1985-06-25

Hon. Don Mazankowski (Minister of Transport) moved: that Bill C-53, an Act to authorize the disposal of the Northern Transportation Company Limited and the forgiveness of its debt to Her Majesty and to amend other Acts in consequence thereof, be read the second time and referred to the Standing Committee on Transport.
He said: Mr. Speaker, Bill C-53 authorizes the federal Government to dispose of the Northern Transportation Company Limited. Agreement in principle has been reached with the Innuvialuit Development Corporation and the Nunasi Corporation. The agreement is being finalized this week and the enabling legislation will give the Government the authority to complete the sale.
By way of background, Mr. Speaker, let me say that the Northern Transportation Company Limited was established under private ownership in 1931 as the Northern Waterways Limited. It operated several small vessels from Waterways, Alberta to Lake Athabasca, Great Slave Lake, the Mackenzie River and Great Bear Lake. In 1934, the company was renamed the Northern Transportation Company Limited, still under private ownership. In 1936, NTCL was acquired by Eldorado Gold Mines Ltd.-later Eldorado Mining and Smelting, now Eldorado Nuclear-which was then a private company involved in mining on Great Bear Lake.
Under Eldorado ownership, the NTCL served Eldorado needs and continued to operate a common carrier service in the Athabasca and Mackenzie area. In 1944, Eldorado Mining and Smelting was nationalized under the War Measures Act because of its radium and pitchblende mining operations at Great Bear Lake. NTCL came under government ownership as part of the Eldorado package.
From 1945 to 1957, NTCL slowly grew as traffic increased. Community resupply became an important activity and thereby NTCL was fulfilling a very important public role.
In 1949, NTCL was declared an agent of Her Majesty, pursuant to the Government Companies Operations Act. In
1957, NTCL began operating into the Canadian western Arctic to resupply the Distant Early Warning Line radar stations established by the U.S. Air Force. This was a further example of NTCL's contribution to government objectives in the North.
In 1957 to 1972, NTCL traffic continued to grow, particularly in later years, as oil and gas exploration was developed in the Mackenzie Delta. In 1962, the NTCL main operating base shifted from Fort McMurray, Alberta, to Hay River, Northwest Territories, with the completion of the Great Slave Lake Railway. Athabasca operations continued but there was no operational link between the Athabasca and the remainder of the NTCL system.
In 1965, NTCL acquired the assets of Yellowknife Transportation Limited, one of its competitors on the Mackenzie River. In 1972, NTCL reached a peak of over 400,000 tonnes of cargo carried. In expectation of further increases, NTCL engaged in a major capital expenditure program involving purchase of new tugboats, barges and shore equipment. In 1973, NTCL bought Grimshaw Trucking and Distributing Ltd. of Edmonton. Between the period of 1972 and 1976, NTCL traffic declined drastically, owing to the failure of the anticipated Arctic gas pipeline to proceed and to reduce exploration activity. In that period of time NTCL suffered some severe financial losses.
In 1976, NTCL was recapitalized through conversion of some $24.9 million of federal government debt into equity. Between 1977 and 1981, NTCL recovered its financial position, which peaked in 1981 with net earnings of $4.3 million and a return on invested capital of 11 per cent.
In 1981, NTCL incorporated Nortran Offshore Ltd. and refurbished two vessels for seismographic geotechnical work under Nortran. From 1981 to the present, NTCL has remained profitable, although at a somewhat lower level than the 1981 peak.
That gives you a brief history, Mr. Speaker, of the development of the Northern Transportation Company Limited.
Presently, NTCL is a federally incorporated company under the Canada Business Corporations Act. The company's head office is in Edmonton, Alberta, with its main operating base at Hay River, Northwest Territories. It is the largest operator of tugboats and barges in northwestern Canada and is the primary means of marine transportation for residents of the Mackenzie River watershed, the western Arctic, and the Keewatin Hudson Bay coast. NTCL operates 26 tugboats and 171 barges. NTCL owns Grimshaw Trucking and Distributing Limited, a trucking company operating in Alberta and the Northwest Territories. It also owns Nortran Offshore Limited
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Northern Transportation Company
which offers seismographic-geotechnical vessels for charter in the Beaufort Sea.
In 1984 NTCL carried 236,000 tonnes of cargo on its 5,000 mile marine system and employed 564 people during its peak summer season. Some of the highlights of its 1984 financial performance are that it generated revenue of S40.9 million and it earned $1.55 million from operations, with net earnings of $1.34 million, a return on invested capital of 5.1 per cent, and a return on equity of 3.6 per cent.
What is the justification for privatizing the Northern Transportation Company Limited? NTCL was not made a Crown corporation by design, but rather by accident through the nationalization of its then parent company, Eldorado. NTCL never had a clearly defined public policy mandate. Although the resupply activities carried out by NTCL are very important to northern residents, there is no reason why resupply operations cannot be carried out by a privately owned company. We believe that the private sector is capable of and willing to provide the service required.
NTCL itself has had aspirations in the past to diversify into related business areas. These aspirations were discouraged because it was not thought appropriate for NTCL to become involved in new areas already well served by the private sector. Privatization of NTCL would free the company to pursue entrepreneurial opportunities.
Northern Transportation Company Limited has been a candidate for privatization on several occasions already. The company was on the short list to be privatized in 1979, and in 1984 the previous Government announced plans to sell NTCL. The process for the sale of NTCL has been public for some time and there have been no expressions of public concern over the issue of privatization.


Mr. Benjamin:: Oh, you're kidding.


Donald Frank Mazankowski: As I said, the previous administration offered NTCL for sale in August of 1984 and, after a lengthy process of providing information to interested parties, three offers were received in November of 1984 for the purchase of the company. The offers were evaluated on the basis of price, native-northern participation, and commitment to community resupply. Northern Industrial Carriers Limited of Edmonton was selected as the preferred offerer provided it could attain a satisfactory level for northern-native participation. Other offers came from the consortium of the Denendeh Development Corporation, the NWT Metis Development Corporation, and Arctic Transportation Limited, and a consortium of the Inuvialuit Development Corporation, the Nunasi Corporation, and NTCL management personnel. After lengthy negotiations, the final offer of NIC was rejected in March 1985. The rejection was on the basis of an inadequate level of native and northern participation and a reduction in price from the original tender.
It was then decided that new offers would be invited from groups that had earlier been involved in the sale process. Three
offers were received: one from the consortium and the Denendeh Development Corporation, the NWT Metis Development Corporation, and Arctic Transportation Limited; the second from the consortium of the Inuvialuit Development Corporation and the Nunasi Corporation; and the third from Arctic Offshore Limited and Northern Arc Shipbuilders Limited. Again the offers were evaluated on the basis of price, native-northern participation, and commitment to community resupply. The IDC-Nunasi offer met all of the criteria set for evaluation. In addition, it presented several other attractive features, notably the fact that IDC and the Nunasi represented the majority of NTCL's resupply customers.
At present, six Inuvialuit communities and 12 Inuit communities are served. Whether one applies revenue-tonne miles or tonnage as compared to NTCL's over-all community resupply services, the percentage attributable to these communities is in the range of 90 per cent to 95 per cent. The offering group is made up entirely of the northern Inuit.
Just to give you a brief run-down on the IDC group, this corporation was created by the Committee for Original Peoples Entitlement to pursue entrepreneurial opportunities on behalf of the Inuvialuit people of the Mackenzie Delta and the Western Arctic. These people live in communities as far east as Holman Island and Paulatuk. The IDC received its current capitalization of the Inuvialuit land claim agreement signed in 1982. This involved a number of businesses, including aviation, catering and support for the Beaufort Sea oil operation. The corporation's head office is in Inuvik, Northwest Territories. Its president is Randal Pokiak and its general manager is Peter Coolican. The Nunasi Corporation pursues entrepreneurial activities on behalf of the Inuit people of the central and eastern Arctic, and acts on behalf of Inuit living in Coppermine and east, and Keewatin, as well as throughout the eastern Arctic. Nunasi has not been the beneficiary of land claim funding since no land claims agreement has been reached with the Inuit. The company owns a small airline in the Keewatin, and until recently had a significant shareholding in a gold mine. The corporation's head office is in Ottawa and its president is John Hickes.
Also involved is the firm of Trimac. Although not a shareholder in the IDC group, Trimac will play an important role by providing administration and management advice to the company. Trimac is a large diversified Calgary-based company involved in bulk trucking, general construction, pipeline construction, oilfield drilling and consulting. The company is very well respected in the western Canadian transportation industry.
The IDC-Nunasi group has agreed to a binding commitment to maintain NTCL's community supply. The fact that the ownership will represent the majority of NTCL's customers strengthens the degree of commitment even further. In addition, NTCL's long-term debt to the Government, currently some $27 million, will be retired on closing, using cash in the company. As I said, closing of the deal is planned for the
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end of June. Negotiations between Government officials and the IDC-Nunasi are going on and progressing well.
I hope that all Hon. Members of the House will agree to give this particular legislation speedy passage. I should say that I will be offering a couple of amendments at some point with respect to the impact on the company as it relates to income tax. The thrust of the amendments are that, for income tax purposes, the company will be in the same position after the sale, with the transfer of property, as if it had always owned the property. The portion of the amendment dealing with the debt recognizes that the debt, which is now owed by an agency of Her Majesty to Her Majesty, will not remain with the privately owned company. Really, what the amendments do is to clarify the technical issues involving NTCL's tax status. It is not a change in the substance of the Bill whose purpose remains unchanged.
I hope there might be some disposition to proceed with this Bill in all stages in the House. If not, I would certainly be prepared to appear before the standing committee to offer further elaboration at that time. But perhaps there may be some discussions about how we might proceed in order that we might receive passage of this legislation before the end of the week.


Leslie Gordon Benjamin: Mr. Speaker, I rise on a point of order. I know that the Minister has been very busy with many things this morning. However, the Transport Committee met and we agreed that we would be meeting tonight on both the Western Grain Transportation Act amendments and the Northern Transportation Company. I have no knowledge of any discussion about the latter Bill going through all stages in this Chamber. We have agreed that we would deal with both Bills tonight.


Donald Frank Mazankowski: Mr. Speaker, if that has been the arrangement, I would certainly have no objection. I merely want to stress the urgency and importance of having the Bill passed before the end of the week. I would certainly be glad to appear before the committee this evening.


Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, let me add my words of appreciation and some sympathy to the Minister of Transport (Mr. Mazankowski). We know that he has had a very harrowing weekend and we recognize the difficult circumstances under which he is operating. Therefore, we appreciate his being in the House today to introduce the Bill and provide us with information related to the sale of the Northern Transportation Company Limited.
However, there are a number of questions that should be answered. Therefore, we would appreciate his appearance at the committee as well as the provision of somewhat more enlightened and expanded comments during the second reading and report stages.
We treat this Bill seriously, not only because of its importance to northern Canadians but also because it is an important precedent in the ways and means of the privatization of a
Northern Transportation Company number of Crown corporations. I would give the Minister of Transport a somewhat backhanded compliment by saying that at least he has been able to privatize one Crown corporation, while his colleague, the Minister of Regional Industrial Expansion (Mr. Stevens), has made more than enough speeches throughout the country about what he will do but has done nothing in ten months. However, while the Minister of Transport has at least been able to bring this privatization almost to fruition, I would add that one reason he has been able to do so is that it was an initiative begun by the previous Government. Obviously his achievement is a result of having a major advantage as a result of the foundations being well laid approximately a year ago. That would explain the difference between his level of accomplishment and that of his colleague, who is absolutely floundering and staggering in his attempt to accomplish his goal. I read recently a speech made by the Minister of Regional Industrial Expansion in October in which he said that all these Crown corporations will be signed, sealed and delivered by Christmas. However, one has yet to pass by the hallowed portals, which only shows that the large sip between the sip and the drink of the Minister of Regional Industrial Expansion must be carefully watched.
When our Government introduced the Crown Corporation Bill over a year ago, it was our belief that it was an important principle that any sale of a Crown corporation had to be examined by Parliament. We believed that it was an essential ingredient in a process that any Government undertook in providing for the sale of a Crown corporation. I suggest that the wisdom of that belief is borne out in today's legislation because it gives us an opportunity to have a greater degree of public scrutiny and examination of a very important issue concerning the way in which the Government sells a Crown corporation.
As the Minister pointed out, these matters should not be approached in an ideological fashion but, rather, in a pragmatic way. We must ask if the existing Crown corporation is serving a public purpose. While that may be defined in different ways by different Parties and Governments, it is a primary test.
Although most Members in the House believe that history began last September 4, that was a test which we applied in November of 1983 when we first announced that we had commissioned the board of directors of Northern Transportation Company Limited to examine the prospects or reasons for the sale of the Northern Transportation Company Limited.
I want the Minister to consider carefully the fact that we asked the board of directors to become directly involved in the assessment and evaluation and to become major partners in the sale. It is my understanding that since the new Government came to power, the board of directors has been basically frozen out of any involvement in this particular sale. That is of some concern. Under basic corporate law in this country, the board of directors, whether that of a private or of a publicly held company, has major responsibilities to act not only as stewards for the shareholders, which, in this case, is the Government, but also to provide for a more sensitive and at

June 25, 1985
Northern Transportation Company times knowledgeable appreciation of the intricacies of a company than you might have from a government Department.
The board of directors is a very important policy-making body, a very important monitoring body and a very important decision-making body. One of the key questions I want to raise and bring to the attention of the House is, why was the board of directors of this Crown corporation, which had been initially involved last year in the preliminary discussions of the sale, according to its President and chief operating officer, Mr. Cameron, not been directly involved? The experience gained and the background enjoyed in running this company has been ignored. I think it may have something to do with the fact that there was a substantial hiccup in sales when the Government made its first overture to northern carriers. It then had to withdraw and move on to a second range of buyers simply because it did not use or exploit the background information that might have been supplied by that board of directors. I do not think it is necessarily within the purview of a government Department to be in the sense the vendor of such a thing, because it is unquestionably the responsibility of the Minister. I believe the initial judgment or assessment that we have to make in this case is that when one comes to making choices about privatizing, it is very important to follow wisdom, which is to involve the interested parties who are essential to a sale. In this case to sidetrack the board of directors from the outset is a very serious mistake and one for which I hope we would receive some rationale. It suggests some of the reasons for the problems that were encountered when bringing this sale to fruition.
I am a little concerned that the Minister did not share with this House the kind of information gained by the initial assessment and evaluation done by First Boston, which had been set up to do a proper financial accounting of the company to determine its level of assets, prospects and so on, which would help Parliament, and in particular the standing committee which will be working in a very strict time frame, to get a better financial judgment as to the pluses and minuses of this sale. I go back to the Minister's own words. Is the Government undertaking the right kind of financial deal in making this sale? We do not know because we do not have First Boston's report. I do not think there is anything particularly confidential there. If there were, it could be raised, but I say to the Minister across the House that it may be of some importance to the committee to have access to the results of the First Boston study. I think it would give us some proper background as to what were the various financial statements and results. I say this in particular because it is important to go back a little in history to clear the air. Certain of the Minister's colleagues a year or so ago raised a number of questions when they were on this side of the House concerning the financial arrangements of NTC sales and made some fairly strong charges concerning the management of the company.
As we said at that time, that was something which, in a way, was an attempt to put these people into a precarious position and to assess their reputation. I think the responsibility of the
Minister should be at least to give us the results of the First Boston study to clear the air and not to leave some of those questions outstanding as they were last year. At that time when I held his position I said I could not answer those questions until we had done the proper financial study, which we were prepared to do through an independent party. Many of those individuals, among them the past President, Mr. Montpetit, deserve and have the respect of this House, and we should recognize that by attempting to come to deal with those financial issues.
I do commend the Minister of Transport for following through on the original terms of reference. They were to ensure that there was substantial participation by northerners and native people. When we initially examined the concept of the sale, we thought it was an ideal opportunity to provide incentives for the newly emerging entrepreneurial class of native people in northern Canada. We thought it would provide them with an opportunity to have a good stake in a company which directly affected their interests. At that time we had several discussions and participated in negotiations with native organizations. They made a very strong case that NTCL was a prime candidate to enable them to get a major toe-hold in a northern transportation system which they could own and operate. That was one of the primary justifications we used in November 1983 to begin the process leading toward the privatization of this particular company.
When the Minister originally made his announcement concerning the sale to Northern Industrial Carriers, at that time it did not contain participation or involvement of northern native organizations in particular. Obviously the second bid which has been accepted by the Government, at least on its face value, fully meets that test and the criteria which we put forward as being a justification for the sale.
I hope Hon. Members of the House will take full recognition of the fact that this is a very important step in northern Canada. As some Hon. Members who represent northern constituencies are fond of saying, and rightfully so, sufficient attention is not paid to the affairs and interests of northern Canada by Members of the House. They tend to be pushed off to the sidelines too often.
One of the most important and exciting developments which I witnessed when I was in the Ministry of Transport was the way in which a number of native organizations, partly using money from land claims as their basis of capital, were undertaking a new way of meeting their economic objectives. They were moving toward the notion of self-sufficiency, not only in local government terms but also in economic terms. My Party and I believe very strongly that this is one of the signposts for the future. If we are to alleviate the severe economic deprivation of northern native people, perhaps one of the most important ways in which Government can assist them is by giving them the equity, capital and operations which allow them to grow, expand and develop economic investments in their own community. As any number of groups at the bottom of the
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economic ladder try to climb up it, they do so by developing a stake in their own community and by developing the ability to obtain a good capital base upon which to build.
This sale of NTCL is a very important step forward. It will enable native people in northern Canada to acquire an important company. It is an important company in that it supplies a very important service. With the right kinds of conditions, it can be a real foundation for the expansion and development of a number of other offshoots, not only in transportation. It will at least give them the basic capital and the administrative development and experience upon which they can grow and evolve into fairly major economic operations.
The Bill is important in terms of being a first step in privatization and the principles adhered to. It is a very important example of the way in which Government can assist native people-and for that matter other groups-in their economic development. Rather than divorce itself from them, it can facilitate their development of economic self-sufficiency.
This raises several questions which I hope the Minister will answer. He mentioned in his statement that the $24.5 million outstanding loan to the Government would be written off. I believe he said that it would be written off by the proceeds from the sale. If that is the case, we would want to know the sale price. Also we would want to know what kinds of conditions and arrangements have been made. Is it simply a writeoff trade? Will further equity be coming back to the Government? In other words, what kind of financial arrangement has been arrived at?
The second component would be: What kind of continuing commitments has the Government made, particularly in terms of resupply in the Keewatin area? As I recall the situation, the present contract went into 1989. I believe that is the present arrangement. In some years, in particular in 1983, the level of subsidy for that was over $600,000. I believe last year, if I am not mistaken, the company paid some money back to the Government, about $300,000. As a result of the way in which the resupply agreement has been worded, there is a back-up commitment by the Government of Canada to ensure that the resupply continues to pay any additional costs over what is returned by way of revenue. It is very important to know at this point in time whether that is simply running until 1989. Is there a long-term commitment from the Government to maintain that subsidy? In particular-and I do not believe the Minister mentioned it in his opening remarks-to what degree has a term of reference or a set of directions been given to the Canadian Transport Commission to ensure that the agreement is lived up to in terms of resupplying essential communities, to ensure that it will be honoured? I am not saying that there should be any mistrust, but we must remember that it is the only source of supply for certain parts of northern Canada, including the northern part of Manitoba, the province from which I come, and the Churchill supply area. What kind of agreements or arrangements will be made with CTC to monitor the performance of the company in its resupply commitments and in redefining its terms? What commitment is being
Northern Transportation Company made by the Government in the long-term interests of the area?
When we talk about privatization, there are many private companies which receive transport subsidies. I have heard Hon. Members opposite say that perhaps too many companies receive such subsidies. However, I want to express a note of caution. In the last Budget papers tabled by the Minister of Finance (Mr. Wilson), there was a very clear statement that the Government intended to reduce the number of subsidies under transportation. Of course, we assume that that would primarily mean in Atlantic Canada. The key question would be: Would this affect or have an application to the Keewatin supply area under NTCL? I think it is very important for the Minister of Transport to outline clearly those conditions.
I should like to refer to another set of issues, those affecting or impacting on local residents, particularly in the Territories. As I understand it, some real concern has been expressed over the last several months about the need to undertake impact studies of both an economic and environmental kind in terms of the consequences of the sale. The Minister did not indicate whether such studies or impact assessments had been made. Some assurances should be provided to the affected communities which have a singular reliance upon the company for their well-being and livelihood. We require further information and clear guarantees from the Government as to what in fact has been done. What kind of assurances have been given to these communities as a condition of sale? Has CTC been assigned a role to determine the conditions of licence and the performance of these conditions?
Those are very clear-cut questions. When this company has been privatized, the only two areas in which the Government will be able to provide some continuing level of guaranteed assurances would be through its subsidy payments on the Keewatin supply route and through the licensing arrangements under CTC. We have not received any information from the Government in either case as to what it intends to do. There are a number of questions related to the sale, but I want to make clear that we as a caucus and as a Party support its basic principle, because in fact it was an initiative which we took. We did so because it made good sense at that time. I suspect it makes even better sense now. One clear question had to be answered at that time, and I believe the Minister referred to it in his opening address. If the company were to expand its operations, if it were to diversify and supply alternative services, it would need more equity to do so. There seems to be no good reason why the Government of Canada should be paying for that new infusion of equity capital. That comes back to what the conditions of sale are and what in fact are the financial arrangements that have been made; to what degree the reserves of the company have been used up; what kind of capital will remain and what kind of return on the capital will be allowed so that it will not be so totally stripped that it would not be able to take advantage of that area.

June 25, 1985
Northern Transportation Company
The second major reason, as I said, that we strongly endorse this Bill, is the opportunity that this provides for self-sufficiency for native organizations in northern Canada. I think that, in the long term, that might prove to be a valuable and important segment of this area.
We would say, by way of an opening of a series of comments, that we support this Bill in principle but many questions need to be answered. We will try to assist the Minister as much as we can so that this transaction can continue, as long as we are able to receive the kind of assurances that I have requested this morning.


Leslie Gordon Benjamin: Mr. Speaker, 1 ordinarily would not welcome any opportunity to speak on a Bill which allows the Government to get out of its obligations to provide guaranteed and essential services to the residents of northern Canada, or to any part of the country for that matter. I am happy to say that the Government's initial plan to sell to a southern private company fell through and it is in fact now planning to sell this company to a consortium of two Inuit corporations. I want to say to the Minister that had he done otherwise, he would not be getting this Bill through in the eleventh hour of this session.
The whole issue of privatization, like deregulation, has been a matter of some debate in this House and all over the country for the last several years, ever since the Proposition 13 syndrome and Reaganomics were imported into this country and grabbed on to by both the Liberal Party and the Conservative Party.
It does provide an opportunity to consider the purpose and the value of Crown corporations, particularly in the instances where it covers part of the economy that is a natural monopoly, small markets or isolated areas where an essential public service has to be provided. Over the years, in this country as well as others, Governments of the stripe of the Liberal or Conservative Parties have got into Crown corporations, not because they believed in them, not because they thought there was an essential public service that Government could best provide through ownership by the taxpayers of the nation, but for a number of other reasons. One was to bail out some outfit that was going broke and to help out the banks and the bond holders and private investors, and the other was because the private sector could not or would not fulfil an essential public need. Where was the private sector in the 1930s when it came to fulfilling essential public need in northern Canada? It could not or would not provide that essential public service, and starting in 1934 the people of Canada began providing that essential public service in the thinly populated northern isolated area.
The other thing is that in the mindless drive toward privatization there seemed to be a strong tendency under the previous Government as there is under the present Government to sell off the winners and leave the taxpayers stuck with only the losers. Hardly anybody is going to rush forward to buy a Crown corporation that is losing its shirt, although the Government may well end up having to sell parts or all of several other Crown corporations. I am thinking of a couple of aircraft manufacturers and a few others that were taken into public ownership, not because the Government believed there was an essential need to have a Crown corporation in the aircraft industry to preserve a qualified capacity for the manufacture, production, research and development in the aircraft industry. It was done for other reasons. Those reasons were part of it, but there were other reasons as well, partly to preserve jobs and partly to bail out those who were losing their shirts and stop them from pulling out of the country or just folding up completely.
The taxpayers are just as entitled as any private investor to the opportunity to obtain a return on the investment they make. That is why I do not understand the rush to sell the winners. I know they are easier to sell because they are making money. NTCL has been very profitable, certainly for the last five or six years. Those are easier to sell. If it were only as easy to sell off the losers! There is no imperative that the Government be in the kind of business that some of those losers are in, but it is in for a variety of other reasons, and they remain losers.
Those public corporations that provide essential public services, that fill a public need and serve the national interest, and at the same time obtain a return on investment in a profitable situation for the taxpayers, are surely the kind, given the combination of all those three things, for the keeping in the public sector of which there is total justification. They should be kept as Crown corporations.
As a matter of general principle, my Party believes that there are certain sectors of the economy, and particularly in isolated or thinly populated areas or areas with a small population and small markets, where the private sector cannot or will not provide the services that people need. Those are legitimate areas for Government to establish Crown corporations on behalf of not only those people in the areas affected or in the services that they require but also to serve the national interest. Otherwise we would never have built a railroad.
We make an exception in this case because at least NTCL is being sold to the people of the North. It is too bad that all of the aboriginal groups who bid on this company could not have got together and been given joint ownership and joint control. Then they would all be involved and we could be certain that all areas of the North currently served would continue to be served as well as they are now, if not better, and that any changes in the future because of development decisions and needs of corporate development would be made by those people themselves with all the interests of the North at hand. Just the same, we believe that the IDC and Nunasi corporations will do a better job than some private sector outfit from the south who would go into it to make a buck, get rid of the parts that lose money, and give little or no attention or consideration to the needs of the people in all parts of northern Canada.
What we would really have liked to have seen in this bill are clauses which would guarantee services to the North, guaran-
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tees that the purchasers, whoever they might be, would continue to provide the excellent services that the company has been providing and some guarantees that the company will continue to invest its profits. The company has been very profitable over the last number of years and its profits should continue to be invested in the further development and improvement of the Northern Transportation system.
We believe that the proposed purchasers will do all of those things because doing so affects all of them. It will be in their own best interests to reinvest profits and to improve the operations of the company so that it will be even better than it is now. There can be no question that NTCL has been doing a good job and has been meeting an essential public need that up until now the private sector has been unable and unwilling to meet. We do believe that the proposed purchasers will do these things, but we want a guarantee that they or anyone to whom they may sell all or part of the company in the future will continue to do the same. However, there is nothing in this Bill that provides for that. There may be something in the agreement of sale providing for that, and I understand that the Minister has said that there is. I wish that he would show us the agreement of sale. Perhaps he will do so later. The Bill itself is completely vague on that matter.
Over the last five years NTCL has made profits of somewhere in the order of $20 million. It has certainly made profits of over $14 million in 1979, 1980 and 1981. I do not have at hand the figures for the last couple of years but I believe the profit picture was good in both of those years as well. I also recognize that the company indicates in its annual reports an extraordinary item, it being payments of debt to the Crown. Even so, it has still reported a profit in each year. Of course, the Bill provides for the forgiveness of the Crown debt so that it will not be an expense that will have to be borne by the new owners. That brings me to two questions.
First, as I mentioned earlier, should the Government be selling a profitable operation for which there are no competitors? In fact, the economic reality is that there is no room for competition because of the high cost of providing services in the North and because of the smallness of the market. The question to be asked is, should the Government be selling the company no matter to whom, particularly when it is a winner both in terms of the services it provides and the profits it makes? Can the Government not provide this service at a reasonable rate itself and still make a return on its investment, no matter how small?
After 50 years of efforts by the Government and investment by the taxpayers, this company has finally become a very successful and worth-while operation. Then and only then does the private sector rush in saying that it cannot have all these publicly-owned corporations interfering in the private sector. The private sector wants to pick up the action and it wants the gravy off the top. This applies not only in this instance but in the case of airlines. Where the hell was Canadian Pacific when we needed it? As soon as Air Canada started making money,
Northern Transportation Company
then the pressure was on and the demand was there for the private sector to involve itself in air transportation to provide competition.


Donald Frank Mazankowski: You helped build that private sector.


Leslie Gordon Benjamin: The taxpayers built it, paid for it and they are still paying for it. Where is the private sector when we need it in areas of essential public services?
I do not question the intentions, motives and abilities of those who are proposing to purchase the NTCL, but even they, through their representative organizations and institutions, have over the years told Parliament and said publicly that they would prefer the Government to continue to operate this company and provide its services. I suspect that if it had not been for the efforts of the southern private sector to purchase this company under the previous administration and again under this one, the native organizations in the North would not have moved to purchase it themselves. I doubt if many Inuit and Dene people would want to be entirely at the mercy of southern private-sector corporations. When they were faced with a policy under the previous administration and now under the present one to privatize this corporation, it seems to me that they had no choice but to get together to offer to buy it in order to keep it in northern hands. Therefore, what is provided in the Bill is the next best thing to leaving it the way it was.
Second, if we decide to sell this corporation, will the taxpayers get fair value for their investment? After the Crown debt is forgiven-and we can only assume that the Minister plans to do so since there is a provision in the Bill to do so and a Royal Recommendation to appropriate the funds to do so-this company will have net assets of some $68 million, if my calculations are correct and I think they are. Yet all we have heard through the news media-not from the Minister or from the agreement of sale-is that the Government expects to receive about $25 million. If that is so, we do not know, because the Bill does not tell us and the Minister does not tell us, why that does not appear in the Bill itself.
Finally, the Minister has asked the House to give an order of reference to the Standing Committee on Transport to study the role and responsibility of the Government of Canada with respect to northern transportation services and infrastructure, and the standing committee will be meeting and travelling to the North in September and perhaps October to study all of that and report back to the House. The committee will be meeting to study this issue over the next weeks and months. While it is doing that, the Minister will be selling off the primary instrument of national policy with respect to transportation in the North. Does the Minister not think that he should not, on the one hand, ask Parliament to study something and then, on the other hand, go ahead and do whatever he was planning to do in any event? We know that the Government has done that with acid rain, with star wars and with free trade. Therefore, we are not surprised, but we are upset and disappointed.
I do not suppose that there would be anything drastically wrong with postponing the implementation of the agreement of

June 25, 1985
Northern Transportation Company
sale until the study of the northern transportation infrastructure is completed by the Transport Committee. The Government could then proceed to implement this Bill. I would be happy if the Minister would agree to make sure that the Bill reads that it will only be put into effect by Royal proclamation and not until after the Transport Committee has made its study, reported to the House and the House has dealt with that report. In fact, there might even be some things in that report that would lead the Minister to adjust the legislation.
I believe, when all is said and done, that the Government ought not to sell Crown corporations, particularly the winners, and Parliament ought not to support such sales, generally, especially without any guarantees in legislation about just who the purchasers are going to be-and I am speaking generally here because we know who it is going to be in this case-just how much the Government-meaning the people of Canada- will receive in return for the sale of the investment they made, and what will happen in the future if the responsibilities formerly held by the Government in trust to the people of the North are not met by future owners. I want to tell the Minister through you, Mr. Speaker, that we will have amendments to this effect when the Bill goes to committee, and I will give the Minister copies as quickly as I can. We are afraid that the government majority in this place will not be persuaded by logic, good thinking or anything else in its suicidal mission to rid the people of Canada of all their hard won and profitable operations, such as it did with the patent office and with Teleglobe Canada.
The Minister waited quite a while to bring in this Bill. I believe the announcement was made of the completion of the agreement on May 17, but, obviously, the negotiations had been going on for a long time prior to that.


Donald Frank Mazankowski: It wasn't by design.


Leslie Gordon Benjamin: The Minister had an agreement in principle with a previous purchaser three or four months ago, but that sale did not go through. There is nothing in this Bill that appears to be specific as to any particular offer of purchase. Nowhere is it mentioned who will buy the corporation or which parts of it or how much of it. The Bill could just as easily be used to sell off any other Crown corporation by simply changing the name of the Bill, because the Bill is that general and vague. So the minister waited until June 12 to introduce the Bill and expected that seven days later it would be debated and passed. Of course, when we are into the dying days of a session of Parliament, the pressure is on the Minister, on every Hon. Member of this House and on the standing committees to rush through as much legislation as possible by the end of the month.
There are a number of clauses in the Bill which give the Minister the power to do practically anything he wishes with this company. If this Bill was introduced for other Crown corporations, Ministers of the Government could sell them for a song to whoever, including perhaps their friends. They could
sell our Crown corporations to someone other than the stated purchaser in press releases. They could sell them for more or less than initially indicated or for much less than the fair market value of the company. Perhaps the rush to get this legislation through is more related to giving the Minister this power than to selling the company before the summer. That is hard to say. While we agree that the purchasers we know of are going to be the best kind of purchasers, we feel that the Bill could serve as a model-all one would have to do is to change the title-for future sales of all other Crown corporations. We worry about that. If that were to happen in subsequent months or years, I can assure the Minister that he will have difficulty getting it through at the beginning of the session, let alone during the last couple of weeks.
Clause 3(3) allows the Governor in Council to exempt any parts of the corporation from sale and allows the Minister to transfer the control of those portions, so exempted, to any government agency or other Crown corporation. That is not so bad because we would like to see him keep the whole thing, but he may also give it to "to any other person or body", to quote the Bill. We find that a little disturbing. If the prospective purchasers were to decide that they do not want some portion of the company, the Minister has the authority under this Bill to let anyone else have that portion. Why has the Minister not indicated in the Bill to whom he is selling NTCL? He has a buyer. He has made various announcements. Why could he not have given us all of the details? If he wants to sell a corporation to someone, why can he not be specific? If the Bill had been specific, the Minister of Transport (Mr. Mazankowski), any other Minister, or the Cabinet could not change the terms. They could not dispose of some parts and not others. They could not sell off or give away parts of a corporation to any other persons known or unknown.
We do not want to obstruct this legislation, but we will want the Minister to give us more detail in committee this evening. We would like him to be a lot more forthcoming and open than he has been. Now that the Government has decided to whom it is going to sell, there is nothing wrong with making all the terms of the purchase agreement fully public. Once this Bill passes, the Minister, I am confident-I accept his word-will proceed to sell to whom he is saying he will sell. I do not know if I would be that trusting of other Ministers, but l believe this Minister and I accept his word.
Initially, the Government had accepted a bid from an Edmonton trucking company but requested some native involvement in order to soothe the native community in the North. That failed to happen and, thank goodness, bids were reopened. Another consortium of southern controlled development companies entered into the bidding. Again, the Government-and I compliment the Minister on this-decided to sell to two of the native corporations which had offered to buy, namely, the Inuit people. That agreement was announced in principle on May 17. But we must prevent this Bill, as is, to be used to sell off other Crown corporations, particularly winners, in the same manner. I can accept this sale in this instance, and in this instance only, because I trust and believe in the
June 25, 1985

Minister's intention to sell to whom he says he will, but, as I said before, Mr. Speaker, the same Bill could be used, by changing its title, to sell of almost every other Crown corporation, winner or loser. The Government is determined to make its point about privatization by selling off this corporation because it feels that since it is in the North, no one in the south will care much, but those people up North will, no matter how few they are. Either way, as a matter of general principle, our Party would be opposed to selling off Crown corporations, particularly those which are winners, and the people of Canada can share in the cost of those losers which provide an essential public service to a small market, an isolated area or a thinly and widely scattered population. However, the bid which has been accepted appears to us to be the best. While co-operation between the Inuit and the Dene would be nice, I suppose a thousand years or more of conflict is not likely to be resolved over a joint board or a split sale in the operations of NTCL.
Finally, Mr. Speaker, the Minister can let me know this evening, or now if he wants, whether any consideration was given to retaining a minority interest in the company of 15 per cent, 20 per cent or 25 per cent. The Government would then have representation on the board of directors and would therefore have first-hand knowledge about what is going on. Another thing, which I know the Minister would be conscious of and conscientious about, is the fact we have heard nothing about what protection there may be for the very experienced management and the employees of the company once the sale is completed and down the road a number of years. This is not an easy operation to run and it is obvious that the management and the employees of the company have been doing a darn good job. We are not suggesting it is perfect; there are always going to be some complaints, always some areas where new or additional services could be or should be provided. But, generally speaking, they have done an excellent job and we want to know what protection there is for the management and the employees of the NTCL.
I would like to close by saying that the Government will not find any obstruction on our part over this Bill for the simple reason that we know or understand who the purchasers are. Had it been otherwise, this Bill would not be going through in this session of Parliament, I can assure the Minister of that. We hope the Minister will accept some if not all of our amendments later this day. Even if he does not, we are prepared to proceed with this because it will serve as an experiment where the people of the North own and operate something which is so essential to their own as well as the general public good.
On the assumption that this will go through by this Friday, we wish the new owners well. We hope the Government will, in subsequent years, provide all the co-operation necessary, including any assistance they might want or need or ask for to help improve and make a better success of the company's operations. I hope that eventually other residents of the North, particularly the Dene, will become involved in ownership and
Northern Transportation Company operation of this corporation. That is something 1 hope the people of the North can work out among and between themselves with the assistance and co-operation of the Minister and his Department. 1 also hope, Sir, that the Minister will give serious consideration to retaining some percentage of ownership in order to maintain the national presence, not just for the sake of doing so but in support of the provision of an essential service in northern Canada. I believe everyone in Canada is willing to provide that support and participation through the Government. I do not think it was necessary to sell off 100 per cent of the company, but if that is the Government's intention,
I am confident that this Minister at least will provide all the help and assistance he can in the years ahead to make sure that those people can proceed to improve and enlarge upon this vital element of northern Canada.


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, it is my pleasure this afternoon to speak in favour of Bill C-53 which would grant to the Minister of Transport the authority to divest himself of equity in the Northern Transportation Company Limited. I guess there are two points for discussion. First of all, the Bill grants to the Government of Canada that authority; the second part is the actual sale itself. I think it will be essential at this evening's meeting of the Standing Committee on Transport, when we delve into the sale, that information requested by both the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) and the Hon. Member for Regina West (Mr. Benjamin) be made available. We should have before us the sale agreement and the memorandum of sale so that parliamentarians can be aware of what we are really getting ourselves into.
I believe that NTCL should be privatized. There is no reason why the Government of Canada should be in the business of operating barges on the Mackenzie River to the Beaufort Sea, Hudson Bay or anywhere else. It can be quite reasonably and sensibly done by Canadians in a private capacity. Why should the Government of Canada be operating trucking companies such as the Grimshaw subsidiary of NTCL? There is no reason for it. The Minister explained that the Government had got into the business by accident when it took over the old Eldorado uranium operation in the war years. Before that time, water transportation services had been provided by private companies and by the Hudson Bay company at one time. Roman Catholic missions operated their own water transport system from time to time. So the service had been provided by the private sector prior to nationalization by the Government of Canada. There is absolutely no reason why we cannot go back to the private system.
As a Crown corporation NTCL was in a very privileged position. It had certain friends in Ottawa who made sure that it was protected when it came to matters such as the issuing of water licences. Other firms which wished to get into the business found that their applications were not dealt with at the same rate of speed and with the same alacrity that NTCL's applications had been dealt with.
I think that at the same time as we are putting NTCL back into the private sector, we should take an over-all look at the

June 25, 1985
Northern Transportation Company
regulatory regime which governs water transportation in northern Canada. No longer should NTCL be in this privileged position, enjoying what is tantamount in certain areas to a monopoly. We should allow proper competition. We should allow small operators to get into the business to provide specialized and localized services. I foresee that in the immediate future we might have what you might call two trunk operators, NTCL and ATL. They would provide service throughout the whole waterway. Specialty services such as stand-by supply vessels for the Beaufort Sea oil and gas industry can be provided by others. For service into small communities there is no reason why local operators cannot get themselves smaller barges. You do not have to run 1,500-ton barges into snowdrifts. You can operate more effectively with smaller barges. This would be a good opportunity for local entrepreneurs to set up business and provide a valuable service to the smaller communities. I hope the Canadian Transport Commission will take a new view of the regime and open up the market. Let us have competition in the market for water services. Let us have flexibility so that services can be changed rapidly to meet rapidly changing demands.
Many customers of NTCL and other firms are in the oil and gas business. One year they need delivery to one point, but in the next year the market has changed and they need delivery to other locations. It is necessary to have a system which can respond rapidly to changes in demand. Small operators must be allowed to set up easily.
The Government should ensure that vessels in operation are seaworthy and that the crews of those vessels have the necessary qualifications to operate the vessels safely. However, the Government should not concern itself about what charges are made to transport goods from place to place in particular vessels. And that is not a concern of the Government of Canada.
The Hon. Member for Regina East takes a very patronizing attitude-


Leslie Gordon Benjamin: Regina West.


