1984-05-28

GOVERNMENT ORDERS


Hon. Pierre Bussieres (Minister of National Revenue) moved: that Bill C-25, An Act respecting the Canada Development Corporation, Canada Development Investment Corporation and certain other corporations, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.


Mr. Speaker:: Is it the pleasure of the House to adopt this motion? The Minister of National Revenue (Mr. Bussieres).


Pierre Bussières: Mr. Speaker, it is my pleasure today, in the House, to propose the second reading of Bill C-25, an Act respecting the Canada Development Corporation, Canada Development Investment Corporation and certain other corporations.
Mr. Speaker, this Bill has basically two objectives.
First, this legislation will enable the Government to meet a commitment made in May 1982 regarding its assets in the Canada Development Corporation, the CDC. At the present time, the CDC is a corporation created by an Act of Parliament, but by adopting this bill, Parliament will authorize the CDC to pursue its activities in accordance with the Canada Business Corporations Act. The CDC's name will be changed to reflect the fact that the Government will no longer have a sustained interest in the corporation. I should point out that the arrangements approved by the Government and the CDC were made two years ago and that they have received the wholehearted approval of private sector shareholders within the CDC.
The changes announced in the Bill are necessary so that the CDC can be managed as a private corporation under the Canada Business Corporations Act, and also to enable the Government to divest itself of its shares in the CDC.
Second, the purpose of this Bill is to establish the Canada Development Investment Corporation, the CDIC, as a corporation created under an Act of Parliament. The House will recall the CDIC was established in accordance with the Canada Business Corporations Act and is being managed according to the provisions of several Orders in Council. These orders impose restrictions and guidelines similar to those imposed by special legislation, and it is desirable to have these provisions confirmed by Parliament.
The CDIC has already proved that Government made a wise decision in creating the Corporation. The Bill will give the CIDC the legal status of a Crown corporation and a clear and limited mandate from Parliament.
Before turning to the provisions of the Bill itself, I would like to outline the current and continuing responsibilities of CDIC. CDIC has four basic functions.


Mr. Malone:: Take over. Take over. Take over. Take over.


Pierre Bussières: First, CDIC is a vehicle for the sound commercial management of various assets and enterprises that have been acquired earlier by the Government of Canada for public policy reasons. The Government has found that there are some cases where, contrary to what is expected, its commercial assets have not been operated in a commercial manner. The controlling shareholder of any company should take a keen interest in that company's activities. In cases where the Government is the controlling shareholder, it needs a vehicle that can provide for that active presence on a continuing and effective basis.
CDIC is intended to be that vehicle in order to achieve commercial performance by these companies and to act as a mechanism for public accountability. This does not absolve the boards of these companies from their responsibilities. The boards of CDIC's underlying companies have an important role to play. We expect the boards of directors of these companies to supervise vigorously the business activities of their respective enterprises.


Mr. Stevens:: That will be a first.


Pierre Bussières: The board and management of CDIC works with the boards and managements of its subsidiaries to help provide a commercial operating environment through the developing and monitoring of performance standards. In this way, CDIC brings a shareholder's perspective to complement

May 28, 1984
Development Investment Corporations Act
the operating perspectives of the subsidiaries; experience has already demonstrated the utility of this approach.
The second function of CDIC is to privatize. This is an important part of its over-all mandate, and CDIC will be judged in part by its progress in divesting to the private sector assets which the Government no longer needs to own for policy reasons. In its divestment activities, CDIC is to ensure that sales are made according to commercial standards, so that the public realizes a fair return from assets which are sold. CDIC has made initial assessments of the prospects for commercial sale of certain of the assets, including consideration of market conditions and timing factors.

The CDIC's third role consists in acquiring new investments from the Government. There is no contradiction here with the corporation's second role. Experience has shown that the private sector will provide other opportunities for the Government to invest, in accordance with the public interest.
Such opportunities were offered recently with respect to the fisheries industry in Eastern Canada. Having decided to invest in fish processing plants in Newfoundland, Nova Scotia and Quebec, the Government is now transferring its shares in those companies to the CDIC. It will be up to the latter to communicate the views of shareholders to those administering the shares on behalf of the Government, and to find private sector buyers when commercial opportunities arise.

CDIC's fourth role is to provide commercial advice to the Government when the Government calls for such advice. Industry and government have different roles in Canada, but it is important to ensure that they do not drift into isolation from each other. The Government hopes CDIC, because of its activities in and work with industry, can help to create a better understanding between government and industry of one another's objectives and procedures.
Government plays many roles in the economy. It establishes fiscal and monetary policies. It regulates some industries. It provides tax incentives. It provides various forms of financial assistance to industry and, in some cases, government invests directly and takes equity in return. It is in these cases where CDIC will play a role, cases where the Government is a direct investor and needs a vehicle to manage its shareholding wisely.
CDIC has established its credentials as the vehicle to bring about commercial quality expertise and practices where they are called for in government investments. Its efforts have produced detailed accountability to Parliament, more constraints on Canadair and de Havilland, and timely disclosure of important developments. CDIC is a pragmatic response to the need for a better means of managing government investments, as well as to the need for a vehicle with a public mandate, including the divestment of government investments when there is no longer a public policy reason to hold those investments.
Mr. Speaker, there are people who are afraid that the CDIC will have wide-ranging powers to make its own investments. That is absolutely false. In accordance with provisions to be found in this Bill, the CDIC has no authority to take control of existing companies or to set up new subsidiaries.
The CDIC is a tool created by the Government to manage investments. However, Government and Parliament will decide what those investments will be. In a few moments I shall indicate the various provisions of the Bill that relate to such decisions.
The Bill has seven main parts. The first three clauses of the first part are the introduction and include definitions and provisions dealing with the event of inconsistencies between this bill and the Financial Administration Act.
Clauses 4 to 8 contain provisions concerning the Canada Development Corporation. These provisions authorize the Government to divest itself of its assets, which represent 48.2 per cent of the shares of the CDIC. The Board of Directors of the CDC believes that the present business climate as well as the market situation are not favourable for immediate privatization of these shares. We feel that the public has a right to expect a reasonable return on its investment, and as soon as the time is ripe, we want to be ready to proceed with privatization, with the authorization of Parliament.

Bill C-25 will bring CDC under the Canada Business Corporations Act as soon as the Bill is passed and proclaimed. This will end the provision for a minimum 10 per cent government shareholding. In other words, even if there were buyers for our CDC shares at the present time, we would not be able to sell them without this legislation. In order to improve the marketability of the CDC shares, the restrictions on the number that any individual investor may hold are also being eliminated, though in this case in two stages. At the present time, non-government voting shareholders are limited to a holding of 3 per cent. This limitation will be permitted to be set at 10 per cent for all non-government shareholdings. This limitation will be removed altogether after a transitional period of three years. This transitional step is designed to allow CDC shareholders protection from unexpected changes in control without their approval. I should also note that the shareholders of CDC have approved these transitional arrangements.

The next part of the Bill, clauses 9 to 24, deals with the activities of the CDIC. These clauses are the actual basis of the CDIC. While the CDC's status as a corporation created under an Act of Parliament is being changed to that of a corporation formed in accordance with the Canada Business Corporations Act, the reverse is true of the CDIC, which was
May 28, 1984

created under the Canada Business Corporations Act and will now become a corporation formed under an Act of Parliament.
Clause 11 is the key clause of the Bill. It specifies the four roles of the CDIC which I mentioned at the beginning of my speech:
(1)	To manage assets in a commercial manner;
(2)	To privatize assets;
(3)	To acquire new investments from the Government;
(4)	To advise the Government on matters pertaining to business and industrial issues.
The powers of the CDIC are not as wide-ranging as these objectives might lead us to believe. In fact, the corporation must conform to strict standards for public disclosure and accountability, and must always obtain Parliament's approval before investing in a new business.
When Hon. Members examine Bill C-25, they will see a number of provisions requiring CDIC to obtain the authorization of the responsible Minister, the corporation's Board of Directors, the Minister of Finance, Cabinet, Treasury Board and finally, in other circumstances, the authorization of this Parliament.
The Bill provides for a board of 20 directors and introduces staggered terms so that in any one year the terms of no more than one-half of the directors expire.
Normally the Bill directs the board and management of CDIC to operate in a commercial manner, but should government decide that some specific course of action is in the public interest, it will be able, under the CDIC Bill, to issue a directive. This directive will be made public, indicating the activity government wants CDIC to undertake and taking appropriate policy responsibility for that instruction. The directive must be given with board consultation. The directors then have a duty to ensure that the directive is implemented in a prompt and efficient manner.
The fourth segment of the Bill is found in Clauses 25 to 41 inclusive. This portion of Bill C-25 covers the financial provisions relating to CDIC and its wholly-owned subsidiaries. Clause 26 sets out CDIC's authority to borrow money and puts a limit of $3 billion on the over-all borrowings and loan guarantees for CDIC and its subsidiaries. The long-term debt of Canadair, de Havilland and Eldorado, a total of $1.9 billion at the end of 1983, is included in this amount. Before CDIC can exercise an unused portion of this debt authorization, it must first obtain the approval of the Minister of Finance as set out in Clause 27. In addition, each year CDIC will be required to indicate its intended borrowings in its corporate plan which requires the approval of Cabinet.
The Bill, in Clause 28, also authorizes the Government to provide up to $1 billion of equity capital to CDIC. This funding will be activated in the context of the corporate plans and capital budgets of CDIC and its operating subsidiaries,
Development Investment Corporations Act
summaries of which will be made available to Parliament. Another clause of the Bill allows the Minister of Finance, with Cabinet approval, to require CDIC or a wholly-owned subsidiary to pay surplus funds into the Consolidated Revenue Fund.

The financial record of the CDIC and its investment activities will be carefully scrutinized by Parliament and the Government.
In accordance with Clause 30 of the bill, the CDIC shall submit annually to Cabinet a plan encompassing all the businesses and activities, including investments, of the company and its wholly-owned subsidiaries. The CDIC and its wholly-owned subsidiaries shall conduct their activities in accordance with this plan.
Furthermore, Clause 31 provides that the CDIC shall submit annually a capital budget to Treasury Board, for its own investments and those of its wholly-owned subsidiaries. The CDIC and its wholly-owned subsidiaries shall not incur, or make a commitment to incur, a capital expenditure in any financial year before the budget has been approved, unless the expenditure or commitment is part of a business activity that has already been initiated.
We shall table summaries of these plans in Parliament. This provision appears in Clause 33 and will prove very useful to Parliament when evaluating and scrutinizing the activities of the CDIC and its subsidiaries.
[DOT] (M30)

Clauses 34, 35 and 36 restrict CDIC or its wholly-owned subsidiaries from acquiring and operating businesses or setting up new companies without meeting certain tests. In cases of a corporate reorganization, for example, where it might be necessary to set up a new corporation, Cabinet must approve the transaction. More important transactions involving entering a new business would require the approval of Parliament.
I wish to stress this latter point. Some have suggested that CDIC is being cast loose to invest in ventures and companies as it chooses. That is not the case. Before CDIC can enter into any new activity, it must receive the approval of both Cabinet and Parliament. Clause 36 sets out the mechanics for obtaining parliamentary approval. As the Bill states in Clause 35, CDIC will not be able to acquire control of an operating business without the approval of Parliament unless the business is complementary to an existing business of CDIC, in which case the approval of Cabinet is sufficient. The exemption from parliamentary approval would not apply where the acquisition would involve substantially all the holdings of another corporation directly owned by the Crown. Cabinet approval is required for CDIC to dispose of any securities transferred to it by the Government or any voting shares. [Translation]
The fifth part of the Bill consists of clause 42, which concerns CDIC's subsidiaries:	Canadair Limited, The
de Havilland Aircraft of Canada Ltd., Eldorado Nuclear Lim-

May 28, 1984
Development Investment Corporations Act ited, Teleglobe Canada and, in the near future, Pecheries Cartier Inc. and Fishery Products International Ltd., and subsidiaries of those corporations. The clause deals with the relationship between the CDIC and its subsidiaries, and the aim to change the status of those subsidiaries to private sector corporations. The clause also guarantees that through the CDIC, these companies shall be accountable to Government and finally to Parliament.
The sixth part of the Bill covers clauses 43 to 46 which deal with general provisions for disclosure and specific accounting requirements. Clause 43 obliges the CDIC and its wholly-owned subsidiaries to conform with the requirements for disclosure of information that apply to corporations whose securities are offered for sale to the public in Canada. Mr. Speaker, as Hon. Members are aware, the CDIC has been following this policy for some time by publishing quarterly and annual financial statements for itself and its subsidiaries. This form of full and rapid disclosure of the general productivity of the companies is important for Parliament and also for the general public. It also acts as an incentive for those directing the companies to perform satisfactorily, since the results of their performance are published within a relatively short time. [English]
Clause 45 will transfer the Government's shares in CDC to CDIC. This will replace the requirement in the existing CDC Act-which is being repealed by this Bill-that the Government's shares be registered in the name of the Minister of Finance.
The final segment of Bill C-25 deals with Teleglobe Canada. Clause 47 transfers Teleglobe Canada to CDIC and clarifies the shareholder-subsidiary relationship between CDIC and Teleglobe. The final two clauses of the Bill contain the necessary amendments to the Teleglobe Canada Act. Because of the unique policy role of Teleglobe and its strategic importance to Canadian telecommunications policy, parliamentary approval will have to be obtained for any future sale of Teleglobe.
Members will see that this is an important piece of legislation. It is designed to deal in a realistic, sensible fashion with an issue that concerns all-the sound management of government investments in commercially-oriented companies and the sale of those investments when the commercial opportunity arises. In cases such as Canadair and de Havilland, it is the investment itself-that is to say, the decision to maintain these companies-which is the public policy choice. But the day to day operations of those companies must be based on commercial principles. The policy decision is that they exist, but they can only exist in the long term if they become commercially viable. They can only become so by following commercial routes.

At the same time, Mr. Speaker, they shall continue to be accountable to Parliament. They shall do so through the CDIC, which will publish quarterly financial statements and annually submit investment budget summaries and general
plans for the CDIC and its subsidiaries, all of which underlines the Government's commitment to ensure that Parliament knows what is going on and that responsibility areas are clearly defined.
The financial statements and summaries of investment budgets and general plans of the CDIC will be available as reference documents to the committees of Parliament concerned, which may summon the Minister responsible for the CDIC and senior administrators of the CDIC and its subsidiaries, to ask for clarification. This means that in addition to conforming to the principle of full and rapid disclosure of financial results, general plans and investment budgets, the CDIC and its subsidiaries will be at the disposal of Parliament. [English]
Experience has shown that government needs an effective vehicle for the management and subsequent sale of commercial-type assets it has acquired at one time or another. There is a need for a clear and on-going shareholder presence to ensure adherence to commercial standards. CDIC, I believe, can be that vehicle. Indeed, it is already performing these responsibilities in a business like manner under the supervision of a board of directors made up of eminent Canadians.

Hon. Members may not agree with certain investments made by the Government, but I think the House will agree that all our political parties, both on the federal and on the provincial scene, have traditionally accepted the principle that in special circumstances, Government intervention is needed to protect the national interest or even to protect regional interests. It is unlikely that this approach will be abandoned in future, at a time when our economy is going through a difficult stage towards recovery and renewal.
In the present economic situation, the CDIC can play a major role in ensuring that these investments are administered as efficiently as possible, that they are privatized as soon as a commercially attractive opportunity arises, and that these activities are carried out in accordance with strict requirements for accountability and public disclosure of any information requested by Canadians.
Mr. Speaker, Bill C-25 meets these objectives and meets this requirement, and I hope we can count on the co-operation of all the Members of this House for approval of the Bill before the House adjourns for the summer.


Mr. Waddell:: I rise on a point of order. I am sorry, Mr. Speaker, I should know this, but perhaps you could tell me if there are questions and comments after the first round?


The Acting Speaker (Mr. Herbert):: There is no provision for a question period following the speeches of the first three lead-off speakers.
May 28, 1984


Mr. John Thomson (Calgary South):: Mr. Speaker, here we go again with the sticky hands of government. Here is another piece of legislation to demonstrate the sticky hands of the Liberal Government. If there was ever a case where we were letting the foxes in with the chickens, this has to be it. Can you imagine letting Senator Austin, Maurice Strong and Joel Bell run footloose and fancy free with $4 billion worth of public assets? I suppose we could entitle this piece of legislation "the interventionists". That would be an appropriate title for the Bill.
If the Government has a problem, rather than dealing with the problem, rather than exercising any political will, the Government simply creates a new Crown corporation. That is the solution to all problems in so far as the Liberal Government is concerned. If we have a problem, let us not deal with it. Let us not exercise any political will. Let us create a new Crown corporation. And this is the granddaddy of them all; $4 billion for a brand, spanking-new CDIC. It is the solution to Canadair, de Havilland, Eldorado, Teleglobe and Massey-Fer-guson. I could go on talking for a week about the Government's Bill to continue the Canada Development Investment Corporation or, as it is often referred to, the CDIC, and its deficiencies.
I really do not know where to begin because there is so much I would like to say on this Bill and on CDIC generally. However, I have decided to limit my talk today to four points. The First point is with respect to the origins of CDIC; second is the CDIC's proposed mandate; third is the serious defects which we have identified in Bill C-25; and fourth, the relationship between Bill C-25, which is before us today, and Bill C-24, the Government's Crown corporation Bill, on which we have just concluded second reading debate under government closure.
CDIC was incorporated under the Canada Business Corporations Act in May of 1982, but the roots of CDIC reach back much farther, back to the failure of the Canada Development Corporation. And let us not confuse the Canada Development Investment Corporation with the Canada Development Corporation. The creation of CDIC represented an admission of defeat by the Government. It represented the culmination of a decade-long struggle between the Government on the one hand and CDC management and the business community on the other. The Government wanted to play both sides of the street with CDC. It said it wanted a commercial operation with control residing with the private shareholders. However, when the occasion arose, the Government tried to use the CDC to bail out companies. It did not have any respect for the private investor. It was prepared to put private shareholders' money at risk in order to pursue its own political purposes. When the CDC resisted the pressure of the Government, the Government cast around looking for another vehicle of intervention. The result was the CDIC.
However, it was not quite that simple. I would like to go through some of the steps which the Government followed in setting up the CDIC to demonstrate two things: first, that the Government really had no strategy for the CDIC. The Govern-
Development Investment Corporations Act ment's explanation of the need for the CDIC is really an ex post facto justification for a series of haphazard, accidental actions. Second, some of its actions were and remain today legally questionable.
As I said earlier, Mr. Speaker, the CDIC was incorporated on May 26, 1982. It was incorporated by Robert James Hamilton, a Toronto lawyer. The sole shareholder of the company was Mr. A. H. Hampson-Tony Hampson-the President and Chief Executive Officer of the CDIC. On September 15, 1982 Tony Hampson gave his shares in the CDIC to the federal Government. The grateful Government accepted the shares and, voila, we have one more Crown corporation! On the same date, the Government made CDIC an agent of Her Majesty by Order in Council under the Government companies operation Act. This means that the CDIC was given a wide range of privileges and immunities not available to private sector corporations, such as immunity from the federal Government's own Combines Investigation Act, and if allowed to borrow money it does so with the full faith and credit of Her Majesty.
Let us stop right here for a moment, Mr. Speaker, and review what has happened. We have a brand-new corporation here, an agent of Her Majesty, and Parliament has not even been consulted. We have a new corporation. We have given it an agent of Her Majesty's status, made it immune to the Government's own Combines Investigation Act, and Parliament has not even been consulted. Why was Parliament not consulted in the creation of this corporation? Why the deviousness? Why not bring the whole thing into the light of day and ask Parliament to review the new corporation in the same way as Parliament reviewed the Petro-Canada Act in 1972 to 1975, or the new Air Canada Act in 1977? Why the secrecy? Why not put it out on the table and let us have a public debate on the creation of CDIC? Why do we create the CDIC without parliamentary approval and the approval of this Chamber? What is the Government trying to hide?
It does not stop there, Mr. Speaker. In September of 1982 the shares of Eldorado Nuclear Limited were transferred to the CDIC, again by Order in Council. However, we will contend, Mr. Speaker, that the Government acted illegally in doing so. We contend that under one Act of Parliament, Appropriation Act, No. 4, 1980-1981, and possibly a second Act of Parliament, Section 10 of the Atomic Energy Control Act, CDIC was precluded from holding the shares of Eldorado. The issued and oustanding shares could only have been held by the Ministry of Energy, Mines and Resources. The shares were illegally transferred by this Government by Order in Council to this new corporation, CDIC. In doing so, the Government acted in total contempt of this Parliament and the people of Canada. Legally, the Government acted improperly and in total disregard of one and possibly two Acts of this House. Clause 42(2) of Bill C-25 is designed to set part of this right but, of course, it does this retroactively.
And it did not stop there; oh, no! The Government was not finished yet. CDIC needed cash for working capital but had no revenues. The Government began to consider its options.

May 28, 1984
Development Investment Corporations Act
Could it charge a management fee to the subsidiaries? Maybe. Could it force one of the corporations to declare a dividend to CDIC? Yes. The Government decided that Teleglobe had lots of cash so it would force Teleglobe to supply the money. However, there was a problem in that Teleglobe does not have a share structure, so there were no shares for CDIC to hold. Under the Teleglobe Canada Act dividends were payable directly to the Consolidated Revenue Fund. That put the kibosh on that.
The Government could borrow the money only if Parliament approved and it did not want to subject the CDIC to a debate in Parliament at that time. A debate on the creation of CDIC in Parliament would almost be democratic, would it not? Rather, the Government resorted to a seldom used clause, Section 72 of the Financial Administration Act, to give CDIC a 12-month loan of $500,000. In the 30 years since 1952, Section 72 of the Financial Administration Act has been used only twice.
The amount of $500,000 was not enough to satisfy the appetite of CDIC. It would not even pay the salaries and they required more money. Therefore, the Government performed a complex share conversion with Eldorado which magically netted the CDIC $10 million. There were two problems. The shares owned by Her Majesty could not be sold or transferred without Her Majesty's Governor in Council permission. Yet we can find no evidence of any permission being given. More importantly, the cash from the transaction should have gone to the Consolidated Revenue Fund rather than into CDIC. However, the money finally ended up in CDIC. In our view, this is totally contrary to the Financial Administration Act.
Why is Bill C-25 before the House now, almost two years after its creation? Has the Government all of a sudden recognized the error of its ways and repented? No. CDIC needs a lot more money and cannot get it until its status is changed. The Government had to bring this legislation forward at this time in order to fund CDIC. There was no alternative to bringing the legislation forward so that CDIC can borrow up to $3 billion and raise equity of $1 billion.
Why should the House look favourably upon Bill C-25 when the Government has ignored and avoided Parliament for two years while the CDIC was set up, financed and operating? Second, the Government has ignored, twisted or subverted Acts of Parliament. Third, the Government only comes to Parliament now in desperation when it has no other choice. For the reasons I have cited, Mr. Speaker, C-25 offends me deeply. I feel as though I am being asked to be an accessory after the fact to legitimize the Government's very questionable past dealings.
I will now turn to CDIC's proposed mandate. In his opening remarks the Minister made much of the fact that CDIC was an instrument to privatize certain corporations. It has had two years to come to grips with the problem. I have not seen one single corporation privatized or even close to it. The Government says it needs to wait until the appropriate time to sell
these corporations. There will never be an appropriate time to sell these corporations because they are not saleable. They are all dogs except for Teleglobe. Teleglobe is the only viable corporation among them.


Mr. Whelan:: We privatized grain elevators in Alberta and the Alberta Government bought them.


John William Thomson: I beg your pardon? Perhaps the Minister will have his chance to let us have the benefit of his great wisdom on this Bill.


Mr. Taylor:: He talks better sitting down.


An Hon. Member:: He just gave it.


