1984-05-07

GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Friday, May 4, 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. Bill Domm (Peterborough):: Mr. Speaker, I rise to speak on Bill C-24, which is an Act to amend the Financial Administration Act in relation to Crown corporations and to amend other Acts in consequence thereof. For my part I would like to discuss the legislation within the broader framework of government intervention. Rather than restricting this, the Bill gives the Government increased regulatory power and is therefore typical of the excessive desire on the part of the Government to control, to keep secret and to insulate, from both parliamentary scrutiny and public scrutiny, Acts of Parliament.
My strongest belief, as a former businessman and now as an elected representative, is that if private enterprise can do the job as well or better than government, then the state should not interfere. Where government intervention is necessary, it must be conducted in a spirit of co-operation and accommodation, not in competition with the private sector. I am sure the Minister of State for Economic and Regional Development (Mr. Johnston) would share this opinion if given the opportunity to express himself freely and free of Cabinet.
If in fact private enterprise is to be successful, the Government must immediately stop creating impediments to growth and allow the small-businessman the chance to expand and stimulate employment opportunities within his sector. Economic recovery is dependent upon developing the creative capacity of the private sector. Yet the Government continues to interfere in the economy, either directly or indirectly, through mechanisms such as Crown corporations. This constant interference in the marketplace has stifled private initiative and has suppressed investment capital which is so badly needed for job creation. If we are truly interested in creating
jobs we need working capital. We have to encourage investment in the private sector, not discourage it. Confirmation of this is provided by the alarming trend developing which is effectively reversing the role of government accountability.
Today the attitude which is prevalent at many levels of the federal bureaucracy is that somehow the taxpayer is accountable to government, not the government accountable to the taxpayer. This is not at all surprising, considering the overwhelming growth of government which has taken place over the past 15 years.
The enormous size of government all but eliminates personal accountability for the economical, efficient and effective management of public funds. During the years of bureaucratic expansion, it appears that the public purse was deemed to be bottomless. All of this uncontrolled growth is designed for the purpose of allowing government increasingly to interfere in the process of free enterprise.
These concerns were expressed very clearly and were shared by the former U.S. Treasury Secretary, William Simon. He said:
People must be taught to start calling for a rollback of the bureaucracy, where nothing will be lost but strangling regulation and where gains will always take the form of liberty, productivity and jobs.
In Canada today we are witnessing the growth of a disease of government which, if it is allowed to proceed unchecked, will reap untold destruction. Yet Government Members express shock when we criticize a Bill which, far from improving the situation, will only make matters worse by extending the discretionary powers of government and Crown corporations. There is, unfortunately, no shortage of evidence to support the claim that is being made on behalf of the Opposition. To quote page 13 of the Auditor General's report, he noted:
It may be helpful in visualizing the scale of the problem to think of the whole group as an enormous iceberg floating lazily in the foggy Atlantic; silent, majestic, awesome. The public tends to see only the upper portions,... the giants like CNR, Petro-Can, CBC,... The great bulk of the iceberg below the surface is less spectacular, less likely to attract public interest, less likely to receive the attention of Parliament, yet costly to the taxpayers.
A list of "wild risks" and "unknown losers" include "the boat that wouldn't float". Between January, 1973 and June, 1979, the Government spent $1.4 million on a fisheries training vessel which was supposed to cost only $308,000 to purchase and refit. The Government of Columbia refused to accept the vessel due to its instability and unsuitability, according to the Auditor General's report of 1979.
Let us take a look at Consolidated Computer Inc. It was a government experiment to take an equity position in this

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computer company, which it was subsidizing, and it ultimately cost the Canadian taxpayer $124 million. The company was finally dumped. That is proof evident of the inability of the Government to compete with the private sector. Let us look at Maislin Transport Ltd. In spite of being told not to by officials in the Department of Industry, Trade and Commerce, the federal Government guaranteed a $33.4 million loan to Maislin in July of 1982. A year later the company declared bankruptcy.
In February, 1981 the federal Government purchased Petrofina for approximately $1.46 billion, or $120 per share. At the time of the purchase the shares were trading for $90 and were estimated by various brokerage houses to have a true value of about $80. In other words, the federal Government paid between $365 million and $486 million more than was necessary in order to acquire a chain of gasoline stations in eastern Canada.
The carrying costs of the money invested by the Government to date in Petro-Canada totals over $700 million. It is important to remember that Petro-Canada was originally intended to give Canada a window on the oil industry. For the amount of taxpayers' dollars spent to date, I certainly hope we have a good view. However, I am not so sure the Minister of State for Economic and Regional Development would agree. For instance, on April 8, 1984, he had this to say about the "people's" company:
I don't see any need for Petro-Canada in the service station business. I don't see that the Government needs to retail gas any more than it needs to retail chocolates-
If someone came with a good offer for the Petro-Canada service stations, I would be the first to recommend that they be sold provided we are satisfied that the same service is going to be given to the public.
It is strange yet somewhat refreshing to observe a Liberal Cabinet Minister voice his concerns for free enterprise. I wonder where his recently established sense of conviction was when his accomplices and their bureaucratic experts fashioned the National Energy Program.
Government has to start slowing down on its involvement in the private sector. It is most important that when we look at Crown corporations, we assess them from the standpoint of their necessity, not from the standpoint of the necessity of government to get involved in the marketplace. I would hope that where the private sector is serving the Canadian people well, the Government would stay out of the marketplace and leave it up to that sector. That is the sector which can best manage our economy.


The Acting Speaker (Mr. Herbert):: Before recognizing the next speaker, I would just like to caution Hon. Members if they are reading extracts that they read a little slower. It is extremely difficult for the simultaneous interpretation staff when a person is reading very fast.


Hon. Ray Hnatyshyn (Saskatoon West):: Mr. Speaker, I assure you that I will speak sufficiently slowly that even those people who do not understand Ukrainian will understand what I am saying.
I appreciate the opportunity to participate in this debate today and to deal with this legislative initiative which has been taken by the Government with respect to Crown corporations in our country. People who are following the debate will understand that there has been of recent months and years a very substantial concern expressed by many Canadians about the whole question of accountability of Crown corporations. I know that people in my own constituency have asked me how it can be that corporations such as Canadair and de Havilland, by way of example-


Mr. Fulton:: 


Ramon John Hnatyshyn: PWA is a money maker. The Hon. Member for Skeena (Mr. Fulton) will know that when the Conservatives get their hands on these things, proper management and accountability prevails. However, I will save that for another debate, Mr. Speaker. I simply wanted to deal at this point in time with the whole question of accountability in terms of the intentions of the Government in this Bill.
Then, to deal with something which has not yet really been covered in this debate, there is the problem, as I see it, of two sets of standards; one for Crown corporations and one for the average Canadian. I refer to the principle of Crown immunity. That simply means that whenever an agency or an official of an agency of government is involved in activities ostensibly dealing with the performance of the duties of government, they are protected from prosecution, criminal or otherwise. For example, if I were to try and set up a cartel, within Canada or internationally, I could expect to be prosecuted to the fullest extent of the law by officials of the Crown. By the same token, if I were involved in misleading or false advertising, the people of Canada would say that it is against the law and that person or company should be prosecuted.
As you know, Mr. Speaker, Canadian Crown corporations occupy a privileged place with respect to the laws of this land. Crown corporations, agencies and Cabinet Ministers involved in direct competition with the private sector do not have to obey the law. They have the defence of Crown immunity. I think most Canadians would ask how this can possibly be. They think we live in a country with a government under the rule of law, which means not only the governed have to obey the law but governments also have to obey the law. I am sure the people do not realize that if government agencies and Crown corporations involved in commercial activities mislead the public by false advertising or involve themselves in cartels, they cannot be prosecuted. But the law says that is the case. Section 16 of the Interpretation Act deals with Her Majesty as follows:
No enactment is binding on Her Majesty or affects Her Majesty or Her Majesty's rights or prerogatives in any manner, except only as therein mentioned or referred to.
That means that the agents of Her Majesty, the Government of Canada, are not affected by the criminal law in this country unless there is a specific inclusion in the legislation to make them liable. Crown corporations continue to enjoy spe-
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cial status and they carry on business in the public domain, but they are not subject to the laws of the land. Since Crown corporations have immunity, they can break the law with impunity. There is no way to achieve redress through the courts of our land. We have one law for the Government, and another for you and me, Mr. Speaker, the governed of this country.
We all know the sordid history of the uranium cartel which took place under this Government. Involved were the present Minister of State for Social Development, Senator Austin in the other place, the Deputy Minister of Energy, Mines and Resources in charge of Uranium Canada and Eldorado Nuclear Limited, and others. These people and the Cabinet Ministers involved actually travelled around the world to set up a cartel with respect to the world price of uranium. This cartel was established. As a result, literally hundreds of thousands of Canadians paid unreasonable and unrealistic prices for uranium for the generation of power. The people in the Province of Ontario paid very large amounts due to this illegal activity. The Government of Canada initiated this activity and was the main force involved in the formation of the cartel.
Mir. Orlikow: Did the Ontario Government know about it?


Ramon John Hnatyshyn: The Government of Ontario was completely oblivious, Mr. Speaker, to this whole situation. I always have to inform Members of the NDP about the facts of life. During my political life I have been trying to be helpful to that Party. They do not take my advice and look where they are in the polls. It is just awful. I do not know what I can do to salvage this Party, but I am working as hard as I can in the best interests of the people of Canada and the NDP to make sure that justice prevails.
In December of 1983 the Supreme Court of Canada handed down a decision which, in effect, said that Eldorado Nuclear and Uranium Canada could not be charged for their part in this cartel. They have been exempted. However, all the private concerns which were forced, by virtue of government directives, either to participate in this activity or be out of the picture as far as uranium sales are concerned find their positions in jeopardy. These private companies are taking the full brunt of the prosecution.
The Government is relying on this defence to protect itself and its political friends. Even under the freedom of information legislation the Government will not release documents pertaining to the formation of this cartel. That indicates the power the Government has. In our country we pride ourselves on the principle that the Government operates under the rules of law. That is why it is absolutely essential that we study this legislation to ensure that those who are involved in government are not exempted by their own legislation from any accountability to the courts or the Parliament of this land.
I could give you other examples with respect to the Department of Energy, Mines and Resources, Mr. Speaker. A matter was raised with respect to what many people in Canada
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considered to be misleading advertising. I see I have only a couple of minutes remaining, but I have a letter dated September 10, 1980 from Consumer and Corporate Affairs to Murray Coolican of the Canadian Arctic Resources Committee in Ottawa. In this letter K. G. Decker, Director of the Marketing Practices Branch, said:
In addition, there have been some cases in law which appear to have established that agents of the Crown, which would include most government departments, cannot be prosecuted.
I raised in the House of Commons the matter of the Royal Canadian Mint, another Crown corporation, advertising silver dollars which in fact were 50 per cent alloy and 50 per cent silver. There was nothing in the advertising which told the Canadian consumer that. Simpsons Limited was prosecuted for advertising jewellery which was not all it was cracked up to be. They were fined $1 million. Of course, there has been no prosecution of the Royal Canadian Mint for misleading advertising.
I have really only started, Mr. Speaker, but I will conclude this part of my remarks on this issue. I know there has been some discussion about changing the competition laws of the country. In this legislation we need a provision to ensure that Crown corporations operate under the same rules as every other company or citizen of the country.


Mr. G. M. Gurbin (Bruce-Grey):: Mr. Speaker, it is with great respect that I enter this debate to follow those Hon. Members in our caucus who have had many years of parliamentary experience and give a background of Crown corporations in order to let Canadians fully understand the difficulties of Crown corporation operations.
There is a story which I believe helps to explain the problems caused by Crown corporations in Canada and other countries assuming an increasing role in the economic and regulatory activities of a country. It is a story by Barbara Tuchman entitled "The March of Folly". The story is about King Philip of Spain who reigned during the seventeenth century. It is said that he died of a fever which was contracted by sitting too long beside a stove. The problem was that he was unable to find the public servant to turn down the temperature of the stove. This story reflects the difficulty that takes place when people who are not fully accountable or sensitive to what should happen carry out an operation for which the Government is responsible.
While King Philip met his end in an extraordinary way, I do not know whether it will be so obvious when we are consumed by the inability to gain control of the activities being undertaken on our behalf by public servants and others in Crown corporations. However, it is a clear demonstration of the dangers and difficulties that exist in Crown corporations. When one considers the ever-increasing involvement of government in the lives of Canadians, the point raised in this story about accountability and communication becomes more important.

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The level of government activity in our daily lives has reached a tremendous proportion, up to 47 per cent of our Gross National Product. This demonstrates the need for more effective management and ability to control and direct this level of activity on our own behalf.
I would also question why we are dealing with a Bill such as Bill C-24 at this time. What is so important about its need today as compared to the last 15 years during which time these difficulties with Crown corporations have been identified by past Auditor Generals and numerous politicians from both sides of the House? These difficulties have been pointed out most recently by one of the Liberal leadership candidates who indicated with respect to Petro-Canada that he would like to make changes and sell some of the gas stations.
While these difficulties have been outlined for some time now, we are suddenly faced with Bill C-24. I guess something is better than nothing and that this Bill has some relevance in that at least some action is finally being taken to come to grips with this problem. However, some of the most important authorities throughout the country have not had an adequate opportunity to study this Bill in detail, to consider its consequences or suggest amendments to address these problems which we have known about for some time.
The Hon. Member who spoke before me indicated several specific examples of the problems which could develop. Due to his full knowledge and understanding of particular areas, such as the uranium cartel and so on, I think he is adequately qualified to point out how this Bill should be modified so that it does not end up as legislation that will not achieve the goals which we set out.
Of course, one of the main goals is to achieve accountability and ensure that Crown corporations have an obligation to serve the public interest while at the same time Ministers and the Government accept the responsibility for their direction. I believe the present legislation will continue to allow Crown corporations to take the responsibility which should be that of the Government in terms of management, personnel and other factors. While political initiative may be behind the action of the corporation, this Bill does not provide for the political responsibility of that action. There could be cases where capable, competent public servants, who may be able to produce a satisfactory result if left to their own resources, may have been interfered with by the political process which in turn has not been accountable for those activities.
In the few minutes remaining, let me proceed to the question of immunity from prosecution according to other Acts. If Crown corporations are to be any value, they will have to be subject to the same laws of the land as other Crown corporations within our economic environment. An excellent example of this was Eldorado Nuclear. In that instance the Combines Investigation Act should have applied. If this Bill is passed in its present form, I suggest that the Cabinet will be the real winner. It will not be Canadians who deserve to have sufficient accountability and the political responsibility which they can judge at the time of a general election. However, this legislation provides the Cabinet with many opportunities to avoid
some of the responsibilities and escape some of the controlled mechanisms that should be consistently applied across the board, as was the intent of this very legislation.
In closing, let me comment on this massive government within government, as it has been described by one Auditor General, which exceeds even the current personnel of the Public Service. I think Canadians must come to grips with what is not necessarily a problem of government or Crown corporations but an effect of human nature. I believe it is human nature for all of us to try to achieve as much as possible with as little effort as possible, whether it is in a public activity, political or private enterprise. Therefore, unless there is accountability and an entire range of requirements for responsibility to carry out particular objectives, we will all lose a very great deal.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, after listening to the Hon. Member for Peterborough (Mr. Domm) who spoke earlier, I had the impression that he and perhaps some of his colleagues were so wedded to the free enterprise system that they are opposed to any and all Crown corporations. I want to remind him that Crown corporations are as Canadian as apple pie. Crown corporations have been created by federal and provincial governments that were Liberal, Conservative, NDP and even Social Credit. They were created by these governments when they came to the conclusion that the free enterprise system was not ready to take the risk. It could not see its way to making a profit in a field which was socially or economically necessary.
And so you have the Ontario Hydro which was created many years ago by a Conservative Government. You have the Manitoba, Saskatchewan and Alberta telephone systems. These are all Crown corporations. Manitoba's Crown corporation was created by a Conservative Government way back in 1907 led by Sir R. P. Roblin. You have the B.C. Hydro created as a public utility by a Social Credit Government. We ought to keep in mind that Crown corporations have been established because they were needed. That does not mean Crown corporations, like privately-owned corporations, need not be monitored, examined and watched to see they do the things which they were created to do. But to operate them as efficiently and as economically as possible, Mr. Speaker, the public needs as much information as possible. A government which creates Crown corporations, be it a federal or provincial government, needs the authority to see that its Crown corporations do the jobs they are supposed to.
There has been a lot of evidence of this, Mr. Speaker. I have given you de Havilland, Canadair and Atomic Energy of Canada, all of which got into trouble. Not only did they get into trouble but it was obvious they were not reporting to government as they should concerning their troubles and what could and should have been done about them. To the extent that this Bill improves the situation by giving government and, therefore, Parliament the authority and power to correct situations which are improper, we will support the Bill.
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I want to spend a few minutes now discussing the problems of one Crown corporation which we believe should not be included under the terms of this Bill. I am speaking of the Canada Council. We think the inclusion of the Canada Council under the provisions of Bill C-24 is wrong. We feel the Government has made a serious error in this regard. We believe it is totally inappropriate for the Government to put an agency such as the Canada Council under the provisions of Bill C-24. We believe that the Canada Council Act as it now stands does everything which Bill C-24 would do, but it enables the Canada Council to maintain its independent position free from the influence of politically motivated decisions.
Over the past 25 years the Canada Council has established a reputation for quality of work, delivery of service, and support to the Canadian cultural community. This reputation was built on the principle that government in Canada should support the flourishing of culture and art in our country. But an independent body controlled by bona fide representatives of the arts and cultural community should make the difficult judgments about which artists and cultural endeavours should be funded by government.
Let me point out that the Canada Council was established in 1957 as a result of the recommendations of the Massey-Levesque Royal Commission on the Arts, Letters and Social Sciences in Canada. At that time the Commission stated in its report:
We should ... consider it a misfortune if this Canada Council became in any sense a department of government, but we realize that since this body will be spending public money it must be in an effective manner responsible to the Government and hence to parliament.
With the Canada Council we are not dealing with a massive corporation such as some I have mentioned, like de Havilland, Canadair or Atomic Energy of Canada. They are Crown corporations which spend hundreds of millions of dollars. We are dealing with a rather small and specialized organization which has always been clearly recognized as a promoter of culture, apart and independent from direct political influence. If Bill C-24 is passed into law without change and the Canada Council is included in the new Bill, it will therefore fall under the provisions of the Financial Administration Act.
It was a Liberal Prime Minister, Mr. St. Laurent, when introducing the Canada Council Act to Parliament, who stated that the Council should be independent because governments should, and I quote:
-support the cultural development of the nation but not control it.
Bill C-24 directly contradicts the opinion of the arts community and overturns the principle of an arm's length relationship established by the Massey Commission and the Liberal Government of the day. We ask ourselves why. We think it is for bureaucratic consistency, to satisfy those minds concerned with building better paper empires, more fundamentally perhaps to give senior departmental officials control of cultural development and to politicize the process of the distribution of cultural funds even more. We have seen that kind of politicization in almost every aspect of this Government's operations. We think that has been bad. We think to begin to apply that to
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the Canada Council and to the arts and cultural community would be a major mistake.
As it operates now, the Canada Council is fully audited by the Auditor General every year, unlike the Crown corporation giants which are more correctly the prime targets of this Bill, and so they should be, Mr. Speaker. The Canada Council fully discloses the names of the organizations and individuals that receive its grants as well as the names of its members and its jurors. These are published in the annual report. Along with this, representatives of the Canada Council appear before Commons committees and other official bodies. They make reports and are subject to questioning on a regular basis.
The requirements of the Financial Administration Act will impose greater administrative costs upon the Canada Council and effectively reduce the already limited funding that the Council must allocate to the arts and cultural community. Under the provisions of Bill C-24, the 21-member board of the Canada Council will have reduced powers and be more subject to the imperatives of departmental officials with the almost certain result that the actions and decisions of the Council will suffer. Specifically the quality of judgment and the decisions made in allocating funds for cultural and artistic endeavours will deteriorate. The needs and priorities of the arts will fall victim to the closer relationship the Council will be bound to have with the Department of Communications.
We believe the Canada Council has over the 27 years of its existence shown itself to be an innovative and active organization using a relatively effective peer judgment system to allocate scarce funding to the Canadian artistic and intellectual community. In doing so it has nurtured research and creation in the fields of social sciences, arts, drama and music and it has produced valuable cultural achievements.
The implications of Bill C-24 are, in the case of the Canada Council, completely inappropriate. This Bill will contribute nothing to making the Council more effective in accomplishing its objectives. The Bill must be amended in order that the Canada Council is excluded from its provisions, just as other specialized agencies of the Government have been excluded.


Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, the opportunity to speak on a Bill like this does not come too often. I am very pleased this Bill has now come to this Parliament, as it has to several other Parliaments through which we have sat. Bill C-24 deals with the organization and operation of Crown corporations to a great degree.
At first glance it would appear that this Bill will give the Government even more power. The Bill does not in any way clarify or specify how the Government intends to use this control of the various Crown corporations for the good of the general public, the taxpayer, or indeed of the corporations.
This Government has, of course, a long record of its treatment of Crown corporations, almost uniformly bad. I can easily agree with the Hon. Member for Winnipeg North (Mr. Orlikow). He pointed out that Crown corporations are supposed to be created to serve the good of the public, when there is a need for a public service that may be lost if the Crown

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does not come to the rescue. That does not mean that the present Government understands its role in Crown corporations. One suspects that the real reason for many of the Crown corporations the Government has adopted lately is that it wishes the Crown to own as much as it can of the industry in this country. Among the reasons it places very high on the scale is the location of the Crown corporation, which Members of Parliament will be affected and what kind of berth it might provide for some of its former Members or some who will be leaving in the near future.
I would like to deal with the problem of the aircraft industry in Canada in particular. This brings us to Canadair and de Havilland. I and many of my colleagues sat in this Parliament in 1974 when this subject was a matter of active discussion. It is like a page from ten years ago to see the Hon. John Turner discussing what he would do. He was the leader in the movement for the Government to go to Crown corporations.
Despite his record of doubling the deficit, he now holds himself up as the champion of halving the deficit. The question of whether he is able to divide as easily as he was able to multiply is something the voters will have to answer, and maybe even John Turner.
When we debated this some ten years ago, the Government was clearly warned what kind of mess it was getting into if it got into the aircraft industry. My friend from York-Peel (Mr. Stevens) spoke on April 2, 1974. He pointed out that the Government and the NDP were of one mind, that they were lusting for power. At page 1095 of Hansard, the Hon. Member for York-Peel said:
I think the Minister of Finance (Mr. Turner) in particular should note that these Members will buy anything sight unseen. When we attempted to have the estimate with respect to de Havilland reduced in committee. Government Members, joined by their allies in the NDP, said, "We don't care what the statement of de Havilland looks like. We don't care whether or not it is earning money. We want that estimate to go through".
The Hon. Member for York-Peel had come across information showing that while the Government was attempting to buy this corporation, it had sales valued at S35 million and was marginally profitable. At the same time the subsidiary of Hawker-Siddeley, England, Hawker-Siddeley of Canada, had sales of $200 million and profitability after taxation of $3 million. We bought the one with the smallest possible profitability and the lower sales. The Government was not interested in buying the one that was a going concern. That was typical of the attitude of the then Minister of Finance. He was totally supported by his chief rival at the meeting in Halifax yesterday. The then Minister of Industry, Trade and Commerce, now Minister of Energy, Mines and Resources (Mr. Chretien), said some things which make for comic relief, knowing what we know now about his pet project, Canadair.
This hearkens back to the politics concerned. This company was located in the constituency of Dollard, the preserve of the then Minister of Supply and Services, the Hon. J. P. Goyer. He turned out to be an executive of Canadair when it became fully nationalized and needed some inexpert directors in which
this Government's Crown corporations seem to abound. The Minister of Energy, Mines and Resources (Mr. Chretien) was extolling this jump into the future that he had brought about. On March 8, 1977 he said in the House of Commons:
I might talk for a few seconds, with your permission, about the famous LearStar jet project. I was asked questions in the House this afternoon on that matter. This is becoming one of the greatest success stories in the history of industrial development in Canada. Within three months, we have already sold 71 aircraft at a cost of some $5 million each. The prototype is not even completed but a combination of factors, the fact that it is a long-range plane with a range of over 5,000 miles and a fuel consumption of approximately two thirds that of competitive aircraft, the fact that the demand is greater for that type of plane since many air services have been discontinued throughout the world and executives feel the need to buy planes for their business trips, and also that we now have the expertise in Canada to build that plane, for all these reasons it is a very exciting program.
We could do with a little less excitement and a little more business sense. He is the second choice for the leadership of the Party across the way.
One yearns for one of the few moments of truth that one has heard from Government Ministers in this regard. When the Hon. Jack Horner was Minister of Industry, Trade and Commerce, I asked whether it was still the policy of the Government to sell to private industry the combined air industry which the Government claimed was the reason for nationalizing both of these companies. To his credit, Mr. Horner said that they had run into a problem: when they were losing money, nobody wanted to buy the company, and when they were making money, they did not want to sell. That was possibly the last totally honest answer we have had on this subject in this Parliament.
If one looks at Schedule C-II showing which corporations are being put in this Bill, you find that the Canada Development Investment Corporation in 1982 had a deficit of $1.7 billion. This was largely brought about by Canadair having a deficit of $1.4 billion. Several times the Prime Minister (Mr. Trudeau) and Cabinet Ministers have been questioned about this. Their answer is: "Do you want to lose the expertise? Do you want to lose the jobs?" It is a sad tale if a company is not able to produce a viable product. However, there must be a limit as to how much you are willing to spend for jobs. Since Canadair has approximately 1,400 employees, it is very easy to figure out what the jobs cost when you have a deficit in one year of $1.4 billion: it comes to $1 million per job. That is a little more than any economy can bear, to be losing $1 million per job created.


The Acting Speaker (Mr. Herbert):: I regret to interrupt the Hon. Member but his time has expired.


Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, we are debating Bill C-24, the Financial Administration Act, a Bill with a magnitude we cannot predict in terms of its effect on the economic health of our country. It is discouraging to be able to speak for only ten minutes on a Bill that has such great implications for the future of our country, for the health of our economy, for our unemployed and all the other aspects. In the ten minutes allotted to me I will confine my remarks to two very important principles that we have to
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look at in this Bill. The first is the matter of accountability; the second is the matter of fairness within the marketplace.
The Government wants to have us believe that Crown corporations will always be accountable, that they are accountable to Parliament, that their annual reports will be tabled in the House and therefore the committees of the House are free to examine those reports. That, in the definition of the Government, is accountability.
However, there are reasons why Crown corporations are increasingly unaccoutable to Parliament. The first reason for this is the massive proliferation of Crown corporations. Frankly, we are losing track of how many Crown corporations there are, where they are, what they are doing and even whether they still deserve to exist. The population explosion of Crown corporations is such that we really cannot keep track of which Crown corporations exist in the marketplace.
I listened with care to the remarks of my hon. friend from Rosedale who spoke last week. He was quoting the Auditor General's report and pointed out that the Auditor General has been concerned about the fact that in the past 22 years the number of Crown corporations has been increased by something like 300. In 1962, 22 years ago, about 28 Crown corporations were in existence; there are now over 300 Crown corporations in existence. Back in 1962, the existing Crown corporations had known assets of about $8.4 billion. Today, those assets are now in the neighbourhood of $74 billion with an additional $63 billion of liabilities. We must ask ourselves how we got from the situation which existed in 1962 when there were 28 Crown corporations to the situation which exists in 1984 when there are over 300 Crown corporations.
If Government Members would like to say that these Crown corporations are accountable to Parliament, all we need do is ask ourselves whether those of us who have been here for half of those 22 years have seen legislation enacting each one of those over 300 Crown corporations. The answer is a very simple no. Some parent Crown corporations have within their enabling legislation the right to spawn further Crown corporations. Therefore, it is almost impossible for us to keep track of which Crown corporations exist in the marketplace. There are very different pieces of legislation which enable the Crown corporations to do that.
Today we are debating the Financial Administration Act dealing with Crown corporations. The title of the legislation would lead the general public to believe that because we are dealing with a Bill with a title which includes Crown corporations, it is legislation which affects all Crown corporations. Nothing could be further from the truth, Mr. Speaker. I have received correspondence from a company called Canertech regarding a company in British Columbia which was formed under the Canada Business Corporations Act. I will refer to that company a little later on in my remarks. As well, companies have been spawned by the petroleum legislation which has been passed by the House. On and on it goes and we have simply lost track of them all.
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The second reason that there is no longer any real accountability and why there will be a diminishing level of accountability under this legislation is the shift of responsibility within Cabinet. In the parliamentary system of our country, Crown corporations have historically been accountable to the Minister to whom those Crown corporations report. That is eminently logical and I think the Canadian people generally believe that if a Crown corporation falls under the energy program, then the Minister of Energy, Mines and Resources (Mr. Chretien) will be accountable for that corporation because it will report to that particular Minister. However, under the new legislation we are debating now, that will no longer necessarily be the case.
Accountability is now being shifted from the Minister to the Cabinet. It is being shifted from a specific responsibility to a general responsibility. How can accountability ever be demanded from a general body? I suppose the only way we could do so is to ask that general body to resign. I see that the Government is so interested in this legislation that the number of Members representing the Government who are present in the House has now been reduced to one. That tells us something about their level of interest. Responsibility is being shifted from the specific Minister to the entire Cabinet. No one will accept personal blame for the failure of any Crown corporation.
Another reason for the lack of accountability of Crown corporations is that Crown corporations enjoy a special and privileged position within the country under the terms assigned to them by the Government. My friend, the Hon. Member for Saskatoon West (Mr. Hnatyshyn), in his brilliant remarks regarding the aspect of the responsibility and accountability of Crown corporations, pointed out that the uranium cartel was exempt from any kind of punishment. He pointed out that it was immune from prosecution. Any company in the marketplace must accept responsibility for its decisions. As pointed out by the Hon. Member for Saskatoon West, when Sears erred in its advertising, it had to pay $1 million. When the uranium cartel, under the protection of the Government, erred, it did not have to pay anything. It was exempt.
The second principle I would like to raise regarding the matter we are debating today is the principle of fairness in the marketplace. It seems to me that Crown corporations play a kind of schizophrenic role in the marketplace. As my colleague from Winnipeg North (Mr. Orlikow) pointed out earlier, the general argument for establishing Crown corporations is that the marketplace is not meeting certain needs and therefore the Government must establish Crown corporations to meet those specific needs. Within the Canadian experience, none of us will argue that particular point of view. However, when a Crown corporation is purportedly founded to meet a need in the marketplace that is not otherwise being met, it at the same time wishes to argue that it is competing fairly and openly in the marketplace.
Nothing evidences that more clearly than the Federal Business Development Bank. It wants to say on the one hand that it is a bank of last resort meeting the needs of small businesses
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in a way commercial banks do not, and on the other hand it wants to say that it is competing. It cannot have it both ways, Sir. Inevitably there is a conflict in goals. However, because of this privilege, Crown corporations enjoy a special relationship.
In the minute or two I have left, I would like to discuss the company to which I referred earlier, Canertech Inc. of Canada. That company sent out a news release some time ago announcing that Wood Gundy is conducting a survey of all energy companies in Canada and wants those companies to provide information to Canertech so that Canertech can help EMR provide an information base. To whom will that information base be provided? Will it be provided to companies like Pacific Enercon which exist to provide competition to private enterprise companies? The Government, by way of a Wood Gundy report, is seeking information from private companies in order to help government companies compete with private companies. That, Sir, creates unfairness in the marketplace.


The Acting Speaker (Mr. Herbert):: Order. Order, please. I hate to interrupt the Hon. Member but unfortunately his time has expired.


Mr. Joe Reid (St. Catharines):: Mr. Speaker, I wish I were able to conclude the comments of my hon. colleague. I too am pleased to rise to participate in the debate of this important Bill and this important subject and to face the problem of saying all I want to say about Crown corporations within a ten-minute time limit.
Bill C-24, known as the Crown corporations Bill, has been a long time in its making. The making of this Bill depicts the Government for what it is. It is flawed, ineffective and inoperative. Many here will recall that in 1979 the Progressive Conservative Government, in less than six months, introduced a Crown corporations Bill which followed very closely upon the very critical Lambert Commission report. We introduced that legislation so that it could be studied, improved and acted upon. But the Liberal-NDP coalition destroyed that opportunity. Almost five years later, the Government comes forward with this version of a Crown corporations Bill.
Quite frankly, Bill C-24 has virtually no chance of passing and receiving Crown approval, Royal Assent, during the present session. It has been introduced to deflect criticism of the fact that the Government has done nothing to rein in Crown corporations over the past five years. The last thing the Government wants is for the truth to come out about Cana-dair, de Havilland, Air Canada, the post office and a great number of other corporations already mentioned by my colleagues in their comments.
One way to keep the true story hidden is to introduce legislation at the last minute and then blame the Opposition for not passing it. We have a piece of legislation which promises much and delivers little. The issue is and clearly has been for several years that of accountability-accountability in, of and for Crown corporations.
Lawyers will always caution a client to read the fine print before a document or contract is signed. No lawyer would ever condone or recommend the signing of a contract before they saw or read the fine print. The kind of fine print we are talking about here is, of course, regulations. This Bill, with respect to almost every section of substance, allows the details to be written in later through regulations. Those regulations are subject to change at the whim of the responsible Minister.
Canadians may as well ask what the point of the legislation is if Crown corporations are going to be exempted from its provisions by regulation. It is worth noting as well that some 100 Crown corporations already in existence will not even be touched by this legislation. Their exemptions came early indeed. Neither does this Bill give Parliament any control over the creation of subsidiaries of Crown corporations, or the creation of a new or other subsidiary corporation where they are permitted in existing legislation. We will have proliferation in the growth of those corporations providing a safe sanctuary for retired or defeated Liberals in the years to come.
We on this side of the House have become increasingly annoyed by the growth of patronage appointments. Ability, competence and merit do not seem to matter any more. If there are not enough jobs to go around, the Government simply expands the creation of a good number of other sinecures.
This legislation would assist by redefining the board of directors of Crown corporations so that those boards would have a real and responsible purpose. In the private sector, the board of directors has a responsible chore; they have responsibility to the shareholders and to their directors. But here Cabinet would appoint the chief executive officer, set his tenure, fix his remuneration, and so it goes with the chairman of the board. The Cabinet would dictate dividend policy and, indeed, literally make all corporate decisions without the necessity of consulting with the board of directors affixed to that particular Crown corporation. What a farce! It is a long way around to provide a convenient resting place for government appointees.
It is interesting to note as well that Bill C-25, establishing the Canada Development Investment Corporation, allows the board of directors to appoint the chairman and the chief executive officer. Bill C-24 gives that responsibility to Cabinet. I am glad to see that there are now about five Government Members present. Confusion reigns on that side, as is so clearly evident among the present crop of leadership candidates.
Canadians are well familiar with the sinkhole some Crown corporations have become, filled in with taxpayers' money. The post office goes on losing hundreds of millions of dollars a year. VIA Rail is accomplishing the same feat. Canadair and de Havilland have shocked the nation through their losses. The Canadian taxpayer is left to wonder what really is going on in this Government. Someone has to be accountable for the excesses that have taken place. Accountability should be the cornerstone of any legislation dealing with Crown corporations. Government Members say "Trust us". The Government
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record speaks for itself-Loto Canada, Petrofina and the election promise of "Elect us and the price of gasoline will go down". Bill C-24 is simply an open invitation to continue this Liberal tradition.
My constituents are well and truly fed up with newspaper headlines screaming about multimillion dollar losses by Crown corporations. Controls and accountability are a must. The Government has been promising action since 1977. If Bill C-24 is the best that the Government can do after seven years, then move over and let us take its place.


Mr. Lome Greenaway (Cariboo-Chilcotin):: Mr. Speaker, like most Canadians I do not know a lot about Crown corporations, but I have a number of impressions in my mind and I have tried to rank them in what I consider some sort of order.
The first thing that comes to mind is that it appears there is a large number of Crown corporations which keep proliferating one after the other in leaps and bounds. In 1968 there were 38 Crown corporations; in 1980 there were 130, but there were 213 subsidiaries and 126 associate corporations. An example of how these corporations grew so fast is the Canada Lands Corporation which was formed in 1982. Since that time it has spawned five subsidiaries. It reminds me of asexual reproduction, where bacteria split in half and then those two halves split again and then split again. Before we know it, we have hundreds and hundreds of these corporations. The impression I get is that we do not know how many Crown corporations we have. We keep hearing that we have at least 400. I do not know if that is right or wrong, but I have never heard anyone stand up and tell us exactly how many Crown corporations there are in Canada.
Another impression I have is that Crown corporations continue to lose vast amounts of money. I am sure some of them probably make money, but we do not hear much about the ones that make money. We continue to hear about the huge sums of money that are poured into Crown corporations using taxpayers' dollars.
A third impression I have is that there is a vast build-up of debt charged to Crown corporations. Again, I have never seen a total or a figure. I have seen some figures, but I do not know how accurate they are. However, I do get the impression that there are billions and billions of dollars in debt piling up in Crown corporations.
The fourth impression I have is that there are a great man's people employed by Crown corporations. I believe I read one time that there were more people employed by Crown corporations than by the Public Service of the federal Government. That might not be accurate but it is the impression I have.
The fifth impression I have is that there is a problem with the auditing of Crown corporations as well as accountability and responsibility. When something goes wrong no one seems to be in charge. Everyone runs for cover. We do not know on whose desk the buck will finally wind up.
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The sixth impression I have is that many of the objectives of Crown corporations could be better served by the private sector.
Those are some of the impressions I have of Crown corporations and I dare say they are representative of what many Canadians think of Crown corporations. I apologize to Hon. Members for not having made an in-depth study of this subject and for not having more accurate knowledge. In any event, I felt when this Bill came forth that any thinking government would want to correct all of these impressions. Surely it would be an excellent plank on which to win an election.
Looking at Bill C-24, it appears that it is not what we had hoped it would be. There are many things which are left undone. For example, let me quote from the report of the Auditor General for 1982 with respect to accountability:
A major theme of my 1982 Annual Report was the accountability of Crown-owned corporations. With the exception of my predecessor's warnings about the state of government financial management in the mid-1970s, no issue involving my Office has captured more public attention than that of the accountability of these Crown-owned corporations. The reason is obvious. A lot of public money is at stake. The accountability framework for what I have referred to as this "sub-government" is inadequate.
On February 28 the Auditor General wrote to the Prime Minister (Mr. Trudeau). He was laudatory of the actions of the Prime Minister and the President of the Treasury Board (Mr. Gray) for bringing forward this Bill. He said, and I quote:
I recollect that last June I wrote you, expressing my concerns about the need for a more effective accountability framework for Crown-owned corporations. I think it therefore only appropriate that I write again now when there is such tangible evidence of action that will help to alleviate my concerns.
May I be permitted to express my sincere thanks for the personal initiatives that you and members of your Cabinet have taken in this endeavour. I wish you and Mr. Gray smooth sailing in the House.
I do not think what the Auditor General really wanted is in this Bill. It seems as if there is much left to interpretation, and I do not believe it is very clear cut as to what the Auditor General's role is going to be as far as Crown corporations are concerned. I feel the Auditor General has settled for half a loaf and I wonder whether after hearing these debates over the past days, the Auditor General is still as satisfied with this legislation as he appeared to be in February.
As far as responsibility is concerned, Mr. Speaker, there is still no one responsible when it comes to this Bill. The Minister is certainly not responsible. It appears that the Cabinet is still taking the major role of responsibility and there are 30-odd Cabinet Ministers. Of course, as soon as they get into trouble, they are going to run for cover. I believe we are going to be in exactly the same position as we are at the moment. This Bill simply does not designate who is responsible when we get into a problem. Over and over in this Bill, Mr. Speaker, one sees that items are left to regulations and to discretion. That is simply not good enough when we are dealing with billions and billions of dollars and such a vast number of corporations. These things should be spelled out very definitely.
As far as the matter of proliferation is concerned, it seems as if an "end run" has been made around Parliament. Crown

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corporations are still going to be able to spin off subsidiaries and that is where the real growth is going to occur. On top of that, Mr. Speaker, there are a number of other items which this Bill does not address, for instance, the privileges and immunities of Crown corporations. The matter of their immunity from the Combines Investigation Act has not been addressed in this Bill. The question of whether or not public servants should be allowed to sit on the boards of Crown corporations has not been addressed in this Bill, as well as the creation of any kind of parliamentary oversight committee, a watchdog type of thing for Crown corporations.
I believe, Mr. Speaker, the Bill is filled with half measures. It does not go as far as it should. It needs to be amended in many areas. As I said, I certainly do not profess to be any kind of an expert on Crown corporations, but I am unhappy with the Bill and I feel most thinking people in Canada would be as well. It is not a good enough Bill to correct the problems which Crown corporations have caused our country.


Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, I rise today in opposition to Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations. I do not intend to go into this Bill clause by clause mainly because of lack of time. However, I will cover what I consider to be the most contentious parts of this particular Bill. I would first like to point out that the Bill is certainly not what the Government opposite purports it to be. Second, it is a travesty of errors and omission. It does nothing to change the present situation or the status quo regarding Crown corporations.
As a small-businessman, Mr. Speaker, I can tell you that the very survival of the day-to-day operations of my business relies mainly on accountability. That accountability, Mr. Speaker, I do not see in relationship to Crown corporations and this is what I feel Bill C-24 should provide. It should provide legislation which would demand this accountability, which would point out this accountability and enforce it.
Let me cover a few points related to this accountability factor. The Auditor General on numerous occasions has pointed out to the Government opposite the lack of accountability, but the Government opposite merely ignores it. I know the Auditor General can defend himself and does, but it should be pointed out that Bill C-24 just further neutralizes his position and Parliament's position.
I would like to dwell now on some of the more direct issues and why we in the Opposition oppose Bill C-24 in its present state. I take the example of Crown corporations such as de Havilland and Canadair. Most Canadians who look at these corporations see the financial disaster of the century. Canadian tax dollars have been, and continue to be, sunk into these sinking ships. Government approaches these corporations on a hit and miss basis, Mr. Speaker. The dollars which these corporations have swallowed up would have saved most of the small businesses which went bankrupt in 1982.
We are given the story that we are maintaining our technology by these investments. There is no one in this House,
Mr. Speaker, who wishes to preserve technology more than we do. But at what cost? Not at the cost of national bankruptcy, Mr. Speaker. We as a Party and myself as an individual have spoken many times in this House on unemployment. I realize the importance of the jobs in these two Crown corporations, and I will do what I can to protect those jobs, as will other Hon. Members of my Party. However, we are jeopardizing these jobs, instead of protecting them, through a lack of accountability.
I would now like to look at Cabinet's role regarding Bill C-24. How does Cabinet deal with the disastrous performance of these Crown corporations? Do they bring in meaningful reform? Absolutely not, Mr. Speaker. Instead, this Bill gives more control to Cabinet. Cabinet is supposed to be running this country and every economic indicator shows it is having a great deal of difficulty. Its members should spend their time running the country instead of trying to run these Crown corporations. Just as a personal observation, as a small-businessman I would not hire one of the members of the present Government to run or oversee any of my businesses, not even a peanut stand. Therefore, why should we give them this ultimate power under Bill C-24?
Under this Bill, Mr. Speaker, the Cabinet would acquire much greater authority to overrule a board of directors. It could appoint a board and then overrule them before they start. It can deny information to Parliament without explanation. In this its members are consistent, Mr. Speaker: they operate as a democratic dictatorship; they exempt certain Crown corporations from general provisions of the Bill. If Cabinet wants to have a sideline, start a little gimmick, the provisions are there. It can fine-tune the application of the Bill by making regulations that need not be disclosed to Parliament. That is what the Cabinet is responsible for, Mr. Speaker, not disclosing to Parliament what it should. These are clear impediments to accountability and I fear the result will be the inefficient running of Crown corporations.
The Cabinet adopted auditing methods such that Liberal-appointed patronage auditors will audit the performance of Liberal-appointed executives of these corporations, supervised by a Liberal Cabinet. This is like taking all the foxes and putting them in with the chickens. It is bad enough that Canadian taxpayers have to subsidize the fees and salaries of these patronage appointees, but must they pay the bill for their mismanagement?
What is Bill C-24 really? I suggest it is ominous, creeping socialism. The Liberal appointees go to the boards, collect their honorariums and do what the Government tells them to do. Cabinet appoints the vice-presidents of some Crown corporations such as Canada Post and CMHC, and then appoints the auditors. It makes and approves the by-laws and sets the dividend policy. If the vice-president, the auditor and the board of directors are all appointed by Cabinet, there is a conflict of interest. But they would not understand conflict of interest because that is the way they operate. No one in Crown
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corporations will speak out for fear of losing their jobs, so the losses continue to grow. Even if they do speak out, the Government says nothing. The Cabinet makes the final decision.
There must be individual ministerial responsibility, Mr. Speaker, but this Bill places responsibility with groups of Ministers. That is one reason these Crown corporations have staggering losses which continue to grow. I cannot repeat often enough that accountability is the problem, not reorganization through CDIC and super-Crown corporations which will only result in greater mismanagement and greater dollar losses.
Yesterday I listened to the Minister of State for Economic Development (Mr. Johnston). The questions he raises concerning the money lost in Crown corporations are serious. The losses are horrendous. When we see the tragedy and despair of youth unemployment, the opportunity cost of that money is unforgivable; this from a senior Minister in the Government. Mr. Speaker, nothing this Government does can be viewed in isolation. Money lost by Crown corporations means less money for medicare, education and reforestation, to name just a few. This Bill does not address the problems facing this country. We will continue to slide backwards economically if we do not change this Bill.


Hon. Allan Lawrence (Durham-Northumberland):: Mr. Speaker, unlike most of my colleagues I do not intend to deal with what Bill C-24 does, even though what it does is inadequate or wrong. Instead, I would like to focus on some of the many important issues with which, to my mind, Bill C-24 should deal but does not.
Contrary to what we have heard from the Government, this Bill is not an ambitious piece of legislation in any way, shape or form. It really does not cover anything new. Many of these issues have already received a great deal of public notice. For example, they have been covered in a series of reports from the Auditor General dating back to 1976. Some of these issues were canvassed in the blue book published by the Privy Council Office in 1977. Some were reviewed in the Estey Commission of Inquiry into Air Canada. They have been covered in the Standing Committee on Public Accounts, particularly the Crown corporations report of 1978. They were studied extensively by the Lambert Commission in its 1979 report. Some of these issues were the subject of Bill C-27, the omnibus Crown corporations Bill formulated and tabled by the short-lived Progressive Conservative Clark Government in 1979.
I am disappointed in this Bill before us today because I do not think it really breaks any new ground at all. It is simply a haphazard amalgamation of selected recommendations, observations and reforms from a host of previous studies, reports and Bills. I suppose one reason Bill C-24 lacked any apparent over-all consistency is that the Government has chosen a set of supposed solutions without any attempt at overall rationality. I do not think the Government can make up its mind on what it really wants to do with Crown corporations. For example, why is this Bill in conflict or inconsistent in so many respects with
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the specific Crown corporation Bill, Bill C-25, dealing with the CDIC?
I have indicated that I want to talk about what Bill C-24 does not even purport to do, Mr. Speaker. First, a Bill such as this, which is long overdue, provides a wonderful opportunity for the Government to wind up several Crown corporations which are inactive, some of which have been inactive for some time. I have in mind companies such as Canadian National (West Indies) Steamships Ltd., Loto Canada Incorporated, Uranium Canada Limited and others. It would have been good management, something which is apparently foreign to the Government, to wind up these corporations.
In addition, such a move would have prohibited the Government from reactivating these corporations at a future date as the public Works Land Company was in 1978, after a long period of inactivity, to administer the lands peripheral to Mirabel Airport. The reason such an old and dead Crown corporation was reactivated was to enable the Government to avoid any scrutiny or control by Parliament. Instead, the Government has added many of these inactive corporations to the schedules of Bill C-24. I hope you will forgive me Mr. Speaker, for suspecting that this is intentional and that the motivations are anything but honourable.
Second, Mr. Speaker, Crown corporations enjoy a long list of privileges and immunities by virtue of their ownership by the Crown. These are privileges and immunities not enjoyed by their private sector competitors. Bill C-24 says nothing about those privileges and immunities. For instance, when borrowing on the capital markets, many Crown corporations enjoy "sovereign status" and their rating and cost of money or, in other words, their interest, is roughly equal to that of the Government of Canada.
Most Crown corporations are immune to a wide range of federal and provincial statutes. As we saw in the uranium cartel case, for example, Eldorado Nuclear in my own constituency and Uranium Canada were held to be immune from the federal Government's Combines Investigation Act. That is certainly an inequitable position which should be dealt with in a comprehensive Bill such as this. Under the current Patent Act, most Crown corporations have full and unrestricted access to Canadian patents without the payment of royalties or fees.
I will not go on, Mr. Speaker. Time does not permit me to list the full range of privileges and immunities enjoyed by Crown corporations. The private sector has asked the Government again and again to remove at least some of these privileges and immunities from those Crown corporations which compete with private sector enterprises. Bill C-24 says nothing about that.
Third, Mr. Speaker, Section 45 of the Financial Administration Act provides that the borrowings of agent Crown corporations are to be recorded as direct liabilities against the federal Government's Consolidated Revenue Fund. Instead, the Government has engaged in an accounting sleight of hand by

May 7, 1984
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recording such borrowings as contingent liabilities, thereby understating the Government's gross direct financial exposure. The accounting community, the Auditor General and the financial markets of Canada have repeatedly asked the Government to straighten out this situation by either having the accounting practices reflect the law or the law reflect the accounting practice. If the Government had the courage of its convictions, it would have set the record straight one way or the other. Instead, Bill C-24 says absolutely nothing about this.
Fourth, Crown corporations are usually heavily debt financed. This practice too allows the Government to engage in some accounting manoeuvrability. As the Public Accounts Committee noted, the debt financing of the Canadair Challenger and the de Havilland Dash programs not only represented poor business judgment, but was also responsible in part for those companies' current chaotic financial situation. Debt financing makes it more difficult to compare the performance of Crown corporations with that of private sector competitors. Debt financing helps to keep Crown corporations tied to the public trough. Debt financing makes Crown corporations more susceptible to interest rate fluctuations and economic downturns. Again, Bill C-24 does absolutely nothing about this.
In many other ways which I have not had time to discuss, Sir, Bill C-24 should be drastically amended before it goes through the House.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I am pleased to participate in the discussion on Bill C-24 in relation to Crown corporations. I would like to begin by saying that two separate and extremely critical issues have become the trademark of the Trudeau times. I am speaking primarily for all of western Canada. First, there is the ever-increasing budget deficit. Second, there is the irresponsible management and lack of accountability of Crown corporations. Bill C-24 concerns the Financial Administration Act in relation to Crown corporations.
In my own constituency I have found that Crown corporations are always the subject of critical comment. Perhaps this is due to a number of reasons. People are always poorly informed about Crown corporations. They never seem to be able to learn details such as why they exist in the first place and how long they might be expected to operate. Crown corporations are difficult for any politician to explain because in many cases they seem to serve such a nebulous purpose. They are also difficult to explain because there are so many Crown corporations in existence and they are so variable in their operations.
A few examples come to my mind from personal experience in my constituency. The one which is by far the easiest to recall is Petro-Canada. Petro-Canada operates a number of producing gas wells and pipelines on my cattle ranch in southeastern Alberta and has for a number of years. Petro-Canada did not explore and discover this gas field; it was purchased with taxpayers' money. That makes a tremendous difference in the feeling towards Petro-Canada in the western part of Canada, especially in the gas-producing area of the
southern Prairies. In the case at hand Petro-Canada purchased its assets from Atlantic Richfield Canada Limited. The first visible result of this takeover was a marked increase in the number of employees and the number of trucks used to tear around the country in. At the same time there was a marked decrease in gas well drilling activities. Petro-Canada is the most visible evidence and reminder of the National Energy Program. This Program is still considered to be a total disaster in western Canada, especially in the last three years.
Further evidence of this disaster has been the collapse of the oil and gas well servicing industry centered around Brooks and Medicine Hat in southern Alberta. Brooks was a thriving small town. It has tripled its population in a very short period of time, due mainly to the interest in gas well servicing. Brooks had attained a population of about 9,000. Now it is a veritable ghost town. This is because of the harsh reaction of the National Energy Program and its backlash on the oil and gas wells, especially the gas well servicing industry.
There is now no evidence of a recovery in the natural gas industry in western Canada and there will be none until the export of natural gas from the southern Prairies to the United States picks up significantly. The only hope for better days in our natural gas industry in Alberta is increased gas export to the United States.
The most knowledgeable people in this field now indicate that that pick-up cannot be expected for two or three years. The only way there will be an increase in activity in our natural gas industry is by significant gas export increases to the United States.
There is another, totally different type of Crown corporation about which I want to comment. That is Canagrex. It is still a bitter memory for many of us. Presumably the Canagrex operation is now in place but there is no report of any real activities in finding any new markets for our agricultural products. Rather, just the opposite is taking place right now, especially in my own industry, the beef cattle industry. Other countries are now finding new markets here in Canada. Just last week, during the NDP opposition day when they were debating agriculture, the Hon. Minister of Agriculture (Mr. Whelan) was the second speaker. He drew attention to the two-way trade between some European Economic Community countries and Canada. Without going into detail, he gave me an opportunity to remind the Minister about excessive beef imports now coming in from such countries as the Republic of Ireland, Denmark and Holland. In the case of the Republic of Ireland, its beef is being imported into Canada presently with an import subsidy by Ireland of 50 cents a pound in Canadian currency. The same situation is occurring with canned pork from Denmark.
Our Canadian cattle producers, specifically the Canadian Cattlemen's Association, reminded both the Minister of Agriculture and the Minister for International Trade (Mr. Regan) of this situation three months ago. At that time the cattle producers asked for countervailing duties to be imposed
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at the same amount of money that the import subsidies from the countries in Europe amounted to. Yet nothing has been done about this by either Minister to date. They have suggested that perhaps the whole situation should be investigated even further.
Very briefly, I want to comment on the post office in my own community. Our first-class mail takes much too long to be delivered. I speak with personal knowledge and I am referring only to western Canada. The post office facilities in Medicine Hat, especially for customer parking, are terrible. If we as Members of Parliament in the west had to depend totally on our post office for our constituency communication, our whole system would have collapsed long ago. The saving feature for all of us, of course, is the excellent telephone service that we are provided with and allowed to use extensively.
I want to conclude by referring to the excellent speech that opened this whole debate. It was made by our spokesman, the Hon. Member for Calgary South (Mr. Thomson). He said as reported at page 2385 of Hansard:
-we will never solve the problems of Crown corporations until they come under an effective regime of individual ministerial accountability-
Bill C-24 goes in the opposite direction. The individual Minister is nothing but a post box-
The real authority is, of course, exercised by Cabinet or Treasury Board; groups of Ministers rather than individuals. In being accountable to so many Ministers, corporations will continue to be accountable to no one.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, the question of Crown corporations has been before the Canadian people for approximately 70 years. We are still faced with the same problem, which is that of accountability.
This Bill involves a simple vote to send this new effort on the part of the Government to a committee. I am saying in all seriousness that it is the most useless action that anyone could think of. The committee will discuss this issue at length and arrive at no decision.
Let me give the House some simple advice. If this House wishes to serve the country, let us abandon this Bill. We know that there is a dying government which has no intention of returning this Bill to the House in this session. Let this legislation disappear so that we can have a chance to spend two or three years to get at the basic problem.
My own positive contribution to the debate would be to suggest that one provision in particular should be included in any Bill dealing with the accountability of Crown corporations if it is to succeed. My advice simply is that if accountability is turned over to the Cabinet, as this Bill does, the same mistakes will be made as have been made during the last 70 years.
This subject was discussed in great detail during the period 1964 to 1967. At that time we were debating one of the biggest Crown corporations in Canada, Canadian National Railways, within the debate of the whole national transportation Bill. Members of the House discussed this at great length and I believe close to 70 amendments came from the floor of the House of Commons. All but two of those amendments were accepted by the Government.
It is interesting to note what those two exceptions were. One amendment concerned the question of accountability. I will not go through the whole debate at that time because it is not necessary. The Official Opposition made that recommendation about accountability but it was turned down by the Government and the NDP. The Leader of the New Democratic Party at that time, Mr. Lewis, held honestly to the view that once this immense power and wealth was turned over to a Crown corporation or any government agency, it should be entrusted to do the right thing since it would have no motivation except to help the country.
However, the grim experience in all countries that have had these types of organizations, including the U.S.S.R. and China, has led us all to agree, both in the socialist nations and so-called non-socialist nations, that there must be a better way than this to deal with the question of accountability in any form of government.
May I call it one o'clock, Mr. Speaker? I want to deal with this proposal later.


