1982-05-17

ROUTINE PROCEEDINGS


[Stage Direction]
5.0.	43
Hon. John C. Crosbie (St. John's West):: Madam Speaker, I rise under the provisions of Standing Order 43 in connection with the first national conference of citizens of Canada representing 27 Solidarity support committees who met in their first national conference on April 24 and 25 at Toronto. I move, seconded by the hon. member for Etobicoke Centre (Mr. Wilson) and the hon. member for Vegreville (Mr. Mazankow-ski):
That this House resolves, since both the Canadian and Polish governments signed the Helsinki Accord, the Canadian government is morally and legally obliged to defend human rights now suspended in Poland; moreover, that the Canadian ambassador to the United Nations raise the issue of Poland at the United Nations debates; that the Canadian government, using moneys put away for Poland, finance a national or international delegation of accountability to verify whether indeed Canadian food exports to Poland are reaching the people; and finally, that the Canadian government replace the present symbolic and ineffective sanctions with more meaningful ones and therefore implement a full range of trade, diplomatic and cultural sanctions against Poland and the Soviet Bloc until the state of war is lifted in Poland and human, citizen and trade union rights are reinstated.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
[Stage Direction]
5.0.	43
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, in order to spare Canadians the spectre of public dissension and discord between the "Gang of Ten" led by the Minister of National Health and Welfare (Miss Begin) and the Minister of State on the one hand, and the Prime Minister (Mr. Trudeau) and his supposedly loyal supporters on the other hand, I
move, seconded by the hon. member for Hastings-Frontenac-Lennox and Addington (Mr. Vankoughnet):
That the Liberal Party be advised to wash its dirty linen in private rather than on the front pages of the Montreal press.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


LABOUR CONDITIONS
Mr. Vince Dantzer (Okanagan North):: Madam Speaker, the lack of Liberal leadership in most areas and the lousy Liberal leadership when it was exercised have caused economic disaster throughout this country. Witness only the bungled budget, the disastrous and devastating results of the National Energy Program, and the crippling burden of high interest rates. Now we have yet another victim of Liberal mismanagement. This month tens of thousands of young Canadian students will not be able to find summer employment. It is expected that the student unemployment rate will be 18 per cent to 20 per cent. This means that next fall their further education will be in jeopardy. Since this Liberal government threatens to ruin a whole generation of young Canadians who are the future leaders of the country, I move, seconded by the hon. member for Bow River (Mr. Taylor):
That this House condemn the Liberal government, and in particular the Minister of Employment and Immigration, for the refusal to institute adequate federal programs to enable students to find jobs.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


DISARMAMENT
Miss Pauline Jewett (New Westminster-Coquitlam):: Madam Speaker, I rise on a matter of urgent and pressing necessity, under the provisions of Standing Order 43. In a

May 17, 1982
speech at Notre Dame University in the United States yesterday, the Prime Minister (Mr. Trudeau) in effect came out in favour of a nuclear arms freeze by both super powers and a nofirst-use of nuclear weapons pledge, two recommendations found in the recent minority report on security and disarmament. The Prime Minister said:
Let us pledge that we will not be the one to start a war. We are worried by statements in the United States about... first-strike scenarios.
The text of the Prime Minister's speech also said that the United States has persistently taken the qualitative lead in the arms race while the U.S.S.R. tries to catch up, suggesting that the time may indeed be right for a nuclear arms freeze. I therefore move, seconded by the hon. member for Winnipeg-Birds Hill (Mr. Blaikie):
That this House, in light of the Prime Minister's remarks, endorse the minority report on security and disarmament and urge the Prime Minister to take the recommendations of that report to UNSSOD II next month in New York, calling specifically for a nuclear weapons freeze and a no-first-use pledge.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


METRIC CONVERSION
Mr. Bill Domm (Peterborough):: Madam Speaker, in view of the rumour of a major scandal in the Metric Commission that is now being investigated, it would appear that large sums of money appropriated to mechanics' metric tools is being fraudulently used to purchase "imperial tools" or, in some cases, items that are not even tools. Therefore, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the Minister of Consumer and Corporate Affairs immediately make a statement on this subject to ihis House clarifying this situation and at the same time indicating why sloppy practices of the Metric Commission permitted this situation to arise.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SOCIAL SECURITY
Mr. Gordon Taylor (Bow River):: Madam Speaker, senior citizens, like all those on fixed incomes, are changing their priorities, as instructed by the Right Hon. Prime Minister (Mr. Trudeau), by cutting down on their food. They have to pay for their lodging. They have to pay the increased costs of
utilities made high by the federal excise tax and the federal Canadian ownership tax, or their light and power will be cut off. The only priority left to them is to eat less. Therefore, I move, seconded by the hon. member for Prince George-Bulkley Valley (Mr. McCuish):
That this House urges the government to eliminate the excise tax and Canadian ownership tax or increase the pensions of the people who toiled and sacrificed all of their working years to build this country. They should not have to spend their sunset years "cold" and "hungry."


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CONSTITUTION
Mr. Rod Murphy (Churchill):: Madam Speaker, I rise on a matter on which I rose on Friday. I did not receive unanimous consent then, but I hope I will do so today. Section 37 of our new Constitution guarantees that there will be a federal-provincial conference held with native representatives within the next year in order to discuss concerns of the native people. Therefore I move:
That this House reaffirm its commitment to serious negotiations with native leaders and requests that the federal government provide adequate funding to major native groups, including representatives of native women, so that they may be able to prepare their positions in advance of the constitutional conference.
This is seconded by the hon. member for Winnipeg-St. James (Mr. Keeper).


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


METRIC CONVERSIONS
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, in light of the many references made by the Minister of Consumer and Corporate Affairs in his intervention in the House last Friday to the associations which had asked the Canadian government to go metric, such as the Consumers' Association of Canada, the Canadian Teachers' Federation, the Agricultural Institute of Canada, the Canadian Chamber
May 17, 1982

of Commerce, and the Canadian Construction Association, I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That this House require the minister to table all letters and submissions from such organizations explicitly asking the government to convert Canada to metric I.S.U., making Canadian units of measurement illegal.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Len Gustafson (Assiniboia):: Madam Speaker, I rise on an urgent matter in relation to agriculture. Farmers are now engaged in the operation of seeding and it is becoming increasingly evident that the high cost of farm fuel will have a counter-productive effect on agricultural production. I move, seconded by the hon. member for Calgary Centre (Mr. Andre):
That this House request the government to remove the federal tax on fuels used for the purpose of farming so as not to have an adverse effect on the production of food.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. Cyril Keeper (Winnipeg-St. James):: Madam Speaker, I rise under the provisions of Standing Order 43. The Conservative Party, which claimed on the weekend to be the only truly national party, managed to scrounge up only 38 people to discuss this country's most urgent problem, unemployment.


Some hon. Members:: Oh, oh!


Cyril Keeper: I move, seconded by the hon. member for Churchill (Mr. Murphy):
That this House urge the Conservative Party to reconvene this workshop, entitled "Policy for People", and instead of inviting its own members, who have only a marginal interest in the subject, that the Conservatives invite the one and a quarter million unemployed Canadians to develop policies for the "Decade of Decision" that will provide the country with some vital insights into this problem and allow the Tories to hear a perspective that is truly national in scope.


Madam Speaker:: Is there unanimous consent for this motion?
Oral Questions


Some hon. Members:: Agreed.


Some hon. Members:: No.


LABOUR CONDITIONS
Mr. Joe Reid (St. Catharines):: Madam Speaker, the current economic recession, with its increasing number of layoffs, is hitting hard at Canadians in the 55 to 65-year old bracket. Many are already victims of lay-offs. They are without jobs, often without pensions, and literally without income. And, most of all, they have extremely great difficulty getting back into the labour force. I therefore move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That the federal government recognize that its economic policies are forcing many Canadians in the 55-65 age group onto the unemployment rolls, and that special attention be given to their particular problems so that they can again become productive members of the labour force.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is directed to the Minister of Finance. This weekend we saw the following bizarre spectacle: the group of ten MPs from downtown and eastern Montreal, who were on a fact-finding mission and decided they wanted to meet with their Parti Quebecois counterparts in order to seek a solution to the problems of unemployment, inflation and high interest rates. My question is as follows. Ignoring this lack of confidence in the cabinet's economic policies shown by two of its members, does the minister intend to meet Mr. Parizeau or does he think that a meeting with Mr. Ryan would be more successful?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I thought the bizarre spectacle at the weekend took place in a city other than the city of Montreal.

May 17, 1982
Oral Questions


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: I believe the comments made by the hon. member recognize the fact that there are provincial governments, and that they too have some responsibilities for economic matters within their jurisdictions.


Michael Holcombe Wilson: Madam Speaker, I wonder whether the minister is speaking to two members of his cabinet as well as Messrs. Parizeau and Ryan.


GOVERNMENT POLICIES
Michael Holcombe Wilson: Madam Speaker, since last fall the number of people unemployed in this country has increased by about 150,000. Interest rates are about the same but are starting to rise again. About 5,000 companies have gone bankrupt since the minister's budget of last fall. Thousands of Canadians are concerned about their jobs and concerned about losing their businesses. Will the Minister of Finance explain why he is persisting with a combination of policies which, as he indicated in Europe last week, have brought the economy to its knees? And I might add we are expecting there will be further trouble ahead with these same policies.


Allan Joseph MacEachen: Madam Speaker, if the hon. member were correct in stating that the policies which were being followed by the Government of Canada had brought about the recession in this country and the recession in every industrialized country, then indeed he would be cutting quite a swath. But, of course, the budget and economic policies we are following are directed to trying to bring this economy and to help bring other economies out of the recession in which they presently find themselves.
I might say that there was a very broad consensus at the meetings of the OECD and the interim committee of the International Monetary Fund, made up of finance ministers from all the representative countries, that the mix of policies being followed in Canada was appropriate to the circumstances.


QUERY RESPECTING POSSIBLE CHANGES IN BUDGET LEGISLATION
Michael Holcombe Wilson: Madam Speaker, as I have pointed out on many occasions in the past, that there are things which can be done here in Canada, and there are things which the Minister of Finance just totally refuses to do. We saw examples of things which can be done in the Ontario budget of last week. The Ontario budget has turned around. That budget said that three principal elements of this minister's budget will not be adopted by Ontario, principally the change in the capital cost allowance which has such an impact on the creation of jobs and more investment in this country. Is the Minister of Finance considering changes when he brings down the draft legislation for his budget, particularly as it relates to those three areas the Ontario Treasurer saw fit to change in his budget?


Allan Joseph MacEachen: Madam Speaker, the hon. member will have to wait for the draft legislation. I have no announcement to make on these points at the present time.


LABOUR CONDITIONS
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, we now have the spectacle of ten Liberal members, including two cabinet ministers, wanting to have something done about job creation next November at their policy conference.
My question is directed to the Minister of Finance who, unbelievably, had to go to France to find out that unemployment in Canada is a question which needs tackling. Was the minister not aware that real unemployment in Cape Breton is running at 40 per cent in places like Inverness and Port Hawkesbury in his own riding? I want to ask the minister if he is now prepared to do something about that 40 per cent real unemployment in Cape Breton and elsewhere, or is he, like his colleagues, prepared to leave it until next November?
[DOT] (M20)


Allan Joseph MacEachen: Madam Speaker, the hon. member must know that over the past several months we have announced a series of programs intended to help the unemployed. The Minister of Employment and Immigration on several occasions has announced improvements and extensions of existing programs, as well as new programs. The minister in charge of housing has done the same thing through various housing initiatives intended to increase employment in the country. That is the policy of the government-to do everything possible within its means to help those who are unemployed.
I would remind the hon. member that it was not necessary for me to go to Paris to find out about unemployment. If she had been in the House, and I think she was, the Friday before the OECD meetings, she would remember that I did discuss employment during question period and expressed my view that the unemployment figures were disturbingly high. They are very high in Canada, and equally high in the United States. Unemployment figures in all OECD countries are likely to rise to about 30 million by the end of this year. Never, since before the war, have we had unemployment in every country in the world as high as we have at the present time. It is our job, working together, to try to bring solutions to this problem of recession which exists in Canada and every other country in the world.


Flora Isabel MacDonald: Madam Speaker, 1 appreciate the minister's genuine concern about unemployment in the United
May 17, 1982

States and in France. I would appreciate it even more if he would turn his attention to the problems of this country.


REQUEST FOR CANADIAN POLICY
Flora Isabel MacDonald: Madam Speaker, I have a supplementary question. Before the minister's budget was brought down, the unemployment figures jumped from 7 per cent to 8 per cent. This should have given the minister some warning last autumn about the seriousness of the unemployment situation. Since the budget has been brought down, unemployment in this country is running close to 10 per cent. It has taken post-war record high unemployment to make the minister realize that it is a problem.
What is it going to take, in the way of additional numbers of people of the unemployment rolls and additional numbers of people without jobs in this country, to make the minister realize there has to be a solution right here in Canada?


Allan Joseph MacEachen: Madam Speaker, I obviously cannot agree with the rather naive position taken by the hon. member in her question. She ought to know that many of the depressed industries and many of the declining job opportunities in Canada are due to recession in other countries of the world. It would be rather foolish for Canada to concentrate solely upon its own economy without making recommendations and suggestions about what ought to happen elsewhere.
One clear message came out of the discussions, both in Paris and Helsinki, and that is that the surest way to assist the process of recovery, not only in Canada but in the United States and other European countries, would be some success in bringing down interest rates in the United States. That is a clear message.
The hon. member is talking about what policies ought to be pursued. Can she tell us what policies were adopted at the spectacle in Toronto at the weekend, to help Canada out of the recession?


Flora Isabel MacDonald: Get rid of the minister.


Mr. Epp:: That is the best economic policy there is.


Madam Speaker:: The hon. member for Oshawa.


EXPORT OF NATURAL GAS-CHANGE IN NATIONAL ENERGY BOARD FORMULA
Hon. Edward Broadbent (Oshawa):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources, and deals with energy security for Canada. When the Conservative government authorized new exports of natural gas in
Oral Questions
1979, the minister, the then Liberal energy critic, had this to say:
We should be extremely careful and cautious when we talk about exports. We should think in terms of the necessity of conserving it for future generations and of the future needs of our country. The worst thing we could do-
He went on:
-is to export gas for a fast buck or in order to support a faltering dollar.
In view of that concern expressed by the minister when he was in opposition, why is he now reversing himself and supporting the National Energy Board decision to change its formula for needed Canadian reserves to include unproved or trend reserves in order to justify additional gas exports?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, I indeed stand by what I said at that time, and which the hon. member has quoted. The reason I endorsed the conclusion of the National Energy Board is very simply that in the last couple of years Canada has seen a very significant increase in its gas reserves and is now in a better position than it ever was, not only in terms of ensuring a supply of natural gas for domestic needs for more than 25 years in the future, but we can still make good money, and help our economy and our balance of payments by exporting what is surplus to our needs. That is also in the national interest.


John Edward Broadbent: Madam Speaker, the minister may have disastrously bad policies, but he is not a fool. He did not answer the question I asked.


REASONS FOR CHANGE IN FORMULA
John Edward Broadbent: Madam Speaker, I asked about a change in the formula. I am not talking about the export of temporary surpluses of gas, I am talking about the fundamental problem which led a former minister, Joe Greene, back in 1971 to accept unproved reserves as the basis of a formula for ascertaining our needs. Considering that under that formula exports were allowed to increase, which led shortly thereafter to a shortfall and the NEB to change its definition so as not to include unproved reserves, why is the government now changing the formula? Is it not precisely because it is after a quick fix to deal with the dollar problem?


Marc Lalonde: Madam Speaker, I have to tell my hon. friend no, that is not the reason. We are in a situation now where, because of the slowdown in the American economy in particular, there is less demand for the authorized exports than we had expected. The demand is only about 60 per cent of production at present. In light of large additional discoveries of gas in Canada in the last couple of years, the NEB has come to the conclusion that we are now in a position to authorize more exports than had been anticipated, that we can be more flexible than we have been. As to what that surplus might be and which companies would be authorized to export it, the NEB will determine that at a later stage.

May 17, 1982
Oral Questions
There has not been one extra metre of gas exported, nor will there be, just because of the NEB decision last week. The NEB has to hold hearings on the various applications before it, and then, on the basis of the modification it has made to the formula, decide how much of a surplus is available for export-after carefully allowing for all the needs of Canadians, as I said, for at least 25 years. I think that is a pretty responsible attitude on the part of the board.


John Edward Broadbent: Madam Speaker, the minister looked a little uncertain about his answer, as well he should, because again, for the second time in a row, he did not answer the question.


GOVERNMENT POLICY
John Edward Broadbent: Madam Speaker, as the minister knows, a few years ago a former minister assured us we had a 900-year supply of gas because he was acting on a formula based on unproved reserves. Shortly thereafter we were told we would be out of gas by 1985. I repeat, given the energy needs not only of the present but of future generations of Canadians, why is the Liberal government now repeating the error it made in 1971 which will potentially sell us short on gas for the future?


Mr. Nielsen:: The minister will never be out of gas.


Marc Lalonde: Madam Speaker, I think I have covered that point extensively in my previous two answers. My hon. friend says I have not answered; I am afraid I have to tell him he has not listened to my answer.


FINANCE
Hon. James A. McGrath (St. John's East):: Madam Speaker, my question is for the Minister of National Revenue. Now that the officials of the minister's department who were involved in the income tax audit of the Atlantic provinces' fishermen have admitted that they made a mistake in not notifying the fishermen involved of the subject of the third party demands, what steps has the minister taken to correct the injustices that occurred? The minister will know that there is a litany of horror stories of fishermen who have been left with little or no money to support their families as a result of the over-zealous activities of this team of auditors and their third party demands.


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, indeed a mistake was made in not sending notices of garnishee to the fishermen as well as to the fish buyers. I regret that. I deplore it, and I have said so to the department. I have given instructions that that sort of thing is
not to happen again. The mistake was corrected about six weeks ago, and I intend to see that it does not happen again.
I might say that I have appointed a special adviser to myself who started work some days ago and who will look into the administration of the law as it applies to the fishing industry. I have received some interim recommendations from the special adviser, a Mr. William Rowe, who is a lawyer in St. John's, Newfoundland. I expect to be advising the House, the public, and the fishermen shortly-possibly this week-of what steps I intend to take.


Erik Nielsen: He is an expert on fish?


REQUEST THAT MINISTER APPEAR BEFORE COMMITTEE
James Aloysius McGrath: Madam Speaker, given the insensitivity and the over zealousness of these auditors, and the mistake that was made with respect to a group of people who, by tradition, do not have a system of written statements like most other Canadians, along with the fact that a number of fishermen have been badly hurt and their confidence in the system has been eroded, what disciplinary action has the minister taken against those overzealous auditors? Will the minister accept the invitation of the Standing Committee on Fisheries and Forestry of this House to appear before it so that members from the Atlantic provinces can cross-examine him on this very unhappy situation?


Bill Rompkey: Madam Speaker, I would be quite happy to appear before the Standing Committee on Fisheries and Forestry. Indeed, I appeared before the Standing Committee on Finance, Trade and Economic Affairs. The topic was raised. We had an exchange of views, and some information was put on the record of that committee. As I said, I would be quite happy to appear before the fisheries committee. I deplore the mistake that was made and I have given instructions that it is not to happen again. I have expressed my serious concerns and feelings directly to the department on that score. I hope this week-possibly very soon-to announce what steps I intend to take as a result of the recommendations made to me by Mr. Rowe.

[ Translation]


PRESENCE IN GALLERY OF MR. MAHER ABAZA, MINISTER OF ENERGY AND OF ELECTRICITY, OF EGYPT
Madam Speaker:: I have the honour of calling the attention of the House to the distinguished presence in our gallery of Mr. Maher Abaza, Egyptian Minister of Energy and Electricity-


Some hon. Members:: Hear, hear!

May 17, 1982


PRESENCE IN GALLERY OF LIEUTENANT GENERAL GONTIER, CHIEF OF STAFF OF THE BELGIAN ARMED FORCES
Madam Speaker:: I also have the honour of calling the attention of the House to the presence of Lieutenant General Gontier, General Chief of Staff of the Belgian Armed Forces.


Some hon. Members:: Hear, hear!


EXTERNAL AFFAIRS
John Carnell Crosbie: Madam Speaker, my question is for the Prime Minister. On February 23 the government announced its response to the situation in Poland. It consisted of mild and very ineffective measures against Poland and the U.S.S.R. For example, we suspended academic exchanges and restricted the Polish airline to two flights per week to Canada. In its press release, the Canadian government urged the Polish government to re-establish civil liberties, to end martial law, to release those arrested and restore dialogue with the church and Solidarity. Now three months later, the Prime Minister knows that none of those things have taken place in Poland. Repression is worse than ever. Peter Kent saw Poles being beaten brutally in prison while he was in Poland a weekend or so ago.
My question to the Prime Minister is-and there is no point looking around for the Secretary of State for External Affairs or any of his deputies, they are all away-will the government now take further and more effective measures to indicate Canada's disapproval of this repression and to exert some pressure for change on the Polish government? Will the government introduce some other measures that may induce the Polish government to change those policies? For example, I recommend my release of March 24 last to the Prime Minister.


Madam Speaker:: Order, please.


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I will be happy to refer the Secretary of State for External Affairs to the hon. member's release of March 24 last.


John Carnell Crosbie: That is progress after three months, Madam Speaker.


PLEA BY CANADIAN SOLIDARITY CONFERENCE
John Carnell Crosbie: Madam Speaker, I will repeat my question to the Prime Minister. Is his government considering further and more effective measures to help the people of Poland who have been subjected to savage repression since last December without any assistance from our government? As a further part of that question, will the Prime Minister do what the Pan-Canadian Conference of
Oral Questions
Solidarity has requested the government to do, that is, to replace the present symbolic, ineffective sanctions with more meaningful ones until human rights are reinstated? That is a plea from Canadian citizens who support Solidarity.


Pierre Elliott Trudeau: Madam Speaker, the hon. member pointed out the importance of helping the people of Poland. That is what the government's policy has been attempting to do. While on the one hand we condemn the government, the use of martial law and the slowness in the reconciliation process, we attempt to help the people of Poland. That is why, in the food area, for instance, we have extended very large credits. We are reluctant to do what the hon. member seems to suggest, namely, using punitive measures against the government, because that would really be a burden on the backs of the Polish people.


THE ECONOMY
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, my question is for the Prime Minister. On Friday the Prime Minister acknowledged in a press conference that his government's anti-inflation program may not be working and, as a result, his government may have to consider unilaterally introducing wage controls in the public sector. Since his Minister of Finance has publicly stated that wage settlements are not necessarily responsible for the inflationary rate, will the Prime Minister justify this notion of his that the new direction of government policy to control inflation would be to impose controls on employees' wages which, in real terms, have dropped for the fifth consecutive year?


Pierre Elliott Trudeau: Madam Speaker, the hon. member may have misread or misheard what I said on Friday. I was asked about the public sector. I reminded the press conference that, as early as last February, I was proposing to the premiers of the ten provinces a program of restraint on wages and salaries in the public sector. I was asked if I was still considering that. I answered the question that i was not announcing any new policy. I was indicating I regretted somewhat on February 5 that the ten premiers were not able to arrive to any consensus with me that the public sector should be exercising restraint. That is still our position, Madam Speaker.


REQUEST THAT PLANS TO IMPOSE WAGE CONTROLS IN PUBLIC SECTOR BE ABANDONED
Nelson Andrew Riis: Madam Speaker, last January it was indicated in a leaked cabinet document that inflation had proven highly resistant to anti-inflation policy, including wage and price controls which had been introduced previously. The document indicated that we are not currently facing a wage-driven inflation such as we were in

May 17, 1982
Oral Questions
1975, and that there might be a greater willingness on the part of the public to accept wage controls when the situation got quite a bit worse. We have reached that point now.
The economy has worsened. It has worsened because of the government's monetary policy which has resulted in these high rates of unemployment now and, as we say, in a high rate of inflation. Since this is, in fact, a government-led inflation policy, will the Prime Minister assure this House today that he will abandon any thought to impose wage controls in the federal public sector, and cease to attempt to make working Canadians not only the scapegoats but the victims of this economic incompetence?


Pierre Elliott Trudeau: Madam Speaker, I think it would have been helpful to the hon. member if his research group had prepared an alternative for his second question. In answer to his first question I answered the very question he is repeating in his second. In formulating that question, if I understood him correctly, he indicated that in some way the government was leading the inflationary push. Surely if he thinks that, he would not be blaming the government for seeking areas of restraint and in trying to get the other ten governments in Canada, with which the federal government provides over-all economic leadership-


Erik Nielsen: It is 12.


Pierre Elliott Trudeau: -to exercise that restraint collectively. The hon. member cannot argue at the same time that we are leading inflation and then accuse us of wanting to press down on it.


ADMINISTRATION OF JUSTICE
Donald W. Munro: Madam Speaker, my question is directed to the Solicitor General. The decision of the Superior Court justice in the province of Quebec to declare a mistrial in the trial of an RCMP officer gives the minister a certain chance to reflect upon some of the decisions he has taken. I am wondering whether the Solicitor General would now pay some heed to the provisions of the Charter of Rights and Freedoms, so recently proclaimed and hailed by him and his colleagues, in particular the Minister of Justice, as ushering in a new form of just society for Canadians. Will he now, with justice in mind as a guiding principle, reconsider his decision to withhold documents from the court which have been requested by the court, so that the defendant can prepare his case with all pertinent documents in hand?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, I do not believe that a reconsideration of the affidavit that I put forward would change my opinion about it. I reviewed all the documents which are covered and made a decision that they ought to be kept confidential in the interests of national security and of federal-provincial relations. Also I ought to say that I do not believe that my exercise of authority under the section contravenes the Canadian Charter of Rights and Freedoms. Until the legislation introduced by the Quebec government in its legislature becomes law, any citizen in Canada, including of course any citizen in Quebec, can have recourse to the statute. My own opinion, though, is that the action which I took would be sustained over the Charter of Rights and Freedoms.


REQUEST THAT DOCUMENTS BE DISCLOSED IN CAMERA
Donald W. Munro: Madam Speaker, bearing in mind the precedent established by the Liberal government, as shameful precedent to be sure, but a precedent none the less, in its handling of the Treu trial in camera from beginning to end, does the minister not feel, in the current situation where an RCMP officer is being tried for offences for which the Prime Minister or any other minister of government so far refuses to accept responsibility, that the time has come to apply the provisions of Section 41(1) of the Federal Court Act to the disclosure in camera of documents requested by the defence once the retrial begins? Does the minister not feel that by proceeding in this way he would be serving justice much more equitably than by withholding vital evidence, as he is now doing?


Robert Phillip Kaplan: Madam Speaker, my view is that Section 41(2) is the section to be used in the case of material governed by national security or federal-provincial or intergovernmental relations.


Donald W. Munro: You want to cover up ministerial responsibility.


