1985-09-25

Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I rise today with regard to the situation concerning Mitel and the subsequent infusion of some $300 million into that corporation which is located here in the Ottawa region. I must say that we are very concerned about all the issues surrounding this particular bid by British Telecommunications and the amount of money that it is going to be putting into that company.
There have been many, many lay-offs, both in Kanata and in Quebec, in regard to this particular company. At the same time as workers are being laid off we read in the newspapers where substantial salary raises have gone to senior members of the management of Mitel Corporation. Yet when we question the Minister of State for Small Businesses (Mr. Bissonnette) regarding the agreement between Mitel and the Government of Canada with regard to the transfer of technology we are not given any assurances that that particular agreement will be in place after the takeover takes place.
As a Member of Parliament I am very concerned that if that commitment, which was negotiated by the previous Government and the management of Mitel, is not continued, that the transfer of technology will take place and it will leave Canada, thereby causing further and greater job losses to this particular community here in the Ottawa region. We don't have any answers-


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


AUTHORS' ROYALTIES
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, I welcome the announcement of the Minister of Communications (Mr. Masse) of an agreement with the provinces for a plan for payment for public use of library books. This has long
been a demand of authors, as a means of compensation for the loss of royalties that they would otherwise receive from book sales.
The federal Government will be providing $2.5 million a year for this plan, assuming cabinet approval. The announcement constitutes a moral victory for the artists and their lobbying organizations.
Economically, however, this proposal is far from making up the $100 million lost to the arts and cultural community in budget cuts. Even if 5,000 writers benefit from this plan, that is only $500 a year on average. Yet the CBC cuts alone took $75 million, costing these same writers jobs, free lance contracts, and professional opportunities. Thus 1 join with the artists attending a conference on culture in Halifax this past weekend in calling for the full restoration of arts funding and, let me be perfectly clear, to the independent arts agencies.


THE LATE VACLAV PIVRNEC
Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, 1 regret to inform the House of the death of Vaclav Pivrnec who died in a cell in a Czechoslovakian jail.
Mr. Pivrnec was the manager of Omni Trade activities in Canada until he was forced to return to Czechoslovakia. When he returned to Czechoslovakia his wife Jana and their two children declared and were granted refugee status here.
Mr. Pivrnec attempted to return to Canada, but was prevented by the Czech Government from doing so. Indeed, he was convicted by the Czechoslovakian state of the offence of trying to join his wife and children in Canada, and has, in fact, been separated from them for nearly four years.
The House will recall that a petition bearing nearly 500 names of Canadians was presented last Wednesday to the House calling upon the Czechoslovakian Government to release Mr. Pivrnec. Unknown to me and to this House, Mr. Pivrnec was arrested again by security forces as a result of protests made on his behalf, and was under an inquisition from September 15 until he died last Friday.
His plight and his concerns have been the subject of our Government's many representations to the Czechoslovakian Government. Czechoslovakia refuses to abide by the Helsinki Accords and refuses to treat its citizens with any sense of humanity. I call upon the Government to curtail immediately the activities of Omni Trade and other Czechoslovakian companies doing business in Canada as these companies are essen-

September 25, 1985
tially a front for espionage in Canada. Czechoslovakia is a police state that has no place-


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


INDUSTRY
Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, you are undoubtedly aware that the world's largest aluminium smelting complex operated by Alcan Aluminium Ltd. is located in my riding of Jonquiere. During a press conference given yesterday by that company management it was learned that the $1 billion major investment project unveiled in April 1984 has been shelved sine die, owing to the slumping aluminium world market.
The temporary cancellation of this project is a hard blow to the social and economic interest groups of the Saguenay-Lac-Saint-Jean region. We could have been witness to an economic recovery, but the impact of this news is nothing short of disastrous. It entails the loss or at least the delay of a $ 1 billion new capital injection in our region, along with dire consequences for a number of local contractors, not to mention the direct or indirect loss of hundreds of temporary jobs among contractors, subcontractors and material suppliers.
As if that were not enough, one can only sympathize with the taxpayers since they will not be able to benefit from the taxes which the new smelter would have generated.
Still, Mr. Speaker, the construction project would have had a negative impact since 600 permanent workers would have been laid off at the Jonquiere plant. It is a reprieve for the federation of united aluminium workers.
The monitoring committee responsible for protecting jobs in the aluminium industry will have to make the best of this reprieve and double its efforts to find other solutions to this problem.


