1984-04-30

[Stage Direction]
The House resumed from Friday, March 23, consideration of the motion of Mr. Ouellet (for Mr. Gray) that Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations and to amend other Acts in consequence thereof, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Mr. Gordon Taylor (Bow River):: Mr. Speaker, I appreciate the opportunity to say a few words this morning about Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations and to amend other Acts in consequence thereof. I have read many Bills during my lifetime but I have never read a Bill which contains so many contradictions as this Bill. In fact, it is a jungle of contradictions. I want to deal with some of these contradictions today. If this Bill is eventually to pass, certainly a number of its measures, particularly the ones I will mention this morning, should be amended, completely overhauled or completely restructured.
The first contradiction that I Find is that the Bill implies that the Minister is responsible for the Crown corporation. It would certainly be commendable if that were true. However, when one reads the Act further one Finds that the Minister really has very little authority. It is the Cabinet that exercises most of the powers, not the Minister. The Cabinet appoints the directors and gives approval to operating and capital budgets. It appoints the chief executive ofFicer. In other words, the Minister is not responsible for the operation of the corporation. Since the Cabinet is responsible this means that there are 20 or more Ministers who are responsible. In other words, what is everybody's business is nobody's business. This explains why many of our Crown corporations have gone awry and have fallen into ridiculous Financial positions. Crown corporations are responsible to several Ministers yet really responsible to no one. That is the first contradiction.
The second contradiction concerns the duties and responsibilities of directors. In the private sector an essential duty of a board of directors is to hire and monitor the chief executive
officer. This is not so with Crown corporations as it is set out in this Bill. It is not the board of directors that has that responsibility but the Cabinet which appoints the chief executive officer. Therefore, the chief executive officer is responsible to the Cabinet. The Cabinet hires and sets out the pay of the chief executive officer and, of course, it is unheard of to Fire a chief executive ofFicer. That authority rests with the Cabinet, not the Minister or a board of directors, even though it is the chief executive officer who will be responsible for the day to day operations of the corporation. That is the second contradiction.
Third, in the private sector the board of directors appoints the auditors. They are responsible to the board of directors. This is not the case here; according to this Bill, it is the Cabinet which appoints the auditors. This means that the auditors are responsible to the Cabinet; in other words, to no one. When one is responsible to 25 Ministers, one is responsible to no one since there is no one to assume that responsibility.
Another contradiction is that the board of directors in the private sector approves, varies or rescinds by-laws. While the Bill states that the board of directors may make by-laws, this is not so according to Clause 124(1) and 124(2). Cabinet approves, varies and rescinds by-laws. What do the directors do? They rubber-stamp whatever Cabinet does. Anything or everything Cabinet does is rubber-stamped by the board of directors. Cabinet can even order the board of directors to approve a by-law or to repeal a by-law. The Minister responsible does not do this. Cabinet may order the board of directors to approve or repeal a by-law. One begins to wonder why we even have a board of directors under this Bill. Everything has to go to Cabinet. No wonder most of our Crown corporations are losing money when Cabinet takes on these responsibilities and the chief executive ofFicer and board of directors are responsible to Cabinet.
There are a few other interesting items about directors in this Bill. If Cabinet gives a directive to the board of directors, the directors must implement same. The board of directors is set up to run a particular corporation. It is supposed to be closest to the corporation and very close to the chief executive ofFicer. However, if Cabinet gives a directive to the board of directors, the directors must implement it. It has no choice at all, whether it is right or wrong. Again, no wonder many Crown corporations are losing money with a legislative set-up such as this. The directors are not accountable for any consequences arising out of the said directive. I suppose that is understandable when Cabinet tells the directors that they have

April 30, 1984
Financial Administration Act
to do it. Even though they think it is wrong or bad, they still have to do it.
Then the Bill indicates that the directors will not be held responsible in cases like that. Then who is responsible? The Cabinet, which means nobody is responsible. When there are 25 people responsible for something, what is everybody's business is nobody's business. In other words, no one is responsible.
That is not the worst of it. While the Bill gives Cabinet authority to make directives, it denies that authority when it comes to certain corporations such as the CBC. The programs can be as bad as the corporation likes, but Cabinet cannot give the CBC any directives, nor can it give the Canadian Film Development Corporation or the National Arts Centre Corporation any directives. In other words, these corporations become the government, responsible to no one. They do what they like. Even the Cabinet cannot make recommendations.
I used to think it very odd when the Minister of Communications (Mr. Fox) would write to me indicating that he had no authority to give directives to the CRTC in connection with Playboy or pornography. The Minister of the Crown responsible for that corporation cannot give a directive. Cabinet can give a directive, but even it cannot direct the CBC, the Canadian Film Development Corporation or the National Arts Centre Corporation. Who runs it? It runs itself. It is like the government of the country. It becomes the government. Why any government would want legislation like this is beyond me.
Let us look at one or two examples. A few weeks ago an item was issued by the National Film Board on a great Canadian war hero, Billy Bishop. This film smeared the courage of not only Billy Bishop, but others like him. Men who gave their lives so that we can be free in this country are smeared in that film. What does the Minister say? He says he has no authority. In a letter to me, the Minister said that we pride ourselves on having freedom of speech. Freedom of speech to smear men like Billy Bishop? What a cheap and sleazy attack.
The Minister says that each agency is accountable to Parliament for its action. When does Parliament have an opportunity? After the fact, never before. We are placing into legislation that a board set up by government cannot be controlled by government. It cannot even receive a directive from the government. Read the Bill. I wonder how many Members have read it. I read it going on home on the plane at Easter. It is so bad that I felt like throwing the Bill and everyone connected with it out of the airplane. That is just one example.
Another example is the CRTC. I attended a CRTC hearing in Edmonton. The board chastised a company because it dared to show American films in the Banff-Canmore area. Those same films are shown almost everywhere else in Canada. I told the directors that every one of them had access to those films, but not the rank and file in Banff-Canmore. The CRTC threatened to cancel the licence of that company because it dared show a film it was not authorized to show.
If American films can be shown in Toronto, Montreal and Calgary, why can they not be shown to those in the rural areas? If you have a lot of money, Mr. Speaker, you can see anything. If you have an extra $2,500, you can buy a TV saucer. Where would the rank and file in this country find $2,500 to buy a saucer to put in the front yard, if indeed they have a front yard? You do not need a licence for a saucer. You can watch any program you want, American or otherwise; it is entirely up to you.
The Minister is doing nothing about this even though it is ruining some of our cable companies. Everyone who purchases a saucer is a potential customer of a cable company. The cable company has to pay taxes. It has to beg the CRTC for a licence. It must get down on its hands and knees because it dares to show a program in Banff and Canmore which the board said it could not show even though the board members watch the same films in Toronto, Montreal and Ottawa. Isn't that a fine how do you do? The Minister says there is no authority to change this situation. This is the kind of Act that is being set up in this country. I will move on even though we could spend the whole day on this one clause.
There is another contradiction in the Bill. Clause 104(1) provides that no Crown corporation may carry on any business or activity that is not consistent with the objects or purposes for which it was incorporated. That sounds fine. A Crown corporation should not do anything that Parliament has not given it the authority to do. However, there is an exception to this. Clause 104(2) indicates that if a Crown corporation is already doing something illegal, it may continue to do it. That makes we wonder how many of these corporations are already carrying out programs for which they have no parliamentary authorization. Some of them must be doing it or there would not be a clause in this Bill authorizing it. This clause indicates that it is all right for a Crown corporation to break the law if it had broken the law before but other Crown corporations cannot break the law in future unless another exception is later added to the Bill.
That makes me think of sin. These days, even some of the churches are supporting sins about which they used to decry. A King of England had to abdicate because he married a divorcee. Now the same church to which he belonged is authorizing divorces right and left. Divorce has suddenly become right. If enough people do it, it is fine. The Government says: "Enough corporations are breaking the law so they can keep right on doing it because they did it before but no new corporations can do it". What kind of a moral attitude is this kind of legislation building in the country?
Some Crown corporations must now be doing things not consistent with their objectives. What are these illegal activities that are being carried out? I would like to know. How many corporations are guilty? Perhaps I should ask how many of these corporations are not guilty of doing this very thing that is now being authorized by legislation. I say shame to any government that would do that.
April 30, 1984

It must be wonderful to be a director of one of these Crown corporations. Clause 112(1 )(c) provides that the director of a Crown corporation may issue a document for which he or she had no authority and the document is still valid and genuine. If a director were to issue a document for which he or she had no authority, it is still valid and genuine unless someone can look into that director's brain and determine whether he or she knew that it was wrong to do so. That is not evidence. Again, the Bill authorizes illegal operations.
Even worse, Clause 112(4) gives a Crown corporation blanket permission to do things it has no power to do. That action becomes valid. Clause 112(4) reads:
No action of a Crown corporation, including a transfer of property, is invalid by reason only that the corporation was without the capacity or power to so act.
What is our country coming to? Clause 116 of the Bill is equally ridiculous. This clause does not give the power to appoint or reappoint directors, chairmen or chief executive officers if they do not meet the requirements of any Act. I would think that a chief executive officer would have to meet the requirements of an Act. However, this does not apply to ex officio directors, chairmen or chief executive officers. They can be appointed even if they do not meet the requirements. In other words, top officials do not need to meet the qualifications set out by Parliament. I suppose the only qualification they must meet is to be cronies or members of the Liberal Party.
Clause 125(1) is another dandy clause. It reads:
(1) Every director and every officer of a Crown corporation in exercising his powers and performing his duties shall
(a)	act honestly and . . .
(b)	exercise the care, diligence-
And so on. Is that not splendid? However, Clause 125(2) indicates that a director or officer is not liable for breach of his duties under subsection (1). In other words, he can be dishonest and does not need to be diligent. He need not be accountable for his dishonesty or carelessness as long as he did not know that he was doing wrong.
I believe this Bill is a shameful piece of legislation. It needs to be overhauled completely. Any government that authorizes the things which I have pointed out should not only resign but should be kicked out and kicked out fast.


The Acting Speaker (Mr. Herbert):: There follows a ten-minute period for questions and/or comments. The Hon. Member for Comox-Powell River?


Mr. Sargeant:: Selkirk-Inter lake, Mr. Speaker.


Mr. Benjamin:: Close!


Terence James (Terry) Sargeant: Mr. Speaker, the Hon. Member for Saskatoon West (Mr. Hnatyshyn) made some scandalous statements in my constituency last week, I will have the House know!
I would like to ask the Hon. Member for Bow River (Mr. Taylor) a question. In his speech he sounded as if he was advocating that the Cabinet exercise some kind of control over
Financial Administration Act
the CBC, the CFDC and the National Arts Centre. I wonder if he could tell us if this is indeed the case. Does he believe that those bodies should not enjoy complete independence from Cabinet? If he does believe that, how does that square with the statements in this House of a week and a half ago made by the former Prime Minister of this country, the Right Hon. Member for Yellowhead (Mr. Clark), when he was criticizing the Government, and rightly so, for not giving this new peace research institute complete independence from government?


Gordon Edward Taylor: Mr. Speaker, what I was advocating was that there should be a Minister responsible and that the board of directors should be responsible. It should not be shoved up to the Cabinet where nobody is responsible.
Second, I certainly believe there should be no political interference, but a government that appoints a board should have some authority over that board. They do not need to censor it, but surely if it starts abusing women or children through pornography that is disgraceful and completely contrary to the thinking of the people of the country, then the government should say: "We do not want that type of thing". If the Hon. Member for the NDP thinks that type of thing should go on, he is not reflecting the thinking of the people he represents.


Terence James (Terry) Sargeant: Mr. Speaker, could the Hon. Member give the House examples of when any of those three bodies-in particular, the CBC, CFDC and the National Arts Centre- have abused women and children in this country? Also, could he answer my second question about how that squares with the comments of the Right Hon. Member for Yellowhead about the need for complete independence of another government body?


Gordon Edward Taylor: Mr. Speaker, if the Hon. Member does not have examples of the things that have gone on at CBC and done by the CRTC, I do not know where he has been hiding the last few years. I saw a program a few years ago called "This Hour has Seven Days" that was complete lies. It was carried out in Alberta, and it was complete lies. That type of thing should not be permitted to go on. Independence and political interference are two entirely different things. Certainly any body that is appointed by a government should be responsible to that government. Do not tell me that the Minister does not talk to the chairman of the board of the CBC. I know he does.


Mr. Tobin:: Mr. Speaker, as one who has humbly practised the journalism profession for some time before I came to this new profession, I am a little bit concerned about the tone of the remarks I hear from the Hon. Member for Bow River (Mr. Taylor). I hear him saying: "If they speak the truth as I see the truth, then they are fine. But if they speak lies as I declare something that has been carried on the public networks is lies, then we have got to do something about it".
When I hear a Member of Parliament who supposedly is here to protect what is near and dear to this country, who has just witnessed in recent days the passage of a Charter of

April 30, 1984
Financial Administration Act
Rights and Freedoms, whether he knows it or not-and that is the frightening thing-he is advocating censorship. He is advocating censorship when it suits his own political, philosophical and ideological beliefs. Can the Hon. Member ensure us-because I am concerned-that that is not the position of the Conservative Party of Canada? Also to assign to a board responsibility for what may be carried by a network, to imply that the board sets up programming in the various private networks of this country, including the CBC, is an unfair, dangerous and very loose allegation. Would he please clarify his statements? Mr. Speaker, I am concerned.


Gordon Edward Taylor: Mr. Speaker, I wish the Hon. Member and his Party would be a little more concerned about the people of this country and less about the corporations. When pay-TV was introduced, thousands of people wrote to the Minister, wrote to the Hon. Member and many other people. We are not talking about censorship. We are talking about decency. It is not what I think and it is not what the Hon. Member happens to think. We are not talking about censorship. When thousands of Canadians object to programs being aired because those programs will ruin the lives of their boys and girls, government has a responsibility to reflect that thinking.
Has the Hon. Member ever heard of democracy? No, they do not practise it over there. Democracy is supposed to reflect the thinking of the greatest possible number of people-not tell them what is good for them, but reflect their thinking. This Government is not doing that. Censorship is not part of our policy, but we certainly want to make sure that we reflect the thinking of the people because that is democracy.


Some Hon. Members:: Hear, hear!


Mr. Foster:: Mr. Speaker, I was very interested in the comments of the Hon. Member for Bow River (Mr. Taylor), because it seems to me that the Hon. Member for Rosedale (Mr. Crombie) was castigating the Minister of Communications (Mr. Fox) just a few weeks ago, saying that the Government would have the power to direct the CBC and the National Film Board. In fact, the Bill really exempts those cultural organizations from directives as to the program content. I am not sure whether the Hon. Member for Bow River is arguing against the Hon. Member for Rosedale in his comments, but it seems to me that they should get their mutual acts together.
The other thing I would like to ask the Hon. Member about is that the Bill sets out and gives responsibility to the board of directors on exactly the same basis as it is given to the board of directors for the efficient and effective operation of these Crown corporations and to every other corporation under the Canadian Business Corporations Act. I think that that is spelled out very clearly in the Bill. I would like to know why he thinks that the board of directors has less responsibility to effectively manage and operate the Crown corporations than any other business corporation under that Act.
The other point that the Hon. Member made is that Cabinet does have the power effectively to override a by-law made by
the corporation. He is arguing on one side that they should not have that power and on the other side he is saying that they do have that power. It seems to me that he has got to go down the middle and clarify exactly where he stands on this Bill and those provisions of it.


Gordon Edward Taylor: Mr. Speaker, in connection with the first question, the Hon. Member is talking about political interference. No government should say: "We want the CBC to carry programs just telling our side of the story". When talking about the absence of common decency that will effect the lives of boys and girls in this country, the Government has a responsibility. If Hon. Members cannot see that difference, there is something wrong with them.
Second, no one is advocating censorship and no one is advocating political interference. We are not saying that the board should have the power to broadcast pornography that will be distasteful to 90 per cent of the people of Canada. I do not agree that the board should become the government of this country. It does not in practice either. When it comes to the duties of the board of directors, they are so limited that they cannot do anything. The Cabinet does all of the real work. Why are you paying the board of directors? They should have some authority. They cannot even hire their own chief executive officer. They cannot fire him. They cannot hire their own auditor. Nor can they fire him. If we must have a board of directors, let it be like the private sector where they have some authority; put some teeth into it.


The Acting Speaker (Mr. Herbert):: That is the end of the ten-minute period for questions and comments. To continue debate, the Hon. Member for Western Arctic (Mr. Nickerson).


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, I welcome the opportunity to enter the debate today because it will take my mind off the cheque I have to write in favour of the Minister of National Revenue (Mr. Bussieres) later on today. It is a hell of a birthday present, Mr. Speaker!
Before I go into the details of the Bill, I would like to lay out my credentials as an expert on Crown corporations. Coming from the Northwest Territories one cannot help but be an expert on Crown corporations, as you will see when I read out the list of those we have to deal with. In the transportation field, our railway is CN. If you want to travel by water, Mr. Speaker, you can use the inland river system and the freight services made available by Northern Transportation Limited. 1 must here congratulate the Minister of Transport (Mr. Axworthy) on his initiative in promising to privatize this corporation. We had that in mind when we formed the Government in 1979. It is certainly a logical choice for privatization.
If you want to ship your freight by truck, Mr. Speaker, you have the opportunity of using Grimshaw Trucking, a subsidiary of our famous NTCL. I hope that is privatized at the same time as the parent corporation. If you want to travel by air,
April 30, 1984

Mr. Speaker, for most routes you are obliged to go on Pacific Western Airlines. Although that company does not come under our jurisdiction because it is owned by the Government of Alberta, it is still a Crown corporation. In my opinion that is another candidate for privatization. I do not know what the Government of Alberta is thinking of when it wants to run an airline; it is just as wrong for that provincial Government to run an airline as it is for the federal Government to operate its airline, Air Canada.
If you do not want to ship your freight on the river system but you do want to ship it on the high seas, then you get involved with Canarctic Shipping Limited in which the Government of Canada has a major participation. Therefore, in the transporation field they have us covered, coming and going.
Similarly in the field of communications, another very important part of Canadian life, we have the CBC, with a virtual monopoly on much of the video and TV in the north. Our telephone services are provided by a subsidiary of CN, the famous Northwest Tel. Much of the radio and electronic communication in the north is done by satellite, which satellites are owned by none other than Telesat Canada, another Crown Corporation. Therefore, in those most important aspects of life, the field of transportation and communication, we are veritably at the mercy of Crown Corporations, whether federal or provincial. I might add that it is provincial Crown corporations rather than territorial. The Crown corporations of other provinces are acting extra-territorially, as it were.
In the resource field, the most important aspect of economic life, you have Petro-Canada busily raking in its 25 per cent back-in on all the oil and gas plays in the Beaufort, High Arctic and Mackenzie. You have subsidiaries of Petro-Canada getting involved in the mineral business. We have that famous corporation, 107744 Canada Inc. busily engaged in mineral exploration. I would like to address this particular matter later because in my opinion Petro-Canada is not allowed, by virtue of the Petro-Canada Act, to get into the mineral exploration business. Yet it has set up a subsidiary that purports to have that authority. It is certainly not the authority that Parliament wished to give Petro-Canada.
In the oil and gas business, too, we have Panarctic and Polar Gas and a number of other corporations or consortia in which the Government of Canada in the case of Polar Gas, and also the Government of Ontario through Ontario Energy, have the major say. One other thing I would mention is the Government's participation in mining companies such as Nanisivik, and the Government's 30 per cent interest in the Norman Wells oil field.
In the field of fishing, the Government, through its Crown corporation, the Freshwater Fish Marketing Corporation, has a monopoly on the buying and selling of fish. It holds the lives of those fishermen in its control. As you can see, Mr. Speaker, the north has been used as a proving ground too often for Liberal social theories. Very often this social theorizing has utilized the mechanism of Crown corporations.
Financial Administration Act
After that brief introduction, I will now look at the Bill itself. Basically, as I read the Bill, there is not a great deal of difference between what it proposes to do and the status quo. What it does is rationalize the status quo to a certain extent and try to introduce some uniformity of treatment for various Crown corporations doing things of a similar nature. But it is certainly not revolutionary legislation. It does not address the great, outstanding public concerns which have been debated in the press and in Canada at large for some time. There is very little on the question of accountability. In my opinion what is more important is the prevention of government abusing its powers and authority by using Crown corporations so to do.
Frequently what the federal Government would be unable to do through democratic institutions such as Parliament, it can do through the back door route using Crown corporations. Major policy and financial commitments can be made using this back door route when the Government is unwilling to appear before Parliament to argue its case. One of the most obvious examples of this was the Petro-Canada acquisition of Petrofina. There was no debate; only a privileged few knew what was going on. However, Canadians were eventually presented with a bill for $1.5 billion, which they had to pay in taxes imposed on gasoline. All this was done through the secret back door route using Crown corporations when it should have been done up front in public. It is that route which scares off the present Government.
The Bill will not prevent an abuse we have been witness to on many occasions in this House. The Government will stand up one day in reply to questions and say that, so far as a Crown corporation is concerned, it is an autonomous body, that it has no control over it at all if things go wrong. On the next day it will take quite a different position. The Minister will get up in his place and say that he represents the shareholders of this Crown corporation and is, therefore, quite right in dictating major policy changes for that corporation and telling shareholders and the board of that corporation what they should do.
The gentleman who is now Minister of Finance (Mr. Lalonde) and who was formerly Minister of Energy, Mines and Resources is famous for the use of this tactic, especially when dealing with Petro-Canada. In dealing with the Petro-Canada acquisition of Petrofina he said that he told Petro-Canada to take over Petrofina. He justified that as acting on behalf of the shareholders of Petro-Canada, the public of Canada. On other occasions when things went wrong with the operation of Petro-Canada, he denied that he had ever heard of such an organization.
In looking at the Bill we find that it is virtually a skeletal Bill, as is so much Liberal legislation. Most of what really happens will be dependent upon regulations which we have not yet seen. We have objected to this approach to legislation so many times in the past that it is hardly worth devoting a lot of time to it now. We should make careful note of the power that the Governor in Council would have under Clause 124(4)(b)

April 30, 1984
Financial Administration Act
of this Bill whereby certain corporations can be exempted from the general provisions by regulation. The Government can say of its own accord, without any debate, that it will suspend the operation of Bill C-24 with respect to certain corporations by way of an Order in Council.
1 would like to speak about the question of accountability. Who is accountable? Is it to be the chief executive officer of the Crown corporation? Is it to be the board of directors? Is it to be departmental officials? Is it to be the Minister, or is it to be the Cabinet collectively? If anything, this Bill diffuses accountability so widely that in reality no one is accountable. When everyone is accountable, no one is accountable. That is the route we are taking with this Bill. I believe the Bill puts the emphasis on the Cabinet collectively being responsible for major decisions, such as major appointments of chief executive officers, directors and auditors. Cabinet as a whole approves budgets, corporate plans and by-laws.
However, the Cabinet cannot do that detailed type of work. There is no way that the Minister of Transport, the President of the Treasury Board (Mr. Gray) and their colleagues can sit down in a Cabinet meeting and go over the details of literally hundreds of Crown corporations. It is impossible. The hon. gentlemen are already overworked. They have already ceased to think because they are so overworked. We do not want to give them more detailed work. We should take it away from them and allow them to do what they are paid almost $ 120,000 a year to do; that is to think. That is what they do not do at the present time. When Cabinet as a whole is made responsible for details, the whole system falls apart.
There is no mention made in this Bill of a parliamentary committee which in my opinion ought to be set up to take Crown corporations under its wing. This is not a perfect solution. Everyone who knows anything about parliamentary committees knows they are not perfect bodies, but I believe this type of approach has worked out reasonably well in the provinces. I believe the Province of Saskatchewan was the province which implemented that idea. This would take some of the load off existing parliamentary committees. We should provide a committee on Crown corporations with competent staff so that it can look into the affairs of Crown corporations in reasonable detail.
There is a tendency for parliamentary committees, especially those which have forceful representation from the Opposition, to want to uncover and publish as many facts as possible that are not particularly advantageous to the Government of the day. This can be good or bad when dealing with corporations of a commercial nature. However, it is no worse than the other route whereby things are dealt with solely by Cabinet and Cabinet committees and the natural tendency is to hush things up and slide them under the rug in hopes that no one will notice things that are seriously wrong with Crown corporations.
I would like to say a few words about the board of directors of Crown corporations. I have always been very puzzled as to what is the real function of a board of directors of a Crown corporation. In private companies they represent the shareholders. On behalf of the shareholders they approve or disapprove of major corporate decisions. For example, a prime function would be to hire, fire, oversee and set the remuneration of the chief executive officer and certain other top employees. However, in Crown corporations that is not a function of the board of directors. Under Bill C-24 that is done by the Cabinet rather than the board of directors. In a private corporation the appointment of auditors and changes in by-laws are the responsibility of the board of directors, subject, of course, to approval at annual general meetings. In the case of Crown corporations those things remain a Crown prerogative.
This Bill would impose the penalties of the Canada Business Corporations Act upon the directors of a Crown corporation for failure to fulfil their duties and obligations. However, Sir, the Bill does not give them any authority with which to exercise what would normally be the duties and responsibilities of the board of directors. The only conclusion which I can arrive at, that being born of careful observation of Crown corporations, is that the function of the board is to provide patronage and honorary positions, sometimes with reasonable remuneration attached thereto. Let us not kid ourselves. Most appointments are made on a partisan basis as a reward for past services, or occasionally to placate regional interest.
There are a number of other things I would have liked to discuss; however, time does not permit. In conclusion I would like to say that this Bill is full of half measures. Real reform is conspicuously absent. It is a far cry from Bill C-27 which was introduced in 1979 by the Clark Government. Had that Bill been passed it would have cleared up some of the outstanding problems which we have with Crown corporations.


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


Maurice Brydon Foster: Mr. Speaker, I was interested in the comments of the Hon. Member for Western Arctic (Mr. Nickerson). 1 would like to ask him a couple of questions.
He suggested that the board of directors normally appoints the auditor. If one looks at the Canada Business Corporations Act one will see that the auditor for any company is appointed by the shareholders. In this case it is the Government of Canada.
I think it is also important to note that in this Bill the auditor is appointed by the Government of Canada, who is the shareholder, after consultation with the board of directors. I do not understand how the board of directors, which is not the shareholder, can appoint the auditor. Appointment by the shareholder is a standard business procedure and is in fact a requirement of the CBCA rules.
It is important to note that even Bill C-27, which was introduced by the previous administration, only provided for consultation with the board of directors under Schedule II, the commercial corporations. I believe this legislation provides for that consultation for all Crown corporations and that the
April 30, 1984

auditor would be appointed by the shareholder as is the normal business practice.
I also wanted to question the Hon. Member with respect to his remarks about parliamentary committees having a chance to review the work of Crown corporations. I believe he thinks there should be one parliamentary committee. While the House could do this if it wished, this Bill provides that the corporate plan, the budget and the annual report for each Crown corporation would be referred to the standing committees of the House. He stated that there are many Crown corporations. It seems more practical to me that more than one committee should be working on examining their activities. In any event, the legislation does not prevent the House, in its wisdom, setting up one committee with special responsibility.
My other question concerns the point raised by the Hon. Member when he said that Ministers do not have time to review each by-law that is made by a Crown corporation. I think that is good advice. I simply point out that Bill C-27 of the former administration, I believe, provided that every by-law made by Crown corporations had to be approved by the Government within 15 days. However, according to this Bill the board of directors make the by-laws of the Crown corporations and while they can be overridden by the Government they usually are passed and become effective as they are approved by the board of directors.