Robert Phillip Kaplan: Section 41(1) is there in the law as well. In my view it is there to deal with matters which could be put to a court to make a decision about other than matters which cover national security and are squarely within Section 41(2). In other words, I did not feel that I had a choice-and I had legal advice about this-between Section 41(1) and Section 41(2). The opinion I had was that when the matters were covered by Section 41(2), that was the section which was to be used. If the new freedom of information law had been in effect-and it would have been in effect except for some of the tactics of the opposition while the matter was before committee-then Section 41(2) would not have been there and I would have relied on the machinery provided in the new law. But that law is not in effect now, and the only option I had was for Section 41(2), not Section 41(1).
May 17, 1982


FINANCE
Arthur Jacob (Jake) Epp: Madam Speaker, my question is directed to the Minister of Finance. In the recent budget of the NDP government of Manitoba, that government imposed a 1.5 per cent employee tax on all earnings of Manitoba employees and stated that this tax was to be paid by Manitoba employers. The rationale of the provincial minister of finance was that, due to the sharp reduction by the federal government of federal-provincial transfer payments, the province of Manitoba by imposing this employee tax would allow the provincial government to recover approximately $17 million from the federal government. I should like to ask the minister whether the federal government views this so-called employee tax of 1.5 per cent of gross employee earnings, paid on behalf of the employee by the employer, as an employee benefit, and is considering taxing it under federal jurisdiction.


Allan Joseph MacEachen: Madam Speaker, I have not examined those budget provisions in detail. My offhand answer would be no, but I want to comment upon the suggestion that somehow the necessity of imposing additional taxes by that province was due to reductions in transfers to the province of Manitoba. The same explanation was given by the minister of finance in Nova Scotia, and the same explanation was given by the Treasurer of Ontario, and in each case federal transfers to each of these provinces increases substantially each year.


Arthur Jacob (Jake) Epp: The minister will know that even by his own calculations there was an adjustment made to Manitoba because of the negative manner in which federal-provincial transfer payments impacted on that province. He cannot deny that; he knows that.


REQUEST FOR FEDERAL-PROVINCIAL CONSULTATION
Arthur Jacob (Jake) Epp: Madam Speaker, in view of this employee tax or employee benefit, depending upon which side of the equation one looks at, and that employers in Manitoba are trying desperately to maintain jobs and employment for ordinary Manitobans, will the minister be in contact with the Manitoba government shortly in order that indecision can be removed, since many people are now facing the prospect that this extra 1.5 per cent will either be deducted from their income or could be eligible for taxation later on?


Allan Joseph MacEachen: Madam Speaker, the hon. member mentioned the adjustment which was made in the equalization formula for the province of Manitoba. The reason for the adjustment was to ensure that Manitoba would benefit more by increasing amounts of equalization each year than it would have had the equalization formula itself been in operation. That was a very substantial concession, in my opinion, to ensuring that equalization worked to the benefit of all provinces entitled to the system. With respect to the request that I be in contact with the Manitoba minister on this subject, I do
Oral Questions
not see the necessity of having such contact. I will look at the situation and, if it is necessary, I will follow the suggestion.


AGRICULTURE
Mr. Jack Murta (Lisgar):: Madam Speaker, my question is directed to the Minister of Agriculture. It concerns the pending class action suit, or the legal case being launched by a group of Manitoba farmers over the bankruptcy of the Econ grain company, which has been discussed before in the House of Commons, and the fact that the producers involved feel that the federal government was wrong or lax because of the Canadian Grain Commission not protecting their interests. Could the minister inform the House whether or not the Department of Agriculture will move to settle with the farmers before this whole question becomes involved in a law suit, which could take many, many months, or perhaps even years, the way law suits are dealt with, vis-a-vis the federal government and these particular producers?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, the legal advice I have at the present time is that the Canadian Grain Commission acted properly. Until I receive other legal advice, I cannot answer the hon. member's question about paying, etc. The advice I have is that they acted within the legislation by which they are bound, and that they have acted properly. The hon. member knows the procedure for bankruptcy and that it can take an awfully long time.


ROLE OF FARM CREDIT CORPORATION
Jack Burnett Murta: My supplementary question is directed to the Minister of Agriculture. The minister and I have held discussions, both in public and private, concerning this particular matter. Some of the farmers involved could face bankruptcy this spring because of the moneys they lost, along with interest rates being so high, and the costs of all their input being so desperately high.
One of the suggestions was that the Farm Credit Corporation in Manitoba could be used as a vehicle to loan money to farmers who could justifiably demonstrate that they need extra financing because of this particular situation. Has the minister looked into this suggestion made by me, and can he indicate to the House whether or not he has convinced himself that this is a viable alternative route and, if it is not, can he indicate whether there will be any help or any hope whatsoever for some of these farmers who could go out of business because of this particular bankruptcy?


Eugene Whelan: Madam Speaker, we have seen the list of the farmers who have been affected by the bankruptcy of this grain-buying operation. It is

May 17, 1982
Oral Questions
difficult to say which ones really need assistance. We have made it publicly known that they should apply to the Farm Credit Corporation. I have no way of knowing how many have applied at this time. The Farm Credit Corporation has been known to be human in its approach to lending money to those who most urgently need it and to those who are in the greatest need of it. I can say no more at this time. I would love to be able to look over the list and say that every one of those people who need it will receive a preferred loan, or will have payment from the federal government in one form or another, but the procedure of bankruptcy does not allow me to do that.


AUTOMOTIVE INDUSTRY
Mr. Derek Blackburn (Brant):: Madam Speaker, my question is directed to the Minister of State for International Trade. In view of the fact that he has just returned from the OECD discussions in Paris, empty-handed and red-faced, as a result of his inability to get a bilateral agreement with Japan with respect to the importation of Japanese cars, trucks and parts, I would like to put a question directly to him. What, now, is the minister's next concrete move in order to save jobs and industries in this country?


Hon. Ed Lumley (Minister of State (International Trade)):: Madam Speaker, as the hon. member should know, the meetings of the OECD are not on a bilateral basis but, rather, on a multilateral basis, with all the membrs of the OECD. However, following the multilateral discussions I did have bilateral talks with my counterpart from Japan with respect to the automobile situation. There was some progress. Madam Speaker, I realize that for the hon. member, and indeed for all hon. members of this House, it is very difficult not to be answered directly, but if the hon. member wants a positive conclusion to the negotiations, I do not think this is the place to discuss them.


Some hon. Members:: Oh, oh!


Derek Nigel Ernest Blackburn: Madam Speaker, for two months, while more and more auto workers have been losing their jobs, the minister has been saying that this is not the place to discuss the matter. Yet he has constantly spoken to the Japanese but has failed to get an agreement.


REQUEST THAT IMPORT QUOTAS BE IMPOSED ON JAPANESE MANUFACTURED VEHICLES AND PARTS
Derek Nigel Ernest Blackburn: Will the minister now unilaterally act and impose quotas of 15 per cent of the Canadian auto market on Japanese cars and trucks? Will he also insist on quotas or a surtax, or both, on parts, until the Japanese are prepared to sit down at the table and come to an agreement with the Canadian negotiators? Otherwise, that
figure of 18,000 unemployed in the parts industry alone will soar to 25,000 by summer.


Edward C. Lumley: Madam Speaker, I do not think the hon. member realizes the fact that Japan is our second largest trading partner. We not only trade in automobiles, but we also sell over $4 billion worth of goods and services from companies all across Canada to Japan.


Some hon. Members:: Oh, oh!


Edward C. Lumley: During the multilateral discussions, the Japanese indicated that they will announce further liberalization measures prior to the Versailles Summit. We did make representations to the Japanese on behalf of several sectors of the Canadian manufacturing industry, such as the forest products sector in British Columbia. The hon. member might be advised to speak to his fellow members in the New Democratic Party from British Columbia who are interested in forest products, as well as to those from Ontario who are interested in automobiles.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


NATIONAL HARBOURS BOARD
Hon. Don Mazankowski (Vegreville):: Madam Speaker, my question is directed to the Minister of Transport. The construction of the Prince Rupert grain terminal is being jeopardized by projected cost overruns and labour uncertainty which have necessitated a re-evaluation of this project by all parties involved. Central to the positive decision for the project to go ahead is the requirement that the federal government provide an additional $10 million worth of funding through the National Harbours Board. Can the minister indicate to the House whether he is discussing this matter with the National Harbours Board, and can he give the House the assurance that the level of funding will be increased so that this project can go ahead?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, the bids on the Prince Rupert grain elevator were indeed substantially higher than expected. The consortium had three possibilities. The first one was to negotiate with the bidders in order to bring the price down. They have done that. The second possibility was to simplify, to cut some of the parts of the elevator which were not totally necessary, and that is being done. The third possibility was to gain some more money from the federal government, and this will be the next step. I expect that consortium leaders will be back to us on that subject in a few weeks.

May 17, 1982


REPRESENTATIONS TO GOVERNMENT
Donald Frank Mazankowski: Is the minister saying that representations have not yet been made to him by the National Harbours Board? Assuming that such representations will be made, can the minister give the House the assurance that he will look at this proposal with a positive frame of mind?


Jean-Luc Pepin: Madam Speaker, previous representations have indeed been made to us, but the implication of our attitude was that the consortium should explore the first two avenues first in order to find out what could be achieved. I expect, having done that, that the consortium will come back and report to ministers and will say how much they have been able to achieve, which will give us a better indication of what might be needed.


ADMINISTRATION OF JUSTICE
Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is directed to the Minister of Justice, who will know that one of the recommendations of the excellent report of the all-party committee on wife-battering was that:
-a federal-provincial conference be held on the subject of wife battering and family violence as it relates to the enforcement and the administration of the criminal law.
Would the Minister of Justice tell the House whether he is prepared to act immediately to seek to convene a federal-provincial conference of ministers of justice and attorneys general to ensure that there be immediate discussion between the two levels of government on actions which we can jointly take to deal with the problems of wife battering which were so effectively outlined in the report of the all-party committee of this House?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, I read the committee report with a great deal of interest, and I feel it would be an excellent idea to discuss this problem with the attorneys general of the provinces, because the problem is not with the Criminal Code, but rather with the administration of justice. I believe we are to have a meeting of justice ministers some time this year, and this will certainly be one of the items I would want on the agenda.
Oral Questions


PETRO-CANADA ACQUISITION OF PETROFINA-COLLECTION OF TAX
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. Last Thursday, here in the House, the hon. member for Lambton-Middlesex indicated that while the government is collecting the Canadian ownership charge to pay for Petrofina, it might well continue to collect that tax even after Petrofina has been paid for. Could the minister tell the House if that is indeed government policy to collect that tax after Petrofina has been paid for in order to pay for the purchase of other companies it wants to take over, as the hon. member suggested might be the case?


Marc Lalonde: Madam Speaker, that is obviously a question which the government will have to decide when the time comes.


Some hon. Members:: Oh, oh!


Marc Lalonde: This is not a matter which is being considered at the present time.


Benno Friesen: I am sure the minister will want once again to flag companies for attention so that the public can pay double the price when the government goes to take over those companies.


CANADIAN OWNERSHIP CHARGE
Benno Friesen: would like to ask the minister, on the basis of the information he has received by way of mail and the protests directed to him with regard to the Canadian ownership charge, whether he feels that the Canadian public can afford the continued payment of the Canadian ownership charge in order to take over other companies?


Marc Lalonde: Madam Speaker, the question concerns whether we can afford to Canadianize the oil and gas industry. With regard to that matter, whether it is by the public or by the private sector, it is substantially the same phenomenon. I must tell the hon. member that the Canadian public overwhelmingly wants Canadians to own and control a larger share of that industry.


John Carnell Crosbie: Not at your price.


Marc Lalonde: It is high time that we do it. This is a basic element of our National Energy Program. This government is committed to that objective.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Not for long.

May 17, 1982
Order Paper Questions



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Mr. D. M. Collenette (York East):: Madam Speaker, I have the honour of tabling, in both official languages, the sixth report of the Standing Committee on Energy Legislation.
[Editor's Note: For above report, see today's Votes and Proceedings.]


TABLING OF COPIES OF REPORT ON CANADA AGREEMENT AND CO-OPERATIVES ON INVESTMENT IN ENERGY
Marc Lalonde: Madam Speaker, under the provisions of Standing Order 41(2), I wish to table, in both official languages, copies of the report on the Canada/Co-operative Energy Investment agreement.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Jim Peterson (Parliamentary Secretary to Minister of Justice and Minister of State for Social Development):: Madam Speaker, I am pleased to present the answers to the following questions today: Nos. 2,813, 2,851, 2,875, 2,898, 2,899, 2,902, 2,949, 2,958, 2,962, 3,129 and 4,108.


Mr. Clarke: 1.	With reference to the education leave costs recorded by the Department of Employment and Immigration at page 13.6, volume I of the 1979-80 Public Accounts of Canada, what guidelines were used to determine (a) which employees should obtain educational leave and whether such employees should be granted (i) leave with pay (ii) travel expenses (iii) payment for tuition (b) whether the skills to be acquired were needed on a permanent basis?
2.	What percentage of the education leave cost of $176,084 was necessitated by the acquisition of new equipment and by the need to have new skills in order to use the equipment?
3.	What percentage of the education leave was necessitated by reason of job redundancy because of the (a) acquisition of equipment (b) change in the role of the employing agency (c) change in the capabilities of employees?
4.	What percentage of employees granted such leave in the past three years have subsequently left the public service?
Hon. Lloyd Axworthy (Minister of Employment and Immigration) 1. (a) and (b) Please refer to Treasury Board
Policy, Personnel Management Manual, chapter 110-5, "Conditions governing education, training and development, including subsidization"
2.	Three per cent was spent on upgrading the technological skills of computer programmers.
3.	As far as our records indicate, education leave was never granted for reason of redundancy.
4.	It is 13.2 per cent.


Mr. Clarke: With reference to the professional and special services recorded by the Department of Finance for the Auditor General at page 32.11, volume II of the 1979-80 Public Accounts of Canada, with particular reference to hospitality services (a) what services does this entail (b) what is a list of each contract of a value more than $2,000 (c) are guidelines used to determine when the department will pay for hospitality and, if so, what are they (d) of the $14,938 paid for hospitality, what percentage was principally used to entertain (i) foreign visitors
(ii)	Canadian businessmen (iii) provincial public servants (iv) federal public servants (v) ministerial exempt staff (vi) Members of Parliament (vii) Members of Provincial Parliaments, Legislative Assemblies and the National Assembly (viii) Canadian dignitaries, such as the Governor General and Lieutenant Governors General (ix) federal Crown corporation executives (x) provincial Crown corporation executives (xi) members of federal commissions, boards and councils (xii) any other categories?


Hon. Pierre Bussieres (Minister of State (Finance)):: (a)
Extension of hospitality during meetings, functions, receptions as part of official government business; (b) There were no contracts of a value of $2,000 or more; (c) The office uses the Treasury Board Hospitality Directive as a guideline.
(d) The $14,938 was applied as follows:
(i)	Foreign	Per Cent 4.2(ii)	Canadian businessmen	17.5(iii)	Provincial public servants	10.6(iv)	Federal public servants	58.7(v)	Ministerial exempt staff	-(vi)	Members of Parliament	.6(vii)	Members of Provincial Parliaments,	Legislative Assemblies and the National Assembly	.2(viii)	Canadian dignitaries, such as the Governor	General and Lieutenant-Governors	-(ix)	Federal Crown corporation executives	4.8(x)	Provincial Crown corporation executives	-(xi)	Members of federal commissions, boards and	councils	-(xii)	Any other categories: Recruitment	3.4100.0


Mr. Clarke: With reference to the professional and special services recorded by the Department of National Health and Welfare under the Health Protection Program at page 32.22, volume II of the 1979-80 Public Accounts of Canada,
May 17, 1982

with particular reference to hospitality services (a) what services does this entail (b) what was the name of each type of service (c) what was the amount paid for each service and, for contracts over $2,000, to whom was it paid (d) are guidelines used to determine when the department will pay for hospitality and, if so, what are they (e) of the $7,710 paid for hospitality, what percentage was principally used to entertain (i) foreign visitors (ii) Canadian businessmen (iii) provincial public servants (iv) federal public servants (v) ministerial exempt staff (vi) Members of Parliament (vii) Members of Provincial Parliaments, Legislative Assemblies and the National Assembly (viii) Canadian dignitaries, such as the Governor General and Lieutenant Governors General (ix) federal Crown corporation executives (x) provincial Crown corporation executives (xi) members of federal commissions, boards and councils (xii) any other categories?


Mr. Doug Frith (Parliamentary Secretary to Minister of National Health and Welfare):: (a) The services referred to involve the extension of hospitality at federal-provincial or federally sponsored meetings.
(b)	Hospitality was extended in the form of formal meals, food and drink at official receptions and light refreshments during meetings.
(c)	A payment, totalling $2,454, was made to the Department of Public Works for refreshments, meals and services provided on behalf of the Health Protection Branch of the department at government conference facilities. The balance of expenditures was paid to hotels, restaurants and other such organizations for similar services.
(d)	The department is subject to the policy on hospitality found in chapter 360 of the Treasury Board Administrative Policy Manual.
(e)	Hospitality was extended to the following categories of recipients only:
(i)	Foreign visitors
(ii)	Canadian Businessmen	56 per cent
(iii)	Provincial public servants
(iv)	Federal public servants	44 per cent
The records of the Health Protection Branch do not permit a further percentage allocation of expenditures for hospitality for the above four categories.


Mr. Clarke: With reference to the professional and special services recorded by the Department of the Secretary of State under the Citizenship Program at page 32.32, volume II of the 1979-80 Public Accounts of Canada, with particular reference to other types of services (a) how does the department explain the increase in expenditure for the item over that for 1978-79 (b) what was the name of each type of service (c) what was the amount paid for each service and, for contracts over $2,000, to whom was it paid?


Hon. Gerald Regan (Secretary of State):: (a) There was in fact a decrease in expenditures for other types of services, in 1979-80 compared to the amount for 1978-79. Expenditures for 1979-80 totalled $154,292, compared to $416,927 in 197879.
(b)(i) Training of public servants; (ii) non-departmental conferences; (iii) hospitality; (iv) miscellaneous services.
Order Paper Questions
(c)(i) $21,609 (no contracts over $2,000); (ii) $4,516 (no contracts over $2,000); (iii) $24,176 (no contracts over $2,000); (iv) $103,978 F. W. Chenoweth, Ottawa, Ontario $6,047; Corre Paquette and Assoc. Ottawa, Ontario $2,240; Supply and Services Canada, Hull, Quebec $57,466; Saskatchewan, Minister of Finance, Regina, Saskatchewan $3,743.


Mr. Clarke: With reference to the professional and special services recorded by the Department of the Secretary of State under the Education Support Program at page 32.32, volume II of the 1979-80 Public Accounts of Canada, with particular reference to other types of services (a) how does the department explain the increase in expenditure for the item over that for 1978-79 (b) what was the name of each type of service (c) what was the amount paid for each service and, for contracts over $2,000, to whom was it paid?


Gerald Augustine Regan: (a) There was in fact a decrease in expenditures for other types of service, in 1979-80 as compared to the amount for 1978-79. Expenditures for 1979-80 totalled $12,632, compared to $66,488 in 1978-79.
(b)	(i) training of public servants; (ii) non-departmental conferences; (iii) hospitality; (iv) miscellaneous services.
(c)	(i) $9,722 (no contracts over $2,000). (ii) $1,103, (iii) $521, (iv) $1,286.


Mr. Clarke: With reference to the professional and special services recorded by the Department of Supply and Services under the Services Program at page 32.37, volume II of the 1979-80 Public Accounts of Canada, with particular reference to other types of services (a) how does the department explain the 929 per cent increase in expenditure for the item over that for 1978-79 (b) what was the name of each type of service (c) what was the amount paid for each service and for contracts over $2,000, to whom was it paid?


Hon.   J.-J. Blais@Minister of Supply and Services: (a) The reason for increase is not volume of expenditures but presentation format. In 1978-79 all expenditures over $2,000 were listed in the public accounts for professional and special services. In 1979-80, only items over $25,000 were listed as per Receiver General Directive 1980-2, therefore a greater number of items was included in the other types of services category. The statement below discloses that in fact a reduction of $3,028,681 or 26 per cent occured in 1979-80.
(b) and (c) Not supplied-see (a) above.
Services Program Professional and Special Services
1978-	79 Professional & special services
Other types of services
1979-	80 Professional & special services
Other types of services * Amount now included with services
Total
Administra-Services	tion	Program$ 10,835,824 $ 841,570 $ 11,677,393 $	2,246 $	6,357 $	8,603$ 8,648,712	*	$ 8,648,712$	67,116	*	$	67,116
May 17, 1982
Order Paper Questions


Mr. Clarke: With reference to the professional and special services recorded by the Department of Agriculture at page 32.2, volume II of the 1979-80 Public Accounts of Canada, with particular reference to education, training, development and conference expenses, what is a list of each contract of a value more than $2,000?


Eugene Whelan: Algonquin College, Ottawa	$ 2,035
Digital Equipment of Canada Ltd.,
Ottawa	21,570
Nutrition Research Consultants Ltd.,
Ottawa	9,450
Government of Canada-Public Service Commission, Ottawa	43,327


Mr. Clarke: With reference to the uninsured losses of more than $1,000 of equipment recorded by the Department of Public Works for the National Capital Commission in footnote No. 14 at page 13.4, volume 1 of the 1979-80 Public Accounts of Canada, under what circumstances was the equipment lost and (a) who was culpable (b) were any convictions made and, if so, what sentences were imposed (c) are any trials or appeals pending (d) was the equipment replaced (e) did the department undertake steps to ensure that such losses did not recur and, if so, what were they?


Hon. Paul J. Cosgrove (Minister of Public Works):: The
losses were sustained at the Moodie Drive Conservation Centre as a result of a breaking, entering and theft incident which was investigated by the City of Nepean police.
Specific replies are: (a) Person(s) unknown, (b) Not applicable. (c) See (a) above, (d) Yes. (e) Yes. An intrusion alarm was installed.


Mr. Clarke: With reference to the uninsured losses of more than $1,000 of miscellaneous items recorded by the Department of Veterans Affairs in footnote No. 21 at page 13.4, volume 1 of the 1979-80 Public Accounts of Canada, under what circumstances were the items lost and (a) who was culpable (b) were any convictions made and, if so, what sentences were imposed (c) are any trials or appeals pending (d) was the equipment replaced (e) did the department undertake steps to ensure that such losses did not recur and, if so, what were they?


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: The items were lost due to theft, (a) Unknown, (b) Not applicable, (c) See (a) above, (d) Yes. (e) Yes, both offices have been moved to new buildings which have better security measures. Also, all staff have been instructed to lock up all moveable items each night.


Mr. Clarke: With reference to the statement of operations of the Pacific Pilotage Authority for the year ended December 31, 1979 at page 146, volume III of the 1979-80
Public Accounts of Canada, which notes that the authority operated at a loss of $108,569 after having registered a substantial level of operating income the previous year (a) how does the authority justify the loss in light of its stated objective "to establish, operate, maintain and administer a safe and efficient pilotage service . . . sufficient to permit the authority to operate on a selfsustaining basis" (b) what special conditions caused this reversal in the authority's operations (c) has the authority taken steps to forestall the recurrence of such a loss and, if so, what steps?


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Transport):: The Pacific Pilotage Authority advises as follows:
(a)	Unforeseen increases in expenses; see part (b).
(b)	The 1979-80 tariff increase was nullified by the inflationary increases in pilots' fees, salaries, fuel and repair expenses in 1979. Again in 1980, spiralling costs in fees, wages and general expenses, as well as unforeseen legal and pilotage service costs, outweighed the 1980-81 tariff increase.
(c)	Indications are that the 1981-82 tariff increase, effective June 1, 1981, finally has caught up with the unpredicted inflationary spiral creating a small monthly surplus which in turn will restore the authority to a self-sustaining basis.


Mr. Heap: 1.	Does Canada intend to triple its aid to countries in Central America and, if so, for each country (a) what amount will be sent (b) to what purposes will the money be put and what amount will be given to each purpose?
2.	Did Canada place conditions upon the expenditure of the money regarding sourcing of supplies or services and, if so, in each case, what were the conditions?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: 1. (a) and (b) Canada recently approved an allocation of $106 million as bilateral development assistance for the countries of Central America. This amount is to be disbursed over a five-year period starting this year and represents in approximate terms a tripling over cumulative disbursements for the previous five-year period. Exact amounts have not yet been determined for the countries of Central America, as these can only be decided on the basis of detailed program discussions which are pending.
In addition Canada has already expended over $5.5 million during fiscal year 1981-82 in the form of financial contributions to Canadian institutions and non-governmental organizations working in Central America. These funds were provided by CIDA through its Special Programs Branch. This type of contribution will continue in the future but no estimates of levels are available at present.
Moreover, the Industrial Co-operation Division of CIDA has disbursed slightly over $1 million for projects in the region in fiscal year 1981-82 and will probably continue disbursements of an equivalent level in the coming years.
May 17, 1982

Canada also provides funds to the World Bank and the Inter-American Development Bank, to the United Nations Development Program and to other international institutions which are active in Central America. However, Since these Canadian contributions are pooled with funds from many other countries, there is only an indirect link between the Canadian development assistance provided to these multilateral institutions and their programming activities in the region.
2. In the case of Canadian bilateral assistance to developing countries, up to 20 per cent of the dollar value of the program may be untied to pay for local costs in the recipient country, non-Canadian procurement of goods and non-Canadian procurement of services, i.e. 80 per cent of the dollar value of the bilateral program is tied to the procurement of goods and services in Canada.
In the case of Canadian government contributions to Canadian non-governmental organizations and institutions as well as to international non-governmental organizations there are no conditions requiring that moneys be expended for Canadian supplies and services.
Under the Industrial Co-operation Program all arrangements with Canadian companies are contribution agreements and not contracts. There are no formal guidelines regarding Canadian content levels but by convention companies must use Canadian personnel unless it can be verified that qualified people are not available in Canada. However, there are no restrictions on the use of the individuals who are citizens of a country for which a project is being undertaken.
In the case of multilateral programs Canada places no conditions on the expenditure of money for the sourcing of supplies and services.


James Scott (Jim) Peterson: I ask, Madam Speaker, that the remaining questions be allowed to stand.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Robert Phillip Kaplan: that Bill C-61, respecting young offenders and to repeal the Juvenile Delinquents Act, as reported (with amendments) from the Standing Committee on Justice and Legal Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
Young Offenders Act
Robert Phillip Kaplan: that the bill be read the third time and do pass.
He said: Madam Speaker, in many ways it is a historic moment to reach third reading of the young offenders bill which has been on the national agenda for active consideration for nearly two decades.
I want to thank all of the members who contributed to the improvement of the bill in the committee. I must say I liked it the way it went in, but I cannot help but feel that many of the amendments which were put forward and forcefully debated from all sides improved the bill. We have made substantial progress in the criminal justice system in our country in bringing the bill to this point.
I would like to say one word not about a specific subject in the bill, but about the process of meaningful consultation. Even at this moment there are groups, interests and some provincial governments who feel that the bill might benefit from more meaningful consultation. I would like to say to all of them from this place that you reach a time when Parliament has to take its responsibility, and this is that time. As with any difficult decisions we have had to make, there have been, if 1 can put it in vernacular terms, winners and losers. Those who in the consultation process found that their position was not being adopted by their colleagues and other participants in the criminal justice constituency inevitably tend to feel that something would be gained by further consultation, especially if meaningful.
One would not like to argue that absolutely nothing would be attained by further consultation. However, I think hon. members can feel that very little further consensus would be reached by allowing further consultation. If in the process of legislation there was ever a time reached, after 14 years of consultation, when Parliament had to take its responsibility, make the tough decisions and put forward the new young offenders regime, this is the time.
In closing, I want to thank the members on my side for their forbearance in permitting and encouraging the process, and members opposite for their contribution and indeed the forbearance which at this point makes it very likely that the bill will pass third reading today.


