1984-05-08

STATEMENTS PURSUANT TO S.O. 21


Mr. Gordon Taylor (Bow River):: Mr. Speaker, the Western grain farmers have amassed a jackpot of nearly $1 billion, and even though the Tories have told the Government to give it back to the farmers, the Government does not appear to know how to make a pay-out. Since the Government is determined to run lotteries, the agricultural reporter for the Calgary Herald, John Schmidt, has come up with a solution.
Since Liberal politicians are wringing their hands because they don't know what to do with the money, the trustees of the Chancellor War Memorial Hall in Bow River are suggesting that the $ 1 billion be sent to Chancellor and be put into a big pot called the Lotta Crow, that the 150,000 Wheat Board permit books also be shipped to Chancellor, and that a nationally televised draw could be made on April Fool's Day, by Otto Lang.
There would be 500 prizes of $1 million, and 1,000 prizes of $500,000. The grain growers could become so independently wealthy that the new Crow rates would never bother them at all. This could be the world's largest lottery pay-out and this Lotta Crow would be more exciting and create more publicity about the gamble of growing wheat than the small payment planned by the Government in the distant future. The trouble now is that the farmers keep paying into the fund, but the
Government uses every excuse in the book not to make a pay-out.
Don't you think, Mr. Speaker, that the farmers have a big enough gamble already, what with the weather, the grasshoppers, and this Liberal Government? Do we have to add another gamble for the farmers to get a pay-out?


MINING INDUSTRY
Mr. Alain Tardif (Richmond-Wolfe):: Mr. Speaker, at a time when the use of asbestos is being thoroughly reviewed in the United States, an Ontario Royal Commission of Inquiry has now published a report that may worsen the situation considerably. Not only does the report fail to clarify the issue, it also raises a number of questions, including the fact that it is more dangerous to remove asbestos from buildings than to leave it in place.
On the other hand, in recent years the Government of the Province of Quebec, which owns two asbestos mines at Thet-ford Mines, and our own Government, have authorized and paid for programs to remove injected asbestos from certain buildings.
The four years of study and investigation required to prepare this report have produced only one result, which is to heighten and add to the controversy around the use of asbestos. This controversy, which has existed for a number of years, has had very tragic consequences for the producing region and thousands of workers. I may remind Hon. Members that these workers are just as concerned about their health as the rest of the country.
Mr. Speaker, in the circumstances, it is now imperative that our Government announce its official position on asbestos, in order to inform Canadians and Americans as well.
On behalf of the people working in the asbestos mines and on my own behalf, I say that we can and should use asbestos and can do so without risk. Now that the Government of Quebec has failed to clarify this issue-


Mr. Speaker:: I am sorry to interrupt the Hon. Member but his time has expired.

May 8, 1984


AGRICULTURE
Mr. Bruce Halliday (Oxford):: Mr. Speaker, I wish to draw a priority matter to the attention of the Government, and particularly to the Minister of Agriculture (Mr. Whelan). My statement is an earnest suggestion regarding the location of the $10 million Agriculture Canada laboratory which is proposed for southwestern Ontario. The County of Oxford will be most pleased to relieve the tension and indecision which the Members from London East, London West, and London-Mid-dlesex have displayed in prior discussions which had seemed to establish the site in the City of London.
As Oxford's Godfather, the Minister of Agriculture will be aware of the many attributes of Oxford pertaining to agriculture. Woodstock, the county seat, is known as the dairy capital of Canada, and many agriculture-related facilities are established within Oxford's boundaries, such as the Agriculture Campus of Fanshawe College, and the head office of the Ontario Flue Cured Tobocco Growers' Marketing Board. Its geographical location, just a few kilometres from the University of Western Ontario, and equidistant from Toronto and Windsor, would seem to indicate that I am offering an ideal site for this project.
I would also suggest that an acceptance of this proposal to establish a laboratory in Oxford would confirm the Government's expressed impartiality when locating projects of this magnitude.


IMMIGRATION
Miss Aideen Nicholson (Trinity):: Mr. Speaker, the recommendation of the Flouse of Commons Committee on Visible Minorities that the proposed Ministry of Multiculturalism should provide increased and extended funding to ethnic groups and broadly-based community organizations, has received strong support from many such groups.
A number of organizations now serving immigrants receive assistance from the Department of Employment and Immigration under ISAP, the Immigrant Settlement and Adaptation Program. The Ontario Council of Agencies Serving Immigrants speaks for many in voicing its concern that the Department of Employment and Immigration is contemplating a redistribution of the ISAP budget to tie ISAP assistance to intake of new immigrants, without regard to the question of continuing to meet the needs of existing immigrants. These agencies and organizations are hard-pressed to remain in existence, and any effective reduction in their funding is indeed cause for concern.
Until funds are available from another source, such as the proposed Ministry of Multiculturalism, I trust the Department of Employment and Immigration will not take any steps which would have the effect of lowering existing levels of assistance to agencies or organizations serving the immigrant community.


EDUCATION
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, in major cities across the country, including Montreal, Toronto, Winnipeg, and Vancouver, a substantial and growing percentage of students attending schools come from families in which the language spoken at home is neither English nor French. These children are attending schools in Canada because the immigration policies of the federal Government in recent years have permitted and encouraged their parents to come to this country. It is now becoming increasingly evident to teachers, parents, and community groups that problems are developing for these students because they are not getting the services they need. They require assistance in order that they can fit into Canadian life on an equivalent basis with young people born in Canada.
Equality Now, the report of the Special Committee on Visible Minorities in Canadian Society, made a series of very good recommendations urging the federal Government, through the Secretary of State (Mr. Joyal), to encourage provincial Governments and school boards to develop and implement policies to improve race relations. The provinces, which are responsible for education, are finding it increasingly difficult to provide local educational systems with sufficient funding to meet those special needs.
I urge the Secretary of State to give consideration to the federal Government sharing the cost to the provinces of funding to meet the needs of immigrant children in Canada, considering that this may be the only possibility which would allow these services to be provided.


CANADIAN COAST GUARD
Mr. George Baker (Gander-Twillingate):: Mr. Speaker, I want to bring to the attention of the House the great need for better ice breaking services along the coastline of Newfoundland. I checked today and I discovered that only one of the four ice-breakers assigned to the Newfoundland region is presently operative. We have two new ice-breakers coming on stream shortly which have been assigned to the western region, to Vancouver.
May 8, 1984

The Maritime region has no problems; it has lots of icebreakers. The Quebec region has no problems; it has lots of ice-breakers. However, on my coastline there are boats stuck in port with people out of work because of that, ferry systems to four islands are cut off most of the wintertime, large ships are unable to get into port, and 11 long-liners have been stuck for the past 37 days, with 60 men aboard. I do not think this is good enough. I ask the Minister of Transport (Mr. Axworthy) to intervene to give the Newfoundland region more ice-breaker services on a permanent basis.


ADMINISTRATION OF JUSTICE
Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, in October last year in Hall Beach, Northwest Territories, three adult men took a 13-year old Inuit girl to the home of one of them. All three had sexual intercourse with her, as a result of which she became pregnant.
The crime which was committed is viewed by Parliament as a most serious one, and one for which Parliament has prescribed a maximum penalty of life imprisonment. However, on April 21 the convicted persons were sentenced to only one week in jail each, of which only a few days were actually served. So light a sentence almost condones the criminal behaviour of the guilty parties. The public of the Northwest Territories, especially those organizations representing native women, are outraged, as am I, at what can only be described as a miscarriage of justice.
The sentence of the court must be appealed so that confidence in the administration of justice and the court system be maintained. The law ought to be applied equitably and fairly without regard to race, and a sentence of only one week's imprisonment for what is commonly referred to as statutory rape ought not to be allowed to stand.


PARLIAMENT
Mr. Bill Yurko (Edmonton East):: Mr. Speaker, it was indeed an honour and a privilege to sit in this Assembly earlier this day to hear the President of Mexico, His Excellency Mr. de la Madrid, address this Assembly, the nation, and indeed the world. This was an historic event.
The President's message was important and laid guideposts and stepping stones on the road toward more harmonious relations within and between the nations of the two American continents. What was not so pleasant was the extent to which chairs in the Assembly were empty during the President's remarks. Even more disrespectful was the late entry of many
Oral Questions
Members into the Assembly. In my view the honour, dignity, and pride of this Assembly trembled today.



ORAL QUESTION PERIOD


Hon. John C. Crosbie (St. John's West):: Mr. Speaker, in the absence of the Minister of Finance, I would like to direct my question to the Prime Minister. As reported in Hansard of April 6, 1984, the Minister of Finance stated the following at that time:
-we expect the unemployment rate to fall during the course of this year. I still expect this to happen, and I am not considering at the present time making any changes to the Budget-
Yesterday Statistics Canada reported in its economic analysis that there is a slackening of employment growth and that, because of the slowing down of the recovery in the United States, the rate of recovery in Canada may not be sufficient to reduce unemployment substantially in the first half of the year.
In view of the fact that the Minister's forecast is again incorrect in that unemployment rates are higher than he forecast, and the Statistics Canada forecast is even worse, will the Prime Minister direct the Minister to bring in a new Budget containing some changes to help the 1,541,000 people here in Canada who are unemployed? The Prime Minister is a lame duck, and he is now raising his wing toward the Minister of Finance.


Hon. Marc Lalonde (Minister of Finance):: Mr. Speaker, I think the best way to create growth and reduce unemployment would be to begin by passing the legislation that is before the House which deals with a number of measures aimed at creating jobs and stimulating growth which were contained in the last Budget. I would hope that the Opposition would gather its energy together, muster its will, and agree to give early and quick passage to that legislation.


Mr. McDermid:: Where is it?


Marc Lalonde: It is right before the House. There are something like six Bills for immediate consideration which are before the House now.


Mr. Wilson:: Bring them in now.


Some Hon. Members:: Oh, oh!


Marc Lalonde: Mr. Speaker, here is a nice example of the ignorance of members of the Opposition. They do not even know which Bills are before the House at the present time.

May 8, 1984
Oral Questions


John Carnell Crosbie: Mr. Speaker, on February 17, 1984, the Minister of Finance said that his new Budget is not having any effect on the Canadian economy and that that makes him happy. How can legislation stemming from the new Budget have any effect on the economy if the Minister has already said that the Budget has had no effect on the economy? So much for his legislation.


FINANCE
John Carnell Crosbie: Mr. Speaker, my supplementary question is directed to the Minister of Finance. Today the chartered banks have increased the prime bank rate to 12 per cent. In the United States, banks have raised interest rates to 12.5 per cent. So much for Mr. Kaufman's forecast. He is 100 per cent more accurate than the Minister of Finance. Given these increases in interest rates, what action will the Minister now take to try to get the economic recovery moving along again here in Canada?


Marc Lalonde: Mr. Speaker, not only do Members of the Opposition display their ignorance, they are also intellectually dishonest in their analysis of the situation and the statements which have been made. I never said that my Budget would not have any impact on the economy. What I did say was that the Budget was aimed at sustaining the basic trend of the economy which was in full recovery after last year's April Budget, I mean a stable and continuing growing trend in the coming months. The latest Figures made public seem to indicate that indeed we have achieved that stable and continuing growth to which I referred in my Budget.
As to the increase in interest rates, the Hon. Member knows for instance that the bank prime rate went up half a percentage point in the United States today, up from 12 to 12.5 per cent in most American banks. It was inevitable and understandable that certain Canadian banks would raise their prime rate, to 12 per cent in this case, which still leaves Canadian interest rates half a percentage point lower than what they are now in the United States.
Personally, I deplore this latest increase in interest rates, particularly in the United States. That does not leave us the choice to keep our rates much lower than those now prevailing. This concern is shared by most industrialized nations and their Ministers of Finance whom I met with recently. We will have another opportunity to discuss this issue at next week's OECD meeting which will be attended by American Government officials, of course. Together we will try to see whether there is any possibility of finding ways to reduce interest rates, or at least prevent them from rising even more.


MINISTER'S POSITION
John Carnell Crosbie: Obviously, Mr. Speaker, the OECD will not need the Minister for his forecasting ability.
On March 12 the Minister said, and I quote from the Ottawa Citizen:
Interest rates will remain stable for most of 1984 and drop towards the end of
the year.
Interest rates have gone up one percentage point since. So much for the forecasting ability of the Minister or for his scrupulous truthfulness.
How can anyone in Canada, whether an economist or other citizen, have any confidence in the Minister after he has made these consistently wrong forecasts just weeks before interest rates go up, unemployment goes up, and the Minister promises they will go down? How often can the Minister cry wolf without Canadians being completely gobbled up? How long is the Minister going to continue in his portfolio after this astounding display of incompetence?


Marc Lalonde: Mr. Speaker, I have taken extra care to mention every time I have spoken on this subject that the forecasts were what they were, that is, they were an estimation of what might happen in the economy at a particular time. I have indicated many times that they should be seen as such. They were estimations of what could happen and the evidence is systematic-


John Carnell Crosbie: We cannot believe a word you say.


Marc Lalonde: -including the forecasts when the Hon. Member was Minister of Finance. The fact is that the world economy usually develops in a different way than most forecasts, anyway.


John Carnell Crosbie: Resign now!


Marc Lalonde: I can show to the Hon. Member-


John Carnell Crosbie: Do you have his resignation, Mr. Prime Minister?


Marc Lalonde: I can show to the Hon. Member, for instance, that last year Canada knew a rate of inflation which was lower than the one I had forecast, and a rate of job creation which was higher than I had forecast-


John Carnell Crosbie: Tell the unemployed.


Marc Lalonde: -and we knew a rate of growth in the Canadian economy in 1983 which was higher than the one I forecast in my Budget. Therefore, sometimes in those forecasts you will have results which are better than those you have anticipated, and sometimes they will be worse than you have anticipated. What anyone must do is try to work on the basis of the best advice you can get in that regard.
May 8, 1984


John Carnell Crosbie: You are a travesty.


Marc Lalonde: I refer my friend to the forecasts which have been made internationally, and those which have been made by dozens of national agencies in the private sector, and he will find out that the forecasts made by myself as Minister of Finance are very much in line with the average forecasts made in the private sector of the Canadian economy.


John Carnell Crosbie: God help the OECD.


HOUSING
Hon. Roch La Salle (Joliette):: Mr. Speaker, I am always rather fascinated by the remarks made by the Minister of Finance, to whom I would like to direct a question about what he has done and what he intends to do in the months to come, considering the problems Canadians will be facing as a result of high interest rates.
As far as the Canada Mortgage and Housing Corporation is concerned, the Minister of Finance is aware that in recent months there were over 27,000 fewer housing starts than during the last three months of last year. The person responsible for statistics at the Canada Mortgage and Housing Corporation is very concerned about the effect high interest rates will have on the construction industry. Does the Minister of Finance have any suggestions he might like to make to the House for avoiding the same problems this vital sector of our economy was experiencing only two years ago?


Marc Lalonde: Mr. Speaker, I am glad the Hon. Member raised this point. I may remind him that according to the forecast, this year the number of housing units built in Canada will increase at a higher rate than it did last year. We expect that between 160,000 and 170,000 housing units will be built this year.
The Hon. Member may recall that early last year, a number of federal and provincial programs aimed at stimulating construction were operational at a time when we had experienced a very substantial slow-down in the Canadian economy.
Since the Hon. Member is asking whether we have any measures in mind, I would like to ask him, as soon as the Bill is introduced at the end of May, to support our measures to provide insurance against rising interest rates for homeowners with mortgages. I also invite the Hon. Member to support the amendments we shall be proposing to the Interest Act, to ensure that borrowers will be able to pay off their mortgages early if they decide it would be to their advantage to do so.
Oral Questions
These measures were announced in the Budget and will be introduced in the House in the form of legislation at the end of May. I hope we shall have the co-operation of the Opposition so that these measures can then be adopted forthwith.


REQUEST FOR DETAILS FROM MINISTER
Roch La Salle: Mr. Speaker, I have a supplementary. I certainly would like to accept the Minister's invitation. However, he said that his projections would give us 160,000 more housing starts, but according to the results for February, March and April, we have had 26,000 fewer housing starts than last year. Mr. Speaker, I am sure you will understand that the Canadian people may have some doubts about the Minister's projections.
In the circumstances, I would ask the Minister, since he referred to his mortgage insurance program, what the maximum would be for insured rates? That is the kind of information we must have as soon as possible if we want to prevent the recession in the construction industry from getting worse. In the circumstances, I would like to invite the Minister to introduce his Bill as soon as possible, because of the drop in housing starts in Canada.


Marc Lalonde: Mr. Speaker, I have two things to say to the Hon. Member. The First one is that last year, there was a rise in housing construction during the first few months of the year because we had a home ownership stimulation plan that expired at the beginning of the year. Later on, there was a slow-down in the construction industry. This year, we seem to be seeing the reverse, since we had a slow-down in the construction industry at the beginning of the year, and now we hope and we believe that construction will pick up in the months to come, in 1984. That is why we expect to see at least as many housing units this year as last year.
Second, as far as the Mortgage Rate Protection Program is concerned, I must say the Opposition's homework is pretty hopeless. The Hon. Member asked me what the insured rate would be. I indicated this in my Budget. I also tabled in the House a paper providing all the details of this program, and I would invite the Hon. Member to read this paper. He would realize that the program provides insurance and security for both mortgagees and mortgagors, that the program is quite clear and provides the assurances the Hon. Member is seeking.


THE ECONOMY
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I think it is appropriate to give credit where credit is due. As a result of government policy we have seen considerable econom-

May 8, 1984
Oral Questions
ic activity in a certain sector, namely, the corporate takeover and merger sector. Corporate mergers in 1983 were higher than they had ever been in Canadian history. Because this is occurring largely as a result of government policy, I ask the Minister of Finance what benefits do average Canadian citizens receive as a result of government policy which encourages and rewards corporate takeovers and mergers?


Marc Lalonde: Mr. Speaker, we have taken steps over the years to ensure that the takeovers and mergers are not going to be detrimental to the Canadian people. We have done this, first of all by ensuring that foreign takeovers are controlled. Contrary to the view of the Conservative Party which would like to do away with the protection we have for Canadian industry and ownership, we have taken steps to maintain the existence of control of foreign ownership in this country. The Hon. Member knows what the Leader of the Opposition has said in that regard where, for all practical purposes, he would do away with that kind of control of Canadian ownership in this country.


Mr. Hnatyshyn:: You had better check with John Turner.


Marc Lalonde: With regard to takeovers and mergers, the Hon. Member knows that this process is occurring all the time in a free economy. This is a normal process. There are laws under the Competition Act to prevent undue detrimental impact on the Canadian public. My colleague, the Minister of Consumer and Corporate Affairs, has introduced a Bill for which she has asked early consideration. This Bill will provide for additional measures in that regard. Again I invite the Opposition to take note of the Bills before the House, to give them support, and to ensure that we have laws on the books which are completely adapted to the needs of today.


TAX POLICY-EFFECT ON CORPORATE TAKEOVERS
Nelson Andrew Riis: Mr. Speaker, although that answer was very elaborate, I would like to repeat my original question. The Government of Canada has tax legislation which encourages and rewards corporate takeovers and mergers. In other words, it makes it an attractive process. How do mergers and takeovers assist Canadians? In other words, government policy which encourages this must be in place because it is going to have an over-all benefit to Canadians. How do Canadians benefit from corporate takeovers?


Marc Lalonde: Mr. Speaker, first I would like to say that, contrary to what the Hon. Member has said, we do not have a fiscal or taxation policy which favours or encourages takeovers or mergers. We are trying to establish a policy which is neutral in that regard and will not favour or discourage takeovers or mergers.
As far as the question raised by the Hon. Member is concerned, I think we will have to spend time on a first year course in economics. Surely he has heard about rationalization in the industry whereby firms are merging, or are taken over,
in order to become more efficient and competitive in world markets. That is how large firms have been built which, in Canada or other countries, are carrying on large shares of the export market and world trade today. You are not going to take over a large share of the world trade if you continue with corner shop operations. You must have large units which are able to compete in world markets. Surely my hon. friend knows that.


Nelson Andrew Riis: Mr. Speaker, surely the Minister of Finance's hon. friend does not know that.


RATIONALE FOR TAX LEGISLATION
Nelson Andrew Riis: Mr. Speaker, I would like to quote to the Minister of Finance from Mr. McKinley of the Combines Branch of his own Government.


Mr. Speaker:: Order. On a second supplementary question, quotations from documents should be absolutely minimal.


Nelson Andrew Riis: Mr. Speaker, I will not quote from the document. However, officials in his Government suggest that there is no evidence to suggest that the economies of scale that result from corporate takeovers have benefited Canadian society. A major report coming from the United States suggested that, out of 200 reasons that corporate managers have for corporate takeovers, economies of scale rank 198 out of 200.
Based on evidence available which indicates that corporate takeovers do not result in net benefit to Canadian citizens, why does the Minister keep tax legislation in place which encourages and rewards this kind of economic behaviour, this paper shuffling, as opposed to real job creation and economic development?


Marc Lalonde: Mr. Speaker, I already answered this question when I clearly stated that our fiscal legislation neither favours nor promotes corporate takeovers or mergers, but that its objective is to establish a policy which is neutral, allowing the marketplace to decide whether it would benefit from a particular corporate takeover or merger. There is, however, in our tax legislation no provision which would systematically favour or promote corporate takeovers or mergers. We try to make our system as neutral as possible.


FINANCE
Mr. Doug Lewis (Simcoe North):: Mr. Speaker, my question is for the Minister of Finance. The details of the Mortgage Rate Protection Program in the budget papers state:
The interest rate to be protected will be the market interest rate prevailing for the relevant mortgage term at the time the mortgage protection is taken out.
May 8, 1984

The Government has delayed the introduction of this legislation for almost two months, and interest rates have gone up almost 2 per cent. Will the Minister admit to the House that his Department is misleading the Canadian people when it suggests, as it did on the telephone today, that the insurance will be available at the rate at which the mortgage is taken out or renewed, rather than the rate at the time the application is approved?


Marc Lalonde: Mr. Speaker, I told the Hon. Member yesterday that he would have to wait until the bill is introduced in the House. Then, he will be able to find out for himself what legislative provisions are taken in that respect.


REQUEST FOR INTRODUCTION OF LEGISLATION
Douglas Grinslade Lewis: Mr. Speaker, I suggest to the Minister that people who are renewing mortgages want the truth from the Department now. Each day's delay in bringing in that legislation is affecting housing starts, which are dropping. Each delayed housing start costs Canada's housing industry two and one-half jobs. Each day's delay, while mortgage interest rates rise, costs Canadian home owners. On March 20 the Minister said a few weeks. Last week the Minister said the end of May. Why is the Minister delaying in bringing in that legislation?


Marc Lalonde: Mr. Speaker, I answered this question yesterday. I indicated that we had extensive consultations with all the private sector people and organizations in this regard to ensure that the Bill which would be introduced would be a piece of legislation which would address the situation appropriately and would meet the needs of all parties concerned. We have concluded those discussions and are in the process of finalizing the drafting of the Bill.
I am happy to see that, for once, the Opposition will co-operate when this Bill is introduced. I am looking forward to seeing this happen because there are now five or six financial Bills before this House which would be beneficial to Canadian citizens and Canadian industry.


An Hon. Member:: Bring them forth.