John William Thomson: The problem is not the question of privatization, Mr. Speaker. All the Government really wants to do is create more and more Crown corporations. That is what CDIC is designed to do. Under Clause 11 of Bill C-25, the CDIC is to hold and manage assets, to effect divestitures and to make investments. In so doing, it has all the legal powers of an actual person. That is a very wide mandate, Mr. Speaker. I would characterize it as a blank cheque to do anything.
What does the Government intend for CDIC? That depends upon whether you listen to the Chairman, the President, or Senator Jack Austin. They all have a different story to tell about what they think CDIC should do. From his speech to students at York University, it would appear that the Chairman of CDIC, Mr. Maurice Strong, sees the CDIC as an instrument of massive intervention into the economy. His blithe assumption that only the Government can respond to new economic challenges through ever greater involvement in the economy is amazing. Why do we have a private sector? If his view is that only the Government can respond, then why have we 1.5 million people out of work in the country today? Did the Government solve that problem? The problem is government intervention. Government intervention is directly and solely accountable for the 1.5 million people unemployed today.
From other statements and speeches of Mr. Strong we learned that he envisages CDIC as a merchant banker, a holding company and, in his words, a much needed mechanism to buy into strategically important corporate bail-out cases. Publicly the Minister responsible tends to emphasize the management and divestiture aspects of CDIC.
Mr. Joel Bell, the President of the company, sees a wide mandate for the company which includes international joint ventures that would give CDIC access to foreign technology and markets. That sounds wonderful. These gentlemen are very clever at crafting the words. They craft the words to mislead public opinion. It sounds great to say that CDIC is going to have access to foreign technology and markets.
In an article in The Globe and Mail Mr. Bell played down the divestiture aspect of CDIC's mandate. He said that divestiture talk was premature and that, in any event, the CDIC may want to retain a stake in the companies for a considerable period of time. Which one of these stories can we believe? The
May 28, 1984

mandate is so broad that the Government is free to do anything it wants. All three of these fellows are free to do whatever they want at any particular point in time.
I obtained a copy of the articles of incorporation of the CDIC in the hope that they would give me a clue as to what it intended to do. I thought that the incorporators might be a little more forthcoming, effusive and informative in the articles than they are in the Bill itself. I thought that the articles would be the true test of the incorporators' intent. What I found was that under the clause entitled "Restrictions on Business the Corporation may Carry on", the incorporators typed in one word. That word is "none". There are no restrictions at all. This corporation can do whatever it wants, regardless of the words that are written in the Bill.
Today Eldorado and Teleglobe; tomorrow Maislin; the next day Power, Argus Corporation or a shoe factory in Argentina. Who knows?
Even more instructive was the Order in Council attached to the articles of incorporation. I assume that this represents Cabinet's real view of the mandate of the corporation. Allow me to quote from the "Objects" part of the Order in Council. It reads;
(A)	To assist in the creation or development of businesses, resources, properties and industries of Canada;
(B)	To expand, widen and develop opportunities for Canadians to participate in the economic development of Canada through the application of their skills and capital in any activities carried on by the corporation.
(C)	To invest in the shares or securities of any corporation owning property or carrying on business related to the economic interests of Canada:
(D)	To invest in ventures or enterprises, including the acquisition of property, likely to benefit Canada: and,
(E)	To carry out all activities in the best interests of Canada, operating in a commercial manner.
That is like something sent from heaven. Those objects allow it to do anything it wants. This comes from an Order in Council, yet there is no mention of divestiture or privatization. It does not mention anything about operating these companies in a good commercial manner like the Minister said it would. It only says "to acquire". Make no mistake that CDIC is an instrument of acquisition. It is supposed to be acquisition in the best interest of the people of Canada, but it is another $3 billion down the tube or perhaps more. That is only a start.
It is fascinating to realize that divesting is not even mentioned once in those objectives. However, "assist" is mentioned twice, "invest" is mentioned twice and to "expand, widen and develop" is mentioned once. There is no mention of the word "divest".
What has government ownership really accomplished for us in Canada today? Are we better off for it? Are we better off for more government intervention? Are we better off for more and more central planning? Do you really believe, Mr.Speak-er, that politicians or governments can create jobs through government ownership? We see only more bureaucracy and more deficit. We on this side of the House do not believe that the ills of the world are solved by more government interven-
Development Investment Corporations Act tion. Even if we did, the current personalities associated with the CDIC have not demonstrated any particular gift for management that I am aware of. The evidence cries out for less government intervention, not more. Bill C-25, the CDIC and the current cast of characters at the CDIC are all going the wrong way.
I spoke earlier of the Government's failure with the Canada Development Corporation. One of the reasons for that failure was the broad and vague mandate given to the corporation under Section 6 of the Canada Development Corporation Act. Apparently having learned nothing from that experience, the Government is asking us to repeat the same folly through Bill C-25.
My colleagues and I in the Progressive Conservative Party believe that one of the solutions to the Crown corporation problem is a more clear and precise definition of the mandates and objectives of Crown corporations. Bill C-25 violates that very basic and fundamental principle.
The first principle in coming to grips with Crown corporations is disclosure. The Government has made much of the standards of public disclosure that the CDIC will have to submit. If the business plans and financial statements submitted thus far by the CDIC are an example of these new high standards of public disclosure, we want no part of it. If the Government will continue simply to wipe out important portions of the plans and budgets, as Bill C-25 would let it do, we want no part of it. Parliament and the people of Canada have a right to know. The public's right to know would be seriously eroded under Bill C-25.
Let me refer to Clause 41(4) of the Bill. It reads:
Sections 24 to 26 of the Statutory Instruments Act do not apply-
-in respect of directives and certain orders made under C-25. What are Sections 24 to 26? Section 24 provides access for the public to such statutory instruments. Section 25 allows the public, for a fee, to copy and take away copies of these orders and directives. Section 26 provides for permanent reference of these directives and orders to the appropriate standing committee of the House of Commons or Senate.
In one contemptuous swoop, the Government wipes out a large portion of Parliament's and the public's ability to know where the taxpayers' money is being spent by CDIC. Yet the Government has the temerity to say that CDIC will be subject to a new and rigorous regime of public disclosure. What unmitigated gall! What contempt for the intelligence of Members of Parliament! The Government's only concern is money, money, money.
According to Clause 26 of Bill C-25, the CDIC would be able to borrow up to $3 billion. That is roughly one-tenth of the Government's yearly deficit. It is $3 billion that the CDIC could raise as a direct charge against the Consolidated Revenue Fund and with no need for any further approval whatsoever from Parliament. It boggles the mind.
As if that were not enough, Bill C-25 would allow the Government to raise that debt ceiling to infinity by a $1 item in the Appropriations Act. I point out that this provision is a

May 28, 1984
Development Investment Corporations Act
clever but transparent way to circumvent the Speaker's ruling of June 12, 1981 on matters such as this.
The Minister responsible for the CDIC issued a press release that makes much of the control Parliament is to have over any future acquisitions by CDIC. But where in Bill C-25 is that control provided for? Clause 34 provides for control by the Cabinet by secret Order in Council, but I see no control by Parliament. It is simply not there. The Government has conveniently forgotten it.
My final point refers to the relationship between Bill C-25 which is before us today and Bill C-24, the Government's Crown corporations bill, tabled on March 15. When the Government presented Bill C-24, there was much fanfare about how it would resolve the problems of control, direction and accountability of Crown corporations. This was to have been the solution to the problem. After nearly 14 years of study, Bill C-24 had finally found a solution.
If Bill C-24 is so great and will do everything the Government says that it is supposed to do, why does it not apply to the CDIC? The CDIC is a Crown corporation, is it not? If it is good enough for Air Canada, for the CNR or Petro-Canada, if Bill C-24 is good enough to put them under a regime of accountability, why is it not good enough for the CDIC?
According to Bill C-24, the chief executive officers of Crown corporations would be appointed by Cabinet. Under bill C-25, the chief executive officer of CDIC would be appointed by the board of directors.
Under bill C-24, the chairman of Crown corporations would be appointed by Cabinet. Under Bill C-25, the chairman of the CDIC would be elected by the board of directors. Bill C-24, in Clause 98, says that it is to apply in the event of any inconsistency between it and other acts of Parliament. In the case of CDIC, which applies? Which route is the Government asking Parliament to approve?
Second, Bill C-24 was supposed to be the framework for all Crown corporations. Yet there are at least half a dozen provisions within Bill C-25 that would exempt the CDIC, or allow the Cabinet to exempt the CDIC, from Bill C-24. Bill C-24 and Bill C-25 were drafted at about the same time, probably drafted by the same person, reviewed and approved by Cabinet at the same time and brought before the House at roughly the same time. Why the differences? Why the inconsistencies? Has the Government not made up its mind?
Is the Government trying to play both sides of the street? Have the Minister and CDIC management made a special deal with the Prime Minister (Mr. Trudeau)? What is going on here? How can the Government expect Parliament to treat these two Bills seriously when it is obvious that the Government does not know which way it is going? Since Cabinet solidarity on the Crown corporation issue is so obviously fragmented, one of the Ministers, either the one responsible for Bill C-24 or the one responsible for Bill C-25, should resign because they differ substantially as to the regime that should exist.
In closing, Mr. Speaker, I would like to say that we on this side have no confidence or expectation that the CDIC will be anything other than another unmitigated disaster. Contrary to the recommendations of the Public Accounts Committee on Canadair, the CDIC will downgrade the boards and managements of the individual corporations. The chief executive officers will be treated as divisional vice-presidents. Does the Government think this will foster accountability? Hardly, Mr. Speaker.
The CDIC is defended on the grounds that it will resolve the problems these "commercial" corporations have had in dealing with Government. Has anyone stopped to ask why the Government need be involved in commercial enterprises? The CDIC is supposed to make up for a range of structural deficiencies in the Government. Why do we not fix those structural deficiencies rather than creating another bureaucratic layer? Why do we not cure the disease rather than the symptoms?
One day the 19 member board at CDIC-yes, 19 members, Mr. Speaker-that 19-member collection of Liberal financiers, door knockers and campaigners, will oversee issues and events relating to international telecommunications; the next day it will be uranium mining and refining; the next day the airframe industry; the next the fishing industry; the next the farm implements business; and on and on. You cannot expect anything more than another series of disasters a la Canadair and de Havilland. By putting this Bill before the people of Canada, we are asking for more intervention and more throwing good money after bad.
When I addressed the House on Bill C-24 I found the proper place for the Government to put that piece of legislation. If the bin is not too cramped with other useless pieces of bogus Bills, the Government can add Bill C-25 to the pile. And so, Mr. Speaker, we intend to resist this Bill with all of the strength and energy we can summon.


Ian Gardiner Waddell: Mr. Speaker, when I was listening to the Hon. Member for Calgary South (Mr. Thomson) I was thinking about Sir John A. Macdonald.
I am a great admirer of Sir John. I was born in Scotland and like Sir John came to Canada at age five and became a barrister. But there the comparisons end. He, of course, was a Conservative and I am a New Democrat.


Sinclair McKnight Stevens: You are a socialist.


Ian Gardiner Waddell: If Sir John had heard the speech given by the Hon. Member for Calgary South, I think he would spin in his grave. I think Sir John and that kind of Conservative realizes that there is a mixed economy in Canada and there is a kind of a role between government and business in its own peculiar Canadian way. I agree with some of the criticisms made by the Hon. Member for Calgary South about this Bill, but for him government is like a disease. It seems to me there is a much more positive way of approaching the criticism of this Bill which would serve the public good in the end much better than this kind of negative and quite reactionary approach.
May 28, 1984


Sinclair McKnight Stevens: There is the old alliance of the NDP and Liberals.


Ian Gardiner Waddell: I want to make a few remarks from the NDP view point on this Bill.


Sinclair McKnight Stevens: You mean from the socialist point of view.


Ian Gardiner Waddell: I keep hearing the Conservatives yelling out "socialist". They are like children. It is as though they have no thoughts. They are afraid. Sure, I am socialist, a social democrat-whatever you want to call it. That is why they are falling so rapidly in the public opinion polls these days. What about dealing with policy and with ideas?


Sinclair McKnight Stevens: How are you doing in the polls?


Ian Gardiner Waddell: They should stop dealing like children with meaningless slogans.
Let me deal with the CDIC. The CDIC is the Government's new, giant holding company. It oversees about $10 billion of Crown commercial assets including Canadair, de Havilland and the other companies, Mr. Speaker, that you have heard of. It is true what we are debating today is really a fait accompli. Basically CDIC was created in the same way its chief Minister, Senator Jack Austin, was created-that is, without the authority of Parliament. Maybe I should make some apologies to his mother. I suppose she had a role. CDIC was created some time ago. Senator Austin himself is an affable, hardworking man. He is from Vancouver. He once stood for Parliament in Vancouver-Kingsway, which is my riding. Needless to day, he was defeated.
Cabinet created CDIC two years ago. This Bill is to legitimize its birth. If Senator Austin wants to legitimize himself and become answerable for this Bill to the House of Commons, I suggest he run against me in Vancouver-Kingsway in the upcoming election. I think he will probably be fairly easy to beat. He will be as easy to beat as my old friend, Jerry Yanover, who is in hospital today and who is probably watching this on television, is at shuffleboard.
CDIC is no ordinary Crown corporation, Mr. Speaker. It has potential ramifications for the economy. In a sense I think the Hon. Member for Calgary South was hinting, and I agree with him about this, that the Government is really speaking from both sides of its mouth concerning this corporation. On the one side the Government is saying privatize, and then the other the Government is saying let us expand into more Crown corporations; at least, the Bill opens up the way for that. The Minister did not make it clear in his speech. He simply said that there is no contradiction. But the fact is that the Liberals have mismanaged Crown corporations. Canadair and de Havilland are two good examples. That is why we have this Bill to try and clean them up. Second, the Government is being inconsistent in its future role with respect to what Crown corporations should do.
I want to try and analyze why the Government is acting this way. It seems to me that you have to look at what the Government is trying to do in this Bill. It talks about account-
Development Investment Corporations Act
ability. The President of CDIC, Mr. Joel Bell, wrote a letter to me on May 9, 1984. Let me read part of it into the record:
We made certain commitments at the outset which I hope you will agree we have lived up to. As you know, we were faced with difficult situations at several companies for which we were made responsible. Our approach has been to carry out a thorough review of the troubled companies, identify the problems and actions needed and provide full reports on them, including quarterly financial reports. We have made regular disclosure of our performance and this report is part of our effort to provide accountability to Parliament and the public. The report outlines the corrective actions we have taken to date and points to our plans for the future.
There is Mr. Bell talking about taking over troubled companies, the problems they have had and the mismanagement they have had to deal with, and he is suggesting in his letter to me and to other Members of Parliament that what he proposes to do is to have accountability. That is what we have to focus on in this Bill.
I want to say something about the people involved, which is a point the Hon. Member from Calgary South mentioned. Usually one does not talk about people. Public servants are public servants. We assume that they are competent and non-partisan. The people who are involved in CDIC are rather interesting. As a matter of fact, they are the cream of the movers and shakers of the "Trudeau" bureaucratic era.
The Chairman of the CDIC is Maurice Strong. He is the ultimate businessman/bureaucrat in Canada. He was the head of the Power Corporation, then the head of CIDA and also first Chairman of Petro-Canada. Indeed, Petro-Canada was partly Maurice Strong's idea and partly Jack Austin's idea, who was then Deputy Minister of Energy. In fact, it was partly our idea in pressing for it in the minority Parliament from 1972 to 1974 in the House of Commons. The President of Petro-Canada was Bill Hopper, another immensely competent public servant. Who was his assistant? It was Joel Bell. It is all tied in; it all links in. The Hon. Member for Calgary South was right.
On March 30 of this year, Greg Weston, a journalist for The Citizen, wrote an article about how it all fits in. He wrote;
There must be days when Senator Jack Austin muses to himself that with friends like Pierre Trudeau, who needs a parliamentary democracy?
I suppose Mr. Bell and Mr. Strong feel the same way. Indeed, CDIC is a vehicle steered by the elite. They are unelected and unanswerable. They are a clique of superbureaucrats and Liberal outsiders.


Arnold John Malone: Just like socialists.


Ian Gardiner Waddell: They are not like socialists. They are quite different. Modern socialism is different from that.
We must remember that by Cabinet order CDIC was incorporated as a private company. Then it was sold to the Government for $1 the same day. By Cabinet order, the shares of the Government in the old Canada Development Corporation went to the CDIC. By Cabinet order, CDIC received a $500,000 interest-free loan. By further Cabinet orders, CDIC

May 28, 1984
Development Investment Corporations Act
was given control over Canadair, de Havilland, Eldorado Nuclear and the Government's stake in Massey-Ferguson.
I should like to refer to an article written by Michael Valpy who is now in Africa. He used to write the Ottawa column for The Globe and Mail. In 1983, when I do not think many people were watching or reading in great detail columns such as this one, Mr. Valpy, to his credit, wrote in detail about what was happening with the CDIC. The Hon. Member for Calgary South and others will agree with me. Michael Valpy was saying that what was happening with the CDIC Bill was one of the most important steps taken by the Government of Canada because it had long-term implications.
As I suggested, CDIC was fundamentally set up by a Cabinet order. What is the matter with that? There is nothing illegal about it, that is true. However, we have to look at the manner in which it is being governed, in which it is being set up and so on. It is really a watchdog for other Crown corporations. Actually, it is more than that. It is a giant holding company to control and bail out other Crown corporations. It is our role in Parliament to ask who will be the watchdog of the watchdog. It is supposed to be us. Therefore we should focus upon the accountability of this giant corporation.
Once we pass this Bill we will give Cabinet authority to give basically $4 billion of spending and borrowing power to CDIC. As the last speaker pointed out, that is a huge chunk of money, a big percentage of the Government's budget and deficit. As the Minister said, it is true that under this Bill corporate plans and capital budgets for CDIC and its subsidiaries must be presented to Parliament. However, they can be amended at any time by Cabinet. Also, as the Minister said and as the Bill indicates, it is true that Members of Parliament will receive quarterly reports. I have one such report in my hand. I believe it is one of the first reports from CDIC. These reports simply let us know every three months how much money has already been spent by the corporation.
Canadair came to Parliament three times in the past 18 months to ask for $750 million. In each case almost all the money had already been spent or was already committed. I am drawing some patterns or some similarities here. We receive reports after the money has practically been spent or committed.
We are told that we will have full and timely disclosure. I have heard that said by Senator Austin, indirectly by the Minister today and in the briefing for this particular Bill. However, if material is commercially detrimental to CDIC or its subsidiaries, we will not receive it. I am not saying that that is a bad principle. Certainly some of the information Crown corporations need to keep private cannot be made public. That may have to happen, but we must weigh it when we walk about the whole area of accountability.
I should like to quote from a consultants' report which was presented to Parliament. If we are to say that such a consultants' report cannot be released because it may hurt the company commercially, we are deprived of information. The report concerned Canadair in 1982, at which time we were debating
whether we should give it another $200 million. The consultants' report, which we did not see, read in part:
The successful public relations program recently used to camouflage the $200 million of additional subsidy to Canadair makes it appropriate for this report to state bluntly the current realities:
There is no chance for recovering the investment in the Challenger (jet
program).
The aircraft adds little of significance to the repertoire of Canadian
manufacturing or technological capabilities.
Rather than a triumph, the Challenger is simply another executive jet the
world could do without.
The report concluded:
In short, selling executive toys at $11 million each is not a business government should be in.
The Conservatives, to their credit, obtained that report through the Access to Information Act 13 months later, after we in Parliament had approved an additional $440 million for Canadair. I am not saying that Canadair is a bad program. I am not saying that I agree with the consultants' report. I am not saying that Parliament should not have given that money. However, what I am saying is that there is a problem in the sense of keeping such information private under the guise of its being commercially detrimental to the company. Then we in Parliament may not be able to examine the affairs of these companies, there may not be any real accountability at all, and mistakes can be made.
We have to look at how these companies are audited and at the role of the Auditor General. I would like to give two examples of why we need accountability. The first is de Havilland, the aircraft company in Toronto which makes Dash-7s and Dash-8s. On May 3, 1984, after talking with some workers in the de Havilland shop in Toronto, I found that in 1981 there were 3,500 employees on the shop floor and 1,900 management employees. In 1984 there are 1,300 floor employees and 1,400 management employees. The union felt there was a kind of slush fund for management retirees and nothing for the workers except layoffs. I asked the Prime Minister (Mr. Trudeau) about this. We were trying to find out if the Government was going to give more money, as it said, to de Havilland. We did not necessarily object to that, but at the same time more jobs were going to be lost in de Havilland, and we did object to that. This is what accountability is about.
I have another example in Canadair of Montreal. A government task force report in 1981 showed that the company's liabilities would have to increase from $150 million to $1.2 billion. Then there was an addendum to their report, that the GE engine they purchased was misrepresented by management. What was expected to be a $24 million increase in the cost of purchasing the GE engine turned out to be a $24 million a year increase. Thus the total exposure of the company was in excess of $1.3 billion.
Then in 1982 the task force was asked to determine if Canadair would exceed the $1.38 billion, as it was then, before the end of 1983. The task force report, hand-delivered to the Cabinet, said a breach would occur because the company's
May 28, 1984

projections were overly optimistic. In fact, they were unachievable. World demand had dropped so that new orders were non-existent. The task force also said that this did not include interest on loan guarantees which might escalate the cost to as much as $2.3 billion.
Without going into all of it, there is a long history of the Commons committee basically being misled by Canadair management and by the Government in not being open with us. We in the Opposition are not fools. We understand that Senator Austin and Joel Bell and Maurice Strong have a big job to do to clean up the mismanagement of these corporations. It probably was not a pleasant job. Canadians are sympathetic, I think. We would like to see de Havilland and Canadair work. When I make my criticisms here and in committee, I am trying to do so in a positive way so that we will have accountability. It is pretty obvious why we need accountability. Senator Austin will not be responsible to the House of Commons. We will not be able to get up and ask him questions daily because he is in the Senate. Without deprecating in any way the Opposition in the Senate, let me say I do not think it is as strong as it is in the House of Commons, to put it mildly. We need a balance between efficiency and accountability in the CIDC.
There are other matters concerning this Bill that we want to raise in committee, Mr. Speaker. For example, the Bill gives broad powers to hold and manage assets, effect divestitures of assets and make investments, and provide advice on matters pertaining to business and industrial issues in Canada. That is pretty broad and just what exactly does it mean? We want to find out in committee, and I put the Minister on notice.
The Bill says that the CDIC's investments and divestments will be subject to Cabinet approval, not Parliament's, although authorized Cabinet directives will have to be tabled in Parliament within 15 days, I believe. We would have to look at that provision. The legislation also says the CDIC must follow in principle the same disclosure rules that govern publicly-traded private companies. I think this may go a little beyond publicly-traded companies in terms of disclosure. But we have to ask ourselves if that is enough for government corporation taking over some failures which have cost the taxpayers a large amount of money. There have been allegations of mismanagement and the Canadian people have lost some faith in the Government.
We in the NDP are in favour of Crown corporations, Mr. Speaker. They are part of Canadian life. There is a mixed economy in Canada and we feel Crown corporations have worked very well for people in the past. It is nonsense just to stand up, as many Conservatives do, and rail against Crown corporations. That does not provide the answers. I see the Minister of Agriculture (Mr. Whelan) is here. I was talking to his brother Ed. He was telling me a little about the experience of Crown corporations in Saskatchewan, from a critical point of view.	*
Our problem in the NDP is that the federal Liberal Government is starting to give Crown corporations a bad name. We
Development Investment Corporations Act
have had Crown corporations in Canada for good reasons. We are a large country geographically and a small country in population. We were at one time very dependent on Britain and we are now very dependent on the United States. To develop our independence as a nation we have had to use Crown corporations and mix government and private enterprise. But we have to give Crown corporations a clear mandate. That is the key. We have to define what we want them to do. We have to see how the corporation is performing its mandate. In the case of CDIC, we have to ask if the right management is in place. If not, we have to have the ability to change the management. We have to have an on-going review of the Crown corporations, their mandate and performance. It seems to me that would make sense. We cannot look at them solely in terms of financial factors, although in certain Crown corporations that may be the only way to look at them. There may be social factors involved. For example, in order to keep an aircraft industry with all its high technology and job ramifications, we may have to lose money on a Crown corporation. It is nonsense to say that we are going to sell Canadair and de Havilland. Who is going to buy them? We should not go around bailing out companies, wiping out their debt and then selling them off to the private sector. That is not the way to operate. Obviously, we really need a Crown corporation strategy.
How are we to obtain this scrutiny and accountability as I have defined it, Mr. Speaker? We will need a standing committee of this House on Crown corporations. It will have to be a bit of a breakthrough. It will have to be like an American Senate committee in that it will have good staff, some real power and a little more relaxed party discipline. There would be automatic referral to the committee. We have to look at the mandate of Crown corporations as I have defined it. We have to look at ways which will provide public accountability and scrutiny. I see this happening through a completely revamped committee. As I said, there are Hon. Members of the House who have much more experience than I in committees and I invite those Hon. Members to take this idea up and advance it before the House in this debate.
I think we must go so far as to have some of the directors of the Crown corporation approved by that committee. We cannot continue to have a small, elite group of people on those boards, as has been so frequent under the Prime Minister's Government. On the other hand, we cannot continue to have party hacks and patronage appointments on those boards because we will not have Crown corporations that are run properly. The boards of directors will not be opened up to consumers, to native people, to women and to all groups of society that have not been represented on boards of Crown corporations in the past and should have been.
We must think about worker participation in Crown corporations. We must think of Crown corporations as being on the leading edge of the new ways of making Canadian workers feel less alienated than they feel now. I have strayed a bit from the

May 28, 1984
Development Investment Corporations Act
CDIC but those are the kinds of things we should look at in the future.
Finally, the Government has disappointed me. The Hon. Member for Calgary South will agree that the Government really has no firm objective for CDIC. Did Government Members create the CDIC to privatize or to vastly expand the role of government in the economy? Perhaps they are juggling and really do not know what they are doing. If they are juggling, I hope they find out what they are doing pretty quickly because there are some vast sums of money involved.
I would like to see the CDIC used for economic planning for Canada. I would like to see it plan for a full employment strategy so that by the year 1990 we could have full employment in Canada. In 1960 President Kennedy said: "We Americans are going to put a man on the moon by the end of the decade". And they did. I think that our goal must be full employment. We can define the meaning of full employment and we can define a strategy to have full employment. We may have to use Crown corporations and particularly the CDIC in a creative way in order to move toward that goal. That issue is not discussed in this Bill and the Bill seems to have no such purpose.
The Hon. Member for Calgary Centre (Mr. Andre) will be surprised when I say this, but I think that in a sense this Bill seems to be coming from a little old-time socialism. The bill calls for a little bit of centralization and is a bit elitist. New socialism is built from the ground up, is decentralized and is opened up to the public. When Members yell at us about socialism, they should know what they are talking about.


Mr. Andre:: When did we say we were against socialism?


Ian Gardiner Waddell: You will, my friend.
In conclusion, I shall return to the problem as I see it. I notice that the American Ambassador to Canada was quoted in today's Citizen as follows:
Saying the only practical choices for Canada's prime minister after the next election are Brian Mulroney, John Turner or Jean Chretien, Robinson said all three understand business and defence well enough to swing Canadian policies more into line with the Reagan administration's thinking.
Perhaps in the future we will have complete privatization, deregulation and a Bill Bennett type of economics in the federal Government.


Mr. Blenkarn:: Good stuff.


Ian Gardiner Waddell: My friend on the Conservative side has said that that is good stuff. That is not the way we see it. We in the NDP feel that we could use this Bill in a positive way so that we may have a Crown corporation that will put good management into Canadair and de Havilland and we may use Canadian technology. Those aircraft companies have proud histories and we are proud of what they have done in the past. They have good workers. To the extent that Messrs. Bell, Strong and Austin would make the management of those companies better, we are all for it. However, to the extent that a small elite would still manage these companies away from the public eye-and being in the public eye would mean better management in the long run-we are against it. We propose to make amendments to the Bill in committee.
In this country, Mr. Speaker, we have seen an absence of debate on the role of the public sector and on the role of Crown corporations. We have heard a lot of rhetoric. I am sometimes as guilty as anyone of rhetoric on that subject. However, today I have tried to make some concrete proposals regarding what we in the NDP see as being the role of Crown corporations. We will advance those proposals during the committee's study of this Bill.