FISHERIES
Mr. Carlo Rossi (Bourassa):: Mr. Speaker, the tuna affair is starting to smell worse and worse for the Prime Minister and his party. Pretending to be shocked at the very idea, the Prime Minister claimed he was not aware that the tainted tuna, which was not good enough for Ethiopia and was turned down by the Canadian Forces, was on the shelves of our food stores.
Premier Hatfield of New Brunswick knew about it, the Minister of Fisheries and Oceans (Mr. Fraser) knew about it, the Minister of Energy, Mines and Resources knew about it, and a number of officials at the Department of Justice, the Department of National Health and Welfare, the Department of National Defence and the Department of External Affairs knew about it. The man in charge of caucus relations in the Prime Minister's Office, Mr. MacAdam, knew about it, and the Prime Minister's communications assistant, Mr. Anderson, knew about it as well, and now the Prime Minister, Mr. Speaker, that clown, would have us believe that he was the only one who was not informed.
Funny way to run a Government, Mr. Speaker. One thing is certain, however, that without that television broadcast, the tainted tuna would still be on our shelves.


HOUSING
Mr. Neil Young (Beaches):: Mr. Speaker, the federal Government has played a major role in the supply of assisted housing since the early 1940s. For the first time in over 40 years there is a real possibility that it will hand over this control to the provinces. A leaked B.C. cabinet document calls for increased emphasis on shelter allowances and more participation by the private sector in developing and managing social housing programs.
Government assistance to the private sector has never ensured a long-term supply of well maintained, affordable housing. In contrast, the non-profit and co-operative housing developed by non-profit voluntary associations are quality affordable accommodation. These programs are at stake in the federal-provincial negotiations.
The federal Government must continue to take the leadership role because of its control over interest rates, tax policy, income support programs and policies affecting native communities. Transferring housing policy to the provinces can only lead to greater disparity in the "have-not" regions of Canada.
The future of non-profit and co-operative housing has been uncertain for the past few years. It is time for the federal Government to map out a long-term housing policy and programs that include a strong and continuing federal presense in the housing field.
It is time the Government started to think about policy and programs rather than following its ideological drift with no policy and programs.
September 25, 1985


THE DISABLED AND THE HANDICAPPED
Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, while most Canadians fortunately enjoy good health, I would like to remind those who are active in all levels of Government of the particular needs of the younger, chronically disabled adults between the ages of 18 and 59.
There are 249 young disabled adults who currently reside in personal-care homes in Manitoba, many of whom are afflicted with multiple sclerosis. Moreover, the average age of the younger disabled resident is 50 years, substantially and significantly lower than the 83 years, substantially and significantly lower than the 83 years which is the average age of all residents of personal-care homes.
These younger persons have specific accommodation needs which are not always met by many of the personal-care home programs. Younger disabled adults often require more than the elderly in terms of rehabilitation, therapy, recreational and job opportunities. They desire and need more community contact and involvement as loneliness is more apparent due to the fact that they are often separated from young families and spouses. In addition, and of great importance, their intellectual needs are often not met.
The development of programs and the provision of separate accommodation for younger chronically disabled persons are necessary because present living conditions sadly, and even tragically, lead to a regression in their state of health.


CULTURAL AFFAIRS
Mr. Ross Belsher (Fraser Valley East):: Mr. Speaker, I think every Member of Parliament from a rural riding must from time to time wish that his or her constituents had the same opportunities to receive as varied and enriched a cultural life as residents in urban constituencies. It is a fact of life that urban areas with their greater population bases receive a larger portion of funds from government. I do not think anyone would argue that such a practice should change, but I think that everyone must recognize that cultural matters mean as much to rural constituents as they do to urban ones.
Recently the Minister of Communications (Mr. Masse) approved a cultural grant to one of the communities in Fraser Valley East. This grant, along with funds raised locally, when coupled with money from the province, made a Cultural Centre for Chilliwack a reality. The Chilliwack Community Arts Council which worked long and hard thanks the Minister and his Department for his co-operation and for his appreciation and support of cultural matters.


