1984-05-09

STATEMENTS PURSUANT TO S.O. 21


Mr. Gordon Towers (Red Deer):: Mr. Speaker, Jack Halpert and Ray Christiansen, two independent gas retailers who have stood up in defence of freedom of choice, can no longer afford to fight the federal Government in the courts. In November, 1983, the pair were awarded $41,000 by a court when they were found innocent of any charges relating to dispensing gas in imperial gallons. To date they have not received a penny of that court ordered settlement. For this reason they are unable to raise the necessary $25,000 for the current appeal before an Ontario County Court, and therefore must default. This appeal was initiated by the federal Government.
We appear to have a double standard alive and well here. If a person owes money to the Government through its agent, Revenue Canada, he or she must pay up immediately, and haggle about the levy or the amount later. Yet the federal Government with its unlimited resources, is able to delay or avoid paying this $41,000 by proceeding through the various appeal stages, including the Supreme Court of Canada. Any ordinary Canadian citizen cannot counter that.
Justice must not only be done, it must be seen to be done. The Canadian Charter of Rights was supposed to accomplish that.


BRAVERY
Mr. Robert Gourd (Parliamentary Secretary to Minister of State (Multiculturalism)):: Mr. Speaker, as the Member for Argenteuil-Papineau, speaking personally as well as on behalf of my constituents, I wish to offer my sincere condolences, after yesterday's tragic events at the Quebec National Assembly, to the families of the victims and to the Government of Quebec that experienced this terrible tragedy. Mr. Speaker, personally and also on behalf of my constituents, I want to ask the House to recommend the Sergeant-At-Arms of the National Assembly, Mr. Rene Jalbert, to the Governor General of Canada for this country's highest award, for the bravery and presence of mind he showed in the course of these tragic events.


POLITICAL PARTIES
Hon. Flora MacDonald (Kingston and the Islands):: Mr. Speaker, a headline in The Globe and Mail of May 8 reads, "Economists skeptical of pledge to cut deficit by $15 billion", the pledge made by one of the Liberal leadership contenders. Economists say that pledge would require major surgery on government programs, or major tax increases, or both.
The candidate refuses to spell out in detail how he would accomplish his goal, but mere mention of his intention to go after social programs has already had a damaging effect. For while economists may be skeptical about his statement, hundreds of thousands of Canadians who have to get by on the guaranteed income supplement and social assistance, are now worried that their payments will be radically reduced.
William Mackness, vice-president of the Bank of Nova Scotia, said that that proposal would mean major cuts in transfer payments for health care and post-secondary education, an end to the principle of universality for old age pensions, and the imposition of user fees for medical services.
This is the prospect a Liberal leadership candidate puts before Canadians, and the Minister of National Health and Welfare (Miss Begin) endorses his candidacy. Such hypocrisy from that Minister, in the face of her utterances in the past year, is beyond belief. She is now willing, it appears, to let lower income and elderly Canadians pay the cost of Liberal ambitions. That is shameful, Mr. Speaker.


AIR TRANSPORT
Mr. Andre Maltais (Manicouagan):: Mr. Speaker, the federal Minister of Transport has accomplished a great deal on the North Shore in the way of providing airports and docks. I

May 9, 1984
would like to point out that the Canadian Air Transportation Administration should consider the importance of 3,000-foot landing-strips to small villages on the middle and lower North Shore, to Kegaska, La Romaine, Tete-a-la-Baleine and La Tabatiere, to help people out of their isolation.
Mr. Speaker, I may add that Quebec has always refused to build roads in this isolated and distant area but I think that after building major regional airports at Blanc-Sablon, la Cheverie, Natashquan and Havre-Saint-Pierre, we should be able to give these isolated communities an adequate air transportation service. Since Quebec continues to delay construction of proper roads in the area, I think the time has come for the Administration to start immediately on the construction of 3,000-foot gravel air strips so that planes of the Otter, Twin Otter and DC-3 type can serve those communities.


OLYMPIC GAMES
Mr. Terry Sargeant (Selkirk-Interlake):: Mr. Speaker, I would like to comment briefly on the regrettable decision of the Soviet Union to withdraw its team from the Los Angeles Olympics. As in 1980, New Democrats oppose such a boycott. At that time my colleague, the Hon. Member for New West-minster-Coquitlam (Miss Jewett), said:
We regret also the decision to single out our athletes to bear personally the total burden of our anger. No comparable sacrifice is asked of others. Furthermore, crippling the games in Moscow probably signs the death warrant of future Olympic Games as well.
The same still holds true, Mr. Speaker. Athletes, many of whom have worked for many years for this one chance, will again be the big losers. Whether they be from countries that participate in the boycott or those who do go, they will never know if they competed against the best.
A second consecutive boycott by a major participant would not bode well for the continued well-being of the international Olympic movement. I call upon the Prime Minister (Mr. Trudeau) to act in the interests of the world's Olympic athletes and of the movement itself, by expressing Canada's displeasure with such a politicization of the Games, and I ask him to call upon Chairman Chernenko to reconsider his nation's decision to withdraw, and on President Reagan to give his personal guarantee ensuring the total security of the Soviet team.


SHIPBUILDING
Mr. Louis Duclos (Montmorency-Orleans):: Mr. Speaker, Davie Shipbuilding in Lauzon Quebec City, which formerly employed more than 2,500 workers, now has hardly 1,500 employees and may have only a few hundred left by the end of 1984, if the company fails to get substantial orders in the next few months. However, one wonders how this shipyard will be able to get the contracts it needs, if nothing is done very soon to make it competitive once more. And competitive it must be, otherwise it will never be able to hire back the hundreds of workers it has had to lay off in recent months. However, to become competitive, it must modernize facilities and equipment, at whatever cost. Since the requisite investment cannot be made without Government assistance, I urge the Government, and more specifically the Minister of Regional Industrial Expansion, to approve the application for a subsidy of nearly $9 million submitted not long ago by Davie Shipbuilding, a company whose operations are vital to the economic well-being of the Quebec City area.


AGRICULTURE
Mr. Jack Murta (Lisgar):: Mr. Speaker, according to a recent survey by the farm newspaper Manitoba Co-Operator, an estimated 200 farmers in my home province have not been able to obtain enough credit to put in a crop for this year. As well, the survey reveals that 350 Manitoba farmers have left farming during the last two to three years for reasons other than retirement. This figure has been given credibility by current Canadian Wheat Board statistics on permit books. According to the Board, permit holders in Manitoba have declined by 490 since 1980. These two revealing statistics are but the tip of the iceberg. Last year Manitoba had a record 62 farm bankruptcies, up 106 per cent over 1982.
Another area of concern which further highlights the severity of economic conditions facing the western farmer is the report by the Farm Credit Corporation which says that arrears on loans owed to the FCC by Manitoba farmers have increased by more than 50 per cent. In fact the increase this year alone amount of $14,660,000, $5 million more than in 1983.
What will it take for the Government to understand the immediate needs of the western farmer? The recent announcement of pay-outs in the fall under the Grain Stabilization Act is much too late. Payments late in the year will not assist those farmers presently faced with a cash flow problem. Interim payments are needed before the end of the summer, and I urge the Government to take action now.
May 9, 1984


POLITICAL PARTIES
Mr. Neil Young (Beaches):: Mr. Speaker, the Canadian embassy in Tokyo is trying to promote Japanese tourism in Canada by running a so-called beauty contest, in which Japanese women are being asked to send photos of themselves, and their physical measurements, to the Canadian embassy. The winner is to be awarded a tour of Canada. While it is a worth-while endeavour to promote tourism, this approach is entirely offensive and hearkens back to the dark ages.
It does, however, point once again to the glaring gap between the platitudes the Liberals pay to women's issues and their policies and actions. For instance, the Government was willing to make companies which had contracts with the federal Government comply with the six and five program when it came to wages, yet it will not bring in contract compliance to promote affirmative action programs within those same companies.
The Liberals are willing to intervene and regulate the broadcasting industry when it comes to ensuring Canadian content. But when it comes to protecting women against sexually abusive broadcasting, the Government says it is the CRTC's responsibility. A warning to all Canadians, but in particular to Canadian women: to be a Conservative is to reveal nothing at all about one's policies; to be a Liberal means to preach one thing and practise another.


AGRICULTURE
Hon. Roch La Salle (Joliette):: Last April 10, Mr. Speaker, some Government Members were pleased to see that the Minister of Agriculture had met with the association of Quebec producers concerning the huge loss incurred by Quebec farmers as a result of bad weather conditions last summer. The Minister said that financial assistance would be available to Quebec farmers on the condition that the Quebec Minister of Agriculture-or the Quebec Government through its Minister of Agriculture-make direct representations to Agriculture Canada. On April 16 last, the Minister of Agriculture of Quebec did make the necessary representations to explain that Quebec farmers deserved that assistance, considering that the federal Government had been extremely generous for western farmers in 1980. Given those circumstances and the fact that the Canadian Minister of Agriculture has received that very clear and straightforward message, I dare hope that Government Members will make every effort to convince the Minister of Agriculture of Canada to respond favourably, keeping in mind the good faith and good will
Oral Questions
shown by Quebec's Agriculture Minister in the interest of farmers. Therefore, Mr. Speaker, I urge the Minister of Agriculture to give a positive response to the request of his Quebec colleague, in the interest of Quebec farmers.


Mr. Dubois:: Did you read Mr. Garon's letter?



ORAL QUESTION PERIOD


Hon. John C. Crosbie (St. John's West):: Mr. Speaker, my question is for the Minister of Finance. Canada has set another record. We have now been singled out by the International Monetary Fund as one of the industrial nations which has an unwelcome set of options, and whose problems are among the worst of those nations which have a rising government debt.
In 1973 our total external debt was $16.4 billion owed by the Governments and the people of Canada, outside Canada. Today it is $127.4 billion. The IMF says that, in relation to the current value of national output, by far the largest interest payments are those of Italy and Canada. They are equal to 9 per cent and 7 per cent of the gross domestic product.
What steps does the Government plan to take to resolve this fantastic debt problem which we now have in Canada, which originated in 1973 when Mr. John Turner was Minister of Finance, and has continued with every Minister of Finance since? When is the Government going to cease putting this country in hock, and reverse this situation? Is the outrageous debt record of the Government not the basic reason for the weakness of the Canadian dollar today?


Hon. Marc Lalonde (Minister of Finance):: Mr. Speaker, I must tell my hon. friend that his slip is showing. Frankly, his fears are appearing rather obviously, in face of the outstanding candidates who are vying for the leadership of the Liberal Party.


Mr. McDermid:: Just name one.


Marc Lalonde: I addressed this issue in my last two budget speeches in particular, and in the economic statement I issued in November of 1982. As I have stated, it is important that we proceed to a gradual reduction of our deficit so as not to find ourselves in a situation where there would be some crowding out, or where a large part of the federal Government's expenditures would be for interest payments. I have indicated a step of a gradual reduction in the deficit.
I can inform my friend, for instance, that we have performed even better than I had anticipated in that regard. Last year, for instance, I had foreseen that the federal Government

May 9, 1984
Oral Questions
would have financial requirements in excess of $26 billion. The most recent figures indicate that we will have achieved an amount that will be $1.7 billion lower than the amount I had anticipated. We have achieved this by careful management, while caring for the unemployed and the people who are in need.


John Carnell Crosbie: I am pleased to see that the Minister is concerned about whether he will be in the next Cabinet, and that he is worried about Mr. Turner who has promised to cut the deficit by $15 billion. I can tell him that John Turner would not touch him with a ten-foot pole.


SUGGESTED OPTIONS FOR CANADA
John Carnell Crosbie: Mr. Speaker, the International Monetary Fund is concerned about Canada, not just Zambia, and not just about Abyssinia or Ethiopia. It is now worried about Canada and has said that our options are unpalatable. Either we have to raise more tax revenue or we have to cut public spending, or the additional charges will be pyramided into a faster growth of debt in a vicious circle of interaction between interest expenditures and indebtedness. Will the Minister tell the House which of these options he will pursue? Will he continue allowing this vicious circle of interaction to continue so that Canada goes down the tubes? What is he going to do?


Marc Lalonde: Mr. Speaker, the Hon. Member says that the IMF has singled out Canada. I invite him to read the report and, as a matter of fact, I will send him a copy of it. I invite him to read what the IMF has been saying about the situation in the United States. That would be some thoughtful reading for him. Before he makes a statement like the one he has made, he will want to read the document very carefully.
I have said that the issue of the deficit is important, but I also want to point out that this has to be read correctly, contrary to what the Hon. Member is mentioning. For instance, if one takes the gross public debt in Canada and compares it to the GNP, Canada ranks third amongst the seven major industrial countries. If one takes the net public debt-that is after the deduction of the interest payments that the federal Government is receiving-the net public debt ratio to GNP, Canada ranks third out of the seven industrial nations. I am sorry, Mr. Speaker. I mentioned third before. It was fourth with respect to gross public debt to GNP ratio. It is third with respect to net public debt to GNP ratio. Only France and Germany have a lower net public debt to GNP ratio than Canada. We are ahead of the United States, Japan, the United Kingdom, and Italy in that regard. My hon. friend could get those figures as well if he wishes.


John Carnell Crosbie: As it is so often, the Minister becomes gross when he is grasping for an answer.


REQUEST FOR GOVERNMENT ACTION
John Carnell Crosbie: Mr. Speaker, the fact is that total Canadian external debt at the end of 1973 comprised 13 per cent of our GNP, just $16.4 billion owed abroad. Today it is 33 per cent of our GNP, which is $127 billion. That is the worst record in the OECD except for Italy.
The IMF pointed out that interest payments and past debt are still mounting, and this poses a threat to the ability of Governments to initiate policies that would foster economic growth. It is concerned about Canada. What plan of action does this ruptured, lame duck Government have to reverse this trend, so that we have some ability to initiate policies to foster economic growth? When are you going to show concern and take some action? The world is alarmed about this Government.


Marc Lalonde: Mr. Speaker, I certainly would not take very great advice from that intellectually bankrupt Party across the aisle. I have indicated what we were planning to do. I have indicated the steps we are taking in my last two Budgets. I have informed the Hon. Member that we have performed even better than had been anticipated in terms of reducing the financial requirements of the Canadian Government, to the tune of $1.7 billion better in 1983 than what we had anticipated. Indeed, I want to continue along the lines because, just as we must be concerned about the size of the deficit, we must also be concerned about the plight of the unemployed and about the necessity of coming to the help of those people in need in this country during the difficult times we are facing. This is the policy that this Government is following, and we intend to continue following it.


SIZE OF GOVERNMENT BORROWING
Hon. Michael Wilson (Etobicoke Centre):: Mr. Speaker, the Government has presided over an increase in the deficit from about $10 billion to $30 billion. Recognizing the clear link that this report, referred to by my colleague, establishes between the burden of heavy government borrowing and our apparent high level of employment, is the Minister prepared to admit now that not only did his Budget completely misjudge the current weakness in the economy today, but it also sidestepped the main issue of excessive government borrowing, which is at the heart of our high unemployment problem and the slow economic growth we are suffering today?


Marc Lalonde: First, Mr. Speaker, this is not at all what the IMF report states. Second,
I totally disagree with my friend's analysis.


Michael Holcombe Wilson: It is clear, Mr. Speaker, that the Minister does not understand the problems and the responsibilities that he is faced with as Minister of Finance.


Some Hon. Members:: Hear, hear!
May 9, 1984


EFFECT ON UNEMPLOYMENT
Michael Holcombe Wilson: Mr. Speaker, the IMF report states that the high level of interest servicing charges in Canada is 7 per cent of national income compared to 4.5 per cent for most of the other industrialized countries. That charge is a tremendous burden on the economy and it uses up the spending power of the Government which could be directed at creating jobs, creating economic growth which would create a climate of confidence in this country. Because this practice has led to an unemployment rate in Canada of 11.3 per cent compared to 7.8 per cent in the United States, why have the Minister of Finance and previous Liberal Ministers of Finance always regarded excessive government borrowing as next year's problem, and avoided taking action today when it is necessary?


Marc Lalonde: Mr. Speaker, the Hon. Member is making a very strange assertion indeed. If his statement were right, you would have, for instance in England today, a lower level of unemployment than in Canada.


Flora Isabel MacDonald: Higher or lower?


Marc Lalonde: The level of unemployment in the United Kingdom, as the Hon. Member knows-


Mr. Stevens:: Has been coming down.


Marc Lalonde: -is significantly above the Canadian unemployment numbers. The Hon. Member should know also, if that statement were true, you would have a lower unemployment level in the Netherlands today than in Canada, Mr. Speaker. The unemployment level in the Netherlands today stands at over 18 per cent.


John Carnell Crosbie: What about the United States?


Marc Lalonde: The Hon. Member cannot establish the kind of relationship that he is trying to establish, and he knows it.