Dave Nickerson: I am sorry, the Hon. Member for Regina West, I stand corrected. I have heard him on a sufficient number of occasions to be able to remember his constituency. He has a very patronizing attitude to the people in the North. He says that the people who live there are not quite up to scratch as compared with the intelligent people who live in Regina West.


Leslie Gordon Benjamin: Come on, I didn't say that.


Dave Nickerson: He says that the Government has to help us out by keeping a handle on things up there. I can tell the Hon. Member for Regina West that the operators and businessmen in the Northwest Territories are just as competent as are those in Regina or anywhere else in the country. We do not need the Government to hold our hands, thank you very much.
In the near future there will be some changes in the nature of the industry as there have been already. The resupply of communities is not as important in the general scheme of things, especially in the revenues generated for the shipping companies, as it was previously. There is no reefer service on the Mackenzie or the Beaufort Sea any more, as far as I know. Produce and groceries are not transported by water any more but, rather, by truck, air, or other quicker methods. The supply of petroleum products to some of the more remote communities is very important. They would like to be assured of having petroleum products delivered on a regular basis.
However, the future of the shipping industry is not so much in the area of community resupply as it is in the area of service to the oil and gas industry. That is the big customer of NTCL and other operators. The future may be in the transportation of heavy machinery for the oil and gas industry and there may be a greater concentration on coastal routes than on river routes. NTCL no longer has a real presence on Lake Athabasca, especially since the uranium mine there has been closed down. As roads push further north along the Mackenzie River, water supply in those areas will not be quite as important as hitherto. The centre of the industry is moving northward, with a greater emphasis on service to the oil and gas industry than there was previously when community resupply was the biggest activity in which NCTL and its few competitors engaged.
As a politician I cannot resist the temptation to make a few remarks about the inconsistency of some of my friends in the Liberal Party. Liberal policy has always fluctuated with wide swings. When the Liberal Party said one thing, one could never take for granted that that would be done as opposed to something entirely opposite. Privatization has always been the policy of this Party. NTCL was on a short list in 1979 when the Progressive Conservative Party formed the Government for much too short a period.
During the 1979 and 1980 election campaigns my Liberal competition went to places like Hay River, which is the centre of operations for NTCL, and tried to put the fear of God into the employees of NTCL. They said that the PCs would sell the industry out from under the feet of the employees and sell them down the river. The Liberal pitch was that they would not sell NTCL but would keep it as a Crown corporation guaranteeing all the jobs for life whether they were needed or not. They said that there was no way they would privatize NTCL.
Only a couple of years later when the Hon. Member for Winnipeg-Fort Garry became the Minister of Transport, his very first act was to reverse totally the Liberal Party policy. He said that they were going to sell NTCL. That makes one wonder whether you should ever vote for Members of the Liberal persuasion having seen them swing around 180 degrees in a matter of months. Their words are not really to be believed. However, I believe the Member for Winnipeg-Fort Garry was correct in coming to the conclusion that NTCL was a prime candidate for privatization and that the interests of northerners and of all of Canada would be best served by having northern water transportation in private hands.
June 25, 1985

Let us look at how this policy decision has been effected in private practice. If we were to be honest with ourselves, we would have to admit that the whole issue has been a comedy of errors from start to finish. The privatization process has dragged on for well over a year. People have not known where they stood. This has been particularly hard on the employees of NTCL who did not know what was going to happen to them. They could not get a straight answer from anyone. It all started when the former Minister of Transportation appointed an American firm of financial consultants to carry out the privatization of a Canadian corporation. I cannot understand why he had to choose an American firm. Are there no Canadian financial consultants who could have done the same thing?
I have heard many prospective buyers of NTCL complain that they were unable to get the necessary information to put in a rational bid. Prospective buyers could not get that information and I know that Members of Parliament could not get it. There is no way that people in general could find out what the Government had for sale. Not only have the customers of NTCL been left up in the air for that period of time, they still do not know what will happen. The whole decision-making process during both administrations has been shrouded with secrecy. Nobody knew what was for sale or what the perspective bids were. Why could we not have had a system which would provide a form indicating what was for sale and which listed all of the assets and necessary information? In that way, there could have been a process whereby the bids were opened publicly to show who bid for what and for how much. The whole process would have been open and would have prevented any complaints about political persuasion in particular circumstances.
We saw the Northern Industrial Carrier fiasco when apparently a conditional sale was made and the prospective purchaser could not then meet the conditions of that sale. I suspect the purchaser did not know what he was getting into the first place, but that delayed matters even more. The employees, customers and others did not know what was happening.
If it is this difficult to privatize a rather small Crown corporation like NTCL, I certainly do not envy the Minister when he tries to privatize Air Canada. I hope he has learned some of the difficulties and how to overcome them when he goes to bigger and better things.


Donald Frank Mazankowski: You have to admit that I am a cautious man.


Dave Nickerson: The Minister says he is a cautious man. He certainly has been cautious for many months in this respect. One reason why it is difficult for the Minister is that there are many small details to address even in a small privatization exercise like this. The Minister is extremely busy and it is difficult for him to devote the necessary amount of surveillance to what is going on in this privatization process.
As all Members of Parliament know, there are a few of us who are overworked, 18 hours a day for seven days a week,
Northern Transportation Company and others who are essentially underworked and do not have that much to do. If we ever go through an exercise like this again, perhaps it would make sense for the Minister to give a parliamentary secretary or other Member of Parliament some responsibility to oversee what is going on with a particular piece of legislation or a privatization such as this. 1 am sure it would assist the Minister to make use of a Member of Parliament who is konwledgeable in the area and knows the actors in the game. It would prevent the occurrence of a situation such as this and the procedure would go much more smoothly if the Minister had someone with political and economic expertise overseeing the procedure.
I have some questions relating to the prospective purchase. I hope they will be answered later tonight but let me put them on the record now, as has been done by previous speakers. We would like to know why this particular bid was chosen rather than others. I understand that my time is almost up. May I request unanimous consent of the House to carry on for another five minutes?


Mr. Deputy Speaker:: Is there unanimous consent to allow the Hon. Member to continue?


Some Hon. Members:: Agreed.


Dave Nickerson: Thank you, Mr. Speaker. We would like to know where Trimac fits into the picture. That is a Calgary based trucking company which is involved in oil field hauling and pipeline construction. Some people are rather suspicious of its role in this plan. They feel that Trimac may be attempting to acquire Grimshaw and use it as a backdoor means of obtaining operating authority for their trucks into the Territories. This would be of great concern to the territorial trucking industry and the Government of the Northwest Territories, whose policy it is that an indigenous trucking industry be developed and big operators from the south do not come in and ride over the local operators, some of whom are very good and have developed much expertise in the various aspects of trucking. It is to be hoped that they will develop even more expertise in oil field hauling.
The interest of Nunasi in the Keewatin operation is very easy to see. That is obviously where they have their great interest. They are very concerned with the operation in the Hudson Bay area, servicing the various Keewatin communities. I wonder whether any thought was given to the possibility of splitting off the Hudson Bay operation of NTCL, which is quite different from the Mackenzie River-Beaufort site of the operation, and having that divested separately, perhaps into the hands of Nunasi. They would be a very likely purchaser of that part. Was any thought given to divesting the NTCL operation to people with particular interest in those various aspects of the service that it delivered?
The question of divestiture to collectivities rather than individuals is cause for some concern. The Government in the North has always looked upon people in terms of groups, particularly ethnic groups, rather than individuals and Canadian citizens. I believe that sometimes it might be better if we

June 25, 1985
Northern Transportation Company could deal with individual people, regardless of race, who come together to form a business corporation rather than having an over-all emphasis on groups put together because of ethnic origins.
Other speakers today have referred to the difficulty with having ethnic groups bidding for private corporations which service areas inhabited by ethnic groups. Undoubtedly it would be preferable to have someone running a shipping company who simply has business and commercial interests rather than being concerned with such things as land claims and aboriginal rights.
Whichever ethnic group would have been successful in bidding on this commercial venture, it is likely that it would have left a rather bad taste in the mouths of others. If we do anything like this in the future, I would like to see a more business oriented approach rather than looking at it in terms of ethnic collectivities. Inuvialuit Development Corporation has showed itself in the past to be a rather efficient business organization, but it is associated with the COPE organization which has been known, from time to time, to play hardball politics. There is some alarm on the part of people who are not in that COPE area as to what might happen in the future. I hope that their fears are unfounded, but when much of the service area of NTCL is not represented in the new ownership, one can certainly understand why some of that alarm might exist.
My final point deals with the future of the Town of Hay River. It is a transportation centre and does not have much else going for it. The Government has gone out of its way to virtually destroy the fishing industry in that town. Its only real raison d etre is transportation. The centre of the transportation element there is the Northern Transportation Company Limited. People in Hay River are very concerned about what will happen as a result of this privatization. Most of the employees of NTCL, in fact a good proportion of them, especially those involved in maintenance aspects and the loading of barges, live in Hay River.
Under at least one of the proposals, Hay River would also have become the head office of NTCL. People in that community were looking forward to that eventuality. Now they do not know what will happen. Some of the feelings of mistrust that have been generated in Hay River must be resolved. People must be aware of what is going to happen to them. Governments must not abandon Hay River and the people of Hay River in their eagerness to divest themselves of NTCL.


Mr. Deputy Speaker:: Are there any questions or comments? We will now resume debate. The Hon. Member for Cape Breton-East Richmond (Mr. Dingwall).


Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I will be relatively brief with my remarks. I must say at the outset that I am in agreement with the sale of this Crown corporation, but I have a number of points I want to share with the Minister while he is in the House. They are
concerns and queries about what is taking place. Much has been said with regard to the contents of the Bill and the effects this particular divestiture, if you will, of Crown assets will mean to the Government of Canada and to the people affected.
I hope this piece of legislation, which is in essence a selling of a Crown corporation, will not serve as a precedent for the selling of Crown corporations. In this Chamber and indeed on many other occasions we have heard the Minister of Regional Industrial Expansion (Mr. Stevens) talk about his desire to sell various Crown corporations of the Government of Canada. We have heard him in the House. We have heard him on the campaign trail and more recently we have heard him talking to the Canadian people when criss-crossing the nation. Unfortunately or fortunately, however one views the issue, that particular Minister has not met with very much success.
I guess it is in order to congratulate the Minister of Transport (Mr. Mazankowski) for being able to put this package together and ultimately consummate a deal with the new purchasers, although I think it would be fair to say that this deal and package commenced some time ago and he, as the Minister responsible for transport, has picked up the file and seen it through to its conclusion.
There are a number of items in the Bill, well intentioned as it is, that ought to be reflected on by members of the Government as indicated by Party spokespersons for my Party. We are not going to oppose the Bill in a very drastic way, in fact, we will approve it, but I ask the Minister to reflect for a moment that if the Crown is to purchase the assets of a private company, whether the assets are fixed, real assets or what have you, that it be clearly spelled out in the legislation as to what Department of the Government will be acquiring them and what Department and Minister will be responsible. I think also the legislation should make mention of the tabling of the annual report and which standing committee of the House of Commons the matter would be referred to. When you have the reverse, as in this case, the same degree of clarity or specificity is not provided for.
I say to the Minister in all good faith that the legal draftspersons would argue, and maybe with some justification if one looked back over a period of time and viewed precedents with regard to the divestiture or the selling of a Crown corporation, that perhaps some of the things my Party and indeed Members of the New Democratic Party have referred to ought not to be included in the legislation.
I say to the Minister through you, Mr. Speaker, that this is an opportunity for the Minister not only to consummate the deal that he and I believe is important for all Canadians to take place, but also it is important that the Minister and his Department reflect upon the broader picture with regard to the selling of Crown corporations. In the substance of the Bill and the way in which it is written, it ought to be changed. For instance, why can the purchaser not be named in the Bill? I pose that question to the Minister. I hope he will have an opportunity later to wrap up and respond. If by naming the purchaser in the Bill itself will in some way affect the agreement of a sale that has already been consummated, I think
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that should be clearly stated and spelled out. If not, if there is no damage nor effect with regard to the selling of the Crown corporation by stating the name of the purchaser in the Bill, why can the purchaser not be named in the legislation?
Concerning the impact study, I am not very clear in my own mind about a certain aspect and perhaps the Minister will afford himself the opportunity to elaborate. It seems to me to be logically consistent that in selling off assets which will affect Canadians in the northern part of Canada, that Canadians and Parliament, either before a standing committee or on the floor of the House of Commons, ought to have in their midst the results of an impact study.
I share some knowledge about these matters. Confidentiality has to be first and foremost with regard to negotiations. I want the Minister to think, and perhaps when he has an opportunity, he can comment on whether the results of an impact study impact negatively with regard to the agreement of purchase and sale he has now consummated. I would think that it would not. If it does, I believe there is an onus upon the Minister of Transport to state that clearly as early as possible so that Members who will be asking questions will know in advance that the answers are not readily available and are not readily available because of good and valid reasons. The whole issue of confidentiality pertaining to what is included in the agreement of purchase and sale ought to be looked at very carefully.
Often governments and representatives of Government Departments will say without ample justification if there is the slightest doubt, "We are going to earmark this as confidential. Therefore, it ought not to be referred to or included in the Act itself." An impact study should be the first step the Minister ought to proceed under and that that impact study should be shared with Members of Parliament. Perhaps my comment may not be valid in that the Minister may in fact appear before the committe and in his usual articulate way answer those questions and in fact table an impact study. Perhaps he could rise in his place today to explain whether or not one has been conducted and, if so, whether Hon. Members will receive copies of it.
The Bill indicates that the terms and conditions of the sale are to be approved by the Governor in Council. It is my understanding that the deal has been consummated. Would the Minister table, with the consent of the other party, the terms of the agreement? I should like to return to Section 99 of the Financial Administration Act which indicates, if my memory serves me correctly, that the Government of Canada gives a directive to Crown corporations through the auspices of their boards of directors. I would like to ask the Minister whether there has been such a directive and, if so, whether he will table it. That is not to suggest that it will contain each and every item in the agreement of purchase and sale, however it may provide us, as Members of Parliament, with a better understanding and a clearer view of some of the general subject matters touched upon by the Minister in his dealings
Northern Transportation Company with the purchaser. The Minister has been in the Chamber a lot longer than I have.


Mr. Baker:: Too long.


David Charles Dingwall: Some may say: "Too long". I would not necessarily agree with that; we will have to wait and see. However, in the spirit of a good debate and in the spirit of being knowledgeable of the subject matter, I think it would be helpful if parliamentarians could see the items to which I referred. It would be helpful to us not only in terms of this particular debate, but they could be used as well in future debates. I should like to know, at the earliest convenience of the Minister, whether a directive pursuant to Section 99 of the Financial Administration Act has been given to this particular corporation and, if so, whether he will table it.
My final point concerns the board of directors of Northern Transportation Company Limited. There are specific provisions in the Bill to exclude certain provisions of the Canada Business Corporations Act. However, could the Minister elaborate at some point in the proceedings on why the board of directors seems to have been prohibited or excluded from the sale which is taking place? I have yet to hear a reasonable explanation as to why it would be excluded. Pursuant to the Canada Business Corporations Act and to the Crown Corporations Act, members of boards of directors are liable for the actions of Crown corporations.
I hope the Minister will answer my concerns relating to Bill C-53, for I believe they are important for the purposes of debating the subject matter at hand. It could be argued effectively that they could have effect upon subsequent sales of Crown corporations and how the formats of Bills will be drawn up. I do not want the Minister or his departmental officials to use the old adage that some of this information is confidential and therefore they ought not to include the name of the purchaser, that they have already consummated the deal and ought not to include it because it may have an effect 99 years down the road. I think we have to be a little more aggressive, a little more liberal, in making certain that legislation, whether it be this Bill or subsequent ones, is right, just and in the best interests of Canadians.
I am not clear as to the mechanics of the loan which will allegedly be written off by the Government, nor its exact dollar amount. I think the figure of $24 million has been used, but if there is additional information available on that aspect, I hope the Minister in his wisdom will share it with Hon. Members while he is present in the House today. I hope the terms and conditions of the sale approved by the Governor in Council will be explained either here today or referred to the standing committee for examination. It is important for Canadians to know these terms and conditions, not 10 years after the sale has been finalized, but at the same time the sale takes place.
I know there are a number of consequential amendments to the Canada Development Corporation Act, the Financial Administation Act and others, which will flow from this particular piece of legislation. I am happy this Bill is before the House. I agree with its general thrust, the selling of a

June 25, 1985
Northern Transportation Company
Crown corporation. I hope the Minister, in all his wisdom, will take into account some of my concerns regarding the sale of Crown properties.


George Baker: Mr. Speaker, I should like to make a few comments about this Bill and the statements which have been made so far in the Chamber today. I agree with the comments of speakers on both sides of the House concerning the advisability of this piece of legislation, but I should like to take exception to some remarks which were made in a philosophical way about the policy of the former Government as it related to this Bill. I can see no inconsistency with the former Government when it initiated this legislation, but I saw some inconsistency in the comments of the Hon. Member who represents this area of the country, particularly in his argument justifying the fact that the Government brought forth this Bill. In effect, that Hon. Member said that a member of the New Democratic Party showed a patronizing attitude when he talked about the needs of people in northern areas and that those people could supply their own transportation companies, that they were well equipped to do so. I do not doubt that at all. I do not doubt the wisdom of the Government in bringing forward the legislation.
I represent a relatively northern area of the country and understand how seasons change-that sometimes it is necessary to use snowmobiles or aeroplanes to transport goods and other times it is necessary to use trucks. It must be borne in mind that the profitable part of this operation in northern Canada, as the Hon. Member outlined, is the transportation of goods and services to the oil industry.
There is another element here that I am confident would have been explained in a much more thorough manner by the former Minister of Transport had he been in the position today of having this Bill about to go through the House of Commons. It is that the Government of Canada has a real responsibility for the transportation of goods and services. It has a responsibility to make sure that when it brings in legislation like this that it is going to protect people who make use of that transportation service, whether or not it be for the transportation of fuel, as is the case with this transportation network we are talking about today. In other words, when you get down to the human element of people who are living in northern areas who depend upon a transportation system for their fuel or for their food or for any other commodity, that has to be borne in mind by the Government of Canada. What I am talking about is direct subsidization or indirect subsidization to that particular carrier.
It seems as if the Minister of Transport (Mr. Mazankowski) only has one thing on his mind when he talks in the House of Commons about changing the structure of transportation in this country. To him the bottom line is saving money for the Government of Canada. That goes across all boundaries of philosophy. One cannot say, for example, that this Minister of Transport or the Government of Canada is anxious to get rid of Crown corporations. When it seems that it can save money
by creating a Crown corporation for transportation purposes, it does it. For example, in the November statement the transportation company called CN Marine is being made into a Crown corporation to save the Government of Canada $20 million or $40 million a year.
The main element in legislation introduced in this House, to accomplish what the Government wants to accomplish, that should be borne in mind is how it affects people, not so much the oil companies that it serves or big business that it serves, not so much that portion of the transportation system that snows a profit to the transportation company but that portion of the system that affects people. It should also be borne in mind who these people are. These people are, in most of our isolated and northern areas, primary producers of one sort or another. They could be trappers, fishermen or loggers, but they are people.
If one adds up what the Government of Canada has done as far as the northern areas are concerned, it has to be looked at from the point of view of how much the transportation costs are being increased. How can any operator today budget, for instance, for the increase on the tax on fuel that was recently brought in in the Budget? Considering services to the general public, it was not beneficial in the northern areas to have the postal Crown corporation cut back the number of hours of the small post offices from 40 to 30.
My main interjection in this debate is that under the former Government, I am confident there would have been guarantees given to the people affected by any legislation that would have been brought forward. The Government of Canada would say that perhaps that was a waste of money and that perhaps it should be getting away from subsidizing services to the general public. That is the bottom line, is it not, of any Government, service to the people of Canada and not necessarily for a company to make a profit at the end of the year?


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


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to the Standing Committee on Transport.

[Stage Direction]
The House resumed from Thursday, May 23, consideration of Bill C-32, an Act to amend the Fisheries Act, as reported (with amendments) from the Standing Committee on Fisheries and Forestry, and Motion No. 1 (Mr. Skelly) (p. 4983).
June 25, 1985
Mr. Deputy Speaker:: We are now on Motion No. 1. The Hon. Member for Prince Albert (Mr. Hovdebo) had the floor, but he is not here.


Mr. Henderson:: Mr. Speaker, I think the Minister of Fisheries and Oceans (Mr. Fraser) has an all-Party agreement.


Mr. Deputy Speaker:: The Hon. Member for Egmont (Mr. Henderson) on a point of order.


George Roland Henderson: I think the Minister of Fisheries and Oceans has an all-Party agreement. I do not see the official fisheries critic for the New Democratic Party here at this time. However, I think the Minister has a statement to make and I will put the time to him.


Mr. Fraser:: Mr. Speaker, the matter to which my friend alluded is correct. There is an understanding between the Government and the Official Opposition and the New Democratic Party as to how to dispsose of this Bill in short order. My only concern, and I say this to the House Leader for the New Democratic Party, is that the Hon. Member for Comox-Powell River (Mr. Skelly) is not in the Chamber at the moment. If the Hon. House Leader for the New Democratic Party wishes me to go ahead and outline what I think the understanding is, I will do so.


Mr. Deans:: Mr. Speaker, I apologize, my colleague had to go to his office for a moment. We called him to tell him that the Bill was coming up. Unfortunately, he has not been able to get back. He is in the Confederation Building and he should be here momentarily. It would be fine for the Minister to proceed.


John Allen Fraser: Mr. Speaker, I appreciate the comments of my friend.
Let me put it very succinctly. Bill C-32 amends the present Fisheries Act and clarifies certain powers of the Minister. The Bill has been before the House and in committee since the first week in March and, of course, it is now at report stage. An agreement has been reached between all Parties concerned that with the addition of several amendments to Bill C-32 as presented to the House there will be a further provision which will have the effect of what could loosely be called a sunset provision. The effect will be that Bill C-32 as amended and as passed by this House today, if that indeed happens and I think it will, will cease to have any force and effect on December 31, 1986. The effect also of the so-called sunset provision will be that unless the present provisions of Bill C-32 are re-enacted before that date or unless some of the provisions of Bill C-32, perhaps with other additions or deletions, are re-enacted by December 31, 1986, then the present provisions of the Fisheries Act will spring back into effect.
What it means, put very simply, is that it has been agreed that we will pass these provisions and they will have effect until December 31, 1986, unless changed by legislation before then, and that if that is not done, we will be back to where we began with the present clauses of the present Fisheries Act.
Fisheries Act
The Government has agreed to this unusual procedure on the basis of common sense. It was clear that members of the New Democratic Party did not want to allow this Bill to go through as presently constituted, and as a consequence, it would be impossible to legislate Bill C-32 before the close of this present parliamentary Session. That would mean that I as Minister of Fisheries would be in a position of leaving at risk my legal authority during the summer months and until such date as the House could next attend to this particular piece of legislation.
When I say that this procedure has been agreed to on the basis of common sense, I think that that is an appropriate way to describe it. I as Minister of Fisheries feel very strongly that it is better to have a temporary provision which at least establishes some stability with respect to the legal regime under which the Department must operate in the interests of the fishing community than it is to leave things at risk any longer. There has been some suggestion that in view of the Court of Appeal ruling which dissolved the injunction contained in Mr. Justice Collier's decision of last summer, there is no risk. It is my view and I think the view of other Members of the House that there is a risk. It is a risk to the welfare and interests of the fishing community that I, upon very careful consideration, am not prepared to take.
My hon. friend, the fisheries critic for the Official Opposition, is present in the House. I wish that my friend, the Hon. Member for Comox-Powell River (Mr. Skelly), were here as well. However, I think the effect of this action would be that Motion No. 1 which stands in the name of the Hon. Member for Comox-Powell River would be accepted. I wonder if I could, through you, Mr. Speaker, ask the Hon. Member if my understanding on that is correct? Is it correct that the amendment contained in Motion No. 1 would-I am sorry, I have made an error.


Mr. Deputy Speaker:: I am sorry to interrupt the Minister. I understand that there will be amendments forthcoming on motions that are grouped, being Motions Nos. 2 to 9. However, perhaps the Chair could dispose of Motion No. 1.


John Allen Fraser: Mr. Speaker, I think it would be better if we outlined the understanding first. Put simply, the understanding I have is that Motions Nos. 1, 2, 4, 5, 6, 7, 8, 9 and 10 would be withdrawn by my friend, the Hon. Member for Comox-Powell River. I wonder if the Hon. House Leader for the New Democratic Party could listen carefully to this. Motion No. 11 standing in the name of the Hon. Member for Comox-Powell River contains the suggestion of a sunset clause. Unfortunately, on legal advice and the advice of the drafters of the legislation, I find that we cannot proceed that way, and I will explain what we have to substitute for it. I would suggest that Motion No. 11 be withdrawn also on my undertaking which has been discussed with the Hon. Member for Comox-Powell River, that I would introduce a motion which will have exactly the same effect. I see that the Hon. House Leader agrees with that?

June 25, 1985
Fisheries Act


Ian Deans: Mr. Speaker, I am prepared to accept the undertaking of the Minister of Fisheries and Oceans (Mr. Fraser) that the motion that he will introduce on behalf of the Government will achieve exactly the same end as Motion No. 11 would have achieved. Motion No. 11 would have had the effect of creating a termination date for the existing legislation and would have enabled the Government then to bring forward additional, supplementary or even new legislation in the year 1986.


John Allen Fraser: Mr. Speaker, I would like to point out, though, that there is one thing that should be brought to the attention of Hon. Members and that is that Motion No. 11 refers to the date December 31, 1985, as being the expiry date. By agreement between myself, the Hon. Member for Comox-Powell River and the Hon. Member for Egmont (Mr. Henderson), the expiry date will be December 31, 1986. That is understood.


Ian Deans: I am told by a nod that that is true.


John Allen Fraser: Mr. Speaker, that leaves us with Motion No. 3 and Motion No. 12. It is agreed that Motion No. 3 introduced by the Hon. Member for Egmont will be passed, but with a change. The change proposed in the motion put by the Hon. Member for Egmont presently reads:
-and, subject to paragraph (a), taking into consideration the interests of user groups and after consultation,-
I understand that my hon. friends are prepared to accept a change to that which would read:
-and on the basis of consultation-
I think that that has been agreed upon by my friend, the Hon. Member for Egmont, and the Hon. House Leader for the New Democratic Party.
Motion No. 12 which is a motion standing in my name is accepted by all Parties and the change to the Bill proposed by that motion reads as follows:
4. Nothing in this Act shall be construed so as to abrogate or derogate from any existing aboriginal or treaty rights of the aboriginal peoples of Canada.
In addition, I wish to move a motion, a copy of which is held by my friend, the Hon. Member for Egmont and the Hon. House Leader of the New Democratic Party as well, I believe. This is the motion which in effect makes possible-


Mr. Deputy Speaker:: Does this mean that the Chair could dispose of the other motions?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: On Motion No. 1, is there unanimous consent to allow the Hon. Member for Comox-Powell River (Mr. Skelly) to withdraw the motion?


Some Hon. Members:: Agreed.
Motion No. 1 (Mr. Skelly) withdrawn.


Mr. Deputy Speaker:: Shall Hon. Members who put Motion No. 2 to Motion No. 9, with the exception of Motion No. 3, be allowed to withdraw?


Some Hon. Members:: Agreed.
Motions Nos. 2, 4, 5, 6, 7, 8 and 9 withdrawn.


George Roland Henderson: Motion No. 3
That Bill C-32, be amended in Clause 2 by striking out line 19 at page 2 and substituting the following therefor:
"and, subject to paragraph (a), taking into consideration the interests of user
groups, and on the basis of consultation, to maintain and develop the eco-".
He said: Mr. Speaker, with respect to Motion No. 3, I just want to clarify that we do have an all-Party agreement that the Minister make the change from "and after consultation" to "and on the basis of consultation". This is agreeable to our Party and I believe if you ask for unanimous consent, you will Find it forthcoming, Mr. Speaker. We in the Official Opposition are quite happy with that change.


John Allen Fraser: That all the words after the word "groups" in the motion standing in the name of the Hon. Member for Egmont be deleted and the following substituted therefor:
"and on the basis of consultation, to maintain and develop the eco-".


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
Mr. Deputy Speaker:: Is it the pleasure of the House to adopt Motion No. 3 as amended?


Some Hon. Members:: Agreed to.
Motion No. 3, as amended, agreed to.


Mr. Deputy Speaker:: Is there unanimous consent to allow the Hon. Member for Comox-Powell River (Mr. Skelly) to withdraw Motions Nos. 10 and 11?


Some Hon. Members:: Agreed.
Motions Nos. 10 and 11 withdrawn.


Mr. Deputy Speaker:: Is there unanimous consent for the Hon. Minister of Fisheries and Oceans (Mr. Fraser) to move a motion to replace Motion No. 11 ?


Some Hon. Members:: Agreed.


John Allen Fraser: I believe you have a copy, Mr. Speaker, of what is in effect a replacement to Motion No. 11.1 am wondering if, in the order of chronology, we might deal with Motion No. 12 first?
June 25, 1985


Mr. Deputy Speaker:: Is there unanimous consent for the Minister to proceed with Motion No. 12 prior to Motion No. 11?


Some Hon. Members:: Agreed.


John Allen Fraser: Motion No. 12
That Bill C-32, be amended by adding immediately after line 40 at page 2 the following:
"4. Nothing in this Act shall be construed so as to abrogate or derogate from any existing aboriginal or treaty rights of the aboriginal peoples of Canada."
He said: Mr. Speaker, in the interests of time, I am not going to say more than a few words about this particular motion except to draw to the attention of the House the fact that this motion makes it abundantly clear that whatever rights the native people of Canada, our fellow citizens, have as of the date of the passing of this legislation are inviolate, and I can only repeat the words of the motion which are "nothing in this Act shall be construed so as to abrogate or derogate from any existing aboriginal or treaty rights of the aboriginal peoples of Canada". I believe we have complete agreement with respect to this motion.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.
Motion No. 12 agreed to.


John Allen Fraser: Motion No. 11
That Bill C-32 be amended by adding, immediately after line 40 on page 2, the following:
"5. (1) The definition "fish" in section 2 of the Fisheries Act, as enacted by subsection 1(1) of this Act, is repealed and the following substituted therefor:
" "fish" includes shellfish, crustaceans, marine animals and the eggs, spawn, spat and juvenile stages of fish, shellfish, crustaceans and marine animals;"
(2) The definition "fishery" in section 2 of the Fisheries Act, as enacted by subsection 1 (2) of this Act, is repealed and the following substituted therefor:
" "fishery" includes the area, locality, place or station in or on which a pound, seine, net, weir or other fishing applicance is used, set, placed or located, and the area, tract or stretch of water in or from which fish may be taken by the said pound, seine, net, weir or other fishing applicance, and also the pound, seine, net, weir, or other fishing applicance used in connection therewith;"
6.	Section 2.1 of the Fisheries Act, as enacted by section 2 of this Act, is repealed.
7.	Paragraph 34(m) of the Fisheries Act as enacted by section 3 of this Act, is repealed and the following substituted therefor:
"(m) authorizing a person engaged or employed in the administration or enforcement of this Act to vary any close time or fishing quota that has been fixed by the regulations."
8.	Section 4 of this Act is repealed.
9.	Sections 5 to 8 shall come into force on January 1, 1987."
He said: Mr. Speaker, the effect of this motion is very simple although it takes a little reading to understand clearly
Fisheries Act
what is being done here. This motion sets out the sections of the present Fisheries Act which are being amended by Bill C-32, and, by the wording, brings them back into effect on January 1, 1987, if no legislation has been passed between now and that time. It is the operative clause which gives effect to what we have euphemistically called the "sunset provision". I understand that my hon. friends understand that this has been received and put forward on the advice of our legal counsel and I understand there is agreement to accept it.


Mr. Deputy Speaker:: Is the House ready for the question on the new Motion No. 11 ?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the new Motion No. 11 ?


Some Hon. Members:: Agreed.
Motion No. 11 agreed to.


Mr. Deputy Speaker:: When shall the Bill be read the third time? By leave, now?


Some Hon. Members:: Agreed.


John Allen Fraser: that Bill C-32, an Act to amend the Fisheries Act, be read the third time and passed.


George Roland Henderson: Mr. Speaker, before we pass Bill C-32 on third reading, I would just like to make a few brief remarks. What has been stated by the Minister is correct inasmuch as we have been able to come to an agreement for this Act to be reviewed and the sunset clause to come into effect, eliminating these amendments, at December 31, 1986. I think there is also an agreement that the Government and the committee will, prior to that date, take the Bill to the West Coast and the Atlantic Provinces to try and bring it more into tune with the realities of the fishing industry as they are today.
The fisheries policy, Mr. Speaker, should always be based on the foundation of consultation with user groups before decisions are made. I have noticed lately that decisions have been made without proper consultation. It is incumbent upon the Minister and the Government to fully consult with those most affected by fisheries legislation and policy before decisions are made. I look back to a decision made in 1979 by the then Minister of Fisheries and Oceans in the Clark Government where large trawlers were allowed in the Gulf of St. Lawrence. This affected the lives of many of our inshore fishermen. That decision was made simply because of pressure, which sometimes comes from political sources. As a result, the fishery in that area was set back for a good many years. I could go on and on about the consultation which should or should not have taken place.
In November the Minister of Finance (Mr. Wilson) indicated the vessel insurance program was going to be reviewed and

June 25, 1985
Fisheries Act
there would be increased wharfage fees and one thing and another, but there was little or no consultation with the people who were adversely affected by the changes. Therefore, I am glad that the word "consultation" is used in this Bill so that the interests of the user groups are taken into consideration before new policies are adopted. I take the Minister at his word that this consultative process will be upgraded and we will have the opportunity to consult with all fishermen concerned. I think the Minister should heed Motion No. 3 and, as I said, I am taking him at his word.
"Monitor" is a term which has been used here quite extensively in the last number of days and we will be monitoring the situation in the future to make sure that any changes in policy or practice will be made on the basis of consultation. That includes wharfingers. In the past few months wharfingers have been relieved of their duties and I think the Minister should very carefully consider this sort of approach and not allow wharfingers to be appointed on the basis of political whim.
With that, Mr. Speaker, I just want to say that over the next year, after the committee goes to Atlantic Canada in the fall, I am hoping that a new or very carefully considered Bill will be brought forward and that the committee will have the mandate to study that Bill along with the people who were involved in the industry. I think it is incumbent upon the Minister and the Committee to travel once again to the West Coast and that the next Bill, after the sunset clause comes into effect, will be carefully written after full consideration of the best interests of the fishing community. Once again, my colleague from Comox-Powell River and I have taken the Minister at his word and we will be monitoring his progress in the future.


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, the progress of this Bill through the House of Commons and committee has been a rather interesting exercise. It has consumed a large number of hours in the House, and I think one thing which should be developed as a result is the way in which Bills are introduced in order to improve understanding between the Members concerned and to try to expedite passage.
It goes without saying that this legislation has important effects on a great many people. The Minister's attention has certainly been called, in quite a number of ways, to the problems of many of the people dependent upon this industry and the expectations for solutions that they have. Early on he received a list of five important areas in the form of a letter from myself regarding the additional discretionary powers which will be given to him. As of now, those points have not been dealt with, and the position of the Minister is: "Trust me,
I will do a good job. I will live up to the election promises of this Government. I have the serious concerns of the fishing industry at heart". Well, the only reason this Bill is passing through the House today is because of this amendment being agreed to which would give the industry the necessary protection. I thank the Minister for considering it seriously and for providing a safety valve.
After several fishing seasons have passed by, we will be able to evaluate its effect in consultation with the people concerned. Our fear, of course, is that this will be the last opportunity for
Parliamentarians to involve the public in consideration of the fishing industry. Should the Minister's Cabinet colleagues or the Prime Minister (Mr. Mulroney) overrule an attempt to do the things which are required, this safety valve would at least present an opportunity for Members of Parliament and the public to provide input.
The Minister said that this legislation provides him more power than he would like to see in the hands of a Cabinet Minister, so that this rather unique sunset clause gives us an opportunity to look at the progress which has been made. Having said that, the Minister must attempt to provide a mechanism whereby the industry can be consulted and a process for making that consultation work can be put in place. There must be a mechanism for resolving disputes that does not end up in civil disobedience or a breakdown of the system. The Minister will have the enormous task of developing that.
There are many problems facing native fishermen and native communities which depend upon the fishing industry. As the committee travelled the west coast, many native fishermen indicated that they had been completely ignored by the Department of Fisheries and Oceans. There is no doubt about that, Mr. Speaker. It was established time and again. The Minister has a major responsibility to ensure that the people who depend on that resource are consulted and given access to the decision-making process.
With regard to amendments, there was an interesting one for which the Minister will have to answer. The Conservative Party chose to defeat an amendment which would provide for sports fisheries within the area of federal Government jurisdiction. In light of some of the statements made in the past by the Minister of Fisheries and Oceans (Mr. Fraser), he will have an interesting job justifying to the sports fishing community why the Government defeated a motion which it allegedly supports. That issue must be resolved.
There are many communities in the country that depend to a very large degree on the fishing industry. Over the years we have watched the centralization of the fishing industry through the movement of processing plants to larger areas and the new phenomenon of trucking salmon from the point at which it is caught and landed hundreds and hundreds of miles to processing plants. That eventually destroys jobs and the economic base of small communities for want of an important infrastructure. Through the actions of the federal Government, a number of other factors have come into play which have made those communities economically weaker.
As the Minister of Fisheries and Oceans and the senior Minister from British Columbia, we ask him to study that problem which, as yet, remains unsolved. An example on the west coast is that of the Campbell River Indian Band which requested assistance in putting in a freezer unit at Port Hardy in order to preserve jobs which are now being trucked away to Vancouver. Another example is that of Bella Coola where it is difficult to land and sell fish because the ice plant burned down a number of years ago and the program which provided
June 25, 1985

it has expired. The Minister is aware that those coastal communities are in tough shape after having been through the recession and a number of extremely poor fishing seasons. There is a need to consider those problems over two years.
Those problems are very real. The Minister knows that they exist and he has a responsibility to move during the next two seasons. His actions and those of the Government will be judged by the user group communities which depend on it. I believe we have better legislation due to this sunset facility which allows Parliamentarians and the public to pass judgment in the future on what we presently have.
I know that we have travelled a long and difficult road. 1 would like to thank my colleagues on the committee and the Minister himself. He has been difficult to convince at times, but I think we have made a very positive move which will yield very positive results.


John Allen Fraser: Mr. Speaker, I would like to respond to the remarks made by my hon. friends. It should be clearly understood that Bill C-32 was not intended to be an overhaul of the entire Fisheries Act. I know that the Hon. Member for Comox-Powell River (Mr. Skelly) knows this to be so, despite what he has said. To argue since March that Bill C-32 should take into account every possible eventuality within the experience of fisheries on both coasts, inland, and in the north, is not an accurate approach to the amendment which has been proposed.
Bill C-32 is an amendment to provide the authority, under law, to the Minister to manage the fisheries of Canada. That authority has been cast in doubt by decisions made on the west coast a year ago. It has been put further in doubt by a court case which is proceeding in the Province of New Brunswick at this very moment. There has been the suggestion that the Government has not consulted enough. I defy anyone looking through my diary for the last eight months, and looking through the diaries of previous Fisheries Ministers, to find any Fisheries Minister who has been to more places and listened to more people than I have during the time that I have been Minister of Fisheries and Oceans.
I have done that because it is my view that one cannot be Minister of Fisheries and Oceans by remaining in Ottawa. One must be where the fish and fishermen are. The vast majority of people involved in the fishing industry in Canada know that someone must have the authority to manage the fishing industry and make decisions for it.
Having said that, I was the fisheries critic for a number of years and I noticed that people within the fishing community have been concerned about decisions that are made in an arbitrary way without real consultation. To the extent that that happened, the interests of everyone may not have been properly taken into account before a decision was made. As a consequence of that, we are in the process of establishing an Atlantic Regional Council in an attempt to focus the fishing community into one place in order to have meaningful consultation. On the west coast we have the Minister's Advisory Committee which, while not perfect, is at least of assistance.
Fisheries Act
In addition to those formal structures, there is also a wide process of consultation with user groups, fishermen, and fishing communities on the establishment of fishing plans, fishing schedules, and opening dates on both coasts. To pretend that there is no consultation going on now is not accurate. Through this Bill the Fisheries Minister is now mandated to take into account the interests of the user groups, and that must be done on the basis of consultation. I believe that there is unanimous agreement among all three parties that that is an advance which reflects the wish of the fishing community. I want to assure Hon. Members that it reflects my own desire to ensure that the interests of user groups are taken into account through real consultation.
One of our difficulties has been to legislate the requirement for consultation. That has caused most of our difficulty with this Bill. It is extremely difficult to determine wording for consultation if you cannot identify the groups with which you are supposed to consult. In that respect this legislation is perhaps not satisfactory. Perhaps between now and the time when I bring further legislation into the House we can develop a consultative mechanism which can be more clearly defined.
If that is possible, then I most certainly shall put it forward and support it. However, I want to give a word of warning to my friends in the New Democratic Party. A very large degree of responsibility now lies on their shoulders not to come up with vague, rhetorical talk about what would be desirable in a perfect world but rather wording that passes the test of what is good legislation and which can be upheld as a consequence of that wording.
This spring, we sent the Fisheries Committee to the West Coast. The Hon. Member for Comox-Powell River knows perfectly well that that committee travelled because I was determined that it would travel. He also knows that I may send him, along with other Members of the committee, to Atlantic Canada. I may leave him there for months if he has any difficulty understanding the problems of that particular part of the fishery.
It must be clearly understood that 1 am going to ask the user groups to send me specific recommendations and to define the wording properly so as to improve this Bill. The search for those recommendations cannot be left indefinitely. I say to the Hon. Member for Egmont (Mr. Henderson) and the Hon. Member for Comox-Powell River that this Bill has been in the process for a long time-since March. It is my view that while the Bill is perhaps not perfect, it goes a long way to at least establishing some certainty within a legal regime until 1986 and gives us an opportunity to examine the provisions during the interim.
We will do that in order to determine if an improvement can be made. It is not my desire to be an autocrat, but it is my determination to be sure that in the interest of conservation of the fish stocks and all the people who make up the fishing communities in Canada that the fishery be properly managed.