S.O. 22 AIRPORTS EXPANSION PLANS FOR VERNON, B.C.
Hon. Andre Ouellet (Papineau):: Mr. Speaker, I have a request from the residents of Okanagan Landing, British Columbia, showing concern about the Vernon airport expansion plans. Apparently the Airport Commission came up with a contract that will produce a licensed facility of only 2,000 feet. This is way below the 4,000 feet originally recommended in the Zolton Report, and below the 3,115 feet considered minimum for municipal use.
It is felt that NORD directors and their appointed airport commission have over-stepped their own mandate, ignoring the first of their prime objectives which is to locate and obtain a suitable airport site to serve the needs of the entire regional district, notwisthstanding future expansion and commercial usability being major considerations in this selection.
I would like to know why the Government is putting money into a project that will be totally unsuitable to the needs of the entire Regional District of Vernon.


WELFARE
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, the Minister of National Health and Welfare (Mr. Epp) announced last week that he and the Minister of Employment and Immigration (Miss MacDonald) have reached a historic agreement with the provinces and territories that will break the deadly cycle of welfare dependency. Disincentives have been replaced by hope, encouragement and, most important, opportunities.
Up until now there have been precious few incentives for welfare recipients to work. Any money a person earned while on welfare was deducted from his or her Government cheque. Hence, it was easier to stay totally dependent on welfare than to risk getting a job. This is a cruel and soul-destroying development.
We know that most people have pride in themselves and would like to work. To their great credit, people prefer selfsufficiency to hand-outs. Under this new program, by enrolling in federal job-training or work programs, people on welfare will be able to earn up to SI58 f>er week without any reduction in benefits. The new Job Strategies Program assures people on social assistance of a fair share of the opportunities at entry and development levels. This is just as true for youth, for women, and for the disadvantaged. I commend the Ministers for their brilliant success in such an important area of concern to all Canadians.

September 25, 1985
Oral Questions



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, I have a question for the Prime Minister. I do not want to ask him about tuna. I want to ask him about integrity.
Last week the former Minister of Fisheries and Oceans told the country that the Prime Minister had received detailed information about the rancid tuna in July. Under pressure the former Minister changed his story and he was fired.
This morning the Hon. Member for Carleton-Charlotte, the riding in which the tuna factory in St. Andrews, New Brunswick, is located, contradicted the Prime Minister by saying that since Parliament has reconvened in September he has raised the issue repeatedly in caucus before it became public. Under pressure from Pat MacAdam of the Prime Minister's office, this morning the Hon. Member attempted to change his story. I ask the Prime Minister what he has been asked before. I urge him to take the question seriously and to think carefully before answering.


Some Hon. Members:: Oh, oh!


John Napier Turner: Does the Prime Minister still hold to the position that he never heard of this affair until one week ago?


Right Hon. Brian Mulroney (Prime Minister):: Yes, Mr. Speaker.


KNOWLEDGE OF OFFICIALS
John Napier Turner: Mr. Speaker, CTV has reported that Ian Anderson, who was Director of Communications and who is now the Deputy Principal Secretary to the Prime Minister, received a transcript delivered to him eight weeks ago with a full account of the story which has since become public. The Prime Minister's caucus liaison officer, Patrick MacAdam, and old college room-mate, and buddy-


Some Hon. Members:: Order.


John Napier Turner: -also knew of the matter in July. Is the Prime Minister asking Canadians to believe that the matter was serious enough to cause the resignation of a Minister of the Crown and yet not serious enough to be told to him by two of the most senior officers in the Prime Minister's Office? Is that what he is asking us to believe?


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Mr. Speaker, I am not asking the Right Hon. Leader of the Opposition to
believe anything. I was asked a question, one which I have been asked for the last three days while he was absent from the House, and I told the truth. That is what it is, absolutely.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Mr. Speaker, I have indicated to this House-and I have no need for a period of reflection-under interrogation by my hon. friend, the Leader of the New Democratic Party, and others, that this matter was brought to my attention for the first time on Tuesday night of last week. That is the fact. Any statement at variance with that is false. I have invited anyone who so contends from whatever side of the House to put his seat in play.