Marc Lalonde: They are before the House at the present time and the Conservatives have reneged on an agreement to pass those Bills expeditiously. That is what the Conservatives have been doing in this place.
Oral Questions


CANADIAN ARMED FORCES
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, my question is for the Minister of Defence. Can the Minister of Defence confirm that the gunman involved in the very distressing situation at the Quebec national Assembly is in fact a member of the Canadian Armed Forces, and is a member of the security detail attached to the government bunker at Carp near Ottawa?


Hon.   J.-J. Blais@Minister of National Defence: Mr. Speaker, I would first like to join with you and other Members of the House who offer their condolences and express their views relating to this tragedy.
As I understand it, the gunman has now been captured and is in the custody of the QPP. My information is that he is a member of the Canadian Forces. However, I do not have details relating to the unit. I cannot confirm the unit to which he belongs at this time.


ACQUISITION OF FIREARM-MENTAL STABILITY CHECKS
Harvie Andre: Mr. Speaker, we certainly join with the Minister in offering condolences to those who lost family and those who were injured in that most unfortunate incident.
I realize it is a very short time after the event. However, I would like to ask the Minister whether he can advise the House how it was possible for a private soldier to get a semi-automatic or automatic rifle from the armouries, with ammunition, which is guarded quite carefully. Did his position in fact allow him to have possession of this ammunition and rifle? This would be the case if he were attached to the security unit at the Carp bunker. What kind of security checks are made to determine the mental stability of individuals who are responsible for protecting the Cabinet, Cabinet facilities, and the ultra secret equipment that is a component of that important part of our emergency measures operation? Can the Minister enlighten the House in this regard?
[ Translation]


Hon.   J.-J. Blais@Minister of National Defence: Because I cannot confirm which unit this prisoner belongs to, Mr. Speaker, I cannot determine what security checks he would be subject to or what definite duties he would carry out.
Yet, I can say to the Hon. Member that we are well aware that military personnel have access to weapons of war which by their very nature are dangerous, and that we are taking every necessary precaution to ensure that the people who are using these weapons are mentally stable people. For the time being, that is all I can say, because no other details concerning this unfortunate affair are available.

May 8, 1984
Oral Questions


LABOUR RELATIONS
David Orlikow: Mr. Speaker, my question is directed to the Minister of Finance. I am sure that the Minister knows that in recent years the average increase in wages and salaries for most Canadians ran behind the increase in the cost of living. Last year the average increase in wages and salaries was more than one per cent less than the increase in the cost of living. This is partly because of the recession, and partly because of the kind of lecturing that the Minister has given to Canadians, urging them to show restraint.
Yesterday we were given the news that Canadian executive salaries jumped last year by 12.5 per cent. Dome Petroleum increased them by 42 per cent, Genstar by 86 per cent, and McIntyre Mines by 71 per cent. I suppose it is too much to ask the Minister to plug some of the loopholes in the Income Tax Act, but may I ask him if he could make a speech in the next while urging Canadian executives to show the same kind of restraint that he has asked Canadian workers to show?


Marc Lalonde: Mr. Speaker, first, contrary to what the Hon. Member has said, over the last several years the average increase in wages has been higher than the cost of living. I invite my friend to look at the figures, both in terms of the average salaries and in terms of the disposable income, which is the income after taxes. He will find that, as an average over the last several years, increases have been higher than the cost of living, not lower.
As far as executive salaries are concerned, he mentioned a few specific cases. Obviously I do not have the detailed information on individual firms, but I will be pleased to send him copies of the speeches I have made already on this very subject that have, indeed urged management in the firms to ensure that increases in their level of renumeration were showing the same restraint in line with the restraint that we were asking of workers. I have stated quite categorically that it would indeed be extremely counterproductive and prejudicial if increases in senior management renumeration were to exceed those that they were ready to concede to their workers in general.
I will be happy to repeat those admonitions at any opportunity that I have. I can take this opportunity today to appeal to senior executives to make sure that they will show the same kind of restraint that they are asking their workers to show during these difficult times. I would hope that indeed we will see that average increases like the ones mentioned by the Hon. Member are not happening as a rule among Canadian industries.


DOME PETROLEUM-EXECUTIVES' REMUNERATION
David Orlikow: Mr. Speaker, Dome Petroleum continues to function as a company today thanks to
the bank loans which were guaranteed by the Government. Yet in 1983, Dome, a company which is close to floating in red ink, gave its executive officers a 42 per cent increase in salary and benefits. Does the Minister believe that such extravagance by a government supported corporation is justified and, if not, what is the Government prepared to do to see that executives in Dome and other corporations bring their salaries into line?


Marc Lalonde: Mr. Speaker, the Hon. Member talks about a government supported corporation. I remind him that the Government has not invested a penny in Dome or has not provided any particular support to Dome. There has not been one dollar of specific support given to Dome in that regard under the agreement that was reached with the banks.


David Orlikow: What about bank loans?


Marc Lalonde: That bank loan guarantee has never been called, and the Hon. Member knows that. Again, the Hon. Member would have to examine exactly what transpired in terms of the executive remuneration because as he knows there has been a change of management at Dome. The company was in very serious difficulties and, as a matter of fact, had to go outside of the country to find the kind of management that it needed.
While I do not know the kind of remuneration that it had to pay in this particular case, one would have to look not only at the level of renumeration itself but compare it with what existed before, for instance, with the previous management when there were stock options and other features concerning fringe benefits that are probably very difficult to calculate. I would invite my friend to exercise some restraint himself in reaching conclusions about the particular figures he mentioned.


INDUSTRY
Miss Pat Carney (Vancouver Centre):: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion. Canada's petrochemical industry is a high tech, state of the art industry which upgrades our natural resources into higher value products and sustains more than 200,000 jobs. Yet the petrochemical industry is suffering from excessive taxation which the Liberal Government has imposed on the energy industry. The Minister is aware that this industry has made representations to Cabinet for some sort of tax relief. Is the Minister going to bat for these 200,000 jobs with his Cabinet colleagues, the Minister of Finance and the Minister of Energy, Mines and Resources? Is he seeking reduced taxes in both the oil based and natural gas based sectors of the industry?


Hon. Ed Lumley (Minister of Regional Industrial Expansion):: Mr. Speaker, as the Hon. Member knows, the Govern-
May 8, 1984

ment commissioned a task force made up of private sector people from both management and labour in the petrochemical industry. It made its report several months ago. That report is under discussion now by various Departments within the federal Government.
The Hon. Member also knows that the major recommendation in that report is seeking a reduction in the industrial gas price, which is the responsibility of my colleague, the Minister of Energy, Mines and Resources, as well as the producing provinces. My colleague has had several discussions with his counterparts in the provinces, and I am sure that when he returns to the House the Hon. Member can ask her question then and probably get a more appropriate answer.


Pat Carney: I regret that the Minister has told us nothing which we cannot read in the newspapers.


FOREIGN INVESTMENT REVIEW AGENCY
Pat Carney: Mr. Speaker, again dealing with jobs within the Minister's area of responsibility, Cabinet reviews all the decisions made by FIRA In regard to the plans of foreign companies to invest in Canada. Therefore the Minister must have been involved in the rejection by Cabinet and FIRA of the proposal by Sumitomo of Japan to invest $10 million in a joint venture with Petro-Canada in a B.C. coal mining project.
Considering the fact that British Columbia has a bleak economic future and has the highest unemployment this side of Newfoundland, what steps did the Minister take to ensure participation of Sumitomo and Petro-Canada in this job creating coal mining venture? Why did he reject it?


Edward C. Lumley: Mr. Speaker, I fail to see that this is a supplementary question; this is a question about a FIRA application as opposed to the petrochemical industry inquiry in her original question. But I am pleased to answer the Hon. Member.
First, the Hon. Member knows that it has been a policy of the Government for a long time with respect to new coal mines that a minimum of 50 per cent ownership must be maintained by Canadians. I am surprised that the Hon. Member would be against this particular policy. We did advise the applicant of that requirement by the Government of Canada, and also that Canadian ownership would be respected as required by government policy in regard to additional new coal mines. Mind you, Mr. Speaker, based on some of the comments I have heard regarding FIRA from the Hon. Member's Party, I cannot be surprised at this particular question.
Oral Questions


UNEMPLOYMENT INSURANCE
George Baker: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. As the Minister knows, heavy pack ice on the northeast coast of Newfoundland and other parts of Atlantic Canada is preventing fishermen from being able to get out and fish this year. The fact of the matter is that unemployment insurance benefits will be discontinued as of May 15. Would the Minister give consideration to extending the unemployment insurance benefits for thousands of fishermen so affected? The ice is an Act of God, but this can be seen as an act of leadership.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Ramon John Hnatyshyn: Show some leadership, John.


John Carnell Crosbie: Move over, Pierre.


Mr. Nielsen:: The iceman cometh.


Hon. John Roberts (Minister of Employment and Immigration):: Mr. Speaker, I want to thank the Hon. Member for his accurate assessment of my qualities but, even more important, I want to thank him for drawing to my attention and to the attention of the House this very serious question.


An Hon. Member:: He didn't know about the ice.


John (Moody) Roberts: I did know about the situation because Hon. Members on this side of the House, in contrast to those on that side of the House, drew the matter to my attention.


Some Hon. Members:: Hear, hear!


Marc Lalonde: Tories don't care.


John (Moody) Roberts: It is a serious situation. I will examine how we may be able to respond to it. I understand that some similar situations have arisen in the past, I think in 1974. There may be some other solution which may be equally appropriate, but I will discuss with my cabinet colleagues how we might respond to the situation which the Hon. Member raised.


SPORTS POOL-PROVISION OF FUNDING FOR MEDICAL RESEARCH
Hon. Jake Epp (Provencher):: Mr. Speaker, my question is directed to the Minister of State for Fitness and Amateur Sport. When the Government introduced legislation setting up the sports pool, one of the recipients of possible profit from the

May 8, 1984
Oral Questions
pool was to be medical research, a kind of moral component in what many of us feel is a very questionable enterprise.
Today when the chairman and members of the Medical Research Council appeared before the appropriate committee, they were asked how much money they had been promised from the Government from profits realized from the sports pool. We were told that there were no promises made nor was any money forthcoming. Could the Minister give an estimate of how much money medical research will get from the sports pool, in view of the fact that this was one of the selling points the Government used to set up the sports pool in the first place?


Hon. Jacques Olivier (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, I am happy to reply to this question. As we all know, Bill C-95 was introduced in the House and voted on. The purpose of this legislation is to provide assistance for various activities, including the Calgary Olympic Games, arts and culture, as well as medical research. Needless to say, we shall have to determine the share each recipient will get but we believe at this stage that the direction to be taken first is the direction which we, as the Government, have taken, namely to make sure that the 1988 Olympics in Calgary are a great success. The first amounts will probably be directly assigned to the 1988 Olympics.


REQUEST FOR FIVE-YEAR FUNDING PLAN
Arthur Jacob (Jake) Epp: Mr. Speaker, I have a supplementary question for the Minister of State for Fitness and Amateur Sport. He said in this House that medical research was going to get money from the sports pool. Today he showed very clearly there will be no money for medical research from the sports pool, that it is a secondary consideration.
In view of the fact that medical research has to have long-term planning, such as five-year plans, and if we are to keep medical researchers in Canada we have to put those kinds of plans in place, does the Minister have any plan for the next five years concerning how much money medical research will get from the sports pool?


Joseph Mario Jacques Olivier: Mr. Speaker, as I have already said, medical research is as important for us as amateur sport, arts or culture. It is obvious that we shall take priorities into account. We are committed to help medical research, and we shall support this sector. We are committed to help arts and culture, and we shall support arts and culture, as we are now doing and shall continue to do. We are already providing assistance for medical research. If the Progressive Conservatives want to give us their support, with the tremendous profits that we make, we shall be able to help medical research even more. If the
Members opposite want to co-operate to help amateur sport and medical research, it will be a success for all of us.


Mr. Paproski:: One short supplementary.


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


FINANCE
Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, my question is for the Minister of Finance, if he would return to his seat. The Minister is well aware of the fact that recent increases in mortgage interest rates, particularly in longer term mortgage interest rates, are having a crippling effect on housing starts at a time when record numbers of building trades workers are already unemployed and drawing unemployment insurance or welfare. Given the fact that these high interest rates also effectively deny home ownership to hundreds of thousands of renters, why is the Minister still acting as a lackey of the banks and refusing to cap mortgage interest rates immediately at levels which Canadians can afford, and at levels that will put building trades workers back to work?


Marc Lalonde: For an obvious reason, Mr. Speaker: the solution advocated by the Hon. Member is both naive and counterproductive. Should he care to review the situation, he would realize that imposing artificial ceilings is not likely to renew the confidence of investors in the construction field. What we hope to do is to keep interest rates at the lowest possible level throughout the Canadian economy as a whole, be it in the construction sector, in the agricultural sector, in the small business sector or in any other sector.
I think that the Hon. Member should instead support the Government in its efforts to keep Canada's interest rates below the prevailing American rates, and support as well its efforts and those of other industrialized countries to convince the United States to stop if not reverse current rising interest rates.


Steve Eugene Paproski: Mr. Speaker, I have a supplementary question.


Mr. Speaker:: I will get back to you. Hold it. The Hon. Member for Burnaby.


Some Hon. Members:: Oh, oh!
May 8, 1984


INTEREST RATES CHARGED BY BANKS
Svend Johannes Robinson: Mr. Speaker, the Minister of Finance appears to be agreeing with the recent statement by the Leader of the Conservative Party that Canadian banks are doing a fine job in serving Canadians, which I suppose is not surprising considering the donations of over $250,000 a year which the Canadian banks give to both the Liberal and the Conservative Parties.
Given the fact that a senior official of CMHC this week noted that at current interest levels on a two-year mortgage a person would need an annual income in excess of $34,000 in order to purchase a house, a level far beyond that of my constituents in Burnaby, if not of just about everybody in this country, how much longer is the Minister prepared to stand by and allow Canadian banks to gouge consumers and charge these exorbitant interest rates, before he finally takes action to lower interest rates to levels which Canadians can afford?


Marc Lalonde: Mr. Speaker, I will always marvel at the hypocrisy of the NDP.


Mr. Stevens:: What about your hypocrisy?


Marc Lalonde: The Hon. Member talks about the high interest rates charged by the banks. He could also talk about the high rates charged by the credit unions, the caisses populates, and the other financial institutions. He does not do so. He knows, or certainly should know, that interest rate levels at the present time are very much influenced by events in the United States which affect Canada and practically every other country in the world. If the Hon. Member were here this morning, he could have listened to the President of Mexico who addressed this House, and he could have taken the trouble of talking to the Minister of Finance for Mexico who indicated that a rise of 1 per cent in interest rates in the United States means $500 million more in interest rate payments for Mexico, which is facing severe difficulty and trouble-


Mr. Stewart:: We are not Mexico.


Marc Lalonde: -and just by an increase of 1 per cent in interest rates Mexico loses all the gains it is making by increasing exports. This is the type of situation and the kind of difficult world in which we are living. I invite my friend to come down to earth, realize what difficulties we are all facing as industrialized countries-


Sinclair McKnight Stevens: You just cannot cope.


Marc Lalonde: -and as developing countries at the present time, and encourage and support all Governments to try to convince the American authorities to take steps to reduce their interest rates.


Sinclair McKnight Stevens: At least the Mexicans are coping.
Oral Questions METRIC CONVERSION


DROPPING OF APPEAL BY TORONTO SERVICE STATION OPERATORS
Mr. Bill Domm (Peterborough):: Mr. Speaker, we all learned today that in Toronto Jack Halpert and Ray Christiansen, the two independent gasoline service station operators who are fighting for the freedom to choose between metric and imperial measurement, have announced that they can no longer proceed with their appeal case in the Ontario appeal courts and they will forfeit their award of $41,000 from the Crown because they cannot afford the appeal.
I would like to ask the Minister of Consumer and Corporate Affairs, who has consistently looked for fairness in her assessment of the right to choose imperial measurement, whether she feels satisfied as Minister of Consumer and Corporate Affairs, responsible for the Metric Commission, that the decision to revert to metric only, because a small independent gasoline operator in Toronto cannot afford to go to appeal, is a fair decision on behalf of the Canadian people?
Hon. Judy Erola (Minister of Consumer and Corporate
Affairs): Mr. Speaker, I was not aware that the appeal had been withdrawn. I will have to consult with my officials for more information.


LEGALITY OF IMPERIAL MEASUREMENT SYSTEM
William Henry (Bill) Domm: Mr. Speaker, now that the Minister of Consumer and Corporate Affairs is aware that the appeal has been withdrawn because Mr. Halpert and Mr. Christiansen cannot afford $25,000 to get the $41,000 they were awarded by Judge William Ross in their first case, and now that the federal Government intends to go all the way to the Supreme Court of Canada to win this fight for mandatory metric, let me ask a supplementary question. Would the Minister, on behalf of Canadian people, in order to do what she said she wanted to do, that is, come up with a fair judgment under the Charter of Rights on whether or not it is legal to use imperial measurement, suggest to the Minister of Justice and Attorney General of Canada that funds be made available to these parties as they have been made available to other parties in the interest of the federal Government to win federal court cases?


Hon. Judy Erola (Minister of Consumer and Corporate Affairs):: As I said earlier, Mr. Speaker, I will examine the facts and report back to the Hon. Member.


Mr. Speaker:: The Hon. Member for Edmonton North on a short supplementary.


Some Hon. Members:: Hear, hear!

May 8, 1984
Petitions


OLYMPIC GAMES
Steve Eugene Paproski: Mr. Speaker, my supplementary question is directed to the Minister of State for Fitness and Amateur Sport. It is a very serious question, the fact that today the Soviet Union has pulled out of the Los Angeles Olympics.


An Hon. Member:: Oh, oh!


Steve Eugene Paproski: Faites attention; faites attention.


Mr. Speaker:: The Hon. Member has been given the floor.


Steve Eugene Paproski: Today the Soviet Union has pulled out of the Los Angeles Olympics. In view of the fact that the lottery was set up to help the Calgary Olympics in 1988, what guarantee do we have from the Minister that the Soviets will not pull out of the 1988 Olympics? Has he had contact with the Soviet Embassy?


Mr. Smith:: That is not a supplementary; it should not be allowed.
[Translation}


Joseph Mario Jacques Olivier: Mr. Speaker, to answer one part of the question asked by the Hon. Member, I simply want to state that, in my opinion, it is unfortunate for the athletes throughout the world that some countries have decided to withdraw. These countries made their own decision. With respect to the lottery, I must tell the Hon. Member opposite that this is not a lottery, but a sports pool. In reply to the third part of his question, I will tell him that I leave it to the Winter Olympic Games Organizing Committee (OCO'88) to reach the decision and answer his question.
 * *


PETITION
Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Edmonton-Strathcona (Mr. Kilgour) on Monday, May 7, 1984, meets the requirements of the Standing Orders as to form.



ROUTINE PROCEEDINGS


Douglas Grinslade Lewis: Mr. Speaker, I have the honour to present the third report of the Standing Committee on Public Accounts to which, pursuant to Standing Order 69(13), the committee requests a comprehensive response.
[Editor's Note: For above report, see today's Votes and Proceedings.]


PETITION
Mr. Bud Bradley (Haldimand-Norfolk):: Mr. Speaker, it is my privilege and honour to present a petition signed by some 182 farmers and residents of the Province of Quebec who are extremely concerned with the effects federal taxes are having on tobacco and its related industries in the country. The petition of the undersigned residents of Canada, who now avail themselves of their ancient and undoubted right thus to present a grievance common to your petitioners in the certain assurance that your honourable House will therefore provide a remedy, humbly sheweth that the federal excise tax placed upon tobacco products is a serious threat to employment and economic viability in the tobacco industry in the communities involved.
The petitioners hope that in your examination of the petition, Mr. Speaker, you will find the petition in order and that you will exercise the discretionary powers vested in the office of the Speaker of the House of Commons to allow discussion and referral to a committee at the earliest possible time, in order that employment and economic viability in that region of Canada may be preserved.


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. 560 and 738.


Mr. Althouse: 1.	During the residence of (a) The Right Honourable Pierre Elliot Trudeau in 1979 (b) The Right Honourable Joe Clark in the period 1980 to 1983 (c) Mr. Brian Mulroney, M.P., to the end of 1983, what, if any, was the cost of
May 8, 1984

renovating and decorating Stornoway, the house used by the Leader of the Official Opposition?
2.	In 1983, were any expenses incurred due to the staffing and operating requirements of the residence and, if so, what were they?


Hon. Romeo LeBlanc (Minister of Public Works):: 1. (a)
$133,934.91, (b) $36,443.84, (c) $150,555.34.
2. (a) The Official Residences Act authorizes the Leader of the Opposition to appoint a steward or housekeeper and up to three other employees to manage his residence. Moneys appropriated by Parliament for the operation of the House of Commons may be used for the remuneration and other expenses related to the employment of such persons. Questions concerning these payments should be addressed to the Speaker of the House of Commons.
(b) Operating cost-$43,019.69.


Mr. Waddell: 1.	In 1975, did the then Department of Regional and Economic Expansion make loan guarantees totaling $315,000 to a trust company for the construction of the Riviera Motel in Tracadie, New Brunswick and, if so, did the company subsequently exercise its power of sale on the property and did the Department pay the company $315,000 as guaranteed?
2.	In 1982, did the trust company mentioned in part I dispose of the motel by means of public auction and was this contrary to its agreement with the Department and, if so, did the agreement stipulate (a) the method of sale (b) whose consent was required for the sale (c) the requirement for court action against the owner and, if so, in each case, what were they?
3.	Did the Department take any action to recoup some of the value of the loan guarantee prior to the sale of the property at public auction and (a) if so, by what methods (b) if not, for what reason?
4.	To the knowledge of the government what was the selling price of the motel and did the Government take any action to ensure that the Crown's interests were protected in this sale and (a) if so, what were they (b) if not, for what reason?
5.	Since the sale of the property at public auction did the government take any actions to recover some of the lost loan guarantee and (a) if so, what were they (b) if not, for what reason?
6.	Was any action taken to reprimand those responsible in the Department and, if so, what action?


Edward C. Lumley: 1. Yes. The Department of Regional Economic Expansion made loan guarantees totalling $315,000 to a trust company for the construction of the Riviera Motel in Tracadie, New Brunswick; yes; the trust company exercised its power of sale on the property. Loan guarantee claims in the amount of $300,000 and $15,000 were paid on July 7, 1982 and September 1, 1982, respectively.
2. Yes. The trust company disposed of the Riviera Motel by public auction. The agreement called for the sale of security by public tender or private sale with the prior written consent of the Minister. By virtue of the Property Act of New Brunswick, a power of sale is given to a mortgagee (the trust company) to sell by public auction subject to compliance of certain advertising requirements prescribed in the Property Act. The trust company chose this route of disposal rather than public tender or private sale as specified in the guarantee agreement. The
Order Paper Questions
Property Act does not require that, in the event of sale by public auction, a consent from the guarantor is required.
3.	No. Prior to the sale of the property at public auction, liquidation procedures were the responsibility of the trust company.
4.	To the knowledge of the Department, the selling price was $200. The Department relied on the trust company to ensure that the assets securing the loan guarantees were sold for adequate consideration.
5.	Yes. The Department is currently considering a course of action including, but not limited to, legal action to recover some of the lost loan guarantees.
6.	A departmental review of this case indicated that this is an isolated incident and, therefore, no specific action has been taken against officials of the Department. The Department's procedures for processing loan guarantees have been amended to include a review by senior departmental officials. In addition, a new form of agreement has been instituted providing for a stronger provision when the lender is deemed to be negligent in the administration of the loan.