Harvie Andre: Mr. Speaker, I was intrigued by my friend's comments regarding the new socialism as being socialism from the ground up, decentralization and so on. I would appreciate it if he could send me some written material on that subject. Perhaps there is still hope for him if he is talking about the value of decentralization. If he would stop to think about it enough, he would find that in fact the main reason why the private sector, the market place and capitalism, if you will, is so efficient and effective is because it is the most decentralized decision-making body possible. It is precisely the fact of its decentralized decision-making that makes it so effective and efficient. If the socialists or the members of the New Democratic Party are talking about this as being the new socialism, so be it. I believe they are really talking about the free market and the capitalist system.
The Hon. Member from the New Democratic Party indicated that members of his Party like Crown corporations. I suppose that that is not exactly news to this House. I think the socialists, whether they are members of the NDP or the Liberal Party, like Crown corporations. He spoke about how wonderful Crown corporations have been. I would be a lot more convinced of that, Mr. Speaker, and it would be a lot more helpful to the quality of debate, if those Members would be capable of pointing out even one single Crown corporation out of the somewhere between 200 to 450 Crown corporations that exist that is operating in the commercial area and compares favourably to an equivalent private sector corporation. If there was one such Crown corporation out of 200 or even one out of 450, just one which would compare favourably to equivalent corporations in the private sector, then perhaps there might be some justification for the statement that Crown corporations are good things.
I would also suggest to my friends in the New Democratic Party that they ought to pay a little bit of attention to what one of the officers of this House, the Auditor General, has been saying about Crown corporations as well as what his predecessors have said. Every time there is an audit of Crown corporations, we are treated to a great long list of abuses, mismanagements and waste of money. We are told that a catastrophic situation has been created which has spilled literally billions of taxpayers' dollars down the drain.
One wonders how many billions of dollars must be lost and how often the Auditor General must make these observations to us before we finally come to the logical realization that the manner in which this Government at least has been using Crown corporations to operate in areas where it is incompetent
May 28, 1984

has been extremely costly to the country. It has been costly in taxpayers' dollars, costly in jobs and costly in so many other ways that are difficult to measure.
It is not hard to understand why there are so many Crown corporations in the country. To a government of socialist bent, whether it be Liberal or NDP, Crown corporations are wonderful devices for getting around the obstacle of having to deal with our political system. They are great political devices. They are great things for governments to get involved in because they have all kinds of potential benefits to a government which is not worried about the country but worried primarily about its longevity in office. They carry few of the risks which are associated with direct government action.
I would like to cite a few examples. Crown corporations with their boards of directors, contracts for advertising and supplying paperwork as well as other business activities, are wonderful vehicles for government patronage. They provide wonderful ways in which to reward poll captains, zone commanders and campaign managers. Therefore, the existence of 400 Crown corporations is not viewed with alarm; it is viewed as a wonderful thing. With 20 directors per Crown corporation, it means that 8,000 loyal Liberals could be appointed to positions. Of course, I am not mentioning the possibility of other forms of patronage, such as obtaining contracts with Crown corporations for the benefit of friends of the Government Party.
Crown corporations also are good vehicles of manipulation for political advantage. Eldorado Nuclear is one example. Approximately four years ago Eldorado Nuclear wanted to add a new uranium refinery. The most economical place to construct the refinery was next door to the existing refinery which was in Port Hope, Ontario. However, there are very few Liberal votes in Port Hope as it is in a Conservative riding. That was the most economical location for Eldorado Nuclear to construct the new refinery. Constructing it anywhere else would have reduced the profitability of the refinery by $150 million to $200 million. That would have been the extra cost. Of course, the money did not come directly from the Consolidated Revenue Fund so it is not a real cost as far as the Minister of Finance was concerned. The then Minister of Energy, Mines and Resources-the current Minister of Finance (Mr. Lalonde)-decided that there would be more political value in moving that refinery to a Liberal riding rather than constructing it in a Conservative riding. That was the decision which was made: it was moved to a Liberal riding. So we can understand why the Minister looks kindly on Crown corporations such as Eldorado Nuclear; it is a wonderful way for him to make a gift to Liberals without it appearing as a cost in the Consolidated Revenue Fund.
I remember vividly in the middle of the 1979 election campaign Petro-Canada announcing, based on one single hole, that it had discovered enough natural gas to cure Canada's energy problems for the next hundred years. It had discovered one hole! It had discovered enough gas to cure Canada's
Development Investment Corporations Act energy problems! That happened in the middle of an election. If Petro-Canada had been a private trading corporation with shares in the stock exchange and had made that kind of statement based on one single hole, the officers of the corporation would have been charged for issuing false information and for attempting to influence the price of the stock. However, being a Crown corporation it was not subject to the normal laws that the rest of us and other companies have to deal with.
From time to time Crown corporations do things which apparently are meritorious. When that happens, it is a tremendous opportunity for Ministers to take credit. I remember, for example, when Canadair produced its first Challenger jet. It was going to turn the world of corporate executive jets on its ear. It was the most marvellous piece of technology imaginable. They would sell hundreds of them. It was produced by a wonderful Crown corporation. It was difficult to watch a television broadcast or open a newspaper or magazine without seeing a picture of the Minister of Energy, Mines and Resources (Mr. Chretien)-the leadership candidate who was then Minister of Industry, Trade and Commerce responsible for Canadair-posing beside a jet. He told us what a wonderful Crown corporation Canadair was and what it would do for Canadian technology. He said it was absolutely marvellous. There was the man from Shawinigan smiling away and strutting around saying: "You reactionary Tories can you not see that here is proof positive of how wonderful Crown corporations are?" However, when the horror of the Challenger jet became known and it was realized that, far from turning the world of executive jets on its ear, no one wanted it and, in fact, the Challenger had cost Canadians $1.5 billion with no chance of recouping that money, there was not a Minister of the Crown who could be found that would admit to having heard of the Challenger or of Canadair.
Ministerial responsibility; what is that? They said that they were not responsible because it was a Crown corporation; the board of directors was responsible. But the board of directors was reappointed anyway. What happens to ministerial responsibility under those circumstances? Nothing. What did they do? They hired three flacks-Austin, Strong and Bell-and asked them to figure a way out of the situation. They said "Please, help us", and those fellows came up with this particular vehicle the Canadian Development Investment Corporation. CDIC is a solution to nothing. CDIC is an invitation to spill many, many more hundreds of millions, if not billions, of taxpayers' dollars. Frankly, there is no way in the world that this Party will be a party to that kind of activity. There is no justification whatsoever for what is being attempted.
My colleague from Calgary South quite accurately, and in detail that cannot be improved upon, described the four reasons for which any responsible parliamentarian-and I emphasize the word "responsible", thereby giving the Liberals an out-must be offended by this legislation and must oppose it with all the means which are at his disposal.
Let us consider for a moment the three principles which are involved and the three individuals who are key to the CDIC- Joel Bell, Maurice Strong and Jack Austin. Joel Bell, the

May 28, 1984
former vice-president of Petro-Canada, was the guy who assured us in the early days that Petro-Canada had no intention of getting into the business of running service stations. We know what happened to that promise. A leadership candidate for the Liberal Party has said that it was one of the stupidest things Petro-Canada could have done. I agree whole-heartedly with him. Maurice Strong was the fellow who helped Petro-Canada buy Petrofina. He is the guy who picked up a great, fat fee for that. I guess he must have spent that money as he is back on the government take.
Or course, Jack Austin is the man who negotiated the uranium cartel and then arranged not to be charged for his participation in that illegal act. With those three fellows in charge, there is no reason in the world that any right-thinking person should co-operate with any of their plans.
May I call it one o'clock, Mr. Speaker?


The Acting Speaker (Mr. Herbert):: Order. It being one o'clock, I do now leave the chair until two o'clock this afternoon.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Hon. Flora MacDonald (Kingston and the Islands):: In
February of this year the Minister of Communications (Mr. Fox) announced that this year's budget of the Social Sciences and Humanities Research Council would be increased by $4.8 million. What he did not say was that the Government was cutting out a $5.9 million supplementary allocation for Canadian studies which had been part of the Council's budget for 1983-1984. The result is that the Council will have to operate with $1.1 million less this year than last. Only the Liberal Government could try to make less sound like more.
The academic community throughout the country has reacted angrily to this attempt at creative accounting, calling for the immediate reinstatement of these funds, and for good reason. Our society is currently undergoing tremendous change due to technological Advances and the changing role of women. It is essential that there be sufficient financial support for the study of how these changes will affect both individuals
and Canadian society as a whole. The Government could not have chosen a worse time to reduce its commitment to the social sciences and humanities.
Rather than paying bonuses to executives of Crown corporations like de Havilland, the Government should be funding research in these vital areas. I would urge the Minister to restore the original level of funding to the SSHRC.



PETRO-CANADA WITHDRAWAL OF MINIMUM PRICING ARRANGEMENTS WITH INDEPENDENT SERVICE STATION OPERATORS

Mr. Girve Fretz (Erie):: Mr. Speaker, there has been much controversy lately in the area of price fixing in the petroleum business. I refer especially to the April court decision which found Imperial Oil Limited guilty of unfair dealings with independent retailers of gasoline in its efforts to keep the price of gasoline artificially high.
A constituent of mine has been informed by Petro-Canada that he no longer qualifies for what is known as a minimum margin should the price fall below a pre-set level as a result of gas wars. The constituent concerned is an independent operator in my riding, who purchases his gasoline from Petro-Canada. However, those outlets which are associated directly with Petro-Canada, and which display the emblem of that company, for some reason seem to be entitled to a minimum spread of 2 cents per litre regardless of how low the price falls in a gas war.
I ask you, Mr. Speaker, does this seem fair? A huge company which is funded by the taxpayers of Canada appears to be muscling out small, independent operators, with discriminatory policies such as these. This is a sure sign of creeping socialism and state control of all endeavours. My colleague, the Hon. Member for Peterborough (Mr. Domm), pointed this out to the House on Friday, April 6, of this year, and the practice continues. It is certainly time that action be taken to curb this undesirable policy.



EXTERNAL AFFAIRS


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, the U.S. ambassador to Canada, Mr. Paul Robinson, has done it again. He does not seem to appreciate that his role is not that of announcing the policy of Canadian Governments, now or in the future. He indicates, and in this case he is right, that there will be no difference between a Liberal or a Conservative administration. He is astute enough to recognize that. However, he went on to say that any government is going to welcome foreign investment here in a way which has not been seen since 1980. He follows that up, in talking about defence
May 28, 1984

spending, with the statement; "If Turner comes in it will improve even more, and if Mulroney comes in it will improve even more than that".
I believe Mr. Robinson would be well advised to inform his Government privately, in whatever way he wishes, about what Canada is doing, in his opinion. I believe he should inform our Government privately, in whatever way he wishes, of the intentions and hopes of the U.S. Government. However, it is not his role to announce the policies of Canada's Government regardless of its stripe. Perhaps it would be more useful for everyone involved if Mr. Robinson were recalled.



CALL FOR INCREASED LOBBYING EFFORTS IN WASHINGTON

Mr. Ron Stewart (Simcoe South):: Mr. Speaker, last year the centre for Canadian Studies at Johns Hopkins University released a major study warning that Canada must increase its lobbying in Washington to protect critical interests affected by the U.S. Congress. I heard these same warnings during a recent trip to Washington to discuss free trade issues. Canada still spends less than most countries on lobbying. Canadian lobbyists spent $7 million in 1981, compared with $22.6 million by the British, $18.5 million by the West Germans, $15.2 million by the Japanese, and $11.9 million by the Israelis.
Because we are the Americans' largest trading partner we stand to lose the most from protectionist American legislation aimed at other countries. My colleague, the Hon. Member for Erie (Mr. Fretz), noted the most recent example of that when he pointed out that a new U.S. directive will prohibit defence contracts to be let to companies outside the U.S., affecting Canadian companies which rely on those contracts. American tariffs on specialty steel, aimed at other countries, are hurting Canada. A U.S. ban on asbestos product imports will cut off the market for one-third of our asbestos exports.
We need to promote our interests more aggressively in Washington. The Japanese are everywhere in evidence. The Chinese threaten to cut off wheat imports in order to have American legislation changed. Canadian lobbyists are like school children on the international scene. When will the Minister realize the importance of protecting our critical interests when they are threatened by the U.S. Congress?



EXTERNAL AFFAIRS


Mr. Paul E. McRae (Thunder Bay-Atikokan):: Mr. Speaker, I have been angered many time by the U.S. Ambassador, Paul Robinson. I have refrained to this point from speaking out. However, I feel this weekend was the straw which broke the
camel's back. I speak also on behalf of a good many of my constituents who are very angry at this kind of outburst. Mr. Robinson is very much opposed to FIRA, which was designed to make sure that foreign investment was good for Canadians. He is opposed to the National Energy Program, PetroCan, and all these things which have been good for Canada.
In 1978, 65 per cent of the oil and gas industry was foreign owned. Today it is 44 per cent. This is the kind of thing which is happening, and he is opposed to that.
Recently he wrote a long article on defence which was published in The Globe and Mail, which showed the strength of the Soviets but did not indicate anything which the Americans had. It gave the impression that there was a very large window of vulnerability, when his own Scowcroft Commission, the most important commission on the subject in the last several years in the United States, indicated that there was no window of vulnerability.
I suggest that this latest step, moving into the leadership in the Liberal Party and into Canadian policy and the Canadian election, is unwarranted. If it were done in other countries, the ambassador would be asked to leave. I condemn it on behalf of my-


Mr. Speaker:: The Hon. Member's time has expired.



NATIONAL CAPITAL COMMISSION


Gordon Edward Taylor: Mr. Speaker, Santa Claus will be in Ottawa this year in May, that is, for specially favoured employees of the National Capital Commission. While scores of people are having a difficult time paying the rent on their homes, and while the Department of Public Works is reducing the amount of money for the poor, for example, on co-operative housing where 72 per cent of the money provided is utilized for families with incomes of less than $10,000, the Minister of Public Works (Mr. LeBlanc) is permitting the NCC to provide a 25 per cent reduction in rent for similar private housing. But this special treatment is only for favoured employees. The NCC has refused to release the names of the employees. However, there is good reason to believe that these favoured employees are in high financial brackets.
Giving a present is a splendid thing when the cost comes out of the pocket of the giver. However, the Government is again playing Santa Claus with the people's money. I wager that the recipients of this gift will be members or special friends of the Liberal Party, people who can well afford to pay the conventional rents. Mr. Speaker, I am sorry I used the word Santa Claus; Santa would be ashamed to be a party to a deal to help only the rich.

May 28, 1984
Oral Questions BILINGUALISM



CONDEMNATION OF PROTESTERS IN VICTORIA, B.C,

Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, the linguistic intolerance shown by a small group of protesters yesterday in Victoria is not typical of British Columbians. These people have no real concept of western Canada. Linguistic equality is a policy supported by all political Parties in the House of Commons and by all fair-minded Canadians, east or west, who have studied the issue. Western Canadians reject, have rejected, and will reject the Liberal Party, not because of bilingualism but because of economic mismanagement and pork barrel politics.
Some 1.5 million Canadians are unemployed, and the Liberals have no plans to help. The Liberals continue to follow high interest rates in the United States regardless of their harmful effects on Canadian home builders, home buyers, and small business people. The Labour Adjustment Benefits Program has been designed with a bias toward central and eastern Canada. Money for special employment initiatives was distributed on a partisan basis. British Columbia received only $60 per unemployed person while Quebec received $206, and the Maritimes received $227.
The people of western Canada are more than willing to recognize linguistic equality. However, we will never accept the present economic injustice which is the present policy of the Liberal Government.



ORAL QUESTION PERIOD


Flora Isabel MacDonald: Mr. Speaker, my question is for the Acting Prime Minister. It concerns the unwarranted delays in getting young people hired for jobs under the Summer Canada Projects. We have learned that prospective employers have to wait weeks before being provided with a list of names of students to be interviewed. This can mean the postponement, or even the cancellation, of some of these very worth-while projects. That means that students lose out on jobs.
What is the Government doing to cut through this bureaucratic red tape in Canada Employment Centres so that students can be placed in the available jobs more quickly than they are at present?
[ Translation]


Hon. Celine Hervieux-Payette (Minister of State (Youth)):: Mr. Speaker, I think that the problem raised by my colleague comes up every year. In fact, delays are normal. There are
always delays between the time when projects are accepted and the time when students are hired. Under a new procedure which has been established, as soon as the agreement is signed with the sponsor of a project, he can go to a bank and borrow the money to pay the staff hired. There are no undue delays this year in the implementation of the program, and students will have 81,000 jobs this year, Mr. Speaker.


Flora Isabel MacDonald: Mr. Speaker, the Minister says that just because this happens every year it is okay that the delay continues. That is not the way we look at it, nor is it the way that students look at it.


OTTAWA AREA PROJECTS
Flora Isabel MacDonald: This past weekend we learned that a number of projects in the Ottawa area were placed in jeopardy because of the bureaucratic foul-ups in the Canada Employment Centres. The Minister understands the difficulty. In order for the projects to get under way the students must be hired and trained. If they are not even interviewed, the projects cannot begin.
These are projects which are funded under the Summer Canada Program, which is a government program. It is administered by the Canada Employment Centres. Can the Minister tell us in how many areas other than Ottawa this foul-up is taking place? Will the Government move quickly to straighten out the mess and get the students into the jobs they so desperately need?


Céline Hervieux-Payette: As I said a moment ago, Mr. Speaker, there are no undue delays in the hiring of youths. That is true. Young people will have jobs lasting about 12 weeks on average. To avoid any discrimination under this system, we do not begin hiring during the examinations in universities, CEGEPs or colleges so that all youths, be they at the secondary or university level, can be eligible for those summer work projects.
As far as I know, all the information concerning those projects is available and everything is ready, except that we will begin to hire young people in the next few weeks because secondary level students are still in school, Mr. Speaker. In my opinion, it is important that all young people have equal access to those summer job projects.


Flora Isabel MacDonald: Mr. Speaker, the Minister simply does not realize that students have a very short time during the summer to earn enough money to get back to school in the autumn. They have already lost a month of that very short time period.

May 28, 1984


PREPARATION OF PROGRAM
Flora Isabel MacDonald: Youth unemployment is over 18 per cent. There are 560,000 students coming onto the labour force this summer. Why did the Government not work the bugs out of the system with regard to the Summer Canada Program before it got under way so that students would not be put into the intolerable position of being denied the jobs they should have?


Céline Hervieux-Payette: Mr. Speaker, I regret to repeat myself. I would like to point out to my colleague that the 12-week jobs will start on time and also finish on time at the end of summer before the students go back to school. We have been asked for an extension due to the visit of the Pope. We are considering that. However, I would like to assure my hon. colleague that the number of weeks and the number of jobs will be there. This summer $200 million will be spent on our students. All students who apply will be treated equally this summer.


INDUSTRY
Hon. Michael Wilson (Etobicoke Centre):: Mr. Speaker, in the absence of both the Minister of Regional Industrial Expansion and the Minister of Energy, Mines and Resources, my question is for the Prime Minister. It is with regard to the petrochemical industry and the importance of that industry in the provision of jobs in the manufacturing sector. The Petrochemical Task Force report has recommended that the cost to the industry of the oil or natural gas feed stock, which is about 50 to 75 per cent of the cost, be reduced to make the industry more competitive internationally and therefore more capable of providing jobs downstream.
Does the Prime Minister agree with the Task Force report that the petrochemical industry, in a resource rich country like Canada, should have a cost advantage on the feedstock, and that this advantage should not be offset by the heavy load of front end taxation on either the natural gas or crude oil inputs?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, a question like that coming from a member of a Party which has been arguing for international prices, seems a bit bizarre. Since the introduction of the national energy policy we have had a policy of having prices fixed in Canada. This was beneficial, not only to the consumer but also to the petrochemical industry. That has been our policy. It continues to apply. It has been somewhat modified in recent years. As a matter of fact, I believe in his Budget before last, the Minister of Finance, in conjunction with the Minister of Energy, Mines and Resources, reduced the taxation to certain areas of the petrochemical industry, and we are taking the present circumstances into account.
Oral Questions
Once again, it is interesting to see the Hon. Member apparently support a two-price policy, being a lower price in Canada for Canadians. The difference is that we wanted it for Canadian consumers. The Hon. Member seems to want it only for the industry.


Michael Holcombe Wilson: Again the Prime Minister is distorting a question that I put to him. We have not said that we support a pricing policy which includes taxes that makes an industry uncompetitive. That is the position taken by the Task Force.


EFFECT OF FEED STOCK PRICE
Michael Holcombe Wilson: Does the Government accept in principle the fact that that high level of front end taxation-not the wellhead price but the high level of front end taxation-should render an industry uncompetitive internationally, particularly an industry which has built its facilities to serve a world-wide market? I would remind the Prime Minister that the price that this industry pays on its feed stock inputs is higher than that which the competing industry in the United States pays in the U.S. market in total?


Pierre Elliott Trudeau: Mr. Speaker, to repeat my answer, the Hon. Member will know from the recent Budget of the Minister of Finance, to which I referred, that we do not want to make the industry uncompetitive. That is why we have reduced some of the front end taxation. That is why some of the provinces have reduced some of the front end taxation.


SOCIAL AFFAIRS
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Prime Minister. I preface it by saying to the Prime Minister that a new and irreversible fact has appeared in Canadian history. It is that a majority of women with preschool children are now working outside the home. Regrettably, some 85 per cent of children who have the need are denied access to daycare.
Would the Prime Minister agree that now is the time for Canada to recognize that daycare, like education and medicare ought to be established as a universal right for all children in Canada? If so, would he agree to the establishment of a parliamentary commission of inquiry whose responsibility it would be to study the situation and bring back to Parliament a series of proposals that would lead to the implementation of this very important principle?


Pierre Elliott Trudeau: Mr. Speaker, it is certainly a very important question. The Government has addressed it within the bounds of its constitutional rights in the

May 28, 1984
Oral Questions
past, not by supporting daycare directly but by providing funds which could be used for daycare. The Hon. Member compares the situation to that of medicare and post-secondary education. Of course he is correct in suggesting that both of these areas, like daycare, are within provincial jurisdiction. We do hope that the provinces, as in the case of medicare and post-secondary education, will be more concerned with this very real problem.
As far as setting up a task force or parliamentary inquiry into it is concerned, we have been discussing this matter in Cabinet and we decided that it would be wiser to wait for the Badgley Report, which I believe is due in early July. That could serve as a basis for the further examination of this subject.


John Edward Broadbent: My party strongly endorses the idea of having a task force that would act on the assumption that the principle of having the federal Government participate in the establishment of the universal principle of daycare will be recognized.


REQUEST THAT GOVERNMENT INITIATE FEDERAL-PROVINCIAL TALKS
John Edward Broadbent: Mr. Speaker, since the Prime Minister does not agree with the establishment of a parliamentary inquiry, does he agree with the principle and, if so, does he not think it would be appropriate for the federal Government to act as it did to get medicare established in this country, initiating talks with provinces, making a specific proposal to establish the principle on a universal basis, and also offering a cost sharing formula, such as 50-50 cost sharing, so that the average, ordinary working family, particularly working women, will have real access to daycare?


Pierre Elliott Trudeau: Mr. Speaker, these are interesting ideas. They are some form of repetition, as I said earlier, of our experience with medicare and postsecondary education. However, I recall that some 15 or 18 years ago the installation of this procedure led to a great deal of confrontation with the provinces which lasted to the early and middle 1970s.
I just want to point out to the Hon. Member that my successors, and the Leader of the Opposition, do not believe in confrontation. I do not think this will be a course which will be easily paved because the provinces are not anxious to have the federal Government interfere in their areas of jurisdiction and tell them what should be done with their 50-cent dollars. It is something which I am happy to leave to my successors. I am sure that the Hon. Member will be there with his Party, at least part of his Party, to goad them on. I wish him well.


PROPOSAL TO PROVIDE JOINT FEDERAL-PROVINCIAL FUNDING
John Edward Broadbent: Mr. Speaker, before the Prime Minister goes to his self chosen happy hunting grounds, if he believes in the principle of medicare and knows that there
can be differences without necessarily having conflict or antagonism with the provinces-although he and I know that some conflict in these matters tends to be inevitable-instead of coasting for the next six weeks, why does he not use the occasion to commit his Government to the principle of universal daycare now? Why does he not commit the Government to initiate action on that?
More specifically, would he consider the proposal that was presented to all three Parties today by the Canadian Daycare Advocacy Association that the federal Government give the reasonable sum of $5 a day for every approved child care space, to be matched by the provinces? In short, will the Prime Minister take some concrete action now so that we can get the principle of universal daycare established in Canada?


Pierre Elliott Trudeau: Mr. Speaker, in my view there are several things wrong with the suggestion-it was more of a suggestion than a question by the Hon. Member. First, as I said, this Government did take initiatives in the past. Notably, we have asked the Badgley Committee to report to us. The report is forthcoming very soon. It would seem to me that before engaging the Government and Parliament in an area which although it is very important is also very expensive, and would be very expensive for the federal Government, it would make sense to look at that report to see what it recommends, and also to use it to try to advance public thinking in this matter, particularly to awaken the provinces to their responsibility and area of jurisdiction.
The Hon. Member had to concede that such things do lead to confrontation. I do not think that he is seriously suggesting that in the next two weeks, one of which will be spent in Europe and at the Summit in London, I could get the provinces to accept the principle as he is asking me to do.


FOREIGN INVESTMENT REVIEW AGENCY
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, in the absence of the Minister of Regional Industrial Expansion and of the Minister of Energy, Mines and Resources, my question is directed to the Prime Minister. Recently the Foreign Investment Review Agency rejected a proposal that was submitted to it by Petro-Canada and Sumisho Coal Canada, a Japanese subsidiary of Sumitomo, for the development of Petro-Canada's holdings in Northeast Coal. This proposal has the potential of creating 700 permanent jobs and a massive construction program.
Could the Prime Minister, since this proposal was before Cabinet, tell the House what it was about this proposal-was it the location or what it was-that the Government could not see fit to permit this application to go ahead, particularly since the Government has a billion dollar public investment and
May 28, 1984

infrastructure in the port, railways and so on that are underutilized?


Pierre Elliott Trudeau: No, Mr. Speaker. I am sorry, not having had notice of the question, I did not have time to look up this particular file. I certainly am assured in my own mind that the reason we rejected it is that it did not bring sufficient benefit to Canada. That is the test under which all foreign investment is looked at and screened. We are accepting over 90 per cent to 95 per cent of all applications for investment or extension of present investment and, therefore, if this one was not accepted it was undoubtedly because it did not bring sufficient benefit to Canada and to Canadians.


REQUEST FOR RECONSIDERATION
Frank Oberle: Mr. Speaker, I apologize to the Prime Minister for not giving him personal notice. I raised the question last week. I would have thought that someone would have briefed someone on the other side. It is a critical issue. In western Canada we feel it is probably another attempt by Government to slow down the development of resource ventures in that part of the country. The Japanese are no strangers to the rules of FIRA and this Government. This application was not unique in any way.
Will the Prime Minister undertake to look into this file and see whether this company and Petro-Canada, the Government's own Crown corporation, could not be asked to reapply and get this project on the way, particularly since we have such massive public investment, as I said earlier, that is underutilized, and since this project has such a potential for the creation of new employment, and permanent employment?


Pierre Elliott Trudeau: Mr. Speaker, the explanation by the Hon. Member of the refusal is preposterous in looking at his own words. He recognizes that the federal Government has put hundreds of millions of dollars into the development of this project, and obviously it is not our purpose not to want investment in that area. The Hon. Member should realize that we do not welcome investment at any cost. If Canadians are not going to get any benefit out of it, then we will not support the investment. I will make sure that the Minister is notified of the Hon. Member's question and looks into this particular case.


CABINET DECISION
Hon. Erik Nielsen (Yukon):: Mr. Speaker, my question is for the Minister for International Trade. Since the Prime Minister has not familiarized himself with the file concerning the rejection of the Sumitomo application, which has been described by British Columbia's Minister of Industry as stupid and shortsighted, and since there is a criterion of 50 per cent ownership in FIRA decisions, and since that was met, indeed, PetroCan held, I believe, 88 per cent of the shares, how can the Minister justify the approval of a decison by Cabinet to block the initial Japanese participation of $10 million, in view
Oral Questions
of the quite disastrous unemployment situation in British Columbia?


Hon. Gerald Regan (Minister for International Trade):: Mr. Speaker, the Hon. Member is aware, as was pointed out by the Prime Minister, that the Foreign Investment Review Agency has been approving somewhere between 92 per cent and 95 per cent of the applications for new investment and acquisitions in this country. Canada is the host country of more foreign investment than any other country on earth. Indeed, it is easier to carry out a worth-while investment in Canada than in almost any other country of which I can think.
I point out to the Hon. Member opposite that he cannot, nor can I, as a Canadian citizen, own a broadcasting station in the United States, any part of coastal shipping, become involved in the uranium industry, or in a variety of other restricted areas.