June 25, 1985
Fisheries Act
My friend, the Hon. House Leader for the NDP, indicates that he wishes to make a comment. Of course, I would be pleased to give him the floor.


Ian Deans: Mr. Speaker, what I am proposing to ask is somewhat of a departure from the normal practice, but I have had an opportunity to read the amendment that we have passed. Before the Minister concludes-which I know he has not yet done-could he indicate whether I misunderstand the amendment or if it is in fact as I read it to be. The amendment as provided to me consists of two pieces of paper. It reads, "New clauses 5 to 9, page 2".
The amendments which we have accepted say, in essence, that the definition of "fish" as contained in the Fisheries Act is repealed. Repealed is the key word. It goes on to say that a new definition is now in place. The original definition is repealed and a new definition has been put in place.
Subclause 2 indicates that the definition of "fishery" is also repealed and a new definition is now in place. It says that Section 2(1) of the Fisheries Act is repealed, that paragraph 34(wj) of the Fisheries Act is repealed and a new section has been added, indicating certain authorizations. Section 4 of the Act is repealed.
Section 9 then comes into force. What I have described so far are Clauses 5, 6, 7 and 8. In each case, the original section was repealed and in three cases new definitions have been brought in. In Clause 5, Clause 6 and Clause 7, there is a new definition and in Clause 8, Section 4 is repealed.
This particular amendment has repealed existing definitions in the main and has replaced them with new definitions. However, Clause 9 says that the new Clauses 5 to 8 shall come into force on January 1, 1987. On the one hand, we have repealed the existing definitions and put new definitions in place but they do not come into force until January 1, 1987.


John Allen Fraser: I can explain it.


Ian Deans: I welcome the explanation.


John Allen Fraser: Mr. Speaker, it is unfortunate that the House Leader did not have an opportunity to go over this in some detail.
As the House will recall, I said a few moments ago that this is not particularly easy to understand. If we consider Clause 5 of the motion which the House Leader was looking at, it says that the definition of fish in Section 2 of the Fisheries Act as enacted by Clause 1(1) of this Act-which is Bill C-32-is repealed and the following substituted therefor. What is substituted therefor are the words that presently exist in the Fisheries Act before Bill C-32 has any effect. That is the pattern throughout the clauses.


Ian Deans: That explains it.


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


Some Hon. Members:: Question.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the third time and passed.
Mr. Deputy Speaker:: By unanimous consent, shall I see it as two o'clock?


Some Hon. Members:: Agreed.



STATEMENTS PURSUANT TO S.O. 21


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, one of the tax measures announced in the Budget brought down by the Conservative Government on May 23 is having a disastrous effect on the construction industry. Tens of thousands of jobs in the prefab concrete sector will be lost as a result of the federal sales tax imposed by the Minister of Finance (Mr. Wilson).
This Government has no idea how the construction industry works and has levied a sales tax while failing to give sufficient notice so that contracts already signed can be carried out before the new tax becomes effective. This Government has helped to increase the cost of residential construction, and considering the way this tax is being introduced, it will cause Canadian contractors to go bankrupt and thousands of Canadians will be jobless. In many cases, the 6 per cent federal sales tax is higher than the profit margin of prefab concrete contractors. The Minister of Finance should announce immediately that the tax does not apply to contracts signed before May 23, in order to give the parties concerned a chance to adjust their prices to allow for the new tax.



HUMAN RIGHTS


Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I rose in the House on December 7, 1984, and gave a statement about the troubles of the Sikh community in Vancouver after people on all sides told me that they were threatened and intimidated.
I rise today to express the shock and sadness of the Indo-Canadian community in my Province of British Columbia at the tragic crash of the Air-India jetliner.
June 25, 1985

All the facts on the crash are not in yet so I will not comment on it. However, I want to take this opportunity to tell Canadians that the Indo-Canadian community in Canada is a peaceloving community. The Sikh community is an overwhelmingly peace loving community in Canada.
Sikhs, who believe that human beings are creatures of the supernatural and therefore equal, pray every day in the temples in my city of Vancouver that God will be kind to each and every one. That includes enemies as well as friends.
Whatever the results of this crash investigation, I ask Canadians not to judge a community by a few extremists. Mahatma Gandhi once said that, if you take an eye for an eye, the whole world would go blind.



DISASTERS


Mr. Bob Pennock (Etobicoke North):: Mr. Speaker, mere words cannot adequately express the shock and sense of loss that all Canadians felt at the terrible human tragedy that occurred on Air-India Flight 182.
I know all Members of this House will join with me today to express the greatest sympathy to all of the families and friends of those who lost their lives. On a personal note, I wish to express my deep sympathy to the members of my community in Etobicoke who lost friends and loved ones.
Over the past few days the media have been quick to speculate on the possibility of sabotage aboard the Air-India flight. Extreme caution must be exercised in this situation. A complete investigation needs to be done before an accurate assessment of the cause of the crash can be determined. The last thing we need in Canada is to fuel animosities between Canadians on the basis of, as yet, unsubstantiated facts.
With this in mind, Mr. Speaker, the Government must not hesitate to tighten security procedures at all Canadian international airports. No measure should be ignored that could increase the security and safety of Canadians travelling abroad.



VETERANS AFFAIRS


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I rise to pay tribute to the 2,000 Norwegian war veterans who trained at "Little Norway" near Gravenhurst, Ontario, during the Second World War. Saturday, June 22, was the fortieth anniversary of the closing of the air base. A plaque was unveiled at Muskoka Airport commemorating the airmen who trained there.
I would like to commend and thank Lieutenant Colonel Svein Aaser, Defence Attache at the Norwegian Embassy in Ottawa. Colonel Aaser brought greetings on behalf of the Norwegian Government, and a special letter from the King of Norway. It is interesting to note that many of the airmen who trained at Little Norway married Canadian girls and settled in Canada. Originally an international air show had been planned, with various types of aircraft invited to participate or be on display. Unfortunately this participation had to be cancelled a few months ago because of a conflict of dates when Trenton changed its airshow from September to June 22.
Mayor Don Holstock hosted a reception for the visiting airmen on their arrival June 14. All veterans from Muskoka formed a welcoming committee for our Norwegian visitors. The red carpet was rolled out for the visitors by Mayor Jim Lang of Bracebridge, who hosted a wine and cheese party. Mayor Sheila Hatch of Muskoka Lakes greeted the guests at a luncheon in Bala. Mayor Gorden Snell of Huntsville hosted a coffee party. Another highlight for the visiting Norwegian airmen was a boat trip on RMS Segwun, and a tour of the Ontario Fire College.


Mr. Speaker:: I must advise the Hon. Member that his time has expired.



SMALL BUSINESS


David Charles Dingwall: Mr. Speaker, the Nova Scotia Road Builders Association represents the road building and heavy construction industry in my provide. Contractors who have a multi-million dollar investment in plant and equipment, and who employ more than 3,500 men and women, are small businessmen, the people the Government has claimed were ignored and unfairly treated in the past, the people the Government wants to encourage and support.
But the Government's actions belie its words. The proposed changes in the May 23 Budget with respect to the 6 per cent sales tax that will apply, among other things, to ready-mix concrete and asphalt paving mix, are a direct affront to the very principles of free enterprise that the Government supposedly espouses. Provincial and Municipal Governments will not pay that 6 per cent sales tax; the burden is falling on the small businessman. The road construction industry in Nova Scotia is one that has been battered by years of recession and is only just now beginning to re-establish any kind of a profit marging. The imposition of this sales tax is the last thing the industry needs at this time.
Already the proposal to implement the sales tax is creating chaos. There is work out to tender; concrete and asphalt will be used. Contractors do not know if they should ignore the 6 per cent sales tax and incur the Government's wrath, or to include it and not get work. A wonderful Catch-22 situation.

June 25, 1985
Surely the Government of the day can delay these tax changes until January, 1986. In the interim there will be time to get systems in place, and time for contractors to negotiate with their customers on how this tax should be collected and remitted.



DISASTERS


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, the Canadian community with origins in India is transfixed with grief this week. The sudden destruction of Air-India Flight 182 off the coast of Ireland has taken the lives of 329 persons, most of them Canadian citizens of Indian origin.
It is possible that a bomb caused this tragedy. It is all too easy in such circumstances for media speculation to focus on a crime and its perpetrators. It is all too easy for popular emotions to be stirred up. People forget that individuals are innocent in our legal system until they have been found guilty in the courts, and that is is individuals who commit crimes, not whole communities.
The Indo-Canadian community has been living through very trying times. The desire by some to achieve more autonomy for Punjab culminated in the Indian Army's assault, just over a year ago, on the Golden Temple in Amritsar. The assassination of Prime Minister Indira Gradhi last October was followed by several days of fierce anti-Sikh violence in Indian cities and towns. If frustration of Sikh desires for more autonomy lead to militant action by some persons, it is clear that the community generally has paid dearly for these excesses.
Prime Minister Rajiv Gandhi has aided the Sri Lankan Government in ending the violence that has gripped that neighbouring country. I call on our Prime Minister (Mr. Mulroney) to offer his assistance to the Indian Government in ending the violence that India is experiencing.



HUMAN RIGHTS


Mr. Andrew Witer (Parkdale-High Park):: Mr. Speaker, Viktoras Petkus, a member of the Lithuanian Helsinki Group, has been arrested time and again for his visible activities and vocal advocacy on behalf of religious freedom in Soviet occupied Lithuania. Petkus was first arrested at the age of 17 in 1947, and sentenced to 10 years of hard labour for his participation in a Catholic youth organization. He was released in 1953, but was once again imprisoned in 1957 for his part in the distribution of religious books written by Lithuanian emigre writers before the occupation.
Viktoras Petkus continues to be adopted by Amnesty International as a prisoner of conscience because of his non-violent
exercise of the right to freedom of expression. The most tragic aspect of the Petkus case is his ever-worsening health. In 1978 the Soviets sentenced him to seven years in prison, three years special regime camp, and five years exile, on a charge of anti-Soviet agitation and propaganda. Those years of medical neglect, followed by an operation for a malignant tumor on his face, have cost him his health. Petkus is still alive, but in grave danger.
I call upon the House of Commons to direct the Secretary of State for External Affairs (Mr. Clark) to call upon the Ambassador of the Soviet Union to demand that Petkus be released immediately, and to send a clear reminder to the Soviet Government of its obligations as a signator of the Helsinki Accords.



MINES AND MINING


Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, on June 20, 1984, more than a kilometre below the surface in the Falconbridge mine, a rockburst occurred which resulted in the tragic deaths of four miners.
Last Thursday in Sudbury I had the honour of attending, together with the Minister of State for Mines (Mr. Layton), the Hon. Member for Sudbury (Mr. Frith), the Hon. Member for Nickel Belt (Mr. Rodriguez), and the Hon. Member for Parry Sound-Muskoka (Mr. Darling), the first Workers Memorial Day service. The purpose of this service, organized by local citizens and the Mine, Mill and Smelter Workers' Union, was to pay respect to and to remember all those miners and others who had given their lives in the production of mineral products. It is to become a national annual event.
Representatives of labour, management, and Government consistently and thoughtfully spoke about the need for accelerated efforts for better health and safety conditions in the workplace.
In the process the Minister of State for Mines described a new, five-year, $4.2 million co-operative research program aimed at eliminating rockbursts, one of the major hazards facing underground miners. The federal Government, the Province of Ontario, Cambell Red Lake Mines Ltd., Falcon-bridge Ltd., and Inco Ltd., will each contribute $1.4 million. This is a fine example of a partnership in progress between government and industry. The threat of rockbursts will increase as Canadian mines progress to greater depths. This research is thus necessary and timely to ensure safe and highly productive mining practices.


Mr. Speaker:: I regret to advise the Hon. Member that his 90 seconds have expired.
June 25, 1985



OLD AGE SECURITY


Hon. Jean Lapierre (Shefford):: Mr. Speaker, during the last election campaign, all Canadians heard the Prime Minister (Mr. Mulroney) talking about his roots in Baie-Comeau and his Aunt Jeanne who raised him when he was a small boy. Recently, and especially last Thursday, the Prime Minister went so far as to deny the very existence of the woman who raised him and, as he said at the time, had even changed his diapers. Mr. Speaker, I would like to say that Aunt Jeanne does exist, and I had a chance to give the Prime Minister her telephone number so he could apologize for this disclaimer.
Mr. Speaker, we are used to the Prime Minister going back on his promises, but to renounce one's own aunt is simply appalling. And that is why I hope, first of all, that the Prime Minister had the decency to call his Aunt Jeanne to apologize for saying she was dead, and second, the best way to show his gratitude would certainly be to keep his hands off her Old Age Security pension. That is what she wants, that is why she signed the petition and that is what she hopes the Prime Minister will do.



PENSIONS


Raymond John Skelly: Mr. Speaker, as my statement today I should like to read into the record comments which I have received from senior citizens living in the riding of Comox-Powell River. Their words say it all. The first one
says:
I could not believe my ears when hearing those irrational Conservative arguments devoid of a sense of fairness and justice by those right-wing Neanderthals. Imagine those unfortunate pensioners whose pensions stand between them and destitution-


Some Hon. Members:: Oh, oh!


Raymond John Skelly: It is extremely funny when about 650,000 old age pensioners live below the poverty line and this is their reaction! The second says:
The Government's blatant display before Parliament and the Canadian people of partisan support for the rich at the expense of the poor reveals an arrogance born of confidence in their ability to crush any opposition no matter how old or frail.
The next one says:
As a senior citizen with the aspirations of reaching up to the comparative luxury of the poverty line, the attack upon indexation comes as a blow. I am not one of those seniors mentioned by the Finance Minister who wishes to bear a disproportionately larger burden in combating the deficit.
A fourth says:
We have already lived through a depression, a world war, the Korean war, a major recession, and now the Government wants us to reduce the deficit.
It continues: "If you are in the position, please tell the Minister of Finance one of your constituents thinks he is a-", and the term is unparliamentary, so I will not use it, "-for picking on old age pensioners ... If you think"-"is too unparliamentary to be used"-


Mr. Speaker:: I regret to advise the Hon. Member that his 90 seconds have expired.



FEDERAL-PROVINCIAL RELATIONS

[Stage Direction]
ROLE PLAYED BY RENfe LEVESQUE IN POLITICAL, SOCIAL, AND ECONOMIC EVOLUTION OF QUEBEC
Mr. Gabriel Desjardins (Temiscamingue):: Mr. Speaker, today I would like to join all those who paid tribute to the Premier of Quebec who announced that he intends to retire from active political life.
Mr. Speaker, no one can deny that Rene Levesque has played a major role in the political, social and economic development of Quebec in the last 25 years. In addition to nationalizing electric power utilities in Quebec and founding a political party which in many respects remains a model of good management, Rene Levesque has especially helped Quebecers take pride in their origins and be recognized and respected not only in Canada but throughout the world. Rene Levesque always had a passionate love for Quebec, and his forthright speech has made him one of the most likable and most respected politicians in Canada.
Mr. Speaker, although his political ideals never materialized, like a true democrat he agreed to go on serving his province.
The day after our party was elected, Rene Levesque called this event a great challenge, and I am convinced, Mr. Speaker, that he would be the first to rejoice in the good relations that have existed between Quebec and Ottawa since September 4.
Finally, Mr. Speaker, I would like to wish Mr. Levesque a happy and well-deserved retirement, although we all know he will continue to follow events in his province with great interest and a critical eye.



LACK OF PARAMEDIC SERVICES

Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, thousands of people die every year due to heart attacks, car

June 25, 1985
Air Disasters
accidents, drownings, and other sudden and unexpected emergencies. Many lives could be saved if life-saving emergency care could be administered immediately at the scene of an accident.
Canadians live with a false sense of security in this regard. On television we see American paramedics in action, whereas in Canada they exist only in British Columbia and Alberta, with limited pilot projects in Toronto and Hamilton.
The first national advanced life support competition was held in Ottawa recently and involved teams of paramedics and emergency medical attendants, many of whom had to learn their skills as volunteers. They represented major urban and rural areas across the country. The ultimate goal of this event was to promote emergency medical services through sensitizing the public, the medical community, elected officials, administrators, and the media, to the fact that pre-hospital emergency care can save lives. I want to congratulate all the competing teams, especially the winners from Toronto who will be competing next month in the United States on behalf of Canada.



DISASTERS


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, the Prime Minister (Mr. Mulroney) has asked me to express in the House the Government's deep sorrow over the two weekend air disasters. The destruction of Air-India Flight 182 off the coast of Ireland brought untimely and tragic death to 329 passengers and crew, the majority of whom were Canadians. An explosion at Tokyo Airport killed two Japanese citizens and wounded several others.
I cannot over-emphasize the seriousness with which the Government views these tragic and sorrowful episodes. [Translation]
Yesterday, the Prime Minister of Canada expressed his condolences to the families of those who lost their lives in this terrible accident.
The Prime Minister has announced the Government's firm resolve to do everything in its power to determine the cause of this disaster.

On behalf of the Government the Prime Minister has expressed his condolences to the families and friends of those who perished in this tragedy, and I am sure that every Canadian shares their grief in their bereavement.
Both of the flights which became the focus of these tragic episodes originated in Canada, one involving a Canadian airline, the other, of course, Air-Indian Flight 182.
[ Translation]
At this time, the Government has no evidence that the Air Indian disaster was caused by an act of terrorism.

There is at this time no direct evidence that either of these episodes is linked to the dark context of international terrorism which appears to have burst out anew in the past few weeks. Nevertheless, the course of prudence would indicate that these episodes be treated in such a context.
[ Translation]
The Government has taken steps to prevent a recurrence of these tragic episodes. Yesterday, the Prime Minister (Mr. Mulroney) ordered a review of airport security.

Security measures have been intensified at all Canadian airports, with emphasis on the scrutiny of baggage.
I want to inform the House that we have begun a major investigation, involving the security forces of several countries, to determine whether indeed the two tragedies are the work of terrorists and whether there is a link between the two episodes. If that proves to be the case, every effort will be made to identify and bring the guilty parties to justice.
We will not allow this country to become a killing ground for international terrorism.


Some Hon. Members:: Hear, hear!


Erik Nielsen: To honour the memory of those who lost their lives in this disaster, flags on all Canadian government buildings throughout Canada and around the world will fly at half-mast tomorrow.


Hon. Herb Gray (Windsor West):: Mr. Speaker, on behalf of the Official Opposition I rise with deep sorrow to express our profound sympathy and condolences to the families of all those who lost their lives, the majority of them Canadian, in the apparent explosion of Air-India Flight 182 from Canada to the United Kingdom.
I would also like to express our sympathy and condolences to the families of those Japanese baggage handlers who were killed or injured in the apparent explosion of a bomb in luggage taken off a Canadian Pacific flight from Vancouver to Tokyo.
In addition, we express our shock not only about these tragic events but also about the strong likelihood that they are the result of terrorist actions. If that is the case, we can only have and express feelings of revulsion about conduct that takes innocent lives in this way.
We call on the Government to do everything possible to assist the families of those who lost their lives in the Air-India explosion, as well as the Japanese families affected by the explosion in Tokyo. We call on the Government to take strong and immediate action to prevent any future incidents of this
June 25, 1985

kind from taking place in connection with flights linked with Canada or with Canadian airports.
The Government must move immediately to determine how and why these tragedies occurred. The Government must join with all nations to take concerted and strong action against all acts of terrorism, not just those involving airlines, and not just after the fact, but hopefully to prevent them from taking place.
Finally, now is the time for all Canadians of every origin to unite with their fellow Canadians of East Indian origin, but not just in sympathy. We must join with them in solidarity and unity in their grief. We must join with them as fellow members of our Canadian family, all of us desiring to live in peace and harmony together in Canada and in the world.

Mr. Speaker, on behalf of the Official Opposition, we want to express our condolences to the families of those who lost their lives in these tragic accidents. We must do everything we can to prevent a recurrence of such episodes.


Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I join with all Canadians in extending our deepest sympathy at the tragic loss of life in the crash of Air-India Flight 182. When this plane, flying from Toronto to Bombay, plunged 9,500 metres into the ocean, it took 329 people to their deaths. The magnitude of the suffering is literally indescribable.
We share the grief and sorrow of the bereaved relatives and friends. Our hearts go out to the families. Many of the victims are members of the Indo-Canadian community. Disaster has shattered their peaceful lives in this their new land.
We share the deeply felt sorrow of parents and grandparents, husbands and wives, children and grandchildren. Many of the innocent victims were on a journey of family reunion, in many instances after many years spent continents apart. The trip of their dreams was tragically transformed into a deathly nightmare.
The cause of this horrible tragedy is yet to be exactly determined. Circumstances indicate strongly that there was a mid-air explosion. I would however, like to mention at this time the heroic efforts of the Irish, British, and U.S. Air Force and Navy rescue teams who, with great will and determination, and attempting to Find an answer by searching to obtain the aircraft's "black box" from the bottom of the ocean. This will be the most reliable source of information on the cause of this horrible disaster.

It is not enough to shed tears and express our sympathy. We must all work together on an international scale to prevent a recurrence of this catastrophe. Countries all over the world must co-operate in providing the best possible standard of security for innocent travellers. We owe it to the victims of this disaster to do everything in our power to allay the concerns of Canadians and people throughout the world.
Oral Questions

Steps have been taken to improve airport security. Every nation in the world faces the challenge. Increasing acts of terrorism in Beirut, Frankfurt, and possibly now on Canadian soil, make concerted international action more urgent and pressing. Our nation can and should play a leading role. International terrorism is on the agenda at the 40th session of the UN in September. The political will to fight this international blight must be an urgent priority at that session of the United Nations. We, all the peoples of the world, must see an end to this international monstrosity.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD

['Hear, hear!']
Hon. Ray Hnatyshyn (President of the Privy Council):: Mr. Speaker, in light of the statements of sympathy that have been expressed, in the usual tradition following these incidents I think you will find an inclination to agree to extend the Question Period for the normal period of time, starting now.


Mr. Speaker:: Question Period will therefore last for 45 minutes until 3.12 p.m.



Hon. Andre Ouellet (Papineau):: Mr. Speaker, as I rise to ask my first question to the Minister of Transport I want to express again on behalf of the Official Opposition our deepest condolences to the families so tragically affected by the terrible incident of Air-India Flight 182. We pray for them, and indeed hope that we can find ways to prevent a recurrence of this horrible disaster.
This leads me to ask the Minister of Transport what steps are being taken to protect Canadian passengers. Can the Minister of Transport guarantee air travellers that his Government has now taken every appropriate measure to protect them?


Donald Frank Mazankowski: Mr. Speaker, I think first of all we should acknowledge that Canada does have one of the best safety and security mechanisms in place. That has been alluded to by international aviation authorities, by the Canadian Airline Pilots' Association, and by the American Airline Pilots' Association, but I believe it is fair to say that, in view of the activities over the last few days, and particularly the last weeks, it is important that all our security and surveillance systems be re-evaluated.

June 25, 1985
Oral Questions
To that purpose the Prime Minister has ordered a full evaluation of the safety and security of all airports and airlines.
As well, we have put in place new measures to ensure that all checked baggage will be adequately screened or inspected. We stepped up the security with respect to passengers and carry-on luggage. We put a 24-hour delay on all cargo shipments, with the exception of perishables, and we are bringing into, at least our international airports for the time being, new equipment which will assist in the inspection of baggage, which equipment we hope will be arriving before the end of this week.


CRASH OF AIR-INDIA FLIGHT 182
André Ouellet: Mr. Speaker, yesterday the Prime Minister confirmed that the Indian Government requested, apparently on numerous occasions, in the days and weeks proceeding the terrible event, increased security for Air-India flights, and for Indian diplomats in Canada. What has the Minister done specifically to respond to these pressing requests?


Donald Frank Mazankowski: Mr. Speaker, from time to time there were requests for additional security by Air-India authorities. There were extra RCMP deployed both at Toronto and at Mirabel, as there has been for some time. I should point out to the House that there was no indication that there was a specific threat to Flight 182 and, as a result, the extraordinary precautionary measures were not put in place. However, whenever the Air-India people had requested additional security or assistance with regard to the surveillance of passengers and baggage, and whenever there were any suspicions and such requests had come to us, we responded on every occasion.


STATIONING OF RCMP OFFICERS AT AIRPORTS
André Ouellet: Mr. Speaker, in light of the incident, the Canadian Air Line Pilots Association has requested that the Minister abandon his ill advised plan to remove RCMP security officers from Canadian airports. Is the Minister ready today to announce that indeed he will not go ahead with such a plan, and the RCMP not only will continue to perform at airports but will receive appropriate resources and money to do the thorough checking that they are supposed to do?


Donald Frank Mazankowski: Mr. Speaker, this was a decision that was partially implemented by the previous administration. The Hon. Member will know that there was a review in 1975, 1976, and again in 1981, conducted by the Air Transport Association of Canada, Transport Canada officials, and the RCMP. At that time it was determined that the removal of RCMP from Class 2 airports would not undermine the level of security of those airports. However,
I would like to inform the Hon. Member, and all Hon.
Members of the House, that in view of the Prime Minister's statement yesterday wherein he ordered a full evaluation of the security systems in place at our airports and the security of our airlines, we are going to defer that decision pending the outcome of this review.


DISASTERS
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is directed to the Minister of Transport. Through you, Mr. Speaker, I would like to say to the Minister that the House notes and appreciates the actions that have already been initiated by the Minister, and the announcement that he has just made.
The Minister knows that several suspicious pieces of baggage were removed from Flight 182 at Mirabel. The superintendent of airport security at Mirabel has stated that Air-India broke a basic rule by not notifying the Department of Transport of the suspicious baggage. Perhaps the Minister could clear up some confusion. He indicated yesterday that, when Transport Canada is notified of these incidents, a thorough investigation of the plane and all baggage on board takes place. On the other hand an official of his Department has said that regularly baggage is removed from planes and flights continue without further investigation. What is the proper procedure to be followed in those circumstances?


Donald Frank Mazankowski: Mr. Speaker, I repeat that in this particular case Transport Canada was not apprised of any specific threat against Flight 182. Therefore, the basic normal Air-India precautions and surveillance that they conduct were conducted in their usual manner. I repeat that we did have the additional RCMP security officers deployed as requested.
With respect to the specific question regarding the luggage, I would like to say to the House, and to the Hon. Member, that this is the subject of a very delicate and intensive investigation by the RCMP and others. While there has been a lot of speculation and conjecture, I would hope that the Hon. Member would agree with me that at this point in time, prior to our ascertaining all the facts, it would probably be inappropriate for us to engage in any further speculation. I can assure the Hon. Member that this investigation will be carried out with the utmost of thoroughness and, until we receive more factual information, I would appreciate it if the Hon. Member would agree with me that it would be inappropriate to comment further on that point.


Brian Vincent Tobin: Mr. Speaker, I want to assure the Minister that I appreciate the delicate nature of the investigation with respect to particular pieces of luggage.
June 25, 1985


ROLE OF DEPARTMENT AND RCMP
Brian Vincent Tobin: Mr. Speaker, I want to ask the Minister about procedure. We are told that the RCMP in Montreal were called to investigate the luggage in question while Flight 182 was still on the ground, but when they in fact arrived the plane had just departed a few minutes before. Given the statement of the Minister that Transport Canada, when informed of these kinds of incidents, does a thorough investigation of every piece of luggage on the aircraft, why was there no procedure in place, even though the plane had left, to have either the RCMP or Transport Canada request that that aircraft return to Montreal so that a thorough investigation of all the luggage on board could take place before it continued its journey across the Atlantic?


Donald Frank Mazankowski: Mr. Speaker, once again may I repeat to the Hon. Member that Flight 182 was not designated as a flight with a specific threat. As a result there were no extraordinary procedures implemented at that time. Had there been, that would have been the normal course. Furthermore, I repeat that, to the best of my knowledge, our people were not informed of this until the aeroplane had left.


CONDUCT OF INVESTIGATION
Leslie Gordon Benjamin: Mr. Speaker, in light of the statement made by the Prime Minister yesterday, I direct this question either to the Deputy Prime Minister or the Minister of Transport. The Prime Minister said yesterday that there is to be a special investigation. I would like to know from the Deputy Prime Minister, or the Minister of Transport, who is conducting this special investigation. Is it an in-house investigation by the Ministry of Transport, is it a combination of the Ministry of Transport and representatives of airlines, or is it a throughly independent investigation?


Donald Frank Mazankowski: Mr. Speaker, I think the Hon. Member is aware that the accident per se is being investigated under the auspices of the Indian authorities, and that is consistent with international convention. Canadian authorities, United States authorities, U.K. authorities, and Irish authorities are also involved in the investigation process. Investigations having to do with security, and any criminal investigations, are being undertaken primarily by the RCMP.


SCREENING OF PASSENGERS AND HAND LUGGAGE
Leslie Gordon Benjamin: Mr. Speaker, there has been a standard in place for a long time now, dealing with the screening of passengers and hand luggage. As the Minister well knows, the screening of checked baggage, other parcels, and all other things that are placed aboard aircraft, is left entirely to the discretion of the various airlines. Yet the Ministry of Transport owns and operates the airports in Canada.
Oral Questions
I compliment the Minister on the quickness with which he has instituted full security arrangements since Sunday. However, is Transport Canada going to return to the practices of the past, or will the Ministry of Transport now assume its own responsibility for the screening of checked baggage and all other items that are boarded onto aircraft?


Donald Frank Mazankowski: Mr. Speaker, I would say to the Hon. Member, and other Hon. Members, that, as a minimum, Canada has always fulfilled the standards and recommended practices of international convention. I think the Hon. Member is aware that most of these arrangements are done through international convention. Canada's practices, have always been superior to the minimum requirements advocated by these various international conventions. In fact Canada has been in the forefront in terms of it constantly striving to improve security and surveillance in our airport system. As recently as the Economic Summit in Bonn, Canada played a very major leadership role in trying to improve our security and surveillance in the airport system.
So, Mr. Speaker, to the extent that we can upgrade those standards consistent with the international convention, we are certainly prepared to do so. In fact it will be my intention to attend the ICAO convention tomorrow in Montreal to speak to this very important issue.


REQUEST THAT DEPARTMENT ASSUME RESPONSIBILITY
Leslie Gordon Benjamin: Mr. Speaker, surely it is obvious that leaving this matter up to the discretion of scores of airlines which come into and leave our country is not good enough. That is painfully obvious. Will the Ministry of Transport from now on be responsible, in co-operation with the airlines, the RCMP, and other security agencies-without us becoming complacent a few weeks later-for the security, screening, and surveillance of all articles and human beings who enter aircraft on international flights and, in many instances, domestic flights, and not leave it up to the discretion of airlines which obviously try to save money every chance they get? When do we put an end to the saving of money-


Mr. Speaker:: Order, please. There are a number of other Hon. Members who wish to ask questions.


Donald Frank Mazankowski: Mr. Speaker, I am sure the Hon. Member heard of the very Firm declaration made by the Prime Minister yesterday and of his full commitment, and that of the Government, to deal with this very important issue. I think that is clear evidence that the Government of Canada is taking a leadership role, in conjunction with the airlines and the aviation community, to deal with this very important issue. However, I believe it is more important to deal with this matter in a co-operative way rather than simply declaring an edict, with all the inherent difficulties which may occur.

June 25, 1985
Oral Questions
The Prime Minister's commitment yesterday was to undertake a complete evaluation of Canada's airport surveillance and security system and, as well, the security and safety of our airlines. To that end we will be instituting any measures necessary in order to ensure that that is carried out.


EVALUATION OF AIRPORT SAFETY PROCEDURES
Lloyd Axworthy: Mr. Speaker, my question is directed to the Minister of Transport as well. I can sympathize and respect the kind of difficulties the Government has in trying to establish a clear set of directions on this question. But I want to ask the Minister a very important question concerning the proposed evaluation announced by the Prime Minister.
I believe the Minister would acknowledge that there have been a number of quite confusing and contradictory statements and judgments about the various roles and responsibilities of agencies under his jurisdiction, and under the Government generally. I would want to suggest to the Minister, by way of a question, that it is far more important to ensure that such an evaluation be seen as not having any vested interest attached and, therefore, should be totally independent in its point of view.
Would the Minister not agree that it would be more appropriate to have the Canadian Aviation safety Board, which is an independent agency not tied into the Government, undertake the investigation into the security system at Canadian airports, as its mandate allows, in order to ensure that it is an independent study and not one which is done by in-house agencies or organizations of the Government itself?


Donald Frank Mazankowski: Mr. Speaker, I am sure that we will be relying upon the advice, wisdom, and recommendations which come forth from the Canadian Aviation Safety Board. I think the Hon. Member has presented a good suggestion. However, I want to remind him, and Hon. Members of the House, that in the Prime Minister's announcement yesterday he requested an examination of all aspects of airport and airline security under the auspices of the Secretary of the Cabinet and senior security and intelligence officials.
I think that the element of senior security and intelligence officials surely puts that within the ambit of some independence. However, we will certainly not disregard any recommendations which the Canadian Aviation safety Board should bring forth. In fact we would welcome them.


RESPONSIBILITY FOR INVESTIGATION
Lloyd Axworthy: Mr. Speaker, we certainly recognized the necessity to have a number of agencies and officials involved. However, the Aviation Safety Board is not only independent but it can make its findings public so that there can not be any ease of security.
I would again ask the Minister if it would not be more appropriate at least to have the direct responsibility for the investigation and evaluation under the auspices of the Canadian Aviation Safety Board so that it can follow its proper mandate, not only to be independent and to be able to draw upon resources, but to also make sure that the findings of that board are independent and not kept within the confines of Cabinet or behind the cabinet door.


Donald Frank Mazankowski: Mr. Speaker, it is certainly not the intention of myself or my cabinet colleagues to keep anything behind the cabinet door. I think this is a non-partisan issue which affects all Canadians. It is something we all have to deal with in a collective way.
To the extent that the Canadian Aviation Safety Board is involved in all elements of the investigation of the accident involving Flight 182, I am sure we will not only have a full report on it but any recommendations which may flow from that report will certainly be given serious consideration by the Government.


PENSIONS
John Edward Broadbent: Mr. Speaker, my question is directed to the Minister of Finance, or to the Deputy Prime Minister. The Minister of Finance will be meeting later this afternoon with representatives of more than one million pensioners with whom I met this morning. They made two basic points about which I would like to ask the Minister of Finance. First, they want indexation restored to all pensions and, second, they want an announcement about the timing of the Government's decision on this important matter, to be made before the end of this week. Considering that the Cabinet met on Friday, is the Minister of Finance in a position to tell the House today the answer to the two important questions to which the pensioners of Canada want answers?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, the Hon. Member is right, I will be meeting with representatives of a very important group of seniors later on this afternoon. I will be discussing with them their concerns about this matter. As I have said on many occasions in this House, I will take those concerns very much into account in arriving at any decision which might be forthcoming. However, in precise response to the Hon. Member's question, no, I am not in a position to state anything further than I have in the past.


TIMING OF POSSIBLE ANNOUNCEMENT
John Edward Broadbent: Mr. Speaker, considering the fact that Hon. Members on the opposition side and Hon. Members on the government side have confirmed that pensioners will be in a state of anxiety over the summer-there are no two sides of that coin; everyone is in agreement about
June 25, 1985

that-and considering that one of the pensioners with whom the Minister will be meeting this afternoon said to me this morning that she would at least like an answer-


Mr. Speaker:: With great respect, this is becoming a preamble to a supplementary question.


John Edward Broadbent: -on the question of timing, will the Minister assure the House that before the House rises the Government will at least have the courtesy to inform Canada's pensioners when they will hear an answer to this important question?


Michael Holcombe Wilson: Mr. Speaker, on a number of occasions I have stated that there would be no changes made in the payments to senior citizens until next year, so I think the Hon. Member should be trying to allay the anxiety about which he talks by advising seniors that they are going to see the normal increase in their cheques effective July 1. Again on October 1 there will be another increase in their pension cheques. I would hope that the Hon. Member would try to put to rest some of the anxieties which have been expressed by senior citizens which, I would say, he and other Hon. Members of the House have been trying to fan.


John Edward Broadbent: Appropriately trying to fan.


IMMIGRATION
Mrs. Lucie Pepin (Outremont):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration.
Following the tragic Air-Indian disaster this weekend, many Canadians are asking questions about Immigration operations, especially in the case of persons sought by the FBI or Interpol.
Could the Minister inform the House what measures are being taken by the Department of Employment and Immigration to prevent persons for whom warrants of arrest are out from entering Canada?
Furthermore, could the Minister inform the House what kind of co-ordination exists between her Department, the Department of Transport and the new civilian security intelligence agency which is responsible for airport security?


Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, the policy of the Department of Immigration continues. Any investigation of the tragedy involving Flight 182 would be carried out under the aegis of the RCMP, certainly not that of the Department of Immigration.
Oral Questions


AIR-INDIA TRAGEDY-SUPPLEMENTARY MEASURES TAKEN BY GOVERNMENT
Lucie Pépin: Mr. Speaker, I have a supplementary. In connection with the same subject, I would like to know what additional measures have been taken by the Minister and what special instructions she has given to prevent a recurrence of these acts of terrorism.


Flora Isabel MacDonald: Mr. Speaker, once again, this is not the responsibility of the Department of Immigration. If the Hon. Member thinks that what we should be doing at this point is instituting police enforcement at the borders in order to meet a demand which has not been proven, if she thinks that there are certain individuals from different parts of the world who suddenly should be kept out of our immigration stream, then I would say she is badly mistaken.


PENSIONS
Mr. Neil Young (Beaches):: Mr. Speaker, my question is directed to the Minister of Finance. He has said, and he certainly knows the Prime Minister has said, that over the weeks I have fairly presented the views of seniors across Canada. I met with a group of seniors in Sudbury yesterday, and 12 provincial seniors' organizations this morning. Will the Minister not accept that it is fair to say that seniors across the country do have a deep anxiety about what the Government intends to do with pensions beginning next year? They fully understand what the proposal is.


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member says he has fairly presented the views of seniors, and I do not quarrel with that. But what I would ask him is whether he has fairly presented the views of the Government as to the reasons why we have done this.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Let me ask him whether he said to the seniors that the country's debt has been growing at 25 per cent per annum. Is he also saying to them that we are spending-


John Edward Broadbent: No, we didn't tell them that.


Michael Holcombe Wilson: The Hon. Leader of the NDP says no, he did not tell them that. Why didn't he tell them that?


John Edward Broadbent: Because we don't want the pensioners to
pay for it, that is why.

June 25, 1985
Oral Questions


Michael Holcombe Wilson: Why didn't he spell it all out? Why didn't he put these facts in front of them? I will tell you why, Mr. Speaker-


Mr. Speaker:: Order, please. We started very well today; I would like to keep it that way. The Hon. Member for Beaches.


REQUEST FOR GOVERNMENT ANNOUNCEMENT
Neil Young: Mr. Speaker, I can assure the Minister that I have done that, and the seniors have responded by saying: "We have paid our dues".


Some Hon. Members:: Hear, hear!


Neil Young: Will the Minister, in all fairness, stand in his place and assure the seniors that the Government will remove that anxiety before the end of this week?


Michael Holcombe Wilson: Mr. Speaker, let me be clear. I am very sensitive to the views expressed by seniors' groups. I have met them on a number of occasions, as has the Hon. Member. As I said many times in this House, as has the Prime Minister and the Minister of National Health and Welfare, we are monitoring the situation. We are going to-


Some Hon. Members:: Oh!