Some Hon. Members:: Hear, hear!


ALLEGATION OF MINISTERS' KNOWLEDGE
John Napier Turner: Mr. Speaker, we have had a statement by a former Minister and a statement by a Member of Parliament. We have had admissions that the Minister of National Defence knew, that the Minister of Justice knew-


Mr. Crosbie:: I did not know.


John Napier Turner: -and that the Minister of National Health and Welfare knew.


Some Hon. Members:: Oh, oh!


Mr. Hnatyshyn:: Get your facts straight.


John Napier Turner: I am suggesting to the Prime Minister-


Mr. Dick:: You are wrong again.


Some Hon. Members:: Oh, oh!


John Napier Turner: Mr. Speaker, we are dealing with a very serious issue reflecting upon the integrity of the highest office in the land.


Some Hon. Members:: Hear, hear!


John Napier Turner: The issue is not fish. We do not have fish before the House any more; we have the possibility of a cover-up.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I would invite the Right Hon. Member to come to his question, please.


John Napier Turner: Mr. Speaker, I think Canadians-


Some Hon. Members:: Order, order.


John Napier Turner: -demand to know the truth. Sir, you know this is a very fragile place. If the Prime
September 25, 1985

Minister has any respect for this institution, I urge him to come clean with the whole story of what he knew about this affair.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Mr. Speaker, the Leader of the Opposition says that the Minister of National Health and Welfare knew. That is false.
He says that the Minister of National Defence knew. That is false.
He says that the Prime Minister knew. That is false.
He says that the Minister of Fisheries and Oceans knew. He acknowledged it and took his responsibilities in a way which is completely alien to the Liberal Party which has no respect for the truth or for Parliament.


Some Hon. Members:: Hear, hear.


VANCOUVER NEWSPAPER REPORT
Mr. George Henderson (Egmont):: Mr. Speaker, if all those people in Cabinet did not know, you must have some caucus on that side.
My question has to do with a column in the Vancouver Sun which stated on Monday, and I quote:
One fisheries source said Mr. Mulroney issued directives on the matter in April and again ... after lobbying by Maritime Ministers and MPs-
-in May.


Ramon John Hnatyshyn: What Minister?


George Roland Henderson: My question is directed to the Prime Minister. What Ministers and Members of Parliament, other than the Hon. Member for Carleton-Charlotte, lobbied the Prime Minister? And can the Prime Minister honestly say to Canadians here today that he knew absolutely nothing about this affair until Tuesday night, September 17, 1985?


Martin Brian Mulroney: Mr. Speaker, my hon. friend asks me about a statement in the Vancouver Sun on September 23, which reads:
One fisheries source said Mr. Mulroney issued directives on the matter in April and again in May, after lobbying by Maritime Ministers and MPs.
The statement is absolutely false.


OFFICIALS' KNOWLEDGE
George Roland Henderson: Mr. Speaker, my supplementary question is directed to the Prime Minister. It is becoming, of course, more apparent than ever before that there has been more than just scuttlebut floating around in the Prime Minister's Office. There were facts about rancid tuna, and decomposed tuna and the Prime Minister's office knew this. Will the Prime Minister tell this House today just exactly
Oral Questions
what his senior aides knew, Mr. Anderson and Mr. MacAdam, about this story? Did they know at that time that this tuna was unfit for human consumption?