INTEREST RATE LEVELS-GOVERNMENT POSITION
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, over the last few days we have been watching interest rates increase. The prime rates for the chartered banks have been established at 12 per cent, and every reputable economist in Canada tells us that if this trend continues for much longer our fragile recovery is about to end. Yet the Minister of Finance stands up daily in the House of Commons and tells us there is nothing he can do, that he is helpless, that Canada must track the interest rates of the United States.
Is the Minister saying to Canadians that he, as Minister of Finance, is indeed helpless and must look to people like Paul Volker, a bureaucrat in the United States, to dictate our policy here that will determine whether or not our recovery is successful?
Oral Questions


Marc Lalonde: Mr. Speaker, I have answered this question a number of times. We are in a situation of very close interdependence with the American economy. This applies not only to the Canadian economy but also to those of other industrialized countries, and even developing countries, at this time.
U.S. interest rates are having a very considerable impact on the movement of interest rates in all industrialized countries. European countries are facing the same problems we are at this time, in terms of upward pressures on their own interest rates.
I have pointed out that we were hoping the industrialized countries would be able to agree on measures that could at least arrest, if not diminish, the rise of interest rates. I said that these issues would undoubtedly be discussed sometime next week, at international meetings of Ministers of Finance. Once again, however, I must emphasize that, in the circumstances, we must always consider what is happening in the United States. The Hon. Member is also aware of certain statements made by spokesmen for the U.S. Administration yesterday, and I hope that these statements will be followed by concrete decisions by the U.S. authorities.


AGRI-BOND CONCEPT-REQUEST FOR MINISTER'S SUPPORT
Nelson Andrew Riis: Mr. Speaker, it is perfectly clear that the Minister of Finance is attempting to focus our attention on the United States, to launch his crusade for bringing pressure on the United States to lower rates, and while one might applaud that effort, there are things which the Minister could be doing today. One of the concepts that I feel should be introduced in the House of Commons is being considered by the Finance Committee at the moment. It is called agri-bonds. It has been referred to the Finance Committee; it is before that committee. The Government has done nothing with that concept.
Will the Minister of Finance say: "Yes, we can provide assistance to food producers in our country"? Agri-bonds have been proven in other parts of the world. Why does the Minister of Finance not stand up and say that this will be a priority of the Government and that we will see this legislation passed in the House of Commons before the end of June this year?


Marc Lalonde: Mr. Speaker, I have answered this question before by saying that the issue had been referred to a parliamentary committee in order to examine the implications, the advantages, and the draw-backs of that specific measure. Also I have indicated that there were possible alternative measures which might be more effective and more useful. I hope the parliamentary committee will examine those various alternatives. I am awaiting its report to see what would be the best steps. Contrary to my hon. friend's
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May 9, 1984
Oral Questions
view, I am not reaching conclusions before matters have been studied.


Nelson Andrew Riis: Perhaps one of the reasons the Minister has not given a concept like agri-bonds the appropriate attention is that he would like to introduce legislation to assist the foreign banks in Canada. We in this Party feel that, rather than giving priority to the foreign banks legislation, we should be assisting Canadian farmers and food producers by introducing a concept such as agri-bonds.


REQUEST THAT MINISTER IMPOSE TAX ON CAPITAL OUTFLOWS
Nelson Andrew Riis: Mr. Speaker, my final question refers to a concern which the Minister has raised time and time again, that the necessity of tracking United States interest rates is to keep capital in this country so that there will not be a haemorrhaging or flowing of capital out of Canada seeking better interest rates in the United States or in other countries.
Has the Minister of Finance considered, as an alternative, the lowering of interest rates in this country and, to keep capital in Canada and to stop the movement of capital out of the country, imposing something like a speculator's tax on excessive amounts of money which would be moved out to take advantage of higher interest rates abroad?


Marc Lalonde: Mr. Speaker, I have two things to say to the Hon. Member. First, he knows that the measure I have introduced dealing with foreign banks resulted from a parliamentary committee's unanimous report. It was supported by the New Democratic Party. He knows that I have acted on the basis of the parliamentary report.
On the issue of agri-bonds, I will do the same. I will act when the parliamentary committee has reported. I will examine the alternatives, as I have done in the case of foreign banks. Also the Hon. Member knows that these measures are not to help foreign banks. They are to help Canadian consumers and Canadian businessmen by introducing more competition in the banking field. He knows that, because he studied the issue and recommended that we do away with the ceiling on foreign banks. He knows what the issue is and what needs to be done.
As far as his particular suggestion is concerned, I have also answered this question before by saying that I did not think this was an appropriate step to take in terms of introducing, directly or indirectly, foreign exchange controls at the present time.


WESTERN GRAIN STABILIZATION ACT
Right Hon. Joe Clark (Yellowhead):: Mr. Speaker, my question is directed to the Prime Minister. We understand- and I would appreciate confirmation from the Prime Minister-that the Government has finally agreed to introduce in the House of Commons the amendments to the Western Grain Stabilization Act and that those will be coming forward later this week, but that the Government will not permit them to be debated later this week. This is a matter of great urgency in western Canada. I ask the Prime Minister for a clear undertaking now that we can have that measure before us for debate at the beginning of next week.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the Hon. Member should remember from the time that he was Prime Minister that House business is discussed between House Leaders of various Parties. There is ongoing discussion on that Bill at this time. Members on this side, and I believe Members on the other side too, would like that Bill to pass into law, but there are other Bills on the Order Paper which are in the interests of Canadians. I would remind the Hon. Member-perhaps he did not know-that we did have a written agreement to pass a certain number of financial Bills, but his Party reneged on that agreement.


Mr. Nielsen:: That is not true.


Mr. Hnatyshyn:: You know not of what you speak.


Pierre Elliott Trudeau: We have it in writing. If the Hon. Member-


Ramon John Hnatyshyn: Get your amanuensis to get it right.


Pierre Elliott Trudeau: I am not dealing with the Hon. House Leader. I am dealing with the Hon. Member for Yellowhead. I am telling him that, if he wants to see the written agreement, we can show it to him. The Party to which he belongs reneged on that agreement. We want to see the Bill on grain stabilization passed, but we want to see other legislation passed too. That is why the negotiations are going on.


Charles Joseph Clark: What I remember, and what I wish the Prime Minister would remember, is that it is the Prime Minister of a Government who sets the priorities of a Government. This Government has consistently been giving western Canada second, third, or fourth place. It does not rank among the priorities of this Government-


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: -even though there are Canadian prairie farmers going bankrupt now, and even though the delay in this legislation was caused because the Minister of Agriculture was too busy running for the leadership of the Liberal Party. This delay is cutting off the access of Canadian farmers to their own money.


REQUEST FOR INTERIM PAYMENT PROVISION
Charles Joseph Clark: Mr. Speaker, I ask the Prime Minister two questions. First, could we have a guarantee that his Government will begin to care about western Canada and bring in that legislation for debate next week? Second, could he tell us, if he knows, whether the legislation
May 9, 1984
that will be tabled on Friday contains a provision for an interim payment right now?


Pierre Elliott Trudeau: Mr. Speaker, I believe the difference between that Party, as it was led and as it is presently led, and this Party, is that we can deal with several priorities, not only with one. We believe that western grain farmers are one priority. There are other priorities in the country. The ability of a Government is shown in its ability to deal with several priorities, not only with one at a time.


Mr. Gustafson:: How about the CPR?


Charles Joseph Clark: Mr. Speaker, the Prime Minister has clearly indicated that the concerns and bankruptcies of Canadian western farmers are a priority way down his list. It is not way down the list of this Party or of this Parliament, and it should not be way down on his.


REQUEST THAT LEGISLATION BE PASSED BY MAY 18
Charles Joseph Clark: Mr. Speaker, the Prime Minister now has a chance to prove that he cares about western Canada, that he cares about the region he once told me somebody else would have to worry about. He has a chance to prove that now, and he could do it by bringing in that legislation for debate and completion next week. Will he do it? Will he do that for the West?


Pierre Elliott Trudeau: Mr. Speaker, the House will remember that we have taken four days, lost four days, on the Crown Corporations Bill, which is also one of the priorities of the Government.


Some Hon. Members:: Lost!


Pierre Elliott Trudeau: The House will know that in Parliaments where they have more civilized Oppositions, they deal with Bills at second reading in one day, and they do not just try to talk those Bills out. That permits Governments in such Parliaments to deal with several priorities at a time.
The Right Hon. Member for Yellowhead seems to think that because we want to deal with other Bills we are downgrading western farmers. That is an example of politics which, in the long run, did not even benefit the Hon. Member. Otherwise he would not be sitting in that seat, he would be sitting in that one.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Hon. Member for Wellington-Dufferin-Simcoe.


John Horton McDermid: You have got to get in the cheap shots.


Ramon John Hnatyshyn: It is better than sitting in that art deco house in Montreal.


Mr. Speaker:: Order, please. The Hon. Member for Welling-ton-Dufferin-Simcoe has the floor.
Oral Questions


NATIONAL REVENUE
Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Mr. Speaker, my question is for the Minister of National Revenue. Could he confirm that, contrary to Section 241 of the Income Tax Act, his Department has been giving taxpayers' social insurance numbers to private credit bureaux. If so, how extensive has this practice been?


Hon. Pierre Bussieres (Minister of National Revenue):: Mr. Speaker, Hon. Members often ask questions and we often enquire about the use of social insurance numbers on some Departmental documents.
I must admit that I was not aware that taxpayers' social insurance numbers were being passed on to private credit bureaux. I will gladly find out and advise the Hon. Member accordingly.


DEPARTMENT'S DEALINGS WITH CREDIT BUREAUX
Henry Perrin Beatty: Mr. Speaker, does the Minister not recall the letter that he signed on April 30, 1984, addressed to my colleague from Calgary West, in which he said:
Further to an investigation into this matter by my officials, it has been determined that, on occasion, officials of my Department have used the services of the credit bureaux in identifying taxpayers by making reference to the social insurance number.
If the Minister does not remember that, will he refresh his memory? Second, will he tell the House how extensive is the giving of confidential information contrary, as he points out, to Section 241 of the Income Tax Act, and precisely what use is being made by his Department of private credit bureaux?


Pierre Bussières: As I
said, Mr. Speaker, there are times when we have to quote social insurance numbers in our communications with private agencies to ensure that bookkeeping data are correctly recorded in our computer system or that debits or credits in the account of a taxpayer are accurately posted. That is why we are using social insurance numbers in our dealings which is not contrary to the specific provisions of the Income Tax Act prohibiting the release of confidential information.
As far as this particular case is concerned, however, or how extensive has the practice been, again I will be glad to find out and to report to the Hon. Member.



May 9, 1984
Oral Questions EMPLOYMENT


REQUEST THAT SAWMILLS BE REOPENED
Mr. Cyril Keeper (Winnipeg-St. James):: Mr. Speaker, my question is for the Hon. Minister of Employment and Immigration. As the Minister is certainly aware, the economic situation on Quebec's North Shore is critical, especially in the forest industry. For instance, in the village of Sacre-Coeur, the main employer, a lumber mill, closed down 16 months ago, leaving well over 400 workers without jobs. This is a modern plant manned by young and qualified workers. Now that the sales in this sector are going up again, does the Minister intend to meet with the management of this plant and others in similar situations so that operations may resume in that area?


Hon. John Roberts (Minister of Employment and Immigration):: Mr. Speaker, I congratulate the Hon. Member for asking his question in French and showing such interest in the fate of French-speaking Quebecers on the North Shore of the St. Lawrence River. I can tell him that I would certainly be very anxious to deal with this situation. I wonder whether it would be better for me to meet personally with the people concerned, but I could and would like to have talks with the officials and this could be considered a preliminary step before holding an actual meeting. Indeed, such a gathering may not be necessary if we find another way of solving the problem.


FORESTRY
Cyril Keeper: Mr. Speaker, my supplementary is for the Minister responsible for Forestry. Where is the Minister, please? The auxiliary agreement between Quebec and Ottawa-


Mr. Speaker:: Order, please! Supplementaries should be directed to the same Minister. Hon. Members are not entitled to direct another question to another Minister.


An Hon. Member:: Rightly so!


Mr. Speaker:: A supplementary, not another question.


Cyril Keeper: Mr. Speaker, my question is on the same subject and is addressed to the Minister concerned.
The auxiliary Quebec-Ottawa forestry agreement involving an amount of $300 million expired a few weeks ago. Can the Minister tell us-


Mr. Speaker:: The Hon. Member is striving to ask another question.


NATIONAL REVENUE
Mr. David Weatherhead (Scarborough West):: Mr. Speaker, my question is for the Minister of National Revenue. Musicians of the Toronto Symphony Orchestra have been very concerned about a recent National Revenue ruling stating that these musicians were employees and not self-employed. The Minister undertook to review this matter. Some time has passed. When will this review be completed?


Pierre Bussières: Mr. Speaker, I congratulate the Hon. Member on his continuing interest in this matter. I am happy to tell Hon. Members that we have completed an in-depth review of the situation. Musicians in the Toronto Symphony Orchestra will maintain their self-employed status.


AGRICULTURE
Mr. Bud Bradley (Haldimand-Norfoik):: Mr. Speaker, my question is for the Minister of Agriculture. It pertains to the problem in the tobacco industry. The Minister knows the problem, and he knows the statistics. I do not have to tell him that there are some 8,000 to 10,000 jobs at stake here. He knows why the problem exists, one of the biggest factors being the taxation by the federal Government. Since the federal Government takes some $1,140 million in taxation from the tobacco industry and returns some $1.6 million to the research station in Delhi, and since most tobacco growers will have to go into some other crop in order to survive as they are pushed out of tobacco by the Government, is the Minister prepared to increase the funding and the manpower at the Delhi Agriculture Station in order that they can do some research into substitute crops for the tobacco industry?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the Hon. Member knows full well that in practically every province the provincial Government receives more revenue from cigarettes than the federal Government. He also knows full well that the Province of Ontario has as much responsibility to the tobacco industry as I do, if he is going to compare. Actually, we spend more on research. We spend more giving assistance through interest-free payments and advance payments on storable crops. The tobacco growers are able to take advantage of that program. We do much more for them than does the Province of Ontario. The Province of Ontario has the main responsibility.
The Hon. Member talked about research. He knows that we have demands, and that I could spend twice as much money on research in all of Canada. I would love to be able to do that. His Party continually tells us to cut back on expenditures,
May 9, 1984

telling us not to spend, yet at the same time he asks me to spend more money.


TOBACCO GROWERS' DEMANDS
Mr. Bruce Halliday (Oxford):: Mr. Speaker, the producers and the people who work in the Delhi research station will be disappointed with that answer by the Minister.
One week ago today, some 2,000 tobacco producers gathered in Delhi and sent two resolutions to the Minister, which will have been received in his office by now. They called on the Government to introduce an amendment to the Farm Products Marketing Agencies Act which would permit the consideration of the establishment of a national marketing agency for tobacco, and, second, would enable the National Farm Products Marketing Council to commence public hearings immediately to investigate the establishment of such an agency. How did the Minister respond to those demands? Can those producers expect to hear something positive prior to the recess of this Parliament?


Eugene Whelan: Mr. Speaker, the Hon. Member will know that I met with the Chairman of the Tobacco Marketing Board of Ontario last week, and also representatives of the industry, to discuss the problems that he is bringing to the attention of the House. I understand that the Chairman of the Ontario Marketing Board is in Prince Edward Island today to discuss this issue with the tobacco producers in that province. I discussed it with the producers in Prince Edward Island when I was there last week.
I am surprised at the noise the other side is making when they maintain that this is such an important issue. Amendments to the National Farm Products legislation are being drafted. We are advised by the legal authorities that, due to the Charter of Rights, we cannot eliminate anyone from that Act. At the present time some of those people can probably lay claim to being discriminated against because it limits certain products that could use supply and management under that Act. The tobacco producers know that, when amendments are made, all groups, whether they are tobacco producers or whatever, will be included. Mrs. Menzies, the Chairman of the National Farm Products Marketing Board, has authority to hold hearings without any direction from me. However, I did talk to her about it, and she is proceeding along those lines.


INDIAN AFFAIRS
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. Four years ago the Minister promised a $345 million economic development fund. It was promised again in 1981, and he and his Cabinet colleagues promised it again in 1982 and 1983. As I believe the Indian people across the
Oral Questions
country know, not one dollar of that $345 million fund was ever put in place.
Would the Minister confirm that the economic development policies of his Department, along with those of his colleague, the Minister of Employment and Immigration, have created a situation where over the last four years, the level of unemployment among native people on reserves has gone up rather than down?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I thought the Hon. Member was aware that there has been a substantial increase in funding by the Government to the Indian people over the course of the last four years. This is not even taking into account the increase in expenditures emanating from my colleague, the Minister of Employment and Immigration. Millions of dollars have gone into housing alone. One year we tripled the budget for housing. Now it is doubled. The Hon. Member can understand the tremendous employment which that generates, and that is just one item.
I would also indicate that there have been great expenditures in the whole land claim area, which lays an economic underpinning for many of the Indian communities. As the Hon. Member knows. That in turn generates employment.


Ms. Jewett:: For whom?


John Carr Munro: Therefore, I cannot agree with the premise of the Hon. Member at all, Mr. Speaker.


James Ross Fulton: Mr. Speaker, I am sure all Members of this House are aware that the level of unemployment among native people is now between five and six times above the national average.


