1983-03-25

STATEMENTS PURSUANT TO S.O. 21


Mr. Albert Cooper (Peace River):: Madam Speaker, in the March 18, 1983, Ottawa Citizen the head of the National Research Council of Canada was reported as saying, "Man is a moral creature and what he does is necessarily moral.'' He then went on to say that moral concerns should not restrict scientists in their research.
Society must play a part in the moral concerns of scientific research, and we as legislators must play our part. But, Madam Speaker, our scientists must not abandon the moral implications of their research. To do so would be tantamount to accepting the gruesome, despicable experiments that have taken place throughout history.
We must all take responsibility for our work, whether we are scientists, legislators, or society in general.


NATIONAL ENERGY BOARD
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, some months ago the National Energy Board suspended its hearings into the Arctic Pilot Project on the grounds that the proponents did not have a confirmed market for their gas. Might I now add my urging to that of the Minister of Energy, Mines and Resources (Mr. Chretien) that the hearings be reconvened.
If successfully brought to fruition, the Arctic Pilot Project would create many much-needed jobs in Canada, as well as contribute sizeably to the nation's export earnings. The potentiality of prolonged delay must be jeopardizing sales negotiations with offshore customers.
There are many facets of the project which ought to be addressed by the National Energy Board and which, in reality, are largely independent of the final customer. For example, the determination of whether Arctic gas is surplus to Canadian requirements, safe production and transportation methods, northern shipping routes, environmental concerns, and the
maximization of Canadian and particularly northern benefits, do not rely on who the customer is to be.
When the national priority is the restoration of the Canadian economy-


Madam Speaker:: Order, please.


EXTERNAL AFFAIRS
Mr. Dan Heap (Spadina):: Madam Speaker, on Wednesday night President Reagan accused Grenada of being one of three Caribbean countries that is installing Soviet weapons and installations. To support his accusation against Grenada he showed an aerial picture of the partly built new Grenada international airport, claiming that it was taken by a United States spy plane.
As is well known, Grenada is building an international airport to support one of its major industries, tourism. Plessey Airports of Great Britain is participating in the construction with a $6.5 million contract, and France, Finland, and Venezuela have pledged assistance. The runway length, which President Reagan attacked as being too great for legitimate Grenadian use, is less than the length of the runways in the Bahamas, Curacao, Dominica Republic, Guateloupe, Martinique, Puerto Rico, Trinidad, and Barbados.
In light of the many U.S. backed invasions of Caribbean countries, such as Guatemala, Dominican Republic, Cuba, and Nicaragua, and U.S. naval manoeuvres in the Caribbean, Grenada is justifiably alarmed at the President's sabre rattling.
I, therefore, call upon the Government of Canada to state publicly that Canada will oppose any move by the United States to interfere with the sovereignty of Grenada and to assure Grenada of our support in the event of any attempt to invade that country.


GOVERNMENT AID
Mr. Jean Lapierre (Shefford):: Madam Speaker, I am taking advantage of the provisions of Standing Order 21 in

March 25, 1983
order to express to the House and to the Canadian people my feelings of dismay at the refusal of the Quebec Government to take part in the NEED program. Everyone knows that in all Quebec constituencies, there are hundreds, and in some cases even thousands, of unemployed workers who have exhausted their unemployment insurance benefits and are now struggling to make ends meet on welfare. For young people, that means $147 per month. The Provincial Government's constitutional nitpicking is certainly not going to help these people, who were probably hoping that the municipal authorities in their areas would at least be able to create jobs for carrying out community projects as needed. Consequently, Madam Speaker, I do hope, and I want to assure these people, that other bodies will be able to submit projects under the NEED program and that the Federal Government's $170 million will be available immediately. Yesterday, the Minister of Employment and Immigration (Mr. Axworthy) announced between 300 and 400 projects. I hope that municipalities that have already submitted projects will be able to switch sponsors quickly and get organized to create jobs in their communities. These jobs are urgently needed by many people, and especially those most sharply affected by the recession.


SMALL BUSINESS
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I have been on my feet several times so far this month alone, and in most of those interventions 1 have been expressing my concerns about the Government's indifference to the plights and problems of small business. An editorial in today's The Globe and Mail underlines my concerns.
Close to half of Canada's unemployed, the editorial states, are the former employees of small and medium business. It goes on to say that "Canadians have been told of the big layoffs by big business. They have personally observed and felt the lay-offs in small and medium-sized business."
While the Government was trumpeting its leadership in economic restraint, but in fact awarding 40 per cent of its public servants raises of 10 per cent and 9 per cent, the small-business sector had imposed upon itself restraints that, in more than 30 per cent of cases, had owners taking less out of their businesses by way of personal income than they had the year before, and in another 30.6 per cent of cases taking out the same amount as they had previously. The Government's self laudatory propaganda has thus been exposed for what it is.
The depressing spectacle of Bill C-139 has, for better or for worse, passed beyond us here. It is now time for the Government to act, and act firmly, to restore confidence and credibility in the marketplace.
I urge the Minister and the Cabinet, if they wish to create recovery with the stamina it will need to sustain itself-


Madam Speaker:: Order.


THE PRIME MINISTER
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I wish to raise a matter that has concerned me over the last 24 hours. I read with interest and heard of the altercation that occurred yesterday outside the Chamber between those who guard the Prime Minister (Mr. Trudeau) and the media.
Without passing judgment on the altercation itself, since I did not see it, I would suggest that the public has the right to know what their leaders think, and what their leaders' views are on matters of public interest. There are very few ways in which this can be achieved. One method of gaining that knowledge is through the media.
It is generally acknowledged that the Prime Minister has not been dealing with the media of late and has not been making himself available for discussion or questions about matters of public interest. In my opinion, that can only lead to further altercations of the type that was reported to have occurred yesterday. I think the Prime Minister has every reason to set down some limits as to accessibility, but he must be accessible. It is an obligation of leadership that one must be accessible.


Madam Speaker:: Order.


REQUEST FOR TAX REVIEW-INJUSTICE AGAINST QUEBEC
Mr. Andre Maltais (Manicouagan):: Madam Speaker, I should like to draw the attention of the House to the unfair situation of Quebecers with respect to the price of gas. I should like to ask the Minister of Energy, Mines and Resources of Canada (Mr. Chretien) to get in touch with his Quebec counterpart with a view to looking into the possibility of reviewing the matter of the progressive tax-the Parizeau-Levesque tax. Only in Quebec are motorists paying on average 59 cents for a litre of gas, as compared with 33 cents in Calgary. Quebec now levies a 16-cent tax on each litre of gasoline.
In my opinion, Madam Speaker, the Minister of Energy, Mines and Resources of Canada ought to make sure that Quebec does protect the interests of Quebecers because, the way it works out now, a Quebecer shells out $10 in direct taxes to the Province of Quebec each time he fills up his gas tank. That is definitely unwonted. Our energy policy is based on the
March 25, 1983

fact that all Canadians ought to be paying the same price. Keeping in mind the fact that Calgarians buy a litre of gasoline for roughly 33 cents whereas Quebecers fork out about 59 cents, we are forced to conclude that the energy policy is very good, except in Quebec where the present Government again makes all Quebecers pay for its inept administration.


CANADA POST CORPORATION
Mr. Blaine A. Thacker (Lethbridge-Foothills):: Madam Speaker, all Canadians want a sound and efficient postal system. Canada Post seemed to have this as its objective. However, reality shows that its real goal is to assure for itself exclusive rights over the mail.
Canada Post's definition of a letter, with all its absurd implications, is but an attempt to solidify its absolute postal monopoly. Business and financial communities at large, including the insurance industry, with their time sensitive and urgent internal communications, will be hit the hardest in terms of reduced efficiency, added cost, and lessening of security.
Canada Post should be reminded that, despite socialistic oriented policies of the Liberal Government, we still continue to live in a free enterprise country where competition is essential to our economic growth and social well being.
It is imperative that Canada Post meets its competitors head-on instead of seeking monopolistic advantage by Government regulation. The public interest requires that Canada Post had better concentrate on improving the quality of its services and abandon policies jeopardizing our business communities already struggling to survive under the chaos introduced by the Government.
Let us hope that Cabinet will apply common sense when it considers the revised definition of a letter.



ORAL QUESTION PERIOD


Albert Glen Cooper: Madam Speaker, my question was to be directed to the Prime Minister but, in his absence, I will direct it to the Minister responsible for employment.
According to the latest available figures on Canadians leaving Canada, some 40,000 young people between the ages
Oral Questions
of 25 and 35 moved out of this country in the two years from 1979 to 1981.


Mr. Lalonde:: The Conservative regime threw them out.


Albert Glen Cooper: I think it is safe to assume that a great many of those young people left the country in order to find work. Can the Minister tell us what is being done to remove this destructive drain of young Canadian manpower and Canadian brainpower?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, I think we should first analyze the basic proposition put forward by the Hon. Member to determine whether people leaving the country are necessarily young people looking for work. In fact we have, on average, and have always had, about 70,000 emigrating from Canada to other places for all kinds of reasons, some for work, some to go south for retirement, and others simply to move to other locations. I would point out to the Hon. Member that, at the same time, double that number has been coming into Canada, many of them also young people coming into this country to find work and to settle here. Therefore, I really cannot answer his question when the premise is all wrong.


Albert Glen Cooper: Madam Speaker, the Minister mentioned that
70,000	Canadians left. In fact 40,000 of those were young people between the ages of 25 and 35. If we consider the next figures, I think we will know why.


YOUTH EMPLOYMENT PROGRAMS
Albert Glen Cooper: Madam Speaker, my supplementary question is directed to the same Minister and relates to the fact that this spring over 500,000 students will be looking for their first full-time jobs. They will be competing with the 1.5 million Canadians already looking for work, and that may explain why 40,000 left. What will the Government do about it?


Lloyd Axworthy: Madam Speaker, I think that is a much more serious question, and I appreciate the Hon. Member bringing it forward, because there is no doubt but that the issue involving how we can help young people, those graduating from schools, to find their first jobs, is really a major national priority. I do not follow the concern raised by the Hon. Member at all. The question is: what is the best way of doing it?
We have taken a number of steps to try to provide new openings and opportunities for young people in the job market. As the Hon. Member knows, we have substantially increased training programs. We increased budgets for this fiscal year by about 20 per cent. We have substantially added to the training in the high technology and high trades areas, where there are still many job opportunities. Second, with the provincial Governments we are considering ways in which we can combine our efforts to deal with unemployment.

March 25, 1983
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Last January I met with provincial Ministers and put forward a policy paper for discussion. We have now held meetings with senior officials following those discussions, to find ways in which we can link up with provincial Governments in a combined effort. As I pointed out in the House yesterday and at times before, members of this caucus have been working very actively to consider a variety of ways by which we might provide incentives to the private sector, ways in which we can use federal Departments and agencies to provide first-time job opportunities.


Mr. Nielsen:: They're so great.


Lloyd Axworthy: Therefore, I would say that we are not immune to the issue. It is a serious issue. However, the fact is that we should recognize that the Government cannot solve the problem all by itself. It will also require major involvement by the private sector and by provincial Governments.


Erik Nielsen: Sit down.


Lloyd Axworthy: We hope that we can bring about that cooperation.
If the Leader of the Opposition is not interested in youth unemployment, then he has no business being in his seat.


Some Hon. Members:: Hear, hear!


Erik Nielsen: Sit down!


NUMBER OF JOBS CREATED
Albert Glen Cooper: Madam Speaker, the fact is that many of the programs which the Government has brought forward are no more than paper programs. Sixty thousand jobs were promised through the NEED Program, but to date it has created less than 15,000 jobs. Time is running out and unemployment is rising. When will the Government get after the problem and do something serious about it?


Lloyd Axworthy: Madam Speaker, I would again like to take the opportunity to correct the Hon. Member. The NEED Program is designed to provide jobs on an ongoing basis over an 18-month period.


Mr. Hnatyshyn:: For exhaustees.


Lloyd Axworthy: We have been providing jobs at a level of
2,000	authorizations per week to ensure that we can provide work opportunities for those who have exhausted their unemployment insurance benefits. At the same time, through the Community Development Projects, of which the Hon. Member's own riding is a major beneficiary, we have also provided over 50,000 jobs during that period of time, so that we can provide an underlying floor foundation of direct employment opportunity.
Under the PED Program we provide incentives to the private sector to provide for wage subsidies to hire people, and
another 20,000 people are employed in those programs. Now, I do not know about the Hon. Member, Madam Speaker, but for the over 150,000 people for whom we are providing employment through direct federal forms of assistance, they are very thankful that we are providing work, rather than simply the rhetoric that they receive from the Official Opposition.


RATE OF YOUTH UNEMPLOYMENT
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, my question as well is directed to the Minister of Employment and Immigration, and is very basic.
If the Minister is so confident that his new and innovative programs are so effective, why is it that youth unemployment is rising disproportionately to the general unemployment rate? In 1979 the youth unemployment rate was 10 per cent; now it is 19.3 per cent. Of the 328,000 jobs that the Minister hopes to create this year, we already know that 20 to 25 per cent of those are five-day and two-week and three-week jobs. There are really no new ideas.
What is the Government doing to rearrange its priorities to make it possible for our young people to regain confidence in the future of the Country, and to find an employment opportunity to restore the hope and the confidence that they have a right to expect to have in this country?


Lloyd Axworthy: Madam Speaker, the Hon. Member says there are no new ideas and no new programs. I would like to point out that in the past year we introduced a work-sharing program whereby we have signed 12,000 agreements with private firms and groups of employers right across Canada that now cover close to a quarter of a million Canadian workers. We have been able to avoid over 102,000 lay-offs, and the evaluations that we have just completed indicate that that program has been supported by over 80 or 90 per cent of its users.
When the Hon. Member says that nothing new or helpful has been put in place, I would point out to him that the worksharing program, a unique program introduced by this Government, has provided major support in guaranteeing job security.
At the same time, I do not quarrel with the concern that Members of this House have expressed about young people coming into the job market. It is unquestionably one of the most serious issues we face, and the reason is because we are still in the midst of a recession, a world-wide recession, where companies, rather than hiring a first-time worker, will be hiring people that they had laid off. Those people will be given the first opportunities, and therefore the companies will not be giving the first-time workers a chance to get on the job.
We must find ways of dealing with the problem; there is no question about that. But I will argue and quarrel with the Hon.
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Member's statement that nothing has been done. We have been sitting down with provincial Governments and with private business to find how we can recruit and enlist their cooperation. We would do the same with Members opposite, as we would like to be able to get ideas from them. Rather than their being simply critical, if they have good ideas we are prepared to listen to them, because we have a number of ideas coming from our own caucus.


Some Hon. Members:: Hear, hear!


Frank Oberle: Madam Speaker, our frustration stems precisely from the fact that the Government has refused to accept any new and innovative ideas from us, and examples from other countries.


Some Hon. Members:: Hear, hear!


GOVERNMENT POSITION
Frank Oberle: Madam Speaker, of all the countries with which we compare our statistics-


An Hon. Member:: Name one.


Frank Oberle: -our record is definitely the worst in terms of youth unemployment. There will be 600,000 young people flooding out of the gates of our schools and universities during the next few weeks. Very few of them will find a meaningful first work experience.
Why is the Government so stubborn? Why has it not accepted some of the innovative suggestions that we have made to it to stimulate and entice the small business sector to make work for young people and, in so doing, find a means to survive the economic holocaust that the Government has created?


Lloyd Axworthy: Madam Speaker, one of the reasons is because we find the suggestions coming from the Hon. Members opposite to be so confusing. One day they say that the Government's deficit is too high, that it is spending too much money, that it should slash its programs and cut its expenditures. The next day the Hon. Member is saying that we should bring in new programs and make more expenditures.
As soon as the Official Opposition is able to decide what it wants to do, then we would be more prepared to listen. But as long as its members are speaking with 12, 13 or 14 voices, we cannot figure out what they mean.
At the same time I would point out to them that, in terms of working with the private sector, the NEED Program has received applications, and something like 20 or 30 per cent of the work programs are now working with private sector firms. I could give one example. The Hon. Member for St. John's East is not here, but we just signed an agreement with a company in his constituency. They are putting up $4 million and we are putting up half a million dollars. We are putting
Oral Questions
120 people back to work, working with the private sector. That is the kind of leadership we are giving, not simply the noise from the left-hand corner of the Chamber over there.


FINANCE
Hon. Edward Broadbent (Oshawa):: Madam Speaker, I will not ask the Minister to repeat his answer.


Erik Nielsen: He will anyway.


John Edward Broadbent: I have a question for the Minister of Finance. There are two bits of alarming news in the press today. First, the chief economist of the Conference Board indicated that real unemployment is about 18 to 20 per cent, which means that there are approximately 700,000 more Canadians unemployed than the Government figures indicate. The other information comes from Statistics Canada. More particularly, an official speaking on that data said that the so-called recovery that is to come in 1983 will be the lowest since World War II. Both of these mean that unemployment in 1983, unless the Government does something quickly to stimulate the economy, will be as bad as it has been for the past year.
Will the Minister tell us the date of the budget, and will he promise that there will be major measures in his budget to stimulate the production of jobs?


Marc Lalonde: Madam Speaker, as far as the date of the budget is concerned, I certainly hope to be able to inform the House before we adjourn for Easter of the date for the budget speech. As far as the Hon. Member's second question is concerned, I am working on a budget that I hope will stimulate the economy, help with the creation of jobs in this country, and speed up the recovery. With regard to the premise of the Hon. Member's question, I remind him that there are many economists with many views.


John Edward Broadbent: There are many economists with many views, and almost without exception all the reports that come from private sector sources, as well as Government information for the past two weeks, say one thing, and one thing only, that more than two million Canadians will remain without a job in 1983 unless the Government starts to act. That is what they agree on.


REQUEST THAT GOVERNMENT REDUCE OIL PRICES
John Edward Broadbent: Madam Speaker, I have a supplementary question for the Minister in terms of action the Government could take now to stimulate the economy. It

March 25, 1983
Oral Questions
concerns energy pricing. The Minister's colleague, the Minister of Energy, Mines and Ressources, has indicated we may have to wait until July to see enforcement of the oil-pricing agreement, which means that prices for the Canadian consumer which should now be about ten cents a gallon lower, will not be brought down until then at the earliest. If we enforce that agreement now, ten cents a gallon could translate into about
33,000	additional jobs for Canadians. Will the Minister tell us why he is waiting until July? Why is the Government postponing this action? Why does it not take steps to bring down those prices now?


Marc Lalonde: Madam Speaker, first, the desire for action is indeed very widespread. As the Hon. Member knows, the problem, whether it is between economists, business people or forecasters, is that there is a very large amount of disagreement as to what steps should be taken. Some say enlarge the deficit, some say don't. Some say have more Government spending, some say no, let the economy-


Mr. Baker (Nepean-Carieton):: What do you say?


Marc Lalonde: The Hon. Member will have to wait for my budget to find out what I have to say.
I do not think it is fair for the Hon. Member to assume that the points of view expressed are as uniform as he attempts to indicate. As far as the agreement with Alberta is concerned, surely the Hon. Member knows that the agreement specifically provides that there is an adjustment of prices every six months, whether the prices come down or go up. When prices were going up, Alberta was asked, and agreed, to wait six months. Twice a year there were adjustments in the price of oil. That still applies, whether the prices go up or come down. Surely the Hon. Member is not advocating that we should unilaterally break an agreement, not respect our word and commitment in that regard, and not abide by the agreement. We intend to abide by the agreement. My hon. friend will have to wait until July for the particular decisions to be taken.


John Edward Broadbent: Madam Speaker, first of all, as to the agreement, the Minister, as I have understood him, is incorrect. The agreement does provide procedures which would enable the Government to move upward in terms of prices, if the world price changed in an upward direction, every six months. It also permits action to be taken during that six-month period if Governments want to act. The Minister knows that there would be no violation of the agreement at all if the two Governments involved took action now to bring down those prices to what Canadian consumers ought to be experiencing at this point.