Hon. Allan Lawrence (Durham-Northumberland):: Mr. Speaker, the House will be relieved to know that I do not intend to speak at great length. Following the conciliatory remarks and attitude of the Solicitor General (Mr. Kaplan), I want to assure him and the House on behalf of this group that there will not be a long list of speakers. We do not intend at this stage to hold up further passage of this bill.
Indeed, it has been our consistent attitude that, basically and fundamentally, the statutes regarding young people who run afoul of the law are sadly in need of reform. This is not necessarily the great step but it is a step along the road to needed reform of the existing statutes.

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Young Offenders Act
I said a step because we are in fundamental agreement with the improvements to the law respecting young offenders and, of course, the repeal of the existing law. Indeed, when the Clark administration took office in 1979, it found that there had been, at the ministerial level with at least the two preceding solicitors general, an attitude that the passage of reform legislation was not necessarily a matter of top priority.
That attitude was changed by the Clark administration. The young offenders legislation was given top priority. A meeting was convened of all the justice and law officers of the Crown at the provincial and federal levels at which top priority was given to reform of that law. When the present administration took office, I believe that priority continued, and it resulted in the bill before the House today.
We want to see this bill passed. It is not a perfect piece of legislation by any means, but at least it is a reform. And, to our mind, an improvement over what we have had up until now. If there is a division, we certainly intend to vote for it. However, my belief is that a division will not be required on third reading.
The bill still suffers from defects. In our view, the major defect is the provision that a person is a young offender until he or she reaches age 18. We believe that that age should be lowered to 16 and we have said so consistently. We said it in committee, at second reading in this House and we say it now.
Consistency has not always been shown by all the parties in this House regarding this matter. On second reading there was a five-day debate in this House. That was in April and May of 1981. If there had been a clear indication of government policy and government consistency at that time, the official opposition would have been quite content to see a ten-minute debate. A lot of words, a lot of rhetoric, a lot of time has been devoted to the time wasting that goes on in this chamber.
I would like to refer you, Mr. Speaker, to the five days' debate in April and May of 1981 on second reading stage. We clearly indicated on behalf of the Conservative opposition that in the bill presented by the government and by my friend the Solicitor General, the major defect was the provision that the variations in the maximum age for young offenders in Canada, at that time and at the present time, were going to remain. As a matter of fact, on second reading I had the honour of introducing an amendment, a reasoned amendment which was accepted by the Chair. I read from page 9497 of Hansard for May 12, 1981, when I moved, seconded by the hon. member for Edmonton-Strathcona (Mr. Kilgour):
That all the words after the word "that" be deleted and the following substituted therefor:
"this House declines to give second reading to Bill C-61, an act respecting young offenders and to repeal the Juvenile Delinquents Act, because the bill rejects the fundamental principle of equal treatment of all persons before the law by specifying that the act will apply to different age groups in different provinces."
We had a five-day debate on that principle that we espoused-a five-day debate, Mr. Speaker. The arguments and the speeches from just about every government member who
spoke before second reading was given denied that principle. Indeed, the Solicitor General himself in introducing the bill, as reported at page 9308 of Hansard of April 15, 1981, said:
Differences exist as to when an individual is or should be considered sufficiently mature to be held responsible and dealt with as an adult. Practically speaking, due to the specialized programs, resources and services which are in place to deal with young offenders, considerable program shifts and adjustments would be required if the maximum age, which is under 18, were to be made uniform.
In other words, the minister came out flatfootedly against our reasoned amendment. Indeed, he managed to bootleg in another small comment later in the debate, as reported at page 9645 of Hansard of May 15, 1981. The minister said:
I would have wished that the provinces would agree to that age_
That age being 18.
-but the financial implications for provinces which now have a lower age are tremendous. It is by and large a burden which the provinces would have to bear almost completely on their own.
In other words, the Solicitor General was arguing that no one could really come up with a consensus on a uniform age, and therefore there was to be no uniform age. He was arguing that the burden imposed on the provinces by a uniform age of 18 would be so great as to destroy the whole concept of uniformity throughout this country.
I will not burden the House with the history of this bill as it passed though its various stages in the House and in committee. I simply want to point out that the House voted on second reading to reject our concept that there be a uniform age.
When the bill came to the committee one of the first acts of the minister was to indicate that yes, there was now to be a uniform age. We all congratulated him on at long last seeing the light. However, he made what is a mammoth blunder in the eyes of most of us and of most of those at the provincial level who have to deal with this very complex matter. I suggest he also made a blunder in the eyes of a great many people in the private sector-those who have to deal with young people who run afoul of the law-by picking the wrong date. That wrong date is still there.
We were concerned enough about it, Mr. Speaker, that in committee an amendment was moved by the members of this party. But, of course, the government majority, as they did previously in the House, voted down our reasoned amendment and voted it down in this House as well.
I do not want to rub the noses of the Liberal members too hard and too long in their past misdeeds and follies regarding this legislation. I merely point out that today obviously we are going to have a speech or two by government members indicating that yes, this is a step along the right road; yes, this is the direction the government should be headed; and yes, this is a wonderful thing that the Liberal government has done, that they are bringing this bill forward for third reading and finally it is going to be passed by this House. I merely want to point out to you, Mr. Speaker, and to the members of the House that there has been a marvellous flip-flop on the part of the minister and the government over this bill.
The debate in the House could have been shortened considerably if the concept we first proposed had been accepted by
May 17, 1982

the government in the first place. The debate in committee could have been shortened considerably again if the government had accepted the principle of 16 as the maximum age. I am fully convinced that before long that age limit will have to be accepted. As I said in the committee, it is a retrograde step to use the age of 18. We are firmly committed on that. But we feel we have made our point, even though we have not been able to convince the minister. Nevertheless the bill does fulfil the long needed demand for reformation in this whole area of the law. Because of that, we are willing to allow it to reach third reading and to be implemented.
The bill is going to take a much longer time to be implemented as a result of the stand of the minister and the government. In the long run there will be very serious defects in the administration of the bill, at the provincial level especially, because of the extremely burdensome and unnecessary costs which will be imposed on the federal treasury as a result of this government's stand. Sooner or later the age of maturity as far as young offenders are concerned will have to be dropped to 16 years. The age should be 16 now.
We are creating an administrative and financial nightmare. There are only two provinces in the country, Quebec and Manitoba, in which 18 is at present the age of maturity. All the other provinces have a lower age. The nightmare will be beyond belief and it will be the result of the minister and the government sticking to the age of 18. As I say, the age of maturity should be reduced to 16. That has been our position all along. It is still our position; but we also want to see this bill passed.


Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, I too rise to speak on the third reading of Bill C-61, the Young Offenders Act. I agree with those who suggested that in many ways this is a historic day.
There have been no changes in substance to the Juvenile Delinquents Act, originally an act of 1908 with some amendments in 1929, since its original enactment in 1908. Of course, a number of attempts to do so were made. A report was prepared by a special committee of the Department of Justice in 1968. Legislation was tabled in 1970-I believe it was Bill C-192-which was heavily criticized at that time as being a criminal code for children.
After that a number of committees examined the various provisions of the Juvenile Delinquents Act. The report on "Young Persons in Conflict With the Law" was in many ways a progressive document and well ahead of its time. It was tabled by the then solicitor general, the hon. member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand), in 1976 and, following that, the solicitor general in the Conservative government, who has just spoken on this legislation, indicated that it was a priority for his government to amend the provisions of the Juvenile Delinquents Act.
The original bill which was tabled in this House did unquestionably contain a number of important advances over the
Young Offenders Act
provisions of the Juvenile Delinquents Act. For example-and I will cite only a few advances in this legislation-there was an end to status offences which, by the way, tended to discriminate particularly against young women who came into conflict with the law. The sweeping offence of being involved in sexual immorality or other similar vices was used overwhelmingly against young women.
The offence of truancy was one which, it was argued quite rightly, should not be contained within the scope of criminal law dealing with young persons.
Indeterminate sentencing, which was permitted under the Juvenile Delinquents Act, has now finally been ended, and provisions with respect to young persons are being brought into line with those for adults.
There are guidelines in the legislation on transfer of young offenders to adult court, and the minimum age has been increased from seven to 12. I do not think many would argue that young people who are seven, eight, nine, ten and 11 years of age should not be dealt with as young criminals but, rather, should be dealt with within the scope of provincial social services legislation.
Perhaps some of the most important advances in this legislation are the clauses of the bill dealing with procedural safeguards for young people at trial. Too often in the paternalistic approach of the youth court-a closed-door, paternalistic approach-the legal rights of young people were overridden. Now, of course, the courtroom will be opened to public scrutiny, and that is as it should be, although the anonymity of the young person will be maintained. The young person who is before the court will have access to legal counsel whether or not the young person is able to pay for legal counsel. Young people will have the right to bail, a right which for too long has been denied them.
There are a number of other significant advances of a procedural nature in this bill. The provisions with respect to dispositions are broad and varied. Again, we welcome the opportunity for juvenile court justices or youth court justices, as they will now be known-to use a variety of sentences which do not involve incarceration; because in many instances when young people have been put into jail the time they have served in jail has in fact been more destructive to them, and ultimately to the community, than another form of disposition. I will come back to this aspect of the bill later on because, as we will see, far too often governments, both provincial and federal, have refused to put adequate resources into the juvenile justice system in our country. While we can establish a legal framework, as we are doing in passing the proposed young offenders act today, unless governments finally get serious about putting money into this area, we will still see far too many young people in conflict with the law, and ultimately we will see these young persons become hardened adult criminals.
While Bill C-61 did contain a number of progressive steps forward, it did, however, contain a number of very serious flaws. In fact, those flaws, in the view of the New Democratic Party, were so serious that at second reading we voted against

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Young Offenders Act
the bill. Perhaps the most important weakness in the legislation was the failure of the bill to impose a uniform maximum age right across Canada. Both the official opposition and the New Democratic Party agreed that the principle of equality before the law was made a mockery in this bill, which allowed a young person to be dealt with under the provisions of a youth court in some provinces up to the age of 16, in other provinces up to the age of 17 and in Quebec and Manitoba up to the age of 18. We condemned that particular provision, and we felt so strongly about this denial of equal rights for young persons that we voted against the bill at second reading.
The question then came before the Standing Committee on Justice and Legal Affairs, and after the Solicitor General (Mr. Kaplan) was advised by his legal advisers in the Department of Justice that the bill might very well be challenged under the charter of rights as denying equality before the law, the Solicitor General had to make a decision. He accepted that there would be a uniform age, and the question as to what that age should be then arose.
After having carefully considered this question and after having listened to a number of very outstanding witnesses representing a cross-section of the Canadian criminal justice community, we in this party came to the conclusion that that uniform age should be 18. That age was the age which was proposed by the Solicitor General, and I would like to take a minute or two just to explain why it is that we on this side of the House were prepared to support a uniform maximum age of 18.
First, I note that a lower uniform maximum age such as 17 or 16 would effectively seriously weaken the existing programs in the province of Quebec and in the province of Manitoba. In both those provinces young persons are dealt with within the context of the juvenile justice system up until the age of 18, and if we in Parliament were to impose the maximum age of 16 or 17, what we would be telling those provinces is that we are not prepared to accept the validity of their particular schemes for dealing with young persons. We in this party were not prepared to gut, effectively, those important programs which, in many instances, have been very successful in keeping young persons out of the scope of the adult criminal law and within juvenile detention systems and juvenile justice systems for as long as possible.
The second concern we had in approaching this question of a uniform maximum age was that if the age were lowered to 16, or even to 17, effectively what we would be doing in too many instances is dumping young persons into the adult criminal justice system and into adult prisons, and it was our view that young people should be dealt with within the context of the juvenile justice system for as long as possible, recognizing the right of the community to be protected from crimes by young persons. However, if we were to have a uniform maximum age of 16, this would mean that effectively 16-year-olds and 17-year-olds who came into conflict with the law, no matter how minor their offences, would be dealt with as criminals under the provisions of the Criminal Code and imprisoned with adults and, in many cases, imprisoned with hardened adult criminals. We do not believe this is the most desirable way of
rehabilitating young offenders. We believe we should be putting additional resources into the juvenile justice system for as long as possible so as to keep young people out of contact with adult criminals until the age of 18.
There are those who argue that there are some hardened young persons who indeed should be dealt with as adult criminals because they may have a record of a series of violations of the law. To those persons I point out that indeed they can in fact be dealt with under the provisions of the Criminal Code because the proposed young offenders act does continue to allow for the transfer of young persons over the age of 14 to the adult court system. Those young people who, as has been pointed out, in some instances are perhaps hardened to the youth criminal justice system can indeed be transferred and, in a number of instances, already are being transferred to the adult correctional system. However, for the other young people up to the age of 18, hopefully we as a society will be prepared to accept an additional responsibility to put additional resources into that particular system to ensure that to the extent possible these young persons will be kept out of contact with adult criminals. As I say, we believe the age of 18 is acceptable.
However, it should be borne in mind that by increasing the age to 18 a substantial financial burden is being placed upon a number of provinces and territories. In response to a question raised by me in the Standing Committee on Justice and Legal Affairs and also in a speech in the House of Commons, the Solicitor General indicated that, while he is prepared to look at some additional resources in this area, this was a burden that the provincial and territorial governments would have to bear largely on their own.
If this government is serious about improving and humanizing the system of criminal justice for young persons, it has to be prepared to put additional financial resources into the hands of provinces and territories to ensure that the legal framework which is established in the proposed young offenders act delivers a system which indeed will encourage young people to stay out of involvement with the criminal law. If indeed the federal government does not come up with additional resources, the provisions in the bill which provide, for example, for dispositions alternative to incarceration will be redundant.
The provinces will argue that they cannot afford these provisions, and what we will see is an increased number of young persons dumped into jails for children. That is effectively what detention centres are. There should be disposition before an actual court appearance; in other words, diversion away from the criminal justice system. This will not take place unless the federal government is prepared to ensure additional resources are made available both to itself and to the provinces.
Surely we as a society must accept our responsibility to young people and our responsibility for dealing with many of the circumstances which lead young persons to become
May 17, 1982

involved in crime. I will come to this in a few minutes, Mr. Speaker, but first I will deal with some of the other weaknesses of the present legislation as we see them.
I should note that we are now dealing with third reading stage of the legislation. We did not propose any amendments at report stage despite the fact that we would like to have seen improvements to a number of clauses in the bill. We agreed that if the Solicitor General and the government did not propose amendments at report stage either in the House or in the Senate, we would not do so either, much as we would like to see the bill improved.
I will not go over all the areas of the bill that were dealt with in committee but I will emphasize two or three areas where we think the bill should be strengthened. In fact, in our opinion some of those areas contribute to weakening the existing protection of young persons under the Juvenile Delinquents Act.
Instead of providing increased protection for the community and for the rights of young persons in conflict with the law, the existing Juvenile Delinquents Act, enacted in 1908, is being watered down. Clause 7 of the bill allows young people who have been arrested and detained to be locked up with adults. Under the provisions of the Juvenile Delinquents Act as it now stands, young people under the age of 14 cannot be locked up with adults under any circumstances, but the young offenders bill would allow young people of 12 or 13 or older to be locked up with adult prisoners in certain circumstances. Those circumstances include conditions in which adequate resources do not exist in the community.
Clause 7(3)(a) provides that a young person can be locked up with adults if "no place of detention for young persons is available within a reasonable distance". This will ensure that young people in rural communities, young natives in particular and young people in poorer parts of Canada, in some instances will be locked up with hardened adult criminals.
Surely these young persons are presumed to be innocent. What we are saying is that in those parts of the country in which there are not separate facilities for them, they will be locked up with adults. That represents serious denial of their rights. In addition, it represents a violation of Canada's commitment to the International Covenant on Civil and Political Rights which requires Canada to ensure that young people are not locked up with hardened adult criminals.
In committee we sought an amendment which would ensure that young people were detained separately from adults, but the government refused to accept it. As a result we will have a regime which will discriminate against young people from rural communities, native young people and children from poorer parts of Canada.
Another provision of the bill which weakens the existing Juvenile Delinquents Act is Clause 24(14). Under this provision the attorney general of a province is allowed to authorize the transfer of young persons over the age of 18 from youth correctional facilities to adult jails. As things now stand, once society has accepted responsibility for dealing with young
Young Offenders Act
people within the context of the youth correctional system, they cannot be taken out of that system at age 18 or 19 and dumped into adult jails. That is the present provision of the Juvenile Delinquents Act. What the government is doing is allowing young people to be dumped into the adult prison system in those parts of the country which do not have other resources. If we are trying to ensure that they will be kept out of contact with adult criminals, we are failing. This particular provision has no guidelines whatsoever and represents a step back from the existing provisions of the Juvenile Delinquents Act.
There are other clauses in the bill which weaken the Juvenile Delinquents Act. This is ironic when we are supposed to be moving toward protecting not only the community but increasing the rights of young people in conflict with the law.
The records provisions of the bill have been described as pernicious and an outrageous violation of the right to privacy of young persons. A respected organization called "Justice for Children" presented a brief to the Standing Committee on Justice and Legal Affairs in which it pointed out that these provisions are far broader in scope than the provisions respecting the records of adults. When we are supposedly ensuring that young people have the same rights before the courts as adults, why do we take this backward step and permit sweeping access to records even before the young person is convicted? These provisions have been described by Justice for Children, the Canadian Bar Association and a number of others as representing a fundamental denial of the right to privacy of the young person. I will not go into a detailed analysis of this at this time, but I want to put on record our serious concern that we are weakening the existing provisions of the Juvenile Delinquents Act in these clauses of the bill.
Another area in which we are taking a backward step instead of moving forward in the area of juvenile justice is Clause 5 of the bill, which would allow the young offenders act to be subject to the provisions of the National Defence Act. As things now stand in law, those young people convicted or accused of a criminal offence, whether they live on a military base or not, are not subject to the jurisdiction of the National Defence Act. What we are saying in this legislation is that we are goint to take a step backward and subject these young persons who happen to live on a military base in Canada or outside the country to the provisions of the code of service discipline. In many ways this is a relic of the eighteenth or nineteenth century which denies not only the young persons subject to it but all military personnel many of the fundamental rights which other Canadians are entitled to.
In fact, the Department of National Defence has had the unmitigated gall to ask for exemption from the Canadian charter of rights to ensure that the code of service discipline is upheld. This code denies bail to persons accused of criminal offences and countenances a number of abuses of their fundamental rights. This bill will allow these young persons to be subjected to the harsh and, in many ways, unjust provisions of the National Defence Act.

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Young Offenders Act
The bill does not go far enough in dealing with the concerns that society must have with respect to the mentally retarded and those persons subjected to lieutenant governor's warrants. I need only point to the case of Emmerson Bonar who has the mental capacity of a six-year-old and was incarcerated at age 16. This bill fails to come to terms with some of the serious problems of a young person who may have psychiatric disturbances or may be mentally retarded. To the extent it fails to do that, Mr. Speaker, we on this side will be pursuing this question.
My colleague the hon. member for Beaches (Mr. Young) has played an outstanding role on the Special Committee on the Disabled and the Handicapped and has a special interest in this area. We will certainly be pursuing this to ensure that justice is finally done to these individuals.
There are a number of other provisions in this bill which are weaker than we would liked to see. We tried to amend it in committee, and I am pleased to note that a number of amendments 1 put forward on behalf of the NDP were indeed accepted by the government. The atmosphere in that committee was one of co-operation; as a result, a number of the amendments we submitted were accepted, and I believe it is a better bill because of that.
Before closing, Mr. Speaker, I would like to turn to an area which is not directly addressed by Bill C-61 but which in many ways is perhaps the most important element of a juvenile justice system in Canada. I refer to the question of prevention. One of the amendments I proposed and which was accepted was an addition to the statement of principles in Bill C-61 which would ensure that society recognized its responsibility to prevent those conditions which lead young persons to become involved in crime. Recently the Senate Standing Committee on Health, Welfare and Science produced an excellent report entitled "Child at Risk". The committee documented many of the conditions which unquestionably lead young persons to become involved in crime. It is very important that we as a society accept our responsibility to do what we can to eradicate these conditions. I am not going to go through all the conditions so eloquently documented by that committee, but I will note some of them.
Child abuse has been recognized as a very significant factor in the development of violent criminal behaviour in later years. A number of eminent psychiatrists who appeared before the committee noted that violent criminal behaviour is in many instances a direct result of child abuse and neglect in the first three years of life. In the past our society has paid more attention to cruelty to animals than it has to cruelty to children. This does not just involve the beating of young children; it is part of a broad range of characteristics which can include family instability, minor criminal offences, high mobility, unemployment, and general economic and social stress. I have no doubt, Mr. Speaker, that the conclusion of the committee that violence breeds violence is entirely accurate.
The committee noted as well the phenomenon of violence on television and pointed to a study which showed that in ten years of viewing, an average Canadian child would likely have watched the violent destruction of more than 13,400 people. In the United States it has been estimated that a child is exposed to something like 17,000 murders during his formative years.
The committee pointed to a number of other problems which can often lead to young people coming in conflict with the law. This goes right back to the fetus, to conditions during childbirth, problems which can be attributed to children being shunted from foster home to foster home. There is also the fact that in many instances children, particularly in single parent families, are raised in conditions of abject poverty. Surely we as a society must, if we are serious about eradicating crime among young people, finally start to accept our responsibility to deal with the economic conditions which so often lead young people to become involved in crime.
In 1975 the National Council of Welfare published a report which should be required reading for all Members of Parliament entitled "Poor Kids". I only wish I had the time to read the whole report to Parliament and the people of Canada, but I will just read a couple of extracts from it:
To be born poor is to face a greater likelihood of ill health-in infancy, in childhood and throughout your adult life. To be born poor is to face a lesser likelihood that you will finish high school; lesser still that you will attend university. To be born poor is to face a greater likelihood that you will be judged a delinquent in adolescence and, if so, a greater likelihood that you will be sent to a "correctional institution". To be born poor is to have the deck stacked against you at birth, to find life an uphill struggle ever after. To be born poor is unfair to kids.
How true that is, Mr. Speaker. The report goes on to note that:
Among children in two-parent families across Canada, 21.2 per cent were in poverty; among those in male-headed single-parent families, 33.7 per cent were in poverty-
And what a shocking statistic this is:
-among those in female-headed single-parent families, an incredible 69.1 per cent were in poverty.
This overwhelming probability of poverty for children in families headed by mothers alone was true right across the country.
We know as well the particular incidence of poverty among native children and the way they are in many cases subject to harsh conditions not only during their childhood, but in many instances as a result of a fetal alcohol syndrome which results from excessive consumption of alcohol by the mother. As the hon. member for Notre-Dame-de-Grace-Lachine East has pointed out, and I commend him for his outspokenness on this subject, we have in Canada in many ways our own "third world", and that is surely the world of our native peoples, the Indian, the Inuit and Metis. It is about time we as a society recognize our historic responsibility for the conditions in which they live today, stop playing our paternalistic and in many ways colonial games and allow the native people themselves to start to take control over their own destiny.
I would also like to note, Mr. Speaker, that the question of resources is central to a comprehensive approach to crime
May 17, 1982

among young persons. Right across this country provincial and federal governments have far too often paid lip service to dealing with the terrible conditions of young people who have come into conflict with the law. In my own province of British Columbia conditions are appalling. In August of 1981, provincial court judge Patricia Byrne declared that she was:
-appalled and disgusted by the way three government departments have been fighting over what to do with a 16-year-old youth with a history of violent behaviour stemming from an emotional disorder-
British Columbia still does not have a single secure facility for dealing with young people who are psychiatrically disturbed. What kind of priority for our society is that, Mr. Speaker?
Then there is Quebec, where it has been admitted that there is a terrible shortage of facilities for juvenile offenders, particularly young Anglophones. In 1981 the Youth Protection Committee in Quebec made a public plea to the Quebec government for more money, facilities, and a greater level of over-all recognition of the needs of young people in Quebec. Quebec does not have a single juvenile detention facility which is equipped to deal with anglophone juveniles who need both maximum security and psychiatric treatment. For that reason, Mr. Speaker, a 15-year-old English-speaking Montreal boy last year spent more than five months in an adult prison in New Carlisle, 900 kilometres from his home, before returning to Montreal.
Again, in British Columbia far too many young people are being locked up because of the unavailability of alternate resources. Instead of dealing with these young persons in facilities which do not constitute secure containment, what has happened is that they are being locked up in jails which are chronically overcrowded. In my own constituency of Burnaby the so-called youth detention centre has regularly been far too crowded. Its capacity is something like 63, and in a number of instances there have been over 100 children crammed in. How can we possibly expect rehabilitation under those circumstances?
The final example is one right here in Ottawa where there is still a terrible need for a facility for psychiatrically disturbed adolescents. Dr. Selwyn Smith, the director of the Royal Ottawa Hospital, said that there is an acute need for a secure handling unit for young offenders, where they can be given specialized psychiatric assessment and treatment. Such a facility is long overdue. It is all well and good to pass a new piece of legislation such as the young offenders act-and as I say, we welcome the changes that have been made; we are particularly pleased to note the number of improvements made in committee-but we as a society must finally accept collective responsibility to create a society in which young people do not live in poverty. We must create a society in which child abuse is recognized as a serious problem. It will not be until we put resources into this area of the criminal justice system that we will be doing justice to young Canadians.
Young Offenders Act
We support Bill C-61. We will be monitoring its progress very closely in the months ahead to ensure that where there are weaknesses in the bill they will be strengthened. Most important, we will be pushing, prodding and cajoling governments, both provincial and federal, to ensure that adequate resources are put in place so that when we talk about justice for young people we mean, indeed, that young people are achieving justice.
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, it is indeed a red letter day for the House of Commons because we are finally about to pass the young offenders act, which will replace the old Juvenille Delinquents Act of 1908. I am myself particularly pleased with the impending passage of this bill. When I was Solicitor General in 1973 the special committee to review the Juvenile Delinquents Act and to recommend changes was set up. That committee was made up of officials from the Solicitor General's department, the Department of National Health and Welfare and the Law Reform Commission. It presented its report in 1975 under the title of "Young Persons in Conflict with the Law." That report was the result of wide consultation with the provinces, with private sector associations, experts and groups.
As I and others have stated, the Juvenile Delinquents Act which is now in force in this country was originally passed in 1908. It was amended only once substantially, in 1929. That means that for 53 years we have not had any substantial change to our juvenille delinquency legislation.
As we all know, much has happened in those 53 years. We have experienced a depression, a world war, very widespread social, political and economic changes affecting the family, the church, community organizations and so on. Because of much public concern about the state of the legislation, the Department of Justice set up a committee in the early 1960s which reported in 1965. That committee recommended widespread changes to the Juvenile Delinquents Act.
In 1970, the government presented Bill C-192, called the young offenders act. That bill passed second reading in the House of Commons but died in committee when the election was called in 1972.
In 1975 the report "Young Persons in Conflict with the Law" was published. This work was done during the time 1 was Solicitor General. The people responsible for the report tried to take into account many of the submissions made to the justice committee during hearings on Bill C-192, and they attempted to deal with the many objections people had to the original bill of 1970. Nothing much could be done following publication of that report in 1975.
As hon. members know, we had elections in 1979 and in 1980. Solicitors General pursued the subject and tried to get agreement with the provinces to bring in legislation. The subject matter was certainly moved forward, but it was only in June, 1981, that we passed the present Bill C-61 at second