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Geoff Scott (Hamilton-Wentworth):: Mr. Speaker, I rise to express my disbelief and outrage at the day parole privileges given to a four-time convicted sex slayer.
For a number of hours during the weekend while William Boden, known as "Strangler Bill", was still at large, the community of Dundas, which I represent, was terrified that what police described as "an extremely dangerous psychopathic killer" was making his way back to southern Ontario to visit relatives. Given his violent criminal background, there were fears that he would take the life of another Dundas girl in the same horrible way he strangled and multilated school teacher Elizabeth Ann Porteous.
I want immediate answers from the Solicitor General (Mr. Kaplan) and the National Parole Board on how it was that "Strangler Bill", whose trademark was to leave teethmarks on

May 7, 1984
women's breasts after he raped and mutilated them, should be allowed a lovely lunch in a fashionable downtown Montreal restaurant. I demand to know how he got his own personal American Express card, and who gave him $300 in cash. I want to know how we are expected to believe the guard who fell for the oldest excuse in the world, right out of a Grade B movie, that the killer had to find the men's room.
I found it absolutely incredible that he was out of jail at all.
I demand to know where, in the name of Heaven, is there any justice for society in allowing day passes for convicted killers serving four consecutive life sentences? It is an unbelievable subversion of the law.


Some Hon. Members:: Hear, hear!



UNEMPLOYMENT INSURANCE


Mr. George Baker (Gander-Twillingate):: Mr. Speaker, I want to bring to the attention of the House the disastrous situation on the northeast coast of Newfoundland and in many areas of Atlantic Canada because of the incredible amount of ice located along the coastline of most of our Atlantic provinces. As well, this week fishermen in Atlantic Canada, some 15,000 in Newfoundland alone, will receive their last unemployment insurance cheques. Surely the Government of Canada, specifically the Minister of Employment and Immigration (Mr. Roberts), can go to Cabinet and see if he can get the unemployment insurance benefits extended for these fishermen who will be without any income next week.
I want to point out the attitude of provincial Departments of Social Services which are claiming that these fishermen do not qualify for welfare because they are self-employed. Really the buck stops with the Minister of Employment and Immigration. I am asking him now, on behalf of the 15,000 fishermen on the northeast coast of Newfoundland, to extend the unemployment insurance benefits until the ice moves off.



INCOME TAX ACT


Lorne Everett Greenaway: Mr. Speaker, Section 31 of the Income Tax Act has been plaguing farmers for over 20 years. Finally, in a token reaction to public pressure, the Minister of Finance (Mr. Lalonde) announced on February 15 that he was going to set up a consultative group to look into the matter. Well, Mr. Speaker, it is two and one-half months later and the Minister has not yet even named the members of this group.
In that two and one-half month interval, Revenue Canada could conceivably reassess a farmer, turn down his notice of objection, and garnishee his bank account. In other words, in
that period of time Revenue Canada could bankrupt a farmer. Recently, in a ten-week period, the Progressive Conservative Party announced its Revenue Canada task force, conducted public hearings in 23 Canadian centres, and drafted and submitted an 80-page report, in both official languages, covering all areas of the Department's operations.
It appears as if the Section 31 problem has been put on the Liberal back burner. Who knows how much more time will be spent studying the issue and providing recommendations to say nothing of the interval the Government will take to act upon those suggestions? At the speed the Liberal Government is going, it will be another 20 years before this stupid and destructive Section of the Income Tax Act is amended.
Fortunately, it is more likely that the consultative group will be reporting to a Conservative Government, and farmers can rest assured that immediate action will be taken.



SHIPBUILDING


Mr. Gaston Gourde (Parliamentary Secretary to Solicitor General of Canada):: Mr. Speaker, the last report of the Canadian Shipbuilding and Ship Repairing Association showed that the total value of shipyard production dropped 38 per cent in 1983, compared with 1982. It seems that the industry is suffering as a result of imports of ships into Canada.
Recent measures announced by the federal Government are aimed at helping the industry. First of all, federal orders have been a godsend, because they represent 80 per cent of new orders received this year. Second, there is Bill C-16, that extends the customs zone to the edge of the continental shelf. However, I feel that this is not enough. I do not think the reasons for exempting fishing boats of between 30 and 50 metres from the provisions of Bill C-16 are very convincing. Furthermore, the Petroleum Incentives Program makes it possible to pay 80 per cent of oil exploration costs to Canadian drilling companies. I have nothing against this measure, except that it should apply only to what is produced in Canada.
I therefore urge the Minister of Energy, Mines and Resources to reconsider this part of the Energy Program and I also hope that the Shipbuilding Industry Assistance Program will be extended until June 30, 1987, because I feel it is hardly appropriate to terminate this program at a time when Canadian shipyards are in great difficulty.
May 7, 1984



FORESTRY


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, about a hundred years ago a scrawny little fellow named Sam showed up in an Ottawa Valley lumber camp. He asked for a job as a faller.
The boss reluctantly hired him, but was completely flabbergasted at the end of the day when he saw how many trees Sam had fallen. "Where did you learn to fall trees?" he asked. "In the Sahara", said Sam. "Go on, there aren't any trees in the Sahara," said the boss. "There aren't now," said Sam.
Sahara Sam finished his work in the Ottawa Valley and moved on to British Columbia, where he has been busy ever since.
This is National Forestry Week and it would be a good time for the federal Government to start taking seriously our forests and our forest industry, before our forests become desert.
Across Canada we harvest more than 800,000 hectares of forest each year, but 25 per cent to 50 per cent of that land is never regenerated, or it grows up in non-commercial species.
The Canadian Forest Service estimates that decent forest management would create 100,000 new jobs, increase product sales by $22 billion, increase exports by $12 billion, and generate an additional $3 billion in tax revenues.
If the Government gave proper attention to the needs of the Canadian people and to the needs of our economy-


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



SOCIAL AFFAIRS


Mr. Stanley Hudecki (Parliamentary Secretary to Minister of National Defence):: Mr. Speaker, I have been impressed by the efforts of an organization in my riding called AEDA, the acronym for "Against Easy Divorce Association". Their concern is the deleterious effect that so-called "no-fault" divorce can have on the children of couples whose marriage ends in divorce.
This group points out that 40 per cent of all Canadian children of divorced couples live in single parent homes. The lifestyle of the children of divorced parents changes rapidly. The children are placed under social assistance rather than cared for by non-custodial parents or, if the custodial parent, usually the mother, works, the children for the most part are left without necessary parental supervision during their developing years.
Added to these indignities, children from easy or no-fault divorces are generally confused as to the reasons why their
parents have split up, and children have not understood, even years later, why their parents' marriage ended. Indeed, there may be a link between the rising suicide rate, particularly among young people, and their growing suspicion and distrust of the actions of their parents. As far as children are concerned, their parents remain married forever. AEDA is correct. Too easy divorce can have serious consequences for children as well as for others indirectly involved.



PROVINCIAL AFFAIRS


Hon. James A. McGrath (St. John's East):: Mr. Speaker, last Thursday the Supreme Court of Canada, in a unanimous decision, ruled that Newfoundland's Upper Churchill Water Rights Reversion Act was ultra vires. This legislation was passed in 1980 in an attempt to redress one of the most serious grievances in this country today, that is, the Churchill Falls power contract. The contract entered into in 1969 by Churchill Falls Power Corporation and Hydro Quebec locks Newfoundland into a situation whereby Churchill Falls power is sold to Quebec for less than three mills. That power is resold to the Americans, and indeed to other Canadian provinces, for up to 28 mills. In dollars, according to the Economic Council of Canada, this means $8 million a year for Newfoundland, and $800 million a year for Quebec.
This country cannot survive on a strict interpretation of the letter of the law. There has to be a spirit of the law. It is in that spirit that I call upon the Prime Minister (Mr. Trudeau), on behalf of the people of Newfoundland, to take whatever steps are available to him under the National Energy Program, or through amendments to the National Energy Program, to correct this most grave injustice. Failure to do so could have most dire consequences.



VISIBLE MINORITIES


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, during the course of their history most countries make mistakes which subsequent leaders are required to acknowledge and rectify. Such is the case today with respect to the treatment of our fellow Canadians of Japanese descent during World War II. The people who were unilaterally uprooted and forcibly relocated, and whose boats, farms, and possessions were expropriated, with very little and often no compensation, were full Canadian citizens. They were Canadians in all respects, and deserved all the protection that citizenship implies.
They were hard-working, lawful, and paid taxes like all other Canadians. Not one Canadian of Japanese descent was

May 7, 1984
ever convicted of an act of disloyalty toward this country. The Government reacted to unsubstantiated fears and hatred. I call upon the Prime Minister (Mr. Trudeau) to reconsider the position of his Government and to set in motion immediately the proper process to address and deal with this serious issue.



DANGEROUS PRODUCTS


James Ross Fulton: Mr. Speaker, one of the most deadly toxics known to man is 2, 3, 7, 8, -dioxin, dangerous traces of which found their way into 2, 4, 5, -T and the Agent Orange mixture that has been used as a herbicide in Canada. The severe damage caused by the compound 2, 3, 7, 8, -dioxoin came to light during the Vietnam War, and now further revelations have come out in the multi-billion dollar lawsuit taken against chemical manufacturers by thousands of former army servicemen. We also knew that Dow Chemical knew as early as 1965 that this deadly dioxin was finding its way into herbicide products in Canada, but to protect its lucrative sales in our country this evidence was kept quiet for five years.
The Government has done nothing to date to protect our citizens from the harmful effects of dioxins like 2, 3, 7, 8. The Government takes the position that all chemicals are safe unless proven otherwise. As the IBT scandal revealed, the Government relies on the bogus reports of the chemical manufacturers to trumpet safety claims to the Canadian people. We still continue the use of 2, 4, 5, -T which the United States banned in 1969. We know that deadly dioxins are seeping into Canada from old American waste dumps, but still the Government does nothing.
In conclusion, responsibility for pesticides and herbicides must be removed from Agriculture Canada. A special task force on pesticides and toxic waste must be established to tour the country and bring in a set of hard-hitting regulations for the future, and a serious plan for past errors. Corporate executives must be held legally liable for violations. A beefed up program to research and develop natural alternatives to toxic chemicals must be put into high gear.


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



EXTERNAL AID


Gerry St. Germain: Mr. Speaker, a recent newspaper article revealed that the Government has decided to contribute $7 million in Canadian taxpayers' dollars to the interim Government of Grenada to complete the international airport at Point Salines. I do not object to Canada being involved in foreign aid programs, and I do not doubt that Grenada is in need of this assistance. However, it is
obvious that the Government has lost sight of its priorities when it comes to making multi-million dollar expenditures for projects of this sort.
Pitt Meadows Airport in my riding requires an extension to its main runway. Many other airports in Canada do, as well. The cost of completing this project is estimated to be just over $1 million. The Minister of Transport (Mr. Axworthy) claims he does not have the funds to complete this project in my riding, and I believe him.
The completion of the Point Salines airport on the Island of Grenada was described by Canadian External Affairs officials as "an important psychological factor for investment needed to bolster the local economy". In my riding, where unemployment has reached 47 per cent, crisis proportions, the same can be said of the need to complete an airport. What are the Government's priorities?



ORAL QUESTION PERIOD


Hon. Brian Mulroney (Leader of the Opposition):: Mr. Speaker-


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: This is a very impolite way to treat a new Member of the Queen's Privy Council.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: A little more decorum, please!

My question is directed to the Minister of Finance. Last Thursday the Minister of Finance said he knew of no serious analyst, either in Canada or in the United States, who was warning of significant increases in interest rates. The very next day Henry Kaufman, respected chief economist for Solomon Brothers, said: "Before the end of the current cyclical interest rate period peak is reached, interest rates will move spectacularly higher." I know that the Minister of Finance views Mr. Kaufman's statements with respect and concern. In light of this very dramatic statement by Mr. Kaufman, is the Minister contemplating revising his budgetary statements? If so, can he tell the House to what point mortgage and other interest rates must rise in Canada before he will consider such a change in course?


Hon. Marc Lalonde (Minister of Finance):: Mr. Speaker, Mr. Kaufman indeed made a statement later in the week after I spoke in the House. I do not think there is any relationship
May 7, 1984

between the two statements. I remind the Leader of the Opposition that the view held by Mr. Kaufman is very much a minority view in North America, in the United States in particular. Mr. Kaufman has proven to be wrong in the past. I hope he is wrong again. Obviously it is a matter of speculation as to what will happen in 1985 in particular, as Mr. Kaufman has indicated. I certainly have a lot of respect for the views of Mr. Kaufman, but it is a matter of trying to predict what will happen in the course of 1985 in particular, and much later this year.
Once more, Mr. Kaufman's view is certainly not a view that is shared by most other analysts. I submit that his view in this instance is not going to be proven right in the course of the next year.
I would like to remind the Leader of the Opposition that, during his absence, we tried to make progress on a number of Bills dealing with the last Budget.


Some Hon. Members:: Oh, oh!


Marc Lalonde: We succeeded in getting some agreement with his spokesman on early consideration of Bills, but we have not been able to get the necessary co-operation.


MINISTER'S ECONOMIC PROJECTIONS
Martin Brian Mulroney: Mr. Speaker, I hope, and I say this with some degree of kindness, that the Minister of Finance is not putting his reputation in the international investment market up against that of Mr. Kaufman, because he will find they will chose Kaufman ten times out of ten. There is nobody in the international investment world, or in the OECD, who pays any attention to this guy. They are even having serious questions in the OECD.


Mr. Trudeau:: What about your Party?


Martin Brian Mulroney: Notwithstanding the generous efforts of the Prime Minister, there are grave doubts arising in the OECD.


Pierre Elliott Trudeau: You do not want a Canadian in OECD?


Martin Brian Mulroney: The Prime Mnister is retiring. He should be polite. The Prime Minister should not be angry with me; he should be angry with all of his Cabinet colleagues who are devastating his legacy every day of the week when campaigning for the leadership of the Liberal Party. I have been out there defending the Prime Minister, Mr. Speaker.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: On February 15, in his economic documents and projections, the Minister of Finance said at page 15:
A crucial aspect of the medium-term projection is the underlying view of moderate sustained declines in interest rates-
Oral Questions
He went on to say:
If nominal and real rates of interest were to rise significantly from current levels, the recovery itself could be at risk-
Those were his words. Since that time interest rates for five-year mortgages have risen a point and a half. The bank rate has gone up 1.13 per cent in less than three months. In the words of the Minister of Finance, the recovery is already at risk. In light of this, will the Minister of Finance acknowledge that the projections have not worked out as he hoped they would, and will he bring in a new financial statement that will relieve the pressure on hundreds and hundreds of thousands of Canadians who need relief from the burden of high interest rates? Will he do so today?


Marc Lalonde: Mr. Speaker, I listened with interest to the lighthearted comments of the Hon. Member. I would like to suggest that, if he is to worry about someone's future, he should worry a great deal about his own future rather than mine. He may have noticed that during his lengthy absence some worrisome results were coming out. I would suggest to him that he should begin to look behind his back because he may end up the way so many other Tory leaders, including the Right Hon. Member for Yellowhead, ended up.


Some Hon. Members:: Oh, oh!


Marc Lalonde: We went from-


Mr. Speaker:: Order. The Chair hesitates to interrupt, but the Chair does suggest that perhaps the questions and answers are straying from the usual procedures of the House.


Martin Brian Mulroney: Mr. Speaker I would just say-


Mr. Speaker:: Is the Hon. Member rising to ask a second supplementary question?


Martin Brian Mulroney: Yes.


Mr. Speaker:: I recognize the Hon. Leader of the Opposition for a further supplementary question.


Martin Brian Mulroney: Mr. Speaker, I would simply say that if the Prime Minister and the Minister of Finance believed those numbers, let them call an election right now because the people of Canada want one.


Some Hon. Members:: Hear, hear!


An Hon. Member:: What about the polls?


Martin Brian Mulroney: This is going to be dangerous, because he is now being coached by the Prime Minister. I have been out conducting my own poll and I have bad news. There are at least 70 Liberal Members who will not be back after the next election.

May 7, 1984
Oral Questions REQUEST FOR NEW BUDGET


Martin Brian Mulroney: Mr. Speaker, in view of the Minister's reference to the situation in the United States, there are four very key areas to be addressed apart from the interest rate burden, these being more robust recovery in employment, more industrial production, more real income, and an effectively milder recession by any objective criteria. I think the Minister of Finance would agree that that is the case in the United States vis-a-vis Canada.
Apart from the overwhelming burden of rising interest rates in Canada, could the Minister indicate his actions to the House, to Canadians, and particularly to those who are running and small and medium-sized businesses who are now being crippled and are alarmed? These businessmen are alarmed as well by the Minister's use of the word "panic" in terms of rising interest rates. Can he tell the House whether or not he will be bringing in a new budgetary document of any kind designed to correct the misapprehensions which have arisen out of his Budget and to reduce the burden of interest rates on the ordinary taxpayer? Will he do that right away?


Marc Lalonde: Mr. Speaker, the Leader of the Opposition is looking more and more like a man who is whistling in a graveyard. I would like to tell him that, indeed, an election will be called in due time and he had better get ready because he will be dumped and buried in the graveyard in which he is whistling at the present time.


Some Hon. Members:: Hear, hear!


Marc Lalonde: As far as my hon. friend's question is concerned, I would like to remind him that in 1983, for instance, Canada knew a rate of growth higher than that in the United States. Canada grew at a rate of 6.6 per cent versus a rate of 6.3 per cent in the United States last year. I would like to remind him that the growth rate in Canada was larger than that in every other industrialized country during that 12-month period to which I have referred.
I would also like to remind my hon. friend that, in terms of job creation, Canada's record compares favourably with that of any other country, including the United States. I also remind him that last year labour growth in Canada was some 50 per cent higher than it was in the United States. This is why we have not been able to reduce the unemployment rate as much as we would have liked. In the meantime all of our efforts are concentrated on creating jobs as fast as we can and on keeping our interest rates as low as possible in the current context.
As far as small business is concerned, Mr. Speaker, I remind my friend again that we have put forward proposals whereby the taxation of small businesses would be very significantly reduced. We would do away with two-thirds of the legislation dealing with small business income tax, and this would generate a tax saving of some $150 million for small businesses. I would hope we would get co-operation from Tory Members to have these pieces of legislation passed quickly rather than the
foot dragging on their part that we have been facing for the last several weeks.


Mr. McDermid:: Introduce the Bill!


THE ADMINISTRATION
James Aloysius McGrath: Mr. Speaker, my question is a supplementary one. The Minister of Finance complains that his policies are not working because there are too many Canadians looking for jobs. I would like to ask a question of his colleague, the Minister of State for Economic and Regional Development. In Halifax on the weekend, the Minister of State for Economic and Regional Development said that he would call on his fellow candidates to put their cards on the table. He went on to say:
Instead of propping up run-down trucking firms, bankrupt computer companies and over-staffed government Departments, we should be investing more money in our people.
The Minister of State for Economic and Regional Development chairs a most important Cabinet committee and I would like to ask him if he has been successful in persuading his Cabinet colleagues to adopt these spending priorities. Since the obvious and self-evident answer to that question is no, how can he reconcile his continuance as a member of the Cabinet?


Hon. Donald J. Johnston (Minister of State for Economic and Regional Development and Minister of State for Science and Technology):: Mr. Speaker, I think that the policies are clear. Just look at the last Budget, Mr. Speaker. Look at the tax incentives for research and development. Look at the investment in the East Coast fishery, for goodness' sake. Is the Hon. Member suggesting that that is not where taxpayers' dollars should be spent? Those are priorities, and those investments are being made.


MINISTER'S POSITION
James Aloysius McGrath: Mr. Speaker, did I quote the Minister correctly in my previous question? If so, does this account for the reason why Canada has fallen so far behind the United States in terms of job creation and in terms of consumer spending? The dollar is down, unemployment is up, and consumer spending is down because Canadians are saving more as they have no confidence in the future because of the policies the Minister supports.


Donald James Johnston: Mr. Speaker, included in the comments I made in Halifax was the statement that that is utter rubbish. I would like to requote myself on that. The Hon. Member for St. John's East always prefers to see the glass as being half
May 7, 1984

empty instead of half full. He is preaching gloom and doom at a time when the object for all of us should be to stimulate the confidence of Canadians in the economy. The economy is growing and a recovery is under way. Jobs are being created and important investments can be made. Our job is to spur that on. That is the job of everyone in the House, including members of the New Democratic Party. We have had enough of this nonsense. Let us tell Canadians how good the economy is, rather than trying to camouflage the strengths upon which we all must build.


FINANCE
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, my question is also directed to the Minister of Finance. Last week in response to a question that I asked the Minister of Finance regarding mortgage interest rate increases, he responded by saying that there is no automatic relationship between the Bank of Canada rate and the interest rates charged by the banks.
Given that we have seen increases in the bank rate over the months of February, March, and April, amounting to 1.13 per cent, given that we have seen increases in the mortgage interest rates charged by the chartered banks amounting to 1.75 per cent, and given that we now see interest rates for mortgages at a level of 14 per cent, which effectively excludes 85.5 per cent of all renters from entering the housing market, is the Minister either incompetent or is he not telling us the truth?
[ Translation]


Marc Lalonde: Mr. Speaker, I might refer the Hon. Member to the answers he gave himself and which indicate a gap between the increase in the Bank of Canada rate and mortgage interest rates, answers which apply directly to his question.
Furthermore, I can inform the Hon. Member that, for instance, the prime rate has remained at 11.5 per cent for several weeks, while in the United States it rose to 12 per cent.
In addition, the Hon. Member mentioned the figure of 14 per cent. I might remind him that mortgages are available for less than 14 per cent, provided they are for periods shorter than five years. If my hon. friend would take the trouble to check mortgage rates for one-year mortgages, he will find that his figures are all wrong. In that respect, the Hon. Member has decided, as usual, to pick the worst figure for the consumer instead of finding out what the possibilities are as far as interest rates are concerned.
Oral Questions


Ian Deans: Mr. Speaker, while the Minister points to the United State prime interest rate as being higher than that in Canada, he fails to acknowledge the fact that the United States has taken steps to establish a mortgage interest rate which is pegged and is well below the prime rate now being charged in the United States.


EFFECT OF MORTGAGE INTEREST RATES ON POTENTIAL HOME BUYERS
Ian Deans: Since the Minister says that I am overstating in using the figure of 14 per cent, surely he recognizes that even at the 12 per cent level which is currently available for one-year mortgages, that rate effectively excludes 80.7 per cent of all of the renters in Canada who might have to qualify for the average mortgage currently available. Does the Minister believe that it is reasonable in this country to have interest rates which effectively eliminate 80.7 per cent of all of the potential home owners from the marketplace? Does the Minister not feel that it would make more sense to protect home ownership, and to move to establish a rate which people in Canada can afford?


Marc Lalonde: Mr. Speaker, the New Democratic Party is back to its usual rhetoric, without suggesting a solution to the problem the Hon. Member is referring to. I am happy to hear my hon. friend admit it is even possible to borrow money at 12 per cent. For his information I may add that even 11.75 per cent is possible today. If the Hon. Member would like to check, he will find a large number of financial institutions that are still offering one-year mortgages at 11.75 per cent.
Now, for the more general issue he is raising, the Hon. Member is aware of the programs that exist under legislation passed by this Parliament, and I am referring to programs set up by the federal Government and aimed at promoting the housing industry in Canada, and more specifically the purchase of homes by Canadians.
I may remind him, however, that we have said many times that we deplored the fact that interest rates are as high as they are, not only for housing but also for small businesses, farmers and anyone in our economy who has to borrow. Nominal and real interest rates are high, and they are much too high in our view. Of course the problem is that we and the rest of the industrialized countries, except for the United States, are in a situation where we depend very much on what happens in the United States. We have made exactly the same complaints as the Hon. Member has today. These views are shared by industrialized countries, who are now making representations to the United States, urging that country to adopt measures that will bring about a reduction in real and nominal interest rates in the United States. If this were to happen, we would feel the beneficial impact immediately. The issue was dis-

May 7, 1984
Oral Questions
cussed at the last meeting of the International Monetary Fund, and I am sure it will be discussed again at the next meeting of the O.E.C.D.