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


John Leslie Evans: Mr. Speaker, if questions Nos. 559 and 712 could be made orders for returns, these returns would be tabled immediately.


Mr. Speaker:: Is it the pleasure of the House that questions Nos. 559 and 712 be deemed to have been made orders for returns?


Some Hon. Members:: Agreed.


Mr. Robinson (Burnaby): 1.	Since January 1, 1976, how many persons died in penal institutions?
2.	How many such deaths occurred in (a) maximum security (b) medium security (c) minimum security institutions and, in each case, what was his/her (i) name (ii) status in the institution (i.e. inmate, guard, social worker, etc.) (iii) cause of death?
3.	To the knowledge of the Government, by province, how many deaths occurred in provincial institutions and, in each case, what was his/her (a) name (b) status in the institution (c) cause of death?
4.	In each case where the victim was an inmate (a) for what crime or crimes had he/she been incarcerated (b) what was the length of sentence he/she had been serving?
5.	Since January 1, 1976, how many hostage-taking incidents have occurred in penal institutions and, in each case, what was the (a) date (b) number of hostages (c) name of the institution?
Return tabled.

May 8, 1984
3508________________________________________
Financial Administration Act


Mr. Mazankowski: 1.	Is there a National Museum Advisory Council on Grants Committee and, if so, what (a) are its terms of reference (b) is the (i) name (ii) background or expertise (iii) term of appointment of each member (c) remuneration, such as salary or travel expenses (i) do the members receive (ii) did the members receive to date (d) other funding, if any, is provided by the government?
2.	During the fiscal year 1982-83, did the Committee meet and, if so (a) how often (b) how often is it required to meet (c) what matters did it consider (d) what reports and/or recommendations were published?
Return tabled.


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, May 7, 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. Tom McMillan (Hillsborough):: Mr. Speaker, today we are debating the federal Government's Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations and to amend other Acts in consequence thereof. In essence, the Bill recognizes belatedly that the Government has lost control over the hundreds of Crown corporations which it operates. Indeed, some months ago, when asked how many Crown corporations the Government had, the then President of the Treasury Board was unable to answer that question even to the nearest hundred. As it turns out, the Government in fact owns and operates some 500 Crown corporations.
Those companies vary greatly in size. On the one hand there are the huge conglomerates like Canadian National, Air Canada and the CBC which employ thousands of people. On the other hand there are those like the Canadian Saltfish Corporation, which in the private sector would be viewed as a small business, employing somewhere in the vicinity of a dozen to a couple of hundred people. Together, whatever the size of the company, government Crown corporations constitute such a large part of the economy that the Auditor General has
termed them a sub-government, rivalling the Government itself in economic might and impact. The truth is that under the present Government Crown corporations have been allowed to multiply like rabbits and grow like elephants. They are all but out of control.
It is bad enough that there are as many Crown corporations as there are, for all the good many of them do, but many have given rise to the creation of others, often without any authority to do so beyond themselves. Certainly Parliament has little control over their activities, a fact of growing concern to the Auditor General and to many Hon. Members of this Chamber. Now like the proverbial deathbed repentant, the Government has introduced this Bill in an effort to blunt swelling criticism about its lack of action.
Specifically, the Bill seeks to tighten control over Crown corporations by giving the Auditor General the authority he has sought. Moreover, henceforth Parliament will be required to approve the creation and operation of Crown corporations, and more information will be required concerning these companies. In the final analysis, however welcome may be the reforms in question, the Bill merely scratches the surface in holding Crown corporations to account. The legislation gives the appearance of action without delivering any genuine solution.
It is ironic that at the very time the Government was heralding Bill C-24, The Globe and Mail, Canada's national newspaper, was releasing confidential Cabinet documentation making it clear that de Havilland Aircraft of Canada Limited, a granddaddy of Crown corporations if ever there was one, will require hundreds of millions of dollars more in government subventions in the years ahead. Even with such support from the taxpayer, however, the principal product of the company, the Dash-8, is not expected to be marketable unless all kinds of questionable conditions prevail. For example, according to the confidential Cabinet document, interest rates will have to be very low and certainly much lower than they are now. The relevant unions at de Havilland will have to be prepared to accept generous wage concessions that in many instances they will not likely accept. As well, not only the federal Government but the provincial governments and perhaps even some municipal governments will have to agree to buy the product at a premium price.
The Government was not prepared to share such vital and important information with Parliament or with the taxpayers. The information had to be stolen from the Government by the media. Parliament and the taxpayers of Canada were expected to approve blindly the expenditure of hundreds of millions of dollars without having access to any of the basic information upon which judicious decisions may reasonably be made.
Between them, de Havilland and Canadair have soaked up more than $2 billion in federal aid. We on this side support the aerospace industry. We are in favour of research and development and in favour of many other such fields of endeavour. We want to protect and strengthen the jobs in those areas.
May 8, 1984

Elowever, we are puzzled that the Government would announce to the country in March that it was prepared to bail out Canadair by assuming $1.5 billion in debt accumulated by that company through sheer bad management after the plane manufacturer had reported a loss of something like $540 million in 1983 alone.
We have now learned that in the case of de Havilland, rather than firing the top managers, the Government paid them fat bonuses of something like $13,000 each on top of their already generous salaries in the neighbourhood of $125,000 a year. In the case of Canadair, every single member of the board of governors was reappointed even after the responsible Minister, Senator Jack Austin himself, blamed the company's problems on the managers who were being reappointed.
Sir, what is lacking is not the authority to bring Crown corporations under government or parliamentary control, but rather the political will to do so. The Government simply lacks the desire to do anything about the problem. It has no intention of holding Crown corporations to account. The legislation we are debating today is simply window dressing. The Government is so accustomed and inured to spending money and wasting hundreds of millions of dollars that it has long since ceased to know what fiscal responsibility means.
No amount of tinkering with legislation of the kind that is before us today will matter one whit. The process in which we are engaged is nothing more than a charade. Frankly, Sir, every single one of us in the House and in general will be contributing to that charade by voting for this legislation. What is needed is a new government which is genuinely committed to reform, ready to shake up Crown corporations from the ground up, and prepared to abolish those companies whose usefulness has long since passed. We need a government that is courageous enough to expose all Crown corporations, large and small alike, to the harsh scrutiny of auditors and parliamentarians. We need a government and a cabinet that is sufficiently insulated-yes, Sir, insulated-from former policies that they may be hospitable to fresh ideas and approaches.
In conclusion, Mr. Speaker, I would say that instead of experiencing that which I have just described, the very creators of the mess in which we find ourselves are disguising themselves as reformers. That is like hiring the town arsonist as fire chief. Bill C-24 is a sham. The Government's policy on Crown corporations is a sham. If the public wants real reform in this area, it will get it only through the election of a new government. In my view, such an event could not happen soon enough.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, I would like to join with my colleagues in opposing this legislation because it is simply inappropriate for the times. If the Government wanted to introduce a Bill which would have Opposition support, it should have introduced the former Bill C-27 which was authored by the Hon. Member for Welling-ton-Dufferin-Simcoe (Mr. Beatty). That Bill offered real accountability.
Financial Administration Act
I would like to put an argument to my colleagues opposite who are not participating in this debate. We are discussing an area of public life which will affect us for many, many years into the future and one which will affect individual Canadians dramatically. Yet Liberal Government Members are not participating in the debate. I would like to see them stand and answer the concerns that I and other Members on this side are raising because that is what this place is for, Mr. Speaker. It is a place in which we may debate the issues. The opinions of both sides are revealed in this place and out of that comes a collective wisdom that is better for the country. However, Government Members are not standing. Once again, it is a case of the Cabinet making a decision and the individual Members not performing what in my submission is their responsibility as imposed upon them by their constituents.
I always find it wise to go back and look at an issue in its historic context. In the development of Crown corporations, there was a period of time that was known as the infrastructure period and this occurred from about the year 1800 to the year 1930. For 130 years the Government was involved in Crown corporations which dealt with ports, new harbour commissions, a few canals and the CNR. For 130 years those were essentially the only Crown corporations that existed.
After the restrictions and cutbacks caused by the Depression, a few more Crown corporations were formed. For example, the Bank of Canada, a farm loan board, the Canadian Wheat Board and the CBC were set up during that time in response to national sentiments and to counteract actions taken by the Government of the United States.
One might describe the third phase of Crown corporations as the war phase. At that time, the Hon. C. D. Howe set up numerous Crown corporations in order to cope with the demands of war. As well, those corporations were set up in part to avoid bureaucracy during the war and to attract managers who worked as the one-dollar-a-year type of manager. You will probably recall those events, Mr. Speaker. During the war phase, the strategic area of atomic energy was nationalized as well.
During the 1950s and the 1960s, a few Crown corporations were set up, most of which acted in the interests of patriotism. Such Crown corporations as the Canada Council, the CBC reorganization and Expo 67 were set up at that time. I suppose that from 1800 to about 1970 there was a maximum of about 50 or 60 Crown corporations in existence.
Since 1968 we have entered a new phase in the growth of Crown corporations. We have entered a phase of an absolute proliferation of Crown corporations which has given the Government and its executive control over broad areas of our society. I believe we should describe this phase as the socialist phase, and I mean socialist in terms of economics. I do not see socialism existing only in terms of social areas. I have no problem with having us collectively agree that we want to fund schools or hospitals publicly. However, when we start to move into the creation of wealth and the economic side of society and begin to nationalize and socialize through Crown corporations, that is when we become inefficient and block the natural

May 8, 1984
Financial Administration Act
market price signals which cause appropriate change where necessary. That is the problem with socialism and that is what has happened since 1972. There has been almost unlimited growth of marketing boards and nationalization of industries, under which Canadair and de Havilland fall. We have the situation of public servants going out and incorporating companies on their own, without even the Minister of the Department being aware of what they are doing; but the taxpayers have to jump in and get those companies off the hook. There is an example of this in British Columbia and it cost taxpayers something like $750 million.
Every few years Parliament has to write off $400 million, $500 million, $600 million or $700 million for the CNR. Air Canada, which is a well-run company, gets all sorts of privileges. When a company becomes an agent of Her Majesty, it can then obtain money more cheaply than private competitors can obtain it in the marketplace. Air Canada also has a monopoly. While it is well run , it is only succeeding because it still has some 5 per cent debentures in its annual report, and it has an absolute monopoly of many of the major points across the country, including the setting of rates. Therefore, it surely should succeed when it has that type of advantage. We might look at the Dungarvin Forest Service Company, which was set up under B.C. law. That company went belly-up and cost the taxpayers $750 million.	'
All of these Crown corporations-and there are over 400, including the subsidiaries-have the effect of distorting the marketplace. I know that my friends in the NDP dislike this profit motive and the concept of the invisible hand of Adam Smith. Adam Smith did not create the law. He was simply describing the phenomenon that if we do not change the times, and if we do not adopt new technology when our competitors do, the competitor will be able to provide a service to the public at a cheaper cost, and that service will be bought. If we do not change, we will go down.
That principle applies whether in a socialist country, a communist country, or here in Canada. We have not been prepared to face the changes that have occurred in the world. It is as if South Korea does not exist. That has been the public policy of this country. It is as if Japan has not come on. There seems to be a reluctance on the part of the Government to realize that we have to compete in the world and to make that case with Canadians, so that we can adopt high technology and change our educational system. That is what the invisible hand of Adam Smith is. He simply described, as did other scientists, the law of gravity. We might not like the law of gravity, but we still are faced with it as a reality. That is the invisible hand that Adam Smith described. We must always in public policy keep on the cutting edge.
Crown corporations, by virtue of being creatures of government and without the discipline of the marketplace, never fail. For example, we know that if 100 private companies are set up, at least 40 per cent of them will fail, either because of under-capitalization or inefficient management. But, Mr. Speaker, have you ever seen one Crown corporation fail? Never, Mr. Speaker; they simply come back and ask the taxpayers to kick in the money. That is the problem.
When Crown corporations are set up, they should be told: "Here is your mandate; either you make it or you die". I could live with that. But when Crown corporations continuously survive as a result of the infusion of public moneys, I take issue with that and I object to that. Those public moneys are coming out of the pockets of our mothers, fathers, sisters and brothers-taxpayers who are having a very difficult time meeting their mortgage payments and properly educating their children. I disagree with digging deeper into people's pockets to save a Crown corporation.
The reason we are saving Crown corporations is that if the Minister responsible sets a corporation up and that corporation fails, it affects the perception and success of the Minister. Therefore, he will not let that corporation fail. That has been the traditional response of government. When a government sets up a Crown corporation, it ensures that that corporation will succeed even if it takes every cent from every Canadian because it is the reputation of the government or the Minister which is at stake. We must cut through that.
This Bill is purported by the Government to give better accountability. When one looks behind it, in fact it does not perform that duty. I say to my colleagues opposite that they should adopt Bill C-27 which was presented during the Government of the Right Hon. Member for Yellowhead (Mr. Clark) in 1979. That Bill was vastly superior in terms of accountability and setting forth the duties of directors.
When the Cabinet appoints a chief executive officer, the directors are nothing but an advisory, honorific body-a way to transfer money to more government supporters across the country. There should be a statute which puts the responsibility on the board of directors. They should hire the chief executive officer and monitor that chief executive officer day by day. If he does not cut the mustard, they can fire him because it would be their responsibility in law. Even that one change would be a major advance.


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I welcome the opportunity to speak on Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations. As I watched the debate on this Bill unfold, I could not help but ask myself: Why is the Government pursuing this Bill? I asked that question because my colleagues in the Official Opposition have already demonstrated that the Bill is seriously, if not fatally, flawed. It does not, for example, address many of the issues and recommendations of the Estey Commission of Inquiry into Air Canada. Had C-24 been in force in 1977-78, we would not have avoided the debacle that occurred with AECL at that time. In my opinion, if Bill C-24 had been in force, we would still not have avoided the chronic problems we are facing today with Canadair and de Havilland.
It seems to me to be quite obvious that the present Government has little or no real faith in Bill C-24 as an effective curative to the problems we have faced as a nation over the
May 8, 1984

past ten years. On the one hand, Bill C-24 is pointed to as a solution to the problems we face when dealing with the financial management and control practices of Crown corporations. On the other hand, only a few days after Bill C-24 was tabled, the Government tabled the CDIC legislation. This Bill, Bill C-25, is in many important respects in direct conflict or inconsistent with the changes listed in Bill C-24. I ask the House, if Bill C-24 is so good, then why is it not good enough for CDIC? These two Bills must have been drafted at approximately the same time, undoubtedly by the same people. Why the inconsistency? Is it an oversight, or is the Government still uncertain about the best way to proceed? I suspect it is the latter and, therefore, the best solution is for Bill C-24 to be withdrawn until the Government can make up its mind.
We must ask ourselves: Why is the Government pressing on with this Bill at this time? The Government had the problems of managing Crown corporations brought forcefully to its attention as far back as 1974. In the period between 1974-76, I served as the Chairman of the Standing Committee on Public Accounts. The new Auditor General for Canada at that time, Mr. James Macdonell, minced no words about the Government's over-all mismanagement of its affairs. That was ten years ago. Why wait until the eve of an election to bring in a hodge-podge of legalese to deal with one of the most important problems in Canada, namely the over-all management of Canada's Crown corporations? As a nation we cannot continue building up our massive public debt with annual deficits ranging anywhere between $25 billion and $31 billion due to the mismanagement that we see at the top.
In the report of the Auditor General to the House of Commons for the fiscal year which ended March 31, 1976, these words appear in his Financial Management and Control Study:
I am deeply concerned that Parliament-and indeed the Government-has lost, or is close to losing, effective control of the public purse.
In the previous year, the same Auditor General stated, and I quote:
The present state of the financial management and control systems of departments and agencies of the Government of Canada is significantly below acceptable standards of quality and effectiveness.
He stated that he based this conclusion on:
a comprehensive examination of financial management and controls in 28 departments and agencies of government. The examination resulted in 34 recommendations for strengthening and improving financial controls at the central government-wide level and in hundreds of observations and recommendations-
He continues in his 1976 report by stating:
During this second year of the massive special study of financial management and control throughout the Government of Canada which was launched in Mav 1974-	'
And, as I say, Mr. Speaker, that was more than ten years ago:
our examinations have been concerned mainly with the Crown corporations-
At that time Mr. Macdonell reported his findings in these words:
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In the majority of Crown corporations audited by the Auditor General, financial management and control is weak and ineffective. Moreover, co-ordination and guidance by central government agencies of financial management and control practices in these Crown corporations are virtually non-existent.
That was not a very pleasant statement to read, Mr. Speaker. It was an indictment of the present administration. The full results of the two-year study led him to state, in his report to the House of March 31, 1976, as follows:
Based on the study of the systems of departments, agencies and Crown corporations audited by the Auditor General, financial management and control in the Government of Canada is grossly inadequate. Furthermore, it is likely to remain so until the Government takes strong, appropriate and effective measures to rectify this critically serious situation.
The Auditor General, Sir, may just as well have been baying at the moon when one considers the lack of attention given to his recommendations. Surely this Government is not going to try to pull the wool over the eyes of the Canadian people by stating that this Bill represents strong, appropriate and effective measures to rectify a critically serious situation. Unfortunately, it falls far short of providing greater cabinet control over our Crown corporations, and far short, Sir, of providing greater accountability to Parliament.
During my public career I have never been persuaded that the requirements for good financial management and control in Government need to differ at all when compared to those in any other corporation in the country, with one exception. I believe management and control over government corporations should be more stringent, because governments are dealing with what I regard as trust funds provided to them by the taxpayers of Canada to finance operations, whereas in the private sector, many times shareholders put up their own money knowing very well that they face a major risk when so doing.
When I look at the wording of Bill C-24, I can come to only one conclusion, namely, that it is a crass attempt to defuse the Crown corporations issue. In other words, it is simply a political exercise. I cannot believe in all sincerity that the Government would want this Bill to become law. It is simply too full of fundamental defects.
Bill C-24 covers some 183 Crown corporations and subsidiaries wholly owned by the federal Government. Some schedules are revised, some corporations are dropped, while others are rearranged into three categories. However, with all of this magician's hocus-pocus, this waving of the magic wand and holding up of a sheet, Parliament will still see only summaries of corporate plans, operating budgets and capital budgets as they are tabled by the appropriate Ministers. I say to you, Sir, that there is no time limit for the tabling of these Crown corporations' documents and the Treasury Board controls their form, content, budgets and summaries.
In view of all the faults I have listed, I hope that the Government will withdraw this Bill and eventually replace it with one more in keeping with the recommendations which were made by our Auditor General. I could cite some suitable recommendations, Sir, for the consideration of this Government, but that is really unnecessary. When James Macdonell tabled his report-and I was privileged to assist him in its

May 8, 1984
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preparation-there were many helpful suggestions put forward. It was a matter of some concern to me, having worked with the Auditor General very closely during those years, that all of that work appeared to be in vain. It still appears to be in vain even at this late date, more than ten years later, because the actions which he had hoped to see taken, the recommendations which he had hoped would become law, are still being divided and subdivided in this Bill.
Mr. Macdonell laid out the course very clearly. He pointed his ship of state toward the area in which it should go, namely, financial management at the top. In his view, if that course had been followed, we would not be faced with the conditions with which we are faced today in this country, where our dollar is debased, our unemployment is at the million and a half figure and rising, where we have massive deficits and a constantly growing public debt. He hoped to avert all that by assessing the operations of these Crown corporations and by putting forward hopeful suggestions.
In conclusion I say through you, Sir, to the Government that I hope the Auditor General's work was not all in vain and that the Government will withdraw this aberration which is before the House and bring forward a Bill more in keeping with the recommendations which were made by Mr. James Macdonell when he was our Auditor General.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I welcome this opportunity to speak on Bill C-24, an Act to amend the Financial Administration Act dealing with the whole subject of the accountability of Crown corporations.
I welcome this opportunity because of the importance of the subject. First of all, it is important simply because of the sheer bulk of Crown corporations in our economy and in our daily lives. Both provincial and federal Crown corporations affect the daily lives of people in all parts of Canada, and there is widespread concern that there is neither financial nor social accountability built into these Crown corporations. Unlike private corporations which exist primarily to make a profit for their shareholders, Crown corporations are supposed to serve a public purpose. The public purpose, as we all know, can be defined in several different ways.
I was interested to read the remarks of the President of the Treasury Board (Mr. Gray) regarding this Bill when he introduced it in March. He talked about the creation of the CNR by the Conservative Government in 1919, and about that he said, and I quote:
The objectives were to safeguard the Government's large investment in the railways, to protect Canada's image in foreign capital markets, and to avoid potential damage to large segments of the Canadian economy if the three companies (then on the brink of bankruptcy) did not continue to operate.
Beneath those very nice phrases, Mr. Speaker, is the fact that the accumulated companies which were brought into the CNR had accumulated debts of something like $1.3 billion. Through the Act which incorporated the CNR, not one investor lost any of that money, even though they had been investing in worthless stock, in effect. Therefore, basically what was defined as the "public purpose" at that time was to protect the investment community which had been speculating and had
made some very handsome profits out of Canadian lands and grants.
The Canadian National Railways was formed to protect its interests and not the public interest. However, at least today it is publicly owned and it could be made to conform with public policy. The concern of our Party is that the CNR and all Crown corporations should be made to conform with public policy in the largest sense of the word. This does not always happen. For example, Canadian National owns property in the Cowichan Estuary, Lot 160. It is presently involved in some major development on that land which will have a detrimental effect on the estuary and its ability to serve as a fish habitat. When we talk about public accountability, we want to see the broadest kind of accountability whereby Crown corporations will serve not just to earn money or provide transportation, as in the case of the CNR, but also to serve the public interest; in this case to protect the fish habitat. But we are having a great deal of difficulty finding out exactly what CNR's plans are for that area because they are very secretive. We believe that at the very least a Crown corporation, when possible, should be open to public scrutiny. There is absolutely no reason, in this particular case, why they could not be open.
We have a similar situation where the CNR is involved in double-tracking through Indian lands. Again, Indian people are having difficulty finding out exactly what is happening. Therefore, we say it is simply not enough that the CNR was nationalized; we would like to see it socialized as well. We would like to see the corporation serve community interests. Basically, we are concerned that this Bill does not help very much in moving in that direction.
There are many similar examples, and I have a very striking one in Petro-Canada. That corporation is involved in exploration in the area which the Lubicon Lake Band of northern Alberta is claiming. Last December the task force on the churches and corporate responsibility wrote a letter to the Chairman of Petro-Canada Exploration Inc., Mr. Albert Hopper, and I quote from that letter:
We have recently received reports that your Company and others are engaged in exploration, production and development on lands claimed by the Lubicon Lake Band. We understand that this industrial activity is proceeding despite the fact that the ownership of land is in dispute. Moreover, this activity apparently causes irreparable damage to the Band's way of life and livelihood and hence to its cohesion and its ability to survive as a band.
The letter goes on to ask a number of questions:
(1)	Has your company adopted certain principles governing its concepts of corporate responsibility?
(2)	Do these principles pertain to the impact of your company's activity on the social well being of people in areas of your operation?
(3)	What factors have influenced your Company's understanding of its corporate responsibility when faced with the plight of the Lubicon Band?
Would your Company accept the proposition that its corporate responsibility goes beyond what are strictly legal or regulatory requirements and accept, as many other companies do, a responsibility towards predicaments similar to those of the Lubicon Band?
(4)	Would you comment on the charges that the activity of your Company (and others) has the effect of causing irreparable damage to the hunting, trapping and fishing economy of the Lubicon Band? Could you tell us what
May 8, 1984

efforts your Company is making to minimize this damage so as not to destroy the Lubicon Band's sources of livelihood?
(5)	A Globe and Mail article (18 November 1983) states that the Band's legal costs are financed through a bank loan. Should your Company and others press to have the court costs assigned to the Band, the Band's diminished resources might make it impossible for it to appeal the court's decision.
Would your Company contemplate such a step, or would it expedite an appeal to a higher court as a necessary part of a multi-faceted process through which it will be determined if the claims of the Lubicon Band have just cause?
The response from Petro-Canada was very legalistic and did not deal with the substance of the questions that were asked. In other words, Petro-Canada does not wish to be brought to the bar of social responsibility and have to face up to questions about social responsibility.
We have to ask whether that kind of action on the part of Petro-Canada really serves the public interest. We in this Party believe that Crown corporations can serve a very positive role in the economy and in society. Generally we support them but we want to see financial and social accountability built in.
I was rather interested to hear the Conservative Member for Lethbridge-Foothills (Mr. Thacker) talk about his concern that Crown corporations wanted to create wealth by using some of our natural resources and that this wealth would be used to finance social services. We ask: What is wrong with that? What is wrong with the public being involved in developing our economy and using the wealth that is generated to provide a better life for everyone? For our part, we support that principle. We feel that the Government is not doing that, but we support the principle.
The Hon. Member also talked about Crown corporations distorting the marketplace. He made a rather incredible statement which implied that he still believed in Adam Smith's myth of the invisible hand. He does not seem to recognize that the marketplace in today's world is manipulated by giant corporations, that we live in a world of administered prices, and that large corporate takeovers have absolutely nothing to do with the concept of the invisible hand.
We want to see Crown corporations made accountable, because too often they act like other corporations in our society; they end up serving their own interests rather than the public interest. They end up serving Liberal Party patronage rather than the public interest. We find in our constituencies that many people are frustrated and fed up with large impersonal systems and corporations which operate in a blind manner so that ordinary people cannot seem to get a handle on them. Even the management of some of these large systems do not seem to be really in control. We suggest that Crown corporations offer the possibility of an alternative model which could be open, accountable and could serve community purposes. Instead, we have the kind of arrogance typified by de Havilland which has incurred large debts, which have been followed by bail-outs and lay-offs and, incredible as it might seem, by bonuses paid to members of the executive.
The Hon. Member for Vancouver-Kingsway (Mr. Waddell) pointed out last week that de Havilland has top-heavy management. For example, in 1981 there were 3,500 employees on the shop floor and 1,900 management employees. In 1984,
Financial Administration Act
there are 1,300 floor employees and 1,400 management employees. There is a slush fund for management retirees and nothing for the workers except lay-offs.
I received a letter from a constituent who was very concerned because he is fighting to keep a small business operating, at a time when de Havilland is giving bonuses to executives who have lost money.
This Bill does not go far enough, Mr. Speaker. We want to see full financial and social accountability on the part of our Crown corporations. We support the concept of Crown corporations, but they must be made accountable to the Canadian people.