EMPLOYMENT
John Edward Broadbent: Madam Speaker, I would like now to come to my last question. Each week there are approximately 20,000 men and women coming off unemployment insurance. Many of these thousands of people are being driven to welfare. Quite independently of those who are being forced to go on welfare, there are thousands of other Canadians who, for different reasons, are going on the welfare rolls. Does the Minister and the Government not recognize some urgency to take action in terms of job creation? Can he not announce some additional specific measure before the Easter break, instead of us having to wait for the budget, in order to get some more jobs in our economy?


Marc Lalonde: Madam Speaker, I am glad that the Hon. Member admits we should not take unilateral action with regard to the agreement. He says that the Governments are obviously free to agree to make a change to the agreement-


John Edward Broadbent: Not a change to the agreement.


Marc Lalonde: -or to agree to proceed with price changes under the agreement. But it requires the agreement of both Governments. I can tell the Hon. Member that the Government of Alberta and the other producing Provinces have not agreed to such changes at the present time. My colleague, the Minister of Energy, Mines and Resources, met with his colleague, the Minister from Alberta, last week. Further discussions are taking place. If and when any decisions are arrived at, I am sure the Minister of Energy will be very happy to communicate them to the House.
As far as the announcement of additional programs, or additional expenditures, is concerned, I remind my hon. friend that we have already some $2 billion worth of direct job creation programs in one form or another, or training programs, in operation at the present time. There are funds which have been approved and the processing is taking place of the various applications, as the Minister of Employment and Immigration has announced. We are trying to speed up that process as much as we can in order to accommodate the largest possible number of unemployed. We are quite conscious and quite concerned about the situation raised by my hon. friend. We are trying to cope with it as fast as we can. If there are other measures to be announced, however, they will be part of the budget.


TRANSPORT
Hon. John M. Reid (Kenora-Rainy River):: Madam Speaker, my question is directed to the Minister of Transport. For about the last six to eight months there have been negotiations
March 25, 1983

going on between the Minaki Corporation, CN, Via Rail, and the Department of Transport over the transfer of a former railway building at Minaki to the Minaki Corporation. I am sure the Minister will agree that eight months is a long time for Crown corporations to get their act together. With the opening of Minaki Lodge taking place within the next month, could the Minister say whether he will intervene to make sure that this charade is ended?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, Via has been preparing a program for the restoration of stations for a number of months, if not years. It is a rather expensive proposition. This program has not been approved by the Treasury Board yet, but realizing the urgency of the matter put forward by my hon. friend, and realizing that the Government of Ontario has restored the Minaki Lodge and would like to have control of the station, I have made a very dramatic decision, a strong decision.


Some Hon. Members:: Hear, hear!


Jean-Luc Pepin: As usual. Discussions are going on now between CN and Via Rail for the transfer of the station. In the coming weeks, then, there will be an agreement, I dare say, between Via and the Government of Ontario in order to accommodate the desire of the government of Ontario to lease the station.


FINANCE
Miss Pat Carney (Vancouver Centre):: Madam Speaker, my question is directed to the Minister of Finance. The Minister has stated that the Government owes 11 million Canadians about $6.5 billion in tax refunds, and now that the Income Tax Act has passed the House the tax refunds will go out next month. Does the Minister have the cash on hand to pay the tax refunds which he owes Canadians, or does he have to borrow it?


Marc Lalonde: Madam Speaker, the borrowing authority Bill which is before the House has a good chance of being passed by the end of this particular part of the Session, that is, before Easter. Thanks to the generosity of Parliament, I am sure there will be plenty of money. As to whether that money comes from money borrowed or from money coming in from tax receipts, we do not stamp dollars saying that it is a borrowed dollar, or that it is a tax dollar. The money will come out of the Consolidated Revenue Fund. My hon. friend need not worry; she will get her tax refund if she has applied for it. I will not be able to tell her, however, if it is coming from borrowings or from actual cash reserves of the Government.


Erik Nielsen: What reserves?
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AMOUNT OF GOVERNMENT BORROWING
Pat Carney: Madam Speaker, my supplementary question is also directed to the Minister of Finance. Canadians can count on the fact that one dollar out of every three dollars the Government spends is a borrowed dollar. The Government is so broke that it is borrowing money under emergency powers which, as far as we can determine, have never been used before. By next Thursday the Government will have borrowed, through the back door, about $2.3 billion without the authority of Parliament. What steps is the Government taking, aside from seeking to borrow another $19 billion, to get itself out of this emergency situation?


Marc Lalonde: Madam Speaker, the hon. lady is creating a phony emergency. The money which has been borrowed has been borrowed under the authority of Parliament. It has been borrowed under the Borrowing Authority Act, Section 39. It has been passed by this Parliament. The action which has been taken has been taken completely under the authority provided by this Parliament.
I am also pleased to inform the Hon. Member that the Receiver General has advised me that he currently has $5 billion in cash to pay a good part of those refunds, so I do not believe she has to worry. We will not go bankrupt over the weekend. We will still be here next Monday. And we will have plenty of time to pass the borrowing authority legislation. The Hon. Member need not fear. I wish her a very good weekend.


CANADIAN NATIONAL RAILWAYS
Mr. Fred McCain (Carleton-Charlotte):: Madam Speaker, my question is directed to the Minister of Transport. The Minister will know that the CTC scheduled hearings to inquire into the benefit of, or the detriment of the participation of CNR and Cast as fellow businessmen. In the last six months CNR obtained two delays of those hearings to determine whether or not this was in fact a good thing for Canada. Will the Minister confirm that, while these delays were taking place, the CNR has in fact purchased Cast, and this has been announced by Lloyds Registry of Shipping in London, England?


Jean-Luc Pepin: Madam Speaker, my hon. friend, and others, always speak as if the CTC has never looked at the Cast acquisition, or the CN participation in Cast. The CTC has done that twice, and has agreed with it, generally speaking-at least once, I must correct myself. On the subject of the discussions between CN and Cast and Sofati, at this time I am not in a position to answer. I do not think there has been any conclusive decision yet. I would like to repeat, though, very emphatically, that whatever decision is arrived at is subject to the approval of Cabinet and is subject to the approval of the CTC.

March 25, 1983
Oral Questions


QUERY RESPECTING ROLE OF PRIVATE ENTERPRISE
Fred Alward McCain: Madam Speaker, the trend and policy of the Government have been to encourage socialist participation in the transportation industry. I would now like to direct another question to the Minister of Transport.
When is the Minister going to establish a climate in which private enterprise might participate in the deep-sea shipping interests of Canada, and when is he going to investigate the viability which has already been proven, but should be announced, of the Ports of Saint John and Elalifax for 12 months of the year as open Ports, windows to the international world of trade for Canada on a very viable basis, and recognize as well the socialist tendencies of the CNR and their interests?


Jean-Luc Pepin: Madam Speaker, there is not much that has to do with philosophy here. The two reasons why CN is interested in being in Cast or in an organization of that type are simply because of the importance of multi-modalism in transportation today. Everyone will tell you that it is very important for a carrier to be associated with others, or to own others in other modes of transportation, if you want to have the door-to-door service for which Cast was known. That is one point, and I repeat, it does not have anything to do with theology or philosophy. It is reality.
The second reason is that in the Port of Montreal today CP has acquired a very strong position, both on rail and on water. So if my hon. friend does not want CN to be left behind, CN has to compete, and it has to compete with CP on similar terms, hence the interest of CN in staying in Cast or in acquiring other facilities.


LABOUR CONDITIONS
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, my question is for the Minister of Employment. Unemployment in British Columbia has reached 196,000, and communities like Kamloops should be declared national disaster areas for purposes of emergency job creation. The Minister is aware that the B.C. Government is exploiting this human tragedy with misleading, exaggerated, and inaccurate public advertising, claiming the credit for thousands of jobs which do not exist, and also for federal programs for which it has not had the responsibility.
In view of this Socred misrepresentation of federal programs, has the Minister written to the Premier of British Columbia demanding withdrawal of this dishonest political advertising for which B.C. taxpayers are being forced to pay?


Lloyd Axworthy: Madam Speaker, I think someone once said that imitation is the highest form of compliment that can be
paid. The fact that the B.C. Government is using federal programs to extol the ability of government to create jobs demonstrates the fact that we must be doing something right, contrary to what we heard just a few minutes ago.
It has been drawn to my attention that the B.C. Government has taken out a number of ads talking about how work sharing has saved thousands of jobs in the Province. It has also saved thousands of jobs in other parts of Canada. We have been in contract with the B.C. Minister of Labour to point out that, if he is going to be so kind as to draw the public's attention to the virtues of that program, he may also draw attention to the fact that it is the federal Government which provides it.


Margaret Anne Mitchell: The Minister is almost as misleading as the Socred Government. He should be telling people that jobsharing does not create new jobs. In fact, it does not really maintain existing jobs full time.


INDUSTRY
Margaret Anne Mitchell: Madam Speaker, my supplementary is directed to the Minister of Industry, Trade and Commerce. The B.C. Socred Government has been forced to withdraw its dishonest claims about thousands of day-care centres it has claimed to have created, but it is still claiming the creation of 10,000 to 16,000 jobs in B.C.'s northeast coal project. In view of the negative predictions about future markets for north-east B.C. coal and the layoffs which he knows are now occurring in the mining of south-east B.C. coal, does the Minister agree that few, if any, additional jobs are being created in B.C. coal production at this time, and does he not also agree that these ads are grossly dishonest and should be prohibited?


Hon. Ed Lumley (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, I have not seen those ads as yet, so I do not want to make any comment. All the federal Government did was to assist the Province of British Columbia, at the Province's request as well as that of the coal industry, to aid in the development of the infrastructure to ensure economic development in that part of the Province of British Columbia.


INCOME TAX
Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, I have a short supplementary to my colleague's question on income tax refunds. Can the Minister of Finance assure us that, not only will the 1982 tax refunds go out, but
March 25, 1983

Oral Questions GRAIN


UNITED STATES PRICE CUTTING POLICIES
[Stage Direction]
the 1981 tax refunds still owing to a number of my constituents will go out as well, with top priority?
Hon. Pierre Bussieres (Minister of National Revenue):: Madam Speaker, I think that where the Hon. Member is referring to Canadians who have not yet received their tax refunds for 1981, these are a limited number of very specific cases where there was some problem with the tax return or changes had to be made. The vast majority of income tax returns for that year have been processed, with very few exceptions.
* *
*


AIRPORTS
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam
Speaker, my question is for the Minister of Transport. Transport management in the Winnipeg region and Ottawa headquarters have prepared and support a detailed proposal to build a new Winnipeg area air traffic control centre. Can the Minister tell me when construction will start on this new centre?


Jean-Luc Pepin: Madam Speaker, I am afraid I will not be able to do so this morning, but I will make enquiries and give the Hon. Member a reply before three o'clock, either by telephone or directly.


A. Daniel McKenzie: Madam Speaker, I appreciate the haste with which the Minister is going to give me the answer, because we want to keep those 250 controllers and their families there.


SITE AND PLANS
A. Daniel McKenzie: Madam
Speaker, I ask the Minister of Transport if he has a proposed building site on Crown land, and immediate access to detailed building plans from Edmonton, Montreal or Moncton? Would he tell me if the funds are available, and what is the earliest possible date for construction to start?


Jean-Luc Pepin: Madam Speaker, I would really have appreciated notice of these questions. Simply put, there are in Canada about 100 airports for which I have some responsibility. There are also 350 ports. I cannot memorize the program for each one of them, so I would appreciate it if the Member would give me notice before asking me what is the state of a project at a particular airport. So again I say, this time in Latin, bis, to the previous question, and I will answer this afternoon.


Hon. Don Mazankowski (Vegreville):: Madam Speaker, my question is directed to the Minister of Transport who, I am sure is aware of the serious difficulties Canadian grain producers are facing as a result of low world prices and the price cutting policies of the United States and the European Economic Community. This has led to the threat of a massive reduction in the initial price of grain paid to prairie producers. Is the Minister's Government actively considering taking any action in this particular area and, if so, what action is being contemplated?


Jean-Luc Pepin: Madam Speaker, I see three parts to the answer. The first one is that, indeed, we take exception to some of the marketing tactics that the Americans have used, particularly in Iraq, for example, which is a cash market, and where they have made sales recently using blended credit. We do not think that is cricket, so we have made a protest on that subject.
The second point is that, contrary to the impression given by my hon. friend, recently there has been in the grain markets of the world a certain strengthening of Canadian Red Spring No. 1, for example, which sold at $204 a ton about ten days ago, is selling at $217 today, and at $222 the day before. So there has been an interesting upward trend. I do not want to make too much of it. On the surface one of the reasons is the limitation of cultivated acreage in the United States. Another reason has been the apparent relatively poor crop in the Soviet Union. "Le malheur des uns fait le bonheur des autres".
Thirdly, on the subject of initial prices, indeed we studied the subject yesterday in committee of Cabinet, so it is on its way to Cabinet now and an announcement should be made in the coming days.


LEVEL OF INITIAL GRAIN PRICES
Donald Frank Mazankowski: Madam Speaker, in light of this so-called strengthening in the market can we expect that the initial price will remain at the level of the 1982-1983 initial price, or higher? Secondly, what action, in addition to a mere protest, is the Government taking to encourage co-operation among the major exporting nations of the world so that there can be some stability in the pricing arrangements for the grain industry as a whole?


Jean-Luc Pepin: Madam Speaker, on the second question, 1 have nothing much to add to what the Hon. Member knows. Canada constantly makes an effort to bring producer and consumer countries together internationally, but without great success in recent years. One has to add the years when my hon. friend was Minister of Transport in terms of the lack of success in recent times.
On the subject of the level of initial payments, my hon. friend is very learned in these matters. I am aware of that, and

March 25, 1983
Oral Questions
compliment him occasionally. He knows that initial payments must express the right balance between too high and too low. The Government cannot risk too much, and it is always good for farmers to have a bit of a surprise on the positive side, as occurred this year, when they realized that the final payment would be $500 million more than they had received in the initial payment. My colleague, the Minister responsible for the Canadian Wheat Board, has balanced all these factors, now, and the results will be known in a few days.


NATIONAL REVENUE
Mr. Jim Fulton (Skeena):: Madam Speaker, my question is directed to the Minister of National Revenue. Would he advise the House of what steps he is taking to see that the present abuse of charitable tax status by some of the 58,000 designated organizations is brought under control? There is an abundance of examples where groups, particularly supporting aims of the Liberal Party, are registered, and those that do not are refused registration. For example, the Fraser Institute was agreed to by the Minister, but the Centre for Policy Alternatives was turned down. In Quebec, such groups as Young Canadians for a Christian Civilization was registered, and its sole purpose seems to be to attack the Government of France. There are others, such as the Canadian Unity Council and the Confessional School movement, which are simply political fronts for the Liberal Party.


Some Hon. Members:: Oh, oh!


James Ross Fulton: Would the Minister refer this matter, at the very least, to a House committee for investigation, or does he intend to allow this kind of activity to continue?
[ Translation]


Pierre Bussières: Madam Speaker, to hear the laughing and joking going on on all sides of the House, I think Hon. Members have already passed jugment on the reasoning behind the Hon. Member's question. Perhaps he should have stopped to realize that more than 50,000 groups are licensed to issue receipts on behalf of the Department of National Revenue, and that by using two or three of these groups to make a snap judgment on their affiliation, he is basing his judgment on a very small number of people. Department officials who are responsible for administering this provision of the Act do so on the basis of documentation they are given by the groups in question, and they exercise the greatest possible objectivity in this respect.


James Ross Fulton: The Minister seems to find a great deal of humour in it. The fact of the matter is that some of these groups are flagrantly violating the law.


REQUEST FOR REFERRAL TO COMMITTEE
James Ross Fulton: Madam Speaker, if the Minister does not believe that, will he refer the law and the documents relating to those 58,000 groups to a House committee? If he is not prepared to do that, will he get his colleague, the Solicitor General, to have the commercial crime squad of the RCMP go over and do a random sampling, and advise the House or the Minister responsible just how many of those groups are flagrantly violating the law?


Some Hon. Members:: Name them.


Pierre Bussières: 
FINANCE
Erik Nielsen: Madam Speaker, my question is for the Minister of Finance. A few moments ago when he was responding to questions by the finance critic for the Opposition, he informed us that present Government borrowings made under its emergency powers were being made under Section 39 of the Borrowing Authority Act. 1 take it that he meant Section 39 of the Financial Administration Act. Will the Minister inform us whether the powers contained in Section 39 of the Financial Administration Act have ever been exercised in the past by any Government?


Marc Lalonde: Madam Speaker, the Hon. Member is quite right. I was going to rise on a point of order at twelve o'clock to correct the reference to the Financial Administration Act rather than the Borrowing Authority Act.
As for the previous use of the power, I cannot recollect an instance, although in a parliamentary committee I was informed by a Member of the Conservative Party that it was used around 1962. I have not verified this matter. 1 do not know whether or not it was used at that time, but it was volunteered by someone on the Conservative side that it had been used.
March 25, 1983

The point is rather irrelevant. Parliament has provided that specific power under Section 39 of the Financial Administration Act. Surely, if Parliament put it there, it was because it expected that the Government would use it when needed some day. This is what has taken place. It has been very helpful and very well received by the financial community as a responsible act, while the Opposition was filibustering the introduction of that other particular piece of legislation.


Erik Nielsen: I am glad the Minister made reference to 1962 because I was here during that time, and he was not. I can tell him that indeed in 1962 the borrowing authority was exercised-he referred to filibustering-by virtue of the fact that the Liberal Opposition of the day held up Supply for 49 days while they filibustered the Government of the day.


Some Hon. Members:: Shame!


Erik Nielsen: I think that filibuster record has never been exceeded since that date.


REQUEST THAT ORDERS IN COUNCIL BE TABLED
Erik Nielsen: Madam Speaker, Section 39 sets forth that the Minister may borrow for a period not exceeding six months. It requires an amount to be stipulated, and terms, and interest rates. What authority does the Minister have from the Governor in Council with respect to the period of the borrowing, with respect to the maximum amount of the borrowing, and with respect to the interest rates authorized by that Order in Council? Will he undertake next Monday to table the Order in Council which provided the Minister with that authority to borrow under Section 39?


Marc Lalonde: Madam Speaker, I can inform the Leader of the Opposition that all borrowing carried out through the issuing of Treasury bills was done pursuant to an Order in Council passed specifically for this purpose by Cabinet. I should be happy to look up the Orders in Council, if they have not already been published in the Canada Gazette, but in any case, I should be happy to give the Hon. Member the information as soon as possible.


TRANSPORT
Mr. Maurice Harquail (Restigouche):: Madam Speaker, my question is directed to the Minister of Transport. It concerns the strengthening of highway linkages in New Brunswick, which touches upon the economy of New Brunswick and the Atlantic Provinces. We have been awaiting that for some
Oral Questions
period of time for a section of main Highway 11 in northern New Brunswick. With the budget discussions and the warmer summer weather coming for construction, I wonder whether the Minister of Transport could give some indication of discussing with Premier Hatfield and the Minister of Transportation of New Brunswick the implementation of their plans to finish the construction of the section between Belledune and Charlo on Route 11, in that Province?


Jean-Luc Pepin: Madam Speaker, I would appreciate notice of these pointed questions, however important they are. We negotiated an agreement with the Maritime Provinces a year ago. We negotiated with the Government of New Brunswick for selection of different routes, and emphasis was given to Route 11 as a preoccupation of Members of Parliament on this side. The Government of New Brunswick was quite accommodating, and I expect that to continue. On the specific point, I will have to telephone my hon. friend this afternoon.


CUSTOMS AND EXCISE
Hon. Jake Epp (Provencher):: Madam Speaker, I have a question for the Minister of National Revenue. He will be aware that there is some concern in a number of overland ports, especially in Manitoba, that the United States Government is considering reducing the number of hours at their overland ports which, of course, would affect ours.
Could the Minister give an indication of what steps the Government is taking in order to provide, not only the service, but also the commercial activity that is obviously enhanced with the longer hours at those ports?


Pierre Bussières: Madam Speaker, we have been advised that the American Government has been making a number of proposals to shorten the time during which certain ports of entry between the United States and Manitoba are open, and we have reacted to these proposals. At the present time, there are two controversial points, one concerning opening time in the morning, and the second the fact that time two ports of entry would be closed by the Americans in the morning between 7.00 and 9.00 a.m. Our position is that if the Americans are unable to provide regular service on the border, they should at least keep the barrier open so that northbound traffic can proceed and we can continue to operate the ports of entry.