Ian Deans: Mr. Speaker, rarely have I sat and listened to such absolute nonsense.


Some Hon. Members:: Hear, hear!


Ian Deans: I want to say to the Minister, first of all, that, even at 10.75 per cent, he knows that 75 per cent of all of the renters in Canada cannot qualify for the average sized mortgages currently required in order to purchase a home.


REQUEST FOR CEILING ON MORTGAGE INTEREST RATES
Ian Deans: I ask the Minister if he does not recall that up until 1968, under the Bank Act, there was ceiling on mortgage interest rates which guaranteed that Canadians working in Canada could affort to buy a home in Canada? Why, therefore, does the Minister not-


Mr. Speaker:: Order, please. With respect to the Hon. Member, the Chair has concern about the length of the questions-


Some Hon. Members:: Oh, oh!


Mr. Nielsen:: How about the answers?


Mr. Speaker:: -the length of the supplements-will Hon. Members allow the Chair at least to make a remark?-and the length of the answers. We have now had our third questioner and the net result of this will be a lack of opportunity for other Hon. Members to participate.


Ian Deans: It might be more useful if you talked to the Leader of the Official Opposition.


Ramon John Hnatyshyn: Order.


Ian Deans: Fifty per cent of what he said was absolute nonsense.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: At this stage the Chair is inviting the Hon. Member for Hamilton Mountain, on his second supplementary question, to be brief in putting his question.


Ian Deans: I now ask the Minister, as I was about to ask the Minister, will he not move to establish a ceiling on mortgage interest rates which is both reasonable and fair, both from the point of view of the investor and of the Canadian family who must purchase a home in order to live?


Marc Lalonde: Mr. Speaker, the Hon. Member was quite wrong in his statement about the Leader of the Opposition.


Ramon John Hnatyshyn: You agree in everything else.


Marc Lalonde: The Leader of the Opposition is usually wrong in 95 per cent of what he says.


Mr. Epp:: That does not beat your 100 per cent.


Marc Lalonde: As far as the question itself is concerned, I want to remind my friend that, indeed, the issue of an artificial ceiling on interest rates was extensively studied at the time when the Bank Act to which he referred was revised.
This issue has been studied extensively over and over again, repeatedly, every time that interest rates tend to go up. All those who have studied this subject have come to the conclusion that it is wrong to set some artificial ceilings on interest rates, for the good reason that the net result in the end tends to be that funds going into that area end up being very limited and there is not enough to meet the demand. I believe, therefore, this country would be much better served-


Ian Deans: By driving people out of their homes.


Marc Lalonde: -by relying on the rules of the market and trying to keep interest rates as low as we can, generally, to all Canadians, whether they want to buy a home, farm, small business, or borrow to buy a car or some appliances. I believe that the best solution remains one whereby the consumers will have the choice to allocate their borrowings according to their needs, rather than making the artificial decision for them.


MORTGAGE INTEREST PROTECTION PLAN-ELIGIBILITY CRITERIA
Mr. Doug Lewis (Simcoe North):: Mr. Speaker, my question is also directed to the Minister of Finance. The Minister will know that rising mortgage interest rates are of continuing concern to the Canadian home owner and the housing industry. Last week the Minister assured the House that everyone who has taken out a mortgage since March 1 will be eligible for the mortgage interest insurance protection plan. In the absence of the legislation, which has been promised for almost two months now, can the Minister explain to the House just what that eligibility is going to mean to the average Canadian home owner?


Marc Lalonde: Mr. Speaker, I have indicated that we have proceeded with extensive consultations with the housing and construction industry, as well as consumer groups, and that those consultations have been concluded. We should be able to introduce a Bill by the end of this month which I hope will receive prompt consideration by the House.
As to the nature of the proposal, I have indicated that all home buyers since March 1, 1984, would be eligible for the program and, second, I released at the time of the Budget an extensive document which provided for the nature of this particular program, to which I invite my friend to refer.
I must say that the consultations we have had, which have been quite extensive across Canada, have indicated very broad support for the measure we have put forward, and it is

May 7, 1984

expected that the Bill to be introduced will be substantially along the lines of what was proposed in the Budget.


BASIS OF PROTECTION
Douglas Grinslade Lewis: Mr. Speaker, I suggest to the Minister that the problem will not be with the concept but with the mechanics.
Mortgage interest rates have risen almost 2 per cent since March 1. Can the Minister assure the House that a Canadian home owner who renews his or her mortgage after March 1, 1984, will receive mortgage insurance protection based upon the rate in effect on March 1, 1984? Or will the protection be based upon the prevailing rate at the time the application is approved? There is a 2 per cent difference right now.


Marc Lalonde: Mr. Speaker, I will take the question of the Hon. Member as a representation. He will have to wait for the Bill, which he will see at the end of the month, to reach his own conclusions in that regard.


FARM FUEL TAX-REQUEST FOR ABOLITION
Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, my question is directed to the Minister of Finance. We on this side of the House are delighted that three Liberal leadership candidates, namely, the Minister of Justice, the Minister of Employment and Immigration, and the Minister of Agriculture, have decided to co-opt the Progressive Conservative proposal to abolish the 9 per cent federal sales tax on farm fuels.


Some Hon. Members:: Hear, hear!


Ramon John Hnatyshyn: Better late than never.


Walter Leland Rutherford (Lee) Clark: In light of that important and noteworthy conversion on their part, can the Minister indicate to the House that he and his colleagues are prepared in fact to do so, which would mean a saving to Canadian farmers of $250 million?


Marc Lalonde: Mr. Speaker, I already answered this question last week. Furthermore, as the Hon. Member is aware, the Government brings down a Budget each year, and I think he should wait until my next Budget.


GOVERNMENT POSITION
Walter Leland Rutherford (Lee) Clark: Mr. Speaker, I think it is very much within the capacity of the Government, if it is so inclined, to introduce interim measures at any time. Therefore, why is this not happening? Is it because the Ministers I have named have no influence in this particular Cabinet, or is it because the rest of their colleagues are insensitive to the plight of Canadian farmers?
Oral Questions


Some Hon. Members:: Hear, hear!


Marc Lalonde: Mr. Speaker, I come from a family which has had eight generations of farmers before me. I have two brothers who are active farmers. Representations along the lines mentioned by the Hon. Member are well known to me. The fact is the Hon. Member knows the Government of Canada is providing support to farmers to the tune of several hundreds of millions of dollars a year. That support is very extensive and takes the form of many, many programs. It also includes a rebate on the federal sales tax on fuel consumed on the farm, of which the Hon. Member is aware. Every time I meet farmers I sit down and discuss with them the notion of sharing the burden of taxation fairly between all Canadians. Other Canadians are also paying high taxes in various forms. I must say that farmers, when you discuss it with them, are very reasonable people and recognize they also have to share the burden with others.


PETROLEUM INCENTIVES PROGRAM-DOME CORPORATION'S REQUEST
Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, my question is also directed to the Minister of Finance. He has recently received correspondence from Mr. Fred McNeill, the chief executive officer of Dome Canada Ltd., requesting that the Government bend the rules so Dome can obtain another $30 million of taxpayers' money under the Petroleum Incentives Program to continue drilling dry holes in the Beaufort Sea. Given the rather disastrous record of this company in that area, would the Minister assure the House that Dome Petroleum will not receive this additional $30 million of taxpayers' money, and that there will be a review of Dome's performance in that area before any further action is taken?


Marc Lalonde: Mr. Speaker, I must admit I have not read Mr. McNeill's letter, to which the Hon. Member is referring. However, the Department of Energy, Mines and Resources obviously approves of exploration projects and investment by various companies in the oil sector, especially on Canada lands, and I am also sure the Department will want to examine very carefully any proposals that may come from Dome Petroleum or other companies.
Actually, I am rather surprised at the Hon. Member's comments of the news in the papers this morning. A multinational company announced the discovery of a major oil pool in the Beaufort Sea on the Alaska side, I admit. I therefore think it is rather surprising that my hon. friend should jump to the conclusion that there is no future in exploration in the Canadian Arctic, while they seem to be able to find oil on the American side, right next to the area where we are drilling now.

May 7, 1984
Oral Questions


REQUEST THAT PROGRAM BE REVIEWED
Raymond John Skelly: Mr. Speaker, we have been calling on the Government to open its eyes and stop squandering billions of dollars in an area which has produced nothing but dry holes. The Japanese have pulled out, and now Dome is pulling out of the Beaufort, and requesting one last hurrah to the tune of $30 million. In light of that, will the Minister of Finance guarantee that we will not squander another $30 million, and that there will indeed be a review of this program which has produced nothing but dry holes on the Canadian side of the Beaufort Sea?


Mr. Speaker:: The Hon. Member is repeating his original question. The Hon. Minister of Finance.


Marc Lalonde: Mr. Speaker, there is so much misinformation in the question, it is pretty hard to answer. First of all, the Japanese have not pulled out. They have loaned a few hundred million dollars in that area. They have indicated they were not planning further investment, but they have not pulled out. They made a commitment, and the money they invested has been spent for exploration.
In addition, the record in the Arctic has not been one of dry holes. There have been a number of discoveries; the question is whether we will be able to make discoveries leading to a development of commercial value. Oil and gas have been discovered in the Canadian Arctic, as the Hon. Member knows.
Finally, I am amazed that the Hon. Member wants to put forward as a philosophy or policy in the energy field the idea that we should go only for wells which will produce. The history of the oil and gas sector is one of a large number of dry holes, with a few discoveries. If you want to have discoveries you have to drill, and you will not be successful most of the time. You will be successful a number of times, and this is how the industry has developed in Canada and around the world.


VETERANS AFFAIRS
Mr. Jim Schroder (Guelph):: Mr. Speaker, my question is directed to the Minister of Veterans Affairs. Last night the television show W-5 was very critical of the adjudication process established under the Pension Act. The show suggested that some veterans are not receiving due consideration from the Canada Pension Commission, and that changes to the adjudication process are required. Will the Minister comment on the subject matter raised on that program, and the action he proposes to take to determine if the allegations are true and how they can be resolved in the best interests of disabled veterans?


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: Mr. Speaker, may I begin by thanking the Hon. Member for his question. As he knows, the Pension Act establishes the process by which entitlement to disability pensions is determined. It is a quasi-judicial process and was developed by veterans to serve veterans. Over the past couple of years we have taken steps to speed up the administrative process by which veterans' applications for disability pensions are handled. We have not, however, looked at the basis for the adjudication process under the Pension Act.
I have taken action not only to meet with the War Amps of Canada and their representative, Mr. Chadderton, a couple of weeks ago, but I further examined whether or not the adjudication process continues to meet the needs of veterans in the 1980s. As a result, I determined to establish a working committee, and I will be asking veterans' organizations to examine the adjudication process and recommend ways and means by which the Pension Act can better serve the needs of veterans.


PENITENTIARIES
Allan Frederick Lawrence: Mr. Speaker, the Solicitor General has caused an investigation to be made, and apparently has an answer ready, as to why Wayne Clifford Boden, a convicted multi-murderer, would even be considered for a full parole, day parole, or even a day pass, bearing in mind that Mr. Boden, immediately upon his escape on Friday in Montreal, was classified by both prison and police authorities as being "extremely dangerous". I understand the Solicitor General has an answer for us. I would like to know what that answer is.


Hon. Bob Kaplan (Solicitor General of Canada):: Mr. Speaker, I had the Commissioner of the Correctional Service in to see me this morning. I must tell my hon. friend that I am not satisfied with the explanation I have of what went wrong in this case. It appears to me there were a number of breaches of long standing policy. I want to hear more from the Correctional Service about the steps they intend to take to be certain that the policies which were presented to me, and which I have approved, are complied with.
I do not see any humanitarian basis in this case for allowing the individual out on a temporary absence, even though he was reported to have been under escort. There is no excuse for his having been given $300 by the person who was responsible for his escort, even though it was his own money which he had earned inside the institution. Policies do not permit sums like that to be given to individuals under those circumstances. They should not have had lunch in a bar where the inmate treated the escorting officer to lunch. He should not have been permitted to go to the washroom without the escort accompanying him.
May 7, 1984

I am pleased to be able to tell the House that, thanks to good police work and to an anonymous tip, this individual was apprehended very shortly after he escaped. However, it is a matter which concerns me very much. I would like to assure the House that steps will be taken to ascertain that the policies of the Correctional Service of Canada are complied with in every case.


REQUEST FOR EXPLANATION
Allan Frederick Lawrence: Mr. Speaker, surely that is not good enough. The Minister has already caused an explanation to be given to him. I think Hon. Members of the House are entitled to hear from the Minister exactly what that explanation was which he has not given to us.
He mentioned a custodial officer. In actual fact it was an art instructor from a maximum security prison. If the Minister is going to attempt to slough off the accountability to his officials, I think the public is entitled to know exactly what the explanation is that the Minister has received and to which he referred.


Robert Phillip Kaplan: Mr. Speaker, I intend to have further discussions with officials about this in the next day. I am glad to remind the Hon. Member that I am appearing on my Estimates tomorrow before the Justice Committee. I would be very glad to discuss this whole policy.
This was a case of an inmate who had served 12 years behind bars, who had undergone sexual therapy treatment at a regional psychiatric centre, who was reported to have been making good progress, and who was about to be downgraded from a maximum security to a medium security level. I agree that the House is entitled to a further explanation and further assurances. I am very pleased that I will have the opportunity to appear before the Justice Committee tomorrow. I will be there with senior officials. I hope that the Hon. Member and other interested Members will attend.


DAY PASS POLICY
Geoffrey Douglas Scott: Mr. Speaker, my supplementary question is for the Solicitor General. Will the Minister report fully to the House on how this convicted sex slayer obtained his own American Express credit card?


Erik Nielsen: Do not go anywhere without it.


Geoffrey Douglas Scott: This calls into question the whole matter of convicted killer day passes. Can the Minister assure us or himself, if he doubts his officials, how many other convicted killers may be out having lunch today with privileges similar to those offered to Mr. Boden?


Erik Nielsen: Do not leave jail without one.
Oral Questions


Robert Phillip Kaplan: Mr. Speaker, I have tried to track down the credit card feature in the story. I do not see any evidence, and neither can my officials find any, that he did in fact have a credit card. I do not know if I have the whole story. By the time of my appearance tomorrow I hope I will have the opportunity to find out about that.
There is no such thing, Mr. Speaker, as a killer day pass policy.


Mr. Stevens:: What do you call it?


Robert Phillip Kaplan: There is a policy of humanitarian releases which are available under very special circumstances, under escort. I do not see any justification for one in this case, even though the explanation I have is that this was out on a humanitarian day pass under full escort. With regard to the escorting official, all of the staff in maximum security institutions receive security training. They are all eligible to handle escorts. I do not have more information about the particular escorting official. However, I know he was trained for that job.


EXTERNAL AFFAIRS
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, my question is for the Prime Minister. I would like to assure him that we in this corner join him in welcoming the President of Mexico, Senior de la Madrid, to Canada for an official visit.
In his meetings with the President will the Prime Minister take care to state clearly Canada's growing concern about, and opposition to, the increasing size and permanence of the U.S. military presence in Central America? Will he also assure the President of Canada's full support for the efforts of the President, and the Contadora group generally, to halt and reserve the U.S. militarization of the region?


Pierre Elliott Trudeau: Mr. Speaker, I have already been discussing these very subjects with the President of Mexico, Mr. de la Madrid. I indicated that it was Canadian policy to try to put an end to the ideological struggle between East and West, between Moscow and Washington, in the area. I repeated the policy often, stated by our Secretary of State for External Affairs, that the problems in those areas are more of a socio-economic nature and should not be turned into a cockpit of ideological confrontation between East and West. That meant regretting any military presence, not only from Washington but from Cuba interposing itself for the Soviet Union. Perhaps in that regard we have a different policy from the NDP in that we regret the ideological use of that area by both the superpowers, not only by the United States.


Pauline Jewett: Mr. Speaker, this Party also regrets it on both sides. I would only remind the Prime Minister that, so far, not

May 7, 1984
Oral Questions
a single shipment of arms, that the Americans keep saying are coming from Nicaragua, has in fact been identified.


REQUEST THAT CONTADORA FOREIGN MINISTERS BE INVITED TO CANADA
Pauline Jewett: Mr. Speaker, my supplementary question is for the Secretary of State for External Affairs. Members of the U.S. Congress, including Senator Edward Kennedy, have invited the four Contadora Foreign Ministers to Washington to discuss with them the recent peace proposals made among the Contadora group at their meeting in Panama.
I would like to ask the Secretary of State for External Affairs whether he has considered inviting the four Foreign Ministers of the Contadora group to Ottawa subsequent to their meetings in Washington, in order that the Canadian public, as well as the Canadian Government, can become more fully informed about and more involved in the Contadora process?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: Mr. Speaker, today I had discussions with the Foreign Minister of Mexico, who is a leading member of the Contadora group. Recently, during my visit to Colombia, I had discussions with Mr. Lloreda, the Foreign Minister of that country. I met with the Foreign Ministers of several of the Central American countries. I will continue that process of consultation as the opportunity arises.


FARM CREDIT CORPORATION
Hon. Bill Jarvis (Perth):: Mr. Speaker, my question is for the Minister of Finance and is with regard to Farm Credit Corporation mortgage interest rates. When these interest rates were in the range of 16.75 per cent to 20 per cent the Government, under considerable pressure, instituted the interest rebate program, which was subsequently abandoned, of course. Now that these rates are on the rise again, at what level of interest rate for a Farm Credit Corporation mortgage will that interest rebate program be reinstituted?


Marc Lalonde: Mr. Speaker, the Government is carefully following developments in this area. As the Hon. Member pointed out, the Government did not hesitate to intervene the last time we had a substantial increase in interest rates. I would like to make it clear to the Hon. Member that my colleague, the Minister of Agriculture, myself and my Cabinet colleagues are giving careful attention to developments in interest rates, and if any steps must be taken, I shall certainly inform the House in due course.


MINISTER'S POSITION ON INCREASE IN INTEREST RATES
William Herbert Jarvis: Mr. Speaker, last Wednesday the Minister indicated that the program was abandoned, to use his words, "because of a significant decline in interest rates". Would he tell us in absolute terms what is his interpretation of a significant increase in interest rates, at which time I would imagine that the interest rate program would be reinstituted?


Marc Lalonde: Mr. Speaker, I remind the Hon. Member that we have known a period when interest rates went as high as 20 per cent and even more. We have succeeded in bringing down interest rates significantly, both in Canada and in the United States. In the last few weeks there has been some increase in the interest rates. I hope that those interest rates will not grow more significantly, but obviously we will monitor the situation. If such were to be the case, we would not hesitate to take steps similar to those that we have taken in the past.



ROUTINE PROCEEDINGS


Mr. David Kilgour (Edmonton-Strathcona):: Mr. Speaker, it is an honour to present a petition on the subject of pornography signed by approximately 200 members and friends of Strathcona Baptist Church in Edmonton. Among other things, the petition expresses concern about easy access to pornography and violence to women and children. The petition calls on the House to pass effective measures to combat pornography, including passing Clause 36 of Bill C-19 amending the Broadcasting Act and, finally, amending the Criminal Code.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will
be answered today: Nos 567, 763 and 789.


Mr. Howie: What are the (a) names (b) positions of the persons who occupy positions on the Executive and Board of Directors of Canada Post Corporation and, in each
May 7, 1984

Order Paper Questions
case, what amount was he/she paid in respect of that position in the fiscal year Hon. Charles Lapointe (Minister of Supply and Services): ended March 31, 1983?	Statistics Canada reports:


Mr. Normand Lapointe (Parliamentary Secretary to Minister of Labour):: The Canada Post Corporation informs me as follows:
(a) Names
Hon. Rene J. Marin
R.	Michael Warren Vacant
K.	J. Harry
S.	T. Cooke
G. C. Clermont
L.	Sperling
A. Villeneuve Elisabeth Kriegler K. Jolliffe W. T. Kennedy J. E. Aiken
G.	F. Wilton
H.	J. Klassen P. E. Vivian J. R. Taylor Paul Lamontagne Claire Beaudoin George A. Cohon Ronald W. Lang Donald A. S. Lanskail Derek Oland Francis J. Reidy Adelard M. Savoie Lynda M. Sorensen
(b) Positions
Chairman of the Board of Directors
President and Chief Executive Officer
Executive Vice-President and Chief Operating Officer
Executive Vice-President-Finance and Administration
Executive Vice-President-Personnel and Labour Relations
Vice-President-Corporate and Legal Affairs
Vice-President-Corporate Planning and Business Development
Vice-President-Corporate Communications Vice-President-Corporate Vice-President-Administration Vice-President-Employee Relations Vice-President-Field Operations Vice-President-Finance Vice-President-Financial and Rate Planning Vice-President-Labour Relations Vice-President-Marketing and Sales Vice-President-Technical Operations Services Member of the Board of Directors
The salary and other remuneration paid to the above-mentioned persons is approved by the Governor in Council. For salary ranges of Governor in Council appointees, please refer to the Report on Governor in Council Appointees tabled in the House of Commons on November 17, 1983.


Mr. Hawkes: Is there a training program for Statistics Canada field interviewers and, if so, during it are they instructed (a) not to mention that many survey questions need not be answered (b) that the easiest way to get financial information is to have respondents show their income tax forms and, if so, are they instructed in how best to probe for sources of "hidden income" (c) that anyone who does not willingly answer all questions probably has something to hide?
Statistics Canada conducts a variety of interviewer training programs appropriate to different survey subjects.
(a)	Interviewers are trained to try to obtain a response to all questions which are applicable to a given respondent.
(b)	For selected surveys where financial information is sought from the respondent, interviewers are instructed to suggest to respondents to refer to their most recent income tax returns to assist themselves in completing the questionnaire. In conducting the interview, questions are asked to enable the respondent to include all sources of income required on the questionnaire.
(c)	No.


Mr. Hnatyshyn: 1.	Are any exempt staff employed by the Department of Regional Economic Expansion and, if so, what are their (a) titles (b) positions (c) names?
2.	Do any of the staff mentioned in part I receive income, financial assistance or other benefits related to their employment from sources other than the ministerial budget and, if so (a) which members (b) what are the details of the income, financial assistance or other benefits?


Hon. Ed Lumley (Minister of Regional Industrial Expansion):: There is no department of Regional Economic Expansion in the Government of Canada.
1. The Minister of Regional Industrial Expansion currently
employs eight exempt staff:	
(a) and (b)	(c)
Executive Assistant	P. McGuire
Special Assistant	L. Branch
Special Assistant	A. Denis
Special Assistant	P. W. Fitzpatrick
Minister's Driver	D. Gaudet
Special Assistant	G. Lalondc
Special Assistant	J. P. Morgan
Special Assistant	D. A. Proudfoot
2.	No.


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


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


Some Hon. Members:: Agreed.

May 7, 1984
Financial Administration Act



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.
Francis Alvin George Hamilton: Mr. Speaker, when the House adjourned at one o'clock, I was laying down the background for a positive proposal to be made with respect to any legislation dealing with Crown corporations under the Financial Administration Act. I pointed out this morning that this is not a new subject and that efforts were made some 15 years ago to give the House some form of responsibility for the accountability work that must be done with these Crown corporations. We are dealing with the same suggestions 15 years later.
When one examines this Bill more closely, it is evident that accountability will be given to the cabinet. All common sense dictates that since the Cabinet has enough to do, it will delegate that responsibility to civil servants who will oversee the accountability of other civil servants. In effect, the same mistakes that have been made over the last 70 years are being repeated.
The one positive suggestion whose precedents I believe made it workable was that suggestion made in the House approximately 15 years ago by the Member for Peace River at that time, Ged Baldwin. I seconded that motion and I believe we made a fairly good argument for it. However, it was turned down by the Government and the NDP. They argued quite sincerely and honestly that if this power was given to civil servants they should be trusted and permitted to run the corporation as they saw fit. This willy-nilly type of thinking has proven to be a disaster.
I put my proposal forward quite seriously in the hope that, if this legislation goes to committee, a suggestion will be made to remove the proposal that accountability be put into the hands of the Cabinet. I suggest that that is a useless form of accountability. My proposal is to use the experience of the Australian Parliament where important subjects in that country are referred to a statutory committee as distinct from the ordinary standing committee that we have. The statutory committee meets automatically and draws its power from Parliament and is not subject to the whims of Cabinet. Such a committee is comparable to the Public Accounts Committee in our country. However, this statutory committee includes competent people who work for the parliamentary committee and who can scrutinize these Crown corporations that are made accountable to the committee. While this cannot be done for all Crown corporations, I certainly believe that the major
Crown corporations should be under some form of statutory committee.
Another precedent that I wanted to mention comes from the Province of Saskatchewan. When the CCF first came to power in 1944, the Province of Saskatchewan had a large number of Crown corporations. That legislature took an important step in appointing a Committee of the Whole House to scrutinize Crown corporations. However, one of the regulations in that provision was that the legislature itself could not adjourn until that committee was satisfied that it had received all of the information it required from a particular Crown corporation. When the Crown corporation civil servants realized that they would be kept there until they answered, they would provide the information. That was a successful form of accountability which even led in some cases to dismissal and reprimands to those in charge.
I can give further examples but I believe I have made it quite clear that a positive suggestion for this legislation is that accountability not be put into the hands of people who are too busy and unable to carry it out. This pertains to a single Minister, as we discovered with Transport, or to the Cabinet as a whole.
I believe that a committee working full time, completely independent from Cabinet and whose recommendations Parliament must heed, would be able to act on the recommendations or warnings of the Auditor General before they are two years too late.
I suggest these views are held by many people in the civil service. Let me quote from a report which I do not believe was ever made public. It was given as a seminar paper to the Canadian Transportation Commission some nine years ago and was written by one of the last old-fashioned mandarins who believed in giving honest judgment and advice.


The Acting Speaker (Mr. Herbert):: Order, please. I sincerely regret to interrupt the Hon. Member but his time has expired. If it is the mood of the House to grant the member a one-minute extension, it will require unanimous consent.


Some Hon. Members:: Agreed.


Francis Alvin George Hamilton: Thank you, Mr. Speaker. I will read this quotation:
In spite of the long slow move to greater recognition of the importance of normal economic processes, recent trends to strengthen the role of the bureaucracy at the expense of the operator, of Parliament, of the regulatory agency and even of the cabinet cause concern. The trend is typified by the increasing concentration of power, as defined by statute or regulation, in the hands of Governor in Council or the Minister. This means, more often than not, the advice of the bureaucracy is leading to a bureaucratic discretionary authority that in some cases should belong to the legislator or, in other cases, to the regulatory agency rather than departmental officialdom. This, if unchecked, could lead to a greater interference with normal processes in transportation.
I quote that in conclusion, Mr. Speaker, to show that these are views of able, sincere and experienced men warning us that if we continue to take this power away from Parliament and put it into the hands of Cabinet or other forms of the bureauc-
May 7, 1984

racy, we will be destroying the very system we are trying to maintain.