Donald Alex Blenkarn: How about a coal mine?


Gerald Augustine Regan: I suggest to him that any question on a specific turndown by FIRA, as it is presently being operated, is one for which there is a very, very good reason. I also point out to the Hon. Member that he is fully aware of the fact that it is the Minister responsible for DRIE who carries the responsibility for FIRA and would be able to give a detailed answer in relation to this question.


Erik Nielsen: Mr. Speaker, that would be amusing if it were not so tragic. The Prime Minister at least had the grace to admit that he did not read the file.


Some Hon. Members:: Oh, oh!


Erik Nielsen: The Minister is responsible in that Government, or should be, for international trade.


LIMIT ON JAPANESE PARTICIPATION
Erik Nielsen: I have a supplementary question for the Minister, Mr. Speaker. We want to know why Cabinet insisted upon Sumitomo limiting its investment participation only to the mine at Monkman. Is the Government against development of other mines in British Columbia or, for that matter, anywhere else in Canada? It certainly appears to be so in the Yukon.
In view of the fact that the project is now on hold, and that the Japanese and other investors have been treated to another example of this Government's ideological interventionism, how can the Minister expect foreign investors to have any confidence or any faith whatsoever in this Government?


Gerald Augustine Regan: Mr. Speaker, it is quite obvious that the Hon. Member paid no attention to my initial answer.


Some Hon. Members:: Oh, oh!


An Hon. Member:: No one else would either.

May 28, 1984
Oral Questions


Gerald Augustine Regan: I have to say to him that while my prime responsibility is the sale of Canadian goods and services in the various parts of the world, and while we are doing very well in that regard, as I hope the Hon. Member will admit, I obviously have the same interest as other members of the Cabinet and all Members of the House in seeing worth-while investments that will bring about improvement of conditions in this country.


Erik Nielsen: Have you read the file, Gerry?


Gerald Augustine Regan: I am concerned about the fact that the Hon. Member would come here and, without having made inquiries as to the reason for the turndown, pose the questions, not to the Minister of Industry-


Mr. Dick:: Where is he?


Gerald Augustine Regan: -but to other Ministers. I am concerned. The Hon. Member mentions the Yukon. I also believe, with him, that there are investment opportunities and trade opportunities there, but the Hon. Member has not once come to me to talk about trade opportunities in the Yukon. I would welcome him doing so. Instead of just trying to say things because he is an opposition Member, I would welcome him, recognizing that we are all here to work together to make Canadian jobs-


Some Hon. Members:: Oh, oh!


Gerald Augustine Regan: -and I invite him to do something constructive.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


BANKS AND BANKING
Ian Deans: Mr. Speaker, my question is for the Prime Minister. The Prime Minister no doubt is aware that on the weekend all six of the Liberal leadership candidates made impassioned speeches against the banks.


An Hon. Member:: All six?


Ian Deans: In fact, in the words of the Minister of Energy, the banks are fat, not hurting, and are very sanctimonious. Recognizing that the farmers, the small-business people and the home owners are suffering as a result of the policies of the self-same banks, will the Prime Minister move to establish an upper limit on interest rates that can be charged by the banks for loans to those groups in particular, in order to ease the burden on them and to ensure that the banks act in the best inerests of Canada?


Pierre Elliott Trudeau: Mr. Speaker, the NDP seems intent on me doing a lot more things before I leave the leadership of the Liberal Party.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: We have been waiting 16 years.


Mr. Epp:: With your records, don't touch anything.


Pierre Elliott Trudeau: I am happy to realize, Mr. Speaker, that there is one area of big business on which I have not been tough, namely, the banks. If I have been neglectful in that area, I am happy that my successors are undertaking to step in with some short, strong action.


Erik Nielsen: Save us from that.


Pierre Elliott Trudeau: At this stage I think the question is rhetorical. The Hon. Member wants to draw it to the attention of the House. He does not seriously think that in the six days of this week before I leave for Europe I will be able to change the Bank Act in the way he suggests. But we have other legislation that we would like to change, Mr. Speaker. I wish the Hon. Member would co-operate with the House Leader on some of that progressive business.


Ian Deans: Mr. Speaker, I assumed the Prime Minister is still in charge until after his successor is chosen.


Erik Nielsen: Obviously that is not the case.


REQUEST FOR INTRODUCTION OF LEGISLATION
Ian Deans: Mr. Speaker, just last week the Government introduced legislation, the mortgage protection plan, the result of which will be that banks will be allowed to continue to charge the high interest rates which they have been charging over the course of the last four years. All leaders of all major institutions dealing with mortgages, from The Canadian Real Estate Association to the Consumers' Association of Canada, and Frank Clayton, the housing economist, say that the proposed program will do nothing more than secure high interest rates in Canada. In the next six days, or between now and the end of June, will the Prime Minister take over the leadership of the Liberal Party once again and bring forward proper legislation which deals in an adequate manner with the usury of banks which has driven people out of their homes, off their farms, and out of their businesses?


Pierre Elliott Trudeau: Mr. Speaker, with the second question we now see that the Hon. Member from the New Democratic Party is not really begging me to stay on as Leader.


Ian Deans: No, I just want you to do your job.


Pierre Elliott Trudeau: What he is doing is laying the groundwork for his Party not supporting the legislation which we have introduced in order to help mortgagees.
May 28, 1984


Some Hon. Members:: Oh, oh!


Pierre Elliott Trudeau: We will see, Mr. Speaker, if tomorrow they will support that legislation alleviating the burden on mortgagees.


Ian Deans: It does not.


Pierre Elliott Trudeau: I deduce from the Hon. Member that they will not, in which case we will see.


CANADA POST CORPORATION
Arnold John Malone: Mr. Speaker, my question is directed to the Postmaster General. Why is it that Michael Warren, President of Canada Post Corporation, cannot answer his mail?


Hon. Andre Ouellet (Minister of Labour):: Mr. Speaker, I feel confident that the Hon. Member will be getting his mail very soon and find answers to the letters to the president of the corporation.


PROMISE OF REPLIES
Arnold John Malone: It is not my personal mail to which I make reference. I was asking the question on behalf of a large number of constituents who complain that they write to the President of Canada Post Corporation and receive a reply from a staff person indicating that a letter will be coming personally from the President of the Corporation. In light of the fact that these letters never show up, will the Minister undertake, as Postmaster General, to inform the President of Canada Post Corporation that it is damaging to the Corporation when the person at the top simply refuses to answer his mail? Surely he is a symbol of the entire Canadian postal system. The Minister ought to be able to do something to give Canadians a little more pride in their Post Office.
[ Translation]


André Ouellet: Mr. Speaker, I have the impression that the Hon. Member is dramatizing the situation, but I will convey his remarks to the President of the Canada Post Corporation.


HUMAN RIGHTS
Mr. Fred King (Okanagan-Similkameen):: Mr. Speaker, my question is directed to the Secretary of State for External
Oral Questions
Affairs. Of course he is aware of the desperate and unhappy circumstance faced by Andrei Sakharov and his wife, Yelena Bonner, in the Soviet Union. The Minister will also be aware of the unprecedented intervention by the Nobel Peace Prize Committee which, in a letter to the Soviet President, put the prestige of that Committee behind a request that Sakharov and Bonner be freed.
Would the Minister demonstrate the deep-felt concern of Canadians by approaching all Governments, signatories to the CSCE Helsinki Accord, with the objective of producing a joint appeal to Moscow on behalf of Dr. Sakharov and his wife, an appeal aimed at achieving an end to their ordeal?


Some Hon. Members:: Hear, hear!


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: Mr. Speaker, as the Hon. Member knows, the Prime Minister indicated-I think last week-to the House the concern which the Canadian Government has consistently expressed to Soviet authorities with respect to the Sakharov case.
The Hon. Member has made a specific suggestion with respect to action which might be taken by members of the CSCE. I am not quite sure whether all members of the organization, or all those who have participated in the discussions, including the Soviet Union, would join in any such appeal. In fact I am quite doubtful whether that would happen. I shall be going tomorrow to the NATO meeting in Washington. It may be a good occasion to sound out with my colleagues there, the Foreign Ministers of NATO countries, on whether action along those lines, or different action, might be undertaken.


INDUSTRIAL AND REGIONAL DEVELOPMENT PROGRAM
Mr. Bill McKnight (Kindersley-Lloydminster):: Mr. Speaker, my question is directed to the Minister of State for Finance, regarding a grant requested by Cominco in Trail, B.C., for an industrial development loan to modernize its facilities. The Minister was made aware of this request some two weeks ago. Could he report to the House on whether this request has been granted?


Hon. Roy MacLaren (Minister of State (Finance)):: Mr. Speaker, I recall the query of an Hon. Member opposite to that effect. I have drawn it to the attention of the responsible Minister, and I am sure that a response will be forthcoming.


INQUIRY OF THE MINISTRY
William Hunter (Bill) McKnight: Mr. Speaker, would the Minister of State for Finance be more disposed to look at this question if the candidate from Canadian Pacific,

May 28, 1984
Oral Questions
Mr. Turner, happened to be the Leader of his Party? Is that the reason he is waiting to make the announcement that Cominco will be receiving industrial grants? Is he waiting for the candidate from Canadian Pacific to become the Leader of his Party?


An Hon. Member:: Don't answer that.


Mr. Speaker:: The Hon. Member for New Westminster-Coquitlam.


EXTERNAL AFFAIRS
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. In recent days Canadians have learned, again from foreign sources, this time the U.S. Federal Aviation Administration, that the DC-3 which crashed near the Costa Rican/Nicaraguan border on March 24 was painted with the Canadian call letters "CF-ETE". As the Minister knows, this DC-3 was owned by the U.S. military and was engaged in running guns to anti-Sandinista guerrillas. Has the Minister asked the United States for an explanation about the illegal use by the U.S. military of Canadian call letters on a gun-running aircraft in Central America?


Allan Joseph MacEachen: No, Mr. Speaker, I have not done that.


AVAILABILITY OF INFORMATION
Pauline Jewett: Mr. Speaker, we have just learned that the Canadian call letters were being illegally used by the U.S. military, and the Minister says he has made no inquiries about it. May I ask him why he has made no inquiries about this illegal use of Canadian call letters? Since he is always saying that we have a sufficient presence in Central America in our embassy in Costa Rica, why did we not know about this right after the plane crashed on March 24?


Allan Joseph MacEachen: Mr. Speaker, I think the Hon. Member is getting more ridiculous all the time, suggesting that the Canadian Government should have a facility to determine what happens on the border of Costa Rica. What does she want us to do, to send in some troops and join the Americans?


Some Hon. Members:: Oh, oh!


James Douglas Manly: Answer the question.


Pauline Jewett: You had better leave government, Allan.


John Edward Broadbent: The Senate is just down the hall.


YOUTH EMPLOYMENT
Arthur Jacob (Jake) Epp: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. It follows on questions asked by the Hon. Member for Kingston and the Islands of the Minister of State for Youth. It has come to our attention that some of the applications under the youth program of the Summer Works Program, having been made at the field office level, are being delayed or held up because the signature of the Minister of Employment and Immigration is needed. Could the Prime Minister check and make sure those applications are signed forthwith, and that aspirations for the Liberal leadership are not holding back jobs that young Canadians need?


Pierre Elliott Trudeau: Mr. Speaker, I heard the answers given earlier by the Minister of State for Youth. I do not find that anything has to be added to that. I would not contemplate even checking into a Minister holding up jobs, as he says, in order to further his leadership ambitions. This is a preposterous suggestion.


REQUEST THAT PRIME MINISTER MAKE INQUIRIES
Arthur Jacob (Jake) Epp: Mr. Speaker, it is not preposterous. Before the approved applications can be funded they need the signature of the appropriate Minister. As long as those applications do not have that signature, there is no funding, and students, who have a limited time to earn the money they need to go to school next fall, simply lose those weeks and cannot recover them. On that basis I would like the Prime Minister to reconsider his answer and check.


Pierre Elliott Trudeau: Mr. Speaker, I ask the Hon. Member if he is challenging the statement of the Minister. She said specifically why some of the demands were not being processed. She gave the answer twice, once in French and once in English. It had nothing to do with the Minister of Employment and Immigration.


FOREIGN INVESTMENT REVIEW AGENCY
Mr. David Kilgour (Edmonton-Strathcona):: Mr. Speaker, my question is for the Minister responsible for international trade. Members of the House who were present at a Canada-
May 28, 1984

Japan trade council meeting at lunch today were told that between $100 billion and $200 billion would be needed to develop self-sufficiency in Canada's energy projects by the end of the decade. Will the Minister tell the House if the inference to be drawn from FIRA's refusal is that Canada is not interested in investment in energy projects by Japan, our second largest trading partner? Will he tell us, if he can, precisely why FIRA turned down this most worth-while project which would have provided desperately needed jobs in British Columbia?


Gerald Augustine Regan: Mr. Speaker, the Hon. Member, like other Hon. Members, continues to seek answers concerning FIRA's policies from a Minister who does not have the primary responsibility for FIRA. I point out to him that Japan has in the past several years made investments in the energy field in Canada which have been approved by FIRA and which, indeed, are very worthwhile in the creation of employment in British Columbia and western Canada. I refer, of course, to the mining of coal in particular, in which they are participating. Japanese investment is welcome in many sectors and is being sought very strenuously in the automobile sector by my colleague, the Minister responsible for DRIE, at the present time. We hope the Japanese will be realistic enough to recognize the importance of making significant investment in that industry. We believe they are a very valuable trading partner, and we look forward indeed to having ever closer economic relations with them.
With reference to the particulars of the file that the Hon. Member has mentioned, I suggest it is only appropriate for the Minister responsible for DRIE to comment thereon.


Mr. Speaker:: A short supplementary. Other Hon. Members want to direct questions.


REASON FOR REJECTION
David Kilgour: Mr. Speaker, will the Acting Minister responsible for DRIE tell the House today why FIRA turned down that particular application?


An Hon. Member:: They don't have anybody over there.


Mr. Speaker:: The Hon. Member for Vancouver East.


SOCIAL AFFAIRS
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is directed to the Minister responsible for the Status of Women. Does the Minister endorse the recommendations of the Canadian Day Care Advocacy Association for federal financing of universal daycare? Has she advocated this plan with provincial Ministers?
Oral Questions


Hon. Judy Erola (Minister of Consumer and Corporate Affairs):: Mr. Speaker, no, I have not advocated this plan with provincial Ministers. But I can confirm to the Hon. Member that I will be meeting with provincial Ministers tomorrow at a federal-provincial conference in Niagara-on-the Lake, hosted this year for the very first time by one of the provincial Ministers, the Minister responsible in the Province of Ontario. This item is on the agenda and will be discussed by the Ministers.


FINANCE
Ronald Alexander Stewart: Mr. Speaker, my question is for the Minister of State for Finance. For months the Ministry has been deflecting criticism of the ad valorem taxation of alcohol and tobacco products, indicating that it would wait for the task force report. Now that three weeks have passed, can the Minister tell the House which of the recommendations it will be adopting?


Roy MacLaren: Mr. Speaker, the Member opposite will have seen the recent report, which was unanimous in some respects. There was a dissent on the part of one member with regard to certain elements in the report. As the Minister of Finance indicated in a press release at the time he received the report, it is his intention to review the recommendations and make an announcement concerning taxation of alcohol and tobacco in due course.


METHOD OF IMPOSITION
Ronald Alexander Stewart: Mr. Speaker, can the Minister assure the industry that when September rolls around the tax will not be imposed in an unfair way, that is, ad valorem on the CPI?


Roy MacLaren: Mr. Speaker, there will be announcements in due course.


INDIAN AFFAIRS
Mr. Thomas Siddon (Richmond-South Delta):: Mr. Speaker, my question is directed to the Minister of Justice, if he can take time out from his lobbying. Lawyers for the federal Department of Justice have claimed that the Minister of Indian Affairs acted without authority when he signed papers relating to a 100-lot housing development planned for the Tsawwassen Indian Reserve in Delta, British Columbia. Needless to say, this revelation has left the Band's corporation in the horrendous position of having hundreds of thousands of dollars of liabilities incurred for servicing the land and being

May 28, 1984
Oral Questions
unable to sell the lots. Does the Minister agree that his colleague acted illegally in signing the master lease which would have allowed development of these properties, and by making undertakings on behalf of the Crown? Will he act to expedite this matter so that the Indian people can get this project under way, and get the jobs and income they need?


Hon. Mark MacGuigan (Minister of Justice):: Mr. Speaker, the Hon. Member has put some of the facts right but, as usual, he has put the context wrong. In fact there is a problem of a lack of jurisdiction. It is not to be attributable, as he suggests, to my hon. colleague. My Department is indeed co-operating with all parties concerned to try to get this straightened out as quickly as possible.


REQUEST FOR SPEEDY EXAMINATION
Thomas Edward Siddon: Mr. Speaker, the lease in question which the Minister signed, apparently incorrectly, is identical to several hundred similar leases which have been signed for other native development projects. The principle here has to do with the supremacy of the Crown over the rights of third parties and municipal governments to require adherence to municipal building code inspection requirements, taxation provisions, and other matters relating to zoning. Will the Minister examine this whole matter and act quickly in order to eliminate inconvenience, and facilitate the creator of hundreds or thousands of jobs which might be possible if this matter is cleared up immediately?


Mark R. MacGuigan: Mr. Speaker, I believe any solution arrived at will enable the broader problem to be taken care of, not just the one in this case.


FARM CREDIT CORPORATION
Mr. G. M. Gurbin (Bruce-Grey):: Mr. Speaker, my question is directed to the Minister of Agriculture. Since 1980 the Minister has suggested and promised a number of measures which might help Canadian agriculture. He will be aware that Farm Credit Corporation rates are between 14 per cent and 15 per cent for long-term financing. Does the Minister have any specific measures to bring before the House so that we may pass them before the end of June?


Eugene Whelan: Mr. Speaker, I am not sure if I understood the last part of the Member's question. To bring in amendments to the Act before the House adjourns? If that is what he is expecting, I doubt it very much.


MINISTER'S POSITION
Gary Michael Gurbin: Mr. Speaker, my question deals specifically with the high interest rates paid by farmers
dealing with the FCC, and the now lapsed measures to assist farmers who were in severe difficulty. The Minister has indicated several times that he is looking at this and he intended to do something in order to provide relief for those farmers who cannot afford to pay interest rates of up to 16% per cent, which they had to deal with previously.


Eugene Whelan: Mr. Speaker, I do hope we are able to do something about that in the very near future.


PETITION
Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Fraser Valley West (Mr. Wenman) on Friday, May 25, 1984, meets the requirements of the Standing Orders as to form.


POINT OF ORDER
[Stage Direction]
Right Hon. P. E Trudeau (Prime Minister): Mr. Speaker, I rise on a point of order. Over the weekend I had occasion to read page 4047 of Hansard. I withdrew the accusation of liar which I addressed to the Hon. Member for Saskatoon West (Mr. Hnatyshyn) conditionally. I was hoping that over the weekend we would all reflect on these conditions. I have returned to page 4041 of Hansard and I see that after a statement made by the Minister of Finance (Mr. Lalonde). The Hon. Member for Saskatoon West is recorded as saying:
Are you calling those people liars?
I then interjected by saying:
Are you? You're the liar.
These are clearly unparliamentary words, Mr. Speaker, and I want to withdraw them unconditionally.
I do hope that the Hon. Member for Saskatoon West will re-read the exchange as recorded on page 4047 where he said that he told the truth when he shouted to the Minister of Finance that the Minister was saying accountants and lawyers were liars. I then accused the Hon. Member on a point of order by saying that this was imputing motives. In fairness, Mr. Speaker, I suppose it was probably not imputing motives but it was putting offensive words, words like "telling a lie to the Minister of Finance", on the record. Therefore, I would hope that the conditionality of my withdrawal which is now withdrawn will lead the Hon. Member for Saskatoon West to say a few words in comment.
May 28, 1984
Hon. Ray Hnatyshyn (Saskatoon West):: Mr. Speaker, all I can say is that I am overwhelmed by the unequivocal retraction on the part of the Prime Minister (Mr. Trudeau) and I think that it is only parliamentary. Taking his lead, if there was any motivation that I imputed to the Minister of Finance (Mr. Lalonde) that was unparliamentary, I would like to say that, in the spirit of this House, I unequivocally withdraw any imputation.


Some Hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


Pierre Elliott Trudeau: Mr. Speaker, under the provisions of Standing Order 42(6), I wish to table copies in both official languages of the report entitled Ethical Conduct in the Public Sector, being a report of the task force on conflict of interest.

Mr. Speaker, I also wish to table letters I sent to Mr. Sharp and Mr. Starr, co-chairmen of the task force, in which I thanked them for their excellent work.
* *
*


PETITION
Ian Gardiner Waddell: Mr. Speaker, I have a petition which celebrates the fact that last week the students of Carleton School released 99 red balloons for peace. The petition asks that there be no more Cruise Missile testing in Canada, that Canada be a nuclear-free zone and that the wasteful spending on the arms race be diverted to more productive spending. I would like to thank the students of Carleton School for their act.
* *
*


CANADIAN HUMAN RIGHTS ACT
Mr. Dan McKenzie (Winnipeg-Assiniboine) moved: for leave to introduce Bill C-243, an Act to amend the Canadian Human Rights Act.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?
Order Paper Questions


Some Hon. Members:: Agreed.


A. Daniel McKenzie: Mr. Speaker, if my Bill, an Act to amend the Canadian Human Rights Act, were to be adopted by the House, it would provide an appeal from decisions of a human rights tribunal or any review tribunal constituted under the Act on the merits of the individual case. As the Act now reads, orders or decisions of a tribunal may be filed as orders or decisions of the Federal Court for purposes of enforcement. However, this does not extend jurisdiction to the Federal Court to confirm, dismiss or vary such orders or decisions.
The Human Rights Commission is taking up to four years to deal with complaints and Canadian citizens are having to go to the United Nations to appeal because they cannot receive positive action here in Canada.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the Bill be read a second time? At the next sitting of the House?


Some Hon. Members:: Agreed.


FOREIGN EXTRATERRITORIAL MEASURES ACT
Mark R. MacGuigan: for leave to introduce Bill C-38, an Act to authorize the making of orders relating to the production of records and the giving of information for the purposes of proceedings in foreign tribunals, relating to measures of foreign states or foreign tribunals affecting international trade or commerce and in respect of the recognition and enforcement in Canada of certain foreign judgments obtained in antitrust proceedings.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Minister shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the Bill be read a second time? At the next sitting of the House?


Some Hon. Members:: Agreed.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 743, 801 and 802.

May 28, 1984
Order Paper Questions


Mr. Greenaway: 1.	In (a) 1980 (b) 1981 (c) 1982 (d) 1983 (e) 1984 did the Department of National Revenue seek advice from outside consultants on the taxation of farmers and/or ranchers and, if so (i) what was the consultant's name (ii) what total amount was paid for the services (iii) what year was the study carried out?
2.	In the same years did the Department seek advice from outside consultants on the taxation of fishermen and, if so (a) what was the consultant's name(s) (b) what total amount was paid for the services (c) in what year was the study carried out?
3.	Was any cost incurred by the Department for the study of the taxation of fishermen conducted by Rowe and Rose in 1982 and, if so (a) what total cost (b) did the cost include (i) consultant fees (ii) travel and accommodation expenses (iii) printing and translation costs (iv) any other expenses and, if so, in each case, what amount?


Pierre Bussières: 1.
No.
2.	Yes. (a) Rowe & Rose, (b) The total amount paid is included in the answer to part 3. (c) 1982.
3.	Yes. (a) $49,789.32, (b) (i) $43,750, (ii) $5,674.56, (iii) nil, (iv) $364.76 (miscellaneous expenses such as telephone calls and publications, et cetera).


Mr. Stewart: In (a) 1981 (b) 1982 (c) 1983 (d) 1984 to date, did the Canadian International Development Agency give any money to the Idera Resource Centre of British Columbia and, if so, in each case, what amount was given and for what purposes were the funds given?


Allan Joseph MacEachen: The Canadian International Development Agency, through its Public Participation Program of the Non-Governmental Organizations Division, contributed during fiscal years: 1981-82-$60,000, 1982-83- $78,080, 1983-84-$82,500 to the Idera Resource Centre of British Columbia.
These funds were contributed to assist IDERA in its development education programs. IDERA operates a local educational development and overseas resource and animation centre.


Mr. Stewart: In (a) 1981 (b) 1982 (c) 1983 (d) 1984 to date, did the Canadian International Development Agency give any money to the Victoria International Development Education Association and, if so, in each case, what amount was given and for what purposes were the funds given?


Allan Joseph MacEachen: The Canadian International Development Agency, through its Public Participation Program of the Non-Governmental Organizations Division, contributed during fiscal years: 1981-82-$30,000, 1982-83-
$38,680, 1983-84-$50,155 to the Victoria International Development Education Association.
These funds were used to assist the development education and animation program of the VIDEA with special focus on the educational system. VIDEA has developed curriculum materials currently being used by local school boards. VIDEA is also organizing a summer training session for Canadian NGO's working in development education.


Mr. Speaker:: The questions as enumerated by the Parliamentary Secretary have been answered.


John Leslie Evans: Mr. Speaker, if question No. 51 could be made an order for return, this return would be tabled immediately.


Mr. Speaker:: Is it the pleasure of the House that question No. 51 be deemed to have been made an order for return?


Some Hon. Members:: Agreed.


Mr. Howie: 1.	Which departments contribute to associations for the handicapped?
2.	In the fiscal year 1982-83 (a) how many projects for handicapped persons were funded by each department (b) what amount was spent by each department in support of the projects?
3.	What amount was contributed by each department in the fiscal year 1982-83 to associations in New Brunswick?
Return tabled.


John Leslie Evans: Mr. Speaker, I would ask that the remaining questions be allowed to stand.


Mr. Speaker:: Shall the remaining questions stand?


A. Daniel McKenzie: Mr. Speaker, once again I would like to ask the Parliamentary Secretary a question with regard to a starred question that I placed on the Order Paper on April 10, being question No. 792. What I merely wanted to know was whether Mr. P. T. Zarry of the Advertising Management Group, Cabinet Committee, is receiving $1,500 a day or $2,000 a day. I have information to the effect that he received an increase of $500 a day as of January 1.
This question is a starred question, Mr. Speaker, and there is no reason on earth for it to take this length of time to receive an answer to a simple question like that. I would like to have some kind of explanation regarding the starred question procedure. Has the starred question procedure now been changed? Will starred questions now be sitting on the Order Paper for
May 28, 1984

years and years or will steps be taken to have them answered in a reasonable period of time?