Arthur Jacob (Jake) Epp: Mr. Speaker, many Members of this House have had experience in committee with executives of Crown corporations and with the Ministers responsible in this House for Crown corporations. We find that in many cases Crown corporations are not answerable to the House or to parliamentary committee and, I dare say, in most cases are not even answerable to the Government. This Bill is at best a feeble attempt to try to address that issue. However, Mr. Speaker, I say that Bill C-24 does not go far enough.
The Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly) believes philosophically that the more Crown corporations you have, the better for the economy. I do not subscribe to that viewpoint. When one examines the amount of money that is generated by Canadians in goods and services and the percentage of those goods and services which are taken by governments at all levels, one sees that we have moved well beyond a mixed economy and are moving dangerously close to the point where government will be the chief architect of the direction and planning of the economy. That is a trend which I personally would like to see reversed.
In part, Mr. Speaker, Crown corporations have had a historical value. For example, the Member spoke of the creation of the Canadian National Railways. He will recall that the CNR actually grew out of a number of private railway corporations which were created in the second phase of railway development, especially in western Canada. Those corporations did not find financial success, and the Government essentially created the CNR out of them.
It is interesting to note that not many years ago in the House there was a write off of CNR liabilities. The argument of the NDP was always that the CNR would make money if it were not burdened with these historical debts and if we would write off in excess of $800 million. When we look at the CNR accounts we see that, through the Western Grain Transportation Act, the CNR will have a further windfall of money to enable it to show a profit. I know the same thing applies to the CPR, but I constantly hear the NDP raising the point that Crown corporations can deal with the conditions of the marketplace as well as turn a profit. However, in most cases the evidence is directly opposite. Therefore, if there is not a social
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May 8, 1984
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value to Crown corporations, I believe we should seriously question their economic viability.
Let us take a look at the way the Northern Canada Power Commission operates. Due to bureaucratic red tape and the decision-making process, the NCPC cannot take advantage of the market or project ahead by making provision to meet the demands of the market. In the Yukon and the Northwest Territories there is economic potential, especially in the mineral field. However, we do not have the infrastructure through NCPC to develop that resource because we do not have the power to do so. There are corporations today considering how that kind of corporation could be privatized in order to develop the social goals which the Member for Cowichan-Malahat-The Islands and the NDP generally say are valid. We accept the validity of the goals, namely, the creation of jobs and of an economic basis in Yukon and the Northwest Territories. However, Crown corporations generally are unable to take advantage of the economic realities of the moment and in many ways have not served the developmental aspirations of that part of Canada.
More important, Mr. Speaker, my constituents do not understand how the Government can create more Crown corporations and spin-offs of those Crown corporations and pour money into them and then come before the House and ask for additional financing for them, as in the case of de Havilland. I defy anyone in the House or in the financial markets to know exactly how much more de Havilland or Canadair are going to need over the next 10 years. Our constituents ask us why taxes have to be at certain levels when they are struggling with their farms and small businesses trying to maintain a tax level to stay in business. They read daily about Ministers making statements that Crown corporations will need new infusions of capital.
I suggest to you, Mr. Speaker, that in that regard Crown corporations are competing directly with the private economy. If you take a look at borrowings today you will find that 93 per cent of borrowings in Canada are made by Government. What does that leave the market economy? That is another way in which the Government and Crown corporations compete directly in the marketplace with small business and farmers. There is a double standard, Mr. Speaker. Crown corporations can come to Parliament and get additional funds to support companies that are not viable on the basis that jobs will be lost if this is not done. If you flip the coin, you will find that we are possibly losing many more jobs. Small businesses are not viable. They are not being created because the tax load is such that a person cannot make that kind of investment.
In my experience in the House, Members and Ministers opposite have not told us the number of jobs that are being lost because the Government is in the competitive financial market as well as competes directly with private enterprise in the same field. We also hear the argument that we do not want to be thrown out of the aeronautical field. That is true and I accept that argument. However, if that is the case, why are European countries looking at the cost of joint ventures? They are looking for new financial arrangements in order not to be a
burden on the taxpaying public of those countries. We in Canada somehow feel that the financial resources are limitless when it comes to Crown corporations.
Those of us who have been sitting in committee have seen executive members of Crown corporations come before committee. We know the answers we are getting are not complete.
I am not saying the answers are false; I am saying they are not complete. They may say that they cannot give more information because it would destroy their competitive or commercial advantage or commercial information. How can you have it both ways? On the one hand Crown corporation executives come before committees and say they are answerable to Parliament. On the other hand, they say they cannot answer questions put by Members of Parliament because it might jeopardize their economic or commercial position.
Until the Government presents a Bill which will make Crown corporations answerable to Parliament, and through Parliament to the people of Canada, who are paying taxes and struggling to develop resources and jobs in the economy of Canada, I suggest to Members of the House that Bill C-24 should not be passed.


Mr. Gordon Towers (Red Deer):: Mr. Speaker, in speaking on Bill C-24 my thoughts go back a number of years to the period in time when we were dealing with AECL. At that particular time, one of the members of the committee decided to ask Government officials exactly how many Crown corporations the Canadian Government had control of. The answer to the first question was that it was in the vicinity of 100 or so. Day after day those officials kept coming back for further questions. Every day they came back they had a few more Crown corporations. They were embarrassed. The more Crown corporations they had to announce to the committee, the more embarrassed they were. I would think that today any responsible Government would be terribly embarrassed to count the number of Crown corporations that the Canadian Government has to service 25 million people. After all, Mr. Speaker, what are Crown corporations for? They are not there for their own purposes but, rather, to give service to the people. We now see that the whole system is getting out of control, to the point where it will be a horrendous task for any government to regain control of the Crown corporation system in Canada. Crown corporations are multiplying like rabbits.
Eventually, the sunset clause with regard to any legislation must be reinstated so that legislation can be brought back to Parliament and sustained for the benefit of the people in Canada. Otherwise, the entire system will get completely out of control. This is what has happened to government officials who have attempted to determine the number of Crown corporations that exist in Canada. I do not think that anyone really knows what the number is today as a result of subsidiaries multiplying so quickly.
Let us consider Petro-Canada, which was supposed to be a window on the industry. The House will recall what the then Minister of Energy, Mines and Resources said at the time,
May 8, 1984

that this was the reason this corporation was being established. It was primarily because the Leader of the NDP at the time, Mr. David Lewis, was harping on the subject of corporate welfare bums. Canadians finally became upset about this and decided that perhaps there was something taking place of which they were not aware. However, I maintain that it is not necessary to have a Crown corporation in order to have a window on an industry. That is the responsibility of the Government. We have the vehicle available to us to be able to delve into those situations and determine whether an individual or corporation is making excess profits. This can be dealt with accordingly through the taxation structure.
Instead, the government of the day decided to set up a so-called window on the industry. Some window! According to the latest figures I have, Petro-Canada has 54 subsidiaries under its control. That is how quickly it has multiplied since its inception.
Let me quote from a statement made by the Minister of Energy, Mines and Resources (Mr. Chretien) to the Ottawa Citizen. He said, "Petro-Canada's latest spending spree, its partial takeover of BP Canada Limited", British Petroleum Canada Limited, "for $347 million is simply a good commercial deal". I suggest that the Hon. Minister made a mistake. The Government did not really want to have a window on the industry. What it wanted was to get into the oil business. We now find that Petro-Canada wants to sell off 400 of its service stations in eastern Canada because it does not have any use for them and they are making it go broke.
If Petro-Canada had to operate within the same structure as does any private corporate entity, it would have gone bankrupt long ago. Hundreds of millions of dollars have gone into Petro-Canada to buy Petrofina and then BP. All of the interest was paid for out of the revolving term loan of the Canadian ownership account. It must be great to have a sugar daddy like that, and I am sure that William Hopper is delighted to be fed cash to enable him to continue paying those debts. He must be pleased that he does not have to show his debt equity relationship.
The facts would come out if we had appropriate legislation. This is why the Government must be held accountable for the Crown corporation legislation. We cannot allow the current situation to continue because it will bankrupt us.
I stand to be corrected but I believe that Mr. Hopper is the director of some 23 subsidiaries that are related to Petro-Canada. The latest figure also shows that Petro-Canada has at least 6,900 person years. This massive corporation is just one example of the Crown corporations with which we must cope. Canadians in the future will face havoc if the Government continues to get itself into this dilemma by promoting Crown corporations without having any sunset clauses.
Let us examine Canagrex, one of the most recent Crown corporations. It was brought in by the Minister of Agriculture (Mr. Whelan). I have talked to people within the Department of Supply and Services who were satisfied that they had all the necessary facilities to accommodate the export industry that Canagrex could possibly generate. Such duplication of services
Adjournment Motion
only causes an overlap, which is a major cause of problems for our country. There is too much overlap between departments of federal, provincial and municipal governments, which only creates much frustration.
For example, when two or three corporations are involved in a single project, one cannot make a decision and accomplish something without the approval of the others. This is a situation that is taking place in the country today. It also happens between the federal and provincial governments. For example, it was reported several years ago that there were 600 meetings between the federal Government and the provincial Government of Alberta alone at the ministerial level, employee level and throughout the system. This is what people mean when they talk about a heavy government overburden on the taxpayers. This duplication and overlapping of services must not continue.
I know that I am expressing the opinion of 100 per cent of my constituents as their Member of Parliament in the House of Commons when I say that they would be very happy if the Government were to take the opposite approach and cut down on the number of Crown corporations and the overburden of Government that has been allowed to take place in Canada. Only then will we be able to create a situation in which the taxpayers will be able to carry the load that the Government thrusts upon them.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: 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 Portage-Marquette (Mr. Mayer)-Railways- Grain freight rates (a) Interim adjustment costs (b) Request that Minister review figures; the Hon. Member for Western Arctic (Mr. Nickerson)-Northern Affairs-Lobby against fur trapping industry; the Hon. Member for Trinity (Miss Nicholson)-Housing-Mortgage rate protection plan.

May 8, 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.
Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, it is a pleasure for me to take part in this debate on Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations and to amend other Acts in consequence thereof.
In looking at this Bill, we find that it is virtually a skeleton Bill because most of what will really happen concerning the Government's intentions on Crown corporations will depend on regulations which have not yet been drafted.
We have rejected this unparliamentary approach to legislation so many times in the past that it is hardly worth-while wasting one's breath or devoting a lot of time to it now. Needless to say, this Bill attempts woefully, I suggest, to deal with a problem which is crying out for meaningful reform. All this Bill contains is cosmetic changes that will do nothing to revamp any Crown corporation meaningfully.
The Minister states that Bill C-24 is designed to strengthen the control and accountability of Crown corporations. However, he neglected to tell us that the Bill does not affect all Crown corporations. There are now some 315 Crown corporations under federal jurisdiction, but this Bill, woefully, will deal with only 183. Really, Mr. Speaker, any child can see that this Bill does not come to grips with and does not accomplish what the Government promises. It really does nothing to strengthen the control and accountability of Crown corporations. There is really no comprehensive plan of action to deal with an extremely serious situation. This Bill could have provided the opportunity for a long awaited and necessary reform in an area that is in great need of meaningful changes. But simply put, Mr. Speaker, it does not do the job that it sets out to do.
I am not going to deal with specific examples of the inadequacies of Crown corporations because we have too many examples of this already in the record enunciated by many speakers in the debate. The record of Crown corporations in Canada is anything but good. Very few of them ever show a profit. In fact, last year they lost a total of some $4 billion, which is underwritten by you and me, the Canadian taxpayers. Crown corporations are good examples of why governments should not be involved in business. I grant you that there may be a few essential areas where government must be involved, but really, Mr. Speaker, 315 Crown corporations? That is ridiculous. If this Bill is to be passed eventually, Mr. Speaker,
it should be amended, completely overhauled and completely restructured if it is to do the job and do it properly.
It seems to me that in Bill C-24 the Government is trying to have itself perceived by the people of Canada, and is trying to convince Canadians of it in the Bill, as having Finally gained control over Crown corporations. Crown corporations have been totally uncontrolled for many years, running their own show and oblivious of the fact that they are responsible to the people of Canada. Unfortunately, gaining control over Crown corporations with Bill C-24 is just an illusion and nothing more. It is a bluff by the Government that will not go unnoticed by Canadians. With this Government, Mr. Speaker, government by Order in Council has become a way of life and Parliament has been turned into a rubberstamping organization. That is why we have Bills such as this before us. That is why this Bill gives all the power over Crown corporations not to Parliament, but to the Cabinet. Only rarely does this Government really seek the approval of Parliament when it comes to the expenditure of taxpayers' dollars. That is why we are looking for accountability in this Bill.
There are many deficiencies in this Bill. This Bill shies away from presenting policy on matters of internal government organization. There is no reference to the privileges and immunities of Crown corporations. The Bill does not specify whether or not public servants may sit on the boards of Crown corporations. This Bill sidesteps the suggestion that a parliamentary overseeing committee should monitor Crown corporations. If this were done, Mr. Speaker, the Government could easily avoid the threat of cover-up accusations. It is common sense that if all Parties are involved, there is bound to be less suspicion of underhanded tactics on the part of the Government or Cabinet.
It is our hope to have the opportunity to make amendments to this Bill, which would institute the necessary checks and balances to prevent the Government from running wild. What Bill C-24 now presents nowhere near gives the answers that all Canadians would like to see in bringing some semblance of control over and accountability to Crown corporations. Let us hope that the necessary changes will be made to Bill C-24 that will result in a meaningful Bill, one which it will be possible for all Members of all Parties in the House to support in order to bring Crown corporations at long last under the control of the representatives of Canada's taxpayers.


Nelson Andrew Riis: Mr. Speaker, I am very pleased to have the opportunity to say a few words on Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations. I must say that in listening today to the various speakers I could not help but think of the individual who purchases a bag of apples from the store and, because there is a bad apple somewhere in the bag, takes the whole bag and throws it out. I have listened to speaker after speaker this afternoon, mainly Conservatives, saying how horrible Crown corporations are and how they have failed to serve the people of Canada. I cannot help but think of the eight Conservative Governments that exist across the country and, in terms of total assets, have more in Crown corporations than
May 8, 1984

the federal Government has altogether. I do not understand in a sense the theme of the criticism-


Mr. Blaikie:: It is called hypocrisy.


Nelson Andrew Riis: As the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie) says, maybe there is some ring of hypocrisy in the comments. However, I will not say that necessarily, Mr. Speaker. One of the very earliest Crown corporations in this part of the world, in central Canada, goes back to 1906 when the Conservative Government in the Province of Ontario decided that a Crown corporation should have a monopoly over all the power generated in the Province of Ontario and that that was in the best interests of the citizens of Ontario. The Government essentially established Ontario Hydro at that time. Because of the obvious advantage, I suppose, in having a Crown corporation responsible for such a critical energy resource, we saw similar things in British Columbia under the Social Credit Government, again the establishment of a Crown corporation to oversee hydro developments. There were similar acts across the country. I suppose that one of the most recent was the Conservative Government takeover of Pacific Western Airlines a little while ago, again in the best interests of Western Canadians, as Premier Lougheed said at that time. It was said that the service being provided by the private airline was not adequately serving Western Canadians, at least in the mind of the Premier of Alberta. He decided that PWA should become a Crown corporation.
One could go on and on, Mr. Speaker, and list literally hundreds of Crown corporations that Conservative governments, as well as Liberal and Social Credit governments, have created for one reason or another in the best interest, at the time of creation, of the citizens of a province or, as far as the federal Government was concerned, in the best interest of the people of Canada.
The tradition of Crown corporations is as Canadian as the beaver or the hockey stick. Crown corporations have been part of the economic fabric of the Canadian economy virtually since their inception. I refer to the origin of Crown corporations which goes back to 1841 when the joint Governments of Upper and Lower Canada decided, in the best interest of Canada at that time, that an integrated canal system would benefit Canadians. The Governments of Upper and Lower Canada got together and established a board, which was essentially the forerunner of Crown corporations in the transportation industry. Most recently, of course, and the most obvious is the creation of the Canadian National Railways, again created by and large in an effort to bail out some financially pressed transportation companies, three railroad companies that had grown up at the second stage of the railroad era in Canada and which found themselves in financial difficulties. Because the Government of the day felt it was appropriate that these rail lines be maintained, that the service they provided and the development, particularly of western Canada, was very important, the creation of the CNR as a Crown corporation took place. Since then, Mr. Speaker, we
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have seen many other examples of Crown corporations created to serve Canadians in one way or another.
While I do not want for a moment to suggest that the Bill before us is adequate, that the Bill before us will resolve the problems attached to Crown corporations, I will say that it is at least a step in the right direction. What we have found in Crown corporations is that while certain areas might have been nationalized, they have not been socialized. While Crown corporations are intended to represent the views of Canadian society and to reflect social and economic policy, in more cases than not they act no different from their corporate brothers in the private sector. Their motives seem to be profits only. Their motives appear to be the shareholders, in this case the people of Canada, as opposed to being an arm or a vehicle with which to develop economic policy in the best interests of Canada.
I should like to refer to some Crown corporations which tend to be glossed over in the criticisms Hon. Members have raised in the last number of days. I refer to corporations such as the Canadian Centre for Occupational Health and Safety, the Medical Research Council, the National Museums of Canada, the National Research Council of Canada, the Natural Sciences and Engineering Research Council, the Science Council of Canada, the Social Sciences and Humanities Research Council, the Canada Council, the Canada Deposit Insurance Corporation, the Canada Mortgage and Housing Corporation, the Canadian Broadcasting Corporation, the Farm Credit Corporation, the Export Development Corporation, and Teleglobe Canada. One could go on and on listing Crown corporations, which are not perfect by a long shot but which provide a very valuable service to Canadians.
First, I will refer to the Export Development Corporation. In what position would Canadian exporters be today, in what position would Canadian firms be today, if they did not have an organization like the Export Development Corporation standing behind them to assist in ensuring for their commodities, as they move into overseas ports, some type of supportive financing? In every exporting country in the world today, there are Crown corporations providing that kind of supportive system, the type of financial support needed to compete on international markets in today's competitive world.
I do not understand the critics of this particular Bill. I do not know whether or not the Conservatives would like to do away with the Export Development Corporation. Are they saying that we should do away with the Farm Credit Corporation? It is not perfectly clear, and I do not want to put words into their mouths. While there is a great deal of room for criticism, let us not throw out the baby with the bath water or throw out the whole bushel of apples because one or two are a little rotten or sour.
It has become perfectly clear that Bill C-24 does not go far enough. It is inadequate. When we lump Canadair and Canada Council in the same Bill and say that they are to be approached in a similar way, it misses the point as to how different are those two Crown corporations. For example, it is

May 8, 1984
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imperative that Canada Council remain at arm's length from this institution. When Prime Minister Louis St. Laurent brought in the Canada Council Act, the point he made was that it was important for Canada to encourage the development of the cultural arts at arms length, not to control the development of the arts in Canada. That distinction is very important.
When it comes to accountability, I sat through the sessions when Canadair appeared before the Standing Committee on Finance, Trade and Economic Affairs, only to hear those corporate directors misrepresent and mislead. I would not go so far as to say that they would lie to us, but they certainly misrepresented the information they were presenting. They refused to tell us all sorts of points when specific questions were put to them.
If they are to be accountable, this Bill before us must be altered. While we have a tendency to support the concept of this Bill, the principle of Crown corporations, we certainly have grave reservations about it in its existing form and will certainly be suggesting amendments at the appropriate stage.