EVALUATION OF MEGAPROJECTS' IMPACT ON NATIVE PEOPLE
James Ross Fulton: My supplementary question, Mr. Speaker, is in the same area. The Minister last year terminated megaproject impact funds. I wonder if he would stand up and tell this House why, even though it has gone through Treasury Board, not one dollar has been released in terms of evaluating projects like Kemano-II, B.C. offshore drilling, the damming of the Stikine River, and Klappan coal? The list goes on all across Canada. As the Minister knows, the World Council of Churches describes the kinds of developments which are going on in norhern Alberta as being genocide. Where is the money? What is all this rhetoric which the Minister is peddling across the country?


John Carr Munro: I do not know, Mr. Speaker, about the "rhetoric" I am peddling across the country-


Erik Nielsen: Neither does anyone else.


John Carr Munro: -but if the Hon. Member is talking about the economic development fund he should be aware by now, after all this time, that the Minister responsible

May 9, 1984
Oral Questions
is not the Minister of Indian Affairs and Northern Development but rather the Minister responsible for small business.


John Carnell Crosbie: No one is responsible. Nothing but excuses.


John Carr Munro: The Hon. Member might be able to access that fund better on behalf of his constituents if he were aware of the right Ministry, to start with.


John Carnell Crosbie: Not even Mr. Trudeau is responsible.


John Carr Munro: As far as what the Hon. Member is talking about is concerned, it is quite true, Mr. Speaker, that the Indian people in northern British Columbia-


John Carnell Crosbie: Eugene Whelan should be responsible.


John Carr Munro: -do have some very serious problems with regard to the social impacts of various projects taking place there. I can tell the Hon. Member that I have talked to the Indian people as recently as two weeks ago, and it is considered a priority in terms of getting them that type of funding. That is one of the key priorities across the whole nation as far as myself and my Department are concerned.


FINANCE
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, my question is directed to the Minister of Finance. Two days ago in answering my colleague, the Hon. Member for Brandon-Souris, he asked the farmers and fishermen to share in the burden of taxation when paying the fuel tax as it applied to farmers and fishermen. That, as the Minister knows, generates a 100 per cent profit of $250 million for the federal Government, and is a direct cost of food production passed on to the consumers. Only the Government benefits from this. Will the Minister revise his concept of "sharing" and think of sharing the $250 million profit the Government makes, with consumers, and remove that tax from the farmers and fishermen?


Marc Lalonde: Mr. Speaker, the Hon. Member has a strange notion of taxes. He seems to be scandalized by the fact that taxes mean revenue for the Government. That is what they are by definition. Indeed, there are a number of taxes which bring revenues to the Government. However, we are facing a situation where, in spite of our revenues, we still have a large deficit about which the Hon. Member's Party complains all the time, including today.


Ramon John Hnatyshyn: And the "Member from Bay Street".


Marc Lalonde: I would suggest, therefore, that the Hon. Member should talk to his colleagues and get their act together.


Ramon John Hnatyshyn: How about the "Member from Bay Street"?


Marc Lalonde: Do those Hon. Members want to have a larger or a smaller deficit? They do not seem to be able to get their acts together at all. I would also like to tell the Hon. Member that he should mention in his question the large amounts of money which the federal Government is transferring to farmers in the form of grants or support for their activities. I have indicated that these amounts are in excess of a billion dollars this year-and that is not bad-from the federal Government.


ABORIGINAL RIGHTS
John Horton McDermid: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development, if I can get his attention. The Inuvialuit agreement which has been negotiated, and which has been cleared through Cabinet, is now going through the ratification procedure with the Inuvialuit in the Northwest Territories. The Minister, I believe, on the weekend said, and I am paraphrasing, "If you do not accept this, you are not going to get anything". Does the Minister not think, Mr. Speaker, that that is a form of blackmail, forcing the Inuvialuit to accept this agreement, because he said if it is not accepted there would be no renegotiation of the agreement?


John Carr Munro: Mr. Speaker, I do not remember saying-and I see he has a press release from me in his hand- "you are not going to get anything".


Mr. Epp:: It is probably someone else.


John Carr Munro: I am prepared to talk to him about various programs of one kind or another. However, if he is referring to the agreement, I would tell him that this is an agreement which the COPE organization wanted, asking me to go to Cabinet to get it approved in terms of the final agreement. This was after working out many problems with respect to the CYI and the Dene Metis, all the overlapping questions, and everything else. We worked it out and got it approved on the terms they were prepared to accept. They have taken it back to get final approval.
Is the Hon. Member suggesting that we should open up an agreement every time there is some difference of opinion? If that were the case we would never get any comprehensive claims settled in the entire Arctic. Of course, it would weaken its position very drastically if the Government indicated it was prepared to be flexible every time we reached a final agreement with the native people on the terms they wanted. If there was no finality to it, it would undermine the whole comprehensive claims process.
May 9, 1984

Oral Questions THE ADMINISTRATION
Of course, if the Inuit are not prepared to accept the final agreement that their own political organization negotiated, then that is the end of that agreement. I suppose they may want to make representations to me or to the next Government, on starting up some process again, and that can be judged at that time. However, there is one final agreement which has been approved.


John Carnell Crosbie: Come on! Speech! Speech!


John Carr Munro: They asked that it be approved, and it is out there for approval.


John Carnell Crosbie: Order.


John Carr Munro: Surely the Hon. Member would not be suggesting any other course of conduct.


GOVERNMENT'S POSITION
John Horton McDermid: Mr. Speaker, I have just a short supplementary question. I would like to quote the Minister. He said:
-renegotiation of the claim settlement would not be considered by this Government.
Therefore, when the Minister makes a statement like that, does he not see that that is a form of threat to the Inuvialuit who must now take a look at that agreement and decide whether to ratify it or not? Coach him, Pierre!


John Carr Munro: Mr. Speaker, I do not know what the view of the Opposition would be on this but, when there is a final agreement, it is a final agreement we are negotiating. We cannot have negotiation going on indefinitely. It is they who want this agreement. Their negotiators agreed with it. It is final.


John Horton McDermid: Why do you make threats like that?


John Carr Munro: It is not a threat, Mr. Speaker.


John Horton McDermid: Sure it is.


John Carr Munro: The problem with the Hon. Member is that he is so lacking in intelligence, he cannot make a distinction-


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: You are seeing red, John.


John Carr Munro: -between reality and a threat.


ATTENDANCE OF MINISTER OF EMPLOYMENT AND IMMIGRATION DURING QUESTION PERIOD
Mr. Jim Hawkes (Calgary West):: Mr. Speaker, in the absence of the Minister responsible for manpower and immigration, I would like to ask the Prime Minister if he can tell the House whether or not he considers the fact that the Minister of Employment and Immigration, day after day arrives in this House at 2.30 p.m. and leaves by 2.55 p.m., is a satisfactory performance in terms of-


Mr. Speaker:: Order. Order. The presence or absence of Hon. Members in the House is not usually the subject of comment. The Hon. Member for York-Peel.


POLITICAL PARTIES
Sinclair McKnight Stevens: Mr. Speaker, my question is directed to the Minister of State for Science and Technology. The Minister will recall that on April 19 he said that Liberal backbench Members of Parliament were voting robots. Would the Minister indicate to the House if that scientific observation meant that he felt that they had some use in the industrial world?


Some Hon. Members:: Oh, oh!


Hon. Donald J. Johnston (Minister of State for Economic and Regional Development and Minister of State for Science and Technology):: Mr. Speaker, the Hon. Member should have heard what I said about the Members of Parliament on the other side of the House.


AGRICULTURE
Arthur Jacob (Jake) Epp: Mr. Speaker, my supplementary question is directed to the Minister of Agriculture. In an earlier answer today the Minister of Agriculture left the impression that for those farmers who produce products under national marketing boards there is a question relative to the Charter of Rights and Freedoms as to whether they are in violation of the Charter. Is that the interpretation which the Minister places on the Menzies exercise?


Eugene Whelan: Mr. Speaker, in our discussions regarding amendments to the Act we were speaking about allowing certain products to be in the Act. Our legal adviser said we could not do that, that it would have to be

May 9, 1984
Petitions
left wide open so that farmers, producing any product and who wanted to enter into a national scheme, would be able to do so.


PENITENTIARIES
Hon. Allan Lawrence (Durham-Northumberland):: Mr. Speaker, my question is directed to the Solicitor General. I believe the allegations made in Montreal today have been brought to his attention regarding Strangler Bill Boden, who was arrested the other night in a bar solely and simply because of information given to the police that Boden was there, by an ex-convict. Earlier, that ex-convict had been approached in the bar to determine whether a gun could be obtained for Boden. That particular ex-convict was out on parole. Apparently, he has now been detained and his parole is in jeopardy.
My question to the Solicitor General is: has he investigated the matter? Does he think it fair that a convicted sex killer can treat his art instructor at an expensive restaurant and almost manage to escape, whereas an ex-convict, who believes in attempting to prevent bloodshed, is now in danger because of his actions in bringing information to the attention of the police?


Hon. Bob Kaplan (Solicitor General of Canada):: Mr. Speaker, I regret that the Hon. Member was unable to take the trouble to attend the Justice Committee meeting last night because a lot of the information which he requested was covered at that meeting. I certainly expressed my opposition to Boden being out on an escorted temporary absence, and indicated the steps that would be taken in that regard.
As far as the source of information leading to Boden's apprehension is concerned, according to newspaper articles and the information that I have, it was an anonymous tip. I can assure the Hon. Member that I do not consider it proper to suspend someone's parole solely because they co-operated with the police. If that is his allegation, I agree with him. I have requested a report on it. I would want to know if his parole was suspended, and whether there were valid reasons for doing so, other than the reasons which the Hon. Member has suggested.


PETITION
Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Haldimand-Norfolk (Mr. Bradley) on Tuesday, May 8, 1984, meets the requirements of the Standing Orders as to form.


POINTS OF ORDER
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I rise on a point of order relating to the question asked by the Hon. Member for Winnipeg-St. James (Mr. Keeper) and your ruling that his supplementary question was out of order. As you, Mr. Speaker, know, it has been quite acceptable in the past for Members to ask supplementary questions of a Minister other than the Minister to whom they asked their first question.


Some Hon. Members:: Order, order.


William Alexander (Bill) Blaikie: My point of order, Mr. Speaker, is that if you intend to change that practice you owe it to the House to give Members some notice. When Members rise to ask a supplementary question-and they have traditionally done so without any interference by the Chair-they should have some expectation of what your ruling will be. Mr. Speaker, if you have changed the rules with regard to Question Period and now regard it differently from what has been the practice in this House, would you kindly enlighten us as to what you have in mind?


Mr. Speaker:: In quoting from Beauchesne's Fifth Edition-


Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: Order, please. The Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie) has raised a point of order on which the Chair will rule. Subsequently, other Members will be recognized.
The point raised by the Hon. Member relates to supplementary questions. In Beauchesne's, Citation 371 reads in part:
The extent to which supplementary questions may be asked is in the discretion of the Speaker.
That has been established for some time. The Chair is concerned with the growing practice in the House of raising questions which are not supplementary and which are directed to another Minister. In some situations it is very difficult for the Chair to make a decision, especially as the Chair must do so on the spot.
However, as a general rule, a supplementary question should be asked of the Minister to whom the original question was put. There are exceptional circumstances where there is a shared responsibility, or where perhaps the Minister indicates that it is not his responsibility but some other Minister's responsibility. There are circumstances in which the Chair will respect that practice. The Chair is attempting in Question Period to discourage the practice of asking different questions of different Ministers.
In this particular situation the Chair will review Hansard carefully. If there are grounds, with respect to the Hon. Member for Winnipeg-St. James, for recognizing that the two Ministers had a shared responsibility, then the Chair will review the situation. It is not the intention of the Chair to discourage supplementary questions, but the Chair will dis-
May 9, 1984

courage supplementary questions which are not supplementary but additional questions.


Ramon John Hnatyshyn: Mr. Speaker, I appreciate very much the opportunity to address this matter briefly. I understand the spirit in which you have addressed your remarks.


Some Hon. Members:: Sit down.


Ramon John Hnatyshyn: The Speaker has not yet-


Mr. Speaker:: Order. The Chair is prepared to accept some brief interventions at this time, but they must be brief. I will certainly hear the House Leader for the Official Opposition on the matter. But the Chair has indicated the views and the procedures that, in the opinion of the Chair, should be observed in the House.


Ramon John Hnatyshyn: Thank you, Mr. Speaker. The point which I would like to make very briefly is that I appreciate very much that it is within your discretion to allow supplementary questions to be put. There is no question about that. I would like to assist you by saying that in making your assessment of whether a matter is an appropriate supplementary question, it should not be based upon whether it is addressed to one Minister and only one Minister but, rather, it should be based on the subject matter. A supplementary question can indeed affect more than one Minister in dealing with one particular topic.
Accordingly, the citation from Beauchesne's to which you referred states that supplementary questions are within the discretion of the Speaker. But this refers only to the extent to which supplementary questions may be asked. The citation referred to by Your Honour indicates that supplementary questions may be addressed to "a" Minister, not "the" Minister, not the Minister to whom the original question was posed but to a Minister.
I fully understand, Mr. Speaker, that it is your responsibility to ensure that the questions are indeed supplemental. I take no argument or issue with that particular point. However, the concern which I have, and which I think Hon. Members of my Party have, is that you were making a ruling that Members may not ask a supplementary question of a Minister other than the one to whom it was first addressed.


Mr. Speaker:: The Chair is perfectly clear. The general rule is that the supplementary question should go to the same Minister. There are circumstances-


Some Hon. Members:: No, no.


Mr. Pinard:: Mr. Speaker, I rise on a point of order-


Mr. Dick:: You are not a dictator yet.


Mr. Speaker:: I am sure the Hon. Member for Lanark-Ren-frew-Carleton (Mr. Dick) will want to think about that a little bit.
The Chair is indicating a general rule. The Chair is making it quite clear that there are circumstances in which there is a
Point of Order-Mr. Blaikie
shared responsibility between Ministers, or in which a Minister may indicate that he does not have the responsibility and that the question should be directed to another Minister. There are situations in which supplementary questions can be directed to another Minister, but they should be supplementary-as the Hon. Member for Saskatoon West (Mr. Hnatyshyn) has clearly stated-arising out of the question which was asked. That is the key. As a general rule, it does not give the Hon. Member asking the question licence to go hunting and to ask questions of any Minister who happens to be in the House.


Some Hon. Members:: Hear, hear!


Ramon John Hnatyshyn: Point of order-


Mr. Speaker:: I have heard the Hon. Member for Saskatoon West. There are one or two other Members who would like to speak. The Hon. Member and I do not have much difference of opinion on the subject, if any. The Hon. Member for Simcoe North.


Mr. Doug Lewis (Simcoe North):: Thank you very much, Mr. Speaker. Based upon the year and a half in which I organized Question Period, I would like to suggest that we can only agree with your submission that it has to be by subject matter. However, I urge on you the view that there are often occasions when the subject matter is the same but it comes down to what you just said, a shared responsibility among Members. It is our right and duty to ask questions, and often we have to use that tactic. I urge upon you that that tactic continue to be allowed.


Mr. Speaker:: If there is an additional point of order, the Chair will recognize the Hon. Member for Winnipeg-St. James.


Cyril Keeper: Mr. Speaker, I think it is important that I be heard on this question.


Yvon Pinard: Why?


Cyril Keeper: Since the ruling directly affects my behaviour in this House.


Mr. Speaker:: The Chair has indicated it will review Hansard carefully with regard to the Hon. Member. I suggest the Chair will be quite prepared to listen privately or discuss-


Cyril Keeper: Privately?


Mr. Speaker:: Order, please. The Chair has made a ruling with respect to the Hon. Member. The Chair is prepared to review Hansard. As I have indicated, they are close and difficult situations to call. The Chair does not wish to violate the rights or privileges of any Member of the House, but in the interests of everyone there has to be more discipline in terms of the nature and scope of the supplementary questions which have been asked. The Hon. Member for Regina West (Mr. Benjamin).

May 9, 1984
Point of Order-Mr. Blaikie


Cyril Keeper: Point of privilege.


Mr. Speaker:: The Hon. Member for Regina West has been recognized.


Cyril Keeper: A point of privilege.


Paul Wyatt Dick: Privilege is first.


Mr. Les Benjamin (Regina West):: Mr. Speaker, I submit that the Chair is perfectly in order to rule Members out of order when they are trying to bootleg a question on a different subject matter. I submit that it is clear that the precedents and practices of this House, and I have been through three Speakers here over 16 consecutive years-


William Alexander (Bill) Blaikie: And you will be through a few more.


Cyril Keeper: You will be through another one, too.


Leslie Gordon Benjamin: The established precedent has always been that an Hon. Member may direct supplementary questions to another cabinet Minister on the same subject matter. I submit that it was perfectly clear today that the question submitted by the Hon. Member for Winnipeg-St. James (Mr. Keeper) was on the same subject matter.


Mr. Speaker:: The Hon. Member will realize, since he has put in 16 years-and the present occupant of the chair has put in just a little more than that-that he is reflecting on a decision of the Chair, and he cannot do so.
It appears that there is no fundamental difference of opinion. I have tried to indicate the general guidelines I will attempt to observe. I have also said to the Hon. Member for Winnipeg-St. James that I will review Hansard and the subject matter. If the Chair has done him an injustice, the Chair will make note of it. But the Hon. Member will at least, I am sure, allow the Chair an opportunity to reflect, as he may himself.


