 1975. When we have a bill that is substantially agreed to on all

May 6, 1980
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sides of the House, surely we are not operating properly by having a prolonged debate on that bill and, at the same time, having government members virtually stalling a meaningful review by a committee of this House of interest rates in this country. Having said that, and having urged that members get on with the passage of this bill, I should like to go further and say what are some of the pluses in the legislation.
I know the foreign bank question perhaps has been one of the more controversial, contentious issues which has been raised during the debate over the years concerning the Bank Act revisions. But I would suggest that if we are properly going to come into the 1980s, it is time we accepted that there is more to be gained than to be lost in Canada by making us an international banking centre, and that is exactly what the admission of foreign banks to a greater extent into Canada will do for us. I think there are pluses to opening up the banking system in Canada and letting, under the regulations that are contemplated in the act and in the regulations, foreign bank activity grow in Canada.
Since 1967 when the present Bank Act was last revised, foreign ownership of any chartered bank in Canada, as we know, has been restricted to a maximum of 25 per cent. However, there were no restrictions placed in that act on the establishment of subsidiaries by foreign banks. Since 1967 numerous foreign bank subsidiaries and representative offices have been established in Canada. For example, in the office building in which I had my office at one time, one day I counted 26 foreign bank agencies or representative offices alone. How ludicrous it is for us to allow that situation to continue, and perhaps most important, think how we look in the eyes of the world.
At last count there are supposed to be 100 corporations doing business in Canada that, to all intents and purposes, are really in the banking business and are controlled or owned in some instances by foreign banks. About 50 foreign banks have an equity interest in these corporations according to the Department of Finance press release of May, 1980, which I know my friend, the Minister of Finance, probably wrote with his own hand.
In addition to the 50 foreign bank representative offices, there are about 30 representative banks which do not appear to have any investments in Canadian financial corporations. The total assets of Canadian affiliates of foreign banks reporting to the Bank of Canada currently exceed $6.5 billion. In short, in addition to the banking assets to which I have referred, we have a situation where there is over $6 billion of banking activity going on within the affiliates, the agencies and the representative offices of foreign banking concerns in Canada. This act will attempt to regulate to some extent that activity, and I think that is good. First, I think it is good that hopefully we will know better what those banking concerns are doing, and second, it will help our banks expand into the foreign markets that we need so badly.
Also I suggest that as we face the current account deficit that we do in this country-the worst of any western industrialized nation-it is important that we recognize that to the degree we become more of an international banking company it should help our trade activity in those foreign countries. In short, let us be less inward looking, let us be less insular, let us be more world-minded, so that we can tap some of the tremendous economic activity that is churning in the world and which could churn to our greater advantage if we accepted the reality of the world such as it is today. I would suggest that among the various reasons we could give for endorsing the concept of opening up our system to foreign banks is the need to increase competition in Canada.
As we have indicated, we have large banks. On a world basis the largest is about thirty-fourth, but in terms of Canada they are undoubtedly very large. Surely it behooves us to open up the system to allow some of the foreign concerns to lend their innovative ways, their new approaches, their new techniques and their ingenuity to our Canadian banking system. I would suggest, from people who have talked to me, that already the foreign banks in the limited extent that they have been active in the country have rejuvenated many aspects of our banking business, and I think that is to be encouraged.
One point which I think was raised very effectively at committee was that, if we do not open up our banking system, we will find that there will be less reciprocity open to us as Canadians when we try to go into foreign banking markets ourselves. In short, let us catch up to the 1980s. I feel that if the socialist rump group to my left-


Stanley Howard Knowles: Call us friends or cousins.


James Ross Fulton: What is happening? You called us cousins before.


David Orlikow: I like it better this way.


Stanley Howard Knowles: The blood stream is all mixed up here.


Sinclair McKnight Stevens: Mr. Speaker, I do not know why they should be so sensitive to being called a rump group.


James Ross Fulton: I thought it was cousins.


Sinclair McKnight Stevens: Perhaps they feel it very fitting, but what I am saying is that I think it is time that little group stopped playing it purely political, and accepted responsibility for their actions now that they have placed the Trudeau government back in power.


James Ross Fulton: 1 thought we had an election.