Michael Holcombe Wilson: Members opposite say "oh". I suggest that they pay attention to what has been happening in this country. They should pay attention to what happened during the 15 years they were in power. They should pay attention to the fact that we were left with such an enormous mountain of debt that we cannot afford to do all the things-


Mr. Speaker:: Order, please.


DISASTERS
Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, my question is directed to the Deputy Prime Minister. A CP wire report which came out shortly after one o'clock says that the Japanese police and Air-India's Tokyo representative said that a Mr. A. Singh and a Mr. L. Singh, which happen to be the same initials as those of the two fugitives from justice earlier referred to, were booked on CP Air flights 003 and then scheduled to transfer to Air-India flight 301 to Bangkok. They are the only two passengers who did not show up, and their luggage appears to have made the flight. Is the Minister in a position to confirm the validity of this report and to tell us whether there may have been some security problem at our end which would have permitted this to have taken place?


Erik Nielsen: I do not believe, Mr. Speaker, that the release is as recent as the Hon. Member says, that being one o'clock, because I myself saw on television last night those two names being mentioned. However, I think he will agree with me that, given the wide ranging investigation that is now ongoing in order to examine every possible facet and detail of the circumstances surrounding the loss of the Air-India flight, it would not be helpful to discuss publicly any details relating to that investigation. I saw the news account on national television last night with respect to the two individuals he named, and naturally, as stated, that is one avenue of the investigation.


AIR SAFETY
Donald James Johnston: Mr. Speaker, the Minister of Transport has referred to the possible necessity of additional security measures. There are substantial cuts envisaged in Transport Canada, some of them arising out of the so-called Nielsen task force. Could the Deputy Prime Minister assure us that the security measures will in no way be compromised by any cuts which have been or will be announced with respect to Transport Canada, and that the Minister will be given all the resources necessary to enable him to establish that full and appropriate security is in place?


Erik Nielsen: The Hon. Member asked the question with respect to the task force on program review. I can assure him that I, as chairman of that task force, as well as my ministerial colleagues on the task force, have approached all matters relating to the review process, in so far as they are applicable to the Department of Transport, bearing in mind at all times the need to maintain the very high and excellent standards of security which have hitherto existed in the Department, and give him the unqualified assurance that the safety and security of Canada's travelling public, both here at home and abroad, will always be a top priority with this Government.


VETERANS AFFAIRS
Mr. Bill Kempling (Burlington):: Mr. Speaker, my question is directed to the Minister of Veterans Affairs. Prior to September 4, 1984, Members used to rise quite regularly and complain about the deplorable delays in war veterans pensions. When the Minister was appointed to his portfolio he promised to deal with this matter. What has he done?
June 25, 1985


Hon. George Hees (Minister of Veterans Affairs):: Mr. Speaker, I would first like to thank the Hon. Member for his very excellent and well thought out question. The answer to his question is a resounding "yes". I will be outlining what the Government has done before the meeting of the Standing Committee on Veterans Affairs which will meet in exactly one-half hour in Room 269 of the West Block. All Members are welcome.


Some Hon. Members:: Hear, hear!



OLD AGE SECURITY


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my question is directed to the Minister of Finance. We cannot let the elderly in this country go on living in their present state of anxiety. We cannot let them wait until September to know what is going to happen. Could the Minister let senior citizens know whether he will be announcing this week or before the end of this session, whether his Government intends to change its plan to de-index Old Age Security pensions?


Michael Holcombe Wilson: Mr. Speaker, we are in fact doing a number of things for older people. As an example, the spouse's allowance provisions which were passed in the House quite recently extended the Guaranteed Income Supplement to 85,000 widows and widowers who are between the ages of 60 and 64. I also remind the Hon. Member that many elderly Canadians are being favourably affected by the change in the definition of "disabled". That will affect about 120,000 Canadians in total, so I think we are doing quite a bit.


Mr. Speaker:: Order, please. I asked for short questions and must ask for short and relevant answers.



THREAT TO PENSIONERS

John R. Rodriguez: Mr. Speaker, my supplementary question is that which was asked of the Member for Beaches and myself yesterday in Sudbury. Does the Minister think it is fair that his Government should allow pensioners to go through the summer with the threat of deindexation of their pensions over their heads, or does he have to lose another nine points on the Gallup poll before he gets the message?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, I would not want to ask an embarrassing question of the Hon. Member. However, when the Hon. Member met with the
Oral Questions
senior citizens in Sudbury did he point out to them that in 1974 the previous Government of Canada-


An Hon. Member:: Answer the question.


Michael Holcombe Wilson: -was spending $ 1 of every $9 on interest payments?


John R. Rodriguez: You are supposed to answer the questions, not ask them.


Mr. Speaker:: Order.


An Hon. Member:: Where is the NDP in the polls?


Some Hon. Members:: Order.


Mr. Speaker:: Order! Now the Minister may like to continue his answer.


Mr. Rossi:: Answer the question.


Michael Holcombe Wilson: Did the Hon. Member point out to the senior citizens in Sudbury that in 1974 we were spending $1 of every $9 on interest costs?


John R. Rodriguez: Do I get a chance to answer?


Mr. Speaker:: Order, please. Order, order! The Hon. Minister knows that I cannot simply allow him to go on asking questions of an opposition Member. The Hon. Member for Trinity.



PENSIONS


Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is also directed to the Minister of Finance. In a few days a sales tax will be imposed and senior citizens will have to pay more for many necessities. They also live with uncertainty about their future incomes. Since 1 am meeting with senior citizens groups this afternoon, will the Minister give me a firm answer which I can convey to them with regard to the indexation of their pensions?


Michael Holcombe Wilson: I can give the Hon. Member a very firm answer. The reason we are handling this problem in the way that we are is because of the massive debt problem that we have. We are now spending $25 billion on interest costs alone, which is more than the Government is spending on medicare, the OAS, and the Guaranteed Income Supplement in total.


Ms. Copps:: What about the oil companies?


Michael Holcombe Wilson: Please relax. Please relax. That problem has deteriorated so significantly over the last 10 years that we are forced to do some things that we are not

June 25, 1985
Oral Questions
happy about doing. However, we must do this in order to avoid having to cut total programs in the 1990s.



REQUEST FOR EARLY CHANGE

Aideen Nicholson: Mr. Speaker, there are senior citizens in my riding who live in a rent controlled apartment building and are afraid to sign leases for next year because they do not know what faces them. We know that the Government is going to make some change in the program. Why does it not make that change now in order to reduce the uncertainty?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, I would encourage the Hon. Member to sit down with those senior citizens in her riding and go through with them the numbers which explain the effects of this. She will be able to satisfy them that they can go ahead and sign their leases.



SCIENCE AND TECHNOLOGY


Mr. David Daubney (Ottawa West):: Mr. Speaker, my question is directed to the Deputy Prime Minister. A recent Canadian Press report indicated that he said that government support for science and technology was too generous. This is not my interpretation of what the Deputy Prime Minister said in the House last week, but given the importance of this issue and the importance of science and technology to the economic growth of the country, is the Deputy Prime Minister prepared to clarify the position of the Government in support of research and development?


Erik Nielsen: Mr. Speaker, I saw that account. It displays the importance of accurate reporting. In response to the question I said that the program review has shown that "the Government support system has grown overly generous over the years". The word "system" was dropped from that account. It, of course, addresses itself to the very important objective of the program review to eliminate overlap, minimize duplication, and give some rational direction to all of the programs, which is the ultimate objective of the task force. Any wrong impression that was left was left as a result of inaccurate reporting.



ATOMIC ENERGY CONTROL BOARD


Ian Gardiner Waddell: Mr. Speaker, my question is directed to the Minister of Energy, Mines and
Resources. On April 15 she wrote to Dr. Ursula Martins Franklin of Toronto, saying:
I am delighted to confirm your appointment as a member of the Atomic Energy Control Board. Your appointment is effective immediately for a term of two years.
The Minister then went to China and her Cabinet colleagues appeared to withdraw the appointment. Has the appointment been withdrawn and, if it has, why?


Hon. Pat Carney (Minister of Energy, Mines and Resources):: Mr. Speaker, I can assure the Hon. Member that the appointment in fact was not made.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: What does your letter mean?



REQUEST FOR RECONSIDERATION

Ian Gardiner Waddell: Mr. Speaker, I do not know what the Minister's letter meant. It says: "I am delighted to confirm your appointment as a member of the Atomic Energy Control Board". This is her letter and her handwriting.
On May 29 the Minister again wrote to Dr. Franklin-


Mr. Speaker:: Order. This is becoming a preamble to a supplementary question. Is there a question, please?


Ian Gardiner Waddell: Given that Dr. Franklin is prepared to serve, has not refused the oath of secrecy, and is competent, will the Government reappoint her to this position, or will it continue this shameless way of dealing with a distingusihed Canadian scientist?


Pat Carney: Mr. Speaker, when the Hon. Member rose to his feet I thought he was going to draw to the attention of the House the recent action of Alberta in lowering its royalties in the spirit of the Western Accord.


Some Hon. Members:: Oh, oh!


Pat Carney: As the energy critic I thought he would be interested in that job-creating move. I can only say, Mr. Speaker-


John Edward Broadbent: You are sick.


Some Hon. Members:: Oh, oh!


Mr. de Jong:: This is becoming a farce.


Mr. Speaker:: Order, please. Order! The Hon. Minister may continue her answer.


Sheila Maureen Copps: Lower the pensions so you can lower the royalties.
June 25, 1985


Mr. Speaker:: Order, please. All that happens when the yelling occurs is that we get fewer questions and fewer answers.


John Edward Broadbent: We don't get any answers.


Pat Carney: Mr. Speaker, they do not seem to be interested in an answer. This matter was fully discussed when I was in China and I suggest that they look at the record.



CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION CN-CP LONG DISTANCE TELEPHONE SERVICE APPLICATION

Mr. Bill Attewell (Don Valley East):: Mr. Speaker, my question is directed to the Minister of Communications. Rate rebalancing could mean very significant increases in local telephone rates. Since the CRTC will soon be conducting hearings to assess CN-CP's application to enter the long-distance market, what steps will be taken to protect the average Canadian against unfair rate increases for local telephones?


Hon. Marcel Masse (Minister of Communications):: Mr. Speaker, I have previously explained part of the Government's policy in this respect. It is true that the CRTC will be making a decision in the weeks to come with respect to CN-CP, and 1 have called a federal-provincial conference to examine our telecommunications policy here in Canada.



AIRPORTS


George Baker: Mr. Speaker, my question is addressed to the Acting Prime Minister. Last week the President of Air Canada said in the standing committee that the screening at airports is of the best standards under the guidance and meeting the requirements of the Ministry of Transport, and upon the advice of the RCMP.
In view of the decision made by the Minister of Transport to lay off RCMP security officers in eight airports which handle international chartered flights, will he not now, in view of recent tragedies, reverse these lay-offs-not only reverse them but increase the number of RCMP security staff at these airports?


Donald Frank Mazankowski: Mr. Speaker, I think I indicated earlier that the question of removing RCMP at Class 2 airports is a subject that is being deferred until the over-all evaluation of both our security
Tabling of Documents
system of airlines and airports is fully reviewed, consistent with the statement made by the Prime Minister yesterday.


George Baker: I asked that they be cancelled, not reviewed.



IMMIGRATION


George Baker: Mr. Speaker, in view of another answer given by the Minister of Employment and Immigration to another question, I want to ask my supplementary question of the Minister responsible for immigration. Does she not agree that the Canadian public today are not only asking for a better screening of baggage that leaves this country but also a better screening of people who enter this country and bring their political arguments with them? Does she not agree with that, and what will she do about it?


Flora Isabel MacDonald: Mr. Speaker, that particular position is being implemented. I would like to tell the Hon. Member that the standard policy of the Department of Immigration is to receive alerts from the RCMP about people who are considered to be terrorists or considered to be divisive. That is immediately taken into consideration by the Department of Immigration, and then airports and other entry ports across the country are alerted. That is what we have done until now and that is what we are doing on a continuing basis.
However, I think it is wrong for members of the Liberal Party to use this issue to try to move against certain groups from other countries. I would like to know who it is they would move against.


Some Hon. Members:: Hear, hear!



CLERK OF PETITIONS' REPORTS

Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Friday, June 21, 1985, meet the requirements of the Standing Orders as to form.



ROUTINE PROCEEDINGS


Pat Carney: Mr. Speaker, pursuant to Standing Order 46(2), I
6146

June 25, 1985
Statements by Ministers
would like to table in both official languages the annual report of the Columbia River Treaty Permanent Engineering Board to the Governments of the United States and Canada for the period October 1, 1983, to September 30, 1984.


REVENUE CANADA TAXATION
Hon. Perrin Beatty (Minister of National Revenue):: Mr. Speaker, pursuant to Standing Order 46(2), I have the honour to lay upon the Table in both official languages copies of the summary report of the Woods-Gordon Review of Revenue Canada Taxation.


FINANCE
Mr. Claude Lanthier (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, on behalf of the Minister of Finance (Mr. Wilson) and pursuant to the provisions of Standing Order 42(2), I have the honour of tabling, in both official languages, the financial institutions technical supplement entitled: "The Regulation of Financial Institutions: Proposals for Discussion".


DISASTERS
Donald Frank Mazankowski: Mr. Speaker, I rise today to make this statement with great sadness. I am sure that all Members of the House-indeed all Canadians-share with me a sense of sympathy and sorrow at the tragic loss of life resulting from the Air-India disaster and the Tokyo Airport explosion. On behalf of my colleagues and, I am sure, the entire House I would like to extend our condolences to the families of all involved.
The Prime Minister (Mr. Mulroney), my colleague, the Secretary of State for External Affairs (Mr. Clark) and the Deputy Prime Minister (Mr. Nielsen) have previously enunciated the Government's sympathy and regret. However, I would like to repeat our expressions of sorrow and concern at this time.
The explosion at Tokyo's Narita Airport of a baggage cart containing luggage from CP Air, Flight 003 and the tragic crash of Air-India Flight 182 off the Irish coast are both tragic events of extreme concern to our civil aviation system, the Government as a whole and indeed the international aviation community.
Over the last 60 hours, since these tragedies occurred, the Government has moved quickly to ensure the security of Canadian air travellers, to reconstruct and investigate the events leading up to the incidents, and to respond in every way possible to the situation. I would like to take this opportunity to provide the House with as clear a picture as possible of some of the facts as we understand them at the present time and outline some of the actions that have been taken.
I will say that the Government has been co-operating with and has received complete co-operation from all other nations and international organizations involved. Within the Government of Canada, a number of Departments have been actively involved and have been proceeding in a co-operative and coordinated fashion.
I want to reiterate once again to the House, to Canadians and indeed to the international community that Canada maintains high standards of airport and flight security through laws requiring security action by carriers operating aircraft in Canada and through the resources of the federal Government. Under the provisions of the Foreign Aircraft Security Measures Regulations and pursuant to the Aeronautics Act, Air-India and all other carriers are required to develop, implement and table with the Minister of Transport a full security program for their flights. These measures must include the inspection of all hand carried luggage, the control of boarding passes, the establishment of sterile areas, and the maintenance of security on the aircraft. Transport Canada assist in meeting these standards through provision of proper security facilities and the training of security personnel. But ultimate responsibility for flight security rests with the carriers.
Within this context, Canada has performed admirably in the area of passenger air safety. That contention is borne out by the statements of many experts in the field.
I quote Mr. Rodney Wallace, Director of Security, International Air Transport Association. He said:
Normally, standards in Canada are very high indeed and they're particularly high with regard to Air-India so this requires a very deep study indeed.
Another quote by Mr. Wallace is as follows:
Canada has had high standards for a long period of time and of course there has been no real perceived threat against Canada and Canadian airlines or even airlines operating out of Canada. In the case of Air-India, they did increase their security a short while ago but that was because of the political situation within India.
The Director of Security for the United States Airline Pilots Association said yesterday:
Canadian airport security is of the highest quality of any system.
I want to repeat that. He said:
Canadian airport security is of the highest quality of any system. The new security measures which were implemented on Sunday are the correct response to the perceived threat but any system is vulnerable to terrorist attack, especially the sophisticated paramilitary groups of today.
Norman Foster, President of the Canadian Airline Pilots Association, said in a television interview that he feels Canadian security standards were of a very high order but that, in view of recent events, they should be reassessed. That is precisely what we are doing. I would like to outline also the
June 25, 1985

over-all international requirements governing the safety of air travellers. We are governed by international law, Annex 17 to the Convention of International Civil Aviation which requires that contracting states take the necessary measures to prevent weapons or any other dangerous devices, the carriage or bearing of which is not authorized, from being introduced by any means whatsoever on board an aircraft engaged in the carriage of passengers. The Annex further recommends that Contracting States establish the necessary procedures to prevent the unauthorized introduction of explosives or incendiary devices in baggage or cargo intended to be carried on board aircraft.
As a Contracting State, Canada is in full compliance with both the international standard and the recommended practice.
With respect to Canadian law, Mr. Speaker, the Foreign Aircraft Security Measures Regulations made pursuant to the Aeronautics Act require every owner or operator who lands foreign aircraft in Canada to establish, to maintain and to carry out security measures at aerodromes consisting of one, a system of surveillance of persons, personal belongings, baggage, goods and cargo; two, a system of searching persons and personal belongings, baggage, goods and cargo; three a system of identification that prevents baggage, goods and cargo from being placed on board the aircraft if it is not authorized to be placed on board by the owner or operator, and, fourth, a system of identification of surveillance and search personnel and the personnel of the owner or operator.
Foreign air carriers must provide a description of their security. With respect to Air-India security measures, Air-India has provided the Minister with a copy of the security program of Air-India Canadian region describing the security measures which Air-India has established and its maintenance and the carrying out of those security measures.
The Air-India station manager is directly responsible for the implementation of these security measures.
First, these measures relate to the establishment of sterile areas, the inspection of hand carried baggage, the controlling of boarding passes, the maintaining of security of aircraft, the ensuring of the security of baggage, and the ensuring of the security of cargo. The Air-India security program requires that all carry-on baggage to be checked physically by handheld devices or by X-ray equipment, and baggage for those passengers who fail to board the flight, is to be off-loaded.
At Mirabel, Air-India's cargo is handled by Mega International in accordance with Air-India security instructions.
Just to outline briefly the sequence of events, Mr. Speaker, much of the information has been provided to Canadians by radio, television and the press, but I believe I should summarize the sequence of events as we know them. I must repeat that. I think that in the course of this exercise we always submit ourselves to some danger in trying to be as forthcoming as possible, but we find that, on re-assessment or re-examination of some of the facts presented to us, sometimes these
Statements by Ministers
change and vary from time to time. Nonetheless, fraught with that danger I think it is important for us to try to reconstruct the events as accurately as possible.
Air-India's Flight 182 planned departure from Pearson International Airport, was scheduled for 1845 hours, with a connecting flight from Vancouver to Toronto carrying an unknown number of passengers. The actual departure took place at 2015 Eastern Daylight Time, one hour and 30 minutes late. It arrived at Mirabel at 2100 hours. The flight planned departure at Mirabel was set for 2203 hours. The final departure was at 2218 hours, some 15 minutes late. It picked up 104 passengers at Mirabel. The passenger manifest showed 307 passengers, with 22 crew members. The crash time, as we have been informed, was 3.13 Eastern Daylight Time.
There has been some controversy regarding the events at Toronto and Mirabel. The events established that Canada provided to Air-India all the assistance it requested for its flights during this particular period.
There was extra assistance provided at Pearson International Airport by RCMP constables who were assigned to the ticket counter, the gate and the ramp. The normal pre-boarding passenger screening occurred at the screening point. There was also a secondary search of all carry-on bags and items conducted by Burns Security personnel as monitored by the RCMP.
In the baggage area, the X-ray machine worked for a period of time and then developed a malfunction. It is estimated that 75 per cent of the baggage was X-rayed and 25 per cent was subject to a mechanical explosive sniffer.
We are informed that no bags were opened and searched. The baggage transferred to Air-India from Vancouver arrived at Toronto on a domestic flight and was delivered to the international area. Once there, it went to the checked baggage area which was then screened by security.
Air Canada's security has confirmed that these procedures were followed for Flight 182.
With respect to Mirabel, RCMP officers are dedicated to Air-India flights. There is an officer in a patrol car, one officer at the ticket counter, one at the screening check-in point, one on the arrival/departure level, and one on the mezzanine level who also checks the roof of the terminal.
Normally there would be an RCMP dog master in the baggage area but this dog was away on a training course and a Quebec Provincial Police dog served as a replacement.
RCMP officers were on the ramp, at the ticket counter, at the screening check-in point, on the arrival/departure level and on the mezzanine level.
At Mirabel, all boarded baggage was subject to X-ray scrutiny. Three suspect bags were withheld. Air-India Flight 182 departed without this luggage. It was subsequently determined that no explosives or dangerous material was contained in those bags.
With respect to CP Air Flight 003, the departure from Vancouver International Aiport was 2037 hours Zulu. The

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Statements by Ministers
planned arrival at Narita, Japan, was 5.55 Zulu. The actual landing at Narita, Japan was 5.40 Zulu, 15 minutes early. The ramp time was 5.47 Zulu. The explosion at Narita, Japan occurred at approximately 6.20 hours Zulu, 45 minutes after landing.
The passenger manifest showed 370 passengers and a 16-member crew.
CP Flight 001 from Pearson International Airport to Vancouver landed at Narita International at approximately 700 hours Zulu.
Flight 003 originated in Vancouver. However, the aircraft had just returned from Narita International, Japan. The aircraft did a turnaround. Normal passenger screening was carried out. Luggage was not X-rayed or searched. This is normal and meets Transport Canada's civil aviation requirements where no threat to a specific flight has been signalled.
As announced on Sunday, Mr. Speaker, we took immediate action to increase security following these tragic events. Increased security measures have already been implemented on all international flights leaving Canada for Europe, Asia and Africa as a result of the Air-India and CP Air disasters.
International authorities have been asked by the Ministry of Transport to introduce similar measures for all flights bound for Canada. In an attempt to ensure that no similar mishaps take place, all baggage on international flights is being security inspected and all international cargo, with the exception of perishable goods from known producers, will be held for at least 24 hours. Twenty X-ray security systems and new explosive sniffers are being purchased for Canadian airports to assist with the new security standards. The first of the new X-ray machines will be operational by Thursday, June 27.
_
The Government has also moved quickly to ensure full international co-operation in investigations of the Air-India disaster as well as the explosion at Narita Airport.
Representatives of the Department of Transport have been dispatched to London to assist in the investigation of the Air-India crash, and a Transport Canada security officer has been sent to Tokyo to assist in that investigation. Transport Canada is also initiating a full investigation of the quality of airport security measures in place for both flights. Investigations into Flight 182 are ongoing and the Government is taking long and short-term measures to prevent any similar occurrences. The people of Canada will be kept informed of further findings and actions respecting this very important area of government concern.
Before concluding my remarks, I should like to say to all Hon. Members of the House that this is a very serious issue. I appreciate the tone with which Hon. Members across the way have approached it. I do not think this should be a partisan issue. It is an issue which is very grave and something which requires the good will and co-operation of all Hon. Members.
There is a rumour to the effect-and I am not sure whether it has been confirmed-that Air-India will be suspending
service to Canada. I understand-and I am not sure whether it has been confirmed-it has been suggested that there will be a temporary suspension of service to Canada and other points because of the lack of equipment. However, I want to reiterate that, to the best of our knowledge, this is merely a temporary suspension and as soon as adequate equipment is made available, I believe the service will be restored.
I hope this will at least partially clarify some of the outstanding and important issues relating to this great tragedy. As I indicated, I will be keeping Hon. Members and the House informed of any further developments as they occur.


André Ouellet: Mr. Speaker, first of all, on behalf of the Official Opposition, I wish to offer my sincere condolences to the families who were bereaved as a result of two tragic episodes involving, respectively, the Air Indian flight to London and the CP Air flight to Tokyo. I want to thank the Minister for the exhaustive statement he made in the House just now.
However, although this is a very serious matter in which political partisanship has no place whatsoever, the fact remains that the Canadian public must be reassured, and that consequently, we on this side of the House have a duty to ask a number of questions, not only concerning the events themselves but also about the procedures in various Canadian airports and the new methods announced by the Minister, in order to ensure that these measures will indeed be effective and provide maximum security for Canadian travellers.
The Minister stated that he had received the co-operation of the authorities of the countries concerned. I am very happy with this decision, but I wonder to what extent the Japanese authorities, especially, are allowing representatives of the Canadian Aviation Safety Board to take part in any inquiries or investigations being conducted at this time concerning the CP Air incident. I am told that representatives of the Canadian Aviation Safety Board have already arrived in Ireland. Are they going to be taking an active part in the investigation to be carried out by the Irish authorities, or will they only be called as witnesses in connection with the investigation? I believe it is essential, in order to safeguard Canadian interests, since so many Canadian families have been directly affected by this incident, that Canada's representatives take an active part in the investigation to be conducted in Ireland.
As for the investigation in Japan, I would like to have some more specific information from the Minister to find out whether or not Canadian Government representatives will be taking part in the investigation to be held in Tokyo.
The Minister referred to our high standards here in Canada. He referred to some very eloquent testimony to that effect by an authority in the aviation field. I agree that Canadian standards are very high. I recognize the Minister's good faith and I realize he is sincere in wanting to find the best way of
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preventing a recurrence of such incidents. In fact, I would like to congratulate him on acting so quickly as soon as he was informed of these events.
However, Mr. Speaker, this is a very serious matter. It is far too serious for the Government to be on the defensive. From what the Minister said and from my reading of the sequence of events, it seemed to me that the Minister was inclined to defend existing procedures, Department of Transport employees, airline representatives and security officers. I think that is a big mistake, because it is clear there are contradictions.

To cite a few contradictions, I refer to articles which were published in the newspapers indicating where in fact contradictory statements were made by the Minister and by some of his officials about the two incidents involving the Air-India flight and the CP Air flight. On one hand, the Minister said that the baggage for both flights had been X-rayed. On the other hand, a Transport Canada spokesman said that only the Air-India baggage had been examined under X-ray. This is the first contradiction.
The second contradiction concerns the Minister who supposedly said that if Transport Canada had been informed that three suspicious bags were removed at Mirabel, the flight would have been held until all baggage had been searched. On the other hand, a Transport Canada spokesman said that bags had been removed from flights three or four times a month at Mirabel although planes may take off without further inspection. This statement by the Department of Transport official is frightening, in a sense, it deeply contradicts what the Minister told the press yesterday.
I do not want the Minister to look like a fool. I do not think he is a fool; I think he is a very serious, dedicated Minister. However, the contradiction between what he said and what has been said by his officials requires further independent investigation. I am afraid that if the investigation is exclusively an internal one by departmental officials, the Minister may not be apprised of what really took place.
There is another contradiction that needs to be looked at between the statement made by authorities on behalf of the Government of India and statements that have been repeated here today in the House that contradict what we have been told by officials of the Government of India. We have been told that, indeed, on several occasions prior to the incident, the Indian authorities have apprised our Government of fears, threats, and dangers and have sought the co-operation of the Canadian Government in order to protect Air-India flights and to protect Indian officials in Canada. The Minister today told us that Air-India Flight 182 was not on the alert system. Why was it not on the alert system after all those representations that had been made in recent weeks by the Indian authorities? Not only is it surprising that it was not on the alert system, but after it was brought to the attention of the Canadian authorities that three pieces of luggage were retained because they did
Statements by Ministers
not pass the appropriate tests, why was no action taken then in Mirabel to call back the flight or to make sure that before the flight left all the other luggage was properly inspected? [Translation]
Mr. Speaker, I say that a complete and independent inquiry must be made, not so we can pin down the guilty person or persons but so that we can make a thorough review of security procedures being used, not just by Canadian authorities but also by the airlines whose aircraft land at Canadian airports. The point is not that individuals did or did not do a good job but that a security system or set of procedures did not work properly and should be reviewed.
The Minister must understand that it is entirely possible that luggage checked in at a small airport might be carried from one plane to another by airport employees, without going through security. For instance, a passenger leaving Windsor Airport could check in his luggage with a small airline which does not have the security procedures existing in large international air terminals. On leaving Windsor, the luggage could go to Toronto, be carried by a handler who does not know it may contain a bomb, be carried from a plane coming from Windsor, Ontario to a CP Air aircraft going from Toronto to Vancouver and ultimately to Tokyo.
There is a strong possibility that individuals who want to blow up a plane would use a small airport where security is not as great and check their luggage through to a final destination, thereby completely short-circuiting the security procedures that exist in the large air terminals. And it is possible that a person who checks in his luggage at Windsor would travel on the flight from Windsor to Toronto but not on the subsequent flight from Toronto to Vancouver and Tokyo, while the luggage containing an explosive device would remain on board the flight for which it was checked in, and so the whole security system has been completely short-circuited.
Mr. Speaker, I think it is important that the Minister review all these procedures in order to ensure that on all international flights, luggage checked for a specific flight can be matched with the passengers travelling on that flight, that security checks be made before an international flight leaves Canada, and that all baggage on board the aircraft can be identified as belonging to the passengers on that particular flight.
That is why I maintain that surveillance at small airports is just as important as at large airports. I agree with the Canadian Air Line Pilots' Association which is asking the Government to reconsider its decision to no longer ask the RCMP to provide for security at Canadian airports.
In reply to a question I asked previously, the Minister said that the decision had been made by the previous Government. In fact, a number of Department of Transport officials had suggested doing this to save money, but I may remind the Minister that the previous administration never accepted this recommendation by Department of Transport officials, and that in fact, the previous Government had been anxious to

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keep RCMP officers on duty at Canadian airports in order to provide the best possible security.
Mr. Speaker, I would therefore ask the Minister to drop this plan and to keep the RCMP at all Canadian airports for the purpose of providing security, not only at our international airports but also at our smaller airports, because, as I explained earlier, trouble may originate from a small airport and not be identified in time.
Finally, I would like to say that the statements made by the Minister will certainly help reassure the public. I hope that the 20 new pieces of equipment that have been purchased will be in place as soon as possible. The Minister informed the House that only one piece of equipment would be a available by next Thursday, but I suppose we can expect the 19 others to be in service very shortly. In any case, until this equipment is in use, I think we will have to be very careful and provide for both visual and physical checks so that passengers on Canadian aircraft will have the assurance that every precaution has been taken to provide maximum protection.
Finally, Mr. Speaker, I would like to make four recommendations.
First, I would recommend that, quite apart from the investigation made by the Royal Canadian Mounted Police and others conducted by Canadian authorities on security information, there is still a whole series of measures and security procedures which ought to be implemented in Canadian airports and I think that the Canadian Aviation Safety Board should be asked to investigate security procedures in our airports as soon as possible.
Second, I would want the Minister to do more than check into this and to confirm that henceforth the RCMP will be used at all Canadian airports.
Third, I would want mandatory security measures imposed by the Department of Transport to all airline companies.
And finally, fourth, I would want the Government to act as humanely and as quickly as possible to help striken families, particularly those unsure whether the bodies recovered from the see off the coast of Ireland are indeed those of their own relatives. We have learned that it is difficult to travel to Ireland to make such identifications. In my judgment, the Canadian Government musts do everything in its power to help those families, especially those that are anxious to go to Ireland to identify the victims of this terrible tragedy.


Leslie Gordon Benjamin: Mr. Speaker, I would like to add my sincere feelings to those expressed by my colleague, the Minister of Transport (Mr. Mazankowski), and the spokesman for the Official Opposition, as well as expressions of our sympathy and sincere condolences to the families, relatives and friends of those who were lost in the tragedy
which occurred last Sunday, as well as to the families and friends, although smaller in number, of those lost, in the tragedy at the Tokyo airport. As well-and I hope members of the Press Gallery are listening-I would like to commend my colleague, the Hon. Member for Vancouver-Kingsway (Mr. Waddell), for his statement about the very unfair assumptions and crass speculations made by some, including members of the media, about the possible involvement of one or more members of East Indian or other communities. That, I suggest, is reprehensible. For the sake of sensationalism, headlines, news and 30-second spots on television, those kinds of assumptions and speculations have been overdone, to put it mildly, over the last 50 or 60 hours.
Neither I nor anyone else in the house relishes having to rise to respond to an occasion such as this. However, I would like to point out that when I and other Members of the House raised issues concerning transportation safety and security under the previous administration and the current one, no sensational events were occurring and it was difficult to get the attention of members of the previous Government as well as of this one. It was difficult to get the attention of the media. Canada can no longer-if it ever could before-think that it can stand alone from and unaffected by the rest of the world and the effects of international terrorism. Regardless of the findings of the investigation of the Air-India flight and the CP Air flight, this occasion presents us with another opportunity to examine safety and security arrangements at Canadian airports.
As I said earlier today, I commend the Minister for the fast action he took to put in place substantially greater security and safety measures since last Sunday. I know that he has spent long hours working all weekend. However, and I say this without malice because it is not peculiar to this administration, we must realize that this is another instance of the barn door syndrome. Policy decisions are made and put in place, but complacency will return a few weeks from now. There will cease to be an interest in drawing the line between where saving dollars ends and appropriate measures, no matter what the cost, begin and stay in place regarding matters of safety and security.
I would remind the House that when we debated in the House, in the standing committee and before the Canadian Transport Commission the issue of deregulation, all sides agreed that there can be no compromise on safety at our airports in Canada, and by extension, safety also means security. That was agreed to unanimously even though the previous Government and the present one insisted on proceeding with the deregulation of fares, exit and entry into routes and city pairs. Even though there was unanimous agreement not to compromise on safety in the past four years there has been a move afoot to reduce the number of RCMP officers on duty at Canadian airports and to reduce their presence, both visible and invisible. I was appalled at the unmitigated gall of a member of the Official Opposition, the transportation critic, who asked about the removal of RCMP officers from airports in Canada. I would suggest that the transportation critic of the
June 25, 1985

Liberal Party talk to his seatmate, because he removed RCMP officers from 12 airports in this country-


André Ouellet: That's not true.


Lloyd Axworthy: You should check your facts.


Leslie Gordon Benjamin: It is true, and there will be eight more from which RCMP officers will be removed this summer.


André Ouellet: This summer, that's true.


Leslie Gordon Benjamin: And those eight more airports include Ottawa and Victoria, an international airport. In fact, international charter flights are leaving from the so-called domestic airports on an almost weekly basis during the high tourist season.
There would have been a reliance on private security agents within a few months if it were not for the Minister's announcement today that that move will be put on hold. I suppose it will be put on hold until all this dies down and there are no more crashes or tragedies of this nature. Then the Government will proceed as usual on the grounds that it will save a few dollars.
The point is that the RCMP as well as the trained personnel of the Ministry of Transport must be in place at all times at all airports owned and operated by the Ministry of Transport. There should be no damned question about that.
Without questioning their good will, I have grave doubts about private security agents that are in place who play the only on-site role in security at our airports. They have neither the training nor the authority to deal with serious problems that may arise, whether they be problems with passengers, alerts, anonymous phone calls, hoaxes or threats. They do not have the capacity and the training to deal with a problem, even if it is only a drunken passenger who threatens physical violence. A private security agent who has no training, whether male or female, young or old, will not be able to handle that. The response time of the RCMP and the police in my city and others is 10, 15, 20 or even 30 minutes. That is not good enough. There must be on site at all times properly trained, equipped and authorized people to deal with situations when and if they arise, even though they may go for months without anything arising and it may appear to be a waste of money.
If we are going to get rid of the barn door syndrome, then that kind of an expenditure of money at the cost of taxpayers, airlines and the travelling public will have to be put in place, and I am convinced that the public will accept that and will not agree that it is an area on which the Government can cut back. As the Minister well knows, I have raised this issue on a number of occasions. I am glad to hear that he has put on hold the removal of RCMP officers.
The main problem with airport security and safety and with other issues such as the transportation of dangerous goods is that action occurs after the tragedy has occurred. Then there is a wild scramble to cover backsides, keep skirts clear and put in place all of the things that should have been in place before. There is nothing new about that. I do not condemn this
Statements by Ministers
Government only. It has occurred time and time again over the last number of years. Every time there has been a tragedy, this House and various authorities get together to try to do something about it, but within a matter of weeks or months we are back into the same rut.
There is going to be a review of procedures in handling baggage and other airline cargo. We know that in the past there has been little or no security checks on baggage which goes into the hold, in spite of some self-serving statements by some. This has been left entirely to the discretion of airlines. And it has been the case not only under this administration but also under previous Ministers of Transport. How many dozen airlines operate in and out of Canada? They all have different policies and take security measures if and when it suits them. If they receive a threat, they will notify the Ministry of Transport and, Mr. Speaker, there can be no question but that the Ministry of Transport is responsible. It has to be in charge. There can be no other way of operating. I am not suggesting, Sir, that it can be 100 per cent sure. If someone wants to beat the system badly enough, he or she will sooner or later figure out a way. But with the maximum of equipment and qualified personnel in place, it is a lot harder for them to do it. Comparisons are odious, but I do not believe that the system we have in place is any better than others in the world. There are others which do a better job and there are others which do a worse one. But any kind of complacency is out of place at this point in time.
Members of the Committee on Transport met this morning. We discussed the statement made yesterday by the Prime Minister (Mr. Mulroney) with respect to a special investigation. A special investigation with respect to these incidents is fine and must take place-


Donald Frank Mazankowski: It's broader than that.


Leslie Gordon Benjamin: -by the RCMP and the Ministry of Transport. But I think that an investigation into present and future arrangements and regulations on safety and security has to be provided by some kind of an independent body. I am not suggesting a two-year or three-year Dubin type of inquiry. We do not have that much time. I would like to suggest to the Minister of Transport that he consider providing an order of reference by this Friday to the Standing Committee on Transport and give it carte blanche in terms of staff, holding hearings, travel and reporting back with its recommendations. If there is any time at which we could support the Special Committee on Reform of the House of Commons, this is one instance. Failing that, however, there should be an independent inquiry with the broadest terms of reference which would make interim reports as well as a final one. And it does not have to take two or three years.
There is the whole matter of the quality, qualifications and numbers of the personnel of the Ministry of Transport and private security firms at our airports. There is the question of the sophistication, quality and numbers of the equipment.

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There needs to be in place a standard for the checking, not only of checked in luggage, parcels, air cargo and air express packages, but of everything and anything that is placed on board an aircraft. 1 will not go into that issue any further, Mr. Speaker, so as to avoid creating more worry and fear in the minds of the public, but the Minister of Transport knows the areas about which I am referring.
The whole matter of inter-line baggage must be looked into. There is nothing to prevent some nut from checking something in at a domestic airport anywhere in Canada through to a destination in Europe, Africa or Asia, which would get transferred from one connecting flight to another on the same airline, or from one airline to another airline, and still not be inspected. A bomb can originate in Vegreville on a little private charter plane flying to Regina, then be put on a domestic flight to Toronto, to end up on an international flight going somewhere else.
I would like to suggest to the Minister that it is not enough to act just on alerts. I suspect that the alert regarding Air-India had more to do with the imminent arrival within two or three weeks of the President of India to the United States. I hope that was not the only reason for the Air-India alert but I suspect it was a good one. I do not blame the head of state of any country for doing so.
Finally, Mr. Speaker, I hope the House and the Government will now seize the opportunity to keep in place, enlarge and replace everything with respect to cut-backs under the previous and the present administrations. They should be put back in place. I believe what the Minister has had to do over this past few days is going to require Supplementary Estimates because he just lost about $300 million out of his Department. But you do not place safety and security in jeopardy because of money. There cannot be any question about that. I hope I will never have to hear again, as long as I am in this House, that in the interests of saving a few dollars we should put into the slightest question the safety and security of our airlines and our travelling public.


Lloyd Axworthy: Mr. Speaker, I will try to restore us back to the standards established by the Minister. I will not be partisan about his remarks and point fingers and lay blame such as, I am afraid, the last speaker attempted to do, which I believe is not called for in the circumstances. I will try to come to the way in which the Government is handling the matter.
As you know, Mr. Speaker, during the course of Question Period I posed a question to the Minister as to why, in establishing the investigation, inquiry and evaluation of our security measures, the Canadian Aviation Sefety Board was not brought in as the primary agency. I simply want to refer the Minister to the findings of the Dubin Commission in 1981. The Minister at that time was very active in this House in supporting those recommendations. The report suggested that the Bill which was introduced create a board separate from Transport Canada so that the regulatory investigative functions may be seen to operate at arm's length. It stated that removal of this potential conflict of interest should improve the
effectiveness of both the regulation and the accident investigation.
I know that things were hectic, harrowing and difficult, but we have established a major improvement in this country's safety record with the safety board. It is a quasi-judicial body, independent, with the power to call witnesses and restore confidence that any finding or judgment would not be subject to conflict of interest. I am not calling into question the integrity of officials, but I am saying that the officials responsible for managing this system should not be responsible for evaluating the effectiveness of that management. I do not think anyone in the auditing business or anywhere else would suggest that one should audit one's own performance. We are all subject to some form of critique that is more independent than that.
I know the Minister is still involved in making decisions, and I think it is wrong to dwell on history, but terrorism is becoming widespread. Therefore, would it not be more appropriate to ensure confidence in the evaluation by charging an independent body with the responsibility of making judgments and assessments of the situation? Again, I make no prior judgment, but I think there is a question of confidence over whether, both internationally and domestically, any new measures would be in full accordance with the requirement of safety and security. Therefore, I ask the Minister, would it not be more appropriate for the safety board to be given that responsibility?