Cyril Keeper: On a point of privilege.


Mr. Speaker:: The Hon. Member for Winnipeg-St. James says, "privilege". Privilege is a very special matter. If he wishes to argue privilege, will he argue his point of privilege?


Cyril Keeper: Mr. Speaker, I could just as well argue a point of order if you would allow me to be heard. That is the basis of my point of privilege. You have ruled with regard to the admissibility of my supplementary question without even hearing what I have to say. I consider that to be a derogation of my privileges as a Member of Parliament.


Mr. Speaker:: The Hon. Member should realize that he is not establishing a case of privilege. The admission of a supplementary question is within the discretion of the Chair. The Chair made a decision not to allow a supplementary. There is no appeal from that, and it is not a matter of privilege.
The Hon. Member for Athabasca.


MR. SHIELDS-VISITORS BARRED ENTRY TO MEMBERS' GALLERY
Mr. Jack Shields (Athabasca):: Mr. Speaker, mine is a different point of order. The Treaty Six Alliance members of the Coalition of First Nations are in Ottawa this week. In fact, they are guests of mine in the Gallery today. They were stopped at the front door and not allowed to proceed to the Gallery area even though each had in his possession a guest pass signed by myself. I am wondering if there has been seme change in the rules, or could the Speaker look into this situation for me?


Mr. Speaker:: The Chair will certainly give an undertaking to the Hon. Member that the situation will be investigated.


William Alexander (Bill) Blaikie: A point of order, Mr. Speaker.


Mr. Speaker:: The Hon. Member for Winnipeg-Birds Hill on a point of order.


MR. BLAIKIE-PRESS CONFERENCE OF MR. BLAIS
William Alexander (Bill) Blaikie: Mr. Speaker, my point of order relates to the fact that, as I understand, the Minister of National Defence (Mr. Blais) is at this moment having a press conference concerning the incident which occurred in the Quebec Legislature yesterday. I would like to submit that if the Minister had something to say about this very important issue, particularly something which affects Parliament and its security, he ought to have had the decency and procedural integrity to make that statement in the House.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: The Hon. Member knows he does not have a point of order. We have not yet proceeded to Statements by Ministers, which would be an appropriate time for a Minister to make a statement.


William Alexander (Bill) Blaikie: A point of order, Mr. Speaker.


Mr. Speaker:: The Hon. Member did not establish a point of order. Does he have another matter?


William Alexander (Bill) Blaikie: Mr. Speaker, it is very difficult to make a statement in the House in the time allocated for Statements by Ministers when you are down in Room 130-S talking to the press, so let's not kid around.


Mr. Speaker:: I suggest the expression "not kidding around" applies two ways. The Hon. Member for Calgary West.


Frederick James (Jim) Hawkes: Mr. Speaker, I have been given some special responsibilities by my Party to hold a particular Minister accountable. That Minister is responsible-


Mr. Speaker:: The Hon. Member is not making a point of order.


Paul Wyatt Dick: A point of order.
May 9, 1984


Mr. Speaker:: The Hon. Member for Lanark-Renfrew-Carleton.


MR. BLA1KIE-SUPPLEMENTARY QUESTION OF MR. KEEPER
Paul Wyatt Dick: Mr. Speaker, I was wondering if perhaps the Speaker could assist me in one area of the point of order dealing with supplementary questions. I understand that the criterion for a supplementary is that it be on the same subject matter rather than that it be put to the same Minister. Now that that has been established, I was wondering-


Mr. Speaker:: The Hon. Member is raising a matter that we have discussed at some length today. I would be quite prepared to reply privately or in other circumstances to the Hon. Member, but the matter has been dealt with today.


Leslie Gordon Benjamin: No, it has not.


Ramon John Hnatyshyn: Mr. Speaker, may I rise on a new point of order?


Mr. Speaker:: If the Hon. Member has a point of order, will he please state it?


Paul Wyatt Dick: Thank you. If you would give me an opportunity to speak, I will, Mr. Speaker.


Some Hon. Members:: Oh, oh!


Paul Wyatt Dick: I prefaced my remarks by saying what I understood you to say, and I wanted to make sure I was not in error. I was wondering how, in circumstances where you do not even listen to the question, you would know what the subject matter was?


Mr. Speaker:: The Hon. Member should know better.


Paul Wyatt Dick: It is true.


Mr. Speaker:: Presenting Reports from Standing and Special Committees.



ROUTINE PROCEEDINGS


Henry Perrin Beatty: Mr. Speaker, I have the honour to present the fourth report, Statutory Instruments, No. 23, of the Standing Joint Committee on Regulations and Other Statutory Instruments, in both official languages.
Petitions


PETITIONS
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, I have a petition with respect to Central America signed by thousands of Canadians to the honourable the House of Commons in Parliament assembled. The petition of the undersigned residents of Canada, who now avail themselves of their ancient and undoubted right thus to present a grievance common to your petitioners in the certain assurance that your Honourable House will therefore provide a remedy, humbly sheweth that global peace is threatened by the growing conflict in Central America. Central America is being turned into a war zone by the arming of privileged elites against the pressures of social change. Canada, by taking decisive public action, can reinforce the threatened prospects for peace. Peace in Central America must be founded on the basis of non-intervention and self-determination, and that Canada can and must do more than praise the Contadora peace initiative. Militarism, repression and-
Mr. Speaker:: The rules regarding petitions do not permit the reading of a lengthy petition. Would the Hon. Member state the purpose of his petition?


Mr. Allmand:: Mr. Speaker, I must say that I cleared this beforehand with certain officials and was led to believe that this was proper. However, if you wish, I will get to the conclusion of the petition.
Therefore, your petitioners humbly pray that the House of Commons will recommend that the Prime Minister state publicly and clearly Canada's unequivocal opposition to the United States military intervention in Central America; press publicly for immediate concrete initiatives to demilitarize Central America, including the end to all foreign military aid, the withdrawal of foreign military forces, and an end to the covert war against Nicaragua; urge the United States to open unconditional negotiations with the opposition in El Salvador; suspend Canadian bilateral aid until Honduras renews its neutrality; establish a Canadian embassy in Managua; and initiate immediate and sizeable humanitarian and bilateral aid.


Bruce Halliday: Mr. Speaker, it is my privilege and duty to present a petition signed by residents of the town of Tillsonburg and the surrounding area who call for stricter laws governing pornography. This petition is signed by over 4,000 men and women, Mr. Speaker. I would urge the House to bear in mind their concerns.


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, I am pleased to present a petition from the Grey presbytery of the United

May 9, 1984
Order Paper Questions
Church of Canada, which represents 8,000 members and 36 congregations of the United Church of Canada within Grey County in Ontario. Its members would like the federal Government to apologize formally and to make appropriate compensation to those Japanese Canadians who suffered during Word War II as a result of being uprooted by the federal Government with a loss of their property, lands and many other possessions.


Mr. Albert Cooper (Peace River):: Mr. Speaker, I have the privilege to present a petition to the House on behalf of a number of people from the Peace River country who are particularly concerned that funding has been cut back for a program which was providing job opportunities for mentally and physically handicapped people in that area. Their particular concern is that the Minister responsible, the Minister of Employment and Immigration, has become increasingly invisible and partisan in his handing out of funds. They are wondering why they cannot have funds for this simple project.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Leonard Hopkins (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, the following questions will be answered today: Nos. 384, 409, 410 and 769.


Mr. Howie: What is the estimated cost to (a) Canada (b) the provinces of the adoption of the uniform maximum age of 18 years under Young Offenders Act?


Robert Phillip Kaplan: The federal Government is currently involved in detailed negotiations with the provincial governments concerning federal financial assistance to juvenile justice services administered by the provinces. Estimates of the costs to, (a) Canada, (b) the
provinces, of the uniform maximum age provision of the Act will not be available until these negotiations are concluded. The initial evaluation by the federal Government of the cost impact of the legislation indicates that the Act will not result in an untoward increase in over-all criminal justice costs for either Canada or the provinces.


Mr. Howie: Did the Solicitor General undertake any studies relating to the incarceration of criminally insane persons and, if so (a) were these studies conducted by outside consultants (b) in what time frame were the studies to be conducted (c) was any amount allocated to the studies and, if so, what amount?


Robert Phillip Kaplan: No. (a) to
(c) Not applicable.


Mr. Howie: Did the Minister of Justice undertake any studies relating to the incarceration of criminally insane persons and, if so (a) were these studies conducted by outside consultants (b) in what time frame were the studies to be conducted (c) was any amount allocated to the studies and, if so, what amount?


Hon. Mark MacGuigan (Minister of Justice):: The Ministry of Justice has undertaken several studies dealing with criminally insane persons. The main effort in this area in the mental disorder project which began in the fall of 1982 as part of the Criminal Law Review. This study involves research on both the legal and social science areas relevant to the mentally disordered offender. Following the publication and distribution of a discussion paper last summer, extensive consultations were conducted with provincial governments, with major national and provincial organizations and associations, and with Lieutenant Governors' Advisory Review Boards. At present, officials within the Department of Justice are formulating recommendations based on the information obtained through research and consultations.
In addition to departmental study, outside consultants have been retained. A complete list follows under the heading mental disorder project. In addition to this extensive study a number of smaller projects relating to the mentally disordered offender have been sponsored by this department. This list, entitled "Discretionary Federal Projects-Mental Disorder", follows as well.
Mental Disorder Project
(a) Contractor	(b) Term	(c) Amount	DescriptionDavid Weisstub	March-June/84 (inclusive)	$ 4,500.00	To provide policy advice on request on legal/psychiatric questions.Lionel Beliveau	March-June/84 (inclusive)	$ 1,500.00	To provide practical advice on the problems encountered in the administration of the criminally insane in psychiatric institutions.Ontario Dept, of Health (secondment of an officer)	Mar. 1/83 to Feb. 29/84 plus extension to May 31/84	$26,377.00	To provide administrative assistance to Mental Disorder Project.
May 9, 1984

Order Paper Questions
Ontario Dept, of the Attorney General (secondment on part-time basis)	Sept. 1/82 to Aug. 31/83 plus extension to Mar. 31/84 (2 days/wk)	$39,000.00	To assume the responsibilities of Chief of the Mental Disorder Project.Gilbert Sharpe	Sept. 5/82 to Sept. 4/83 plus extension to Mar. 31/84	$86,565.00	To provide professional advice and services; to cover costs of operating Mental Disorder Project office in Toronto.Marc Schiffer	Jan. 7/83 to Mar. 1/83 plus extension to Mar. 1/84	$12,794.50	To prepare background and consultation documents for the Mental Disorder Project.Shari Stein	Nov. 8/82 to Dec. 3/82	$ 8,344.00	To prepare background and consultation documents for the Mental Disorder Project.Gerry Ferguson	May 15/82 to Sept. 1/83 Jan. 21/83 to Mar. 31/83	$18,870.70	To prepare study papers for the Mental Disorder Project.Larry Gostin	March 26/83 (one day)	$ 300.00	To provide information on the operation of the English law relating to Mental Disorder.Georges Levasseur	July 7/82 to July 30/82	$ 4,750.00	To prepare a critique of the federal criminal law policy paper.Mar. 18/83 to April 30/83	To prepare critique of the Canadian criminal law as it stands and to summarize French law regarding sentencing and third party intervention in criminal cases.David Lepofsky	Oct. 4/82 to Nov. 30/82	$ 4,830.00	To prepare background and consultation documents for the Mental Disorder Project.Norris & Norris	April 18/83 to July 18/83	$15,437.07	To prepare a written summary of and analysis of American research and recent legislative reform relating to Mental Disorder in the Criminal law context.Michael Phillips	Feb. 18/82 to Feb. 15/83	$21,400.00	To conduct a demographic survey of Ontario's Lieutenant Governors' Warrant patients.Alan Mewett	Mar. 3/83 to Mar. 3/84	$ 1,060.00	To provide policy advice on request regarding legal aspects of the Mental Disorder Project.Discretionary Federal Projects-Mental Disorder	(a) Contractor	(b) Term	(c) Amount	DescriptionCanadian Mental Health Assoc.	Dec. 1/83 to June 30/84	$24,500.00	Research project to develop education materials in relation to the Charter of Rights and Freedoms for psychiatrically disabled personsCanadian Legal Advocacy, Information and Research Assoc, of the Disabled	Dec. 23/83 to Apr. 30/84	$28,000.00	National Symposium on the Self-Determination and Autonomy of People with Disabilities (includes every form of disability)Canadian Legal Advocacy, Information and Research Assoc, of the Disabled	Mar. 1/83 to Feb. 15/84	$14,000.00	Research related to s. 15 of the Charter of Rights and FreedomsNational Legal Resources Service of the Canadian Association for the Mentally Handicapped	Nov. 1/83 to Aug. 31/84	$19,500.00	Implications of the Charter for the Mentally HandicappedTenth International Congress on Law and Psychiatry	June 14-17 1984	$14,500.00	Deficit funding for the International Congress


Mr. Towers: 1.	Is the Government contemplating making grants or low-interest rate loans to those branches of the Royal Canadian Legion wishing to build a facility for veterans?
2.	Is any financial assistance now available to branches of the Legion and, if so, what assistance?
3.	Does the Department of Veterans Affairs draw on the local insight of Legion branches for information on current national programs and, if so, by what means?


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: 1.	No.

May 9, 1984
Motions for Papers
2.	The Department of Veterans Affairs provides an annual grant of $9,000 to the Dominion Command Royal Canadian Legion. The purpose of this grant is to assist the Royal Canadian Legion in the administrative costs associated with the operation of the Legion Service Bureau.
3.	Yes. Through departmental participation at zone, provincial and national Royal Canadian Legion conventions and through regular contact between Branch Legion Service Bureau officers and departmental field representatives, considerable insight is gained on local concerns regarding national programs. Department of Veterans Affairs Regional and District offices have a continuing responsibility to maintain good liaison with the Royal Canadian Legion and all veterans organizations in their area.


Leonard Donald Hopkins: Mr. Speaker, I ask that the remaining questions be allowed to stand.


Mr. McKinnon:: Mr. Speaker, I rise on a point of order once again to ask when the Parliamentary Secretary will be able to provide a reply to Question No. 368, which deals with the increase in the defence budget for each fiscal year from 1970-71 to 1979-80.
I would like to point out that that question is now three years out of date because it has been over three years since I asked the question. There is no reason in the world that the Department of National Defence cannot produce the answer to that question. A long line of Parliamentary Secretaries have promised they would do something about it. I hope forever that each new one, as he comes along, may indeed fulfil his promise.


Leonard Donald Hopkins: Mr. Speaker, the representation has been noted.


Mr. Speaker:: The question as enumerated by the Parliamentary Secretary have been answered. Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.


Leonard Donald Hopkins: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Shall notices of motions for the production of papers stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


Hon. Judy Erola (Minister of Consumer and Corporate Affairs) moved: that Bill C-17, an Act respecting bankruptcy and insolvency, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
She said: Mr. Speaker, the House is now asked to proceed with the second reading of an extremely important piece of legislation and to refer it to committee. As I am sure Hon. Members know, the proposed revamping of our bankruptcy and insolvency legislation has been in the making for quite a number of years, long before I came to the House. In fact, it has been some 18 years, depending upon when one started counting.
Although Bill C-17 is the sixth Bill on bankruptcy presented to Parliament, it is the first time that, as current sponsor of this particular Bill, I have the opportunity to address the House on it. In the previous session of this Parliament, a predecessor Bill, Bill C-12, was well under way. Second reading had taken place in the House, with an extensive explanation of the content of the Bill given by my predecessor, who is now the Minister of Labour (Mr. Ouellet). Good, substantial speeches were made at that time by Hon. Members on both sides of the House.
The Bill was finally referred to the House Standing Committee on Finance, Trade and Economic Affairs late in September, 1983. The Finance Committee was quick to start its study of the Bill. On October 25, I was the first witness. Soon thereafter, departmental officials were heard. The committee was then poised to start hearing from some of the numerous associations which had expressed interest in the Bill. Unfortunately, before it could do so, the first session of the present Parliament came to an end and Bill C-12 died on the Order Paper.
I think it would be a shame, Mr. Speaker, if the unbelievable amount of work done to date were to come to nothing. I am very pleased that I was able to re-introduce the Bill as soon as possible in the present session, on January 31. That is the Bill now before us. Unfortunately, it did not move too quickly because there was no agreement at that time from the New Democratic Party to bring it forward. That agreement has now been reached as a result of some very effective work done in committee the other day, and we now have the Bill before us.
I do not intend to speak at length on the content of the Bill because I stand behind everything my predecessor said in the House on May 19, 1981 when he spoke on second reading of Bill C-12. With the co-operation of Hon. Members on the other side, I am anxious for the Bill to go before the Finance Committee for a good public debate to take place there on the many concepts contained in the Bill. I am told that the steering committee is already poised to move in this direction as soon as the Bill clears the House.
May 9, 1984

To all intents and purposes, the Bill which is before us today is exactly the same as the last Bill, but with some technical amendments which were approved in the session that was held prior to the Bill dying on the Order Paper. You will also notice, Mr. Speaker, that the French text of the current Bill is quite different from that of its predecessor. It expresses in better French what the first text was saying. I am told that the language is now quite precise and indeed quite eloquent and elegant.
I would like to say a word about some provisions which you will not find in Bill C-17 as it now stands. Additional provisions have been drafted which I propose to table when I appear before the committee. They deal with measures which, in my opinion, will improve the lot of some of our citizens who must be better protected in bankruptcies and insolvencies. Hon. Members know that I am talking of wage earners, suppliers and farmers.