Dave Nickerson: Mr. Speaker, the Hon. Member made some interesting and quite valid observations. Perhaps he should have listened more carefully to what I was saying because I was at pains to point out in my initial presentation that the appointment of auditors for public corporations that are not Crown corporations is made by the shareholders of that corporation, normally at an annual general meeting. However, the process of arriving at this is that the board of directors will make the initial decision as to who should be the auditors. It could be on the advice of the operating officers of the corporation but not necessarily. They then take the recommendation to the annual general meeting. I do not know of one instance when the recommendation of the board of directors on the appointment of auditors has been turned down. It would be something that happens very, very seldom. Certainly it should not happen if the board of directors is properly representing the ownership in the company.
What concerns me in the case of Crown corporations is that the Minister may tell a certain Crown corporation that he is not particularly interested in discussing the matter with anyone in the corporation because he wants to appoint a certain friendly firm of accountants as auditors because he owes them a favour for the work they did in the last election. That is what we are concerned about on this side.
With respect to the question dealing with parliamentary committees, I am of two minds. I always dislike establishing new committees because we have boards and committees coming out of our ears. I sometimes wish that we could not have quite as many. Given that, it is always hard to recommend the etablishmment of yet another committee but I think
Financial Administration Act
that when it comes to Crown corporations that operate in the commercial realm, there is a need for a good deal of expertise.
I suggested the formation of a parliamentary committee to which all of these matters could be referred. However, this committee would have available to it the expert staff who are skilled in things financial, accounting and in the operation of corporations of this nature and like non-Crown corporations. They would be able to go through the various reports, budgets and corporate plans that were made available and isolate those things which should be brought to the full attention of Parliament. It would be similar to the Standing Joint Committee on Regulations and Other Statutory Instruments. When the voluminous material comes in, the counsel for the committee goes through it and brings to the attention of members those things which are in need of more public debate. I prefer this to other committees, such as the Transport Committee or the Communications and Culture Committee, getting clogged up with work on Crown corporations.


The Acting Speaker (Mr. Herbert):: Further questions or comments?


Mr. Thomson:: Mr. Speaker, for the record I am sure that my colleague would not object to my making a small correction. It is that PWA was privatized by the Province of Alberta last November.


The Acting Speaker (Mr. Herbert):: Continuing debate.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, I believe no one will dispute the need for this particular Bill. We certainly need legislation which will do something to affect the control, development and future work of Crown corporations within the economy of Canada. There is no doubt that Crown corporations are a continuing part of our economy and the nation as a whole. However, we must review what has happened to Crown corporations. I suggest that a study of this Bill in the House and in the committee might help us better understand what happens to Crown corporations that makes it necessary for us to change the legislation which controls them.
I could easily give at least six examples of how Crown corporations have strayed from their original purpose. They are costing the country money without contributing any money to the economy. I suppose the best and most publicized example we have had lately is Canadair. Looking into Cana-dair gives one an insight into the need for some kind of legislation to control and make Crown corporations accountable.
When Crown corporations are formed, they are formed for some particular reason. They are considered to be vehicles of public policy which will do something for the country. If they are of no value, they will not do something for the country. If they do not fulfil some government policy, they should not be formed. We develop these Crown corporations so they will provide some kind of economic direction, some kind of commercial entry into a particular market, some need, or some

April 30, 1984
Financial Administration Act
kind of development. Possibly they provide a service to Canadians. Many of our Crown corporations are exactly that-service organizations. For example, we have provincial telephone companies. The understanding of Crown corporations as being necessities for the offering of utilities in most of provinces is an accepted reason for having Crown corporations.
But what happens to a number of these Crown corporations? We pass a Bill here, which is one method of forming Crown corporations or has been in the past. Possibly passing a Bill in this House is the best method. In the process of passing a Bill, we look at the reason and the objective for having a Crown corporation. Therefore, the social responsibility of a Crown corporation is put before the House. We develop objectives which are acceptable to the people of Canada by being acceptable to this House. That is the theory.
What happens after having formed a Crown corporation? This Government and the Official Opposition have developed a philosophy that if we have a Crown corporation, it must be at arm's length, that we must not have anything to do with it because if we do we will be affecting the marketplace in some way. It leaves corporations to wander through the economic world and they eventually become entities unto themselves. Every decision made by a Crown corporation is quite often for the benefit of that Crown corporation, possibly for the benefit of the managers or the board of directors or for the benefit of those people most closely concerned with it. The Crown corporations then loses some of its public responsibility.
We in the New Democratic Party believe that Crown corporations are a necessity. If we establish Crown corporations, we should do so with clear mandates of public responsibility and public direction. As these Crown corporations operate, we should keep a hand on them to see they operate within the mandate and the objectives this House has placed upon them. But that has not happened with a number of Crown corporations. As a result this Government and its philosophy has given Crown corporations in Canada a bad name. Walking down the street you quite often hear it said: "What can you expect? It is a Crown corporation".
There is no reason to believe, Mr. Speaker, that a Crown Corporation cannot be run as efficiently and effectively as any private corporation. Besides that, if a Crown corporation is run effectively and efficiently as a public corporation, it will be run in that way for the benefit of Canadians, not for the benefit of the people who own the shares and live in New York, Houston, London, or Berlin. Basically the reason we form Crown corporations is to have them operate for the benefit of Canada.
What we have right now is a conglomeration of Crown corporations that have no relationship to the public mandate which they originally had. Besides that, our Crown corporations have been allowed and have been encouraged to move into the market and pick up competitive organizations. Sometimes they pick up organizations which are not even relevant to the area in which the corporation operated initially. For instance, if you were to look at the back of this Bill, Mr. Speaker, you will see a list of corporations. Actually it is only a small list of the corporations which actually make up part of
Canada's Crown corporations. But a number of them are second, third, and even fourth tier corporations. In other words, there is no relationship between the original corporation that was formed and a secondary corporation that was purchased which owns a third, fourth, or fifth corporation and consequently becomes part of the family of Crown corporations in Canada.
We need to look at this Bill very thoroughly. In the last few months we have become very concerned about the accountability of de Havilland and Canadair. These companies have been before us so often. It has been dramatized that they are important in our every day life. We have decided publicly in this House and outside of this House that there is a need for more accountability of Crown corporations. The Government has proceeded to try and put before us a Bill which is supposed to affect the accountability of Canadian Crown corporations.
As a matter of interest, in various committees of this House we have been studying the effects of the Crown corporation structure. Particularly in recent weeks we have been studying the effects of the structure of Canadair. In various committees we have made a number of recommendations to the Government as to what could be done to improve the responsibility of the Government for Crown corporations, rather than letting them become corporations in their own right.
We had hoped that this Bill would incorporate some of the recommendations that came out of the Finance Committee, the Public Accounts Committee, and various other committees which have had to deal with Crown corporations either directly or indirectly. We hoped that the Government would adopt some of these recommendations and provide the kind of Bill which would make it possible for this Parliament to feel secure that if a Crown corporation, such as Petro-Canada, is started, it would do what it is supposed to do.
We have found out-and Petro-Canada is probably as good an example as any-that it does not matter very much what the mandate was that was given to the Crown corporation initially; it is the mandate carried out by the Crown corporation that is important. We can have all the fine words we want in the definition of the objective or mandate, but if the government in power does not have the will to control the company, it will not be controlled. If it does not put people in charge of those companies who recognize that their responsibility is to Canadians, not to the corporations or to the government, we will not have the kind of accountability which we see as necessary.
A number of criticisms were made of Canadair, and I would like to indicate what can happen to a Crown corporation which does not have the accountability it should have. I will spend just a few minutes dealing with Canadair. What role does a Minister in charge of a corporation play? The new Bill suggests that it will be a Cabinet role and that reporting will be to Cabinet and so on. I agree with the Hon. Member for Western Arctic (Mr. Nickerson) to some extent that if we disperse accountability too widely we will not have accountability. The
April 30, 1984

Standing Committee on Public Accounts suggested that the Minister must be aware of the financial status and the activities of the corporations at all times. Possibly the Act suggests that that is what should happen as well. However, if we look at the Act, we see that there is plenty of room for corporations to go in their own direction, to spend money and to make Canadians responsible for it later. One suggestion was that they must present a corporate plan to the Government of Canada and eventually to committee. However, that is not a solid operation because it occurs only in the case of parent corporations. Subsidiary corporations are not required to make that same kind of public explanation.
Also the Public Accounts Committee suggested that every significant decision made by corporations which would change their direction should be within the knowledge of the Minister. If the Government had a particular direction in which it wanted to go, the Committee also suggested that it was the responsibility of the Minister to present that direction to the board of directors of the corporation. Of course, he also had responsibility to see that there is a strong and effective board of directors and management of the corporation. As well he had responsibility continuously to put before the company the objectives which the Government expected from it.
The Minister has failed to do all these things in the case of Canadair. As the shareholders' representative, he said: "Here is all the money you want. We will pass letters of comfort and give you further financing if you need it, but we trust you and you go in the direction you want". That corporation did not stop its direction until it was $1.4 billion in the hole.
This Bill should be looking much more thoroughly at the responsibility of boards of directors and how they relate to the Minister or to Cabinet. Also it should look at the responsibility of management. For example, the management of Canadair was related too closely to the Minister's office. The board of directors was left out in the cold and it became an ineffective operation before too long. If one has been watching CDIC developments closely, one will have seen the suggestion that government should have a much more effective control of management and be much closer to management, possibly eliminating the need for a board of directors. Perhaps that will happen.
There are a number of recommendations at which we should look closely when considering this Bill. When Crown corporations are used as vehicles for public policy, the direction in which the Government wants them to go should be enunciated clearly and directly at all times. That has not happened with Canadair, Petro-Canada or CNR, which has been a Crown corporation for many years. The need to make companies operate for the benefit of Canadians is important.
Somehow we have developed in Canada government by bureaucracy. For instance, CDIC has four or five deputy ministers on its board of directors. Although we need a connection, we do not need too much control. The Government should monitor Crown corporations to ensure that they do what they are supposed to do. However, we do not need a situation where the bureaucracy advises the Government as
Financial Administration Act
well as the management and passes the word back to the Government that things are going well. In the case of Canadair, that cost us $1.4 billion. It is likely to be the case in other situations as well. There is no need to have ineffective or inefficient management, but this can happen if we allow too much direct intervention of government in situations without a mandate which everyone knows should be there.


The Acting Speaker (Mr. Herbert):: There follows a period of up to ten minutes for questions or comments. The Hon. Member for Calgary South (Mr. Thomson).


John William Thomson: Mr. Speaker, how would the Hon. Member recommend that we hold Crown corporations to their mandates? For example, in the case of Petro-Canada, Parliament approved its mandate. As I recollect it, it was to have a window on the industry and primarily engage itself in frontier exploration. We know that it has strayed from its original mandate. However, what sanction process would the Hon. Member visualize to come to grips with a great number of Crown corporations, not only Petro-Canada? As all Hon. Members know, in all good conscience we approve a particular mandate for a Crown corporation. A number of years go by and it has strayed so far from its mandate that its original purpose is completely lost. What process or what means of sanction would the Hon. Member recommend putting forward?
My second point concerns the appointment of deputy ministers or bureaucrats to boards of directors. The Hon. Member suggests that perhaps a bureaucrat is needed on a board of directors to act as the conduit of information from the corporation to the Government. Surely if the Minister is held accountable for a corporation, it is incumbent upon the board of directors and management to provide the Minister with that information without the bureaucracy being represented on the board. As the Hon. Member pointed out, there is the danger, as in the case of Canadair, that the bureaucrat on the board ends up talking to himself as the bureaucrat representing the Government. As the Hon. Member correctly points out, this is one reason for the problems that have evolved in a number of Crown corporations, including Canadair.


Stanley J. Hovdebo: Mr. Speaker, I agree with the Hon. Member entirely that quite often the mandate of a corporation becomes unrecognizable. The process of keeping the Crown corporation to its mandate is partially dealt with in this Bill, but not the method that will guarantee it. I suppose that is what the Hon. Member is talking about. Public exposure is one factor that could do it. In hindsight, this certainly occurred in the case of Canadair.
The other approach is the necessity for a Crown corporation to get money, if it requires money, from Parliament rather than having the authority to get it as it pleases. That would be restrictive for the corporation but maybe that is what is needed. Maybe we should not develop corporations without the direct knowledge of Parliament.

April 30, 1984
Financial Administration Act
On the second question, I agree entirely. I do not think we need bureaucrats on the board. Although they have been there, I believe it would be possible to have a reporting system work well without the deputy minister or a bureaucrat on the board. If the board has the responsibility to report to the Minister, you could dispense with the conduit or whatever. The structure, mandate and necessity of the corporation to stick to the mandate must be there, as well as the will of the Government and the corporation to fulfil it properly.


Maurice Brydon Foster: Mr. Speaker, the Hon. Member expressed concern that subsidiaries of parent Crown corporations would not be subject to the same corporate plans and budgets being approved by the Government and reported to Parliament. Has the Hon. Member looked at Clause 130, which states:
Each parent Crown corporation shall annually submit a corporate plan to the appropriate Minister for the approval of the Governor in Council on the recommendation of the appropriate Minister and, if required by the regulations, on the recommendation of the Minister of Finance.
Subclause (2) states that the corporate plan of a parent Crown corporation shall encompass all the businesses and activities, including investments of the corporation and its wholly-owned subsidiaries, if any. It goes on to spell out the details of that corporate plan. The Hon. Member may have overlooked that. It is an important point that the corporate plan of parent Crown corporations spell out the details of activities of subsidiaries, and those subsidiaries can act only in areas in which the parent Crown corporation has responsibility for financial or corporate activities. Has the Hon. Member had an opportunity to look at that clause?


Stanley J. Hovdebo: Mr. Speaker, I recognize exactly what the Parliamentary Secretary is talking about. However, if you look through the Bill very carefully, you find it is quite possible for the corporation to buy or sell a subsidiary corporation without referral to Parliament. In the process, you lose control of that operation entirely. When subsidiaries at the second, third or fourth level become a line in the development plan, if the will is there, it might happen. A third tier corporation with a manager who has done his own thing for a long time is not going to make a report which has to go through the second and first corporations to get to the Cabinet. It might be there, but that does not guarantee it will happen. The mandate has been there before, but they have not fulfilled the mandate. Why should we believe because it is here in this form without a requirement for development and expenditure of money that it will happen any more now after the Bill is passed than at present?


The Acting Speaker (Mr. Herbert):: Are there any further questions or comments? If not, we will continue debate.


Hon. Flora MacDonald (Kingston and the Islands):: Mr. Speaker, when the President of the Treasury Board (Mr. Gray) tabled this Bill on March 15, 1984, he put out the usual press release. I refer to Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations and to amend other Acts in consequence thereof. The
press release stated what the objectives of the Bill would be. In very grandiose terms, the Minister stated:
The objective of the new Bill is sound management of these important instruments of national interest.
He went on to say that the legislation is designed to strengthen the control and accountability of Crown corporations. That is a very laudable goal. It certainly is an objective that should have the endorsation of all Members of Parliament. I am sure that the Parliamentary Secretary, or the Minister if he were here, recognized that strengthening the control and accountability of Crown corporations is something that members of the Official Opposition have been advocating for years.
As the Government, we introduced a Bill designed to do that. That was some five years ago. If this present legislation could meet that objective, I am sure it would have the support of all Members of this House. The problem is that it does not meet that objective. It fails lamentably in meeting the objectives spelled out by the President of the Treasury Board. I will spell out some of the shortcomings as I speak. I mention this because we have heard so much about Crown corporations over the years. They have come to assume a massive place in the economic development of this country both in number and in financial importance.
If one were to look at the number of Crown corporations listed by the Government, there are currently some 315 Crown corporations. More are being created each year. There are also 180 mixed and joint venture enterprises in virtually every field of economic and social responsibility. These 315 corporations are of enormous difference and variety. They range all the way from such grand operations as the Canadian Broadcasting Corporation, Canadian National and Petro-Canada to such minute Crown corporations as the Crane Cove Oyster Farm in Nova Scotia and the Mingan Association fishing camp in Quebec. There is obviously a great variety of Crown corporations. However, the true importance of the situation with regard to Crown corporations becomes apparent only when one realizes that the Auditor General, in his 1982 report, calculated that Crown corporations have combined assets of $67 billion and that they employ something like 263,000 people. They employ 25,000 more people than the Public Service of Canada. In his report of 1982, the Auditor General said:
In the majority of Crown corporations audited by the Auditor General, financial management and control is weak and ineffective. Moreover, co-ordination and guidance by central government agencies of financial management and control practices in these Crown corporations are virtually nonexistent.
That statement was contained in the very important document put out by the Auditor General in 1982. I presume that the Minister brought in this piece of legislation to address that very criticism. The need for that is so critical because of the magnitude and variety of Crown corporations, the amount of money involved and the fact that the Auditor General had indicated that they were out of control.
We are speaking of $67 billion worth of taxpayers' assets. There must be accountability for that money and there must
*
April 30, 1984

be ministerial responsibility for the way in which that money is expended. Those things are the very underpinnings of our political system and are the things to which the Bill should be addressing itself. That is why we have urged that the Government come to grips with this issue and that is why we have waited so long for the Government to do so. I must say that having advocated greater control over Crown corporations for so long, it is a great disappointment to see that the proposals in the present Bill do not provide the means by which these goals will be adequately realized.
Because the Bill is so full of shortcomings, my colleagues on this side of the House and the Hon. Member for Calgary South (Mr. Thomson) in particular have articulated our opposition to this particular piece of legislation and pointed out its defects. What is perhaps most disturbing to me is the realization that this is not simply an isolated incident. In fact, the objections that we have made to this particular Bill are almost identical to those which have been made with regard to other pieces of legislation which have recently come before the House and some which are currently before the House. Bill C-24, which deals with Crown corporations, is only the latest example of the Government missing an opportunity.
The Bill attempts to deal with a problem which is crying out for meaningful reform but all it contains are cosmetic changes. We have seen that happen not only with this Bill but with others. The Minister has stated that Bill C-24 is designed to strengthen the control and accountability of Crown corporations. However, he neglected to tell us that the Bill does not affect all Crown corporations. There are currently some 315 Crown corporations listed by the Government but this Bill deals only with 183 of them. Another 108 Crown corporations are not mentioned at all. There are a number of mixed and joint enterprise and their subsidiaries which are not affected by the provisions of this Bill. As well, a number of the provisions in the Bill could exempt many of the affected Crown corporations from the public scrutiny.
There are many important matters which are not touched upon by this Bill. For instance, there are no rules regarding the spawning of completely autonomous subsidiaries; the Parliamentary Secretary just made mention of that. The Bill does not come to grips with the increasing prominence and influence of state-controlled corporations in the economy. In other words, the Bill does not accomplish the Government promises. In his press release, the Minister promised to strengthen the control and accountability of Crown corporations. I wish the Bill did that. However, it does not.
Once again, Mr. Speaker, little bits and pieces of the overall problem are being addressed but there is no comprehensive plan of action to deal with an extremely serious situation. The extent of the severity of that situation was made clear at least five years ago at the time of the report produced by the Lambert Royal Commission. The issue has been debated and raised time and time again since then. However, this is not the only example of the Government neglecting to come to grips in any meaningful way with a serious problem. I can say to the
Financial Administration Act
Minister whom I see in his seat that it has happened to others of his colleagues.
The Minister of National Health and Welfare (Miss Begin) recently brought in a Bill called the Canada Health Act which initially proposed to reform the entire health care system. It did no such thing. It tackled the problems of extra billing and user fees, something which was quite necessary, but it did not come to grips, at a time when it should have, with means to produce a more effective and efficient health care system, nor did it come to grips with the way that health care system should be funded. That particular Bill solved a few problems but, once again, it ignored the larger questions hidden below the surface. I would say that it did so to the detriment of all of us.
The same thing holds true with regard to Bill C-10 which is designed to amend the Divorce Act. That Bill is currently in the process of debate at second reading. The Minister of Justice (Mr. MacGuigan) who is sponsoring that Bill has claimed that the amendments put forward in the Bill would make the process of divorce simpler, more equitable and more just. I would say that the need for that is undeniable. However, the Bill does not deliver what it promises to deliver in the same way that Bill C-24 does not deliver what it promises to deliver. The Bill which deals with the amendments to the Divorce Act could not in some measure make the legal aspects of divorce simpler. However, the effects of that Bill upon women and children could be devastating. The real problem was not dealt with in that particular piece of legislation.
Like the two Bills I have just cited, this Bill, which could have provided the opportunity for meaningful reform in an area that is in great need of attention, simply does not do the job that it set out to do. I would say that a large part of this failure is because of the way the Bill has been drafted. Rather than include strict rules and guidelines which would be incorporated directly into the Bill, the Government has chosen to use regulations as the means of controlling Crown corporations. Yet although it says it will use these regulations, we do not have the regulations. We do not know what is contained in the regulations; they were not tabled with the Bill.
I can only assume, therefore, that if the Bill were passed, all regulations would be made by Cabinet and away from public scrutiny. Once again, the accountability that the Government is speaking of and that we are demanding simply would not be there. It would mean that Cabinet would be the judge, jury and police officer all rolled into one. This would hardly be in keeping with the so-called objective of the Bill, as Cabinet could, I suppose, change the regulations whenever it saw fit.
As I have said, this is not an isolated incident in the way in which government introduces legislation to this House. The control that the Government seeks to have within Cabinet in this Bill is not very dissimilar from the bill dealing with the Canadian Security Intelligence Service, Bill C-9. Once again, in that piece of legislation the Government did not spell out what it meant with precision. For instance, such words as

April 30, 1984
Financial Administration Act
"sabotage" and "espionage" are left undefined, leaving the Solicitor General (Mr. Kaplan) and the Cabinet far-reaching powers. They will have discretion under that Bill to do anything. Will the President of the Treasury Board and the Cabinet not have discretion under this bill to continue to do anything they want with Crown corporations? Even the so-called "watch-dog" of the agency would be powerless, as it would be made up, as we know, of political appointees.
This Bill, like the Canadian Security Intelligence Service Bill, seems to me to show once again the arrogance that this Government takes unto itself by saying: "We can look after you. We will make the final determination, because we will put before you only vague and general wording, and we will retain the far-reaching powers in the scope of what we want to do". Mr. Speaker, that kind of power in the hands of any government or cabinet is dangerous. What we really want to see is that kind of power and that kind of accountability reintroduced into the House of Commons. This Bill does not do that.
I want to come, finally, to the whole question of the lack of respect for parliamentary accountability that has been exhibited by this Government with increasing rapidity ever since its re-election in 1980. This Bill is like others. The Government has continued on its favoured path of excessive administrative discretion by the Cabinet. It ignores the need for extensive ministerial responsibility and financial accountability. Despite claims to the contrary, when one studies the Bill, it does not bring Crown corporations under control. It actually gives more power to the Cabinet. I would say that it is a case of patronage appointments, which are certainly allowable under this piece of legislation. Those patronage appointments and the way that the Government will be able to go about them ignore the rights of Parliament and the public to scrutinize all of the Government's decisions.
In fact, the power of the Cabinet reaches down into the corporate structure itself. I would say that it thereby reduces the role and the importance of the directors of Crown corporations. In this way, it makes it much less possible to trace the responsibility for poor performance and inefficiency. It would, in fact, make it virtually impossible to hold anyone accountable for such failures as Canadair and de Havilland, which, despite record-breaking corporate losses over the last three years, retain virtually the same executive officers. There is no way to get at them. This Bill certainly would not make it any easier to do that.
We have seen, as I have said, a number of pieces of legislation come through the House in the current session of Parliament where the Government has literally failed to deal with the major problem. In some cases we have managed to force the Government to make amendments. That was certainly the case earlier this month with the borrowing authority Bill, Bill C-21. We said that the Government had to be more accountable to Parliament. Eventually we forced some amendments, not enough but some amendments, to that particular Bill. We opposed that Bill because the Government would not be responsible on a ministerial basis or have financial accountability, which are the very underpinnings of our parliamentary system of government.
This particular piece of legislation is really symptomatic of the weakness and ineptitude of the Government, indeed the ongoing weakness and ineptitude, particularly when it comes to the drafting of legislation which is intended to deal with critical issues. There is an over-all pattern emerging. The Government is content to tinker with nuts and bolts but it will not move to correct serious problems. That, above all, is a commentary on a government that has run out of initiative, energy and ideas.
The Government is old and it is stale. This Government, in its dying and decaying state, is very soon going to have to meet not just the Members of Parliament, it is going to have to meet the people of Canada. They will be the judges of the inept legislation that it has been putting forward. I would say that when the voters of Canada get a chance to have their say on pieces of legislation such as this one, and on the Government now sitting in office, they will reject not only Bill C-24, but they will reject its authors as well.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Herbert):: There follows the ten-minute period for questions and comments. The Hon. Parliamentary Secretary to the President of the Treasury Board (Mr. Foster).


Maurice Brydon Foster: I would like to make a couple of comments with respect to the speech made by the Hon. Member for Kingston and the Islands (Miss MacDonald). I think she left a few things not particularly clear. She suggested that there were something like 315 Crown corporations. I think that if she checks a little closer she will find that there are in fact some 67 parent Crown corporations, another 128 subsidiaries and another 112 corporate interests.
She is suggesting that the Bill does not give complete control for mixed investments and for joint ownerships. 1 really would like to know just how she would propose to do that. If PetroCan is investing in a joint venture in oil and gas exploration-surely because it is a joint investment activity, perhaps PetroCan's investment is only a small percentage, 5 per cent, 10 per cent, or 20 per cent-it is not possible to deal with that kind of investment in the same way that it is for a parent Crown corporation or for a wholly-owned subsidiary. Those investments have got to be made by the Crown corporation itself and not be subject to directives by the Government.
She also pointed out the criticism of the Auditor General's report. I would like to point out to her that this Bill was drafted in close consultation with recommendations and suggestions by the Auditor General.
I have a couple of other questions to put to the Hon. Member but perhaps I will call it one o'clock.


The Acting Speaker (Mr. Herbert):: I regret the response of the Hon. Member will have to wait until this afternoon.
April 30, 1984



It being one o'clock, I do now leave the chair until two o'clock this afternoon.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, a study just completed in the eastern half of my riding by the Dewdney-Alouette regional district has found that the unemployment rate there is 47 per cent, or nearly half the work force. This unemployment is largely due to the shutdown of the shake and shingle industry. In spite of millions of tax dollars having been paid to all levels of government by this industry, no assistance or incentives have been put forward for research and development, or market development. We now have a major export industry in trouble simply because no planning or forethought was undertaken. We need economic development and diversification in our local economy to address this crippling unemployment problem. With almost half the work force unemployed, no retail operation, business, or family remains unaffected.
I am not looking to blame anyone; I am looking for solutions and immediate action. Partisan politics must be shoved aside. I call upon the Government to sit down with the Dewdney-Alouette regional district representatives when they visit Ottawa next month, along with myself, to discuss this problem. I suggest, Mr. Speaker, and I believe, we must take this opportunity to initiate a major reforestation and R and D effort to preserve this area's largest industry. Haggling between the provincial and federal Governments over reforestation is hurting our entire country, not to mention the citizens of my riding.

[ Translation]



SHIPBUILDING


Mr. Gaston Gourde (Parliamentary Secretary to Solicitor General of Canada):: 

HOUSING


Mr. Ron Stewart (Simcoe South):: Mr. Speaker, in his February Budget, this fancy brochure of unfulfilled promises I hold in my hand, the Minister of Finance (Mr. Lalonde) said that owning a home is an abiding goal in life for millions of Canadians. He vowed that help was on the way for mortgage rate protection, fixed-rate, long-term mortgages, and more humane penalties for renegotiating existing home loans. More than two months have passed and there is no sign of even draft legislation to ensure that Canadians might realize their aspirations, especially now that interest rates are once again on their way upward.
Parliament will soon rise for summer recess and possibly an election campaign. It could be a year or more before home owners are offered any type of protection. Government advertising presently suggests that home owners add insurance premiums to their mortgage principal, instead of paying it up front, making the cost of the plan more expensive.
We received the speech, the glossy brochures, the budget papers and the broken promises. Before it is too late, Mr. Minister, I ask you on behalf of Canadian home owners and prospective home owners; where is the beef?