Donald Frank Mazankowski: Mr. Speaker, I appreciate the Hon. Member's comments. I thought that my answer to the Hon. Member's question during Question Period left the impression, which I tried to give, that he had a very valid suggestion to make. To the extent that we can use the Canadian Aviation Safety Board in this process, it makes eminent good sense. As was alluded to, we are dealing with world-wide terrorism and I think it would be important to engage the most senior security and intelligence resources we have at our disposal, here and around the world, to evaluate and to ensure that any improvements in airport and airline security will take into consideration any information which can be garnered from a security and intelligence standpoint.
I will certainly take the Hon. Member's suggestion seriously-I have and I will-and to the extent we can integrate the work of the Canadian Aviation Safety Board, which I agree is an independent arm, I think it would make eminent good sense and I thank him for his suggestion.


Lloyd Axworthy: Mr. Speaker, I leave the matter in the capable hands of the Hon. Minister and we will see what arises.
The Minister indicated during Question Period that he intends to be in attendance at the International Civil Aviation Organization meetings on Thursday. IATA is also having meetings on Friday and we will have delegates there. Can he indicate whether Canada intends to put any proposals in front
June 25, 1985

of those bodies concerning the way in which various members of the international aviation community can co-ordinate their efforts? I know there have been a number of discussions in the past. I was party to some of them in my previous incarnation. But we all recognize that security has to be upgraded and improved. Time is short, but I think sufficient work has been done in the past, both in External Affairs and in Transport, concerning amendments to the international aviation code regarding registration, licencing and other procedures. Can the Minister indicate whether we will be making specific proposals? The reason I ask, and I do so out of some concern, is that we all know our country has had an extraordinarily high reputation in this area. It now may be called into question, and I think there have been a lot of comments, and I believe we should take some leadership to show that our system is open and we welcome the involvement of ICAO and IATA in helping us determine improvements in our own procedures. It also should be co-ordinated with other countries. Would the Minister care to respond to that?


Donald Frank Mazankowski: Mr. Speaker, that would certainly be my intention. I think the initiatives we have taken are fairly well advanced. I know that in discussions with American authorities, we have come to the conclusion that the detection devices which have been developed are really not as adequate and proficient as they could be. I think there is a real challenge in trying to accelerate the technology required if it should be necessary to inspect all luggage carried on board an aircraft. I think we all recognize that by the actions we are now taking we are creating long line-ups and delays and perhaps some frustration. While we are bringing on equipment which will facilitate and speed up the process, we have quite a distance to go in developing the technology to put in place that kind of screening device on a massive basis. That will clearly be an issue which will have to be dealt with at the international level. However, yes, I will be making some recommendations which we believe are necessary.
I think all Hon. Members would agree that we are probably entering a new era of reality. Canadians once thought we were immune to the horrors of terrorism and sabotage, but now that it appears to have struck very close to home, it is a rude awakening for us all and we are trying to address the reality of the situation. We will do it in as positive and as straightforward a manner as we possibly can.


Ian Deans: Mr. Speaker, I really have only one question and it flows from the statements made in the press regarding the methods currently used to check luggage and the fact that it appears as if it has been very much up to individual airlines to determine the appropriateness of the measures they themselves put in place, and the obvious effect of that kind of policy. The safety of all passengers, employees, indeed all persons in the facilities or in the vicinity of Canadian airports surely must be our primary concern. I was going to ask the Minister two things, bearing that in mind.
Quite clearly, under the present system one airline could choose to have adequate review and check-up procedures,
Statements by Ministers
while the airline immediately next to it might not. However, all of the baggage is handled in one general facility and it all goes through one main terminal. Aircraft are parked one beside the other. Notwithstanding what is accepted internationally at the moment, could we in Canada not lead the way and say that every single piece of baggage transported by aircraft must receive a proper check not only through X-ray procedures but also from the point of view of determining whether or not there may be explosives on board a plane.
Let me just preface my second question with a concern. The more things you think up, the more you alert people to a potential, and that worries me. For the first time in my life I can appreciate that it may be necessary to conduct an inquiry of this type in private; that it cannot be handled openly for fear that by the very nature of the questions you raise, new ways of creating an entree to the system are exposed for those who would act as terrorists. But it is clear that I, for example, could get on a flight in Hamilton with checked baggage and have it directed through a variety of different ways all the way to any place in the world. If it was not properly checked at the first place, chances are it would not be checked at any of the subsequent places either. Therefore, it becomes apparent to me, as a layman, that if protective measures are going to be put in place they will have to be put in every airport. There is no such thing as designated airports. They will have to be everywhere in order to provide the required protection.
I would like to suggest with some degree of trepidation that although airports are the primary targets of terrorists using transportation for their terror, they are not the only places we should be looking. There is quite clearly the option of making threats on and creating terror through any method of transportation. It might be useful, therefore, if the Minister would consider my colleague's good suggestion of some kind of parliamentary review. Perhaps we could discuss what would be an appropriate forum for this. However, there should be some parliamentary review of how transportation is conducted from the safety standpoint and how we in Canada can take whatever steps we can. I recognize that no matter what we do it will not be likely to work anyway, but we can try to provide the safest possible means for as many people as we can subject to the fertile imaginations of the terrorists of the world who always seem to be one step ahead of us.


Donald Frank Mazankowski: Mr. Speaker, I will try to respond to the three questions which the Hon. Member has raised. I think it is fairly common knowledge that it is not customary for checked baggage on domestic and transborder flights to be screened through an X-ray or physically checked. Those are the established international standards.


Ian Deans: It may not be enough.


Donald Frank Mazankowski: That is a matter that we will have to consider.
With regard to the broader question of the adequacy of the standards, there are minimum standards established by inter-

June 25, 1985
Statements by Ministers
national convention. The level of security of each individual airline is based upon its assessed level of threat. Because of the political developments in India it was determined by Air-India that there was an extraordinary level of threat. As a result, they have been in a high state of alert, which means that their standards are considerably higher than those required. It is based upon their assessed level of threat. For example, their security manual requires searches of baggage by X-ray, hand search, or hand-held sniffers. Air-India was following these procedures at both Pearson International and Mirabel.
When the airline determines that there is a specific threat against any given flight, which I reiterate was not the case with regard to Flight 182, there are Transport Canada procedures which call for full hand baggage inspections. That triggers a completely new process. Again, the information that I have, which has been confirmed by the RCMP, is that there was no request received for special security because of the specific threat to Flight 182. There was a request for additional RCMP personnel, but this flight was not designated as a special security threat. As a result, the extraordinary procedures, which would have been triggered had that determination been made, were not implemented at that time. I believe that probably answers most of the questions that were raised.


Mr. Deputy Speaker:: May I take this opportunity to remind Members that the period allotted at this time is strictly for questions rather than for comments. The Member for Humb-er-Port au Port-St. Barbe (Mr. Tobin).


Brian Vincent Tobin: Mr. Speaker, I have a few questions for the minister. I would like to congratulate him on the clarity of the responses we are receiving to our questions and on the quick manner in which he has acted on behalf of the Government and of the people of Canada. However, there are still a number of questions I would like to raise. The Minister has pointed out again that there was nothing to indicate to the RCMP, Transport Canada, or the Government of Canada that this particular flight required any extraordinary security measures. Are we to assume from that that the only reason a number of pieces of luggage were removed from the flight at Mirabel is that they happened to trip an electronic sensor which indicated that there were metal objects in the suitcases?
I will ask the Minister to respond to that and then I would like to continue with another question or two.


Donald Frank Mazankowski: Mr. Speaker, Air-India had been in an abnormal state of alert for some time when all checked-in luggage was examined by X-ray or hand sniffer. It was in the process of that examination that the three bags were detected.


Brian Vincent Tobin: Mr. Speaker, with reference to this situation, the superintendent of airport security at Mirabel Airport said that, in his judgment, Air-India had broken a basic rule. That basic rule is that when it becomes necessary, because of electronic sensoring devices, to pull some luggage off an aircraft, Transport Canada is informed and the entire aircraft is checked by lining up baggage and people and finding out whether all the
baggage on board matches people on the aircraft. I am still a little confused.
I want to ask the Minister about the process. The Minister was quoted in the Ottawa Citizen of yesterday as saying that if Transport Canada had been informed about suspicious baggage on a flight, the flight would have been held until all the baggage had been searched. The same article in yesterday's Ottawa Citizen quotes a Transport Canada spokesman as saying that bags are removed from flights three or four times a month at Mirabel although planes may take off and continue flights without further inspection. I am sure that the Minister will appreciate that there is somewhat of a contradiction there.
I ask whether there was any recognition of any problem on the flight yesterday because Transport Canada, the RCMP, and the airline itself all had the authority to have that plane fully searched. If at any point, even after the plane had left the runway in Montreal, there was any reason to believe that there was anything amiss on that flight, there was nothing to prevent anybody from contacting that airplane and asking the pilot to return. This would have enabled a thorough investigation to be carried out which the Minister suggests would be done when Transport Canada is tipped off that there may be a problem. Can the Minister explain the contradiction between his comment and those of his officials? What is the procedure that is to be used? Why was that procedure not considered in the case of this flight, even in retrospect?


Donald Frank Mazankowski: Mr. Speaker, I appreciate the Hon. Member raising that matter because I can also understand the interpretation of a contradiction. I suppose that I am partially responsible for that in that my statement was made in the context of there being a specific threat against Flight 182. If that had occurred, then the extraordinary Transport Canada procedures would have been triggered. I regret that I may have not made myself abundantly clear on that particular point. My comments were made within that context.
What is the second part of the Hon. Member's question?


Brian Vincent Tobin: Mr. Speaker, I just wanted to be absolutely clear because the RCMP were called in to investigate the luggage on this aircraft and in fact I am told that they arrived minutes after the plane took off. They checked three bags in question, had a negative reaction from their sniff dogs and the aircraft continued on its way.
I just want to be clear that what the Minister is now telling us is that until that aircraft disappeared from the radar screen there was never any indication or warning whatsoever that anything may have been amiss on that airplane. I am saying that if a plane takes off and authorities in Canada, be it the RCMP or Transport Canada, discover there may be a problem, surely there is nothing stopping us from contacting the pilot as long as he is in Canadian air space and asking him to return to the airport in order to conduct the kind of thorough investigation that the Minister said would be conducted when a warning had been evident. Am I correct?
June 25, 1985


Donald Frank Mazankowski: As I indicated earlier, this particular flight was not designated as a flight with a specific threat. Therefore, that procedure was not triggered.
With respect to the larger part of the question, I hope the Hon. Member and others will understand that when we get into that kind of discussion and debate we are engaged in an investigation on the floor of the House of Commons. As I said in my comments earlier, I want to be as forthcoming as I possibly can, but I believe the Hon. Member will appreciate that in our desire to be as forthcoming as possible there are facts that are updated. Sometimes there are contradictions. The Member for Papineau (Mr. Ouellet) alluded to that earlier in his remarks when he indicated that I had been quoted as saying that the baggage for both flights had been X-rayed. That is a misquote, absolutely. It may have been misinterpreted.
The story was written by Richard Cleroux who is a very distinguished reporter. However, I can say here and now that if that impression was left, it was wrong. From the beginning I took the position, and expressed the point of view on many occasions, that the baggage with respect to Air-India was inspected either by X-ray or by a hand-held sniffing device.
With respect to the baggage on CP, it was not customary for that luggage to be examined.
The other misinformation in that same article is the fact that I am quoted as saying:
Mr. Mazankowski said that he believes dogs were also used at Toronto's Pearson International Airport on the Air-India baggage.
That is wrong. I never did say that. I did say that there were dogs available at Mirabel. I wanted the opportunity to clarify that because in this particular kind of atmosphere these kinds of contradictions should be cleared up as soon as possible.


John R. Rodriguez: Mr. Speaker, we seem to be making assumptions that whatever device was smuggled on to the plane got on through the baggage. However, many Members are often in airports, and I often wonder what security measures exist for access to the aircraft.
When the Minister's investigation takes place, would he investigate the whole question of the security of the plane while it is waiting to receive both baggage and passengers? This includes the food and mail being loaded on to the plane.
We have assumed that only airline personnel have access to the plane. It seems to me that it would be the responsibility of Transport Canada to look at the procedures that airlines have in place for personnel security.


Donald Frank Mazankowski: Mr. Speaker, I genuinely appreciate the Hon. Member's comment and regret that in the course of this dialogue we sometimes draw conclusions. I regret that the assumption has been made, First, that it was a bomb or an explosive device that caused the demise of Flight 182. That has not been officially confirmed.
Second, it has not been officially confirmed that if it was a bomb, it was in a piece of luggage. I appreciate the fact that the Hon. Member has brought us back to a state of some
Statements by Ministers
objectivity. That is the problem when we become involved in this sort of discussion. In our attempt to be as forthcoming as possible, we sometimes draw conclusions.
Naturally, I think the terms of reference that were outlined by the Prime Minister clearly give us the parameters to examine airport security as well as security of the airlines, which means the airplane as well.


André Ouellet: Mr. Speaker, earlier this afternoon I alluded to measures that could be taken by the Government to help the families who have been so badly hurt in this incident. There are a number of relatives who are anxiously waiting for news, some of whom are interested in going to Ireland to see for themselves what happened and to take whatever steps they want in order to identify the bodies or dispose of them according to their religious beliefs.
What assistance has the Minister offered to these families, and when can they expect to be accepted in Ireland? I understand that at the present time the authorities have not only not welcomed them, they have imposed what may be called an embargo for some time. Therefore, the relatives must stay home.
Will the Minister also answer a question concerning an incident that is reported in The Toronto Starl Vern Thampi, husband of Metro's Vijaya Thampi, a Toronto Star employee who was among the dead, said that he has been getting the runaround from Air-India. He told the Star, "I have phoned every half hour but I cannot get through". He told the Star, "My grief is beginning to turn into anger".
Indeed, this is something that is understandable and we should sympathize with these people who are unable to get appropriate information from Air-India, particularly if the company has decided to suspend temporarily some of its activities.
Could officials from the Department of Transport act on behalf of the airlines or assist the people who are seeking information about their relatives?


Donald Frank Mazankowski: Mr. Speaker, the Secretary of Sate for External Affairs (Mr. Clark) has been involved in the kind of discussions to which the Hon. Member refers. I know he met with the Indian High Commissioner this morning. I am sure some of these things were discussed. I think, as was indicated by the Prime Minister (Mr. Mulroney) yesterday, the Government is willing and prepared to assist in every way possible and is offering support in a general way and is assisting the bereaved families to travel.
With respect to the specific point made in the quotation from The Toronto Star as well as the general broad issue which the Hon. Member has raised, I will undertake to draw it to the attention of the Secretary of State for External Affairs. There is a co-ordinating group working between my Department, the Department of External Affairs and the Department of the Solicitor General. Indeed the Prime Minister has taken

June 25, 1985
Statements by Ministers
a personal interest in this. I will certainly draw his concerns to their attention.


Leslie Gordon Benjamin: Mr. Speaker, I thank you for your indulgence in such a serious matter. I appreciate our being able to get into this matter in some detail with the Minister. I will try to put about three questions to the Minister in one and he can make note of them.
I believe the Minister mentioned the number of additional scanners that have been ordered. I did not catch the number. That is a good move. Whatever additional ones are needed, I say get them, and with the latest technology. I invite the Minister to check out what is being done at the airport in San Francisco, which is supposed to have one of the best safety and security arrangements of any in the world. The San Francisco Airport has mobile X-ray scanners. Before a plane takes off or up until its point of no return, it can return and mobile scanners move into action. I want to know whether any of those scanners were ordered.
Second, the Ministry of Transport some time ago was not satisfied with the electronic and/or chemical sniffers developed in England and in other parts of Europe. They did not meet what the Ministry thought our standards should be. The Ministry of Transport commissioned the National Research Council to develop better sniffers which it has done and has licensed a Toronto firm to produce them. I understand they will not be available until this fall. Can the Minister tell us when they will be available? Has he ordered any of those? Will there be any additional dogs trained and available, more than the present four?
I am sure the Minister and all other Members know that one can go through as a passenger with his hand luggage through three scanners in one day. The first one or two let you through and on the third one, even though you have the same amount of keys and coins in your pockets, the bells ring and the lights go on.
When will we get a standard minimum application of these machines so that if I go through a scanner in Regina, one in Winnipeg and then the one in Toronto beeps yet I have the same things in my pockets, obviously there is no uniform standard.
Does the Department have a minimum level at which the scanners must be set, or do airports with a higher risk have a tougher level than those with a lower risk? I would like to know what the score is on that.


Donald Frank Mazankowski: Mr. Speaker, I am not sure that I can answer with precision all the questions which the Hon. Member has advanced. I can assure him that I will get him the answers and perhaps communicate with him either directly or by letter.
With respect to the X-ray equipment, and this again demonstrates the difficulty of being accurate on a day-to-day basis, I think I used the figure of $1.5 million yesterday, but the briefing notes I have today indicate that some $3.75 million is going to be spent on X-ray equipment. System Two will be
available within two weeks in some airports, an available System Three by Friday, three certainly, one at each of the following sites: Toronto, Vancouver and Mirabel. There will be five System One units. Smaller carry-on baggage units have been borrowed from manufacturers and will be flown to Pearson International Airport. The estimated cost is some $3,375 million for the time being.
As for the NRC issue, I will certainly get back to the Member with respect to the standard minimum application. 1 know there is an adjusting device. I am not mechanically proficient enough to respond, as I said, with a degree of accuracy, but I will try to get that information to the Member as soon as I possibly can.


Leslie Gordon Benjamin: What about the dogs?


Donald Frank Mazankowski: With respect to that-


Mr. Speaker:: Hon. Members seeking to ask questions at this point are: The Hon. Member for Gander-Twillingate (Mr. Baker), the Hon. Member for Comox-Powell River (Mr. Skelly), and the Hon. Member for Trinity (Miss Nicholson). Assuming that ends it, then I will end at that point.


George Baker: I will be very brief, Mr. Speaker. I want to point out to the Minister the proposal to cut at the eight airports RCMP security force. During Question Period, I asked the Minister if he would cancel that decision, not review it and not put it on hold. I asked him if he would cancel the decision. I am surprised that some Members really did not listen. I suppose that is a problem, Mr. Speaker, of Members listening to the answers and the questions that are given during Question Period.


Mr. Speaker:: No comment.


George Baker: No comment from the Speaker. An airport can be classified domestic military, internatinal general aviation or international charter or it can be an international airpot. The point is that most of those eight airports I know of have licences for international charters, international general aviation purposes. That is why the question has been asked over and over again. Why not cancel that particular decision because then the back up security will go to the lowest bidder?
There is not much wrong with that if the low bidder is high enough to be equal to the rest of society, but for the first time in Canadian history we have the federal minimum wage at airports lower than the minimum wage in every province in Canada. A fellow can go to work one week say at the international airport in Toronto for $3.50 an hour and then go to an office building the next week in Toronto and get paid $4 an hour in Ontario, $4.58 in Quebec or $4.30 an hour in Manitoba.


Leslie Gordon Benjamin: And sometimes a 12 hour shift.


George Baker: The Minister should tell us whether or not he is aware of this. If he is aware, then he should speak to the Minister of Labour (Mr. McKnight) to get that provision
June 25, 1985

changed quickly because provincial minimum wages have gone up drastically since January in at least five or six provinces. The main question is that the provision of the equipment in the airport is the responsibility of the Minister's Department. The Minister's Department also pays the salaries of the RCMP officers quarterly to the Department of the Solicitor General. When an airport manager has to make a decision on a cut-back of his local budget, he should not have to make a decision on the cutting back of extra equipment or whether or not who he is going to get to repair it.
Second, the airport security staff at these eight airports should be kept on. There should be no review. There should be a greater presence of RCMP officers than less of a presence.


Donald Frank Mazankowski: Mr. Speaker, I repeat again that the decision has been made to defer the withdrawal of RCMP officers from the eight airports in question.
1 want to point out once more that there were RCMP personnel removed from 12 airports earlier by the previous administration as a result of the re-evaluation in 1975-76 which was conducted by a joint review committee on Transport Canada, the RCMP and ATAC. The Hon. Member did not get up, holler and scream when the RCMP were being removed from those 12 airports.


Leslie Gordon Benjamin: I did.


Donald Frank Mazankowski: We have stated-and 1 made it very clear in the House today-that that decision was deferred. We are going through a complete review and re-evaluation of our total airport and airline security system. I think it would be premature for me to make a definitive decision at this particular time, but I can assure the Hon. Member that in light of the new circumstances and the experiences over last weekend, he need not worry.


Raymond John Skelly: Mr. Speaker, I spoke privately with the Minister this morning about an issue which concerns me, and I would like to raise it publicly at this point. In the area which 1 represent and in areas surrounding it, there are at least 10 small airports from which passengers and baggage are ferried into the main terminal airport without going through the security system. One example of that would be the dirt strip in Bella Bella. People picked up on Air B.C. are ferried into the main terminal beyond the security area, providing an opportunity for them and their baggage to be moved directly into any aircraft. Will the Minister's evaluation of airport security include every point of access to main terminals or main airlines.
The people involved in the security which exists-and it is extremely minimal-are generally airline employees who have no training and very little in the way of security facilities. In the summertime, at this point in time, ticket clerks are security agents, baggage handlers and various other things. They are throwing baggage on the aircraft without ever looking at it. They are not able to frisk individuals. When there are late
Statements by Ministers
passengers and standby people waiting to board, and the propellers on the place are turning, there is no security. Would the Minister indicate whether they will look into revamping that situation?
In some areas there are security individuals. For example, TWA is one airline which contracted security from people who were former police officers or military personnel familiar with the procedures. Those people have been laid off from many terminals and apparently airline employees have been given temporary authority to do it. Given the fact that deregulation moves will result in more and more small carriers from small airports feeding the mainline and having access to those terminals, will the Minister be looking beyond major terminals and into smaller ones to ensure the presence of trained personnel to do an adequate job with security?


Donald Frank Mazankowski: Mr. Speaker, let me say first of all how much I appreciate this kind of constructive contribution to the debate. The Hon. Member shared with me some thoughts on this earlier. I was looking for the sheet of paper which he presented to me; I assure him that I have it. Of course the evaluation which we will undertake will go beyond international airports. It seems to me that it would make eminent good sense, when we do that kind of evaluation, to do it on a global basis rather than simply on the basis of international, national or regional airports.
In an attempt to respond to the occurrences over the weekend, to deal with what we have perceived as an international crisis, we tried to address it by tightening up the inspection of baggage on international flights both leaving and entering Canada. We will certainly take the Hon. Member's representations into consideration.
Furthermore, the Hon. Member talked about the advent of more smaller carriers getting into the business. I think he will appreciate now, more than ever, the importance of the Aeronautics Act. It really provides a new framework for the implementation and enforcement of the necessary safety rules and regulations, another component of safety and security for the welfare of the travelling public.


Aideen Nicholson: Mr. Speaker, I have two related questions for the Minister. Both of them are quite short, so perhaps I might pose them together. The first one concerns the announcement in the budget papers of a new management structure for the federal airport system in Canada which will allow for the independent operation of local airports. From the Minister's last answer, can we assume that "independent" does not mean any diminution of safety and that, for instance, baggage loaded at small independent airports will have to meet certain standards so that it is not a hazard when it is transferred in larger airports? My first question concerns the nature of the independence, whether systems will still be compatible and whether there will be some regulation of it.
My second question concerns tax increases. In the space of the last five months there have been two tax increases, so that the Government will now be taking an extra $90 million per year from Canadian airline passengers. In view of the tragic

June 25, 1985
Adjournment Motion
events of last weekend, can we assume that some or all of this money will be earmarked to improve safety and security measures?


Donald Frank Mazankowski: Mr. Speaker, with respect to the new proposed airport management system, I am consulting with various industry groups, aviation groups, the provinces and representatives of all regions, to examine ways and means of putting in place a more effective management and administrative system for all Canadian airports, while at the same time providing a greater degree of local autonomy or involvement by using the local airport as an important economic tool within the particular region. We think that is a sensible way to go. However, in the course of that it will in no way reflect upon the standards of safety. It will not detract in any way, shape or form from Transport Canada's responsibility to maintain a safe and reliable air navigation system across the country, control towers, light service stations and the like. It will not involve any reduction in the level of safety.
Hon. Members who have been around the House for some time will recognize that I have been involved through many years of my parliamentary career in working and helping to elevate and upgrade the level of safety in our aviation system. It was under my prior jurisdiction that we commissioned the Dubin report. The Canadian Aviation Safety Board was a product of that. The Aeronautics Act, which we recently passed through the House, is a further product of that. We have a very high level of safety in Canada, and we are always striving to improve it.
With respect to the taxes to which the Hon. Member referred, there has been some increase in the level of the ticket tax. However, I remind Hon. Members that the federal Government subsidizes every air passenger on a return trip basis to the tune of $58; in other words, every passenger who flies in Canada is subsidized at the rate of $58. I think we recognize that that is a fairly high level and that the airport cost recovery is at about 35 per cent. It was at 50 per cent in 1980. We are constantly being asked to improve firefighting services and safety, to provide better navigational services and new radar systems. This costs money, and we are attempting to address it.


Mr. Speaker:: I regret to interrupt the Hon. Minister, but I must make the following announcement before five o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. 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
Hastings-Frontenac-Lennox (Mr. Vankoughnet) - Penitentiaries-Cost of maintaining inmates; the Hon. Member for Bow River (Mr. Taylor)-Sports-Baseball decision unfair to Canadian umpires; the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall)-Pensions-Statement by Premier of Nova Scotia-Request that budget provisions be withdrawn.



ROUTINE PROCEEDINGS


Sheila Maureen Copps: Mr. Speaker, I have literally thousands of constituents who have become signatories to petitions, but today I should like to table a petition signed by residents at 30 Sanford Avenue South in my riding, asking the Prime Minister (Mr. Mulroney) to respect his commitment in the 1984 election campaign to maintain full indexing for old age pensions. I should like to table this petition for Your Honour's consideration.


Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, I have the honour to present a petition from a group of elderly residents of my riding of Saint-Michel-Ahuntsic. Those people are asking the Government to re-establish the full indexation of old age security pensions. The petitioners urge the Prime Minister to honour the commitment he made during the election campaign. The petition has been signed by people who live in various senior citizens' homes, including 165 residents of the Tour Andre-Grasset, 163 residents of Retrouvailles and 128 residents of the Cooperative La Source. They are asking the Government to reconsider its position and take the necessary steps to redress this injustice against them.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I also have a series of petitions signed by Canadians asking the Government to live up to its election promise in which it promised that the PC Government would once more index the old age pension at the actual cost of living on a quarterly basis.
The petition is from people at Seven Sisters Falls, Beause-jour, Pinawo, Lac du Bonnet, White Mouth. All these people are residents of the riding of the Minister of National Health and Welfare (Mr. Epp), the Minister responsible for the legislation.


Simon Leendert de Jong: Mr. Speaker, I also have numerous petitions today, mainly from residents of the Province of Saskatchewan, the City of Saskatoon, the City of
June 25, 1985

Regina, the Town of Norquay, et cetera. These petitioners join with thousands of other Canadians in urging the Government not to proceed with the deindexing of the Old Age Security and to live up to the promise that the Prime Minister (Mr. Mulroney) made during the election campaign, and that was to maintain our social security system as a sacred trust.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I have a couple of groups of petitions to present today. The first is a group of petitions from towns and villages in my riding, Southey Humboldt, Watson, St. Gregor, Muenster, Lake Lenore and Strasbourg who are petitioning the Government to reverse the policy of deindexation and go to full indexation for Old Age Security programs in Canada.
The second petition that I have was sent by the Action Now group which is the main senior citizens' organization in Saskatchewan who are petitioning the Government to point out that seniors will be losing with deindexation $100 in spending power in 1986, $205 in 1987, $315 in 1988 up to $431 in 1989-


Mr. Speaker:: Order, please. The Hon. Member knows that he should be making a summary.


Mr. Maurice Foster (Algoma):: Mr. Speaker, I have the honour to present several petitions. The first is from 275 residents of the Towns of Blind River and Elliot Lake calling on the Government and the Prime Minister to respect his commitment of the 1984 general election campaign in Canada to maintain full indexation of the old age pensions.
The second petition is signed by 175 constituents throughout the communities of central Algoma including Thessalon, Bruce Mines, Desboro, Echo Bay and other communities in that area, calling on the Government to maintain full indexation of the old age pensions.
I have a petition signed by some 40 constituents in the communities of the north shore, Massey, Blind River, Serpent River and Spanish calling on the Government to maintain full indexation of the old age pension.
I have a petition signed by 350 constituents in the Town of Espanola calling on the Government to maintain the promise of the 1984 general election to maintain full indexation of the old age pension.
I have another petition signed by 250 constituents from the communities throughout Manitoulin Island calling on the Government to maintain a full indexation of the old age pension.
I have a petition signed by 100 constituents in the City of Sault Ste Marie, the constituency and the community of the Minister for International Trade (Mr. Kelleher), calling on the Government to maintain full indexation of the old age pension.


Mr. Speaker:: Order, please. Is the Hon. Member presenting another petition on the same subject or does he simply want to indicate a summary of where they are from?


Maurice Brydon Foster: I have one more petition outlining 120 names of constituents throughout the communities of Sault North
Petitions
including Goulais Mission, Goulais River, the Frontenac area, Rupert's Acres and several other communities in that area, calling on the Government to maintain its election campaign promise and maintain full indexation of old age pensions.


Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker,
I am dutybound to present to the House these petitions from people in my riding, the first one from residents of the village of Grande-Digue, of Cogagne.
The second comes from residents of the town of Bouctouche.
The third is from residents of the town of Sackville.
The petitioners humbly call upon this House to urge the Government to re-establish the full indexation of old age security pensions.


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, it is my duty and privilege today to present three petitions, the first of which is signed by 644 residents of the City of Toronto who humbly pray and call upon the House of Commons to reinstate full indexation of the Old Age Security program in Canada.
The second petition is signed by 238 residents of the communities of Red Lake, Madsen, Balmertown, Emo, Ear Falls and Cochenour and similarly calls upon the House of Commons to call upon the Government to live up to its election promises and reinstate full indexation of Old Age Security pensions.
The third petition is signed by 548 residents of the east end of the City of Toronto who call upon the Government again to reinstate full indexation of the Old Age Security program.


Raymond John Skelly: Mr. Speaker, I wish to present a number of petitions pertaining to the question of pension indexing from a substantial number of senior Canadians receiving the old age pension who call upon the Government to live up to its election promises and to ensure that full indexation of the old age pension is maintained. Those residents have come from the community of Campbell River.
The second petition again calls upon the House of Commons to ask the Government to maintain full indexing of the old age pension and that petition again comes from Powell River, British Columbia.
There is a third petition from the community of Courtenay, British Columbia and there is a fourth petition from Royston, British Columbia.


Ian Deans: Mr. Speaker, I have the honour to present a petition on behalf of residents, a majority of which come from Yellowknife, and it also deals with the deindexing of the old age pension, and requests that the Government not move to deindex old age pensions.

June 25, 1985
Introduction of Bills



FARM IMPROVEMENT LOANS ACT


Hon. John Wise (Minister of Agriculture) moved: for leave to introduce Bill C-56, an Act to amend the Farm Improvement Loans Act.


Mr. Speaker:: Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to the printed.


John Allen Fraser: for leave to introduce Bill C-57, an Act to amend the Fisheries Improvement Loans Act.


Mr. Speaker:: Shall the Hon. Member have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.


John Wise: for leave to introduce Bill C-58, an Act to amend the Advance Payments for Crops Act.


Mr. Speaker:: Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.


Henry Perrin Beatty: for leave to introduce Bill C-59, an Act respecting Customs.


Mr. Speaker:: Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.

['I do not think that that is appropriate at this time, with respect. I think perhaps the Hon. Member might']
Mr. Speaker:: I am in receipt of two Notices of Motions under Standing Order 30.


Leslie Gordon Benjamin: Mr. Speaker, I rise on a point of order. As anxious as I am to hear about how you would have intended to rule on this matter-and possibly you might be willing to tell me some time later-in view of the fact that we have spent some three to four hours having the Minister and Members of the House deal with a matter which I think we all agree was urgent, I am prepared, with your approval and with the approval of the House if it is necessary, to withdraw my motion subject to reintroduction at a later time, if necessary. I do hope you will let me know how you would have ruled today, Mr. Speaker.


Herbert Eser (Herb) Gray: Mr. Speaker, I rise on the same point of order. The notice that I brought to your attention earlier today arose out of our view that we were dealing with a very serious matter, being the subject of our attention during Question Period and through the statement of the Minister of Transport (Mr. Mazankowski). However, we have had a very good initial exchange on this important subject of the safety and security of air transportation to and from Canada. Under the circumstances, I would ask for your permission, Sir, to withdraw my Notice of Motion. Obviously I reserve the right, if future developments require it, to bring forward a similar motion on a later date.


Some Hon. Members:: Agreed.



[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Paul Dick (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, question No. 327 will be answered today.


Mr. Gagliano: What is the cost out of the Consolidated Revenue Fund for the car and driver provided to the Minister of State (Small Businesses)?


Hon. Andre Bissonnette (Minister of State (Small Businesses)):: From October 1, 1984 to March 31, 1985:
june 25, 1985__________________________________COMMONS DEBATES___________________________________________________6161
Fisheries Improvement Loans Act
Vehic]e	$i6,ooo	want to raise the question of business at the normal time in theoperating Cost	$1,974	normal way through his House Leader.
Driver (Salary Range) 521,500 to 524,395


Paul Wyatt Dick: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Speaker:: The question enumerated by the Parliamentary Secretary has been answered. Shall the remaining questions stand?


Some Hon. Members:: Agreed.


Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order. There have been consultations between the Parties with respect to the Bill relating to the Fisheries Improvement Loans Act, and while I am on my feet, I might as well address myself to a subsequent Bill dealing with the Farm Improvement Loans Act. These Bills are very straightforward and in effect extend the operation of the legislation for an additional period of time. The present legislation would provide that those two Acts would end and would no longer be available to the people of Canada by the end of this month. Accordingly, these Bills are before us for the purpose of extending the time. We have discussed the matter and, since there seems to be a general agreement with respect to the legislation, it has been agreed to have these Bills brought forward to be dealt with relatively briefly but at all stages so that both Bills will be passed sometime today.


Herbert Eser (Herb) Gray: Mr. Speaker, I just want to state that what the Government House Leader has said represents the results of our consultations and, therefore, I readily give consent to that course of action on behalf of the Official Opposition.


Ian Deans: Mr. Speaker, you will be pleased to hear that we all agree to that. Subject of course only to my good friend and colleague, the very diligent Member for Comox-Powell River (Mr. Skelly), being able to give the Minister some enlightenment as to how the Fisheries Ministry ought to be operated, we will see this matter through today, by God.


Mr. Speaker:: The Hon. Member for Papineau (Mr. Ouel-let) on the same point of order?


André Ouellet: No, Mr. Speaker, I have a question to ask the House Leader regarding a piece of legislation that he has promised to bring forward.


Mr. Speaker:: Order. I take it that the Hon. Member is attempting to convert this point of order into the question regarding House business?


André Ouellet: Yes, Mr. Speaker.


Mr. Speaker:: I do not think that that is appropriate at this time, with respect. I think perhaps the Hon. Member might



GOVERNMENT ORDERS


John Allen Fraser: that Bill C-57, an Act to amend the Fisheries Improvement Loans Act, be read the second time and, by unanimous consent, referred to Committee of the Whole.
He said: Mr. Speaker, first I would like to thank all Hon. Members of the House for indicating their readiness to pass this legislation swiftly. I would like to say to the Hon. House Leader of the New Democratic Party, who indicated that it took some discussion, entreaties and persuasion on the part of the Hon. Member for Comox-Powell River (Mr. Skelly) to get me to proceed with this Bill with dispatch that if the Hon. Member for Comox-Powell River had in any way put up any resistance to this Bill, he would have had a number of fishermen from his own riding knocking on his door asking him why. The reason for that is that this Bill, which has been in existence since 1955, is designed to facilitate credit to fishermen who need money for the purchase or construction of a fishing vessel, the purchase or construction of fishing equipment such as auxiliary boats, engines, winches, electronic equipment, nets and so forth or for the major repair or overhaul of a fishing vessel.
The legislation operates by authorizing the federal Government to guarantee lenders against losses incurred on loans made in accordance with its provisions. The House, of course, is familiar with the Bill as it has been in effect since 1955. I do not think that I need to go into it in any particular detail at the moment.
The Bill is before the House for the purpose of asking the House for an extension of the Bill's effectiveness for another 18 months. In the event that any Members wonder why that is so, it is of course because all programs including this one are being carefully reviewed. In the meantime, I think it is in the interests of the fishing community that speedy passage of this Bill be given by the House. Again, I would express my appreciation to the critic for the Official Opposition, the Hon. Member for Egmont (Mr. Henderson), and the critic for the New Democratic Party, the Hon. Member for Comox-Powell River.


George Roland Henderson: Mr. Speaker, I would like to add a few brief remarks to the comments made by the Minister. All Parties did agree to get Bill C-57 through the House in all stages today. I must say that the extension is now

June 25, 1985
Fisheries Improvement Loans Act
over 18 months, from July 1, 1985 to December 31, 1986. I would have liked to have seen the Government put just a little more money into it. I do not know if perhaps there are some dollars there which are not spent, although someone told me just recently that that fund was out of money. If that is the case, we probably would not have enough money for the next 18 months.
There are some other rather interesting aspects of the fisheries as far as dollar allocation for that Department is concerned. Certainly, vessel subsidy programs are under funded. I am not aware of a program this year. Perhaps the Minister could tell me later on.


John Allen Fraser: Small craft harbours.


George Roland Henderson: Small craft harbours. The Minister agrees with me. I wish he could talk to the President of the Treasury Board (Mr. de Cotret). Every time I rise in this House, Mr. Speaker, I try to tell the Ministers on the front-bench just how insignificant the funds are for small craft harbours. There are some $50 million for all of Canada, which is peanuts. 1 am here to help the Minister get more money in whatever way I can. I hope the Minister will argue as forcefully behind closed doors within the confines of Cabinet where he should have the full clout of a very superior Minister, not only as the Minister responsible for British Columbia but responsible for all of the good fishermen of this country.
I hope the Minister will raise his voice loud and long before this House adjourns for the summer recess, when that party has its cabinet meetings at Meach Lake, or wherever they are held. I hope he will tell the Prime Minister (Mr. Mulroney), the Deputy Prime Minister (Mr. Nielsen), the Minister of Finance (Mr. Wilson) and the President of the Treasury Board. I hope the House Leader will stand up on his hind legs and give the Minister of Fisheries and Oceans (Mr. Fraser) the support which is necessary and most important. The Minister of State is another fellow who could do an awful lot for us. I do hope that those Ministers carry this forward in the chambers of Cabinet and forcefully represent the fishermen the way they should.
I will conclude my remarks, Mr. Speaker, by saying we do support this Bill in all stages. I believe my colleague, the Hon. Member for Gander-Twillingate (Mr. Baker), has a few remarks to make before this Bill passes, I am sure with his accustomed brevity, and that the Bill will pass very quickly.