Hon. George Hees (Northumberland):: Mr. Speaker, I rise, as have other Hon. Members, to speak on Bill C-24. I should like to say at the outset that I share the many concerns of my colleagues in the Opposition on this whole matter.
The concern I want to express today, however, relates to the lack of accountability of Crown corporations to Parliament. During the Crown corporations hearings before the Standing Committee on Public Accounts in January-February 1978, a committee member expressed the frustrations of many Members of Parliament with Crown corporations. He said:
When it comes to Crown corporations, I feel like I am in a bus, with the windows painted black and the bus is taking me helter-skelter to God knows where.
The essential ongoing role which Parliament must play with respect to Crown corporations is to hold Crown corporations to account for their handling of the public trust and to hold the Government to account for the exercise of its shareholders' prerogatives. To do so requires that Members of Parliament have information about Crown corporations which is relevant, accurate, comprehensive and provided on a timely basis. What happens all too often is that Members of Parliament do not receive any information at all or, when they do, it is irrelevant, inaccurate and too late.
In his 1982 annual report to Parliament, the Auditor General found that "timely" information on Crown corporations is often not made available to Parliament. Under the Financial Administration Act, Crown corporations are supposed to provide their annual reports to the Minister within three months of the end of the fiscal year. The Minister then has to table the report in Parliament within 15 days.
The Auditor General has found that in 1982, 64 per cent of the annual reports of Crown corporations were tabled after this deadline. It took 54 per cent of Crown corporations over six months to have their annual reports tabled after the end of the fiscal year-54 per cent took six months or more! Is that
timely information? The Auditor General also found that in 1982 only two capital budgets of Crown corporations were approved prior to the year to which they applied and were tabled in Parliament. Most capital budgets of Crown corporations were approved during or after the year to which they applied. The 1982, capital budgets of 10 Crown corporations were never tabled in Parliament, according to the Auditor General's 1982 report. Is this the way to provide timely, accurate, comprehensive information to Parliament? What penalties or sanctions were taken against those Crown corporations or Ministers who failed to fulfil their statutory duties to provide information to this House? The answer is none, absolutely none. That demonstrates how serious the Government's commitment really is to reforming Crown corporations.
Since 1976, the Auditor General has frequently been critical of the quality and integrity of information provided by Crown corporations through their often glossy and expensive annual reports. The Government alleges that Bill C-24 would result in Parliament receiving much more and much better information about Crown corporations. What nonsense, Mr. Speaker. In fact, in many respects Bill C-24 goes in precisely the opposite direction.
Let us take a look at the facts. Under Clauses 99 and 154 of the Bill, the Minister can withhold from Parliament a directive to a Crown corporation if, in the Minister's opinion, the directive contains "commercially detrimental information". The Minister alone makes that decision. There is no appeal.
Under	the	current	Financial	Administration	Act,	all
Schedule C corporations and some Schedule D corporations are to submit operating budgets for approval by the Government and for tabling in Parliament. Under Clause 131 of Bill C-24, only those corporations requiring a parliamentary appropriation are required to table an operating budget in Parliament.
Under	the	current	Financial	Administration	Act,	all
Schedule C and D corporations are to submit capital budgets for approval and for tabling in Parliament. Under Clause 132(2) of Bill C-24, all corporations which fall under Schedule C-l must submit capital budgets, but corporations which fall under Schedule C-ll need submit capital budgets only if the Treasury Board so directs.
Under Clause 130 of the Bill, corporate plans from all Crown corporations are submitted for the approval of the Government. However, only summaries are prepared by the corporation and tabled in Parliament. In other words, the corporations and Ministers will decide what Parliament should or should not know about the content of corporate plans.
Under Clause 154(5) of Bill C-24, Orders in Council approving, first, the incorporation or acquisition of subsidiaries; second, remuneration for directors, chairmen and chief executive officers; and third, corporation plans, are exempted from the authority of Sections 24 to 26 of the Statutory Instruments Act. This means that they are not public docu-

May 8, 1984

merits and are not automatically referred to the Standing Committee on Regulations and Other Statutory Instruments.
Although Bill C-24 goes to some length to define deadlines by which reports, budgets and plans are to be tabled in Parliament, it provides for no sanction whatsoever for a Crown corporation which ignores or breaches those deadlines. The situation identified by the Auditor General to which I alluded earlier is therefore completely ignored by Bill C-24.
I could go on and on, Mr. Speaker, to say how Bill C-24 diminishes Parliament's access to relevant, accurate and comprehensive information concerning Crown corporations. In that respect, Bill C-24 proposes a regime that is worse and not better than the status quo. In tabling this Bill, the Government has once again demonstrated its contempt for Parliament and its penchant for secrecy.
I have only one paragraph left, Mr. Speaker. To return to the metaphor I used at the beginning of my address-


Mr. Deputy Speaker:: Order. Order, please. The Hon. Member can only be allowed to continue his remarks with the unanimous consent of the House because his time has expired. Is there such agreement?


Some Hon. Members:: Agreed.


George Harris Hees: Mr. Speaker, I thank my colleagues for their generosity. To return to the metaphor I used at the beginning of my address, Bill C-24 paints the windows of the bus even blacker and hurries us toward a precipice of more Canadairs, more de Haviilands, more AECLs, more sports corporations and more money being wasted by Crown corporations, with little or no scrutiny or control by Parliament.


Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, I am pleased to be afforded the opportunity to address the House on Bill C-24 this afternoon because it is a Bill which deals, at least in part, with a very important issue. What I regret very much, however, is that the Government, apparently being cognizant of the problem, has failed to go far enough in its attempt to resolve the problem.
The problem is that Canadians are deeply distressed, first, by a general lack of accountability that they believe permeates the entire parliamentary process and, second, by the growing number of Crown corporations which have appeared in recent years and by the fact that those Crown corporations appear to act in a manner which is almost beyond the comprehension of most Canadians and perhaps even beyond the comprehension of most parliamentarians. The difficulty causing this problem is that there is a lack of information being made available to the public regarding the nature and number of Crown corporations, regarding their methods of operation and, indeed, regarding the very purpose of their being.
I find it almost unbelievable that there is a lack of awareness among the public about the number of Crown corporations which exist, because these Crown corporations are in themselves economically significant. In many cases, they represent a drain upon the public purse. As well, new Govern-
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ments which have come to power have found it difficult for a number of days and indeed for a number of weeks to determine exactly how many Crown corporations and their subsidiaries exist. This indicates that there has been an unfortunate failure on the part of the Government to make available to the public sufficient information to permit the public to appreciate the purpose and operations of Crown corporations.
Unfortunately, Mr. Speaker, the Bill that is before us today addresses the administration of only 183 Crown corporations out of the total number of Crown corporations which exist. Members who have spoken today have referred to the fact that there are 315 Crown corporations in existence. I have heard other Members on other occasions use different numbers. The public is left at sea. It is simply unaware of how many Crown corporations exist.
I believe that the Government has taken a tentative step in the direction of trying to convince the public that Crown corporations will be more accountable, but it has failed to ensure that there will be sufficient accountability for the public to feel confident about the Government's administration of this problem. Many Canadians would be quite content if there were some way for us to reduce quite substantially the number of Crown corporations which exist. In fact, many Canadians would like to see that happen. One of the reasons why they are so opposed to Crown corporations is that they believe that these institutions have failed in the past to be accountable to Parliament and to the public.
As well, Canadians are deeply distressed by the fact that they know very little about the affairs of Crown corporations, including the highly publicized ones like de Havilland and Canadair, two Crown corporations which have been in the public eye in recent weeks. It has become apparent to Canadians, who believed that they understood the financial doings of such Crown corporations, that they are in fact unaware of important statistics and have perhaps even been misled by those who are responsible.
What we need is a complete overhaul of the entire structure of all Crown corporations which exist. We need an intensive examination of the reasons for their creation in the first place. We need an intensive investigation to determine whether or not they are fulfilling the purposes for which they were intended. We need an opportunity to determine whether or not Crown corporations are being operated in a proper administrative manner that is, in a competent and business-like manner. We also need to determine whether or not they are, in fact, fulfilling some important function.
Some of the better-known corporations are very much under public scrutiny. The lesser-known corporations, of course, operate almost in ignorance-the public is almost ignorant of their very being. This Bill unfortunately does very little to offset public concern. For example, the Bill will ensure that it is Cabinet rather than Parliament which will have access to vital information. There is nothing in this Bill which will compel Cabinet to make the information available to Parlia-

May 8, 1984
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ment and hence to the public at large. Unfortunately, this Cabinet and other Liberal cabinets in the past have demonstrated a very definite inclination to ignore Parliament and to ignore public opinion. Whereas Cabinet responsibility under an older political system would have ensured parliamentary awareness of important and vital decisions, we do not have that kind of assurance any longer.
What we need is a system whereby the operations, the day-to-day administration and the books of Crown corporations worthy of public support, are open to public scrutiny. That means, of course, that they must be fully accountable to the Parliament of this land. It is not enough for summations of financial statistics to be made available to Parliament. Detailed estimates should be made available to the appropriate parliamentary committee. As well, we need the assurance that no new Crown corporation will be established without parliamentary scrutiny and without parliamentary approval. Hon. Members of this House know that it is possible under the proposed legislation for new subsidiaries to be created under existing legislation without reference to Parliament. Also, new Crown corporations could be created with only a minimum amount of reference to Parliament and, hence, to public opinion.
Therefore, there is nothing in this legislation which will dispel the immense amount of public antipathy which exists. There is nothing in the legislation which will reassure Canadians that someone is responsible to Parliament and hence to the public, that someone in fact is in charge of the ship. If we use the analogy of the rudderless ship, there is a feeling that somehow or other the whole concept of Crown corporations has gone astray from its original purpose.
Previous speakers have referred to Crown corporations which were introduced early in Canada's history, at a time when there was widespread appreciation of the need for such particular institutions. However, those Crown corporations were created in response to a specific need. They were created at a time when the purpose and the administration of those Crown corporations were subject to public scrutiny, today, we have a situation whereby individuals operate in secret and have the capacity to create new Crown corporations that are permitted to continue to operate almost beyond public reproach. As a result, as has been stated, those Crown corporations were permitted to accumulate an operating deficit of approximately $4 billion last year. As a result of the method in which those Crown corporations have been permitted to operate, without being subject to parliamentary and public scrutiny, we are virtually unaware of the reasons for those losses. The public remains unaware as to why the losses were incurred and in what enterprises they were incurred, and they have no awareness of the economic or perhaps social benefits which could be derived from such government activity.
One of the reasons why I think there is so much dissatisfaction with the entire political process today is that we have permitted an immense bureaucracy to evolve within Canada. I think that Crown corporations are part of that bureaucracy in a general sense. We permitted the public bureaucracy to
evolve within Canada and we permitted it to operate in such a way that the public, unfortunately, has lost confidence in it. As a result of the public's having lost confidence in that bureaucracy as well as in the Crown corporations, the public is growing extremely apprehensive about the entire parliamentary and political process. The danger in permitting that lack of confidence to continue is that, without support for this institution, the very essence of the democratic process is in danger. The essence of democracy is the principle of accountability. We must do everything to ensure that that principle continues.
Therefore, this Bill is a bad Bill because it misleads the public into believing that henceforth, if the Bill is passed, it would ensure that accountability. This Bill does not go far enough. It is bad legislation and must be amended before it can be improved.


Mr. Charles Mayer (Portage-Marquette):: Mr. Speaker, Bill C-24 is indeed an important piece of legislation. It is important in the context of the tremendous number of Crown corporations in Canada. In fact, I am given to understand that the Government does not know precisely how many Crown corporations it has. If the Government does not know how many Crown corporations it has, then it becomes all the more important that the legislation be effective to deal with their operation.
I listened with interest to the Hon. Member for Northumberland (Mr. Hees) who spoke previously. He is a very distinguished and senior Member of this House. He referred to information being relative, accurate and too late. It reminds me of the story of the economist who was good in handing out information that was relative, accurate, but totally useless. That is how many of us view the legislation in front of us. It is not simply that we want to be critical of the Government for the sake of being critical, but many speakers, on this side, in fact the spokesman for our Party, the Hon. Member for Calgary South (Mr. Thomson), laid out some very useful and helpful suggestions on ways in which the Government could use legislation like this effectively to bring about its intended purpose.
The name "Crown corporation" has an interesting connotation. The Bill begins by saying:
Her Majesty, by and with the advice and consent of the Senate and House of Commons-
I am not sure that Her Majesty, if she knew everything that was being carried out in her name, would be very pleased about it. One cannot help but make that kind of observation. What is most important for anyone, including government, to bring to his job is the right attitude. If the Government really wanted to control Crown corporations and to see that they function according to their purpose, it would have had a different attitude. I would like to cite VIA Rail as an example. VIA Rail was created on a $1 vote. We do not have a Bill which is called, "VIA Rail". Therefore, there is no precise, easy-to-look-at terms of reference for VIA Rail. What is VIA Rail's mandate? In the last Estimates we saw that it is costing the taxpayers of this country $700 million or $800 million.
May 8, 1984

That does not require an Act of Parliament; it simply requires a change of attitude on behalf of government as to how it views and how it wants to make use of Crown corporations.
It is fine to have legislation. I do not think this is, by any means, perfect legislation. It is flawed in many ways and there have been many speakers who have pointed out why the legislation is flawed and why we are concerned about it. But even if it were first rate legislation that did not have the flaws, which we have tried to point out to the Government, the most important thing we could bring to any venture would be our attitude. I would like to suggest that that is one of the most important things which is lacking in this Government-the attitude which it takes toward its job. Its job is to see that the tax dollars which it collects from the many citizens of this country are spent in the best possible way.
I would like to talk about the regulations in the Bill. There is another point which needs to be made, and that is, that the more any government tries to do, the less control people have over it. If a government tried to do everything for the people, and they still had only one vote every four years by which to judge that government, that would mean that the people would have one vote to judge it on everything. The point is that the more a government attempts to do on behalf of the people of this country, the less control citizens of the country have over it, because they only have one vote on average every four years, or thereabouts, to pass judgment on everything the government does. Therefore, the more government does, the more that one vote at election time becomes diluted over all the issues with which the Government has dealt in the ensuing term. That is a concern. And when you see the amount of regulation being put in place with this Bill, which hands over the real power to Cabinet and by Order in Council, it further dilutes the control of the people, because it takes away what we should be doing in this House and in committee.
Over two years ago we began a process in this House which was designed to improve accountability, to improve the functioning of the House, and to improve the way the committee system works. I was part of that Special Committee on Standing Orders and Procedure which, I believe, in many ways, made some very useful suggestions as to how this place should conduct its affairs in a more appropriate and efficient fashion. Yet what did we see? We saw in many cases the recommendations of that committee thwarted by the present Government simply because of the attitude it took toward some of the changes which were recommended.
That is what is happening here, Mr. Speaker. When you have a committee of Cabinet which is able to appoint the board of directors, the chief executive officer, and, in the case of Canada Mortgage and Housing Corporation and Canada Post, even appoint the vice-chairman of a Crown Corporation, what does that do to the accountability of that Crown corporation to the House of Commons? It does absolutely nothing.
It was pointed out previously by the Hon. Member for Brandon-Souris (Mr. Clark) that one of the ways to control
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anything in this world is to have a handle on the financial matters. One of the ways to do that with Crown corporations is to regulate the amount of borrowing which they are able to do. Clause 100 in the Bill gives, at least on first blush, control of the borrowing power of any Crown corporation over to the Minister of Finance (Mr. Lalonde). However, Clause 135(4) states:
The Governor in Council may, on the recommendation of the Minister of Finance, make regulations
(a) exempting a specified Crown corporation or a Crown corporation of a
specified class from the application of subsection (3)-
Subsection (3) simply says that a Crown Corporation cannot borrow unless the Minister of Finance approves. Yet the subsequent subsection dilutes the whole provision so that, with the approval of Cabinet, that Crown corporation can borrow and incur debt and carry on its affairs in spite of what appears to be a good clause, Clause 100, which would limit the amount of borrowing by any Crown corporation. Those are some of the things which are disconcerting about Bill C-24.
VIA Rail is an important institution in this country. It is important because the railways have played a historic role in the settlement of our country. Many of us from the west feel particularly strongly about it because distance is greater in the west, and when we see a Crown corporation like VIA Rail, which can operate without any mandate and incur the kinds of deficits it has without any instructions from the Government on what its mandate should be, it really makes one wonder how serious the Government is about addressing the problems of this Crown corporation without bringing forward, first of all, a VIA Rail Act.
It seems to me we can make the same case with CDIC. If the Government was really serious about doing what it should do with Crown corporations, it would, first of all, approach some of these Crown corporations and give them a mandate so that we may know how to judge them and what kind of guideposts they can be measured against. In the specific case of VIA Rail, we see that without a mandate it can abandon some of its passenger lines and then talk about bringing them back. How is this Bill going to affect VIA Rail when its executive officers ask for additional money to provide the services that we understand the Minister of Transport (Mr. Axworthy) is going to ask VIA Rail to provide? How is it going to be affected by this Bill? We are not told. We are simply turning over more regulation, more power and more latitude to the Cabinet to make regulations by Order in Council away from the House of Commons regarding the manner in which some of these Crown corporations should carry out their affairs.
I would like to suggest in closing, Mr. Speaker, being aware of the attitude of the present Government, that what this Bill is really going to do is to make Crown corporations if anything more exempt from examination by the House of Commons, more autonomous and independent of the committee system, and it will give them wider latitude in operating free of Parliament and free of the control of the ordinary citizens who vote and send us to this place to represent them.

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Harvie Andre: Mr. Speaker, Bill C-24 is a rather pathetic attempt to come to grips with what is a very serious governmental problem, namely, the fact that Crown corporations are basically out of control. Billions of dollars of taxpayers' assets are tied up in these Crown corporations, yet to all intents and purposes they have no democratic control over these Crown corporations. My colleague, the Hon. Member for Red Deer (Mr. Towers), earlier related to the House the difficulty the Government had in even establishing the number of Crown corporations, let alone in controlling them. It did not even know the number of its own Crown corporations.
I suppose, Mr. Speaker, one has to ask oneself how the heck this happens? Why are there so many Crown corporations? Why have they been allowed to proliferate as they have? I believe that if one asks oneself that question and looks for the answer, one will find that the fundamental reason is that Crown corporations are a wonderful thing for an irresponsible government. They really are a wonderful thing because, if perchance a Crown corporation does something which is good and beneficial, or is perceived to be good and beneficial, the government can take credit. If, on the other hand, the Crown corporation fouls up, well, it is not a part of government. It is there on its own. The Minister avoids any acknowledgement of its existence.
Let me give you, Mr. Speaker, two examples in that regard. I recall the time when the leadership candidate, the current Minister of Energy, Mines and Resources (Mr. Chretien), was Minister of Industry, Trade and Commerce, and Canadair produced this marvellous executive jet called the "Challenger". You could not watch a television program, see a magazine or a newspaper which did not have a picture of the Minister in front of a Challenger jet talking about this wonderful Crown corporation which was at the peak of technology with this tremendous product which was going to make us billions of dollars. A few years later, when the Auditor General pointed out exactly what Canadair was doing and how many billions of dollars we were going to lose, you could not find a Minister of the Crown who would admit having heard the name "Challenger", let alone accepting responsibility for that foul-up costing billions of dollars.
I would like to point to Atomic Energy of Canada Limited, Mr. Speaker. I recall when I was debating the Petro-Canada Bill, the royal commissioner Donald Macdonald was talking about how marvellous Crown corporations were and he talked about Atomic Energy of Canada Limited which had just sold a reactor to Argentina. He said, "You reactionary Tories, can you not see how wonderful Crown corporations can be?" When the Auditor General pointed out three years later that that deal was going to cost us $250 million, that there was no profit, and that an illegal bribe was made to get the contract, again you could not find a member of that Liberal Government who would admit to knowing the name of Atomic Energy of Canada Limited, let alone accept the responsibility which should be theirs.
That is the fundamental reason, Mr. Speaker, that we have so many Crown corporations. It allows that irresponsible bunch over there to avoid the responsibility of the depletion of the Treasury and the wasting of billions of dollars of our money. That is why Crown corporations exist and that is why we need something much better than Bill C-24 to bring them under control.


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



PRIVATE MEMBERS' BUSINESS-MOTIONS

[Stage Direction]
[ Translation]
["There have been some compromises made. First, the United States invited Canadian scientists to study the matter. I think we should have taken them up on that invitation. However, the decision not to do so was a political decision. I believe we erred by not accepting that invitation.\nThe Americans then proposed a closed waterways system. To their credit, the Americans have suggested compromises for our benefit. Unfortunately, at the time of the proposal of the closed waterways system, the Americans wanted to save millions of dollars by doing it on the cheap, and therefore the closed waterways system was not very safe. As a matter of fact, it turned out to be worse for us than what had been suggested in the first place.\nIf those are the proposals of the Americans, they do not give us any great faith in them. The Americans proposed the formation of a technical committee, and I give them full credit\nfor that proposal because it seems that they are going to go ahead with the project notwithstanding what was done in Canada. This joint Canadian-American committee has been formed and it assures us that it will stand on guard, for want of a better word, because it cannot do much else. It assures us that it will stand on guard against the malfunctioning of the screen, the implementation of phase II, and the introduction of parasites into Canada. However, such treaties have existed with the United States since 1909. I believe it was in 1909 when the original trans-boundary water treaty under which the IJC functions was introduced. Since that time, not only the Americans but also the Canadians have polluted the water system.\nI will begin with the pollution that originates in Ontario. Ontario puts 263,000 tonnes of liquid industrial waste into the water system per year. Every day, Ontario puts 34,000 tonnes of dissolved solids, 127 tonnes of heavy metals, 18 tonnes of phosphorus, 118 tonnes of oil and grease, 12 tonnes of phenol and 3,000 tonnes of chlorides into the water system. In Thunder Bay, millions of tonnes of asbestos fibres are being put into the water system. In the St. Mary's River, there are phenols, oils, cyanides, sulphides, zinc, ammonia and iron. The St. Clair River system contains ammonia and lead.\nWith all this going on, I commend the motion of the Hon. Member from the New Democratic Party because someone must stand on guard. I am certainly not going to leave it to the American Government."]
The Acting Speaker (Mr. Herbert):: Shall all orders and items preceding No. 100 stand?


Some Hon. Members:: Stand.


The Acting Speaker (Mr. Herbert):: Stand, by unanimous consent.
OO)

Before we proceed to the motion, may I draw the attention of the House to the fact that last week the Chair expressed some reservations as to the content of certain motions proposed for debate during Private Members' hour. Again today before the House is a motion which contains detailed provisions which might more properly be advanced during the course of debate. The Chair will propose the motion to the House so that debate can proceed. I would, however, invite all Hon. Members when drafting their motions for the Order Paper to pay particular attention to citation 423 of Beauchesne's Parliamentary Rules and Forms, which reads:
A motion should be neither argumentative, nor in the style of a speech, nor contain unnecessary provisions or objectionable words. It is usually expressed in the affirmative, even where its purpose and effect are negative.