May 17, 1982
Young Offenders Act
reading. It was then sent to the Standing Committee on Justice and Legal Affairs.
I must say that I was extremely pleased with the work done in that committee. It passed over 70 amendments. I mention that because many people think our parliamentary committees do not work, that they just rubber stamp government legislation. In this case, the minister-and I congratulate him for being reasonable-accepted amendments from all sides of the House-from the Conservative Party, from the New Democratic Party and even from some of us on the government side who had amendments to present. The Solicitor General himself presented amendments which improved the bill. This was a good record and an example of co-operation among all parties in the committee to improve the legislation. It is true that not all amendments were accepted. Some were voted down on division, including some of mine. But a very good job was done by Parliament in that committee.
With respect to the importance of the subject matter, that of juvenile crime, the last Statistics Canada report we have on the subject is for 1980. It indicates that 28,008 children as defined in law committed 73,098 offences in 1980 under the Juvenile Delinquents Act, which in itself is a serious problem. But what is even more alarming is that in the past a good number of young people who commit crimes as juveniles remain criminals. They become adult criminals, in my opinion because not enough attention is paid to them when they commit their first offences as young people.
It is my hope that, with the provisions of this legislation and with the services that are in the process of being set up and are underway in several provinces to deal effectively with juvenile crime, with diversion, with many types of rehabilitation, with closer consideration and care to the problems of young people which lead and instigate crime, this situation can be turned around. If we are ever to solve the adult crime problem in this country, we have to start with the juvenile.
Bill C-61 is not a perfect piece of legislation but it is an immense improvement over the present Juvenile Delinquents Act. It gets rid of the status offences, that is, the offences of delinquency and so on. It no longer covers provincial offences or school board offences. It deals with offences which are criminal properly speaking. It gives the young person the full right to counsel that an adult has. It gives the young person all the rights an adult has. It also gives the young person certain responsibilities.
The subject which led to most disagreement in committee and in the House was with respect to age. The chief critic for the Conservative Party, who was Solicitor General at one time, stated that he and his party had always been in favour of a uniform maximum age across the country for juvenile offenders under the law, and they wanted that age to be 16. I must say that the report published while I was Solicitor General also suggested a uniform age, but the age suggested was 18.
The hon. member stated in his speech earlier this afternoon that he feels 16 is the proper maximum age for juvenile offenders. I do not agree with that. I think the maximum age should be 18. If we think it is correct that people should vote
only when they reach the age of 18, that they should drink alcoholic beverages only at 18, then they should not be tried as adult offenders at the age of 16. If they are to be considered young persons for many other things until reaching the age of 18, then they should be treated for criminal purposes as a young person until reaching that age.
I do not want to delve into that topic too much at the present time, but I do not think there has been any flip-flopping on this. If we read the different legislation which has been produced and the different reports of the last ten to 15 years on this subject, we will know that we wrestled with the subject of what a uniform age in Canada should be.
The area of Ottawa-Hull is where the difference in maximum age showed up the most. Under the present law, if a 17-year-old person in Hull commits the offence of breaking and entry, because the maximum age for juvenile offenders in Quebec is 18, he will be tried in the juvenile court system in Hull under the Juvenile Delinquents Act. If he is found guilty, he will be sent to juvenile detention centre or be treated under the provisions of the Juvenile Delinquents Act. However, across the river here in Ottawa, because the age in Ontario for criminal responsibility is 16 years, a person of the same age would be tried in an adult court and very likely sent either to Joyceville or Millhaven penitentiary. We can see how unfair it is to have within a few miles of each other two individuals of 17 years of age being treated differently. One could end up in Millhaven penitentiary and the other could end up on probation under the Juvenile Delinquents Act for committing the same offence. This situation was completely unfair and had to go. We were all agreed that we needed a uniform age. The question was whether the age should be 16 or 18. I opted for 18, as did the New Democratic Party and the government. The Conservative Party opted for 16, and I must say that it had a certain number of supporters. But it was nothing which could be settled absolutely or dogmatically.


Allan Frederick Lawrence: Why did you vote against a uniform age at second reading?


Mr. Allmand:: I was in agreement with a uniform age at second reading. But I was against 16 years and I knew the proposal of the Conservative Party was 16.


Allan Frederick Lawrence: You voted against it at second reading.


William Warren Allmand: I would rather have a variable age than a uniform age of 16 across the country. I am very much opposed to the maximum age of 16 years. The hon. member can check the record. For years I have been for a uniform age of 18 years. This is pretty clear both in Hansard and in the record of the Standing Committee on Justice and Legal Affairs over the years.
I am extremely pleased, as are many people in the country, that we are finally passing the young offenders act. It contains much improvement but it is not perfect. As time moves on, I am sure we will make this legislation even better.
May 17, 1982


Benno Friesen: Mr. Speaker, I join with the other hon. members who have participated in this debate in saying that this is long overdue legislation. Any act which is 74 years old obviously has come in confrontation with some anachronisms. As the hon. member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand) enumerated, there are a number of them, so we welcome the updating of the legislation.
I disagree with some of the points of the Solicitor General (Mr. Kaplan). First, he commended the committee for working so well, as did the hon. member for Notre-Dame-de-Grace-Lachine East. If the minister looked over the record of the committee and its work, if he took off his vested-interest glasses which he wears as a minister of the Crown, he would have to say that in terms of parliamentary work, as a Parliament and one of its committees should function, the committee was a joke. It really did not function as a committee should. It heard all the witnesses and went through the pro forma of presenting amendments, but in terms of working in an open-minded way and hopefully improving the legislation by the contribution of all parties, it was a total joke.
For example, I had a minor amendment which I wanted to make concerning Clause 3(l)(/t). Obviously subclause (1) contains sections (a) to (h). My amendment was to move the position of (h) to that of (a) and then reletter all the sections. Section (h) dealt with the fact that young people are accountable. It read:
(h) parents have responsibility for the care and supervision of their children, and, for that reason, young persons should be removed from parental supervision either partly or entirely only when measures that provide for continuing parental supervision are inappropriate.
I support that provision. I think it is a good inclusion in the law. But it should not be the last, it actually should be the first. If we leave it to the last and begin with individual responsibility at the outset, and then move through a progression where the courts and government support systems move in, we really have a statist, progressive role in the role of the family. All I wanted the minister to do was to move section (h) to position (a) so that parental authority would be number one and, after parental authority broke down, the state could move in. That was a monumental change for the minister. The committee could hardly accommodate such a revolutionary concept and it was summarily voted down. This was how well the committee functioned!
It was faulty in another very important sense, and that is, it ignored provincial representations. As I recall, there were only two provinces which represented themselves and presented briefs. It may have been that I was absent on one or two occasions and other provinces appeared, but I recall only two submissions from the provinces of Saskatchewan and Ontario. At no time do I recall any representation from Quebec or Manitoba. But presto, somehow the position of Quebec and Manitoba took precedence on the subject of uniform age.
It so happens that Ontario has a maximum age for juveniles of 16, Alberta has a maximum age of 16 and British Columbia has a maximum age of 17. The combined population of these three provinces is equal to half the population of Canada,
Young Offenders Act
whereas the combined population of Quebec and Manitoba is less than one-third. Despite these disparities and representations, somehow the message from Quebec and Manitoba got through.


Donald W. Munro: Without a presentation.


Benno Friesen: Even without a presentation. The hon. member for Burnaby (Mr. Robinson), in his vaunted eloquence, supported age 18 as the uniform age. He may have a legal opinion on that. Later on in his presentation today he objected to the fact that young people will be incarcerated with adults-what a crime to put 12-year-olds with 20-year-olds. I agree. Why should young people, children in fact, who are really on the threshold of life and beginning to engage in criminal activities, be given a kind of "university education" within the criminal system by being put together with 20 and 21-year-olds? Exactly, but why does he support age 18 as the uniform age? It would be a sure way of incarcerating children with adults. He cannot have it both ways.
At the outset I said that the province of Ontario opted for age 16 as the uniform age. That was its recommendation which the minister, hiding behind the curtains, seems to have forgotten. The province of Ontario indicated that if a uniform age were adopted, it would recommend the age of 16 as the uniform age, but that if this were not accepted it recommended that age 17 be adopted. In its supporting documents, the province of Ontario submitted the following points:
1.	Inclusion of 16 and 17-year-old youths in our junevile justice system would represent an increase of more than 165 per cent in the number of charges brought before the youth court each year. Many of these charges will represent more serious types of crimes by seasoned offenders. We have grave concerns that the excellent juvenile programs developed in this province may be severely damaged by the need to accommodate such a mix of children and young adults.
This is just the very thing the hon. member for Burnaby wants to avoid yet supports.
2.	In proposing these changes you have expressed concern that 16 and 17-year-olds not be exposed to older, more experienced offenders. Ontario is greatly concerned that your proposed changes will expose 12-year-old children to offenders who are up to 22 years of age. In many parts of Ontario, there will simply be no practical way to avoid this most unfortunate result.
The province further stated:
Another concern you purport to be addressing with your amendment involves reducing the number of young persons being institutionalized. We are afraid that you are achieving precisely the opposite result. Our experience shows that in practice few 16 and 17-year-olds are incarcerated because the courts respond to this age group generally as first offenders. However, if the maximum age is raised, many would undoubtedly be appearing before the youth court as repeat offenders and would draw stiffer penalties. The number of custody dispositions for 16 and 17-year-olds may increase by 200 or 300 per cent. Furthermore, the adult court would probably adopt a more lenient approach to 18 and 19-year-olds, as first-time adult offenders.
That kind of concern ought to register with the Solicitor General. On the one hand, he wants to prevent young people from being incarcerated with adults, but, on the other hand, he brings in an amendment which will ensure that young people will be incarcerated with adults. I find that to be reprehensible.

May 17, 1982
Young Offenders Act
Further, he ignores the testimony given in committee by members of the Ontario government. I would like to quote from page 63:54 of the committee hearings held February 23, wherein Mr. Drea says:
Now, there is no way, even at a cost of some $83 million-
I might say in passing that the hon. member for Burnaby wants us to spend more money to assure that the justice system works. I agree that we do need to spend more money in some areas. I would remind the hon. member, however, that the way to save money is to let the family look after the juvenile if at all possible, rather than to institutionalize, and it would not only save money but would also be much better for the juvenile.
Mr. Drea continued:
-and that may be low-that I can provide at least 20 new maximum security- and 1 am not talking about maximum security for juveniles, I am talking about detention centres that would be built to the standards of Toronto East or the Don jail; that would be built to the standards of the Millbrook provincial institution. There is no way I can provide those-forget the money; just the bricks, the mortar, all the security that goes in. We are not going to be able to do that in three years.
Therefore we are going to have to take over from the adult system some maximum security detention centres. If this goes through, you are going to have juveniles in the Don jail in Toronto. It is that simple. I have no other place to put them. 1 cannot put them in a group home. I cannot put them in an observation place. Perhaps after trial or a disposition they may go off into something not that secure.
On the one hand, the Solicitor General and the hon. member for Burnaby want to ensure that these young people are not incarcerated with adults, while on the other hand they are making sure that it will happen. Two pages later on, Mr. Drea states:
*-By the way-and this has not even been touched-the probation caseload in Ontario will change by about between 7,000 and 8,000 people a day. Now, the important thing about that is that most 16 and 17-year-olds are the prime users of probation and with community service orders and a number of other things, it is working. It is really working. Okay. Now, you are switching, you are having to fragment your probation thing without any regard to the end of the system. It is what you want to accomplish. Knowing all the restraints and all the legalisms, which are quite popular, that 1 would prefer to look at.
I suspect that the secret of the hon. member for Burnaby, certainly, is that he enjoys having that kind of a state role in juvenile affairs, that he wants to have a state enterprise in the juvenile system and to move into those areas which are properly the family areas. I suspect that that has more to do with ideology than it has to do with the welfare or prescient understanding of where the children or the young people are at.
The hon. member for Burnaby also ignored a representation by the New Westminster crime prevention committee. This is an organization of private citizens, ratepayers' groups, business people, members of the MHR, police, YMCA, YWCA, probation services, detached youth programs, etc. They state:
We are opposed to the item whereby the age limit of prosecution for an adult will be raised from 17 (the current age here in B.C.) to 18. In our collective experiences we believe this will only serve to give too many juveniles another year to continue their anti-social (criminal activities) before they will be held fully responsible for their actions.
We are also concerned about the involvement of lawyers at the initial phase of investigation of first offenders. This will, in all likelihood, put an end to our very
successful police diversion programs. We find that the youth are already very familiar with their rights and the presence of a lawyer at this stage could in many instances hinder our working with youth before they get into the justice system.
That is the presentation of a committee from New Westminster, the city bordering on the constituency represented by the hon. member for Burnaby. He ought to be informed about the cause in B.C. He ought to know how people in British Columbia think. Instead, he would rather choose to represent the feelings, ideas and presentations of the people of Quebec and Manitoba and forget about those in British Columbia. Of course, we are familiar with that from the members in the New Democratic Party of British Columbia. We saw that during the constitutional debate and we understand where that sort of thing comes from.
The other point, which is ambiguous to the extreme as far as the Solicitor General is concerned, and certainly the hon. member from Burnaby, is that on page five of his presentation to the committee the Solicitor General pointed out that:
The key principles which underlie the proposed young offenders act are:
That young persons should be held more responsible for their behaviour but
not wholly accountable since they are not yet fully mature-
I agree with that. As a matter of fact, that was corroborated by the Minister of Justice (Mr. Chretien) only a few days ago when he was referring to the child pornography provisions in Bill C-53. I agree that young people ought to be held accountable, but not wholly accountable. It strikes me as somewhat strange that the hon. member for Burnaby takes the same position, but in a different way. Here in the House he has been pontificating as to how society ought to operate under a load of guilt for the many wrongs that it has perpetrated on young people and children, and that one really cannot blame children for doing wrong because, you see, society is at fault. That may be incredibly sound socialist principle and ideology, but it is rotten psychology. Even that university-educated hon. member for Burnaby, who has done a lot more reading than he has living, ought to know that if young people are trained to shove the blame on to someone else, they will learn that very well and they will never learn to be accountable. There is a choice between making young people accountable or making society accountable. The hon. member for Burnaby ought to learn that there are sometimes people who choose-who decide-to do wrong regardless of the circumstances and regardless of what society has done. Witness the affluent community from where he comes.


An hon. Member:: Like the Conservative Party.


Benno Friesen: Yes, including the Conservative Party. It is part of human nature.


Mr. Darling:: Like the NDP in Saskatchewan.


Benno Friesen: I do not absolve any segment of society from that. But even in the community which the hon. member for Burnaby represents, there are affluent members of that community who do wrong. Will he blame that on society? Will he blame it on poverty when the upper and middle-class people
May 17, 1982

in his community commit crime? As I say, it may be great Skinnerian dogma, but it is not good psychology. It certainly portrays an incredible lack of understanding of human nature and of young people.
As I said before, I agree with the minister that there ought to be joint responsibility between the young people and some other body in society. That is why I was so relieved to see the Solicitor General, when he was a backbencher, table a private member's bill which called for joint responsibility between young people and their parents in certain cases. I thought that was a good idea, so I took up that idea. I admittedly modified it very slightly and submitted it as an amendment. The minister is enjoying this, is he not?


Robert Phillip Kaplan: Not very much; not this part.


Benno Friesen: Here is the amendment I submitted in committee:
That Clause 3 of Bill 61 be amended by
(a) striking out line 31 on page 3 and substituting the following:
"(a) parents have primary responsibility for the care and supervision of their children, and, for that reason, young persons should be removed from parental supervision either partly or entirely only when all measures that provide for continuing parental supervision are inappropriate;
Later there was an amendment asking that the parents of the children be held jointly responsible when the judge deemed it appropriate to do so. When the Solicitor General was a backbencher, he found that to be a good principle. In fact, he did so at the behest of his constituents. Apparently there was a lot of vandalism in his riding. The community organizers came to him and said they needed a back-up to the present law. If parents are irresponsible, the law ought to bring them to account and make them jointly responsible for the children. I think that is good.
That was the view of the Solicitor General when he was a backbencher. A marvellous conversion took place between his move from the back bench to the front bench. When he became a cabinet minister, he either had a conversion or lapse of memory because he felt that it was not an appropriate piece of legislation.
I am quite astounded at that. I think it is a downward move. For support, I have the credo of the Canadian Society for the Prevention of Cruelty to Children. It underscores this. I quote:
Most parents are willing and able to provide their children with the necessary loving empathic care, given support from others, appropriate understanding of the task and the conviction of its absolute importance.
It is unutterably cruel to permanently maim a human being by failing to provide this quality of care during the first three years of life.
There is an urgency therefore to:
-Re-evaluate all our institutions, traditions and beliefs from this perspective.
-Oppose and weaken all forces which undermine the desire or ability of parents
to successfully carry out a task which ultimately affects us all.
-Support and strengthen all aspects of family and community life which assist parents to meet their obligation to each new member of the human race.
That is a very positive statement. It addresses the perception in the way it ought to be seen-that the family comes first.
Export Development Act
When there are families which are irresponsible, the support mechanisms of the state step in, but only as a final resort.
While we support this legislation and while there are aspects of the bill that are upgrading and do away with some of the anachronisms in the legislation-and it is necessary to do that-there are some very dangerous trends in the legislation.
I want to go on record and absolve myself of the responsibility for those aspects of this legislation that are destructive, and to point out to the members of this House and the Canadian people that there are aspects of this legislation that lead us down the road of statism.
The role of the family is being eroded, the position of the family is being eroded, parental responsibility is being eroded, and there is an easier intrusion on the part of law enforcement agencies, human resource agencies and the court system into the family unit. This will, in effect, allow parents more easily to absolve themselves of their responsibility, allow the state to come in and say to parents that because they are not doing it, the state will have to.
I want to go on record today as one person who tried in this House and in the committee to stop that slide toward a statist trend and intrusion into our family lives, who tried to preserve the integrity and sacredness of the family unit.


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


Some hon. Members:: Agreed.


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


Some hon. Members:: Agreed.
Motion agreed to and bill read the third time and passed.


EXPORT DEVELOPMENT ACT
Edward C. Lumley: that Bill C-l 10, to amend the Export Development Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, it is indeed a pleasure to initiate second reading debate on Bill C-l 10, to amend the Export Development Corporation Act.
I hope I will have the indulgence of my colleagues since, due to my international travels, this is my first opportunity to speak in this House since becoming a minister, other than answering questions during question period. I would like to speak for a few minutes, before getting into the details of the bill, about the initiatives we have undertaken since March, 1980 with respect to export development, as well as to pay tribute to some of my colleagues in the House.
Most ministers upon entering their portfolios do not have the luxury of having several of their colleagues in the House of

May 17, 1982
Export Development Act
Commons having been their predecessor. For my part, I have four distinguished members of this House who have been previous ministers of trade; the hon. member for Northumberland (Mr. Hees), the hon. member for Etobicoke Centre (Mr. Wilson), the hon. member for Saint-Maurice (Mr. Chretien) and the hon. member for Ottawa-Carleton (Mr. Pepin).
I sincerely appreciate the guidance and counsel of these individual members who have made my job much easier, particularly the hon. member for Ottawa-Carleton who has spent a great deal of time working with me. As my neighbouring Member of Parliament he not only has worked hard in his own area of responsibility of transport, but also has spent a great deal of time with me on what I think is his first love, international trade.
1 also want to thank colleagues on both sides of the House who participated in the various trade missions we undertook during the past two years. We decided two years ago that it would be to the advantage of the Canadian business community as well as to all parties in this House to have individual members of Parliament travel with the trade minister to various countries on trade missions with the Canadian business community and participate in those discussions. The contribution made by members on both sides of this House has been applauded by the business community and, I might add, by trade ministers and industry ministers in just about every country that we visited. In particular, I would like to single out my two trade critics, the hon. member for Yorkton-Melville (Mr. Nystrom) and the hon. member for Calgary South (Mr. Thomson), who have participated in several trade missions and have made very important contributions to our trade efforts abroad.
Canada is historically a trading nation, depending on international markets to consume close to one-third of the goods and services produce. With respect to goods, almost 50 per cent of domestic production is for the export market.
The degree to which we are successful in selling abroad has a large impact on new investment and new jobs in Canada. Because such a large portion of our GNP is export-oriented, Canada is much more trade dependent on other countries, such as our friends to the south. In addition, because of the relatively small size of Canada's domestic market a successful export effort is crucial, since it provides the opportunity to achieve the economies of scale necessary for Canadian firms to compete effectively at home. All of these factors suggest that the continuous support of Canadian exports is essential.
The ultimate goal, of course, of increased exports is the creation and maintenance of jobs which are consistent with the social and economic goals of Canadians in all regions of our country. It is for this reason that successive governments have recognized the importance of the Export Development Corporation and has supported its efforts.
The international marketplace is becoming increasingly competitive. Developed countries have traditionally stressed exports as the key tool in difficult economic times and as an
engine for economic growth. Competition has always been fierce among these countries and continues to be so today.
Recently the newly industrialized countries, recognizing the validity of economic arguments in favour of increased exports, are putting considerable effort into the development of export markets for their own goods and services. In order to be successful in international markets, Canada must appreciate the challenges of international competition, face them squarely and pursue the many opportunities that exist with imagination and aggressiveness.
What are some of the areas, Mr. Speaker, we have been concentrating on during the last couple of years to increase Canada's exports abroad? First we have put increasing emphasis on capital projects. Why have we emphasized capital projects? There are three very simple reasons, Mr. Speaker. First and foremost, the successful acquisition of a capital project by a Canadian company, or by a consortium of Canadian companies, means an increase in the export of Canadian capital goods, the labour-intensive side of our industrial structure.
Secondly, we have tried to accelerate our aggressiveness in the non-traditional trading markets of Canada. It is very interesting, Mr. Speaker, that the areas of indigenous expertise to Canadians such as in energy, power generations, transportation and communications, etc. are also the major capital projects being undertaken by many of the newly industrialized and less developed countries throughout the world. So by acquiring these major capital projects we increase the image of Canadian manufacturers as excellent suppliers of goods and services in the highest technology sectors.
Thirdly, Mr. Speaker, we increase the image in our own country of our fellow Canadian businesses in terms of being successful in acquiring these contracts-to try and spread the good word-and I think this is having substantial success due to the fact that more Canadians than ever before are bidding on major capital projects throughout the world. Perhaps the best indication of our success in this regard, Mr. Speaker, is the fact that in 1981 we acquired more one-hundred million dollar contracts than at any other period of time in our history. As a matter of fact, we acquired more of these contracts in one year than we acquired in all the years previous. I think that is an indication of the aggressiveness, the international marketing ability and the technical capability of Canadian business men and women in a very difficult international marketplace.
How have we done? What have our results been? Canadian trade results are testimony, I think, to our increasing success in the international marketplace. When we consider the adverse economic conditions which we and our trading partners are facing, as well as the intense competition that exists in all export markets, Canada continues to perform impressively. For instance, merchandise exports increased by 17 per cent in 1980 and a further 10 per cent in 1981, outpacing the growth of the GNP in each of these years. Our 1981 trade surplus of $6.5 billion was exceeded only by the surplus of $7.8 billion in the preceding year. Perhaps, Mr. Speaker, the most important statistic is that Canada has had 23 successive months of merchandise trade surplus.
May 17, 1982


Some hon. Members:: Hear, hear!


Edward C. Lumley: In the areas of manufactured exports, the labour-intensive side and obviously the most important side to us, we are doing much better than many of our critics would lead us to believe. Some 70 per cent of Canada's merchandise exports take the form of semi- and fully manufactured products, a fact which often seems to escape the notice of those who characterize Canada as simply a country rich in natural resources.
The measurement of a trade surplus is based on the value of exports against the value of imports. I suggest that there is another way of looking at our export data which provides us with new insights about our trade performance. Industrial growth and employment show a direct relationship to the volume of output, and thereby to the volume of trade, and are not simply aggregate values in current dollar terms. Over the period 1970 to 1981, the price index of crude materials, as outlined in StatsCan figures, soared to almost five and one-half times its 1971 base, whereas the increase in the price of end products-"inedible", to use StatsCan terminology-is much more modest, having only slightly more than doubled. The result of the greater increase in the price of crude materials has obscured full recognition of the doubling of the physical volume of end product inedible exports between 1970 and 1981.
In citing these figures, I do not want to imply that I am not concerned about the further growth that still remains to be achieved in our export of fully manufactured end products. Rather, I want to highlight the important progress that Canadians have achieved in the production and sale of manufactured goods, and to stress the importance that this government places on the production of these types of products from a socio-economic perspective. Further, 1 would like to emphasize that growth in this sector is an important aspect of current economic development policy.
One of the other areas of priorization for our trade officials during the past few years, Mr. Speaker, is the area of market analysis. Traditionally, and as used many times in this House by speakers on both sides, we state the figure of 70 per cent as representing our total trade with the United States of America. In the last two years this figure has dropped from 70 per cent to approximately 65 per cent to 66 per cent. Thus it can be seen that Canadian businessmen and women are doing their very best to diversify and develop a much broader base from which to export Canadian goods and services.
In our market analysis we have first of all looked at the areas of the world which would have the largest GNP growth. The 7, 8 and 9 per cent annual GNP growth that used to be experienced by the developed world is now being experienced by countries in the Middle East, the Pacific Rim and in Latin America. During the past two years our officials have been working on special market analysis programs not only for these regions but for specific countries in these regions. The first three of these studies have been made public and I understand from the business community have been very well received.
What have we done with respect to some of the other programs to encourage Canadian business to export? Perhaps
Export Development Act
the most important program incentive to the Canadian business community is the PEMD program, the program for export market development. The Government of Canada last year tripled the budget from the PEMD program. The PEMD program, very simply, Mr. Speaker, is a program to cost-share the risk with Canadian business, particularly small and medium sized businesses, in trying to increase the marketing of their goods and services abroad.
We have opened up a new post in Quito, Ecuador. We will be opening up a new post in Perth, Australia this year and we have under discussion right now a request to cabinet for several other posts which should assist Canadians in markets which we think will improve our ability to export.
On ministerial visits, Mr. Speaker, in the past we have not taken advantage of ministerial visits to a variety of countries as requested by the Canadian business community. During the past two years we have put special drive on furthering ministerial visits to accompany Canadian business people at their request, where and when required. Based on the Canadian Export Association's last annual report, this has indeed been appreciated.
One other point I would like to highlight, one which does not get full credit, relates to the travels of our Prime Minister (Mr. Trudeau). The comments of the president of the Canadian Export Association last year at the association's annual convention were indicative of how the Canadian business community appreciates the Prime Minister's travels abroad.


Mr. Blenkarn:: You don't believe that, do you?