March 25, 1983
Point of Order-Mr. Baker (Nepean-Carleton) PETITIONS


TABLING OF REPORTS OF CLERK OF PETITIONS
Madam Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Thursday, March 24, 1983, meet the requirements of the Standing Orders as to form.
of a sub-committee of the Canadian Videotex Consultative Committee, which is a consultative committee to my Department. I would be pleased to table the report in the House, but I would point out that that does not automatically refer it to a committee of the House under the new Standing Orders since it would not be tabled pursuant to a legal obligation to do so. However, I will be pleased to table it and to discuss the matter with my House Leader.



ROUTINE PROCEEDINGS


Mr. Claude-Andre Lachance (Rosemont):: Madam Speaker, I have the honour of tabling the Seventh Report of the Standing Committee on Justice and Legal Affairs.


TABLING OF EXTRACT OF MINUTES OF MEETING OF COMMISSIONERS OF INTERNAL ECONOMY RESPECTING SALARY REVISIONS
Madam Speaker:: I have the honour to lay upon the Table of the House an extract from the minutes of a meeting of the Commissioners of Internal Economy, held on Monday, February 28, 1983, respecting salary revisions of employees of the House of Commons effective April 1, 1983.


POINT OF ORDER
Walter David Baker: Madam Speaker, first of all I want to thank the Minister of Communications (Mr. Fox) for remaining in the House. As he knows, a report was released yesterday which had been funded by the Department of Communications to look into the impact of information technology on Canadian society. It speaks of fundamental changes and a number of other things that it is important for the House to consider, such as employment, technological change, science and technology, research and development, and so on. They will affect every part of the lives of Canadians over the next 20 or 30 years.
Is it the intention of the Minister to table that document in the House, and perhaps refer it to the appropriate committee in the event that the committee may wish to look into the matter?


Hon. Francis Fox (Minister of Communications):: Madam Speaker, the report that was made public yesterday is a report


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 3,941, 3,942, 3,943, 3,948, 3,950, 3,951 and 3,952.


Mr. Lawrence: What is the name of the present (a) Director (b) Deputy Director of the Altadore Centre, Calgary and, in each case (a) for how long has he/she held the position (b) what position did he/she hold previously (c) what is his/her salary level (d) what formal education does he/she have?


Hon. Bob Kaplan (Solicitor General of Canada):: In so far as
the Correctional Service of Canada is concerned:
A.	There is no Director at Altadore Centre but there is a Superintendent, whose name is Henry Parker, (a) Date of appointment to present position: May 18, 1981. *(b) Position held prior to present appointment: Parole Officer, National Parole Service, Calgary District Office, Calgary, Alberta, (c) Salary range: $28,118 to $31,640. *(d) This position requires a university degree, preferably with specialization in sociology, psychology, social work, criminology or some other specialty relevant to the position, or to have passed the Public Service Commission Examination, "General Intelligence Test 310" and possess the experience qualifications for the position.
B.	There is no Deputy Director at Altadore Centre but the Senior Counsellor, Wayne Reddon, is presently designated by the Superintendent to act in his absence through a Commissioner's Directive issued in accordance with section 29(3) of the Penitentiary Act. The responsibility may be rotated periodically in order to provide experience and training opportunities to the Case Management Officer.
(a) Date of appointment as Senior Counsellor: January 19, 1981. *(b) Position held prior to present appointment: Living Unit Officer at Altadore Centre, (c) Salary range: $24,892 to $27,998. *(d) Same as part A(d).
Information provided is for previous work experience in the federal Public Service only. The provision of any additional information on individuals

March 25, 1983

regarding previous work experience outside the federal Public Service and personal educational qualifications is of a personal and confidential nature, the disclosure of which is governed under the Canadian Human Rights Act, Part IV.


Mr. Lawrence: What is the name of the present (a) Director (b) Deputy Director of the Portal House, Calgary and, in each case (a) for how long has he/she held the position (b) what position did he/she hold previously (c) what is his/her salary level (d) what formal education does he/she have?


Robert Phillip Kaplan: In so far as
the Correctional Service of Canada is concerned:
A.	There is no Director at Portal House but there is a Superintendent, whose name is Larry Simonson, (a) Date of appointment to present position: May 18, 1981. *(b) Position held prior to present appointment: Parole Officer, National Parole Service, Calgary District Office, Calgary, Alberta, (c) Salary range: $28,118 to $31,640. *(d) This position requires a university degree, preferably with specialization in sociology, psychology, social work, criminology or some other specialty relevant to the position, or to have passed the Public Service Commission Examination, "General Intelligence Test 310" and possess the experience qualifications for the position.
B.	There is no Deputy Director at Portal House but one of the two Case Management Officers, Anthony Bouchard, is presently designated by the Superintendent to act in his absence through a Commissioner's Directive issued in accordance with Section 29(3) of the Penitentiary Act. The responsibility may be rotated periodically in order to provide experience and training opportunities to the other Case Management Officer.
(a) Date of appointment as Case Management Officer: December 18, 1978. *(b) Position held prior to present appointment: Counsellor at Portal House, (c) Salary range: $24,892 to $27,998. *(d) Same as part A(d).
* Information provided is for previous work experience in the federal Public Service only. The provision of any additional information on individuals regarding previous work experience outside the federal Public Service and personal educational qualifications is of a personal and confidential nature, the disclosure of which is governed under the Canadian Human Rights Act, Part IV.


Mr. Lawrence: What is the name of the present (a) Director (b) Deputy Director of the Grierson Centre, Edmonton and, in each case (a) for how long has he/she held the position (b) what position did he/she hold previously (c) what is his/her salary level (d) what formal education does he/she have?


Robert Phillip Kaplan: In so far as
the Correctional Service of Canada is concerned:
A. There is no Director at Grierson Centre but there is a Superintendent, whose name is Douglas Alexander Clark, (a) Date of appointment to present position: April 1, 1978. *(b) Position held prior to present appointment: Superintendent, Osborne Centre, Winnipeg, Manitoba, (c) Salary range: $33,689 to $37,913. *(d) This position requires a university
Order Paper Questions
degree, preferably with specialization in sociology, psychology, social work, criminology or some other specialty relevant to the position or to have passed the Public Service Commission Examination, "General Intelligence Test 310" and possess the experience qualifications for the position.
B. There is no Deputy Director at Grierson Centre but the Case Management Officer, George Buys, is presently designated by the Superintendent to act in his absence through a Commissioner's Directive issued in accordance with Section 29(3) of the Penitentiary Act. The responsibility may be rotated periodically in order to provide experience and training opportunities to three other Case Management Officers.
(a) Date of appointment as Case Management Officer: March 1, 1974. *(b) Position held prior to present appointment: Keeper at Drumheller Institution, Drumheller, Alberta, (c) Salary range: $24,892 to $27,998. *(d) Same as part A(d).
* Information provided is for previous work experience in the federal Public Service only. The provision of any additional information on individuals regarding previous work experience outside the federal Public Service and personal educational qualifications is of a personal and confidential nature, the disclosure of which is governed under the Canadian Human Rights Act, Part IV.


Mr. Lawrence: What is the name of the present (a) Director (b) Deputy Director of the Robson Centre, Vancouver and, in each case (a) for how long has he/she held the position (b) what position did he/she hold previously (c) what is his/her salary level (d) what formal education does he/she have?


Robert Phillip Kaplan: In so far as
the Correctional Service of Canada is concerned:
A.	There is no Director at the Robson Centre but there is a Superintendent, whose name is Reginald Clarkson, (a) Date of appointment to present position: February 8, 1982. *(b) Position held prior to present appointment: Co-ordinator, Employees' Health Care Services, Correctional Service Canada, Regional Headquarters, Abbotsford, British Columbia, (c) Salary range: $28,118 to $31,640. *(d) This position requires a university degree, preferably with specialization in sociology, psychology, social work, criminology or some other specialty relevant to the position, or to have passed the Public Service Commission Examination, "General Intelligence Test 310" and possess the experience qualifications for the position.
B.	There is no Deputy Director at the Robson Centre but the Case Management Officer, Graydon McMurdo, is presently designated by the Superintendent to act in his absence through a Commissioner's Directive issued in accordance with Section 29(3) of the Penitentiary Act. The responsibility may be rotated periodically in order to provide experience and training opportunities to one other Case Management Officer.
(a) Date of appointment as Case Management Officer: July 20, 1980. *(b) Position held prior to present appointment:
24162

March 25, 1983
Order Paper Questions
Parole Officer, Vancouver Parole District Office, Vancouver, British Columbia, (c) Salary range: $24,892 to $27,998. *(d) Same as part A(d).
* Information provided is for previous work experience in the federal Public Service only. The provision of any additional information on individuals regarding previous work experience outside the federal Public Service and personal educational qualifications is of a personal and confidential nature, the disclosure of which is governed under the Canadian Human Rights Act, Part IV.


Mr. Lawrence: What is the name of the present (a) Director (b) Deputy Director of the Elbow Lake Forestry Camp, Harrison Mills and, in each case (a) for how long has he/she held the position (b) what position did he/she hold previously (c) what is his/her salary level (d) what formal education does he/she have?


Robert Phillip Kaplan: In so far as
the Correctional Service of Canada is concerned:
A.	There is no Director at Elbow Lake Institution but there is a Superintendent, whose name is Sepp Tschierschwitz. (a) Date of appointment to present position: July 1, 1975. *(b) Position held prior to present appointment: Head, Living Unit, Ferndale Institution, Mission, British Columbia, (c) Salary range: $32,112 to $36,212. *(d) The minimum educational requirements for this position are successful completion of secondary school or to have passed the Public Service Commission Examination 320 coupled with relevant experience.
B.	There is no Deputy Director at Elbow Lake Institution but the Assistant Superintendent, Offender Programs, Tom Crozier is presently designated by the Superintendent to act in his absence through a Commissioner's Directive issued in accordance with Section 29(3) of the Penitentiary Act.
(a) Date of appointment as Assistant Superintendent, Offender Programs: November 5, 1976. *(b) Position held prior to present appointment: Classification Officer at the former Agassiz Correctional Camp, Agassiz, British Columbia, (c) Salary range: $28,118 to $31,640. *(d) This position requires a university degree, preferably with specialization in sociology, psychology, social work, criminology or some other specialty relevant to the position, or to have passed the Public Service Commission Examination, "General Intelligence Test 310" and possess the experience qualifications for the position.
Information provided is for previous work experience in the federal Public Service only. The provision of any additional information on individuals regarding previous work experience outside the federal Public Service and personal educational qualifications is of a personal and confidential nature, the disclosure of which is governed under the Canadian Human Rights Act, Part IV.


Mr. Lawrence: What is the name of the present (a) Director (b) Deputy Director of the Matsqui Trailer Unit and, in each case (a) for how long has he/she held the position (b) what position did he/she hold previously (c) what is his/her salary level (d) what formal education does he/she have?


Robert Phillip Kaplan: In so far as
the Correctional Service of Canada is concerned: Matsqui Trailer Unit has been converted into a Community Correctional Centre and has been renamed Sumas Centre.
A.	There is no Director at the Sumas Centre, but there is a Superintendent whose name is Jim White, (a) Date of appointment to present position: April 1, 1979. *(b) Position held prior to present appointment: Section Supervisor, Abbotsford District Parole Office, Abbotsford, British Columbia, (c) Salary range: $28,118 to $31,640. *(d) This position requires a university degree, preferably with specialization in sociology, psychology, social work, criminology or some other specialty relevant to the position, or to have passed the Public Service Commission Examination, "General Intelligence Test 310" and possess the experience qualifications for the position.
B.	There is no Deputy Director at Sumas Centre, but the Case Management Officer, Dalia Meredith, is presently designated by the Superintendent to act in his absence through a Commissioner's Directive issued in accordance with Section 29(3) of the Penitentiary Act.
(a) Date of appointment as Case Management Officer: September 15, 1980. *(b) Position held prior to present appointment: Parole Officer, Abbotsford District Parole Office, Abbotsford, British Columbia, (c) Salary range: $24,892 to $27,998. *(d) Same as part A(d).
*Information provided is for previous work experience in the federal Public Service only. The provision of any additional information on individuals regarding previous work experience outside the federal Public Service and personal educational qualifications is of a personal and confidential nature, the disclosure of which is governed under the Canadian Human Rights Act, Part IV.


Mr. Lawrence: What is the name of the present (a) Director (b) Deputy Director of the Ferndale Institution, Mission and, in each case (a) for how long has he/she held the position (b) what position did he/she hold previously (c) what is his/her salary level (d) what formal education does he/she have?


Robert Phillip Kaplan: In so far as
the Correctional Service of Canada is concerned:
A.	There is no Director at Ferndale Institution but there is a Superintendent, whose name is Maurits Vanderveen. (a) Date of appointment to present position: April 1, 1980. *(b) Position held prior to present appointment: Acting Assistant Superintendent, Offender Programs, Ferndale Institution, (c) Salary range: $32,112 to $36,212. *(d) The minimum educational requirements for this position are successful completion of secondary school or to have passed the Public Service Commission Examination 320 coupled with relevant experience.
B.	There is no Deputy Director at Ferndale Institution but the Assistant Superintendent, Offender Programs, Michael Treloar, is presently designated by the Superintendent to act in his absence through a Commissioner's Directive issued in accordance with Section 29(3) of the Penitentiary Act.
March 25, 1983

Financial Institutions
(a) Date of appointment as Case Management Officer: October 1, 1981. *(b) Position held prior to present appointment: Chief, Quality Control and Procedure Review, Correctional Service Canada, Regional Headquarters, Abbotsford, British Columbia, (c) Salary range: $28,118 to $31,640. *(d) This position requires a university degree, preferably with specialization in sociology, psychology, social work, criminology or some other specialty relevant to the position, or to have passed the Public Service Commission Examination, "General Intelligence Test 310" and possess the experience qualifications for the position.
* Information provided is for previous work experience in the federal public Service only. The provision of any additional information on individuals regarding previous work experience outside the federal public Service and personal educational qualifications is of a personal and confidential nature, the disclosure of which is governed under the Canadian Human Rights Act, Part IV.


David P. Smith: 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


[Stage Direction]
The House proceeded to the consideration of Bill C-130, to authorize continuing financial assistance to be provided to certain international financial institutions, as reported (without amendment) from the Standing Committee on External Affairs and National Defence.
Mr. Douglas Roche (Edmonton South) moved:: That Bill C-130, An Act to authorize continuing financial assistance to be provided to certain international financial institutions, be amended by adding immediately after line 13 at page 2 the following:
"5. (1) An order of the Governor in Council under section 4 shall be laid before Parliament not later than the fifteenth sitting day of Parliament after it is made.
(2)	An order referred to in subsection (1) shall come into force on the twentieth sitting day of Parliament after it has been laid before Parliament pursuant to that subsection unless, before that time,
(a)	a motion for the consideration of the House of Commons to the effect that the order be confirmed, signed by a Minister of the Crown, is filed with the Speaker of the House of Commons; or
(b)	if no motion has been filed under paragraph (a), a motion for the consideration of the House of Commons to the effect that the order be revoked signed by not less than thirty members of the House of Commons is filed with the Speaker of the House of Commons.
(3)	Where a motion for the consideration of the House of Commons is filed as provided in subsection (2), the House of Commons shall, not later than the sixth sitting day of Parliament following the filing of the motion, take up and consider the motion.
(4)	A motion taken up and considered in accordance with subsection (3) shall be debated without interruption for not more than three hours and, on the conclusion of such debate or at the expiration of the third such hour, the Speaker of the House of Commons shall forthwith, without further debate or amendment, put every question necessary for the disposition of the motion.
6.	If a motion described in paragraph 5(2)(o) is taken up and considered by the House of Commons in accordance with subsection 5(3) but is not adopted by that House, the particular order to which the motion relates shall stand revoked.
7.	If a motion described in paragraph 5(2)(6) is adopted by the House of Commons, the particular order to which the motion relates shall stand revoked.
8.	(1) If a motion described in paragraph 5(2)(a) is taken up and considered by the House of Commons in accordance with subsection 5(3), and is adopted by that House, a message shall be sent from the House of Commons informing the Senate that the motion has been so adopted and requesting that the motion be concurred in by the Senate.
(2)	Where a request for concurrence in a motion is made to the Senate pursuant to subsection (1), the Senate shall, not later than the fifth sitting day of Parliament following the receipt by the Senate of the request, take up and consider the motion.
(3)	A motion taken up and considered in accordance with subsection (2) shall be debated without interruption for not more than three hours and, on the conclusion of such debate or at the expiration of the third such hour, the Speaker of the Senate shall forthwith, without further debate or amendment, put every question necessary to determine whether or not the motion in question is concurred in.
(4)	If a motion taken up and considered in accordance with subsection (2) is concurred in by the Senate, the particular order to which the motion relates comes into force immediately on the concurrence therein.
(5)	If a motion taken up and considered in accordance with subsection (2) is not concurred in by the Senate, the particular order to which the motion relates shall stand revoked.
9.	(1) If a motion described in paragraph 5(2)(b) is taken up and considered by the House of Commons in accordance with subsection 5(3) but is not adopted by that House, the particular order to which the motion relates shall come into force on the fifth sitting day of Parliament after the failure of the House of Commons to adopt the motion unless before that day a motion to the effect that the order be revoked, signed by not less than fifteen members of the Senate, if filed with the Speaker of the Senate.
(2)	Where a motion for the consideration of the Senate is filed as provided in subsection (1), the Senate shall, not later than the sixth sitting day of Parliament following the filing of the motion, take up and consider the motion.
(3)	A motion taken up and considered in accordance with subsection (2) shall be debated without interruption for not more than three hours and, on the conclusion of such debate or at the expiration of the third such hour, the Speaker of the Senate shall forthwith, without further debate or amendment, put every question necessary for the disposition of the motion.
(4)	If a motion taken up and considered in accordance with subsection (2) is adopted by the Senate, the particular order to which the motion relates shall stand revoked.
(5)	If a motion taken up and considered in accordance with subsection (2) is not adopted by the Senate, the particular order to which the motion relates comes into force immediately on the failure of the Senate to adopt the motion.
10.	An order of the Governor in Council under section 4 that has been laid before Parliament but has not come into force shall stand revoked on the dissolution or prorogation of Parliament.
11.	For the purposes of this Act, "sitting day of Parliament" means a day on which either House of Parliament sits."
and by renumbering the subsequent Clauses accordingly.