Mr. Terry Sargeant (Selkirk-Interlake) moved:: That, in the opinion of this House, the government should consider the advisability of taking those measures necessary to ensure that there is no damage caused to the Manitoba environment by the completion or construction of the Garrison Diversion Unit in the State of North Dakota and, that such measures to be considered include:
May 8, 1984

1.	Continuation of diplomatic action to have the Garrison project amended so as not to affect the environment of Canada;
2.	The offer of legal and technical assistance to those citizens groups in Canada now striving to halt the progress of the Garrison Diversion; and
3.	The bringing to trial in the World Court, the government of the United States, should Canada be unsuccessful in its efforts to receive satisfactory assurances regarding the future safety of the Canadian environment.
He said: Mr. Speaker, it is a pleasure once again to rise on a motion in this House to discuss this issue, which is very important to all Manitobans. This motion is similar, if not exactly the same, as the one I had on the Order Paper throughout the last session of Parliament. Indeed, it was debated on at least two occasions. I must admit that from what you have said I am not quite sure what is wrong with the motion, but I will get some direction from you on that at another time so as not to make the same mistake again.
I would like to point out, before I get into debate, that if I were submitting this motion again I would very likely take out the third point regarding the world court. I would hate to have to see us ever resort to that, because it would be an admission of complete defeat, at which time the Manitoba ecology would be subject to the kind of destruction we do not want to see happen. In addition, given the recent American attitude towards the world court, it may not be an effective move.
In any event, I would like to point out that the very first time I took part in debate in the House of Commons back in October or November of 1979 when I first came here. I asked questions, during Committee of the Whole, on a fisheries motion having to do with the Garrison issue. It is a subject matter to which I have paid attention and which I debated in this House on a number of occasions over the years. A lot of things have changed in that time Mr. Speaker, but one thing I can say has not changed is the fact that I am still as strongly opposed to the completion of the Garrison Diversion unit as it is presently designed as I was five years ago. This issue, I believe, is probably the single most important regional issue I have dealt with during my time in the House of Commons. There is a lot at stake here. Manitoba's fishing industry could be severely damaged if the project were to go ahead as planned. Jobs could be lost in that industry and in the tourist industry. The ecology of Manitoba's lakes and rivers could be irreversibly transformed. Needless to say, it will have a lasting effect, perhaps a disastrous effect, on my riding if it goes ahead as presently planned.
In preparing for the speech today, Mr. Speaker, I looked over my previous questions, statements under S.O. 43 and speeches, etc. on the Garrison. I discovered that I had risen in this House on 14 different occasions concerning this subject. As well, I have attended countless meetings in the Province of Manitoba and travelled to Washington on, I believe, four occasions to discuss the issue with members of the American Congress in order to share my concern and the concern of all Manitobans, regardless of political stripe, on this very important issue.
Over the years, Mr. Speaker, all of us have become increasingly aware of the very delicate balance which exists between nature, our ecology, and the industrial society we have created
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throughout most of the northern world. We have learned how fragile our rivers, streams and forests are, and how easily damaged they can be. Of notable concern is an issue which has received a lot of attention in Canada in recent years. We have seen in recent years acid rain turn living bodies of water into stagnant and worthless cesspools. Most Canadians concerned about acid rain have really wished over the years, as we continue to wish today, that our neighbours to the south shared the same concern about it that we have here in Canada. The same thing applies to the Garrison issue, Mr. Speaker. It must be dealt with between the Governments of Canada and the United States. We can see that more Canadians than Americans are concerned about this issue. They do not seem to share our particular concerns about Garrison.
Unlike the acid rain issue, Mr. Speaker, the effects of Garrison would be not largely the result of chemical pollutants but, rather, of the transfer of fish and bacteria into Canada's waterways by means of man-made lakes and canals constructed as part of the Garrison Diversion unit. Let me just backtrack for a moment and give a very brief history or description of the project.
It was initially conceived in the 1940s as a way to counter the serious effects during the depression of the drought on the State of North Dakota and its agricultural industry. Basically, the Garrison is a gigantic irrigation system which travels across the northern central part of that state. As currently designed, its aim is to irrigate 250,000 acres of North-Dakota soil by means of reservoirs and dams, which would eventually, through human engineering, do something that nature never intended to be done, that is, link a southern flowing drainage system with a northern flowing drainage system, specifically, the waters of the Missouri-Mississippi system with the waters of the Red River-Lake Winnipeg-Hudson Bay drainage system. We Manitobans have no quarrel with the Government of North Dakota or the U.S. federal Government planning to build such a massive and complicated irrigation system in that state. We do not object to anything the American Government wants to do on its side of the border. However, as it is now designed, the Garrison Diversion unit will not only irrigate land in North Dakota. As I have pointed out, it will cause water to flow from the Missouri River system into the Red River system. It will thereby introduce strange fish, water, bacteria and, likely, a certain amount of chemicals into the rivers and lakes of our province. That is what we object to. These objections are not only based upon a purist, naturalist obsession about our province, although we are certainly proud of our clean air and waters. Our objections are based just as strongly on the reality of the lost livelihoods which could result from the completion of this project. These livelihoods would be lost mainly in the fishing and tourist industries. There will also be problems with the water supplies of many towns and rivers which lie along the Red and Souris Rivers in Manitoba.
There are 700 commercial fishermen in my constituency, Mr. Speaker. They have families and they support other industries such as trucking and fish-packing. I consider these

May 8, 1984
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people to be an important component of my constituency. Obviously I believe that it is my job to represent their interests and concerns here in Ottawa. Over the years I have tried, to the best of my ability, to do just that, to make Members of this House and of the American Congress aware of our concerns with regard to the Garrison Diversion unit.
As I have pointed out, the environmental impact of Garrison would be the introduction of these various fish species into Manitoba waters. The Lake Winnipeg fishing industry in particular could be destroyed if these larger and often predatory fish were allowed to compete with the indigenous fish population for space and food in that lake.
I have said before, and will say again, that this is an emotional issue for me. That is not just because I have made it one of my priorities in the time in which I have been a Member of the House of Commons. It is also because I have often been frustrated by some of the things which have occurred during the course of the battles we have fought over the years. It has not only been Members of this House and government officials who have been involved in this fight, Mr. Speaker. There are a number of private citizens in the Province of Manitoba who, unlike those of us who are politicians and government officials, do not get paid for their efforts in opposing the hazards of the Garrison Diversion unit. I refer to people such as Jerry McKinney, a Manitoban who on a number of occasions has led delegations to the City of Washington, most recently in April of this year, to talk to Members of the House of Representatives and Senators. He uses his own money and time to take on the bureaucracy and the legislative branch of government in the United States. Another such person is the Mayor of my home town, Gimli, Manitoba. Ted Arnason has worked long and hard against Garrison. He spends a lot of time educating a whole generation of young people throughout the province about the potentially devastating effects of Garrison. Recently on the CBC show The Fifth Estate, Mr. Arnason pointed out that this issue is not just for today's townfolk but for the future people of that small town. All of them depend in some way or another on Lake Winnipeg for their livelihood.
I must admit that I have occasionally been frustrated by some of the setbacks we have encountered in our opposition to Garrison. I have also been tremendously encouraged at all times by the perseverance of those who work in this fight. I believe that progress is possible, otherwise I would not stay in the fight. I believe that the joint efforts of the Governments of Manitoba and Canada, as well as the lobbying efforts of the citizen groups, have had some effect.
One thing which has been on our side in recent years is the fact that the costs for the Garrison Diversion unit have sky-rocketted. The cost has become well over $1 billion now. More and more American politicians and more of the American media have come to see that it is perhaps a waste of money. In the current issue of Esquire magazine it was described as a massive boondoggle of which a few persistent Senators refuse to let go because they think they can win votes by pushing ahead with it.
As well, there has been some meddling in this issue, leading to its continuation in recent months. Last fall, a well known American syndicated columnist, Jack Anderson, wrote a column pointing out that the Department of the Interior and the Government of the State of North Dakota had meddled in studies having to do with wetlands and wild life habitats which would be affected by Garrison. They had cooked some of the results which were being used to determine what kind of effect it would have in those areas.
More recently, Mr. Speaker, we have learned of another kind of meddling which is taking place, this time in the Province of Manitoba. The proponents of the Garrison Diversion unit have hired a public relations firm in the City of Winnipeg to circulate the pro-Garrison side of this issue to Manitobans. From time to time in recent weeks articles, which are unsigned and are not accredited to the Garrison Diversion supporters, have shown up in Manitoba newspapers. These articles are designed to make Manitobans believe that Garrison will not be a threat to their waterways.
I am skeptical, Mr. Speaker, about anything that is designed to placate Manitobans. We do not want to be placated. We do not need to be placated. We want to have the plan changed. We want the U.S. Congress to re-examine the project. We want the Department of the Interior to come up with a new concept for Garrison which will not have anything to do with Canada's rivers or lakes. As long as the only plan around is the one currently on the books, Manitobans will feel threatened.
Recently, some good news came out of Washington. It was probably the best news we have had on this issue in quite some time. After a recent trip to Washington by officials of the Governments of Manitoba and Canada, we learned that the Department of the Interior and the State Department, along with some Canadian supporters in the American Congress, agreed to put forward proposals for the funding of alternative designs for the Garrison Diversion unit. This is a very important step. I made a statement about this in the House last week, Mr. Speaker. It is a small but very important step. It is the first time that the American Government has publicly admitted that it is willing to spend money to find ways of altering Garrison. It is the first time it has publicly admitted that Canadians do have legitimate concerns with regard to the present design of the Garrison Diversion unit. We received that news in good spirit and look forward to the studies being done in the very near future.
Having said that, Mr. Speaker, I was very disappointed to learn, a few days after hearing that news, that Senators Burdick and Andrews from North Dakota have thus far objected to using any of this year's money to conduct these studies to look for alternatives. They have also objected to a proposal which would have used some of next year's money now to carry out these proposals. I would point out to the House that Senator Andrews has often been interviewed on CBC Radio. I heard him approximately a year ago on The Food Show on Saturday morning, I believe, criticizing Canadian Politicians and Canadian government officials because, he said, there have been no studies conducted that
May 8, 1984

would prove the Canadian points. He said that Canadians were unwilling to study alternatives to Garrison and that we stick to only one point, that is, that we want the project stopped. That is clearly untrue. We have always stated that we have no problems with what they do on their side of the border.
The recent action of Senators Burdick and Andrews is very disappointing. It begs the question as to who is really dealing in good faith and who is looking for a way whereby Americans and North Dakotans could have the benefits of Garrison while Manitobans and Canadians would be protected from the bad effects of Garrison.
Let me point out quickly that the member of the House of Representatives from the State of North Dakota has been very supportive of the alternatives proposal.
In conclusion, let me just say that I am pleased to have had the opportunity to present this motion to the House yet again. It is an ongoing and very critical issue in the Province of Manitoba. At times it might seem that we belabour it too much and that the issue is always around and will not go away. I am not sure that it will ever go away in the sense that I am not sure that we will get a clear-cut victory. However, it is an issue for which I strongly believe we must continue to fight to the best of our abilities in order to prevent the serious harm that might come to the Province of Manitoba. It is far too important for our province to let it lie or for us to roll over and let the proponents of Garrison proceed to construct it as it is currently designed.
I pointed out that we have seen an important development. Let us hope that there are many more important developments. Members of the House and the Government of Canada must continue the very strong and, I would suggest, the very good fight we have been carrying on for the last few years.


BUSINESS OF THE HOUSE
Mr. Pinard:: Mr. Speaker, I rise on a point of order. I would like to announce a change in House business for the remainder of the week. I have just talked to representatives of the two Opposition Parties to inform them that tomorrow we will proceed with Bill C-17, an Act respecting bankruptcy and insolvency. There is no change for Thursday. On Friday, we will be debating Bill C-32, which was supposed to be debated tomorrow. However, debate on Bill C-32 is postponed until Friday and will be replaced by Bill C-17 tomorrow.
The back-up Bill tomorrow, in case we conclude second reading of Bill C-32, will be Bill C-10, the Divorce Act. As 1 have indicated there is no change for Thursday. It is an Opposition Day.


Charles James Mayer: Mr. Speaker, may I ask the Government House Leader if he could give the House an idea as to when he will be presenting the Bill to amend the Western Grain Stabilization
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Act? Could he tell us now when he believes that Bill will be introduced?


Yvon Pinard: Mr. Speaker, there is not question that the minute notice is given, we will be able to introduce the Bill within the normal delay. There is no link to be attached to any other legislation to be passed, depending on the introduction of the Bill referred to by the Hon. Member.
I indicated in my answer last week that we would likely do that this week. I have very good reason to believe that the notice will be given before the end of the week. I hope to be able to introduce the Bill, as the result of pressure from Members on both sides of the House, as early as possible.


Charles James Mayer: Mr. Speaker, I have heard suggestions that the Bill may in fact be introduced in the Senate. Could the Government House Leader comment on whether it will be introduced in this place or in the other place?


Yvon Pinard: Mr. Speaker, our intention would be to introduce the Bill in the House of Commons.


GARRISON DIVERSION
[Stage Direction]
The House resumed consideration of the motion of Mr. Sargeant:
That, in the opinion of this House, the Government should consider the advisability of taking those measures necessary to ensure that there is no damage caused to the Manitoba environment by the completion or construction of the Garrison Diversion Unit in the State of North Dakota and, that such measures to be considered include:
1.	Continuation of diplomatic action to have the Garrison project amended
so as not to affect the environment of Canada;
2.	The offer of legal and technical assistance to those citizens groups in
Canada now striving to halt the progress of the Garrison Diversion; and
3.	The bringing to trial in the World Court, the government of the United
States, should Canada be unsuccessful in its efforts to receive satisfactory
assurances regarding the future safety of the Canadian environment.
Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Revenue):: Mr. Speaker, at the outset I would like to congratulate the Hon. Member for Selkirk-Inter-lake (Mr. Sargeant) on his persistence and his concern about this very important matter. I can assure him that this matter is not only a concern to him and his constituents but it is a concern to all Canadians. It has been a great irritant between Canada and the United States for a number of years.
I welcome this opportunity to respond to the Hon. Member's statement on an appropriate strategy for managing the longstanding garrison issue. The Hon. Member is advising the Government in his motion before the House to consider the advisability of taking necessary measures to ensure that no damage is caused to the Manitoba environment by the construction of Garrison project features. His recommendation in particular is that the Government continue current diplomatic action, offer legal and technical assistance to anti-Garrison

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citizen groups and, should these measures fail, that the Government bring the United States of America to trial at the International Court of Justice in The Hague.
I might point out to Hon. Members that this motion is substantially the same as that introduced by the Hon. Member on February 9, 1981, and debated again in the House on November 2, 1983. However, while the motion is substantially the same, the Garrison Diversion unit we are facing in 1984 is substantially different from that which was envisaged in 1981, or so I have been advised. In response to persistent representations by the Canadian Government based on the conclusions of the International Joint Commission's 1977 report, in 1982 the United States undertook a major redesign of the full 250,000-acre project into two phases in order to proceed with the construction of only one phase, which would not affect waters flowing into Canada, while deferring indefinitely construction of phase II, which would affect waters flowing into our country. Further project revisions and technical modifications have been introduced by the United States Bureau of Reclamation engineers over the past half year, largely as a result of the technical consultative process developed last fall by federal and Manitoba officials and agreed to by the United States at the November 21, 1983 consultations in Ottawa.
The considerable success achieved by the Canadian Government in securing project modifications and safeguards for phase I features was evident at the most recent round of consultations held on April 25 in Washington. The Hon. Member is himself aware of the very positive results achieved by the Canadian delegation through the technical consultative process, and has gone so far as to stand in the House a week ago on May 1 to portray the April consultation as "good news" and even as "a breakthrough".
I believe that the Hon. Member's statement on May 1 is a more accurate and timely reflection of the success and status of government efforts to resolve the Garrison issue than is his motion which dates back to 1981. I agree, however, with his view that the April consultations represent an important step forward rather than a complete victory. I can assure him, therefore, that the Government will indeed continue diplomatic action through the technical consultative process to the point where no Garrison feature which potentially could damage or pollute waters flowing into Canada is constructed or contemplated. That said, I see no reason at this stage for the Government to adopt additional and unproven measures when measures already in place have already proven effective to the satisfaction of federal and Manitoban representatives.
The process to which I have referred a number of times already is one that is being pursued together by federal and Manitoban officials. It has two clear objectives: first, to ensure that technical modifications and safeguards for phase one Garrison features are fully adequate; and second, to obtain clear, credible and publicly convincing assurances from the U.S. Government that phase II as planned will never be built. These two objectives are based on recommendations of the International Joint Commission's report, which is and always
has been the foundation of Canada's position on the Garrison Diversion unit.
With respect to project features defined by the United States as phase I, Canada has requested technical modifications and safeguards to eliminate the risk of accidental, interbasin biota transfer, pursuant to the following recommendation of the International Joint Commission:
If and when the Governments of Canada and the United States agree that methods have been proven that will eliminate the risk of biota transfer, or if the question of biota transfer is agreed to be no longer a matter of concern, then the construction of the Garrison Diversion Unit which will affect waters flowing into Canada may be undertaken providing the following conditions are met:
(a) Any agreed modifications or other measures required to resolve the
inter-basin biota transfer issue are incorporated into the project-
Canada is categorically opposed, as the Hon. Member knows, to those project features defined by the U.S.A. as phase II, and has requested tangible evidence from the U.S.A. that its assurances on that score are in fact credible, bearing in mind the International Joint Commission's recommendation that:
-those portions of the Garrison Diversion Unit which would affect waters flowing into Canada not be built at this time.
Canada proposed the technical-consultative mechanism to the U.S.A. side at the November 21, 1983 consultations. This was an attempt to shift management of the Garrison issue back on track toward mutually agreeable solutions, after a long period of protracted and often interrupted consultations.
Canada had always valued general assurances provided by the United States at the policy level not to construct Garrison features which would affect adversely Canadian waters, and had always welcomed the commitment of successive United States administrations to the principle of consultations. At the same time, however, the Government realized that if it was to be successful in its determination to protect Manitoba's commercial and native fishing interests and prevent the pollution of Hudson Bay drainage basin waters by foreign biota from redirected Missouri River water, then it must fashion some instrument for translating general assurances from the United States into technical assurances and have safeguards built into the specifications of Garrison engineering plans and drawings.
Further to the requirement for a bilateral mechanism at the technical level was the requirement to institutionalize bilateral consultations at the senior officials' level. Canada was seeking above all else a fail-safe mechanism for preventing a recurrence of the Lonetree Dam fait accompli, which in August 1983 had aroused deep concerns if not suspicions in the minds of many Canadians that the United States intended to proceed with construction in advance of consultations.
Against the background of these considerations, Canada presented the United States with two alternatives: either to resolve to manage jointly the Garrison issue in a manner that reflected the two nations' mutual commitments to the 1909 Boundary Waters Treaty and to recommendations of the International Joint Commission, or to allow matters to devolve along separate tracks, with the risk that the inevitable environ-
May 8, 1984

mental and political consequences would dominate the issue, undermine Canada-U.S.A. efforts to manage our joint tenancy of North America, and make a solution to the Garrison issue even more difficult.
It was evident at the November consultations that both countries preferred the first course of action to the second. The technical-consultative mechanism they agreed to comprises a senior officials' consultative group with representatives from the Canadian, Manitoban, American, and North Dakotan Governments, and the Garrison Joint Technical Committee of technical experts from these respective Governments. The United States readily supported the establishment of a technical committee, in particular, which hopefully could move the Garrison issue from the arena of political rhetoric to the domain of disinterested professionals of impartial judgment. To ensure that the technical committee did not work in total isolation from the policy and political process, while respecting the impartiality of due technical process, the technical committee was made accountable to the senior officials' consultative group, which would next meet in April and, as the Hon. Member knows, it did meet at that time.
The Garrison Joint Technical Committee has been mandated by the consultative group to carry out two prime functions. The first function is to examine Canada's immediate phase I technical concerns, which were communicated formally to the United States in Canada's diplomatic note No. 473 of October 3, 1983. These are recapitulated, item by item, in the technical committee's terms of reference. To this end, the committee is tasked with obtaining all relevant technical information, project plans, specifications, construction schedules, secondary source material and information from on-site inspections in order to assess Canada's concerns and American-proposed solutions. The second and longer term function is to act as an early warning signal to alert the federal and Manitoban Governments should it appear that phase II construction might proceed. Specifically, this function tasks the technical committee with monitoring the plans of the United States for future development and advising the consultative group on technical considerations related to whether and how phase II might be developed outside the Hudson Bay drainage basin without damage to Canadian waters. In this respect, as with phase I concerns, the consultative group technical committee's interface provides Canada with an effective bilateral mechanism for narrowing the gap between general assurances at the policy level and actual project modifications at the technical level.
In my opening remarks I mentioned that in the May 1 statement of the Hon. Member he portrayed the April consultations as good news and a breakthrough. I would like to emphasize that the outcome of the consultations, which was very positive indeed, was no accident but was, rather, the product of a lot of hard and concentrated work by the technical committee and its task forces. In the short space of time between its establishment in January, 1984 and the April consultative group meeting, the technical committee met four times in Winnipeg, Bismarck, again in Winnipeg, and in Denver to examine those phase I technical concerns for which
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engineering plans were available and to monitor bureau of reclamation construction schedules and budget documents relative to the intentions of the United States for future development of the Garrison project. At its first meeting in January, the technical committee established a supportive task force structure in the fisheries and biota, wildlife mitigation and engineering fields, which comprised representatives of the Canadian, Manitoban, the United States and North Dakotan Governments. Arrangements were also made to establish a fourth task force. These meetings and consultations went on endlessly and are continuing.
Hon. Members who have followed closely the Garrison debate over the past year will be familiar with the two key issues which were uppermost in the minds of the Canadian delegation as the consultations approached. The issue of whether or not the United States would construct the McClusky Canal Fish Screen had been a subject for consultation in November, with inconclusive results, and deferred to the April consultations when the report of the technical committee on the biota situation in the Missouri and Hudson Bay systems would be available. Of equal concern was the issue of the intentions of the United States regarding phase II, that is, the continued construction and the need to secure tangible evidence that assurances of the United States were credible.
The McClusky Canal Fish Screen was not included in original designs for the Garrison project, but was added shortly before 1975 in response to concerns, mainly from Canada- one can see from this that the matter has been going on for at least ten years-that diverted Missouri River water would convey undesirable fish species, fish disease, and other biota via McClusky Canal directly into the Lonetree reservoir. From there it would enter into all associated water systems of the Hudson Bay basin. However, at a bilateral technical meeting in Ottawa on July 20, 1983, the United States made available to Canada the final supplemental environment statement prepared by the Department of Interior which reported that the fish screen was no longer contemplated. Canada was told that this decision would be made final only after the consultations anticipated for the fall. This kind of thing went on.
Canada's request for construction of the fish screen was raised by the Deputy Prime Minister and Secretary of State for External Affairs (Mr. MacEachen) when he met with Secretary of State Mr. Shultz for their bilateral discussions on October 16 and 17 in Halifax. The same issue dominated the agenda at the November 21, 1983, meeting. You can see, Mr. Speaker, that this has been a matter of concern to both sides at a high level for quite some time. I suppose the cost of this project was really one of the problems, because the cost for the Fish Screen Project is $40 million.
In April, the consultative group reapproached the question of the fish screen, this time equipped with the results of the technical committee's study of the fish and biota situation in the Missouri and Hudson Bay systems. Canada built its case for the fish screen on the technical committee's finding that there had been no significant change in the distribution of problem fish species in the Missouri and Hudson Bay systems

May 8, 1984
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which would cause different conclusions to be reached from those in the 1977 International Joint Commission, reinforcing its case with the technical committee's conclusion that downstream movement of rainbow smelt and other Missouri species into the Lonetree reservoir was certain without the fish screen while the fish screen, though unproven, would provide a first line of defense against any such movement.
The second major issue dominating the agenda for the April 25 consultations was the question of U.S.A. intentions regarding phase II. Canada has taken every opportunity to communicate its unequivocal opposition to phase II, and did so once again at the consultations. As anticipated, the United States repeated earlier assurances provided in diplomatic notes and at bilateral discussions that phase II would be undertaken "only if it could be implemented consistent with the United States obligations under the Boundary Waters Treaty", and that no contracts would be let until Canada had been afforded "an opportunity to consult with the Government of the United States on specific features, and adequate assurances had been given that Canadian waters would be protected, as recommended by the IJC".
Canadians, Manitobans in particular, have always valued such assurances and appreciated the fact that the United States is proceeding with construction of only phase I features, which will not transfer Missouri water to the Hudson Bay basin and which are subject to the modifications and safeguards introduced through the technical consultative mechanism.
What the Canadian side had in mind was a study of viable alternatives to phase II, construction outside the Hudson Bay drainage basin which could not affect adversely waters flowing over the border into Canada. In response, the United States agreed to support and broaden initiatives to study such alternatives. This agreement is a good example of the kind of positive results which emerged from the April 25 consultations and which motivated the Hon. Member to speak as he did about the breakthrough last week.
The McClusky Canal Fish Screen and phase II were the most significant but not the only concerns addressed at the April consultative group meeting. The consultative group reviewed and concurred with 17 recommendations and conclusions submitted in the technical committee's report for resolving a substantial number of Canada's detailed engineering and wildlife mitigation concerns which had been outlined in Canada's note No. 473. For example, the consultative group agree with the technical committee recommendation that the municipal and industrial outlet from Lonetree Dam be sealed with a bulkhead/frange/steel plate structure considered technically superior to the concrete plug agreed to in November, and so on.
Canada approached the April consultations with the twin objectives of ensuring that phase I technical modifications and safeguards are fully adequate and obtaining tangible evidence that United States assurances respecting phase II are indeed
credible. The United States agreement to construct the McClusky Canal Fish Screen and to support studies of alternatives to phase II marks a significant advance toward both these objectives and reinforces, in particular, the utility of the technical/consultative process as the most effective mechanism for resolving any remaining or newly-emerging concerns.
I hope my remarks will satisfy the Hon. Member to some extent and that no further motions on this subject will be necessary.