Edward C. Lumley: The businessmen appreciate the high esteen in which the Prime Minister is held abroad and the doors that are opened to Canadian business by his reputation internationally.
Another positive development is the formation of the Export Trade Development Board which was recommended both by the previous minister in my department and the last time our party was in power. The formation of the Export Trade Development Board has made a very important contribution to a co-ordinated, cohesive approach by the private and public sectors with respect to our trade effort abroad. The only group we were not able to include in the formation of that board were the provincial governments. However, the formations of federal-provincial committees on export promotion and trade policy have given the provinces direct input into the discussions of the Export Trade Development Board and, obviously, into discussions by the Government of Canada with respect to trade policy.
Finally, with respect to new financing programs, which in essence is what we are here to discuss today in relation to Bill C-110, as I have stated repeatedly, the international trading environment is indeed competitive. Among the other things, Canadian exporters face a form of concessionary financing, called credit-mixte, offered by the governments of other industrialized countries. In the face of such competition this government established the EDC credit-mixte program in early 1981. The establishment of this financing instrument was

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a measure taken to combat the growth of such financing. While backing Canadian exporters with our own facility as long as necessary, Canada continues to oppose the use of credit-mixte and is working with other like-minded nations to reduce its application.
The firm position which Canada has taken in respect of credit-mixte underlines the position which this government has taken in the broader context of subsidized export financing. Our government has put important efforts into international negotiations to achieve a reduction in the subsidies being offered by some other countries to make the goods and services of their exporters more attractive. I am pleased that important progress has been achieved in this area and particularly that internationally agreed minimum lending rates for official export credits have been adjusted significantly upward in recent weeks. The government is somewhat encouraged by these developments; however, it will continue in its efforts to reduce subsidies in export credits further, allowing Canadians to compete effectively on the basis of price, quality, delivery and service.
Canada is very fortunate to have a strong and internationally oriented banking system. However, the creation for exporters of any country of an acceptable risk environment for trading involves risk management and financing of a nature beyond the capability of their commercial banking and insurance systems. Thus, governments have become involved and act as required to complement facilities offered by the private sector to finance and assume some of the risks associated with export trade.
The Export Development Corporation, the instrument through which official export credit and credit insurance is delivered in Canada, is an integral part of the national trade development policy and program. Continuing government support of the EDC such as that shown in this bill is indicative of the priority which this government places on exports as well as its willingness to help exporters meet international competition.
The EDC is a Crown corporation-not known to the average person in Canada-which provides financial services to Canadian exporters and foreign buyers in order to facilitate and develop export trade. It does this through a wide range of insurance, guarantee and loan services. Because it is a Crown corporation, it enjoys status as a government agency when funding itself and in foreign government dealings. The EDC is determined in its effort to assist Canadian exporters facing tough, government-supported foreign competition while at the same seeking to maintain minimal subsidy levels in the interests of the Canadian taxpayer.
The corporation encourages maximum private sector involvement in the provision of services to exporters, consistent with the realities of international competition. Therefore, an important part of its role is to work in partnership with the
Canadian banking community to combine their efforts effectively to the benefit of the exporter.
The EDC conducts its affairs in accordance with commercial principles and disciplines, seeking, in the long term at least, to cover all costs and preserve the invested capital. Accordingly, it extends its support only to transactions that are in all respects commercially sensible. The corporation is in business to take foreign risks, but it does not insure when, so to speak, the house is on fire; nor would it be prepared to lend to a bankrupt buyer.
The corporation's performance in recent years, particularly in 1981, has been exemplary. I am sure that during this debate individual members will detail the EDC's performance. I will limit my comments to saying that the EDC should be commended for the quality of its operations and particularly for its responsiveness in the last few years to the needs of the exporting community-small and medium-sized in particular-and is deserving of the ongoing parliamentary support which is implicit in this bill.
Bill C-110, which we have before us today, would allow the EDC to continue to fulfil its role in support of Canadian exporters. Three major types of change can be identified. First, the bill extends the corporation's legal capacity to deliver its services. It should be noted that the statutory limits are not an indication of the cost of EDC services to the taxpayer but, rather, represent ceilings on the amount of liabilities which can be incurred by the EDC on behalf of the government. The actual scale of the EDC program is established annually through the government's budgetary systems and necessary appropriations by Parliament.
Second, there are a number of changes which authorize the EDC to improve the range and flexibility of the services it offers to Canadian exporters.
Finally, a third group of amendments is designed to facilitate greater administrative efficiency and speed in the delivery of the corporation's services to the advantage of exporters. I am sure details of the bill will be outlined by colleagues on both sides of the House before the end of this debate.
In summary, I would like to commend the Canadian exporting commmunity for its success in recent years. As I indicated earlier, Canada's trade performance statistics are testimony to the drive and aggressiveness of our exporters in the international marketplace and are indicative of the fact that they are prepared to face the tremendous challenges ahead.
For its part, the government is very active and has undertaken many initiatives recently in the quest to improve further the environment within which Canadian exporters must operate. The amendments proposed in the legislation at hand are a further indication of the continuing support being accorded to exporters by the government through the Export Development Corporation.
May 17, 1982



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Desmarais):: 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 Winnipeg-Assini-boine (Mr. McKenzie)-Veterans Affairs-(a) Request for adjustment increase in pensions, (b) Inquiry respecting date of presentation of legislative amendments; the hon. member for Mississauga South (Mr. Blenkarn)-The Economy-(a) Level of interest rates, (b) Request that new budget be introduced; the hon. member for Winnipeg-St.James (Mr. Keeper)- Employment-(a) Voluntary affirmative action program- Reported contents of memorandum, (b) Request for introduction of mandatory program.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lumley that Bill C-110, to amend the Export Development Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. John Thomson (Calgary South):: Mr. Speaker, I want to make a few comments about Bill C-l 10 but, before doing so, I should like to make a couple of points of a general nature about Canada's trade. In spite of the very glowing picture which has been left with us by the Minister of State for International Trade (Mr. Lumley), I have to say that I think we in Canada are losing the trade battle. I am afraid that we are going backwards. I know the minister does not like to refer to this and he does not really consider it a valid point, but the fact is that we are losing our share of international trade today and have been for some time. Canada's share of world trade has been on the decline for the last six or seven years, and I think that is a very important point we have to take into account in assessing our trade performance.
The second point is that our deficit in fully manufactured goods in Canada this year will approach $21 billion. That is a very large sum of money. To put it in some sort of perspective, $21 billion is about one third the federal government's level of expenditure for this year. It is about one and one half times the federal government deficit we will be looking at this year. So it is a very significant number. More important is the fact that in order to produce a $6.5 billion surplus in trade we have to have a surplus in our natural resource industries of some $28 billion to offset the deficit in fully manufactured goods of $21 billion.
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While $6.5 billion sounds like a good surplus, Canada is becoming increasingly reliant on its trade surplus for selling the natural resources of coal, iron, natural gas, lumber, forest products, copper, etc. That is another factor we have to take into consideration in our trade performance.
Perhaps the third point that I want to make in connection with trade is the most important. Trade cannot be considered in isolation from all the other things that we do with our customers. Whether we want to believe it or not, we have alienated a good number of our customers over the last few years. Some people do not like to buy from Canada now because of the National Energy Program. They do not want to do business with Canada because of FIRA. They do not want to do business with Canada because we discriminate in some other fashion, be it in fisheries or something else. We certainly do not discriminate against anyone in terms of acid rain.
All these factors have to be taken into account when examining our trade performance and our ability to trade with our neighbours and our customers. We cannot trade in isolation from everything else. When we make a bad friend because we have discriminated by virtue of lower prices and by subsidizing Canadian industry through the National Energy Program, that contravenes the spirit and intent of our agreement under GATT. It is no wonder they get mad at us. The same holds true with FIRA. Some people think we are not playing according to the rules of the game, but then we think some of the people we do business with do not play by the rules of the game either! I like free trade, Mr. Speaker, but I also like fair trade and I think that a good many of the signatories of GATT are not playing the game either.
I come back to the point that trade cannot be considered in isolation from everything else. We have to take a whole political spectrum into account when judging our ability to trade with our customers.
I should like to turn to some of the specific provisions of Bill C-l 10. This bill to amend the Export Development Act essentially increases the limits of borrowing and increases the limits under which the government can undertake to do business in insurance and guarantees. The present legislation allows the Export Development Corporation to take on liabilities equal to ten times the amount of its authorized capital which at present is $1 billion. That means that the government can make loans of up to $10 billion. Up to the present time the EDC has made loans and unfunded commitments totalling almost $8 billion, so it is approaching the upper limit and I can understand that it must be extended. I have no quarrel with giving EDC a greater line of credit to enable it to expand its business. Under the Export Development Act the government was permitted to make loans or to undertake guarantees on its own account as distinct from the Export Development Corporation, up to an amount not to exceed $3.5 billion. Again, the

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government is pushing the upper limit so the amount is being raised to $10 billion.
The third element of the legislation is a technical one dealing with the number of directors. The existing legislation allows for 12 directors, of which six must be members of the public service. The amendment to the legislation would raise the number of directors from 12 to 15. Apart from the change in the number of directors, we are dealing with the creation of new financial limits with respect to the Export Development Corporation and the amount that the government is allowed to borrow to finance export sales.
I should now like to deal with the question of financial disclosure, Mr. Speaker. I sense that today there is a lack of trust on the part of the public toward all governments, not least the federal government. I believe the public mistrusts all levels of government, so it is absolutely essential that governments go the extra mile to reveal the financial dealings of all Crown corporations to the public. Not everyone believes in Crown corporations but I happen to believe in the Export Development Corporation. Regardless of whether it is the Export Development Corporation, Petro-Canada or any other Crown corporation, I think it behooves us as parliamentarians to go that extra mile to provide complete financial disclosure. That is what I want to speak about with respect to the Export Development Corporation.
This may become a little complicated, Mr. Speaker, but I shall try to simplify it as much as I can. The money that the Export Development Corporation has loaned out and the commitments it has made amount to close to $10 billion. That is why we need to increase the limit. Of that $10 billion, $4 billion has been borrowed to cover the $8 billion or $10 billion that is committed or loaned. That leaves what we call unfunded disbursements of about $4 billion or $5 billion. In other words, the government has committed Canadians to $5 billion worth of loans that will have to be funded in future at unknown interest rates.
We do not know what the interest rate will be at the time we go to borrow the money but we know what it is today. If the EDC goes into the market today it will have to pay roughly 16 per cent for its money. The Export Development Corporation has made firm commitments to others that it will lend the money at something close to consensus rates. We hope they will be consensus rates, Mr. Speaker.
Another factor is that the government will not say what kind of loans the Export Development Corporation makes. I am not suggesting that the government should tell us the terms of every individual transaction, but it is the Canadian people's money, not the government's, and surely they are entitled to know what the government is committed to on their behalf. But no, the government will not open up, and that is part of the problem. The people do not trust government because government will not put the facts on the table. What the government is saying, in effect, is, "You are not smart enough to know, so we will not tell you."
The government has committed taxpayers to $4 billion or $5 billion in loans at subsidized interest rates for anywhere from 20 to 30 years. But those liabilities have not been funded. We do not know what it is going to cost us at some point down the road, but we do know what it is going to cost us today. What I am driving at here is that the Canadian public should be told what the liability is. For example, if we loan that money out for 15 years at, say, 8 per cent, and we have to borrow at 16 per cent, we are liable for 8 per cent on $5 billion for 15 years. So let us get it up front and tell the Canadian taxpayer what it is really costing. We are increasing the loan limit of the corporation from $10 billion to $20 billion; we are increasing the limit on government account from $3.5 billion to $10 billion; and we are increasing the corporation's authorized capital from $1 billion to $2 billion. Those are pretty big sums of money. The Canadian taxpayer is going to have another $30 billion at risk.
Let us talk about the Candu reactor sales for a moment. They provide a lot of jobs and keep Canada at the forefront of technology. Maybe they are a good thing. I am not convinced that Candus are all that great a thing, but let us assume for a moment that they are. I think the minister confirmed to me in committee that if we sell a Candu to Mexico we could be talking about a $5 billion line of credit. A sale to Roumania, if it goes through, would, I think, be something over $800 million, perhaps $1 billion. I have heard a figure of between $3 billion and $4 billion for the sale to Korea, if it goes through. I am not certain whether we have any commitments there at the moment, but the point is that we could be looking at $10 billion in financing. While I doubt very much that we would be able to sell Candu reactors on the basis of 11 per cent financing, let us assume that we can and that we have to borrow the money today at 16 per cent. We are then talking about a 5 per cent interest spread on $10 billion. That comes out to about $500 million a year.
The point I am getting at is that I think the Canadian people are entitled to know that is the kind of commitment the EDC is making on their behalf. Admittedly, the government does not know what the interest rate is going to be when those loans are actually funded, but let us tell the people, for heaven's sake, what it would cost the taxpayer if we funded those commitments today. No private corporation would ever get past a security exchange without providing that information. You have to tell the people what you are committing them to.
What the government is saying to the public is: We are going to lend all this money out to help Canadian exporters- which is fine-but we do not know what it is going to cost you, the Canadian public. Trust us, we will look after it. We are a good government and you do not have to worry about it.
Well, I think the government has to come back to Parliament. We as parliamentarians are the representatives of the Canadian people, and I think it behooves the government to come to Parliament and say, "Here is what we are committed to." We do not want to be looking over the minister's shoulder on a day to day basis, but when we reach these staggering
May 17, 1982

amounts our priorities could change. The EDC will lose something like $35 million in 1982, and I am not saying that is wrong. As a matter of fact, it may not be enough; perhaps we should be doing more financing at a loss to promote Canadian industry. 1 understand also that it is forecast the EDC will probably lose $60 million in fiscal 1983.
As competition for international trade increases and more and more countries are desperately looking for trade to support their balance of payments, then pressure on all countries to export increases. Who knows what will happen to interest rates? It is very unlikely in the near term that the rates at which we finance Canadian exports will be anything close to the market rates we pay for the funds. I suggest to the minister and to the government that very likely we will be looking at significant interest rate spreads for quite some time. No one knows what is going to happen, but the trends are there. We are facing tough competition to get Canadian goods abroad. We are facing subsidized concessions that our competitors in other countries make. We have to face the fact that our interest rates will remain at a high level. We are looking at a sizeable interest rate spread and at large amounts of money. I do not want the government to come back here looking for a blank cheque. Five per cent, 6 per cent or 10 per cent of $30 billion is a lot of money. 1 do not think the government should have the right to ignore Parliament and just come back to report what commitments it has made. Our priorities could change.
If we should have learned anything in the last year in this Parliament, surely we should have learned that man's ability to forecast is pretty fragile. All we have to do is look back at the National Energy Program and all of the good things that were expected to happen six, seven or eight months ago. The Minister of Energy, Mines and Resources (Mr. Lalonde) and the Minister of Finance (Mr. MacEachen) were saying, "We do not need to make any changes in the National Energy Program; we are still going to get $53 billion over the next five years." I see only two members of cabinet on the opposite side, but I would like to ask them what they think the budget deficit will be or how much oil revenue they think they are going to get now. Some people say the amount received will be $30 billion less than forecast. I do not know what the number is. It might be $30 billion, but let us assume it is $20 billion less. Where will that money come from?
The deficit will be a paltry $13 billion this year. What if the federal deficit reaches $20 billion or $25 billion over the next few years? If that were to happen, would you not think that the government should reconsider its priorities? Does not the government think the Canadian people might want to reconsider what is being spent by the Export Development Corporation? I am not saying that we would cut back on the financing to the Export Development Corporation, but maybe we should reconsider it. Maybe we do not want to commit $10 billion, $15 billion or $20 billion to the sale of Candu reactors subsidized by interest rates of 5 per cent or 6 per cent. Perhaps with
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so many other problems at home, we should be reconsidering our priorities.
I ask the government to amend this legislation so that if it makes a commitment over and above a certain amount in the way of potential losses in the future, it will give us the opportunity as parliamentarians and as representatives of the people to take a look at what it is doing.
I have another point I want to bring to the minister's attention. It is a message I have tried to get across to the President of the Treasury Board (Mr. Johnston) without success for the past three years. It concerns the method of reporting; the question of financial disclosure. I am glad to see the Minister of State for Finance (Mr. Bussieres) is here; I want to get his attention for a moment on this question. I am talking about the estimates. I think the form in which these estimates are presented is a disgrace, not only to the public but to parliamentarians. God help the Canadian public. I happen to be a lowly chartered accountant and I think I can read a few numbers, but I cannot understand the form of this document. I have been in the business for 25 years and I cannot understand the form in which these estimates are presented.
I will not read the amounts but I will read the terminology. There is an item in the 1981 estimates "Program by activities". This is supposed to tell you a whole lot. We find "Export development corporate account: bank so much; Canada account so much; total; less repayments. Corporate account so much; Canada account so much; retained earnings and outside borrowings so much; total estimates."
That is really an informative piece of information which tells everybody absolutely nothing! Surely to goodness we can have a little more information presented than that. We should at least have some form of description which will tell us ordinary parliamentarians what in the world is going on. I do not think that is too much to ask. I ask the minister of state to speak to the President of the Treasury Board to see if something can be done.
What I have just pointed out is typical of so many of the estimates that come before this House. It is typical of the disregard which this government has for people who want to know where the money is going and how it is spent. People want to know the background. It is very difficult even for trained people to understand these estimates. I ask the government again, does it not think it is time to try to put the information in a form which the people of Canada can understand so people can trust their parliamentarians?
My next point deals with the board of directors of this corporation. The number of directors is to be increased from 12 to 15. The present legislation calls for 12 members. If I remember correctly, I believe the present legislation calls for six directors to be public service employees. The export development committee recommended that there be a greater proportion of private sector directors on the board, a recommendation with which I fully concur. In my opinion, any board, public or private, should not consist of a greater number of inside rather than outside directors, because boards must be
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independent. Independence is absolutely critical to the operation of any board, whether public or private. If the directors are under the thumb of a government or are perhaps employees of a corporation, those directors are not in a position to make an independent judgment. My experience, having been in industry over 20 years, leads me to believe that they are not in a position to make an independent judgment. I think it is absolutely wrong for any board of directors to have 50 per cent of its directors being, in effect, inside employees, which is the present situation in the Export Development Corporation.
When the government in its wisdom drafted this piece of legislation, I guess it decided to leave the six public service employees on the board, that it would not do anything to them, but to increase the number to 15. This provided an opportunity to increase the number of private sector representatives on the board but not do anything with the public service employees. The Export Development Corporation does not need 15 directors. It is ridiculous, it is nonsense. EDC is a fairly cut and dried operation and 12 directors is plenty. Let us have nine directors from the private sector who are independent and three directors from the public service. This would be plenty to get the job done.
I have no axe to grind. Obviously the president of the corporation should be a director, but I do not see what useful purpose is served by the Governor of the Bank of Canada being on the board. I am sure he has more important things to do than that at the moment. I do not understand why the president of CIDA should be on the board. I understand that he becomes involved in some of the dealings, but why should he be on the board? I cannot see his being on the board. I certainly cannot see the deputy minister of finance being on the board, or the deputy minister of industry, trade and commerce. The interests of Canadian taxpayers would be far better protected if there were three or four private sector representatives on the board.
I have nothing against these people personally. They are all able and probably capable, but we need independence in that board of directors. Independence is the key to the management of any successful institution, whether it be government or the private sector. I have said that many times in the House, but I do not seem to be able to get my message across. If we do not have independence, all we have is a rubber stamp.
If I invited a person who was working for me to be a member of a board of directors, he would realize that I am his boss and he would not want to say anything against me which might jeopardize his future, salary increases, pension or even security of employment. Therefore, he is not independent. I do not think that all these gentlemen would fall into such a category, but there is a very good chance that they would be yes men rather than representatives acting in the best interests of Canadian taxpayers.
Another matter which I would like to see discussed in committee is the provision of greater opportunity for chartered banks in Canada to participate in export financing. It strikes
me-and I cannot be certain of this without a real in-depth review of the Export Development Corporation-in looking at the financial statements of EDC that the delivery of service is very, very expensive, as is the case with so many things in government. I can think of many reasons why the Export Development Corporation cannot farm out all export financing business to the chartered banking system. It is not an impossibility, but I do not think I agree with that approach because it is necessary for EDC to do certain things with respect to financing, which a chartered bank would not ordinarily do, in the interests of Canadian exports. I hope this matter will be raised in committee, because I think there is opportunity for greater participation on the part of the Canadian banking system than is presently the case.
Perhaps the government could encourage Canadian chartered banks to go further than they are presently by allowing them to look after some of the every day cut and dried export financing and by letting EDC look after special situations. This matter requires a great deal of study. Perhaps we could save a good deal of money in the cost of the administration of EDC but, perhaps even more important, we might be able to limit the amount of funds which EDC and the government will be required to borrow in coming years to finance Canadian exports. We are looking at very substantial sums of money. If we could shift the burden of these borrowings on to the chartered banking system, it would remove an equal amount of burden from the shoulders of Canadian taxpayers, and perhaps we would make EDC a more efficient corporation.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I wish to say a few words on Bill C-110 which is before the House today. I begin my remarks by responding to the hon. member for Calgary South (Mr. Thomson) by saying that I am very interested in his ideas on accountability but that I would like to see the wording of the amendments. It would have been interesting to see his party, when it was in power for a short period of time, amend the legislation so that there would have been more accountability.


Donald Alex Blenkarn: You made sure that we did not stay there.


Mr. McDermid:: We could not do everything in six weeks; we could not clean up the mess in six weeks.


Lorne Edmund Nystrom: It seems that I have, in a very low key manner, struck a few nerves. I remember that the election took place in May and that Parliament was not recalled until October. There was approximately a five-month break. It was unprecedented that a party which had won an election would take a massive holiday at the expense of the Canadian taxpayers. At any rate, I would be very interested in seeing these amendments because I believe that there should be as much accountability as possible. I believe in openness in government, and I believe that we should reform this institution so that it is more meaningful to us and to the people of Canada. If we can accomplish this in any way, it will make things more open and democratic. I can guarantee that my party and myself are very, very interested.
May 17, 1982

The hon. member for Calgary South and the Minister of State for International Trade (Mr. Lumley) have both stressed the importance of trade to our economy. Not many Canadians realize that trade amounts to about 25 per cent of our gross national product. We are one of the great trading nations of the world in terms of depending, for jobs and economic activity, upon the export of our commodities from this country to other parts of the world. Our neighbours to the south, for example, depend upon approximately 12 per cent or 15 per cent of their GNP in terms of trade. Thus, what happens in terms of trade around the world and world economic trends affects Canada more than most other countries. The Export Development Corporation, as we all know, is a Crown corporation which has been set up to facilitate trade and to try to develop trade around the world. It offers such things as insurance to our Canadian exporters. It offers all kinds of financial assistance, credit assistance and export financing to the exporters of Canada. I noticed in the 1981 annual report that a number of very interesting things are happening in relation to export financing. For example, I found that the net earnings of the Export Development Corporation were $2.2 million last year, while two years ago they were some $42 million. I think that this, as the minister indicates, reflects the reality of the trading world today, which is that it is highly competitive, that people from many other countries such as the Japanese, the French, the Germans, the Americans and others, are offering all kinds of highly subsidized rates to their exporters, which puts us in a very difficult position as a nation unless we make a few changes ourselves.
The legislation we have before us today will amend the Export Development Act in about five or six different areas. Many of these areas are very technical, and perhaps we can get into those at the committee stage of the debate, which is to come. Some of them are perhaps a bit more important. We have here, for example, an amendment to increase the size of the board of directors from 12 to 15 people. That is an interesting amendment. I am not sure we need 15 people, but I do like the idea of involving more people who are in the export business. I would also suggest to the minister that since the provinces are so important, perhaps we should involve the provinces a bit more in the spirit of co-operative federalism. Perhaps someone who comes from one of the Crown corporations which exports into the international market should be on the board of directors. We have federal Crown corporations and we have provincial Crown corporations, such as Sask-potash and Hydro-Quebec. Perhaps people from those corporations should be involved.
I also think the time has come in our country when we must start looking at the whole question of economic democracy. When we have a private corporation, a Crown corporation, or a mix of the two, I think it is very important that the employees of a particular company have some representation on the board of directors and some direct input into how that company operates. An employee in the company, be it a
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secretary or working person, is very sensitive as to what that company is doing right or what it is doing wrong. Those are some of the matters we should consider at the committee stage.
There is also an amendment before us which will increase the capitalization of the company from $1 billion to about $2 billion. That reflects the reality of inflation and of the international interest rates. I have already mentioned that we face tremendously stiff competition today from a number of countries, such as France and Japan, when it comes to trade. That is one issue we will have to get around.
I, like the minister and the hon. member for Calgary South, want to mention a few ideas we should be discussing in relation to over-all trade. When we refer to trade, we should not discuss it in isolation. I do not think we should discuss any issue in the world today or in our country in isolation. I suppose, by nature, I am very suspicious of people who go on one issue crusades or one issue campaigns, regardless of the issue, because it should fit into a system of values for Canada and for all of mankind. Therefore, when I refer to trade, I do so in relation to an overall strategy for Canada and how it should fit into the world.
I want to mention about seven or eight different points. The hon. member for Calgary South and the minister himself mentioned the problems we have in exporting fully manufactured goods. In about 1970, we had a trade deficit of around $2.5 billion or $3 billion in fully manufactured goods. Last year, in 1981, our deficit was $21 billion. That meant a lot of money and a lot of jobs which could have been here in Canada or kept here in Canada for Canadian workers. I believe any trade policy and any policy of the EDC must attempt to push the export of fully manufactured products to other parts of the world. That must be part of policy of the Export Development Corporation.
A second point, and I noticed in the annual report that there was a positive trend here last year, is that more and more aid from the Export Development Corporation should go to small business and medium sized enterprises. The multinational corporations and the large companies have a much better chance in terms of their international organization, their economy of scale, their contacts, their internal financing, their long-time establishments and so on, to find the markets, to be able to promote their exports and to finance those exports, than do the ordinary smaller and medium sized enterprises in this country. I also noticed a very interesting statistic which came out of the report of the committee in relation to the National Trading Corporation, which pointed out that some 63 per cent of Canadian businesses knew of the EDC. In other words, about 37 per cent, or over one third of Canadian businesses, were not even aware of the Export Development Corporation. Only 29 per cent of Canadian businesses use the services of the Export Development Corporation. So many people out there who could be exporting something are not aware of the corporation or of its services or, if they are aware, they are not using its services. I have not had the opportunity to sit down and analyse which companies use the corporation's

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services and which do not, but my guess would be that the majority of the people who do not are probably those in the small and medium-sized enterprises. If one looks at the nature of our country, one will find that more jobs are created by small and medium-sized businesses and more people work for small and medium-sized businesses than work for the big corporations of Canada. I believe that one of the policies of the EDC should be to make itself known to the small and mediumsized business and to aid them more than it has in the past.
The third point I want to mention, which should fit into our over-all policies, is in relation to the attempt to Canadianize our economy. I know of no other industrialized country in the world which is as controlled by foreign shareholders and companies as is our great nation of Canada. In fact, we find that last year several billion dollars of profit and dividends flowed out of this country to foreign shareholders. The EDC should be trying to promote a policy of Canadianization in terms of making its programs and policies known to Canadian firms. It should perhaps aid and assist some of the Crown corporations a bit more, not only at the federal level but at the provincial level as well. That would be a very important step to take.
A fourth point I might discuss a little more later relates to increased aid to what I would call the sunrise industries, the futuristic industries around the world. By that I mean the industries involved in the whole area of science, high technology and the world of the future. I suppose we are moving into a society where, in a few years, every kid in every classroom will have a computer on his or her desk. It is a very rapidly changing society. There is a massive technological revolution going on out there, so much so that even in our most efficient industries, such as the steel industry, even if there were a booming economy and if we were to get out of the recession, we would probably never gain back all the jobs we had before it started, simply because of technological and scientific change. It is important for our country to ensure that our industries remain competitive and up to date so that as we go through this revolution, we as Canadians will be in the forefront and will control the robots and computers so that they will not control us. That is very important. As I look at the statistics, I find that we are lagging further and further behind in this field. For example, in Japan there are 40 times as many young people attending electrical engineering schools as in Canada, and that means a lack of foresight. In terms of percentage of GNP devoted to research and development, I find that we do not rank equal with Japan, the United States, France or Germany; rather, we are on the level of countries like Ireland, Egypt and Italy.