Mr. Ted Miller (Nanaimo-Alberni):: Mr. Speaker, Bill C-24 before us today is an important Bill to amend the Financial Administration Act as it pertains to Crown corporations. The legislation, I am afraid, is a great deal of smoke and mirrors. What this legislation reflects is the concern which the Liberal Government has now about the public's attention to and its suspicion of those Crown corporations which the Liberals set up. This Bill reflects a mechanism which the Liberal Government is hoping to use in an election campaign to indicate to the public that there is concern among the caucus and the Cabinet. As a result the Government through this Bill is going to deflect some of the anger, frustration and bewilderment which the public presently has toward Crown corporations, Crown corporations which Canadians do accept and do understand are a part of the mixed economy we have and have had for some time.
The public is concerned over the revelations about Canadair and de Havilland and the massive debt those corporations have accumulated over the past few years. People are concerned that the Government did not seem to understand that these corporations were running up large deficits until it was revealed that Canadair had a deficit of $1.4 billion. The public is concerned that Canada Post Corporation has not met the level of efficiency expected. Everybody has examples of mail service inefficiency, examples of letters being lost or mail misplaced for months and months.
Then there is the concern about Petro-Canada, a corporation set up with a great deal of public support. Indeed, this was a corporation which the pbulic hoped would be a window on the oil industry. But we are finding that the public is becoming very disenchanted with Petro-Canada, and I think rightfully so. Petro-Canada is operatinmg much like any other corporation in the oil industry, in a great deal of secrecy, with very little public input in terms of the service people can expect of it, its pricing policies and access to information about its financial position and the investments in which Petro-Canada is involved.
This legislation is really an appeal to the public in an election period. If we look at some of the terminology in the press release of the President of the Treasury Board (Mr. Gray) announcing the legislation, we cannot argue with its intent. What do we have? We find terminology to the effect that Crown corporations should become more accountable to the public, that Crown corporations should operate under sound management procedures. A Crown corporation should produce a mandate for the pbulic and Parliament to understand what it intends to do, plans should be filed, and the objectives should all be placed before Parliament and government. All of these terms are commendable and supportable. There is a little bit of suspicion, particularly on my part, that we are getting into legislation which does not meet all those criteria, as with much of the legislation which the Liberal Government passes.
Financial Administration Act
Why have these policies not been implemented in the past? Why do we wait until this particular time? Every Crown corporation should be operating under sound management. The public should be aware of the mandate and the objectives of a Crown corporation. We have waited until 1984 because it has been divulged that the public mood toward Crown corporations is changing.
In terms of this legislation, I wonder whether we have the resources in Parliament and in the provincial legislatures to deal with the number of Crown corporations that have been set up. In Schedules B and C, for example, there are some 50 Crown corporations listed. These Crown corporations have some 129 subsidiaries. They have assets of some $47 billion and employ 209,000 people. That covers only the 50 corporations and their subsidiaries; there are far more Crown corporations than that. The kind of mechanism proposed in this legislation does not give us the opportunity to deal with those Crown corporations and their function adequately without some kind of parliamentary assistance.
In the short time I have left, Mr. Speaker, I want to talk about the fishing industry. My Conservative colleagues are somewhat critical of the number of Crown corporations there are, I think rightfully so. We have to assess the value of those corporations. I know that in the fishing industry we have a number of Crown corporations. In Schedule C, for example, we find the Canadian Fisheries Products Company, the Canadian Saltfish Corporation, the Fishwater Fish Marketing Corporation and the St. Anthony Fisheries Limited. These corporations were not set up particularly because government wanted to get into the processing sector of fishing industry. All of these corporations were set up because the private sector was unable to operate effectively and efficiently in the fishing industry whether on the Prairies through the Freshwater Fish Marketing Coporation or in Atlantic Canada through the Saltfish Corporation. These companies were set up by the Government in order to protect jobs in the communities, those jobs benefited and the fishermen who were dependent on one of the only resources in the northern parts of the provinces of Saskatchewan or Manitoba, or on the East Coast. Those corporations are serving public policy and those communities. They will continue to serve them because the private sector could not function or support those industries themselves.
However, if we look at the restructuring of the Atlantic fishery, we get an indication of how the Government really feels about accountability and openness in Crown corporations. We passed a Bill restructuring the Atlantic fishery in Newfoundland and Nova Scotia. That Bill was expected to be passed within a couple of days effecting an expenditure of $138 million. Parliament was not given adequate financial information concerning that restructuring, a restructuring that put massive amounts of Canadian funds into the Atlantic fishery. That is not accountability as far as this Parliament is concerned.
If we are to have accountability, there must be some initiative on the part of the Government to provide Parliament and its members with adequate information to make decisions

May 7, 1984
Financial Administration Act
about Crown corporations. I have some suspicion that that will not happen. When we see a major restructuring with a day long debate in committee and without adequate access, how are we expected as Members of Parliament to deal with the hundreds and hundreds of Crown corporations if there is not that sincerity, accountability and the willingness on the part of the Government to allow Members of Parliament to look at the financial structure of Crown corporations, particularly in the commercial field? Without sincerity and accountability, Members of Parliament will not achieve anything more through this legislation than they have under the present legislation.
With that in mind, I think we have to be convinced that the Government, through legislation and some amendments to this present Bill, will really allow Members of Parliament and this House to have the information to make the directors of the Crown corporations accountable to the Canadian public.


Mrs. Jennifer Cossitt (Leeds-Grenville):: Mr. Speaker, in rising to speak on this important and utterly inadequate Bill before us, C-24, an Act to amend the Financial Administration Act in relation to Crown corporations, I must admit to a continuing sense of bewilderment about the business of this House. I know that I have been a Member of this Chamber long enough that nothing should surprise me, but it does. I cannot overcome the Alice in Wonderland sense of disorientation in which this Government seems to fulfil its legislative obligations.
Here we have a Bill which supposedly will restore accountability to the management of our Crown corporations. According to its sponsors, Ministers of the Crown will be responsible for these corporations and they will have the duty of reporting to Parliament. At exactly the same time that these proposals come before us, we have the spectacle of the Crown corporation de Havilland paying unheard of bonuses to its executives for the sterling job of having lost $236 million. Ministers of the Crown have been more than rigorous in defence of these bonuses.
At the same time we have the spectacle-the word "spectacle" hardly does the phenomenon credit-of Liberal leadership candidates and Cabinet Ministers criss-crossing the country, disavowing any personal responsibility for the unholy mess they collectively have made of our economy. I need hardly reiterate for this House the flabbergasting performance of the Minister of State for Economic and Regional Development (Mr. Johnston) just this past weekend. Whom are we to believe? Who truly speaks for the Government? The President of the Treasury Board (Mr. Gray) who, in introducing it, expounded that this Bill would clarify the responsibilities and relationships of Crown corporations and Ministers? Is it the Minister of National Revenue (Mr. Bussieres) who has no nobly defended de Havilland and CDIC bonuses? Is it the Minister for Economic Development who would have us believe the question is really academic since he will be cutting these Crown corporations loose just as soon as the June
convention is concluded? Whose voice is the voice of authority? It is like the old game show, "To tell the truth"? Is it Minister number one, Minister number two or Minister number three? The only difference is that on the game show you eventually found out who was telling the truth.
My colleagues who have spoken on this Bill have outlined thoroughly and convincingly why this Bill is so inadequate. In particular, the Hon. Member for Calgary South (Mr. Thomson) did so in his rebuttal to the Minister of Labour (Mr. Caccia) who spoke on behalf of the President of the Treasury Board. My colleague showed the many ways in which this Bill is deficient in the purpose for which it was intended; the subsidiaries of Crown corporations which are exempt from the control of Parliament, all 150 or so of them, the built-in closure to cut off debate on the creation of a new Crown corporation after only seven hours and 30 days in committee, and the possible power of the Governor in Council to by pass Parliament altogether in creating new corporations.
To be sure, Bill C-24 promises regulations to make Crown corporations accountable to Parliament, but it does not specify what those regulations are to be. What we have is a set of conditions and circumstances in which such regulations may be suspended or even subverted entirely by the removal of a given Crown corporation from one schedule to another. Is it any wonder that we on this side of the House must treat this Bill with suspicion? Is it any wonder we question the accountability of Crown corporations under this Bill when the Bill itself so obscures the process of accountability as to make it invisible?
Under this Bill, boards of directors have no authority but to act as a rubber stamp. Cabinet picks the chairman and the chief executive officers, the vice-presidents and even the auditors. What has a board of directors to do but to clock in for their per diems and expenses? What, then, is it accountable for, and to whom?
As far as my colleagues on the Progressive Conservative task force on Crown corporations can determine, there is no clear chain of command either up or down. Any one of a half dozen interested Ministers can get in on the act and give their orders, but when it comes to carrying the can, what do we hear? Cabinet is collectively responsible; it was a decision of Cabinet.
Even that we could live with if we could believe it, but how can we when half the leadership candidates, Cabinet members, daily undermine that collective responsibility with impunity? The Minister of Justice (Mr. MacGuigan), the Minister of Employment and Immigration (Mr. Roberts) and the Minister for Economic Development all question openly and publicly the policies they are responsible for and yet cling so tenaciously to office. One or the other. There is no honourable or honest middle ground.
Of course, it may be that it is we on this side of the House who are wrong. Perhaps we should not complain about the inefficiency and mismanagement of de Havilland and Cana-dair. Perhaps we should not worry about all the political appointees to these six-figure plums. Perhaps we should be
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unconcerned about the secrecy, the Orders in Council which pervade the Crown corporations, the post-midnight manipulations such as that performed very early last Wednesday morning when at the stroke of a pen the sports pool became a lottery.
Perhaps we simply should not concern ourselves that the Parliament of Canada is now, and under C-24 will remain, powerless to demand an accounting of either Crown corporations or their nominally responsible Ministers. After all, Crown corporations now employ 263,000 people, 25,000 more than the Government of Canada. Last year they lost $4 billion. The Government of Canada lost $25 billion. That is small solace to the taxpayers who must underwrite such losses, the people who are owed accountability by all of us in public life, not just at election time but every day that we sit as Members of this House.
That above all else is the principle that Bill C-24 ignores. That more than anything is what is missing from this legislation-the obligation to see that these Crown corporations answer to their stockholders to no less of a degree than would the board and administration of any publicly-held and traded corporation or business enterprise.
These Crown corporations-Canadair, Canada Post, the CBC, Air Canada, Petro-Canada-do not exist in a vacuum. They are the very real property of the people of Canada, from the desk Knowlton Nash sits behind to the corner gas station with the Petro-Canada logo. If Members opposite forget, they should be reminded that it was their policy to have the latter, Petro-Canada, spend millions to convince us with their slogan "Petro-Canada, it's ours". Yes, it is ours, for better or for worse. The Crown corporations of Canada belong to the people of Canada. They are their property. The Government is only the steward of those investments, with no less responsibility to give a full and accurate accounting than any executor or trustee of an estate required to pass the accounts before the court each year.
That is the accountability which is required, that and nothing less. We, the 282 Members of this House, not only represent the people of Canada; we represent and hold the trust of the people of Canada. The court before which the accounts of Crown corporations, of government in all its form, must pass is this Parliament. We have not only the right but the duty to demand a full and complete report, not this pitiful sham called C-24. Nothing less can or will do.


Mr. Bud Bradley (Haldimand-Norfolk):: Mr. Speaker, I appreciate the opportunity to speak to Bill C-24 today. The expanse of the proposed legislation is such that one could speak under the old rules for 40 minutes over and over again. It is quite restrictive to speak for only ten minutes. I will restrict myself to that.
I begin by saying that I am not opposed to Crown corporations. I do not think anyone on this side is opposed to Crown corporations when they are utilized to the extent and the need where private enterprise cannot provide the service. I am
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opposed to Crown corporations that abuse the public system and abuse the taxpayers' funds.
The purpose of this Bill is to amend the Financial Administration Act to provide greater Cabinet control over Crown corporations and greater accountability to Parliament. The statement of that purpose is one which I would have liked to have written myself because I feel that it is indeed the purpose of this Bill. The only question I have is whether or not the Bill follows up on that purpose.
Perhaps I may quote the words of Mr. J. Robert S. Prichard, a Professor of Law at Harvard Law School, who on November 29 to December 1, 1983, made a representation to the Conference on "The Board of Directors: Coping with Changing Expectations" sponsore by the Conference Board of Canada in Toronto. I am sure that government Members listened to and received copies of his comments. At that time, he said:
My concern is that the accountability mechanisms are failing us with the result that the viability of the Crown Corporation as a policy interest is being threatened.
He went on further to say:
-in attempting to respond to demands for increased accountability, the government has resorted to a complex web of multiple bureaucratic approvals, attempting to make Crown Corporations accountable to everyone in sight-Parliament, Treasury Board, Finance, Ministers, committees, officials, etc. In the course of making Crown Corporations nominally accountable to so many, they are in fact truly accountable to no one.
His comments caused me great concern, Mr. Speaker. He went on to make some recommendations to which I would have hoped the Government had paid attention. The first of those recommendations reads as follows:
First, reduce the problem to a manageable size: ... reduce the number of Crown Corporations that need to be kept accountable.
He went on to recommend the following:
Second, encourage-indeed mandate-processes that will clarify objectives for Crown Corporations: Without objectives we cannot derive performance standards. And without performance standards we cannot achieve accountability-
Later on in his speech, he recommended the following:
Third, follow Lord Macaulay's dictum: "Choose Wisely and Confide Liberally": That is, we should try to ensure that appointments to the Boards of Directors are of the highest quality-
The Government did not listen to that recommendation.
-and then, having chosen the directors wisely, we should confide liberally in the Board, giving it both the responsibility and the necessary power to do its job.
Another recommendation reads as follows:
Fourth, emphasize regular, reliable and timely reporting and disclosure policies: The current haphazard situation is utterly unacceptable and the case history of Canadair provides compelling evidence of the inadequacies of the current legislation.
He went on to make the following two recommendations:
Fifth, to the extent possible, minimize the bureaucratization of the interrelationship of Crown Corporations and the government-
Sixth, resist the temptation to achieve accountability through relying primarily on after-the-fact audits,-

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Professor Prichard's final comment that day was the following:
Whether or not we move in that direction has now become a question of political will. And whether or not our government possesses that will is a judgment on which 1 can make no special claim to competence.
Has the Government addressed that problem, Mr. Speaker? Has it exhibited the will to which Professor Prichard refers? The legislation before us applies directly to about 183 Crown corporations and subsidiaries wholly owned by the federal Government. Parent Crown corporations are held accountable for all of their subsidiaries, investments and mixed enterprises. Definitions of relevant terms are substantially clarified. That is a general over-view of the Act.
Looking at this Bill in the light of accountability and fairness, I do not think that we could even stretch a curve in order to give this Bill a passing grade. The Bill provides the Governor in Council too much regulation-making power. We must bring more of the mechanics of regulations to the Bill. The Ministers have responsibility but no power under Bill C-24. Power over the appointment of directors and the approval of plans and budgets still resides with Cabinet.
Bill C-24 provides for an insufficient role for boards of directors to play. More power should be given to the boards of directors, particularly in the appointment of CEOs and auditors and the setting up of by-laws. We should create an onus of responsibility on the boards of directors.
Above all, Mr. Speaker, Bill C-24 provides for an insufficient role for Parliament to play. It states that all new parent Crown corporations will be formed only by special Act. However, it provides for no control over subsidiaries of parent Crown corporations. That is our greatest problem at the present time. As well, many existing Acts will allow for the establishment of Crown corporations of the parent type.
The clause in the Bill dealing with special investigations and comprehensive auditing is totally confusing. What is a special investigation? Who dictates what special investigations will take place? Who carries out those special investigations? Who reports them and to whom? Who finalizes them before they are reported to the House, Mr. Speaker?
Dealing with directives, Bill C-27 provided for compensation. Bill C-24 provides for none. Mention of the FBDB, the EDC and the Farm Credit Corporation should be added to Clause 99(7) of the Bill. Our interpretation of the Act is that it is not binding on the Crown.
After reading the clauses which refer to annual reports and trying to understand what is meant by them, one finds that the Treasury Board will still control the form and content of all annual reports of Crown corporations. That is the accountability which is contained in the Bill, Mr. Speaker. Accountability is still spread all over the place and is still not given to Parliament. No Minister of the Crown can be truly held accountable for the Crown corporations for which he is responsible.
I return to the final comment made by Professor Prichard and 1 will read it again, Mr. Speaker, as follows:
Whether or not we move in that direction has now become a question of political will. And whether or not our government possesses that will is a judgment on which I can make no special claim to competence.
I wish Professor Prichard were here to read this Act and to see the lack of political will displayed by the Government.
I would like to carry on, Mr. Speaker, but I see that my time is running short. If I had more time, I would discuss the issue of fairness as it relates to this Act and to Crown corporations. I do not believe we see Canada Post exhibiting fairness when it is entering the field of Consumers Distributing and competing with private enterprises and small corner hardware stores. What about the fairness of a Crown corporation like Air Canada and the fairness of the way the Government is treating employees of Nordair and people who wish to purchase shares in Nordair? I do not think that we see any fairness there, Mr. Speaker.
I could mention many aspects of this Bill and try to relate the accountability contained within the Bill to the issue of fairness to people in private enterprise and to Members of the House. There is no fairness in the Bill, Mr. Speaker, so I ask the Government to reconsider the Bill and to reconsider the need for accountability of Crown corporations before it imposes this on the people of Canada.


James Aloysius McGrath: Mr. Speaker, I would like to join my colleagues in putting forward my concerns about the Bill which is now before the House. I do so because it creates the sense that it satisfies one of the legitimate concerns of Parliament, that is, the accountability of Crown corporations to Parliament. I do not believe that the Bill achieves that very noble and necessary objective. Certainly it will have the effect of making Crown corporations more the instruments or the creatures of the Government. I do not suggest that that is a bad thing. It is a good thing. Having had some limited experience in that regard, I believe that the Government should have more direct day-to-day control over the running of Crown corporations. That is the function of government. But I suggest that it is the function of Parliament to hold the Government and agencies of the Government accountable for the day-to-day spending activities of the Government, of Crown corporations and of agencies. Parliament has the responsibility of holding the Government and its agencies accountable for the money that we vote for them every year. I do not believe that this Bill satisfies that basic objective.
I remember the special committee on parliamentary reform, the Special Committee on Standing Orders and Procedure, which made ten reports to this House. One of the reports dealt exclusively with the question of accountability. One of the recommendations in that report called for the establishement of a standing committee of the House to deal with Crown corporations. It called for a special standing committee of the House which would have the power to deal exclusively with Crown corporations, their day-to-day activities and how they conducted themselves in terms of the mandates that they were given by Parliament. Unfortunately, that report remains on
May 7, 1984

the Table of the House. It has not been dealt with by Parliament. Like so many of the other excellent recommendations of that committee, we have chosen to set it aside and relegate the responsibility to some future Parliament. I would say that that is a great pity.
I suspect that the genesis of this Bill stems not only from the growth in the number of Crown corporations, their size and financial strength, but also from the comments made by the Auditor General in his annual report of 1983. I would like to quote from paragraph 1.61 of that report. It reads:
The sheer size of the Crown-owned corporations makes the matter of accountability important. Crown-owned corporations employ over a quarter of a million people. With revenues of $40 billion in the fiscal year ended 31 March 1983 (up from $31.9 billion in the previous year) and expenses of $44.2 billion ($33.7 billion in the previous year). Crown-owned corporations form a huge segment of Canada's total affairs. Their very massiveness demands a proper accountability framework.
Nothing could be more clear, nothing could be more precise, than what the Auditor General said to us in that report. He went on to say, in paragraph 1.63:
In my view, it is a situation which must not be permitted to continue. While it does continue, parliamentarians are losing part of their fundamental right to be the representatives of their constituents in the crucial decisions of how tax dollars are to be deployed and accounted for.
Parliament-not the Government, but Parliament-was the concern being underlined by the Auditor General, the ability of Parliament to exercise its ancient and very important function of holding the Government accountable for how it spends taxpayers' dollars.
Other Members of the House in speaking on this Bill have made reference to the sheer size of Crown corporations, to the growth in the number of Crown corporations-and I underline this because it is important to emphasize it-and the growth in the number of subsidiaries and agencies of Crown corporations. I emphasize that because this Bill will not exercise any degree of statutory control in terms of accountability over subsidiaries of Crown corporations. Again I refer to the Auditor General's report of March 31, 1983, from which I found out that there were 72 parent corporations in Canada. Those 72 parent corporations controlled 114 subsidiary corporations. There were also 106 corporate investment subsidiaries, for a total of 292. As has already been outlined by my hon. colleague from Leeds-Grenville (Mrs. Cossitt), Crown corporations directly employ more people than the Government of Canada. According to the Auditor General, they employ a total of 263,000 people. The 72 parent corporations, at the end of fiscal year 1983, had assets of $71.7 billion. What is even more important is that they had total liabilities-here again I refer to the 72 parent corporations-in fiscal year 1983, of $64.3 billion. Clearly, it is a situation which is out of control.
What concerns me-and I go back to my opening comments-is that the Bill creates the perception that the Government somehow is addressing the concern expressed by the Auditor General, which has been expressed in many other public forums and also in this House, that not only has Parliament lost control over Government spending but that
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Parliament has no control whatsoever over Crown corporations and their subsidiaries.
The danger of involving oneself in this kind of rhetoric is that one could get carried away and say that all Crown corporations should be done away with. I, for one, would be the last to put that position forward. Crown corporations are a unique part of the Canadian way. If they are a unique and important part of the Canadian way, then somehow they have to be made accountable to Parliament. I would like to suggest ways in which that could be made possible. For example, why not have Crown corporations report directly to Parliament instead of to the Government? After all, we as Members of Parliament represent the shareholders of Crown corporations-the taxpayers of Canada. Why should they go to the Government first? They should come to the shareholders in terms of being represented by the Members of this House. That is number one. The second suggestion is: why should the Government not move now? It does not have to wait for the recommendations and bring in the entire report of the Special Committee on Standing Orders and Procedure. It could bring a measure now, through the good offices of the Government House Leader, and establish a standing committee of the House to deal with Crown corporations. In that way, Parliament would have a vehicle by which to exercise some degree of control over Crown corporations.
Indeed, I would suggest that these two very simple suggestions would go a considerable way in strengthening the Bill to allay the fears of people and in ensuring that this Bill addresses the concerns of the Auditor General and Parliament, and that we will somehow take control of Crown corporations.


An Hon. Member:: Question.


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


Some Hon. Members:: No.


The Acting Speaker (Mr. Herbert):: The Hon. Member for Lanark-Renfrew-Carleton (Mr. Dick).


Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, I would like to discuss briefly some of the matters in this Bill relating to Crown corporations. The proposal before us would allow an amendment to the Financial Administration Act and, in essence, would give Cabinet greater control over what are sometimes referred to as Crown corporations. To a certain degree it would give greater accountability to Parliament but, through a number of loopholes or ways in which the Bill could get around the basic premise-and there are a number of them Parliament and the Members of the House of Commons and the Canadian people would not be made aware of what is going on in Crown corporations.
There are, according to some estimates, 183 or 186 Crown corporations of which the federal Government has 100 per cent ownership. The Government also has interest in about 315

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other listed corporations, some of which are mixed enterprises, some are subsidiaries and some are associated with the subsidiaries or other types of ventures. There are 55 associated corporations which are less than 50 per cent owned by the Federal Government. It has 17 point mixed enterprises. It has 23 other corporate entities, which are not explained. It has 148 subsidiary corporations, and there are 72 parent Crown corporations. That makes a total of 315 listed Crown corporations. There are, however, disputes over certain other corporations as to which no one seems to know whether they are, in fact, Crown corporations.
The unfortunate thing about this Bill, Mr. Speaker, is that it provides so many loopholes and so many exceptions and the federal Government and the Cabinet can interfere so much. A number of Crown corporations, such as the Bank of Canada, the Canadian Wheat Board and the international development research centre, are going to be exempt from this entire structure set up under the Financial Administration Act. However, that is for now. Others can be exempted later by statute.
As all of us are aware, in the last few clauses of almost any statute or Bill that has been passed there are a few clauses which deal with regulations such as, "The Governor in Council can make regulations pertaining to ..." I am sure many times in the future regulations will sneak in to exempt such and such a corporation from the Financial Administration Act. It is done all the time and we are only too aware of it. I feel it would be better, frankly, for Cabinet, as the shareholder, to vote its shares at the annual meeting, to elect the directors and then leave it up to the directors to run the company, unless there is something of massive importance to the Canadian nation and to society for which it must give direction. I do not believe the Government should be involved in the day-to-day running, decision-making and reviewing of by-laws of each of the parent corporations and 114 subsidiaries.
Under this proposal the Cabinet makes the major strategic decisions. Parliament merely approves the creation, and if it comes around to it, the disposal of a Crown corporation. Budgets, although they may be put before Parliament, are always put together in such a flimsy form and with such lack of detail because of alleged commercial confidentiality, that it really must be considered a bit of a laugh.
The unfortunate thing today is that although most of the major corporations in this country and in other countries really try to select the appropriate directors and go to great pains and effort to try to get the right mix of directors so they can give the right direction as need be to the management, the only prerequisite in a Crown corporation is that a person have connection to the governing Party, which in this case is the Liberal Party which has been in power for so many years. Therefore, we see intelligent people such as Pierre Goyer, who, however, was a bit of a disaster as a Minister in this House, being appointed a director of Canadair where there is another disaster taking place. It would seem to me that a person should have proven himself in the corporate commercial world before being appointed director of a Crown corporation. However,
such is not the case. It has become a patronage tool. Cabinet has taken away most of the issues which directors should be discussing and has left the directors with certain criteria and guidelines which may be inappropriate. Cabinet has taken away the powers of the directors to direct and it has asked the directors to develop and implement the corporate plans, which I really believe is a management prerogative, and if management does not carry it out then the director should have the right to change the management.
Of course, under the terms of this legislation, Cabinet chooses the management, not the directors. Therefore, the directors are really toothless tigers, which is an unfortunate situation. For example, directors should appoint the auditors, whether it is Touche Ross Limited, Thorne Riddell Inc., Price Waterhouse Associates or whatever accounting firm is competent and capable. That is a normal every day obligation of the directors, a decision which is usually approved at annual meetings. But in this case they must consult the Minister or the Cabinet, which is just another way of allowing the Cabinet or the Ministers to interfere and to porkbarrel, making sure that their Liberal friends-as has been the case for so many years-are in there to mess around with the Crown corporation.
The Bill says they are to consult with the Ministers and Cabinet in other management affairs. Again, that is not what shareholders are allowed to do. As a shareholder in any one of our Canadian companies, one cannot go in and involve oneself in management affairs on a daily basis. All that shareholders can do is to wait until the next annual meeting or special meeting and vote, and by the pressure of their vote make their concerns known to the directors, who will, in turn, pass them on to management. Management would be unwise to ignore the interests of the shareholders, and I think any intelligent management would take cognizance of the fact that they have certain views. However, under this legislation, Cabinet has a right to meddle on a daily basis with the management affairs, and I feel that is wrong.
Cabinet can give directives, which are to be tabled within 15 days in Parliament unless the appropriate Minister feels that this would be detrimental to the commercial interests of a Crown corporation. We have heard, Mr. Speaker, the excuse that this is detrimental to the commercial viability of so many things, whether it be a FIRA application or a person applying for a grant under the RDIA program, formerly the DREE program. Unless you had a copy of their application in front of you, even though they were constituents, you would not be allowed to discuss it because, we are told, security is needed to protect the commercial nature of the project. Right there we have an exemption which, although directives can be given and Parliament is supposed to hear about them within 15 sitting days, is allowed just on the whim of a Minister.
There are many other areas I would like to speak about, Mr. Speaker, but unfortunately I see my time is running out. All I want to say is that I know our Party was so concerned at the proliferation of Crown corporations and the bad administration involved, it set up a task force, which has set forth a very
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good report. I think the Government would have been wise to have read the report of that task force before it undertook the appointment of more Liberal appointees in the system.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order. It is my duty, pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Peterborough (Mr. Domm)-Canadian Development Investment Corporation-(a) Status of orders for Dash-8 aircraft manufactured by de Havilland (b) Financial assistance offered to airline companies; the Hon. Member for St. John's East (Mr. McGrath)-Provincial Affairs- Churchill Falls power contract-(a) Government position (b) National Energy Board Act; the Hon. Member for Red Deer (Mr. Towers)-Western Grain Stabilization Act-(a) Size of announced pay-out (b) Contributions to fund.