CHANGE IN LANDSCAPING-REQUEST THAT SPEAKER CONDUCT INQUIRY

Mr. Claude-Andre Lachance (Rosemont):: Mr. Speaker, this afternoon I want to express my indignation about what hap-

April 30, 1984
pened here on Parliament Hill on April 19, when in the course of their activities, workers trampled flower beds and cut trees. All this may seem rather minor, compared to the country's present problems, but it does show a lack of sensitivity on the part of certain officials. If they gave prizes for this kind of complete lack of judgment, I think I would nominate the person who gave these workers the go-ahead.


Mr. Speaker:: I sincerely hope that in future, you will be given advance notice of such activities-I do not think that is the case now-so that you will be able to safeguard the aesthetic environment of the House of Commons and Parliament Hill.



NATIONAL ENERGY PROGRAM


Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, before I give my statement I would like to note that on Saturday some 115,000 people in Vancouver, by police estimate, took part in the largest demonstration for peace in Canadian history. I think that is most heartening.


Mr. Speaker:: The Hon. Member should make his statement, if that is his statement.


Ian Gardiner Waddell: Mr. Speaker, my statement is tied in with that.
United States Ambassador Robinson gave some very remarkable interviews in radio and print this weekend. He revealed that the Americans had objected to the Canadianiza-tion of our oil industry. There had even been a White House meeting to discuss retaliation against Canada, but the Ambassador recommended against that and said to wait and see if Canada would come around. Sure enough, he said, Canadians have come around and have backed off from Canadianization. He said he hoped that Messrs. Turner, Chretien, and Mul-roney were "sensible" enough to change the back-in provisions which further Canadian control of our industry.
Canadianization has collapsed, Mr. Speaker. It seems to me that there is an alternate policy out there, which is continued Canadianization, continued efforts for an independent Canadian economy, because that is the only way we are going to solve unemployment. We also have to get an independent Canadian foreign policy, a policy for peace. I hope to raise in the House this week the next test of Canadianization which I see coming, that is, the takeover by Socal of Gulf Oil.



ADMINISTRATION OF JUSTICE


Mr. Chris Speyer (Cambridge):: Mr. Speaker, a little over two weeks ago the Ontario Court of Appeal gave a ruling which gave me some solace with respect to the Grange Commission and the inability of the commissioner to name names with respect to that investigation. However, in the last two weeks counsel for the Attorney General of Ontario and counsel for the Metropolitan Toronto police have, in my view, made a mockery of the ruling of the Ontario Court of Appeal. The Court of Appeal said this:
Such an inquiry is a coercive procedure and is quite incompatible with our notion of justice in the investigation of a particular crime and the determination of actual or probable criminal or civil responsibility.
What we now have, Mr. Speaker, is the unseemly and unfair spectable of counsel for the Attorney General asking a nurse to take truth serum. This is such a marked departure from everything we find fair, and everything we expect from a representative of the Attorney General's Department, that I think that particular individual ought to be censured, or removed, as a result of his lack of judgment.
[DOT] (MIO)
The second thing that concerns me, Mr. Speaker, is the attitude which has been taken by counsel for the police. He is persistently the most aggressive attacker with respect to the witnesses. Time after time Mr. Percival is trying to get to the question of whether any of these particular nurses are the murderers. The police officers in this particular investigation have much to answer for, and-


Mr. Speaker:: I regret to interrupt the Hon. Member, but his time has expired.



THE JUDICIARY


Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, there is now a vacancy on the Supreme Court of Canada. In the next few years the Court will be charged with ruling on a flood of human rights cases when Clauses 15 and 28 of the Charter of Rights come into effect. Many of these cases will affect women's equality rights.
To date the Supreme Court's record on women's equality rights has not been good. For example, in 1928 the court declared that women were not persons. This decision was overturned on appeal to the Privy Council in England. Then Canadian women did become persons. In 1972 the Supreme Court upheld Section 12(l)(b) of the Indian Act which allows native men to marry non natives and retain treaty rights, but women who do the same lost theirs, as do all their children. In another famous 1972 judgment, Irene Murdoch, who had contributed for 25 years to the development of an Alberta
April 30, 1984

ranch, was told by the Supreme Court that her contribution was "only what was expected of any wife".
Three years ago when the Charter of Rights was enacted to enshrine equality in our laws for all claimants, women had to fight relentlessly to ensure that the wording of the Charter would in fact grant them equal rights. The battle to ensure equality for women in interpreting the laws of the land now falls to the Supreme Court under the Charter.
As evidence of its intention to achieve a more just balance on the Supreme Court, and a broader perspective on issues affecting over half of the population, I and my colleagues in the New Democratic Party urge the Government to appoint a woman to fill the present vacancy.


Mr. Speaker:: Unfortunately the Hon. Member's time has expired.



HORTICULTURE


Mr. Joe Reid (St. Catharines):: Mr. Speaker, where and when does making progress mean going backward? Ask the Ontario grape growers. Increased investment and careful plantings in Niagara brought record tonnages of the highest quality wine grapes. The wineries responded by earning recognition around the world. Domestic wineries supplied 52 per cent of the domestic market. Jobs were provided by some
16,000	persons.
However, what are the prospects for this year and the next for what should be a Canadian growth industry? Whoever heard of stimulating an industry by taxing it at 120 per cent, continuing an oppressive, inequitable tax on the domestic product? Our share of the market has dropped 20 per cent. Wineries have already had lay-offs. Employment is expected to be down 15 per cent from last year.
The grape and wine industry was able to establish the dumping of subsidized wine products in this country. Wines are being landed in North America at prices between 40 per cent and 80 per cent below prices in the countries of their origin. Yet it was determined that our industry was not hurting enough. How badly does our industry have to hurt before the Government will face up to the challenge of Italy and France dumping their surplus products in this country? No sales mean no harvest, no jobs, and, ultimately, no fruitlands.
How does the Government expect to preserve and protect-


Mr. Speaker:: The Hon. Member's time has, unfortunately, expired.
Oral Questions



WESTERN GRAIN STABILIZATION ACT


Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, proposed amendments to the Western Grain Stabilization Act announced recently by the Minister of Agriculture fall far short of what is required. For more than a year the Progressive Conservative Party has sought changes to the Act in order to trigger a pay-out to farmers, yet it has taken until now for the Minister to propose something.
In the first place, his proposals will not result in a pay-out until October, even though farmers need the money now. Second, individual producers are not sure how much they will receive. It is clear, however, that most of them will not get back anywhere near as much as they have paid into the fund over the past years. Certainly the pay-out will provide some relief. However, with the average farm debt load in excess of $200,000, it is not about to solve the economic problems of western grain farmers, especially in light of recent cuts in initial grain prices.
If the Minister were truly committed to helping western producers, he would have persuaded his colleagues to authorize an interim payment. As one elevator agent told me this past weekend, Manitoba farmers are bitterly disappointed by this proposal for a meagre and belated pay-out, and it certainly has done nothing to alter their opinion about a Government which has ignored them for far too long.



ORAL QUESTION PERIOD


Flora Isabel MacDonald: Mr. Speaker, my question is for the Minister of National Revenue in his capacity of replying in the House to questions about the Canada Development Investment Corporation. The day after Parliament recessed for the Easter break we learned that substantial bonuses totalling $155,000 had been paid to 12 senior executives of the Crown corporation, de Havilland. Just a few days before that, it had been announced that hundreds of workers were going to be laid off by de Havilland, and that others would be asked to take cutbacks of one kind or another.
The Canadian people want to know how the Government can justify these bonuses being paid to already highly paid senior executives of de Havilland, when rank and file workers are being threatened with cutbacks and lay-offs.


Hon. Pierre Bussieres (Minister of National Revenue):: Mr. Speaker, I would like to inform the Hon. Member and the
3226

April 30, 1984
Oral Questions
Members of this House that the bonuses were paid for the year ending May 1983. Furthermore, the bonuses are paid to ensure that this aircraft manufacturing company will be viable and sound. If we want sound management and expert research teams that will safeguard the jobs of company workers, as this Government has always insisted on doing, we must be able to offer competitive salaries to the managers of such companies.


Flora Isabel MacDonald: Mr. Speaker, that is absolutely incredible. Any other corporation that had the kind of record that de Havilland had last year would have fired its senior executives rather than paying them bonuses.


Some Hon. Members:: Hear, hear!


GOVERNMENT POLICY
Flora Isabel MacDonald: Last year de Havilland lost $236 million which the Canadian people had to pay. I would like to ask the Minister about government policy. Can he give us an explanation for government policies which look after the need to pay bonuses to these senior executives while, at the same time, there are 1.5 million Canadians without jobs, and thousands of students coming out of our colleges and universities hoping to get work during the summer months but who simply cannot find work? What is the explanation for paying off one group and ignoring the other? Where is the Government's sense of priority?
[ Translation]


Pierre Bussières: Mr. Speaker, the Hon. Member seems to forget that the Government has always been consistent regarding the billions of dollars it invests to provide jobs for those who have trouble finding work and especially for the young people graduating from our universities. When the Hon. Member's party was in power, the first thing it did was to cut back on this kind of investment and on programs to provide jobs for young people.
Furthermore, her party has always criticized the Government's support for companies like Canadair and de Havilland. We, as a government, have always supported the development of these corporations, and we are now safeguarding the jobs in those corporations while the Opposition is criticizing the Government's action.


Flora Isabel MacDonald: Mr. Speaker, that explanation does not go down with the 1.5 million people who are unemployed. I must tell you it does not even go down with the Minister's colleague, the Minister of State for Economic and Regional Development.


CANADA DEVELOPMENT INVESTMENT CORPORATION-PAYMENT OF EXECUTIVE BONUSES
Flora Isabel MacDonald: Mr. Speaker, bonuses were also paid to senior executives of the Canada Development Investment Corporation, the company which controls de Havilland. When the spokesman for CDIC was asked about this he said that the payment of these cash gifts-


Mr. Speaker:: Order, please. Reading of material on a second supplementary should be very restricted.


Flora Isabel MacDonald: Thank you, Mr. Speaker.
The spokesman for that company said that it was due to the fact that these senior executives had had an extremely hard year. If that is the rationale why these people received a special bonus, would the Minister please tell me what special bonuses can be expected for the unemployed, for the single, elderly poor, and for the one parent families headed by mothers? What can he tell us about the rationale for these people who also have gone through an extremely hard year?


Pierre Bussières: Mr. Speaker, it seems to me the Hon. Member is a bit mixed up.
If she wants to argue about this Government's social programs, she should go right ahead and criticize the millions of dollars the last Budget provided for single pensioners. Let her criticize the hundreds of millions of dollars that have been added to many of this Government's social programs and job creation programs.
Now, if the Hon. Member also wishes to criticize this Government's policies aimed at revamping the financial situation of corporations such as de Havilland and Canadair, let her do so, by all means. However, our objective is to ensure that these companies are commercially viable and to maintain an aviation industry in Canada that is technologically superior.


Mr. Speaker:: The Hon. Member for Cambridge.


Chris Speyer: Mr. Speaker, my question was intended for the Minister of Justice who is expected but is not in his seat. I wonder if I may stand down.


FINANCE
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of Finance. We noticed that many of his colleagues were in western Canada on the weekend making promises about what they would do for the West. I notice that the Minister of Energy, Mines and Resources has
April 30, 1984

not recovered from the shock in terms of the reception he got. In his absence I wish to ask the Minister of Finance a question concerning something that he could do now, that would provide benefits for the West.
He is aware that grain prices are down by some 6 per cent this year. He is aware that bankruptcies in agriculture all across Canada, particularly in the West, are up by more than 100 per cent over last year. Considering that the federal taxes of all types that remain on a litre of diesel fuel or gasoline amount to about 6 per cent, will the Minister do something concrete for western farmers and, I say, for fishermen who have the same problem, by removing this tax?


Mr. Hnatyshyn:: Welcome aboard! Better late than never.


Mr. Shields:: Where have you been, Ed?


Hon. Marc Lalonde (Minister of Finance):: Mr. Speaker, I am glad that the Conservatives are getting away from their shock. I would like to tell the Hon. Member that the federal Government has been contributing to the well-being of western farmers to the tune of hundreds of millions of dollars. As a matter of fact, through the Crow rate benefits and other benefits, the benefit granted to western farmers is getting close to a billion dollars in the course of the last year.
In terms of our commitment to the welfare of western farmers, I do not think that the Government has any lesson to take from any of the Opposition Parties. There is no doubt in my mind in that regard.
My friend knows that the gasoline used by farmers is eligible for reimbursement of some federal taxes and the farmers are resorting to this opportunity that has been made available to them over the years. I am sure that farmers will continue to use that particular opportunity.


John Edward Broadbent: The farmers will be more than a little amused-in fact they will not be amused at all-to hear the Minister say that the Government has been aiding them in the West, particularly when their brankruptices are up more than 150 per cent year over last year. They can do without that kind of assistance from the federal Government.


REQUEST FOR ASSISTANCE FOR FARMERS
John Edward Broadbent: Mr. Speaker, considering that the removal of all remaining taxes at the federal level on gasoline and fuel would amount to approximately $190 million, in terms of its impact on the federal treasury, which is almost exactly the same amount the Minister gave to the oil companies in his most recent Budget, will he show some justice and fairness, apply a consistent standard here, and give the farmers the kind of assistance that they need today?


Marc Lalonde: Mr. Speaker, I would be very surprised if the western farmers would listen to the advice of the Hon. Member and do without the assistance they receive from the federal Government, whether it is in the
form of Crow rate benefits, in the form of crop insurance, or in
Oral Questions
the form of the very many programs that exist in terms of price stabilization and others which come under the Minister of Agriculture in particular.
As I have said, the support that is being provided by the Government of Canada runs into the hundreds of millions of dollars every year. I would invite my friend to look at those figures and seriously consider whether he is recommending that we do away with those programs.


John Edward Broadbent: The Minister is a little more confused than usual. We are not talking about doing away with the minimum number of programs the Government has to aid farmers. We are talking about providing some justice that is comparable to what the Government gives to the big companies, particularly the oil companies. We want some justice for the farmers.


GOVERNMENT'S POSITION
John Edward Broadbent: Farmers face increased costs, their prices are going down, and their bankruptcies are increasing at an alarming rate. Since the removal of this tax by the federal Government would provide the typical grain farmer with about $2,500 in assistance that he badly needs this year, will the Government, just for once, deliver on its commitment to western Canada and remove this tax?


Marc Lalonde: Mr. Speaker, I have nothing to add to the previous answers that I have given. The Hon. Member does not seem to have understood them. I invite him to read them and maybe he will realize that we have covered the point extensively in the previous answers.


CANADIAN UNITY INFORMATION OFFICE
Chris Speyer: Mr. Speaker, my question is directed to the Minister of Justice. He will know that at a cost of approximately $158,000 the most flagrantly partisan political document was issued. His Department is responsible for the document.
In this document the Minister of Labour asserts that he is responsible for eight South Shore Quebec ridings. There are pictures of all Liberal MPs and, with respect to one Member, the Member for Chateauguay, it is asserted by a constituent that he has acted really like a father watching over his family to see that it lacks nothing.
The head of the CUIO has stated that the Minister of Justice approved this document although it was instigated by the Minister of Labour. That occurred in February. Will the Minister of Justice tell us what conversation went on with the Minister of Labour, whether he approves of this document, and how he can so dishonour the high office he has by using it for such a mean spirited partisan purpose?

April 30, 1984
Oral Questions


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker-


Some Hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I am not sure what the "Oh, ohs" are about, but I thought I would inform the House that during the leadership race period I have asked the Minister of Justice to be the administrative head of that office, the CUIO, but that he would be relieved of his duties for policy questions in order that they would not be applied unfairly to other leadership candidates, and that I would take questions on the subject. That is in answer to the "ohs" I heard from the other side.


Chris Speyer: I respect the fact that the Prime Minister is taking questions with respect to this, but this question pertains to facts that occurred prior to the leadership candidacy commencing.


POSITION OF MINISTER OF JUSTICE
Chris Speyer: Mr. Speaker, I ask the Minister of Justice whether he had any conversations with the Minister of Labour with respect to this document, whether he in fact approved it, and whether he will do anything with respect to future documents which were approved during the currency of his administration?


Pierre Elliott Trudeau: Mr. Speaker, with respect to future documents, I think my previous answer would cover those. They will not be under the policy direction of the Minister of Justice. As far as the past ones are concerned, I will look into this particular document and perhaps inform the House with my answer.


GOVERNMENT ADVERTISING
Walter Leland Rutherford (Lee) Clark: Mr. Speaker, my question is directed to the Minister of Agriculture. He will know that there was a three-quarter page advertisement placed recently in the Thunder Bay Times-News which featured the Minister himself in a pictorial manner. This advertisement just happened to appear prior to the coming to the area of one of his leadership opponents, and prior to local Liberals choosing delegates for the upcoming Liberal leadership convention. How can the Minister of Agriculture justify the use of taxpayers' money for what would appear to be blatant political purposes?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, if the Hon. Member reads that paper very often, he would find that is a request we receive from it from time to time. Agriculture is an area the paper wants to develop. The picture
of Whelan being there probably could be coincidental, because I think I am in 14 papers today.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Mr. Nowlan:: How many funny papers?


Maurice Brydon Foster: Wait until tomorrow.


Walter Leland Rutherford (Lee) Clark: Mr. Speaker, unlike Members on the other side of the House, we on this side, and Canadian taxpayers in general, do not appreciate the misuse of public money in order to assist any leadership candidate at this point in time.


Some Hon. Members:: Hear, hear!


TIMING OF ADVERTISEMENTS
Walter Leland Rutherford (Lee) Clark: Mr. Speaker, I have another question for the Minister of Agriculture. Perhaps he has already answered it. Does he in fact intend, as he travels about the country, that there should be such co-incidental newspaper advertisements placed in appropriate newspapers at opportune times?


Ramon John Hnatyshyn: John Munro could not get away with it.


Eugene Whelan: Mr. Speaker, the Hon. Member knows that agriculture-he has heard questions about agriculture and I am sure he has listened to them already in the House today-is a very important industry and that there is a lot of concern about it. And even if I am in another contest, it does not mean that I should neglect agriculture. I am here today because the House of Commons is here. I meet the French Minister of Agriculture at four o'clock today to discuss world problems. There might even be a picture in the paper tomorrow. I shall also meet him at a press conference tomorrow. The Hon. Member himself can come and get involved in that if he wants.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


THE ADMINISTRATION
Mr. Tom McMillan (Hillsborough):: Mr. Speaker, my question is a related one, directed to the Minister of Justice. In CTV's Question Period program on April 15 the Minister of Justice stated that his leadership campaign manager, Jim MacDonald, had ceased to be on the public payroll two weeks earlier as a contract employee in the Minister's office.
April 30, 1984

Given that the Minister's office has now released information that the same Jim MacDonald's company has a speechwriting contract with the Minister's Department until June 30, two weeks after the Liberal leadership convention, how can the Minister reconcile this conflicting information from himself and his office?


Hon. Mark MacGuigan (Minister of Justice):: Mr. Speaker, the Hon. Member raises an entirely different question. There are several pre-existing contracts involving a company in which Mr. MacDonald, I believe, has an interest but in which he is not involved in the execution thereof, that are being continued. One of them has been completed. The contract for the Second People's Law Conference was completed before I spoke. But the other one, the speech-writing contract, continues. My hon. friend will appreciate that I have to continue to make departmental addresses during this period. In fact I am making one tomorrow and the Hon. Member for Saskatoon West will be pleased to hear it will be in his region.


Ramon John Hnatyshyn: You bombed out yesterday. You can try
again.


Some Hon. Members:: Oh, oh!


MINISTERIAL STAFF GUIDELINES
Thomas Michael McMillan: Mr. Speaker, my supplementary question is for the same Minister. On April 11 the Prime Minister told the House that his guidelines dictate that there should be no active involvement of any ministerial staff in a leadership candidate's campaign in any important way "without that staff either resigning or asking for a leave of absence."
In light of those guidelines, how can the Minister justify the fact that his campaign manager, Jim MacDonald, is continuing to draw a salary from the Government and from the Minister's own office, albeit through a company, while serving as the Minister's campaign manager in the leadership contest? How can he justify that fact? On the one hand there are the Prime Minister's guidelines, which are clear enough, and on the other hand, and equally clear, is the fact that the Minister's campaign manager is deriving his income in large part from the Government of Canada and the taxpayers of Canada.


Gordon Edward Taylor: It is the Liberal way.


Mark R. MacGuigan: Mr. Speaker, if my hon. friend would wait until he hears the answer to draft his supplementary question, he would not have bothered asking that question. I have already answered it.
Oral Questions


WESTERN GRAIN STABILIZATION ACT
Stanley J. Hovdebo: Mr. Speaker, the Liberals have been promising the world to the Prairies this last week. In the case of the Western Grain Stabilization payments, their promises come a little short.
My question is for the Minister of Agriculture. The Minister of Agriculture and the Minister responsible for the Wheat Board unveiled some changes to the grain stabilization Bill which the New Democrats had suggested in the 1974-75 session and which the Leader of the Opposition got around to a couple of weeks ago. Of major importance in these changes is the timing of the pay-outs. Will the Minister explain to the House and to the western Canadian grain producer why the pay-outs cannot be made immediately after the passing of the enabling legislation in Parliament?


Eugene Whelan: Mr. Speaker, the pay-outs could possibly be made, if you want to get in trouble with the Auditor General. I said at the press conference in Winnipeg that I would not mind getting in trouble with the Auditor General for that kind of a cause. You could estimate what the pay-out would be. The idea and the reason we were putting it forward would be so that farmers could use this issue as collateral at the bank, to have an advance, or to use it with their suppliers for seed or fertilizer. A maximum pay-out, Mr. Speaker, to anyone would be close to $6,000, but the average pay-out is about $2,500 to $3,000 and the Hon. Member knows that, I am sure.


Leslie Gordon Benjamin: Do it now.


Eugene Whelan: This is not going to go as far as a lot of people would like. They would like a lot bigger payment for a lot of farmers who are in dire need this spring perhaps because of bad crops, and that kind of thing.
Yesterday evening I was in Hudson Bay, Saskatchewan. I would say there were about 400 people there, and they were good-natured people, too. They listened. They asked questions. I could not have had a more responsive-


Mr. Speaker:: The Minister appears to be straying from the original question. The Hon. Member for Prince Albert has a supplementary question?


PAYMENT OF INTEREST
Stanley J. Hovdebo: Mr. Speaker, we have noted that the whole $300 million will come from the pockets of the farmer and not from the Government. However, the Minister stated that the change is due to the possibility of the payments being illegal. Could he not use the present timing that is in the Bill and establish the trigerring mechanism retroactively so that the money is paid out December 31, 1983, rather than at the end of this crop year? Alternatively, would the Government pay interest on the money it is withholding from the farmers for this period of time?

April 30, 1984
Oral Questions


Eugene Whelan: Mr. Speaker, the Hon. Member knows full well that the Government pays interest on all of the money. When the Hon. Member talks about $300 million being all farmers' money, I am sure he realizes that the farmers have paid into this program on a voluntary basis. About 75 per cent of the farmers in western Canada belong to this program. For every dollar they put in, we put in $2, but we pay interest on it and we also administer the program. The interest last year and the total payment in that program came to $131 million. When the Hon. Member says it is all producers' money, he is wrong. It is not all producers' money. Producers have got back every cent which they put into that program since its very beginning. They have actually received more than the maximum amount they could put into it.


Leslie Gordon Benjamin: That is not true.


Eugene Whelan: It is a good program. The legislation, when it is brought to the House, will be readjusted. If there is a way, Mr. Speaker, that we can make a payment before the legislation even receives its final passage in this House, I am told- and our legal people are checking with the powers that be today-that there is a possibility that, after it receives second reading and the intent is clear, that possibly you then would not get in trouble with the Auditor General.


REQUEST FOR INTERIM PAYMENT
Mr. Bill McKnight (Kindersley-Lloydminster):: Mr. Speaker, my question is for the Minister of Agriculture. It concerns the proposed changes in the grain stabilization Act. The Minister is aware that the Agricultural Stabilization Board reviewing the 1982-83 crop payment on corn calculated that on a calendar year, and there was no payment. The Board then recalculated it on a crop year and made a payment. The Minister is also aware that in 1978 and in 1979 interim payments were made from the Western Grain Stabilization Fund. More than 50 per cent of the expected payment was paid out in the spring. Would the Minister bring forward immediate legislation for an interim payment based upon half the $300 million? If he does so, we will pass it immediately upon it coming into the House.


Eugene Whelan: Mr. Speaker, the Hon. Member talks about the payment that was made for corn in the Provinces of Manitoba, Ontario, and Quebec. It involved producers mainly in those three provinces. I am fully aware of how that program worked and why the readjustments were made. It was not as simple as the Hon. Member tries to make out. It was because farmers delivered a lot more corn and, in some increases, some held it. Because there was no real record system in that organization, no real organization which keep tabs on what they do, you have to go back to the elevators and all the grain handlers and get the evidence again from them as best as you can. A lot of it is on supposition until you
have the Final year-end receipts from the producers. That is why this was done.
I hope the legislation will be presented to the House this week or early next week. The Hon. Member will have the opportunity to see it then, and hopefully that provision will be there.


REQUEST FOR PAYMENT TO ASSIST WITH SPRING PLANTING
William Hunter (Bill) McKnight: Mr. Speaker, again my question is directed to the Minister of Agriculture. He neglected to answer my previous question concerning the precedent set in 1978 and in 1979, with interim payments being made from the Western Grain Stabilization Fund in the spring rather than mid or late summer. I will quote a brief sentence in the 1979 annual report of the Western Grain Stabilization Fund which reads: "A two-instalment procedure was used to enable at least a partial payment to be distributed in the spring period rather than waiting until mid or late summer".
Would the Minister bring forward legislation to make an interim payment on the expected pay-out, which he has already announced, of some $300 million? Would he make that interim payment now when farmers need the money to go through with their spring planting?


Eugene Whelan: Mr. Speaker, the Hon. Member knows full well that under the present Act you use the calendar year to make that kind of payment. If you follow the present Act, there is no triggering mechanism which will allow you to make a pay-out. This is why we are changing the formula, so that a pay-out can be made, mainly because more grain was shipped and sold than was ever expected, even surpassing the most optimistic viewpoint of all the advisers and everyone else concerned with the Western Grain Stabilization Act. They never dreamed that 37 million tonnes would be sold in one year. This is why the amount of volume, the amount of money and of returns are so high. They do not allow a triggering mechanism for a payment. We will be going on a different basis so that we can make a payment if it is possible. I am as concerned as the Hon. Member that a payment be made as soon as possible.


INCOME TAX
Mr. Jack Murta (Lisgar):: Mr. Speaker, my question is directed to the Minister of National Revenue. He will know that over the weekend the Province of Manitoba experienced a very severe ice and snow storm which disrupted hydro, closed roads, and generally made life very miserable for its residents. Many people who had intended to file their income tax returns of course could not, and accountants were unable to complete returns. Has the Minister or his Department given consider-
April 30, 1984

ation to extending the deadline from midnight tonight until some time in the future to allow the backlog of tax returns to be filed in a proper manner?


Pierre Bussières: Mr. Speaker, I reviewed that situation with my officials this morning. I am now in a position to announce to the House that the tax filing deadline for all taxpayers in Manitoba and Saskatchewan will be extended from midnight tonight to next Monday, May 7.


Some Hon. Members:: Hear, hear!


INDIAN AFFAIRS
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is directed to the Prime Minister. On International Women's Day the Prime Minister's office announced with great fanfare that the Government would repeal Section 12(l)(b) of the Indian Act, which would remove discrimination against women. There are only 36 days left before the summer break. Did the Prime Minister mean what he promised and, if so, when will he table the legislation to remove this discrimination against women?