Sinclair McKnight Stevens: I think it is time that they stood up and said, "We are jointly presenting Bill C-6; we hope the House will accept it; let us go get on with its passage." Instead we have heard speech after speech in which they attempt, if it suits their purpose, to disown the bill and, in any event, delay its passage.
May 6, 1980


James Ross Fulton: Name one area in which you are different from the Liberals.


Sinclair McKnight Stevens: My friend is asking for one area in which we differ from the Liberals. I thought I had just mentioned one area in which we very dramatically differ from the Liberals, and that was on the question of the deficit. To me a $3.7 billion-


David Orlikow: Would the hon. member permit a question?


Mr. Deputy Speaker:: The hon. member for Winnipeg North (Mr. Orlikow) seeks permission to ask a question.


David Orlikow: 1 wonder if the hon. member who is so opposed to deficit financing by government would explain to members of the House how it is that the Conservative government of Ontario has had a deficit in the millions for each of the last half dozen years or so.


Sinclair McKnight Stevens: If the hon. member would like to meet with me after this evening's session, I would be very pleased to go through the budgetary position in Ontario.


David Orlikow: I would like to know now.


Sinclair McKnight Stevens: I think he will be most impressed to see, if capital items are taken out, that the provincial budgetary position in Ontario is now in surplus. I think the Conservative government of Premier William Davis is to be complimented for keeping a current budgetary surplus in Ontario. To the extent that I can ever be moved to compliment the NDP, of course, in this connection I have to compliment the NDP opposition in Ontario who consistently support Mr. Davis and keep him in power. Clearly the deficit that the hon. member for Winnipeg North thought he saw in Ontario's budgetary position is non-existent. In fact, it is presumably so acceptable that even his cousins in Toronto-


An hon. Member:: They are brothers.


Sinclair McKnight Stevens: Apparently they are brothers, Mr. Speaker.


An hon. Member:: Tell us one thing that is different.


Sinclair McKnight Stevens: The hon. member is asking me to indicate one thing that we would perhaps differ on as far as the Bank Act is concerned. At the committee I think the hon. member may see one or two places where we suggest changes or amendments to Bill C-6, but I do not think that makes it necessary to delay its passage.
For example, one area where I think there should be further consideration is the extent to which it may be advisable to allow our banking institutions to get into leasing. Most of us have had discussions with those who might be affected by bank leasing activities. I think we would be wise at least to hear out those observations and hopefully come up with a formula that would give the banking institutions substantially what they want in leasing activity, because I think, certainly with regard
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to the big ticket items, there is a need to have further financing and development of leasing. On the other hand, I think it would be a pity if, in giving the banks that new scope, we somehow inadvertently killed off other forms of competition in the leasing of smaller ticket items.
Again at committee we should be more conscious of the fact that the trust and loan companies of this country might perhaps find it very difficult to compete if legislation is not brought in at an early date modifying trust and loan legislation in Canada, ensuring that trust and loan companies are given whatever new provisions are needed to make sure that they become truly competitive with Canadian banks, and to make sure that in no way are they put in a position that they cannot prosper and grow.
In short I am suggesting we do have a good banking industry in Canada. It is time we showed that, as a House of Commons, we can act. Since 1975 this bill has been under review and debate. Surely now there is absolutely no excuse to prolong the debate any further. Let us get Bill C-6 into committee, and if the changes to which I have referred, or other changes that might be suggested, are approved by the committee, that is fine, but let us for once show the business community in Canada that this House of Commons, and hopefully this Parliament, can act when it is clearly in the interests of all Canadians that some action be taken and politics be put in a secondary role.


Raymond John Skelly: Mr. Speaker, I wonder if the hon. member would permit a question?


Mr. Deputy Speaker:: With the consent of the hon. member for York-Peel (Mr. Stevens).


Sinclair McKnight Stevens: Certainly, Mr. Speaker.