Donald Alex Blenkarn: What's this got to do with the Export Development Corporation?


Lorne Edmund Nystrom: So when it comes to Canadian trade policy and the EDC, we should be putting more emphasis on developing industries which are involved in the more modern technological side of things. We can do this in areas like communications. The hon. member asks, "What about the EDC?" in terms of Brazil, Canada has signed a contract which will involve some Canadian firms which will supply equipment for
satellites in that country. These are some of the points that should be kept in mind involving the EDC and our trade policy.
A Conservative asked, "What does this have to do with trade?" His party's spokesman mentioned a number of areas for innovation in terms of trade, and so did the minister. I am simply making a few more suggestions myself.
A fifth point, as mentioned by the minister, concerns the need for diversified trade. About two thirds of our trade is with the United States. The Americans are obviously going to be our biggest trading partner. They are our best friend. We are side by side geographically and share a large border with them.
It is very important that we diversify that trade and not put too many eggs in one basket. When the Americans are in trouble and have a recession, we are somewhat isolated and insulated from some of their harsh economic realities. Looking around the world, we should look more and more to the Pacific rim countries, which are very important to British Columbia. We should look to Japan, Latin America, the people's Republic of China, the Middle East and other greatly-populated areas. It is very important that we not rely as much as we do on only one nation for trade.
I have not had a chance to work out all the statistics, but when it comes to the Export Development Corporation, we should be aware of what this does to national policy. Unfortunately, most of our manufacturing and industry is situated in central Canada. Therefore, most of the assistance goes to the corporations located there.
Much of what has been done by DREE, such as equalization payments, for years has been directed to the poorer provinces. The effect of that is diminished or nullified by programs such as those of the Export Development Corporation. It puts money back into that part of Canada that is already more developed and wealthy. It is a very difficult question, but we have to look at EDC in terms of national policy and ensure that what we do to improve underdeveloped provinces is not nullified through the EDC.
My sixth point, and this is very important, is that on the board of directors we have the head of CIDA. It is important that we not forget about world politics. The hon. member from Calgary mentioned world politics; he spoke of our friends and those who are not our friends in terms of our trade policy. We must think of trying to help the Third World and developing nations. There should be a moral and humanitarian purpose to our trade. We should not always be after the big buck and the fast buck but, rather, should try to help those less fortunate than ourselves. We should export some of our knowledge and know-how to help people in other parts of the world become more self-sufficient and thereby improve their standard of living.
When I look at some of the projects financed by the Export Development Corporation, such as the Candu reactor, I am
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not sure whether those should be our priority. I believe there are other priorities we should be stressing instead.


Donald Alex Blenkarn: How would it be financed otherwise?


Lorne Edmund Nystrom: A member of that hon. member's own party raised some doubts about the Candu reactors about half an hour ago. When we talk about trade and exports, we cannot divorce them from the international political situation. Our role as a more fortunate nation should be to help people in other countries who are less fortunate.
There are a number of other things that one could say. Over the last few months and years we have heard many stories about our being the boy scouts of international trade. In many ways we are. We have to become more aggressive and recognize the realities. We have to diversify our economy and start manufacturing and processing more goods in this country.
One of our problems historically is that we have relied on the exporting of raw materials and importing of finished goods. We export a lot of raw materials that are not processed or refined. This started with Jacques Cartier back in 1608 with the exporting of beaver pelts to Europe and the importing of fur coats. In many ways we still have that kind of simplistic policy, and it has to be changed.
Another problem is that we are afraid to be independent of the United States. We tend to be the shadow of the Americans. We have a tag-along economy, and when they have monetarism in the United States, we in this country tend to follow. The government believes they can squeeze inflation out of the system by upping interest rates and restricting the money supply. Galbraith described this as the horse-and-sparrow system. If you feed enough oats to the horse, perhaps enough oats will pass through for the sparrow. Those policies are not working. I hope the Prime Minister (Mr. Trudeau) will put forward new ideas in Versailles when he attends the very important summit to be held there in a few weeks' time.
We have to look at our economic and trade policy and decide where we want to concentrate, look at what we as Canadians do best. Also, we have to look at where Canadians spend their money. When we look at the spending habits of ordinary citizens, we find that between 80 per cent and 85 per cent of the money goes to housing, food and transportation. Because so much of our money goes into those three fields, why not specialize more in those areas? Why not develop those areas more so that we can supply more of our domestic market? When we become better, we can export our technological know-how and products.
I keep watching the clock, Mr. Speaker. I know the time is going on. In concluding, I want to mention five areas where this country can specialize, not only in terms of the domestic market but also of the international market, in areas that are naturals for Canada. I do that because of the rapid changes in the world and the need to modernize our industry to be competitive in world terms. We must do this if we are to continue to provide jobs for Canadians and increase the national pie so
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that we can equalize income, wealth and power in Canada among people and among regions. I will name these five.
First, we must build on our resource base. We have a lot of resources. In the past we have tended to export them as raw materials. Last year we had a $21 billion deficit in manufactured goods. We must, as much as possible, process, manufacture, refine, upgrade and fabricate our natural resources, prior to export.
We have many resources and projects. I think of oil, gas and hydro. Therefore, we use a lot of machinery and equipment. More and more of that machinery and equipment is being imported. Since we use so much of it, it is important that we have an economic strategy to encourage Canadians to produce more of that machinery. Canadians would be put to work producing that machinery for an industry in Canada that will use the machinery.
If we become competitive and produce a quality product, we can export that machinery. I think of Hydro-Quebec and the big hydro projects. We have much expertise there and a potential to produce our own machinery and equipment for the resource sector.
The next thing outside of resources is food and agriculture. I see the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), the minister of agriculture in the Diefenbaker government. He will agree that there must be a greater emphasis on food and agriculture in this country. We are a great food producer and have a small population. We must look at this sector in terms of increasing our exports. The People's Republic of China and other areas could use more Canadian products. In the longer term, they could use more of Canada's knowledge and know-how. This would make other countries self-sufficient in the production of food.
I believe that almost every country can be self-sufficient in the production of food with the proper technology, irrigational and farming skills. I have been to Israel, a small country carved out of the desert. It has become a Garden of Eden in terms of production of food. They export a lot of their products, such as oranges. They do all this despite the fact that they have been faced with many wars over the past 30 years. If it can be done there, it can be done in other countries. We should play our role in terms of exporting the knowledge and technology that we have developed.
We should process more of our foodstuffs as close to the source as possible. This would provide jobs close to the source of production rather than centralizing them in certain parts of the country. We should produce more farm machinery in Canada. That industry has been going downhill. It is now in serious trouble. We have many farm machinery industries that are small but are developing. I can think of three in my own riding of Yorkton-Melville, that is, the Morris Rod-Weeder Company, which has been developed from scratch and is doing very well. I think of Leon's Manufacturing in Yorkton. I think of Ram Industries in Yorkton. These are industries in a small city of 15,000 or 16,000 which have been able to flourish and

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develop. I think we must aid and assist that kind of development across the country. We must also assist as much as possible Co-operative Implements Ltd.
I had a chance a few weeks ago to go to Co-op Implements annual meeting in the town of Preeceville, one of the regions in my riding which gave me an opportunity to understand their concern about the grim and bleak future for farm machinery.
We are an agricultural nation and we should be putting more emphasis on assisting machinery production and everything else that goes into the food and agricultural production for our own markets and for markets overseas and around the world.
Third, Mr. Speaker, there is the question of transportation. We are a big country that stretches for miles. Yet we see smaller countries in size, like the Japanese and the French, who are well able to develop a transportation system. My friend, the hon. member for Kootenay East-Revelstoke (Mr. Parker) is an ex-railroader and knows more about this than I do. They, the Japanese and French, have a transportation system where the trains travel at 200 kilometres an hour, they are very rapid trains. If those trains were put on our road beds, however, they could not go very far because we do not have the proper road beds. We have a trans-continental train that crawls across the country at a snail's pace in comparison with those high speed trains in other countries. Our trains seem to travel across Canada at only 19 or 20 miles an hour.
We want to keep this country together and develop our expertise. That will give us much knowledge and enable us to increase our exports later on. We should be putting more money and more emphasis on transportation, on rolling stock and on road beds. These things would help not only the prairie farmer but all people right across the country.
This morning I came back from Halifax, where I heard about the problems in SYSCO, a plant where they produce only one commodity, that is, steel for the CNR. If we were to improve our rail beds and our transportation system we could at the same time be putting people to work in Cape Breton Island in producing that steel. We could also be putting people to work in Trenton, Nova Scotia, producing rolling stock to haul our potash and our grain and other products. That would help depressed areas like Cape Breton and give some of those people some hope, and some good feeling about this country.
I have dealt with resources, with food and agriculture, and with transportation, and now I would like to deal with two subjects. One of them is communication. The minister mentioned that we have developed a lot of expertise in communications. I remember being with him in Brazil a few months ago. We were there with Spar, a company that was bidding on a communications payload for a couple of satellites down there in competition with the French. We have not only that company but many other companies, including some federal government Crown corporations and provincial government Crown corporations, such as Saskel in Saskatchewan. They have developed tremendous expertise in communications. We
should build on that. Once again, we are a vast country and we have to develop communications. If we can do it for our market we can become leaders in the world and supply other markets in other continents far, far away.
I would give you one or two examples again . The Saskatchewan Telephone Company decided some time ago that they were going into fibre optics. These are laser beams communications through a little thin glass tube. It is a far more efficient and effective form of communications than the satellite. To get sound from a ground station to a satellite and back again takes about half a second. When you go through the fibre optics, it travels at the speed of light which is almost instantaneous. They decided they were going to develop this sector, and because of that they started shopping around for someone to produce fibre optics. They were able to say to a company like Northern Telecom: "You can get all the contracts for fibre optics in our province, if you come out to Saskatoon and establish a plant." That is what is being done. We have used that kind of leverage to get fibre optics into our province. They have already installed the first fibre optics, which happens to be in my constituency in a rural area, and it is working well. The hope of Saskatchewan Telephones is that after Saskatchewan has been supplied with fibre optics, the plant will become big enough and will be a world leader, because we are now in the forefront of the entire world in this area and we can become a major exporter of fibre optics to other countries around the world. Other countries have not thought of the idea yet, or are just in the embryonic stage of trying to develop fibre optics.
There is also the SED Industries in Saskatoon, a company that is owned half by the university, 25 per cent by the workers at SED, numbering about 300 employees, and 25 per cent by the provincial government. It is high technical industry and it is diversified and develops a lot of products. It produced part of the Canadarm, the space arm for the space shuttle Columbia a few weeks ago. We were able to do that in a small province, in the city of Saskatoon, with a bit of courage and vision and imagination. So I say to you, Mr. Speaker, that with national visage and a national dream, we can do things that are as great and much greater from coast to coast.
The last dimension I should like to mention, Mr. Speaker, is the whole area of high technology. I have referred already to the fact that we are moving into the computer generation, not just into the PacMans and the video games, but into the micro and the silicone chips. It is an area that is revolutionizing very rapidly, where the robots are doing more and more of the calls and where the computers are doing more and more of the work. Everything is going through that massive scientific revolution.
My suggestion is that we will have to put a lot more emphasis on making sure that we are in that race and that we use that technology for ourselves and for a better human life. That technology is going to come. If we do not develop it ourselves explicitly, it will arrive here implicitly through imports, with people demanding cheaper and cheaper imports because they
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are done through technological change. It is important that we become a leader, it is important that we invest in that kind of future.
I think of a lot of the possibilities that are missed. A friend of mine said, for example, "Why does a province like Ontario, that uses thousands and thousands of word processors, not use some imagination and buy into a computer firm, along with the co-operatives or the unions or anyone else, and establish that firm in an area that has high unemployment and then channel the orders for word processors from departments and industries and the educational systems and the hospitals, to that firm and into that area, to create jobs and economic stimulation in the province of Ontario?" Ontario should do something like that, as Saskatchewan has done in the area of fibre optics and will be doing in fibre optics in the city of Saskatoon.
It is this kind of vision, this kind of future orientation, that we are going to need in terms of a national economic development policy, to keep Canada in the forefront of the twenty-first century.
In conclusion, I emphasize that there are these five areas: resources, food, transportation, communications and technology. I do not think you can deal with anything in isolation in this world. There must be an over-all vision of where we want to go. I suggest that the Export Development Corporation may not be the leader, it may not be able to play a major leadership role, but certainly it can play a player in developing that kind of policy for Canada in the years that lie ahead.
I see, Mr. Speaker, that it is six o'clock. I do not want to indulge the House any longer, except to say to the minister that we will be taking a very serious look in detail at the amendments that are before us, and asking him some questions between now and the final passage of this bill.


The Acting Speaker (Mr. Ethier):: It being six o'clock, I do not leave the Chair until eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Donald Alex Blenkarn: Mr. Speaker, in my business career I have had the opportunity to deal with the Export Development Corporation, and that is what prompts me to speak tonight. At First Canadian Place in downtown Toronto a floor of space is devoted to this corporation. It has the finest boardroom I have seen. The boardroom table is three yards across, and the chairs are so comfortable one could fall asleep. Mr. Speaker, you would be very comfortable in one of those boardroom chairs.
The overhead of the Export Development Corporation is something else again, and it is about that I want to speak tonight.
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The Export Development Corporation basically has two functions. The first is its insurance company function. The corporation is designed to insure Canadians who are exporting against the political and economic risks of selling their goods where they may have a difficult time collecting payment for those goods in a lawsuit.
People who export from Canada require some sort of insurance policy which enable them to insure their receivables. The insurance aspect is the first responsibility of the Canadian Export Development Corporation, and I suggest that is the most important responsibility of the corporation.
I am disappointed the minister is not here tonight. I see him coming in now. I am glad he is because I want to repeat that the most important thing the Export Development Corporation does is to provide insurance so that when an exporter sells his goods on commercial terms in a foreign country, he can have credit cleared for the foreign recipient of the goods, and he can be insured against political risks, economic risks, current currency exchange risks and all the risks implicit in selling goods in places where it might not be easy to collect because of political and legal systems. That is the first job of this corporation.
Last year the Export Development Corporation sold insurance for which it received a gross premium of SI4.2 million. As any insurance company does, the EDC invested those premiums and earned investment income of $2.6 million for a total receipt of $16.8 million. It placed reserves against its total collection of $13.6 million, for a profit or a gross margin on its insurance operation of a little over $3 million. Out of its reserves the corporation paid $8.2 million in claims, which was probably the highest payout in history. I think the minister will confirm that. In any event, based on the premiums the corporation charged exporters and based on the income the corporation received from the interest, its gross margin was over $3 million, even allowing $13.6 million as a reserve against claims, and I point out to the House that the corporation paid only $8.2 million out of its reserves. That particular business of the corporation is essential to exports. The exporter has to be able to take his receivable and pledge it to his bank for working capital. Unless the receivable is guaranteed by some sort of insurance policy, the commercial banks in this country do not treat it as worth anything. If a company is involved in exporting, its major problem is being able to borrow against its receivables, so export insurance is probably the most valid thing that this corporation could offer.
For a moment I want to explore with the House the way this insurance corporation handles its concerns because I have been involved in this. I opened a new market in Australia for a company. The Export Development Corporation asked for the status of the people I proposed to sell to. I sent the Export Development Corporation a list of the companies and asked if, in their opinion, they were good credit risks. The corporation replied that it was not their concern to determine that as they

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were only an insurance company, and it was up to me to determine that.
I was absolutely shocked, Mr. Speaker. The corporation took the position that the Canadian manufacturer should supply it with Dun & Bradstreet reports and with other evidence of the quality of the proposed customers. I did that. I went to the Department of Industry, Trade and Commerce in Sydney and gave it a list of the proposed customers and asked that they be checked. The department did so. It said, this one is pretty good, that one is not very good and so on. Of course I sold to the good ones.
Then I sent the Dun & Bradstreet reports in to the Export Development Corporation. It said, "You sold the goods to those people but you have not got credit approval. We don't like this one or that one, or that Dun & Bradstreet report is not good enough and this one has not got enough capital invested. We will not insure your sales and we want one per cent across the board for our fee, whether we insure them or not."
That particular corporation, which had signed up with the EDC, wound up going private, wound up having to go to Australia and discount Canadian receivables of the merchant bankers through Singapore because the Export Development Corporation, sponsored by the minister, refused to do anything, it was so bureaucratic.
This is the attitude expressed in Toronto in the beautiful boardroom with its nine foot long, three yards wide table and great big comfortable chairs, with its beautiful paintings on the wall-the kind that come from the National Art Gallery. They cannot be sold anywhere else so they are hung in First Canadian Place and people are hung out to dry in First Canadian Place too!
It is about time a bill came before the House that would allow the Standing Committee on Finance, Trade and Economic Affairs to review the Export Development Corporation, its bureaucracy, its incompetence and its inability to deal with people and make trade move for this country. The corporation is overloaded with people-people who have never met a payroll and who do not know what it is like to go out in the marketplace to try to sell a product. People are told that the Export Development Corporation cannot insure the customer because it has not given approval. The attitude is: cancel the sale or do not make the sale. The Canadian manufacturer has an order, but he must just take his chance. He must take the total political and commercial risk on his own behalf-if his bank will let him-or cancel the order. That is the kind of thing that happens with this corporation day after day after day, Mr. Speaker.
The financial statement of the corporation for this year shows that the gross amount it covered by insurance declined from 1980 to 1981 despite 12 per cent inflation.
I am happy that this bill is before the House, Mr. Speaker, because I want to hear the officers of the corporation and the minister explain why it cannot act sensibly and aggressively; why it cannot make things go for this country.
In its own statement the corporation declares that it has 1,429 people or different companies who have signed contracts for export insurance. The figures produced by the minister in his annual statement show that only some 830 people bothered taking export insurance this year. That is all. Why is that, Mr. Speaker, when export insurance is the most important type of insurance for people who are selling goods abroad? By and large, those goods are financed in the country of purchase and they are sold in the country of purchase. They are manufactured Canadian products sold for consumption in one form or another. Payment is three months or six months, that is all. Large loans are not required, but the Canadian producer needs insurance to make sure the receivable is worth something so that he can pledge it to his bank. He needs a guarantee against the foreign receivable. Without the guarantee he cannot borrow against it, and without borrowing he will not have the cash flow he needs to build the product in the first place. That is what this bill is all about and that is what this corporation is all about.
Saddled with a large bureaucracy and its failure to understand the nuts and bolts of exporting for small business, the corporation has failed badly.
Sir, I want to relate some figures to you. Talk about the Export Development Corporation being an insurance company! Royal Insurance Company took in $470 million in premiums last year. The smallest of the big ten insurance companies, the Fireman's Fund, took in $128 million. It took $14.2 million in premiums; that is where it stands. This is supposed to be a big exporting country, a world trader, and this world trader's insurance company did $14.2 million in premiums and that is all. It does not even rank with an insurance company doing ordinary household policies. Where is the go, the drive, the enthusiasm to sell? We are talking about a Crown corporation with $535 million in capital, $350 million subscribed and $185 million in earned surplus over many years. That is what we are talking about, a company which should be able to do a hell of a lot better-I put that bluntly- than it is doing.
It is only relatively recently, Mr. Speaker, that the company got into the loan business on the international market. That is the reason for the huge increase in authorized capital set out in this bill. It is going to be a big lender. Well, we can see some of the loans it is making and some of the countries it is lending to. Some really secure countries, the Algerias, the Polands. We are supposed to give a government stamp of guarantee on these countries. We should be pretty careful about using the credit of Canada to finance Algeria and Poland. But this minister does not seem to worry about it. No limits are placed on specific countries, the corporation can lend to anyone it wants to, at any time it wants to, up to $20 billion.
This corporation made a total of 115 new loans last year, and has a total of 543 loans outstanding. Strangely enough, the corporation also has 543 employees. Can you imagine, one employee per loan. Of the 115 new loans last year, 13 were to
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the de Havilland Aircraft. I suppose they needed one employee per de Havilland loan. The minister did not explain that when he explained the bill, but at least he will do so before it gets through the committee stage. Perhaps the president of the EDC will be happy to explain how he can justify 543 employees per 543 loans.


Donald Frank Mazankowski: Small business.


Donald Alex Blenkarn: My colleague says it is a small business corporation. If you look at the loans, most of them are in packages. You come to Israel and you find there are five loans for computer equipment, all to one company, Control Data Limited. That company is in my riding. Great stuff for Mississauga, but there are five loans. Does it need five employees for five loans to one company? I am happy the EDC and the minister will have to come before the committee to explain why this company has so many employees. How many insurance companies doing $14.2 million in premiums would have 543 employees? How many companies with 543 loans would have 543 employees and offices in Vancouver, Toronto, Ottawa, Montreal and Halifax? They have nine foot wide boardroom tables, big comfy chairs, lots of paintings, and an inch and a half thick broadloom.


Mr. Irwin:: Use metric.


Donald Alex Blenkarn: Mr. Speaker, we must promote the export of Canadian manufactured products and we must have insurance for those products in order to satisfy banking requirements. We must be prepared to lend the capital required to finance those exports from time to time. But we must do it sensibly and on the basis of value for money paid. The minister talks about the need to export and how essential it is for Canada to be a world trader. However, he must show us that it is being run effectively, efficiently and profitably. It should be run profitably, not in the sense of money at the bottom line necessarily, but profitably for the country. When you wind up with a company which has 543 loans outstanding and 543 employees, one begins to wonder where the efficiency is. Where is the concept of making the country grow and prosper? That is what it is all about. It is not a question of attacking the corporation or the idea, or the reason it might need more capital; it is a question of being concerned with whether we are getting value for money or whether we are being ripped off, as I see it, by ineffective and incompetent management and government which, considering the talent, facilities and money it has behind it, is not doing the kind of things which need to be done in Canada. It is a question of whether we are getting productivity or production for what we are paying; are we getting our money's worth? I say there is grave doubt as to whether this corporation is giving us its money's worth.
I want to point out a couple of things to you about the balance sheet of the company. This year the administration costs for this corporation amounted to $21,410 million. Last year these costs amounted to $15,995 million. The administration costs alone went up 25 per cent in one year. This minister
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was in charge for that year. Can the minister explain to the House why the administration charges of that corporation went up 25 per cent in one year? Can he explain that? The minister might want to say that the problem with the change in profit was interest rates. I want to point out to the minister, from his own statements and nowhere else, that last year, after paying interest on the loan portfolio, he had $39 million left. This year he had $20 million. He lost $19 million in the loan portfolio. When you get down to the bottom line, the profit this year was $2.2 million; last year it was $32 million and the year before it was $42 million. It makes one begin to wonder what has happened. This minister has been in charge of this corporation since 1980. He took over a corporation that showed a bottom line of $42 million. He ran it down to $32 million in one year, and the next year he ran it down to $2.2 million. At that rate he will run it into bankruptcy. Where is this minister's alleged business experience? Where is the bottom line? It is not in the interest differential. I say to you, sir, that it is in the administration costs. The overhead went up $5 million. That is the reason. Did the service to Canadians go up? It did not do so in the insurance portfolio. The gross amount covered by insurance went down. Did it go up in the lending area? Yes, it went up $500 million. That is all it went up, and that is gross assets, about 15 per cent.
One must look at this corporation and its profitability. One must look at whether this corporation is doing the work we have employed it to do. Has this minister, in managing this corporation, done what we have employed him to do? On second reading of this bill, I see there is serious concern whether this corporation is doing what it was engaged to do effectively and profitably. When we take a look at the total number of employees in the corporation, the increase in overhead, the massive decrease in profitability and the massive amount of taxpayers' money in this corporation, we can see that this corporation is not carrying its weight. That is what it is all about. That is why it is important that when this bill goes to committee the minister must be ready to explain in detail his management and his tenure in the office of Minister of State for International Trade. When we were in government, the corporation made a profit of $42 million. During the minister's tenure, he saw when we were in government this profit reduced to $2.2 million. The insurance operation has declined in value. The minister has made loans to the Algerians, the Poles, the Israelis and the Argentinians. What has he really done? He has financed 13 sales for deHavilland Canada Limited. That is a Crown corporation and it, too, is in the hole.
Let us get down to brass tacks. Are we selling Canadian goods? Are we financing Canadian trade? Are we making Canadian trade go? Are we messing around?
This minister knows that the greatest opportunity in trade for Canada is with South Africa and Taiwan. Yet he refuses to open offices in those countries. He refuses to promote trade because he somehow believes it is not politically advantageous for the government to do that. I might agree with his political affiliations if he were Secretary of State for External Affairs

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(Mr. MacGuigan), but he is Minister of State for International Trade. I want to say to the minister that trade knows no boundaries. He had better get into the business of trading and selling for Canada instead of worrying about what the Secretary of State for External Affairs is going to say to the United Church of Canada. I say to the minister, "Let us get on with it." People are buying goods and we ought to be out there selling and winning deals. He has the agency. He has an insurance corporation and he has a finance corporation, and this bill gives him even more power to do that. But he has to get out and do the work. He has to make sure that it is done properly for Canadians. If he cannot do that, then he had better go back to Cornwall, or wherever. We have to make sure that we have somebody in Canada running things that will get trade going again, who will get things moving, who will explore new markets, who will say that Canadian producers and manufacturers are entitled to have sales where sales can be made.
If you want to influence people, you have to influence them by dealing with them. You do not influence people by refusing to deal. You do not influence people by being stupid in your transactions or by saying, "I am a boy scout and I will be fair in my dealings." You influence people by hardnosed dealing.
I say to you, Mr. Speaker, that there is a very strong feeling in this country that we have given away our potential. When my friend, the hon. member for Halton (Mr. Jelinek), talks about the unemployment in the automobile industry because of Japanese imports and when people talk about the lack of pork exports to Japan where they pay three times what they pay in Canada for pork, one wonders where the minister has been when it comes to trade. Has he been having a holiday? Has he been having a grand tour around the world? The minister has a lot to answer for regarding the validity of trade in Canada, as well as regarding what he is doing with what he has in the way of an armory to advance, protect, develop and finance new trade for Canadians. With what the minister has in his arsenal, he should be doing a great deal better than he has been doing.