An Hon. Member:: What about fishermen?


Judith A. Erola: Yes, fishermen are included as well. Fishers, be careful. I know there is not unanimity in or outside of the House to-


An Hon. Member:: Fishers is not a word.


Judith A. Erola: Yes, it is a word which exists. It was indeed a biblical term.
I am asking Hon. Members opposite to make it possible for this Bill to go to committee so that there may be an opportunity to disclose publicly the approach that I want to follow. Of course, Members will be free to agree or disagree with my approach on some of the details of the Bill, but this will advance the debate and eventually enable us to put the best insolvency Act possible on the statutes to respond to the needs of our times.
While Bill C-17 is a good Bill, I welcome proposals for improvements. Many of its numerous provisions represent a reasonable compromise between opposed interests. Indeed, every word of the Bill has been debated at great length in many forums. In fact, at the moment while I am speaking a seminar is being held by the Canadian Insolvency Association of Toronto at which the representatives of, I believe, six organizations that represent thousands of people will be expressing their views on this Bill. Of course, they are anxious to appear before the committee.
I agree that not everyone is pleased with each of its measures, but if one believes that the Bill should not be proceeded with at all for that reason, it would be a great disservice to our society. Therefore, I urge both Opposition Parties to support this Bill and let it proceed to committee without further discussion in the House. Let us get on with the new Act dealing with bankruptcy and insolvency because it is long overdue.
Insolvency Act


Mr. Chris Speyer (Cambridge):: Mr. Speaker, the Minister has stated that the new insolvency Bill is a good piece of legislation. By and large I agree with her, and therefore, since it was introduced as Bill C-12, our Party has given the utmost co-operation in seeing that the legislation is passed.
Although there are many areas in the provisions of the Bill with which I disagree, I have received the assurance of the Minister that amendments will be heard after experts have been called. I believe that all sides of the House want co see Parliament draft the best possible Bill.
One of the great reservations that I have with respect to this process and the tremendous amount of work that has gone into this Bill is that for at least 15 years assiduous work has been done in drafting the new legislation, which is of great social and economic importance. The first bankruptcy Bill was drafted in 1919. The only significant amendments were made in 1949. At that time, there was absolutely no departure from the philosophy of the Bill in 1919.
Modern commercial, economic and social policies have changed dramatically since 1919 and 1949. There is a profound need for us to deal with modern commerce as it exists on the streets. Having said that, the concern that I wish to express applies not only to the bankruptcy Bill but to many other Bills for which the Minister is responsible. She has heard my criticism and I believe that it is valid.
In the last eight Speeches from the Throne we have heard of the Government's intention to put forward legislation with respect to competition. Indeed, legislation does come forward, but there is not the political will to ensure that it becomes reality by being passed into law. We have heard promises with respect to copyright legislation. We have seen important proposals with respect to copyright, but nothing seems to get done. There were promises with respect to the Patent Act, but we will not see it. I hope that we will see amendments made to the Interest Act before the end of this session.
The point is that we are now in the month of May discussing second reading of a Bill which is of great social and economic consequence. This Party wants to see the matter get into committee as soon as possible. We understand our obligation to allow individuals and interest groups to tell Members of the House the good and bad aspects of the Bill. We cannot deny people the right to appear before committees. In this case I am talking about the Canadian Bar Association, which has certain concerns and I am talking about trustees and the Canadian Insolvency Association which the Minister has mentioned. It will take time to hear these views. As well, we must advertise for them to come to the committee. Although many briefs have already been submitted under Bill C-12, other briefs are to follow.
I am pleased and I applaud the fact that we are proceeding with this Bill, but the reality is that by the time the committee commences its meeting, in two or three weeks it will be June. I hope that I am wrong, but I do not foresee this good legislation being passed.

May 9, 1984
Insolvency Act
As I have said, we have done everything to co-operate in this regard and I want to see this Bill passed with refinements and amendments. I hope that the Minister is receptive to certain changes to particular measures in the Bill. I hope that it is made law because of its social importance.
Let me give an illustration of why it is socially and economically important. Commerce and the means of banking have changed very dramatically. Until the mid-1960s we were regulated by the Bank Act. Bankruptcies had a certain significance which they do not have today.
Insolvency means going broke. There are three ways of going broke: by formally being declared bankrupt or being petitioned into bankruptcy; by receivership by which the creditor, through a floating charge debenture, is able to realize upon the security of the debtor; and, finally, by simply closing the doors of a business.
The fact is that until the change in the Bank Act in the mid-1960s, banks could only take certain action. According to Section 88 with respect to security, banks were only entitled to take accounts receivable and inventory. Unless there was a default, they could not get any other security. However, with the advent of the change in the Bank Act and the new commercial instrument which is now called the floating charge debenture, a debtor in a commercial enterprise is tied up lock, stock and barrel. Unfortunately, the rights of debtors and unsecured creditors are not sufficiently protected.
This is a lengthy Bill which consists of over 300 pages. If I were asked what the most important pages were, I would say that in my view the five pages pertaining to receiverships represent the most significant commercial advancement that we have made. The reality is that all the big insolvencies in Canada today are not bankruptcies. Many people are not petitioned into bankruptcies but go into bankruptcy in order to extinguish their own liability.
What takes place today is that when a bank calls a note, it realizes upon its security, but not by way of the bankruptcy but by way of a floating charge debenture, which is the chief means by which commercial lenders realize upon their security.
People who are in a secured lending role have certain obligations. Some of the important and beneficial measures in this Bill concern the provisions of Clause 355 under receiverships, which make it incumbent for a creditor to act honestly, in good faith and to deal with the property of a debtor in a commercially reasonable manner. We all know of situations where that has not happened.
I am not talking about the large firms but, regrettably, there are receivers who have acted to the detriment not only of the debtor but also of the unsecured creditor. Items have been sold as if at a fire sale, which has caused, quite properly, a tremendous amount of bitterness to the debtor because he did not receive what was commercially worthwhile. In other words, he did not get credit for the amount of money that should have been due if the receiver had acted in an honest and commercially reasonable manner.
I applaud this particular provision with respect to receiverships. However, there are certain matters with respect to receiverships that I very strongly oppose. One of them is not with respect to the powers of the court to intercede under the provisions of Section 356.2, which I think are good, but with respect to the emasculating provision in subsection 4 which, as I see it, limits the courts' jurisdiction. I hope the Minister- and I have brought this point forward on a number of occasions, and Mr. Goldstein who appeared before our committee was a very impressive individual-will take a look at the provisions of Section 356.4(a). That is the provision whereby, in order for the court to intercede, the order would have to affect a creditor materially and particularly. That is a very important emasculating feature of some of the good provisions that are in this Act as it affects receivership. I will be saying more about it in committee, but it is one of my prime concerns.
There are certain matters that I find good about the Bill, Mr. Speaker. I want to speak about the Bill in terms of the matters that I think are socially important. I applaud the abolition of Crown priority. The existence of this priority in the present Act has served, in my view, as the worst disincentive to ordinary creditors becoming involved in a bankruptcy. Presently, creditors do not work to maximize the realization on the assets because the fruits of their toil are applied to Crown assets. I think it is a significant advance with respect to this Bill that we see the abolition of Crown priority.
I am very happy to see consumer bankruptcies treated very much differently from commercial bankruptcies. There is a world of difference between them. In consumer bankruptcies there is a social ingredient that is very important. Anyone who has been to Osgoode Hall in Toronto or has gone to Montreal on discharge day and watched the judicial process with respect to consumer bankruptcies knows that it is just a farce. I am glad to see that that is to be stopped. We are still going to protect the creditor. If there is any wrong-doing by the debtor who is looking for a discharge, the creditor will still have a right to intercede. Otherwise, it will be automatic, and that deals with the realities.
I think also that the consumer arrangements are important. What we might find is that the impoverished debtor will retain a certain sense of self-respect. Instead of declaring bankruptcy with the arrangements that can be made, it may very well be that he would pay off a certain portion of the debt and maintain his own respect rather than declare bankruptcy. There is not the social stigma of bankruptcy in 1984 that there was in days gone by.
Probably two of the matters that will cause the most debate when we get the Bill to committee and that have caused the most debate so far is the question of super priority. I can tell you, Mr. Speaker, that to some of the Members of our caucus to whom I spoke with respect to super priority-and I am talking about the time the insolvency of Maislin occurred and the Bank of Commerce bounced workers' cheques of about $ 12 million-the question was of great significance. There is no
May 9, 1984

right and there is no wrong when it conies to priorities with respect to who is going to take the assets of an insolvency or a bankruptcy. We have to make a choice. That is the question. How are those assets to be distributed in an equitable and a fair manner? For reasons which I stated in 1981, our Party has supported the whole notion of super priority. I point out to you, Mr. Speaker, and to other Members in the House that the notion of super priority is not new.
Super priority has been in the Bank Act under what was known as Section 88.5 since I can remember. I now believe it is Section 271. When the banks, prior to 1967, wanted to realize upon the securities, they had to pay the workers. That provision is still in the Bank Act. The whole notion of super priority is not something that really concerns me. But there were certain limitations on what the bank could do, as Hon. Members will recall, with respect to accounts receivable and not really with respect to fixed assets or land.
I must tell the Minister that, as a result of representations made to me and to the committee, there are certain problems about which I am very concerned, namely, super priority as it affects real estate. I think there probably should be a pecking order. This was something suggested by Mr. Goldstein when he testified before our committee with respect to current assets, fixed assets, and real estate. Why it is so important with respect to real estate is that people are entitled in the provinces to rely on a registry office system. They are entitled to take a look in the registry office at the books and to make their judgments based upon what is in public documents. I can foresee circumstances where, if real estate is not exempt, we could get ourselves into some serious trouble. But I am not an expert in this particular matter. I am prepared to listen to experts. I want to hear what the Canadian Bar Association has to say with respect to this. I want to hear what the Insolvency Association of Canada has to say. I am sure the Minister will have an open mind so that we can make this particular area, super priority, a workable feature in this Bill.
There is one other area that gives me concern with respect to super priority, and that is, the stipulated amount of $4,000. We have had a great deal of criticism with respect to that, especially concerning labour intensive industries. Again, I am very anxious to hear what witnesses will have to say. I can say that our Party has an open mind with respect to the quantum amount.
There is one other area that gives me some personal concern. It has to do with the right of suppliers to take their goods within ten days of an insolvency. I understand the rationale for that, but I am not sure one can set an arbitrary date. I know that under the law of the provinces title passes under the Sale of Goods Act at a certain point in time, usually at the time the contract is entered into or on other occasions at the time of the delivery of the goods. However, what I am really concerned about is the intermingling of goods. How can you say to a person, who might have sold his goods nine days prior to the insolvency, that he can have those goods back, but say to another person who sold his goods 15 days before that he
Insolvency Act
cannot do so? I want to hear also what experts have to say concerning whether or not this is commercially workable.
There are so many areas in this long and complex Bill that I would like to speak about, but I will not do so today because I do not think it is necessarily appropriate. What I want to tell the House, the Minister and the country is that there is an urgent need, in my view, to pass new insolvency legislation. The Minister will know from our conduct in the past that we as a Party have done absolutely nothing to obstruct this Bill. As a matter of fact, the converse has taken place. We want to see this Bill passed into legislation. We want it to be a reality. The only thing I ask the Minister is to keep a very open mind on many of the amendments which this Party will put forward so that all of us in this House can make a significant contribution on an important piece of economic and social legislation.
My friend and colleague from Bruce-Grey will be speaking today concerning certain important features involved in the amendments which the Minister will present dealing with farmers and fishermen. I just want to say that I want to give the Minister some notice that there are certain provisions on court formulated arrangements as they appear in Section 120, on which we will be asking for certain changes. We note under Section 120 that if an insolvency exceeds $1 million, the state has an interest in it and therefore the court has certain powers which it would not have in a private insolvency. I think quite frankly-and this may sound ludicrous to some people-that $1 million is far too low. It probably should be closer to $5 million. The truth of the matter is that insolvencies of $1 million right now are commonplace. I applaud what the Government is trying to do. For example, if a fishing village is going down as a result of the insolvency of a fish-packing plant and there is more than $5 million involved, there should be some type of public interest in it.
I will make certain representations with respect to the amount or the quantum being increased. I will also put forward some amendments with respect to what should be the power of the court as it affects matters of insolvency in excess of $1 million, $5 million or whatever figure is set. These matters are important because I think the court needs guidance.
I practised in the courts for 15 years. One of the criticisms of judges about legislators was that we never said what we thought. We have a duty to be precise. We have a duty to know our own minds. I do not see in this particular area of insolvency the requisite guidance which ought to be given to the court. I know some people practise civil law, however, I come from a common law jurisdiction and I admire precision. As a legislator I want to ensure that the courts understand what is intended by Parliament.
In conclusion, our Party will co-operate in every way. I hope we are not deluding ourselves. I hope we make new insolvency legislation a reality. I say to people who want to testify before the committee that they are welcome. There are many areas in which legislators have to be educated. If we are doing some-

May 9, 1984
Insolvency Act
thing which will hinder commercial practice, I want to know about it. On the other hand, we are giving notice to interest groups that we are serious about this important Bill. With that, I will say no more and reserve my more specific comments for committee.


Mr. Svend J. Robinson (Burnaby):: In response to the very serious concerns of workers, the Minister has recommended a system of super priority. She suggested that wages should be placed at the top of the pecking order and that this will adequately protect the claims of workers in the event of bankruptcy.
I would like to take a few moments to indicate why we in this Party believe that while super priority is clearly a step in the right direction, it falls far short of the kind of protection which should be accorded to workers' wages. In raising these concerns, we are echoing the concerns not just of the Canadian Labour Congress, which has carefully examined this question, but of virtually every group and individual who has studied the question. They have all come to the conclusion that a clearly formulated system of wage insurance makes far more sense and guarantees far greater protection for workers' rights than does the system of super priority.
Before addressing that specific concern and that debate, I would like to note that the definition of wages in the Government's Bill falls far short of what is acceptable to this Party and to workers across this country. It is unacceptable that the Government is restricting the definition of wages in such a way as to exclude severance pay and as well to exclude significant benefits, in particular the unpaid pension contributions in private pension plans.
I have here a letter signed by the Minister of Consumer and Corporate Affairs (Mrs. Erola) addressed to Mr. Fred Randall, business manager of the International Union of Operating Engineers with headquarters located in Burnaby. It is an astonishing document. I quote from the Minister's letter:
Dear Mr. Randall:
This is further to your letter dated February 21, 1984, requesting that unpaid pension contributions in private pension plans, which are a part of the wage package, be given the same priority as the wages in the traditional sense.
That possibility has been carefully examined by myself, and by officials of my Department in the past few years. The present Bankruptcy Act seems to protect wages on the basis that they are urgently needed to provide the daily necessities of the unpaid employees and their families. That approach ignores the fact that nowadays, more and more employees trade wage dollars for future benefits and I agree that their rights to a decent income in their retirement years should not be jeopardized.
However, with the great expansion of private pension plans in recent years, I believe it would be imposing a heavy burden on other secured and unsecured creditors. In order to achieve a proper balance between the rights of wage earners and those of other creditors, and to preserve the lines of credit of business enterprises, especially the labour-intensive ones, it was found necessary to exclude, for the time being at least, those benefits from the definition of wages in the proposed insolvency legislation (Bill C-17).
That is an incredible document. On the one hand the Minister acknowledges that more and more workers are trading wage increases for improvements in benefits. In the next breath she suggests that she wants to ensure that the banks are properly looked after. So much for the concerns of the working people, so much for the full and adequate protection for workers' wages. I can assure the Minister that we will be proposing amendments in committee to strengthen and broaden the definition of wages to include these benefits of severance pay and the unpaid portion of private pension plans, all of which have been earned by workers and which should be a first claims in the event of bankruptcy.
Insolvency Act
I referred earlier to the question of the debate between those who are advocates of super priority and those who are advocates of a system of wage insurance. I know that the Minister and the Official Opposition, the Progressive Conservative Party, have taken a position in support of the super priority scheme. I would note that the super priority concept has been rejected by virtually every independent study which has been conducted, including a study by the Senate Committee on Banking, Trade and Commerce which unanimously recommended that the proposal for super priority be rejected in favour of a carefully drafted system of wage insurance. As well, a special committee was established by the Minister's predecessor to look into the whole question of super priorities versus wage insurance. That was a very respected committee, the representatives of which included a chairman who was a former Superintendent of Bankruptcies and Dean of Law at the University of Ottawa, Mr. Ron Lang. He was a member of the staff of the Canadian Labour Congress. It also included Mr. George Hitchman, the Deputy Chairman of the Bank of Nova Scotia, and Raymond Dufour, Vice-President of a major bankruptcy firm. This is a broadly representative committee. Their unanimous conclusion was a clear and unequivocal rejection of the super priority concept. They strongly recommended the establishment of a wage earner's insurance scheme which would be self-sustaining and which would be maintained by minimal monthly contributions from all employers in Canada with more than six employees. It would in fact be a guarantee that in the event of bankruptcy, workers' wages would indeed be paid.
There are two or three fundamental objectives in ensuring that workers' wages are paid in the event of a bankruptcy. They include certainty of payment, promptness of payment to the wage earner, ease and simplicity of administration, and the maintenance of the ability of a borrower to obtain financing for his business operation. I suggest that on each of these counts the super priority concept falls far short.
With respect to the question of certainty of payment to the wage earner, there is no certainty whatsoever that wages owing to a bankrupt will be paid under a super priority concept. In a number of instances, there will be insufficient assets even if the workers' wages take top priority. In a number of instances, as well, there is no doubt that sophisticated lenders might stipulate that their loans will be made to an associated holding company which owns all of the assets of value, which would once again leave workers out in the cold. I am also very concerned that in response to representations from the bank and possibly from the Conservative Party, the Minister might water down the existing proposals for super priority to exclude all assets, specifically real estate.
We could certainly examine the question of the pecking order, but I would suggest that any attempt to water down even the minimal provisions with respect to super priority would be very rigorously resisted by this Party.