Raymond John Skelly: Mr. Speaker, the Bill is in fact moving forward very quickly today. I believe one of the reasons is because of the Minister's acceptance of putting in the sunset clause. We were then able to deal with a piece of legislation which is largely, I would suggest, a bookkeeping item. There are some questions the Minister should probably address before leaving this House, if we do in fact adjourn at the end of the month, which deal with the context in which the Fisheries Improvement Loans Act is developed.
The Minister will know that it is really not the same on the West Coast as it is on the East Coast. We have a substantial
problem with a fleet which is too large. Rather than building more vessels, we should be looking at bringing that fleet into manageable size. I wonder if the Minister might be in a position to give this House some indication of what the present status of the buy-back is right now. During the election campaign there were promises of $100 million buy-back. Now we hear the Minister talking about a $37 million buy-back. I believe it is extremely important that something be done in terms of fleet rationalization on the West Coast.
We certainly have a fleet too large for the resource at the present time and there is a major program, and a promise of the Conservative Party, to enhance the size of the resource. During the election campaign, there was talk of a $200 million enhancement program. It is our understanding now that that figure has been mentioned in committee, that there will be a program in the order of $200 million which is currently before the decision-making body of Government. I wonder if the Minister can give the House some indication as to the status of that promise before this House adjourns?
Of course, as I mentioned before, there is the problem of having an improving fishery but, certainly, when small communities which have been dependent on fisheries are being largely taken away from it by the mobile nature of the purchasing agencies, the trucking facilities to major processing operations, and the rationalizing of those facilities in the major centres, we see those communities on the coast of British Columbia being deprived of an opportunity to maintain employment in that industry. It will be useful if the Minister in his summary remarks on this legislation gives us an indication of how the Fisheries Improvement Loans Act is going to work with respect to such things on the west coast as fleet rationalization and the salmonid enhancement program.
The Minister, being aware of the employment and economic difficulties in those communities, should look at supporting infrastructure programs, through his Department, to aid fishing and processing at the local level in order to ensure that employment and economic benefits are retained in those communities. The Hon. Member for Skeena (Mr. Fulton) has numerous projects in his area which require serious concern. The Minister has yet to make a statement on the Campbell River Indian band marina project, the Port Hardy freezer unit, or the Bella Coola ice plants. There are numerous areas in which we need those kinds of attention.
I would also ask the Minister of Fisheries and Oceans for a comment prior to parting from this House on another critical and important issue. I think of justice. A number of individuals who were faced with, I think, indecision on the part of Government, became involved in a civil disobedience situation.
It would be hoped that the Minister would be in a frame of mind to consider whether or not the Department should maintain the charges in this matter, and, in the interests of maintaining within the industry a willingness to bargain and cooperate-and there has been an enormous amount of co-operation this year in the absence of strict authority-to bring a fishing plant into place in all aspects and keep it rolling along.
It would be my hope that the Minister, prior to this Bill being
June 25, 1985

completed today, would make some summary remarks as we get close to adjourning this House for a considerable period of time while the fishing industry works through its 1985 fishing season, and give these people an understanding of where they stand on some of these important issues.


George Baker: Mr. Speaker, 1 will try to be as brief as the Hon. Member for Egmont (Mr. Henderson). Perhaps it might appear to Hon. Members that on some legislation I am always complaining-


Mr. Lewis:: More than you did in the previous administration, or had the nerve to do.


George Baker: -in taking the Minister to task. There is some sound from across the way. I don't know where it is coming from. It is obviously an Hon. Member whose riding is not affected by the Fisheries Improvement Loans. I'm sure that if the hon. gentleman turned around he could speak to two good Newfoundlanders who would be able to enlighten him on the legislation.


Philip Derek Lewis: Much more than you could.


George Baker: The Bill before us, Mr. Speaker, amends the Fisheries Improvement Loans Act. As the Minister said, it guarantees loans that the banks give to the fishermen. That is an interesting proposition, Mr. Speaker. In the way the Minister said it, it is as if the banks give a loan to a fisherman for a boat or gear and that is guaranteed. In other words, if the fisherman defaults, then the bank has to then go after the federal Department of Fisheries to be paid for the difference. The Minister is shaking his head. "Take security" says the Minister. After the security is taken, it is guaranteed by the federal Government to be paid to the lender if the fisherman defaults. That is correct. The Minister is shaking his head.


John Allen Fraser: Oh, no, I am only-


George Baker: I want to read a brief letter from a bank manager to a fisherman. Fishermen in British Columbia, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland, and part of Quebec are getting these letters. I would like the Minister to listen. It says:
Dear Mr. Elliott,
We advise that the Federal Government is paying no further claims against Fishery Improvement Loans advanced between 1977 and 1980. In this regard, we regret to inform you that your loans are now excluded from the Federal Government Guarantee, and as such, the accounts now revert to your sole
responsibility.
We advise that outstanding amounts on your loans are as follows: -Boat Loan, Principal-$9,602.95, Interest to May 28, 1985-$1,504.41; Gear Loan, Principal-$5,661.60, Interest to May 28, 1985-$1,824.45.
Did you notice the dates, Mr. Speaker? May, 1985. The Minister said that this particular legislation would take effect the end of this month because that would allow the Government to guarantee loans to fishermen after the end of this month. I just read a letter from a bank manager to a fisherman which said that loans granted between 1977 and 1980 are
Fisheries Improvement Loans Act
no longer guaranteed by the federal Government. This is a very serious matter. We are not really debating a fisheries improvement loan guarantee program at all. Go into the bank and you will see a sign which says "See us for fisheries improvement loans guaranteed by the federal Government". They signed for the loan, they got into trouble because it was a bad fishing season from 1977 to 1980, their gear is seized and sold at public auction, they forgot about it for a few years- the Minister is getting up and going to the phone.


John Allen Fraser: Phoning the bank.


George Baker: Phoning the bank. I can save him the trip and tell him what is wrong.
Another gentleman says he took out a fisheries improvement loan in 1979 which was guaranteed by the "feds" as he put it. He was unable to pay so the bank repossessed his gear and sold it, the proceeds being applied to his loan. That was last week and then he received a letter from the bank saying the federal Government was paying no further claims against fisheries improvement loans advanced between 1977 and 1980 and the account was now his sole responsibility.
What has happened now for the first time, Mr. Speaker, since 1935? I will tell you what happened. The Minister of Fisheries and Oceans (Mr. Fraser) should listen to what happened. Hidden away in the regulations, unknown to the banks, is a policy which says that the federal Government will only honour an amount of money not exceeding 10 per cent of the total value of the loans guaranteed by that bank in a three-year period. Now, this situation never arose before so the banks did not know about it.
What has happened now? A bank has exceeded the amount indicated and has been informed by the Minister's Department that the Government can no longer honour any more loan guarantees on loans from 1977 to 1980. What do the banks do? They go directly to the person they loaned the money to and say that they owe the banks the money right back to when they got the loan, including interest all along the way.
The Minister can say that was in the regulations, but my argument is this. Two years ago we had the greatest number of claims against this guarantee program, some $4 million or $4.5 million. Last year it was about $1 million. This year I suppose they are projecting it down to maybe $500,000 in claims. My point is, why can the Government of Canada not honour the guarantees that were given to the banks? It is not the bank's fault. They had never exceeded that level before. They did not know the regulation was there. I am asking the Minister, in a spirit of good will as shown by this Bill, to say to the banks that we will honour the loans made from 1977 to 1980 because the fishermen did not know the loans were not guaranteed. They were told they were. The banks did not know they were not guaranteed, they were told they were. There it is in writing.
For the sake of those fishermen, and there may only be a couple of hundred fishermen involved, a couple of hundred families, let the Government do that. Here we have a fellow who has to pay back $18,593.41 for gear that was seized back

June 25, 1985
Fisheries Improvement Loans Act in 1978, Mr. Speaker. Another poor gentleman here has to pay back $3,740.96. He was charged interest of 11.5 per cent from the beginning of the loan.
As I said, I am not blaming the Government because no action was taken, although I probably should. There are a lot of fishermen out there sitting down with their wives this evening wondering how they are going to pay this massive amount of money which they owe only because they got a loan guaranteed by the federal Government. I will tell you what they are saying. They are saying it is the Tory Government. I have heard it on the phone and I have tried to explain it to them and say no, it is not the Government of Canada at all, it is the division operating under the guarantee. I try to explain it to them. As sure as I am saying this, Mr. Speaker, they are saying it is that Government of Canada, a Tory Government, and that Minister of Fisheries and Oceans. That is what they are saying in Newfoundland. They say "He is from British Columbia, that's him! Now we have to pay all this money because the banks are notifying us in writing that the federal guarantee is no longer any good".
One fellow said to me the other day that he heard the Prime Minister (Mr. Mulroney) say that we may not be able to send out any cheques any more, they may bounce. Well, this could be one of the spin-offs. The Government's guarantee is no longer any good.
My intervention was going to be very short and to the point, but you will have to agree that this is a very important subject, Mr. Speaker, affecting hundreds of people. It is not fair, either to the individual or to the banks. I never thought I would see the day when I said it was not fair to the banks, but it is not. After having introduced this Bill to extend it for a year and a half, the Minister should study this problem on an urgent basis in an effort to respect the guarantees which were signed in good faith by the banks and the fishermen concerned.


John Allen Fraser: I listened with attention to the entire speech of the Member for Gander-Twillingate (Mr. Baker). I would ask that he immediately send me a copy of the letters to which he referred. I will consider the reason those letters were sent and will report to the Hon. Member tomorrow.


Maurice Brydon Foster: Mr. Speaker, I have only a couple of points 1 would like to make on second reading of the Fisheries Improvements Loans Act.
The Minister had made certain commitments to a number of Members of the House of Commons with regard to improvement of small craft harbours. If these harbours are not improved and upgraded fishing cannot take place. At the meeting of the Committee on Fisheries and Forestry on May 21 a number of Members from Ontario pointed out that we have very high water in Lake Huron and many small craft harbours have been damaged by ice and have become incapacitated due to the high water. Will the Minister give his assurance that his officials will report to those of us who made representations on this matter?
For instance, the Minister made a commitment that he would have the director general look into the matter of the harbours at Little Current and Desbarats, Ontario, and take the necessary action. I certainly hope that the word of the Minister will be good. I have provided the information to his senior officials but I have not had any response.
Harbours in Lake Huron at South Bay Mouth and Mel-drum Bay were seriously damaged this past winter and early spring by ice and high water. No action has been taken to carry out the necessary repairs. Before this Bill is passed I would like to have the Minister's commitment that these harbours will be repaired. If these harbours are not in shape for operation the Fisheries Loans Act legislation will not help the fishermen.
The Minister made a commitment to me that he would provide information as to which wharfingers were being changed in the Ontario region as a result of the election last fall. The Hon. Member for Egmont (Mr. Henderson), who is our fisheries critic, raised the subject of that problem in Prince Edward Island. At that time the Minister told me that he did not think any changes were being made in the Ontario region and that he would be quite happy to provide a list if any changes were being made.
I am not sure that any changes have been made in the wharfingers and harbour masters, but there was a story in the Sault Ste. Marie Star last week indicating that Henry Coyle, the wharfinger and harbour master for that important port, is in fact being replaced. Could the Minister clarify that point? I understand that that harbour master has been doing an excellent job, and that the officials of the department in Toronto and Parry Sound are very pleased with the work he is doing.


Mr. Speaker:: With respect, I hesitate to interrupt the Hon. Member, but we are moving further and further away from what is directly related to the Fisheries Improvement Loans Act.


Mr. Nystrom:: It sounds fishy.


Maurice Brydon Foster: The Hon. Member suggests that it sounds fishy, but I just want to have the Minister clarify that point. He made a commitment to Members of Parliament that he would provide that information. I understand that the harbour masters and wharfingers may be changed at Owen Sound and Midland as well. If that is true, it will certainly have an impact on the operation of the inland fresh water fishing fleet.
I hope the Minister will respond in a positive way because he made very clear commitments to Members from the Great Lakes region to make investigations and improve the docks. I hope he will make that commitment either at second reading stage or in Committee of the Whole. These matters are of very great concern to people in my constituency, as well as in the other constituencies which I have mentioned this afternoon. I want to have this legislation passed, but I certainly hope the Minister will look after the details which I have raised as well.
June 25, 1985


Mr. Speaker:: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and the House went into committee thereon, Mr. Danis in the Chair.
Marcel Danis: Order. House in Committee of the Whole on Bill C-57, an Act to amend the Fisheries Improvement Loans Act. Shall Clause 1 carry?
On Clause 1-


Raymond John Skelly: Mr. Chairman, before we move right through this, would the Minister of Fisheries and Oceans take the opportunity, during debate on Clause 1, to respond to some of the questions I raised? The Fisheries Improvement Loans Act does not stand alone as a management tool affecting the fishing fleet. During the election campaign certain commitments were made about buy-back programs. Would the Minister take a minute or two to give us an indication of the progress on such things as government investment in the Salmonid Enhancement Program and what the present status and future prospects are for the buy-back?


John Allen Fraser: Mr. Chairman, I am pleased to advise the Committee that with regard to salmonid enhancement and the buy-back I have submitted documents to Cabinet. As soon as they have been dealt with I will be able to advise the Hon. Member on the outcome. I want to assure him and others that I take both those matters very seriously and am pursuing them.
With respect to some other matters raised by the Hon. Member, they are important and I would be quite pleased to discuss those in detail with the Hon. Member. I believe that attempts have been made and that there is some co-operation between my staff and the Hon. Member's office to arrange a meeting on Thursday. Certainly I hope that that will be accomplished.


Maurice Brydon Foster: Mr. Chairman, could the Minister take a few minutes to respond to some questions with respect to financial assistance being made available to the Ontario region to make repairs to wharves that are suffering either from ice damage or high water which is affecting many harbours this year? Could he respond to those concerns?


Marcel Danis: The Chair does not believe that the question is really relevant to the Bill. I do not see the relevance of the question to the Bill before the House.


Maurice Brydon Foster: Mr. Chairman, I cannot imagine what the value of improving or extending the Fisheries Improvement Loans Act will be if we are not getting the proper improvements to harbours to operate at a reasonable level. If harbours are awash and completely unusable, how are the fishermen in the Great Lakes region going to operate? What is the value of having a loan if the Department of Fisheries and Oceans is not
Fisheries Improvement Loans Act prepared to improve the harbours which are not functional in some cases because of high water? Surely we are here to deal with the over-all fishery.
For instance, in my constituency in South Bay Mouth, where a number of commercial fishermen operate, not only the perimeter wharf but all the finger wharves are completely submerged. This requires massive attention. If the fishermen operating out of South Bay Mouth do not have decent harbours from which to operate-they are completely inoperative at this time-what is the point of extending the fisheries loans legislation to them?
I saw that the Minister was prepared to respond to my representation. I am sure there would be agreement for that response to be made now.


Marcel Danis: The Chair is not convinced of the relevancy of the question. I would ask the Hon. Member to direct another question to the Minister. The Minister may reply at some time, if he wishes.


George Baker: Mr. Chairman, I have one further point to make to the Minister with respect to Clause I concerning the loans that are made under the Fisheries Improvement Loans Act that are not honoured by the Fisheries Department because the banks involved have gone over the figure that is supposedly stipulated in the regulations. I do not know where the figures are stipulated in the regulation.
Although most Acts are confusing, this is particularly confusing when trying to determine the amount of money the Government will respect that the banks cannot get from the fishermen, after using every method possible to get their money from the fishermen. As I stated during the second reading, the banks try every method possible to get their money and then go after the fishermen as a last resort.
I did not mention to the Minister that the Fishermens' credit has totally gone and the banks have written a second letter, pursuant to Fisheries Improvement Loans Act asking for their credit cards because they no longer have any credit with the bank. The reason is that the federal Government is no longer honouring their fisheries improvement loans. They do not point out that they have surpassed the limit stipulated by the Government.
This system was triggered for the first time in April. The fishermen were notified that they owed the banks the money plus the interest because they no longer had the loans guaranteed by the federal Government. The unfairness is that the claim of the person who took out the loan in the 1970s and worked hard to pay it back by making sacrifices will not be honoured, while someone who quit fishing after finding it difficult will have his claim honoured because he made it first.
The Department of Fisheries has no way now of knowing how many fishermen are involved in the provinces throughout this country. There is no way of knowing, unless there is a mechanism whereby the banks notify the Fisheries Improvement Loans people of the total value of their loans made as of March 31. Perhaps the Minister could then divide that total

June 25, 1985
Fisheries Improvement Loans Act
figure into the total number of fishermen who received loans and arrive at a general figure of the number of fishermen who were so affected.
However, the banks are quite understandably notifying the fishermen that they are no longer covered because they were notified at the end of April by the federal Government that it no longer respects the banks' loans for that period 1977 to 1980. You will recall, Mr. Chairman, that that was a bad year in the fishery.
It is also my understanding that the Royal Bank, the Bank of Montreal and the Toronto Dominion Bank are fast approaching their limit from 1980 to 1983. Again, the federal Department of Fisheries and Oceans may have to notify those banks that it no longer respects the claims on loans that were taken out years ago.
We do not know how many fishermen have lost all their credit and must repay up to $18,000 or $19,000 to the banks. The banks are the only ones who know the number of fishermen involved. I wanted to point out to the Minister the unfairness to the fishermen who are really trying to make it in British Columbia, Newfoundland, Nova Scotia, New Brunswick, Prince Edward Island and Quebec. Members of Parliament who represent fishing ridings should be prepared for letters over the summer from fishermen who are stuck because of this particular decision. I wanted to bring that to the attention of the Minister and reiterate the importance of finding a solution to the problem.


John Allen Fraser: Mr. Chairman, let me very briefly respond to the Hon. Member for Algoma. As I explained to the Fisheries Committee some weeks ago, there is an application before Treasury Board which I hope will be granted, that will give us more funds to meet some of the obligations which I think are proper to meet. I also must say to the Hon. Member, as I said in committee, that until we can persuade others to increase the funding I do not have enough money to go around. I listened with great concern to what the Hon. Member says. There is nothing that he says that I quarrel with in terms of need for these funds.
With respect to the point raised by my hon. friend, the Hon. Member for Gander-Twillingate, I haved read a copy of the letter from the Scotia Bank to which he referred and also a copy of the letter from his constituent. I can only say this afternoon that I am not familiar with what has lead to this. I will find out. Since this debate began, I have contacted my Department to find out exactly what the situation is and I will report back to the Hon. Member tomorrow.


Maurice Brydon Foster: Mr. Chairman, I note in this legislation, as far as I can see, that the proposal of a 1 per cent fee put in the Small Business Loans Act last fall does not apply to the Fisheries Improvement Loans Act or the 15 per cent of losses which have to be absorbed by banks under the Small Business Loan Act.
I note that the Bill is being extended for only 18 months rather than the usual five years. Is the Minister planning to institute those fees in this legislation the next time the legislation is being amended? Is that why the Bill is being extended for only 18 months rather than the normal five year period? I think that kind of move made in the Small Business Loans Act has a very detrimental effect on the availability of loans.
The problem with most of these loans is that very often the small businessman, the farmer or the fisherman finds there are no funds available. The banks do not want to provide the funds because they get only 1 per cent above prime in interest and now with the 1 per cent acquisition fee being charged by the federal Government and having to absorb 15 per cent of the losses makes these loans a poor opportunity for the banks. Has the Minister considered that problem, has he rejected it, or is he keeping that open as an option when he reviews the legislation in the next 18 months when the Bill is due for renewal again?


John Allen Fraser: Mr. Chairman, the Hon. Member will understand when I say that I have presently today no firm views on what changes if any might be made to this Act many months from now. I assure the Hon. Member that I will take note of his comments and pay some attention to the representations that he has made today.
Clause 1 agreed to.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.

John Wise: that Bill C-56, an Act to amend the Farm Improvement Loans Act, be read the second time and, by unanimous consent, referred to a Committee of the Whole.


[Stage Direction]
Motion agreed to, Bill read the second time and the House went into committee thereon, Mr. Danis in the chair.
On Clause 1-
John Wise: Mr. Chairman, I want to express my appreciation on behalf of my colleagues for the co-operation we have received from the two Opposition Parties with respect to the agreement to pass this piece of legislation through all stages. I thought perhaps at this point it might be appropriate for me to make some remarks on the Farm Improvement Loans Act. While we are in Committee of the Whole, perhaps I could respond to questions that more than likely will flow from Members opposite.
I am pleased today to be speaking to this legislation amending the Farm Improvement Loans Act. This Bill will extend my authority as Minister of Agriculture to guarantee loans under the Act for the 18 month period from July 1, 1985 to December 30, 1986. The extension of this Act is recognition of
June 25, 1985

its ongoing importance within the credit system of Canadian agriculture.
These days, as Members will realize, farmers pay close attention to their books as well as to their land. The successful ones are good business people who understand, among other things, how credit matters affect their operations. In examining Government programs in the agriculture credit area, you must keep in mind the farm community's special characteristics. The cyclical nature of farming demands that producers have a good handle on their cash flow requirements. The dependence of farming on weather and market prices means that producers must be highly knowledgeable about methods of stabilizing their income. The tendency to plow profits back into the business means, that, even after being in the business for years or generations, many farmers continue to require a reliable line of credit.
Finally, farming is extremely capital intensive and again has certain credit implications. It is not enough to recognize that farmers need credit. What they need is a flexible range of credit options. Without this, the sort of long-term planning so important to effective, efficient farming would not be possible.
The Farm Improvement Loans Act provides an option that meets a very specific need, that of intermediate term financing to cover capital expenditures.
The Act itself, as many Members will realize, was introduced 40 years ago. It has authorized Ministers of Agriculture to guarantee against losses term loans made to farmers by chartered banks, Alberta treasury branches and other designated lenders across the country.
Producers are able to have several outstanding loans under this program to a combined ceiling of $100,000. The maximum repayment period for loans to cover the purchase of additional land is 15 years while for all other purposes the term of repayment is 10 years. Since its introduction in March 1945, the Act has been amended several times, primarily to effect lending periods.
Just to give some idea of its impact on the farm community since the introduction of the Act until the end of last year, about 1.9 million loans have been approved worth in excess $5 billion. This reflects a sizeable capital investment in the agriculture sector.
During this period some $17 million, that is a fraction of 1 per cent, was paid by the federal Government in claims, of which $2.8 million subsequently was recovered. That is not a bad record. I think it proves farmers generally are a very, very good credit risk.
As further proof, prior to the introduction of the Act, lending institutions were reluctant to extend intermediate credit to farmers. However, during the years following the program's introduction, lending institutions came to realize that producers were indeed good risks. As a result, numerous banks and other lending organizations have entered the field with their own programs for intermediate farm loans. In this
Farm Improvement Loans Act
sense, the Farm Improvement Loans Act played an instrumental role in expanding the number of farm credit sources open to farmers, as well as raising the level of credit available to them.
I am sure every Member of the House has noted with great satisfaction the over-all decline in interest rates. This trend is reflected in FCC rates, which have dropped from thirteen and three-quarters per cent on five-year loans as of last December, to eleven and seven-eights per cent as of now, the lowest level since 1979. This downward trend is clear evidence that the Government's economic policies are on target. Declining interest rates are a sign of growing confidence in our economy and in the Government's determination to get the deficit under control.
By the way, this trend in interest rates is good news for producers who took out or plan to take out guaranteed loans through the Farm Improvement Loans Act. The ceiling on loans made under this program is equal to the prime lending rate of chartered banks plus 1 per cent. As our economy improves and interest rates reach favourable levels, this program becomes all the more attractive.
I should like to quote a few statistics to illustrate further the significance of the Farm Improvement Loans Act to the agricultural sector.
Looking back on 1984, in excess of 12,000 loans were guaranteed under the program, amounting to more than $159 million in loan capital. During the year loans were made for a variety of uses. The bulk of them, $105 million worth, went toward buying agricultural implements. The remainder funded construction or repairs of farm houses and buildings, land purchases, land improvements and irrigation, livestock purchases and equipment overhauls.
While producers in every province have benefited over the years, historically western Canada has depended more heavily on the program. For example, in 1984 loan capital guaranteed to producers under the Act in the four western provinces amounted to more than $133 million. That was about 83 per cent of the total under the Farm Improvement Loans Act last year.
It is true that FILA does not command the same share of the total farm credit market as it once did. Of course there are a number of reasons for that. For instance, provincial Governments have entered the agricultural lending field and lending institutions have set up their own programs. However, I am sure all Hon. Members would agree that it is in the best interest of the agricultural sector for this program to continue. This is especially true in rural Canada where its termination could truly spell hardship, particularly at this point in time. It is not uncommon in many less populated regions for only one lending institution to serve an entire area. Farmers in these regions see FILA as a vital resource to obtain much needed credit.
By comparison, this 18-month extension is relatively short. Of course there is a reason for it. My Department will be using this time to review the Act to ensure that it is meeting current

June 25, 1985
Farm Improvement Loans Act
needs. If necessary, changes will be introduced at the end of the extension period. Among other things, I am interested in examining whether this program could work in combination with existing and future FCC programming.
I suggest to Hon. Members that they would be acting in the interest of Canadian farmers by supporting quick passage of this Bill. I urge them to do so, and I would be happy to respond to their questions.


Maurice Brydon Foster: Mr. Chairman, we in this Party will be pleased to see the Bill pass in that it provides some assistance to agriculture. I think the Minister referred to the amount of loans last year totalling some $1.5 million.


John Wise: They amounted to more than $159 million.


Maurice Brydon Foster: I should like to put that amount into perspective. We should be conscious of the fact that there are something like $20 billion worth of farm loans at the present time, and that the profit from many commodities is not adequate for producers to repay their loans or debts. This is why they are facing the worst economic crisis since the 1930s.
In its report last fall, the Farm Credit Corporation catalogued the depth and scope of the crisis when it indicated that 39,000, or something like 17 per cent of our farmers were in serious financial difficulty, were borrowing more than they were spending on capital expenditures and had equity of less than 15 per cent. Since that report came out, the Government completely fumbled the handling of the EEC beef matter. We now have something like 17 million pounds of subsidized beef entering the country, which will make it that much more difficult for farmers to repay these loans.
When I heard this afternoon that the Minister wanted to bring in emergency legislation, I hoped that he would bring in a Bill to provide for an agri-bond program such as the one recommended by the finance committee. It recommended a $96 million program which would provide 8 per cent loans. The program was recommended highly by the chairman of the committee, an outstanding chairman and government Member. Such an agri-bond program would help solve the financial distress faced by a large percentage of the 39,000 farmers about whom I just spoke.
As I understand it, the prime rate of the bank plus 1 per cent will probably be close to 13 per cent, or an interest rate which is actually higher than the present rate of the Farm Credit Corporation. Although this Bill provides a useful form of farm financing, a minuscule amount is actually available. The banks would not want to give out these loans because they would stand to make only 1 per cent above prime. Obviously they want to allocate most of their funds to other programs under which they make higher interest rates. Although some $825 million was made available through the Farm Credit Corporation last year, that amount has been slashed to some $94 million this year. There is really no hope in that regard.
In addition, producers have to face the prospect of new taxes on farm input costs; of nine cents per gallon on gasoline starting on September 3, and of a new innovation on the part
of the Government to tax the harvest of western grains. On January 1, another 1 per cent sales tax will be imposed. All these things make it very difficult for producers to repay their farm improvement loans.
In the last three or four days before the House adjourns for the summer recess, I hope the Minister will take into account the serious difficulty faced by the red meat industry and by the western grain industry, with the United States bonus program, and bring in substantial legislation to deal with the farm debt crisis. Only by doing that will we be able to come to grips with the magnitude of the farm debt problem. Extending the provisions of this Bill for a few months or a year or so, and providing a few guaranteed loans, will not really come to grips with the massive debt problem faced by many producers. As was recommended by the finance committee of the House of Commons, an agri-bond program should be established on an emergency basis. I certainly want to see this legislation passed and extended but I hope that the Minister will be bringing in more substantial legislation to really deal with the larger problem on an emergency basis later this week. Thank you, Mr. Chairman.


Victor Fredrich (Vic) Althouse: Mr. Chairman, I would like to make a short statement and then I have some questions for the Minister as well.
This Bill brings up an old question that I am asked, quite often when I go through my riding. Does the Farm Improvement Loans Act still exist? The answer is that it does. Most farmers are still eligible. There are some 350,000 to 500,000 farmers in Canada who would be eligible. They have to be commercial farmers who are attempting to make a living from farming. The rate is prime plus 1 per cent and the Government will guarantee part of the loan, so it should therefore be something that banks are anxious to give out.
I guess the reason they ask about the eligibility is that it extends to virtually all farm activities, anything that a farmer would want to produce on his farm. The loan can be used to purchase the breeding stock, to build buildings and facilities, to buy equipment, even to buy land and make land improvements. The term runs for 10 years on most things and up to 15 years for land purchases.
The reason I think they ask if it still exists is in part explained when you look at this particular amendment we have before us today. It is very much like two previous amendments we have had under the previous Minister of Agriculture, Mr. Whelan. The problem is simply that for the total amount of money available for protection, because really this Bill is a form of protection to the banks, to the credit unions, to the trust companies and the Alberta treasury branches who want to participate in it, the federal Government will provide guarantees that there will be limited losses if the loans are not paid. So it is a federal Government guarantee of the loan to the farmer.
Unfortunately the Bill still reads as it read back in 1980 when I first came here. It was one of the first Bills I had to
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deal with as a new Member when I came in February of 1980. The Bill at that time extended $1,550 million from July of 1980 to June 30, 1983. You can see, Mr. Chairman, how you get into a problem when you continue to use that same amount of money. Later on Mr. Whelan introduced another Bill that extended it to this June. We now have the current Minister extending it from July, 1980 to December 31, 1986. We have the same amount of money being guaranteed, not for a little over two years but over six years. There is a shrinking amount of money available for new loans as a result of this.
It has to be remembered, as I pointed out, that the loans are extended for as much as 15 years if they are for land purchases. It is small wonder then that in spite of their being something in the order of $1,550 million there in the pool that we only had, according to the Minister's statement, something in the order of $145 or $150 million loaned under the program last year. That is what I would expect, because money only becomes available to be loaned under the program as people pay off their loans of previous years.
It is not a great deal of money. It is somewhere between 3 per cent and 4 per cent of the amount of money that farmers require and use on an ongoing basis. Farmers have borrowed between $20 billion and $23 billion at any one time and this program provides just over $1.5 billion, not a very big chunk of that money.
Back when farm improvement loans meant something to the farming community they made up a much greater portion of loans outstanding. In fact, at one time they made up virtually all of the short and medium term lending that the banks engaged in. Credit unions engaged in some other lending, but banks were pretty much only in the farm improvement loans business. At that time it had been government policy to have government guarantees extended to the banks to take up a big portion of the amount of money that farmers needed.
We are quite obviously trying to shrink both the farm improvement loans through the Farm Improvement Loans Act and the Farm Credit Corporation which extends longer term loans. Along with that there has been companion legislation to attract the banks into the farm loan business, which they and the trust companies have done to some very large extent.
Farmers however have not necessarily been as well served. Those who have been in the business for more than 20 years can recall when they could get a farm improvement loan and were guaranteed both the amount of interest and the term of the interest; that gives pretty good financial control for any operation.
Gradually we got to the point where Section 88 of the Bank Act was used to supplant the Farm Improvement Loans Act. That gave the banks the right, resulting in a revolution in the farm lending field. Under the Farm Improvement Loans Act, when the loan was made the only item given as security was the building or the machine or the herd of cattle or whatever the loan was borrowed for.
Under Section 88 of the Bank Act, came the revolution! A farmer could buy a cow or a combine but he signed on the
Farm Improvement Loans Act
dotted line giving as security all of his grains, all of his livestock and all of the movables from that operation. We moved from there to the recent Bank Act where now a similar thing is done under Section 176, but in addition to all of this extra security Section 176 the farmer only knows on a weekly or monthly basis what the rate of interest is, and it is due on call. So this has really changed the conditions for loans. It is small wonder that farmers ask with some nostalgia what ever happened to the Farm Improvement Loans Act, because they had a firm rate of interest, they had a certain amount of time in which they knew they had to pay the loan off and the security was only the item that the loan had been granted for.
We have moved a long ways. I think this particular Act effectively protects only those people who still have farm improvement loans. I think that the chance of this particular amendment assisting very many farmers is not at all great. We will probably see a continuation of the situation, with only a few farmers succeeding in getting a farm improvement loan. It will be a somewhat different process than that which is gone through to win a lottery, but for those who make it they will consider themselves about as lucky.
I would close the remarks portion of my time today by asking the Minister if he can give us some information regarding the Farm Improvement Loans Act, and tell us how much of that $1,550 million is outstanding in loans now and how much he expects over the course of the next year to become available for such loans to farmers.


John Wise: Mr. Chairman, I want to respond to the comments made by both the Hon. Member for Algoma and the Hon. Member for Humboldt-Lake Centre. First, I would like to indicate to them that in my remarks I did not suggest that I was coming before the House with a great, new, innovative piece of legislation. It is a piece of legislation that has been around for about 40 years.
I can well recall that about three years ago, I was not sitting here but across the way in the opposition benches. In the last 13 years, I have had two or three opportunities to speak to this legislation when it was brought forward by the previous Government for three-year extensions. I really have not changed my view about it. I want to make that point because I want to be very honest, open and frank. I can well recall that when I sat over there and made representations about this Bill, I used to make some of the same comments and observations that have been made by the two opposition critics. My remarks were probably more parallel with the latter speaker than the former.
I can recall that when I was in opposition, there was one major problem with this piece of legislation, and that was that the banks did not participate in it to the extent that we thought they should. I would like to tell my colleagues that I still have some concerns about this. Simply because I have from moved Opposition to Government does not mean that I am now carrying a flag in support of the Farm Improvement Loans Act.

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Farm Improvement Loans Act
I used to say that many farmers came to me to indicate that when they approached their banking institutions, the bankers had three stock answers: one, they had never heard of this piece of legislation before; two, it was not their policy to participate in loans under this Act; three, it was their policy to provide loans under this piece of legislation but they could not extend any more loans because their allotment had been used up. It is for that very same reason that we are not coming to the House, as the previous Government did time and time again, to simply ask for a three-year extension on the Farm Improvement Loans Act.
We are coming before the House, not having forgotten the problems farmers have with this piece of legislation. We are trying to get an interim extension to this legislation because we want to take a look at it. We want to have an opportunity to assess its usefulness and to determine whether or not it is meeting the needs of today and will meet the needs of tomorrow. We want to determine if it can be approved or amalgamated with some other government program. We want to have time to find out about information of this kind so that we will be in a position to improve the Farm Improvement Loans Act if it is our finding that that is what should be done.
I am not going to take on all of the observations that have been made by the two opposition critics. I suppose I could consider myself fortunate for having the opportunity to sit through the passage of the previous Bill, the Fisheries Improvement Loans Act, when the Hon. Member for Algoma got so far off the Act that he began to speak about wharfingers. He did not quite get to wharfingers on this particular Bill but he did go off on an EEC tangent.
Again, I must set the record straight. It was the previous Government that turned its back on the Canadian beef industry and took no action. This Government acted. We invoked the meat import law. To refresh the Hon. Member's memory, that occurred on December 21, 1984. As a result of our invoking the meat import law the Canadian beef industry is protected to the extent that the level of EEC beef coming into this country this year is about 55 per cent lower than it was last year. I think that is a significant protection for the Canadian beef industry. In fact, about 75 or 80 per cent less beef is coming into this country from EEC countries than would have come if we had not moved. I simply make that observation to set the record straight.
The other observation of the Hon. Member was perhaps a little more on track and dealt with farm finance. A few moments ago he indicated that the Government slashed the amount of money that is transferred from the Consolidated Revenue Fund to the Farm Credit Corporation. He left the impression that we slashed that amount of money from $300 million to $94 million. The truth of the matter is that $94 million is what the previous Government contributed from the Consolidated Revenue Fund to the Farm Credit Corporation. If we are talking about slashing, yes, there was a slash, but it was not done by this Government. I wanted to set the record straight on that matter as well.
Some comments were made regarding the usefulness of the program. The Hon. Member knows where I stand on the usefulness of the program. What is our other option? Our other option is to simply terminate the legislation. If the terms of this Bill were to terminate this piece of legislation, can you imagine what we would be hearing from Members opposite, Mr. Chairman? We would be hearing the most negative comments imaginable. We are not terminating the legislation.
I think it is important to recognize that $105.7 million or 66.1 per cent of the $159 million that was lent under this program was used to purchase agricultural implements. We know about the situation facing farm implement dealers today. It is pretty serious. A great many farm implement dealers across the country are having some very great difficulties surviving. Some $14.1 million or 8.8 per cent of that money went for construction, repair or alteration of farm houses and farm buildings. We know that the construction companies and builders can certainly utilize another $14 million. As well, $15.7 million or 9 per cent of that money was used for the purchase of land.
Some $10 million was used for other improvement purchases such as clearing of land, fencing and irrigation. There was certainly some investment in land clearing, tiling and irrigation projects, all of which are certainly in the best interests of Canadian agriculture. We know that some $13.4 million or 8.4 per cent of the money was made available for the purchase of livestock. We know that when a farmer is facing a difficult financial situation, it is important to invest money in good livestock. Everyone who has been in the livestock business knows that only a rich man can afford poor cattle. There was some half a million dollars spent on major repairs and overhaul of agricultural implements.
We are not here today taking great credit, saying that this is a new innovative program which is going to be the end to all of our problems in the agricultural industry. That is not it at all. We are coming here very honestly saying that we are not perfectly satisfied with the program the way it now is, although the previous Government seemed to be. At every three-year interval we would see the same old Bill back again. The Government would ask for a three-year extension for the same old Bill. We are not doing that. We are just asking for enough time to have a look at the program to see whether or not it can be improved.


Mr. Taylor:: Mr. Chairman, I am not going to hold up this debate, but I want to commend the Minister on what he just said. I believe it is an excellent explanation. I do not think anyone would be happy if we terminated this Bill in spite of all its shortcomings. I was happy to hear the Minister say that during the interim this Bill is going to continue and there will be a review. That is the reason I rise now.
It is not only the financial difficulties which are facing our farmers, many of whom I am not sure are going to survive until 1986. They have high interest rates and foreclosures threatened by banks. In addition, farmers in my riding have
June 25, 1985

winds, drought, grasshoppers and cut-worms to contend with. The increased costs of production are becoming so high that many farmers are almost ready to give up. They do not think they can make it. Can the Minister tell us generally what is going to be included in this review because farming in western Canada is becoming a very serious matter. Many farmers are leaving. They have given up hope. Others are on the verge of giving up hope. We must do something in order to keep our farmers there because once the farmers disappear, I tell you, Mr. Chairman, the city people will know what the price of goods will cost because it is the many farm families who are keeping the price of food down. We in Canada do not appreciate that. We do not appreciate agriculture.
My point is that there are a number of matters which should be reviewed. For instance, if farmers received a price for their produce which included the cost plus a reasonable profit, we would not have very much difficulty. Every year the farmer is receiving less and less for what he grows. He is not even getting the costs back. There is no other industry in Canada in that position. Unless we find some way of seeing that the farmer receives his cost plus a reasonable profit, we are going to lose a lot of good farmers. We are going to lose our young innovative farmers, most of whom have diplomas from agricultural colleges.
Along with a review of this Act, I would suggest to the Minister that we have to review the Bank Act as well. Section 88 is being taken advantage of. Banks have taken and frozen a whole herd of cattle, and that is pretty discomfiting and frustrating. What is entailed in the Minister's review, which I am glad he mentioned? What does he anticipate might come out of that review with regard to keeping our farmers on the land?


John Wise: Mr. Chairman, the Hon. Member for Bow River raises a number of points and, of course, they are very important and legitimate points to raise during this debate. I would love to respond to all of them, but let me only respond by saying that it is the intention of this Government to review all of the programs which currently deliver services to the agricultural community, and all of the dollars we invest, because we really do not spend money when it comes to food production in this country, rather we invest dollars in the agri-food industry. Of course, those dollars return to the general economy many, many times.
I would just like to indicate to the Hon. Member that as far as this Government is concerned, there is no question about the fact that we recognize the importance of the agri-food industry both in economic terms and as far as employment opportunities are concerned. There are many examples of this during the short period of time we have been in office. The Hon. Member knows that we have taken a number of very major steps. We are not claiming great victory here but we have taken many major steps in the farm credit, farm finance area. Other steps are being considered.
I know there was a great deal of expectation when the Budget was brought forward on May 23 that there would be some special provisions dealing with the farm finance issue.
Farm Improvement Loans Act
However, I warned Hon. Members in this House and farm organizations across the country that although there would be some very significant measures in the Budget, not to hold out any great hope that there would be any special measures in the Budget dealing with the farm finance issue. The reason for that, of course, was the fact that we have taken a number of steps. I am not going to go through them now-they are all listed and my colleagues will know what they are-except to say that the previous Government did not move in any way, shape or form in this area, but we have moved, and moved in three or four very significant ways.
I would like to indicate why I cautioned that significant measures would not be contained in the Budget dealing with the farm finance issue. Of course, there was a major provision in the Budget for which agricultural organizations have been asking for years and years and which was not provided by the previous Government. That, of course, was the measure of no capital gains. The other measure was the extension of the Registered Retirement Savings Plan. Third was the extension of the small business bond provision.
I received the report of the Bruce-Grey pilot project on May 17. The Budget, of course, came down on May 23. Since that time, I have had the benefit of the advice of both regional and provincial farm credit managers across the country. They have been acting, of course, as an appeal board in many provinces. I am receiving their advice. This week, we have a meeting with the chairpeople of the Farm Credit Appeal Board. We will have the benefit of the advice from the Bruce-Grey pilot project. We will have the benefit of the advice of our regional and provincial farm credit managers, and we will also have the benefit of the advice from the chairpeople of the Farm Credit Appeal Board. We will have to decide, of course, what further measures we can take from the federal point of view in order to deal with the farm finance issue.
I could go on-the Chairman has been very lenient with me to this point in time-but I think that most of the questions centred around this debate which can be properly procedurally talked about are those measures dealing more specifically with the farm credit issue.
In response to the Hon. Member for Humboldt-Lake Centre, I can tell him that I have charts and charts. I am not so sure whether I have the appropriate chart to supply him with the information for which he asked, but I can assure him that I would be happy to share the information I have. First is Table 1 which provides me with a summary of operations. It goes from the year 1945 on through to 1984 and lists the number of loans and the average loan. The next chart I have is Table 2, Loans and Repayment to Lenders. It goes through that same period of time. Table 3 shows loans classified by province and by lenders. That is interesting information. I know that when I was sitting in the Opposition, I was always anxious to receive that. I would be happy to share that information with all Hon. Members of the House. Table 3 continues for three pages.