Martin Brian Mulroney: Mr. Speaker, I thought I responded fully to that question yesterday but 1 will be happy to go through it again for the Hon. Member.
In early July Mr. MacAdam picked up the comment or the scuttlebut, here in Ottawa, to the effect that a network might be airing that kind of-or a story of some kind. He communicated with the official in the office of the Minister of Fisheries and Oceans who advised him that there was no cause for concern of any kind.
The second meeting to which I referred yesterday involved Mr. Ian Anderson who was visited by two members of the Minister's staff. They gave the assurances that there was no health hazard, that the Minister was acting within his authority and that there was nothing wrong. They asked for Mr. Anderson's view-in the event the program aired that very evening-as to what they ought to do because the Minister was absent from Ottawa. Mr. Anderson immediately advised that they get the most senior official available and make him or her available to the media to respond fully to all inquiries.
One of the things which was given to Mr. Anderson was the transcript referred to by others where the Minister says: "First of all, you must remember that none of this product was unfit for human consumption". This was a fiat statement which was made by the Minister in a television interview on June 26. This is a transcript which Mr. Anderson was given.
In light of this, Mr. Anderson gave the advice he gave, which I felt-and I hope my hon. friend would agree-was appropriate in the circumstances.


STATEMENT ATTRIBUTED TO MEMBER FOR CARLETON-CHARLOTTE
Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, the transcript in the hands of the Prime Minister refers to a million cans of rancid and decomposing tuna. It is a serious matter affecting a $2 billion industry and 100,000 jobs in Canada. It is unthinkable he would not have informed him.
The Hon. Member for Carleton-Charlotte today contradicted the Prime Minister. My question to the Prime Minister is this. Does the challenge to put your seat up apply to the Hon. Member for Carleton-Charlotte? If he is wrong and he did not inform caucus and the Prime Minister at the same time, would the Prime Minister have the Hon. Member for Carleton-Charlotte put his seat on the line? Or, would the Prime Minister quit the charade and tell the truth to the House of Commons?


Some Hon. Members:: Order!


Mr. Speaker:: The Hon. Member-


Some Hon. Members:: Throw him out!


Mr. Speaker:: No, no.

September 25, 1985
Oral Questions


Mr. Forrestall:: Why not?


Mr. Speaker:: Everyone just calm down, please. The Hon. Member knows there is an implication in the second part of his question which is improper and I simply invite him to rephrase it. Only the question without that part.


Raymond John Skelly: Mr. Speaker-


J. Michael Forrestall: Talk about charades!


Raymond John Skelly: -my second question to the Prime Minister is: Does the Prime Minister know the price of defending a lie?


Some Hon. Members:: Oh, come on!


Mr. Mazankowski:: That is way out of order!


Raymond John Skelly: The loss is honour. The loss is the integrity of his Government.


Ramon John Hnatyshyn: Why don't you sit down?


Raymond John Skelly: Does he know that it is a very serious problem?


An Hon. Member:: You are wrong.


Some Hon. Members:: Withdraw.


Mr. Speaker:: The Hon. Member is skating very close and he knows it. It is not proper-


J. Michael Forrestall: He thinks he is walking on water right now.


Mr. Speaker:: It is not proper-order, please. All Members, order, please! What is improper is not made proper by yelling about it.
The Hon. Member is skating very close to the line. He knows it is improper to do indirectly what cannot be done directly. Making an accusation of that sort with regard to character is improper in this House. I, therefore, invite him to withdraw the earlier question and put a simple question of fact if he has one.


Raymond John Skelly: Mr. Speaker, the simple question of fact is-


Some Hon. Members:: Withdraw!


Raymond John Skelly: -that a Minister of the Crown has given contradictory-


Some Hon. Members:: Withdraw!


Mr. Speaker:: Order, please. The Hon. Member for Port au Port-St. Barbe.



MEMBER'S STATEMENT

['Amazing.']
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, the issue before this Parliament today is not about tainted tuna.


Some Hon. Members:: Question.


Brian Vincent Tobin: Any more than the issue more than a decade ago in the U.S. was about a bungled break-in at Democratic headquarters.


Some Hon. Members:: Oh, oh!


Brian Vincent Tobin: I repeat the question my colleague attempted to put to the Prime Minister. Given the Prime Minister's challenge yesterday that anyone who contradicts his version of truth should put his seat on the line, will he inform this House whether or not the Hon. Member for Carleton-Charlotte has resigned, or how does he explain the statement made this morning by a member of his caucus?


Martin Brian Mulroney: The statement I made yesterday applies to any Member of this House irrespective of where he sits. I can tell my hon. friend that the Member of Parliament to whom he refers has since-


André Ouellet: Changed his mind.