Raymond John Skelly: The hon. member spent a great deal of time talking about foreign banks. 1 felt he was coming to the conclusion of his remarks and that it might be worth while if, following the presentation of the merits of foreign banking, since this particular act purports to provide for near-banks and other organizations to form banks more quickly and easily to compete with the major banks in this country, he would tell us whether, in his opinion, it would be advisable to provide those institutions that might desire to do so with an opportunity to compete as Canadians rather than having the competition by foreign banks. Would he tell us what hazards he might see in the possibility of extraterritorial control in Canada from these foreign banks? We see this government, and even the Conservative government, sincerely concerned about Canadian control of the economy. What kind of conduits are they creating by allowing foreign banks in this country rather than looking for new mechanisms to legitimize these organizations? Basically, can he answer the question about competition for Canadians and about creating potential extraterritorial control?


Sinclair McKnight Stevens: Mr. Speaker, perhaps the hon. member for Comox-Powell River (Mr. Skelly) has forgotten that his party

May 6, 1980
Bank Act
voted us out of power. His question would appear to be much more appropriate for the Deputy Prime Minister and Minister of Finance, or my colleague, the former minister of finance.
Let me simply reply to him that I think we need both. We need encouragement to those who would start new banking concerns in Canada, and none of us are opposed to that. If the trust companies, loan companies, financial institutions and others wish to form new banks, fine, let us facilitate that. At the same time we have to accept that we are part of a very interrelated world banking community, and we cannot continue indefinitely to have the benefits of penetration into some of those foreign countries without accepting at least limited penetration by those foreign banking concerns in Canada. I am suggesting that such penetration is something we need not fear, because I believe with the restrictions in Bill C-6 they are not going to run away suddenly with the domestic Canadian market. On the contrary, 1 think they will be a very effective, new competitive force in the Canadian market which will make our own bankers even better than they are in serving the public.
Having said that, I do not think those two things are inconsistent. In fact if we do not begin to accept in Canada that we should be much more of an international power, and much more concerned with international activities, we will be destined to a rather secondary role in the world, and that should not be the role for Canada, and certainly would not have been had former Prime Minister Clark been allowed to continue to govern this country.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: We are not cousins any more.


Sinclair McKnight Stevens: Think of the potential. If we properly change the banking legislation to permit foreign banking activities, such as I am suggesting, and Bill C-6 goes a long way, and if we tried to encourage an atmosphere in Canada for international banking activity, then I can see that Canada could easily become, in North America, the Switzerland of North America. Think of the benefits that would create. If foreign bankers felt that one of the most desirable places to be doing business of an international nature in North America was in Canada, that would be the type of thing I would wish to see encouraged. Let us take the blinkers off. This is a big country. Let us get away from the insular type of petty thinking that seems to be heard so much from my cousins to the left.
Having said that, Mr. Speaker, let me tell you this. If we, as a new Parliament, can pass this bill, that will go a long way toward creating a new sense of confidence in the economic community in Canada. This is needed, and I only hope that members will accept the challenge and say, "Let us debate it, get it into committee and passed." Thank you very much.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Gordon Towers (Red Deer):: I wish to thank you, Mr. Speaker, for according me the privilege of bringing to your attention a very important matter. I wish to place before this House some facts about the metric conversion program in this country. They are facts, not arguments.
The fact is that the Liberal government has created a monster in the most devious fashion possible. The metric system was thrust upon the Canadian people by an order in council and by regulation. Surely it must rate as the number one subject which rankles Canadians. It is a costly mistake. It is too much, too soon. It is an over kill.
The metric conversion program was first introduced to this House in the form of a white paper which was tabled in 1970. The government had the courtesy at the time to give our spokesman, Mr. Ged Baldwin of Peace River, advance notice, but even then he had only scant minutes to reply in the House to a subject which has had, and is having, sweeping ramifications across this land. Even then Mr. Baldwin warned the government of the day of the pitfalls of proceeding with haste with metrication unilaterally, without working in concert with the United States, the country with which more than two thirds of our trade takes place.
No, the government decided to operate by stealth. Metrication was introduced through the back door and, like Topsy, it just grew. Last week in the House the Minister of State for Small Businesses (Mr. Lapointe) conceded that no formal metric bill had ever come before this House. I question, since this is the case, whether the metric program has effect in law. It was not passed by this House. Were indeed the estimates for the program passed by this House? I think not. What is the legal glue which holds this sticky wicket together?
We have had occasion to amend existing pieces of legislation so that they conform with the SI scale of measurements, amendments which could allow the use of metric standards in lieu of the inch-pound measurements. I would like to lay some facts before you, Mr. Speaker. Fact one, the metric program was introduced to the House in the form of a white paper. Fact, the white paper was not debated, merely commented upon by opposition spokesmen, and very briefly. Fact, opposition spokesmen warned the government of the suicidal course of going it alone without parallel measures coinciding in the United States.
Fact, the metric commission was established by executive order or by cabinet. Parliament was bypassed in the creation
May 6, 1980