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.
William Herbert Jarvis: Mr. Speaker, it is embarrassing to confess that with respect to Bill C-24, an Act to amend the Financial Administration Act, I find myself not only confused but bewildered. I know some of my colleagues might allege that this is a permanent state of affairs for me, but I frankly do not understand what went on in the developmental process leading to Bill C-24. I am the first to acknowledge that we are in what is likely to be the last or penultimate session of this Parliament, what we normally call our pre-election session, when Government has historically been cautious in its legislation, bringing forward only that which it thinks is in its own best political interests. That is understandable. I sometimes deplore it but I think we have been living with that for well
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over 100 years and none of us should be too surprised at it. But what confuses me is that I did not think, and I still do not, that there was any political downside to an Act dealing rather substantively with Crown corporations. I do not see where the political risk is. In fact, I think it is a good political issue no matter what side of the House you are sitting on.
In my view, Bill C-24 could have been a very substantive, tough and realistic piece of legislation without any political risk whatsoever. I do not want to be harsh, but I think we are dealing with a cosmetic Bill, one that might be termed, were it dealing with some other subject matter, a political Bill in the last session of the House before an election.
The Government has certainly had lots of time. I can recall that when I first came here 12 years ago, the Government commenced the study of Crown corporation control and accountability. More than seven years ago, this Government promised legislation to reform Crown corporation control and accountability. If, Sir, this is the result of over a decade of Government study, then frankly, to be as charitable as I can, it is extraordinarily disappointing.
There is a multitude of flaws in this Bill. One could take almost any one of a dozen aspects, but time is limited and I want to deal with something that others in the House have dealt with. Because I find it so incredible, I think the point needs reinforcing, that is, Mr. Speaker, the role and responsibility of the board of directors of Canadian Crown corporations. I admit that a Crown corporation has certain unique elements, but if it is engaged in commercial or quasi-commercial activity, then surely it must bear some resemblance to a corporation undertaking the same thing in the private sector. My colleague, the Hon. Member for Calgary South (Mr. Thomson), in opening the debate for our Party said that: "In effect, Bill C-24 would convert board of directors into advisory boards with little or no power". I absolutely agree. If I had any quarrel with that, it would be that the Hon. Member was being a little too charitable to the Government. I am not sure that these boards of directors should really be called in the truest sense advisory boards whose advice would, as a rule of thumb, be given some credibility even if it were not followed. Frankly, an advisory board gains its reputation by its clout, power or prestige, of which obviously there is none in these Crown corporations as proposed by Bill C-24. Frankly, Sir, I cannot see anything very prestigious about the proposed boards of directors of Canadian Crown corporations. The greatest flaw is the inability of a board, Mr. Speaker, to choose the chief executive officer, establishing the tenure and supervise him or her. I have always believed that to be a hallmark of any board of directors. However, in this legislation Cabinet, not the board, appoints the chief executive officer. Cabinet establishes tenure. Cabinet sets the remuneration. With respect to some Crown corporations, Cabinet not only appoints the CEO, it appoints others at the executive level. Also, the election of a chairman of the board is not made by the board from among its members. Cabinet appoints the chairman. Cabinet appoints the auditors as well. Cabinet establishes the dividend policy of the corporation.

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I suppose the question is, Mr. Speaker: Why the flaws? Again, trying to be as charitable as I can, I presume no one directed his or her mind to the principle of responsibility when the legislation was drafted. If one had started with the Minister responsible for a particular Crown corporation, then I think there would have been a natural flow. The Minister has to be put in the position, if he is to exercise his judgment with any degree of responsibility, of being able to say, "I am responsible, my job is on the line, and I am going to go out and get the very best board of directors I can find". He is not going to give them seven, eight and nine year terms. If they do not measure up to the standard which the Minister needs to protect him or her as a Minister and to discharge his or her responsibility, they should go. That to me would seem to be the logical flow, Mr. Speaker. At that point the board is going to say, "We had better get the best chief executive officer we can find in this whole country to run this Crown corporation. Unless we do, we, the board of directors, are going to be gone". If that had been the starting point, Mr. Speaker, we would never have got into this mess.
As I say, it is inconceivable that there is a downside. I do not understand why any Cabinet Minister would want to proceed in that direction. Obviously there are political appointments and everyone has his input on the Government side, particularly Cabinet Ministers. But when your job is on the line, I would think it not only behooves you, but it is, in the most crass way, in the self-interest of a Cabinet Minister to get the very best board he or she can get his or her hands on and say to them: "You are running this company, so find a chief executive officer and other executives who will make sure that you and I look good". Obviously that was not the starting point. I do not know what was. I do not know whether this was a bureaucratic Bill that no one thought through in a business or political sense. I do not believe the Government has done a good political job here.
I see, Mr. Speaker, that you are signalling that I have one minute left. The analogy to a commercial corporation is not perfect. I understand that. There are no shareholders in the sense in which we know them. One could say that every taxpayer is a shareholder. I do not think that destroys the natural analogy to a company in the private sector. If I were the Minister, I would say that I am the trustee for every shareholder and that every taxpayer is a shareholder. As a trustee I would be very careful because a trustee's responsibilities are even greater than those of a Cabinet Minister.
I see, Mr. Speaker, that you are signalling for me to conclude. I would like to go on for another hour, Mr. Speaker. However, I am not going to ask for unanimous consent to do that. I thank you for your patience. I deeply regret that this Bill, which I thought was very very important, has turned out to be such a disappointment for all of us.


Mr. Terry Sargeant (Selkirk-Interlake):: Mr. Speaker, I am glad to have a few minutes to speak on the Bill before us this afternoon. This Bill could be a very important development in
the life of Crown corporations in this country. Unfortunately, the way it has been put before the House of Commons, it will certainly not be anywhere near adequate. I do not think it will come as a surprise to Members of the House that we in this corner of the House have a very positive position with regard to Crown corporations. We recognize that they are a very important part of Canadian life. We recognize that many years ago governments in our country realized that with Canada's great geographical area and small population there were many services that the private sector either could not or would not provide. Therefore, it became incumbent upon the governments to put forward this bill having to do with Crown corporations.
Since that time the Canadian economy has evolved into what we refer to in this country as a mixed economy, with a large private sector and a substantial public sector in the form of Crown corporations and other government bodies under Crown control or partly owned by Crown corporations. Unfortunately, in recent years the credibility of Crown corporations has been called into question. I believe we can lay a lot of the blame for that on the Government. It has not kept an adequate control on the Crown corporations.
What has been the purpose of some of these Crown corporations, Mr. Speaker? In some cases, such as that of PetroCan, they have provided a commercial entry into an area of the economy. In other cases, their purpose has been to develop a certain part of the country. In many instances, they provide a service. One example is provincial telephone companies, which in much of Canada are Crown corporations. I believe that electric companies in the entire country are Crown corporations. In some parts of Canada, automobile insurance has been taken over by Crown corporations with great success. There are a lot of very good success stories about Crown corporations. I would say that most of them in the country have been successes.
When my friend, the Hon. Member for Nanaimo-Alberni (Mr. Miller), was speaking earlier this afternoon, he made reference to the Freshwater Fish Marketing Corporation. I am very familiar with that Crown corporation, Mr. Speaker, since a large part of its business is done in my constituency. I would like to relate its experience very briefly.
This corporation moved into an industry which was in terrible shape in the late 1960s. At that time it was controlled by a number of private corporations, which were not acting at all in the best interests of the fishermen, the people for whom the industry should be providing the most benefit. These private corporations were operating in a dog-eat-dog fashion. They basically controlled the Fishermen through their initial payments and, in most cases, lack of a final payment, and through the provision of start-up fees for getting into the business at the beginning of each season. In many ways they were endangered employees. Most of them were fairly poor as a result of that.
In the late 1960s, provincial Governments asked the federal Government to step in and fix it up. The federal Government moved in and provided a very successful corporation. At the
May 7, 1984

present time, fishermen in most of western Canada who come under that body are able to earn at least an adequate living, if not a great living. I certainly do not want to give the impression that this is a perfect corporation. It is not. There are many improvements which could be made. However, there is no arguing with the fact that the situation for the workers is vastly better than it was previously.
What happens to so many corporations? In recent months we have heard much about the computer company which lost hundreds of millions of dollars. We have certainly heard of the scandalous situation of Canadair and de Havilland. We all know the story of Canada Post. I am most amused by the quarterly reports which we receive from the Chief Executive Officer of Canada Post, Mr. Warren, informing us how much things have improved since he took over the corporation. Almost ironically, within days of receiving a quarterly report I often receive a letter from a constituent telling me a horror story he or she has experienced in getting mail delivered.
What should we do, Mr. Speaker? In his opening comments last week my friend, the Hon. Member for Prince Albert (Mr. Hovdebo), said that we must give these corporations a clear mandate with public responsibility and public direction. We then must ensure that they stick to that mandate and operate within the objectives which this House gives them when the corporation is established. That does not mean that we are going to interfere in the day-to-day operations. Indeed, if this piece of legislation is to give the Cabinet the right to interfere in the day-to-day operations of Crown corporations, then I think the Bill has to be changed. The responsibility for day-today operations must be left up to the board of directors and the chief executive officer. However, we must ensure that Crown corporations, like any other corporation, operate with sound management in the best interests of the shareholders, who are the taxpayers of the country.
I would like to make a few comments on the parliamentary reform committee that the Member for St. John's East (Mr. McGrath) was talking about a few moments ago. You well know what I am speaking of, Mr. Speaker. You were one of the leading members of that committee. You are aware that we debated at some length the need for controls and government accountability in many different areas, including Crown corporations and Departments. We received some degree of accountability through the fact that government Departments must now submit their reports to standing committees. However, we also identified the fact that there are many corporations which do not put out annual reports. There are many corporations which are partially owned by the federal Government that should be accountable to the Parliament of this country.
As the Hon. Member for St. John's East (Mr. McGrath) pointed out, we called for the establishment of a committee to which all Crown corporations, quasi-Crown corporations and partly owned corporations will report. As the Hon. Member said, it is lamentable that this report still lies on the Table of
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the House and that nothing has been done about it. It calls the good faith of the Government into question and begs the question as to whether the Government has something to hide about the operation of these Crown corporations. We would certainly hope that is not so, but when we see the scandals of recent weeks, notably that of Canadair and de Havilland, after their huge losses, having had the nerve to grant bonuses to some of their senior executives, we think it is time that Members of the House of Commons, who are the representatives of the shareholders, have a say in how those corporations are run.
In closing, I think that most Members would agree, and certainly we in this Party believe, that Crown corporations are too important to the well-being of this country to be left alone. It is very important that they maintain their credibility. For that reason we believe that through this piece of legislation and amendments to it, through the adoption of the recommendation made by the Special Committee on Standing Orders and Procedures for a standing committee, Crown corporations will be made accountable to the Parliament of Canada.


Mr. Chuck Cook (North Vancouver-Burnaby):: Mr. Speaker, the tired, old, worn out Government has given us another useless, pitiful and disgraceful piece of legislation. It is all smoke and mirrors without any true substance at all. This is evident when one sees de Havilland, Petro-Canada, the CBC and Canadair. I could go on with a list of 420 Crown corporations.


Mr. Foster:: The tories set up the CBC.


Charles Henry (Chuck) Cook: If they remained silent, they might learn something, but that would be asking a great deal. The Government has been studying Crown corporations since 1972 and has been promising reforms since 1977. We have read the various reports of the Auditor General and of the Public Accounts Committee. We have had the Lambert Commission and various reports by academics. There is a consensus that something must be done in Canada to bring Crown corporations under control. However, Bill C-24 is totally inadequate. I do not know why the Government has bothered with it.
Bill C-24 entails a clear and major erosion of Parliament's control over Crown corporations. Of course, there was not that much control to begin with. Parliament will have no control over the creation of subsidiaries by Crown corporations. A Minister need not get parliamentary approval for the creation of a Crown corporation if he or she already has the power to do so through an existing Act of Parliament. There are at least 12 pieces of legislation that give Ministers such power.
Bill C-24 gives immense regulatory power to the Government. Virtually every clause of the Bill contains a regulationmaking power by which the Government, in effect, defines how that clause will operate or which Corwn corporations will be exempted from the requirements imposed by that clause. In effect, the Bill states that regulations can change the clause, so the Government is offering nothing to the people of Canada

May 7, 1984
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except to ask then to trust it. That has been the problem with Crown corporations in the past.
There are few, if any, criteria in the Bill which constrain or establish a framework within which the Governor in Council may make regulations. Bill C-24 converts boards of directors into advisory boards with little or no real power. In the private sector, the principal role of the board of directors is to recruit the chief executive officer and to supervise his stewardship of the corporation. According to Bill C-24, the Cabinet appoints the chief executive officer and sets his tenure and remuneration. Cabinet also appoints the chairman and the auditor, and it approves the by-laws and may even make laws for the board of directors.
The basic problem is that the Crown corporations do not know to whom they are responsible. Real authority is not exercised by a Cabinet Minister but by Treasury Board, groups of Ministers or the Cabinet as a whole. It is certainly not exercised by an individual Minister. As a result of being accountable to so many ministers, Crown corporations are accountable to no one. However, I suggest that this is probably to the Government's advantage, because what Minister would want to be totally responsible to any Crown corporation after the mess that has been made of them over the years?
The proliferation of Crown corporations has meant that the task of ensuring their accountability has become much more difficult and really much more important. No matter how good a government's accountability regime, it will not work so long as the trend to the creation of more Crown corporations continues.
The first step under Bill C-24 should have been to reduce the number of Crown corporations that we need. Every means should be utilized, either by selling them, giving them away, winding them up or making them smaller. However, we certainly do not need the present number of Crown corporations.
The increase in Crown corporations has not been accompanied by a comprehensive overhaul of the legal and administrative machinery for ensuring their accountability. We have not heard the objectives of Crown corporations properly clarified. Boards of directors should be obliged to articulate their understanding of their corporations' objectives on a regular basis. If the Government does not agree with those objectives, it can exercise its power as the sole shareholder to direct a change.
It is not clear to me from this Bill to whom the Government wants the Crown corporations to be accountable. Is it Parliament, Treasury Board, Finance Ministers, standing committees or various government officials? They are nominally accountable to many but truly accountable to no one which, I suggest, is evident from the scandals of the last few years. There should be regular, reliable and timely reporting and disclosure policies for all Crown corporations. Why is that not set out clearly in the Bill? Appointments to boards should be of the highest quality, and the Government must have the will to forgo patronage. Directors' terms should be for one year, not multiple years, and performance, not presumption, should govern the appointment and reappointment.
Boards should be given responsibility and the necessary power to do the job. Furthermore, interrelationship with Government should be streamlined, simple, expeditious and effective. There should be no ambiguity in these objectives.
I think an analogy with the private sector is worth-while pointing out. The private sector involves shareholders. In the case of Crown corporations, the shareholders are the people of Canada, and through them, their elected representatives. I am a shareholder in every Crown corporation, but those Crown corporations do not give me the information that I would receive as a shareholder in a private company. The board of directors should select the chief executive officer, as it does in the private sector. While I admit that the Government can appoint the board of directors, the members of any board of directors should have some ability to operate those corporations.
Every Crown corporation should make a quarterly report as well as provide financial statements. Their financial accounting should be conducted in the same way as is done in any other company and they should not hide the truth from their shareholders, the people of Canada, as they do now.
The Canadair, de Havilland and other scandals have cost me as a taxpayer million of dollars. I find the attitude of this Government in this Bill C-24, which is its mirror image, does absolutely nothing to clean up the horrible mess it has created. It is shameful to bring this Bill before the House in this form. All I can say to this tired old Government is, for heaven's sake, in this case in the interest of all Canadians, why not withdraw this Bill, clean up the act and make Crown corporations accountable to the House of Commons? Let us get some facts out on a quarterly basis so that we can save a dollar now and then for the taxpayer, about which this Government does not seem to care. What's a billion? Canadair can tell you what a billion is. The taxpayers of Canada as voting shareholders will have a chance to tell you, Members opposite, in terms of your tenure as the board of directors of this country what they think. You, over there, have to be thrown out for the benefit of all.


Mr. Thomas Siddon (Richmond-South Delta):: Mr. Speaker,
I would like to say a few words. The Government opposite has a tendency to wait until the later months of spring as we get into the time of adjournment to bring in a whole host of complex and overdue pieces of legislation, such as Bill C-24, to create the illusion of progress and activity on behalf of the people whom they have poorly represented these past 14 years. That is what Bill C-24 is all about. It is the same in the case of Bill C-19, the omnibus Bill which purports to amend so many aspects of the Criminal Code including sentencing, computer crime, drinking drivers, fire arms, and a whole long list of important measures of reform. They have all been thrust upon this House in the dying moments of a dying Government merely to create the illusion of action. Here we are once again faced with a piece of legislation. Suddenly the Government awakened to the realization that the Crown corporations,
May 7, 1984

which it has created in abundance over the past 14 years, perhaps 15 years under the present Prime Minister (Mr. Trudeau), have been disastrous in their consequence to the people of Canada. It has not mattered whether these Crown Corporations have been in a form to regulate and their regulatory powers have run out of control. It has not mattered whether they were corporations created to fulfil some great and important national purpose by way of providing a monopoly service to the people of Canada, which then became deficit ridden and top heavy with bureaucracy. It does not matter whether we are talking about the Crown corporations that were created to generate a positive industrial climate by developing new initiatives in different areas in which Canada had not previously been engaged. In all of these cases the Government opposite has failed miserably to bring these Crown corporations under control, to make them accountable to the people, who, after all, ought to be considered as the shareholders. If the Crown is to operate corporations in the name of the people of Canada, what better place to make them accountable than in this House of Commons where those who represent the people of Canada are empowered and should be welcome to overview the management of such major enterprises? As other Members have pointed out we have now created, at last count I think, over 450 corporations of this sort in Canada. We cannot count all of the subsidiary little creatures that have spun off from the major corporations, because they are being created virtually day after day without the House of Commons and the Parliament of Canada being invited to scrutinize the rationale, the raison d'etre for the creation of these new agencies.
If we look at Bill C-24 in detail, we can see that it will not go too far to resolve this fundamental question of accountability. One of the reasons Crown corporations have not been held accountable is that the legislation under which they were created, where indeed that legislation has been debated in the House of Commons, is more or less just a shell, a framework in which broad powers of discretion are granted to the Governor in Council. If we look at the detail of this Bill, we see no means of bringing this lack of direction under control. In fact, the regulation making powers of the Governor in Council will be enhanced under the provisions of this Bill.
We have also pointed out that the boards of these corporations and their chairmen are not directly accountable to Parliament. Under existing legislation, most of the boards are accountable to responsible Ministers. But under the proposals contained in this Bill, Mr. Speaker, that level of responsibility-accountability to a specifically designated Minister- would be diminished and the corporations and their boards would be asked to report to a Cabinet committee, thus the direct responsibility to the House of Commons and to a responsible Minister would be diminished even further.
If we were to prepare a Bill of this nature dealing with the necessary structure and framework under which Crown corporations were required to operate, it would begin with the notion that no Crown corporation has the perpetual right to existence. We would begin with the notion that Crown corpo-
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rations would be required to come annually to Parliament to justify their financial plans and their borrowing requirements. Members of the board would be called before parliamentary committees to demonstrate their expertise in conducting the affairs of a corporation. When such a corporation was established under legislation to serve certain aspects of a national interest, that is to say to provide transportation in remote parts of the country, which was the original mandate for the CNR and Air Canada, then it would be incumbent upon the directors of that corporation to come before Parliament annually and point out the extent to which that national interest was being served.
The question in the case of Air Canada of meeting the convenience and the necessity of an affordable service to the travelling public, for example, would have to be addressed by the chairman of that corporation. He would be accountable to Parliament for the continuation of his responsibility, not accountable to the Cabinet or the Prime Minister.
The system of politically appointing the chief executive officer or the chairman of a Crown corporation and his board-I should correct that slightly, the chief executive officer is not supposed to be a political appointee, although in many cases he is, but it is quite evident that the chairmen or chair persons of major Crown corporations are appointed for political reasons-that practice must come to an end, Mr. Speaker. If a Crown corporation is to be accountable to the taxpayers of Canada in whose interests it is supposed to operate, then the Parliament of Canada-just as in a private corporation where the board of directors is selected by the votes of the shareholders-the Members of this House of Commons, should have the right to examine the proposed occupants of the key positions on the board of a corporation, and indeed in some case this House should vote on those positions.
Another area where Crown corporations should be brought under control is their almost unlimited ability to borrow money privately in the name of Her Majesty without adequate overview by the people's representatives here in the House of Commons. In other words, the extent to which Crown corporations incur financial responsibility must be strictly controlled. There ought to be a relationship drawn between the equity, the asset value of the Crown corporation, and the amount of liability it incurs. Those liabilities should be permanently entered on the books of that corporation as a liability to be cleared from the earnings of that corporation, unless the chairman and board of directors can justify the deficits from the point of view of fulfilling some element of the national need.
There is no provision in this legislation to restrict the ability of Crown corporations to spawn subsidiaries. There is no provision to prevent Government Ministers from creating Crown corporations merely as a smokescreen, to remove from their area of responsibility a corporation that is going wrong, as was the case with CDIC. The responsible Minister did not

May 7, 1984
Financial Administration Act
want to have to account for the disastrous and tragic mismanagement of Canadair, de Havilland and Eldorado Nuclear. Therefore, the Government hived them off into a new subsidiary organization, CDIC, whose purpose to this date has not been clearly stated in this House of Commons. It appears to be a ruse to deny parliamentarians the right to scrutinize those corporations by removing them one step from the overview of this Parliament.
When we look at the track record, we see that Canada Post is incurring annually a deficit in excess of $500 million. We should look at the deficits incurred by the CBC. We can turn on the CTV television network and obtain virtually the same quality programs without incurring a deficit of half a billion dollars a year. We have to ask if this Bill is adequate.
In conclusion, it is obvious to the people of Canada that a major overhaul is essential in the management of our Crown corporations. This Bill will just not fill the bill.