Martin Brian Mulroney: -issued a statement which substantially alters the impact of the first statement. 1 can tell my hon. friend that he has not been here. He has, as I understand it, been ill. Apparently this is sort of funny to the NDP.


Mr. Andre:: He has never been to caucus this year; he is ill.


Martin Brian Mulroney: The statement was that this came up in September. The Hon. Member in question has been ill and not been in Ottawa since last June.


Some Hon. Members:: Hear, hear.



Brian Vincent Tobin: Mr. Speaker, I want to say that I have the greatest respect for the Hon. Member for Carleton-Charlotte. I sat on the Fisheries Committee with him for four years. He has a very sharp mind and he fights hard for his area. I believe he raised the matter in caucus-


Some Hon. Members:: Oh, oh!


Some Hon. Members:: You believe?


Brian Vincent Tobin: -and I ask the Prime Minister again-


Mr. Kempling:: He wasn't here.


Brian Vincent Tobin: I ask the Prime Minister again. How can he square the fact that both the Minister of Fisheries and the Hon. Member for Carleton-Charlotte have issued clarifying statements under pressure from his office? Does that not represent a very dangerous and frightening pattern of Members being pressured by his office to conform to the Prime Minister's idea-


Some Hon. Members:: Hear, hear!
September 25, 1985


Martin Brian Mulroney: Mr. Speaker, I too, have the same kind of respect for the Hon. Member for Carleton-Charlotte who has been ill for some time. I have not followed his movements-


Brian Vincent Tobin: He has a good memory.


Martin Brian Mulroney: -exactly but my information is that he has not been in Ottawa hardly at all, if at all, since the month of June. But in any case, let me just say this. The Right Hon. Leader of the Opposition and the Leader of the New Democratic Party will, I am sure, agree with the basic principle that matters which transpire in caucus are, of course, secret. I will, however, without hesitation, make an exception to that rule today and say that at no time was that matter raised in my caucus by that Member in my presence.


Some Hon. Members:: Hear, hear!


PROCEEDINGS IN CAUCUS
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, lest we misunderstand what the Prime Minister is saying-


Some Hon. Members:: Oh, oh!


André Ouellet: It might have been raised in caucus while he was not there.


Mr. Nielsen:: You clarify it.


Ian Deans: I'll try. I learned from you. Is the Prime Minister saying categorically that the Member for Carleton-Charlotte did not ever raise that matter in the caucus of the Conservative Party during the period leading up to the time when it became public knowledge on September 18-that he never at any time raised that?


Martin Brian Mulroney: Mr. Speaker, I have just said that not only that Member, but no Member, raised that issue in our caucus in my presence.


Some Hon. Members:: Hear, hear!


CAUCUS INQUIRY
Ian Deans: Mr. Speaker, I left "in your presence" out. I know the Member whom we are talking about very well. Is the Prime Minister saying that, whether or not he was present, at no time did that Member raise that matter in the Conservative caucus prior to September 18?


Martin Brian Mulroney: Mr. Speaker, we have a pretty big caucus.


Some Hon. Members:: Hear, hear!


Mr. Blaikie:: Enjoy it while it lasts.
Oral Questions


Martin Brian Mulroney: The NDP says "enjoy it while it lasts". You just keep up this kind of character assassination and you are going to be reduced to zilch in this country. That's what will happen to you.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: I will repeat for my hon. friend that 1 heard of this matter for the first time on Tuesday night of last week.


Ian Deans: That's not what I asked.


Martin Brian Mulroney: This matter was never raised by anyone in our caucus at any time in my presence or, I am informed, in the presence of anybody else.


Some Hon. Members:: Hear, hear!


STATEMENT ATTRIBUTED TO OFFICIAL
David Charles Dingwall: Mr. Speaker, Sir Walter Scott once wrote:
"Oh, what a tangled web we weave,
When first we practise to deceive!"


Some Hon. Members:: Oh, oh!


David Charles Dingwall: I remind the Prime Minister that yesterday he said of Mr. Pat MacAdam:
He got in touch with the Executive Assistant to the Minister of Fisheries and Oceans and received the assurance that there was no problem.
Today Mr. Pat MacAdam denies that he received any assurances. Will the Prime Minister indicate to the House who was telling the truth; he or Mr. MacAdam?