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Farm Improvement Loans Act
Now we get to Table 4, loans classified by province and purpose. I have that information here. We have Table 5, loans for implements, combines, hay bailers, trucks, tractors and others; Table 6, loans for various farm improvement purposes; Table 7, loans for construction, repair and alteration of farm houses and buildings. I have a lot of information here which I am happy to share with the Hon. Member.
I could perhaps answer him by saying that as I recall, and I may be wrong, our losses under the Farm Improvement Loans Act were next to nil, thus the observation that this is not going to cost us a great deal. Farmers are good credit risks. They will make every effort to repay their debts. Therefore, we do not really see this as a great liability. We see it, instead, as another option to provide credit to a certain group of farmers. It has served a purpose over the years. We agree with some of the comments made and that is why we are coming back here today, not to terminate this legislation, but asking for an extension so we can sit down and try to improve the Act to the benefit of Canadian farmers.


Maurice Brydon Foster: Mr. Chairman, last year some $825 million was made available for loans through the Farm Credit Corporation. This year the estimates showed only $94 million. Is the Government going to be borrowing additional funds as a result because it could not really complement the funding available through the Farm Improvement Loans Act?
I want to point out the urgency of additional credit being made available. A Bruce County independent producers' group report showed 30 per cent of their producers were in serious financial difficulty. It seems to me that, given this drastic reduction and additional funds not being put in place, it will be hard to overcome the losses and foreclosures which have been taking place. Can the Minister clarify just what percentage of the $1.5 billion guarantee provided under the Farm Improvement Loans Act has actually been utilized? Is the entire amount being utilized? That is the problem with the Act in that the banks just do not make these loans available to farmers because they do not make enough profit. It it is not being utilized, then will the Government give consideration to requiring the banks to utilize the full amount? It is useful legislation and if only a small amount of funds are being rolled over each year, then the full amount should be utilized.
In the report that the Minister referred to, one of the problems seemed to be that the FCC were very inflexible. They would not write off loans even if the banks did so. Is the Minister prepared to bring in legislation or adopt a policy which would provide for that kind of flexibility? I also wonder if we could have the Minister, since he referred to a chart, table the statistical breakdown of farm improvement loans and show how much money is being utilized, so it could be made available to all Members?


John Wise: Mr. Chairman, I have tried to be as helpful as possible. If I had expected questions of this kind, then it would have been possible to have an official seated in front of me so I could receive this information. There is no question about the
circulation of the information. There is nothing confidential about that at all. It should be public knowledge and I have no reservation about making the information available to Members of the House.
I have to point out to the Hon. Member that the figure he cites might well be a combination of what the FCC could borrow from the private sector plus what it might be able to receive from the Consolidated Revenue Fund. The fact is that those totals become rather unimportant because the FCC required only $94 million from the Consolidated Revenue Fund last year. Therefore, when you are preparing the Estimates to be tabled, that is the basis upon which you do so; the amount required the previous year.
I have said publicly many times that if we find the demand is such that we require additional funds and we cannot get them in the private sector, then it is possible for me as Minister of Agriculture to go back to the Consolidated Revenue Fund to receive additional money. However, we have to recognize that it is highly unlikely that there will be a great demand throughout 1985 because of a number of factors, with the result that there will be many fewer transactions taking place.
The Hon. Member also indicated that loans last year totalled $1.5 million, but of course that is not correct. It was $159 million. I think the Hon. Member just made a slip of the tongue and did not do it intentionally at all. He also indicated that we might well be restricted because we are limited to $1.5 billion in total. The information I have is that would not be the case. To date roughly $900 million has been extended since 1980. Obviously I would not expect that we would be restricted by the $1.5 billion ceiling. We do have some latitude there.


Victor Fredrich (Vic) Althouse: Mr. Chairman, the Minister pointed out that something in the order of $159 million was lent under this program last year. That brought the total outstanding loans guaranteed under the Act into the neighbourhood of $900 million while there is $1.55 billion of loan guarantees available under the Act. Could he tell us how the system is monitored? People have gone to banks and been told that there is no more money available through that program. Is each large chartered bank allocated a maximum amount that the Government will guarantee for a certain time, or is the pool of money kept wide open so that any time a credit union, bank, or trust company wants to lend money under this program it can just do so? Surely there must be some form of communication, particularly when they are close to using up the guaranteed funds. What sort of communication system is in effect, or is it just parcelled out to various banks, some of which in fact reach their limit?


John Wise: Mr. Chairman, I do not think it is parcelled out in any way, shape, or form. It is my understanding that in the past this Act was administered by the Department of Finance. When the previous Government asked for an extension, the administrative role was transferred from the Department of Finance to the Department of Agriculture. I believe that transfer took place three years ago. This program is now
June 25, 1985

administered by officials of my Department. We are presently considering whether the Department of Agriculture is the appropriate body to carry out that administration or whether it should be transferred to the Farm Credit Corporation.
I have received complaints that there seems to be reluctance on the part of certain bank managers to participate in this program. Elowever, some banks participate readily in the program. There is a bank in my constituency which utilizes that legislation very effectively. In fact, we would probably all be better off if we had the level of participation in this legislation which is exercised by certain banks.
With regard to administration, there are many forms which must be completed. There is a reluctance on the part of the client as well as the bank. After an application has been filled in, the banker would most likely have to seek approval from his head office in order to determine whether the federal Government was in a position to utilize the lending provisions of the Act.
That is a round-about answer, Mr. Chairman, and my terminology may not be exact, but I think you will find that that is the procedure which is followed which enables us to determine whether we have gone beyond the cap.


Victor Fredrich (Vic) Althouse: Mr. Chairman, would it be possible to make the seven tables referred to part of the minutes of this Committee, or to make them available to Members who would like to have them in order that they will be part of the public record?
My last question is a very simple one. The Minister mentioned a problem that appears to have been created with paperwork. Since 1980 the Minister of Agriculture has been in charge of this program. Is it his intention to simplify those procedures, or is there a policy decision to phase out the program entirely? Farmers and lenders would like an indication of the Government's intention in this regard.


John Wise: Mr. Chairman, no final decision has been made with reference to the future of this program. We think this program can be improved and we want to study it for that purpose. We will be considering the possibility of making it less burdensome. I apologize for not making paper flow from my desk to that of the Elon. Member. My problem was that if this left my desk, I would not have anything in front of me from which to respond. I do not use this as a lever to attempt to get this Bill through the House, but if Hon. Members give me an indication that they are reaching the conclusion of the detailed technical questions, I will be happy to give up my only copy and have it copied and distributed.


Maurice Brydon Foster: Mr. Chairman, the Ministers answers have been helpful. He has indicated that only $900 million of the total $1.5 billion of the borrowing authority is presently being utilized by the banks. Why are the rest of those funds not being utilized by the banks? Banks are writing off hundreds of thousands of dollars in bad farm loans. If they were taking out loans of up to $100,000, which is the limit of this program, they would be guaranteed by the federal Government. Would
Farm Improvement Loans Act
the Government consider requiring banks, on a national basis, to provide a certain percentage of their loan funds under the Farm Improvements Loans Act?
With the financial situations of farmers being not as liquid as they should be, this would provide a source of reasonably priced credit. Would the Minister clarify why the full limit is not being utilized and whether the Government would give consideration to requiring banks to use a much higher percentage of the loan guarantees which are available under this program?


John Wise: Mr. Chairman, I think the Hon. Member knows that according to this legislation we could not direct or unilaterally decree that the banking institutions must fully utilize the piece of legislation. I suppose that if it was the opinion of the government to take such action, that question could be put more appropriately pursuant to other legislation. However, it would appear to me that the Hon. Member is suggesting that if we took this tack, it would be a significant step in dealing with our farm finance problems. The fact is that that is not the case. I did not come to the House saying that this would be a great piece of legislation. I am as critical of this piece of legislation as I sit here as I was when I sat over there, for the very same reason.
However, when we are dealing with the farm finance issue, those old, traditional interest rate subsidies which the previous Government started but did not continue for 1984 for some reason, provide very little help and satisfaction in dealing with the crux of the matter. It is further proof that it is not only dollars that will solve our problems. It is improvements in commodity prices where the dollars really count in providing some real assistance to those farmers who face real difficulty.
The solutions will probably be found through some of the approaches and recommendations that are laid out in the Bruce-Grey pilot project. It will be through some of the recommendations that we will receive from our farm credit provincial managers across the country. It will be through some of the recommendations that we will receive from our farm credit appeal chairpeople who have been in the field. We will be getting some of those recommendations as well. It will not be achieved by those of us sitting here, throwing stones and criticizing the banking institutions in this country. That does nothing whatsoever, as we have already experienced. It serves no useful purpose at all.
It is obvious that banking institutions have changed their attitude, as they should. I believe we can take some satisfaction in that and compliment them somewhat. They are not the same group that they used to be. They are taking some positive steps in the farm finance area today.
As far as the Farm Credit Corporation is concerned, the Hon. Member indicated that there appeared to be a situation in the Bruce-Grey pilot project where the Farm Credit Corporation appeared not to be as flexible as he would like to see it. However, the Hon. Member must respect the fact that this was a pilot project. We were sitting at a table for the first time

June 25, 1985
Farm Improvement Loans Act
with clients and a group of creditors. We were in an exercise in which we had to be somewhat cautious.
In the final analysis, we had to be careful when we decided on a case in the Bruce-Grey pilot project because it had to become a national policy which applied across the country. Therefore, it led to an observation that indeed we could have been more flexible in that exercise. While that is a fair observation, those who make that observation must realize that there was a reason. We had difficulties because whatever we agreed to in the pilot project, we would have to make a national program.
Of course, there are costing factors which had to be taken into consideration. I have indicated that one useful mechanism will be appeal boards. The question we are faced with now is that there appears to be an opinion that the most effective appeal boards might not be at the federal level but might well be at the provincial level. We want to provide the best appeal process possible and we are considering very seriously the possibility of set aside, of first offers to purchase and ability to pay and ways of working out many schemes with our clients to keep them on the land if they want to stay there. Those are the directions which we must consider rather than simply dollars and a little bit of unused capital that we have here.
The other matter also deals with the Bankruptcy Bill. I have had conversations with my colleague, the Minister of Consumer and Corporate Affairs. A very high priority in his legislative program is to amend the Bankruptcy Bill dealing with the farm finance issue. That is the appropriate place for it. It is not with extending the power of write downs with appeal boards, whether they be farm credit appeal boards, federal appeal boards or provincial appeal boards. The real problems develop when you extend the authority to write down and to write off. The proper legislative route to take is the one we are planning in the Bankruptcy Bill.


Neil Young: Mr. Chairman, I have a brief question. As you no doubt appreciate, there are not many farmers in the east end of Toronto, but I did have an opportunity recently to spend some time in Bruce-Grey county with farmers. I discovered very quickly that the resentment against the banking community largely stems from the difficulty many farmers have in making applications for funds. One reason is the distance.
Another major problem in the community at that time was that the local branch of the bank did not appoint a manager so that there was no one to whom a farmer could make an application for that Government funding. If he wanted to make such an application, perhaps he would be required to travel an extensive distance to do so.
Has the Minister's Department given any consideration to farmers in that situation and attempted to find an alternative when there may not be a branch manager at the bank or even a credit union so that farmers could avail themselves of that fund? As I say, I am not an expert but these farmers were certainly resentful toward the banking community.


John Wise: Mr. Chairman, I appreciate the intervention by the Hon. Member for Beaches. He indicated his apologies, to some extent, that he did not have farmers in his riding. He need not apologize because he has many consumers in his riding. I want to remind the Hon. Member to tell his constituents and his consumers that if they eat, they are involved in agriculture. The Hon. Member for Beaches is very much involved in agriculture.
He points to another very legitimate problem. I thank him for focusing on something other than the federal Government or the Farm Credit Corporation. It seems that everyone wants to say it is the Government's fault and that it must come up with the solutions and the money. The fact is that we do not hold all the solutions and have all the dollars.
Some improvements can be made at the provincial level, for example. I made some observations about the appeal boards. It may well be that the more appropriate place for an appeal board would be at the provincial level. The provincial governments, through their grassroots people, have done a great job throughout the country in almost every province. They have been correctly concentrating to a great extent on increasing production and other worth-while special projects over the years. These have paid great dividends.
However, perhaps we have been lax in not recognizing that perhaps we were achieving our goals ahead of time as far as production is concerned. We have been misled, I suppose, by the so-called experts telling the world that in the 1970s we were going to have great days during the 1980s, that input costs would remain low, that we would have shortages and commodity prices at an all-time high. Maybe with those messages coming from the so-called experts, that is why provincial ministries across the nation kept going on production, production and production.
All of those observations made during the early 1970s with reference to the 1980s and beyond turned out to be completely wrong. Input costs have risen and commodity prices have fallen. Shortages are not our problem; surpluses are. They have to direct more attention to the financial problems of farmers, perhaps with business management courses and time spent there. I know that we are trying to do it, at the federal level through the Farm Credit Corporation.
The Hon. Member's observation were directed toward the banking community. I could tell some interesting stories about the observations I have made of some of the shortcomings, the shortfalls and gaps in the judicial banking community as well.
I think they have to assume a greater responsibility in providing more people at the local level with agri-food business experience. That will be helpful because the farmer over a long period of time always has looked to his banker as the financial expert for his business. Unfortunately in the past the bank manager might not have had sufficient expertise and experience in the agricultural industry. The Hon. Member makes an observation with which I agree. I added to it a little.
June 25, 1985


Philip Derek Lewis: Mr. Chairman, might I pose a short question to the Minister following up on my colleague from Beaches? I know when I lived at the end of the Queen Street carline it was an awful problem getting farm loans under this Act. I think it was about the fourth concession of Beaches. Could the Minister tell us whether it has improved any?


John Wise: Mr. Chairman, we have no problems on that concession at all, I can assure the Hon. Member of that.
Clause 1 agreed to.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The House resumed from Wednesday, June 19, 1985 consideration in committee of Bill C-51, an Act to provide Borrowing Authority-Miss MacDonald (for the Minister of State (Finance))-Mr. Danis in the chair.
John Barry Turner: Mr. Chairman, I owe a very deep debt of gratitude to the hon. Government House Leader, the distinguished Member for Saskatoon West for allowing me to speak on behalf of the Government. I am honoured and pleased on behalf of all the constituents of the great riding of Ottawa-Carleton to speak to Bill C-51 this evening. I would like to set this $18.2 billion borrowing requirement in its proper national economic context.
A reporter asked me the other day why I ran for Parliament. I responded by saying, because I love my country and I was concerned enough about its future to want to do something about it. I have lived and worked in the international community and have, therefore, seen Canada through the eyes of foreigners. The land is strong, but the direction in which it was heading was weak. I could see that we were going the wrong way. Therefore, I ran for Parliament and here I am. I am pleased and proud to be a part of the new crew helping to guide the ship of state on its new course through the economic, political and fiscal minefields placed by previous successive Liberal administrations.
We have had a few bumps and bruises in altering our course, Mr. Chairman, but that is part of the maturing process for a new Government. The course is now set. Economic renewal is now well under way, lead by our determination to reduce the deficit and to create an atmosphere for renewed confidence, investment and job creation by Canadian businesses.
I said during the election last year that I cannot live beyond my means, that businesses cannot that no Canadian can. Why then should our Government? 1 underlined that theme time and time again. Now we are delivering by getting our own fiscal house in order.
Borrowing Authority Act
I did a survey in my riding last December. I asked a question to which I had 2,244 responses. The question was: "Do you feel that we should take further action to reduce the deficit?" Seventy-three per cent asnwered yes, and so we are. Many people are saying that we did not go far enough soon enough.
Is it not nice to know that we are now rewarding success, instead of subsidizing effort, through the incentive of the elimination of capital gains tax to a lifetime total of $500,000? If one person with a good idea can create some jobs then we will reward that person. That is called incentive, a word my colleagues in the socialist axis do not understand. The Liberals spell prosperity "s-p-e-n-d", we spell it "i-n-c-e-n-t-i-v-e." Imagine, we are rewarding the entrepreneurial spirit, the genius of job creation in the world.
The capital gains exemption will reach all communities, not justs those the Government targets. All communities in all ridings and all Members should be applauding this giant step for Canadians.
To maintain our momentum, the Government needs to borrow some funds as a normal course of action to finance its programs. Bill C-51 is a formal request of Parliament to do that. But I want to let Canadians know that it is not money being wasted. This request for borrowing authority dovetails beautifully into the ongoing Budget debate for the following reasons. After the November 8 economic statement last fall, the opposition leaders cried that we would lose 50,000 to
100.000	jobs as a result. Well, "Holy Moses" and as our son Blair who is just over two years says "Look at that". I would like to give some statistics.
Employment increased by 159,000 in April and May, the largest two-month gain in decades. Since September, 271,000 new jobs have been created, nearly three times the job creation during the same period last year. Since January of this year,
75.000	new jobs have been created for youth. Since September, 112,000 new jobs have been created for adult women and
111.000	new jobs for adult men.
The unemployment rate declined to 10.5 per cent in May, a drop of 1.1 percentage points from September. During the same period last year the unemployment rate rose 0.4 per cent. The 10.5 per cent unemployment rate is the lowest since May, 1982.
Since September, the youth unemployment rate has declined 2.1 per cent to 16.2 per cent, which at this point in time is still unacceptably high; the unemployment rate of adult women has declined 0.6 per cent to 9.5 per cent; and the unemployment rate of adult men has declined 1.1 per cent to 8.2 per cent, the lowest rate since June, 1982.
After the May 23 Budget the Right Hon. Leader of the Opposition questioned the impeccable integrity of the Minister of Finance by wondering why the Minister paid as much attention to Miami Beach as he did to Thunder Bay. The answer was quick and clear-Canadians did not have the confidence to invest their money in their own country. We

June 25, 1985
Borrowing Authority Act
have changed that, and to coin an old phrase: "You ain't seen nothing yet". The net inflow of capital to Canada last fiscal year was over $2 billion, and that has not happened for a long time. That is called confidence. The more Ottawa spent, the more unemployment went up. Short-term artificial job creation has not worked, so we are going another route. We are breaking from the past. We are putting the ball in the people's court, and they are winning.
My colleague, the Hon. Minister of State for Finance, said in a speech in Toronto on May 27 that the Budget would "promote competitiveness, vitality and common sense", and that it would restore "initiative, self-reliance and personal choice". She went on to say:
One of the things we're trying to do is get out of the routine of making people's investment decisions for them.
The challenge is now on the table. Government will not do it any more. If more government is the answer, then it must have been a stupid question. Eighty per cent of deficit reduction is through imported management, program reduction and enhanced cost recovery. Twenty per cent of reduction is through increased revenue; only 20 per cent, so what is all the fuss about?
It is correct that Bill C-51 is asking for some borrowing authority, but this is a normal course of government business. Let us look at the Western Accord. "Holy Moses", as my son would say. The 1981 Budget and the hideous National Energy Program destroyed this vital Canadian industry and the Liberal Government in the process. Recently I received a letter from Miss Cooley who is with the HUDAC organization in Alberta, in which she indicated that in general the economy in the west was healthier, that the oil patch was all abustle, and that north of Edmonton accommodation was in short supply.
That is good news. An article in the June 10 edition of The Edmonton Journal read as follows:
Statistics Canada reports the seasonally-adjusted unemployment rate in Alberta dropped last month to 10.6 per cent. This time last year it was 12 per cent-
It's the type of economic news politicians, investors and the unemployed have been waiting a long time to hear.
That is also good news. We did not put balls on a Christmas tree for everyone, but what we have and are doing will solidify the future of that tree and allow more Canadians to hang whatever they want on it.
The Canadian Federation of Independent Business called the Budget a block-buster, a dose of salts for our constipated economy, a requirement for a national effort to reduce the deficit so that in future years the Government would not have to borrow as much. Let us keep the Budget in its global perspective. If we borrow less, there will be more for everyone else. In economic jargon that is less crowding out of funds. This is the first time in many years that the deficit has been reduced. As an editorial which appeared in The Globe and Mail on May 27 indicated, "the Budget deserves a chance to work". We will remove $78 billion from the national debt by 1990. How can anyone question that? This fiscal year the average cost to a Canadian family will be from $1 to $1.25 per
day. That is not too much to ask in order to sustain a strong, stable recovery.
I should like to commend the Hon. Member for Thunder Bay-Atikokan for his strong efforts to help save and fully restore the CBC children's program, The Friendly Giant. He mentioned in a memo to all Members of Parliament on May 22, the day before the federal Budget was brought down, that across the country Canadians were demanding more control of their economic affairs. He is right. We have just given it to them. I invite him to help us sell the new prosperity which we are all starting to enjoy.
I used to live in the riding of the Hon. Member for Hamilton Mountain when I worked as a summer student on shift work for Stelco. He indicated in debate in the House on May 28 that even if we created more jobs, produced more goods and services, where would we sell them? He is right. We all have to go out and sell what Canada has to offer, all of us in all Parties and from all provinces, and the sooner the better. If we create the right environment, Canadians will take the risks of putting some of their own money on the line to build a business. We all have a responsibility to help them do what. We have to be less critical and more positive and stop using fear tactics and vicious, thoughtless comments in the House of Commons to scare Canadians.
I should like to review a few more key economic indicators by comparing Canada with the United States. Since September last year Canada's unemployment rate has declined 1.1 per cent, while the United States unemployment rate has declined only 0.1 per cent. Since September, employment in the U.S. has increased by 1.5 per cent, while it has gone up 2.5 per cent in Canada. Holy, Moses, look at that.
We have done something which has not happened in a long time. We have brought peace to the provinces. We have strengthened our ties with the United States, which is a true sign of friendship. It sure beats kicking one's allies in the teeth. We have made energy deals with the west and with the Atlantic provinces. We have strengthened our commitment to NORAD and NATO. We have introduced the lowest rate of public spending in 17 years. We have created 271,000 jobs since September. Investment Canada has replaced that ugly FIRA feeling. Confidence and investment intentions are well up. Interest rates are down. Unemployment is down. Car sales are up. Housing starts are up. These are key economic indicators. Housing starts have increased for four consecutive months and, at 150,000 units in April, on an annual basis, were 23 per cent above the December 1984 level. There is a pent-up demand for a housing boom in the country. Retail sales jumped 3.4 per cent in March, relative to February, the seventh consecutive monthly increase. These are good signs.
When we took over government, we inherited an economically troubled country. It is now beginning to work. Tory times are employment times. Tory times are now growth times. Tory times are low interest rate times. The list goes on and on. We should not be held back. We are on a roll. What we need is more encouragement, more optimism, more positive promotion of the successes of the Government to date, more talk of the
June 25, 1985

gains Canada has made since September 1984; not doom and gloom scare tactics by the Opposition. The people of Ottawa-Carleton and the people of Canada know that we are on a roll. Business leaders of Canada, small, medium and large, feel a renewed sense of optimism. The only way to build a solid house, the only way to build a solid business, the only way to build a solid country is through a renewed sense of confidence in our ability and in our sense of direction.
I should like to quote the Chairman and Chief Executive Officer of Sun Life Assurance Company of Canada. In a speech in Toronto on May 7, he said:
Canadians should support the federal Government's determination to tackle the problem of the deficit by reducing our demands and by encouraging government to show the same sort of fiscal responsibility and prudence that we tend to show in our private lives. If we do not, we are being unfair to today's youth and are mortgaging the future of generations to come.
Mr. Galt went on to say in his same address, and I quote again:
We must accept that this means that tough decisions will have to be taken. But if we and our governments are sincere in wanting to be fair to our young people, we can, in my view, demonstrate it no more clearly than by making a determined attack on the growing future financial burden that we have been placing on their shoulders.
Mr. Galt is a man of vision, a man who is looking to the future, a man who is preparing to bite the bullet and help lower our national debt and annual deficits.
When I think of 1984 I am reminded of the successes of Canadian Olympians in Los Angeles. They won gold and silver and bronze because they were prepared. They were determined; they wanted to succeed for themselves and for their country. This new Government is also prepared. It is also determined. It will also continue to succeed so that all our people from all regions will have a healthier, happier, more stable economic, social and political future. That is what you build on, strength and successes, not weaknesses and words.
Bill C-51 is an essential component for continued Conservative creativity. The facts to date that I gave this House, Mr. Chairman, speak for themselves. The future is waiting to speak for us all, so let us get on with it.


George Baker: Mr. Chairman, just a few words to add to the subject under discussion. I think it should be kept in mind that the debate over the cut-backs in the indexing of the old age pensions and the savings projected by the Government of Canada as far as family allowances are concerned are only a part of an over-all program of cuts that the people do not want and that the people do not deserve from this new Government.
I would like to highlight a couple of these concerns this evening. We have talked very extensively about the discontinuation of the COSP program, the program that enabled people to get off oil and on to other cheaper forms of home heating, and the discontinuation of the CHIP program. We watched as the Minister of Labour in charge of housing announced, not to the House of Commons or to the people of Canada, but certainly to the provincial Governments, the great number of closures of CMHC offices in Canada last week.
Borrowing Authority Act
Surely, that particular cut highlights an obvious policy on the part of the federal Government to get out of the area of social housing to some degree, because those 31 CMHC offices affected in Canada were the offices that consulted with local non-profit organizations, that consulted with the provincial Governments, that ran the home repair program in a great many areas of Canada, and now we see 16 of those offices closed down right across this country. Unfortunately eight of them are in Atlantic Canada, with some five or six in the Province of Ontario. Surely that means that CMHC as a housing authority that is supposed to look at the social needs of-


The Assistant Deputy Chairman:: Point of order. The Hon. Member for Ottawa-Carleton.


John Barry Turner: Mr. Chairman, am I correct in assuming that we are in the period of comments and questions now, and not more speeches?


Steve Eugene Paproski: No, we are not in the period of questions or comments. We are in Committee of the Whole debating the authority Bill, and we are making 20-minute speeches, or asking questions of the Parliamentary Secretary in this very specific case.


George Baker: Mr. Chairman, I suppose the hon. gentleman could treat this as a response, as a stretched-out comment on his entire address, because it certainly negates a lot of things that he pointed out in his address.
As I was saying, the closure of the CMHC offices across Canada certainly must signify a change of government policy. What we saw from the Department involved was a change of policy in the first place to cut back on existing programs.
One of the most serious cut-backs that the Minister announced was, as I have mentioned in this House before, the 25 per cent reduction in the home repair program. The CMHC, the federal housing authority, stepped into areas where the local inspectors, the provincial housing authority, the non-profit organizations or the municipalities could no longer afford to operate or deliver the program in that area because of the federal Government's cut-back. CMHC officials then stepped in and did the inspection themselves in order to maintain the program in that particular area.
The hon. gentleman from Nova Scotia knows that down in New Glasgow and down in Sydney those officials would obviously have to replace the municipal authority and the provincial housing authority to operate the program now, because of the reduction. Now what we have is a cut-back in CMHC offices, four of them in the Province of Newfoundland, one on the south coast, two in the central portion of the island and one up in Labrador-the only offices in those areas completely cut, wiped out, closed, doors locked now as of last week's announcement by the federal Minister of Housing.
This goes hand in glove with the policy of the Government to restrict the entry requirement, or the qualification that one has to meet in order to get federal assistance to repair a home, to such a degree that only those on fixed incomes can qualify.
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June 25, 1985
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A lot of these people we are talking about today are senior citizens right across this country who are on a long list to get their homes repaired. Where do they now find themselves? They find themselves further down the list, or off the list totally because the program is being discontinued in their area.
Again, it was a continuation of the government policy that was announced last November when the Government of Canada said, those who have worked all their lives are now eligible for separation pay-any moneys at all from their employer-will have it treated as income, that is earnings. That is now going to be stretched out over the entire year, and that knocks people off unemployment insurance that they would normally have drawn for a year. That $12,500 is going to be taken away. The Government of Canada came out in its November statement and said that small pensions are now also treated as earnings, and that knocks people off unemployment insurance for all time in the future, although they have to pay into the program.
It was a part, I believe, of I would not say a concerted effort, but certainly-


David Charles Dingwall: A Conservative effort.


George Baker: A Conservative effort, the hon. gentleman says, to try to save money on the backs of people who cannot afford today to deal with the ever-increasing cost of living. A lot of that cost of living, Mr. Chairman-


An Hon. Member:: Liberal mismanagement.


George Baker: Liberal mismanagement, the honourable gentleman says. It is a funny thing that everything that happens that is good he says is the result of a Conservative Government, but everything that happens that is bad he says is because of the dirty old Liberals, years ago. We will be listening to that for the next four years, at least, because this Government will try to stay in power for that long. It will go right to the end of its mandate because it will see that the polls will begin to change and opinion will roll right around. As the hon. gentleman said a few moments ago, it is on a roll, right downhill.
What about some of the incidental measures undertaken by the Government of Canada? I referred a moment ago to the home repair program. As well, earnings are going to be taken into account and if someone receives money after working all of his or her life, he or she will be knocked off unemployment insurance that was given as a gift by the former Government. Now pensions are going to be taken into account as earnings.
Then there are the incidental items. For instance, the Minister of Fisheries who was in the Chamber this evening put through a Bill called the Fisheries Improvement Loans Act Bill. It was not too long ago that the Minister of Fisheries unilaterally cancelled the salmon licence program in Newfoundland. Everyone with a restricted salmon licence who was classified as a part-time fisherman would lose his or her licence. That was the policy of the Government of Canada.


An Hon. Member:: Hear, hear!


George Baker: I hear an hon. gentleman across the way saying "Hear, hear". Yes, the Newfoundland Government said "Hear, hear". It had been advocating that measure for years. However, just because the Newfoundland Government advocates something for years does not make it right. The Newfoundland Government in this case was wrong. Why was it wrong? The fact of the matter is that there will be a lot of senior citizens who will not even sign the sheet of paper that will get them their money. Why will they not sign the sheet of paper that will get them their money? The answer is obvious. It is because the $750 that they will receive is not only taxable but is taken into account the following year on the income supplement to old age pensions.
When programs like that are announced, they sound great. However, a person who is filling out that form thinks about all kinds of things. He asks how this will affect his old age pension and the Guaranteed Income Supplement of his wife. He checks with the office and finds that his wife will lose $20 per month and he will lose $20 per month. Apart from that, he finds that the payment is taxable. The gentleman asks why he should apply for it. That was the funny part of the whole thing. One had to apply to give up one's licence that the Minister of Fisheries said was going to be taken away.
The Government of Canada unilaterally removed the licences which in most cases were held by senior citizens because they were classified as part-time fishermen. Yet they had to sign for that removal. I could never figure out why they had to sign for it. In committee, someone responded by saying that in order to have the payment made to the individual the individual's signature had to be on a sheet of paper. As I pointed out, the majority of these people were senior citizens and the majority of them would not put their signatures on that sheet of paper. The reason is that the money would not only be taxable but would be deducted next year from their incomes under the Old Age Security Program.
I will conclude because I am sure my hon. friend from Nova Scotia wishes to say a few words. I think it should be kept in mind by everyone who talks about decreasing incomes to people who are on fixed incomes that, depending upon in which part of the country people live, they will be hit in varying degrees. There are parts of this country in which there are senior citizens drawing pensions who have to pay municipal taxes in varying amounts. In some cases, senior citizens are paying for services which they do not receive. In some cases, they pay school taxes, and in the Province of Newfoundland there is the special tax. It is not unusual for me to receive letters from senior citizens who ask why they have to pay, and why they have been taken to court by the municipality. They ask why they now owe $200 in municipal taxes and why they have been taken to court by the school tax authorities. They want to know why they owe $150 to the school tax authorities and what they are going to do.
Now the Government of Canada is going to restrict the indexing of seniors' pensions and it is going to do all kinds of other things through the Budget that will increase their cost of living. The Government is going to increase fuel taxes and
June 25, 1985

make people pay for all kinds of things for which they did not have to pay before. They will have to pay to call the weather office. They will have to pay to do all kinds of things. As I said, the Hon. Member who will be a Minister in the next Government of Canada, I hope, wants to say a few words on this debate.


David Charles Dingwall: Mr. Chairman, I want to thank my colleague from Newfoundland for such a warm introduction. I would like to direct some of my comments on the borrowing authority to where the money is going to be spent. It seems to me to be absolutely absurd that when in excess of 1.4 million Canadians are out of work, and when the majority of senior citizens live below the poverty line, we are cutting back on their benefits while finding lots and lots of money to help the multinational oil companies. In fact, the Government House Leader himself has been part and parcel of the bailout of the multinational oil companies, a bailout to the tune of in excess of $1.3 billion.
What about the absurd program providing money under the capital gains provisions of the Income Tax Act?


Ramon John Hnatyshyn: What have you got against farmers?


David Charles Dingwall: I have nothing against farmers but I have a lot to say about promoting the livelihood of our senior citizens. If we cannot find the money for the senior citizens, why do we not take it out of the capital gains provisions? There will be $300 million this year, $600 million next year and $1.2 billion in 1990.
The Government has gone a step farther. The cut-backs with regard to the Canada Mortgage and Housing Corporation affect the provinces across the country in different ways. The average cut with regard to RRAP funding is approximately 25 per cent. In some provinces, the poorer provinces, the cuts are as high as 41 per cent. In the Province of Nova Scotia, Canada Mortgage and Housing offices in Yarmouth, New Glasgow and Sydney are losing staff because there are no programs available to assist those Canadians who in the past availed themselves of those programs because of the benefits of home renovation.
What about the lack of money for small craft harbours? We have heard the Minister of Fisheries make statements before the Standing Committee on Fisheries and Forestry to the effect that much money is needed to maintain and improve the samll craft harbours in this country. Very little, if anything, Mr. Chairman, has happened with respect to small craft harbours. In fact, I charge that the Minister of Fisheries and Oceans has abdicated his responsibility. I would not suggest he is negligent, but the Minister did travel across Canada suggesting to the Canadian people that more money was needed immediately and then found himself coming out of Cabinet emptyhanded. I suggest he ought to do the honourable thing, Mr. Chairman; either get the money which is needed to assist under the Small Craft Harbours Act or resign.
Borrowing Authority Act
This great Government which was elected on its promise of sensitivity towards the different regions of this country has done nothing although it has talked a pretty good game, Mr. Chairman. And we don't need any lessons from those Members of Parliament who happen to represent ridings in the City of Toronto or the outlying regions, because this Minister of Regional Industrial Expansion is an absolute jellyfish. He has done nothing for the poor regions of this country. In fact, Mr. Chairman, it was the Premier of Prince Edward Island and the Premier of New Brunswick who said it best when they said about the Tory Government in Ottawa that it is not providing the leadership, or the financial resources in order for the poor regions of this country to survive in difficult economic times. It is doing the exact opposite, I suggest. It is cutting back in those poor regions of the country to the detriment of those Canadians who live in those areas.
Yes, Mr. Chairman, I am aware, as you are, of the provisions of the new Canadian Constitution. It talks about equal opportunity. Where is the equal opportunity when the Government cuts back on regional development and at the same time gives to the multinational oil companies which had profits in excess of $400 million last fiscal year? They are not the ones who need additional assistance. It is the poor regions of this country which need the additional assistance. This Government has its priorities wrong. As Disraeli once said of the Conservative Party, "It is an organized hypocrisy". What better example of hypocrisy Mr. Chairman? The hypocrisy is best evidenced when it comes to our own senior citizens.


Some Hon. Members:: Oh, oh!


David Charles Dingwall: It is unbelievable that the sheep in the Province of Saskatchewan would be here to heckle the senior citizens of this country. I find it appalling. This Government said in 1984 that it was going to provide full indexation to our senior citizens, only to break that promise in the Budget of the Minister of Finance on May 23, 1985. The Government broke its commitment to the senior citizens of Canada on that day.
I asked it before, Mr. Chairman, and I ask it again; where is the pride of the Minister of Finance and the Prime Minister? Are they proud to say to those Canadians, in excess of 1.5 million, who live below the poverty line that the Government is going to take away 3 per cent more? What it ought to have said to the multinational oil companies is that is wants that money back in order to provide a meaningful contribution towards our senior citizens. But, no, Mr. Chairman, the hypocrisy is evident and clear for everyone to see.
I thought the book-ends in this chamber, Mr. Chairman, would have availed themselves of the opportunity to stand in their places and speak with eloquence, conviction and honour for the senior citizens of this country. I would not expect them to speak against their Government. I would never suggest that. But we are treated to the comments of the Minister of Finance who has repeatedly lectured the veterans who fought in two world wars. He has lectured the senior citizens of our country and told them that they have to submit to further cut-backs in
June 25, 1985

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their livelihood. I suggest to you, Mr. Chairman, that this Liberal Party will fight this measure tooth and nail. We want to see government Members being honourable. We want them to stand in their places and speak for the senior citizens of their country, and insist that this regressive meaure be changed so that full indexation will be restored to the senior citizens.
The Government has taken another step, Mr. Chairman, it has taxed our senior citizens even more. It is going to charge them more for their gasoline. It is going to prohibit them from travelling to visit their relatives and loved ones. It adds up, Mr. Chairman. If one studies the ideology of the Conservative party, one finds it is a Party which wishes to give preference to a select minority of elite in this country. That is very evident when one looks at its measures collectively.
In fact, Mr. Chairman, the economic policies and thrust of this Government can best be described as the "trickle down theory". The theory is that there is no room in this country for weak people, as evidenced by the slashing of the pensions of the senior citizens. The Government also believes there is no room in this country for weak businesses because there is nothing in this Budget to help small or weak businesses. There is nothing for the weak regions of this country. It was evidenced by the cut-backs of November of 1984, and now in the Budget of May 23, 1985, that this Government is operating under the trickle down theory, hoping to God that in Toronto, Montreal and Vancouver there will be sufficient economic growth so that somehow it will trickle down to the less fortunate regions of this country. I say to you, Mr. Chairman, and to government Members, that it will not work.
The Government of Canada, whether or not it disagrees with the ideology or policies of previous Governments, has to be an active player in order to assist weak individuals, weak businesses and weak regions in this country. And those Hon. Members of the Government who say nothing about those issues which so greatly affect Canadians are not living up to their oath to represent their constituents to the best of their abilities.
Of course, Mr. Chairman, I would be remiss in my remarks about the borrowing Bill if I did not mention something about Challenge '85. That program is well intentioned. I don't know how many students it employed in Prince Edward Island, but I know in other poor regions of this country, jobs and job opportunities are just not there. No one would argue with Challenge '85 if there were sufficient moneys put into the program. But I suggest there are regions of this country where there is not sufficient industry or an economic base, such as a university setting with research facilities, to go out and hire students who may be pursuing a career in those areas.
There are a great number of young people who, after their first, second or third year post-secondary studies are not overly certain about what they want to do in their adult life. A great number of young Canadians are not overly certain as to which vocation they will choose to earn their living. But this Government has come in with a very restricted Challenge '85 type program and said to those people that if they are uncertain about what they want to do, sorry, we cannot provide you with meaningful summer employment. The unfortunate part is that many students will not have the opportunity to continue their education because they will not have sufficient funds. Yes, Members can argue that that is what the student loan program is available for. But I suggest it is getting rougher and tougher for students to get loans and, when they get them, to pay them back after four or five years in university.
I hope the Government will change its priorities and put money back into the RRAP program, the Small Craft Harbours Division of the Department of Fisheries and Oceans, and the Department of Regional Industrial Expansion; and that it look again at the Challenge '85 program. I know there is a short period of summer remaining, but the Government could upgrade the amount of money and reduce the number of restrictions.
The Government could, as well, change its priorities in order to give our senior citizens full indexation. It is not fair that in 1985/the senior citizens of this country have to bear the brunt of a deficit reduction program while the multinational companies benefit and/a capital gains provision is implemented. It is not fair, and I urge all Members opposite to change that regressive policy affecting our senior citizens. As I said before, this could be used as a partisan argument on our part, but the Government has nothing to fear from changing this legislation as it will be righting a wrong. I say that the Government could take great political pride in restoring full indexation to our senior citizens.