Pierre Elliott Trudeau: Mr. Speaker, the answer to the first question is yes. As to timing, we are attempting to have that legislation moved forward in parallel with the legislation on self-government for natives. We would hope that the House would be prepared to deal with both expeditiously.


POSITION OF MINISTER
Margaret Anne Mitchell: Mr. Speaker, my supplementary question is directed to the Minister responsible for the status of women. Recently the Minister threatened to resign if no action was taken on this matter of repealing Section 12(1 )(b) of the Indian Act. I understand from the Prime Minister's statement that the self-government legislation and the equality legislation might be tabled at the same time. Does she agree with that, or does she support the view of Canadian women that the discrimination in that Act must be removed first?


Hon. Judy Erola (Minister of Consumer and Corporate Affairs):: Yes, Mr. Speaker. Unfortunately my resignation is not imminent, I must say to the Hon. Member, because the Prime Minister, as he indicated a moment ago, has said that the legislation will go. The words I used at the time the press picked up the remark were that the legislation had to go and, if it did not go, I would go. Unfortunately they could not plan on my going because the legislation was being amended.
Yes, I feel that that must come first. When the Prime Minister indicated that the legislation was coming forward as
Oral Questions
a package, he did not say that it would be one neat package but that they would be coming in together. Certainly the amendments to the Indian Act will be separate.


AGRICULTURE
Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, my question is supplementary to that of the Hon. Member for Kindersly-Lloydminster, and it is directed to the Minister of Agriculture. He has explained the reasons why there was no payment in the west. Could be tell us why the application for price stabilization for the potato industry of Atlantic Canada has been on his desk for about a year and a half and there has been no reply from him? Will he be giving that reply before he makes any major leadership campaign in New Brunswick?


Eugene Whelan: Mr. Speaker, the Hon. Member knows full well that there is an eastern district that you make payments on, and a western district. If you follow the policy, there is no payment on the 90 per cent of the five-year average in western Canada. If you use eastern Canada, there is no payment either. I am sure the Hon. Member knows that it is so small that it would not be worth the effort to go and pay it. If you are just going to use it for New Brunswick, there would be a payment. If you were going to use it for Prince Edward Island, Quebec or Ontario, there would be no payment. The other provinces are saying that they do not want any payment.


Fred Alward McCain: Mr. Speaker, I was under the impression when I participated in the passing of the legislation for price stabilization that there was a point of income which triggered a payment for price stabilization for virtually any commodity in Canada. Certainly the application which relates to the 1982-83 crop was on the basis of sales which would trigger it by a formula that could be applied to the Act as far as New Brunswick is concerned.


MINISTER'S DISCRETIONARY POWER
Fred Alward McCain: Mr. Speaker; why has the Minister not used his discretionary power which gives him the opportunity to relate cost of production and return on crop as well as the individual five-year average for that crop? If he uses that return on the particular crop, it is triggered very generously.


Eugene Whelan: Mr. Speaker, I do not know from where the Hon. Member is getting his figures, or what formula he is using. The formula for Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island is such that it does not trigger a payment using the five-year average and a 90 per cent payout. If I were going to go to 95 per cent or 100 per cent, there probably would be.

April 30, 1984
Oral Questions NATIONAL REVENUE


DEPARTMENT'S SEIZURE OF OLD CROW CO-OP'S BANK ACCOUNT
Hon. Erik Nielsen (Yukon):: Mr. Speaker, my question is directed to the Minister of National Revenue. It concerns an emergency situation which his Department has brought about the native village of Old Crow. The co-operative store there is owned by and operated by native people. It serves the people of that community as the only commercial outlet. His Department has now seized the entire bank account of that store, preventing the native people from getting much needed gasoline, flown in at $6.50 per gallon, so that they can go trapping on their traditional trapping lines. When did the Minister commence a policy of shutting down native industry in such a fashion in this country?


Pierre Bussières: Mr. Speaker, I wish the Hon. Member would give me a chance to look at the facts. I may remind him that often, even very severe measures are justified by the circumstances.
However, if the Hon. Member will allow me to look into the particular facts relating to this matter, I would then be able to judge the situation in the light of those facts.


REQUEST THAT MINISTER CONSULT COLLEAGUE
Erik Nielsen: Mr. Speaker, I would be delighted if the Minister would look into it. I would have directed this question to the Minister of Indian Affairs and Northern Development, but he is not present today, having priorities elsewhere. When he does look into it, will he consult with his colleague, the Minister of Indian Affairs and Northern Development, about this very urgent situation of the closure of the outlet which provides the necessaries of life, the only one in Old Crow, by his Department, so that these people can go trapping? Perhaps the Minister of Indian Affairs and Northern Development might be persuaded that the $10,000 he received from native groups would be better spent in keeping outlets such as this open.


Pierre Bussières: Mr. Speaker, I can assure the Hon. Member that whenever there has been a situation involving my Department and native groups in this country, I have always consulted, and indeed shall continue to consult, with my colleague, the Minister of Indian Affairs and Northern Development.


NATIONAL DEFENCE
Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of National Defence. He has had the board of inquiry report on the Pacific Petrel for some four months. I finally got my copy the other day. The board of officers reported that there is financial chaos in the Pacific region and that the Minister would do well to look at the other regions to see if they are any better off. They tracked down $1,092,000 of taxpayer's money spent on this project, all of which seems to have been misappropriated. What has the Minister done about it in these past four months?


Hon.   J.-J. Blais@Minister of National Defence: Mr. Speaker, the hon. gentleman is quite right in terms of the analysis that was done in the circumstances. There was a very thorough review. Indeed, as a result of the fact that the navy cadet budget on the West Coast was lacking sufficient control, there was a review of all the various budgets of like kinds throughout the whole system. The evaluation was carried forward. It was ascertained that there were no other instances except the specific case of the Pacific Petrel.


OFFICERS' RESPONSIBILITY
Allan Bruce McKinnon: Mr. Speaker, I have a supplementary question for the same Minister. The board of officers supplied the names of five officers of flag rank and three of general rank whom they found were particularly responsible because they had direct executive authority and all knew in greater or lesser detail of the scope of this project. Some or all of these eight officers must be in direct contravention of Section 24(4) of the Financial Administration Act. What does the Minister intend to do about that?


Hon.   J.-J. Blais@Minister of National Defence: Mr. Speaker, as the hon. gentleman knows, a finding having been completed through a board of inquiry, the board of inquiry submits to commanding officers individuals who are identified within the board of inquiry. The board of inquiry so being staffed by the commanding officers, they make a determination of what measures ought to be taken, disciplinary or administrative, relating to any individuals so identified. The Hon. Member knows that in one instance there was a court martial. In others, internal administrative measures were taken.


WESTERN GRAIN STABILIZATION ACT
Mr. Gordon Towers (Red Deer):: Mr. Speaker, my question is directed to the Minister of Finance, and deals with his exchange with the Leader of the New Democratic Party. It is
April 30, 1984

obvious that neither one of them knows what they are talking about. The Minister of Finance is taking credit for the pay-out from the stabilization program. Is he aware that the Government is not even returning the money which the farmers put into that?


Marc Lalonde: Mr. Speaker, is the Hon. Member not aware that the federal Government is contributing more than the farmers to that plan?


CONTRIBUTIONS TO FUND
Thomas Gordon Towers: Mr. Speaker, is the Minister of Finance aware that the proposed pay-out does not return the payment that the farmers have made to the program, aside from any government input?


Marc Lalonde: Mr. Speaker, I would like my hon. friend to consider the Government's contribution to that program. The program has been set up to be self-balancing in the medium and long term. This is what the program will do.


HOUSING
Mr. Bill Kempling (Burlington):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. The Minister has stated that she will bring in some form of mortgage insurance in the near future. When the Throne Speech was presented, the Minister is reported to have said that mortgage insurance is a long way down the road. Will the Minister reconcile the two statements "the near future" and "a long way down the road"? Can she be more specific and give us a date, a week, or a month, when she will bring forward mortgage insurance legislation?


Judith A. Erola: Mr. Speaker, I believe the Hon. Member is somewhat confused, because mortgage insurance does not fall within my domain. I think he is referring to changes to the Canada Interest Act, changes which I have promised and which I hope to bring into the House with other new housing proposals.


William James Kempling: Mortgage insurance and amendments to the Interest Act are all in the same release from the Minister's office. She should read it.


POSITION OF MINISTER OF CONSUMER AND CORPORATE AFFAIRS
William James Kempling: Mr. Speaker, the Minister said she would resign if certain legislation was not passed. Will she make the same commitment on mortgage insurance and
Oral Questions
amendments to the interest Act, and will she resign if it is not passed by June 30, 1984?


Judith A. Erola: Mr. Speaker, one commitment at a time.


CONTROL OF OIL INDUSTRY-FUTURE OF GULF CANADA
Ian Gardiner Waddell: Mr. Speaker, I have a question for the Minister of Finance. The Minister must be aware that Standard Oil of California, Socal, proposes to take over Gulf Oil of Pittsburgh, the biggest American corporate takeover in their history. That, of course, will affect Gulf Oil of Canada. What is the present level of Canadian control of the oil industry percentagewise? Does the Government of Canada intend to take action so that Gulf Canada can become Canadianized and in fact become a Canadian controlled company?


Marc Lalonde: Mr. Speaker, since 1980 Canadian ownership in the oil and gas industry has increased from 28 per cent to 38 per cent, an increase of 10 per cent, practically one-third compared to what it was before. On the second question, this is a matter that will go before the Foreign Ivestment Review Agency. The minister responsible for the Agency will report the recommendation made by FIRA to Cabinet.


Mr. Speaker:: One single supplement. The Hon. Member for Vancouver-Kingsway.


POSITIONS ADVANCED BY LIBERAL LEADERSHIP CAMPAIGN CANDIDATES
Ian Gardiner Waddell: Mr. Speaker, I will direct my supplementary question to the Prime Minister. That means that 62 per cent of the oil industry is still foreign-owned. Is the Prime Minister disappointed that all the leadership candidates appear to be abandoning the concept of Canadianization of the oil industry in Canada? Is it the present position of the Prime Minister and his Government to abandon that path?


Mr. Speaker:: Order. I wonder whether the question is supplementary to the first.


INDUSTRY
Gerry St. Germain: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. The Minister recognizes that unemployment is

April 30, 1984
Privilege-Mr. Allmand
the biggest issue facing Canadians. In the Dewdney-Alouette regional district, which is the eastern half of my riding, 47 per cent of the people are unemployed. In committee the Deputy Minister stated, and the Minister has stated this, that fasttracking programs for troubled areas would be instituted. Will the Minister consider instituting one of these programs for that area due to the problems in the lumber industry at this time?


Hon. John Roberts (Minister of Employment and Immigration):: Yes, Mr. Speaker, I will look into the way in which the LEAD Program might apply to that area. I will be happy to take the representations of the Hon. Member seriously and do just that.


REFORESTATION PROGRAM
Gerry St. Germain: Mr. Speaker, will the Minister consult with the Minister of the Environment with regard to a possible reforestation program to employ some of the unemployed in the lumber industry? I am sure that these people will be able to find good, long-term employment in the reforestation industry. Would the Minister look at this aspect of it as well?


John (Moody) Roberts: Mr. Speaker, I have just consulted with the Minister of the Environment who assures me that he would be happy to discuss the matter with me further.


PETITION
Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Laurier (Mr. Berger) on Wednesday, April 18, 1984, meets the requirements of the Standing Orders as to form.


PRIVILEGE
Mr. Speaker:: The Hon. Member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand) has served notice to the Chair of a matter of privilege which he wishes to raise. Before giving the floor to the Hon. Member, the Chair would like to make the observation that the matter affecting the unionization of House of Commons employees is sub judice. However, the Hon. Member is raising the matter as a question of privilege and I invite him to restrict his remarks to the question of how his privileges are affected.
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, in accordance with the notice which I gave you earlier today, I wish to raise a question of privilege which affects my rights as a Member of the House and which I believe affects the rights of all other Members of the House. The employees of this House, whether they are messengers, security officers, interpreters, cleaners and all others, work for all of the Members of the House and not only for the Cabinet or for the Board of Internal Economy.
When the Canada Labour Relations Board decided on April 9 that employees of the House of Commons had the right to collective bargaining under the Canada Labour Code, it was a decision that affected all Members of the House of Commons and one that was welcomed by many. It was therefore with some surprise and dismay, I might say, that I learned on April 19 after the House had adjourned for Easter that the Board of Internal Economy had decided to appeal the April 9 decision of the Labour Relations Board to the Federal Court.
I take strong exception to the fact that a small group of Members of this House, being the Board of Internal Economy-


Mr. Speaker:: Order. The Hon. Member was invited to address his remarks to how his privileges are affected.


Mr. Allmand:: Thank you, Mr. Speaker. I was about to do that and I had already begun to do that. I was saying that a small group of Members of the House have decided to appeal that decision to the Federal Court without consulting all of the other Members of the House and without referring the matter to them for decision. This is a matter which touches upon the work of every Member in a personal and intimate way. It is not a matter which should have been dealt with by the board without wide consultation. It is a matter for the whole House and not just for the Government to decide. Since these people work for me, I feel very strongly that I should at least have been consulted in some way or another.
I submit very strongly, Mr. Speaker, that I have a prima facie case of privilege. I would ask that this matter be referred to the Standing Committee on privileges and Elections where it can be examined and decided upon. I understand that this matter was discussed at a much earlier date by a committee-


Mr. Speaker:: Order. The Chair has allowed the Hon. Member to make his argument. The matter is sub judice. In the opinion of the Chair, the Chair cannot make a prima facie ruling of privilege which would have the effect of giving priority to this motion at this time. Therefore, the Chair will have to so rule.


William Warren Allmand: I rise on a point of order, Mr. Speaker. If these matters cannot be raised in the House of Commons-


Mr. Speaker:: The Hon. Member cannot reflect upon a decision of the Chair. That is what he is seeking to do as a point of order. The Chair has given consideration to the matter. The Hon. Member gave notice and the Chair, under the circumstances, has no option but to decide that it cannot
April 30, 1984

rule that there is a prima facie question of privilege in a matter which is now sub judice and before the courts.


William Warren Allmand: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: Order.



ROUTINE PROCEEDINGS


Ian Gardiner Waddell: Mr. Speaker, I would like to present a petition that humbly sheweth that many Vancouver-Kingsway residents, including Eileen Sayman, Lloyd Fox and Harold and Phyllis Boalch, find telephone solicitation, expecially computer-generated telephone solicitation, to be an invasion of their privacy and that these computer-generated calls have lately become more frequent in my constituency. Therefore, the petitioners request that the CRTC intervene to put a stop to these calls and to look into the matter of computer-generated telephone soliciting in general.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today, and it is a big day for the Hon. Member for York-Sunbury (Mr. Howie): Nos. 12, 91, 381, 393, 570, 572 and 589.


Mr. McKenzie: 1.	Was there correspondence between a R.W.B. Bailey, Chairman, SGPE Sub-Group and a Mr. R. Gagnon, Assistant Deputy Minister, Department of Consumer and Corporate Affairs, dated February 17 and February 19, 1982 respectively on the subject of a hiring team to recruit Francophone employees?
2.	Are the contents of the correspondence factually correct and, if not (a) in which parts do they vary (b) what are the correct facts?
3.	Does the Department of Consumer and Corporate Affairs have such a hiring team in the SGPE Sub-Group and, if so, in which other sub-groups, bureaus, directorates or divisions does the Department have similar hiring teams?
4.	In the Department of (a) Agriculture (b) Communications (c) Consumer and Corporate Affairs (d) Employment and Immigration (e) Energy, Mines and Resources (0 the Environment (g) External Affairs (h) Finance (i) Fisheries and Oceans (j) Indian Affairs and Northern Development (k) Industry, Trade and Commerce (1) Justice (m) Labour (n) National Defence (o) National Health and Welfare (p) Public Works (q) Regional Economic Expansion (r)
Order Paper Questions
National Revenue (s) Secretary of State (t) the Solicitor General (u) Supply and Services (v) Veterans Affairs (w) the Treasury Board (x) the Ministry of State for Science and Technology (y) the Canada Post Corporation, are there hiring teams for ensuring a certain level of Francophone recruitment and, if so (i) how many in each department (ii) how many members are on each hiring team (iii) what is the total cost of maintaining the hiring team?
5.	For each of the departments and the corporation listed in part 4, what schools and universities are the hiring teams visiting in each province and territory?
6.	For each of the departments and the corporation listed in part 4, what other employee pools are being approached by the hiring teams and in which provinces and territories is each employee pool being approached?


Maurice Brydon Foster: As the Hon. Member knows, this question raises matters that had already been under review by the Federal Court of Appeal for several months on the date of the question, and continue to be sub judice. The Government is not, therefore, in a position to deal further with the question.


Mr. Howie: How many persons engaged in public relations, media relations or publicity are employed by the Treasury Board?


Maurice Brydon Foster: Six.


Mr. Howie: Does the Department of Justice provide a legal service to Canada Post Corporation and, if so, what (a) is the estimated cost of this service for the current Fiscal year (b) was the expenditure for such service during the last fiscal year?


Mark R. MacGuigan: The Department of Justice provides legal services to Canada Post Corporation on a cost recoverable basis, (a) $815,000; (b) $607,000.


Mr. Howie: Did the Canadian Human Rights Commission require any additional staff to implement the recently proclaimed amendments to the Canadian Human Rights Act and, if so, what (a) were these requirements (b) was the estimated cost of them?


Mark R. MacGuigan: In so far as
the Canadian Human Rights Commission is concerned: (a) Thirty person-years for the period 1983/84 to 1986/87. (b) The total estimated cost is $1,548,000, of which approximately $950,000 is for the salaries spread over a four-year period.


Mr. Howie: What are the (a) names (b) positions of the persons who occupy positions on the Executive and Board of Directors of International Development Research Centre and, in each case, what amount was he/she paid in respect of that position in the fiscal year ended March 31, 1983?

April 30, 1984
Order Paper Questions


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: The International Development Research Centre informs the Government that: Pursuant to the International Development Research Centre Act (Section 3), the Board of Governors is composed of the Chairman of the Board, the President of the Centre and not more than 19 other governors. Subsection 11(1) of the Act further stipulates that the Executive Committee of the Board shall consist of the Chairman, the President of the Centre and at least five other governors, annually elected from the Board in such a manner that a majority are Canadian citizens.
Members of the IDRC Board of Governors for fiscal year 1982/83 are as listed below. An asterisk indicates those governors who comprised the Executive Committee of the Board for the period in question.
Mr. Allison A. Ayida
*	Mr. Pierre Bauchet Dr. Gelia T. Castillo
*	Mr. Norman T. Currie
*	Dr. Frank A. DeMarco
*	Dr. Liliane Filion-Laporte
*	Mr. Ivan L. Head
*	Dr. Carl-Goran Heden Mr. Felipe Herrera
*	Mr. Francis Keppel Dr. David J. Lawless Dr. J. Maurice LeClair Mr. Hadj Mokhtar Louhibi
*	The Hon. Donald S. Macdonald (Chairman of the Board)
Mr. Marcel Masse
Dr. Yelavarthy Nayudamma
*	The Hon. Rex M. Nettleford Mr. Gordon F. Osbaldeston Dr. Rolland P. Poirier
*	Dr. John B. Stewart
*	Sir Geoffrey M. Wilson
Chairman, Fininvest Associates (Nigeria) Ltd., Lagos, Nigeria.
University of Paris,
Paris, France.
Professor of Rural Sociology, University of the Phillippines at Los Banos, Philippines.
President, Corporate Food Limited,
Toronto, Ontario.
Professor of Chemical Engineering, University of Windsor, Windsor, Ontario.
Director of Family Medicine, St. Mary's Hospital, Montreal, Quebec.
President, International Development Research Centre, Ottawa, Ontario.
UNEP/UNESCO/CRO, Karolinska Institute, Stockholm, Sweden.
Retired (former President, Interamerican Development Bank) Santiago, Chile.
Harvard University Graduate School of Education, Cambridge, Mass., U.S.A.
Professor, University of Manitoba,
Winnipeg, Manitoba.
President, Canadian National,
Montreal, Quebec.
President and Director General, Algerian Interprofessional Grains Office, Algiers, Algeria.
McCarthy & McCarthy Toronto, Ontario.
President, Canadian International Development Agency, Ottawa, Ontario.
Scientist, Central Leather Research Institute, Madras, India.
Professor, University of the West Indies, Kingston, Jamaica.
Under-Secretary of State for External Affairs, Ottawa, Ontario (resigned Feb. 1/83).
Retired, (former Chairman, Canada Farm Credit Corporation), Ste-Foy, Quebec.
Professor, St. Francis Xavier University, Antigonish, Nova Scotia.
Chairman, OXFAM,
Oxford, England.
Order in Council No. P.C. 1981-3023 of October 29, 1981 provides that remuneration of $250 per day be paid to the Chairman of the Board and $200 per day be paid to other governors when attending to Centre business, with the exception of the President who receives a salary set by Order in Council (see below).
As well as the amounts stated above, governors are provided with reasonable travel and living expenses to attend Board meetings or in the course of other Board functions.
The President of the Centre is appointed by Order in Council which also fixes his remuneration within the DM1 salary range $75,360-$88,610 (effective April 1, 1982).


Mr. Howie: What are the (a) names (b) positions of the persons who occupy positions on the Executive and Board of Directors of the Export Development Corporation and, in each case, what amount was he/she paid in respect of that position in the Fiscal year ended March 31, 1983?


Allan Joseph MacEachen: Export Development Corporation states that the names and positions of the persons who occupy positions on the Executive and Board of Directors of the Export Development Corporation are as follows:
(i) Executive
Name S. Cloutier J. J. R. Ares B. A. Culham
D.	A. Keill B. R. King M. D. Bakker J. R. Hegan
E.	G. Law D. B. Modin J. R. Paquette G. Ross
(ii) Board of Directors Name
Mr. J. A. Armstrong
Mr. P. Berthiaume
Mr. G. K. Bouey
Mr. J. L. Bragg
Mrs. M. Y. Catley-Carlson
Mr. S. Cloutier
Mr. M. A. Cohen Mr. V. E. Daughney Mr. P. Goyette
Mrs. S. Ostry
Mr. M. D. MacDonald
Mr. W. J. Riva Mr. W. R. Teschke
Position
Chairman of the Board and President
Senior Vice President, Export Financing Group
Senior Vice President, Finance
Senior Vice President, Export Insurance Group
Senior Vice President, Corporate Affairs
Vice President, Corporate Affairs
Vice President, Marketing and Communications
Vice President, Human Resources and Administration
Vice President and Treasurer
Vice President, Export Financing
Vice President, Legal Services and Secretary
Position
Retired Chairman of the Board & Chief Executive Officer, Imperial Oil Limited
President, Le Groupe BST Inc. and la Societe d'Automation TECNEX (1983) Ltee
Governor of the Bank of Canada President, Oxford Frozen Foods Ltd.
President, Canadian International Development Agency
Chairman of the Board and President of Export Development Corporation
Deputy Minister of Finance President, First City Trust
President and Chief Operating Officer, Montreal City and District Savings Bank
Deputy Minister, International Trade & Coordinator, International Economic Relations, Department of External Affairs
Partner, Parlee, Irving, Henning, Mustard & Rodney, Barristers & Solicitors
Vice Chairman of the Board, Westar Mining Ltd.
Deputy Minister, Department of Regional Industrial Expansion
April 30, 1984

Compensation. See the Report on Governor in Council Appointees tabled in the House of Commons on November 17, 1983. Compensation for all other positions not listed in the report is regarded as proprietary information to the Export Development Corporation.


Mr. Howie: What are the (a) names (b) positions of the persons who occupy positions on the Executive and Board of Directors of the International Boundary Commission and, in each case, what amount was he/she paid in respect of that position in the fiscal year ended March 31, 1983?


Allan Joseph MacEachen: (a) Dr. Alec C. McEwen.
(b) Canadian	Commissioner-$45,780-$53,255	per
annum, (engineering and land survey-survey 6).


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


John Leslie Evans: Mr. Speaker, if questions Nos. 392 and 495 could be made orders for returns, these returns would be tabled immediately.


Mr. Speaker:: Is it the pleasure of the House that questions Nos. 392 and 495 be deemed to have been made orders for returns?


Some Hon. Members:: Agreed.


Mr. Howie: Did the Ministry of Justice make any initiatives to assess the needs of victims of crime and promote co-ordinated, comprehensive and widespread services for them and, if so, what were the initiatives?
Return tabled.


Mr. Howie: What is a complete list of all private and public sector superannuation plans under federal jurisdiction?
Return tabled.
Financial Administration Act


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


Mr. Speaker:: Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Ouellet (for Mr. Gray) that Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations and to amend other Acts in consequence thereof, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Mr. Speaker:: There were seven minutes remaining in the period following the speech made by the Hon. Member for Kingston and the Islands (Miss MacDonald). Are there Hon. Members rising to ask questions or make comments? I would recognize the Hon. Member for Algoma (Mr. Foster). The Hon. Member for Kingston and the Islands is not in her place but the Hon. Member does have the right to ask questions or make comments.


Maurice Brydon Foster: Mr. Speaker, perhaps I might mention for the record a couple of the points to which the Hon. Member referred in her speech. I would like to put the questions to her; perhaps she will be able to respond to them at a later time.


Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order. I should mention that the Hon. Member for Kingston and the Islands (Miss MacDonald) is temporarily out of the Chamber. She is meeting with a large group of constituents who have come to meet with her and she expects to return to the House very shortly. Possibly by the time the Hon. Member for Algoma (Mr. Foster) has finished his intervention, the Hon. Member for Kingston and the Islands will be back and would be prepared to give an appropriate and adequate answer to his inquiries.


The Acting Speaker (Mr. Herbert):: The period allowed for questions and answers can only be extended by unanimous consent. I suggest that the Hon. Member might wait until an appropriate time to make such a proposal. In the meantime, the Hon. Member for Algoma could continue with his comments or questions if he so wishes.


John William Thomson: Mr. Speaker, I rise on a point of order. Perhaps the Parliamentary Secretary would care to put his

April 30, 1984
Financial Administration Act
questions on the record. The Hon. Member for Kingston and the Islands (Miss MacDonald) has indicated to me that if she is not back in the House in time, she would be more than happy to respond in writing to the questions of the Parliamentary Secretary.


Maurice Brydon Foster: Mr. Speaker, I have two points to make. The Hon. Member for Kingston and the Islands mentioned that much would be done by regulations and she pointed out that the regulations had not been tabled with the Bill. Of course, that is true because regulations are seldom tabled. However, at second reading debate the Minister indicated that at the committee stage the regulations drawn to the Bill would be made available to committee members. I think that is a good procedure to follow so that the members will know exactly what the regulations provide for. Certainly the Government is prepared to co-operate in every way in that regard.
The Hon. Member for Kingston and the Islands also suggested that the Bill really does not provide proper parliamentary accountability. I would like to point out that this Bill does provide for a great deal of parliamentary accountability. The Minister has to table the corporate plan, including the details of not only the parent Crown corporation but subsidiary Crown corporations. There is a great deal of information there. The operating budgets of the parent corporation and the subsidiaries have to be tabled in the House and stand automatically referred to the appropriate standing committee. Directives that are made by a Minister of the Government to Crown corporations would have to be tabled in the House. I would be interested in knowing in the debate that is going on whether the Hon. Member for Kingston and the Islands favours the position of the Hon. Member for Rosedale (Mr. Crombie), who thinks that those directives which relate to the CBC and the Canadian Film Development Corporation should not relate to programming, whereas other Members on the opposite side seem to suggest that there should be a wide discretion to make directives relating to programing.
The annual report of the Crown corporation and subsidiaries would have to be tabled in the House. Of course the auditor's report, and a new feature, the annual summary of all Crown corporations, would be tabled by the President of the Treasury Board (Mr. Gray). These, of course, would be referred to the appropriate standing committee.
The Hon. Member also mentioned amendments. It is important to note that the Government is fully prepared at committee stage to consider constructive and positive amendments from Hon. Members opposite. We are, of course, anxious to move to committee stage so that we can hear those suggestions.