John Leslie Evans: Mr. Speaker, I can only refer the Hon. Member to the numerous occasions on which we have dealt with the starred question issue. A starred question only means that the answer will be read in the House but gives no precedence as to timing. I will as always consult with the Minister and see if we cannot get an answer to the Hon. Member at the earliest possible opportunity.
It would appear to me as if the Hon. Member has an answer to his question. If that is the case, then it would seem that under Standing Orders, if the information is publicly available, and the Hon. Member has just made it publicly available, it is no longer appropriate for the House.


A. Daniel McKenzie: Mr. Speaker, I would like it confirmed officially whether Mr. Zarry is receiving $1,500 a day or $2,000 a day. If I knew it was $2,000 a day, I would not have to put a starred question on the Order Paper. I would like it confirmed by the Government exactly what this man is being paid.


Mr. Speaker:: Shall the remaining questions stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Bussieres that Bill C-25, an Act respecting the Canada Development Corporation, Canada Development Investment Corporation and certain other corporations, be read the second time and referred to the Standing Committee of Finance, Trade and Economic Affairs.
Harvie Andre: Mr. Speaker, as I indicated before the lunch hour, the address which was given by my colleague, the Hon. Member for Calgary South (Mr. Thompson), in kicking off second reading debate on this Bill covered the salient reasons for which any reasonable person would strenuously object to this legislation and help defeat it. I do not want to go over all of the ground covered by my colleague, but I would like to elaborate on one point which has been of interest to me in the past.
The provisions of this Bill give CDIC a mandate to permit it to carry up to $3 billion worth of debt as an agent of Her Majesty. That debt is precisely the same as a direct debt of the Government. In other words, the taxpayers of Canada are
Development Investment Corporations Act obligated for that debt. The Bill also provides $1 billion in equity. As my colleague pointed out, it seems like an excessive amount of both debt and equity for a company which is supposedly being created for the purpose of privatizing certain Crown corporations. That is the statement which Senator Austin, among others, has made, but given the history of statements and actions by this Government and the diversity of the two, we would be fools to take it at face value.
Of more concern to me is the provision which would allow the Government to raise the debt and equity ceilings by a $1 item in the estimates. For a number of years this Government has adopted the practice of legislating through the estimates, legislating through the Appropriations Act. In fact, VIA Rail, which is another monstrous Crown corporation, was created by a $1 vote under the Appropriations Act. The Appropriations Act over the years has been full of examples of improper legislating by $1 items. That approach has been objected to strenuously by myself and many other Members of the House for a number of years. I would invite Members to recall the words of Mr. Speaker Lamoureux, Mr. Speaker Jerome and Madam Speaker Sauve who pointed out the impropriety of that approach. They pointed out how wrong it is and what an offence it is to our parliamentary traditions to legislate through the Appropriations Act. It is an absolute offence to 800 years of parliamentary history to attempt to legislate in this way. Three years ago, Madam Speaker Sauve ruled that that process had to stop. After many warnings from successive Speakers-warnings unheeded by that contemptuous bunch opposite-Madam Speaker finally ruled that it was improper to legislate in that fashion.
What do we have before us now from the Government in Bill C-25? We have a move to make that activity legal. It is utter contempt for parliamentary traditions and for the proper way of doing things. It is utter and complete contempt. Coming from Jack Austin, that is not surprising. He is contemptuous of everything in this place. However, we would fail completely in our responsibilities and we would be ignoring the traditions and values of parliamentary democracy if we did not fight at least that provision with every ounce of strength we have.
I call upon responsible Members wherever they are to take a good look at what the Government is trying to do, and to think a little bit about parliamentary traditions and their responsibility to future generations who will look to this Parliament to retain our democratic system. We must ensure that Jack Austin, Ed Clark and the rest of those folks who find Parliament a pain in the backside are not allowed to get away with this. We must ensure that this terrible Bill goes to the trash-can, where it deserves to go.


The Acting Speaker (Mr. Herbert):: There follows a ten-minute period for questions and comments. If there are no Members wanting to put questions, for continuing debate, the Hon. Member for Crowfoot (Mr. Malone).


Arnold John Malone: Mr. Speaker, it is very important that Bill C-25 be debated now because as long as

May 28, 1984
Development Investment Corporations Act there are Liberals around, this Bill may never be debated properly again. What we are really talking about is the Crown corporations' Crown corporation. This is the big daddy. The Government has run into trouble with Crown corporations left and right for a number of years. What was the answer? The answer was to create a Crown corporation to look after Crown corporations. To create a Crown corporation to manage all others is simply to put down another layer, another veil of secrecy, and to wallpaper one more time away from public scrutiny the actual facts of how the Crown corporations and their fiscal responsibilities are managed. The Government believes that somehow another layer of paint will keep the people from knowing why these Crown corporations are, as the Auditor General, Kenneth Dye, and a succession of Auditors General have told us, becoming a sub-level of government and are one of the major areas of expenditure and debt to which there is no accessibility in the accounts.
By putting in place another agency that will come between government and corporations, we do two things. First, we layer in a way in which information becomes more difficult to obtain; and second, we restrict the capacity of Ministers to be responsible for the various agencies and Crown corporations. So we are faced with this debate to create the Canada Development Investment Corporation.
If the Liberals remain in power, we are not likely to debate this matter again because, as the Hon. Member for Calgary Centre (Mr. Andre) has just mentioned, any increase in expenditures could be accomplished through the estimates and $1 votes. Legal or otherwise, past Speakers have said that that would take us down the road of avoiding Parliament and public comment by putting in place an agency that, rightly or wrongly, is set free to tap public funds but is never accountable to the public for the money it is spending. That is despicable in terms of democracy. Parliament was established in the first place to put controls on the King's purse. It comes back to the fundamental reason for which we are here, and that is dollar accountability.
This Government is operating a string of catastrophes in Crown corporations. It is obviously looking for a mechanism by which it can hide the disasters which it has created. If the Bill is passed, the results will be disadvantageous for Canadians. I would like to point out some of the reasons for which I believe this umbrella agency which will look after all agencies of government is not in the best interests of Canadians.
The number of Crown corporations is not necessarily going to decrease. In response to a question I placed on the Order Paper, we learned that there were in excess of 350 Crown corporations. There are newspaper articles which estimate that there are somewhere in the neighbourhood of more than 400 Crown corporations wholly or partially owned by the federal Government. The Auditors General have underscored that Crown corporations are a sub-level of government which we are unable to tap into and for which there is no accountability or responsibility. Mr. Speaker, that is one of the most serious defects in the Bill. Even if some Minister might say that that is the Government's intended position, I suggest to you, Sir, that
unless it is specifically stated that the objective of the umbrella agency is to decrease the numbers of Crown corporations, that that is its purpose and its goal, then on the basis of lack of clarity this Bill must be amended.
Another flaw I find in the Bill is that there is no provision for a sunset law with respect to any of the Crown corporations, or even the master corporation itself, and there should in fact be a sunset law which will bring these corporations before committees of Parliament or Parliament itself. We have a list of money losers such as de Havilland, Canadair, Petro-Canada, Teleglobe, CN and CBC; some 350 corporations. Surely we should not just be giving birth to all these corporations and never once ask the question whether the people of Canada have the right to decide if the corporation should continue to exist.
There may have been at some point in the social and economic culture of a nation a need for a corporation to be started by government. I recognize that from time to time there will be the coming together of conditions which will cause, in the nation's interest, such a corporation to be struck. But surely that does not mean that once it is struck, it should exist ad infinitum without question, simply collecting more and more of the taxpayer's money.
I watch CBC's The Journal on television at night. I enjoy the CBC news and I feel The Journal portion of it is good. However, Mr. Speaker, I personally would have to question whether it is worth $1 million a week. That is an enormous expenditure for 40 minutes of television every night. If there is not some kind of sunset provision in Bill C-25 which will automatically bring the corporation before committees of Parliament for review, then it seems to me it fails on one of the very basic and fundamental questions of Crown corporations themselves. In that respect, I submit that this piece of legislation must either be amended or should not pass. This corporation, which is presently far too removed from Parliament, will add another layer of government and, Sir, that is my third point. If there is any outcry among the Canadian people, it is an outcry that governments must become more open rather than more closed.
As the Auditor General tells us, there is a sub-layer of government which exists in the form of Crown corporations. Surely, adding another bureaucracy between Parliament and these corporations-this super corporation as a management group-is not bringing government closer but is simply hiding and shielding it, putting it in a more removed form than ever. We as parliamentarians are not going to be able to be in a position to bring to task and analyse each of those corporations. We are now going to have to go through a super mother corporation and, boy, the Government will be able to bamboozle Parliament one more time, giving us a mix of numbers and figures which point in different directions in such a way that the people of Canada will end up simply paying more and more without any hope of bringing under control the spending of their tax dollars.
May 28, 1984

Parliament is losing its control of the public purse. That is extremely important because the role of this institution itself is to be able to control expenditure of the taxpayers' money. What this Bill does is set aside the rights of parliamentarians and the institution of Parliament itself to be able to analyse the individual budgets and fiscal accounts of any one corporation. It denies Parliament access to these corporations.
My wish would have been to have made every Crown corporation subject to an appearance at the call of any special standing committee of this House whose obligation would be to call corporations before it, without reference to the Minister, and to ask that corporation to justify its existence. If we, as Members of Parliament, through the committee structure, and without having a ministerial reference necessary, could point to any Crown corporation and say we want it to show up in front of us in the committee room for whatever period of time is necessary, then put it through a drilling documentation of its fiscal accounts, I believe Canadians by and large would be better served.
I asked the question, Mr. Speaker, a few moments ago about the justification of the CBC's news program, The Journal. It might be that after close examination the Government could justify that expenditure. However, I can tell you quite frankly that the vast majority of Canadians, if they were simply asked if they want to spend $1 million a week for a 40-minute television program, would answer, obviously, no. We should have that opportunity to bring Crown corporations which are using the taxpayers' money before Parliament, the people's representatives, and put that very basic and fundamental question. Not to be able to do that, Sir, is simply another indication of Parliament losing its power and control.
The CDIC was established in secrecy. It has operated since 1982 and it remains immune from Parliament. It is so immune that it is even immune to the Combines Investigation Act. Yet, Sir, that agency which was established two years ago is just now coming before Parliament for authority to exist. The truth of the matter is that it exists today with a most suspicious character. I submit that we have every reason to doubt and question a corporation which came into being out of such secrecy when, in fact, these Crown corporations ought to be completely open.
The Auditor General tells us all, tells Canadians everywhere, to be worried and concerned about the sub-level of government which exists in the Crown corporation structure. The Government's answer to that is to take people like Joel Bell, Maurice Strong and the good Senator from Vancouver and put them at the head of the head Crown corporation. On the very face of it, it seems to me that Canadians everywhere would be annoyed, disgusted and disappointed at such an agency. This hidden layer of Government simply becomes hidden by another layer.
In his speech, the Member for Vancouver-Kingsway (Mr. Waddell) said that he did not know whether CDIC is to expand intervention in the Canadian economy or to privatize
Development Investment Corporations Act the present Crown corporation. I submit, that if you cannot see what the intentions of this new corporation are, you would not be able to read the letter E on an eye chart. It is obvious what the new corporation is for. It is not there for the purpose of decentralizing or privatizing. It is there to get control of the economy and to expand.
As one reads through the objectives of the CDIC, one sees numerous references to expansion and acquiring. There are numerous references which would imply that this corporation is to encourage growth of Crown corporations. Nowhere within those objectives is found the word "divest". There is no indication that we will somehow be able to rid ourselves of some Crown corporations. There is not a single hint that at some time some Crown corporation may have lived its useful life and should be set aside. It says only that we should acquire more and more.
In spelling out the mandate for this new super corporation, the dangerous word "none" was typed under the title "Restrictions". No restrictions were to apply to this new super corporation. The Government creates a Frankenstein, and then will not tell him where to play or what time he should go to bed. It is a case of creating, with the people's money, an agency so strong and powerful that in and of its own initiatives it can acquire and project new corporate structures under the name of Government. That is a dangerous concept. All Canadians should recognize that this ought not to be passed into law.
The country and Government need more openness rather than another layer of underbrush and fog. CDIC has been operating for two years, without the approval of Parliament, in conflict with the existing federal laws. Coming into this great new agency now are Maurice Strong, Joel Bell and Jack Austing. Maurice Strong is the man who bought Petrofina for twice the value of its shares. He is going to be running this corporation. Joel Bell is the person who said that Petro-Canada would not acquire a single service anywhere in Canada. He is coming in as part of the management of this new agency. Jack Austin associates himself with the uranium cartel. Those are the people who will run this new corporation. The Government tries to make us believe that the purpose of this corporation is to privatize.
When Joel Bell says that, I believe him just as much as when he says that Petro-Canada will not acquire a single service station. If this agency is to privatize Crown corporations, let us see that specified in the objectives. With the words "acquire" and "obtain", and without the objective of divesting, the Bill remains dangerous and should be either amended or rejected.
Sending Maurice Strong, Joel Bell and Jack Austin to privatize Crown corporations is like sending a tomcat to guard mice. It just will not happen. Why should the people of Canada believe that these persons, with the records which I have just indicated, are in any way interested in the private sector?
I have many more comments which I would like to make, Mr. Speaker. I got through about one-half of my notes.I see
4112

May 28, 1984
Development Investment Corporations Act
you are indicating my time is up. If that is the case, in conclusion I would say that-


Ian Deans: Ask for consent to continue.


Arnold John Malone: My good friend is asking if I would ask for consent to continue. Perhaps I would just ask you, Mr. Speaker, if you would seek that consent. If given, I will continue.


Ian Deans: Absolutely.


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Herbert):: If a Member requests permission to continue beyond the 20 minute limit, it requires the unanimous consent of the House.


John Leslie Evans: How much time?


The Acting Speaker (Mr. Herbert):: Is there a time limit?


Ian Deans: No, it is a fascinating speech.


The Acting Speaker (Mr. Herbert):: Is there unanimous consent for the Hon. Member to continue his speech?


Some Hon. Members:: Agreed.


Mr. Fleming:: What do you mean it is a fascinating speech? He has said the same thing over 11 times so far.


The Acting Speaker (Mr. Herbert):: Is there unanimous consent?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Herbert):: There is consent. The Hon. Member for Crowfoot (Mr. Malone).


Arnold John Malone: Mr. Speaker, I will not abuse the privilege given to me.


Ian Deans: You said you were only halfway through. I am expecting 20 more minutes.


Arnold John Malone: You will certainly get enough detail here to be able to give a good 20 minute speech. Why should we grant favourable approval to an agency which has subverted Parliament, intends to operate in secrecy and defies the laws of our land? The persons who I have already pointed out are to become the managers of CDIC. They bought Petro-Canada from a Belgian oil company at double its value. The Prime Minister (Mr. Trudeau) claims that the land is strong. It is not strong like moose. It is strong like skunk. There is great concern with respect to-


Ian Deans: This is deteriorating.


Arnold John Malone: You think you should not have given me unanimous consent. Well you think about that just a bit more.


Ian Deans: This is deteriorating something awful since we gave you unanimous consent.


Arnold John Malone: People wonder what the principles are by which this company will be managed. What objectives are CDIC to assume? If one checks under the restrictions of the corporation, one finds that there is to be no restriction whatsoever on this company. It is typed right in that there is to be no restriction. That comes back to the fundamental principle of a Crown corporation. No Crown corporation should be set up as an instrument of Government without it first being specified that it is there to meet the objectives of a Government policy. That policy ought to be spelled out very clearly. There should never be the establishment of a company for which the restrictions are labelled as ''none", yet that is precisely the situation with regard to CDIC. The restrictions to its management are none. Even though my friend opposite chastises me while he is giving me extended time, I make no apologies for repeating that. It is so serious that it deserves to be repeated.


Ian Deans: Repeat it again.


Arnold John Malone: To repeat it again, indeed, the restrictions on this corporation are none.


Ian Deans: None at all?


Arnold John Malone: That, Sir, is more important than the four letters it takes to spell it. Every Crown corporation should be set up with specific stated objectives. Once the objectives are met, an analysis should be made with regard to the continued existence of the corporation.
The Government is willing to create this monster corporation, but is unwilling to publicly disclose the nature of its restrictions as it should. The corporation has a mandate to grow, expand and increase but does not have the specific objective to divest, shrink or decrease.
There are currently some 350,000 Crown corporations, and some suggest there are in excess of 400 Crown corporations when one takes into account wholly and partially owned corporations. That figure in itself is a very important reason to bring these Crown corporations under constant scrutiny.
Bill C-25 is a guarantee of more bureaucracy, intervention and centralized planning which consequently removes the agencies themselves from the touch of the people. In fact, it strangles and destroys the initiatives of individuals. It gives the corporation the ability to acquire without any obligation to divest. Divesting must be part of its objectives if those objectives are to privatize. If it is the intention of this corporation to divest, then it must be so stated.
I want to make it clear the Crown corporations are not automatically wrong. Obviously there are social and economic conditions that require the establishment of Crown corporations from time to time. However, no Crown corporation should be established and allowed to continue without challenge. This Bill does not provide a legitimate mechanism for challenging the existence and continued expenditures for each or all of those Crown corporations.


Ian Deans: You mean there are no conditions?
May 28, 1984


Arnold John Malone: There are no conditions. There are none. In opening this debate today, the Minister of National Revenue (Mr. Bussieres) implied that the corporation will work within the public view. That is false in the extreme. The corporation is established so that it can always make an end run around Parliament. It becomes a shield between Parliament and the existing Crown corporations. While there is a legitimate concern being voiced for the inspection of Crown corporations, the mechanism being put before us is not workable.
I suggest that the most effective way to make Crown corporations accountable is to establish a special parliamentary committee with the authority to call Crown corporations without ministerial reference, to issue subpoenas to hear sworn evidence and to take the necessary time to conduct a full and legitimate analysis of their books. Perhaps this could be done in co-operation with the Auditor General's staff, such as is done in a United States Congressional or Senate committee. This parliamentary committee could scrutinize Crown corporations much more effectively than an obscure new Crown corporation whose job it is to manage all other corporations but really does not permit us to begin to review them at all.
According to Bill C-25, the CDIC can acquire up to $4 billion. Furthermore, it can get any other amount of money the Government ascribes to it on the basis of a dollar vote. Currently, it can run up to one-tenth of our annual deficit through the Crown corporation structure, without having the dollar vote.
Let us put into perspective what the Government is doing with $4 billion of the taxpayers' money. That amount in one dollar bills could be laid end to end two and one-half times from Vancouver to Halifax. The CDIC is being given that amount to strutinize and manage all other Crown corporations. It is simply an attempt to hide a sublayer of government through Crown corporations, as has been pointed out by these auditors general, and the latest Auditor General, Kenneth Dye, in particular.
In conclusion, I am pleased to hear the Government talk about the need to privatize Crown corporations. However, I am not being at all fooled by their camouflage because the fact is that the structure and the personnel it has put into place means that Canada will have an acceleration of Crown owned companies that will encroach upon the free marketplace and the right of people to purchase. It will indebt our citizens ever deeper. In the final analysis, this is not a agency for protection but an agency to veil and hide the true facts from Parliament, and consequently the Canadian people. I hope that Members of Parliament from all Parties will return to the basic principles that we are trying to establish and reject this Bill as it presently exists.


The Acting Speaker (Mr. Herbert):: There follows a ten-minute period for questions or comments. Debate.


Gordon Edward Taylor: Mr. Speaker, I wish to say a few words in this debate on Bill C-25 because I believe it gives us an excellent opportunity to set out the reason why our country is in such terrible shape. While I am not one who
Development Investment Corporations Act glorys in gloom and doom, neither will I put my head in the sand and ignore the conditions that exist in this country.
Our country was built on the principle of free enterprise. Many people went into business on their own, sometimes with little more than the shirts on their backs. They had very little money but it was their own and they believed in what they were doing. They worked hard and prospered. When thousands of people did this, it made the country great.
We have strayed far from that free enterprise principle. Today it is difficult for an individual to invest his money because he must receive approval from numerous boards and agencies, which only leads to discouragement. It is no wonder that there are two million people unemployed today. If Canadians were permitted to invest their money, run their own business and assume responsibility for their own mistakes or successes without government interference, we would not have these conditions today. A prime reason for so much unemployment is simply that the Government is trying to run our affairs.
I have given some examples of this before, but I wish to repeat them because they are so evident. For example, the capital cost allowance was an excellent innovation. It was established in recognition of the fact that equipment, such as machinery, wears out. Because it wears out on its own, there should be enough money to eventually replace that machine. So we introduced the capital cost allowance provision which is a sound principle. It is accepted universally in free enterprise countries.
What did this Government do with regard to capital cost allowance? It introduced another principle. It said the machine does not wear out the first part of the year, so the Government will not allow any capital cost allowance in the first year. That disallowance, and it may seem very small, was the means of throwing hundreds of people out of work, particularly in Eastern Canada because that is where farm machinery and other equipment is manufactured. I see the Hon. Member for Ottawa Centre (Mr. Evans) just shaking his head-at least I hear him shaking his head. But I want to tell you, Mr. Speaker, he should look at the facts.


John Leslie Evans: You should look at the facts.


Gordon Edward Taylor: There is one agency in my constituency that cancelled an order for seven combines. That is just one agency. The order for the seven combines was cancelled because the farmers said after that provision came through "we will stick with our own. We will make our old combines do, or we will rent out the work." As a result, seven combines that would have been manufactured in Eastern Canada were not manufactured. Multiply that kind of cancellation from scores of dealers across the country and you begin to see why Government policy has been so influential in causing unemployment.
In this Bill we have an aggravation of Government policy. We have another corporation that is supposed to solve the problems of Canada. I have not yet seen a corporation that

May 28, 1984
Development Investment Corporations Act solved the problems of Canada, and I do not expect to see one. If we could forget a lot of these corporations, go back to the simple principles of free enterprise and create a climate where people will invest their own money, take responsibility for losing it, and of course, have the chance to make a profit without the Government grabbing most of it, then we would see things altogether differently here in Canada.
Risk is fine. In a free enterprise system you know there is a risk of losing or making money. But you survey the situation and come to the conclusion whether you can make a success. If you succeed, you make a few dollars. You have a profit. You risk the money you have, and you work in order to achieve that end. That is simply free enterprise. But we do not like that anymore. Perhaps it is too simple. You hear people say profit is a bad word. You cannot make a dollar anymore without feeling guilty, or that the Government will grab too much of it if you do make a dollar. Consequently we are killing the goose of free enterprise that has laid the golden eggs for so many years and has kept the country going. We are substituting the goose for corporations which do not invest their own money, but invest the people's money. That is the big difference. Corporations will do anything with the peoples' money. They do not have to take the responsibility if they lose thousands of dollars. They simply go back to the Government trough and get more money. It is almost as simple as that.
Canadians are getting well informed about Crown corporations. They have seen examples where thousands of dollars are being used up wastefully by corportions with no accountability for that waste. That is really why this Bill is before us today. CDIC needs money again.
It is very strange, but the Government did not come to Parliament when the CDIC was formed. The Government avoided Parliament for two years while the CDIC was set up, financed and operated. But now CDIC needs more money. The Government ignored Parliament until now when CDIC has run out of ways of getting money without coming to Parliament.
What does the Government say the objective of this organization is? What is it supposed to do? What is its purpose? To put it bluntly, it is to establish the Canada Development Investment Corporation and to clarify its status. That part is necessary. It is to empower and prepare the Canada Development Corporation for privatization. Isn't that wonderful, Mr. Speaker. It is to prepare the Canada Development Corporation for privatization. If that is the objective, I would like to know where in the Bill that is going to be done. It looks to me as though the Government is getting further and further away from privatization and wanting more and more Crown corporations to run the business of this country.
When this Bill was first introduced on May 25, 1983, under Bill C-158, it set out certain items. The new Bill, Bill C-25 incorporated some changes to Bill C-158 as well as putting in some additions. It is to make CDIC conform with the general framework proposed for all Crown corporations under Bill C-24.
Maybe that is not that bad. If we are going to have Crown corporations, maybe there should be some basic premise to which they all conform. It is stated that this is supposed to be the objective. The Government wants a commercial operation with the control residing with the private shareholders. That is standard except at the first chance the Government will use the CDIC to bail out the companies in order to pursue the Government's own political objectives. In other words, the Government overrides the shareholders.
There are a number of things I hope to deal with in the time allotted to me this afternoon that shows while the objective is to make the corporations conform to some of the basic premises in Bill C-24, it is not doing that at all. With the increased power of the Cabinet the Government can set the remuneration of the CDIC directors, chairman, and president. Let us look at Clause 19 in Bill C-25. It reads:
The company may employ such officers, agents and employees as are necessary for the purposes of the company and, except as provided in subsection (2), the officers, agents and employees shall be deemed not be employed in the public service of Canada.
They will not be civil servants. That is fine. Right after we find power in the next clause. The next clause gives the Cabinet power to override that clause under the conditions set out. We find that all the way through the Bill. Principles are set out and then there are powers to override. We found that also in Bill C-24. In fact, that is far too evident in Bill C-24.
Then we come to another clause. This morning the Minister said the Government will present all of the facts to Parliament and report to Parliament. He quoted Clause 36. He said there will be accountability because the Government will submit this whole thing to the Parliament of Canada. If the whole budget of CDIC were brought here and we had an open debate and questions either in Committee of the Whole or a committee set up by the House, I could see some rhyme or reason to what the Government is saying. But when I looked at the Bill immediately after the Minister said that, that is not what clause 36 does at all.
Clause 36 reads:
The Minister may, with the approval of the Governor in Council, cause a motion for the authorization of an acquisition referred to in Section 35 to be moved in both Houses of Parliament.
He may, he does not have to; it is up to him. When it comes to budgets, the Bill gives authority to the Minister to bring in a summary. He does not have to bring in the entire budget at all. He may bring in a summary which he approves. He has to approve it before it can be brought before the Parliament of Canada. We are not entrusted with the entire budget. We will only be entrusted with a summary approved by the Minister. He can leave out what he wants and include what he wants. That is a pretty amateurish way of running business. Certainly it is another black eye for the people of Canada and for the Parliament of Canada.
May 28, 1984

The Minister is making an awful lot of to-do about Clause 33 and disclosures as to what the corporation is doing. Clause 33 reads:
The Minister shall cause a copy of every summary he approves-
Is that not interesting? He will not bring in an income account or expenditures account. We will not see them any more than we do right now. Under law he will be able to bring in a copy of every summary he approves, and only the summary he approves is what Parliament will see. That is terrible legislation. The House should not pass legislation which gives the Minister an opportunity to fool the people of Canada, and that is exactly what it is doing.
Surely Canadians are entitled to know what is happening to their dollars. It is their money. Under the free enterprise system, when people invest money they know what happens to it. If a company is formed, the shareholders know what happens. They approve policy and they receive an expense and income accounting of every dollar spent. They can chastize the directors or managers if they find that things are not going right. However, in this case the shareholders of Canada or the people of Canada will not have that opportunity. They will simply receive a copy of every summary the Minister approves. If he does not approve any, nothing will come. He can leave out what he wants under Clauses 31 and 32.
Why is the whole capital budget not brought before the House of Commons for discussion, not just the part the Minister wants to bring before us? Talk about disclosure! In this Bill disclosure is just a nice word which means nothing. It does not do anything. Of course this is not surprising when we have a man like Senator Austin running the show in CDC and CDIC. The man was never able to get elected. Every time he tried, the people said: "Nothing doing, we are not trusting him in Parliament". I see Mr. Speaker indicating that I only have two minutes remaining; I have barely started. The people have said that they would not trust Senator Austin in Parliament and have refused to send him here. Therefore, what did he do? He became involved in a Party which appointed him a Senator. He kowtowed and was put in charge of this corporation. He has never run a successful business in his life, and he is not running one now. Look at the mess he made of Canadair. Even its own president said that the corporation did not need 22 vice-presidents.
What kind of a business are they running? No wonder Canadians are becoming tired of government. They think there is no possible hope of having a government which will run the country in accordance with the thinking of the people. Reflecting the thinking of the people is free enterprise. That Government over there would be pretty smart if it threw out these corporations and returned to the basic principles of free enterprise which built this country.