Mr. Walter McLean (Waterloo):: Mr. Speaker, in joining with my colleagues in speaking to this Bill I wish to spend my allotted time on Bill C-24, an Act to amend the Financial Administration Act dealing with Crown corporations, by addressing one very crucial aspect of this legislation, one that is fundamental to my Party's view of financial accountability. It is important because, while it demonstrates a gaping flaw in Bill C-24, it is characteristic of the current Liberal's inclination to snub a tradition of trust with the electorate at the same time as it takes steps to legislate sloppiness and protect bunglers. This Bill legislates against the tradition of ministerial responsibility.
As the Hon. Member for Calgary South (Mr. Thomson) outlined in his speech opening second reading, this Bill once again ducks the whole notion of ministerial accountability. We have heard from political commentators that the so-called Trudeau era ushered in the practice of collegial decision-making. I suggest that Bill C-24 provides eloquent testimony to the failure that this practice has been in terms of public policy formulation and the efficient operation of the Government of Canada.
Collegiality might better be viewed as the attempt to protect the slender reputations of political appointees who found themselves stuck in ministerial roles demanding far more managerial moxie than they could ever muster. Except for geographical coincidence, they should never have been considered ready to manage anything more than their golf scores. Even then, they would have needed to have a foursome.
The Hon. Member for Calgary South outlined my Party's position on ministerial accountability. He said:
-we will never solve the problems of Crown corporations until Crown corporations come under an effective regime of individual ministerial responsibility. C-24 goes in the opposite direction. The individual minister is nothing but a post box. The real authority is exercised by Cabinet or the Treasury Board-groups of Ministers, rather than individual Ministers... In being accountable to so many Ministers, Crown corporations will continue to be accountable to no one.
The Government maintains that this Bill seeks to address the problems of the accountability of Crown corporations, as pointed out in various studies ranging from the Auditor General's report, the Lambert report, and its other self-appointed experts. This is nonsense. What this Bill does is to enshrine all the worst inclinations this Government has demonstrated in unnecessary bureaucratization of a process that clearly demands the hands-on intervention of responsible Ministers held accountable by Parliament. In Bill C-24 we are offered regulation instead of responsibility, mud instead of stone, and spinelessness instead of gumption.
Let me offer a case in point, one that illustrates the often useful vehicle of a Crown corporation which has gone sour, and worse. During 1966 and 1967, the federal Government was busying itself creating the National Museum's board. As originally envisaged, the board was to offer centralized services to the National Museums and Galleries. However, in settling on a model for this board, the Government chose the structure of the British Coal Board to oversee the best interest of Canadians in housing and exhibiting their heritage in an educational fashion. Think of the example of the British Coal Board. Needless to say, what Canadians actually got was a messy bureaucratic structure which takes up nearly three-quarters of all monies allocated in the federal budget to museums. That way we see the current administration able to hide away the National Museums Construction Board, which will not be audited until 1989, which is hell-bent on building new galleries and museums before the Minister, who should be responsible, has even begun to devise the programs by which they will be run.
The viability of the Crown corporation as a vehicle for public interest is being threatened by the tendency for Ministers to hide behind bureaucracy rather than to send clear signals to that bureaucracy and then be prepared to stand in Parliament and defend them. This Bill demonstrates no newfound desire to open Crown corporations to public scrutiny, to let the interest groups regularly and systematically react, whether it be through the vehicle of parliamentary committees or whatever. On the contrary, Bill C-24 has the seeds of even more blatant attempts by our collegial federal Cabinet to spend its way into the political hearts of Canadians while it eats its way into the future of their children and grandchildren.
There are many illustrations. When talking about responsibility, I think not only of the responsibility in cultural areas but of the responsibility in public transport. In the last few days I have been reviewing the service of VIA Rail into the Kitchener-Waterloo area. I spoke to passengers about that Crown corporation, the funding for which is still a $l-vote in the Estimates. It is a corporation which is impossible to influence even though the citizens are directly affected by it. I regularly found that the insensitivity of this Crown corporation is such that all of the advertisements in the Kitchener-Waterloo area relate to national travel and it is impossible for passengers wishing to travel from Kitchener-Waterloo to Toronto to find those trips advertised by a government agency in their own newspaper.
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I could go on. My colleagues have been outlining the failure of this Bill to meet the reality of what we see as being a substructure of Government running amok. Each of us could spend hours illustrating this from our own experiences.
Let me conclude my remarks by indicating that not only is the lack of ministerial responsibility one of the fundamental shortfalls of the Bill but, as well, the scope of the Bill is very limited. Bill C-24 does not cover many of the major structural problems related to Crown corporations as a whole. It is, for example, silent on the matter of internal government organization and on the matter of privileges and immunities of Crown corporations. It is silent about whether we will find more Crown corporations hiding behind the Combines Investigation Act and whether public servants should serve on the boards of Crown corporations. It is silent about the extent of the Government of Canada's accounting entity and the creation of parliamentary oversights. In addition, the Bill covers only wholly-owned corporations. It does not apply to the more than 100 mixed and joint enterprises that exist.
Therefore, Mr. Speaker, I would like to suggest that the public is not being fooled by this cosmetic effort. Bill C-24 demonstrates that the Government is out of step with the thinking of Canadians and their desire for accountability of the tax dollars that are spent. I join with my colleagues in asking the Government to withdraw this Bill and return to Parliament with something which will really tackle the serious concerns which have been reflected in the House.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, it gives me a great deal of pleasure to participate in today's debate concerning the control and accountability of Crown corporations. Crown corporations have played a very long and valuable role in the development of Canada. As long ago as 1841, the joint Governments of Upper and Lower Canada, the Government of the United Provinces, set up a board of public works to build canals in the country which was known as Canada at that time. As long ago as 1906, Ontario Hydro was established as a Crown corporation which had a monopoly on producing electricity in the Province of Ontario. That corporation was set up by a Conservative Government in 1906.
Many provinces have found it useful and necessary to set up Crown corporations, most of which have been patterned after a monopoly, with regard to the offering of telephone services. As an example of that, I cite the Government of my own Province of Saskatchewan and the Government of the neighbouring Province of Manitoba. In terms of providing services for the new airline industry, for example, Trans-Canada Air Lines was established as a Crown corporation to provide service right across the country.
I suppose there are many different ways to look at Crown corporations, because there is a great range of work that can be done by Crown corporations and a great many ways in which Crown corporations may function. Some very useful and beneficial Crown corporations do exist. Corporations which are often thought of as Crown corporations, such as the
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Canadian Wheat Board, have been very useful. The Canadian Wheat Board does an excellent job of marketing farmers' grain in western Canada, the area for which it has responsibility, and it does so in the most efficient manner possible. Without extracting a profit from its users, it returns all of its benefits and all of its surplus funds back to the farmers who use the Wheat Board. When Crown corporations function in that way, they provide a benefit to the users and a benefit to the economy as a whole.
We have seen examples of Crown corporations being created to bail out investors who have done a poor job. We saw this happen in 1919 when the Borden Government established the Canadian National Railways by rolling three nearly bankrupt railway companies into one. The shareholders of those companies were protected because the Government took over the liabilities of those railways and kept on paying dividends by way of interest. The CNR had a great deal of difficulty functioning because what had happened was that the Government had in effect taken over the assets of those railways for far more than their market value.
A similar example occurred a few years earlier when the Liberal Government of Saskatchewan began to establish a government grain elevator corporation, the establishment of which was against its will. The farmers insisted on having a government-operated elevator company in order to avoid some of the practices in which the free enterprise elevator owners were engaged. The Government of the day did not want to enter into the elevator business but was forced into it, by the farmers. Consequently, the Government chose to buy all of the losing elevators across the country. It bought the poorest elevators in the poorest locations with the worst managers and combined them all. By golly, the Government was right. The Government could not run an elevator company. Since that time, many other corporations have been set up by the Crown that have not followed that route but have been very efficient and effective. It is simply a matter of what the mandate of a Crown corporation is and what the written and unwritten agendas of the management of the Crown corporations are.
I believe that a Bill which would attempt to make Crown corporations more accountable and would set out rules for them to follow would be of some use to the country. The effects of the proposed legislation have been indicated several times in the speeches we have heard up to this point. Given the few moments left to me, I would like to point out that we have some questions regarding the ability of this legislation to provide the necessary control and accountability, given the fact that there now exist Crown corporations which act as holding companies.
The proposed Canadian Development and Investment Corporation would act in effect like a little Argus or Power Corporation. There would be a great many other second, third and fourth-ranked Crown corporations under that corporation. Under this legislation, the Parliament of Canada would only be setting out accountability provisions for the granddaddy corporation, the CDIC, and would not have very much say or
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Capital Punishment
control over what goes on in the second, third and fourth-level corporations.
As well, another form of involvement of Crown corporations which we are seeing quite often is the entry of Crown corporations into joint ventures and the setting up of other Crown corporations in which the parent Crown corporation is a one-third or one-half shareholder. This legislation does not make clear at all how the Parliament of Canada will be able to control those assets, which are under the name of the Crown and managed by a Crown corporation but exist beyond the control of Members of Parliament and beyond the accounting process that is set up by this legislation. We do not think that those questions have been adequately answered at this point in time.
We believe that the legislation should take those kinds of real life, current-day problems into account when it goes to committee. We feel, therefore, that the legislation needs some further amendment and further strengthening if indeed parliamentarians will be able to make the Crown corporations of the country accountable to them on behalf of the people of Canada who act as the shareholders of these corporations.


The Acting Speaker (Mr. Guilbault):: 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

["Order, I am sorry to interrupt the Hon. Member, but it is now six o'clock.\nThe time provided for the consideration of Private Members' business has now expired."]
The Acting Speaker (Mr. Guilbault):: Shall all orders and items preceding No. 108 stand by unanimous consent?


Some Hon. Members:: Agreed.



Mr. Gordon Taylor (Bow River) moved: that Bill C-214, an Act to amend the Criminal Code (death sentences), be now read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, I hope it is the intention of the House to pass this measure, because the people of Canada are getting tired of waiting for the reinstatement of capital punishment.
I want to deal with the problem today from the viewpoint of the man on the street, and from the viewpoint of 85 per cent of the people who sent me here. First, I think the terms should be defined. In the Bill, capital punishment means the death
penalty for the murder of another human being that is deliberately planned and executed, and where the person committing the act is found guilty beyond the shadow of a doubt. I want to make it clear that if there is any doubt whatsoever, the execution should not take place, in order to do away with the suggestion that we may hang the wrong man.
The first point I would like to deal with is that it is time the long moratorium on capital punishment ended. The people want it to end, and I think statistics will show that it should end. Canadians are angry. They believe in democracy and they want to know why the Government of Canada is not reflecting their wishes.
What are their wishes? According to the polls, the vast majority of people want the death sentence reinstated for first degree murder, where there is no shadow of a doubt. In 1972, the polls showed that 63 per cent of the people wanted the death penalty reinstated. In 1975, it rose to 69 per cent, and 79 per cent if it involved the death of a police officer. In 1983, the polls showed that 85 per cent of the people wanted capital punishment reinstated. When 85 per cent of the people of the country want something done, surely it is the responsibility of the government in power to reflect that thinking in the legislation. That many people cannot be wrong.
We live in a democracy. I do not accept the theory that the Government is providing leadership. His the people whom we are representing. When I knocked at doors in my own riding, more than 85 per cent of the people wanted capital punishment reinstated. If I did not stand for that, I would have had to tell them so, and I am doubtful if they would have elected me.
Why is the Canadian public feeling terrorized? Why are women afraid to walk in the streets of our cities after dark and sometimes before dark? Why is it not safe to put your can in an underground parking lot, or even in a parking lot above the ground in some cases? I think there are a number of reasons. There are too many murderers walking the streets. We do not know when those who are in prison are going to get out.
There was a very definite example of that just in the last day or so with a man who strangled four women. One of them was a schoolteacher in Calgary; the other three women, I believe, were from Quebec. He strangled them. A sex maniac. What happened? He was supposed to get a life sentence, but he was out at a fancy restaurant for dinner without enough guards to look after him. He went to the washroom and he escaped. He could have killed another woman. Fortunately, he was caught before he did that. It is not good enough for the Minister to say, as he did this afternoon, "I am not sure what went wrong". I know what went wrong. The man should have been executed after he murdered the first or second person. We should not have waited until he murdered four people.
How many times does this happen in Canada with murderers committing their second, third and fourth murder? The bleeding hearts of the country say, "We are rehabilitating them". I would have laughed, if it were not so sad, when the Hon. Minister said today that the chap took sexual therapy. Well, sexual therapy did not do Boden much good. I am
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doubtful if it is doing anyone else much good. What is wrong is that we are catering to our murderers. We are giving more attention to the murderers than we are to the victims. The people of Canada are getting fed up with it.
Another case-and I do not want to deal with this in detail because I would like to deal with it at another time-is that of Clifford Robert Olson. He murdered 11 young people, people who were in the spring of their lives. He deliberately planned and murdered those young people. What he did to them before he murdered them God only knows. I do not say that in a profane way. Of course, Olson knows the abuse to which he may have submitted those young people before he murdered them and before he buried them. Then he bragged that he killed at lot more than 11 people. He tells us that he killed several more in the United States. Now he wants to write a book and make money from the deaths of the kids. It has gone too far and the people are getting fed up with this bleeding heart business.
Let us look at Brown and Peters in my own riding. They went out and searched to find a woman or girl whom they could sexually abuse, mutilate and then cover with gasoline and burn the evidence. One young married woman who ran out of gas happened to be their victim. It could could have been your daughter or your wife, Mr. Speaker, who happened to be on that road that night. But it was a young lady. If that was not enough, a short time afterward they watched stores to see if they could find a young girl who was left alone. Finally they found a store, went in the back way and took her out. They mutilated, abused her, and then covered her with gasoline and burned her. What happened to them? They got life. I would not be surprised if they are out on parole right now. There are so many bleeding hearts in this country who think that such men can be rehabilitated, men who are deliberately committing murder, who get their kicks out of murder. The kick they should get is at the end of a rope, and it should be their last kick.
There is also the Shearing case in British Columbia, that of a man who murdered three generations all in one night. He killed them, burned them and tried to destroy the evidence. It was carefully planned. He did not know the two families. It might have been you and your wife in the trailer, Mr. Speaker, but it happened to be those two particular families. Who knows what other murderers are lurking beside some national park waiting for the same thing to happen? In the way these murderers are treated afterward, there is certainly no deterrent. They are put in prison and they are given special attention. They are guarded from other prisoners. The other prisoners would not stand for it. There would be another murder if Olson was ever let loose in a prison. But do not worry, he will get out. "Life" does not mean a life sentence any more. Life means 20 years or 25 years, if it means that much. The prisoner is then supposedly rehabilitated. Yes, just like Boden. We are fortunate that Boden did not commit another murder. No wonder the Canadian people are terrorized. "Life" does not mean life. If it did, perhaps 85 per cent of the people of this country would not want capital punish-
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rrient returned. "Life" does not mean life; it means 15 years or 20 years, and less than that in some cases.
Shearing got 25 years, and what did the judge say? I quote from part of his comments when sentencing, " . .. this senseless, brutal, cold blooded murder of six innocent people, three generations, murdered". For what? So he could have their trailer. That is how he views human life, and we make sure that he lives and we as taxpayers give him the best to eat. The prisoners are receiving the best of food, particularly those like Olson, Shearing, Brown and Peters, who are put into special protective areas. They eat a lot better than people on relief and a lot better than people who are unemployed, I will tell you that, Mr. Speaker. If you do not believe me, go to the prisons and see what they are eating. In the Calgary remand centre a short time ago prisoners went on strike because they are getting too much turkey. Well, I know people in my riding who are lucky if they get turkey once a year. That is why the Canadian people are angry.
People say the death penalty is not a deterrent. I happen to believe it is a deterrent. I respect those who think it is not, but I cannot follow their logic. People love life and people will do anything to stay alive. It is only the exceptional person who wants to die. We struggle to remain alive. Some people say that capital punishment is not an effective deterrent, that it is never used. We are told that it did not produce results. Well, it has been a long time since we have had capital punishment, and people knew they would be hanged or executed if they committed a murder. It was in 1961 or 1962 that the last person was hanged in Canada. After that, every murderer was pardoned by a royal pardon. It became a policy of the Government, both Liberal and Conservative, to pardon the person who took another's life. It is too bad they could not bring back the lives which were taken.
How do people know that the death penalty is not a deterrent? From 1961 to 1967 murders kept increasing. In 1963, murders went up 1.04 per 100,000 per year on an average. In 1966, they went up to 1.2. In 1969, they went up to 1.67. In 1972, they went up to 2.05. In 1975, they went up to 2.46, and that was the peak. That was also the time when the death penalty was abolished altogether. Many people tell us to look at the years from 1978 to 1981 when the number of murders dropped from 2.46 to 2.38. But I do not believe that proves anything. I do not really believe statistics prove a great deal either. How many of us know how many murderers would be deterred if they knew they were going to be executed? They love life.
It does not matter what kind of law you have, some murders will be committed, murders of passion which happen in a moment over a family fight, a love affair, or many other instances. It just simply happens. It is not planned and deliberate. Those are a different type of murder. I speak now of those murders which are deliberately planned and executed by these people who know they are not going to be executed but are

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going to be given number one treatment in our jails, and that is what we are giving them.
In my view, the death penalty is a deterrent. It is an effective tool which pinpoints law and order. I respect the views of people who do not believe in capital punishment, even though I cannot follow their logic in light of things which are happening today. The abolitionists appear to have no objection to punishing a child for stealing or a grownup for committing rape. There is no objection to punishing them. But when someone is murdered, the worst of all crimes, then the appropriate punishment is objected to, namely, death to the killer. Violent crimes are becoming all too rampant throughout Canada. Elderly men and women are afraid to walk outside after dark in some of our cities. But we are more concerned about the criminal, in rehabilitating him, than we are about the victims of the crime. The rights of law-abiding citizens seem to be eroding with the increasing leniency toward crime in prison sentences and punishment.
When we get these people in prison, what rights do we take away from them? The only punishment is that they are locked behind bars. That is all. They have better food than many people outside of prison who are honest and clean living. They have entertainment. They are even provided with movies, which many of us would not go to see, blue movies. They have the best of pool tables. Oh, yes, we treat them wonderfully well. We are rehabilitating them. We give them sexual therapy, and what happens? We are now providing conjugal visits at the expense of the taxpayers for prisoners serving a life sentence. We do not even stop with those who are married; we even give this privilege to those who are not married. That is the way we are operating our prisons. Common law wives can go in for conjugal visits at the expense of the taxpayer. Sometimes I wonder why we do not take the prostitutes away from our main hotels and put up a sign in front of our prisons saying, "March up and down here. Government will provide a trailer for you". I hope that is not the next program because it is almost that bad now.
Yes, we must provide food, clothes and shelter, but let us forget about all this bleeding heart business on the pretense of rehabilitating these people. If they did not know what they were doing, that is one thing, but when they know what they are doing, death is the proper punishment. I make no excuse or alibi for advocating that very thing.
I believe that the death penalty is a just punishment when someone deliberately plans to take the life of another human being and carries that plan out, particularly when the victims are young children and women. That is the kind of man Olson was, a yellow dog. He could not pick on a man his own size; he picked on kids or on women. The death penalty, in my view, is a deterrent. We have not given it a chance. We have not had the sure penalty of death on the books long enough for people who deliberately plan and kill and are found guilty beyond the shadow of a doubt. It has not been on the books long enough to show whether or not it is a deterrent, and I believe it is.
The death penalty prevents a second, third and fourth murder, as in the case of Boden. The school teacher in Calgary
would still be teaching youngsters, helping people, if she had not been strangled by this man they call "Strangler Bill". The death sentence is a basic of justice in law. The death penalty is final because there can be no change after a murderer is executed. The courts must be sure that a person is executed only if and when that person is proved guilty beyond the shadow of a doubt to have murdered a child, a woman, a man, a guard, a policeman, another human being. If there is any doubt, then the murderer should be put in prison and not executed. What are we going to do with all these murderers as our prisons get fuller and fuller? Some day we will have so many murderers in our prisons that we will have to start building more prisons, another expense for the taxpayer.
I say, Mr. Speaker, that people who kill should get their desserts: execution. Let it be known across the land that that is what it is. I believe that then the number of deaths will decrease because all human beings love life.


Stanley Hudecki: Mr. Speaker, I welcome the opportunity to speak on the issue of capital punishment. The Hon. Member for Bow River (Mr. Taylor) has introduced a Bill to reinstate the death penalty for first degree murder, and I wholeheartedly disagree with that suggestion. I am disappointed that a man of his stature should have killing as the thrust of his speech. The psychology of killing appears to pervade an increasing proportion of our society. We see it in the killing of the unborn and those who are born with abnormalities. We see the thought pervading hospitals when they bring in a person with a broken hip who appears to have difficulty in orientation and in understanding what is going on. The thrust of this psychology of killing is really that we are seeking vengeance, and the more vengeance we seek, the more we promote the concept of killing.
In our system of justice, which is of very high calibre, there have been two cases of people found guilty of murder, and later their innocence was proven. Fortunately, they had been put in prison and not executed. It would have been a sad reflection on our system of justice had we lost those two men.
In 1976, Parliament had a free vote on capital punishment. The result was approval of the Bill officially bringing capital punishment to an end. Instead, as the Hon. Member for Bow River indicated, we have a imposed sentence of life imprisonment with no parole for at least 25 years for first-degree murder and 10 to 15 years for second-degree murder. However, it appears that that vote did not settle the matter. Since then there has been a stream of Private Members' Bills, motions and proposals for a national referendum on the subject. What has this accomplished? Absolutely nothing. Just a lot of window dressing about procedures governing appeals and executions.
There is only one point to be debated here, that is whether or not we want to bring back capital punishment. I suggest, Mr. Speaker, that we have to ask ourselves why this particular subject keeps coming back. We have to look at it in perspec-
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tive. We have heard, and probably will hear, numerous arguments about the effectiveness of capital punishment as a deterrent. Statistics can be marshalled to show that the murder rate has not increased since capital punishment has been abolished. Reference will be made to trends in other western abolished. Reference will be made to trends in other western countries. However, I would like to deal with the moral question, because I think that is the key to understanding why this issue keeps coming up. It is perhaps also the key to determining whether or not the matter should once again be put to a vote in the House.
First, Mr. Speaker, every time those who favour capital punishment raise the matter, they inevitably give lurid and emotional examples of murders which have occurred recently. We hear examples of cold-blooded murders in individual ridings. Members do surveys of their constituents and find that a significant percentage are in favour of capital punishment. What these samples illustrate is but one side of the moral issue, namely, that everyone is outraged and horrified by such extreme crimes. No one wants to see a criminal get away with his crime. Every time a murder is committed we hear demands that the death penalty be brought back. Thus it is clear that for the anti-abolitionist the central issue is a moral one.
However, this is stating only one side of a difficult moral question. Those who keep introducing motions to reinstate capital punishment tend to ignore the other half of the problem, that is, whether the state has the right to take a human life deliberately. The right to life is given explicit recognition in our Charter of Rights and Freedoms. It is not sufficient for anti-abolitionists to argue an eye for an eye. In other areas the state does not punish a crime in the same way it was committed. For example, we do not mutilate those who have been convicted of the crime of mutilation. I seriously question whether the appropriate punishment for the crime of murder is a corresponding act of murder by the state, and I have yet to hear any persuasive arguments to this effect from the other side.
I note the statements by those in favour of hanging that crime is on the upswing and we have lost our morality, that we must do something about these crimes. Well, if indeed Parliament, the criminal justice system or this Government did nothing about crime, then obviously it would be acting immorally. The fact is-and I think we can take some comfort from this solid fact-that Canadians enjoy an effective, sophisticated criminal justice system. The great majority of criminals, including killers, are apprehended by the police. The penalties provided in the Criminal Code for serious offences are severe, and I have noticed no reluctance on the part of the courts to impose such sentences. In 1977, capital punishment was replaced with a mandatory life sentence without eligibility for parole for 25 years. We certainly are not coddling criminals or acting immorally in handing out such sentences, but I hasten to point out that unfortunately in Question Period today details were presented to us by the Solicitor General (Mr. Kaplan) indicating that in a particular situation the implementation of such sentences is wanting. However, he has assured
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the House that this is an exception and will be fully investigated and appropriate measures taken.
Those who are in favour of capital punishment have the burden of proving that this form of execution by the state is justified. It seems to me that this ultimate penalty carries with it the seeds of severe injustice through its potentially unequal application to the poor. It is very rare that we see the rich, well supported and knowledgeable people go on to an execution. Usually they are able to get the support of the best criminal lawyers in the country. Through the use of their status in life, the support of their friends and the very skilful use of the laws, they are able to have their crime dealt with by a sentence other than execution. If you study the records, you will see that it is usually the ignorant and uneducated who are found guilty and who in so many cases have been, and in some countries still are, executed. So there is a very definite potential for error. This was demonstrated lately in the cases which have been mentioned. This has happened despite elaborate safeguards and guarantees built into our criminal justice system.
The definition problem also makes it difficult for the state to impose the death penalty fairly. However shocking some of the particular examples described, it is likely that many of these crimes would not constitute first degree murder given the emotional element of the crime and the lack of premeditation. These aspects of a crime are very difficult to prove and errors can occur. Moreover, I have heard it argued by retentionists that those who kill are sick, incurable souls. We do not execute the sick. We try to control them, through incarceration if necessary, in order to prevent repetition of their crimes.
It is often suggested that the majority of Canadians want capital punishment, the conclusion from this being that the Government must respect their wishes. The results of the Gallup poll which the Hon. Member has given us are certainly most impressive. However, he was not able to give us the circumstance under which those polls were taken. What were the factors that stimulated such a response at that time and place?
I believe that we must confront the moral issue, particularly in terms of our roles as MPs. Certainly the majority of Canadians do not want to pay taxes, for example, but no one is suggesting that we stop taxing. Our democratic system does not require that each MP vote every time according to the wishes of the majority of his constituents. That is not our role as Members of Parliament. This is particularly true of moral and philosophical issues like this one. His or her decisions must be based on reason, evidence and a sense of the morality of the issue. I believe that this principle of parliamentary democracy was articulated centuries ago by Edmund Burke, and I am willing to be guided by that well-known conservative.
There also appears to be a trend in the United States in favour of executing people by pills or lethal injections, as though this made execution somehow more humane, as if it was simply a matter of putting someone out of their misery.

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The first such execution was carried out in Texas in December of 1982 on a prisoner named Charlie Brooks. In effect, they gave him a massive drug overdose to kill him. Whether we kill someone by hanging, shooting or by passing 2,000 volts of electricity through his body, we cannot sidestep the fundamental moral issue of whether or not this meditated killing by the state is justified.
In conclusion, Mr. Speaker, I have chosen to emphasize the moral question in this capital punishment controversy. The 1976 free vote was a culmination of years of public debate on the issue. Approximately half the Members of the House at that time spoke on this matter. I know that many of them agonized over the moral question. Ultimately, Members voted according to their conscience, and the result was a majority in favour of abolition. The issue has not changed since this wide-ranging debate in 1976. I cannot see what would be gained by returning to the issue in a free vote.
Yes, there will continue to be horrifying examples of murder. I stress that these incidents will probably occur regardless of whether or not we have capital punishment. Members can conduct public opinion polls of their constituents, but it is not our role collectively to vote strictly according to public opinion surveys. The issue keeps coming up because it is a moral issue. It seems to me that in the 1976 debate the moral questions, from both sides, received a full and fair hearing.
I do not have the time to deal at length with the huge subject of deterrence, which is a moral question in itself. I would like to quote from an essay by Albert Camus, the Nobel Prize winner and passionate opponent of capital punishment. He said:
It cannot be denied, however, that men fear death. The privation of life is indeed the supreme penalty and ought to excite in them a decisive fear. The fear of death, arising from the most obscure depths of the individual, ravished him; the instinct to live, when it is threatened, panics and struggles in agony. Therefore the legislator was right in thinking that his law was based upon one of the most mysterious and most powerful incentives of human nature. But law is always simpler than nature. When law ventures, in the hope of dominating, into the dark regions of consciousness, it has little chance of being able to simplify the complexity it wants to codify.
If fear of death is, indeed, a fact, another fact is that such fear, however great it may be, has never sufficed to quell human passions.
The proof of this argument is that capital punishment has never succeeded in eliminating murder. I suggest that our strong and fair system of justice, including the criminal law, has shown itself to be a better approach to deterring criminal acts. It imposes appropriate punishments but, perhaps more important, it fosters respect for the law. The Government has also implemented firm gun control measures and is embarking upon crime prevention efforts that I believe will result in significantly reducing the opportunity to commit crimes.
I have heard no compelling reasons for reopening debate on an issue which has received as much House time over the last 30 years as any other single matter.