Michael Holcombe Wilson: Mr. Speaker, I am very pleased to participate in this debate as one who has had some experience with the current problems faced by the minister. We are looking at a very important area in the economic development of the country. Also it is a very important area when we look at the basic problems in the country today of high unemployment and slow economic growth.
The bill seems to make a number of technical changes as well as some very fundamental financial ones such as the amount of taxpayers' money which the corporation will invest on our behalf.
When I look at the Export Development Corporation, I realize that it is a very positive and important organization. As the hon. member for Mississauga South (Mr. Blenkarn) just said, it is important in the development of exports, both through insurance transactions and capital financing transactions.
Initially in my remarks I want to be quite specific, and then I want to move on to matters of broader concern regarding our over-all trade and economic development policy. In looking at the requests of the minister through these amendments, I must come to the conclusion that he is being irresponsible in the extent of his requests. He is quite aware of what he is doing here. In Clause 5 of the bill he is requesting an increase in the authorized capital from $1 billion to $2 billion or twice the amount of capital which the company has today. What is more important, the company is only using today about one third of its authorized capital or $350 million. He is asking for a blank cheque to go out and do all the things he would like to do without any control by or any further reference to Parliament as to how the funds will be spent. The $350 million supports borrowing of $3.5 billion, and the $2 billion worth of authorized capital supports $20 billion worth of borrowing, which is a full six times the current liabilities of the corporation.
The minister also knows that there is another limitation in the bill which calls for all liabilities of the corporation, for insurance, for capital financing and for other contingent liabilities to be a total of $10 billion. Again the minister is requesting a very substantial increase in the authority. He wants a free hand. I gather this was the minister's first speech as minister in this Parliament, but I do not think he has told the House sufficiently clearly what he wants to use the money for or what are his plans for developing exports for the Canadian marketplace.
We have seen ample evidence in the last couple of years- and more recently some very important mistakes have come to light-of mistakes by the government which have caused Canadian taxpayers a tremendous amount of grief. For example, there are the losses of the Consolidated Computer, a debacle which has seen $125 million written off because of mistakes and lack of control of the government in the operations of a company one step removed from the control of Parliament.
Also the hon. member for Mississauga South referred to the guarantees of a number of Crown corporations. We have seen the government requesting carte blanche authority for a number of Crown corporations. Currently we have before us its request to increase the authorized capital of Petro-Canada from $500 million to $5.5 billion, or ten times its current capital. Again insufficient information has been given to Parliament to allow it to judge whether it is an appropriate decision to make. There are billions of dollars outside the scrutiny of Parliament at the present time. Again referring to the Consolidated Computer mess, the Minister of Industry, Trade and Commerce (Mr. Gray) never asked during his entire period of time in office who caused the problems or which officials reporting to him were responsible for the mistakes or the lack of control that resulted in a $125 million loss. We tried to find out who it was, but the minister said, "No, I will not tell you". Then we said, "Did you ask? Do you know yourself who caused the problems or who was responsible?" No, he did not ask, that was the answer we obtained.
May 17, 1982

For that reason we must have a better understanding of the use of these moneys. We cannot forget that it is the money of taxpayers which is at risk here, not just money borrowed out of the air and spent on behalf of taxpayers by the minister and his officials. There will be no further recourse to Parliament. There is no further way to draw information out of the minister or to have some degree of control over the operations of the organization, because any increases will now be done by order in council-the same old way, by order in council. How many times have we heard that there is a rubber stamp from cabinet for the minister to go ahead and spend money?
I have referred to this because that $2 billion will now allow for a substantial increase in borrowings by the corporation to finance its operations. We also know that the corporation is an agent of Her Majesty, therefore the obligations of the Export Development Corporation are the obligations of the government and, therefore, direct obligations of the taxpayers. When we see this vast amount of money being authorized and also understand that there will be considerable financing received from the general public and from foreign investors, we realize that they are all direct obligations of Canadian taxpayers and that as parliamentarians we must take very seriously the authorization of this increase in capitalization.
Let me turn to another area of the operations of the Export Development Corporation which 1 raised with the minister in committee about two or three weeks ago. I am referring to the mandate of the EDC. What is its mandate? Is its mandate to make a profit? Is it to break even, or has some other fuzzier mandate been given to the corporation? With this vast increase in capitalization there are possibilities for a very substantial hidden subsidy, because as the corporation draws down capital funds from the government, if it does not make money and breaks even, people will say that it is good. If the corporation does not lose money or show a loss-and they know that with international competition it is tough to make a profit-people will say that EDC has done well. But we must not forget that the $1,650 million which will be drawn down in capital funds by the corporation must support an interest rate because the money is being borrowed from the markets by the Government of Canada. Thus, there is an indirect subsidy here.
1 think the minister said in committee that he proposed to use an increasing proportion of equity capital funds to support the loan capital as a means of subsidizing indirectly or in a hidden way the exports of Canadians. As hon. members have heard me say on a number of prior occasions, I am in favour of increasing trade and I am in favour of the government doing whatever is reasonable to increase the exports of this country. I believe in trade. It is very important to our wellbeing, both economic and social. But, at the same time, it is essential that any subsidy provided to our exporters in this country is known to taxpayers and to parliamentarians. I do not think we will have nearly the same control if we follow the way proposed by the minister, because it will not be apparent, it will be a hidden subsidy. I can hear the minister now; he will come into this House and say, "We broke even despite the competition from the Japanese, the French, the English and the Germans, and
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that is good." He will not say for one minute that the vast amount of capital he has drawn down from the Consolidated Revenue Fund has not earned a penny. That $2 billion, earning no money, is equivalent to a $200 million a year subsidy at 10 per cent, and a $300 million subsidy at 15 per cent. The point I am making is that we do not have the proper control here.
Let me refer briefly to another element of the annual report which came out after the minister presented himself to the committee a few weeks ago. It concerns the whole question of rescheduled loans, loans which have effectively gone bad but which the government has taken steps to extend, through the Export Development Corporation, so that they do not show up as bad loans in the books. This year there has been an increase of $30 million in these loans, and there is a substantial increase in the provision for bad debts amounting to another $15 million. I think this acknowledges our difficulty in the international trading markets today. It is also a warning sign that because these problems are growing there is a greater degree of risk to the Export Development Corporation. Viewed from that standpoint, it is all the more reason we should not be asked to give carte blanche, a blank cheque, to the minister to go ahead and operate and, through him, to the Export Development Corporation to operate without parliamentary control, without the duty of having to come back to justify a further increase of capital. I must say to Your Honour that in the context of the problems with the Consolidated Computer Corporation, I am not convinced that we should allow ministers opposite the use of the taxpayers' funds in that way. When we were in office, we initiated some studies on the extension of the Export Development operations into the private sector, sharing the operations of EDC with the banking community and others in the private sector who also had expertise in international trading markets. I must say that I am disappointed that we have not seen any extension or any further work done on this privatization, if I can use that word in a broader sense than is normally given it. I believe there has been a considerable increase in the expertise of the private sector since EDC was formed and, prior to that, since the Export Credit Insurance Corporation was formed. These two organization were formed because there was a gap, a void, in the capabilities and in the interests of people in the financial sector to become involved in international trade. But now, in the past few years, there has been a considerable increase in expertise, and most of the loan packages put together by the EDC are put together in consultation and in co-operation with the private sector, so there is a private sector package and participation by the EDC.
I believe there are other ways, more than have been followed to date, of drawing in the expertise and financial resources of the private sector to increase our capacities as a trading nation. It is important that this government initiate a study to this effect, and I call on the minister to do this, to carry forward the work we had started, to discuss the situation with some of

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the banks and other institutions which have an interest here and to consider ways in which they can become involved. I do not believe the small business community is as well served as it could be by the Export Development Corporation.
My colleague, the hon. member for Mississauga South has referred to the size of the EDC staff and the number of loans it has handled over the past year. Elowever, when one looks at the size of these loans, one finds that it points out the nature of the involvement of EDC in that it is more concerned with huge projects. A number of huge projects are on the drawing boards and are being actively pursued by Canadian exporters in cooperation with the EDC and the banking community. However, more than likely, the EDC does not have the time, the staff, nor the interest to ensure that the small business community is as actively served as are the major corporations. It is probably human nature that if one has a $ 100 million here and a $10 million or a $1 million deal over here, one will spend more time with the $100 million deal.
It is for that reason that the government should try to co-opt the resources, the expertise and the day to day business contacts of the banking community to try to service that small business sector more efficiently and more effectively than has been the case to date. So I call on the minister to try to involve the private sector in the decision-making of the corporation to a greater extent and also to take that one step further so that a task force or some form of consultative body might be created with a specific mandate to increase the degree of activity that the private sector can take over from the operations of the Export Development Corporation.
I would like to address the balance of my remarks to a very important area of trade policy, that is, I would like to look behind trade policy to see what we are doing in our economic and industrial development policies. The minister is probably quite aware of the fact that if the proper economic development policies are not in place, he will be spinning his wheels more and more as time goes on. If we are not competitive as a nation, if our inflation rate continues at today's rate of 4 per cent, 5 per cent or 6 per cent, whatever is the proper ratio compared to that of the United States or of our other major competitors, and if our product development is not up to the current standard of technology, he will be spinning his wheels. He will be fighting an ongoing battle, which he is bound to lose.
Looking back over the past ten years, we can see that we have been losing that battle because we have seen our manufacturing trade deficit increase from about $3 billion ten years ago to a current level of about $21 billion or $22 billion. I am sure the minister will say that we still have a positive balance of trade. Last year I believe our trade balance was $5.8 billion. He is very proud of that. The important fact he has to recognize is that during that same year, the manufacturing trade deficit increased from $17 billion to $22 billion. We lost $5 billion in our balance of trade. This essentially means we exported probably 50,000 to 60,000 jobs to other markets in the United States, the Far East, Germany and so on.
Let us dwell for a minute on the importance of our economic development policies. Let me take one by one those policies that we in the Conservative Party feel are essential and must be the yardsticks which the government should build around in order to make the minister's job easier than it is today.
The first is training. If we do not develop the expertise and capability for our people in this country, it makes it very difficult to take advantage of the new technologies that will be coming forward over the next few years. We are not just looking at training of people who are already on the job, but also at training in the high schools, community colleges and universities. We must get the programs together to allow us to have the skilled people available to take advantage of the opportunities that will be ours in the future. That is why we have opposed so strenuously the cuts in post-secondary education funding. It is cutting our future at a time when we need it most.
We also have to look at a much greater degree of cooperation between the federal and provincial governments. I was very disappointed when the Minister of Employment and Immigration (Mr. Axworthy) announced his new policy. Right on the heels of that announcement, not one, not two, but ten provincial ministers spoke out strongly against the initiatives the federal government was taking. Surely something was wrong that there could not have been that degree of cooperation to allow for policies announced at the federal level to be warmly received by the provincial and municipal governments. If we cannot have that co-operation, we will continue to knock our heads against each other and not move ahead in cooperation to fight the problems of not just our Canadian domestic market, but the world market.
The next important point in any economic development strategy has to be research and development. My colleague, the hon. member for Scarborough East (Mr. Gilchrist), has spoken time and again and has been very specific in recent speeches in the House about moves we can make in this country to improve our capacity to develop our own products for our own markets rather than always buy from outside. We have lost the technological development. We do not get the advantage in terms of the expertise that we gain from developing things on our own. We lose a tremendous amount of profit which can be reinvested into development for further technology-
We have seen this country stumbling along in seventh place of all the industrialized summit nations in research and development over the past seven or eight years. Those figures are right out of the government's document "Economic Development for the Medium Term". From time to time we hear how sad it is to watch the way the Italians and the English struggle along with all their economic problems. Let us look at some figures drawn from that document. Our productivity improvement-


Donald Frank Mazankowski: What productivity?
May 17, 1982


Michael Holcombe Wilson: That is the point I am going to make. Our productivity improvement has been one seventh the productivity improvement of the United Kingdom and one eleventh of that of the Italians. The government says that we have a commitment, that 1 and one half per cent of our GNP will be invested in research and development. The government has been saying that for four years, yet we continue to stumble behind further and further. We are not reaching that goal because policies have not been put together to allow us to do so.
Time and again this government comes out with the right objectives, but it does not know how to get there. It does not understand the problems. The government does not know how to go about finding the ways to achieve those objectives. That is why I urge government members to listen to the speeches of my colleague from Scarborough East who has done considerable work in developing policies here.
1 would like to say that we can wait until the next election when we can put in those policies ourselves as a government, but we do not have time. People are losing their jobs. We are losing ground day in and day out in the technology race. In the meantime I urge the government to listen to my colleague from Scarborough.
Let us look at some of the broader problems such as inflation. If we cannot get inflation under control in this country, we are going to lose our competitive position. In the mid-1970s when John Turner was at the helm, government spending ran at 26 per cent, 27 per cent and 28 per cent per annum. We had a runaway monetary policy and no control whatsoever over public sector collective bargaining. John Turner was saying at the time that his was the government of restraint, that that was to be the year they would control government spending. That was the year that government spending increased by 26 per cent.
The hon. member for Ottawa-Carleton (Mr. Pepin) saw that from the outside. He had to come back to pick up the pieces as chairman of the anti-inflation board. He understands the problem. Unfortunately, he is not having much impact with the man in the next seat to him who is inviting inflation. Therefore, it still continues to be a major problem, and we are not getting any action.
That is the same government that said this will be the policy of restraint. What happened last year? Government spending went up 22 per cent. What happened to our inflation rate? It went from 9 per cent to 12 per cent. It is no surprise that what happened caused inflation to gQ up.
As I said a minute ago, the government has all the right objectives, but it does not know how to get there. It does not know how to reach those goals. Let us look at another fairly broad program. That is the world product mandate approach to economic development. This is a policy that will be very important for this country to follow in the years ahead.
In this country we have many companies that are subsidiaries of multinationals. That is a fact of life. It is something that developed from loose policies of the Liberal Party in the fifties
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and sixties. It has developed contrary to statements made by that party, but we have that problem.
It is a fact that many foreign companies are represented here. What can we do, kick them all out or make the best use of them here? I say we have to make the best use of them here. One way to do that is to make them more independent from their parent companies, giving them such greater control over their product line and over the operations and development of their company so that we can improve the economy of the country over all. By giving them encouragement to develop the world product mandate, control of their product line from the research stage through production and marketing, having total control of that over-all cycle, we can develop our country better.
People talk about Canadianization. We have a much greater chance of getting more and more Canadian ownership of these companies if we allow that cycle to develop. Once those companies achieve a greater degree of stability and independence and less reliance on their parent company, at that point we will see many more of those companies going to market and being realistic investments for Canadian investors.
Let me move now to the whole question of dumping.


Mr. Blais:: Did you read the Gillespie guidelines?


Michael Holcombe Wilson: I have read them. The minister asks, "Have I read the Gillespie guidelines?" I have also asked his colleague, the Minister of Regional Economic Expansion and Minister of Industry, Trade and Commerce about these Gillespie guidelines. He says yes, but he also has written that no one is paying any attention to them because the government does not pay attention to them themselves.


Jean-Jacques Blais: That is not so at all.


Michael Holcombe Wilson: When were the Gillespie guidelines discussed in this House last?


Jean-Jacques Blais: Last year.


Michael Holcombe Wilson: He says they were. I draw the minister's attention to the fact that the agenda of Parliament is controlled by the government, not by the opposition. Surely he has been around long enough to know that. These guidelines, if they are to be of any use, have to be implemented by the government.


Jean-Jacques Blais: They are being implemented.


Michael Holcombe Wilson: I have yet to hear of any serious attention being paid to them by the government, to the development of the world products, to the development of a greater degree of independence of the subsidiaries of foreign companies in Canada. The only thrust of that government is "kick 'em, get rid of the foreign subsidiaries, tell them to sell out," "get rid of the foreign investment from this country and take the jobs that go with them, too." That is the attitude of the government, and

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it does not work. That is why there is one and a quarter million unemployed today.


Some hon. Members:: Oh, oh!


Michael Holcombe Wilson: I think the minister has some experience with this. I would encourage him to flex his muscles a bit, if he has not been getting too flabby over the last little while. Let him flex those muscles a little and possibly show the people who are exporting to this country that we are not going to accept dumping here, that we are not going to accept the fact that they are using our markets as a way of supporting jobs back in Japan, jobs in Germany or jobs in Brazil. He should get tougher there and recognize that when a Japanese company sells something here at 10 per cent, 20 per cent, 30 per cent below the prices at home, there is not much we can do. Where can we buy that here? We are exporting jobs to Japan, we are making their life much easier for them and we are increasing our unemployment here.
I encourage the minister to discuss the whole question of dumping to a much greater extent with the people he is trying to fight with, in Japan, because if he says there will be no selling, no sales of electric generators or turbines or other products that we sell in this country, that would make for a much healthier economic and industrial climate.
Let me move to savings and investment, Mr. Speaker. The attitudes to savings and investments are one of the critical problems. We had a budget brought down last November which had the effect of totally undermining the attitudes of entrepreneurs, the attitudes of people who are investing money, of people who are saving money for their retirement. These were moneys that will be reinvested in the economy to provide the wherewithal for the various things I talked about in the last few minutes. The government must learn that you cannot fool around with how people regard their savings, savings that they have worked for years to develop, businesses that they have worked for years to develop, you cannot tamper with that. We have seen the direct result of that tampering in the past couple of years, with the energy program and the attitude toward foreign investment and the attitude towards broader intervention in the economy, and then the budget on top of that.
Last year we had an outflow of capital, domestic capital as well as foreign capital, from this country, totalling some $19 billion. That is a lot of money, Mr. Speaker. It represents one tar sands and half of the Cold Lake plan. It represents about one and a half times the total amount of money that we spend from coast to coast on housing. If that money had been invested in this country it would have created some 200,000 jobs. That is equivalent to all of the people who are unemployed in Toronto, in Hamilton, in London and in Windsor. That is why it is such a serious problem, and it is a serious problem because the government has ignored the impact of their policies on the investment attitude and the savings attitude of the people. People are scared, they are scared that they are going to lose their savings and lose their business, because of the attitudes and policies followed by this Minister
of Finance (Mr. MacEachen) so they are shooting their money out of the country.
People have said, "Let us let the Canadian dollar drop, let the interest rates drop, and then the Canadian dollar will drop." That is okay. It will help the minister sell more exports. But that is a short-term palliative, it is a short-term relief for long-term grief, and it does not work. Once we get the dollar down, what is going to hold it at that level? We will have greater inflation, we will have higher interest rates, we will get the dollar down and have the same high interest rates as we have today. That is the wrong way. It is the wrong way to approach the problem. We have to get the basic economic development policies right.
I say to the minister, do not just throw money at the problem-as he is doing now with the Export Development Corporation, do not throw money at the problem-as he was talking of doing with the national trading corporation that, thank God, has now gone the way of the wild goose. Let us get the economic development policy right, because that is the way he will make his job easier. He has to speak to the Minister of Finance, the Minister of Energy, Mines and Resources (Mr. Lalonde) and the Minister of Regional Economic Expansion and Minister of Industry, Trade and Commerce.
We have a great opportunity to build up this country but the policies that we have been following over the past ten years are a burden, and that burden is apparent in the huge increase in the manufacturing trade deficit.
We have to make some changes. That is the positive approach that I am trying to take in the debate tonight, to encourage the minister to take these ideas to his colleagues, to encourage the economic-development thinking of his party, so that we can attack the basic problems that are causing so many difficulties in the country today.


Some hon. Members:: Hear, hear!


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, I think the House has been well served tonight by the remarks of several members of the opposition. I am thinking of the member for Calgary South (Mr. Thomson) who put forward a policy of approach to the minister. Also, the member for Yorkton-Melville (Mr. Nystrom) laid down the priorities of trading in techniques of production. We had the member for Mississauga South (Mr. Blenkarn) bringing together his considerable experience in the actual question of efficiency of the corporation. We have heard from the member for Etobicoke Centre (Mr. Wilson) speaking about the credit responsibility of the corporation and also about the relationship to the economic growth of the nation.
The minister himself should be congratulated on bringing this bill in, with clause 1 in it, that I will speak on in a minute. Apart from that, he has paid the House great courtesy by coming in and listening. These speakers have been tough, but they have been constructive. The minister is to be congratulated for paying the courtesy of listening to this House, because the only thing he can do is to listen. This is a Parliament, a

May 17, 1982

talking place, and the talking has been of a very high standard tonight.
My remarks will be on one point in the bill and may include a little philosophy. It gives the minister a great opportunity to expand the services of the Export Development Corporation and do so in a way that does not put any extra great bonds on to the ways and means of the Minister of Finance (Mr. MacEachen). I am talking about the capital structure. This particular corporation is founded on a principle similar to the principle on which the Farm Credit Corporation was founded in 1959. The Farm Credit Corporation has a capital structure and, depending upon how much money is put into that capital, the Farm Credit Corporation can lend up to 25 times as much as that capital. It has one of the characteristics of a bank. The Export Development Corporation has a multiplier of only ten, but it has a bigger capital base. That base is now being raised to $2 billion, and if the multiplier is ten, that is a sizeable sum of money to have to play in the big poker game known as world trade.
What struck me as radical and what struck me as more than important was the amendment contained in Clause 6. I will read it into the record to make certain the record shows there is a consistency here which, for government, is rare indeed. Clause 6 says:
Section 12 of the said act is repealed and the following substituted therefor:
I have described the previous section in a general way. Under this amendment the new Section 12 would say:
The Corporation may, with the approval of the Minister of Finance, borrow money by any means, including issuing and selling bonds, debentures, notes and other evidences of indebtedness of the Corporation.
If with that one amendment an aggressive, intelligent group of people working under the minister-and according to the hon. member for Mississauga South there are 543 of them-


Donald Frank Mazankowski: One for every loan.


Francis Alvin George Hamilton: -cannot put together a series of deals and ideas as to how to get money into the corporation much cheaper than they can get it by having to borrow from the Consolidated Revenue Fund, they are not worth their salt.
This same sort of amendment appeared in a previous bill of this session, Bill C-88, regarding the Farm Credit Corporation. I will not read it, but it is exactly the same, word for word, as the amendment we have in this bill.
What to me is so exciting about this is that if I were to put myself into a minister's position and try to do an aggressive, constructive job, I would like nothing better if someone gave me the key to the kingdom. Lawyers in the Department of Justice tell us that the words "by any means" mean what they say, and when I proposed an amendment to this section in the Farm Credit Corporation Act, it was turned down as being unnecessary. I wanted greater certainty, and I named some of
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the other techniques on the ground that the lawyers say that that clause "by any means" means exactly what it says.
What are those other means by which money can be put into the capital account-and therefore into the lending account- of this corporation? One technique which was put forward a year ago in the House by the Conservatives was that we could use the principle of the Small Business Development Bond. That does not mean that we have to call it the Small Business Development Bond. In plain English it means we could use the principle of the Small Business Development Bond, which is well established as a precedent in our Financial history as well as in the financial histories of the United States and other countries. The principle is very simple. If an individual in Canada lends money for any worthwhile national or social purpose, that person does not have to pay tax on his income from that loan. At the time of the First World War we used it for bonds, but the Crosbie budget of 1979 laid it down as a principle to get money into the hands of small business, which included incorporated farms. That principle was a good principle because when the banks began to realize its potential, they began to lend money to small businesses and farmers across Canada at a little above half the normal interest rate. That principle is workable.
The administration or handling of this money could be put into an organization which is free from the difficulties of working with a civil service operation, and I suggest the minister should be asking the people of this corporation to be laying plans down now, long before the bill goes through committee. They should be making plans now to put before the Treasury Board, the Department of Finance and, eventually, the cabinet which will be acceptable to the Department of Finance.
The only argument I have heard against this approach by the Farm Credit Corporation, the Canada Mortgage and Housing Corporation and this export agency is that it may take an amendment to the Income Tax Act. This should be faced up to right away because if the Income Tax Act can be amended for the Small Business Development Bond, it should not be very difficult to get a similar amendment through for these other agencies. I suggest to the minister very seriously that he work in co-operation with the Minister of Agriculture (Mr. Whelan), who has the same clause in his legislation, and see if they cannot put together a proposal which would include this method of raising money cheaply. If they can raise money at half the going interest rate because of the exemption from federal tax, then they have a base for cheap money on which they can begin to build and expand by giving cheaper loans to borrowers. As the minister knows, this is very important in the great fight for markets. We are competing, really, for credit arrangements. We might have the best product in the world, such as the Candu; we might have the best farm machinery in the world, which we have; and we might have the best quality steel at the lowest price in the world, which we have; but we cannot sell unless we offer credit terms, because that is the base upon which we compete with other nations.