Mr. John Gamble (York North):: Mr. Speaker, I had an opportunity to listen to the comments of the Hon. Member for Selkirk-Interlake (Mr. Sargeant) with respect to his motion. He mentioned that there were two valid reasons, given other circumstances, for his being inclined to strike out paragraph No. 3 in his recommended conduct with respect to the Garrison Diversion project. It occurred to me that there was one very valid reason for striking the recommendation to bring to trial in the World Court the Government of the United States. It is simply that the provision is offensive and objectionable when dealt with in the fashion the Hon. Member for Selkirk-Interlake would bring it.
He mentioned that he spoke about this issue 14 times in the House. He said that he had even gone to Washington to deal with this important matter. Let it be clearly understood that the matter of the Garrison Diversion project is serious. It has, if it proceeds, a most detrimental effect upon the welfare of this country, in particular the welfare of the people of Manitoba who live in the immediate vicinity of the project. So long as the Hon. Member for Selkirk-Interlake and his colleagues in the House persist in attacking the Government of the United States, its representatives and the nation of the United States, as though they were Canada's bitter enemies, there is little likelihood that they can, under any circumstances, convince the administration of that country that it should deal with this serious matter as it affects Canadians in a manner which will be beneficial to Canadians.
I am not suggesting for a moment that in pursuing our goals, as they relate to the welfare of the environment and the economic well-being of the country, we ought not to be persistent and determined. However, it does us no good in advancing that cause if members of the New Democratic Party in Manitoba, in particular the minister responsible for the environment of Manitoba, attend meetings at which symbols of the United States are burned in effigy. In the event that people are legitimately concerned about the welfare of Canada and genuinely believe that something should be done to prevent this project from ever proceeding, we must advocate our positions in a strong and determined but friendly fashion.
The United States is not the enemy of Canada. The United States has defended freedom and liberty. It has the same kind of system of government as we do in terms of permitting the people to determine how the country is run. It has, through its defensive mechanisms, protected the entire North American continent. I know the Hon. Member who brings this motion and his colleagues would prefer at every opportunity to attack that friendly neighbour to the south, attack it for involving

itself, as it should, in preserving freedom in the Americas, attack it for being unfriendly to a communist regime in Nicaragua or for not treating as a friend the communist government in Havana, Cuba. Quite frankly, the real issue which should be dealt with when we are concerned about the environment of this country should not be intermingled with contempt and open hatred for the Government of the United States and the people of that country. Accordingly, I examined the original draft of this motion and, as I indicated at the outset, was offended by the suggestion that the United States be brought to trial in the world Court like some criminal.
We have disputes with the United States. There is no doubt that we have disputes with respect to the establishment of a boundary off the Grand Banks. Quite frankly, that dispute is now being adjudicated. It is a matter which has a direct bearing upon the welfare of our fishermen off the East Coast. We have disputes with the United States with respect to matters of pollution such as acid rain. It would appear-and I say that because I do not think it has been convincingly established as yet-that Canada has decided to go it alone, at long last, with respect to this issue, as indeed it should, and abate a pollution problem for which we are in large measure responsible as well.
We need the co-operation of the United States. In the event the Hon. Member for Selkirk-Interlake goes to Washington, he should go there as a legitimate ambassador speaking to a friend, not someone shaking a fist like an enemy. In my view these problems with the administration of the United States could best be solved if men and women of good will, recognizing a common problem and desiring not to harm a friend, negotiate for the purpose of ending this project, ending the problems of pollution which jointly confront both our nations and working out, as friends should, the difficulties which are bound to occur when two developed nations have areas of disagreement between them. If they are legitimately concerned about the issue raised in this motion, I would urge members of the NDP, both in the Government of Manitoba and in this House, to approach the matter in the fashion that I have decribed rather than by wielding a battle axe and chanting anti-American slogans.


Mr. Ron Irwin (Sault Ste. Marie):: Mr. Speaker, we are dealing with a very difficult problem which goes back almost to the 1930s. I will try not to wrap myself in the Canadian flag as the Hon. Member for York-North (Mr. Gamble) has done.
Nothing really happened with the Garrison Diversion until 1943, and we have been debating the problem ever since. One thing is clear, Mr. Speaker. The goal of connecting the Mississippi River with the Hudson Bay drainage system is not in Canada's best interests. It is only in the best interests of the United States. The Americans wish to achieve the goal of connecting those two waterways solely to irrigate North Dakota.
We in Canada have some legitimate concerns about this goal. If the Hon. Member for York-North wishes some Ameri-
Garrison Diversion
can input, I might suggest to him that he read the 1977 IJC report. That report was prepared by equal numbers of Canadians and Americans and it indicated that as of 1977, the technology for the McClusky screen referred to by the Hon. Member from our side was not adequate. All this time we were being told by American politicians, who were not really acting as judges but more as advocates, that we in Canada should not be concerned. Well, we are concerned.
We are concerned about parasites getting into our water system. We are concerned about fish eggs, fish, chemicals and everything else that comes from that drainage system which may interfere with our commercial and sports fishermen, our drinking water and our recreational facilities.
While we in Canada were being told not to be concerned, an impartial report was prepared in the United States by the Environmental Protection Agency. Again, I would suggest that my friend, the Hon. Member for York North read that report, because he seems to be very prone to American studies. In that report, the EPA indicated that it could not conceive of a program which would adequately police human and wildlife activities to prohibit transfer of undesirable fish species. This report was in existence at the same time as we Canadians were being told not to be concerned.
My hon. friend referred to the great things that Canada and the United States are doing together. He referred to the achievements made with regard to solving the problem of acid rain. In August, 1980, Canada had a written memorandum from the United States regarding acid rain. That is much more than we have now. Daniel S. Greenberg, a respected and responsible writer for the Washington Post, said about the Reagan administration's feelings toward that written memorandum that the Reagan administration was of the opinion that the memorandum of intent carried only "moral rather than legal force" and so, without consultation, the Reagan administration went its own way. He went on to say:
We have double-crossed the Canadians plain and simple.
That was the fate of our 1980 written memorandum. Fool me once, foolish you, but fool me twice, foolish me.
We are now expected to believe, without even a memorandum like the one we had in 1980, that all these great things will be done regarding the Garrison Diversion. The Americans informally say that they will police fishing at the reservoir. I can see them trying to police fishing. If they cannot even police chemicals. How can they police fishing? They say that the screen for which they are paying $40 million will work. It has not even been tested. They tell us not to be concerned about phase two, and at the same time they have allocated approximately $5 million for 1983, I believe, $20 million for 1984, if my memory serves me correctly, and approximately $40 million for 1985, in order to go ahead with the project.
Who from Canada has gone to the United States to discuss our concerns? We have sent federal-provincial representatives, farmers, fishermen, municipal people and native people to the U.S. The Right Hon. Howard Powley sent wires to all Congressmen. The Hon. Minister of Transport (Mr. Axworthy)

May 8, 1984
Garrison Diversion
has expressed his concerns about new mechanisms. The Hon. Secretary of State for External Affairs (Mr. MacEachen) has said that we do not want phase II to go ahead. A resolution, which I believe was passed unanimously by the House, resolved to refer this matter to the World Court. Lawyers from Canada and the United States have suggested a uniform trans-boundary pollution reciprocal access Act, which the Americans scoffed at. However, the Hon. Member for York North tells us to trust the Americans.


John Albert Gamble: Are you kidding? What were you listening to?


Ron Irwin: I heard Nicaragua mentioned.


John Albert Gamble: Yes.


Ron Irwin: I heard many stories about the American flag.


John Albert Gamble: Yes.


Ron Irwin: However, I did not hear much about the issue itself.


John Albert Gamble: I told them how to negotiate.


Ron Irwin: I did not hear much about the issue, and the issue is that we in Manitoba are concerned that we should be addressing the matter as a federal House and not leaving it for a few MPs and MLAs to discuss and not leaving it to periodic dialogue in the House.
I think the public perception of this issue in Canada is much like it is in North Dakota, that is to say, 5 per cent know about the issue and want it, 5 per cent know about the issue and do not want it, and 90 per cent do not know about the issue and do not care. That is the perception in Canada of the Garrison Diversion.
I believe that if our responsibility is to the entire country, we should learn a little more about the situation and not talk about communism in the United States. We should talk about the very important fishing industry of Manitoba.


John Albert Gamble: Obviously you were not listening.


Ron Irwin: There have been some compromises made. First, the United States invited Canadian scientists to study the matter. I think we should have taken them up on that invitation. However, the decision not to do so was a political decision. I believe we erred by not accepting that invitation.
The Americans then proposed a closed waterways system. To their credit, the Americans have suggested compromises for our benefit. Unfortunately, at the time of the proposal of the closed waterways system, the Americans wanted to save millions of dollars by doing it on the cheap, and therefore the closed waterways system was not very safe. As a matter of fact, it turned out to be worse for us than what had been suggested in the first place.
If those are the proposals of the Americans, they do not give us any great faith in them. The Americans proposed the formation of a technical committee, and I give them full credit
for that proposal because it seems that they are going to go ahead with the project notwithstanding what was done in Canada. This joint Canadian-American committee has been formed and it assures us that it will stand on guard, for want of a better word, because it cannot do much else. It assures us that it will stand on guard against the malfunctioning of the screen, the implementation of phase II, and the introduction of parasites into Canada. However, such treaties have existed with the United States since 1909. I believe it was in 1909 when the original trans-boundary water treaty under which the IJC functions was introduced. Since that time, not only the Americans but also the Canadians have polluted the water system.
I will begin with the pollution that originates in Ontario. Ontario puts 263,000 tonnes of liquid industrial waste into the water system per year. Every day, Ontario puts 34,000 tonnes of dissolved solids, 127 tonnes of heavy metals, 18 tonnes of phosphorus, 118 tonnes of oil and grease, 12 tonnes of phenol and 3,000 tonnes of chlorides into the water system. In Thunder Bay, millions of tonnes of asbestos fibres are being put into the water system. In the St. Mary's River, there are phenols, oils, cyanides, sulphides, zinc, ammonia and iron. The St. Clair River system contains ammonia and lead.
With all this going on, I commend the motion of the Hon. Member from the New Democratic Party because someone must stand on guard. I am certainly not going to leave it to the American Government.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Charles James Mayer: Mr. Speaker, I rise this evening to further amplify a question I put to the Minister of Transport (Mr. Axworthy) last Thursday concerning the recently announced transportation rates for western grain. I asked the Minister why the Government was not going to assume its share of the costs. This will involve some explanation; I will try to be explicit and speak in some terms so that the Government will understand exactly what I am saying. I am not at all certain that the Minister understood the question which I posed to him.
Let me begin by saying that the rates that western farmers are now paying for grain as a result of the demise of the Crow on January 1, are made up of three components: the first is volume, the second is an adjustment for the previous crop year, and the third is an increase in costs, if any, that the railways
May 8, 1984

say they incur. I would like to deal with the last component first-the increase in costs which the railways claim.
The Minister said that the railways did not have very much of an increase in costs. We agree with that. Effectively, that means the increase in the rates was not very great, if any, attributable to the costs the railways say they will have this year over next year.
Volume should not be a factor because volume is down. When the crop year started on August 1, the estimate for the year was 32.8 million tonnes. It looks like the railways will move 34.55 million tonnes this year, but the estimate for the coming year, to which the rates apply and about which I am concerned, is less than the estimate for this year. The two factors I have mentioned, an increase in costs that the railways say they have, and an increase in volume, should not be part of the increase in the rates the Government has just announced.
The increases are substantial. They are 33 per cent. The average rate for shipping a bushel of grain from the western provinces to export position is something like $7.70 a tonne. That is increased $1.94 over the previous year, which means almost a 33 per cent increase. That tells me that the total, almost exclusively, reason for the increase in rates is the interim adjustment. The interim adjustment comes about as a result of the rate setting mechanism and the way it is established.
Very simply, at the beginning of the crop year, which is August 1, an estimate is made of the amount of grain that will be moved. If the amount is greater, the railways have to be paid more because they have moved more. If the amount the railways move is less then they will get a refund, because they move less grain. The adjustment in this crop year is amost exclusively the result of an underestimate in the volume. If the railways move more than is estimated, they will get paid more. It is that simple.
But, this is a special year because the Bill did not come into place until January 1. That meant that for the previous five months, from August 1 to December 31, the Government was responsible for the increases in rates. The producer then was responsible for the next seven months, January 1 to July 31. That meant that for the first five months, which is five-twelfths of the calendar year, the Government should have been responsible for the increases in costs that the railways charged to the producers.
The difference that the railways should have as extra compensation for the extra volume they moved is $60 million.
What I would like to know from this Government is why it is not picking up its share of the increase-Five-twelfths of $60 million is $25 million. There is no doubt in my mind that the Government is overcharging producers to the tune of $25 million.
We raised this issue with the Government at committee when the Bill was being put through. I would like to quote from an exchange I had with Mr. Kruger in committee. I said:
Adjournment Debate
The railways are not going to be short-changed, they are going to get their additional increases, except in this case it is all going to come from the Government up until January 1.
That is January 1, 1984. Mr. Kruger replied:
Yes, it will, but not under this Bill. The Government will be seeking authority from Parliament under the next Supplementary Estimates to make a further installment-
I went further to ensure that he understood my question. I was asking him if the producers were going to be expected to pay more. He replied:
No. That is a matter between the Government and the railways as to whether the railways are to be compensated for their losses in the first five months of this crop year or not.
Clearly, what Mr. Kruger said is that the Government is going to take up with the railways the issue as to whether they are going to be compensated for their losses, if they have any, as a result of the increase in volume, and that it is not going to be the producers' responsibility. The announcement last week of the new rates, indicates to me that the Government is deliberately overcharging the producers by $25 million.
I hope the Parliamentary Secretary will confirm this evening that the Minister understood my question, and that he is now going to announce that $25 million will be deleted from the producers' share of that increase in rates, Mr. Speaker.


Mrs. Eva Cote (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, under the provisions of the Western Grain Transportation Act, the producers have to pay for any rate increase resulting from traffic movements in excess of a preset volume. Because the 1983-84 crop was underestimated by nearly three million tonnes, that increase is quite considerable. That underestimation is offset through a rate structure interim adjustment. As a result, the Government paid too much and the farmers did not pay enough. Rather than distributing the Crow profits on the basis of 34.7 million tonnes, the Government did so on the basis of 31.9 million tonnes. However, those profits were paid out on the basis of total grain movements for the year, hence the one payment in excess.
When the people involved in the Gilson project were trying to find a producer and Government contribution formula with respect to future freight rates, they had to decide how best to allocate the Crow profits. In their opinion, the best way to protect the producers was to make the Government responsible for the highest possible percentage increase in inflation-related costs. Under a legislative provision, for the first three years the Government will pay for any inflation-related cost increase over 3 per cent, and for anything else over 6 per cent in the following years. In exchange for that protection against inflation, they suggested that the producers be held responsible for future increases in the volume of shipments. This is a wise choice because the increase in volume is tied to the productive capacity of the land, and also because an increase in volume means higher incomes for grain producers. Fortunately,

May 8, 1984
Adjournment Debate
increases due to inflation were not very high this year. However, the volume of shipments was badly underestimated, so much so that payments had to be adjusted under the formula contained in the legislation. We agree that producers are now facing cash problems, and that is why we are amending the Prairie Grain Advance Payment Act and the Western Grain Stabilization Act. There is no way to solve the problem raised by the Hon. Member for Portage-Marquette (Mr. Mayer) without amending the Western Grain Transportation Act. I think that the current formula will be effective in the long term and cannot be changed every year to account for short fluctuations in volume and inflation rates.


NORTHERN AFFAIRS-LOBBY AGAINST FUR TRAPPING INDUSTRY
Dave Nickerson: Mr. Speaker, Canada's oldest and most honourable industry is under attack. I refer, Sir, to the fur industry, a business which really started Canada. For many years the fur trade was the most important industry in Canada and had it not been for the fur trade which encouraged people to go out to the hinterland, Canada might even today be only a few small scattered settlements along the St. Lawrence Valley. Even today, the Fur Institute of Canada estimates that about 100,000 Canadians are involved throughout the industry which, I might add, considerably aids Canada's international balance of payments. Not only are trappers involved in the industry, but all manner of traders, merchants, pelt processors, auction house employees, manufacturers and retailers.
In northern Canada trapping today remains the most important part of the local economy. In the Northwest Territories, for instance, we annually produce $3 million to $5 million worth of raw fur which would have considerably more value once it has been processed and upgraded. But that value represents production in excess of any other renewable resource industry such as fishing or lumbering. Many people in northern Canada, particularly in my constituency, are dependent for their livelihood, either wholly or partially, on the trapping industry. What is probably more important is that it is a way of life. It is a means for independence. You do not have to be a wage slave if you can go out and get yourself some fur once in a while.
This has all been threatened, Mr. Speaker. There is a concerted attack on the industry by well financed organizations like Greenpeace and other animal welfare rights organizations which are invariably supported by city dwellers, people who do not really know what the trapping business is all about. They tend to play to the hilt the cruelty aspect, even though the degree of cruelty involved in the industry is debatable. In my opinion it is not at all comparable with the cruelty to animals in industries, such as the veal industry in this part of Canada. Animals are kept under what I would consider cruel conditions throughout their short and I assume rather miserable existence. At least the animals harvested in the fur trade have an opportunity for practically all of their lives to live in the way wild animals were intended to live. I have seen the signs on buses here in Ottawa playing up this kind of thing. Also there is the use of high pressure and sometimes illegal tactics. I think back to the shenanigans going on at the Frankfurt Fur Fair a couple of years ago where valuable fur coats were sprayed with paint and the young women who were modelling the coats were assaulted.
I asked questions of the Minister last Thursday and he was sympathetic to the cause of the trappers, but the answers I received were not really detailed enough as to what the Government was doing to combat this attack. In my opinion the case for the trapper must be equally as well organized and financed as that of the anti-trappers. A strategy is needed to combine the efforts of trappers themselves, their organizations and native organizations. I know a lot of work has been done here already and I cite as an example the Winnipeg conference organized by the Native Council of Canada not too long ago. I would also include in that group the provincial and territorial Government who legislate with respect to trapping methods and have under their jurisdiction fur bearer management, as well as the federal Government, especially the Department of Indian Affairs and Northern Development.
I am not satisfied the Government has done all it can on this issue, Sir. We must not lose on this issue the same way we lost on the white coat issue. Sir, the trappers of Canada must not be blackmailed out of existence.


Mr. Rene Gingras (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, during the Question Period on Thursday, May 3rd, the Hon. Member for Western Arctic (Mr. Nickerson) raised the issue of the ecological lobby and of the threat its activities represent for the Canadian fur industry and the way of life of northern hunters, especially the native people.
As the Minister stated at that time, it is a fact that this lobby poses a serious and unwarranted threat. The seal pelt boycott initiated by the European Economic Community in 1982 clearly reminds us that ecological groups can have a crucial influence on the market. If foreign fur markets give in to this threat, the Canadian fur industry will be seriously affected. In addition, native and northern hunters will be most affected by a possible slump in the fur trade. The consequences of one lost hunting season could be disastrous for the communities.
Because of this, in December 1983, the Ministers of Environment (Mr. Caccia), External Affairs (Mr. MacEachen) and Indian Affairs and Northern Development (Mr. Munro) submitted to Cabinet a three-part federal strategy based on consultations with all the parties concerned both within and without the Government. This strategy involved, first, a na-
May 8, 1984

tional and international information program using the most effective approach to both prevalent opinions; second, an education program for hunters to make sure that Canadian hunters are better informed about all aspects of the issue; and, third, a research program to develop more humane trapping methods adjusted to Canadian conditions.
Cabinet approved the use of an amount of $5 million to develop and implement the federal strategy during the upcoming three years. Cabinet also asked the Departments of Indian Affairs and Northern Development, Environment and External Affairs to assume responsibility for the development of the federal strategy in consultation with the other Departments, the Provinces and representatives of the private sector.
I would like to point out that, before taking any direct action about information campaigns, the federal Government intends to assess fully public opinion both in Canada and internationally in view of the sensitive nature of this issue.
Abroad, to make sure that the Canadian Government will make timely interventions, for instance, at the recent Frankfurt fur fair-
I am sorry, Mr. Speaker, but if I had a few seconds more, with unanimous consent-


The Acting Speaker (Mr. Herbert):: I am sorry, but there is no provision to extend the allotted time. The time of the Hon. Member has expired.


HOUSING-MORTGAGE RATE PROTECTION PLAN
Aideen Nicholson: Mr. Speaker, on May 1 I asked the Minister of Finance when he expected to introduce legislation to give effect to two measures announced in the last budget speech; first, the mortgage rate protection plan and, second, the proposal to give borrowers the right to prepay their mortgages at any time. In his reply the Minister said he hopes the legislation will be introduced this month. He stressed that there have been extensive consultations with the housing and construction industry, with consumer groups and financial institutions. The Minister also said that those who have taken out mortgages since March 1 would be eligible under the new program.
I am pleased that there has been such extensive consultation, because the measures will depend for success on the active participation of all involved, in particular the financial institutions. We have heard of at least one trust company which is now asking people renewing mortgages to waive any rights they may acquire under the new legislation. There is no lack of funds on the money market for mortgage loans at this time, and there is no need for borrowers to agree to waive their rights since many other financial institutions are willing to co-operate with the Government in enhancing security and opportunity for homeowners.
Adjournment Debate
The Budget encouraged Canadians to anticipate stronger rights for mortgage borrowers, a wider choice of mortgage instruments, a more flexible mortgage market, greater stability in mortgage costs and fewer risks in taking out a mortgage. These measures are eagerly awaited not only by homeowners and prospective home owners, but also by realtors, construction workers and those involved in producing the goods associated with new homes, such as furniture and appliances.
The consultations and discussions to which the Minister referred have, I trust, removed potential problems and ambiguities in what admittedly is a complex undertaking. I trust that we will soon have the legislation before the House in a form which will facilitate general acceptance and speedy passage.