Flora Isabel MacDonald: Mr. Speaker, I regret that I was not here when the Hon. Member began his comments. He will understand that I had to meet with a school class from Kingston and the Islands for a few minutes just outside the Chamber. I therefore missed a bit of what he had to say.
Very briefly, the first question that he asked this morning was about the numbers that I used when I was quoting figures with regard to Crown corporations. I want to tell him that those figures came from a document entitled Crown Corporations and other Canadian Government Corporate Interests, issued by Treasury Board in December, 1982. He used some other figures, and I know they are broken down into categories, but the information that I took from that document totals the figure of 315, which I used. It may be that that figure has changed since December, 1982.
With regard to the question of accountability, which is really the major one that we are discussing here, I would say in response to the Hon. Member that nothing shows me the need for greater accountability, accountability that I think is still lacking in this Bill, than the questions that I raised during Question Period and the responses from the Minister who was speaking on behalf of the granddaddy of all Crown corporations-the Canadian Development Investment Corporation. He not only did not seem to comprehend what the questions were all about, but he rather shrugged them off.
We were talking about bonuses paid to executive officers of Crown corporations at a time when they are cutting back on their staff and causing lay-offs. This seems to me just incredible from the point of view of any kind of accountability. How does the Parliament of Canada get legitimate responses for a situation like that? This Bill still would not provide for the Members of this House to get legitimate answers to a situation such as that. That is the difficulty that I have with this Bill.
Earlier the Hon. Member asked whether or not I would agree with joint ventures and how I would bring those under a Bill, since I had indicated that I would favour moving into more control than is exerted now where both public and private funds were involved. I would say to him that as long as public funds-the taxpayers' money, not the money of the Government, not the money of the Members of Parliament and not the money of this Chamber, but the taxpayers' money-are involved, I feel there must be a much stricter means of holding companies, Crown corporations and individuals who work for them, accountable, much more than appears to be the case in this Bill.


The Acting Speaker (Mr. Herbert):: That is the end of the ten-minute period for questions and comments. For continuing debate, the Hon. Parliamentary Secretary to the President of the Queen's Privy Council for Canada (Mr. Evans).


John Leslie Evans: Mr. Speaker, with regard to the question which was just raised about the number of Crown corporations, I think there is still a bit of confusion. The Hon. Parliamentary Secretary's question related to whether or not the Hon. Member for Kingston and the Islands (Miss MacDonald) believed that the same rules for accountability as outlined in Bill C-24 should apply in cases of partial interest or joint venture where the Crown does not own a 100 per cent interest in a corporation. For example, in the case where Petro-Canada-I think the Hon. Member used that exam-
April 30, 1984

pie-goes into a joint venture for offshore exploration with two or three other oil companies, would the Hon. Member believe that Bill C-24 should allow the Government to issue directives to a jointly held public and private corporation? We do not think it should be the case. That is why they are not included. It is not a matter of having these corporations outside of the control of government; it is because they are, by definition, joint ventures between the private sector and the public sector. If the Government were able to give directives in the way that Bill C-24 would imply, and if that kind of reporting was required publicly, it is highly unlikely that such joint ventures could ever be put together. That is part of the problem. I do not think the Hon. Member for Kingston and the Islands dealt with that particular issue.
There are 315 Crown corporations and corporations in which there is a public interest. The total number of Crown corporations is 67, and there are 128 wholly-owned subsidiaries. The legislation will apply to them. The additional corporations in which the Government has an interest are not covered in that way by the legislation for the reasons that I have just described because they are joint ventures with private sector companies. They are investments by the Government, partial investments in ventures and so on.
The second thing I would like to say is that this particular legislation has come about as a result of a great deal of consultation between the President of the Treasury Board (Mr. Gray), the Minister's officials, and the Auditor General who really is the instigator of the move to put together legislation of this kind. The Hon. Member for Kingston and the Islands read part of the Auditor General's 1982 report into the record where he said that there needs to be greater accountability; there needs to be greater control. The Auditor General, it could be said-and I think over the years it can be said quite honestly-is the instigator of this legislation. I think that was what was behind the legislation that was introduced by the previous Conservative Government under the title of Bill C-27.
And so, Mr. Speaker, the Auditor General is the driving force and the revelations that he made are the motivating force behind this legislation. Therefore it would seem to me that an assessment of the legislation by the Auditor General would have some validity and carry some weight in this House of Commons. It happens, Mr. Speaker, that the Auditor General has been in consultation with the President of the Treasury Board and he has examined the draft legislation.


John William Thomson: Not until after the Bill was tabled.


John Leslie Evans: He knew what was to be put forward in the legislation. The Auditor General has written to the Prime Minister (Mr. Trudeau), I believe, indicating that he strongly supports the legislation. I think the wording was that it should find the support of the broad base of Members of Parliament from all sides of the House. That is not a direct quote but I remember seeing such correspondence. The Auditor General was saying that this legislation should receive the support of Members of the House of Commons because it deals in very
Financial Administration Act
large part with the issues raised by the Auditor General himself. He, after all, as I just mentioned, was largely responsible for bringing to light the need for this legislation in the first place.
There is also a need to make comparisons, Mr. Speaker. I know the previous Conservative Government brought forward legislation in the form of Bill C-27 in the 1979 Parliament which was meant to deal with this issue. We have brought forward Bill C-24 which stands before us today, and I think it is important that we compare these two Bills to see if, as the Opposition seems to be saying, this particular legislation before us today has serious shortcomings of a kind not found in Bill C-27. In other words, to find out if Bill C-27 was greatly superior to that which we find before us today.
Nowhere is the contrast more revealing, Mr. Speaker, than in the degree of clarity and the standards of financial management and auditing required of Crown corporations by Bill C-24. The requirements are far more clear than they were in the previous legislation in that corporate books must at the very least be kept in accordance with standard accounting practices required in the private sector. Examination of management performance is specifically designed to ensure that management practices are adequate and fulfil the purposes of the corporation.
Our Bill privides, moreover, that information provided by Crown corporations must be shown according to major business activities. This is terribly important because Members of the House of Commons have said in the past that while we get an annual report, we do not know how it relates to individual areas of corporate business in general or the business being done by wholly-owned subsidiaries. This legislation requires that Crown corporations report on a line of business basis so that Members of Parliament and the public generally can have a clear idea of what it is the Crown corporation is doing and in what way these activities lead to the accomplishment of the goals and objectives originally set out for the corporation.
All Hon. Members will also recognize that in this new Bill the audit regime has been strengthened substantially. It will ensure the Crown corporation will be acutely aware of its responsibilities to directors, the Government and Parliament for the continuous monitoring of corporate operations.
The Opposition, in particular, Mr. Speaker, cannot fail to agree that we have responded more fully to the concerns of the Auditor General with respect to his mandate and the general auditing position than would have been the case in the previous legislation. Under this legislation he will have the right to become the auditor of Crown corporations. It is necessary to remind the House that Bill C-27 made no provision to confer a statutory right on the Auditor General to audit any Crown corporation. It merely included a provision which made him eligible to be appointed to audit those corporations where he did not already have that right conferred upon him in the incorporating legislation.
With respect to the borrowings of Crown corporations, the provisions of the legislation now before us are demonstrably superior to those found in the Conservative Bill C-27. Under

April 30, 1984
Financial Administration Act
their approach it was possible for the Minister of Finance to give a Crown corporation access to the consolidated revenue fund regardless of whether its legislation provided for such access. That simply ignored the view that unless there is explicit provision for such access, the corporation should not be allowed to use public funds in that way.
Furthermore, in our Bill there are clear measures for protecting the Crown's assets, including restrictions on the right of Crown corporations to retain proceeds from the sale of real or personal property. The proposed legislation carefully circumscribes the right of Crown corporations to pledge government property as security for loans. Also, Crown corporations are required to inform the appropriate Minister, indeed the Treasury Board, of new developments which could affect performance or funding of those Crown corporations.
Let me turn now to two features of the new Bill on which there has been considerable debate here today and previously; that is, the power of direction and the appointment of the chief executive officer of a Crown corporation. Bill C-24 recognizes in a forthright and realistic way the critical role the chief executive officer must play in the sound management of a Crown corporation. Surely in any situation where there is a single shareholder, as in the wholly-owned Crown corporations and wholly-owned subsidiaries, the shareholder, that is to say the people of Canada represented by their elected government, should be responsible for the appointment not only of the directors of the corporation but also of the chief executive officer. It seems to me any other arrangement is patently inconsistent with any reasonable concept of improved control and accountability. It is reasonable to assume that in making such appointments the Government would consult the appropriate board of directors. However, there is no question in this Bill on where the appointment responsibility resides. Under Bill C-27 the chief executive officer would have been appointed by the board of directors. However, it is important to note that even under the Conservative administration's approach, such appointments would have been subject to government approval. Therefore, while there has been some to do about who appoints the chief executive officer, under the Conservative Government the appointment would have been by the Government as is in Bill C-24, because the Government-


John William Thomson: Come, on, John, that is a misrepresentation.


John Leslie Evans: The board of directors would appoint the chief executive officer subject to the approval of the Government. That was part of Bill C-27 and Hon. Members opposite simply cannot deny it.
The provisions in the new Bill as to where the responsibility lies are much clearer. When you come right down to it, it seems to me that responsibility has to lie with the sole shareholder, being the people, who are represented in Parliament by the government of the day. The government is in turn held accountable by other Members of Parliament. Where else would the responsibility lie for appointing the directors, the people who are going to run corporations which operate on assets belonging to the people of Canada? It seems to me
obvious that Bill C-24 puts the matter in proper perspective and deals with this issue in the manner in which it should be dealt with.
As for the directive power, Mr. Speaker, the proposals of this Government and of the Opposition in Bill C-27 are for a broad universally applicable power of direction. What is sought here, of course, and there is no dispute on this objective, I believe, is the power of direction by which the Government can unambiguously direct its Crown corporations to pursue public policy or other objectives the Government has determined to be in the public interest. After all, if that were not the case, there would be no rationale whatsoever to Crown corporations. In Bill C-27 these directives would have been made available to Parliament. The same provision is found in Bill C-24. Bill C-27 said that the directives have to be made available to Parliament, and Bill C-24 says the same thing. In Bill C-27 the cultural corporations would have been excluded from directives touching on issues of artistic integrity. The same general principle is incorporated in Bill C-24.
The difference arises on this directive power in that while we believe the measures we have suggested for preventing improper use of directives are just as effective as those which were included in Bill C-27, they do not provide opportunities to the Crown corporations to evade their responsibility in complying with the directives issued to them by the Government. Unlike Bill C-27, the proposals found in Bill C-24 make no universal provision for compensation to be paid to the Crown corporation for the implementation of a directive given to it by the Government that would result in increased costs or losses to the corporation. Hence, Mr. Speaker, by taking this route, the Bill provides no explicit means or incentives for Crown corporations to attempt to defer the implementation of programs which would be called for under public policy directives.
It is important, Mr. Speaker, that if the Government in its wisdom feels, subject to the scrutiny of the Opposition in the House of Commons, that a public policy interest needs to be served by a Crown corporation, it should not be possible for that directive given to a Crown corporation to be circumvented by the Crown corporation saying that it would not be a money making proposition or that the costs would be exceeded by what the Crown corporation feels to be the benefit, when in fact the matter is of a public policy nature, the responsibility for which is being taken by the Government's being held accountable in the House of Commons. It is not the place of the Crown corporation to say it will not comply with that directive under certain circumstances.
The Conservative Government's approach would have held the board of directors entirely responsible for carrying out Government directives. Our Bill retains the board's responsibility for efficient and effective implementation of the directives. However, we acknowledge that the ultimate responsibility for the directive itself belongs squarely with the Government. The Government is to be held accountable here in the House of Commons and in committee for the directives

April 30, 1984
it gives. The Government should not be able to push the responsibility on to the board of directors. The Government should be held responsible in this place. Therefore, we specifically absolve the board of directors from any consequences arising from the implementation of directives given to it by the Government. Surely this is a much more direct, honest and reasonable assignment of roles and responsibilities than was found in Bill C-27. It maintains a direct responsibility where it belongs, with the elected Government of the day in the House of Commons, which is terribly important to my mind.
In all these respects and others, Mr. Speaker, this new Bill is a vast improvement over the former administration's proposed legislation. It is direct, clear, understandable and, above all, it gets us all where we want to go, that is, into a long overdue system of comprehensive control and direction of Crown corporations and the affirmation of the accountability of Crown corporations to the Government and thereby to Parliament.


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


John William Thomson: Mr. Speaker, I would like to make some comments. There is a lot more involved in Bill C-24 than the auditing of Crown corporations and the general accounting standards concerning Crown corporations. The whole question of accountability goes far beyond simply auditing and generally accepted accounting principles. I am sure the Hon. Parliamentary Secretary would agree with that. We are also talking about the proliferation of Crown corporations in this Bill.
The point is that in his correspondence with the President of the Treasury Board (Mr. Gray) the Auditor General addressed himself to the audit provisions contained in Bill C-24. That is all he dealt with. Incidentally, in his own statement to me personally he said that the Bill had been reviewed in draft form with the Auditor General prior to tabling in the House, and it was on the strength of the draft document which he saw that the Auditor General corresponded with the President of the Treasury Board. However, in final form, the Bill differed substantially from the draft with which he was presented. Those are the facts of the matter in so far as the Auditor General is concerned. The implication by the Parliamentary Secretary that the Auditor General was implicitly endorsing the entirety of Bill C-24 is misleading to this House and the Members. That is one point. I think it is an unwelcome input into the debate in the House to imply that that is the case.


Flora Isabel MacDonald: He has not seen the regulations.


John William Thomson: Nor have we seen the regulations. The Parliamentary Secretary is well aware of that. In its humbleness the Government has agreed to let us see the regulations when we get to committee. I can tell you right now that we are never going to get to committee until we do see those regulations.
The Parliamentary Secretary also referred to the magnificent set of general auditing standards which have been introduced in Bill C-24.1 am sure that the Parliamentary Secretary
Financial Administration Act
is cogently aware that one of the provisions in Bill C-24 is the reference to special investigations. If the Auditor General deems it necessary, he can make a special investigation of a particular Crown corporation. What is a special investigation?
It is a new set of words dreamed up by the draftsmen who put together Bill C-24 which completely confuse the auditing issue. Clearly the Parliamentary Secretary to the President of the Treasury Board (Mr. Foster), the President of the Treasury Board himself, and the Parliamentary Secretary to the President of the Privy Council (Mr. Evans) know full well that we are talking about comprehensive auditing. They do not want to come to grips with it so they decided to muddy the water. They decided to do another flimflam job and confuse the issue. Comprehensive auditing is a reality which is understood by the Auditor General and by the general accounting profession, but the Government does not want to submit its Crown corpses or Crown corporations to comprehensive auditing. So what does it do? It dreams up-


The Acting Speaker (Mr. Herbert):: Order please. I must draw to the attention of Hon. Members that they may have a chance to ask another question but the question should be relatively short. The Parliamentary Secretary to the President of the Queen's Privy Council of Canada.


John Leslie Evans: Mr. Speaker, I beg to differ with the Hon. Member opposite on a number of points. If he is concerned with the question of proliferation of Crown corporations, I believe that is dealt with in the following way. A Crown corporation has to state its goals and objectives. Any investment in a wholly owned subsidiary of a Crown corporation must fall within the mandate given to that Crown corporation. It seems to me, Mr. Speaker, that if Parliament has said that this should be the mandate of a Crown corporation and this is the field in which it should operate, and the Crown corporation operates in that field, then it does not seem to me that there should be a great hue and cry that this is somehow improper. If it was improper, then why did Parliament say that it was all right for Crown corporations to perform certain functions?
I am given to believe that there is no substantial difference between the draft Bill that the Auditor General had an opportunity to examine and the Bill that was introduced in the House. If there is substantial difference and if the Auditor General does not approve of the changes that the Hon. Member alleges were brought into this Bill, can he table or put evidence before the House that suggests that the Auditor General is acting contrary to what he said in the letter he sent to the Prime Minister (Mr. Trudeau), that he was hoping the Bill would move through smoothly? I will quote from the letter. It reads:
I recollect that last June I wrote you, expressing my concerns about the need for a more effective accountability framework for Crown-owned corporations. 1 think it therefore only appropriate that 1 write again now when there is such tangible evidence of action that will help to alleviate my concerns.
If the Hon. Member has written or other evidence that he can place before the House which shows that the Auditor

April 30, 1984
Financial Administration Act
General refutes or retracts this statement about the Bill on the basis that there is some vast difference between the draft Bill that was shown to the Auditor General and the Bill that was tabled as Bill C-24 in the House, then let the Hon. Member place it before the House.


The Acting Speaker (Mr. Herbert):: I should point out that it is the Hon. Member's speech that is being questioned and upon which comments are being made. He should not be putting questions to another Hon. Member who is putting questions to him.


Mr. Blenkarn:: Mr. Speaker, I have a question for the Parliamentary Secretary. Is it his view of government policy that the matter of the independence of the Auditor General ought to be brought before the House? My conversations with the Auditor General indicate that he did not expect any of his letters to be quoted in the House. Does the Parliamentary Secretary not believe that he has compromised the office of the Auditor General by quoting from his letter without allowing the Auditor General an opportunity to explain further? Is it the Government's intention to put the Auditor General out to dry? I want to tell the Parliamentary Secretary that I personally have had dinner with the Auditor General to discuss this matter. If the Government intends to continue to hang the Auditor General on a letter that he wrote approving the general thrust of the Government's proceeding with Crown corporation legislation and trying to say that the letter implied full approval of that legislation, he is totally wrong. If he continues this course of action and the Government continues in this way, it is hanging the Auditor General out to dry and destroying the office of the Auditor General.


John Leslie Evans: Mr. Speaker, the Auditor General is not being hung out to dry here any more than he is being hung out to dry when the attacks the Government in his report. The Auditor General has sent a letter that was neither private nor confidential. It was sent with carbon copies to others.
This does not happen to meet his political objectives, and if the Hon. Member is so concerned that the Auditor General is being hung out to dry, which he is not, then the Hon. Member can simply pass this Bill at second reading so that we can send it to committee. The Auditor General can then come and testify and say whether or not he approves of this Bill and its direction. The Auditor General might point out certain other action he might prefer. However, the Hon. Member must realize that the Auditor General is not the elected government of this country; we are.


The Acting Speaker (Mr. Herbert):: That is the end of the
ten-minute period for questions and comments.


Donald Alex Blenkarn: Mr. Speaker, I rise on a point of order. Could we continue this line of questioning with the consent of the House?


The Acting Speaker (Mr. Herbert):: There must be unanimous consent.


Some Hon. Members:: No.


The Acting Speaker (Mr. Herbert):: There is not unanimous consent. Continuing debate, the Hon. Member for Parry Sound-Muskoka (Mr. Darling).


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I am delighted to have the opportunity to speak on the second reading of Bill C-24, a proposal to amend the Financial Administration Act for Crown corporations.
The Government has pointed an accusing finger at the Opposition many times, charging us with trying to delay the legislative process. Bill C-24 serves as a prime example of proposed legislation that must be scuttled in the best interests of the Canadian people. As has too often been the case, this Bill is designed to take the power from Peter and give it to Paul.
It is the Government-which is not to be confused with Parliament-that will absorb that power through the Cabinet. Should this Bill pass, the board of directors of Crown corporations will be virtually relieved of their existing mandates.
The absence of regulation in the proposed Bill bestows an awesome power on the Government. This open-endedness and lack of upfront commitment is an insult to the parliamentary process. The potential for clandestine wheeling and dealing behind boardroom doors is fantastic. I believe that acceptance of this piece of legislation would set a deadly precedent whereby the Government would be no longer accountable to Parliament. The willingness of a government to create regulations to suit its needs for the moment is just part of an elaborate smokescreen. So long as it refuses to lay its cards on the table, it will be impossible to know exactly what it will do. For example, so long as the Treasury Board can exempt corporations from presenting operating and capital budgets at their whim and fancy, the temptation for cover-ups will be immense. That temptation should be removed. There is a vast difference between trying to remain flexible and throwing caution to the wind. It seems unfortunate that the Government failed to make changes where they are most required.
As is now the case, the Cabinet would retain the responsibility for making major decisions on behalf of Crown corporations. Instead of placing the onus on one Cabinet Minister or the board members themselves, the entire Cabinet shoulders the responsibility.
To echo what has already been said, being accountable to so many means that Crown corporations will continue to be accountable to no one. Why should the responsibility for a corporation's success or failure not rest on the shoulders of those who run them, namely the board of directors? Instead, Bill C-24 undermines their authority and cuts their legs out from underneath them.
What kind of work can we expect from capable men and women who are not trusted to use their own judgment and their own specialities? Surely the Government can efficiently monitor Crown corporations without tying the hands of the experts. If anything, an amendment of this nature should enhance and upgrade the responsibilities of the boards.
April 30, 1984

Of course, in the private sector a board of directors may hire and fire a chief executive officer as well as decide how much she or he is worth. If the Government had its way, this essential part of the decision-making process would be handled at a distance by the Cabinet. Such action is the embodiment of authority usurped. It is simply a matter of time until Peter and Paul are no longer on good speaking terms. In this sense, the Government is moving 180 degrees in the wrong direction.
There is a great deal of concern within the Opposition regarding the proliferation of Crown corporations, and for good reason. Although Bill C-24 requires parliamentary approval to create a new parent corporation, it ignores the subsidiaries. In other words, while the Government holds the gun to the mother's head, the kids are out stealing your hubcaps. The subsidiaries, which have sprung up like crocuses, will continue to proliferate unchecked. To keep the progeny of Crown corporations from becoming an unruly bureaucratic tangle, birth control is the only answer.
Another loophole in the Bill would give the breath of life to a new corporation so long as an existing Act of Parliament will facilitate it. We are stepping back into that smokescreen. It is obvious that there are already so many such Acts in place that refusal of a new corporation would be a real problem.
The Government also seems interested in tying the hands of Parliament in the future. With its outlandish suggestion that debate of special Acts be limited to 30 days in committee and seven hours of continuous debate, it is forcing future Parliaments into dangerous limitations. It is frightening to imagine what effect this would have on other Bills brought to the House by the Government. It would be a dangerous precedent indeed. The restriction of time leaves no fail-safe mechanism for extenuating circumstances or particularly controversial applications. In suggesting such legislation, the Government is claiming it can see the future. It is becoming apparent that the Government is having difficulty even seeing the present.
There are many vital issues which Bill C-24 fails to address. It shies away from presenting policy on matters of internal government organization. Does the Government intend to make the rules as it goes along? There is no reference to the privileges and immunities of Crown corporations. The Bill does not specify regulations as to whether public servants may sit on Crown corporations' boards of directors. Surely at least minimum qualifications for board personnel must be clearly delineated by legislation. The Bill sidesteps the suggestion that parliamentary oversight committees should monitor Crown corporations. In this matter, the Government could easily avoid the threat of cover-up accusations. If all Parties are taken into the inner sanctum, there is bound to be less suspicion of sleight-of-hand tactics on the part of the Government or the Cabinet itself.
I trust it is becoming apparent, Mr. Speaker, that the present proposal is somewhat narrow in scope, to say the least. The Bill refers only to corporations owned entirely by the Crown. There are over 100 enterprises only partly owned by
Financial Administration Act
the Crown in tandem with independent bodies. Those corporations in which the Crown has invested, but does not own, represent a healthy chunk of revenue. Why then, have they been excluded from Bill C-24? I believe that these omissions reveal the haste with which this Bill was drafted by the Government. It is the duty of the Opposition at this time to quash the haste in this issue.
It is our mandate to inject some expertise and finesse into the creation of a Bill concerning Crown corporations in Canada. We intend to institute the necessary checks and balances to prevent the Government from running out of control. The people of Canada require an amendment regarding Crown corporations, but Bill C-24 is nowhere near the answer. Instead, it is the product of Government whistling in the dark. When the Liberals hand us the reins in a few months-which is a decision of Canadians but which the polls show will certainly happen-then perhaps the Liberals will be able to see just how bright the prospects can be under new and responsible leadership.
My colleague, the Hon. Member for Kingston and the Islands (Miss MacDonald), mentioned the news item which appeared in The Citizen of Ottawa and in all other papers regarding the de Havilland chiefs being given big bonuses as debts mount. Those bonuses were pretty healthy sums. I can understand a board of directors voting its officers bonuses if they are doing a good job. But de Havilland lost S500 million, give or take, and yet here the officers were presented with bonuses in the neighbourhood of $ 13,000 each, on top of their salaries which in all cases are probably well over the $100,000 mark. I am not sure whether the bonus announcement has been made by Canadair but, on the same basis, if it is following the principle that the more you lose the more you get, I am sure Canadair officials will be licking their chops when the Government makes its announcement in that respect.
I think we are all aware of matters in Chrysler Corporation. It was almost on the verge of bankruptcy. It pulled itself up by its own bootstraps, aided by some guarantees by the Government, and I will give the Government full marks on that. Chrysler Corporation is a company that has come back and is a real success story. Its recent financial announcement revealed that the corporation had made, I believe, $715 million in the first quarter. Chrysler Corporation also paid Lee Iacoc-ca, the President, a bonus of $700,000, give or take. That is a hell of a lot of money, but that bonus is justified. I suppose it was calculated on the basis of 10 per cent. If Mr. Iacocca was able to turn that company around, then he earned the money. I guess he will pay a good deal of it in taxes. When Crown corporations are able to make profits, then the officers should be given bonuses. And until that time, officers should certainly be paid the originally agreed salaries, or else get their fingers rapped or be fired.


Flora Isabel MacDonald: Right.


Stan Darling: This brings up another point, Mr. Speaker. It concerns government Departments. I see the President of the Treasury Board (Mr. Gray) is here. What about deputy

April 30, 1984
Financial Administration Act
ministers who are able to save their Departments a considerable amount of money? I know that deputy ministers are not the most underpaid section of the bureaucracy because most of them get a hell of a lot more than Members of Parliament, and 1 doubt if they put in the hours that Members of Parliament do. Instead of doing what we know these deputy ministers have done in the past, that is, scurry around in the month of March trying to find places to spend money, to spend any unused portion of their budgets so they can go back to the Treasury Board for the same amount of money or even more the following year, if they were paid bonuses if they could save X-million dollars a year, that would be a positive step. I would not be adverse to giving a deputy minister a bonus of $100,000 if he could save the tax payer $1 million. This is something to which we could give consideration. It is certainly a suggestion I hope the next government will take when it comes to power, whether in three months or six months. I know the Government can hang on almost another year. That decision, as you are aware, Mr. Speaker, remains in the hands of the Prime Minister, whoever he or she may be within the next year.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Herbert):: There follows a ten minute period for questions or comments.
If there are no questions or comments, we will continue with debate. The Hon. Member for Esquimalt-Saanich (Mr. Munro).


Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, this Bill is so faulty, so full of defects, that I scarcely know where to begin my criticism of it. I am really astounded that the President of the Treasury Board (Mr. Gray) should bring forth a Bill which has so many faults in it. There are faults in basic concept. There are faults in translation, which I shall mention as I go along, or perhaps if they are not faults in translation, they are at least attempts to rewrite either the English or the French language, and I am not sure which it is. But so faulty is the Bill that I suppose the best way to get at it is to start at the beginning of the Bill, look at it and see where it seems to be going. I hope the criticisms that I will be able to bring to your attention, Mr. Speaker, and to the attention of the President of the Treasury Board will be sufficiently cogent to persuade him that the Bill needs to be withdrawn.
First, I look at the front page of Bill C-24 and I see that in the English version it is called an Act to amend the Financial Administration Act in relation to Crown Corporations. The French version reads:
Loi modifiant la Loi sur l'administration financiere a l'egard des societes d'Etat-

It therefore seems that Crown Corporations-

-as they used to be called, have now become "des societes d'Etat." This is exactly the way it was being introduced in the
statement by the hon. President of the Treasury Board in March when the Bill was being brought forward. His introductory comments referred to the control and accountability of Crown corporations.
I would like to quote the first paragraph of that statement wherein the Minister indicated that the federal Government believed that new measures were required to strengthen the control and accountability of its Crown corporations. He indicated that this could best be done by clarifying the roles and responsibilities of Parliament, the Government, the boards of directors and the managers of Crown corporations. The whole focus of that opening paragraph was on Crown corporations. What did he do? He brought forward Bill C-24 amending the Financial Administration Act.
I wonder whether the President of the Treasury Board even bothered to look at Bill C-27, which was introduced in the previous Parliament, a Bill to establish the legitimacy of Crown corporations within the Government structure, the means of controlling them, the means of ensuring their accountability and, in addition-and this is one of the greatest defects in this legislation-the means of ensuring that if their job is done they disappear, or sunset laws. There is not even a notion of a sunset law in these particular amendments to the Financial Administration Act relating to Crown corporations. Is that assuming that all Crown corporations which have come into existence deserve to remain in existence? Is there not some provision that the Government could make or ought to make to assure itself that once the functions of a Crown corporation have been satisfactorily concluded or fulfilled, it ceases to exist as a Crown corporation? There is no such notion whatsoever in this Bill of some 140 to 150 pages and all its appendices; it has at least 156 pages of text.
This particular approach strikes me as being not only unusual but an insult to Parliament and to the Canadian people. There are so many Crown corporations in existence-and probably a good many more in the mind of the Government- that they deserve a statute of their own on which to stand or to fall, a statute which could look after the entire structure of Crown corporations and certainly ensure that once they have fulfilled their functions they will be withdrawn. The concept of approaching control and accountability of Crown corporations through amendments to the Financial Administraton Act is a defective one. On those grounds alone this particular legislation deserves to be withdrawn.
I will have occasion to contrast portions of this Bill with Bill C-27 from the Thirty-First Parliament. There was a Bill which dealt exclusively and positively with Crown corporations. It is one which ought to have been a model for the Government to follow in bringing forward legislation purporting to do no more than deal with the control and accountability of Crown corporations.
I said that I would start at the beginning, and perhaps that is a good place to start. Having looked at the title page, I will deal with some of the definitions which are provided. Even there I find either defects, faults or attempts to rewrite either the English or the French language. In English the title of the
April 30, 1984

Bill is, "an Act respecting Crown corporations and matters related and incidental thereto". In French, the version is:
Loi modifiant la Loi sur l'administration financiere a 1'egard des societes d'Etat et modifiant d'autres lois en consequence.
We find that the Crown corporation, a notion which has been around for a good many years, has now shifted and is no longer called "corporation de la Couronne", but "societe d'Etat". Is this deliberate? Is this evasion or avoidance of the mere word "Couronne", something of which this Government is ashamed? Why has it decided to rewrite the French language at this particular time? I find this particular instance strange, and I also wonder a little about the expression "societe d'Etat".	,

Indeed, I have reservations about that French translation. Would it be not more accurate or more correct to say "les societes del'Etat"? We say "societes de la Couronne", so why not say "societes de l'Etat"? If anything is to be changed, it ought to be done correctly. In any case, perhaps it is not too important-

However, it tells me a great deal about the slipshod manner in which this Bill was drafted so that it could be brought forward to the House at this particular time.
Also, I notice in the definitions section of the Bill that the "Crown" is used in English and "Sa Majeste" is used in French. I wonder why they shifted from the symbol to the person. This does not make good sense. Why are they avoiding the use of the symbol "Crown" in French and using the person in its place? I do not know who did it. I know that the Minister is very articulate in both languages. I am surprised that he should have let this slip through. I think it is necessary-and the Minister of Justice (Mr. MacGuigan) would probably agree-that there is a distinction to be made between the person and the symbol. Why get them mixed up in a Bill like this? I thought the Minister of Justice provided some of the legal advice on the drafting of Bills. Was it just slipshod workmanship by the Department that allowed the shift from the English symbol to the French person to be slipped in? I find it most extraordinary that the Government by this means should rewrite one or the other of the two official languages of Canada.
The legislation is drafted in a clumsy, even unmanageable manner. I suggest that it be withdrawn. Back at the drafting board, Bill C-27 could be used as a model to assist the drafters. This is not a Crown corporations Bill as it has been touted. It is an amendment to the Financial Administration Act. It is regrettable that in this day and age, with all the Crown corporations in existence, we should have a Bill brought before us in this shoddy manner.
One of the problems of Crown corporations, particularly in Canada, is the subsidiaries created by Crown corporations. The Salmonid Enhancement Program in British Columbia
Financial Administration Act
could take a few lessons from Crown corporations. On the Pacific Coast we are having difficulties in spawning enough fish to make the salmon Fishery a thriving industry again. Meanwhile in Ottawa, the Government is busily engaged in producing Crown corporations that spawn subsidiaries at a rate that put our salmon to shame.
Do you know, Mr. Speaker, how many subsidiaries Petro-Canada has? I bet you do not. I read some of the literature related to Petro-Canada, if it can be called literature. Sometimes I look in the appendix or the schedule to the Financial Administration Act. Sometimes I look at the report of the Crown corporations. I find that PetroCan, for example, and I use this only as an example, has 33 listed subsidiaries. I wonder, Mr. Speaker, if you know what Rocair Limited does. I doubt that anyone in this House knows. It is a subsidiary spawned or acquired by Petro-Canada and listed as such. Is GMI Co. (Bahamas) Limited the summer resort to which the PetroCan officials retire when they have had enough of the cold Canadian winter? That is possible. What would it do other than that? These subsidiaries are barely acknowledged in this Bill. They can spawn without let or hindrance.
I am not talking just about PetroCan, which is fairly well known. One of the earlier Crown corporations is CNR. Do you know, Mr. Speaker, how many subsidiaries CNR has spawned in the course of its life? That company which is ours, if we are to believe the advertisements, has 45 subsidiaries.
I placed a question on the Order Paper. I received an answer about two weeks ago. I find that Autoport Limited was spawned in December, 1971 to operate the storage, servicing and distribution area for imported automobiles. That is part of the CNR. Canadian National Steamship Company Limited makes a fair amount of sense. There is Canadian National Hotels (Moncton) Ltd. Canat Limited has its home base in Delaware. It was created for the sole purpose of owning and managing railway equipment purchased with incentive per diem funds in accordance with Interstate Commerce regulations. That is a subsidiary of Canadian National Railways. Some have their operating base in Canada. I do not think there is one in the Bahamas yet.
CN Tower Limited is a subsidiary. Whoa! I had the feeling that we in this House passed legislation creating CN Tower Limited. There is another one related to CN Tower, CN Tower Restaurants (Ltd.). That was created in order to facilitate the separate operation of the restaurants in the CN Tower. That, as you would expect, has its headquarters in Ontario. Another subsidiary is in Minnesota, the Duluth, Winnipeg and Pacific Railway Company. There are several in Delaware. I guess Delaware is a great haven of Crown corporations.
I did not realize my time is about to run out so quickly. I became rather involved in all of these subsidiaries.
A major criticism is the fact that this legislation would put shackles on the House of Commons or the Senate, whichever House receives a motion relating to the creation of a Crown corporation. That is absolutely unacceptable to any respectable parliamentarian. I am ashamed that the President of the

April 30, 1984
Adjournment Motion
Treasury Board would allow that clause to creep into the legislation. The limitation on the length of debate on this legislation that may be permitted in this House has been written into this legislation. That is absolutely deplorable. There is a period of 30 sitting days, seven hours debate and all that sort of thing.
I want to draw one further matter to your attention, Mr. Speaker, in the half minute I have left. Clause 15 of the Bill requires the parent corporation to report to the appropriate Minister the creation of subsidiaries, not to Parliament but to the Minister. Depending on how much goodwill he has, the Minister may report the existence of a subsidiary to the House of Commons.
Those are some of the criticisms I would level at the Bill. I urgently suggest that the Minister withdraw it and produce a better Bill more closely related to Crown corporations and less to the Financial Administration Act.


The Acting Speaker (Mr. Herbert):: There follows a ten-minute period for questions and comments. If there is no one rising to put a question, to continue the debate, I recognize the Hon. Member for Regina West (Mr. Benjamin).


Leslie Gordon Benjamin: Mr. Speaker, I found it fascinating when listening to my friends from the Official Opposition-


The Acting Speaker (Mr. Herbert):: Order, please. I regret to interrupt the Hon. Member before he has started but I have a little job to perform right now.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Herbert):: It is my duty, pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Athabasca (Mr. Shields)-Crown Corporations-Northern Transportation Company Limited (a) Date of decision to sell (b) Disposal of Athabasca assets; the Hon. Member for Mississauga South (Mr. Blenkarn)- Canadian National Railways (a) Request that subsidiary operations be privatized (b) Government policy; the Hon. Member for Kindersley-Lloydminster (Mr. McKnight)-Railways (a) Level of investment by railroads (b) Size of investment to move grain.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Ouellet that Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations and to amend other Acts in consequence thereof, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Leslie Gordon Benjamin: Mr. Speaker, I found it interesting and a little bit amusing to hear my good friends from the Government side and from the official opposition side speaking about Crown corporations, because they are all somewhat schizophrenic about Crown corporations. They believe in Crown corporations if necessary but not necessarily in Crown corporations.
In the history of the western industrial world, Crown corporations have been inaugurated when Governments of all political stripes have taken over or provided the services of the private sector. There is nothing new about that. The question to be asked is why Crown corporations exist. If the free enterprise capitalist system is so good and if it works so well, there would be no need for Crown corporations. However, even the free enterprisers and the capitalists have admitted that the weaknesses in their own system have necessitated the inauguration of Crown corporations. When private enterprise Governments have asked themselves why they have inaugurated Crown corporations, invariably the answer has been because the private sector could not or would not occupy that area of economic or social endeavour in the economy.
There is another reason for the existence of Crown corporations which was endemic in the early years of Crown corporations in Canada. A federal Liberal Government or a federal Tory Government would start a Crown corporation, not because it believed in it; not because it served a necessary public good, need or demand; not because the private sector would not fulfil the role, but because the private sector could not fulfil the role. The histories of Canadian National Railways and Trans-Canada Air Lines-Air Canada are classic examples of this. Canadian National Railways was made a Crown corporation not because the Government of the day thought there was a need for a publicly-owned national railway system but because the Government wanted to bail out five bankrupt railway companies. The Crown corporation started off with a debt of something in the order of $1.5 billion, which in 1922 or 1923 was a sizeable sum in today's terms. It was done for that reason only. The bondholders and the banks got their money and the taxpayers have paid ever since.
During the 1920s, the 1930s, the 1940s, the 1950s and the early 1960s, we heard the hue and cry how Canadian National was losing money and Parliament would have to vote to give it $200 million or $800 million. Since I came to the House, every
April 30, 1984

year we have had to vote to supply Canadian National with amounts of money which were in that range whenever the CNR financing Bill came to the House. We heard the hue and cry about how terrible it was that this Crown corporation was losing all that money. However, as soon as it starts to make money, we hear the hue and cry from the same people who now say that these Crown corporations have no business making money and they should be privatized. I find that strange.
When a Crown corporation is making money, surely it benefits the taxpayers. Members of the Official Opposition and the Liberal Government claim to be sound businessmen who use sound business practices. Why would they want to sell off the corporations that are making money? Why do they not try to privatize the corporations that are losing money and save the taxpayers that expense? In my province, we have heard that same hue and cry over the last two years. We have heard it in this place and we read about the hue and cry over privatizing Crown corporations in the financial pages of the newspapers. The fact of the matter is, Mr. Speaker, that in a modern industrial economy, whether it be that of Canada or of a host of other countries, enterprises take the form of one of the following or a combination of two or three of the following: public enterprise, co-operative enterprise or private enterprise, That is called a mixed economy. The trouble is that Crown corporations run by Liberal and Tory Governments create a mixed up economy.
Our national governments have never formed Crown corporations because they believed in them. They set them up either to bail out bankrupt private-sector companies and save hundreds of millions of dollars in losses for mainly wealthy investors or because there is a public need either locally, regionally or nationally which the private sector refused to fulfil. In the latter case, the Government of the day has no choice but to establish a Crown corporation. There is nothing intrinsically bad or intrinsically good about Crown corporations.
The necessity for accountability of Crown corporations is something about which Members on all sides of the House agree. The question is how we go about getting that accountability. I am proud of the history of the Government in my province. In the early days of the Tommy Douglas administration of the 1940s, a legislative Crown corporations committee was set up. The annual reports of provincial Crown corporations automatically by statute went before that Crown corporations committee. I do not think that that would be practical in the federal Parliament because there are several times as many federal Crown corporations as there are provincial Crown corporations in any given province.
No one parliamentary committee could by itself deal with all of the annual reports and get accountability from all of the Crown corporations. Therefore, it would seem to make sense that, by statute, the annual report of every Crown corporation should be referred to the appropriate standing committee of Parliament. That would be a good beginning, and that system is in place in the case of a number of Crown corporations. One
Financial Administration Act
of the very few times, and in fact perhaps the only time, a former Minister of Transport, Mr. Lang, accepted an amendment I proposed was when it was made statutory that the annual report of Air Canada be referred to the Standing Committee on Transport. That requirement is now incorporated into the Act and applies to Canadian National Railways as well. It should apply to all Crown corporations.
Something more must be done regarding accountability. First, each standing committee should be appropriately staffed with accountants, research staff, actuaries and whoever else is required so that every member of a committee, no matter to which Party he belongs, can be armed with information and questions to ask which have been arrived at independently. This must happen if any member of a committee is to be able to fulfil his duties by asking appropriate questions and demanding appropriate answers.
Second, as and when a Crown corporation's annual report goes before a standing committee, the committee meetings should not only be public but the public should also be free to appear and put forward their concerns, complaints and questions. I hope I am not speaking out of turn, but this might be starting to occur. It may well be that in the next week or two, the Transport Committee will decide to hear one or two witnesses other than those of Via Rail when it deals with Via Rail's annual report. And why not? Why not provide an opportunity for groups and individuals to appear? It would seem to me that when a committee reports to the House on its dealings with an annual report of a Crown corporation, it should feel free, even though it may well recommend things that are contrary to current Government policy, to report such and to recommend such. It still remains the prerogative of the Government, whoever is in power, to decide whether or not it will accept or reject those recommendations in whole or in part. That is the final responsibility of the Government. I have no quarrel with that, so long as each individual member of a standing committee has some degree of independence, whether he be on government side or on the opposition side.
It seems to me also that there will be-and undoubtedly should be from time to time, depending on the kind of enterprise that it is-joint ventures. There should be a mix. Frankly, I would like to see, for example, Petro-Canada, federated co-operatives, the United Co-operatives of Ontario, and one or two private companies in joint ventures.
I think my hon. friend from Ottawa Centre (Mr. Evans) raised the matter of privileged information, private and confidential information, in joint ventures. I would see nothing wrong with having part of the hearings-where it was a joint venture in which the private sector and the co-operative sector were involved-held in camera. The committee could report in confidence to the Government with its recommendations. Because every Crown corporation has to operate within the framework of the general policy laid down by the government of the day, and it is the duty of the board of directors to pass the internal policies of the Crown corporations that stay within

April 30, 1984
Financial Administration Act
that over-all framework laid down by the policy of the government of the day, in terms of the over-all accountability it is the duty of those who administer and manage the Crown corporation to manage it on a day-to-day basis and conduct the operations within the context of that policy. If there are any failings by way of policy, then it is the government of the day and the board of directors who are accountable. If it is a failing in day-to-day operations, the day-to-day, week-to-week, month-to-month management of the corporation, then it is they who are accountable. They can be and should be accountable to a standing committee of this House.
I would like to turn now, Mr. Speaker, to the matter of the right of the Auditor General to audit as a matter of right. I have no objection to that provision being there. I would be very surprised, in fact, and it would be an extremely remote occurrence if the Auditor General exercised that right on every single Crown corporation every year. He would pick out two, three or four a year and maybe different ones each year. If he were to audit, as a matter of right, every single Crown corporation, he would need a staff of another 2,000, 3,000 or
4,000	people. Then of course he would have the Chartered Accountants Association of Canada madder than heck at him. But in any case, there is no reason why the Auditor General should not, if he feels that a standing committee was unable to dig up enough information or could not adequately carry out its task, pick out a certain Crown corporation and do an audit on it. Why should he not? Then the appropriate standing committee could deal with that audit also in the next annual report of that same Crown corporation.
When it comes to Crown corporations, one hears much about losses, breaking even or profitability. It depends on what kind of Crown corporation it is and what it is there for. If it is of a public utility nature, something that the public utilizes, something for which there is a public need and of which there is a public acceptance regardless of whether it loses money some years, breaks even some years, and makes money in some other years, those are not the criteria for the existence of that Crown corporation. If it provides an essential public service and most years loses money, then the nation as a whole shares in the cost of those losses. In order to provide an essential and needed public service or public utility, whether it be national in scope, regional, or local, you cannot have a Crown corporation operating only on the criterion of its profitability.
Mr. Speaker, one looks at Canadair, de Havilland, Chrysler and so forth. Governments, of whatever political stripe, have to decide if they should make it a Crown corporation, or do they lend it money, or do they guarantee its loans? Whatever route they choose to follow they have to take it in order to keep that particular enterprise viable either economically or in terms of long-term prospects to preserve employment, to preserve technology and to keep well trained people in the country. That is a legitimate decision for a government to make. The question is not how much de Havilland or Canadair lost. The question is, on the other side of the coin, are the present short-term or long-term prospects and benefits sufficient to make any losses now perfectly justifiable? Some of that will have to be guesswork. But it seems to me in general that it is a worth-while effort for a government of any political stripe to make.
It was also mentioned that every Crown corporation should have its own legislation. I for one agree with that. We have been trying since 1975 to get a VIA Rail Canada Act out of this Parliament. We still do not have one. VIA Rail Canada operates on a $1 vote from the Estimates of 1975. The operations of VIA Rail Canada are subject entirely to whatever the Minister of Transport of the day decides. He can do absolutely anything he wants with it. Even if he were to do something that we all agreed with, would that be appropriate? Is that appropriate? Surely a Crown corporation should have the legislation that allows it to exist as a totally legal entity, accountable and answerable to Parliament.
On the issue of accountability, we all agree that there should be a maximum of accountability from Crown corporations. I only wish we had the same degree of accountability from the private sector. In the overwhelming majority of cases, shareholders in private corporations do not know and cannot find out what is being done with their investment. They cannot find out about the goofs and mistakes that occur in private corporations. I am sure there is nobody in this House who will tell me that private corporations do not make goofs. They do. If you went to the annual meeting of Canadian Pacific Limited and tried to find out, Mr. Speaker, you would not have a chance. I wish we had legislation that would require the same kind of accountability from the private sector as that which we are asking for in Parliament from Crown corporations. Let us keep, Mr. Speaker, the principle of the necessity of Crown corporations in various sectors of the economy as an essential part of a western industrialized nation. It is in conjunction with a mixed economy, the co-operative movement and the private sector that Crown corporations should function, not only with full accountability but also with the ability to go into joint ventures and derive the maximum benefit, whether economic, financial or social, for the people who put up the money, namely, the people of the country. That is all that is required, but that is a large order. Surely that is what this Parliament should be doing.


Donald Alex Blenkarn: Mr. Speaker, I was wondering if the Hon. Member could advise us whether it is still the position of the NDP to call for the nationalization of CPR by turning it into a Crown corporation? In view of the fact we have had a number of Crown corporations losing money, is that the kind of thing he says we should continue to do?


Leslie Gordon Benjamin: Mr. Speaker, I than my hon. friend for the question. I was afraid he would not ask it. Too often, and it has occurred with Liberal, Tory and NDP Governments, we have taken over losers. Well, here is a winner we should take over.


Mr. Gamble:: Then we can make it a loser.


Leslie Gordon Benjamin: I say that because, for historic and economic reasons relating to the welfare and good order of the entire
April 30, 1984

national economy, it does not make good private enterprise economic sense to have competing railroads. They are a public utility and provide a service everyone has to use, directly or indirectly, whether they like it or not. If it were logical to have competing railroads, it would be equally logical to have competing highways, sewer systems, water lines, power lines, and telephone lines. However, anyone suggesting that would be locked up.
It is a longstanding Party policy to take over Canadian Pacific Limited. This will continue, I am sure, for a long time to come, until it happens, as it will one day. It may well be a Liberal or a Tory Government which will have no choice but to take it over. We suggested a way of doing this during the debate on the Crow Bill last year. In return for any capital funds given to CP by the Government of Canada, the Government would take common voting stock in the company. What is wrong with the taxpayer as a public investor having an opportunity for a return on that investment the same as a private investor? It makes good business sense and protects the taxpayer's investment.
We need to put that enterprise under public ownership, Mr. Speaker. Some of it we might sell off. I do not know if we would want to stay in the hotel business. I am sure we could make a bundle selling off Marathon Realty. That would be a nice change for the taxpayer. However, given the transportation needs of this country, Canadian Pacific Limited, in all of its transportation aspects, should be under public ownership as a Crown corporation and answerable to Parliament.


Donald Alex Blenkarn: Mr. Speaker, in view of his statements, would the Hon. Member agree that the CNR should sell off its hotels, which, as he knows, lost $2.7 million last year? Is it his view that the Government should be running hotels and supplying accommodation for the less fortunate, as the Chateau Laurier does? Or does he think we should build more CN hotels so we can lose more money? Is that the policy of his Party?


Leslie Gordon Benjamin: Mr. Speaker, the Hon. Member did not ask me that question in any year when CN hotels made money.


Donald Alex Blenkarn: When did that happen?


Leslie Gordon Benjamin: There were not very many of them. Private as well as public transportation companies, airlines, and railroads all over the western world have hotels as a necessary adjunct to their transportation system in order to keep their customers as long as possible. What is wrong with that? CN was looking at privatizing its hotels and shopped them out to the Hilton chain to operate them for CN. That was a disaster and so CN has had to take some of the management them back. The hotel business, whether owned by a Crown corporation or privately, has been going through some tough years. That is no reason to condemn public ownership of hotels. If it is, I suppose there is no reason either why Canadian Pacific should own hotels, because that is costing shareholders money. But the CPR directors are not accountable to their sharehold-
Financial Administration Act
ers the way CN is to Members of Parliament. I would be inclined to keep the hotel operation.
I note there are various rail, airline and other sundry operations in Europe which own, in whole or in part, hotels, resorts, condominiums and shopping centres, you name it. It is strange that it is all right for the private dollar but not for the public dollar. That kind of double standard has been prevalent too long under successive national governments. What is so holy about a private dollar and unholy about a public dollar? Public dollars do as much or more good than private dollars. If a hotel as an adjunct to a transportation system is a good and sensible part of the operation to deal with tourists and the travelling public, then it should have some hotels. Why not?


Donald Alex Blenkarn: Mr. Speaker, I am interested to find out that the railways are carrying passengers again. It was my understanding that the passenger service had been designated to VIA Rail. Perhaps the Hon. Member could tell us about the express operations of CNR. For example, CNR has lost considerable money over the past several years on its trucking services. Would he have them sell those trucking services? As he knows, private truckers all make a profit and pay corporate taxes and so on. Does he think it is the business of the Government to own trucking companies?


Leslie Gordon Benjamin: Mr. Speaker, first I should tell the hon. gentlemen that VIA Rail, even though it is a one dollar item in the Estimates, is classed as a class of railway. Under the laws of Canada and under the North American Association of Railroads, it is a class 1 railway.
Do I think CN should sell its trucks? Mr. Speaker, I do not think they should, because no one would buy them right now. It would be a dumb time to try to sell them if they are losing money, unless you plan on giving them away to some friends. I do not think my hon. friend is like that. There might be some Members on the Government side willing to do that, I do not know. But, again, where a Crown corporation like CN uses trucks to take advantage of the highway system and the various laws and regulations in each province which enables it to do it cheaper than it could do it by rail, that is one thing. But if it is at the same time hauling heavy bulk commodities by truck, that is economic stupidity. I would prevent CN from long distance trucking iron ore and heavy steel products and what not. That is not the place for the trucking industry. I would prevent CN from entering that area of transportation which any transportation economist will tell you is just sheer nonsense. It is a loser, and it has been finding that out the hard way.
We had the bitter experience in Saskatchewan of trucking potash. The province had to rebuild a highway and then the potash mine, which was privately owned, had to agree to pay so much money to rebuild the highway. In the end both the taxpayer and the potash mine lost money. That is dumb. You do not haul heavy bulk commodities on the highway for long distances at high speed. It makes no sense. No government of any political stripe would countenance that, given the experience we have had.

April 30, 1984
Financial Administration Act
If CN's trucks are a necessary adjunct to its transportation operation, then it should retain its trucking sector. That is part of the whole transportation package.


Gordon Edward Taylor: Mr. Speaker, I have just a quick comment and then a question. When the President of CDI Corporation checked Canadair last year he found that it had 22 vice presidents and he cut them down to 12. A few were retired. The difficulty with Crown corporations is that the employees multiply like rabbits. If the hotels of our railways were taken over by the Government, the first thing that would happen is that the number of employees would double. That is a bad part about Crown corporations.
If Crown corporations can do so well with hotels, why are they not doing so well with the post office? They have certainly had a wonderful chance there.


The Acting Speaker (Mr. Guilbault):: Order, please. I am afraid that the time allowed for the question period is over now. We are reverting to debate.


Leslie Gordon Benjamin: Will you not let me answer his question? I am sure you will get unanimous consent.


The Acting Speaker (Mr. Guilbault):: Is there unanimous consent for the hon. gentleman to answer the question?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Regina West (Mr. Benjamin).


Leslie Gordon Benjamin: Mr. Speaker, the only thing I have to say about the post office is that no one anywhere in any political party in the whole western world, or perhaps the whole world, would suggest for one moment that postal services should be part of private enterprise. That is some kind of dream world. I do not know of post offices that make money anywhere in the world, at least it would be very rare. The public does not expect them to as long as they get the service. If there are some losses, the public is prepared to share in the cost as long as they get the service. That has been the problem.
On the matter of the number of officers of Crown corporations, I plead with my good friends to the right, both physically and politically, not to condemn Crown corporations because of stupid government policies that allow a Crown corporation to have a dozen vice presidents. It is not the fault of the Crown corporation; it is the fault of government policy. Do not condemn a Crown corporation because of that. Go after the ones who did it. Do not blame the person who happens to be the vice president in charge of Wicker Chair in the lobby of all the hotels. He may have been a former Liberal organizer or something. Blame the Government that allows that to happen. It lays down the overall policy.
One of the disasters of laying down an overall policy occurred when Mr. Lang, a former Minister of Transport, instructed the board of directors of Canadian National to start
making a profit. Ever since then it has been downhill. There have been lay-offs and cancelled services from coast to coast because of an outrageous demand by the Government for CN to start making money. This has hurt a lot of Canadians. Surely that is the wrong reason. It is not the number of vice presidents but the policy of the Government which allows that to be at question. It is not the principle of whether you should have a Crown corporation.