The Acting Speaker (Mr. Herbert);: There follows a 10-minute period for questions or comments. As there is no one wanting to put any questions, for continuing debate, the Hon. Member for Lanark-Renfrew-Carleton (Mr. Dick).
Development Investment Corporations Act


Paul Wyatt Dick: Mr. Speaker, I should like to make a short intervention relating to Bill C-25. The present Government has made much of this Bill and its companion piece of legislation, Bill C-24. The Government would have us accept this as a signal that it is trying to get a grip on Crown corporations and the multiple embarrassments which have been springing from them. In their rhetoric and fanfare, the Liberals would have us believe that there has been a miraculous transformation in the policy of their Party and in the thinking of the Government on this issue.
This Government would have the people of Canada, who have been sickened by weekly headlines relating to Crown corporations, believe that it has learned its lesson and is trying desperately to make amends for its past errors. The Government would have Canadian taxpayers swallow at face value its deathbed repentance. However, with the least amount of scrutiny, one can see that this transformation is nothing but mere lip service. The Government is paying lip service to the goals of greater accountability, greater control and greater direction of Crown corporations. It has no intention of fulfilling those goals.
Sown in this Bill C-25 are not the seeds of accountability and divestiture, but the seeds of more government intervention, the seeds of more government ownership, the seeds of more politicizing of what should be purely market decisions, the seeds of more heavy-handed intrusions for exclusively political reasons and, worst of all, the seeds of more deficit, a much larger deficit. This Bill to continue CDIC must be examined in conjunction with its predecessor in the last Parliament, Bill C-158, and with its companion piece of legislation in this Parliament, Bill C-24-the Government's alleged solution to its past disastrous policies on the growth of commercial Crown corporations.
The present Liberal Government indicates that the mandate of CDIC is to hold and manage assets. What a fine job it has been doing with Canadair and de Havilland! Also, the Liberal Government says that the mandate of CDIC is to effect divestitures. It has not divested anything yet. It has talked about divesting itself of Northern Transportation. A proposal was put in 1979 by an organization to buy that company when it was a going concern, but after the National Energy Program, there is nothing for it to carry up the Mackenzie Valley. It does not have the clientele it once had or carry the freight it once did. They are not going to be able to sell it for the same price they could have sold it for then.
The Government says the CDIC's mandate is also to make investments in a commercial manner as a federal agent. That is the intent. The Government wants to intervene some more. Then, for public consumption, the Government tacks on something else. It wants to accent divestiture. The CDIC now manages Canadair, de Havilland Aircraft, Eldorado Nuclear and Teleglobe Canada as wholly-owned subsidiaries, and manages the 48 per cent voting stock, 85 per cent of the actual shares of the Canada Development Corporation. Essentially

May 28, 1984
Development Investment Corporations Act this Bill is designed to regularize the incorporation of CDIC retroactively, making legal the illegal transfer of shares of Eldorado Nuclear and the CDC and granting responsibility for Teleglobe Canada to CDIC. The earlier transfer of those shares contravene both the intent of Parliament and the then existing legislation. The CDIC was set up illegally by this Government, which would now have us grant after the fact approval to this earlier illegal action.
The Minister responsible for this Bill has made much of it as a tool of management and divestiture, and downplays its role as a tool of investment. In other words, he downplays the fact that this Government wants to intervene more in commercial activity. Yet, on the other hand, both the chairman, Maurice Strong and the president, Joel Bell, of CDIC have publicly taken the complete opposite tack. They do not talk about divestiture; they have not mentioned it yet. Those two officials proudly enforce the view that the Government alone can respond to new economic challenges. They endorse the view that the appropriate response to those challenges is greater and more direct Government involvement.
Under Bill C-25, the CDIC gets a wide mandate, excessively wide in the view of this Party. I want to go on record as saying the Progressive Conservative Party is not against Crown corporations per se. We agree there is a role for Crown corporations. This Party was associated with the setting up of a number of Crown corporations many decades ago. In a country so wide and diversified as Canada and with so little population, sometimes there is the necessity for a Crown corporation to play a role. But it is the last choice. We would prefer the public sector pick up and do the work through companies listed on stock exchanges and so on.
The articles of incorporation of CDIC do not list any restrictions on the business it may carry jon. When we look at the illegal Order in Council which set up this corporation, we find it speaks of investing, assisting, expanding, widening and carrying out all activities in the best interests of Canada operating in a commercial manner. All activities. It does not mention divesting. We can only assume, therefore, that the Minister and the Cabinet, in talking about divestiture, are trying to pull a little ploy for public consumption while they hide their real intent. Make no mistake about it; both the present Government and present management of CDIC view the role of CDIC as that of economic intrusion under an exceedingly vague mandate. It is vague precisely so it can be used to serve essentially political goals and write blank cheques; so it can be used to duplicate all the past disasters of Crown corporations, meddling in what should be strictly commercial matters. Yet the Government would have us believe at the same time that Bill C-24, the companion legislation, will clear-up some of these problems. There is no clear, precise definition of the mandate or the objectives of CDIC anywhere. We know from past experience with this Government what that state of affairs leads to. It leads to disaster.
The Government has taken hold of a new catch-phrase, that of accountability. We on the Opposition side of the House, for the time being, have been talking about accountability for
almost ten years. For us it is not some mere catch-phrase. For us it is not designed as part of a public relations scam. For the Progressive Conservative Party, accountability is a commitment. What does Bill C-25 tell us about the depth of the Government's commitment? Under Clause 41, CDIC will be pointedly free or exempt from Section 24 to 26 of the Statutory Instruments Act with respect to any directives or orders made under Bill C-25. In other words, CDIC will be exempt from the provisions for public access to such statutory instruments. Why? The Government is trying to hide things again. The public can neither copy nor take away copies of such orders and directives. There is no permanent reference of such directives and orders to any of the standing committees of Parliament, whereas in the case of all other statutes, regulations and directives, they are all referred to the Standing Committee on Regulations and Other Statutory Instruments. In other words, Mr. Speaker, they have excluded CDIC from some fairly heavy and what could be onerous provisions but which are important for a company playing around with our tax dollars. So much for accountability. So much for public responsibility.
We are told that Bill C-24 is designed to enhance the control, direction and accountability of Crown corporations. We are told it is going to be the grand solution, the framework on which the future of public corporations will be made to adhere, and the framework which will clear up all that has gone wrong in the past. It is of such value to the interests of greater control, direction and accountability that in Bill C-25, introduced at precisely the same time as Bill C-24, we find that on at least six occasions the CDIC is either exempt from the application of Bill C-24 or the Cabinet is pointedly authorized to allow such exemptions. We need look no further than Bill C-25 to see the illusion of the present Government's commitment to accountability.
Last year, Bill C-158, the predecessor to Bill C-25 which we are discussing today, provided that Parliament would have seen the complete capital budgets of the CDIC after approval by Cabinet. One year later, this regime has decided that only summaries of corporate plans and capital budgets of the CDIC will be tabled. The Bill has been watered down already.
Under this Bill, Parliamentary approval will be required for CDIC to acquire new wholly-owned subsidiaries but, in the same breath, Cabinet is given an override on that requirement. Clause 41 waives the requirement to table before Parliament any information that the Minister feels would be detrimental to the commercial interests of either CDIC or any of its wholly-owned subsidiaries. These are major loopholes.
Let us not ignore the fact that under this Bill, CDIC has a $3 billion debt limit which includes the borrowings of subsidiary corporations. The CDIC is allowed to raise $3 billion in the form of debt and it will never have to come back to Parliament to ask for permission to do so. Some accountability that is. Aggregate payments of up to $1 billion from the Consolidated Revenue Fund can be authorized by Cabinet.
May 28, 1984

Some accountability that is. Parliamentary appropriations would only be required for payments in excess of $1 billion.
The Minister has attempted to sell this Bill and the CDIC as an instrument of divestiture. When we see a debt ceiling of $3 billion and an equity ceiling of $1 billion, we cannot believe for a moment that this is the true thrust of government policy. As if the ceilings were not high enough, and in fact we believe that they are already too high, the Government has carefully allowed in Bill C-25 for the ability to raise both the debt and equity ceilings through the simple expedient of a $1 item in the Appropriations Act. That is what Liberal Members call accountability.
It is apparent to those of us on this side of the House that the deficiencies of Bill C-25 are such that the CDIC can only become an instrument for more disasters and for what almost amounts to less accountability and management. We are told that the CDIC will resolve most of the problems which commercial Crown corporations have had when dealing with the Government and that it will make up for structural deficiencies. I would not want to count on that. As usual with this regime, the answer to every problem is to create a new layer of Government and a new layer of bureaucracy which by one more step protects diversions from public accountability and Parliamentary scrutiny.
We believe that the Liberal regime only pays lip service to divestiture. This Bill proves that. We know precisely what we will get if this Bill is passed. We will get more government involvement in commercial enterprise with minimal accountability. We will get more public investment in commercial ventures based on political motivations and not on economic ones. We will get more debt and more disasters. We will waste more money and we will have more misallocations of scarce resources. Unfortunately, worst of all, we will have more headlines to sicken the average Canadian taxpayer. Where, they will ask, was Parliament when this scheme was concocted?
In conclusion, I would like to say that at least we on this side of the House are here for this debate. We would like to try to alert the public to this latest government scam. We are prepared to fight this Bill.


The Acting Speaker (Mr. Herbert):: There follows a 10-minute period for questions or comments.


Mr. Robinson (Etobicoke-Lakeshore):: Mr. Speaker, the Hon. Member referred to Clause 41 of the Bill in which certain items considered as regulations or statutory instruments are not made available to the Standing Committee on Regulations and Other Statutory Instruments. I feel very keenly about that kind of thing because I happen to be a member of that committee and have been for quite a number of years. As a matter of fact, under the short rule of the former Leader of the Progressive Conservative Party, I was the co-chairman of that committee. I have a great deal of interest in what it does.
I do think that the Hon. Member should appreciate that it would not be in the best interests of this corporation for a
Development Investment Corporations Act committee of the House of Commons to be looking into the commercial nature of the various so-called regulations or instruments that should be provided but rather that the corporation should be placed in the same position as that of any other commercial corporation in the country. I wonder if the Hon. Member would care to comment on that.
Federal corporations or Crown corporations that are dealing with the public in the same manner as private corporations should be treated in the same way. Guidelines, instructions, documentation and regulations of private companies are not available to be scrutinized by the Standing Committee on Regulations and Other Statutory Instruments, nor should those of Crown corporations and public companies.


Paul Wyatt Dick: Mr. Speaker, the one big difference which the Hon. Member for Etobicoke-Lakeshore (Mr. Robinson) appears not to have taken into consideration is that the officers and directors of a private company are spending their own money. In the case of a public company, they are spending the taxpayers' money. That is the big difference between the two and that is why we must have a disclosure of what they are doing.
In the United States, such companies disclose almost everything. Here they try to keep everything secret. Even Subclause (2) of this Bill provides for tabling at a later time.


William Kenneth Robinson: Mr. Speaker, partly as a point of clarification, I would like to mention to the Hon. Member that there are shares in these corporations as well. Surely all shareholders should be treated the same. It is the shareholders' money. Whether it happens to be so-called government money or private money, it is still the shareholders' money. The federal corporations need to be accountable to their shareholders the same as private corporations need to be accountable to their shareholders.


Paul Wyatt Dick: Mr. Speaker, I believe that the companies which are specifically referred to in the initial part here like Cana-dair, de Havilland Corporation, Eldorado Nuclear and Teleglobe are 100 per cent owned by the Canadian Government. The Government is the only shareholder at this stage. Granted, only 85 per cent of the shares of the Canada Development Corporation are owned by the Government, but the Government has 48 per cent of the voting stock at the present time. The Hon. Member will notice that the majority of these companies are wholly-owned companies.


William Kenneth Robinson: Mr. Speaker, I have one further objection to make. Of course, these shares are held by the Crown corporations, but the suggestion in the Bill is that they could be sold off at the appropriate time. Whenever that may be is probably a question of when those shares would receive the greatest return for the public sector upon their sale. Certainly it is in the interests of all Canadians to see that these corporations are successful and receive a piece of the action if at all possible. The Bill specifically provides for a sale of shares to the public.

May 28, 1984
Adjournment Motion


Paul Wyatt Dick: Mr. Speaker, unfortunately, it is obvious that the Hon. Member did not hear my entire speech. If he would like to read it in tomorrow's Hansard, he would find that I spent a good deal of time talking about divestiture. The fact is that the Bill talks about planning for divestiture and says nothing whatsoever about actually divesting anything. Knowing the make-up of the people who will control this organization-Mr. Bell, Maurice Stong and Senator Austin-they will keep on hauling stuff in on their plate. I have never seen them give away anything or sell anything. I gave as an example the one company which the Government had suggested it was prepared to sell, and that was Northern Transportation. It takes freight down the Mackenzie Valley and it has other ancilliary types of business. I know personally that an offer was made to buy that company back in 1979-80. The Government has never acted on that offer. Since the National Energy Program, freight is no longer being transported to that area and the company is not worth very much. The Government is now willing to sell it. I do not think the Government will maximize its dollars as it could have back in 1979-80.


The Acting Speaker (Mr. Herbert):: Are there any further questions or comments?



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
[ Translation]

The Acting Speaker (Mr. Herbert):: Order. It is my duty, pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows:	the Hon. Member for Peterborough (Mr. Domm)-Metric Conversion-Enforcement of regulations- (a) Minister's statement (b) Salaries of Metric Commission executives; the Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen)-Finance-Fuel tax paid by farmers and fishermen-Request for removal; the Hon. Member for Winnipeg North (Mr. Orlikow)-Immigration-(a) Recruitment of foreign executives by Bank of Montreal (b) Permission granted by government.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Bussieres that Bill C-25, an Act respecting the Canada Development Corporation, Canada Development Investment Corporation and certain other corporations, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
William Kenneth Robinson: Mr. Speaker, I welcome the opportunity to participate in the debate on Bill C-25. This Bill, in conjunction with the amendments to the Financial Administration Act-Bill C-24-represents a new departure for the Government in its management and divestment of Crown corporations and other investments.
In recent decades, government has gradually acquired investments in companies of various kinds. The Canada Development Investment Corporation, as a special Act corporation, has the mission to manage government-owned assets that operate in the commercial sector. That is important to remember. It is the commercial sector which we are talking about. Crown corporations should be run according to commercial principles. That is a very, very important aspect. These investments have been made for pragmatic reasons.


Some Hon. Members:: For what reasons?


William Kenneth Robinson: Well, maybe some of the reasons are because of Opposition proposals. In any event, they are pragmatic reasons.
It is in the public interest that these companies operate on a sound commercial footing so that they can be returned to the private sector when the commercial opportunity arises. I am sure members of the Opposition would appreciate that this portends only good for Canada and for the corporations.
There is a history in this country of government investment in the economy. Governments in Canada, whether federal or provincial, Liberal, Progressive Conservative, New Democratic or Social Credit, have invested in companies when they saw a clear and pragmatic public policy need to do so. I could mention a number of examples; Panarctic Oils Ltd., Syncrude, and Petro-Canada. There are dozens of such companies- wholly government-owned and partly government-owned- from coast to coast. The Ontario Government has invested in Suncor. The Alberta Government has the Alberta Energy Corporation and it has invested in Pacific Western Airlines. The Nova Scotia Government has Sydney Steel.
It is a fact of public life in Canada that governments become investors in the economy and that they they become shareholders in companies. They do so for a variety of reasons which are of a pragmatic nature. But once governments are
May 28, 1984

shareholders, they must manage their shareholdings. It only makes good commercial common sense.
What lessons can be learned from the private sector in such cases? On the positive side, we learn the importance of major shareholder presence in a company, making its weight felt keenly. It is an investment to protect and, in most cases, it does so. On the negative side, we learn the lessons offered when this does not happen. For example, in the case of Massey-Fergu-son, the key shareholder stepped back from its responsibility as the major shareholder. We all know the outcome.
When anyone-a person, a private company or a government-is the key shareholder in a company, he must make his presence felt as a shareholder. That is fundamental. That is perhaps the major benefit which we can derive from CDIC. CDIC is a vehicle through which the Government can manage its commercial investments. It is designed to be a holding company in the best traditions of private sector holding companies; constantly reviewing the activities of its subsidiaries, developing and articulating the views of the shareholder, making sure that management knows what the shareholder expects and replacing management when performance is inadequate.
CDIC is doing that job and doing it well. The progress made by Canadair over the past year is one example of CDIC's value to government and to the country. We could imagine how much worse it would have been if we had not taken it over. Let me remind the House of what has happened with Canadair Ltd. since CDIC took over responsibility for that company.
What kind of problems did CDIC find? I will list them: First, a failure by management realistically to identify and address the business problems of Canadair. Second, inadequate disclosure by management of corporate information to Parliament, government and the board to allow for meaningful awareness and resolution of corporate difficulties. Third, the over-aggressive use of an accounting method that failed to reveal the full extent of the company's true financial difficulties. Fourth, a Challenger production rate in excess of market demand, with consequent excessive and costly inventory buildup. Fifth, outstanding delivery commitments of Challenger aircraft at prices less than the cost of parts and labour. That is a horror story. Sixth, marketing projections which were excessively optimistic and which were not subject to critical review. Seventh, a Middle East distributor agreement that was not in Canadair's best interests. Eighth, a corporate structure that lacked clear lines of accountability. Ninth, a level of production and managerial employees whose numbers were excessive in relation to the production and sales rates which the company could reasonably expect to achieve in the foreseeable future. Finally, tenth, a board of directors that did not adequately participate in the key decisions of the company. There are probably many more. We could almost go on ad infinitum with a company of this nature.
What did CDIC do about these problems? The most recent step was a complete re-organization of Canadair Inc., which is the U.S. marketing division of Canadair Ltd. Canadair Inc. has been cut in size and cost, but it will be more sales effective.
Development Investment Corporations Act Two new executives have been appointed to run Canadair Inc. They are key people who came from Gulfstream Aerospace Corporation, which is one of Canadair's main competitors. But, that is only the latest of many steps.
I would like to list some of the other steps which CDIC has taken to put Canadair on a sound footing. First, personnel changes have been made to strengthen the management group. The President of the company was replaced and four senior officers have departed. Second, there is a commitment to full and timely disclosure which includes an audited annual report and unaudited quarterly reports. Parliament has been provided with audited financial reports for 1982 and 1983, along with extensive financial data for ealier years. Those reports, together with the accompanying notes and commentaries, were designed to meet the reporting and disclosure roles applicable to companies whose securities are traded on Canadian stock exchanges. Third is the adoption of conservative accounting practices. Canadair used an overly-aggressive form of program accounting in recording certain costs and revenues for the purposes of Canadair's audited financial statements for 1981 and for prior years. Canadair's 1982 and 1983 audited statements were, therefore, prepared on the basis of a conservative, more traditional form of program accounting. In CDIC's opinion, those financial statements presented a more realistic view of Canadair's assets and liabilities.
Fourth, the strengthening of financial controls through the reinstatement of the office and function of internal auditor. The function had been eliminated in 1982. Fifth, the establishment of a lower Challenger production rate. In February, 1983, Canadair was producing Challengers at the rate of 30 aircraft per year. CDIC and Canadair's management concurred in reducing that rate to 24 aircraft per year. In July 1983, the Challenger production rate was again reduced, to 16 Challengers per year. In December 1983, steps were taken to permit production of 19 Challengers in 1984. The foregoing changes in production rate were made as a result of CDIC's assessment of the probable rate of Challenger sales in 1983 and 1984. To date, that assessment appears to be valid. By December 31, 1983, Canadair had delivered all but one of the Challengers built in 1983. No Challenger sales were lost in 1983 by reason of the unavailability of aircraft. The production rate reductions resulted in cash savings to Canadair in 1983 of $37 million and will result in further cash savings of $141 million in 1984. I am sure that is most heartening for Members of the Opposition. Of course, it is heartening for Members of Government as well.
Sixth, the enforcement of sound sales practices. All new Challenger orders are being signed at a price which recovers all costs, except interest on past debts and which, on the basis of 15 deliveries a year, results in a profit before interest for the program. With the recent capital restructuring of the company, Canadair's debt burden will be removed and the Challenger, at 15 sales per year at current prices, will yield a profit.

May 28, 1984
Development Investment Corporations Act
Seventh, changes in forecasting and marketing. Canadair has adopted a more realistic sales forecasting approach. It has also adopted a conservative method of counting new orders. I am sure Hon. Members opposite will appreciate that it is a "conservative" method. It lists only firm orders, and to be considered firm, an order must first be legally enforceable by Canadair. Also, it must be with a customer who has a clear ability to pay for the plane, and it must be with a customer who has not indicated any desire not to take the plane. In addition, Canadair has employed two major outside groups to provide a view of market prospects for the Challenger. On the basis of that view and other analyses, CDIC and Canadair have concluded that with a prudently conservative view of market shares, the Challenger program can generate a profit, including overhead but excluding interest on past debt. That is progress.
Eighth, the modification of Canadair's Middle East distributorship. Canadair has concluded a new representative and distributor agreement with TAG Aeronautics (Saudi Arabia) Ltd., and has settled an arbitration claim made by TAG through the International Chamber of Commerce. The two companies will be co-operating closely to realize Challenger sales opportunities in the Middle East.
Ninth, changes in management and management structure. After making a careful assessment of Canadair's management structure, CDIC concluded that significant changes were required. The structural changes which have been made were designed to produce a management team organized along functional lines. Authority and responsibility have been reallocated in accordance with the new structure and the management team is now functioning satisfactorily. The number of vice-presidents has been reduced from 22 to 12. I am sure you will appreciate that that is progress as well.
Tenth, the implementation of cost reductions. Significant reductions have been made in corporate overhead and operating costs. The savings to Canadair, once severance costs have been absorbed, will be $27.5 million a year.
Nothing I have said should come as news to this House. Indeed, the Minister responsible for CDIC spelled it all out in a report to Parliament on Canadair in March. The lessons were not easy ones; but we have learned them. More important, we now have in Canada a well diversified company turning out good products-products of which all Canadians can be proud-and going out into the world to sell them. Canadair's costs are under control, its orientation is more commercial, its lines of accountability are clearer. It is positioned for profitability and it is identifying new strategic opportunities for the future. What more can I say? CDIC has effectively carried out its mandate to bring commercial attitudes, businesslike management and a strategic mentality to Canadair. Over the coming year Canadair, as a result of CDIC's efforts, will become one of the exciting instances of dynamic corporate turnaround, we all hope.


Mr. Nickerson:: Even you do not believe that.


William Kenneth Robinson: Well, we can hope for it, can we not? If you lose hope, what do you have left?
The same process is under way at de Havilland. Obviously, CDIC has more to do there. We know that. We do not need to be told. The Government believes that there is a good opportunity to have in Canada a commercially viable aircraft industry. That is a decision we had to make. Do we want an aircraft industry or not? Diefenbaker in his time decided we did not want one. We have decided at this time that we do. We will have to wait and see what happens in the future. The lesson to be learned from this experience of the last two years is that turnarounds of the sort which is underway at Canadair do not just happen on their own. The turnaround at Canadair happened because the Government had in CDIC an instrument it could use to manage its investment in Canadair.
Quite simply, the Government needs an instrument like CDIC to manage its investments when it becomes a shareholder. The critics of CDIC cannot wish away these shareholding situations by attacking the vehicle through which the Government is managing its investments. Last Fall, this House passed Bill C-170, the Atlantic Fisheries Restructuring Act. Again, this was a situation in which the Government found itself as a shareholder in three companies involved in the catching, processing and marketing of fish, companies whose operations are vital to the well-being of the entire fishing industry and of the economies of the five eastern provinces. Hon. Members know the story behind that investment and I will not go over that old ground.
However, once the Government found itself, for pragmatic reasons, with new shareholdings, there was quite obviously a continuing need to manage those investments. Those companies, or their predecessors, had all lost money in recent years, but all of them must become internationally competitive because the major markets for Canadian fish are broad. They must operate on a commercial basis and the Government's investment must be well managed.
The Government could not ask the Minister of Fisheries and Oceans (Mr. De Bane) to do that job; he is the regulator of the resource and its harvesting. This time the Government had a vehicle available to manage those investments; CDIC. We need CDIC to take charge of such cases and to return them to the private sector when it is commercially feasible to do so. That makes sense to me, and it should make sense to Hon. Members opposite. We do not want to see the Government losing more money than it has already.
CDIC has proven its usefulness in the case of Canadair. It is applying the same analytic and problem solving ability to de Havilland and it will do the same in the fishing industry. Hon. Members know that any Government will find itself with investments in industry. They know that these investments need sound management. They know that there must be an instrument available to Government to provide that management. CDIC is that instrument, and I am confident that its creation represents a major step forward in dealing with the issue of managing government investments.
May 28, 1984


The Acting Speaker (Mr. Guilbault):: Are there any questions or comments?


Paul Wyatt Dick: Mr. Speaker, I would like to ask the Hon. Member for Etobicoke-Lakeshore (Mr. Robinson) whether he believes all that he said in his speech, including the portion dealing with Canadair. Does he really and truly believe that?


William Kenneth Robinson: Mr. Speaker, I believe it is Chronicles III in the Bible which talks about faith, hope and charity. I believe it has now been changed in the modern version to faith, hope and love. I have faith, I have love of my country, and I have hope. If the Hon. Member has as much hope as I have for this and will work as hard to make it work, it will be successful.


Paul Wyatt Dick: Mr. Speaker, I do not think any Members of the House would disagree. We all have faith and hope, and, to a greater or lesser degree, I think we all have some charity. I asked the Member whether he believes all that he said, including all that he said about Canadair in his speech.


William Kenneth Robinson: Mr. Speaker, my friend reminds me of a doubting Thomas, if I may refer to the good book again. I personally am a believer. When I cease to be a believer, I will not be here.