of the overseers of the metric program. Not even the NDP raised a word about this fact. Fact, as the Minister of State for Small Businesses has readily admitted in his reply to my question of privilege, an omnibus bill which would allow us to debate the principle of the metric system was never brought before this assembly.
Fact, the metric program was imposed on the good citizens of three major centres of population, Peterborough, Ontario; Kamloops, British Columbia; and Sherbrooke, Quebec. Fact, the program has not been well received and the government has had to pull in its horns in all three areas. Fact, in Peterborough, Ontario, residents boycotted city stores which had to use metric and did their shopping in the neighbouring communities, which was a severe financial hardship on Peterborough merchants. Fact, despite the unpopularity of the metric program, the bureaucrats intend to introduce metric, cold turkey, in 25 or 26 other cities and towns early next year.
This is folly, Mr. Speaker. Why is the government so prone to rush in when it is so obvious there is built-in resistance to an unpopular program? Why can the government not admit a mistake and draw back until the time has come for metric? It may not be in my lifetime, but perhaps sometime in the distant future. Our young generations, our school children, will have little trouble assimilating metric along with their other studies. Perhaps the solution to the dilemma would be to have school children study both systems, become conversant with both, in order to plan for that day when metric might be introduced in a sane and rational fashion when it is needed.
You cannot teach an old dog new tricks, Mr. Speaker. I, for one, will probably always rely on the old measurements. Even though metric has been in effect for some years, I still convert in my head metric to the old scale.
I implore the government not to proceed with this foolhardy course it is taking. If it persists, let us get it out into the open, get a bill before Parliament where the principle of metric and metric conversion can be intelligently debated. Let us get it out in the open so that the elected representatives can voice the concerns that are being expressed to them by angry and confused constituents, businessmen and ordinary citizens.
If, as the Minister of State for Small Businesses admits, a metric bill has never been debated in this House, now may be the time to do it, now before the bureaucrats ram the program down the throats of Canadians in 25 or 26 other centres. Let us have a free vote.
Let us work in concert with our neighbour to the south. Let us find out what its plans are vis-a-vis the metric system. Let us get off this unilateral, undemocratic course, pushed at us by an arrogant government. The Prime Minister (Mr. Trudeau) said he would listen to the petitions of western members; let him now fulfil that promise.


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of State, Small Businesses):: Mr. Speaker, I think perhaps I
Adjournment Debate
should quote the president of the nation to the south, Mr. Carter, who, in January 1980, said this:
1 personally support and encourage the use of the international metric system of measurement in the United States. Conversion to the metric system will help us to expand America's export market.
Mr. Carter concluded with these words:
Because I believe metric conversion holds important long-term benefits for our country, I am taking steps to encourage the use of this system in the private sector as well as in government.
With regard to the comment on working in concert with the United States, it is interesting to note that plans for the automobile industry in north America are for it to be completely metric by 1982.
Legislation on the subject of metric conversion has had considerable debate in this House. The use of the metric system was made legal by Parliament with the passage of the metric Weights and Measures Act many years ago. The Weights and Measures Act of 1971 included an amendment which made the international system of units the legal embodiment of the metric system in Canada. The policy that metric conversion was inevitable and in the national interest was established with the House leaders of all parties on January 15, 1970, speaking in the House in support of the white paper on metric conversion in Canada.
The Consumer Packaging and Labelling Act of 1971 made it mandatory for all pre-packaged goods to carry a metric contents declaration.
The Statute Law Amendment Act of 1976, which was debated in this House over a period of nine months, gave the governor in council the power to set dates in any sector of the economy after which the use of the customary or imperial system would be illegal.
A program of guideline dates for metric conversion recommended by Metric Commission Canada after consulting with industry, labour and consumer groups, was approved by the government and debated in the House of Commons on March 17, 1975. The Standing Committee on Finance, Trade and Economic Affairs studied this matter at length and voted unanimously in favour of it. It reported it back to the House of Commons on December 17, 1976, with a recommendation that the House consider the advisability of adopting this program and also introduce additional legislation to metric conversion. Subsequently the Statute Law Amendment Act of 1976, was passed by the House of Commons on July 25, 1977, and received royal assent on August 5, 1977.
In view of the fact that metric conversion currently is proceeding or has been completed in 88 of the 100 odd sectors of the economy which have published conversion plans, with the phasing and co-ordination of Metric Commission Canada, there is a proven continuing need for the commission staff and the commissioners to ensure that orderly conversion is made to the best advantage to consumers and to Canada.
It is interesting to note that an industry in my constituency has expanded its production threefold since going metric because it can now export to Europe.