March 25, 1983
Financial Institutions
He said: Madam Speaker, we are taking up the report stage of Bill C-130 and discussing the amendment which stands in my name on the Order Paper and presented on behalf of this Party. At the outset, may I say that the wording of the amendment was arrived at following discussions. I believe it is the intention of the Government to accept my amendment. In a few moments we will hear from the spokesperson for the New Democratic Party, and I have some reasons to believe that that Party also finds the amendment acceptable. In this case, I believe it would be in the interests of speedy passage of the legislation if my intervention were brief.
Bill C-130 was debated on second reading in November and extensive discussions were held in committee in December. We are now going to discuss the amendment and what it seeks to do to the Bill.
Let me remind the House that the principle of the Bill is to provide for transitional payments of some $442,000 to be paid out of the Consolidated Revenue fund, and $117,040,000 to be issued in the form of non-interest bearing, non-negotiable demand notes to the eight regional lending institutions listed in the Schedule of the Act.
One of the reasons for the importance of debating this legislation is the fact that it is a very rare occasion when the House is seized of any sort of debate on these matters, let alone dealing with legislation having to do with Canada's role in international development. As we know, CIDA has been operating through the years without an Act of Parliament. The only time we deal in any substantial way with CIDA does as the main proponent of Canada's role in international development, is at the time of the Estimates. I am afraid that all Members of the House are too well aware of the inadequacy of the rules concerning the examination of Estimates that preclude the full treatment that important spending programs require.
Spokesmen for this Party have previously expressed the basic support that we bring to the Bill. We believe that the sums mentioned in the Bill, and indeed the Bill's thrust, are in harmony with Canada's role in international development. It reflects the concerns of many Canadians that Canada play a proper role in international development, both bilaterally and multilaterally, not to mention the role of supporting nongovernmental organizations that, in my view, perform perhaps the most valuable work toward human development programs in the world on a dollar for dollar basis.
Nevertheless, this Bill deals with part of Canada's commitment to multilateral agencies and specifically to international financial institutions. Since we have made commitments to those institutions, there is no doubt that the correct procedure to follow would be to pass this Bill after recognizing the work we have done in the House today and the consideration we have given to its principles and limitations during the second reading and committee stages.
We are now seeing an important qualification. The Bill as presented to us would have allowed the Government to change the names of financial institutions by Order in Council, particularly the eight that are named in the Bill. For the purpose of the record, I should briefly refer to those institutions. They are: the African Development Fund, the African Development Bank, the Asian Development Fund, The Asian Development Bank, the Inter-American Development Bank, the Fund for Special Operations of the Inter-American Development Bank, the Caribbean Development Bank and Special Development Fund, the International Fund for Agricultural Development, and now the new Common Fund for Commodities that has evolved from the discussions of UNCTAD over the past few years.
The amendment before us addresses itself precisely to the problem of how the names of those institutions would be changed. As I have said, whereas the present Bill would allow the Government to do this by Order in Council without its being subject to the scrutiny of Parliament, the amendment would provide that if the Government decided to alter that list, to add or substract, but particularly to add, it would bring such an order before Parliament and put it in the form of a motion to which Members of Parliament could address themselves. To do this, 30 Members of Parliament would be required to sign a statement that would call for a special three-hour debate, to be followed by a vote. That procedure would allow Members of Parliament to fulfill at least a modicum of responsibility in scrutinizing where Canada's money is going.
As I have indicated, the wording of the amendment was arrived at after consultations and discussions. I believe it to be a good amendment. Moreover, there are several precedents for such an amendment which provides that 30 Members of Parliament sign a statement calling for debate on a motion that the Government is required, by legislation, to bring forward when it seeks to change certain Bills that have been passed by the House in any substantive way.
The precedent for my amendment is found in Bills C-102 and C-123. The wording in both those Bills is almost identical to that found in the amendment before us. Those amendments have previously found favour with the House and have established a precedent which I believe the House would be wise to follow today at the report stage of the present Bill. Having said that, I want to make two brief comments.


The Acting Speaker (Mr. Reid (Kenora-Rainy River)):: regret that the time allotted to the Hon. Member has come to an end. He may continue with unanimous consent. Is there unanimous consent?


Some Hon. Members:: Agreed.


Douglas Roche: Mr. Speaker, I thank my colleagues. I will continue for a couple of moments. As I have indicated, it is not my intention to debate this Bill at length because it has received full treatment. I believe there is a common desire to process the Bill through its final stages immediately.
March 25, 1983

I think the House would be interested to know that there were several questions raised in committee about the procurement by Canadian business from those international institutions to which we are subscribing funds. Subsequent to the committee hearings in December, I received some very interesting information from Mr. Bill McWhinney, the Acting President of CIDA, which I think is useful and ought to be put on the record now. 1 am informed that the returns to Canada from the money that we put into these international financial institutions amounts to a 66 per cent return. The latest figures that are available show that Canada has received some $930.4 million in procurement which is related to Canadian contributions of $1.4 billion.
I would also bring some additional information to the attention of Hon. Members which relates to the downstream commercial benefits to many firms that have tendered and received contracts from international financial institutions. I specifically refer to the study done by the Asian Development Bank that confirms that although the level of Canadian bidding remains low on a relative basis, the success rate of Canadian bids tendered is generally high. More important, it is noted that there is an ongoing effort to generate interest and increased awareness by Canadian companies in the IFI financed projects through a series of conferences, seminars and promotional tours across Canada by IFI procurement officials.
The World Bank, the Asian Development Bank, the African Development Bank and the Inter-American Development Bank have all conducted tours within the last 18 months. Financial assistance to Canadian firms seeking export contracts, including those financed by the IFI, is also available.
Therefore, we see that some progress is being made on procurement by Canadian firms, although I do not believe it is yet at a substantial level. I urge the Government to do more to help Canadian business achieve those contracts and obtain that legitimate business that follows from the greater flow of Canadian assistance and contributions in the form of loans and grants into the multilateral institutions. If we are to play a greater role, as we have been asked to do in the Brandt Report and the many professional studies that have been conducted, we will have to ensure that Canadians, and particularly Canadian business, receive their fair entitlement to the benefits that will increase development throughout the world. This will be done when we recognize the need for increased international financing today to solve the debt crisis, when we recognise the need for the doubling of the bases of the IMF and the World Bank and the increase of facilities to make more of the world's liquidity available in those areas of the world that are pressed for development now and are caught in the international debt crisis.
[ Translation]


Mr. Maurice Dupras (Labelle):: Mr. Speaker, I wanted to take part in the debate on Bill C-130 for several reasons. The most important of these is my involvement in the area of international development and the study my colleagues and
Financial Institutions
myself have made on all aspects of our relations with the countries of Fatin America and the West Indies.
Mr. Speaker, another reason why I wanted to take part in this debate concerns the selection or evaluation of the borrowing projects which have been submitted by various countries. What I mean, Mr. Speaker, is that I am concerned that the ministers of the various countries which contribute to the international financial institutions are not really in charge. The politicians are not sufficiently involved in the selection and evaluation of the borrowing projects. Very often, Canada finds itself in a situation where one of the institutions to which we contribute funds grants a loan to a country which, at least in our opinion, is not sufficiently respectful of human rights. Because of this, Canadian contributions to these international institutions are often used to help countries which we should not necessarily be helping and I find it unfortunate that the politician responsible, whether the Minister of Finance of Canada (Mr. Lalonde) or the Minister of External Affairs (Mr. MacEachen), would be directly involved in the selection and assessment of loan proposals which are made to us through those financial institutions.

Also, this legislation provides for continuing financial assistance by Canada to a number of international financial institutions which play a vital role in Third World development. My predecessor and friend, the Hon. Member for Edmonton South (Mr. Roche), gave the list of the institutions. I will not repeat them. I am confident that the vast majority of Hon. Members of this House understand and appreciate the importance of international development and the seriousness of the crisis facing the Third World countries and people as a result of the current economic recession. To take only one example, Mexico is undergoing harsh and severe adjustments as the result of its balance of payments problems.
I am equally confident that most Hon. Members now understand that it is in Canada's self interest, as well as being our moral obligation, to remain firmly committed to development and improved North-South relations. It is particularly worthy of note that leading members of the Canadian business community have been drawing attention to the importance of these matters. For example, Mr. William Mulholland, Chairman of the Bank of Montreal, recently observed that "loans to the developing countries represent investments in the future health of the entire world's trading system".
The first thing to be noted about these financial institutions is that they are not in the business of giving money away. They are carefully managed institutions, mostly dealing in loans to the Third World countries. The record of repayment over the years has been excellent, which is why the banks are able to raise capital themselves on the most favourable commercial terms.
At the same time, the regional development banks, such as the World Bank, have special funds or "windows" which provide loans at lower than commercial rates to the poorest countries in the world. In this way and in their project selection they attempt to deal with the problem of mass poverty. As

March 25, 1983
Financial Institutions
the parliamentary Task Force on North-South Relations concluded, investment in the overcoming of poverty and misery is one of the best long-term investments we can make.
One measure of the competence and effectiveness of the international financial institutions was provided by a 1981 study by the U.S. Treasury Department of the World Bank, the Inter-American Development Bank, the Asian Development Bank and the African Development Fund. I think all Hon. Members will agree that the U.S. Treasury Department is not a soft-hearted or soft-headed organization, and yet this study found that the institutions were generally well run and effective in promoting development. It concluded that continued U.S. participation was justified by a fundamental national interest in a more stable and secure world.
During the course of my own work over the past three years with the parliamentary Task Force on North-South Relations and the Subcommittee on Canada's Relations with Fatin America and the Caribbean, I have had occasion to study and meet with officials of many of the institutions listed in Bill C-130.
While I have no doubt that there are areas of their work which can and should be improved, I am also convinced that they serve important Canadian interests. I would summarize these as follows: First, they serve to expand private financing and investment through co-financing and participation in projects for which they do the basic staff and analysis work. Second, they encourage efficient use of local resources. Third, they are in the forefront of research on development problems and policies, particularly in the area of basic human needs. Fourth, they expand and enhance the value of Canadian aid through CIDA's participation in large-scale projects planned by the international financial institutions. Fifth, the regional banks provide excellent opportunities for Canada to develop commercial and other contacts with Latin America and the Caribbean, Africa and Asia. These regional markets are among the most promising for long term expansion of Canadian trade. Sixth, they provide an immediate market for Canadian goods and services. While it has been noted that the Canadian procurement record is poorer than that of some other countries, studies show that Canadian suppliers and consultants do very well when they bid on contracts. In short, we need to get out and hustle for this business.
I would conclude as I began, by arguing that immediate selfinterest as well as our fundamental commitment to development should and will lead this House to give strong support to Bill C-130.


Miss Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, we have agreed that there will be just one Hon. Member speaking per Party, covering both report stage and third reading stages of the Bill. On behalf of the New Democratic Party I say that although we are supporting the Bill as we did on second reading, and certainly supporting the amendment put forward by the Hon. Member for Edmonton South (Mr. Roche), we do, and I do particularly, have some quite serious reservations about it.
At the time of second reading I requested the Government to bring to the standing committee a detailed report from the Canadian perspective on the operation of each of the eight institutions mentioned in the appendix to the Bill, and particularly concerning the operations of the Inter-American Development Bank. However, we received no detailed reports on the operations of the institutions concerning which we are voting today to replenish the Canadian contribution. There was nothing in writing prepared and there was nothing verbal offered.
Referring to my speech on November 9, 1982, during second reading stage, I expressed some of our Party's very serious reservations which, in effect, concerned the political criteria being used in deciding, with particular reference to the InterAmerican Development Bank, what countries would be granted loans. I suggested that the Minister might bring to the Committee a more detailed review of the criteria used in the granting of loans. Again, there was no satisfactory response to this concern, a concern which is shared by other Members of the House as well.
The Hon. Member who just spoke mentioned but did not elaborate upon the situation of large loans going to countries engaged in massive violations of human rights. That was one of the criteria that I asked about. A second one that I asked about was when loans are in effect being used by Government forces, so-called security forces, to further engage in a civil war or in a war of aggression against a neighbour.
I wanted to have some analysis from the Government as to whether or not we should be engaging in the support by a multilateral institution like the Inter-American Development Bank when that is the kind of way in which the money is being used. I had already written to the Minister about this in connection with the loan to Guatemala.
The third point on which I had requested further enlightenment was whether we should be looking to see whether the loans were really directed to satisfying basic human needs and whether they should be conditioned, to at least some extent, on the degree to which they satisfied these basic human needs and addressed the problem of the very serious maldistribution of income in many of the countries that are recipients of loans.
I was really extremely disappointed on the fact that the Government has failed to address these issues seriously. The Minister of course paid no attention to them whatsoever, but I was sorry that the Department or CIDA did not address these requests a bit more fully. In fact, they hardly addressed them at all.
That being the case, although we will support report stage and third reading of this Bill, I think it only fair to say that we do it now with really very great reservations for the reasons I have given. By the way, Mr. Speaker, my reservations have increased because of new evidence that the Inter-American Development Bank is becoming, I am sorry to say, an agent of White House policy in Latin America and particularly in
March 25, 1983

Central America, and the recent loans to El Salvador, to which we have contributed, give ample evidence of this.
I am sure some Hon. Members will have already read the report, which was mentioned by The Globe and Mail on March 24, 1983, of James Morrell of the Center for International Policy in Washington, a centre which monitors U.S. policy in the Third World. It is quite clear from his report that indeed political considerations are becoming even more critical in the final decision on who gets what loans from the InterAmerican Development Bank. The political considerations, I am sorry to say, seem to have nothing to do with human rights violations; they have nothing to do with redistribution of income and they have nothing to do with whether or not the money is being spent on arms. All they have to do with, it seems, is whether or not the recipient country is one that is favoured by the U.S. State Department in its, to put it mildly, reactionary policies vis-a-vis Central America.
We must look more seriously than we have done at the Canadian contribution to loans being given to various countries by such an international financial institution as the InterAmerican Development Bank, and ask some very serious questions. It is not good enough for the Minister to say, as he did to me, that they do not consider political considerations in the granting of loans, when it has become very clear that when the Americans say no to Inter-American Development Bank loans to Nicaragua but yes to loans to El Salvador, a political consideration is in fact being made.
I think that the amendment which the Hon. Member introduced, and which we support, that the Government cannot add to or subtract from the list or the schedule, is a useful amendment and will, if 30 Members so request, give us an opportunity for debate. However, I now feel that since there was such an inadequate response to my concerns and to the concerns of other Members on the criteria used in the giving of loans, we have to find some other method, before we are next asked for a Canadian replenishment, of ensuring that we get complete reports on the activities of every agency, and that we follow them with a careful and thorough examination and discussion of the criteria that are used in the granting of loans and, finally, that we ascertain that in fact political considerations do not enter into what are supposed to be neutral decisions.
We have agreed on one speaker, so I guess I will not get my answer now, but I would hope that the Government will take my suggestions very seriously into consideration.


The Acting Speaker (Mr. Reid (Kenora-Rainy River)):: Is it
the pleasure of the House to adopt the said motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Jean-Luc Pepin: that the Bill be concurred in.


[Stage Direction]
Motion agreed to.
Small Businesses Loans Act
Jean-Luc Pepin: that the Bill be read the third time and do pass.


[Stage Direction]
Motion agreed to, and Bill read the third time and passed.

[Stage Direction]
The House resumed, from Friday, March 18, consideration of the motion of Mr. Rompkey that Bill C-144, to amend the Small Businesses Loans Act (No. 4), be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Dave Nickerson: Mr. Speaker, I assumed that one of the hon. gentlemen opposite might want to lead off the debate on Bill C-144. It is a subject in which we on this side are very interested, the matter of small business and finance for small business, and we assumed that they might be equally interested, but apparently that is not the case.


David P. Smith: No, we are.


Dave Nickerson: The objective of the Bill before us, which it is our intention on this side to support and deal with expeditiously so that it can be dealt with in the appropriate Committee, is to extend the provision of the Small Businesses Loans Act for an additional period of two years. The provisions of the Act were to have expired on March 31, 1983 and the intention of this Bill is to extend that period of time to March 31, 1985 and to allow the volume of loans to be guaranteed within that period to be made up to a maximum of $1.5 billion.
What I just said should have been said by the Minister of State for Small Businesses and Tourism (Mr. Rompkey), whom I see in his seat, in order to show the real intention of the Bill. I want to address one point fairly briefly, that is, the difference in philosophy on this side of the Chamber and the other side as to how we might have handled things differently. On the specifics, other Members on this side will go into the details.
The Minister of State responsible for Small Businesses knows what is happening. He was formerly the Minister of National Revenue. His revenue procedures worsened the plight of small businesses, and today he is trying to put that right. Today he is paying his penance, so to speak. The idea of the Government, in its grab for more and more revenue, is to hit hard the business sector of Canada. It is supported in this by our friends to the extreme left, only one of whom is here today because they do not like the idea of business making profits.
We saw this in Bill C-139 which was enforced by closure yesterday. This will hurt small business. We see the 12.5 per cent small business dividend distribution tax and the way that will affect small-businessmen. The provisions of Bill C-139 and

March 25, 1983
Small Businesses Loans Act
the budgets will no longer permit small businesses to participate in certain deferred profit-sharing plans. That will affect the revenues and profits of small businesses. The Minister of Finance (Mr. Lalonde) has stated that he intends to tax benefits that are commonly accepted in Northern parts of Canada, such as Labrador City represented by the Minister who will be speaking later today.
I want to speak specifically on the taxation of northern benefits. They affect large corporations such as the Iron Ore Company of Canada. This is one more straw on the camel's back in those types of operations. It will affect federal, provincial and territorial Governments which will have to find additional moneys with which to recompense their employees who will be subject to this additional taxation. Probably more than anything, it will affect the small northern businessman, the guy whose profit is limited, whose every dollar counts.
When new taxes are placed on the employees or the proprietor of a small business, it makes life doubly difficult. I suspect that a disproportionate number of northern small businesses will go into receivership compared to the number elsewhere in Canada if this provision in the budget announced last year by the Minister of Finance goes into effect.
Other Members on this side will speak of the necessity for skilled help, certain financing arrangements which could be worked out, the regulations and paper burden placed on small businesses, the way that Government purchasing and procurement policies could be used to assist small business. On one hand the Government is putting an additional burden on small businesses, whether it be a financial burden by way of additional taxation or more regulations and paper work, grabbing all it can and taking it away, and with the other hand with this type of legislation trying to give a little assistance back to them.
My preference is allowing market forces to operate on their own. It would not be necessary for the Government to bring forward complicated pieces of legislation designed to assist businesses, small businesses in particular, if it were not taking everything away from them at the same time. The market would operate much more smoothly. We cannot protect every small-businessman. Some will go out of business. Some are in the wrong business, some do not work as hard as others and some experience bad luck. The small business sector as a whole would be healthier and more productive if we as Parliamentarians, people who impose legislation, were to rearrange our thinking. We should allow the market to operate freely and smoothly instead of impeding it, sometimes with good intentions.
In the remaining minutes I want to bring to the attention of this House some matters that affect small business and banking, particularly in the area I represent, the Northwest Territories. A lot of what I will say has been brought to my attention by my constituents, but may be equally applicable in other northern areas of Canada, and in fact throughout the country. There is suspicion in my area that those who control the banking operations from head offices or regional offices in the South do not really appreciate the special needs of business in northern Canada. Take the present economic climate over
much of southern Canada and in parts of the North, and you find that business is at a standstill. One can understand the reason why a banker would not want to force more loans on people, if they ever do that, and why people are a little more cautious than normal. However, in areas such as the Mackenzie Delta, the Mackenzie River and Norman Wells, where there is a lot of oil exploration and development gearing up for production, the businesses there need more money. They can handle further indebtedness in a prudent manner. This would allow them to expand and take advantage of the increasing economic opportunities which exist in that part of the country. It is suspected that this is not known in southern head offices of the banks. Local loan offices are not permitted to authorize on their own account sufficient funds required to operate a business where it is necessary to keep large inventories because of the transportation difficulties and high transportation costs. For example, the freight on a truckload of flour from the mills of Edmonton or Calgary to the Mackenzie Delta is about $10,000, which is the maximum amount a local loan officer can authorize. Therefore, a baker cannot buy a truckload of flour on credit without the banker contacting the head office in Edmonton or Calgary. He cannot pay the freight on that truckload of flour, let alone purchase the contents.
Mortgage money is especially hard to come by in northern parts of Canada. That has been made known to me on several occasions. In some areas there are no banking services whatsoever. For example, in the hamlet of Fort Rae-Edzo, with a population of 1,500 to 2,000 people, there is no bank. The nearest bank is 60 or 70 miles away. I believe there is a tremendous opportunity for one of the chartered banks to move into a town like that. There is more and more money all the time coming into these towns, and there is a tremendous opportunity to grow with them. It might take a few years before the branch of the bank makes a profit, but there does exist an opportunity for the banking community, an opportunity which should be seized, and which will also provide proper banking service in locations where that is not presently available.
There are cases, and one of these happened very recently in the Town of Inuvik, where a previous bank manager had been suspected by his head office of being a little too lenient and giving out too much money to business, small business in particular, by way of loans. He was subsequently replaced and the new manager was told to tighten up right away. It may be true that the previous manager was handing out too much money, but I believe investigations are showing that this is exaggerated. However, when someone new comes in to a small town bank and immediately changes the policy, refuses to allow extensions to lines of credit, calls in loans, or starts bouncing cheques, the whole business community suffers the repercussions.
You can imagine what would happen if this were to occur nationally, because any banking system which relies on fractional reserves is inherently insolvent. Once that sort of
March 25, 1983