Claude Lanthier: Mr. Chairman, quite a few points were raised by the Hon. Member for Cape Breton-Richmond East (Mr. Dingwall). However, I would like to consider a few that have been mentioned time and time again. I have noticed that both in the House and outside, there has been a tendency to misinterpret certain points, and I would like to clarify one particular point in connection with the capital gains exemption. Increasingly, people are referred to this exemption as a giveaway to Canadians. The Minister is not giving away anything, but that is what has been claimed a number of times.
1 may add that it is not an expenditure either, certainly not. [English]
It is not an expenditure or an expense.

I believe that the capital gains exemption is truly perceived by the public as an incentive to investment which is ultimately aimed at creating jobs. Of course, people may not understand how this incentive to investment is going to create jobs. It may be perceived as a foregone source of revenues badly needed by the present Government to mop up the deficit it inherited, that is to say, the cumulative deficit inherited from the previous Government.
June 25, 1985

As Hon. Members are aware, the Budget contains a proposal for a lifetime capital gains exemption of half a million dollars. This is an important initiative that is aimed at encouraging risk-taking and investment. It is a clear signal and a direct incentive to Canadians to start buying shares. Especially for small-and medium-sized businesses, realizing capital gains will provide the entrepreneurial drive that creates growth and employment which are the basis for our economic security. This measure will clearly encourage equity investment. Subsequent increases in returns on investments will encourage risktaking. Furthermore, since capital available for acquiring shares in companies will increase as a result of this measure, the balance sheet and financial health of our corporations will improve, and thus have a beneficial effect on the financial restructuring in progress since the recession. Companies will be able to develop and expand as a result of equity investment. Consolidation of their financial positions will be accelerated, and companies will be in a better position to engage in productive investment. This investment will maintain and create employment and will also help to strengthen our ability to compete on highly competitive international markets. I may also add that the full exemption will be available immediately for capital gains realized on the sale of farm property, which will increase assistance to this vital sector of the economy.


An Hon. Member:: Who wrote that?


Claude Lanthier: I will answer that interruption as soon as I have the attention of Hon. Members.
In brief, the capital gains exemption is a clear signal and an incentive to investment. The exemption will apply to various types of property, with few restrictions. It is an incentive that will let Canadians decide where and when they want to invest and create wealth and eventually jobs, without merely relying on the Government, as was the case before.
I am now ready to answer the question. This speech was drafted by your humble servant during the weekend. I am glad of this opportunity to speak my piece, since I did my homework on the weekend, and I can give the Opposition the assurance that if they have any other questions, I will be glad to answer them, especially if they are as straightforward as this one.
To get back to the capital gains exemption-something the Opposition seem to have trouble seeing as an investment-I would refer Opposition Members to an excellent brochure about the 1985 Budget and small business by the Department of Regional Industrial Expansion, published for small businesses.


An Hon. Member:: This is Government propaganda!


Claude Lanthier: It explains how capital gains exemptions can generate increased investment and ultimately create jobs, which is one of the new Budget's three goals, and I will repeat them for the benefit of the Opposition: job creation, putting
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our finances in order and, of course, controlling our national debt. I would therefore urge Opposition Members who, whenever they touch on the subject of capital gains exemption, fail to understand that this is an investment to create jobs-
Mr. Chairman, I would also like to-


André Ouellet: Would the Parliamentary Secretary be willing to entertain a question?


Steve Eugene Paproski: The Parliamentary Secretary may finish his comments. Basically, we have 20-minute speeches, while the Parliamentary Secretary may of course answer and take a reasonable amount of time to do so. However, I am sure the Hon. Member for Papineau (Mr. Ouellet) will have a chance to address the Chair later on.


Claude Lanthier: I will be happy to answer the question instead of going on forever about the same subject. However, I decide to prepare a concise and comprehensive speech, and, if the House does not mind, to use the time for debate to reply. 1 would appreciate it if Hon. Members would give me a chance to speak, and if there are any questions, I certainly cannot listen to them and speak at the same time. So I would be happy to answer any questions the Hon. Member for Papineau may have.


André Ouellet: I have just a very brief question for the Parliamentary Secretary. If he wishes he might continue his remarks afterward.
I would like to ask him whether he realizes that not only real estate speculators but also stock market professionals as well as painting collectors who make it a business to buy and sell works of art are three groups of Canadians who are favoured under the measure just mentioned by the Hon. Member. Those people can benefit from that Budget proposal, make huge capital gains, yet do not create a single job in Canada.
Here is my question: If the Parliamentary Secretary is aware of that, why did the Minister of Finance (Mr. Wilson) not include in his Budget some limits or standards concerning the kind of job-creation investments that might be made in Canada for which investors would be eligible for tax-free capital gains, whereas the three examples I gave him are examples of people who can make huge profits thanks to the generosity of the Minister of Finance, but still without creating a single job in Canada?


Claude Lanthier: Indeed, Mr. Chairman, this is the kind of question I like very much because I know the answer, at least I think I do.
Mr. Chairman, this was meant to be a simple Budget, at the same time, if you have read it you noted that one of the major Budget consideration with respect to the business community

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Borrowing Authority Act is to simplify as much as possible our tax system and the filing of financial statements required by the Government. I would think that the additional standards set forth-
It is true that some people may indeed take advantage of the new income tax provisions, but I think the Minister took that into consideration in his Budget.
First, a good many of the so-called loopholes found in previous legislation have been eliminated. Because of them, taxpayers had to hire tax consultants or experts to file their tax return. This aspect has been eliminated.
Second, if we want to simplify tax returns, we must not put in additional requirements.
Third, earlier, there was reference to those who dealt in art work and made large capital gains, to those who make profits in real estates and to some third group that I do not recall. However, I remember the first two categories. 1 was surprised that wines were not mentioned in this group, because I am usually an obvious target as far as the alcoholic beverage business is concerned.
However, I can assure the House that, according to the figures given by our experts last week, 55 per cent of those who claim capital gains in their income tax return have yearly earnings under $40,000. This means that these exemptions will reach a great majority of Canadians. They will not necessarily be speculators.
As concerns the capital gains to be claimed by the owners of apartment houses or other types of buildings, as I was myself involved in the construction industry, I had phone calls from promoters, from people who make our economy work-this term is not meant to be abusive-and I can assure the Hon. Members that they welcomed this Budget because it will reactivate the economy, and the construction industry and trade will certainly follow. If I may, I shall explain once more the great good that this tax incentive will do by referring to this magnificent little brochure which states that the only way to create jobs is through the private sector as the Government has already proven its inability to create jobs, and I believe that this brochure clearly shows that the private sector is all in favour of this capital gains tax exemption.
Naturally, as we have said many times, this Budget might not eliminate every loophole, but you can be assured that the Minister of Finance is well aware of it as he is an accomplished economist, and he will do much more, first to eliminate these loopholes, and second, he will do this without adding a lot of complexity so that tax returns can only be understood by experts or speculators and people who can afford specialists.


Alfonso Gagliano: Mr. Chairman, I have a question for the Hon. Parliamentary Secretary to the Minister of Finance (Mr. Lanthier) concerning capital gains. I would first ask him if he is aware that in 1982, according to recorded statistics, 94 per cent of capital gains listed by Canadians involved real estate,
mainly land and highly speculative apartment buildings. This is my first question.
Secondly, you state that you are from the construction industry. Are you aware that as of July 1st, there will be a 6 per cent sales tax applying to prefab concrete, and since you come from the building industry, you know very well that the building industry is not like the food industry or the tobacco industry where you can implement a tax, announce it at 8 p.m. and say it will apply as of midnight on your inventory. Building contracts, and I hope you will tell this to the Minister of Finance because, apparently, he has no idea of the workings of the construction industry, in which contracts are signed well ahead of time and all those contracts that are already signed have fixed costs mainly because often in most cases, it is specified: federal tax included. Therefore, as of July 1st, those 6 per cent will not be rolled back to their customers. Consequently, a vast number of small and large contractors will find themselves in very great financial difficulty. There will be loss of jobs unless the Minister of Finance here, and hopefully soon, can announce a measure or state that the tax will apply to new contracts as of May 23 or, at least, allow an extension until January 1st in order that those contractors may adjust to the new situation. Could you enlighten me on that?


Claude Lanthier: Mr. Chairman, this is another good question! Yes, we are aware that 94 or 95 per cent of capital gain tax exemptions involve real estate. Of course, I am aware of those figures. You asked me if I was aware of it in 1982. Yes, we were quite aware of it, and coming from the construction industry, I mentioned this often, this is an area upon which I dwelt somewhat more because definitely most capital gains fall into that category. Needless to say, this is why I am also repeating that this tax is generally well received in the construction industry.
Secondly, you referred to taxes on prefab products. Yes, on the one hand, I am aware of that tax, and on the other I have received representations. I can assure the Hon. Member for Saint-Leonard-Anjou (Mr. Gagliano) that such a tax is offsetting a competing provision that favoured prefab products, giving them a competitive edge that they did not deserve on top of that, because naturally they were competing with fully-taxed products. Therefore, in that spirit, we developed a balance, and indeed this is stated in the Throne Speech itself. I do not remember the exact wording, but I could give you the reference later. It is in order to provide a balance. It is true that representations were made to the Government by contractors who had carried out some work on a contract basis including all taxes. Since I have done a great deal of arbitration in the construction sector, I think that this is a debatable point. On the other hand, it would be fair to say that people who have undertaken work on a contract basis are now in an economic straitjacket with no way out. There is a legal point of view according to which the owner is then, but I would not venture to discuss a legal matter here, sort of growing rich for
June 25, 1985

no reason. Should he pay tax on the new product or should it be absorbed by the government or taken out of the profits of the contractor himself? That point of view is now being considered by the Department, which was not aware until now that such conditions existed with respect to construction work performed on a contract basis. However, you can be assured that this is now be looked into and further regulations will soon be issued taking into account, first, work performed on a contract basis and, second, our financial needs due unfortunately to our increasing debt.
However, I can assure you, because I am contact with general building contractors, that the capital gains tax exemptions are much more important for job creation and business development than that part of a tax in a specific area which is nevertheless a minor one in the construction field. Prefabrication is very popular in Quebec but it is only a minor aspect of the construction sector. And as is so rightly said in the Budget, that aspect of construction will now be more competitive and will be placed on an equal footing with products made directly on the site.


Alfonso Gagliano: As to the matter of the capital gains tax, Mr. Chairman, I was certainly glad to learn from the Parliamentary Secretary that 94 per cent of all exemptions in 1982 were for real estate. He must be aware, therefore, of the financial aspects of the purchase and sale of lands and real estate. He himself admitted that much. It is a speculative industry. I quite agree with you, Mr. Parliamentary Secretary, when you say that most general contractors are delighted with this legislation. I can even tell you that some of my former customers are delighted with it.
But let us have a look at the whole scheme. Nowadays, the Number One problem in Canada is that most people, young and old, are looking for jobs, as I was made aware once more yesterday as I was walking through the park in Saint-Leonard during the Saint-Jean-Baptiste Day celebrations. When you realize that only 4 per cent of Canadian taxpayers declared capital gains last year and that 94 per cent of these gains came from a very speculative industry, you will certainly agree with me that this particular Budget provision is not likely to create many jobs, in spite of the booklet published by the Minister of State for Small Business (Mr. Bissonnette) which you have just mentioned, but I have not received yet; however I will examine it very closely and comment on it at the first opportunity .. . Those in the know, not I, are saying that the only jobs this provision is likely to create are high-paying ones for accountants and lawyers who are tax experts, claiming that with a little imagination and some long term tax planning, they will probably save the rich not $500,000, but many millions of dollars. And instead of reducing the deficit, they will probably cause the government to increase it.
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Claude Lanthier: Let us be clear about this, Mr. Chairman. When I said that some general contractors were pleased with the Budget, I was certainly not referring to those building prefabricated houses. We agree on that.
It is mostly the developers who create projects and keep them going and, of course, create jobs. I must say I agree with the distinction you made. Obviously, the developers are going to endorse the Budget because they stand to profit most. I have nothing against making a profit, since my background is the private sector. We want to create incentives and reward success instead of subsidizing effort. The previous Government was very generous about subsidizing effort. Today, the new Government wants to reward success instead of effort and get together with developers and contractors who are successful. They are the ones who create jobs. Jobs are created by a healthy private sector.
Second, I do not agree with your experts. Our Budget experts do not agree with yours, certainly not. When you said that the experts are, and so on, we are not talking about the same experts. I can assure the Hon. Member that the experts who helped us draft the Budget do not agree with the people who say that capital gains exemptions in the real estate sector do not create jobs. I am sorry but we do not agree here, and as someone who knows the construction industry, I certainly do not agree with that premise.
When you say that only accountants and tax lawyers are going to make money in those areas, I do not agree either. I hope the Hon. Member does not take me for an ally, because what he is claiming is completely at odds with the main goal of this Budget and the measures that were introduced to stop the tax avoiders from taking advantage of any loopholes in the system.
Instead, the new Budget is going to simplify and clarify the tax system in general, as the Hon. Member for Papineau (Mr. Ouellet) mentioned earlier, in order to close more and more loopholes, but I do not agree that the people you referred to will benefit more under the new Budget. From the telephone calls I received, I did not get the impression that the tax experts and accountants were particularly delighted. I can assure you that these people thought we were reducing considerably the need for relying on their services, since next year's income tax returns will reflect the philosophy which forms the basis for the new Budget, which is to simplify Canada's tax system and get rid of all kinds of red tape and complications and direct or indirect Government intervention which tend to complicate business transactions. We want to rely increasingly on the business sector to create jobs, and this Government intends to reduce its expenditures with a view to controlling the deficit and ultimately reducing our national debt.


Alfonso Gagliano: My last question, Mr. Chairman, because I do not want to keep the Hon. Member for Papineau (Mr. Ouellet) waiting too long. You referred to "your experts", and I just want to set the record straight. These were not my

June 25, 1985
Borrowing Authority Act
experts. 1 said these were experts who were quoted in the press, so they are not my experts. However, you said that according to your experts, and now I mean yours, not mine, such a measure would create many jobs because businesses will create jobs. My question is the following: Have you made studies of who is going to create jobs? If so, could the Minister of Finance table these studies so that we in the Opposition could take a look at them? Good heavens, if you create jobs, we will give you a round of applause, but we would like to know whether any studies have been made on the subject. That was my first question.
Now for my last question. You were referring to simplifying income tax returns. I would like to know-and I am very curious-I would like to know where the tax returns were simplified, because personally, I did not find anything about simplifying income tax returns in the Budget, unless it has yet to be announced, but the Budget contains no simplification whatsoever, on the contrary. In fact, with the capital gains exemption, it takes an accountant to figure it all out.


Claude Lanthier: First, I really appreciated the reference to "your experts and our experts" a while ago. I was myself called as an expert before the courts many times and any reference to "our experts" or "their experts" were avoided. We always referred simply to the experts. We do not want to start a war of experts, especially without naming them. I would not want to wage such a war, especially as you called them experts because it was written in the newspapers. I have great respect for the journalists, but not as authorities on experts. In fact, we have been told that a real expert is someone who borrows your watch and charges for telling you the time. As for the war between experts, we could meet outside and exchange studies.
As a third question, you asked if we had made studies. Naturally, I took part in the general preparatory work for the Budget itself, but the Minister made the final decision on every item included in the Budget. He had choices to make and he made them. Some choices were difficult. We knew that there were alternatives, but we had to make some choices. You now say that you would like to see the studies that were made. For my part, I had the opportunity to see a lot of papers, but the papers I saw last were the ones that you had. If I have heard anything about this year's Budget, it is that this Budget is very complete, and when I sent it to friends, whether tax experts, bank managers, promoters, manufacturers or businessmen, they all congratulated us on the detailed and very complete background information published with it. In my opinion, the budgetary papers include all the information that was used, and I think that it is quite complete.
Third, you spoke about simplifying the tax returns and the tax system. As I am not a tax expert, I shall reserve my answer for a while. I would like to look into this matter. I can promise
you to come back with a document, but it is quite late. I cannot promise to have it for tomorrow, but you shall eventually have an answer.


Sheila Maureen Copps: Mr. Chairman, I did not intend to speak, but as the Parliamentary Secretary has admitted that he is responsible with the Minister of Finance (Mr. Wilson) for this disastrous Budget, I would like to ask him whether he consulted senior citizens before committing himself to this Budget which goes really to the heart of Conservative politics in Canada. I would also like to know whether he can confirm in the House that, according to his own Budget figures, a family of four in the highest tax bracket worth $200 taking advantage of this capital gains gift of nearly $500,000 will pay $2,352 less in taxes in 1990 than today, and that a family of four with an income of $15,000 will pay $413 more taxes in 1990. Since the Parliamentary Secretary admitted in the House today that he was responsible for the Budget, is he also responsible for these figures which discriminate against the poorest members of our society to give to those who are less in need of assistance? Is that what makes him feel proud today in this House?


Claude Lanthier: Mr. Chairman, I am learning by experience; I did not think that I had admitted so much.
Mr. Chairman, when I said that, since my appointment to the Department of Finance, I have had the opportunity to provide assistance to my two Ministers of Finance, it is quite obvious that I did not mean that I was the only one with the Minister of Finance to work on the Budget, as the Hon. Member has suggested. My role was very modest. For instance, I certainly had meetings with the senior officials of the Department of Finance for consultations in the areas in which I have a special interest, either by training or by personal experience. However, I did not make the decisions alone. On the contrary, I was not involved in the decision-making process. The Minister of Finance made all the decisions, as is proper, in my opinion. I would not want to discuss previous cases as I was not involved before. I can assure you that, first, the Minister of Finance is the boss of the Department of Finance. Second, did I consult with senior citizens? I already had an opportunity to answer that question last week, and I will tell you: Yes, I consulted with seniors. When seniors were consulted-


André Ouellet: Before or after?


Claude Lanthier: They were consulted before, during and upon invitation recently from certain Opposition Members. And I gave evidence on some cases last week and I even identified the people who advised me on that. I clearly identified senior citizens' clubs with which I consulted since then . . . We consulted before, and I myself consulted before. Third, concerning gifts to the rich, again we did not discriminate between investment and expenditure, between investment incentives,
June 25, 1985

and gifts. Jobs will be created by people who will invest in private enterprise. Jobs will not be created by the Government. We have seen how it failed on that. All the Government can create is temporary jobs rather then read ones. Let me give you an example of the programs, because earlier there was a reference to the program Challenge '85.
Mr. Chairman, we have two kinds of Challenge '85 programs. There were those which involved the private sector, and those which rather involved Government, namely municipal administrations, plus all kinds of non-profit organizations. Let me tell you that in my constituency in particular, which I had a chance to monitor, the private sector jumped wholeheartedly on the bandwagon and we were able to create many more jobs per dollar than we had been able to do under the previous program, which had evolved rather along the lines of the previous Government. Let me tell you that with Challenge '85, the private sector got aboard, fully confident because of the positive measures we had taken on November 4. At that point, they saw we were serious, and private business became involved, and let me tell you it is a real success. They contributed their own dollars. 1 believe that private management under someone who uses his own dollars is much more productive and much tighter than when somebody else's dollars are involved, Government money for instance.


André Ouellet: Mr. Chairman, in light of the revelations just made by the Parliamentary Secretary I can only ask him again to what extent he did consult senior citizens and the golden age clubs he referred to before the Budget was prepared. If indeed there were consultations with senior citizens before the Budget was drafted, I am wondering what the Parliamentary Secretary is doing now about the general outcry from people who feel cheated and betrayed by this part of the Budget which savagely deindex the pensions of retired people.
In his remarks a moment ago the Parliamentary Secretary candidly admitted that he was one of the people responsible for this Budget. After the question of my colleague, he reconsidered his position by saying that he did not have too much to do with the Budget.
I can understand that but I simply want to read him a quotation from The Globe and Mail of last June 13:
Before introducing his Budget last month. Finance Minister Michael Wilson was confronted with figures by his Department indicating that tax increases would hit low-income and middle-income earners harder than high-income earners-
The Finance Department also provided the Minister with figures indicating that the benefits of the tax exemption on capital gains will go largely to the wealthy and will cut the incomes of low-income groups.

That information was therefore known to the Minister of Finance before he tabled his Budget in the House. This document had not been made public with the series of docu-
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ments tabled along with the Budget, but it has since been released and it is the document to which The Globe and Mail refers. Was the Parliamentary Secretary aware of those documents, and how could he support such generous and favourable measures towards a certain group of businessmen, well-to-do people, and how could he, after consulting groups of elderly citizens, not speak up against such hand-outs to wealthier Canadians and such severity towards the poorest people in our society? Either the Parliamentary Secretary is trying to show off and did not consult groups of elderly people before the Budget, or if he really did I would like him to tell us right now who are those groups of people he consulted before the Budget was tabled.


Claude Lanthier: Mr. Chairman, I am very close to the elderly people of my riding. I had an opportunity to meet with them, and I am trying to remember exactly when I met with three golden age clubs. I recall the names of two I consulted with later and I can identify them for you if Members of the Opposition want me too, for the Hon. Member referred earlier to my candour.
For a while I thought the allegations of the Opposition were founded, so I went to see the people to find out whether there was a general outcry as the Hon. Member suggested earlier. Let me tell you that the people were furious, not because of the Budget itself, but because of the interpretation somewhat-I would not say fraudulent but somewhat biased given by certain Members of the Opposition who are more interested in scoring political points than in telling the truth to the elderly. And again let me tell you that during the last election campaign we began to talk to senior citizens and other people affected by the deficit. Young people were asking for jobs, middle-age people, workers and the unemployed wanted to keep their jobs or find work, but senior citizens were mostly concerned about our growing indebtedness and our ever lasting and ever larger Government deficits. So we did consult with the elderly right from the start, during the election campaign. What concerns them most is not really the 3 per cent, what they want is to keep the major slice of their old age security pensions, the major slice of 97 per cent. The Minister of Finance was quite clear during today's oral questions period, but apparently Members opposite do not want to listen. But I can assure you that I talked to the Saint-Jean-Damascenes Golden Age Club, the Sainte-Catherine-Laboure Club and the Golden Age Club of-I cannot remember the name of the other parish in my region, I mentioned it last week should you care to refer to last week's debates. Mr. Chairman, let me tell you that those three senior citizens' clubs sent me a message that was very common after the Budget. They told me: Be careful not to spend our hard-earned money, do not touch our capital! And they were very worried about their hard-earned money and their capital. And as was said earlier today, and I want to get back to what was so aptly said by the Minister of Finance, if we do not pay attention to general measures, not just the 3 per cent that is

June 25, 1985
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mentioned and which is now being considered by the Department of Finance, if we do not pay attention to all the budgetary measures, it will not be the 3 per cent but the 97 per cent we will have to consider as well. The balance is then at stake. In 1990 there will be nothing left.
So I do not think we can be accused of failing to consult. We consulted before the Budget. We did so during the Budget and we did so afterwards. Of course I would like to give people the assurance . . . Earlier, I was accused of bragging. I am sorry but I simply wanted to make the point that I made my own modest contribution to the general consultation process that preceded the Budget. However, I was not one of the main artisans, as others would have me say. If I gave the impression that I was, I think you greatly underestimate the Minister of Finance (Mr. Wilson) who is far more competent in this area that I could ever be.


Sheila Maureen Copps: Mr. Chairman, I heard the Hon. Member for LaSalle (Mr. Lanthier) say that he did a lot of consulting before, after and during the election campaign and before, after and during the Budget. I wonder if this evening .. . after all, we are not in a hurry, we can stay until tomorrow, we are here for the whole evening and all night if necessary, I wonder if he could table in the House the names of the presidents of senior citizens' clubs in his riding who supported the plan of his Minister of Finance to eliminate their tiny pensions by 1990.
I also heard, and I may be mistaken or I may have misunderstood the French, that the Parliamentary Secretary suggested that if nothing is done, all old age pensions will be eliminated by 1990. The Minister of Finance has accused the Opposition of playing on public sentiment and misleading people by suggesting that they would lose 30 per cent of their pension each year, and now the Parliamentary Secretary is suggesting to the House that all old age pensions will be eliminated by 1990 if we do not accept the proposals of his Minister of Finance. I think that is intolerable, and I am waiting for him to inform the House quite clearly today that there is no sword of Damocles hanging over the heads of our elderly, because if he is here to make threats, we in the Opposition are not going to stand by idly and let the Minister of Finance threaten to eliminate all pensions. We are going to continue our fight. So I would like to have two answers: first of all, whether the Parliamentary Secretary, either today or tomorrow, could give the House the name of any president of senior citizens' clubs in his riding who supports the proposals of the Minister of Finance regarding the removal of Old Age Security pensions, and second, whether he can clarify his position on the so-called complete elimination of Old Age Security pensions, as he suggested this evening in his comments?


Claude Lanthier: Mr. Chairman, I come back to the first question which is easier. Now that I have given the names of
parishes, I am asked the name of the presidents and what not. I did not have any petition signed. As I said last week, a petition is not the only way to seek advice. And surely I will not be bossed around by Members opposite who tell me: "Go and fetch me the petition that we have drawn up." Mr. Chairman, I have quoted names, but I have forgotten one, and as I said, you can refer to Hansard. I do not want to dwell on that point.
As far as phasing out pensions is concerned, we are not phasing out pensions as the Minister stated today, and 1 support his comments because the evidence is quite clear in the Budget and Budget papers. If we do not take care to control our national debt, all our social programs will be in jeopardy in 1990. We are not making any threats. Those are real facts. Our social programs are in jeopardy because of our ever increasing deficit from year to year and our burdensome debt. I do not think this is anything new.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Bill Vankoughnet (Hastings-Frontenac-Lennox and Addington):: Mr. Speaker, recently I rose in this House to ask the Solicitor General what measures Correctional Service Canada was taking and how the inmate population in Canada is helping to control the national debt, reduce expenditures and share in the economic responsibilities of this nation.
My concern stems from the fact that we are asking Canadians to participate in economic responsibility and I strongly believe all Canadians should be contributing. I believe we have a duty to all Canadians to ensure that Government exercises restraint and cut expenditures, as is being done in many areas.
Six weeks after taking office this Government cut expenditures by $4.2 billion. Various programs are presently being reviewed to determine their effectiveness and areas of duplication. This Government is serious about cutting our expenditures. We introduced measures in the May 23 Budget that will help reduce the deficit by $4.4 billion from the previous projection of almost $40 billion.
I am concerned about the costs of our correctional services. There are various costly expenditures ranging from food and clothing to visitor facilities and building maintenance. I realize that such expenditures are necessary, but they should not be incredibly expensive.
June 25, 1985

The over-all national average cost to maintain a person in a federal penitentiary rose to $109.81 per day during the year ending March 31, 1984. That is an increase from $103.66 per day for the previous year. On average, Canada spends $39,419 a year for each inmate in a federal penitentiary. Costs have risen substantially since 1979-80 when Canada spent $75.58 a day to house an inmate.
The number of inmates has also increased greatly, from 8,465 in 1979-80 to the 1983-84 total of 10,438. Women make up 2 per cent of this number. A further 1,100 federal prisoners were on parole, probation or mandatory supervision when the count was made. In 1982-83 the total expenditure on prisons cost each Canadian $42.67 a year, or a total of $1.1 billion. By 1983-84 that cost had risen to $49.13 per Canadian, or a total of $1.2 billion.
There are some programs run by the correctional institutions that give me cause to doubt the economic responsibility of the system. The conjugal visiting sessions for inmates serving life sentences does not make sense to me. These are people who have opted not to be part of our society, yet feel it is their right to have visitors with them. The costs of these visits must be borne by the average Canadian who carries on a productive, law-abiding life.
Projects such as the greenhouses and farms that the Honourable Minister mentioned in his response to my question are other programs that I am concerned about. Just how cost effective are some of these programs? We must consider the fact that supplies and equipment must be purchased for these operations, and I consider it vital that we not have the average Canadian paying for inmate activities that are not necessary and self-sufficient.
Further, there are some important questions regarding the costs of transporting inmates from penitentiaries to court houses and back. Such involvement of inmates requires elaborate preparations, a great many security personnel and costs a great deal. There is also the question of the possible danger to the community at large should the prisoner escape, not to mention the costs associated with a search for an inmate who has escaped.
At this time there are no provisions to try an inmate in a court on penitentiary grounds to save the transportation and subsequent related costs. There may be some concerns about this proposal, and some may claim that it is contrary to the Charter of Rights. However, I would like to point out that the prison population has opted not to abide by the law and by so doing have forfeited the privileges of freedom and voting. It is a person's choice and an inmate has chosen not to be part of our free and democratic society. That does not mean that inmates no longer have responsibilities. They must still lead responsible and productive lives while serving time.
I am concerned, and rightly so, that the Correctional Service of Canada is not contributing to the Government's restraint program. Are we asking our inmates to share in cost reductions to help reduce the serious national debt? We should be
Adjournment Debate
doing just that. I am not suggesting that we mistreat or abuse the prison population. I am not suggesting that prisoners are the sole cause of our present economic situation. However, I do ask that we consider treating all people on an equal and fair basis so that all people of Canada share in economic restraint.


Mr. Gordon Towers (Parliamentary Secretary to Solicitor General of Canada):: Mr. Speaker, I am pleased to have the opportunity to respond further to the issue raised by the Hon. Member for Hastings-Frontenac-Lennox and Addington (Mr. Vankoughnet) in a question he asked during Question Period on June 10, 1985, with respect to the cost of maintaining offenders. I can understand the Hon. Member's concern, particularly in light of recently published statistics indicating a rise in the average annual cost of maintaining a person in a federal penitentiary.
The Correctional Service is very much aware that the costs of maintaining penitentiaries must be kept to acceptable levels, and is doing much to employ inmates in ways that keep them productively occupied, provide training and contribute to the daily operations and upkeep of institutions. Accordingly, inmates are assigned to cleaning duties, the preparation and serving of food, laundry services, renovation projects, farm operations, industries and so on.
In order to foster a sense of personal responsibility and thrift, inmates are required to save a portion of the money they earn while working, and in this manner funds are accrued to provide the support they need during the critical re-entry phase into the community when they are released. In other words, they can better support themselves while looking for employment and thereby avoid further burden to the taxpayer.
I must make particular mention of the fact that the Correctional Service reduces the cost of maintaining offenders through the operation of five farms and greenhouses, gardens and other operations at several institutions that collectively provide approximately 25 per cent to 30 per cent of all food required, to a total market value of about $4 million annually. Production is being expanded with the development of a sixth farm at Bowden Institution in Alberta. Since Bowden is in my constituency, this question is very important to me. The Correctional Service hopes to eventually improve self-sufficiency to the level of 50 per cent, the upper limit in practical terms given the Canadian climate and the remote location of some of our institutions.
The Correctional Service also operates almost 100 industrial shops and institutions across the country. These shops operate with inmate labour and manufacture goods that are used at the institutions or sold to government agencies and non-profit, charitable or religious organizations. Revenue generated by sales offsets the costs associated with training inmates in marketable industrial skills and the costs of operating the shops.
Finally, I would like to mention that inmates are actively employed in forestry activities carried out at five institutions, and these activities involve the production of about four million seedlings each year, spacing and thinning, log salvage,

June 25, 1985
Adjournment Debate
firefighting, campground development and parks maintenance. A joint venture of the Correctional Service and the Scott Paper Company in Nova Scotia has resulted in a tree nursery operation which provides training for inmates who are paid as Scott Paper employees and who reimburse the Correctional Service for room and board.
As you can see, Mr. Speaker, there are several dynamic and original ways that have been developed by the correctional service to reduce costs, while at the same time providing inmates with training which will help them find jobs when they are released.


SPORTS-BASEBALL DECISION UNFAIR TO CANADIAN UMPIRES
Gordon Edward Taylor: Mr. Speaker, on June 18 last I asked the Secretary of State for External Affairs (Mr. Clark) the following question, and I quote:
While we are waiting for the day when the world series will be held in Canada between the Expos and the Blue Jays, will the Minister ascertain why Canadians, who have graduated from recognized umpire schools in the United States, are not permitted to umpire in the minor and major leagues in the United States! while American umpires in baseball and American referees in hockey work in Canada? Should this not be a two-way street?
The Secretary of State for External Affairs replied as follows, and I quote:
I thank the Hon. Member for that very serious question. We are looking into it seriously. We have had discussions with officials of the United States. We are not completely satisfied as yet with the response, but it is the bottom of the seventh inning and we expect that we will win that particular game before the end of the ninth.
That was a very thoughtful answer and I am delighted that we have at least reached the seventh inning. The purpose of my remarks today is to encourage the department to bat a home run with the bases full and finish the game so that qualified Canadians may umpire in the United States in the major and minor leagues, just as qualified Americans may work in our baseball leagues in Canada.
A number of people have asked me if I have any examples. I have and I will quote them. The first example is the case of a constituent of mine who, while in the United States attending a five-week course at the Joe Brinkman Professional Umpires School in St. Bernardino, California, along with another Canadian, was astounded when told that because they were Canadians they could not be hired in the United States. An official of the Harry Wnedlestedt School for Umpires at Daytona Beach, Florida, stated in a letter to my constituent, and I quote:
Much attention is currently being given what I consider a silly law that exists banning placement of foreign candidates in jobs that can be filled by the country's own citizens. This agreement was forged between Canada and the U.S. during a time of great unemployment in both countries. Only those candidates in what is considered a critical occupation, such as science and medicine, can be placed in jobs in a country of which they are not a citizen. Hopefully if enough people complain to the politicians things will change.
Another example is the case of a young man from Surrey, B.C. who applied to work in the Pioneer League and his
request was denied. The story in The Globe and Mail on Saturday, May 11, 1985, indicated that five other Canadians have applied for work visas so they can umpire in the United States and were refused. The Americans have made one exception, a Canadian citizen from Montreal who had a brother who was U.S. citizen was permitted to work in the American league. The story also states that Canadians lost their jobs in the minor leagues after it was found out that they were Canadians.
It was reported that Barney Deary who heads baseball's umpire development program, has also appealed to have Canadians made eligible. He is reported as saying, "I am supposed to be finding the best umpires and right now I am not able to do that". I agree with him, that Canadian umpires are just as highly qualified, if not more so, as American umpires.
Another story that appeared in Referee, the magazine for sports officials, in the July, 1981 edition, told the story of a Royal Canadian Mounted Police officer living in the Northwest Territories, who in 1974 was one of the youngest umpires working in the Inner County baseball league in southern Ontario. In 1979 he worked at the Canadian National Junior Men's Championship in Richmond, B.C. In 1980 he worked at the Canadian National Senior Men's Championship in Saskatoon, Saskatchewan. He was also appointed Deputy Umpire-in-Chief of Canada by National Umpire-in-Chief Ed Bitz. He is a graduate of Bill Kinnamon's Umpire School in St. Petersburg, Florida, where he received a very good rating.
I say again that this should be a two-way street. American umpires and referees may work in Canada. Surely we should have a reciprocal arrangement so that qualified Canadians may work in Baseball and hockey in the U.S.


Thomas Gordon Towers: Mr. Speaker, as one old ball player to another, I wish to assure the Hon. Member that we are committed to developing a mechanism which would permit aspiring and talented Canadians to pursue careers as umpires in professional baseball.
The Hon. Member has rightly pointed out that it has been some time now since major league baseball has come to Canada. As the Hon. Member knows, baseball requires anyone who wishes to pursue a career in baseball to "start at the bottom", to move through the minors into the majors. With specific reference to umpires, the United States' immigration regulations provide for Canadian participation at the major league level through the issuance of H-I employment visas, issued on the basis of merit and ability. Once a Canadian has reached this level he does not encounter any difficulties entering the United States. However, to attain that level an individual must move up through the minor leagues and, unfortunately, this cannot be done solely within Canada, as Canadian minor league teams are grouped in leagues with teams based on the United States. In order to be employed in those leagues, a Canadian requires an H-2 employment visa
June 25, 1985

which can only be issued after the United States Department of Labour has completed a labour market survey and determined there is no qualified and available American to fill the vacancy.
For many years organized baseball has had a program to develop potential major league umpires. This program is operated through the Office of Baseball Umpire Development and involves a screening of initial talent, evaluation and appraisal of development and progressive promotion up to the major leagues. We have urged the United States Department of Labour that the merit principle be incorporated in their decision on labour certification. This would provide an avenue for Canadians who have graduated from a recognized umpire school to begin careers which would hopefully culminate in the major leagues. Negotiations will continue with the United States until an equitable solution can be found.


PENSIONS-STATEMENT BY PREMIER OF NOVA SCOTIA- REQUEST THAT BUDGET PROVISIONS BE WITHDRAWN
David Charles Dingwall: Mr. Speaker, on June 14 I posed a question to the Right Hon. Prime Minister (Mr. Mulroney) regarding the restoration of full indexation of Old Age Security. On that day I quoted a statement made by, as the Prime Minister would say, a very distinguished Canadian. I wish to again quote that statement:
-it was a wrong move, I am very disappointed, I am totally against it. It was the wrong thing to do to our senior citizens. That part of the Budget was not compassionate.
That was said by the Premier of the Province of Nova Scotia. The Prime Minister responded that at the earliest possible moment he would make a statement which would be consistent with the intentions as set forth by the caveat placed in the Budget.
I suggest to Hon. Members opposite that the thrust of my question was that this Budget measure was wrong in its substance because of its negative effect on senior citizens. Unfortunately, there are far too many senior citizens in this country who live well below the poverty line. To cause them anxiety or frustration for any period of time, be it temporary or indefinitely, regarding cuts in their Old Age Security is both inequitable and unfair to those who served Canada in so many ways for so many years.
I asked the Prime Minister, as I am asking the Parliamentary Secretary, who no doubt will be answering for the Prime Minister, if the Government is prepared to make a statement forthwith, prior to the adjournment of the House on June 28, that it will restore full indexation to the cost of living, as it was before, and to right this wrong. I say to the Parliamentary Secretary with great sincerity and civility, which is another word used so often by our Prime Minister, that the measure contained in the Budget is not supported by provincial premiers, senior citizens, a vast number of members of provin-
Adjournment Debate
cial legislatures and, I venture to say, a good number of Members of Parliament in this Chamber.
I would hope that since there is no support for this measure, and since it has the possibility of causing further frustration and anxiety for our senior citizens, remedial action will be taken to restore full indexation for our senior citizens so that they will not have to live with this fear over the next number of months. I hope that the Parliamentary Secretary will stand in her place and indicate what the Government's intention is for the next number of days.
If the change is made there may be some commentators within the media who will write some non-favourable things about the Government. However, I suggest that if that is the case, the result of changing back to full indexation will outweigh any political fall-out that the Government may experience for a short period of time. I am quite confident that if the Government changes this measure it will receive the support of senior citizens across the country, as well as that of a large majority of Canadians who believe this regressive measure to be wrong in substance at this time for our Canadian economy.
[Translation)


Mrs. Gabrielle Bertrand (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I am pleased to deal with the very serious issue raised by the Hon. Member for Cape Breton-East-Richmond (Mr. Dingwall), and I congratulate him for doing so in a most civilized way.
First of all, I must remind him that the purpose of this budgetary measure is to index the Old Age Security pensions effective January 1, 1986, only for the annual increase in the consumer price index greater than 3 per cent. Mr. Speaker, we feel that this measure is a must if we want to preserve the integrity of our social programs in the years ahead. The greatest prejudice we could cause our senior citizens would be to make it impossible for the government to pay them these benefits by refusing today to make the difficult decision. On the other hand, Mr. Speaker, the government has never intended to ask our senior citizens to make unacceptable sacrifices, and as the Prime Minister himself repeated on many occasions, it was with no light heart that the government was forced to make those decisions. As to the Minister of Finance, on June 21, he was quoted as saying:
I do not like cutting indexation. But I look at the options that are available to us. I say to myself, to the Hon. Member and all Canadians, that we have tried to address this problem in the broadest possible way so that the load is spread as thinly as possible.
As a matter of fact, that is the reason why the government announced formally in the Budget and my colleagues and I repeated on many occasions that we would closely monitor the situation to see if the benefits were adequate and that he would increase them as resources permit.
In other words, we suggest that this budgetary step concerning the indexing of the Old Age Security pensions should be

June 25, 1985
Adjournment Debate
reexamined in light of its impact on the economic situation of senior citizens.


The Acting Speaker (Mr. Charest):: The motion to adjourn the House is now deemed to have been adopted. Accordingly,
the House stands adjourned until tomorrow at 2 to Standing Order 2(1).


[Stage Direction]
The House adjourned at 9.25 p.m.
[Stage Direction]
p.m. pursuant
[Stage Direction]
Wednesday, June 26, 1985