William Henry (Bill) Domm: Mr. Speaker, I am very pleased to have the opportunity to speak on Bill C-214, an Act to amend the Criminal Code. I feel very strongly that we need
a review before the Standing Committee on Justice and Legal Affairs in order to review some of the more recent statistics we have as a result of the abolition of capital punishment.
I would like to take a moment, Mr. Speaker, to discuss a couple of points that were brought up by the Hon. Member for Hamilton West (Mr. Hudecki). First, there seems to be an inclination among members of both the Liberal and the New Democratic Party to refer in the House to cases in which people would have been hanged. They talk about two cases in which a person who was found guilty would not be alive today if the death penalty were in force. These people have since been found innocent. I remind both of these Parties that in both occasions, and in particular in the Don Marshall case in Nova Scotia, the charge was not first degree murder but second degree murder. The courts did not find the murder to be premeditated in the case of Donald Marshall. That person would not have been hanged had the law implementing capital punishment for premeditated first degree murder been in place.
The other point that was made by the Member for Hamilton West was that there was one strong point to be made, to paraphrase his comment, which is, that murders have not increased since the abolition of the death penalty. I would like to take this opportunity to point out to the Hon. Member that according to the statistics of Statistics Canada, it is the number of first degree murders committed while in the act of committing a criminal offence that have increased. That means murders while robbing a Beckers, a Mac's Milk or actions of that nature. The deterrent to carry a gun is not there, particularly a loaded gun.
Therefore, it is grossly unfair to say that, because we do not have capital punishment and because there is a decrease in first degree murders, we do not need capital punishment. If we could decrease the number of first degree murders that have occurred while in the act of committing a criminal offence by the deterrent of carrying a loaded gun, that would go a long way. I remind the Hon. Member that the number of first degree murders was decreasing when capital punishment was in place according to a great number of Statistics Canada figures. First degree murders were on a decline and they are still on a decline, thanks to the improvement in society. It still does not answer the question of when constituents feel that there needs to be a review of this very important question.
With respect to deterrents, there are those like myself who feel that it would definitely be a deterrent and there are those who feel differently. With all due respect, there are people who are probably far more expert in analysing the pros and cons of capital punishment than are most Members of Parliament, including myself. We cannot afford the disadvantage of not reviewing such an issue from time to time. Simply because we abolished capital punishment in 1976 does not mean that it should be abolished forever. There have been many types of legislation that have been put in place and either have not been
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implemented by the Government or have been overlooked or else have been amended as time have changed.
As far as violence while in the act of committing a criminal offence is concerned, I am sure the Hon. Member who is in support of abolition was horrified by the Barbara Turnbull case. She is an 18-year old girl from Mississauga, who was a Beckers' store clerk and also a volunteer worker with terminally ill cancer patients, who was shot in September, 1983, and now is paralyzed for life. I am sure he is also aware of the Nizam Ali case. He was an 18-year old boy who was stabbed to death recently while he worked the overnight shift at a fast food dispensing store. Constable David Utman is another example. He was a 38-year old Nepean police force officer who was shot to death at a west end shopping centre on October 14, 1983. The accused, one Peter M. Collins, escaped in June from the regional detention centre where he was awaiting trial on several robbery charges. I am convinced that bringing in capital punishment for premeditated first degree murder would deter us from carrying a loaded gun.
I am not picking on the Member for Hamilton West but he is the only member on the government side who has spoken on this issue so far. I would like to make one other point in response to his comments. During his remarks in reference to the remarks of the Member for Bow River (Mr. Taylor) who introduced Bill C-214 he said that he "could not substantiate the poll". I challenge the Member for Hamilton West to take his own poll. Let the Member ask a very simple question of the constituents in his riding. Let him ask if they support capital punishment for premeditated first degree murder, yes or no. I challenge him or any other Members of the House to take the same poll.
Surely, when Gallup takes a poll, it is a national poll. They do not look for the riding that has just experienced a most horrendous murder. They do it on a regular basis, and there has never been a poll taken in Canada that has demonstrated the support of abolition by a majority of people.
I believe that we as Members of Parliament have a certain obligation to our constituents who send us to Ottawa to represent them. It is not satisfactory simply to say that we abolished the death penalty in 1976 by a majority of six votes and so we have abolished it forever.
I remind Hon. Members that when we abolished the death penalty for first degree murder in 1976, I am sure that a great number of those in the House today who were here then have perhaps changed their minds. I know that I used to be an abolitionist. I am the son of a United Church Minister who fought long and hard for many years to see the death penalty abolished. When I came to Ottawa in 1979, I was still an abolitionist.
However, there comes a point in the conscience of every Member of Parliament when he or she must determine on many of these issues whether he or she will vote one of three ways; either for the position taken by the Party, on what he or she believes to be the majority wishes of the constituents, or on his or her own conscience. I found it very difficult as a Member of Parliament to satisfy my conscience when I voted
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against 87 per cent of the constituents in my riding. I did not ask that question if the people in my riding at a time when there was a horrendous murder case described on the front pages of any daily newspaper in Canada. In fact, I pointed out to them that I thought that the people in my riding might have changed and that there was a feeling that there might be a desire to maintain the abolitionist viewpoint. I was prepared to listen to my constituents, 87 per cent of whom voted to return to the death penalty for premeditated first degree murder.
I would be remiss if I did not take this opportunity to answer some of the questions that are so often asked of Members of Parliament who support capital punishment for premeditated first degree murder.
In addition to what has already been stated, the following points illustrate why it is favourable, in my humble estimation, to have capital punishment for premeditated murder reinstated. First, public opinion appears to be in favour of the death penalty. In a democracy, the will of the majority should be respected.
Second, the alternative of life imprisonment or 25 years of mandatory imprisonment may be harsher and more cruel punishment than death. Some prisoners in the position of facing this kind of alternative have voiced this kind of opinion publicly.
Third, in response to the argument that the state does not have the right to take a person's life, think what the state can do in wartime. One will see that the state has established the right to take another man's life.
Fourth, the victim's family should be a major factor in fitting the punishment to the crime. Next, the rate in Canada of homicidal offences generally and murder incidents in particular has more than doubled from 1961 to 1978. At a time when violent crime is increasing, the focus should be on the maximum possible protection of society rather than on the treatment of the criminal.
The final point is that in 1956, the parliamentary joint committee, after serious study, recommended retention of the death penalty.
I would say that the principle of democratic representation is a greater one than that of any single cause, whether or not, for the best of reasons, Members are convinced of their own rightness of action which is contrary to the clear opinion of the majority of their constituents. I for one do not quibble with, or seek to argue, the rights or wrongs of the case, although I have my own opinion about that. What I seek to defend is the right of the people to exert their will. This right, I feel, should supersede the right of government within the limits of order to exert its will if that is contrary to the peoples' will.
Finally, the principle of a free vote is far preferable to the muzzle which has been imposed on certain sections of seats in this House when it suits the purposes of certain interests. I say that with good reason. We had an Opposition Day motion to be considered publicly not as a vote of confidence or non-confi-

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dence in the Government two years ago in the House. It was introduced by the Conservative Opposition. We asked for no more, no less than that the subject of capital punishment be referred to the Standing Committee on Justice and legal Affairs in order that we could review up-dated information, perhaps so that we could convince the abolitionists that we should have capital punishment or perhaps so that we could convince those in support of capital punishment that we should retain abolition. That is the democratic process. All government Members plus five Members in Opposition voted against even talking about it. That says something about Government and its lack of credibility in representing constituents when 80-some per cent of constituents in most polls and 70-some per cent of constituents in national Gallup polls support capital punishment for premeditated first degree murder.
What I would like to see happen with this Bill brought in by the Hon. Member for Bow River is to see it referred to the Standing Committee on Justice and Legal Affairs in order that expert witnesses from the John Howard Society and organizations that speak very strongly in support of abolition could be called so that all Members of Parliament would have a better understanding of the pros and cons of capital punishment. Failing that, Mr. Speaker, in order to carry the case before the House of Commons, we have to resort to Opposition Days, asking questions in the House, making statements under Standing Order 21, through Private Members Bills and through statements on motions as well as every other means we can conjure up so that someone can give some fair representation to constituents who send Members here to Ottawa to represent them.
It is seven minutes to six o'clock. I do not want to be accused of talking out this Bill. I am sure that if I sit down now there will probably be no other speakers and we could refer the subject matter of the Member for Bow River's Bill to the Standing Committee on Justice and Legal Affairs.


David Orlikow: Mr. Speaker, this is the first time in my years in Parliament that I have spoken on this question. I have voted on this question three times. I voted for abolition on each occasion. The people of my constituency who are part of that large majority which the polls tell us favour capital punishment knew my position and had the opportunity to end my career as a Member of Parliament if they thought that this was an issue that was so important and an issue on which I was so at odds with them that I ought not to continue to be a Member. But I am still here, Mr. Speaker.
I want to remind those Members who have spoken in support of capital punishment, and I respect their right to hold their views, that we have had three votes on this question. The last time we had this vote, the vote for abolition was supported by the Leaders of all three Parties, the present Prime Minister (Mr. Trudeau), the present Leader of the New Democratic Party (Mr. Broadbent), and the Rt. Hon. Member for Bow River, who was then the Leader of the Conservative Party.


Gordon Edward Taylor: Mr. Speaker, I rise-


David Orlikow: I am sorry, Mr. Speaker. I meant the Right Hon. former Prime Minister. He is not the Member from Bow River. Let me remind Members of Parliament that the Gallup polls in Great Britain show a similar support for capital punishment. I remind Members of Parliament here that the British Parliament recently had a free vote.


William Henry (Bill) Domm: Good.


David Orlikow: The British Parliament has a majority of members who are Conservative. The Government is led by the Prime Minister who is a supporter of capital punishment. The British Parliament again voted on the question and again rejected bringing back capital punishment.


William Henry (Bill) Domm: What is wrong with that?


David Orlikow: In virtually every democratic country, Mr. Speaker-


William Henry (Bill) Domm: Except Canada.


David Orlikow: -Norway, Sweden, Holland, Denmark, Belgium, France, Spain, Australia, New Zealand, and Israel, all of them have abolished capital punishment. The State of Israel has the kind of problem that we will never have. It has terrorists operating almost daily. When Israel wanted to execute Adolf Eichmann for the millions of deaths for which he was responsible, Israel had to pass a special Act which applied only to Adolf Eichmann.


William Henry (Bill) Domm: You will never get that chance in Canada.


David Orlikow: Those countries have abolished capital punishment. The countries which have not abolished capital punishment are the military dictatorships of South America, communist countries-


William Henry (Bill) Domm: The United States.


David Orlikow: -such as the Soviet Union, China. Those are the countries which have capital punishment. I see no reason that I should follow the example of those countries on the question of capital punishment or on any other question. I see every reason for following the example which we have seen in virtually all democratic countries which have abolished capital punishment and which, incidentally, have among the lowest rates and numbers of murder of any countries in the world.
We have figures for the number and rates of murders which have occurred since the abolition of capital punishment. The facts are pretty clear, Mr. Speaker. The numbers and rate have decreased. In 1975, we had 701 murders. This figure includes manslaughter and infanticide. In 1980, the last year for which I have figures, that number is down to 593. The rate was 3.07. That figure is now down to 2.48. The rate is determined on the basis of offences per 100,000 of the population.
All the evidence is that capital punishment does not work as a deterrent. If it does not work as a deterrent, the only argument for capital punishment disappears. That being the
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case, I would vote again, as I have on earlier occasions, for abolition.


Mr. Henri Tousignant (Temiscamingue):: Mr. Speaker, thank you for giving me the floor. I suppose I could speak to this subject for at least half an hour, but since we only have one minute left until six o'clock, I have no objection if the House agrees to call it six o'clock, I think it is not really worthwhile to start a speech with one minute left. Could the House give me its opinion?


The Acting Speaker (Mr. Guilbauit):: In order to do that, we need unanimous consent. Is there unanimous consent to call it six o'clock?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Henri Tousignant: Mr. Speaker, we do not have the unanimous consent of the House to interrupt the debate, and we only have about thirty seconds left. I wonder whether I should start my speech. Actually, the abolition of capital punishment was adopted by the House on July 14, 1976, for a variety of good reasons and after lengthy debate.
Mr. Speaker, I feel that the Bill presented in the House by the Hon. Member-


The Acting Speaker (Mr. Guilbauit):: Order, I am sorry to interrupt the Hon. Member, but it is now six o'clock.
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.

William Henry (Bill) Domm: Mr. Speaker, I am pleased to have the opportunity to enter into the record information concerning the Dash-8 aircraft and the sale of this aircraft by de Havilland to three domestic Canadian airline companies. In
Adjournment Debate
telephone conversations today, I was advised that there is very little now standing in the way of the Government of Canada co-operating through the Crown corporation, de Havilland, so that these $60 million to $100 million worth of Dash-8s are sold to the three Canadian airline companies.
What good is an aircraft company in Canada if we cannot sell the aircraft to our domestic airlines? Atonabee Airways, a Peterborough company, has now moved its headquarters to Toronto. What is standing in the way of the sale of millions of dollars of aircraft by de Havilland to Air Atonabee, Time Air of Lethbridge and Norcanair of Saskatoon? It is very simple.
Competition in Ireland has come in with a comparable aircraft. It developed in its private sector an aircraft that seats 36, the same number of people, flies at less cost per mile and costs $2 million per aircraft less. It will sell to the Canadian passenger aircraft industry for over $2 million less per unit. In addition, it will sell with an interest rate of 7 per cent to Air Atonabee in Toronto.
What does the Government have to do in order to save the industry? I would point out that a loss of $100 million worth of business to de Havilland represents an immediate lay-off of 400 employees. It means cutting the work force from 2,450 to under 2,000 and a forecast of future lay-offs. The Canadian Government has dumped $700 million into de Havilland to build an airplane that cannot be marketed because of poor management on the part of a Crown corporation. That Crown corporation is directly accountable to the Cabinet. Regardless of whether or not the Economic Development Minister says we should get rid of it, the point is that we have put a lot of money into de Havilland and Canadair. Those who go on the air to talk about getting rid of these two companies have little compassion for the 2,450 employees at de Havilland.
We are not interfering, as the Minister would have us believe, with our GATT agreements when we offer to subsidize interest rates in order to compete on the international market in a domestic situation. We in the Opposition are asking the Government to take a very close look at the situation that now prevails. An Irish firm is offering 7 per cent interest to Atonabee Airways on the purchase of planes for $2 million less. We have invested $700 million in de Havilland and the Government is not prepared to subsidize the interest rates. Where is the justice that is required on behalf of those employees?
If that is not bad enough, Jack Austin appeared on Canada AM just last week and stated that we should be subsidizing interest rates to the tune of 2 per cent. I do not know what he meant by that. There is no one with any sense to answer for him in the House of Commons. All the Minister of Finance (Mr. Lalonde) has said is that we are not in the business of subsidizing these industries in order for them to sell aircraft. If we are not in that business, then why did we dump $700 million into a company so it could build an aircraft that we cannot market?

May 7, 1984
Adjournment Debate
I plead with the Government of Canada and with the Minister's Parliamentary Secretary who will respond to me to answer the question. Are we going to susidize Air Atonabee and de Havilland aircraft so that we can sell the Dash-8s or are we going to let $100 million go out the window through Time Air, Norcanair and Air Atonabee, and satisfy ourselves by saying that we have some strange agreement with GATT? This is a domestic matter. Another country has entered Canada and has undercut our own Crown corporation. I plead with the Government to meet the interest rate. If it can do it to build monuments in Algeria, it should be able to do it to sell aicraft.


Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Revenue):: Mr. Speaker, the Hon. Member for Peterborough (Mr. Domm) is to be congratulated for keeping this matter before the House. He does make a good point. When he has asked what good the aircraft industry in Canada is if we cannot sell to airlines in Canada, he makes a very valid point indeed, and one which we must take a very good look at. Unfortunately, the time that is available to me will not allow me to respond to all of the matters raised by the Hon. Member. It is too bad that we could not have a full-scale debate on this issue because I think it is one that is worthy of that kind of consideration.
When this issue first arose a few weeks ago, a great many false impressions were created regarding the status of potential purchases of the Dash-8 by Air Atonabee of Peterborough, Ontario, Time Air of Alberta and Norcanair of Saskatoon. Let me correct the record.
First, Air Atonabee had then and has now five conditional contracts for the Dash-8. There have been no cancellations of contracts. Second, Time Air had a contract for four Dash-8s. The contract was conditional on the availability of satisfactory sales financing. Time Air gave notice of cancellation because of a lack of this financing. The two parties are now discussing a new contract. Third, Norcanair has not signed a contract but is currently negotiating a contract for three Dash-8s. In the last two weeks, representatives of all three airlines have witnessed demonstration flights of the Dash-8. Believe me, Mr. Speaker, they really like that plane.
I hope that this will clear the air on the current status of de Havilland's dealings with those companies. All of these airlines would prefer to buy the Dash-8. That is why they are pressing so hard for financing concessions. They are tightly run enterprises with limited margins and must be extremely conscious of costs. This means that competitors offering low-interest sales financing have great appeal for Canadian regional operators. What Members have seen is a public lobbying effort to get a government decision on the type of competitive sales financing de Havilland may be able to offer. The pressure reflects the fact that these operators would sooner buy the Dash-8.
Embraer Brasilia is an example of what we are up against. Brazil has offered 10-year 90 per cent financing at interest rates as low as 7.5 per cent in Canada. This may be compared
with the roughly 13.5 per cent interest rates which domestic carriers can negotiate with Canadian financial institutions.
The 360 Short aircraft has been named publicly as one that is taking customers from de Havilland. I must tell the House that this aircraft is not comparable to the Dash-8. It is unpressurized, which means it cannot fly above 10,000 feet and therefore cannot climb to avoid turbulence. It is also slower than the Dash-8. It is unlikely that the flying public would want to use this plane for any but the shortest flights.


The Acting Speaker (Mr. Guilbault):: I regret to interrupt the Hon. Member but his time has expired.


PROVINCIAL AFFAIRS-CHURCHILL FALLS POWER CONTRACT- GOVERNMENT POSITION. (B) NATIONAL ENERGY BOARD ACT
James Aloysius McGrath: Mr. Speaker, on Thursday last, that is May 3, the Supreme Court of Canada brought down a unanimous decision respecting the Upper Churchill Water Rights Reversion Act. They declared that legislation to be ultra vires, that is to say unconstitutional. That was a Bill which was brought in and passed by the Newfoundland legislature in 1980 to give the Government of Newfoundland the authority to withhold the water that was the source of power for the Churchill Falls Corporation Limited. The legislation was referred to the Supreme Court of Newfoundland by the Government of Newfoundland, in order to be sure it was on clear constitutional grounds. It was ruled by that court, in fact, to be constitutional. The Government of Newfoundland then referred it on to the highest court in the land, the Supreme Court of Canada.
I might have raised the question that day, to the Government of Canada, as to what steps it proposed to take with regard to the impact and the consequences of the decision. I did not because I wanted to wait 24 hours so as not to be seen to be emotionally shooting from the hip or, more precisely, to have an opportunity to examine the judgment and the consequences flowing from it. I raised the question on the following day, May 4. It can be found at page 3412 of Hansard. I put the question to the Acting Prime Minister (Mr. Pepin). I served notice that I would be raising the question, because I knew that the Prime Minsiter (Mr. Trudeau) would not be in the House that day and I wanted the acting Prime Minister to be fully briefed. I put the question to the Acting Prime Minister as to what steps the Government of Canada intended to take to see that justice was done in this case. The Supreme Court of Canada addressed itself to the strict points of the law-to the letter of the law. They said that someone else would have to deal with the social and political ramifications of the legislation.
The genesis of Newfoundland's Upper Churchill Water Rights Reversion Act goes back to 1969, when the Government of Newfoundland through its agency, the Churchill Falls Corporation, entered into a long-term agreement with Quebec Hydro. It was a 65-year agreement for the sale of power from the Churchill Falls development to Hydro Quebec. The Quebec Government of the day made it very clear to the
May 7, 1984

Newfoundland Government that if they did not sell the power to Quebec they would not be able to sell the power to anybody. In other words, Newfoundland would not be able to transmit its power through the Province of Quebec. Therefore, Newfoundland was forced to enter into a 65-year contract to sell that power for 2.5 mills.
That power is being sold today to New York State and to some of the New England states, as well as to the Province of New Brunswick and, to a lesser extent, the Province of Ontario, for 28 mills. The Economic Council of Canada estimated the income to the Province of Quebec to be $800 million. The income derived from that power to the people of Newfoundland-the owner of the resource-has been estimated to be $8 million. It is clearly a situation that cannot be condoned and cannot be allowed to continue.
The Acting Prime Minister, in reply to my question, said that it was a provincial matter. Clearly it is not a provincial matter because it deals with interprovincial trade, it deals with international trade, it deals with the National Energy Board and it deals with the National Energy Program. Under the Constitution all of these are clearly within federal jurisdiction. While the Acting Prime Minister was saying that it was a provincial matter, his colleague, the Minister of State for Mines (Mr. Rompkey), was saying outside of this House that he felt the federal Government should have been involved in this matter.
How can the federal Government get involved? There are a number of ways. First of all, it must recognize that this injustice cannot be condoned and cannot continue. Second, it must recognize that we cannot hope to achieve justice from a government in Quebec that is dedicated to the separation and the breaking up of this country. We cannot expect to get just treatment from a separatist government in Quebec. Third, the Government must recognize that this power belongs to the people of Newfoundland, and should enjoy the same rights of passage as natural gas coming from the western provinces. When the Government of Canada builds a pipeline, it does not have to ask the Province of Manitoba or the Province of Ontario for permission to build the pipelines in order to get the gas into the markets of Montreal. We demand nothing less in terms of hydro power.
The purport of my question on Friday was to ask the Government of Canada in the name of justice, in the name of simple justice, if it would invoke the powers it has under the National Energy Program, specifically under the National Energy Board, to treat the transmission of hydro electric power in the same way as we treat the transmission of other sources of energy, for example, gas, in terms of declaring it in the national interest that common carriers carry this power across the Province of Quebec and into the markets of Ontario and New England so that Newfoundland could enjoy the revenue.
We are a poor province, Sir. We have had a number of blows. We pay the second highest domestic electric rates in the
Adjournment Debate
country in St. John's, Newfoundland. I believe Charlottetown pays the highest. The City of Montreal, I believe, pays the lowest domestic electricity rates. That is because of the power it enjoys from a Newfoundland resource.
I said to the Prime Minister that this was a festering sore on the face of Canada and unless something was done to correct it, unless there was remedial action, there would be dire consequences. The people of Newfoundland have been much harder hit by this decision than by the decision with respect to the offshore oil and gas. Clearly this is perceived by every man, woman and child who has the power of judgment and rationality to be a gross injustice to the people of Newfoundland. I can only say to you, Sir, that if corrective steps are not taken it will fan the fires of separatism of which I hope the Government will take notice.


Mr. Leonard Hopkins (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, in order to add to the remarks made on May 4 by the Minister of External Relations (Mr. Pepin), I would make the following comments: trade in oil and gas and in other commodities which involve the bulk transfer of a natural resource between a source province and a number of receiving provinces lends itself readily to the concept of a common carrier for transportation. Electricity trade, on the other hand, has generally involved interchanges between complex electric power systems that include generation facilities and customer loads. These systems usually involve multiple transmission linkages, making it technically difficult to identify definite paths for a specific flow of power and energy. For this reason, interchanges within power pools and between individual utilities have quite generally in North America been handled through a series of contractual agreements for "wheeling", by which is meant the transfer of electricity over transmission systems.
The power conferred upon the National Energy Board, under its Act, provides for the authorization of construction of designated interprovincial and international transmission lines. This would provide, for example, the assurance that interconnections could be built even if provincial statutes did not provide powers for the province to authorize such facilities for extra-provincial purposes. These powers do not envisage common carrier facilities. No application has yet been received for interprovincial lines and there is no proposal to make any changes to legislation at the present time.


WESTERN GRAIN STABILIZATION ACT-SIZE OF ANNOUNCED PAY-OUT. (B) CONTRIBUTIONS TO FUND
Mr. Gordon Towers (Red Deer):: Mr. Speaker, on April 3, I directed a question to the Minister of Agriculture (Mr. Whelan) which is recorded at page 3681 of Hansard as follows:
-my question is supplemental to those asked of the Minister of Agriculture with regard to the Grain Stabilization Fund. When is this pay-out going to be made?
The Minister of Agriculture replied:
-I am sure the Hon. Member knows that the legislation has to be changed, et cetera. The formula has to be approved by the House through the necessary

May 7, 1984
Adjournment Debate
procedures. Unless we have the speedy concurrence of the House, we would be very lucky to make one in 1984. However, we want to do it in 1984.
Then as recorded at page 2711 of Hansard the Leader of the Opposition (Mr. Mulroney) asked the Prime Minister (Mr. Trudeau) this question:
The Prime Minister is aware of the growing concern of western grain farmers because of the Government's delay in carrying out its commitment to amend the Grain Stabilization Act to permit desperately needed cash payments this spring. Will the Prime Minister prod his lethargic Ministers to bring down the legislation so that hard-pressed grain farmers in western Canada can have the assurance right now of desperately needed cash flow at this time?
The Prime Minister replied:
Mr. Speaker, I would be in a better position to give that assurance to the Hon. Leader of the Opposition if he were to assure me that his Party would co-operate with the Government House Leader in getting through that and many other pieces of legislation which the country needs.
Then as recorded at page 2713 of Hansard the Leader of the Opposition said:
It is typical of the Government that when the interests of western Canada are involved, it is always tied to something else. You can't get a straight answer from the Government.
The Hon. Otto Lang proposed this legislation to the House of Commons. We told him at that time it would not work, but he was stubborn, would not listen, and now western grain producers are suffering the consequences. On April 4, the Prime Minister said that the legislation passed by the Liberal Government in 1976 had to be corrected. We are still waiting for the amendments.
The western grain producers are not asking for something which is not theirs by right. There is $1 billion in that fund, a third of which was contributed by the producer. That was the agreement, however, inept it was, that the Government of the day made with western grain producers. We had a promise of a pay-out in October, but the farmers need it now. The pay-out is supposed to be in the vicinity of $300 million. That is less than one third of the balance in that account. That means that even with this pay-out the Government is not giving back to the farmers even the amount they put into it. It is unfair, unjust and it is frustrating for the western grain producer.
This year, Mr. Speaker, the western producers will probably contribute about $50 million to this fund. There is now $1 billion in this fund, which means that at 10 per cent interest there will accrue to the fund probably $100 million. That is a total of $ 150 million, subtracted from a $300 million pay-out, leaving a pay-out of only $150 million in fact. The fact that the producer has to wait until the fall to receive this money just creates more distrust and disharmony in the west.
I wanted to bring to your attention and the attention of this House how unjust the Government has been, and is currently in its treatment of the prairie grain producer. There is absolutely no wonder, Mr. Speaker, why the Government cannot
generate any trust or good will in western Canada. If the Government would make they pay-out immediately, then of course the farmer would be getting it at a time he justly deserves it.
Thank you very much for allowing me to bring this to the attention of yourself and this House.


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, the Western Grain Stabilization Act was enacted to provide income insurance for those prairie grain producers who wished to be covered. It was designed to be actuarially sound. Normally producers contribute 2 per cent of the value of their grain sales and the Government of Canada contributes an additional 4 per cent. This money is deposited in an interest bearing account, the western grain stabilization fund, for use when prairie grain incomes are depressed.
Because of the actuarial mechanism, contributions were reduced on January 1, 1984 to 1.5 per cent for producers and 3.5 per cent for the Government in light of large fund balances. Proportionately, therefore, producers have benefited more from this, with a 25 per cent reduction, then has the Government, with a 12.5 per cent reduction.
Pay-outs under the original Western Grain Stabilization Act are triggered when net cash flow, which is essentially receipts less cash costs, fall below the previous five year average. Despite lower grain prices over the past two years, total receipts have not fallen because volumes sold have been increasing so that pay-outs have not been triggered.
The intention of the Western Grain Stabilization Act was to have an actuarially sound producer-contributory program. Even in its proposed amended form, it is important to note that the actuarial soundness will be preserved. It would be imprudent to amend the Act in such a way as to undermine its actuarial mechanism, as would be the case if all producer contributions to date were simply reimbursed. This could seriously deplete the fund, leaving inadequate amounts available in case pay-outs are triggered next year or beyond.
The Government intends, however, to amend the Western Grain Stabilization Act to make it more responsive to the needs of the prairie grain economy. Under the proposed payout mechanism, participating producers will receive larger and earlier payouts than the existing Act would provide. The actuarial soundness of the program will, however, be maintained so that the funds will continue to be managed in a responsible manner.


The Acting Speaker (Mr. Guilbault):: The motion to adjourn the House is now deemed to have been adopted. Accordingly,
May 7, 1984

Adjournment Debate
the House stands adjourned until tomorrow at 2 p.m., pursu- At 6.27 p.m. the House adjourned, without question put, ant to order adopted on Thursday, April 12, 1984.	pursuant to Standing Order.


Tuesday, May 8, 1984