May 6, 1980
Adjournment Debate


TRANSPORT-MOVEMENT OF GRAIN-ALLOCATION OF HOPPER CARS TO BRITISH COLUMBIA RAILWAY
Frank Oberle: Mr. Speaker, I rise tonight to debate a matter which I discussed briefly during the question period with the Minister of Transport (Mr. Pepin). I choose this timing because it is my understanding that the minister visited this strange and mysterious land beyond the rocks which is called Colombie-Britannique. He just returned from there. I presume he had some discussions with the politicians and transport managers there. Maybe, just maybe, his parliamentary secretary will be able to make an announcement tonight with respect to this matter which has been of concern to me and the people I represent in the farm community in the Peace River area.
I asked the minister in the House why it is that the British Columbia Railway, which is known to some people in his department as a foreign railway because there is no direct subsidy or involvement by the federal government or the national railways in the ownership and operation of that railway, has never been allocated any hopper cars. These are the cars, as hon. members know, that are part of our modern grain delivery system. They are now essential to fulfilling the task of getting our grain to market.
The reason the minister used for not allocating any hopper cars to the railway relates back to the Crowsnest freight rate. As hon. members know, it has always been the understanding that the railways would have to haul grain from the prairies to the ports on a subsidized basis because, without that, it would be very difficult to compete in world markets. It has always been the understanding as well that, in return, the railways were granted large areas of land and other concessions. Over the years they have been granted other subsidies like branch line subsidies and so on. All of these things were never granted to the BCR.
The minister argues, and he said to me in answer to my question in the House that the subject is debatable. That is what I am doing here. He said the BCR, because all their grain goes to the west coast from the Peace River country, is not obliged to haul its grain on the same terms and conditions that the national railways haul through the Crowsnest Pass. That is quite true. However, nobody would ship any grain on the BCR if it were not shipped and transported in competition with the rates that prevail in other parts of the western prairies. The Peace River country, knowing the geography of this country, is the last part or the tail end of the prairies.
When the BCR extended its line to Fort St. John in the B.C. portion of the Peace River country, it had to compete with the Crowsnest rates. It began in 1958 to haul grain at the same price it was hauled to other ports by other railways. Therefore, that argument does not hold true. It has been very disconcerting to us because many farmers in the Peace River country have not been able to fill their quotas. There were never any cars. There are not sufficient cars there now to move the grain from the elevators to the port.
As well, the system is being modernized and changed to the point where these cars are essential because it is very difficult to unload the conventional cars at the ports now with all these modern elevators.
In 1973 the federal government purchased the first 2,000 hopper cars and allocated them to the national railways. They were allocated in proportion to the volume that these railways were hauling, CP and CN. CP got 52 per cent of the initial order and CN got the rest. They passed them on to the other railways such as the Northern Alberta Railway which competes with the BCR to some extent for the Peace River grain. That particular railway, because it is not an alien railway and because it is owned by the CN and CP jointly, has the use of these hopper cars.
In 1975-76 another 4,000 were bought by the federal government. In 1978 another 2,000 were purchased. That is 8,000 altogether. As we all know, the minister now has a commitment which was made by the former Conservative minister to purchase another 2,000 cars. Even though there is some doubt about that commitment, since he is using different criteria to make an assessment, I understand from the answer he gave the other day to one of my own friends from Alberta that he will live up to that commitment. So the federal government will have about 10,000 of these cars in service. These are allocated to the national railways at a cost for maintenance and repair of 3 cents per mile.
It is true BCR has been offered some of those cars but 23 cents a mile was demanded for maintenance and repair, and that is not tolerable. It is true, also, that British Columbia has not contributed to the extent of other provinces to the aquisi-tion of these cars. Alberta has made a commitment to purchase a thousand cars, and other provinces have purchased or leased some. On the other hand, the government of British Columbia will have told the minister during his visit out there that it has made contributions in other areas, namely, through the development of Prince Rupert, helping with the infrastructure to a large extent, and so on. So there is no excuse for the withholding of a number of these cars which are owned by the taxpayers of Canada through the Wheat Board. There is no reason a portion could not be allocated to the British Columbia Railway, and I hope tonight the parliamentary secretary will have an answer for me.