thing starts happening, the very thing which the banking industry most fears is precipitated. Unless credit policies are changed gradually over a period of time, the local business community is subjected to much greater difficulty than it should experience, and there are real problems and occasionally bankruptcies.
Another complaint has been made known to me by people who deal with oil companies which are the recipients of PIP grants. The Government has decided that it is in the national interest to pay large numbers of taxpayers' dollars to oil companies in order to allow them to operate in remote areas. This is deemed to be in the national interest. Effectively, therefore, companies such as Dome Petroleum can be operating with what amounts to 25-cent dollars, and in the days of the Gallagher amendment and super depletion it was a lot less than that. In turn, the local small business community feels that those recipients of Government largesse should help to spread some of that wealth, instead of taking such a hard line and insisting that everyone be absolutely competitive. Because they have been given assistance themselves to operate in remote areas, it is believed they should in turn assist those permanent resident businesses in the same way. This is not always seen to happen.
The Federal Business Development Bank has received a number of suggestions as to the way they could improve their operations. The penalty which they charge on an early repayment of a loan is said to be excessive. I know a number of people who, because of the economic circumstances, have been forced to draw in their horns and liquidate some of their assets, with the idea that they could pay off some of their indebtedness. However, they found they were not able to do so because of the very heavy penalties imposed by the FBDB on the retirement of their loans. I understand the other side of the argument presented by the FBDB, that it itself has had to borrow money at high rates, but I am sure that some kind of accommodation could be worked out to allow the early retirement of loans without this penalty, or to allow loans to be rolled over more easily without the penalty provisions which presently exist. A lot of businessmen got themselves into trouble by borrowing money at the very high rates of interest which existed a year and even six months ago. Now because of the drop in the level of interest rates they would like to roll over those loans so that their payments are much reduced. To enable them to do that would be to their benefit.
The last comment I would like to make is one of a general nature. It is in respect of the relationship between banks and borrowers. If you are a large corporation which borrows hundreds of millions of dollars, or if you are a country or state which borrows hundreds of millions of dollars, or on occasion billions of dollars, it is pretty easy for you to negotiate with your bank. When you owe your bank that much money, it is in your power. We have seen cases in the recent past where countries in actuality, Sir, have defaulted. I know that that is a bad word to use and banks do not like any suggestion of "default" when moneys of that magnitude are involved.
Small Businesses Loans Act
However, for loans of that magnitude it has been relatively easy for the borrower and the lender to sit down together and re-negotiate a schedule for repayment. Bansk have had to do that. But when it comes to small business, that is not the case. The head office of the bank will issue a blanket policy, and each manager and each local loan officer will be obliged to put it into effect. There is not too often much of chance to renegotiate a repayment schedule, and the line of credit is very often unilaterally cut off. If the system can be improved-and I am not really suggesting legislation because the more burdensome regulation we put on both the borrowers and the lending institutions, the more difficulty there is in the long run. Any decrease in efficiency caused by legislation or regulations ends up ultimately in an increase in the price of a loan. There is no doubt about that. I am suggesting, however, there are many ways, especially in the more remote parts of Canada, where the relationship between small business borrowers and the banking institutions can be improved.
We look forward to the swift passage of this legislation because we on this side feel that even if it does not go far enough, it will, to a limited extent, help the small business sector of Canada, that very important small business sector.


Mr. Cousineau:: Mr. Speaker, with the unanimous consent of the House, may I call it 1 o'clock and ask to be recognized at 2?


The Acting Speaker (Mr. Reid (Kenora-Rainy River)):: It
being one o'clock p.m., I do now leave the chair until two o'clock.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Mr. Deputy Speaker:: When the House rose at one o'clock, the Parliamentary Secretary to the Minister of State (Small Businesses and Tourism) (Mr. Cousineau) had the floor.


René Cousineau: Mr. Speaker, last Friday, the Minister of State (Small Businesses and Tourism) (Mr. Rompkey) explained his reasons for tabling this Bill. This afternoon, for the benefit of Hon. Members, and through you, Mr. Speaker, I would like to highlight the objectives and impact of the Small Businesses Loans Act, a measure that is being used more and more by small businesses.
The Small Businesses Loans Act was passed by the House in 1961, to make it easier for small businesses to obtain longer term financing. The Act, which provides guarantees against all losses for the lender, was initially intended to be effective for

March 25, 1983
Small Businesses Loans Act
three years only. There have been several extensions, however. The Act now in effect will expire next Thursday, on March 31, 1983.
Mr. Speaker, since 1961, many amendments to the Act have been made, and I shall mention some of the most important ones. In 1974, the maximum amount of the loan that may be outstanding to anyone firm rose from $25,000 to $50,000. In 1977, the maximum was increased to $75,000, and in 1980, to the present limit which is $100,000. In 1977, the maximum annual turnover allowed for a business to be eligible was increased from $1 million to $1,500,000, and finally, in 1978, the administration of the Act was entrusted to the Department of Industry, Trade and Commerce, and the maximum interest rate chargeable was now based on the bank's prime or basic rate plus 1 per cent, more commonly referred to as prime plus one.
One of the most attractive aspects of the program is that loans are negotiated directly by the businessman or woman with the private sector lender. No prior authorization is required from the Government, since the latter only guarantees the loan. Today, loans to small businesses are made for the purchase of fixed or movable equipment, improvement or modernization of premises, purchase or construction of new premises and the purchase of land.
Loans are made in accordance with normal banking practice. They are fully guaranteed and are to be repaid over a period not exceeding ten years.
Mr. Speaker, as a program, the Small Businesses Loans Act has been favourably received both by borrowers and lenders, and its national impact is considerable. According to our statistics on geographical distribution which are fairly representative of the distribution recorded since the program came into effect, loans, expressed in percentages, break down as follows:
British Columbia: 20.5 per cent; the Prairies: 18.8 per cent; Ontario: 21.6 per cent; Quebec: 33.3 per cent; the Maritimes: 5.5 per cent, and the Northwest Territories and the Yukon: 0.3 per cent.
I would like to pause here, Mr. Speaker, and comment on statements made by the Minister responsible for Industry in the Quebec Government, who said that the Canadian Government never does anything for small businesses. I may refer Hon, Members to a statement the Minister made before a meeting of Provincial Ministers of Industry was held here in Ottawa. The Minister said, and he referred to a plan known at the time as the Biron Plan, he said in the National Assembly, and I quote:
The Biron Plan was established a year ago-
I am quoting from an article in Le Droit, dated February 19, 1983:
The Biron Plan was established a year ago, when the Federal Government refused to create a special program to help small- and medium-sized businesses. Today-"
-the article goes on-
-we can say that we have reached our objective," said Mr. Biron, who pointed out that his plan had helped over 500 businesses employing nearly 25,000 workers, and involved funding of over $100 million. Since then, Mr. Speaker, we have asked for the addresses of these 500 companies which received assistance under the so-called Biron plan and we are still waiting for replies.
As for the Quebec Minister of Industry, he always says that the Federal Government never does anything whether it concerns transport or agriculture; the various Quebec Ministers, also share this view. According to them, the Federal Government never does anything!
In this regard, I must say that we have to ask ourselves seriously what is the main purpose of the recent controversy about the NEED program, and I do hope that this program will not fail. Of course the Quebec Government will not recognize the efficacity of this program because according to them the Federal Government can never do anything good. The Quebec Government wants to control the funds provided by the Federal Government. It does not work that way. The Federal Government wanted it known that these were Federal funds really provided by all Canadians. But it is always the same, Mr. Speaker.
I am mentioning all this because it is extremely important for the Quebec people to realize that they have had enough of such statements. I would like to give another example. Hon. Members are aware that the Federal Government contributes to the building of low-cost housing everywhere in Quebec and in the other provinces. Why a supposedly responsible Government be fair and give credit where credit is due? Everywhere you go in the province, and especially in my constituency, it is the same. For instance, the other day I went through Val des Bois and saw a sign which said "Quebec Housing Corporation, low-cost residential construction" written in large letters, and underneath, in small print "with the co-operation of the Val des Bois municipality and the Canada Mortgage and Housing Corporation". On Marengere Street in Pointe-Gatineau, there is similar sign on which the Quebec Housing Corporation is mentioned in large letters, followed by the words "with the cooperation of the City of Gatineau and the Canada Mortgage and Housing Corporation" in small characters.
This should be pointed out to the Opposition Members because the little game that they play in Quebec is childish. Why not give its due to the Federal Government? On September 7-


Walter David Baker: That is why I gave you a flag.
March 25, 1983


René Cousineau: I thank the Hon. Member for that. That is right, he gave me a flag. Some Quebecers are happy about that.


Walter David Baker: That is good, I am too.


René Cousineau: Maybe not for the same reasons.
[ Translation]
On September 7, 1982, there was a ground breaking ceremony on Marengere St. in Pointe-Gatineau. Here is the press release which the Quebec Housing Corporation issued on that occasion and which reads:
Visit of a housing project on Marengere St. in Pointe-Gatineau, in the Chapleau Riding. 48 housing units will be made available to low-income families at a cost of $2,225,000.
Mr. Bernard Landry, the Minister, was there, together with Messrs. Michel Gratton and M. Kehoe, the Quebec MPPs for Gatineau and Chapleau respectively, Mayor John R. Luck and Alderman Michel Seguin, who is responsible to the other aldermen for municipal housing projects. Yes, I was there, and when the time came for the sod-turning ceremony, I got into trouble because I hit a huge rock with my shovel.


An Hon. Member:: In spite of the fact that you were the one footing the bill.


René Cousineau: Yes, I was the one footing the bill. Mr. Speaker, 1 should like to emphasize this point: The Federal Government, through the Canadian Mortgage and Housing Corporation, is participating in this project to the tune of $2,224,800 in guaranteed loans-$2.5 million makes a rounder figure-an amount which represents the total cost of the project. Moreover, the Canadian Mortgage and Housing Corporation will provide on a continuing basis a subsidy of over $306,463 a year. The Canadian Government therefore pays between 72 and 75 per cent of the operational deficit at the end of the year-I should not say 75 when it is 72 perhaps, I would not want my separatist opponents to call me a liar- and the balance of 28 or 25 per cent is shared by the municipality of Gatineau and the Provincial Government.
I have not checked this with my Quebec colleagues, but here the story is always the same with respect to signboards: the name of the Societe d'habitation du Quebec appears in 6- or 8-inch high letters, and "with the participation of the town of Gatineau and the Canadian Mortgage and Housing Corporation" is acknowledged in letters measuring about three quarters of an inch, maybe an inch. Why? It is the same thing on our buildings where people have to go, not to beg but to get social benefits because they have been hard hit by the current recession. The flag of Quebec is displayed, but the fact is that the benefits handed out by that department are paid at the rate of 50 per cent by the Federal Government and 50 per cent by the province, be it Ontario, Manitoba or any other. Unfortunately, Quebec will not admit that the Federal Government pays its share.
Small Businesses Loans Act
Perhaps I am slightly out of order when I say that, but my point is that when Industry Minister Biron comes along and states that he has spent so many dollars to help small businesses, I would advise the people of Quebec to check before quoting those statements, because sometimes they are halftruths. I would not say that the Minister is telling lies, but he does get carried away now and then and he does not always speak the truth.
Well, Mr. Speaker, back to the piece of legislation we want to adopt today. Besides being available in all regions of Canada, the program has enabled the Government to give assistance to a wide range of businesses. According to the 1982 figures, the service industries got 40.3 per cent of the total amount of loans, followed by retail outlets with 24.9 per cent, manufacturing companies with 11.4 per cent, construction firms with 9.4 per cent, and transport companies with 9.8 per cent. Other companies in the communications and wholesale sectors received 4.2 per cent of the loans.
At first, only chartered banks were allowed to act as lenders under the program. Over the years, the program was extended to other lenders, and today, in addition to banks, the list includes trust companies, mortgage companies and savings banks, while hundreds of credit unions, caisses populaires and branches of the Alberta credit union network also make loans. The number and amount of the loans contracted in 1981 and 1982 demonstrate how important the program is to small businesses, whatever Minister Biron, the Separatist Minister of Industry in the Quebec Government may have to say about it. In 1977, only 4,894 loans representing a total amount of $96 million were granted. In 1981, the number of loans had risen to 17,378 and totalled $516 million, while the preliminary figures for 1982 are almost identical, namely, 16,843 loans representing a somewhat smaller amount, namely, $435 million. These figures are ample proof of the importance of the Bill we are considering in the House today.
I would like to end on this note, Mr. Speaker, because otherwise I would be tempted to make a few more references to Mr. Biron, but I think he has had enough attention for today. Nevertheless, it is very sad to see someone from my own Province trying to sell the people a bill of goods. In any case, as far as small businesses are concerned, I heard my good friend from up North-I am not too sure what his constituency is-saying that we should not forget small businesses. Well, I do not think we are forgetting them today, and we have wanted to pass this Bill for a long time. Therefore, I hope that my colleagues opposite will do their share to show Canadians that this Bill is really going to help them, and I would also invite the Members of the New Democratic Party to vote for all stages of the Bill this afternoon, so that we will be able to tell Canadians that the Act is not going to expire on March 31 but will be extended for another two years.

March 25, 1983
Small Businesses Loans Act


Mr. Deputy Speaker:: Order, please. The rules permit a ten minute question and answer period at this point. Are any Hon. Members rising to ask questions? If not, the Chair will recognize the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie).


A. Daniel McKenzie: Mr. Speaker, I rise to participate in the debate on Bill C-144, an Act to amend the Small Businesses Loans Act. The effect of this will be to extend the termination date for loans to be guaranteed from March 31, 1983 to March 31, 1985. I hope that this will assist small business. Today, they have a great problem with red tape and trying to obtain loans from the banks.
The Government could help small business in the Province of Manitoba which is not receiving its fair share of public works expenditures. That is why I am pressing the Minister of Transport (Mr. Pepin) to build a new air traffic control centre in Winnipeg. In 1982, Manitoba received only $4 million public works grants. I hope the Minister will make an early appearance before the Treasury Board to request funding so that construction can be started on the air traffic control centre so that 250 air traffic controllers and their families will not have to move away from Winnipeg.
I am glad that the Minister is in the House this afternoon. I hope he can provide me with an answer before three o'clock, as he promised in Question Period, as to when construction will start. He complained that I did not give him notice of questions. Mr. Speaker, I did give notice last week to his Parliamentary Secretary in the adjournment debate. It would appear that he did not get the message. I hope I hear from the Minister before three o'clock on when construction of the new air traffic control centre in Winnipeg will begin.
I want to deal with the difficulties that small businesses have in obtaining loans in Manitoba. It is not only Government red tape and regulation that hampers them but they also experience great difficulty in obtaining help from banks.
A constituent who had applied for a small business loan wrote to me as follows:
I spoke several times with our bank-Toronto Dominion. They refused on the grounds that we are financially not stable enough.
Then I requested to get the Government bond for small business from our bank. They refused on the grounds that we are financially not weak enough to qualify.
I spoke several times with the Federal Development Bank about obtaining an interest break on a loan to help set up the food store. They refused on the grounds that we had purchased used equipment. In order to qualify we would have to have bought new equipment.
I hope the Government will change that ridiculous regulation.
It was only because we were able to purchase good used equipment that we were able to get the food store going, new equipment was just out of our reach.
That is a roadblock that the Government places in the way of this small businessman and probably of others in Canada. He went on:
I also went to the Economic Department of Manitoba. There they refused on the grounds that we did not start operating before June, 1981.
That is a New Democratic Party Government which is supposed to assist small business, but it is throwing up roadblocks here as well; it has imposed a worker's tax on Manitoba businesses which hampers them. With that regressive NDP tax many small businesses have to lay people off. It can be described as an anti-employment tax. It will not help with the unemployment problem. This gentleman went on to say:
As you see I did not get anywhere with all my inquiries. Your help would be much appreciated since time is running out.
To set up the food store I had to take out two second mortgages of $28,000 each at interest rates of 5 per cent above prime. Then a $25,000 loan with the Federal Development Bank at 4.5 per cent above prime. At present I have to take out a mortgage on our cottage of $37,000 at 12.25 per cent. At this rate it is hard to survive.
It is hard to believe that he did not just throw in the sponge and give up. With these regulations and the problems with the banks, it is almost impossible for small business to survive in Canada today.
In January, 1983, a newspaper put out by a small business called Mandate had an excellent article on the problems being experienced by Canadian experience. It stated that the average Canadian bank manager has less and less time available to service small business clients because of the literally hundreds of other bank services he or she must manage. It quoted Patricia Johnson, Vice-President of the Canadian Federation of Independent Business, as saying that excessive collateral requirements are used to paper over the fundamental structural problems in Canadian banking.
In some highlights the article pointed out that Canadian banks provide far less staff training in commercial lending than do banks in the United States, Japan or West Germany. It said that bank staff trainees in Japan call on business clients weekly to pick up deposits and loan payments, and if a business is facing difficulty, the bank may send in a rescue squad, at its own expense, to help the firm.
The article went on to say that two-thirds of U.S. banks have at least one officer designated for small business lending and about 40 per cent of there give special training to small business officers.
According to the article, in the Netherlands the largest small-business banks keeps credit officers in the same branch for a minimum of four years, maintaining continuity of service to small business clients. Canadian banks should provide the same service to Canadian small business, Mr. Speaker. The Government should show leadership in this area by having discussions with the banks to make sure that they improve their services and assist small business in Canada instead of sloughing them off.
On March 23, The Globe and Mail carried an article entitled "Survey depicts recession impact". The article began:
The economic impact of the recession on Canada's small and medium-sized businesses accounts for 700,000 to 800,000 fewer jobs, or nearly half the country's unemployed workers, according to a survey by the Canadian Federation of Independent Business.
March 25, 1983

Restraint measures-including layoffs, reduced wages and cuts in investment-have severely hampered the performance of the small business sector. A survey in February conducted by the 64,000-member organization revealed the extent of the recession on small and medium-sized businesses since January, 1981.
The 14,171 companies that responded were forced to cut employment by 42,470-which, if extrapolated to cover the entire small business community, means 700,000 to 800,000 fewer jobs across Canada.
You can see the difficulty that small business is having, Mr. Speaker. The banks and the Government will have to put their heads together to find new ways to assist small businesses, and not throw roadblocks in their paths.
Here is another example from one of my constituents in Winnipeg-Assiniboine. He points out:
We have been trying since early August to obtain our bank's approval for an interest-reduced loan. The Government Information Centre who we were referred to said 'Go to your bank manager.'
The problem is the banks have no information that authorizes them to give loans under this program.
That is unbelievable. We are here debating this small business Bill today and I feel that it will have very little impact in assisting small businesses in Canada. These Bills, Government advertising and bally-hoo sound great politically. The letter continues:
Sounds great politically-but how do we go about getting it from our bank?
Trust you will look into this on our behalf. My home is in your constituency.
I made representations on behalf of the gentleman. We were able to get some action taken for him. However, many small businesses must come to their Members' Parliament who then have to go after the Minister of Finance (Mr. Lalonde) and the Minister responsible for Small Businesses (Mr. Rompkey). This takes weeks of letter-writing, and in the meantime the small businessman is left to hang out to dry, waiting in anticipation.
I wish to cite for the record a number of problems that small businesses are facing. The Government has tried to raise revenue through measures that will hurt the small business community. The half-year convention will hurt the cash flow of business, and this is covered in a paper called "The Evolving Budget, A Background Paper on C-143".
The 12.5 per cent small business dividend distribution tax will punish those small businessmen who have dared to become successful enough to pay a dividend. You get more penalties if you make a profit.
The Small Business Development Bond has become a bailout bond with an interesting "catch 22" situation. People cannot apply unless they are in trouble and if they are in trouble, the bank will not lend them the money.
Small-businessmen will no longer be able to participate in new deferred profit-sharing plans. That is another penalty.
Increased taxes on employment benefits will place increased wage demands on employers and make it hard to recruit employees in remote areas. I have also referred to the NDP tax
Small Businesses Loans Act
in Manitoba, the employee tax, or perhaps unemployment tax would be better terminology.
With regard to skilled help, the recession has temporarily helped to resolve the shortage of skilled help, a problem often faced by small-businessmen. Steps should be taken now to ensure that recovery does not mean the return of skill shortages.
With respect to financing, the focus of recent Government policy has been to assist in debt financing. Assistance is needed but not forthcoming in the area of equity financing. The Government should encourage Canadians to invest in small business.
Another problem concerns regulation and paper burdens. Small businessmen are forced to comply with a complex series of regulations and requests from various Government agencies for statistical and other information. The owners of small businesses spend about half of their time filling out the most complicated and silly business forms and questionnaires imaginable. All this time they spend on those forms detracts from their business.
As well, in regard to the Government purchasing policy, Government contracts are far too often too large for most small businessmen to bid on, or the specifications may be written in such a way that only a few larger firms may meet the requirements.
We hope that the contents of this Bill will assist small businessmen, but there is much left to be desired in the way the banks are dealing with small business. There is too much Government regulation and red tape. I hope the Government and the banks will get together and eliminate many of these regulations and the red tape. I hope the Government will insist that the banks hire professional help to go out and assist small businesses to survive in Canada.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, the Bill which is before us extends the period under which the provisions of the Small Businesses Loans Act will be available into the year 1985.
The Minister is taking the opportunity once again to extend the Small Businesses Loans Act which has, since January, 1961, provided the Government with an excuse to claim that it has done something, however little, for the small business sector in Canada.
Our Party does not intend to delay this Bill since the Government has indicated that to do so would be futile. It will not allow improvements to be made to the very weak provisions of this Bill. Its provisions were weak when the legislation was first proclaimed over 20 years ago. They have been made even less important as they have been seriously eroded by inflation.
The shortcomings of this and other Bills which are supposed to help small business have been well documented by organizations such as the Canadian Federation of Independent Business. We believe that the Government's refusal to make improvements is perhaps more indicative than anything else of