Martin Brian Mulroney: Mr. Speaker, with regard to that statement of my hon. friend attributed to Mr. MacAdam, I took the liberty of inquiring of Mr. MacAdam prior to Question Period, and that statement was never granted by him. It is inaccurate.


Mr. Guilbault (Saint-Jacques):: Amazing.



STATEMENT ATTRIBUTED TO MEMBER

['Order, please. That is not a question of privilege.\nStatements by Ministers']
David Charles Dingwall: Mr. Speaker, is the Prime Minister telling the House that the objections in the representations by the Member of Parliament for Carleton-Charlotte were never raised in his caucus? The report says he did raise them in September of last year, not this year.


Some Hon. Members:: Oh, oh!


Brian Vincent Tobin: Since September of last year.


David Charles Dingwall: Since September of last year.

September 25, 1985
Oral Questions


Martin Brian Mulroney: Mr. Speaker, we only formed the Government on September 17 last year. I do not know when the caucus met after that.


Brian Vincent Tobin: Over the last year.


Martin Brian Mulroney: No, you asked me about September. You said it was not this September because the Member is sick, so it has to be last September. Now you change your mind on that.


Mr. Marchi:: You are the one changing your mind.


Martin Brian Mulroney: I first acquired this information last Tuesday night. It is just as clear cut as that, and that is exactly the
case.



Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Prime Minister. Canadians believe that all uranium exported from our country is to be used exclusively for peaceful purposes. In fact, we have an agreement with the United States which contains a specific clause about Canadian uranium which says that it "shall not be used for any military purpose".
I have given the Prime Minister notice of this question. Would he agree that the only possible interpretation of those words is that no uranium exported from Canada to the United States should be used for anything but peaceful purposes?


Martin Brian Mulroney: That is generally our interpretation. The Secretary of State will be in the House tomorrow to provide more ample information for the Member. This policy is one that has been unchanged. It goes back to a decision by Mr. Pearson in about 1965, and that is the general thrust of what successive Governments have followed.


USE MADE OF URANIUM
John Edward Broadbent: Mr. Speaker, I agree with the Prime Minister that that is what the policy is supposed to be, and that is what the words of the agreement between Canada and the United States are. Has the Prime Minister been informed by the Secretary of State for External Affairs, or by any of his officials, of the very serious evidence that has been brought forward to show that Canadian uranium is now being used in the United States for the construction of nuclear weapons?


Martin Brian Mulroney: I am not
aware of the specifics of that, but as I indicated, the Secretary of State will respond very fully to the question tomorrow in the House.


REQUEST THAT INQUIRIES BE MADE
John Edward Broadbent: Mr. Speaker, given the very great importance of this issue to Canadians and other people around the world, will the Prime Minister assure the House that he will have people in his office look into this immediately to find out if the evidence, which I understand to be quite conclusive, is conclusive? Once that is established, will he find out how it ever came to be that we would allow that to transpire with our uranium? Finally, will he take immediate steps to ensure that no uranium exported from Canada is used in any way for military purposes?


Martin Brian Mulroney: Mr. Speaker, as soon as we received notice of the question of my hon. friend I began the process of conveying those instructions. A fuller response will be delivered by the Secretary of State tomorrow.


STIMULATION OF CANADA LANDS EXPLORATION
Mrs. Barbara Sparrow (Calgary South):: Mr. Speaker, my question, through you, is directed to the Parliamentary Secretary to the Minister of Energy, Mines and Resources. The Petroleum Incentive Program terminates in March, 1986, as is stated in the Western Accord. What is being done and what discussions are under way to formulate a new federal policy to stimulate Canada Lands exploration? When might the Minister make an announcement in order that resource companies can make plans for future activity in the frontier?


Mr. John McDermid (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, the Minister is having discussions with the industry, the provinces, and the Minister of Finance and others in the Government involved in this particular program. She will have something to announce to the House, hopefully before the end of the year.