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I am glad of this opportunity to reply to the hon. member on this question of the allocation of hopper cars to the British Columbia Railway.
The hon. member suggested that BCR is viewed by Department of Transport officials as a foreign railway. The fact is that the railway does not come under the Railway Act and is therefore not obliged to carry grain at the Crowsnest Pass rates. I am sure our major railways find this position enviable. The British Columbia Railway voluntarily maintains a rate structure for grain comparable to the statutory rate.
May 6, 1980

It is correct that no hopper cars purchased by the federal government or by the Canadian Wheat Board have been allocated to the British Columbia Railway. This is because of the general shortage of cars and the fact that the federal government has no jurisdiction over the said provincial Crown corporation. However, the government is sympathetic to the case presented by the Peace River region grain producers that the railway which serves them should receive an allocation of hopper cars from the federal government and the Wheat Board fleet.
The Wheat Board has entered into discussion with the British Columbia Railway to establish the railway's need for the cars. As the hopper car fleet increases, so does the likelihood of some cars being allocated to the BCR for grain service. Nevertheless, the federal government must obtain certain assurances from the railway regarding car operation, future rates to be charged and grain service provided.
I am pleased to inform the hon. member that discussions have taken place as recently as this morning between the Canadian Wheat Board and the British Columbia Railway and that it is very likely some agreement will be arrived at in the near future.


ENVIRONMENTAL AFFAIRS-ACID RAIN-CANADA-U.S. DISCUSSIONS
James Ross Fulton: Mr. Speaker, the Minister of the Environment (Mr. Roberts) indicated on his return from Washington that he had received no commitments from the Americans. In fact Mr. Costle, the head of the Environmental Protection Agency, said the following about planned coal plants in the United States: If the coal plan means more emissions in the northeast, "we are going to have to offset them," meaning the emissions, "somewhere else."
Where is that? Are the Americans considering setting aside some areas of their country as pollution wastelands? Is Canada to be one of those zones, or is this government going to be tough and aggressive and protect this land and Canadians?
The minister alluded to the fact that ten years ago the Scandinavian countries were concerned about acid rain. Today their lakes are dead. What the minister is saying is that we will cut back a few percentage points over the next few years while the United States increases by many. The remedy the minister offers is a prescription for a dead environment. Why has he not taken the reins in this situation and set acceptable limits to be met this year, in time to be of some use to Canada?
The U.S. response is unacceptable, and it is time to increase pressure from Canada. The Liberal actions are a peculiar approach: on the one hand to export low-cost non-polluting natural gas to the United States while, at the same time, President Carter is putting in place and operating coal-fired plants with little and often no pollution reduction equipment. There is a need for analysis of the costs foisted on us by the Americans, and at the same time an analysis of the energy
Adjournment Debate
benefits given to the United States by our country such as hydroelectricity and natural gas.
Our lakes, buildings, farms and health are taking the brunt of coal-fired pollution to allow the coal-producing and consuming states to maintain low energy rates and costs.
The United States is dumping five times as much on us- three million to four million tons per year-as we are on them. They dump about one quarter of their airborne pollution into Canada, which kills off lakes, etc., in Ontario, Quebec, and the maritimes principally. Quebec is one of the most sensitive geologically, and the history of the federal government in pressuring the U.S. has been weak-kneed and ineffective.
Destruction of the Canadian environment by "insignificant increment" now has deadlines that can be measured in tons, days and months.
The minister made political hay here in Canada recently by juggling maximum limits from Inco, which were at 3,600 tonnes per day and, with present output, are only 2,200 tonnes per day. This allowed the hon. gentleman to lull Canadians into thinking that something is being done and that because Inco was not polluting full bore the minister was somehow responsible for this incremental reduction. This is hardly the case. Available information in Canada indicates that emissions can be brought by Inco to below 1,000 tonnes per day at a cost of only 20 cents per pound. This would put Inco in a highly competitive and unreduced production position. Why is the minister not mobilizing a plan to reach the figure immediately?
The question is, what is the minister doing? I state to the House that he is doing nothing in Canada to demonstrate a tough attitude in order to protect Canadians from our own pollution, nothing to demonstrate to the United States that we will stop dumping over one million tonnes per year into their back yard, and nothing to awaken the United States to the fact that Canada will not accept the destruction of our environment, lakes, fish, farmland, health, forests and genera! wellbeing. In fact President Carter proposes to increase emissions by hundreds of thousands of tonnes into Canada.
Is the minister waiting for a major health epidemic or photographs of thousands of dead acres of fish and trees? Or is the de facto Liberal policy that the environment is of no value?
Perhaps the minister's representative here in the House tonight will reveal just what steps the Liberal government and the minister are taking on all fronts to obtain reductions from the United States. If he cannot be specific, that is precisely what he should say to this House and to Canadians.