March 25, 1983
Small Businesses Loans Act
the Government's attitude toward small business. It is obvious that the Government's view of small business is one of disdain, tokenism and, indeed, sheer lack of interest.
The fact of the matter is that the Government has not even considered amending this Bill in order to give the Small Businesses Loans Act some real impact. The Government says that it is deeply concerned about the economy. It has made much of its determination to cut the wages and salaries of workers in order to deal with inflation. However, why does the Government not increase the S100,000 loan limit which has been provided for in this Bill for a number of years when both the cost of living and the cost of doing business have increased very markedly? It is apparent that the Government is not prepared to move at all.
The Government says that it is concerned about the alarming rate of bankruptcies in the business community, which it should be. We have seen a string of Government bail-outs of the big corporations in this country, such as Dome Petroleum, Massey-Ferguson, Chrysler and others over the last year. But what has it done for the small business community, which makes up over 97 per cent of Canadian businesses? The Canadian Federation of Independent Business has estimated that in the last year 80,000 small businesses either went bankrupt or closed down before being forced into bankruptcy.
It would be relatively simple to reduce the bankruptcy rate of small businesses by extending the Small Businesses Loans Act to include loans for working capital, broadening the range and impact of this now very restrictive program and allowing thousands of small businessmen, who are now on the brink of bankruptcy as a result of the current depression and the Liberal Government's destructive interest rate policy, to obtain loans for badly needed working capital to keep people working. That was the type of proposal made by the Canadian Federation of Independent Business and rejected completely by the Government.
The present legislation provides loans for the purchase of fixed or movable equipment, land for the operation of the business or the construction of new premises. But this can only be done up to the legislated limit of $100,000. Hon. Members need only to think of cities in their ridings to realize that it is difficult to find a single family home in many cities in Canada that does not cost at least $100,000.
Does the Government really expect a loan program which was established in 1961 and later extended to the upper loan limit of $100,000 to provide any real incentive to small businesses in 1983?
Another aspect of the program which I feel deserves the attention of the House is the prime role which banks play in deciding who gets loans. The reputation of the chartered banks of Canada for making huge loans to big corporations and then allowing those corporations to have interest-free holidays from those loans is well known. We know, for example, that in the last couple of years, the chartered banks lent billions of dollars to some of our largest corporations, mainly for takeovers of other corporations, takeovers which added little, if anything, to our productive capacity.
We know that a few months ago the banks were carrying $4.2 billion, or $4,200 million, in what they called nonproductive loans. Those were loans which large companies had made on which they could not even pay the interest, let alone the principal. However, these banks, the big five, increased their profits by over 40 per cent in the first quarter of this year. The total profits were $1.6 billion, on which they paid the magnificent tax of only $132 million. That is an average tax rate of just 8.1 per cent. Two of the banks, the Bank of Montreal and the Royal Bank, paid no tax at all in 1982. In fact, they received a tax credit. I wonder which of our constituents would not love to have a tax rate on their income of just 8 per cent.
At the same time the banks were dealing with the large corporations, as I have indicated, small businesses requesting loans were being asked to put up collateral of anywhere from 200 per cent or 300 per cent of the value of the loans. It is therefore no wonder that when the Canadian Federation of Independent Business appeared before the appropriate committee of the House of Commons, it made the statement that in its view, banks, as they operate today, do not understand the problems of small business and have very little sympathy for small business.
We say that when the Government puts programs such as this into place, there should be consideration for the possibility of going outside the banking system to deliver such programs in a more direct and clearly much more beneficial way to the small business sector. One must only consider the squeeze which the banks have put on the consumers and small business borrowers in order to carry the big corporate loans to see whom the banks are really interested in servicing.
In this country, we have a small business sector of over 600,000 private enterprises, yet to the end of 1981, the Small Businesses Loans Act had provided less than 100,000 loans, representing slightly less than $2 billion. That is in over 20 years. In comparison to that, the small business sector is estimated to borrow close to $9 billion a year from private sources, from the banks, the credit unions and insurance companies. Therefore, we see the over-all insignificance of the small businesses loans programs.
Big business in Canada is 48 per cent foreign-owned. The small business sector represents about 96 per cent of Canadian ownership and over 50 per cent of the private sector jobs which have been created since 1971. Small business provides 40 per cent to 50 per cent of all the jobs at which Canadians work outside of the public sector, yet the assistance that small business recieves from the Government is miniscule as compared to the help which big business routinely receives from the federal and provincial Governments. Small business deserves more than the highest bankruptcy rate since the depression which it has experienced in the last year.
We have some specific proposals as to what should be done instead of what will be done as a result of passage of the Bill. We believe that the $100,000 limit on the program should be increased to bring it more into line with the real cost of business start-ups and business operation in 1983. We believe
March 25, 1983

that the program should be broadened to reflect the need of small businesses for working capital to keep their operations, which are now hard-pressed because of the recession, going and to keep them out of bankruptcy which has been increasing in numbers over the last couple of years.
We believe that the delivery system for this program, which has been channeled through the chartered banks which, as intermediaries, have been sitting in judgment on small business loan decisions, should be reconsidered. Why should it not be possible to have a loans screening body in which small business would participate and have some say, rather than leaving it entirely to the banks which have failed so lamentably to meet the need of small business?
Lastly, we need a program to help small business which will include a package of economic initiatives to stimulate the economy and further lower the interest rates to the real rate of inflation, rather than 4 per cent, 5 per cent or 6 per cent above prime rate, which small business has been expected to carry in recent years.


Arthur Jacob (Jake) Epp: Mr. Speaker, 1 want to put a few comments on the record today with regard to Bill C-144 because it is a timely topic for debate by Hon. Members of the House, and it is timely for Canadians who are involved in small business. First, I think we must be a little careful concerning the words "small business". In fact, I had lunch with a "small businessman", in the words classified under the Act, just today. I was discussing with him, as a businessman, the advantages and disadvantages of his business at the present time. It is sometimes good to get back to the grass roots to find out what the very people who will be affected by legislation before the House are saying with regard to it. He is involved in a service industry in my riding. His first real comment concerned the definition of small business. The vast majority of those involved in small business, at least those in service industries in rural Canada, will argue that the definition is too broad and that at the upper end, in terms of size as set out in the definition of small business, in fact they are often not considered to nearly the degree they should be, in relation to the number of jobs they create in the economy.
It is also important that we as Members of the House keep in mind the impact of small business on our country. We discuss the unemployment rate and speak of one and a half million Canadians being unemployed. We hear those comments in the House, we consider the statistics, and we view the tragedy. Today in the House there were comments as to how we should create, or develop jobs. I think that "develop" is a more accurate word than "create". For instance, how are we to develop jobs for young people as they come on to the labour market?
How should we develop jobs so that these people will not face despair or, more important, feel as they enter the market that the economy will not give them the opportunity to either create their own jobs or to fit into the job market? It is important for us to address this matter in the debate today as well. However, it is important to keep in mind that the owners of businesses to whom we speak as we go into our ridings, the people on Main Street, Canada, the fellows with whom we
Small Businesses Loans Act
have coffee around the horseshoe, are people who can create jobs in our community. These are the small business people, and we all know them. We can give various names to these people, because they are friends, neighbours and are very often our community leaders.
We must keep in mind that in this period of unemployment, it is small business which is most often labour-intensive. Today, a number of small businesses, as they are facing the spring and summer of this year, are considering expansion of their businesses. As they do this, they automatically think of the creation of work, the hiring of people in their community. Small business is labour-intensive. Also, by all definition, we find that in small business there is a higher ratio of job creation relative to investment per job as compared to larger businesses. Therefore, it is a good use of money, a good investment. I am obviously trying to build the case that we in this House have not paid enough attention to these facts, to small business or, in my view, to the country.
Also, small business creates more opportunities for workers with limited skills. That does not say that they would not develop their skills in the workplace, but I am speaking of initial hirings. For example, very often small business is more ready to hire people with limited skills, and then develop those skills in the workplace, than larger industry is.
Today more than 90 per cent of our businesses in Canada are employing less than 200 people in their business. For a lot of us from rural Canada, a business of 200 employees is a fairly large business. We have some of those businesses in my riding, but a lot of us would welcome that kind of size in our riding.
I hear references made to anti-profits, anti-business, "We are going to get the corporate welfare bums and we are going to get all of these people". I keep on saying that we have to roll out the red carpet to these investors; we have to start rolling out the red carpet to these risk-takers. It is an attitude that I believe we have to change very dramatically.
I am not trying to be critical today but I am trying to analyze the situation to see how we can have some positive direction. Governments of all Parties put a great stress on the concept of megaprojects, be it energy or manufacturing, but especially in energy we have talked about megaprojects. The investment per job is very high. I am in favour of megaprojects; I am in favour of business; I am in favour of creation of wealth through that kind of investment, but I do not think Governments have given the same stress to smaller businesses and what they mean to the economy. For instance, how much time do we spend in this House discussing megaprojects? How much time do we spend in this House talking about small business? Yet if we say that 90 per cent of business is small business, I think we have to re-examine our priorities.
In our Canadian economy, the economic engine is small business, and I include farming in small business. The reason I put farming into that category is that I speak to farmers in my

March 25, 1983
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constituency and they are business people with a myriad of skills, not only in farming. Today if a farmer wants to survive he also has to have business acumen second to none, equal to the person operating on Main Street, Canada. I put them in that category as well.
I have been interested for some time in the psychological relationship between business and financial institutions, and maybe that is a topic that does not excite the House too much, but I think it is important for us to analyze what other countries have done relative to business, and what we have done and why. Maybe there are some answers in other countries that we could apply to help the economy in Canada.
When I make these points about other countries I am not saying that other countries have these motivations exclusively and that Canada has none of them. I am strictly talking about stress and emphasis. But there is no doubt that in the United States there has been a great emphasis on the spirit of enterprise. Some people would say "free enterprise", some people would say "the market economy". Teenagers today use the term "Go for it". I think that term possibly explains that attitude, that spirit of going for it, having the confidence, being willing to take the risk, going for it and enjoying the benefits of success. I guess that is what enterprise means; that is the modern term.
There has been a great reverence in the United States for the common person, a reverence for that drive that I have already talked about and a reverence for the contribution of the individual to the larger whole. When I say that, I do not mean that we in Canada are devoid of that. I am not arguing that point. I am simply talking about emphasis of that point.
So when I look at Government agencies in the United States, despite the fact that so often we talk about economies of scale of ten to one, United States to Canada, I find a very deep interest and a stress in U.S. Government circles on small business. They call it commerce; that is the word they like to use. We say that we have to generate business.
So what is happening? As I look at it there, for instance, I see they have created a banking system quite different from ours. I am not here today to criticize the banks. I know that is a common and easy hobby-horse, but I want to look very specifically at why there is that difference. One thing I notice in their system is that they have a different banking mix than we have. They have different banking services. The percentages of national or large banks, that is, relative to the amount of deposits, is lower in the United States than it is in Canada, compared with our national chartered banks. They have many more local banks. They might call them savings and trusts, but they are local banks. I know the first argument that I am going to get is that it is too risky. But that is the secret of enterprise, taking risks, not unqualified risks but taking risks.


Jean-Luc Pepin: Not much enterprise for the person who suffers from that risk.


Arthur Jacob (Jake) Epp: I am not saying as well that there are not negatives on that side. I am asking, is our mix askew, too much on the other side? That is the point I want to make, and I think it is a point that we could look at.


Jean-Luc Pepin: The search for balance.


Arthur Jacob (Jake) Epp: The search for balance, as the Minister of Transport says. I am wondering whether our search for balance in terms of the safety nets which we talk about so glibly, means that we have gone to the other side.
Let me give you some examples, Mr. Speaker, if the House will indulge me. Today, in Canada, chartered banks dominate the financial markets in our country by holding about 74 per cent of all deposits in banks or in trust companies. Roughly three-quarters of all deposits are held by the major chartered banks; mortgage and loan companies have approximately 5 per cent-I am rounding off the figures, Mr. Speaker-trust companies, 12 per cent, and just recently we have had again an exercise in the trust companies where people are saying: "Is my money safe?" There will obviously be a question as to whether that is the best way to invest. Credit unions have approximately 10 per cent.
In my limited experience from my riding, where we have had strong credit unions, and I speak to bank managers frequently about this, the banks have been better for it.


Mr. Fennell:: Competition.


Arthur Jacob (Jake) Epp: It is competition, and I am not saying that it need be a credit union, it could be a savings and loans company or a trust company, but the competitive nature of the financial marketplace has the same laws as enterprise in other business. That is the point I am trying to get across.
Looking at the United States, we find that the larger commercial banks, and for our purposes here today we could compare them to our national chartered banks, instead of 74 per cent, are down to about 57.5 per cent or 58 per cent. But also, their banks are more commercially oriented, not in all cases, but I believe the majority lean more toward the commercial end of banking. Some people would argue that, with the economies of scale in the United States, obviously that is larger business. The only point I am trying to make today is that according to the psychology that we have developed in our own country it would appear to me that we have possibly erred on the side of safety as against the willingness to take risks.
When we look at loans for small business in Canada, we make the case strongly that loans are made on the basis of what is referred to as formula lending. In other words, when a businessman or woman goes into the banking institution to ask for a loan, first there are the standard questions of collateral investment. When speaking to some business people, they say they would sure like to get their hands on the little black book from which decisions are often made. These decisions are often not made at the branch level. In the national banking system there is a much larger network of branches, depending of course on the district or the central bank.
March 25, 1983

While we cannot forget about formula lending, I suggest the banks would be well advised to re-examine some of their mix. I believe their profitability could be increased by greater involvement in small business. It seems to vary from branch to branch. There are branches in my riding that are excellent in commercial activity and small business. The local branch manager has experience, expertise and the confidence of the local business community. It is a secret that we must look at. On balance, our banking system serves well, but I hope it will look at the mix, the balance, more carefully when considering small business.
Having said that, what about Government? How is Government helping small business? The arguments about Government, the lack of interest and the disincentives towards small business are legendary. We hear about them every day in this House.
Earlier today the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie) talked about Manitoba. Right now approximately 37 per cent of Manitoba's total budget is federal-provincial transfer payments, and it is going up. As a citizen of that Province, that is a trend I do not particularly cherish. I would like to see the figure go the other way. I would like Manitoba to be a have Province, an engine of enterprise.
One of the great advantages in that Province has always been relatively low-priced electrical energy, hydraulic energy. There was a freeze on hydro-electric increases. Why? We wanted to attract businesses. When you are mid-continent, you must provide some reason for companies to locate there rather than somewhere else. When you have one million people in a given region, you must give a reason why a business should establish there rather than somewhere else where there is a larger population. Those are economic facts; we have to deal with them.
When you take away the incentive of stable and competitive prices for energy, then the reasons of distance and space become more important in the decision-making process. Today for every dollar we pay to Manitoba Hydro, over 50 per cent goes for debt forgiveness. Where is the incentive to establish more business, attract new business or the psychology of taxes?
We now have a payroll tax in that Province. It is 1.5 per cent of gross payroll. Some people will argue it is not very high in terms of actual payment, but what it does for the psychology of creating new employment is devastating.
I say let us look at good loan programs; they are much better. 1 suggest we have competitive loan programs which allow for profitability and expansion rather than all kinds of grants which result in paper work, questions and disincentives.


Thomas Scott Fennell: Mr. Speaker, it is an honour to follow my colleague from Provencher (Mr. Epp). What amazes me today, and this is very serious, is that although there are between 700,000 and 800,000 people unemployed in small and medium-sized businesses, the Minister is not even in
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the House and the Parliamentary Secretary is smoking behind the curtain. They do not have enough interest to listen to some ideas. They keep accusing us, asking what are our programs. 1 am shocked that the Government does not show more interest. This Bill has been around for a number of years.


David P. Smith: Mr. Speaker, I rise on a point of order. We should be fair. The Minister has been here throughout the day. He has a long-standing commitment for tonight which he has to keep. His plane leaves at three o'clock. I think we should be fair.


Mr. Deputy Speaker:: The Chair would like to intervene and point out that the practice of referring to the presence or absence of Members is not considered good form in the House.


Thomas Scott Fennell: The only reason I mention it is that even though our Party is very involved in extracurricular activities, there are more Members of this Party in the House than there are across the way. We are talking about a very important issue, jobs. I am concerned about jobs. People are losing their jobs. We are constantly accused of not coming up with any ideas. Perhaps if somebody listened, they would hear some.
I support what my colleague for Provencher said, that grants and give-aways do not do anything for this economy. Reasonable loans are the solution. We are being requested to renew an old Act. When the amount was increased from $75,000 to $100,000, I stated that that was still not enough, that it was too little. When you consider that today it costs between $75,000 and $100,000 to create a job, that amount will only create one job.
I take exception to the Government's practice in small business. They have the Small Business Development Bond. It was our idea. They have abused it and torn it apart. They only allow it as a last resort. There is the SBLA we are now talking about, and the SBIG which is the beginning a very sound program. It is a patchwork.
There is the FBDB. The normal rate is 2 per cent over prime; it does not even qualify for 1 per cent over prime program. Then there are the DREE grants. Everytime DREE money is given to a needy part of the country, the funds funnel back to the industrial heartland of Canada. It does not benefit the part of the country for which it is intended.
There is the Enterprise Development Program which has been very successful. The Minister is now going to intervene and remove the right of the businessmen who have been on the board of the Enterprise Program across this country. Government intervention will probably destroy it.
The Minister of Industry, Trade and Commerce (Mr. Lumley) comes from the business world, and I respect that, but why is he getting public servants involved in running businesses and providing incentives? Next we have the great patronage program. Maislin is a classic example. The Government can give $34 million to Maislin, but cannot consider giving a $250,000 guaranteed loan to small business in this country.