Mr. Jarvis:: Mr. Speaker, I think the Hon. Member misunderstood the question. We were simply giving him the opportunity to disassociate himself personally from some of the things which were contained in his speech as compared to associating himself, quite naturally, in terms of his parliamentary responsibility. If he wishes to take the opportunity to disassociate himself personally from some of the contents of his speech, I will give him the opportunity to do so.


William Kenneth Robinson: Mr. Speaker, let me say this. If the positive points which I made in my speech do not come to fruition, I will certainly be taking exception to it and will agree with the Hon. Member.


Mr. Miller:: Mr. Speaker, I would like to clarify something with regard to the Hon. Member's speech. The Conservative Party makes a great deal about divesting itself of Crown corporations. The Government has indicated that part of the rationale behind CDIC is that at some stage it will divest itself of Crown corporations. With regard to the fishing industry, that was made fairly clear by the Minister of Fisheries and Oceans (Mr. De Bane) in the Bill.
At what stage do we divest ourselves of these Crown corporations? At what point do we feel that we have had an adequate return on the taxpayers' investment in those corporations? Are we going to divest them as soon as they become profitable and become a source of interest in the private sector? Or, are we going to demand that for all that public investment there is going to be an adequate return to pay the taxpayer for saving those industries and saving the jobs which we have had to save in the fishing industry and returning the
Development Investment Corporations Act
$138 million, if it is under the Fisheries Bill, to the Canadian purse? At what point do we divest ourselves and what return do we expect for the Canadian public?


William Kenneth Robinson: Mr. Speaker, I agree with the Hon. Member's altruistic motives. I am sure it is altruistic motives that are contained in the Bill, and the reasons for providing them. I do not think that as yet we have decided upon the policies as to when we would divest ourselves of the assets. Surely it is going to have to be actuarially sound. There would probably not be too many people interested in acquiring the business unless it was making a profit. I see nothing wrong with making a profit, whether by the Government or private enterprise.


Edward Allan Miller: Mr. Speaker, the point I was trying to make was whether we write off all the investment that the Canadian public has made in that industry at the point that it becomes profitable and the private sector is interested in buying it, or do we demand that we make some profit to return to the taxpayer who bailed out an industry that was badly managed by private enterprise?


William Kenneth Robinson: Mr. Speaker, I would venture to say that quite a number of items would have to be considered before that decision could be made. Obviously, we do not want to continue losing money in a losing venture. If we spent a lot of money, we would like to have a recovery for the people of Canada who invested their money in the enterprise through Government. One must make a judgment based on the facts at a particular time. Whether we are making or losing money at the time is a decision which would have to be made at that particular time. To say anything other than that would be purely speculative at this point in time.


Paul Wyatt Dick: Mr. Speaker, the Hon. Member for Etobicoke-Lakeshore (Mr. Robinson) in much of his speech dealt with Canadair and the bad shape it is in. Is he aware that the Government of Canada forced General Dynamics to sell what is Canadair to the Government of Canada because the Government of Canada wanted to get into a different type of manufacturing of airplanes than General Dynamics wanted to get into? At the time General Dynamics did not want to sell and, as a matter of fact, still has a working relationship with Canadair.


William Kenneth Robinson: Mr. Speaker, I can neither confirm nor deny the allegations which are made by the Hon. Member. That is something which could be looked into. I am sure the Department would be only too glad to provide him with the facts.


Paul Wyatt Dick: Mr. Speaker, when the Hon. Member was talking about Massey-Ferguson and referring to majority shareholders, was he aware that at the time that the largest shareholder owned only 17 per cent of Massey-Ferguson, it offered to invest more money if the Government wished to participate at the time? The Government refused to participate at the time and the only way they could get the Government to participate

May 28, 1984
Development Investment Corporations Act was if they themselves bowed out. They did not bow out by selling their shares. The largest shareholder at that time got out by giving its shares to the employee pension fund, thus making it possible for the Government to come in.


William Kenneth Robinson: Mr. Speaker, I really do not know what question the Hon. Member is posing. It seems to me that you certainly do not need to have a very large portion of a company in order to have control of it. I would think that if the major sharehoder had 17 per cent of the company, it obviously had control of it.


The Acting Speaker (Mr. Guilbault):: Resuming debate, the Hon. Member for Western Arctic (Mr. Nickerson).


Dave Nickerson: Mr. Speaker, before beginning my debate on Bill C-25, I should thank the Hon. Member for Etobicoke-Lakeshore (Mr. Robinson) for 20 minutes of humorous interlude. I found it very entertaining. It was not particularly enlightening, but certainly very entertaining. Reading out a speech of that particular ilk displayed a loyalty on his part to the Liberal Party that was way beyond the call of duty.
I recall, however, being invited by the Minister of Industry, Trade and Commerce to a film show a few years ago. The Minister had all his directors and people from Canadair there. He was saying what a good thing Canadair was going to be. He was saying what a good job he had been doing getting these Canadair Challenger jets going. To use a biblical phrase, as the Hon. Member for Etobicoke-Lakeshore was doing, today we see the Government acting like Pontius Pilate. He was washing his hands of the whole affair. He said that the Government had nothing to do with it. He said the Minister of Industry, Trade and Commerce was not to blame, that it was the fault of the management of Canadair. That is what we heard today after the fact. You cannot have it both ways.
This afternoon we are dealing with the brainchild of that famous Senator from the other place, one Senator Jack Austin. I know he has laboured over this Bill for some time. It attempts to legitimize-
I see you waving at me, Mr. Speaker. I only had two minutes, and it was not enough. However, I look forward to going into this in considerable detail at the next opportunity.


The Acting Speaker (Mr. Guilbault):: Order. It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS-MOTIONS

["Order, please. The hour provided for the consideration of Private Members' Business has now expired.\nAdjournment Debate"]
The Acting Speaker (Mr. Guilbault):: Shall all orders and items preceding item 2 stand by unanimous consent?


Some Hon. Members:: Agreed.



[Stage Direction]
The House resumed, from Tuesday, January 31, consideration of the motion of Mr. Wenman:
That, in the opinion of this House, the retention of productive and potentially productive small holdings in agricultural production is of value and, that the government should consider the advisability of repealing Section 31 of the Income Tax Act which threatens the retention of such productivity lifestyle and land use.
The Acting Speaker (Mr. Guilbault):: The Hon. Member for Fraser Valley West.


Mr. Robert Wenman (Fraser Valley West):: Mr. Speaker, in closing debate on the motion, I want to express my appreciation to all Hon. Members from all sides of the House of Commons.


The Acting Speaker (Mr. Guilbault):: Order. The Chair realizes that the hon. gentleman has already spoken on the motion.


Robert Lloyd Wenman: That is right, Mr. Speaker. Now that you have recognized me, I am closing debate on the Bill so that we can proceed to have a vote of general agreement of the House of Commons on this matter. You have recognized me, and I would like to continue my speech and continue holding the floor.


The Acting Speaker (Mr. Guilbault):: Usually, as a matter of practice, the Chair asks if any other member wants to speak before someone closes the debate. However-


Robert Lloyd Wenman: Thank you very much, Mr. Speaker. In view of the fact that all Parties have given their concurrence in their speeches in the House of Commons, which could be checked by yourself, if you want to look at the record, and that in fact I was commended for bringing this proposal forward, I feel that the positions have been made and it is important that we should act now. By acting, we will state in voting for this motion, as all political Parties will do, the concern that the small farmers have in fact had.
We have heard suggestions during debate that the limit of farm loss deductibility be raised from $5,000 to $20,000 or $30,000 annually. Of course, this is only a half measure. The

May 28, 1984

problem is more than disagreement over tax law. The problem is the attitude of the Government that small agricultural land holdings are not valuable and somehow do not make their own kind of significant contribution to agricultural productivity and the environment.


Mr. Collenette:: Mr. Speaker, I rise on a point of order. Clearly there are members on this side of the House who want to contribute to the debate. To have recognized the original proponent of the motion at this stage is clearly out of order. I understand that my colleague, the Hon. Member for Niagara Falls (Mr. MacBain), is about to speak on this matter, as are other members. Surely you must recognize him before putting any question. I suggest that it is clearly out of order to have the original member who proposed the motion speak at this stage.


William Herbert Jarvis: Mr. Speaker, I rise on the same point of order. I clearly heard you call the order of the day. I was in the House and no one from the government side rose to speak. I can absolutely assure the House of that. I hope that Hon. Members opposite, particularly the Minister, will accept my word that no one from the government benches rose to speak.
You recognized the Hon. Member in whose name the motion stands. As I understand the Standing Orders, once having recognized legitimately the member in whose name the Bill stands, because no other member was standing, I think it is quite clear that on the completion of his remarks the debate is closed. If there is to be a division, which I do not expect in this matter in view of the previous interventions, then the debate automatically closes on the cessation of the remarks of the member who now has the floor.


David Michael Collenette: Mr. Speaker, the Hon. Member for Perth (Mr. Jarvis) may be making a valid point. However, notwithstanding that case, it frequently occurs that members are otherwise occupied. For instance, there was some confusion before five o'clock when the Hon. Member for Fraser Valley West (Mr. Wenman) stood up at the wrong moment and the Member for Western Arctic (Mr. Nickerson) then finished the debate. There was some confusion.
However, when there is an element of confusion in the House, one always defers to the continuity of the debate for those members who have not spoken. That is how we operate traditionally in the House. I would submit that you have no other recourse but to recognize my hon. friend from Niagara Falls who is most willing to take part in the debate.


Robert Lloyd Wenman: Mr. Speaker, the point of order I wish to make is that we are now in Private Members' hour. In Private Members' hour it is very important that the will of a private member not only be allowed to be heard in this place, but be brought to a vote, continued or brought to another committee. Perhaps it can be brought to completion so that these ideas of people that come through Private Members' are heard.
By calling this motion a second time, the House of Commons clearly intended that we should have further debate and perhaps conclusion in this area. Therefore, I insist that I
Income Tax Act
maintain my place in debate, as recognized procedurally and correctly in procedure by yourself and other members, by the fact that there was no one standing. I insist that I conclude my speech in concluding the debate and that we have an agreement on this measure.


The Acting Speaker (Mr. Guilbault):: Order. The Chair believes that it has enough information from various members from all sides of the House. First, the Chair did not recognize originally that the Hon. Member had spoken. I was just brought the list and I see his name on the list as having spoken.
This being said, I will read Standing Order 41(2):
A reply shall be allowed to a Member who has moved a substantive motion, but not to the mover of an amendment, the previous question or an instruction to a committee.
Standing Order 41(3) reads:
In all cases the Speaker shall inform the House that the reply of the mover of the original motion closes the debate.
In other words, the floor is always offered to others who want to speak before someone closes the debate. With all due respect to the hon. gentleman, I would ask if someone else wants to speak-


Robert Lloyd Wenman: Point of order.


The Acting Speaker (Mr. Guilbault):: Will the hon. gentleman resume his seat for a moment. To correct its own mistake in not having seen the list before the Hon. Member rose, the Chair proposes to ask other Hon. Members if they want the floor. If not, the hon. gentleman can speak right away.


Robert Lloyd Wenman: Mr. Speaker, you did not err in any way, shape or form. I did not err in my response. I opened my debate with the words "in closing debate". Furthermore, there was no one speaking and I insist on my place on the floor.


The Acting Speaker (Mr. Guilbault):: I believe that the hon. gentleman is now trying to comment on a ruling. Debate. The Hon. Member for Niagara Falls (Mr. MacBain).


Mr. A1 MacBain (Parliamentary Secretary to Minister of Justice and Attorney General of Canada):: Mr. Speaker, the effect of the motion by the Hon. Member for Fraser Valley West (Mr. Wenman) is that the Government should consider the advisability of repealing Section 31 of the Income Tax Act. Admittedly, this is a controversial section. There are two sides to the argument about whether there should be an amendment repealing Section 31 of the Act. This section, which is commonly referred to as the hobby farmer section, limits the expenditures which certain farmers can deduct in a year for income tax purposes.
The danger of simply advocating the removal of this section from the Act is that it may interfere with the integrity of the Act if it is removed. As well, it deals with tax expenditures that are sometimes known as loopholes. There is a difference of opinion even among farmers and certainly among others as

May 28, 1984
Income Tax Act
to whether or not the provision has reason to stand at least in a limited way.
Consideration has been given to section 31, but there are two arguments. The one put forward by my learned and hon. friend is one side of the argument only. The other side allows someone who is really not a farmer to reduce substantially his income, if the section were removed, and gives protection against an unnecessarily high tax expenditure from income from other sources being used.
I admit there is room for a discussion or refinement of the section, refinement being where there is strictly an opportunity taken by someone to overcome what would otherwise be taxable income by using expenditures of great dimension against other income. If that were allowed to be taken advantage of by everyone, what would be the end result? What is the policy angle involved? If it is a policy angle to attempt to let the taxpayer go from a mere employee at General Motors to buy a farm and to slide into farming using tax expenditures, for all intents and purposes really government grants, is that what our Government, whatever Government it may be, wants to do? If that is what you want to do, maybe we should say it, Mr. Speaker. If what we want to do is permit someone just to take advantage of the Tax Act, to get reductions in his actual tax payable by going into a non bona fide operation where there is little or no hope for income but lots of expectation of losses, and if losses were not curtailed, it would be a loophole or a tax expenditure which would have serious consequences on the integrity of the whole Act. I am not at all sure that the Hon. Member is correct if he were to say, or to suggest to us at least by implication, that all farmers would be happy by a mere deletion of Section 31.1 will go with the Hon. Member for Fraser Valley West (Mr. Wenman) a certain distance. I will go the distance that the matter which he has brought before the House this afternoon is timely. It is my understanding that the basic question is being considered by the Department. I can say there is no firm decision that there should be a step to remove the section completely and to remove any safeguards. The expenditure from what is in fact and in substance merely for a hobby farmer would be to remove any tax payable from his normal income, regardless of how much that income was and how much tax there would be thereon, but I am prepared to go part of the way to agree that Section 31 is controversial.
I think there is need for a refinement, perhaps for a small farmer who is merely working off the land to supplement his income until his farm becomes profitable or at least so it can sustain the operation. That might be quite in order. I am sure if one were to study the section and to study the implications with great care and go into the question with Departmental officials, one would find there have been improper advantages taken of the Section over the years. That is my understanding. In a genuine case where a person has in fact and in substance a genuine farming operation, which admittedly may be losing money, that individual may be forced temporarily to remove himself from being a full-time farmer and take some income
elsewhere. If he wants to use some of that income where it is limited to $5,000 in order to limit the tax payable on his secondary income, it may be perfectly all right, but to do what the Hon. Member for Fraser Valley West says, which is to let him go whole hog and remove all his income from taxability, may be to place on the shoulders of the other taxpayers an unfair tax burden.
I for one would be hesitant to do that. I am a farmer's son and, like many of us in the House who are second generation farmers, we are hesitant to do anything that would hurt the farmers. We are always anxious to do something helpful, but one must look at the fairness of what we are trying to do.
There are in society, and farmers are no exception although it seldom happens in the farming community, some people who take advantage of any section or any tax expenditure no matter how carefully the section is drawn to turn a legitimate tax expenditure or legitimate loophole to their advantage. Thank goodness there are a very limited number of such people in our society.
If we were to say this afternoon, that we should remove Section 31 altogether and not limit the expenditure from the so-called hobby farm as against regular income, I would have to be against the motion. I know there are legitimate cases. I accept the fact that the Hon. Member for Fraser Valley West is putting forward his motion on the basis of legitimate cases, but there is room for honest men to disagree on how the matter should be approached.
The way this motion approaches the problem leaves a lot to be desired. But if you approach it by amending Section 31 either by changing the amount of the $5,000 expenditure or by putting in certain safeguards and spelling them out, that might work. Probably one of the problems with Section 31 is the interpretation it has received by the department and its officials, including the feeling and the position of the Minister of Finance (Mr. Lalonde) which he put forward in his Budget of February 15, 1984. We must also consider the decisions made on tax cases concerning this matter. I think the Section is drawn in such a way that there is a serious difference of opinion about it and that has to be removed. That perhaps is true, but to say that is not to say we should support removal of the Section without due consideration as to its statutory history.
We must look at the ramifications. How has this section affected genuine farmers? By that I mean not the hobby farmer but the genuine farmer who is in a tight situation trying to make a farm produce taxable income and in doing so, trying to survive and at the same time fight very hard with another job off the land to make the total operation-the farming operation and what he does elsewhere-at least profitable.
I am prepared to discuss the basic question with the Hon. Member. However, I have reservations about removing Section 31 and letting the chips fall where they may. It is probably true to say that the problem is as much one of
May 28, 1984

interpretation of the statute as it is whether or not the statute was properly drawn and reflected what legislators intended when they passed it. We would have to go back and study the intention of the legislators and what has happened under the section. For example, how many cases have there been, have decisions been going one way or vice versa, what is the position of the tax Department, or how difficult is it for the Department to make this section work when dealing with farmers.
As I said before, we know as farmers' sons how difficult it is for them to make a go at any time. The last few years have been particularly difficult, and no doubt 1984 will also be. We tend to do what the Hon. member for Fraser Valley West has done. With the best of motives, we try to lean over backwards to help farmers. He is particularly dealing with small farmers.
I understand and agree with him in that respect, but how can we remove Section 31 and let the consequences fall where they may?
The motion of the Hon. Member would affect the integrity of the Act itself. It would not bring harmony to the farming community. Many farmers are not in favour of the use of farmlands for hobby purposes. They are not in favour of promoting hobby farming in that manner, especially full-time farmers who are profitable and have to pick up the slack. It is not a black and white situation like the Hon. Member would like us to believe. I do not think that will solve the problem and make farmers happy. Certainly small hobby farmers will be happy if we take away Section 31 and they are allowed to use as many expenses as they can dream up on their hobby farm operations against their secondary income. However, the farming community in general will not be happy. Certainly those who have an interest in the integrity of the Income Tax Act and trying to make it work will not be happy.
While the matter is worthy of debate, the simple solution of the Hon. Member for Fraser Valley West is inadequate.


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I would just like to make a few comments on the motion of the Hon. Member for Fraser Valley West (Mr. Wenman). I am interested in it because some people in my riding have expressed concern about the way in which the Income Tax operates in this particular respect. I mentioned this matter in the House before in a statement pursuant to Standing Order 21.1 called attention in particular to the unfairness of the way in which retroactivity was applied in some of these cases.
However, I rise to participate in the debate this afternoon more from my concern about what I think is a false impression on the part of the Hon. Member. He would like to give the impression that he is for policies to promote "the retention of productive and potentially productive small holdings in agricultural production" and that he regards it as something valuable. I regard it as something valuable, but I would like to deal with some of the ways in which the Hon. Member and the Party he represents advocate a set of policites which go in the opposite direction to valuing "the retention of productive and potentially productive small holdings".
Income Tax Act
What is the position of the Progressive Conservative Party with regard to the development and growth of agribusiness? What is its position in terms of the way in which more and more farms in western Canada are becoming larger, with small farms disappearing as a result of the ability of the larger ones to buy them out and as a result of the vertical integration in the agricultural sector? I have never heard any Conservatives, nor for that matter Liberals, speak against that kind of economic phenomenon which has every bit as much to do with the disappearance of small productive and potentially productive holdings.
I have never heard Conservatives object to the way in which many people from outside Canada have been able to buy up large tracts of land, driving up the price of land in Canada and making it impossible for small farmers to carry on or for people who want to become small farmers or start new farming operations. When we try to do something about that, the same people who now say they are for small farmers rise in the name of free enterprise and values in the marketplace to say that we cannot stop it because it is free enterprise. Their first priority is not productive and potentially productive small holdings. Their real priority is free enterprise. If small farms stand in the way of that, they can go the way of the dinosaur, as far as the Progressive Conservative Party is concerned. Let us not kind ourselves about that.
I have never heard the Hon. Member nor his Party ask for something to be done about land speculation or about the way in which potentially valuable land is raised in price and often used for the wrong reason because someone got hold of it first and did what they wanted to do. I have never heard Conservatives object to that, because above and beyond the value of land and the responsibility to use it well, they hold the value of free enterprise and the marketplace. Let us not be kidded about that this afternoon by the Hon. Member for Fraser Valley West.
The only people we can take seriously when it comes to land use are those who are willing to say that it is our responsibility to be good stewards of the land, a responsibility which goes beyond any attachment we may have to any particular economic system or economic values. That is what the Progressive Conservative Party is not prepared to do. It exalts the kinds of land use which at the moment are destroying the eco-system of this planet. That is the kind of development to which it looks forward for the future of Canada and our planet. That kind of private, uncontrolled, profit-motivated free enterprise development is using up the last remaining stands of the Amazon forest. The other day the Duke of Edinburgh, His Royal Highness Prince Philip, called attention to this particular problem. If we do not do something about the way in which our economic system is using up land-


John Leslie Evans: Order.


Robert Lloyd Wenman: What does that have to do with the motion?


William Alexander (Bill) Blaikie: I think it is completely relevant because the Hon. Member prefaced his remarks by commenting upon land

May 28, 1984
Income Tax Act
use in particular. If we do not address these kinds of questions, we will never address the problem of land use as it should be addressed.
Members of the Progressive Conservative Party have risen and waxed self-righteous about land use. They do not really care about land use. They care about money use. To hear any Progressive Conservative get up and talk about land use and responsibility for the land is just so much hypocrisy. What they really care about is money. When the day comes that they are willing to put their concern about land above and beyond the concern for profit, then we will be able to take them seriously when it comes to land use.


Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, I must begin by expressing my disappointment at the extreme divergence from the topic which the Hon. Member who just spoke indulged in.


William Alexander (Bill) Blaikie: It is not a divergence at all; it is to the point.


Walter Leland Rutherford (Lee) Clark: Mr. Speaker, Section 31 and Brazil have nothing whatsoever in common. Section 31 is making it exceedingly difficult, impossible in many cases, for young farmers who are attempting to acquire small holdings and make them productive. I know some of those young farmers. If they succeed they will become very productive farmers in the future, but at the moment they cannot support themselves by their agricultural earnings alone. As a result, they are compelled to seek employment off the land. Very often both the farmer and his wife are compelled to seek employment off the land.
These young people are working exceedingly hard. It is not unusual for them to have a regular job which requires them to put in 40 hours and then have to work another 40 and 50 hours on the farm. I think specifically of a member of my own family who drives from Regina to his holding in eastern Saskatchewan. That young man is very anxious to become a full-time farmer, and he will as soon as economic conditions permit. In the meantime he faces a handicap which, not solely but in part, is due to the policies of this Government. He is faced first of all with a shortage of capital. He is also faced with high interest rates which have unfortunately been increasing. He is faced with a decline in the revenue he receives for his product.
As you know, Mr. Speaker, the price of grain has dropped some 6 per cent this year. This young man is receiving the same price for his produce as was received in 1971 and 1972, but his costs of production are now 250 per cent greater than they were. He is trying to make ends meet but, naturally, he is incurring losses. Unfortunately, Section 31 denies him the opportunity to apply all of those losses against his general income. The result is that Section 31 is making it even more difficult for him to become a full-time farmer.
The young man of whom I speak, and there are many others like him, is not and will never be in the class of a so-called hobby farmer. We on this side of the House do not carry any particular torch for hobby farmers. There are ample provisions
within the Income Tax Act, so I am informed, to govern so-called hobby farmers without reference to Section 31. Our concerns are for those young and struggling Canadians who seek to become self-supporting and productive farmers, those who will become the next generation. They are the unfortunate ones who are not in a position to inherit farm land and equipment from others. They are simply trying to do what our forefathers did two and three generations ago. It was easy at one time for a young man without capital, by virtue of his labour, to go out and become over a period of time a self-supporting farmer. But land value at it is today, and with the cost of operation being what it is today, it is impossible for a man to become a full-time farmer unless he has, first of all, an immense amount of capital available to him. Those who do not have those assets must, of necessity, take employment and try to farm at the same time.
Section 31 works to the detriment of such young people. If it is permitted to continue to function in the way it is now, we will make it virtually impossible for such young people to become full-time productive farmers. If we do that, the economy of Canada will be the loser. We who play the role of Government will also be the loser because we will lose the revenue these young people will eventually bring to us. I commend the Hon. Member for Fraser Valley West (Mr. Wenman) for bringing this issue to the attention of the House. As you know, Mr. Speaker, this Bill is being debated for a second time. We had ample opportunity the first time to discuss the merits of the legislation. That is why I very much support the Hon. Member and encourage Members opposite to permit the Bill to be brought to a vote.
We have an opportunity to indicate where we stand on this legislation. We have an opportunity to express our disapproval of Section 31 which is strangling young Canadians. This is a particularly onerous condition because of the high unemployment which exists across the land. The people of whom I speak already have a job. However, they do not wish to remain in that job, they wish to be farmers. If we permit them to vacate their salaried positions and become full-time farmers, we will free up another position for those 1.5 million unemployed Canadians. In doing this, are we not only helping farmers and the agricultural economy as a whole, but we are helping the unemployed of Canada. Therefore, I say to the Members opposite that they have an opportunity to take a bold step forward. They have had a chance to speak; if they will just permit this Bill to be brought to a vote, then we can do something to further the condition of the young farmer, an opportunity which I think we should take.


Mr. Denis Ethier (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, I find it very strange that the Hon. Member who just spoke talks of the fear we might talk out this Bill. What they have been doing up until five o'clock was trying to talk out the Bill we have before the House. I find it even more amusing to see how the Hon. Member for Fraser Valley West (Mr. Wenman) wanted to rush his Bill through without even giving us a chance to take part in the debate. I find it amusing because on so many occasions the same
May 28, 1984

Member, as well as other Members of his Party, have accused the Government of rushing legislation through when it is sometimes before the House for days, weeks and months. Today they want the Bill through without any debate. I find it very, very strange.
I am sure the Hon. Member for Fraser Valley West has very good intentions to present a Bill to find ways and means to pay less tax on income. This is quite typical of Members opposite. It is a wonder that they have not included in the motion all sections of the Income Tax Act which deal with collecting taxes. However, they cannot have it both ways. You cannot talk of reducing deficits and not collecting taxes and lowering the Government's revenues.
Individuals engaged in farming activity are placed in one of three categories under the Income Tax Act for the purposes of determining the extent to which farming losses may be deducted from other sources of income. Full-time farmers for whom farming may reasonably be expected to provide the bulk of income, or the centre of work routine, are unrestricted in their eligibility to deduct losses fully. At the other extreme is the person who engages in minimal farming or peripheral activity and who has no reasonable expectation of a profit. Any farming losses sustained by such individuals are not deductible. This is because the activity is a personal endeavour and is a hobby and not a business. This hobby criterion applies to all activities and not only to farming.
Individuals in the third category do not look to farming or to farming and some subordinate source of income for their livelihood, but carry on a farming business as a sideline. Such secondary farmers are restricted under Section 31 of the Income Tax Act which imposes a $5,000 annual limit on the deduction of farm losses against other income.
However, all farmers including those farmers who have a restricted farm loss, can carry losses back for three years and forward for ten years so that these losses can be deducted from farm income earned over this period. These more generous carry-over provisions were introduced in the April, 1983 Budget. Previously, farm losses could be carried back only one year and forward only five years. Hence, the restricted farm losses of such farmers are not lost if in fact the farming operation is profitable over this period.
The purpose of Section 31 is to set up a flexible boundary between the person who carries on farming activities for personal enjoyment and the genuine farmer. This boundary is essential to restrict access to the very generous incentive provisions available to farmers, particularly the ability to use cash accounting methods. Repealing Section 31 would make it administratively more difficult for Revenue Canada to distinguish between genuine farmers and those engaging in farming as a leisure activity.
Section 31 has been a controversial provision of the Act and has attracted a great deal of criticism. Arguments have been made that there is a feeling in the agricultural community that the restricted farm loss rules are discriminatory since they do
Income Tax Act
not exist for other forms of business. Most typically, it is argued that Section 31 limits access to farming since it restricts the extent to which losses sustained in the early stages may be written off against other income and hence impedes the transition from part-time to full-time farming. It is also commonly argued that Section 31 imposes a hardship on bona fide farmers who temporarily take off-farm work during periods of poor farming conditions and who occasionally find themselves restricted by the provision.
Because of the controversy surrounding Section 31, the ramifications of the existence of the provision have been subject to extensive analysis in the Department of Finance. Although the arguments put forth are of concern, extensive research indicates that it is by no means obvious that reapeal of the Section or an increase in the annual limit would remedy existing problems.