Ronald Alexander Stewart: Mr. Speaker, it is a pleasure for me to join my colleagues today in expressing my condemnation of this latest attempt by the Government to hoodwink Canadians. There has not been a major overhaul of Crown corporation legislation since 1951. The Liberals have been considering changes since 1972 and, as my colleague from Calgary South (Mr. Thomson) has pointed out, have been promising reform since 1977. This has not come about.
Now that we are into an election year, the Government has produced a most flawed piece of legislation in an attempt to convince Canadians that they will gain control over the monsters that have been created. Most of these are not really Crown corporations but are Crown corpses and should be buried.
As has been pointed out by previous speakers, there is no provision for any sunset laws in the legislation. The legislation will not work the way it is, Mr. Speaker. It will not work because the legislation is flawed and because we will let Canadians know that this is another example of the tired Government that has run out of fresh ideas. The current leadership race of the governing Party is evidence of that.
The biggest flaw in this Bill is that it does not deal with all of the Crown corporations that have been set up by this Government to interfere in the private sector, which is the engine that drives our economy. It applies only to about 183 Crown corporations, a little less than half of the total amount. Note, Mr. Speaker, that we cannot talk precisely about the number of these corporations because no one really knows for sure how many there are or what they do. Any number of Crown corporations can be exempted from this legislation by Cabinet. That is one of the major flaws. The Bank of Canada, the Canadian Wheat Board and the IDRC are excluded. If this is a good piece of legislation, why does it not apply to all Crown corporations? If it is bad legislation, why apply it at all? The trouble with this legislation is that it raises more questions than it answers.
Why, for example, will Cabinet be given the power to deny information to Parliament without explanation? Why is this so in a Bill that purports to make Crown corporations more accountable to Parliament? Why will Cabinet be given the power to amend the Bill, by regulation, without informing Parliament? There were see shades of metric. Why will a Crown corporation be able to operate freely, with Cabinet approval only? Why will Cabinet have the power to regulate how Crown corporations dispose of property and what is done with the proceeds? Why will Cabinet be responsible for appointing boards of directors and chief executive offciers as
April 30, 1984

well as setting pay scales? Why is there a clause giving Cabinet the power to alter the by-laws of Crown corporations?
I will tell you why, Mr. Speaker. It is very simple. It is because, to a Liberal, parliamentary accountability is a contradiction in terms. Everyone in Canada now realizes the low esteem in which the lame duck Prime Minister views the institution of Parliament and its Members. He has expressed it publicly. It often borders on contempt. Government by Order in Council has become a way of life under that administration, and Parliament has been turned into a rubber-stamping organization. Its only corollary that I can think of, Mr. Speaker, is the Politburo of the U.S.S.R. State and centralized control is the desired effect. That is why we have Bills such as this before us. That is why this Bill gives all the power over Crown corporations to the Cabinet. It would never occur to Members opposite to seek the approval of Parliament when it comes to spending the taxpayers' money, as has been pointed out by the Hon. Member for Bow River (Mr. Taylor) this afternoon.
Lack of accountability and lack of trust is what this is all about. In this morning's The Toronto Sun there is an editorial about the Canada Unity Information Office, which is a Crown corporation. It indicates that it began in a tiny way with $10 million, which is mere peanuts to the Government. The CUIO was supposed to counter separatist rhetoric. Perhaps it did, but the CUIO is still operating after the separatist business is all washed up and its budget has tripled. I would like to quote the final paragraphs of that editorial, Mr. Speaker. It says:
And that's how come the CUIO got into the business of printing a 52 page booklet praising the virtues of eight Quebec Liberal MPs to a few hundred thousand households in their ridings.
The booklet didn't cost that much-just $158,000-but multiply that by all the other patronage, rip-offs and handouts our governments give their favorite sons and daughters and it adds up.
A lean, small, accountable bureaucracy is not just knee-jerk thinking. It's necessary to prevent layer after layer of civil servants, playing with taxpayers' dollars in a moral vacuum that destroys the citizens' trust in government and bureaucrats' own moral worth.
That is why we want accountability in this Bill. We know what the Government has done. You cannot trust it. Canadians do not trust it. Canadians will remember that from 1968 to 1984 Government spending increased 751 per cent. That is why we want accountability. The deficit increased almost
6,000	per cent and the interest on that debt increased over 1,300 per cent. Right now 31 per cent of the Government's revenue goes for interest alone. That is why it is not trusted. That is why it must be replaced. That is why we oppose this legislation. People will remember that the dollar fell from 93 cents U.S. to 78 cents. Business bankruptcies increased 314 per cent. Should we trust it not to have accountability? I hope not. Why has all this come about? Because the Government did not care to consult Canadians on how their own dollars were being spent.


The Acting Speaker (Mr. Guilbault):: It being five o'clock, the Chair regrets to interrupt the Hon. Member. He may have
Tenure of Senators
time to complete his remarks when the Bill is before the House again.

It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS-PUBLIC BILLS

["The Chair regrets to interrupt the hon. gentleman, but the time provided for the consideration of Private Members' business has now expired."]
The Acting Speaker (Mr. Guilbault):: Shall all orders and items preceding item No. 25 stand?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Guilbault):: Agreed.



Mr. Bill Yurko (Edmonton East) moved: that Bill C-231, an Act to amend the Constitution Acts, 1867-1984 (tenure of Senators) be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, I am very pleased to bring before the House once again the urgent matter of Senate reform. More specifically, I move second reading of Bill C-231, an Act to amend the Constitution Acts, 1867-1984, tenure of Senators.
Permit me to read the last paragraph on page 41 of the Special Joint Committee on Senate Reform. It reads:
The question may be asked: if a system of direct election is not established, should the term of those senators who have already been appointed for life or to age 75 be shortened? We believe that this question should be addressed if and when it becomes clear that an elected Senate is unlikely to be put in place. It may, however, be noted that the turnover of membership in the Senate has been fairly rapid. From 1970 to 1980, for example, 59 per cent of the seats in the Senate became vacant. This would suggest that not many years would elapse before most Senators had been appointed for nine-year terms.
I would like to read the explanatory note from Bill C-231 before I get into my remarks. It reads:
Recently, the Special Joint Committee on Senate Reform recommended a single nine-year term for newly appointed Senators. If implemented, such a recommendation would create three classes of Senators: those appointed for life, those appointed until age seventy-five, and finally, those appointed for a nine-year term.
This bill, in contrast, would create one class of Senators by making all existing appointments subject to a nine-year term or retirement at seventy-five years of age, whichever occurred first. Because this amendment would not affect paragraph 42(1 )(b) of the Constitution Act, 1982, 'the powers of the Senate and the method of selecting Senators', it could be passed by Parliament exclusively

April 30, 1984
Tenure of Senators
without recourse to the general procedure for amendment requiring provincial approval.
Concurrently with the passage of this Bill, it can be expected that Parliament will pass legislation to adjust the statute law relating to the retiring and severance allowances of Senators.
I recognize fully that the current problems facing the nation are economic in scope and priority. Nevertheless, there is a larger problem facing Canadians that must be seriously and urgently addressed. That is the need for the reform of our federal institutions, and Senate reform tops the list.
The speech given by the Prime Minister (Mr. Trudeau) on March 30, 1984, at the colloquium organized by Laval University students concerning reform of federal institutions is well worth reading as reference is made there to the need for Senate reform.
On this matter of Senate reform we must ask ourselves two questions. The first question is, why has Senate reform been pursued with such vigour over the last dozen years? Second, why have we failed so miserably in effecting any meaningful reform whatsoever?
Permit me to try to answer these two questions from my own perspective. First, the reason Senate reform has been pursued so vigorously over 12 years is that Canadians in general and we in Parliament have realized that the Senate has lost its relevance. It has neither legitimacy nor accountability nor independence and it has doubtful authority. It sure has continuity. Longevity and stability.
There is an increasing public revulsion against any institution giving lifetime tenure without accountability to anyone in our society. There is a revulsion against handing out guaranteed tenure of 30 to 40 years because of political friendship or political compatibility. There is no sense of fairness, no sense of justice, not even a sense of propriety to such overwhelming patronage.
Canadians are saying that political patronage is acceptable but it must have limits and not be abused. An increasing number of Canadians are becoming committed to Senate abolition if meaningful reform is not soon effected. I am against abolition.
In 1972, a special joint committee of the Commons and the Senate co-chaired by Senator Molgat and the then Minister of Justice extensively studied Senate reform and put forth a proposal. In January of this year, another joint committee chaired by the same Senator Molgat and the Hon. Member for York-Scarborough (Mr. Cosgrove) issued another report after extensive hearings. How greatly the two reports differeed! They are as different as night and day. What a revelation occurred in a mere 12 years!
In the interval between these two special joint committees we had the following studies and reports: the federal Government Bill C-60; the Ontario Government proposal; the B.C. Government proposal; the Pepin-Robarts Council of the Federation proposal; the Quebec Government proposal; the Senate 1980 proposal; the Alberta Government proposal; and the eighth was my own proposal, Private Member's Bill C-640. All the nine previous proposals prior to the present one recognized and advocated the need for direct provincial involvement in the senatorial selection process.
Why has this matter of Senate reform been pursued so vigorously and yet no action has occurred? It is downright irresponsible, though a significant effort was made by the federal Government with its Bill C-60 in 1978. The 1972 special joint committee chaired by Senator Molgat and the Minister of Justice recommended an appointed Senate of 130 Members, with one-half appointed federally and one-half appointed from provincially supplied lists. They were to be lifetime appointments with mandatory retirement at age 70.
The western provincial representations were doubled to 12 for each of the four western provinces. The Yukon and Northwest Territories representation was also doubled from one to two each, increasing the total from 104 to 130 Senators.
Twelve years later a special joint committee, co-chaired by Senator Molgat and the Member for York-Scarborough, recommended an elected Senate, expanding the size from 104 to 144 Senators. It also recommended a doubling of the Members from each of the four western provinces, with an additional increase of 12 Senators for the four Atlantic provinces and an increase of four for the Yukon and the Northwest Territories. All Senators in this most recent proposal would be elected for non-renewable terms of nine years.
Almost unanimously, the recommendations were for: one, the election of Senators to provide legitimacy and accountability; two, a nine-year non-renewable senatorial term to provide independence and a more frequent turnover to increase effectiveness and remove the deadwood; three, equal regional representation from what might be considered the six regions of Canada, each with 24 Senators, for a total of 144 Senators. These six regions, as I see them, are the B.C.-Alberta region, or the Mountain region; the Saskatchewan-Manitoba region, or the Prairie region; the Ontario region; the Quebec region; the Nova Scotia-New Brunswick region, or the Acadia region as I call it, and a supposedly complex, somewhat fanciful region composed of the Yukon, the Northwest Territories, Newfoundland and Prince Edward Island, having a total of 24 Senators altogether. I must conclude that the above distribution may be difficult for Ontario and Quebec to swallow. Of the above structural recommendations only the term of nine years can be effected constitutionally by Parliament. All other structural reform recommendations need the constitutional approval of seven provinces having at least 50 per cent of the Canadian population.
In my view, Parliament should move immediately to introduce the nine-year term to provide more independence, more frequent turnover, and more effectiveness. This type of amendment, which is what Bill C-231 effectively accomplishes, is politically responsible and necessary. It is a giant first step in Senate reform. If a nine-year non-renewable term is desirable for an elected Senate, then surely it is even more desirable for an appointed Senate.
April 30, 1984

In my opinion, a nine-year non-renewable senatorial term would provide the turnover dynamics which would tend to reduce regional and federal-provincial tensions. Co-operative federalism would be advanced and national unity would be enhanced.
This simply must be the first act on Senate reform. The other recommendations may bog down in federal-provincial wrangling. Let us do it as a House of Commons. We must effect Senate structural reform a step at a time. During the last 18 years, two minor Senate reform proposals were passed. In 1965, the senatorial tenure was limited to forced retirement at age 75. However, 16 senators still have lifetime tenure. Canadians do not accept the continuation of this anachronism of the past, and neither does Bill C-231. All present Senators above 75 years of age should retire or be retired. The Senate should establish a senior advisory council of retired Senators which would meet periodically and provide advice to Parliament. Former Senator Forsey is performing a useful and similar advisory role now. The Senate should implement an appropriate pension plan. In 1975, another minor change was passed which added two additional Senators to give both the Yukon and the Northwest Territories representation.
But why has there been no meaningful structural Senate reform in the last dozen years in light of the ten proposals put forth? I believe it is because the size of the package has always been too large and too complex for the Canadian federation to swallow in one gulp. A more step-wise process is advisable. Was not the pursuit of too large a package the prime reason for decades of failure in constitutional reform and patriation itself?
Of course it was. The Prime Minister in his March 30 speech at Laval University effectively acknowledged this realization. A two or three stage or step-wise process for reform of the Senate is also necessary and workable.
I simply do not agree with the contention that if Parliament acts to effect Senate reform, where it can do so without the agreement of the provinces, it may jeopardize the achievement of reform where approval of at least seven provinces having 50 per cent of the Canadian population is necessary. In fact, I believe the converse to be more accurate. Indeed, if Parliament acted to incorporate the nine-year non-renewable term on its own, this would signify the beginning of reform, and the Canadian people would then put significant pressure on the provincial Governments to go all the way with the joint committee's recent recommendations. Certainly such action would whet the public appetite for Senate reform.
I agree fully with the statement in the special joint committee's report which stated:
We were told frequently that, after so many abortive attempts at Senate reform, the time has come for vigorous action-for fundamental change in the Senate-and that it would be a mistake to adopt inconsequential reforms.
Well, Bill C-231 is a giant step and the first step in fundamental reform of the Senate. And it can be done by Parliament. So let us do it. And as we do it, let us continue negotiations with the provinces to entrench constitutionally the remaining recommendations of the special joint committee. I
Tenure of Senators
believe that the provinces will accept some of the recommendations, such as increasing the size, perhaps even to 144, to provide more equitable regional representation. However, in my view, many moons will set before the provinces accept an elected Senate. The people of Canada will have to push the provinces into accepting a fully elected Senate. The provinces will continue to demand direct or indirect provincial appointment of Senators as was proposed in all nine proposals prior to the present joint committee report. But in time either a fully elected Senate will be a Canadian reality or else the Senate will disappear. Only then will a Senator have legitimacy, accountability, and independence.
Since coming to this House in 1979, and even as a provincial Member, I have worked increasingly on federal institutional reform. Senate reform has been one of my top priorities, as was patriation of the Canadian Constitution. In the last five years, I have issued many letters and reports, and I have taken several initiatives through private Member's Bills and resolutions in this assembly on Senate reform. I am convinced that we are now on the threshold of reform of this institution, mainly because the people demand it. Reform of the Senate should be a major plank in the election platform of each political Party in the next election. Those politicians and would-be politicians with an eye focused on the future will make it an issue.
I trust that the people will respond to their cries for Senate reform and that the next House of Commons will be filled with elected Members in all Parties demanding Senate reform. I think that Senate reform will come to pass during the four to five-year tenure of the next Parliament of Canada. It is interesting to recall that the Prime Minister in 1968, when he was seeking to become Leader of his Party, had Senate reform as one of his top planks in his platform. What are the views on Senate reform of today's would-be Prime Ministers who roam the country? Why do they not speak with conviction? Some have, but not all.
But let us approve second reading of Bill C-231 today and let us send it to committee for additional consideration.


Hon. Roger Simmons (Burin-St. George's):: Mr. Speaker, first I would like to commend the Hon. Member for Edmonton East (Mr. Yurko) on his continuing campaign to encourage parliamentary and public debate on Senate reform. Indeed, some of us will recall that just over a year ago, in April 1983, we discussed another Bill proposed by the Hon. Member for Edmonton East, Bill C-640. It dealt with structural reform of the Senate. It was a detailed and comprehensive proposal, and a number of Members recognized then, as they do now, that it was a good and thorough piece of work on the part of the hon. gentleman.
The Hon. Member for Edmonton East later appeared as a witness before the Special Joint Committee on Senate Reform. He modified his proposal somewhat on that occasion, but I know his ideas and strong belief in Senate reform caught the attention of the members of that committee at that time.

April 30, 1984
Tenure of Senators
On April 4, 1984, the Hon. Member introduced Bill C-231 which is now before us. It proposes that all future Senate appointments be for a single nine-year term and that all existing appointments be subject to a nine-year term or retirement at age 75, whichever occurs first. The Bill's explanatory notes show that there is some similarity between the proposal before us today and one of the recommendations in the recent report of the special joint committee. I would suggest that in order to assess the merit of Bill C-231, we need to look first at the work of the special joint committee, for its work has influenced public debate on Senate reform and, arguably, accounts partially for the nature of the constitutional amendment which is now before us as proposed in this Bill.
The Special Joint Committee on Senate Reform was established by a motion of both Houses of Parliament in December 1982. The most important part of its mandate was the following:
To consider and report on ways by which the Senate of Canada could be reformed in order to strengthen its role in representing people from all regions of Canada and to enhance the authority of Parliament to speak and act on behalf of Canadians in all parts of the country.
The committee began to hold public meetings in Ottawa in May, 1983. By the end of June, it had already heard from a large number of academics, interested groups, Members of both Houses and others. During the committee's first round of hearings, the Minister of Justice (Mr. MacGuigan) appeared as a witness and presented a discussion paper on Senate reform on behalf of the Government of Canada. That paper did not put forward a detailed government position on Senate reform. However, it contained a number of significant statements that revealed both the Government's interest in Senate reform and some of its general inclinations on the relevant options. I would like to refer to a couple of those statements this afternoon.
First, it seems clear that the Government saw the launching of the special joint committee as the beginning of a second phase of constitutional renewal. In its introduction, the Government's discussion paper referred to the three steps in constitutional reform that had been suggested in 1968 in Mr. Pearson's paper entitled "Federalism for the Future". The discussion paper stated that with the patriation of our Constitution and the adoption of the Charter of Rights and Freedoms, the first stage had been largely completed. The paper then went on to say:
The Government of Canada believes that it is now time to begin the second: to strengthen the national institutions of Government, beginning with the Senate of Canada, the chamber of Parliament in which Canadians were intended to be represented on the basis of regions, rather than strictly on the basis of population. In due course, we will then be able to take the third step on the path of renewal, for which the Royal Commission on the Economic Union and Development Prospects for Canada is already preparing the ground.
I believe that those words in the introduction to the discussion paper on Senate reform are worthy of note. In my view they illustrate this Government's interest in the reform of our national institutions and its belief in the importance of Senate reform in particular.
It seems clear to me from reading the discussion paper that the Government hoped the committee would give particular attention to the Senate's role in regional representation. The paper defined the regional representation role of second Chambers in federal states as "the representation of the regions or the constituent political units on a basis other than representation by population". The Government's particular interest in improvements in the Senate's regional representation role was stated at another point in the paper, and I quote:
Although there are a variety of potential functions for the Senate, the Government of Canada believes that, if the second chamber of the Canadian Parliament is to help us respond to the challenges facing our country and make a contribution similar to second chambers in other federations, the role which needs the most attention at this time is the role of regional representation. Yet the strengthening of regional representation in the Senate should be undertaken, if at all, for the purpose of stengthening Parliament too, and enhancing its authority to act on behalf of Canadians in all parts of the country.
The Government's discussion paper also noted that substantial provincial agreement under the amending formula would be required before major reform of the other place could occur. The paper specifically stated that "before such changes can be made, the federal and the provincial governments will have to discuss Senate reform and reach a sufficient measure of agreement". However, parliamentary consideration was to precede intergovernmental discussions. In the words of the discussion paper, Parliament would first "consider its own reform and reach conclusions about the best means of strengthening its role as the primary focus of our political life as a nation".
I thought it might be helpful to remind Hon. Members of some of the views the Government of Canada submitted to the committee last June. I think they give us an idea of the Government's reasons for encouraging parliamentary and public debate on Senate reform during the past year.
The special joint committee resumed its work in September, and between then and the end of October it visited all provincial and territorial capitals. It heard witnesses and held meetings with members of six provincial Governments. Although it had invited all provincial Governments to speak to the committee, the other four chose not to do so. Nevertheless, the committee should be congratulated on its decision to consult closely with provincial Governments. Those Governments will have a major influence on the course of Senate reform. It is in the public interest that their views be part of that process at this stage.
The committee deliberated during the last two months of 1983, and on January 31, 1984 it tabled its report. I would add a comment on the support behind that report. Committee members of the two major Parties and both this and the other House endorsed it. It thus bears the stamp of a bipartisan, bicameral consensus within that committee. That is a significant achievement, especially when one considers that the report proposes a bold, clear-cut plan for Senate reform. That bold plan is centered on the committee's most important conclusion, which is found on page 1 of its report to Parliament, and I quote:
April 30, 1984

An appointed Senate no longer meets the needs of the Canadian federation. An elected Senate is the only kind of Senate that can adequately fill what we think should be its principal role-the role of regional representation.
The committee stated in its report that it did not reach that conclusion lightly or easily. It obviously had an ample body of evidence and research before it, and it drew on the background and political experience of its own members. The committee also looked at the Senate's historical origins and the role it was meant to play within the federation, as is plain in the report's statement that "only an elected Senate can satisfy the original intent of the Fathers of Confederation".
Apart from its being elected, what are the characteristics of the reformed Senate proposed in the report? First, the report suggests the Senate should have significant powers, "but it should not be able to undermine Canada's well-tried system of responsible government". With that in mind, the report proposes that the reformed Senate have a suspensive veto of a maximum of 120 sitting days over ordinary legislation. On legislation of linguistic significance, the report recommends that the Senate would have an absolute veto, and its own approval of such legislation would have to be by a double majority.
The committee proposed that the number of Senate seats be increased to 144 from the present 104. Ontario and Quebec would retain their present 24 seats each, but all other provinces would have their number increased to 12, except Prince Edward Island, which would receive two additional seats for a total of six. The Northwest Territories and the Yukon would be allotted four and two seats, respectively. The committee thus did not opt for equal provincial representation in the reformed Senate, even thought the proposed distribution, in the words of the report, would provide for "substantial overrepresentation of the less populous provinces and territories".
The report recommended that Senators be elected in singlemember districts according to the first-past-the-post system values for the House of Commons. Although the committee considered proportional representation, and many of the witnesses who advocated an elected Senate also favoured some form of that method of election, the committee concluded that the same electoral system should be used for the reformed Senate as for this House. In proposing that the method of election used for the House of Commons be adopted for an elected Senate, the committee did not explain how this would significantly improve the Senate's role in regional representation.
The report recommended that Senators be elected for a nine-year term, which would not be renewable. One-third of the Senate would face election every three years, and those elections would be held on fixed dates so as not to coincide necessarily with elections to the House of Commons.
The proposed term has received a good deal of comment so far. It might be helpful to recall the committee's rationale for it. The committee in its report said:
Tenure of Senators
If Senators are not able to seek re-election they will have more independence of Party influence and greater freedom to speak out as regional representatives, they will be less likely to get involved in the kind of constituency duties that would duplicate those of Members of the House of Commons, and they would be able to devote most of their energies to sitting of the Senate and its committees.
It is worth considering whether such a long, single term would allow Senators truly to be effective regional representatives.
There are other recommendations in the report, some of which are meant to be acted on in the short term. Nevertheless, the committee did not produce an overly detailed set of proposals. Public comment so far has noted the clarity of the report and the straightforward manner in which its conclusions are presented. I think I can speak for other Hon. Members when I say that we owe a great debt to the committee for bringing forward such a broad analysis of the problem and a clearly presented proposal for a reform of the Senate.
Under our rules, the special joint committee requested a response from the Government. That response was tabled in both Houses of Parliament on April 10.1 do not know whether Hon. Members have read it, so I would like to take some time this afternoon to review the key points in it. First, the Government, through a letter from the Prime Minister (Mr. Trudeau) to the co-chairmen, has given its general response to the committee in the following words:
The Government of Canada believes the committee report contains a useful set of proposals on which a fruitful public debate might be based. I am therefore pleased to inform you that the Government intends to use the report as a whole as its working document on Senate reform for future consultations with provincial governments, interested groups and individual Canadians.
The response goes on to refer to the report's recommendation that the reformed Senate's primary role should be regional representation. The Government states that it accepts the committee's assessment of the problem and its recommendation that the primary role of the Senate should be in the area of regional representation.
Within the response, the Government states its specific acceptance of some of the committee's other recommendations. For example, the Government concurs with the Committee's view that in addition to the primary function of regional representation, the Senate should continue to make the two complementary functions of investigation and the improvement of legislation. The Government has not yet accepted the report's specific proposal for the distribution of seats, but in the response it agrees with the committee's suggestion that any revised seat distribution should substantially increase the proportion of seats allotted to western Canada.
It seems clear from reading the Government's response that it sees the committee's report as a very useful analysis and proposal for Senate reform. The Government has announced its intention to use the report as its working document on Senate reform. Moreover, the Government has said it will include provincial governments in its consultations and that it will use the report as the point of departure for those discussions. In my view, the Government is on the right track. Substantial provincial agreement will be required if any significant change in the other place is to come about. It is wise, I

April 30, 1984
Tenure of Senators
think, to begin to involve provincial governments in planning the way for that reform.
With that bit of background on the Government's discussion paper, the recommendations of the special joint committee and the Government's response to those recommendations, I will return to Bill C-231. It seems to me that the Hon. Member's proposal is inspired by a recommendation in chapter 7 of the committee's report. That chapter is entitled "Reforms that should be made now", and in it the committee proposed that all future Senate appointments should be made for a nine-year non-renewable term.
The Hon. Member's Bill points out, quite correctly, that if that recommendation were implemented, three "classes" of Senators would result: those appointed for nine years, those who would retain their seats until age 75, and those others, not very numerous, who would keep their seats for life. Therefore, he has proposed in Bill C-231 that those now holding Senate seats should be obliged to give them up after they have served nine years or reached the age of 75, whichever occurs first, and that all new appointments be made for nine years.
I think the Bill before us is a useful contribution to the ongoing debate on Senate reform. However, I do not think that, on its own, its acceptance will bring about the degree of change the joint committee had in mind and which many Canadians expect. I do not think we should take one small part of the committee's report, separate it from its context and act on it at this time. The Government has stated its intention to pursue the issue actively, particularly with provincial Governments. When we have a better idea of the general reaction to the committee's proposals as a whole, we might be better equipped to decide whether action on all or on any part of it should be undertaken.