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The minister well understands the other difficulty. The euphemistic phrase used for it is "marketing expenses", but I think I have made my point that we in this House in all parties-I am sure the government party-will do everything we can to help the minister improve the performance of the Export Development Corporation, and the first step is getting a supply of capital at the lowest possible price so that we can compete with other nations doing the same thing. With a bigger bank roll we have some chance of success. I suggest that the principle of the Small Business Development Bond is a sound one. If the minister wants, other members of my party will explain other techniques.
The budget got rid of all these incentives to save money that were built up over the last seven or eight years, but they can be restored under this clause by allowing people to lend money to the Farm Credit Corporation. The income-averaging annuity could be used to spread income over a number of years. Retirement plans could be set up under this clause, or anything else you want. The only limitation is the initiative and the imagination of the staff administering it. If they are not already in the department, they should be hired, but this opportunity should not be missed. Any number of these devices could be used.
I put these things forward because as an ordinary Member of Parliament I am very pleased to see evidence of ideas that were presented in this House at the request of the Prime Minister (Mr. Trudeau) and other ministers, put to use. A year ago we put forward some positive suggestions, and I am pleased to see them included in the budget and in this legislation. This proves that if one is patient and constant, sometimes one can manage to get certain items included in legislation.
In all humility, I say God bless the civil servant who sneaked this item into the bill. It gives the minister a chance to get around the budget which changed incentives into loopholes. It leaves room for cancelling the budget without loss of face.
The minister has an opportunity to let his imagination and initiative have free rein so that when the race is run he can say, "By jove, I got something done in spite of the system!" I should like to see the minister supported in that approach by all members of the House.
That is not the only way to get money, however. The minister must be aware that there is a lot of money around which is looking for investment. I am sure that officials in government are aware of this as well. I am referring particularly to Eurodollars and Petrodollars. The minister probably knows that there are people who are very anxious to get their money into the United States and into Canada. As far as I can establish it, if one were dealing with a Swiss bank today the effective rate would be about 11 per cent, and with Saudi Arabia it is probably about 10 per cent. Of course there is the risk of a change in value of the relative currencies when one borrows from such countries. There were some bad experiences seven years ago when a big change took place over a year and a half. However, these loans can be insured from any variation in the basic principal or in the rate of interest. A premium of 2 per cent is charged for this by most of the Swiss banks which
would bring it up to 13 per cent interest, but there would be no risk of a change in the value of the Canadian dollar.
I put that forward as the second alternative for getting cheaper money. Certainly the Export Development Corporation does not want to borrow money from the Consolidated Revenue Fund at 17 per cent. First of all, it is not available and second, who wants to pay 17 per cent when it can be borrowed at 11 per cent plus 2 per cent? The Arab investment corporations would probably charge about 10 per cent plus 2 per cent.
These things should be looked at by the minister. These people are desperate to get their money invested and also, they do not want it back too soon.
The same methods cannot be used in dealings with the developing nations. In those cases a three way trade operation is best. We cannot lend them money because they do not have a credit rating and it would be bad for them and bad for us. But a relationship could be set up through a well qualified international trading agency which knows that in order for these countries to pay us back, they would have to sell some of their goods somewhere else. The EDC is not equipped to do that-in fact none of our agencies are, but some private international trading companies do a good job with three way trade. The financing of such a deal becomes very complicated.
I am not trying to read the minister a lecture here but am simply pointing out some of the difficulties to him. Today, with our growing industrial might and our potential productivity growth, an export technique has to be developed at a very high level. It is important to get good terms on interest rates, the payout period and the marketing expense. These techniques are sometimes handled by an experienced international trading corporation.
Another thing to be negotiated is mutual advantage. The old North American concept in the days of economic imperialism was that there was only one type of deal-to get the best of it. The new type of deal that works with the more sophisticated developing nations is one that offers mutual advantage on both sides. This can always be arrived at if both parties approach it in the right spirit. Of course, every nation is different; in Mexico it is oil versus the CANDU. In Japan, it is whether they really want access to our resources in the future. It is important not to be backed down by Japanese politeness and firmness. As long as one speaks politely to the Japanese one can be tough. In fact, that is how they gain respect. With Europe it is also access to resources. If Europe wants our coal and our iron it will have to split its tariff structures. I am sure the minister knows how effective this idea is in dealing government to governent. In the case of Poland and the Iron Curtain countries the key is food. We have it, but the question is how they will get the money to pay for it. The minister knows the answer-it is three way trade. That is why I always put in my notes, "No more than three years' credit."
I will not speak of the joint enterprise technique and I will not speak of the international trade companies in detail nor
May 17, 1982

will I talk of the relative position of the World Bank and the International Monetary Fund and so on.
I want to leave one thought with the House. This bill has given the minister an opportunity to put a credit base under the Export Development Corporation where he has a fighting chance to meet the competition from other industrialized nations engaged in the same business. It is a rough world out there. He has listened to my colleagues who have spoken of efficiency and how these things will be established, but I say that I wish the minister the best of luck in getting action immediately on this. We certainly need action immediately on our export business over the next few decades.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: Mr. Speaker, I rise to speak in support of this bill subject to the reservations expressed by my colleagues, which have been expressed for some very good reasons. This company is a wholly-owned Crown corporation with broad powers including the power to borrow, lend, guarantee loans, enter into export and foreign investment insurance contracts, and issue guarantees in respect of export transactions. Hopefully, some of the points raised by my colleagues will be fully dealt with in committee.
While the Export Development Corporation has been a useful instrument for expanding Canada's world trade, I think we all recognize that our record in international trade is not all that impressive. One can only speculate about what might have been had we not had the EDC. The record shows that Canada's share of world trade has declined over the last ten years from 4.9 per cent to 3 per cent. In absolute terms, and compared with other western industrialized nations, our productivity has declined rather dramatically and continues to do so. One only has to look at the recent budget papers, specifically the document entitled "Current Economic Situation" to see that Canada's productivity percentage change over the last ten years was 0.2 per cent. In the U.S. it was 0.6 per cent; in the U.K., 1.5 per cent; in Germany, 3.1 per cent; in France, 2.7 per cent; in Italy, 2.2 per cent; and in Japan, 3.4 per cent. So out of those seven countries, Canada has the worst record of performance. Our manufacturing sector can be described in general as being inefficient. I think it is fair to say we produce far too many lines, and our economies of scale are such that we find it difficult to compete in the international marketplace. We are weak in research and development, we do not have an effective marketing system, and we seem to lack a degree of persistence and continuity in exploiting and maintaining our markets. In other words, there is a tendency to be in and out of the marketplace; when things get a little tough, we withdraw; when we have a surplus we try to get involved in a marketing situation. So the in and out nature of our marketing strategy hinders us.
Excluding the auto pact trade, Canada's exports of fully manufactured goods represents only one fifth of our total exports, well below the average of one half to three fifths of all major industrial nations. This of course contributes to two of our very pressing problems, that of the balance of payments,
Export Development Act
and unemployment. In the 32-year period from 1950 to 1981, on only four different occasions did Canada manage to achieve a surplus in its current account. To a large extent it is fair to say that that has been caused by the outflow of dividends and the cost of servicing our debt, but our deficit in manufactured products during the 1970s was some $88 billion, $60 billion of that in the last five years of the decade.
That deficit is worsening, Mr. Speaker, when we look at the 1980s. In 1980-81 the manufacturing trade deficit was close to $40 billion, with no indication the trend is going to reverse. We rely far too much on our resource industries which are capital intensive and light in labour content. I am pleased that the Minister of Transport (Mr. Pepin) is in the House today because he is grappling with the issue of railway capacity, particularly in western Canada. The demands on that capacity are largely in the natural resource sector, particularly coal, the west bound exports of which will increase from about 15 million tons in 1980 to about 59 million tons in 1990, an increase of about 350 per cent. Fertilizer components will increase by 78 per cent to 28 million tons, and raw forest products will increase by 65 per cent.
I guess, Mr. Speaker, that this is one of the arguments that western Canadian farmers placed before the minister, as they do before other politicians, when they say: we are being asked to share in the cost of increasing railway capacity, but what we are going to be doing is exporting a larger amount of our own real estate to other countries. That coal will probably come back to us in the form of a television set, refrigerator or automobile. On the other hand, the movement of grain will probably increase by maybe 40 per cent over the next ten years. So what we are doing in effect is aggravating the situation.
It is further aggravated by the fact that we are in a worldwide recession. The government continues to base its policy for economic recovery on resource megaprojects as outlined in the economic development strategy which accompanied the recent budget. That budget did nothing to enhance our manufacturing capability. As a matter of fact, it aggravates the situation as well, for example, the reduction in the capital cost allowance in the first year and the impact that has had on the automobile sector. In the leasing industry alone it will mean the loss of some 44,000 units during 1982. There are no incentives in the budget to encourage manufacturers to retool and improve their productivity. This whole question of reliance on resources and the failure to recognize our manufacturing potential is manifest in the fact we do not seem to have the resolve to increase our productivity, research and development, or to encourage retooling. These are all part of Canada's dismal performance record.
It is not very often that we have a bill of this nature to stimulate the kind of debate that I think has taken place here today. But when we really examine our own situation as a nation we find ourselves in a serious export crisis. I must

Export Development Act
compliment the agricultural sector, particularly the grain and oil seed sector. Once again I am pleased to see that the Minister of Transport is here. I think he has recognized the importance of the grain and oil seed sector, particularly the importance to Canada in terms of its export potential because it does generate huge amounts of spin-off activity. I know the minister addresses that problem most seriously. While we have slipped somewhat over the last ten years, we have not really penetrated our market potential in the way we should have. Perhaps that is due in part to the unreliability of our transportation system. I am happy to note, and I give full credit to the minister, that this year we will probably establish an all-time record of 26 million tonnes, which was the target established.
I have always been one to believe in establishment of targets. I did so when I was minister. I think you have to have something to strive for. 1 am pleased the minister and his colleague, the minister responsible for the Wheat Board, established a very ambitious target of 26 million metric tons, which I think will be achieved. It charges the system to work, to function, to iron out the wrinkles and the deficiencies.
Ten years ago we participated to the extent of 26 per cent of the world's wheat trade. Last year we recorded only about 17 per cent of the world's wheat trade. It means that while in aggregate terms Canada's share is going up, in terms of our penetration of markets Canada's share is going down. Clearly, that is a challenge to all of us. Part of that challenge is to improve our transportation system. We must also sharpen up our marketing abilities. I firmly believe that Canada's producers will produce if they are challenged with that task. The export of grain and oil seeds in Canada will generate some $5 billion to $6 billion in foreign exchange this year. When you look at the tremendous spin-off that is generated throughout the country, I think it fair to say that for every dollar's worth of export trade in grain and oil seed products, we witness a multiplier effect of something in the order of $4 to $5 which generates activity right across the country from Vancouver to the Atlantic sea ports. That is most remarkable. One only has to visit a place such as St. Catharines to recognize that that community is very much attached to and involved with the grain growing centres of Saskatchewan, Alberta and Manitoba. Notwithstanding the fact that there has been a dramatic increase in the price of imputs and a rather substantial reduction in the price of the net product to the producer, our producers are still competing in the international marketplace.
Take for example this year. When you look at the increase in input costs and couple that with the decline in prices in the international marketplace, you will note a 25 per cent reduction net income. Yet our producers are competing and penetrating that market. I merely make this point to indicate that given the will, the resources and the desire, we can compete and penetrate those international markets. I think the agriculture sector can be held up as a clear example of maintaining its prominence in ensuring we maintain the markets that have been established over the years. I hope we can improve. I am sure that we can improve because I believe our
May 17, 1982
trade potential in agricultural products is greater than what we have achieved to date.
I am not sure whether Canagrex will make any major impact on our ability to improve. The bill dealing with Canagrex at present is hung up in committee. I think there are some real second thoughts about the ability of Canagrex to achieve what it was intended to do. Whatever happens to Canagrex, given the right climate, given the right kind of transportation facilities and the marketing mechanism, and given the credit arrangements that are required, our agricultural producers can produce. There is no question about that.
One of the problems that affect Canada's ability to penetrate world markets is the arrangements in which we are involved with respect to GATT. Someone has suggested that as far as Canada is concerned we are the boy scouts in the trading world. Whether it is correct or whether it is implied, the fact still remains that we do not fare very well in terms of dealing with our counterparts in terms of how we honour commitments to GATT and how other countries, our competitors, get around some of these things. We recognize that there are protective shields which some countries adopt to protect their own sectors. We know there are tariffs; we know there are non-tariff barriers, we know there is a lot of unequal treatment, and we know dumping goes on.
1 have to point out that in the case of the megaprojects, and I refer to them once again, I think it is overlooked by many that out of the $440 billion worth of identified megaprojects, about 50 per cent relate to the electrical sector. When we look at what has happened in that sector we note that 10 per cent of those megaprojects are currently under way. We notice also that 80 per cent of the hardware for those megaprojects has been provided by offshore resources. While we are here talking about the need to penetrate our export market, we should also be talking about and recognizing the fact that we had better capture our own domestic markets. Dumping is crippling our basic manufacturing industry. That is clearly an area of government responsibility that should be addressed. There is no question that some nine hydro generator purchases in the last while have been supplied by offshore sources, essentially by Japan at 50 per cent below the prevailing price. These same markets are closed to foreign manufacturers. In other words, Canada cannot penetrate that market even if it wanted to.
As a matter of fact, when we look at specific prices, we note that in the case of one power transformer there was a differential of 35 per cent. That was the margin of dumping. In another case, the figure was 33 per cent. While we must stress the importance of export markets in penetrating markets and in achieving our potential, we have to make sure that our own market potential is not raped, that we have some protection for our own markets here in Canada.
In the area of agriculture and agricultural products, I am fully aware that the ECC and Japan have closed the door to many agricultural products, and agriculture is heavily subsidized. I could go on. I hope I will have the opportunity later on, either in committee or through further debate in this
May 17, 1982

House, to elaborate on some of the points that have to be made. I understand there is agreement to see that this bill moves on to committee. It is with that spirit of co-operation in the House that I will yield the floor. Speaking on behalf of our party, I believe, that we are prepared to see this bill move on to committee at this time.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.

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

Mr. Dan McKenzie (Winnipeg-Assiniboine):: Mr. Speaker, I rise tonight because of a totally unacceptable answer which I received from the Minister of Veterans Affairs (Mr. Campbell) on May 12, 1982, to the question concerning increasing the basic rate of pension payment to disabled veterans. The minister's answer indicates to me that perhaps he has not done his homework as well as he might have. I asked the minister how he could justify allowing some 130,000 veterans to fall $900 behind the composite group of the public service in terms of pension payment. Also I asked the minister to introduce amendments to Section 58 of the Pension Act which would provide that pension increases reflect the principle of parity with the average wage of five unskilled categories of public servants or the increase in the consumer price index, whichever is greater, and that this principle be entrenched in the Pension Act. Such an amendment would guarantee veterans a fair and constant increase compared with increases in the public service.
The minister replied that he had not enough time to study the proposal which had been presented through my question and by national veterans' organizations of Canada in the Standing Committee on Veterans Affairs. The minister failed to realize in this admission that this very same recommendation had been put forward by veterans' organizations, by various governmental committees and by a 1972 study group established by and with representation from his own departmental officials. As far back as 1972, his department was recommending that, and I quote from the study group recommendations:
Adjournment Debate
It would seem readily apparent to the study group that these disabled veterans should be permitted to join in the standard of living available to other Canadians, and should not be restricted to relating future increases in pension to the cost of living today. By their service and sacrifice they have earned the right to enjoy the standards which working Canadians have as a matter of course.
The recommendations of the study group continued:
Pensions should be adjusted annually on a fixed day in accordance with changes in the average wage rates for the public service groups selected and taking into account income tax deductions in effect on that fixed date.
If the minister and his department need more than ten years to study and implement such a simple amendment to the Pension Act, it is no wonder that more complicated problems like pension application processing delays have been with us since the advent of the veterans' benefits system. Ten years is simply too long for any person to have to wait for a simple decision, yet the minister says that he needs more time to review the proposal. Meanwhile, veterans' organizations must come hat in hand to plead on behalf of their members for pension increases on a yearly basis just so veterans can survive.
There have been a number of encouraging improvements made to the management and operation levels of the department, but there is no reason this healthy trend should not continue here tonight by the minister agreeing to the cancellation of this grovelling which veterans must do just to keep up with the cost of living.
I am especially pleased that the minister recently stated in the Standing Committee on Veterans Affairs that he had no objection to a six-month time limit on pension processing and the appeal process, except for the possibility that the retrieval of medical records would be hard to accomplish. Surely, with the introduction of the computer system on which the department's newspaper has reported so glowingly, the retrieval of medical documentation from one end of the country to the other will be accomplished well within three months, thus leaving three months for appeal procedures.
In response to my questions tonight, I know the minister will reply that it has only been recently that veterans have actually fallen behind. Still, he cannot justify making them come back year after year to beg for increases just to keep up with the cost of living. This is a completely unnecessary complication both for veterans' organizations and for the department. If it is true that such amendments would not cost the department unaffordable sums of money, what sense does it make not to have the system regularized by having annual automatic increases?
The amendment to the Pension Act which has now been recommended by almost every veterans' association in Canada, by the Senate Committee on Health, Welfare and Science, by officials within the Department of Veterans Affairs, and by the Conservative Party can no longer be ignored on the basis that it is under review. I hope the minister will stand up tonight to accede to the many proponents of this proposal and that he will tell us that legislation will be forthcoming before the summer recess. He could be sure of all-party support and quick passage if this were the case. Disabled veterans across Canada will be very interested in the minister's reply tonight.

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Adjournment Debate


W. Bennett Campbell: Mr. Speaker, as the hon. member knows, in 1973 the basic rate of disability pension was set so that a pensioner without dependants, whose disability or disabilities were assessed at 100 per cent, would receive a pension equivalent to the composite average salary of five selected categories of unskilled public servants, after income tax had been deducted, as if the public servant lived in the province with the lowest tax rate. Of course, we all realize that income tax is not payable on pensions paid by the Canadian Pension Commission.
As of January 1, 1982, the average annual salary of the five categories of public servants was $10,371. This meant that there was a difference of $554.52 per annum between the average annual salary after taxes in favour of the 100 per cent unmarried disability pensioner who receives $10,925.52 per annum following a 12.2 per cent increase, in line with the consumer price index.
Following recent wage adjustments in certain of the civil service categories used in computing the composite average salary, as of April 1, 1982, the salary after tax of the average of the five selected categories of single public servants is $988.91 a month, or $11,867 per annum, while a 100 per cent unmarried disability pensioner receives $910.46 per month, or $10,925.52 per annum, for a difference of $78.45 per month or $941.48 per year in favour of the composite public servant. A married 100 per cent disability pensioner with no dependent children receives $13,656.96 per annum, whereas the married average public servant will receive $12,613.00 per year after tax for a difference of $1,043.96 per annum in favour of the disability pensioner.
It should be noted that approximately 76 per cent of disability pensioners are married, and therefore most pensioners receive substantially more than the composite public servant who, as we all realize, receives nothing extra for being married.
The Royal Canadian Legion and the National Council of Veteran Associations have indicated their concern with the present rate of pension, and I wish to assure hon. members that I have this subject under very active consideration.


THE ECONOMY-LEVEL OF INTEREST RATES. (B) REQUEST THAT NEW BUDGET BE INTRODUCED
Donald Alex Blenkarn: Mr. Speaker, on Thursday last, I raised a question with the Prime Minister (Mr. Trudeau) because of the change of interest rates in Canada on Thursday. Your Honour will recall that interest rates in Canada rose a quarter of 1 per cent, or 25 basis points, on Thursday. At the same time, interest rates in the United States declined 40 basis points, increasing the separation between Canadian and American interest rates to very close to 3 per cent per annum.
Your Honour will recall that the government has blamed the Americans for our interest rate problems in Canada, but the fact is that the basis of the treasury bills is that interest rates in Canada are very close to 3 per cent above those in the
United States. Commercial paper is about 2 per cent above that in the United States, and it is a little better than that on long-term Canada bonds. The effect is that we have a high interest rate policy in this country. We presumably have it to maintain the value of the Canadian dollar. The Prime Minister was concerned that I was trying to advocate a lower dollar, in his opinion. That is not the case. The Prime Minister knew perfectly that we had 35 hours of debate the previous week with respect to the economic problems of this country, initiated because of the failure of the Alsands project. In that debate we made a number of references to what needs to be done in this country to turn around the economic conditions of Canada and reduce interest rates.
We have said time and again that the budget of November 12 must be dumped. It has almost been dumped, but it has to go completely in order to cut down the uncertainty and lack of confidence in Canada.
We said that we have to reverse the National Energy Program which has driven capital out of the country. In fact, lately there has been a flood of capital out of the country. In order to balance that capital, we have to pay higher and higher interest rates in order to attract hot money from the rest of the world to this country.
We said that we must take a very serious look at the Foreign Investment Review Agency. The government refuses to do that. It brings in legislation that discriminates against foreign capital. It gives Canadians generally the attitude that their capital might be expropriated.
We have said to the government it must change its penchant for creating a series of grant and loan programs. We have almost a Campbell's alphabet soup of initials for various programs, enterprise development-oriented programs, housing programs, or whatever. We have a whole series of programs involved in grants which Canadians are supposed to look at as a benefit from government. We said that should be reversed. Instead, we should have incentives in the tax system to encourage Canadians to invest and make Canada a place where they can stand and grow.
We have told the Prime Minister time and again that if he really wanted to make this country grow, he would look seriously at the capital gains tax structure in this country. If he did that, he would see that most of the capital gains tax the government collects is as a result of inflation. True gains should be indexed. In fact, we would be better off without the whole concept.
Time and again we have said the government should get its costs under control. It must reduce government overhead to below the rate of inflation, not above as it has been for the last year, this year 16'/2 per cent of the budget and 22 per cent the year before, far above the rate of inflation. Time and again we have said it must control costs, but the government has yet to do that.
May 17, 1982

We have said time after time that the government should look at the various departments of government and at such things as Consolidated Computers. We spoke tonight about the Enterprise Development Corporation and corporations such as Canadair which have benefited from all sorts of loans, grants and programs. Money is funded into unprofitable and very marginally profitable operations at enormous costs. The Prime Minister refuses to look at these. No wonder the Canadian dollar drops. No wonder interest rates go up higher and higher in Canada. This government refuses to look at remedies proposed by the opposition and by Canadians generally. With blinders on, it continues its high interest rate policy designed to ensure that our recession will become a massive depression.


Mr. Douglas Fisher (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, I am surprised to hear such a hodge-podge of fuzzy economic thinking from the hon. member for Mississauga South (Mr. Blenkarn) who usually presents himself as knowledgeable on economic matters. He approached an important topic, the question of interest rates and inflation in Canada. He presented a long list of what he sees as sins by the government as the cause for high interest rates. I am surprised that in the list of those sins he did not give even a token acknowledgement of the fact that he was acting as a spokesman for a very reasonably small group of privileged people. He was attacking some very important programs that happened to help a broad spectrum of business, industry, labour and ordinary people in this country.
The hon. member's claim that we can drop interest rates is a direct lead-in to several important economic consequences. He does not want to tell us that his claim to drop interest rates will lead to a devalued dollar, that it will push up prices enormously for ordinary Canadians. He does not want to tell us that this higher inflation, which will result from his policies, will end up eroding the savings of ordinary people, especially the pensioners in his riding who depend very much on their savings. He does not want to tell us that the kind of thinking he has given us leads to the sort of panic and despondency, the kind of bad psychology, that he wants to lay at the government's door.
These are the logical consequences of the kind of attack and the kind of policies that he has presented. I am surprised to hear him make the claim that we can arbitrarily drop interest rates. It sounds to me that once again the hon. member is cozying up with the NDP and its kind of magical economic thinking. Usually he tries to present himself as something more Conservative than that. He knows full well that the real way to get rid of high interest rates is threefold. First, it is for all of us to dedicate ourselves to some kind of fight against inflation, some kind of restraint that will get inflation down. Second, we need to encourage areas of genuine growth, genuine strength. Third, we need in the course of this activity to find the people who are suffering from the recession and to provide them with specific and well-deserved help to help them bridge these difficult times. That is what this government is involved in,
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Mr. Speaker. We are not involved in negative thinking, negative attack or magical answers.


EMPLOYMENT-VOLUNTARY AFFIRMATIVE ACTION PROGRAM-REPORTED CONTENTS OF MEMORANDUM. (B) REQUEST FOR INTRODUCTION OF MANDATORY PROGRAM
Cyril Keeper: Thank you, Mr. Speaker. I rise this evening because the response to the question that I put to the Minister of Employment and Immigration (Mr. Axworthy) on May 14 of this year was totally inadequate. My question was with regard to the affirmative action program, and I want to spend a couple of minutes indicating why that question was important.
I must say, Mr. Speaker, that basically what we are dealing with here is a program that attempts to help disadvantaged people, native people, women, and the handicapped. The facts that lead to the creation of such a program are that, for example, 60 per cent of all women in the labour force end up working in jobs which are classified as clerical, sales or service. There is nothing wrong with these jobs in and of themselves, but when 60 per cent of all women work in these kinds of jobs only, rather than in senior management, for example, or in professional employment, these jobs in themselves become job ghettoes. These low-paying jobs, dead-end jobs, mean that women today earn only 60 per cent of what men earn. That is, for every dollar that a man earns, a woman who is working full time will be earning 60 cents.
The reason that I asked the question with regard to affirmative action is that affirmative action in other jurisdictions has proven to be a good, effective way to bring about greater equality in the incomes and working conditions of men and women.
In my question to the minister I began by focusing upon Manitoba in which over a period of seven years of a supposed affirmative action program, no agreement has been signed between the government and the private sector to establish these affirmative action programs. The fact that there has been no agreement has been well known to everybody, including the minister, and therefore was clear evidence that nothing was happening in the area of affirmative action, that there were no results coming out of the government's activity. To underline the fact that the government was not getting any results, a memo came to public light over the last week or so. I would like to quote from that memo directed to affirmative action consultants, those civil servants whose job it is to go out into the community to meet with companies in the private sector to encourage them to establish affirmative action programs. These consultants received the following directions in a written memo:
-you will not promote Affirmative Action nor visit employers in this regard. In addition, you will not conduct any seminars or disseminate any information to the field to explain or promote Affirmative Action.
That memo in and of itself is shocking and disgraceful, and I must say it was not surprising that when this came to the

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Adjournment Debate
attention of the minister, he ordered an investigation. I have only one comment about the investigation, which the minister describes as a full investigation: the investigation is an internal departmental investigation. I think the public would have more confidence in this investigation if it were a public, open investigation in which everyone could see that justice were done rather than being an internal departmental investigation, in other words, the department investigating itself.
However, be that as it may, there is an investigation, and perhaps some good will come of it. I certainly hope it does because if there is any way to put a little energy behind the affirmative action program in Manitoba, perhaps it will be found in that investigation.
What strikes me most deeply about the memo is the fact that it raises the whole question of what level of commitment to affirmative action the government has. Just how much energy is the government putting into affirmative action? The memo raises this question because it seems to me that only in government which has no real and firm commitment to an affirmative action program could any civil servant even conceive of writing such a memo to employees whose job or mandate it is to promote such a program. I think what the government has to deal with is the whole question of its level of commitment to affirmative action.
The minister responded to me by saying that the government is deeply committed to affirmative action and citing the "very major" success of the affirmative action program in the public sector. I want to put on the record a few facts about the program in the public sector, which the minister describes as a very major success and as evidence that the government is deeply committed to affirmative action. The annual report of the Public Service Commission for 1981 gives statistics in relation to affirmative action in the public sector, and I will put some of those on the record here tonight. Only 4.3 per cent of the management category in the public service are women, and 81.6 per cent of the administrative support category are women, so at the top end of the public service there are mostly men and at the bottom end of the public service there are mostly women. With regard to salary levels, 67 per cent of public servants earning less than $10,000 were women, while 97 per cent of those earning over $50,000 were men.
I see an indication that I should be winding up very quickly.
I just want to say that the statistics I have quoted-and many more could be quoted-demonstrate that the results of affirmative action are as bleak in the public service as they are in the private sector.


Douglas Glenn Fisher: Mr. Speaker, before discussing the specific question let me provide for the
hon. member some background information about the affirmative action program.
Affirmative action is a process undertaken by an employer to identify and eliminate systematic discrimination and to redress the imbalances in the work force caused by past discrimination. Affirmative action was first enunciated as commission policy in 1979 and became operational in the 1979-80 fiscal year.
There are presently 16 affirmative action consultants located in the major centres across the country. For example, there are two such affirmative action consultants in Winnipeg. It is true that affirmative action has not enjoyed a great deal of success in signing agreements with employers in the past few years. Many employers have a negative perception of affirmative action based upon the American experience. Some employers, in addition, fear that by signing an agreement they will be admitting that there is presently something wrong with their hiring practices. This attitude neither helps the employer nor target group members who are being excluded from jobs. Finally, there is a group of employers who simply feel that any government intervention in business is unacceptable. For these and many other reasons, affirmative action has had a difficult introductory period.
The hon. member has asked if we should not now consider a mandatory affirmative action program utilizing the contract compliance mechanism. In response, let me say that the minister is not happy with the voluntary program because it does not seem to meet the needs of disadvantaged workers nor the needs of the employer community. He is, therefore, determined to make changes in the approach being used, and it is for this reason that they are presently reviewing the affirmative action strategy and are considering various options. They will, of course, continue to consult with business and labour before taking a final decision in order to ensure that any new policy option will be workable.
With regard to the specific situation which has risen in Manitoba, the minister has now seen the memos. Mr. Lussier, Chairman of the Canada Employment and Immigration Commission has been asked to investigate the situation and to provide the minister with a detailed report at the earliest possible time. If, in fact, the report shows that our officials were operating contrary to commission policy, the situation will be immediately rectified.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock.
At 10.27 p.m. the House adjourned, without question put, pursuant to standing order.

Tuesday, May 18, 1982