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, the Minister of Finance (Mr. Lalonde) has indicated that he anticipates that legislation for the mortgage rate protection program and for amendments to the Canada Interest Act will be introduced in the House of Commons toward the end of this month. Over the past several weeks, the Minister of Finance, the Minister responsible for Canada Mortgage and Housing Corporation (Mr. LeBlanc) and the Minister of Consumer and Corporate Affairs (Mrs. Erola) and their officials have been actively involved in intensive consultations with the provinces, with the housing industry, with consumers' representatives, with lenders and with life insurance representatives. This consultative process is surely the best way to develop and implement these budgetary proposals.
The basic purpose of the government's proposed mortgage rate protection program is to offer security against severe financial disruption due to sharp increases in interest rates. By limiting an individual's exposure to extreme volatility in mortgage rates, the program will add to stability in mortgage costs and thereby increase the ability of individuals to plan their financial affairs with confidence. The degree of protection provided by the program can be very great if mortgage rates should increase dramatically.
The proposed amendments to the Canada Interest Act will ensure that mortgage borrowers have complete disclosure of all terms and conditions regarding their mortgages, including those relating to the prepayment of their loans. This initiative responds to the needs of borrowers for full information, and will improve competition in mortgage markets by helping consumers to compare the terms and conditions of mortgages offered by various lenders. The amendments will give borrowers the right to repay their mortgage at any time, at penalties that are fair to both borrowers and lenders. In addition, the proposals in the Budget would facilitate the introduction of mortgages with terms of more than five years and increase the number of alternative mortgage instruments that are available to borrowers.
In considering these measures, the various Ministers involved have attempted to ensure that the mortgage market

May 8, 1984
Adjournment Debate
remains as viable and responsive in the future as it has in the past. We certainly would not want to approve measures that would have the effect of increasing the cost of mortgages, decreasing the availability of mortgage funds or reducing the range of instruments available. Indeed, the various measures in the budget related to mortgages are expected to improve the security of home owners and prospective home buyers and increase the flexibility of the mortgage market.
The Minister has indicated that the mortgage rate protection program and the amendments to the Canada Interest Act are well advanced. Because of the extensive consultations, it is
hoped that legislation could be passed expeditiously. In addition, the mortgage rate protection program legislation is to be retroactive to March 1, 1984, so that the delays resulting from the consultation process would not prevent home owners from obtaining protection.


The Acting Speaker (Mr. Herbert):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 2(1).
At 6.25 p.m. the House adjourned, without question put, pursuant to Standing Order.
May 8, 1984


APPENDIX
[Stage Direction]
of
HIS EXCELLENCY MIGUEL DE LA MADRID President of Mexico
to
Both Houses of Parliament in the
House of Commons Chamber, Ottawa on
Tuesday, May 8, 1984
The President was welcomed by the Right Honourable P. E. Trudeau, Prime Minister of Canada, and thanked by the Honourable Maurice Riel, Speaker of the Senate, and the Honourable Lloyd Francis, Speaker of the House of Commons.
Hon. Lloyd Francis (Speaker of the House of Commons):: Order, please. The Right Hon. the Prime Minister of Canada.


Right Hon. P. E. Trudeau (Prime Minister):: Senor Presi-dente, Mr. Speaker of the Senate, Mr. Speaker of the House of Commons, Hon. Members of the Senate and of the House of Commons.
Canadians consider it a mark of special distinction for them, Sir, that you have chosen Canada for your first official visit North of the Rio Grande. We welcome you with open hearts to our country, as Mexicans have warmly welcomed Canadians. The generosity of your people is matched by the splendour of your country, as in the words of Octavio Paz:

Mexico rises between two seas as an enormous pyramid: its four sides are the four cardinal points, its steps are the climates of all its regions, its high plateau is the house of the sun and the constellations.

Mr. President, Canada is honoured by your presence in this Chamber. All Canadians are pleased to welcome you to Canada and to afford you an opportunity to speak directly to us at this Special Session of both Houses of our Parliament.
Early in your term of office, Sir, you earned our admiration and respect for the vigour and determination with which you strove to ease the crushing burden of indebtedness which Mexico, like so many other countries around the world, faced during the deep recession of recent times. Courageously you made difficult decisions which required heavy sacrifices by the Mexican people.
You have proved, as you said you would, that both the people and Government of Mexico are vigorous and mature, capable of responding to crisis and overcoming adversity. We admire such strong and determined political will. I am glad that Canada and Canadian financial institutions were able to play a part in assisting you.
Thus I welcome you as a neighbour and good friend. Mexico and Canada are no longer separated by time and space, living apart in their own labyrinths of solitude, to borrow again from the moving thoughts of Octavio Paz. In dramatic ways, technologies of transportation and communications make it possible now for nations everywhere to draw together. Government leaders in our two countries, and increasingly people in private walks of life, have shown very clearly their strong desire to draw together, to know each other, to co-operate in the arts, science, technology, energy and commerce.
Your visit today is contributing to this growing tradition of community and consultation for we have much in common and much to say to one another. When I became Prime Minister in 1968, the Government decided that Canada must systematically enlarge its relationships with Mexico and other key countries of Latin America. This we have done, with a reciprocal commitment from the Mexican Government. I have had the pleasure of making two official visits to Mexico and of welcoming two of your predecessors to Canada. These visits and the frequent meetings between our Ministers attest to our mutual determination to make our bilateral relationship successful.

Mr. President, the links between Canada and Mexico go back for many centuries. In fact, Samuel De Champlain visited a flourishing settlement in Mexico City, nine years before he founded Quebec City and fourteen years before travelling past the site of Ottawa, where we are today, during an expedition on the Ottawa River.
Canadians will recall with pride the constant collaboration with Mexico within United Nations agencies and other institutions during the creative post-war years. At the time, we worked together to prepare for a world order to be founded on a common vision of the need to reinforce gradually international law and to establish effective economic co-operation. In a word, we tried to provide a solid basis for peace.
Unfortunately, since then, man has seemed to take a perverse pleasure in developing military technology, while political institutions designed to safeguard peace crumbled.
As international tensions rose, Canada and Mexico, conscious of their responsibility and of their own resources, have always tried, each in its own way, to persuade the parties concerned to reconcile their differences. The perseverance we have shown in the past is needed even more urgently today, because the dangers that threaten us now are so much greater.
As you know, Mr. President, Canada has, out of a concern for deteriorating relationships between East and West, taken the initiative of trying to bring these essential relationships on

May 8, 1984
a more constructive level. On that occasion, I found that both sides had a number of points in common, and I urged Eastern and Western heads of State to set aside their differences and concentrate on what draws them together. In fact, we all have the right, in fact we have a duty, to try and reduce the risk of nuclear war.

Mexico and Mexicans have earned international credentials for independent viewpoint, fair mindedness and common sense. That is why I am encouraged that Mexico is currently spokesman for the Group of 77. You no doubt regret, as I do, Mr. President, the present state of North-South dialogue after the strenuous efforts Mexico and Canada made in recent years, especially in Cancun, to stimulate progress. We hope that Mexico's moderation and restraint will help to move the dialogue back on to a constructive path. Success in that endeavour would serve the cause of peace in a very fundamental way.
In the same spirit, I congratulate Mexico and the other Contadora members for their imagination and courage in seeking a regional solution to the potentially explosive situation in Central America. Your approach to this web of most difficult problems is above all realistic in its aim of building a consensus on a set of socio-political security objectives for Central America.
As a consensus develops, Canada will be prepared to help with whatever political or economic support we can effectively offer. We are consulting closely with the three Contadora working commissions. We will also be in close touch with the Action Committee for Socio-Economic Development-CADE-SCA.
Canada's approach to these problems, as frequently enunciated in Canada and in the region by my colleague, the Deputy Prime Minister and Secretary of State for External Affairs, is to recognize that the basic causes of instability and conflict are economic and social in nature. We look to Governments in the region for advice on how enduring solutions are most likely to come about. We are firmly persuaded that these are problems which must be seen, as they will be solved, in the light of the human needs of the people directly affected, and not in terms of ideological arguments. The imposition by force of external ideologies is seldom motivated by a genuine concern for the needs of the people.
Amid the international tensions and violence of our times, the right to speak becomes a responsibility, the need to hear a duty. That is why we are gathered in this Chamber today to listen to your views firsthand.
Each of our political parties, in its own way, is apprehensive about the dangerous deterioration in the security situation in the neighbouring regions that you know so well. Therefore be assured, Mr. President, that you are now welcomed eagerly by an audience, both here and in Canada at large, who will be heeding your words of counsel with an open mind and sympathetic heart.

To speak clearly, to dialogue, and to work together in the quest for viable solutions marked by human values and common sense-these are the urgent tasks of our area. The entire world today is trapped in a prison of dilemma, mainly dominated by the nuclear threat, and yet no less dominated by the tyranny of false and outdated ideologies on how society should evolve. As nations, we all search for the way out of such a prison, while remaining faithful to our own traditions and giving loose rein to our hopes and dreams in order to enjoy the fruits of the amazing human mind. I firmly believe that humanity will find its way; it has no other option.
It is with great pleasure that we welcome today the President of Mexico, Mr. Miguel de la Madrid Hurtado.

Senor Miguel de la Madrid (President of the United Mexican States): Mr. Speaker, distinguished Members of the Canadian Parliament, Mr. Prime Minister, Ladies and Gentlemen.
It is a great honour to accept the invitation extended to me by this distinguished body which represents the people of Canada. The Canadian Parliament combines the quest for the democratic perfection of the nation and the desire for its people's active participation in the tasks of the State. This forum confirms the validity of the desires and hopes with which the Founding Fathers of this country viewed its future.
Canada has forged its history and its future in a continuing effort to build a system of life that is firmly sustained by values and principles. The vigour of its political institutions and relations of peaceful coexistence stem from its perseverance in the practice of democracy as their mainstay.
Constitutional balances and counterbalances, the fostering of representative assembly, respect for social diversity and the opinions of the citizenry, and the active support of one's chosen party are constants in public power based on a broad and firm community foundation.
No democratic State can stand on the fragmentation of its society. On the contrary, political legitimacy must be based on the sentiments of the nation, on the co-ordination of action and needs of different sectors and groups; on maintaining a balance between the social distribution of responsibilities and the scope of governmental powers.
In putting its authentic values into practice, each country manifests its unique nature. Canada and Mexico are the result of unique and untransferable experiences. Their histories make it impossible in our times for them to accept that devious attempts be made to impose or force assimilation of foreign systems whom them.
We do not, however, believe in the Utopia of an autarchic system and we assert our identity without shutting ourselves off from enriching contacts with other peoples. We want to join in united efforts, but we refuse to accept any attempt at
May 8, 1984

uniformity that denies the historical foundation of peoples and cultures, that harms the individual values of each society and closes off genuine channels of co-operation and solidarity.
Canada and Mexico are becoming increasingly associated with each other through initiatives and common viewpoints and through their responsible participation in international affairs. Today there is particularly strong need to make our continent a place of converging ideals and an area privileged with understanding and progress, and to establish new relations that are more dynamic, more productive and more just.
This is so because today the international community is immersed in increasing uncertainty in the face of power politics, hegemonic zeal, political intolerance and profound economic imbalances that are so harmful to developing countries.
The world would seem to be skidding down the slope devised by the promoters of the use of power. Technological development has relentlessly built up a deposit of destruction and terror. Both usable weapons and the leftovers of war are employed in attacks on the survival and dignity of mankind. While innumerable people are afflicted by hunger, unhealthy conditions, ignorance and death, millions are being spent to build an apocalyptic arsenal that is becoming increasingly difficult to control and presents a great risk of thoughtless use. We are witnessing an irrational cult to the capacity for self-destruction and to excessive spending to build power.
Mexico has categorically repudiated the validity of doctrines of deterrence and nuclear balance which have jeopardized the legitimate aspirations of nations to live in peace, to seek economic development, political stability and social progress through just and equitable co-operation.
It is imperative that measures be taken to prevent the destruction of all that represents the cumulative efforts of modern civilization. The aberrational idea that not acting is equivalent to avoiding risk must be abandoned. Eluding responsibilities multiplies the effect of lack of foresight and, sooner or later, the price of remaining passive must be paid.
In this context, Mexico has followed with particular interest the development of the peace initiatives recently undertaken by Prime Minister Trudeau, which led to his interviews with leaders of the superpowers and with those of other countries that possess nuclear weapons and of numerous industrialized and developing nations. We congratulate this outstanding contemporary statesman who, with his political imagination, courage and capacity for leadership, has successfully furthered the cause of peace and development.
Mexico fully supports all action aimed at halting the arms race and reaffirms its commitment to complete and universal disarmament and to dialogue and negotiation as Sole means of achieving understanding.
We do not want a return to the dark days in which the alternative to confrontation was an unstable peace, subject to cycles of dependence on armamentism. On the contrary, we want constructive times of stability and progress through co-operation. The crisis that is now shaking the very foundations of world order makes this an ideal time to re-examine our course and adjust our objectives. The current problems affect us all and also tend, although in varying degree, to increase for us all. In looking toward the future, each country must decide whether it will act in favour of a collective effort or to pursue sterile and egotistical interests in isolation.
Two indivisible imperatives weigh on mankind's aspirations, peace and development. We recognize, with concern, that the instruments for achieving them are becoming more and more fragile. In addition to political tensions, we are faced with economic uncertainty, breakdowns in negotiation and the outright obsolescence of models and systems that have not provided the answers required today. Once again, the burdens of the crisis and of adjustments are being transferred to the developing countries and the lack of equity in the international structure is becoming more serious.
It is not enough to recognize that interdependence has only exceptionally led to the level of understanding and co-operation required. It is also necessary to prevent the lack of dialogue between the North and the South on behalf of world economic recovery from becoming part of the vicious circle of confrontation between hegemonic powers, or of irreducible opposition between East and West based on unilateral and ideologically motivated views, that violates sovereignties and delays or cancels out any real hope of independent progress.
The economic crisis is making inequality more acute, increasing contradictions and undermining the foundations of the international order. Recession and generalized inflation, the contraction in trade and the reappearance of protectionism, monetary and financial chaos, and the foreign debt are all manifestations of a divided world, incapable of achieving cohesion and rationality.
Sustained recovery will not be possible if it does not extend to every member of the international community.
The crisis that is affecting the developing world will not be settled without the concerted action of the international community. The problem of the debt is of a global nature. It affects all of us, and we should all contribute to solving it: industrialized and developing countries, debtors and creditors, and public and private financing institutions. To meet their loan payments, debtor countries need to regenerate their capacity to pay, and that will only be possible if their export products have access to the markets of the industrialized countries. At the same time, such access is the only possibility for strengthening their purchasing power abroad and re-establishing world trade flows. Attempts to do otherwise are not only unfair but also unrealistic. We trust that this point will be fully understood.
If the protectionism of the industrialized countries does not give way to the logic of reality, meeting demands for generating foreign exchange to cover development needs will prove an extremely complex task. Eventually an illogical situation would arise that would lead to undesirable forms of involution as a substitute for progress.

May 8, 1984
Renewing confidence and resuming the course of progress implies an immediate strengthening of immediately strengthening the specific mechanisms and activities of co-operation among States and thus a return to the original meaning of interdependence.
For both Mexico and Canada, the continental scope of such co-operation is fundamental. Imbalances in the world economy have dealt serious blows to the countries of Latin America. Long decades of growth and growing expectations have been replaced by regressive forms of development that affect not only aspirations for progress, but also employment, consumption and the well-being of extensive groups of the population.
It is thus imperative to establish new continental relations that provide room for production, exports, the distribution of income and the political and social progress of all peoples. It is a question of expanding economic co-operation, and with it, development and stability; of broadening political communication with respect for plurality and, with it, the true security of all nations.
Latin America has revitalized its own endeavours. We have co-ordinated actions under a joint strategy aimed at renovating our approaches, criteria and mechanisms. Our goal is to bring about a system of collective economic security supported by regional integration, the strengthening of our forums and organizations, and the co-ordination of common stands. This is the meaning and the objectives of the Quito Declaration.
To supplement these actions, we Latin American countries have responsibly begun making adjustments in our economies-in a necessary effort to rationalize them-that have a painful social impact.
In Mexico's case, we have organized with determination to overcome the obstacles arising from adverse circumstances. Firmly united, the Mexican people have brought their combined sacrifice, work and trust to bear on the common task of reordering the economy. The National Development Plan we have drawn up is designed to respond to the most pressing problems, such as inflation and the fiscal and foreign economic imbalance. At the same time, the Plan involves a readjustment process designed to make the structural changes essential to improving the production base by guiding it realistically towards feasible priority areas of national development. Despite the great difficulties that Mexico has faced, we have maintained a reasonable level of spending and social investment with a view to fulfilling the binding commitments inherent in the history of our nation's development and to alleviating the suffering of the people.
Distinguished Members of Parliament, Canada has been outstanding among the countries of the industrialized world in its sensitive understanding of international realities and its commitment to dialogue, development and detente.
We have observed its growing interest in Latin America and, particularly, the attention it has been directing toward the Central American crisis. That interest has been effectively demonstrated by this Parliament with satisfaction. The establishment in 1981 of the Subcommittee to study Canada's relations with Latin America and the Caribbean is indicative of its desire to strengthen ties between our countries. Another outstanding example is Canada's decision to double, over a five-year period, the economic assistance it provides to Latin American and Caribbean countries.
Mexico and Canada agree that the major cause of the Central American crisis is the area's lack of economic and social progress. This is why Canada's contribution to the program of the Committee for the Support of Central American Economic and Social Development, created under the auspices of SELA (Latin American Economic System) is so important. Canada's experience in designing and implementing development projects, together with its financial and technological capacity, will unquestionably prove very useful.
Canada's commitment to stability in the region is also reflected in the support the Canadian Government has expressed in different forums for the peacemaking efforts of the Contadora Group. Today, with growing threats to peace in the region, the voice of Canada and its political and moral weight are particularly valuable.
Today, we are reiterating our conviction, that the only path to firm and lasting peace is full respect for law and for the principles and norms of peaceful international coexistence.
It is the unavoidable obligation of Central Americans to staunch their wounds and regain stability by revitalizing the age-old concept of unity and settling differences among brothers, while it is the duty of other countries to respect the free determination of these peoples and to abstain from the use or promotion of force as a means of solution. Fortunately, countries like Canada, and almost all the Latin American nations, have taken specific steps to demonstrate their full support for diplomatic negotiations. This build-up of the international desire for peace strengthens the possibility that law and reason will ultimately triumph over generalized violence and war.
Distinguished Members of Parliament, in today's world, characterized on the one hand by East-West tension-a sterile force that endangers the very existence of mankind-and on the other by the profound imbalance between the North and South and the instability bred by injustice and inequality, Mexico and Canada share the common goal of promoting dialogue, reducing tensions and furthering international cooperation for development.
In practice, Canada's and Mexico's foreign policy, as expressed in different forums, has often been the same and they have both promoted initiatives and striven for solutions to the serious problems that afflict mankind. This is not unusual. We have both always upheld the importance of international organizations for the maintenance of peace, security and cooperation, in the conviction that such organizations represent the values of peaceful coexistence among States and the supremacy of law over might.
I have come to Canada to reaffirm the high priority the Mexican Government confers on its relations with this coun-
May 8, 1984

try. We know that distortions in the world economy, which are also affecting Mexico and Canada, have slowed the pace of our exchange activities. Nevertheless, experience in recent years has shown the numerous opportunities for co-operation in such diverse areas as agriculture, industry, energy, communications, fishing and transportation.
Economic and political relations between our two countries are not a matter of momentary circumstance, but of interests of a much vaster scope: similarity of political concepts and values, complementary economies and a common willingness to foster dialogue and co-operation on the basis of respect, trust, friendship and mutual benefit. We Mexicans and Canadians want to be increasingly closer friends.
Ladies and Gentlemen, under the threat of grave nuclear escalation, the increasingly acute ideological confrontation and the economic crisis that overshadows the world's atmosphere, there is a ray of light for the peoples of the American continent. Peace, respect for law, justice and co-operation must and will take their proper place as indispensable ideals of our community of countries. Those values are not negotiable, nor can they be fragmented without threatening the stability of all and violating the humanistic sentiment that permeated the enterprise of civilizing the New World.
It is my hope that through the untiring efforts of people and government, of organizations and individuals, future generations on our continent may find a safe, harmonious and just place in which to live together and grow. I trust that Canada and Mexico will be able to meet the challenge of making to-day's dream, a reality.
Thank you very much.


Hon. Maurice Riel (Speaker of the Senate):: Mr. Speaker of the House of Commons, Mr. President of Mexico, Mr. Prime Minister of Canada, fellow parliamentarians.
Today we have had the great privilege of listening to an eminent statesman in the person of the President of Mexico. It is a great honour for me, as Speaker of the Senate and on behalf of my fellow senators, to thank the President for his wise words and to salute him as the leader of a country with which we maintain numerous cultural ties and ties of friendship, in addition to important trade relations.
Mr. President, you are also particularly welcome as the leader of a nation with which we share the larger part of the North American continent.

We in Canada have been impressed by the skill and the strength with which you, Mr. President, accepted the challenge of these difficult circumstances and have put your nation on the long and arduous path to recovery. In this, Mexico has given us all a praiseworthy example of confidence in the future.
A concern for the future has been evident too, Mr. President, in your commitment to the peace and well-being of the
peoples of your region. We in this Parliament, indeed in this country, have followed the efforts of the Contadora Group with an intense interest and a profoundly-felt hope for their success. We realize that, as never before, we are all, literally and figuratively, "a piece of the continent, a part of the main". We ask you today to take back to your colleagues in Venezuela, Panama and Colombia our earnest wishes for the realization of your vision of a Central America in which conditions will permit its peoples to progress towards peace, stability and good neighbourliness.

Mr. President, we are all delighted to have you and your ministers visit Canada. Frequent meetings at the highest level, among heads of State, ensure an abiding respect for the best interests of all concerned by consolidating bilateral ties between countries. Therefore, we earnestly hope that the ties that exist between Canada and Mexico will continue to grow for the greater good of both our countries.
Finally, I wish to thank you again, Mr. President, not only for your address, not only for having come to Canada, but also for your efforts to restore peace in our hemisphere. Rest assured that Canadians, like all people of good will, are grateful to you for this and urge you to continue. In this as in all other things, Mr. President, we wish you the best of luck!


Hon. Lloyd Francis (Speaker of the House of Commons):: Mr. President of Mexico, Mr. Prime Minister, Members of the Senate and the House of Commons.
It is a great honour for me, on behalf of Members of our Houses of Parliament and guests assembled, to express our appreciation of the Address we have heard from the President of Mexico. We welcome him to Canada as the leader of a friendly nation which shares Canada's commitment to peace and development in the Americas.

Continuing with the warm friendship developed between our two countries, we have the honour of welcoming our distinguished visitor to our capital.

Canada and Mexico have enjoyed diplomatic relations for 40 years. Our two nations are linked by many important treaties and agreements in such areas of common interest as energy, culture, industry and agriculture. The past several years in particular have witnessed a very welcome increase in the number and level of official contacts between our Governments.

In 1983, a delegation of Canadian parliamentarians visited Mexico to consolidate our friendship, increase our knowledge of each other's country and explore further avenues for cooperation between our two countries. All delegates came back delighted with their visit.

May 8, 1984

Hundreds of thousands of Canadians visit Mexico every year, and the number of Mexican visitors to Canada continues to increase. The beautiful Spanish language is heard spoken more and more often in the corridors of this building as touring groups follow guides across Parliament Hill. Such exchanges foster better mutual understanding and good will. We hope that they will thrive and expand.

Mindful of the cordial relationship between our two countries, we wish to thank His Excellency for his visit and his kind words. Thank you.

This joint meeting of the Senate and House of Commons of Canada is now adjourned.


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Wednesday, May 9, 1984