March 25, 1983
Small Businesses Loans Act
The record shows, Mr. Speaker, that these loans have been very successful. The cost has been minimal to the Government, and what a bonanza it would be today to create jobs.
Government has gone into research and development on a hit and miss basis. It has no programs. If they hear something one day they go into it. There is no total, global program for these people. Then we have the miscellaneous Government grab bags. There are so many I cannot keep track and I do not know how industry does. The Government does it this way: there are consultants in Ottawa to whom you go to find out where you can get your money. That, to me, is an economic waste. Surely one solid industry and trade program can be set down, one simple program. Let us not talk about $100,000 for this one and $500,000 for that one. Let us go big and think big. Let us start perhaps at between $2 million and $5 million maximum, because that is what you need today. You need much larger sums of money because industry is that much more capital intensive.
When we give this money, we should not, as a Government, have to guarantee 100 per cent of these loans. We should process them entirely through the banks and let the banks accept 50 per cent of the risk. They make the profits. Why should they not accept a portion of the risk? If that is done, it could be very effective for a new corporation or a new expansion by reducing the interest rate until the building is built and the turnover is at a level where the industry can afford to start repaying interest. What has happened in this country, Mr. Speaker, is that we have capitalized interest to the point where we are no longer competitive.
I am very concerned about that when I look at the international competition we must deal with. There are many examples right in my riding. I received a phone call last week from a company by the name of Whitby Welding. It is a very old, well-recognized and established company which exported over 50 per cent of its products. That company is being put on the ropes by the bank because during the high interest period when it had growth, the company kept paying these interest amounts out, and when sales dropped off because of lack of demand, they had already built up the cost by building up the plant and its equipment. But they still have the interst rates to contend with. If there was a flexible interest rate policy where interest rates would go up and down depending on the economy, we could pay for the subsidized interest rates very simply out of saved Unemployment Insurance benefits and welfare benefits. Furthermore, and this is something that is really close to me, the people would feel better about themselves if they were employed rather than sitting at home drinking beer. This is the key.
To go back to Whitby Welding, if they would have had a fixed low rate of interest, or a flexible rate of interest, they could have survived, but the bank not only pushed them for the interest, they demanded repayment of all their loans. I have not heard from this company in the last week, but I hope they found some relief through Industry, Trade and Commerce,
because they are a fine company. They are wonderful men who run it, and they are very good supporters of mine, I must admit. Furthermore, the president happens to be one of my major fund raisers, and I really need him back on track. But, you see, Mr. Speaker, that is what we represent. This Party represents small industry and those people get behind us because they believe in free enterprise, freedom of ownership and the individual.
We are letting this country down, Mr. Speaker, because of our policies. We are not being fair to the people. We are saying that unions are no good instead of trying to encourage cooperation between Government, the employer and labour, giving some form of incentive for productivity. We are not looking in that direction.
Let us look at what other countries have done so successfully. I have great admiration for Japan but, Mr. Speaker, you have heard me in my place argue against letting any more cars into this country from Japan because it is going to hurt employment in my area. The Government has not given any incentive to our producers to change over to high technology. However, in Japan a small-businessman can lease from the Japanese Government one or two robots. He does not pay any rental on those robots until he perfects the process. Then he leases them on a long-term scheme at an increasing scale so that he can afford to become more productive in his industry.


Mr. Bosley:: Sounds like the Liberal Cabinet Ministers.


Thomas Scott Fennell: Well it may sound like some Cabinet Ministers, but I am talking about people.


David P. Smith: We are people.


Thomas Scott Fennell: I know you are people, and you have people you represent. What I am trying to get across, however, is that by working together in this House, surely we can come up with a solid policy which would save us billions of dollars in Unemployment Insurance benefits and welfare benefits and give the Canadian people a feeling of worth. People who are unemployed, Mr. Speaker, do not have a feeling of worth. The 700,000 people who have run out of Unemployment Insurance have less of a feeling of worth. That is what I am talking about, a feeling of worth for the worker and the entrepreneur.
We have been talking about banks, Mr. Speaker. We brought in foreign banks and then we put a tremendous limitation on them so that they could not grow beyond a certain size. That is because there is very powerful bank lobby in this country. We should double the number of banks we allow to come in. I know they are increasing slowly, but we need a lot more financing. If we are not going to allow foreign ownership in this country, then we need a lot more lending power.
As my hon. colleague the Hon. Member for Provencher mentioned earlier, we need savings and loans associations. We need trust companies. I would qualify that, though, by saying that we must get them under the Bank Act. We have seen the problems we are getting into with financial institutions under
March 25, 1983

the provincial Acts. Let us get them under the Bank Act, but let us not make it so difficult. For instance, National Trust is big enough to become a savings and loans institution, as well as Canada Trust. Prior to this time, Crown Trust qualified but because they were not controlled federally and did not come under the Bank Act there was trouble.
Beyond banks and savings and loans institutions, there are individuals who I believe would want to invest in pools of money which could not only be venture capital but also could be debt capital. We also, Mr. Speaker, must attract foreign capital into this country.
Another new organization which has just come into my riding is Makita Tools. They are putting 65 per cent Canadian content into the tools and exporting over 50 per cent of the product line. Well, Canada is ahead and we have created 100 jobs. Every time we create 100 jobs we are that much better off.
I spoke about a flexible rate and fixed rate and working something out. We also have the SBDC in Ontario. People do not really understand them because it is another Government-operated program. Perhaps we should only lay the groundwork and let the private sector do the entire funding. Perhaps the other side is that Government's only purpose is to maintain a fixed or flexible interest rate and get right out of money lending.
We used to hear, Mr. Speaker, that big is beautiful. Well, big is no longer beautiful. I remember that in 1979 the Chairman of Northern Electric said there would only be three large high technology companies in the world. Well, to this point he has been proven quite wrong because there are hundreds of high technology companies in Canada and thousands in the United States. Some will succeed, some will fail, and that is free enterprise.
Comparing the United States to Canada, why is everything in Canada in the large cities? In the U.S. you have small towns with businesses. Throughout the whole mid-west you see the small towns with little businesses. That is because there are local banks. The local banker did not move from one town to another and that is how it started. He owns that bank and was on the board of directors of the company, so he got the financial statement every week. We have to get that type of tie-in but we have to do it through the private sector. I have not had a chance to talk to the Minister about this, but he has stated that he does not have enough control in this area. I think it is wonderful when a Minister does not have too much control.
I have spoken about the budget a number of times and there are many negative factors there which hurt small business. The standby charge for company-owned, employee-driven cars was doubled. It was not doubled on a depreciated basis; it was doubled on the original cost basis. That is inequitable. Those are people who make their living selling Canadian products from small Canadian plants.
Another thing I object to in the budget was the 12.5 per cent tax on dividends for small corporations. That is a deterrent.
Small Businesses Loans Act
We have to encourage people to invest in this country. This is a great country. People want to work. They do not want to leave but they are being forced to leave this country because they are not given an opportunity to be part of an organization of which they can be proud.
That is an area where the Japanese have done something very unusual. Perhaps it is because of their culture, but they are proud to work in their plants. They are proud of their country. Part of the reason they enjoy working in their plants is that their bonuses are based totally on productivity. It is not how many weeks you stay on strike but how many units you produce per day. We have to be competitive with these other countries. We have to be in a position where we can compete.
We are in a very difficult period right now, Mr. Speaker. People do not realize that unemployment is not going to drop down below 12 per cent or 13 per cent very quickly. The more productivity you get from high technology, the less employment you have. You lose people on the production line, but you gain the employment of technical people, repair people and maintenance people. In time it will balance out. We will go through a very difficult period of adjustment, but that is only with respect to older workers on the line, not the younger ones.


John William Bosley: Mr. Speaker, Bill C-144 has been discussed at length in some detail but perhaps it would be useful if I put on the record for those who will be following this debate at home the history of the Bill.
The Small Businesses Loans Act has been around for some years. Originally it was introduced in 1961. One of the fascinating parts of the Bill before us today is that when it was last before us for amendment in 1981 the loan ceiling was raised from $850 million to $1.5 billion, being the maximum outstanding debt covered by the Act. It is ironic that in this year of 1983, when we are asked to extend the life of this Bill from the middle of 1983 to the middle of 1985, the Government has not contemplated it being necessary to increase that ceiling. I honestly do not know why there has not been an increase. I suspect that the reason there is not an increase is that Government Members opposite, and I am sure the departmental officials, know that what is likely to happen in the next couple of years is that people who qualify for these loans, new businesses or businesses increasing are expanding their operations-I note in passing that debt restructuring or the consolidation of existing debt is particularly not allowed under the SBLA-those people are not likely very many.
That is the tragedy of the recession we are in. There were some figures in the business section of The Globe and Mail yesterday which indicated the views of businesses in Canada as to their potential for expansion and new spending or even getting back to where they were before the recession began. While I do not have the figures with me, if my memory serves me very few businesses in Canada of any size, small, medium or large, foresee that they will be increasing their capacity. Very few businesses are likely to undertake expansion programs over the next few years. That is understandable, if sad,

March 25, 1983
Small Businesses Loans Act
if you simply look at the crisis of confidence which I find, at least in my area of Toronto, the majority of businessmen feel about this country.
Therefore, Mr. Speaker, I come back to the original point: it is not surprising that the Bill to extend the life of the borrowing guarantee does not at the same time increase the maximum capacity of the borrowing guarantee. That reflects, I believe, a recognition that there is unlikely to be a good deal of borrowing.
A number of Members today have put on the record, Mr. Speaker, their concerns about small business. My chief reason for rising is to add my few comments to that debate. There is not a Member in this Elouse who does not have a very substantial small business community in his riding. Therefore, it is, I am sure, one of the areas of debate common to all of us. There is no reason or necessity to be partisan on this question. I do not think there is a Member in this House who is not experiencing every day and every month the misery of bankruptcy in his home town or community on the part of dozens of people and dozens of businesses. There would be no point trying to make partisan points on an issue such as that.
Perhaps Hon. Members opposite will understand that some of us are trying to encourage the Government to recognize that the small business programs it has in place today are really just ways of further bandaging the wounded in the hope that they will some day be able to get back into the economic war. It is really not meant in a partisan manner. It is a plea to recognize the general thrust of Government policy on the small business community at a time when that community has never been more needed by the Canadian economy.
Some of us have been pleading since the beginning of this session for some relief on the mortgage interest question. We have been requesting some form of relief, whether it be straight tax deductibility, tax deductibility with a cap or property tax relief for home owners. Hon. Members opposite have pooh-poohed it, but it is particularly appropriate in today's discussions because the largest small business sector is the construction sector. While small businesses comprise about 24 per cent of Canadian industry, in the construction sector small businesses make up 55 per cent of it.
When other Hon. Members and I raise this issue, we raise it precisely in the context of what the Government could do to get the construction industry going without a great deal of cost to Government at a time when unemployment in that industry is 35 per cent. Also companies simply cannot use a vehicle such as the one before us today because they are not in a position to invest in new plant or equipment since no business is being done and there is no real prospect of a great deal of new housing construction. That is the tragedy of the recession.
I should like to refer to an article which appeared in the Star. I do not often refer to that newspaper because it does not have a lot of sympathy with the things with which I have sympathy.


Mr. Dick:: Is that the Windsor Start


John William Bosley: No, I am referring to The Toronto Star.


Arthur Jacob (Jake) Epp: Oh, that one.


John William Bosley: Yes, that one. I am only referring to that article because it is equally illustrative of the problems confronting small business. I confess to not being particularly aware of the current status of the bankruptcy legislation. I am told that Bill C-12 has not yet had second reading or been referred to committee. I was unaware of that. I am saying it has not yet had second reading because the article indicated yesterday that a spokesman for the Government House Leader was quoted as saying that the Government placed a high priority on the bankruptcy legislation and hoped to see it passed by the end of the session. That was a remarkable comment to make about a Bill which has not yet been before the House for second reading, let alone sent to committee. It has been on the Order Paper since April 12 and it is a follow-up to the original legislation introduced in 1980. The suggestion in the newspaper article that the Government places high priority on the bankruptcy legislation is unlikely to be true.


Arthur Jacob (Jake) Epp: To turn a phrase.


John William Bosley: Yes, to turn a phrase. I am grateful to learn something, one hopes, at least once a day.


Mr. Nystrom:: Shame.


John William Bosley: I am happy to learn something. My goodness, another NDP Member appears to have joined the Liberal ranks without giving notice. Without any formality at all, he walked across the Chamber and sat down. I suppose the House should take note that the Hon. Member for Yorkton-Melville (Mr. Nystrom) appears to have given up his provincial leadership aspirations and joined the federal Liberals. That is remarkable.
I am never afraid to admit when I do not know something, but one of the major issues involved in debt restructuring, which is the current major issue for small business, is the inability of businesses in major debt situations and facing bankruptcy to obtain restructurings of debt, without getting into all the technical language in the article, because of the stature of the federal Government itself.
Again I refer to the article because it is one in which a number of chartered accountants urged and pleaded with us to deal with the issue because they believed particularly that amendments to the Bankruptcy Act would have the largest possible impact upon avoiding bankruptcies of small businesses, and that right now it was more of an issue than granting additional credit to small businesses which cannot find anything to secure it against.


Mr. Bloomfield:: Be careful when quoting from newspapers.


John William Bosley: I appreciate and accept the recommendation of the Hon. Member. I am careful when quoting from any newspaper, particularly this one. I appreciate that my comments may not be directly on Bill C-144, but I think they come
March 25, 1983

much closer to the rules of relevancy than some of the other aberrations which have taken place. The article reads in part:
The Act's main drawbacks are that secured creditors and landlords now have powers that can actively prevent a reorganization. Also, preferred creditors including Governments and employees-whose claims rank behind those of secured creditors and ahead of unsecured creditors-must be paid immediately if reorganization takes place.
That point is critically important, because the article refers to a small business which at the time was trying to reorganize itself in order to avoid bankruptcy and obtain a chance to get back into the ranks of profitable companies, presumably to be able some day to take advantage of the legislation which is before us today.
I return momentarily to my first comment, that this is at least as important an issue as the legislation before us today which itself, by not raising the limit, recognizes that there are not likely to be a great number of applications for that form of relief.
The article continues:
In the case of Hi-Fi Express, several creditors had asked Price Waterhouse to create a debt restructuring proposal .. . But it was not possible because of potential trouble with landlords . .. and because Government debts totalled at least $250,000.
Now, $250,000 to a big business is not a lot of money. To a small business it is an incredible amount of money. To a business which spends $87 billion per year, called the Government of Canada, it is a tiny, tiny drop in the bucket. Therefore, the effect of that legislation is that the Government of Canada is itself the reason a business going bankrupt cannot be restructured to try and survive. I literally did not know that. In fact I am quite stunned that we would be dealing with other legislation rather than resolving that issue. There is no question that the extension before us today is important. As little good as it will do, at least it will do something.
I was astounded yesterday when I read the suggestion that the other Bill, in layman's language, could have a tremendous impact. I am referring to that one item alone, not necessarily the entire Bill. When the Government is owed tax, it should recognize that it would be wiser to avoid putting people on the unemployment and welfare rolls and simply postpone the debt in a re-arranged structure to give the owners and employees the right to continue working and a chance to pay the debt rather than put them out of business.
It amazes me that that legislation has not yet been before the House, at a time when the issue is not as much finding new sources of borrowing money for small business as helping them restructure. When I was thinking about some comments to make in today's debate, I was a little perplexed to discover that the Government has been sitting on a piece of legislation which I think my small businesses need more than the legislation before the House. If anything, small businesses need both, yet the Government's priority over debt restructuring legislation and amendments to the Bankruptcy Act is the sports pool or lottery Bill to help fund a very important event, the Calgary Olympics due to take place in 1988. That has a higher priority today for the Government of Canada than amendments that
Small Businesses Loans Act
would help small business to survive. I think you will understand, Mr. Speaker, if I find that more than moderately astounding.
When we are dealing with this question it seems more appropriate to ask the Government to remove whatever the roadblock is on that particular provision of that legislation and allow us to deal with it as expeditiously as we have agreed to deal with the two items that are before the House today. 1 do not believe that any Member of the Government has fewer problems in his small business constituency than a Member on this side of the House. I appeal to Hon. Members opposite to move at least that piece of legislation forward as quickly as possible. I do not think they want to see any small business go into bankruptcy if there is a way to prevent it. To find that the Government is an agency that is creating bankruptcy is terrifying in these times.
One could speak at great length about other dilemmas but I want to put on record one small matter, Mr. Speaker, and that is the 12.5 per cent tax on small business dividends paid to shareholders and owners. This is a technical matter for most Canadians who do not receive dividends. The Government's proposals on that matter have excited more comment from owners and operators of small business in my constituency than any other in the budget, however. It would be inappropriate if I did not take this opportunity to register their concerns.
Finally, I should like to say to the Government that its willingness to bring the legislation forward at this time and have it go through is to be commended.


Walter David Baker: Mr. Speaker, may 1 say at the outset what a great pleasure it is to follow the Hon. Member for Don Valley West (Mr. Bosley) who, by the force of his oratory, has caused Members from all sides of the House to come in and listen to his speech. I look across the House and see phalanx upon phalanx of the Liberal Party who have stayed to hear me and I am grateful. I look through the maze of faces and see the Hon. Member for Gatineau (Mr. Cousi-neau), my colleague on the Special Committee on Parliamentary Reform. I see the Minister of Transport (Mr. Pepin) who shares with me the responsibility of representing a seat within the National Capital. I look to my right and see row upon row of Members of my own Party. 1 look to my left and see row upon row of Members of the New Democratic Party. All are here to express interest in small business.
I want to say that I am glad you are in the chair today, Mr. Speaker, because on another occasion you have demonstrated your ability to handle tumult in the House. Before I launch into the burden of my speech, I want to make an apology to the security staff in the House of Commons who have had so much difficulty handling the crowds that have been lured into the House by the speeches of the Hon. Member for Don Valley West and others in the debate today. A crowd of this size is unusual on a Friday afternoon in the House of Commons, so 1 want to express my thanks to members of the general public for coming to hear this debate.


Some Hon. Members:: Hear, hear!