Hon. Bill Jarvis (Perth):: Mr. Speaker, I join with the Hon. Member who just spoke in extending my sincere thanks to our colleague from Edmonton East (Mr. Yurko) on bringing the matter before the House for debate. As he likely knows, I was a member of the Special Joint Committee on Senate Reform since its inception until its report. I hasten to point out that I do not pretend to speak on behalf of that committee, nor do I speak necessarily on behalf of my Party, I speak, rather, as an interested Member of Parliament during Private Members' hour.
As I said, I compliment the Hon. Member for Edmonton East. I deplore the fact that more initiative in terms of this type of debate has not been taken in the Senate. If the Hon. Member has been following the proceedings of that Chamber, he will know that little of substance has been said, not just with respect to the committee's report but to the broader subject of reform which the Senators are quite capable of initiating in any number of matters. Frankly, to their discredit, they have not sought that initiative. That is not to cast aspersions broadly, because I believe there are a good number in the other place who are generally concerned with the status quo and generally interested in seeing some reforms initiated.
I believe that the Hon. Member for Edmonton East quoted the exact sentence from the report. An appointment for a nine-year term was recommended almost as a last resort. I believe that that is what our general thinking was at the time. The Hon. Member has put that in a much different context. I believe I heard him say a few moments ago that if a nine-year term for an elected Senate is important, it is even more important for an appointed Senate. I might get into a debate with him on that point. I do not think I will, but it seems to me that the thinking of the committee was not necessarily along the same lines as his in terms of those priorities for the nine-year term.
I would like to deal with the explanatory note. I hope that I am not doing the sponsor of the Bill an injustice. He indicated that his Bill may have an advantage over the committee's report in that the committee's report could result in more than one class of Senator. That is absolutely true. He says that his Bill will eliminate that possibility. Something about that, however, does cause me grave concern. I am not sure that it is a good analogy, but the Hon. Member will recall the Government's six and five program. At that time, a number of us thought that that program was in part a moral breach of contract if not a legal breach of contract. Its effect on some of those in the Public Service troubled me deeply.
I do not know why I should be the spokesman or defender for those in the other place who are well able to speak for themselves, but it would trouble me somewhat to think that a person who had been appointed either for life or until age 75, despite having been given that rather enviable appointment, now finds that the rules have been changed. I would be less than frank if I did not say to my colleague that that causes me some concern. I am not so concerned that it would cause me to ract totally negatively to this Bill, but it would be something that I would want to think about and explore very deeply in committee before saying amen to that particular proposal.
I absolutely agree with the sponsor of the Bill when he says that, because of economic priorities, little or no attention has been paid to this issue either by leadership candidates, leaders of Parties, or the public in general. I think his timing is dreadful. I thought that the timing of the special joint committee was dreadful, coming as it did in the penultimate year of a Parliament when our Party had just chosen a new Leader and an election was being expected, and now that we have a leadership contest in the Government Party. Despite all that, what is really wrong with the timing is the natural preoccupation of the electorate with economic matters. I would think that we would really be living in a fool's paradise were we to say to ourselves that a leadership candidate or the leader of a Party could make this a burning issue across the country in a general election.
Frankly, I did agree with the Hon. Member for Edmonton East when he said that the leadership candidates and leaders of Parties should be put on the spot. They should be asked how they feel about Senate reform. There is nothing wrong with that, but to think that this issue will be a major vehicle with
April 30, 1984

which to persuade or dissuade the electorate would, I think, be pretty naive.
As the Hon. Member has said, there is no question that those who are thinking about Senate reform want accountability. As well, they overwhelmingly reject patronage. I believe they were simply saying to the committee that if we could not as a committee, a Government and a part of a constitutional process effect significant Senate reform, then we might as well abolish it. I think that was the difference between what the committee heard as evidence and what was contained in the seven, eight or nine reports. I myself was a member of the committee which dealt with Bill C-60.
Attitudes have hardened and I believe that that is the difference between this report and previous reports. I think many of the institutions of Government have fallen into some disrepute. 1 think there is a cynicism and suspicion that exists, and that is natural for a population suffering economic pressures. This cynicism and suspicion has resulted in a hardening of attitudes, and there are very few people other than several here in Ottawa who would be great defenders of the present Senate system.
I would like to deal with my concern about, to use the Hon. Member's words, "provincial involvement in the Senate process". We must be extremely careful at least to attempt to differentiate between the involvement of people who live in a province and the involvement of provincial Governments in the Senate process. Those two things are dramatically different. It is simply too trite to say that because a provincial Government has been elected, it should be directly involved in the Senate appointment process. I have always had grave difficulty with provincial appointments. Again, I do not wish to be too cynical, but let us be realistic. Say that I am a premier of a certain province and I have a Cabinet Minister who has outlived his usefulness, is causing me trouble or is a threat to my leadership, and I have the power of appointment.


Mr. Bloomfield:: Put him in the Senate.


William Herbert Jarvis: As my friend, the Hon. Member for London-Middlesex (Mr. Bloomfield), just said, I would solve the problem by putting him in the Senate. I would do the same thing to my fund raiser who had made too many calls to the same well.
I believe it goes deeper than that, Mr. Speaker. I do not believe that a provincial Government which has successfully sought from its electorate a mandate on a certain set of issues has ipso facto or automatically a mandate to involve itself directly in the appointment of a person to a federal institution. Unless senate appointments were part of the campaign issues of that Government, its electorate has given it a mandate to act within the boundaries of that particular province.
I believe that I as a member of the committee and all members of the committee diligently sought an alternate and more acceptable form of an appointed Senate. It was not to be found. I can say to the Hon. Member for Edmonton East, that with respect to regional representation, it was made clear to us by witness after witness that in the minds of Canadians a
Tenure of Senators
region is now a province. It is not the western region or the Atlantic region or the maritime region. A region is a province. I think we should forget all about lumping Manitoba and Saskatchewan together or lumping two or four of the Atlantic provinces together. We should forget that because it is not going to work.
I am absolutely convinced that when people now talk in terms of regions, they talk in terms of provinces. That is why, instead of proportional representation or election at large within a province to the Senate, we recommended a senatorial district or whatever it might be called. Those of us from Ontario, and I am sure those from other provinces, know that there are extraordinary differences in the interests, ambitions, prejudices, fears, hopes and aspirations of those who live in rural southwestern Ontario and those who live in metropolitan Toronto. Even more dramatically, those who live in northern Ontario from North Bay up to James Bay have different interests. I am sure the same is true in every province. Therefore, we said to ourselves that if we need greater regional representation in the Senate, then we cannot do so by election at large or by using a list of eligible candidates from our particular Party from the Province of Ontario. If we have as our pillar the principle of greater regional representation, then we must carve the regions into districts.
Frankly, I would be one of the first to support having this Bill go to committee if I were convinced that it would act as an effective lever to get the provincial premiers and the Prime Minister (Mr. Trudeau) to the bargaining table. If that is all that it accomplished, it would be worthwhile. There is no question about that. We in the committee had serious doubts about using that kind of lever. We are very anxious for the next First Ministers' Conference to see if anyone will take the intiative to put it on the table. We have some hope that the premiers, who have their annual conference I believe in August of each year-just the provincial premiers, no federal Government involvement-will put it on the agenda for the next conference.
With respect to the Hon. Member's remarks that no reform had occurred because the package was too large to swallow, he may be right. There is no question about the present report; it is a package. It is a package and it is inextricably interrelated-an elected nine-year term senatorial district. It is very har to carve out the pieces, pull out the district and put in proportional representation. One will find that argument very flawed if one accepts the regional representation argument. It is very, very flawed. That concerned me deeply with respect to the reply of the Prime Minister. I do not think that the Government has thought through those three principles and how they were interrelated. I appreciated receiving the reply of the Prime Minister well before the time required for that reply.
I certainly hope that the subject matter raised today by the Hon. Member for Edmonton East will be the subject matter for further debate and, particularly, I hope that it is a matter
3258

April 30, 1984
Tenure of Senators
for further debate in the other place where, so far, that debate has been saddly lacking.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Carleton-Charlotte (Mr. McCain).


Fred Alward McCain: Mr. Speaker, I want to compliment the Hon. Member for Edmonton East (Mr. Yurko) on the work that he has done on this subject matter and the literal thesis which he wrote about it. Whether I agree with him or not is another question.
Unfortunately for us, we have lost sight of the purpose of the Senate. The Senators themselves have lost sight of the very basic philosophical and political logic on which the bicameral system was instituted in Canada at the beginning. The initial understanding of Canada was that it was, in fact, made up of regions; that these regions had differences of needs and opinions, and that the best way to have these represented was by a Senate with a regional representation rather than to have representation by population. This, of course, has been the principle on which the Senate of the United States was formed. State by State there are two Senators. There is a regional impact in that Senate at any point in time they wish to exercise it. It is perhaps more noticeable in the farm belts of the United States than it is in any other region. The Senate, by virtue of its two Senators per State, has been able to exercise the interest of the region which it represents in a fashion which is in the best interest of the nation as a whole. There has been very little criticism of the failure of the Senate to be there by representation by population.
Again I am very sincere when I refer to the very hard work the Hon. Member for Edmonton East has done. Of course the Hon. Member for Perth (Mr. Jarvis) and others who sat on the committee did an equally diligent job of considering the subject matter. What we have not considered in any of the remarks today is the fact that the Government of Canada, since I have been here, has chosen to issue ultimatums to the Senate, and the Senate has chosen suppliantly to give them exactly what they ask for in the ultimatums. For instance, budgets have gone from this House to the Senate and back in the same afternoon. That means that the Senate has absented itself from its-


John Leslie Evans: Matters of supply do not go to the Senate.


Fred Alward McCain: Supply and other items of a comparable nature do go, but they cannot change supply, I agree. Let us take Canagrex. Canagrex was a Bill in which there were regional inputs, with regional differences of attitude toward that particular Bill. That Bill went there about noon and was back not later than the next morning. In that case, I submit to you, Mr. Speaker, that those regional Senators did in fact divest themselves from the responsibilities of their office as appointed and as it was intended that they should function.
I submit that another primary example is the lassitude which Maritime or Atlantic Senators have shown toward to the reduction in federal allocations of money for cost-shared programs, which has put the Atlantic provinces in a very, very
serious financial position. Yet, there has been no debate that I am aware of with Atlantic Senators speaking up on behalf of the Atlantic provinces. In round figures-and I cannot get an exact figure; I perhaps could get one from the Minister of Finance (Mr. Lalonde)-the Minister of Finance has stated that in a five-year period we will have some $6 billion. With respect to the Bill on health care, which will pass, that Bill and that attitude, coupled with the reduction in the percentage of cost-sharing which the federal Government has exercised recently, will put Atlantic Canada $1 billion short of its needs to render service on the same level as in the rest of Canada. This is an opportunity for the Senators of Atlantic Canada to speak up and to exercise their input.
I submit to you, Mr. Speaker, that an elected Senator is not the answer. It might be the answer if elections were simultaneous, because in that case the body of the Senate would in fact correspond with, in most instances, the Government that might be elected at a particular moment in time. But if perhaps a senatorial election should happen some 18 months after a change in Party of the federal Government, there is no doubt that with any backlash against an 18-month old government in this nation-18 months after its mandate was granted by the vote of the people-the Government would find itself in conflict with that Senate which was elected 18 months thereafter.
I do not see it as a solution. I see it as an amplification of the problems which we already have in respect to the purpose of the Senate, namely, to give second tought to all legislation as well as to give regional representation which is so badly needed. I come from that region and understand that need.
I would have to say to you that I agree with the Hon. Member for Perth when he said that each Member should have his own constituency as far as an elected Senate is concerned. I also agree with the Hon. Member for Perth when he suggested that it is very difficult for provincial Governments to make appointments. I give the instance of the last siege of federal Government, which has gone on since 1963. If the provinces of Atlantic Canada, which are all Conservative, were to appoint Senators, I submit to you that the same problem would exist in the Senate, if they exercised their regional influence as they should, as would, in my opinion, result from elections of the House of Commons and Senate which were not simultaneous.
I submit to you that the Senate is in disrepute because it has neglected its regional responsibilities and, secondly, because the Government has issued ultimatums to it, to which it has unfortunately submitted itself and thus brought upon itself the great bulk of the criticism which has been levelled at it of late. It blame the Prime Minister of this day and the Senate itself for its capitulations to ultimatums one after the other which have been issued to it by this Government. Properly appointed and with their responsibilities exercised as it was perceived they should be exercised, the appointed Senators can accumulate skills which I do not believe can be accumulated by the election process. I do not believe it can be accomplished.
April 30, 1984

If a government were conscientious in the selection of skills in its appointments to the Senate, it would be a much stronger Senate. If it is to be the home of bagmen and people in need who have supported a particular Party, then of course it will not function very well. I can think of a multitude of Senators who have outstanding ability and who have done outstanding work. Perhaps one of the best examples is the work which the Senate committee on Agriculture did some 15 years ago. In its study of that national problem, it produced a work which was very complimentary to the Senate.


The Acting Speaker (Mr. Guiibault):: The Chair regrets to interrupt the hon. gentleman, but the time provided for the consideration of Private Members' business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Jack Wendele Shields: Mr. Speaker, on April 9 I posed a question to the Minister of Transport (Mr. Axworthy) regarding Northern Transportation Company Limited. I requested information concerning the date the decision was made to privatize NTCL. It becomes clear, when one reviews the activities of NTCL and its abandonment of the Athabasca run from Fort McMurray to Uranium City, Fort Chipewyan and places in between, that management knew full well, probably two years ago, that they were going to privatize this Crown corporation. The line from Fort McMurray north on the Athabasca River was a profitable line. The volume of shipping was starting to drop because of the closedown of the mine in Uranium City and the subsequent drop in tonnage from that mine.
If one reviews the history of Fort McMurray when the land was purchased to accommodate the yards and dockage facilities for NTCL, one can see that a great deal of capital gain has been made in transportation with NTCL in that area. NTCL did not announce they were closing down the line, Mr. Speaker, they simply failed to apply for their license to be renewed. They did not hold public hearings to allow the people in the communities to participate. The transportation authority went up there, announced they were taking applications for the rights to handle the run, and NTCL failed to submit an application. In so doing, it circumvented any public inquiries or public input as to whether they should or should not close down.
Adjournment Debate
It became clear when we examined some of the issues in committee that NTCL did not lose money on the run north from Fort McMurray to Fort Chipewyan and Uranium City. Indeed, they charged back some of the capital expenditures made on the Athabasca run and then transferred tugs and barges, charged to the Fort McMurray run, over to the eastern Arctic. This all looks very suspicious, Mr, Speaker, as if the directors were attempting to run the operation down to a point where it could be easily purchased when it was privatized. When you look at the annual report of the corporation you see that it shows assets at book value, somewhere around $40 million, when in fact NTCL records indicate the value of this Crown corporation exceeds probably $200 million. One begins to have suspicions when a group of people made up of directors and managers of the existing Crown corporation join with two other groups to form a consortium so they can make an offer for this company.
I asked the Minister if he would make the commitment in this House that the right of first refusal for the purchase of the land located in downtown Fort McMurray would go to the City of Fort McMurray. Mr. Speaker, that land was bought 30 years ago when land values were absolutely nil in the community. It is now a prime piece of real estate in the community. The City of Fort McMurray wants very badly to become owner of this property in order to develop it for the betterment of the community of Fort McMurray. I have yet to receive a reply to this request.
If I could refresh your memory, Mr. Speaker, the Minister said:
I will take the Hon. Member's representation and examine it. I would point out that we took a position on the Fort McMurray alternative almost a year ago. There is a private development taking place in that area under agreements with other federal Departments. In terms of a specific request, I will refer to the proper authorities and get an answer for the Hon. Member.
I would assume that the private developments which the Minister is referring to are the developments which are taking place in the oil sands. Clearly, if developments are going to take place in the oil sands and the mining operations, it is not going to require the type of property which exists in a high density and high commercial area in the City of Fort McMurray.


Mrs. Eva Cote (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I am pleased to have this opportunity to answer the question raised by the Hon. Member with respect to the sale of Northern Transportation Company Limited, although I should add that the Minister has spoken to this subject several times within the last few weeks.
The Hon. Member suggested there was a connection between the Government's decision to privatize Northern Transportation Company Limited and the allocation of costs on the Athabasca run. I can give the House the assurance that there is no connection between the two.

April 30, 1984
Adjournment Debate
Some time ago, the corporation's management informed us that losses incurred on the Athabasca run were too high. We received this information quite some time before the thorough study made by the Government with respect to privatization of this corporation.
In any case, as the Hon. Member is aware, allocation of expenditures to the components of a corporation is not an arbitrary exercise. On the contrary, it is governed by the principles of accounting practice. We are convinced that Northern Transportation Company Limited was acting in accordance with generally recognized accounting principles when it determined the cost of the Athabasca run.
The Hon. Member has argued that facilities no longer required for the Athabasca run should be sold. As far as tugs and barges are concerned, I can assure the House that this equipment will be used in a manner that is appropriate. Northern Transportation Company Limited is negotiating a contract under which a number of tugs and barges will be leased to other businesses providing a service on the Athabasca. The rest of the equipment will be transferred away from the Athabasca system, and no surplus equipment will be kept.
Sale of the tugs and barges has become rather complex owing to the privatization of this corporation. We believe it would be preferable to leave such decisions up to the corporation's new owner.
As for the land owned by Northern Transportation Company Limited at Fort McMurray, it will be sold in the same manner as the corporation's other assets. At the present time, the Government, as shareholder, wishes to sell Northern Transportation Company Limited intact, rather than selling each of its components separately. However, perhaps the Government might consider the sale, at market value, of several assets not required by Northern Transportation Company Limited for its operations, depending on the effect that would have on privatization of the corporation as a whole.
In this connection, the town of Fort McMurray would be free to make an offer to Northern Transportation Company Limited for the land located within the town limits, and such an offer would certainly be taken into consideration, at the same time as offers to purchase the entire corporation.


CANADIAN NATIONAL RAILWAYS-REQUEST THAT SUBSIDIARY OPERATIONS BE PRIVATIZED. (B) GOVERNMENT POLICY
Donald Alex Blenkarn: Mr. Speaker, last April 17 I raised with the Minister of Transport (Mr. Axworthy) the question of certain subsidiary operations by Canadian National Railways in competition with the private market. Those operations are CN trucking operations that are in competition with private trucking operations across the country, the hotel and restaurant operations that are in competition with small businessmen across Canada who are hotel and motel owners. In those kinds of operations a small private
businessman makes a profit and pays taxes; that is not the case with the conglomerate run by the CNR. Frankly, the hotel operations by the government through the railway has been a disaster for well over a decade and a half.
The railways originally got into the hotel business to actively promote passenger transportation by rail. We know that for some time now the whole matter of transportation of passengers by rail has been delegated to VIA Rail, and that the railways are no longer involved. It would seem that the railways would try to get out of the hotel operation and let private hotel, motel and restaurant operators run this business. Surely there is no public necessity for the Government of Canada in terms of transportation and maintenance to in fact own hotels.
However, on reading the annual report of this Crown corporation it seems that it wants to expand its hotel operation. For example, it is building a 600-room hotel in Toronto, next to its tower. We know that the tower only cost approximately $60 million, plus the cost of the land it is on. It has not made a nickel since it was built; it is a loser. Now a hotel is to be built next door to the tower. Toronto has lots of hotels, and private entrepreneurs who build good hotels. It is ridiculous that the Government of Canada under the auspices of this railway should build a hotel.
It will also spend the taxpayers' dollars to refurbish the MacDonald Hotel in Edmonton. This might be acceptable if it were making a profit. However, in respect of the hotels owned by the railway in this country there is $124.5 million on a depreciated basis. That means, taking capital cost allowances into account, this year this operation lost $2.7 million. It lost also money last year and the year before. While it made a very slight profit the year before that, every year prior to that it lost money.
In this situation more and more money is being poured into hotel operations every year than is allowed in capital cost allowances or depreciation. The Government of Canada, through the railway, gets more deeply involved in an activity from which it has proven it cannot make money. It should not be involved.
I ask the Minister why he simply does not turn the hotels and restaurants over to people who know how to run them? The Government should sell them and get out of the business. I am suggesting that it should not only get out of the hotel business but the trucking business as well.
Let me name some of the companies involved in the railways' trucking business. One is CNM Incorporated. I am not sure if these are trucking companies but they include Domestic Four Leasing, Domestic Three Leasing and Domestic Two Leasing. There is the Royal Transportation Company, Transport Husband (Quebec) Incorporated and Transport Route Canada Incorporated. There is Empire Freightways, and the list goes on. This is not a complete list. It loses money in trucking. There is some $30.4 million involved in trucking. The loss last year was $8 million. The whole investment is doubled
April 30, 1984

in losses every three and one-half years. There is no justification for that.
Let me deal with the express service. At one time it was necessary for the railway to be involved in moving express. The total investment by the railway in express service at the present time is $23.8 million. Last year it lost $25.4 million. The railway would have been better off to turn the key in the lock and not operate a single express facility. It would not have lost $25 million. If it had written off the whole $23.8 million in assets, it would have saved $2 million on the balance sheet.
That is the kind of thing that is happening with Crown corporations, not only with the Canadian National Railways, but everywhere. Subsidiaries of Crown corporations and Crown corporations themselves are pretending to do a job in the public interest, pretending to do a service that must be done. But invariably when that service is performed by a Crown corporation in competition with private entrepreneurs a loss is incurred. Let us consider this area of express. The bus companies deliver express packages, the airlines deliver express packages, Purolator delivers express packages and Courier delivers express packages. Everybody is in the express business, and a loss is incurred. We have the Government of Canada through CNR in the express business showing a loss of $25.4 million. This is disgraceful and it must end. The assets should be sold to those who can handle those assets and make a profit and pay tax. That is the way business ought to operate. Things ought to be done properly, reasonably and effectively.


Eva Lachance Côté: Mr. Speaker, as the House is aware, from the very outset the railways in Canada have had to undertake many peripheral activities to ensure efficient operation of the railroads as such. They had to provide their own telephone lines and they also had to provide the infrasctructure for traveller accommodation. In addition to these peripheral activities, the railways were also granted non-monetary privileges. The latter included title not only to land but also to minerals and oil.
With the passage of time, the needs of the railways and the value of their assets have changed. Canadian National Railways had to decide whether it would sell its assets and made a financial profit immediately or optain a maximum profit on a long-term basis. The Government, as shareholder, will have to decide whether CN's activities with respect to non-rail assets are appropriate. The question of privatizing the corporation has been the subject of several studies. With the exception of CN Rail, CN's assets are managed by CN Enterprises. This division has been given the mission to manage and control assets so as to ensure maximum returns on a long-term basis and also to develop new projects that would complement and enhance current CN projects. In 1983, CN Enterprises made a profit of $65 million, specifically in communications systems, marine services, real estate and oil. These profits have enabled
Adjournement Debate
the corporation to increase borrowing by $100 million without changing its debt/asset ratio. This means that CN has been able to finance other projects such as expanding railroads in western Canada.
Like other hotel chains, the Hotels Division and the CN Tower have suffered from the recent recession. In 1983, the Division incurred a loss of $2.7 million. In 1982, it incurred a loss of $0.7 million. In 1981, it made a profit of $0.9 million, and in 1980, a profit of $2 million. In 1984, the corporation expects the market to expand and its income to increase. Over the next five years, the corporation intends to integrate all its hotels in a unique and distinguished chain of first class hotels. The Government is confident this project will be a success.


RAILWAYS-LEVEL OF INVESTMENT BY RAILROADS. (B) SIZE OF INVESTMENT TO MOVE GRAIN
William Hunter (Bill) McKnight: Mr. Speaker, I rise to take part in the adjournment debate regarding a question I asked the Minister of Finance (Mr. Lalonde) on April 16, 1984.
It is very interesting to follow my colleague, the Hon. Member for Mississauga South (Mr. Blenkarn), who spoke on the Canadian National ownership of hotels, trucking lines, parcel services, restaurants and towers in downtown Toronto. The CNR, which is supposedly in dire straits financially, has to charge the farmers who produce the grain for a hungry world more to move that grain. Yet it continues to operate in areas where it could very well be displaced by enterprising individuals who wish to make an investment and obtain a return. The investments the CNR has made in hotels and the trucking industry, as my colleague pointed out, have not brought a return to the taxpayers of Canada.
On April 16, following a question by the Hon. Member for Brandon-Souris (Mr. Clark) to the Minister of Finance, the Minister stated that over $1 billion from the Government of Canada was being put into the farming industry in western Canada. I would like to quote briefly from Hansard for April 16, as reported at page 3080, wherein the Minister stated:
The Hon. Member's Party opposed the improvement which we put forward in the Crow legislation, but the Hon. Member should realize that with that legislation goes substantial support to the farming sector and to the grain community.
Anyone who has ever sat on a tractor for more than 37 seconds, or grown any more than a half bushel of grain would understand that that is a complete fallacy. The people in western Canada will give action to that knowledge by way of the ballot box when they have a chance.
Let us determine, by using Westack figures, who uses the railroads and who benefits from the investment. In 1982 coal took up 45.5 per cent of available space on the railroads in

April 30, 1984
Adjournment Debate
western Canada. In 1990 coal will take up 60.5 per cent of the available space on railroads in western Canada. In 1982 potash took up 7.5 per cent of available space and by 1990 it will take up 7.9 per cent of that space. The percentages for lumber and petrochemicals will increase. But grain, which took up 32.5 per cent of available traffic space on railroads in western Canada in 1982, will decline by 1990 to 23.7 per cent. That is the only commodity which will decline between now and 1990 in movement in western Canada over the rails. Yet the Government said that it had to charge producers of grain more to move their product because they would use the rails and displace all other available traffic. However, we find that by 1990 grain will use the rails less than any other available product.
The Minister said that there would be huge investments in western Canada. Now the Minister of Transport (Mr. Axworthy) is saying that $1.1 billion will be invested this year in railroads in Canada. That is true, when we take into consideration all of Canada, but the figures of the railroads for capital investment in 1984 indicate that CNR will invest, in western rail related investment, $281 million and that CPR will invest $345 million, for a total of $646 million.
However, what are these railroads getting from the Government of Canada this year? They will be getting $652 million from the people of Canada. This is the great investment which was to come about in the western transportation system with the passage of Bill C-155! The railroads are not even investing in western Canada the total amount the people of Canada are giving them. These are exact figures for the two major railway companies in Canada.
Also we find that the original proposed investment of $16.5 billion has now been cut to $ 12.5 billion. The Department and the Minister say that that is because things have changed. If they have changed that drastically; if the proposed investment has been reduced by 25 per cent from the supposed commitment of the railroads to the people of western Canada, perhaps the tariff proposed in Bill C-155 should also be reduced by 25 per cent. In terms of the investments which will take place, the drop of some $4 billion in those investments, roughly $2 billion is due to changes in plans by CN, $1 billion is due to changes in plans by CP and $1 billion is due to inflation.
Canadian National Railways, which is committed to doubletracking in the next five years, has said that it will not do it in five years, but will push it to seven years. Maybe in two years' time it will be pushed along another seven years. It will be deferred. It is like the deferred maintenance that used to be done on the tracks in western Canada. They got paid for deferred maintenance but never did the maintenance. It was never done.
This year Canadian Pacific will only invest $95 million more than it invested in 1983. In 1983 it spent $355 million on rail capital programs and in 1984 it estimates it will be spending
$450 million. When we look at the share the farmers will have to pay, and the cap put on in Bill C-155, we see that the producers will pay 5 per cent more because of additional volume. The Government will benefit. It will pay 7 per cent less because of the blended rate. We are very concerned about that because we remember the promises in the 1980 election about a blended gasoline price. Now it is higher than the world rate. That is what we will have in western Canada with this blended freight rate in Bill C-155.
I look forward to hearing an explanation from the Parliamentary Secretary as to the rationale for the lack of investment and the need to charge producers of food and grain more so that railway companies can invest less in western Canada.


Eva Lachance Côté: Mr. Speaker, in the question put by the Hon. Member for Kindersley-Lloydminster (Mr. McKnight) to the Minister of Finance on April 16 of this year, the Hon. Member asked why the Minister of Transport rationalised that investment by the railroads would be down some $4 billion from what was in Bill C-155, because substantial financial support of $1 billion was being made available by the Government to the grain producing industry.
There is still a certain amount of confusion with respect to these two amounts. First of all, the $4 billion represents a reduction in the expenditures forecast by both Railways for the period 1982 to 1991. At the beginning of 1982, on the basis of the economic situation and traffic predictions, it was estimated that railway expenditures during the decade in question might go as high as $16.5 billion. Since that time, however, inflation rates have dropped substantially, and predictions with respect to growth in railway traffic have become less optimistic. Forecasts by the Advisory Council on Western Transportation for shipments of grain, coal, sulphur and potash to this part of Canada, for the period from 1981 to 1990, dropped by about 13 per cent between October 1981 and August 1983. As a result, predictions have been revised to allow for the present economic situation, which also means that new coal cars will be introduced at a slower rate.
Furthermore, regarding the amount of $ 1 billion mentioned by the Hon. Member, I would point out that this represents the Government's total expected annual expenditures for grain transportation. The Western Grain Transportation Act does not in any way oblige the government or the railways to make specific investments. It does require the railways to invest sufficient funds to make the system viable and efficient and adapt it to changing needs with respect to the movement of grain. However, it obliges the Government to pay the Crow subsidy after 1986, that is, $658.6 million per year, plus part of the annual increase in the costs of the railway companies, this to help pay the expenses incurred by producers as a result of the grain transportation rate.
April 30, 1984

We estimate that this year, the Government will pay a total of $580 million. Furthermore, during the current financial year, the Government will spend the following amounts on grain transportation: $84.3 million for the purchase of hopper cars; $20.6 million to lease hopper cars-
Adjournment Debate


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

Tuesday, May 1, 1984