Robert Lloyd Wenman: It would help.


Denis Éthier: It would not remedy the existing problems. In fact, such actions might create major problems within the legitimate farming sector. Data indicate that the vast majority of individuals restricted by the provision have very low gross farm sales, typically less than $5,000 annually, and high average off-farm income. Furthermore, a large percentage of those who would be affected by the provision habitually report farming losses year after year.
The U.S. experience, as well as available data for Canada, suggests that removal or extension of the limits would make farming even more attractive to individuals whose main interest in farming was primarily the speculative and tax write-off possibilities available. In fact, a large portion of the agricultural sector in the U.S. has argued vociferously for tightening up of liberal loss write-off provisions already in existence there.
It has been argued by many agricultural economists in the U.S. that the existing situation has forced up the price of agricultural land, thus making expansion and entry difficult and has reduced product prices. It is also argued that rates of return in farming have been lowered by the influx of speculative capital to the point where legitimate farmers find it difficult to make a living.
In summary, there is need for the restricted farm loss provision. Farmers receive generous incentives, most particularly the ability to use the cash accounting method for tax purposes. It is important to restrict these provisions to fulltime farmers and to prevent non-farmers from gaining unintended access to these incentives. Such access is undesirable as it adversely affects the economic conditions facing the genuine farmer.
The Government is very concerned to see that the restricted farm loss provision does not apply to genuine farmers. This provision is being reviewed to seek ways to prevent such genuine farmers from ever being affected by the restricted farm loss rules. At the same time, the Government is anxious to ensure that the generous tax incentives available to the agricultural community are properly targeted at those for whom they were intended.

May 28, 1984
Income Tax Act
I do not think that passage of this Bill is in the best interests of the taxpayers of the country. It is not in the best interests of the farming community of the country and I cannot support the Bill in its simple form.


Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, I rise today to speak on the motion of the Hon. Member for Fraser Valley West (Mr. Wenman) with great consideration and understanding. I know the problems that Section 31 of the Income Tax Act has created for a large segment of Canadians who made the extra effort by trying to establish businesses in the farming sector.
The motion proposes that we consider the advisability of repealing Section 31. Here again, the Hon. Member has clearly shown a responsible role by saying that we should consider its repeal. I think that this clearly points out that we on this side of the House are not trying to provide an avenue for those who are wealthy to escape paying taxes. We are merely trying to give those who want to enter into the farming community a chance.
In the area in which I live, which is part of the Fraser Valley in British Columbia, the price of land is very high. It is very demanding financially to enter into those kinds of enterprises. There is no other way to do so unless one is born with a silver spoon in one's mouth. Most of the people who want to enter into the farming community are born in poverty like most of the rest of us are.
On my own farm, there was a young man who was driving a chicken-catching truck who wanted to enter into the dairy business. He would never have been able to enter into that business had some form of reasonable taxation not taken effect. With Section 31 remaining a part of the Act, this man is really going to struggle.
The Hon. Member for Brandon-Souris (Mr. Clark) mentioned the matter of jobs. If one man is taken off the job and goes to a farm, a job opening is created. The lack of jobs is the biggest issue facing Canadians today. There are no jobs, whether it be for the young, the old, or anyone.
In the Budget speech, the Government promised to reconsider Section 31 of the Income Tax Act. What has the Government done? It has done absolutely nothing. Here it is saying that it is the protector of the minority-the small businessman and what have you. But, who does it worry about? It worries about the big businessman. The most unbelievable presentation that I have heard in the House was given by the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie). He did not even speak to the Bill. He did not consider the small guy. I do not know what he considered. He was speaking about the Amazon and Brazil.
This is an important issue. The context of entering into the farming community today has totally changed from what it was in prior years. Elderly people who must retire can no longer hand their farms over to their children. The children must purchase the farms so that the elderly can maintain a
reasonable standard of living. In most cases, those young Canadians must go out and perform work other than the work which they perform on their farms. It has been proven time after time that the only way to do it is to hold down a job and farm x number of hours each day as well.
I believe that the Government has a responsibility to Canadians, and to small entrepreneurs who are trying to break into the farming industry. Without seriously considering the Bill put forward by the Hon. Member for Fraser Valley West, we will achieve nothing.


Paul Edmund McRae: Mr. Speaker. I have no concern about speaking this Bill out. However, I would not feel that way if the motion called for changes which would make it possible for small farmers and part-time farmers to get a better break and make it possible for them to survive. However, that is not what the Bill proposes. The Bill proposes that Section 31 of the Income Tax Act be repealed. That leaves it wide open for anyone to purchase a farm or a piece of property in order to obtain a great tax write-off. They do not really have to be concerned about farming at all.
One thing that bothers me about this Bill is that it has been characteristic of the Tory Party in the debates in the last several months to always be worried about the person who is not paying taxes. They should be looked after nicely and we should treat them well! I can truthfully say that in the last three or four months, there has been a great deal of concern in my community by the people who are earning wages and whose taxes are being paid at source that they will be forced to pay more and more taxes if more and more ways are found in which other people do not have to pay taxes. Therefore, I think that the deletion of Section 31 is one way to create a situation in which some people could beat the game and other people would have to pay more.
Taxes are a zero sum game. If there are segments of our society which are not paying their fair share, then those whose income comes from wages and who pay their taxes at source will have to pay more. I think the people in my constituency of Thunder Bay-Atikokan and the community in between are getting a little annoyed about the idea that there is this great inequity in the taxation system. This Bill is one way to create that inequity.
What are we going to do? The Tories are talking about the terrible deficit and how they want to reduce that deficit. What do they do? They say: "Let us make it possible for anybody to buy a farm, do what he wants with it and write his losses off'. They do this without any compunction at all. They are not interested in farming. One of the consequences of this kind of measure-and there is evidence in the United States to suggest that this is true-is that it will increase the value of farmland, and it will put it in the hands of people who are only interested in using that land for a tax write-off. They are not interested in the kind of food production we need. This is the kind of thing which is happening.
I realize that there is a problem. However, Section 31 is there to solve that problem. If the Tories had submitted an
May 28, 1984

amendment or some suggestions as to how we might solve the problem of the person who has to work 35 hours to 40 hours a week to get his farm going and who wants to be a farmer, who needs help, and who really has some legitimate grievances, then I would suggest that an amendment be made to Section 31. They should deal with that particular problem-


Robert Lloyd Wenman: Mr. Speaker, I rise on a point of order. I think that it would be appropriate as a matter of order for you to inform the House, as you did by recognizing me as a speaker, thereby taking my rightful place from me on the floor of the House, that if in fact the Member of the Liberal Party continues to speak he will effectively kill this measure which will help the small farmer of Canada. Mr. Speaker, will you inform the Member that he will do that?


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Thunder Bay-Atikokan (Mr. McRae).


Paul Edmund McRae: Mr. Speaker, I do not understand the last manoeuvre at all. I am trying to suggest that if there was an honest attempt on the part of the Opposition to seriously come to grips with the problem of the small farmer who is trying to get a start, who wants to spend the rest of his life on a farm, and who wants to pass it on to his son or daughter, that that kind of suggestion would receive support from this side. We are trying to do that very thing.
That is not what this particular motion proposes. It proposes to repeal Section 31 of the Income Tax Act. Repeal, as far as I am concerned, means to take it right out of the Act. That means that anyone could use the purchase of a farm as a loss against income. It means that someone else will have an opportunity to get away with beating the tax system and have an added tax expenditure. That particular person will not pay his fair share. My constituents who work at Great Lakes Paper or Canada Car, in the riding of Thunder Bay-Atikokan and across this land, will have to pay more.
There was a Budget a couple of years ago-which may have had some flaws-which the Opposition Party ran into the ground. The whole point of that Budget was to bring more equity into the tax system to ensure that every Canadian would pay a fair share, and there would not be people with incomes of $200,000 or $300,000 a year paying no tax at all.
If the Party opposite comes into power-and I hope that they do not-in the next six months, we will have changes. That is what it has been about for the last six months: tearing the tax Department down. We will have changes which will mean that all kinds of Canadians will not be paying taxes. The working man, the guy who earns a wage, is the guy who will have to pay more.


The Acting Speaker (Mr. Guilbault):: Order, please. The hour provided for the consideration of Private Members' Business has now expired.
Adjournment Debate



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 45 deemed to have been moved.

Mr. Bill Domm (Peterborough):: Mr. Speaker, I refer back to some questions and answers which took place in the House of Commons on May 24. I asked the Minister of Consumer and Corporate Affairs (Mrs. Erola) to explain her recent news release communique which clearly states that because of pressures brought to bear on the Government of Canada by various organizations such as the Consumers' Association of Canada, the Retail Council of Canada and other industry representatives, it was made very clear to her that she was going to have to reintroduce certain regulations affecting the implementation of metric in Canada. It was my concern that there was a recent court decision in the Province of Ontario which clearly exonerated retailers in that Province against charges that they were using Imperial against the law.
It was the decision of Judge William Ross that both Mr. Halpert and Mr. Christiansen should be permitted in the Province of Ontario to continue the use of Imperial and metric, or either measurement in their retail establishments. I wanted to know how the Minister of Consumer and Corporate Affairs could reintroduce regulations making it illegal to use Imperial measurement in any form, in any retail establishment in the Province of Ontario, when she, as Minister of Consumer and Corporate Affairs, back on November 2, on page 28620 of Hansard said, and I quote:
At the moment, of course, the law prevails and we will not be able to enforce any of those regulations in the Province of Ontario.
The Minister later extended that to include all of Canada. I asked how then could the Minister, in her communique on May 14, reintroduce amending regulations under the Weights and Measures Act which would make certain forms of measurement illegal in Canada? Her answer to me, I believe, corrects the problem, that is that she is not talking about the use of Imperial weigh scales. To use her exact words which are found in Hansard of May 24, 1984, at page 4010,1 quote:
In fact there were 242 member organizations at a metric forum that requested we put regulations in effect that would call for both metric and imperial advertising;-
She goes on to say, and this is the key:
-advertising only. It does not refer to any use of metric scales.
That clearly means now that the Minister has decided that Imperial scales are now legal in retail grocery establishments. That means that it will not be against the law to weight in pounds with the use of Imperial weigh scales, or use metric weigh scales. The only regulation which the Minister is bring-

May 28, 1984
Adjournment Debate
ing into place, to use her own words, are regulations affecting advertising. Under the new regulations both metric and Imperial are to be used in advertising. This is further explained in an article in the Toronto Sun on May 25, 1984, which states, and I quote:
Erola said yesterday Domm was "manufacturing statements" about the new regulations. She claimed there would not be new orders-in-council outlawing the use of Imperial weigh scales.
This means very clearly that the grocers, not only in the Province of Ontario but in all other provinces and territories, have won a great victory. They now have the use of Imperial weigh scales, to use the words of the Minister, in their stores. The only requirement is that they use both metric and Imperial in their advertising. I personally see nothing wrong with that. In fact, I am sure our Party in opposition could endorse very easily the use of both metric and Imperial in advertising until we become more familiar with metric, if that is the route we are to take. What we in the Opposition are objecting to is the mandatory use of metric weigh scales with prosecutions to follow if Imperial continues to be used. That clearly is not the position of the Minister.
What we have now in Canada with respect to metric and Imperial measurements is a clear case where one can use yards, as they are doing across Canada in the advertising of floor covering, and one can use metres if one wishes. That is perfectly permissible in all of Canada. There have been no prosecutions in three years. We now have that extended to the grocery sector where one can use Imperial weigh scales, to use the words of the Minister, and one can use metric weigh scales or you can use either or both. However, they would like you to use metric and Imperial in advertising groceries.
That leaves only the case of gas stations to be resolved. Until those cases are resolved through the appeal court in Ontario, which will be sometime in the fall, it is permissible in Canada to use gallons or litres in the advertising, sale and display of petroleum products at retail establishments. We have voluntary metric in Canada today. We have the right to use Imperial weigh scales or metric weigh scales. We have the right to sell by the yard or the metre. We have the right to sell by gallons or litres. To use the words of the Minister of November 2, 1983, there will be no prosecutions in Canada until we clear away the appeal case. It is safe to put on record that Imperial measurement is now legal in Canada. You can use Imperial weigh scales if you wish. We would just ask that you advertise in both metric and Imperial.


Mr. Jean-Louis Leduc (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, last week, the Hon. Member for Peterborough (Mr. Domm) claimed it was the Minister's intention to ignore the law with respect to Judge Ross's ruling in the Halpert-Christiansen case (Hansard, p. 4010, May 24, 1984). As the Hon. Member is no doubt aware, this court case was concerned only with the regulations for the sale of gas and diesel fuel in metric units. On May 14, 1984,
the Minister announced, following many requests from industry and consumer groups, that she had decided to allow the retail sector to indicate prices for goods weighed in both metric and imperial units. In recent months, consumers had trouble comparing market prices, since retailers were not taking a uniform approach. The change in the regulations allows the use of imperial units for the purpose of advertising prices. All food prices must include a reference to metric units, and it is up to the retailer to decide whether he wishes to include imperial units as well, provided that most of the space is given to metric units. The word "scales" is not mentioned, and the Minister made it clear that the change in the regulations applies only to the use of both units simultaneously when indicating prices and in advertising. This decision takes into account the views put forward by the Consumers' Association of Canada and the Retail Council of Canada. Since the Hon. Member attended the conference on the metric system held here in Ottawa, he must have heard more than 200 organizations and private individuals say it was absolutely necessary to make metric conversion a success.
As far as phasing out the Metric Commission is concerned, the decision was made in May 1983, after lengthy consultations with many representatives from various industries, associations and individuals associated with the conversion program. It is a fact that as a result of the work done by the Commission, the provinces, industry and consumers, the program's various phases have practically been completed. There is nothing secret or mysterious about the plan to phase out the Commission. Information on the subject is available from the Commission itself.
I would like to point out that the amounts set aside in the budget for the salaries of the Commission's seven members do not total more than $156,000, well below the figure of $270,000 mentioned by the Hon. Member for Peterborough in the House last week. Perhaps he would like to create a benevolent fund to help these unfortunates.


FINANCE-FUEL TAX PAID BY FARMERS AND FISHERMEN- REQUEST FOR REMOVAL
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, on May 9, I rose to ask a question of the Minister of Finance (Mr. Lalonde) regarding the Government's blind determination to continue charging the farmers and fishermen of our country an extra 9 per cent for the cost of fuel in the production of food. I should point out that in addition to that 9 per cent they have to pay a 1.5 cent per gallon excise tax which is refundable, but simply adds an extra burden to the fishermen and farmers. It is an extra burden of paperwork of which they must keep track. It simply adds to the bureaucracy of our land in computing taxes.
Furthermore, I was just informed that the 9 per cent tax will go up another 1 per cent in the fall. As I said to the Minister
May 28, 1984

of Finance at the time, that total amount of at least $200 million from the farmers and fishermen is a direct profit to the Government and a direct cost to the farmers and fishermen. Those costs must be passed on the consumer if these fishermen and farmers are to stay in business.
The answer I received to that question was a polite homily from the Minister of Finance, telling me that taxes are always necessary. He lectured me on the deficit of our country and that somehow the Government must cover the cost of that deficit. That was small comfort to the consumers who must pay that $200 million that the Government nets from that direct tax on the cost of production.
There is a choice in some industries of passing on that tax. For example, with respect to the plastics industry, which would have to pay that 9 per cent and soon 10 per cent tax because it is a petrochemical industry, the consumer will ultimately have a choice of whether he wants to buy a product. He does not have to buy the extrusions, molded plastics or throw away toys which that manufacturer is trying to sell to the consumer. There is a choice about whether a consumer wants to pay that tax. However, the consumer must pay the additional cost on the food because there is no choice.
The Consumer Price Index, which came out last week on May 22, indicates that it now costs $93 or $94 for the essentials of food for a family of four in this land. It was approximately $9 less a year ago. The Consumer Price Index keeps going up. The secret is that as much as the Consumer Price Index goes up, it is always going up less than the cost of food production. That means that the fishermen and farmers are in a cost price squeeze. They cannot pass on all the additional cost of production to the consumer because the price index does not go up that high, and they simply cannot afford to pay it. This means there must be some give somewhere.
I think you will agree, Mr. Speaker, that the fishermen and farmers in our country have to be the most efficient producers in all of the land. The multiplier of their efficiency has to be greater than any other in the country, yet the government is asking them to do more. It wants them to increase production, to become more efficient with a better means of production but not to charge the consumer.
If a fisherman uses 100 gallons of gas or diesel fuel to go to the fishing grounds, it will mean an extra $18 just to get there. If that fisherman uses 1,000 gallons of fuel in the fishing season, it means another $ 180 in the cost of production just for that one fisherman. Something must give and it certainly will not be the Government.
We only have to let our minds go back four years when the Government ran large ads during the election campaign. The present Secretary of State for External Affairs (Mr. Mac-Eachen) was putting out large ads to "vote Liberal and the price of gas will stay down". That is hogwash. The Government has a short memory about that. It sent on the cost of fuels not only to the farmers and fishermen, but to all those who use that fuel, including senior citizens and low-income groups.
Adjournment Debate
I would remind you, Sir, that when it comes to the cost of food produced in Canada, the products of the grain farmers and the fishermen are the staples for the low-income families of our land. Wheat, oats and fish are staples. This Government is asking the low-income people to carry the additional cost now 9 per cent, soon to be 10 per cent, on fuel. That is an injustice that Canadians will not tolerate.


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, the Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen) has raised again an issue which was debated before this House on February 17, 1984, specifically that the federal government provide a further subsidy for Canadian farmers and fishermen by eliminating the 9 per cent federal sales tax on motor fuels used in their activities.
I wish to point out that the federal Government has had this fuel tax in existence for many years. In fact, in the autumn of 1978 it was 12 per cent. Later that year the tax was reduced to 9 per cent. Further, I would like to put this matter into perspective. The estimated cost of farm fuels in relation to total farm input costs across Canada is 8 per cent of the total. What we are talking about is a 9 per cent tax on 8 per cent of total input costs.
The Hon. Member referred to the 1.5 cent per litre refundable excise tax. To eliminate this for one sector of the economy would require identifying the fuel to prevent abuses by other vehicles or for other activities. I hope the Hon. Member is not suggesting that we add colouring to the fuel such as the Ontario Government did a few years ago that subsequently caused the farmers to have clogged fuel filters, ruined injectors, and ruined motors. Of course, the Ontario Government disclaimed any responsibility for this, although it did change to a different type of fuel colouring.
I do appreciate the Hon. Member's desire to reduce the share of the tax burden borne by farmers by eliminating the sales tax on farm fuels. Nevertheless, the tax only represents a small portion of the price of fuel. It is less than 3 cents in the case of a litre of diesel fuel which sells for about 35 cents a litre to farmers. Thus, on an individual basis, the relief the Hon. Member seeks would not be substantial.
Furthermore, all other users of motive fuels, including trucking companies, railways, air carriers, municipalities, mining and logging companies and individuals are not entitled to a tax concession on their fuels. It would be difficult to grant relief for farm fuels without also granting comparable relief for others who could argue that they too are equally deserving. Clearly such an exemption would significantly increase the deficit.

May 28, 1984
Adjournment Debate


IMMIGRATION-RECRUITMENT OF FOREIGN EXECUTIVES BY BANK OF MONTREAL. (B) PERMISSION GRANTED BY GOVERNMENT
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, some weeks ago I asked the Minister of Employment and Immigration (Mr. Roberts) why his Department had approved the entry into Canada of about two dozen senior executives from outside of Canada for the Bank of Montreal and why he had also given authorization for the further recruitment of another 25 or 30 more people by the Bank of Montreal.
I pointed out to the Minister that no other bank was doing this, that this was being done at a time when we have a large number of Canadians who have graduated and taken postgraduate courses in economics, finance, in such fields as chartered accountancy and so on.
I pointed out further that no other employer was able to do that. Any other employer who wanted to bring in someone from outside Canada had to demonstrate to officials of the Department of Employment and Immigration that they had tried to recruit someone inside Canada and that neither they nor the Department were able to find a Canadian to do the job.
There were Canadians who could have done the work for which the Bank of Montreal recruited offshore. The Chairman of the Bank of Montreal, Mr. Mulholland, has been in Canada since 1969. He is still not a Canadian citizen. I assume it is Mr. Mulholland who has made the decision to recruit so many non-Canadians for senior positions within the Bank of Montreal.
Among the influential appointments made by the Bank of Montreal of non-Canadians are: Mr. Farstad, Vice-President in charge of credit at Toronto who came from Citibank in the United States; Mr. Allen C. Marple, Senior Vice-President and Division Executive in Toronto, from the Chase Manhattan Bank; Mrs. Elizabeth Wright, Vice-President and District Executive in Toronto from Chemical Bank; and Mr. Michael Cully who came from Citibank to be Senior Vice-President in charge of Corporate Planning in Toronto.
These influential appointments included: the senior officer responsible for the bank's corporate and government business globally, the senior officer of the international banking group, the senior trade finance officer responsible for promoting Canada's exports, the senior merchant banking officer, the senior petroleum industry officer, the senior planning officer and the senior loan syndication officer.
This policy of the Bank of Montreal means for Canada that a disproportionate number of key policy-making positions are involved, the result of which is a distinctly non-Canadian interpretation of the bank's responsibilities in Canada. The number of U.S. officers in senior positions in the Bank of Montreal exceed that of the other four major banks combined, all of which appear to manage their business with more success. I will deal with that later. Notwithstanding the bank's argument with immigration authorities that international postings are a two-way street, Greenwich Research Associates, a leading U.S. survey firm, reported that the bank "predominantly employs U.S. nationals in the United States, unlike the other Canadian banks".
More disturbing in the long run is the bank's recruitment policy. Each year a number of post-graduates are recruited for accelerated preparation for senior management. Again there is a heavy bias toward the United States. Extensive recruitement presentations are made at the better United States campuses, while a number of Canadian universities, such as the University of Saskatchewan, do not qualify. Harvard, Stanford, Wharton and several other universities in the United States receive official delegations of recruiters, but Canadian universities do not. Over a third of the jobs in the top tier of the bank's recruitment program go to United States recruits, while any number of young Canadians are not even given the opportunity to hear what is available.
The result is that morale in the bank has declined to a very great extent. One would expect that because of its recruitment policy the Bank of Montreal is more successful than other Canadian banks. Nothing could be further from the truth. In 1983, of the five major Canadian banks, the Bank of Montreal made the lowest profit. The Royal Bank had profits of $480 million; Toronto-Dominion $325 million; Bank of Nova Scotia, $347 million; Canadian Imperial Bank of Commerce, $314 million; and the Bank of Montreal, a mere $282 million. This is the bank which in 1982 paid no taxes and in fact received a tax credit of $22.4 million. This is the bank which in 1983 paid a tax rate equivalent to that of small businesses, a tax rate of 25 per cent.
The Minister should apply to the Bank of Montreal the same standards he applies to other employers who wish to recruit people from outside of Canada. He should make the Bank of Montreal prove that the vacant positions for which it wishes to recruit people cannot be filled by Canadians. We have spent hundreds of millions of dollars in recent years to support post-secondary education. We have turned out more Ph.D's in economics, finance, accounting and every other field having to do with banking than ever before, and I simply cannot and will not believe the contention of the banks that they could not find Canadians to do the work, which contention has been, I believe, very casually and literally accepted by the Government.
[ Translation]


Mr. Jean-Guy Dubois (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, as the Hon. Member for Winnipeg North (Mr. Orlikow) is probably aware, generally speaking, the Canada Employment and Immigration Commission does authorizes Canadian employers to recruit foreign workers only under the following conditions: first, their admission does not prejudice employment and career opportunities for Canadians and other authorized residents; second, no qualified Canadians are available or want the
May 28, 1984

jobs; and, third, the employer accepts, if deemed appropriate by the Commission, to have foreign workers train Canadians.
These criteria are valid for small and large businesses alike and each employer must prove compliance in order to be authorized to hire one or more foreign workers. The application made in 1982 by the Bank of Montreal was accepted in principle under this policy. In fact, only 26 persons were admitted to Canada even though approval in principle was granted for 42.
The Bank spent $8.5 million in 1981 to train Canadians, emphasizing the chances for promotion and self-improvement of its own workers. In Canada, they hired a very large number of new employees, first on campuses, through the CEC's and the other college and university employment services, and also elsewhere by advertising in the media to attract qualified applicants, and through the National Employment Bank and 18 private employment offices. In spite of all its efforts, the Bank was unable to find and hire Canadians with the required qualifications and international banking knowledge for certain management and analysis positions.
Contrary to what the Hon. Member for Winnipeg North has stated, the Bank of Montreal was not favoured in this specific instance. In fact, a number of other similar applications were approved, similar in the sense that the jobs involved are very specialized and require unusual experience and exper-
Adjournment Debate
tise. Approval of such application promotes the planning of human resources by the industry, which operation stabilizes in return the employment sector and creates career opportunities for Canadians.
With respect to the hiring method used by the other banks or other employers in the same situation, it depends on the needs of each one. Some employers prefer to decentralize their international activities. On the other hand, the Bank of Montreal seems to have decided on centralizing its national and international operations in Toronto, and this requires the presence in Canada of experts in international banking operations, as well as specialists in banking systems and advanced techniques, and international economists with a detailed knowledge of certain areas of the globe. Their presence contributes to the transfer of technical knowledge and provides for a greater number of opportunities for Canadians, both here and abroad.
As I have just explained in answer to the question raised by the Hon. Member for Winnipeg North, the Bank of Montreal was not given more privileges than other institutions.


The Acting Speaker (Mr. Guilbault):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 2(1).
At 6.30 p.m., the House adjourned, without question put, pursuant to Standing Order.

Tuesday, May 29, 1984