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Walter David Baker: That is the largest round of applause that has occurred in the House all day, Mr. Speaker, and it is an indication of the interest there is in this debate.
It is an important debate, Mr. Speaker. We are talking about the segment of the business community that is being hurt very badly. The Hon. Member for Don Valley West, the Hon. Member for Provencher (Mr. Epp) and the Hon. Member for Ontario (Mr. Fennell) have spoken about the problems that they face in their constituencies. I am sure you share those problems in your constituency and I know that the Minister of Transport shares them in his. We all know that there is no part of the business community that is hurting more than small business. We understand that from our mail and we understand it from the visits we make to the premises of small businesses in our constituency from time to time. The Hon. Member from Provencher spoke of instances in his riding.
I could go on and on, Mr. Speaker, as could every Member of the House, but I think it is important that the debate be concluded today so I shall not take up the time of the House. I do not want it to be said, however, that because a problem is left unspoken, the problem is not an important one.
In my constituency I attended a meeting of the Canadian Federation of Agriculture. In Canada, agriculture has been one of the most stable of small businesses but last year the rate of bankruptcy had increased 65 per cent over the previous year. That is a startling phenomenon, Mr. Speaker.
Although there are many doubts about what the House achieved with the Private Member's Bill to amend the Farmers' Creditors Arrangements Act introduced by the Hon. Member for Lambton-Middlesex (Mr. Ferguson)-and which the Government had to be shamed into moving-there is no doubt in the agriculture sector of the business community that something has to be done.
As a result of passage of this Bill, amending the Small Businesses Loans Act, the ceiling for the period which has been extended from March 31, 1983 to March 31, 1985 for loans that can be guaranteed will be $1.5 billion. I share the view of the Hon. Member for Don Valley West that the ceiling is probably too low, just as the ceiling on the Farm Credit Act is too low. There is a crisis in agriculture, Mr. Speaker.
I do not mean to be partisan. For example, I do not believe that there is any room for crass partisanship in relationship to the economy. With the Hon. Member for Willowdale (Mr. Peterson), Mr. Speaker, you and I attended a meeting in Toronto of the Canadian Construction Association attended by representatives of companies large and small in the construction business. These businesses operate in the constituencies of every Member of the House. Those people spoke of their situation with despair.
This Bill allows the rate of loans for small businesses to continue. In some manner it compensates for what I am sorry to say is the foolishness of the budgetary policy of the Government. To that extent it is supportable.
Close to half of all Canadians presently unemployed were formerly employed by small and medium-sized businesses. That is what The Globe and Mail reported today. They
represent close to half of the unemployed in Canada. In February, there were 1,585,000 people unemployed in Canada. According to the same report, the small business sector employs between 700,000 and 800,000 fewer Canadians than it did in January of 1981. That is a sad statistic. There is no place for partisanship when dealing with these statistics.
The other aspect dealt with in this same report is that few of these industries that were surveyed in this large survey that was conducted by the Canadian Federation of Independent Business have any plans to increase either hiring or investment. Of those industries surveyed, 66.7 per cent expect to retain present employment levels. Those are levels which have fallen off by almost a million from a year and a half ago. The fact that 9.1 per cent would be rehiring laid-off workers shows just how small the prospect for advancement is as we deal with this matter. Only 7.9 per cent will be hiring additional people. What impact will those little glimmers of optimism have on the 1,585,000 unemployed, half of whom were employed in small business? Is it any wonder that this Bill is important and we want to pass it tonight? I do not think so.
What reason did those surveyed give for this happening? They admitted that the recession is world-wide, a fact with which we are all aware. They say that much of the cause has been the result of a combination of damaging federal policies and intergovernmental bickering.
I would like to stop there for a moment and talk about damaging federal policy. There is no Member over there who is unhappy to see the MacEachen budget gutted piece by piece by the former Minister of Finance himself, who brought it in, and then the final crowning insult, swift and merciful death at the hands of the new Minister of Finance (Mr. Lalonde). No one was unhappy about that. The Hon. Member for Gatineau was overjoyed to see it gutted. It cut the mail from his constituents by over 85 per cent.
Something which has characterized the national life of Canada and which I believe has been damaging not only to the country but to the sense of national will to achieve goals is the fact that there has been bickering among the Governments in Canada. In a federal state, co-operation, consultation, consensus, understanding and compromise are the catch words. Cooperation is essential whether we are applying it to how we treat the native people of Canada and deal with those problems, whether we are talking about an assault on the problems of agriculture or the environment, whether we are talking about transportation or attacking the problems of big business and the challenges facing the country. Co-operation is possible because we have co-operated before.
Last night, I met a man at the Infotech Display at the Sportsplex in my riding, which is an exhibition giving a view into the future of the computer and micro-technology industry in the National Capital area. He reminded me and the group I was with of this national will that we talk about. He reminded us that Canadians had a purpose during the war. We had a job
March 25, 1983

and the will to achieve something. We built airfields within a period of time that no one thought possible. We built airplanes at a rate at which no one said it could be done. We built ships, hangars and other installations.
I say to those people who are pessimistic about the country and feel that it is drifting with no hope that there is hope. In all the dismay and despair over the economic situation we are facing today, there is a challenge. It is the challenge of creating the national will. It is a challenge in which the Government must take the lead but, I am sorry to say, it has not done so. I do not say that in any partisan way. I suppose we are all to blame in one way or another. Government, in the broad sense, is to blame.
The battle which exists between labour and business in this country has been caused by an adversarial atmosphere. It is an atmosphere we will have to change because our competitors are changing. If there is new technology, we will either have to buy it or develop it because our competitors are buying it and developing it.
I believe that this country is capable of doing anything it sets its mind to. We are told of the riches and resources of our country. Of course we have riches and resources. We are fortunate never to have been scarred by war. We have never had to rebuild an institution. We have never had to rebuild a major transportation facility.
We are rich in something else. We are rich in talented people because we have one of the highest educational levels in the world. This is another challenge that we must face in the future. What will we say to those young people, some of whom are in school because they cannot get a job, when they graduate? What will we tell them if we have not taken up the challenge of creating a better atmosphere for them as they look to careers?
The new technology developing right here in the National Capital area shows promise for expansion not just in this area but in the country. Expansion is not only possible for that industry but new industries as well. When will we recognize the fact that it is a growth industry which has potential and one which cries out for investment capital? In order for that investment capital to come forward, a certain atmosphere and climate is required which the Government can set. That industry has told the Government what it needs, and I need not repeat it. The way out of the despair is by taking up the challenge.
There are many things which can be done with respect to that challenge. If anyone does not believe that there is a challenge to the country, let them know that an average of 40 Canadian businesses went bankrupt every working day last year. When the dust of those bankruptcies has settled, those firms will show debts totalling $2.3 billion. Let the Government consider figures like that if it is concerned about its revenues. Figures now indicate that the jobless rate in Canada is perhaps 20 per cent. If there was ever a time for us to emphasize our efforts on small and medium-sized businesses, it is now because it is an historical fact that the greatest sector to
Small Businesses Loans Act
play a part in creating jobs has been the small business sector. That is where the jobs are created.
My speech today is likely the last one I will make on an economic matter prior to a budget since the Minister of Finance (Mr. Lalonde) announced today that he will shortly bring in his budget. I want the Minister of Finance to consider that evidence. I am sure that he will. I want the Minister of Finance to know that in terms of the position in which the country finds itself and what must be done about it, I do not believe there is crass partisanship. There may be differences, but there is no crass partisanship. There is no Canadian on either side of this House of Commons who does not want success from the budget and from economic policy. There is no Member of Parliament who relishes the thought, for whatever reason, of row upon row, line upon line, day after day, with his or her office being filled with young people who cannot get work and small business people who are worried.
I believe, as we were told at the Construction Association meeting in Toronto, that it is important to the country that the right answers be found by the Minister of Finance, that the right balance be struck by him, so that we do not destroy the battle against inflation which has been fought with a singleminded purpose, to the extent that small business has been ground into the ground, as well as the manufacturing sector. We do not want to forget the importance of that. However, we equally must not forget that, aside from the statistics on joblessness, we have a social problem. It is for that reason, because the Bill assists in that important sector, that we intend to support the Bill and allow it to go through today.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I am wondering whether all of the interest expressed by my colleague, the Hon. Member for Nepean-Carleton (Mr. Baker), has shown how the crowds have rushed the other way. Certainly Hon. Members have debated the Bill on two Friday afternoons. As I start my remarks, the debate has been going on for five hours. What is it about this Bill which requires five hours at second reading? Yet it is of importance. I am astounded that besides the Minister of State for Small Businesses and Tourism (Mr. Rompkey), only the Hon. Member for Gatineau (Mr. Cousineau) has spoken from the Government side. They profess to be greatly interested in the operations of small business, and they know that Hon. Members, particularly those from the Province of Quebec-
[ Translation]
-particularly in Quebec, where the small business sector is the pivot of economic development, but in view of the lack of participation by Quebec Members, 1 wonder how interested they really are in this instrument which has proven so effective in the past to finance small businesses. After all, the figures which the Hon. Minister has tabled give us a good idea about the number of small businesses in Canada and their quality. A business may include only two persons. It may also include about 50 employees working for a family business. Because of

March 25, 1983
Small Businesses Loans Act
this, there is not a single village or small community in Quebec or elsewhere in the country where there are no small businesses. The lack of interest shown by the Quebec Members is therefore surprising. Moreover, Mr. Speaker, and this is even more surprising, when we examined Bill C-139 to amend the Income Tax Act, the Government Members remained completely silent and accepted a 12.5 per cent tax increase on the distribution of small business profits. It is right here in Bill C-139!

Why is that torpedo included in the Bill? It is part of the Government philosophy, demonstrated by the Minister of Finance who, in his budget of November 12, 1981 said: "We will increase the tax on small business dividends by 12.5 per cent. That will raise the taxes of the owner of the small business to about that of a salaried employee." In other words, the owner of the small business receives nothing for his worry, for putting up the money, for having to meet payrolls. For all of the responsibilities of running a business, he gets absolutely zilch. That is what the Government considers shall be the reward of running a small business. I say to you, Mr. Speaker, that that is a shame. I know that our friends over in the New Democratic Party talk long and loud about small business, but as soon as the word "profit" is mentioned-
[ Translation]
As soon as we speak about the profits or the profitability of a business-

-they jump on it with both feet as being quite immoral that anyone should make a profit out of business, particularly their love of soaking it to corporate profits.
As I said, corporate profits can be a partnership of two men or women or a combination, or a few individuals who have "Ltd," or "Inc." behind the name of their business. Their profits are considered to be immoral. But surely to goodness, is it not a cliche merely to say that small business cannot get on without profits? There must be profitability in order to pay the owner or owners their return, because they, too, are entitled to a fair return for their labours and worries.
This Bill extends by one year a form of loan operation with the chartered banks and other credit-granting institutions. We have heard lot of nonsense about the chartered banks neglecting small business. The reason I am speaking this afternoon is that I am primarily interested in the operations of the chartered banks, trust companies and other financial institutions in this country.
I recall last year when the Finance Committee, following a motion of this House that bank profits be examined, had before it as witnesses representatives of all of the major chartered banks, some of the trust companies and some other organizations. I recall the words of Rowland Frazee, the President and Chief Executive Officer of the Royal Bank,
which is Canada's largest bank. Mr. Frazee was able to show indisputably that the major portion of that bank's business is with small business. Small business is not just 15 or 20 accounts, but tens of thousands of accounts where financing is required.
We have seen high interest rates, the recession and the National Energy Program. In my Province, Mr. Speaker, how that Program caused small business to take it in the neck, across the back, across the knees and stomped on both feet. That was the result of the immediate and then cumulative effect of the National Energy Program. My colleagues from Saskatchewan, many of them whose constituencies are in oil-producing areas, saw the same thing happen.
Those businesses were the type of businesses that one just loved to see. It was hard work, it was risky, but the men and women involved were quite prepared to go out on the limb for heavy equipment for a few dollars down and hundreds of thousands of dollars of financing, and they made it pay. We saw population move to the western Provinces to participate in this economic boom. Certainly there were some large corporate entities that were there. They always have to be there, but the big bulk of the service industry, the drilling, the pipelaying, the road building, the list of jobs and types of operations are legion. That was all small business.
Then the plague hit, and what a sorry picture it has left. And we wonder why. The rest of Canada has suffered doubly from that. Ontario industry, machines, equipment, the steel industry, the automobile manufacturers, who lost tens of thousands of vehicles per year, all as a result of those dark days of 1981. Now we are trying to pick up the pieces.
Hopefully with a changed picture for the banks, since they will be able to use the Small Business Development Bonds, we have to give these people an opportunity to finance. No one has the cash. They cannot be expected to have the cash, and when their profit margins have been trimmed, there are no reserves. There are no socks or no bundles of money tucked under mattresses. We have to see that the legislation is available for those who want to act.
I do not want to see grants, because they become conditional, so give them incentives either by lower term loans or some incentives through the Income Tax Act so that those who want to do may do, those want to shake may shake, and we will get that fundamental, basic industry that is represented by all facets of small business back in motion.
Then we will see the ranks of the unemployed go down, not by make-work programs through the Minister of Employment and Immigration (Mr. Axworthy). They will not deal with unemployment. We need small business to get back on its feet and employ those hundreds of thousands; in fact, there are well over a million people employed in small business.
For that reason, I hope that we would now be able to agree to this Bill going to Committee for Clause by Clause study. That should not be long, and then we will take the report stage.
March 25, 1983


Mr. Bill McKnight (Kindersley-Lloydminster):: Mr. Speaker, I am rising to speak on the Bill, if it is not past that time.


René Cousineau: On a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The Hon. Parliamentary Secretary to the Minister of State for Small Businesses and Tourism (Mr. Cousineau) on a point of order.


René Cousineau: Mr. Speaker, I would like to say only one thing. The Hon. Member who just spoke mentioned that the Act would remain in force for one year, but in fact, it will for two years.


William Hunter (Bill) McKnight: Mr. Speaker, I rise to take part in this debate. 1 do not know what has happened since the Member for Don Valley West (Mr. Bosley) spoke, but the Member for Nepean-Carleton (Mr. Baker) has spoken as well as the Member for Edmonton West (Mr. Lambert) and I find myself virtually alone. I do not think 1 will change that either way, Mr. Speaker.
Bill C-144 may have had adequate discussion but it certainly has not had lengthy discussion in the House. We heard from the Government benches a week or so ago that they wished this Bill to be passed in one day, passed immediately. I could understand that if this Bill to amend the Small Businesses Loans Act were Bill C-44, but when it is Bill C-144 I do not think that shows a great deal of urgency on the part of the Government.
It is a Bill that will extend something that is used, hopefully, by a lot of small businesses in Canada, by enterprisers and people who wish to contribute to the economy of Canada, hire fellow Canadians, expand and do what we all hope can be done in this country, which is to provide a better country to live in, a country in which people are not left without the dignity of employment, especially when we have over two million people in Canada right now who are left without the dignity that I know they want and that we have expressed to the Government that they want.
This Bill basically extends its life for another two years, and we endorse that. It has attached to it a consultative committee that is to advise the Minister as to what small businesses should be able to apply for loans and what small businesses should be allowed to accept loans. This committee is made up of members of small businesses and members of the financial community.
The imbalance that we have now in debt equity in small firms is very apparent to all Members who have consulted with firms in their constituencies and have kept an eye on the state of the economy in Canada over the last number of years. When the small business consultative committee makes its report, I would be very interested in seeing it tabled and made available as soon as possible to the Members of this House and the small business community throughout Canada.
Small Businesses Loans Act
The largest contributor to employment in this country is small business. There are over 645,000 small businesses in Canada. They employ 42 per cent of the work force and make up 25 per cent of our GNP. The enterprise spirit of these risk-takers provides productivity to our economy.
In 1982 there were close to 150,000 business start-ups. Unfortunately there have been some failures. Those people have the enterprise, spirit and will to risk their life savings and in many cases the life savings of their families, friends and relatives. They should not be ridiculed for their failure. Without that spirit and desire to go ahead, our country would not be what it is today. Unfortunately, in 1982 there were 10,765 business bankruptcies, 410 farm bankruptcies and over 30,000 personal bankruptcies. Losses to business and farm bankruptcies in 1982 amounted to $2.33 billion.
That is very unfortunate. A lot of those people who failed in 1982, given the opportunity and environment, because they are enterprisers and risk-takers, if allowed to have the reward for their endeavours will take the risk again. They will continue to strive for success. If the Government provides the environment and the ability to those people to start again as we, hopefully, come out of this recession, they will survive and contribute to the employment of this country.
Under this Bill, any small farm can have $100,000 outstanding at one time. Let us look at what $100,000 does when used by an enterpriser, a small-businessman. Each $100,000 of equity capital invested in 1979 averaged $310,000 in exports for this country, $100,000 in expenditures for research and $11,000 in corporate, property and personal income taxes to the different levels of Government. That is what $100,000 taken in equity and placed in a small business generated in 1979 in Canada.
By drawing this to the attention of the Government, we are not criticizing this Bill. Indeed, we support it. However, there is one shortfall that could be drawn to the Government's attention. The money available under this Act cannot be used for operating expenses. It cannot be used to carry inventory. For many small businesses, the total cost of their operation is in their inventory. If this Bill could be changed so that small businesses can borrow against their operating cost, it would certainly help.
When I look at this $100,000, I think of all the small businesses in my riding that would be assisted by the injection of that amount of money. Service stations, small grocery stores, welders, farming operations, any number of small businesses, welders, could benefit. If they are going to invest this money and have this assistance from the Government, why in the budget which the Government brought forward did it cut in half the capital cost allowance for the first year for investments? The total cost to small, medium and large businesses is estimated to be in excess of $3 billion. That $3 billion is taken right out of businesses in this country. Where

March 25, 1983
Small Businesses Loans Act
was it put? In the midst of this recession, we pray that businesses will invest, continue to expand, upgrade their production and modernize their plants, but the Government cuts $3 billion out of that operation.
Even worse, every other industrialized country went the other way and allowed a larger capital cost allowance to their businesses. In the United States, for example, the margin will be increased by 34 per cent by 1985 for allowances and equipment and furniture, 42 per cent for automobiles and light trucks and 15 per cent for buildings. That is the difference between the United States and Canada for the operator of a business.
We wonder about capital costs. The Minister of Transport (Mr. Pepin) was here a few moments ago. The capital cost allowance for business was cut in half, but an extension of the capital cost allowance, a tax concession, is being proposed for the railroads. The railroads will receive an extended tax credit, a capital cost allowance over the next five years, while farmers and small businesses see their capital cost allowance cut in half. Important as the railroad system in this country may be, it does not compare to the importance of small-businessmen and farmers.
When talking about this Bill, we wonder about the criteria that are established and a lot of the red tape that is involved when making application for these grants. I cast my mind back to last June when a trucking company by the name of Maislin had over $34 million guaranteed by this Government, indeed by the taxpayers of Canada. Maislin was given $34 million in guarantees on unaudited financial statements for the year 1981. That was in July, 1982. On September 14, 1982, over a month later, the Government received the first audited financial statement for that company. That can only happen to friends of the Government. It does not happen to those men and women who operate small businesses and risk their capital.
Over 2,000 employees of Maislin are employed in the United States and 800 are employed in Canada. Therefore, Canadian taxpayers are subsidizing the American teamsters driving Maislin trucks. The operators in the United States are subsidized by taxpayers in this country who are struggling to get ahead and have to use this Small Businesses Loans Act to borrow funds.
When we consider employment and ability to expand, the truckers of Canada are only operating at 60 per cent capacity. Therefore, one has to wonder why it was one company, the only company in the trucking industry, the only service company in Canada, which received a loan guarantee of $34 million from this Government.
I know we will be moving quickly along with this Bill, Mr. Speaker, but I would just like to suggest that in a country as large and expansive as Canada, if you wish to cut the costs- because movement is so important in our country-one place this Government could start which would assist every single business in Canada would be to reduce the take by the federal Government of the tax on fuel.
I would just like to talk briefly about one gallon of fuel. On one gallon of fuel which a farmer now uses in Canada, 69 cents, or 44 per cent, goes in federal tax. Excise tax is seven cents a gallon. Granted, that is refundable. You have to go through a lot of red tape; you have to fill out a lot of forms; you pay it out and you wait for it. Then the people from Revenue Canada come out and do an audit to make sure you are not telling a story. But eventually you get your seven cents. But there is a 9 per cent federal sales tax, which is 15 cents a gallon. There is a petroleum compensation charge which is 18 cents a gallon. That is a familiar figure, Mr. Speaker. The Canadian ownership charge is 4 cents a gallon. Petroleum and gas revenue tax is 7 cents a gallon. And the corporate tax is 18 cents. There are two 18-cent charges in there. That comes to a total of 69 cents a gallon, Mr. Speaker. If you deduct 7 cents a gallon, that is still 62 cents a gallon which is a federal tax. If this tax was removed, in a country the size of Canada, where movement of goods and people are so important to the economy, it would do more good than any other Act that I can think of which we have debated lately in this House.
I would like to move now, Mr. Speaker, that we proceed to the Committee of the Whole and continue the study of this Bill.


[Stage Direction]
Motion agreed to, Bill read the second time, considered in Committee, reported, read the third time and passed.
Walter David Baker: I rise on a point of order, Mr. Speaker. I am acting in the place of our House Leader today, a situation where I want to be demoted immediately after I finish! Before the Parliamentary Secretary to the Government House Leader left, he and I had some discussions about what would occur if we managed to get through the three readings of the Bill today. We have now reached that stage on Bill C-144. We agreed that if we made that kind of progress, it might be appropriate if we called it five o'clock now. I wanted to indicate that agreement and understanding to the House. I have indicated this informally to the Minister of State for Finance (Mr. Cosgrove) who is representing the Government today. Perhaps he might comment; 1 assume he is still agreeable.


Mr. Cosgrove:: Mr. Speaker, I can confirm that that is the agreement which was reached by the Parliamentary Secretary to the President of the Privy Council (Mr. Smith) and I am authorized to indicate consent on behalf of the Government. We were quite anxious, Mr. Speaker, that this legislation be enacted today. Indeed, it was one of the reasons we did not offer speakers this afternoon. We concur with the situation as put by the Acting House Leader for the Opposition.


Walter David Baker: I thank the hon. gentleman. I do not want to correct him, but for the sake of my friend, the Hon. Member for Gatineau (Mr. Cousineau), I must say he did take part in the debate, and a very good part. I listened to his speech with great interest.


Mr. Deputy Speaker:: 
René Cousineau: Now that the Acting House Leader for the Tories has resigned for today!


Some Hon. Members:: Agreed.
Small Businesses Loans Act


Mr. Deputy Speaker:: By unanimous agreement we will now call it five o'clock. This House stands adjourned until Monday next at eleven o'clock a.m., pursuant to Standing Order 2(1).
At 4.39 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, March 28, 1983