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The second concern with respect to a super priority scheme is that there is no guarantee whatsoever that payment to the wage earner would be made promptly. In many instances it would mean protracted legal hassles and disputes before such payments were in fact made. When dealing with workers who have to pay bills on an ongoing, day-to-day, week to week basis, obviously promptness of payment is essential.
Another difficulty is the problem with the administration of this proposal, for example, the allocation of the burden of super priority among various secured creditors. The courts would no doubt be clogged with bitter disputes over the relative burden to be shared by the creditors. Also, while those arguments are taking place, workers once again receive nothing whatsoever.
The final and major concern with respect to the super priority concept is that it may very well have the opposite impact from that which is suggested by the Minister, that is, to reduce the credit which is available in labour-intensive industries and to motivate credit-granting institutions, banks in particular, to pull the plug that much earlier on a firm. That would drive the firm into bankruptcy and throw the workers out of work before they might otherwise lose their jobs.
The clear and unequivocal conclusion of the Landry Committee to which I previously referred-and I might say, it is rare indeed when a committee made up of representatives of the CLC and the banking community are able to agree strongly on a proposal-was that a wage insurance scheme would be the most appropriate way to proceed. That does not mean that we would not be prepared to accept some kind of super priority scheme as an interim measure; but certainly the establishment of a wage insurance scheme such as those which have been successful in a number of other countries-France, West Germany and the United Kingdom-is one of the major amendments which we will be proposing to this important legislation.
I would like to deal very briefly with a couple of other important concerns that we have with the legislation. I will not take the full time allotted to me because I know that my colleagues, the Hon. Member for Humboldt-Lake Centre (Mr. Althouse) and the Hon. Member for Prince Albert (Mr. Hovdebo), would like to have some time to deal with the serious concerns that our Party has with respect to the silence of this legislation on the important question of bankruptcies which are facing farmers and fishermen in Canada. There are record levels of bankruptcies facing the farming community, fishermen and women across the country. Both of my hon. colleagues from Humboldt-Lake Centre and from Prince Albert have been outspoken and have worked very hard to urge the Government to take action on this. The Government should have moved a long time ago with respect to this important question.
Of course, what we are proposing, in essence, is that there be some sort of orderly, formal process whereby heavily indebted producers and farmers can obtain some relief from the threat of losing their farms and their livelihoods as a result of their inability to meet their obligations. This process should
include the ability of the courts to step in if the producer is not satisfied that his or her position is being adequately addressed on a purely voluntary creditor basis. The Private Members' Bill which has been studied by the Finance Committee for some time certainly went a long way in that direction. I know that my colleagues will be dealing at greater length with these serious concerns. There must be speedy and effective action on this important question regarding the protection of farmers and fishermen in the event of bankruptcy.
One other major area of concern which has arisen since the tabling of Bill C-12 in this House, and indeed since the tabling of the follow-up Bill, Bill C-17, is the possibility that bankruptcy can be used as a mechanism by the business community to scuttle effectively collective agreements which are in effect. I would like to take a moment or two to explain why we believe there must be amendments to Bill C-17 to ensure that this does not become a reality in Canada.
In the United States, a recent Supreme Court decision has been described by representatives of the building trades in particular, as well as other labour representatives, as licence to use bankruptcy laws to destroy collective bargaining agreements. Effectively, what the United States Supreme Court held was that a bankruptcy court could free a company from its union contracts without requiring any proof whatsoever that the contracts threatened the survival of the company. All the company had to do was to show that the contracts constituted a financial burden. I would note, for example, Continental Airlines in the United States which, on the advent of deregulation, cancelled its union contracts after filing bankruptcy petitions. The pilots went on strike. Continental now has strike-breakers flying planes at something like 55 per cent of the original contract wage. There have already been steps taken in the United States Congress to reverse the effect of this very damaging Supreme Court decision.
I intend to propose amendments in committee to this piece of legislation which will make it very clear that bankruptcy laws must not be used as a mechanism to break collective agreements in Canada. We want to ensure that the decision of the United States Supreme Court is not reflected in Canadian legislation. The provisions of Bill C-17, particularly those dealing with commercial arrangements, still leave the possibility open that bankruptcy might be used effectively as a mechanism to avoid collective agreements. That is fundamentally unacceptable to Members of the New Democratic Party.
One of the major areas of concern in the small business community in Canada is the question of receiverships. Certainly there is an improvement in this Bill with respect to the handling of receiverships and the obligation of receivers. But there are only six clauses in the Bill concerning the obligations of receivers. I would suggest that the Bill does not go far enough to ensure the full accountability of receivers for the handling of firms under their custodianship. Again, we will be proposing amendments in committee to strengthen the protection of the assets of a company which has been brought under receivership. For every bankruptcy in Canada, statistics show that there are at least two receiverships.
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The biggest concern that small businesses have in the area of receivership is the tendency of receivers, acting on behalf of one secured creditor, to undervalue assets when disposing of them. As long as they get their money out of the transaction, they do not really care too much-if its the Royal Bank or another secured creditor-about other unsecured creditors down the line, many of whom are small businesses struggling to survive in the face of this Government's disastrous economic policies.
Another major concern is the difficulty of stopping people from declaring bankruptcy one day and then opening up the next day across the street another company with another name. These are areas of concern that we will be addressing when the Bill goes to committee. We are prepared to facilitate quick passage of this Bill in committee.
As I have indicated, my colleagues from the farming community have some concerns which they wish to bring to the attention of the Minister and the House at this point. However, we are prepared to put in the necessary time in committee to propose very important amendments in a number of key areas. I have highlighted some of those areas today-amendments with respect to the protection of workers' wages; the expansion of the definition of wages; and provision for a wage insurance scheme. There should be amendments to ensure that the bankruptcy law will not be used as a means of smashing collective agreements, amendments to strengthen the protection of unsecured creditors, small businesses, in the event of receiverships, and, of course, amendments in a number of other areas which will no doubt flow from the representations which will be made by witnesses appearing before the committee.
In conclusion, Mr. Speaker, I look forward to hearing from witnesses on this Bill in the very near future, witnesses from labour, from the farming community, and representatives of the credit granting institutions. I suggest that the time for change is indeed long overdue. However, Mr. Speaker, we must ensure that in making changes in this important area of the law, we fully and properly protect the wages of the people who have contributed to the profits of the company in question. As I say, that is our fundamental objective in examining this legislation from the perspective of those who are left out in the cold. As well, we want to ensure the protection of farmers and fishermen in the event of bankruptcy. I look forward to elaborating on our concerns, Mr. Speaker, when this Bill reaches committee. Hopefully, by the time this House rises for the summer recess, if the Minister has an open mind after hearing witnesses and is prepared to listen to our representations, particularly in the areas I have outlined today, I am confident that we will be able to emerge from this session with bankruptcy legislation which can be supported by all Hon. Members of this House.


Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, I rise for a few moments to speak about Bill C-17. A bankruptcy or insolvency Bill is a Bill which deals with trying to divide up
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among the various competing interests a pie which is not large enough to cover all of the claims made against that pie. Those claims include the claims of wage earners, those who have been the suppliers to the corporation or business involved, landlords, mortgagees and indeed they include all of the various claims which in any way affect a business or indeed an individual.
It is about time that this House dealt with bankruptcy and insolvency legislation because enormous changes have taken place over many years and the present statute law is not satisfactory to anyone. I would note that predecessors to this Bill have been before this Parliament and were never passed, indeed often, and were never brought forward, for some reason, since 1977. It is absolutely a disgrace that this legislation was not brought forward sooner. It is with that in mind that I hope we have the co-operation of all Parties in the House to expedite this Bill and get it before committee today so we can start hearings as early as tomorrow morning in order to make sure that we get at the details of this legislation quickly.
The legislation before us, Sir, is a good first draft, but that is all it is. It is only a good first draft. The Minister has already circulated amendments half an inch thick. There is another half an inch thick pile of amendments still in the circulation stage in the Department of Justice and here and there, which have to be brought forward. There are a number of concepts with which we are not all agreed, but we are agreed on one thing; that we must have new insolvency legislation in this country and we must have it immediately. Before this House rises on June 30, this legislation must be put through committee, it must be refined, and there will be compromises which will be required. That is the way it is, but we need the legislation.
My friend from the New Democratic Party has indicated that efforts must be made to change the laws with respect to farms and with respect to the fishing industry. Yes, there must be. There must be a way that the result of a seizure, bankruptcy or insolvency does not wind up putting a farm or fishery operation completely out of business. There must be a way that debts can be postponed, reorganized and so on. It was with that in mind that this House directed a Bill to go to the Finance Committee for study, and it was with that in mind that the Minister has suggested that such provisions be in this Bill. Exactly how those provisions will work will again have to be a matter for this committee to work out in detail.
The Minister has suggested that in a whole series of statutes governments can claim a first lien on the assets in a bankruptcy. The Minister has indicated that in her view the government lien should no longer be a first priority, that the Government, when it has a claim for taxes, should rank as ordinary creditors. There is no reason why the Crown should somehow come in and say it is entitled to its sales tax before the company and before the wage earner who supplied the work and effort to make the sale possible gets paid. Surely, the Crown must be an ordinary creditor. The amendments which are contemplated which address that situation are important amendments. Those

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Crown priority changes should apply, and must apply, to the priority given by provincial legislatures to the claims for provincial taxes and indeed for municipal tax levies, I am thinking, Sir, of business taxes.
Bill C-17 has a great number of concepts whereby businessmen will be able to organize with the bankruptcy court to rearrange their debts. Those types of arrangements, certified by the court, are important. Yes, it may affect the rights of those who have collective agreements. Yes, it may affect the rights of those who have sold goods. And, yes it may affect the rights of those who have mortgages. However, Sir, surely, in the interests of commercial activity and in the interests of employment and of making our country go, it is important that arrangements be made to satisfy creditor claims in such a fashion as to keep businesses going and people employed.
One of the problems which this Bill deals with are receiverships. In the present Bankruptcy Act there is no mention whatsoever of receiverships. However, today, most insolvencies are the result of a receivership started by a bank, a trust company or a commercial lender who has a floating charge debenture against the assets of a company. Floating charge debentures did not exist when the present Bankruptcy Act was put through. At least, no one used them, if they did exist. Today, floating charge debentures are the way many secured creditors try to protect themselves. Indeed, shareholders in businesses often, in making further advances to their own businesses, secure their own advances by floating charge debentures. Thus, under the current law, they put themselves in priority, even in priority to their own employees.
That brings up the real question, Sir, which as been haunting this Bill for the past year and a half or two years, and that is, the question of super priority. The question is, how do we handle the valid claims by those who work for a business when the business, all of a sudden, without their knowledge, without their even knowing what is happening, is put into receivership? A man goes to his factory and finds the door is locked and there is a sign on the door saying, "In receivership. Call so and so", and he has not been paid. He has worked for two weeks, or he is a truck driver and he even has personal mileage expense which he has paid out. He is entitled to that money and he has not been paid. Somewhere along the line those people who work with their hands, those people who work in business, have to be covered.
The Landry Committee suggested that we go through another fund. Somehow there should be another employment deduction like that of the Canada Pension or unemployment insurance; that business should have another deduction fund. I was told the other evening that it might be managed by the Unemployment Insurance Commission. Well, that is an efficient commission to manage things if there ever was one!
Sir, businesses in this country have too many payroll deduction burdens. That is what is wrong with the whole economy. That is why we cannot get people back to work. Businessmen are asked to make a contribution to this fund, that fund and
the next fund. The payroll burdens in this country are far too high. They militate against jobs and, heaven knows, there are 1.5 million Canadians out of work, a great number of whom would not be out of work if we did not have the horrendous payroll burdens demanded by the laws of this Parliament. To add another one would further militate against jobs. Anyone who suggests another payroll burden is saying they do not want jobs for people, they want more burdens on the small businessman, the factory owner and the office employer. A suggestion of this nature could only be made by someone with their head in the clouds. One can only wonder what kind of clouds. Therefore we cannot and will not support a system which adds another payroll burden on the backs of employers and employees and militates against jobs.
How are you going to handle it, Mr. Speaker? The only way we can see is to make the claim of those who work a priority up to a certain amount, we suggest $4,000, against the assets of the bankruptcy. What is wrong with that? Surely when a company goes bankrupt there must be something left. Surely that something can pay the wages of employees. If there is nothing left, then there is nothing for employees either; but that is the nature of bankruptcy. If the company is so bankrupt that there is nothing left of realizable value, then the employee, too, goes without. But after all, the employee at that stage of the game should know that the situation is with the company for whom he works. Sure, he can be hurt, he can be out money. But the concept of super priority would have made sure that Maislin truck drivers would not have had to wait and take part payment of their wages. They would have been paid in full, and early. The Canadian Imperial Bank of Commerce and other secured creditors could not have gone ahead and sold the trucking licences and other assets of that corporation without paying the employees. They would have paid them in a hurry because they would not have been able to operate their receivership without doing so. So much for delay.
If you want to see a delay, Mr. Speaker, look at how the Unemployment Insurance Commission handles people who are sick, have a claim in for 15 weeks and how they get diddled around. If you want to see delay, look at how a person who may have a back injury or something and is making a claim for unemployment insurance is told he is not even sick. They talk about a fund run by the Unemployment Insurance Commission. Look at the delays and how ordinary workmen are pushed around, shoved around and messed around with by bureaucrats in the UIC.
Sir, the private economy can get things done pretty quickly.


William Alexander (Bill) Blaikie: Ever been to a bank lately?


Donald Alex Blenkarn: Secured creditors in a receivership move as quickly as they can because they know dollars not converted to pay off bills are themselves eaten away by interest costs. Therefore they move as quickly as possible. That is one of the concerns, that receivers move too quickly in selling assets to pay off claims. I can say to you, Sir, that they will pay off the claims outstanding for workmen quickly, efficiently and effec-
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tively. That is why we say the super priority route is the way to go.
There has been some concern as to what the super priority would apply to. Clearly we would have difficulty in supporting super priority against real estate and specific charges against specific assets. The concept of super priority refers to the floating charge which trust and insurance companies, the secured creditors, generally take. The charge is against the accounts receivable, stock in trade and work in progress. The small bits and pieces of tools and so on not covered by specific charges, the stuff that makes the business go, are enough. There was enough in the Maislin case. There could not be specific financial charges against the licences. How can you do that? Well, there was enough there to pay the wage earners off in full. They got a settlement but they should have been paid in full.
Maislin is the big case but it happens in all sorts of other cases. You have real estate salesmen who have put deals together and all of a sudden the bank pulls the plug on the whole operation. The bank takes the money because they say, after all, the accounts receivable are ours, they are pledged to secure a loan. The salesmen who put the deal together to make that money in the first place do not get anything and that has to stop. A travelling salesman out on the road is entitled to a claim. That is why, to some extent, we cannot cut back on the amount of $4,000 that easily. Some of the evidence we are going to hear in committee will have to deal with the quantum. We cannot leave people with an intended priority forever; there must be some cap.
We are going to have to hear evidence with respect to consumer bankruptcies because they are covered under this Act for amounts up to $20,000 on goods purchased. There has been some concern about that. We are going to have to hear evidence on how we get at situations where people have obviously organized their affairs to defraud, in a way, their creditors by going bankrupt. These are issues which have to be brought before us. We need a number of committee hearings; we have a lot of work to do. I commend the House adopt this Bill; let's get at it.


The Acting Speaker (Mr. Guilbault):: At this stage in our debate, there is a ten-minute period provided for questions and comments. Are there such questions? Then, resuming debate.