Mr. Roger Simmons (Parliamentary Secretary to Minister of State for Science and Technology and Minister of the Environment):: Mr. Speaker, notwithstanding what the hon. gentleman has said about acid rain in the Scandinavian countries, acid rain has not long been recognized as a problem of major proportions. Indeed, it was only in 1976 that the OECD recognized it as a serious problem. It is only in the last half dozen years, I say to my colleague, that the matter has

May 6, 1980
Adjournment Debate
appeared to take on the kind of urgency which he speaks of tonight.
In those years the problem has mushroomed in Canada. We now emit into the air in sulphur dioxide and nitric acid something in the order of five million metric tons of the first, sulphur dioxide, and just about two million metric tons of the latter, nitric acid or nitrogen oxides generally. It is a problem of major proportions. The problem is seen in its true proportions when we realize that the United States emits five times what Canada does.
As I listened to the hon. gentleman, I realized that much of his grievance is against the United States, and so is ours. To that end about three weeks ago the Minister of the Environment (Mr. Roberts) went to Washington and spoke with Mr. Costle, the head of the Environmental Protection Agency, about the subject of acid rain and what ought to be done about it.
We are very disappointed and discouraged by the failure of the Carter administration to include any provision for reducing emissions in its coal conversion program. However, I say to my friend, the hon. member for Skeena (Mr. Fulton), that the light at the end of the tunnel is that Mr. Carter's coal conversion program has not yet passed the Congress. I say to him, and to others in the House, that this is a good time for us in the House and in the country to give a higher profile to the
increasingly serious subject of acid rain and its adverse environmental impact on acquatic life and, to some degree, though more indirectly, on agricultural products.
There are things which we have to do here at home, and to this degree we wanted to be identified, as we were last week, with the program being undertaken by the Ontario government in so far as Inco in Sudbury is concerned, but that is only part of the solution to the problem. It is easy to knock it because we have not come up with an instant solution in one day, as is the wont of my colleague and his friends in that party, but we are on the road; we are beginning.
Part of the solution lies in persuading the U.S. government and the U.S. Congress that what they are doing with the coal conversion program without proper safeguards in so far as acid precipitation emissions are concerned, is further damaging our situation here in Canada and their own situation in the United States. I believe that that is the main lever which, without reference to partisan causes, we should highlight now to the degree that we may have some effect, we hope, on the passage of this coal conversion program through the American Congress.
[ Translation]


Mr. Deputy Speaker:: Order. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10.27 p.m.

Wednesday, May 7, 1980