Mr. G. M. Gurbin (Bruce-Grey):: Mr. Speaker, I am pleased to follow my colleague who has just completed what I would have to say was a very well informed and enthusiastic identification of the Bill and its background, as was indeed the representation made by the Hon. Member for Cambridge (Mr. Speyer) who started the debate for our Party.
There are only four or five points I would like to make and I would like to focus most particularly on the agricultural scene. The first issue, as has been identified by others who have spoken, is that of urgency. I guess I will be excused if my enthusiasm or optimism for the successful completion of this Bill is somewhat constrained. Not for seeing this Bill into committee, Mr. Speaker, which I think can happen very
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quickly, but in actually seeing a successful conclusion to this matter before the end of this Parliament.
The Minister indicated in her speech that there have been about 18 years of preparation for this Bill. I am not sure if that is exactly correct, but that is the figure she used. All through that time it has been very clear, particularly in the past few years, that there has been a growing need for legislation which is sensitive to the problems which people in Canada are facing today. There is a real need for legislation which is going to respond to identified needs in many specific areas. We can all work very hard toward the goal of seeing it completed and introduced as full legislation before the House adjourns in June. Given the performance and history of both the Bill and the current Government and its activities, I think we must view that with some skepticism.
The economic background which we have in Canada right now makes the urgency of this Bill even more pronounced. I would like to focus on agriculture and establish how agriculture is situated today. In about 1979-80 it became very clear, particularly in some areas of the country, that agriculture was experiencing a very significant cost-price freeze. That could be said to be true particularly of the red meat sector. However, as time has passed it has become clear that that had also been occurring in other sectors of agriculture. In fact, we were, and still are getting a very consistent message across the country today.
At that time Bill C-653 was introducted by a Private Member on the Government benches. That Bill was considered for a long period of time, until it became very clear that the Government itself did not feel that was the method it would like to use to respond to the problem of farm bankruptcies.
We had suggestions for an amendment to what was then Bill C-12, now Bill C-17. I will read that particular amendment into the record in a moment. That amendment was a successful consequence of many months of representations from all sectors of agriculture during the consideration of Bill C-653. It identified many problems in terms of lending institutions and producers as reflected upon by farm organizations and interest groups across the country.
The two other points in this Bill which I think are very important to agriculture have to do with the ten-day extension of time which was mentioned by my colleague, the Hon. Member for Cambridge. Another important point is the different legislative control of receiver actions.
For the record I would like to relate a little of the economic background of the farm situation as it has changed over the past few years. Farm input costs escalated by 115 per cent between 1976 and 1982. Net farm income as a portion of the gross farm income actually decreased by 27.4 per cent from 1965 to 1982. Bankruptcies are really only the tip of the problem. A better reflection may be the statistics of the Farm Credit Corporation in terms of loans and arrears. Of all the money that the Farm Credit Corporation has lent to agricul-

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ture across Canada, 13.6 per cent is in arrears. Of those arrears, 45 per cent are on loans made in the last five years.
The first farmers to fail were those who were in the red meat industry and those who had just started a farming operation, had made management errors or did not have the capacity properly to manage a farm operation. At this point, however, Mr. Speaker, it is very clear that bankruptcies do not occur among producers of only one commodity or only with young farmers or farmers who have just begun in the farming industry. Bankruptcies occur right across the board. Farmers who have been farming for generations and have not bought any expensive equipment or changed their farming practices over the past few years are getting into significant trouble now. As we see the future unfolding now, it is indeed a very bleak future for them as well as for the community as a whole.
There have been a lot of changes, Mr. Speaker, in the last few years in terms of world markets, world commodity prices and protective mechanisms in the European Economic Community, Japan and even in the United States. With these measures and the consequent difficulties our producers have in gaining access to world markets, farm commodity prices have remained at low levels. Farmers have had low returns while they have had all these other pressures, including the interest rate factor, coming at them from the other end in terms of input costs.
One of the important factors to consider in the situation of the farm community today, Mr. Speaker, is that of land equity. In many areas the equity of farm land has decreased by as much as 50 per cent. For many farmers, the equity they had in their land provided the basis for additional borrowing to overcome the decrease in net return because of low commodity prices on the one hand and the high input costs on the other hand. The decrease in value of their equity has resulted in their inability to refinance in many cases. It has also put many other farmers in danger who would otherwise perhaps not have been faced with any serious economic pressure. That factor is a variable which no one has much control over. It depends upon interest rates, farm commodity prices and a whole range of factors which in themselves will reflect on farm land prices.
Twenty-five per cent of our farmers produce approximately 75 per cent of our farm produce. These active, enthusiastic producers are really the entrepreneurs of the farm community. They have been producing large amounts of grain and all sorts of farm produce. It is this upper crust which is being most seriously affected. They have had the most economic activity and have probably been contributing in the most major way to our farm production.
The net consequences of all those factors is that in 1979 there were 125 farm bankruptcies across the country and in 1983 there were 488. In the first quarter of 1984 there was another 42 per cent increase. From 1979 until the end of 1983 there was a 350 per cent increase in the number of farm bankruptcies. In the first quarter of 1983, as compared to the first quarter of 1984, there was an additional 42 per cent increase. Those figures clearly indicate that we have a serious problem which should not be addressed with just bankruptcy
legislation. We should be working harder on it at the other end. However, it indeed reflects a need for bankruptcy legislation which is sensitive to the needs of agriculture and to the plight experienced by many fishers.
The ten-day period of extension is very significant to farmers who, as an example, take their produce to auction barns for sale. Lending organizations or institutions which might force a secondary agricultural operation, such as a cattle auction bam, into bankruptcy would not be able to recover any profits which were not legitimately theirs. In some instances farmers have taken their cattle to the auction barn and perhaps even after their cattle have been sold they have been forced into receivership or have faced bankruptcy. Those primary producers have experienced very serious losses, sometimes up to hundreds of thousands of dollars, through no fault of their own.
In some cases the institutions could be criticized while in other cases the producers may deserve the blame. However, the fact is that a ten-day extension, if that is what it is, should satisfy situations in many cases when the primary producer will have an opportunity to look after his own best interests. In that period he may be able to recover those moneys which are owed him and not be left exposed and vulnerable.
There were changes to the Bank Act a couple of years ago which would have, at first blush, been seen to give some protection. It is clear that lending institutions have been able to get around that section of the Bank Act through other mechanisms. I suggest that this type of proposal will be valuable to those involved in agriculture.
The second point that we raised concerns receivers. While it would be unfair to suggest that all receivers have acted unreasonably, it would be equally naive to suggest that there was not a serious problem with respect to receivers. It is a difficult situation and, in many cases, an unhappy one particularly for those who are directly affected.
There is much difficulty in justifying the consequences of the action of receivers. These adverse consequences are reflected in certain cases involving small businesses and there are easily identifiable consequences that have occurred in agriculture. For instance, a sale of farm equipment in a receivership situation may occur at precisely the wrong moment in the yearly cycle to get a reasonable return on the investment that has been made by a farmer. If one tries to sell 20 tractors in November, in most parts of the country one can anticipate a minimal recovery compared to the real value of that equipment. This has been the experience of many farmers who are in a bankruptcy situation. There should be a rational and legal requirement for the receiver to justify his actions to ensure that there is at least a commercial consideration given to the value of the goods for which he is responsible when he is called in.
Ultimately, it is not only those who are directly affected who seriously suffer but also the lending institutions that have failed to recover a significant portion of the money owed to them as a result of the actions of the receiver. The receivers



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themselves seem to be adequately protected as long as they recover enough to cover their own costs. I suggest that the situation as it exists today is very negative. I believe a specific effort to make receivers act in a commercially responsible way will help to improve that situation.
Let me deal with the basic issue concerning farm bankruptcies. I would like to discuss a draft amendment that is presently being considered which deals with Clause 120 of the current Bill. That clause allows the creation of a court formulated arrangement in circumstances where there is seen to be some social need or effect if a bankruptcy should occur. Presently the Bill limits this to those business operations which have assets in excess of $1 million. My colleague from Cambridge pointed out that that figure is perhaps not representative of the value that should be applied today. While I do not want to go into detail in that respect, I would like to talk about the effect that this amendment might have if it were included in the Bill in its final form.
The effect of the amendment would be to add farmers and fishers, no matter what their debt level, to those businesses with assets of over $1 million. It also takes one further significant step which I suggest represents the sum total of approximately seven months of ongoing meetings that were held prior to the introduction of this amendment and consideration of this Bill. Essentially, it provides for a court-appointed group that would reflect the interests of the debtor and the lender as well as a third party to act as an adjudicator. It would allow this group to consider the bankruptcy situation of a debtor prior to his going before a bankruptcy court judge who would have the legal authority to impose an arrangement. I believe such a procedure would avoid many of the difficulties that might occur if a farm bankruptcy situation was placed before a judge who may have no experience in farming or fishing but who would be expected to treat a farmer or fisher in a fair and reasonable manner.
In closing, I suggest that this proposal is necessary and valuable as an option to those in agriculture and fishing who are experiencing the most severe distress. While it will not stop all bankruptcies since there will still be farmers and fishers who face a real bankruptcy situation, it will provide an additional option for the consideration of those who are put into an untenable economic position, through no fault of their own.
I believe this amendment deserves considerable support. There may be modifications which would allow it to be more effective. We look forward to being able to consider it with the expert witnesses who appear before the committee.


Mr. Deputy Speaker:: Before recognizing the next Hon. Member, I possibly should have intervened earlier in the course of the Hon. Member's speech, but let it be known that the Chair should remind Hon. Members that second reading stage is not the time to deal with specific amendments as such, whether they are real or proposed. Second reading stage is reserved for the discussion of the principle of the Bill. Specific amendments should be dealt with properly at the committee stage. I say this for the record.
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Gary Michael Gurbin: Mr. Speaker, I respect your remarks fully. In fact, without reading the direct words, I was trying to deal with the principles that were involved.


Mr. Deputy Speaker:: The Chair appreciates the Hon. Member's comments.


Mr. Hovdebo:: Mr. Speaker, I have a question for the Hon. Member. Does his Party consider that the idea of a board, the vehicle suggested in Clause 653, is the proper type of vehicle that could be of some value to farmers who are facing bankruptcy? Is that the kind of thing that should be in this Bill?
[DOT] (noo)


Gary Michael Gurbin: Mr. Speaker, absolutely. I am sorry if I did it in so vague a way, but that was exactly the point I was trying to make and it was a potential defect in Bill C-653 as it was originally presented.


Mr. Deputy Speaker:: Are there further questions or comments? The House will now proceed to debate.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, we understand there has been a House agreement to deal with some haste, with Bill C-17, the Bill before us now, which deals with bankruptcy and insolvency. We agree it should be completed today. There are a few words I want to say concerning the background of this Bill and its application to farmers specifically.
This Bill before the House is a redrafting and reintroduction of Bill C-12 that was introduced just over four years ago in April, 1980. It was not examined very much at committee stage and it was hung up in the House. Because of the delay and because of the increasing number of bankruptcies that farmers faced, there was some pressure to bring forward special measures to deal with farm bankruptcies. As a result, Private Member's Bill C-653 was introduced into this House about a year and a quarter ago. There was unanimous agreement to deal with it in committee. It was transferred to the Standing Committee on Agriculture and a subcommittee was subsequently set up to deal with it.
Some of the incidents which led up to the House agreement at that stage included year upon year increases in bankruptcies. From 1980 to 1981 bankruptcies increased 50 per cent to 80 per cent in each of the provinces. The number of bankruptcies continued to increase at an even more rapid rate the following year and the numbers continue to accelerate. At present we are looking so far, in 1984, at increases over the previous year as follows: in the Province of Manitoba, 75 per cent; in the Province of Saskatchewan, 100 per cent; in Alberta, 165 per cent; in British Columbia, 159 per cent. You can see the increases in bankruptcies continuing right across the nation and the need for specific bankruptcy legislation that can be of assistance to farmers is vital.
It was an action by the Ontario arm of the Farm Survival Association which helped trigger the response in the House of Commons when we gave all-Party agreement to discuss Bill C-653. Allan Wilford, President of that organization, was

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Insolvency Act
thrown into jail as a result of an action by the Farm Survival Association at a sheriffs sale of one of the members of the Association. There was an attempt to stop the sale to make it possible for the bankrupt farmer to continue to negotiate an accommodation with his bank. Subsequently some of the leaders of that group ended up in jail. What they asked for and what Bill C-653 was asking for was a method of allowing the debtor to be represented and have his side of the case heard.
At the moment, as you are aware, Mr. Speaker, the creditor, the banker in most cases, can move in and seize property. Because of the amount of the assets and the financial situation a farmer might be in, it is very difficult for him to hire adequate legal protection. In fact, it is very difficult to get a fair hearing in this kind of situation. Bill C-653 referred to an old law emanating from the 1930s which had provided some protection to farmers in particular. It empowered them to set up tribunals, which meant that one party would represent the bank and another party would represent the farmer. They would agree on a third party to be the chairman and the case would be dealt with in a reasonable manner. They then decided whether or not to convince the bank to consolidate the debt. The tribunal even had the power in some cases to reduce the debt so that it was possible to keep the individual on his farm.
I understand Bill C-17 does have some recognition of the impact that a bankruptcy will have on the community, as did Bill C-12. It only recognizes that impact on those cases where the bankruptcy involves more than $1 million in assets. There has been some mention of that in the House today. It seems to us and to me, after having gone through the process of hearing witnesses in the subcommittee on agriculture which looked into this problem, that that is really not adequate. When you are dealing with a farming community, the economic base of that community is not all that large. Even one family makes quite a difference to the viability of a community. From the testimony given by witnesses we heard, it was my feeling and I think the feeling of many other people that the powers of the lending institutions, the banks, are being abused. The sheriff is called in, property is seized and assets are taken away. These things are being done under circumstances which one would think should not be allowed in a democratic country like Canada.
One of the first people who appeared before us was from eastern Canada. He had established some 750 acres of woodlot and he had a blueberry business. He was selling maple syrup, hardwood, and harvesting blueberries. He had a relatively small loan at the bank considering the amount of acreage he held. He had run into some difficulty getting equipment in place for the maple syrup part of the operation. He admits he was about eight or nine months behind the schedule he had set for himself at the bank. He was in the process of negotiating to continue the loans through a lawyer, accountants and the bank, only to find when he arrived home at noon that day, the day when the negotiations had been taking place, that the sheriff and five or six large trucks were in the yard loading equipment. They had taken the locks off the buildings and
were loading a lot of the equipment which had not even been assembled. In the process of cleaning up all of the equipment, they had taken not only the farmer's equipment and any implements that were lying around, but also about $10,000 worth of his neighbour's equipment that happened to be sitting in the yard. There was no accounting of the equipment taken. There was no inventory of what was seized. There was no accounting after the equipment was sold as to what was available, where the equipment had gone, what the prices were, and how it had been sold.
By his own estimate and by the bank's estimate, the equipment taken was worth somewhere in the neighbourhood of $50,000. By the time the process had been completed, there was approximately $22,300 gross from the sale of the equipment as a result of the method chosen by the receiver, of which $9,100 was considered to be selling costs. In addition to that $9,100, the farmer had to spend in the neighbourhood of $600 in legal fees, time and transportation charges to recover the $ 10,000 worth of assets which truly belonged to his neighbour.
All this was done under a current section of the Bank Act, Section 128, after the bank had changed the loan. It had begun as a fixed-interest rate loan and was changed at the bank's initiative, without the knowledge of the borrower, to a floating-rate loan which cost in the neighbourhood of $30,000 extra in interest, according to the witness we heard. We received a recommendation from the witness that in all cases there should be an agreement on the part of the borrower and the lender if a loan is to be changed from a fixed rate to a floating rate. I realize that this is not strictly relevant to the Bankruptcy Act, but it does explain how some of these problems come about.
Also he suggested that the bank should not be allowed to debit overdue payments from one account to another account, because this eventually ended up in some cheques being returned NSF. He was as surprised as anyone when that happened. It spoiled his image in the business community with which he has to work. The contract with the bank changed without his knowing it. Most of all, he urged that when dealing with this kind of legislation, the bank should not be able to move unannounced on to a piece of property and seize the assets even though there is the strength of Section 128.
We are hoping for a section of the Bankruptcy Act which would permit farmers and fishermen to have the same options open to them as those of creditors who owe in excess of $1 million, so that some of these extreme situations will be avoided. In the particular case which I mentioned, the bank did not benefit; it did not recover its funds. It put the man virtually out of business. He retained his land, which was under a different lending institution, but the bank continued to send him notices that he owed more money. It continued to charge interest on the amount of money it did not recover from the unfortunate seizure and sale of his assets at a time when the market was bound to be low. It was off-season. Who would be interested in purchasing maple syrup equipment in the
May 9, 1984

months of May and June after the season had just ended? Who would be interested in buying maple syrup equipment which had been lying in sheds, loaded with front-end loaders, smashed, dented and dumped in a pile as if it were junk rather than new equipment? These are the kinds of things we must remember when changes to the Bank Act are made. The process has to be delayed so that the debtor has an opportunity equal to that of the bank to present his side of the case and to negotiate something in the realm of fairness.
Despite our attempts in the House to improve the Bank Act when it was revamped in 1980 and 1981, we should provide protection to producers supplying products to processors who have already found ways of getting around the protection we thought we were providing. There was an instance concerning an auction market which went into receivership. Farmers who sold livestock through that market did not receive money for their cattle. If farmers are not paid for a shipment of cattle, often it involves the full year's production of livestock, and almost three years of effort and feed have gone into getting the cattle ready for market. It is a tremendous loss to farmers who are not paid. What happened in the case to which I was referring was that cheques were issued but they were no good.
There was a similar case last fall involving a grain elevator company in southern Ontario, the Niagara Feed and Seed case about which you may have read in the newspapers in recent months, Mr. Speaker. Some producers understood that there were problems with the financing of that particular entity and made inquiries at the bank to make certain that if they delivered grain to that elevator, the cheques would be good and indeed they would be paid. The bank assured them that they would be paid, but when the grain was delivered it simply became part of the assets which the receiver used to settle the debt load of the elevator company. This reduced the losses of the bank but left farmers facing large losses. Some of them virtually lost one year's crop, in effect to help a bank to get out of a bad loan situation with an elevator company in which it had become involved with both eyes wide open.
We had hoped to provide assurances for people who produce fruit and vegetables, raise livestock and grow grain regarding those changes to the Bank Act. However, there was another step where assets are held in trust for the bank and moneys are extracted from farmers and producers which are then transferred to the bank to reduce its loss at their expense. We hope Hon. Members of the House will be conscious of those loopholes and will attempt to fill them at committee stage.
Without such amendments there is no hope for improvement in the situation of farmers facing bankruptcy. There is no hope for farmers who are not now facing bankruptcy but have the bad luck to deliver produce to a company or processor on the verge of bankruptcy. They can be caught and go broke just as quickly, simply by having delivered produce to a processing firm or marketing agency which happens to go bankrupt while their produce is in train, on the way through. We hope that farmers and fishermen will be permitted the same rights and privileges as those firms which go bankrupt with a debt load in excess of $1 million. The court should be brought into all these
Insolvency Act
cases because of the effect that the demise of a farmer or fisherman has on his or her very small community. I hope the legislation can be improved to take these matters into account.


Mr. Gordon Taylor (Bow River):: Mr. Speaker, I want to deal with certain principles of the Bill and I will base my comments upon happenings in the past. The first point is that there has to be protection for the workers. I notice in the Bill that when a bankruptcy occurs, up to $2,000 in wages is provided. What concerns me is the part that states "for all wages payable at the date of bankruptcy not exceeding $2,000 for each such employee for services performed".
The other principle involved in the Bill is what is called the super priority claim for unpaid wages. That covers up to $4,000 per employee. We have to ensure that those who have been working and who depend on their wages receive their wages. That should be the number one protection. It appears that the Bill provides for the wages owing at the time. When a company gets into financial difficulty, there is the danger of prolonging that period where it does not pay its employees. Sometimes that can involve quite a large sum of money, certainly more than the employee would normally receive every two weeks or every month. Normally it is every two weeks.
A small company with, for example, 100 employees may have to borrow money just to stay alive. It may be the only way it can keep going. Such a company is built on borrowing, providing it has the wherewithal eventually to pay back that debt plus make a profit. This super priority claim does not cause me concern with regard to large companies, but it does for the borrowing capacity of a small company. A lender takes into consideration the liabilities of a company.
Let me use the example of a company that requires $1 million to expand. This would not be a very large company. The capital required is $1 million. The downpayment is generally 20 per cent. That brings the figure down to $800,000. If there are 200 employees and you multiply 200 times $4,000, that comes to $800,000. Thus the ability of the company to borrow is nil. I am afraid of what this might do to the ability of smaller companies to expand or even to stay alive. The number one premise is that wages have to be looked after. Let us not drive smaller companies out of business because then there would be no wages.
Many businesses in Canada today want to expand but will not do so because of government policies. Consequently, they take their money to another country or leave it in the bank. They either export jobs or, by leaving their money in the bank, do not provide more jobs. Government policies with regard to capital gains tax prevent many businesses from expanding. We should carefully consider this clause in committee. We must not do anything that would drive smaller businesses into bankruptcy or receivership, which could easily be done. The amount of money required by the smaller companies is a factor. With this super priority, we may be undoing something

May 9, 1984
Insolvency Act
that we do not want undone. We may drive companies out of business by eliminating their ability to borrow.
The second point is the protection of smaller companies. Protection of wages is number one. We have to protect smaller companies so they can stay alive and expand. There is a lot of detail in the Bill. I have not found this provision, but it may state that smaller companies in Canada will receive help to stay alive. We put too much emphasis on those who lend money rather than those who borrow.
When a bank, credit union, caisse populaire, the Farm Credit Corporation, provincial agriculture development boards or other institution lends money, it requires certain collateral. There must be some equity. I know of a case where the Royal Bank is foreclosing on a loan made just over a year ago. They say the farmer has no equity, that he has used up all his collateral. He had these other loans before the Royal Bank made its loan. If the bank was going to make the loan on the collateral produced at that time, it should not impose receivership before the farmer has had a chance to produce and repay the loan. This situation has to be looked at very carefully.
This is not a fictitious case, this is actually happening. The families involved are frightened. They do not know whether they will lose everything they have worked for. They had a loan from the provincial Agriculture Development Board and a loan from the FCC. When they needed additional capital, they went to the bank. The bank knew all of this.
This business I refer to is partly a greenhouse operation. It takes three years to confirm your customers and the market and start bringing in money rather than only paying out. A lot of capital must be expended to build the necessary sun houses and purchase equipment. The bank is foreclosing. There is no recourse, no way the farmer can protect himself. The bank says he must pay up by a certain date, such as the end of the month, or it will start proceedings. When one lender starts to do that, the others become very concerned.
We must provide protection in this Bill for the small operator. When they take a loan, they must have a chance to make use of that money long enough to produce and pay back. The very operation for which they borrowed the money will bear fruit and they can then start producing and make a profit.
Another important principle is that there must be a provision in the Bill which gives some consideration to the borrower in regard to the amount of the loan, the amount he has paid back and the amount he still owes. I am aware of a case in which an insurance company in Canada foreclosed on a farmer who had taken out a loan when wheat was at a high price. When the price of wheat dropped, he had difficulty making payments on the loan. However, he kept up the payments to the best of his ability, but the insurance company took over his farm. He had paid the principal of the loan two and one half times but he still owed as much as he had borrowed in the first place.
That type of situation should not be permitted in this country. There must be some consideration given to those who
borrow money. If there is no protection provided to them, there is something radically wrong with the system.
The case which I referred to happened during the Depression years. It happened in a district where I was teaching school. I felt very sorry for that man as he had paid back two and one half times what he had borrowed. Then the price of wheat dropped to practically nothing-approximately 19 cents a bushel. Wheat was $2 a bushel when that man borrowed the money. However, the insurance company told him to clear off the land and gave him a number of days to get off the land. What did he do? He pulled a granary on skids to some adjoining land which belonged to a land owner who felt sorry for him. The land owner felt he was a good farmer and that it was not his fault. He asked the farmer to farm his land. So the farmer pulled the granary over in order that he, his wife and his kids could have a place to live. What happened then? He not only lost the farm that he had spent a lifetime building up, but the insurance company threatened him with court action if the granary was not returned. Many of us, including myself, went to the insurance company and told them that this was inhuman. As a consequence, the insurance company did not lay charges regarding the granary, but they took his farm. The farm went into other hands. How much the insurance company was paid, I do not know, but they were certainly paid plenty. The insurance company did not lose one cent; they made a lot of money on the deal. The original capital was paid more then twice, yet the farmer still lost his farm.
That is no way for a civilized country to treat its primary producers. I hope that members of the committee will ensure that there is some protection for farmers. They are not trying to get out of paying their debt, but they have no control over the conditions.
Later on, the late Right Hon. R. B. Bennett and the late William Aberhart in Alberta brought in debt legislation which established a debt legislation board. If that had happened two years earlier, that man would not have lost his farm because the Alberta Government declared a moratorium on debts. Between the federal legislation introduced by the late Right Hon. R. B. Bennett and the twin legislation introduced by the late William Aberhart in Alberta, a board was set up which had the power to say to the lenders; "You have already collected heavily on this deal; we are going to cut down the amount this man still owes".
Unless we have authority such as that, our producers will not get a fair deal. The lenders will want their pound of flesh and every ounce of blood that goes with it. I have seen it happen several times before legislation was introduced giving a government-appointed board the authority to say to the lenders; "You have been paid once or twice. You have got double your capital back. Now you have to cut it down to something sensible and reasonable that the man can pay". Under the other system borrowers could not pay off the debt in a lifetime.
We must protect wages. We must ensure that workers receive their wages. We must ensure that we do not drive our businesses out of business by telling them that they do not have the authority to borrow. They have to borrow. We need
May 9, 1984

authority for some group or board to look over the situation before farmers are kicked off their land.
I had a few Ontario farmers visit my office a short time ago. One of those farmers told me that he had recently been kicked off his land. He had paid more than the total principal. He told me that he was prepared to pay but that he did not have the wherewithal to pay because his land was taken away from him. We need legislation to ensure that our farmers and small businessmen who want to pay have the wherewithal to pay. It should not be like the Shakespearean play, because when the lenders take their pound of flesh, they also take the life savings of individuals and those individuals cannot continue in business.
I would like to make a point regarding collateral. I know of a case where a bank took the tractor and the cattle of a farmer. What was the farmer to do? He had no wherewithal to pay off his debt. It is tantamount to saying: "We want your farm". They took away his means of ever meeting the payments on the loans to which he had agreed. He required the equipment to put in the seed and to thresh and harvest that seed. He required his cattle to reproduce in order to sell them. But the bank took away the very means he had of paying the debt. I say that is not right. There must be power in this Bill to ensure that we can protect our farmers and small businessmen against the financiers. All financiers who lend money are not that tight-fisted, but there are some around who want their pound of flesh and every ounce of blood that goes with it. We must ensure that our farmers, businessmen and people trying to produce in Canada are not crippled by giving the financiers the right to do anything they want to do; whether it is right or wrong. We need protection for those who are honestly trying and who, through no fault of their own, are unable to meet the obligations which they want to meet as early as possible.
I will not say anything more because the Hon. Member from Bruce-Grey (Mr. Gurbin) dealt very well with bankruptcies, and other Members have dealt with other points. In conclusion I would like to say that this Bill should give us a chance to protect wage earners, farmers, small businessmen and other people against the financiers who want to take every ounce of blood and reduce a borrower's ability ever to pay back a loan.


Mr. Deputy Speaker:: Questions or comments? Debate.


Stanley J. Hovdebo: Mr. Speaker, it is a pleasure to be able to spend a few moments speaking in this debate on Bill C-17, an Act respecting bankruptcy and insolvency. I will spend my time, Mr. Speaker, mainly on the needs of the agricultural industry in bankruptcy legislation, although I would far rather be speaking about how we could keep them in business.
When a business or a farm is ailing, there are really only four alternatives put before them; receivership, liquidation, some form of proposal which would keep them in business, or bankruptcy. Unfortunately, Mr. Speaker, only one of those
Insolvency Act
options is really an attempt to keep the farm or business going. Perhaps we should spend more time in this House attempting to provide ways of keeping farms and businesses going rather than worrying about bankruptcy. However, what we have here today is a Bill which is intended to put down rules in the battlefield between the financial institutions and the rest of Canada.
I am speaking only about farming because there is probably no area of the economy which is more affected by the vagaries of the market than the agricultural industry. It has to deal with circumstances outside of its own ability to establish what it will get back for its efforts. Only for agriculture, and a few of the other primary producer industries, is the free market still expected to work. The theory of supply and demand is expected to dictate the returns which a farmer receives from his operation. Since the farmer has no control over the marketing of most of his products, he accepts what he can get. The market, therefore, dictates whether or not he will survive. The farmer can plan as well as possible and look to the future as much as possible, but the market, the weather and other conditions may make the difference in whether he survives or not. Survival, therefore, is what Bill C-17 is all about.
If one cannot survive in farming, one goes bankrupt or one quits. Most farmers are too proud to go bankrupt so they move over and make room for someone else. They sell their land and what is left and let someone else have the farm. They stay as long as possible, living on their equity, until their debts become more than their equity; then they sell out saying, "I guess I will go to town and work."
How does a farmer get into the position where he finds it necessary to go bankrupt or to sell out? Farmers are probably the largest users of credit for their operations of almost any industry. They use credit for their operations as well as for financing their capital costs. I remember in a speech not too long ago the Hon. Member for Sarnia-Lambton (Mr. Cullen) said that we spend our lives establishing a credit rating. I believe possibly there are some people who have gone bankrupt in the last few years who would think that if their credit rating had not been quite so good perhaps they would not have had quite so much money and not now be bankrupt.
However, in establishing a credit rating, a farmer must prove his ability to continue to operate. He goes out in the spring and borrows money to buy feed and fertilizer and in many cases the fuel, and he waits for the land to produce the crop so he can harvest it in the fall. It seems simple. However, if you are a new farmer going into business, first of all you must have the land. These days land costs anywhere from $150 to $1,000 an acre. The absolute minimum for a viable farm in my area, Mr. Speaker, is a section or a section and a half. You can purchase that for possibly something better than half a million dollars. If you were going to borrow the money to buy that land and make payments uii it, you would be paying $120,000 in interest. And at present prices for wheat, you are not going to make that much from the land you own. Therefore, it is much better if you own the land ahead of time. No sane individual would go out and pay $600,000 for land and

May 9, 1984
Insolvency Act
expect that land even to pay the interest. You must, therefore, have some other source of funding to get to where you want to be as a farmer.
If you do make this investment and the price of wheat does stay where it is, you are well on your way to bankruptcy and you have not even planted your crop yet. These last few years we have had a lot of farmers on the Prairies go bankrupt and for a good many reasons. Sometimes it is because the weather has been bad. Sometimes it is because interest rates have been too high, or they have gone up during the period of time the farmers had hoped to pay off their particular investment.
The agriculture industry has to be one of the businesses which has the longest wait between the time of the original investment and the return on that investment. First of all, a farmer buys the fertilizer and the seed, he sows the grain, he spends money on spraying during the summer, he harvests in the fall, puts the crop in the bin and, if he is lucky, he might sell it next August, a good year and a half later. So two full years have passed from the time the farmer invested in that particular crop before he receives money to repay his investment. The full cow-calf cycle, Mr. Speaker, is about ten years. It is the same with apples. Ten years is the length of time for apple growers to receive a return on their investment.
How are we going to protect farmers who get themselves into the position where they have to go bankrupt? Farmers are usually eternal optimists. That is part of the reason, I suppose, why they keep sowing and hoping to harvest. They are probably the only group of businessmen who continually lose money and still stay in business. Farmers have a tendency to live on their equity and, of course, they feed themselves off the farm.
This Bill should do something to protect the people who are important to this country, the primary producers. They produce a large portion of the food we eat. The worker, the farmer and the fishermen should be protected. If someone is going to be punished in this operation, it should be the finance company or the fiscal institution which has in mosts cases, as the Hon. Member for Bow River (Mr. Taylor) said, gotten all the money invested plus that much more. Instead of a Bankruptcy Act, Mr. Speaker, maybe we should be looking at an interest control Act. Maybe by the time a financial corporation has doubled its money on loans for which they take very little risk, there should be no more interest charged.
We need to do something about what happens to a farmer or small businessman if they do go bankrupt. In the last 20 years something has happened to the basic economic structure in Canada, something which is bad for Canada. There was a time when everyone considered production the most important thing to the economy. We paid for production and if you produced well, you did well. Production was the key to survival and getting ahead. Today we have changed the definition of what
is important in the economy. In farming and most small businesses what you produce and how much you produce, even how efficiently you produce it, does not have as much impact on your success as the price you pay for the money you borrow. These days in farming and small business the only person guaranteed a return is the person who lends the money. That seems wrong to me. I think it is our responsibility as Members of Parliament to put in place rules which do not allow those financial institutions to take advantage of the situation in such a way that the farmer who has worked hard and should have been successful just cannot quite make it.
If we look back, Mr. Speaker, Christ went to the Temple and tipped over the tables of the money lenders. He abhorred the money lenders. Our morality has changed somewhat in the last number of years and the money lender is now an accepted and respected part of the economy. I think it is the Government's responsibility to put rules in place which do not allow money lenders to take advantage beyond what seems respectable, I suppose.
We therefore have a responsibility to put into this Act some kind of a structure which allows the farmer or the fisherman or small businessman to know that if he has made a good strong effort he will not be taken over, he will not be forced into the position where he is unable to survive. If that is what this Bill does, then it is a good Bill. If it allows people to be taken advantage of by financial institutions, then we should change the rules so those institutions allow the majority of Canadians to make a living rather than just the bankers.


Mr. Deputy Speaker:: Order. Is the House ready for the
question?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is as follows: Mrs. Erola moves that Bill C-17, an Act respecting bankruptcy and insolvency, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: On division.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to the Standing Committee on Finance, Trade and Economic
Affairs.
Mr. Deputy Speaker:: Is it the pleasure of the House to call
it six o'clock?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: Order. It being six o'clock p.m., this House stands adjourned until eleven o'clock tomorrow morning.
At 5.55 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, May 10, 1984