BANKS AND BANKING
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is directed to the Minister of State for Finance. On March 29 the Minister assured us that, with the exception of the Canadian Commercial Bank, no financial institution was in any difficulty. On that very same day, Western Capital Trust closed its doors after months of negotiations with the Minister's officials. Will the Minister explain why, only two days ago, she again said in the House that her March 29 statement was true?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, as I have explained in the House before, Western
September 25, 1985

Capital Trust closed its doors voluntarily on that day while I was in the House. Through discussions with Western Capital we learned that they were trying to come up with a plan which my officials advised me had a chance of succeeding. When they closed the doors they informed me after the fact. I repeat that the reason I made the statement in the House that day was because it was true.


MINISTER'S KNOWLEDGE OF BANK'S PROBLEMS
Aideen Nicholson: Mr. Speaker, I would have thought the circumstances which the Minister described indeed did indicate that the institution was in difficulty.
May I move on to another example of perhaps different understandings, Mr. Speaker? During the debate on the CCB bail-out in March, the Minister told us very definitely that there was no indication before March 14 that there were serious problems within this bank. We now know that is not so.
Can the Minister explain what happened? Was she not briefed? Why was she not able to be more factual?


Barbara Jean McDougall: Mr. Speaker, if there is anything I have dealt with in this House, it is the facts. The problems that were brought to our attention on March 14 were the facts on which we acted on March 25, namely, that there had been, obviously, in the Inspector General's office monitoring of financial institutions.
There is always monitoring of financial institutions. The problems that we moved to resolve we moved to resolve after the problem was brought to our attention on March 14.


FISHERIES
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, my question is addressed to the Prime Minister. The Minister of Fisheries retracted his statement on Friday that he had informed the Prime Minister's office about the great tuna scandal.
Mr. MacAdam has retracted his statement about his sources of information about the tuna problem-


Ramon John Hnatyshyn: Question.


Howard Douglas McCurdy: Today the Member for Carleton-Charlotte has retracted his damning statement made recently.


Ramon John Hnatyshyn: Question.


Howard Douglas McCurdy: How many retractions of this kind are the Canadian public to have before the people lose confidence altogether in this Government?


An Hon. Member:: Where is your question?
Oral Questions


Martin Brian Mulroney: Mr. Speaker, there are 210 Members of the Conservative caucus sitting here, and they will all give you the same answer.


Some Hon. Members:: Hear, hear!


An Hon. Member:: They have it written on the palm of their hand.


INQUIRY OF PRIME MINISTER
Howard Douglas McCurdy: My supplementary question is for the Prime Minister, Mr. Speaker. Does the Prime Minister remember Richard Nixon?


Some Hon. Members:: Oh, oh!


Mr. Beatty:: Remember Joe McCarthy?


Mr. Speaker:: Order, please. Order. May I remind Hon. Members that questions are supposed to have something to do with eliciting information about government policy.
The Prime Minister wishes to respond?


Martin Brian Mulroney: Yes, Mr. Speaker. I remember Mr. Richard Nixon who was an unindicted co-conspirator, I understand, in a matter in the United States, a very tragic figure in American history. His problem was that he failed to respond fully and completely to legitimate questions, unlike me who responded completely before the House and the Parliament of Canada.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: They are twisted turkeys. It is the New Demogogic Party.


Mr. Speaker:: Order, please.

[ Translation]


BANKS AND BANKING
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, my question is directed to the Minister of Finance. Canadians read in the papers this morning that as far back as March 22 of this year, the President of the Toronto-Dominion Bank and other bankers had asked the Government to appoint a senior official to take charge of administration at the Canadian Commercial Bank, in order to protect the interests of Canadian taxpayers.
Mr. Speaker, I would like to ask the Minister of Finance why his Government, the Government to which he belongs, failed to designate anyone to protect the interests of taxpayers by monitoring the Bank's administration?

September 25, 1985
Oral Questions


Barbara Jean McDougall: Mr. Speaker, this question has been answered time and time again. In the spring we moved as rapidly as possible to try to find new directors for the Canadian Commercial Bank. I have no power to change the management of any banking institutions. 1 would also like to point out that the problems of this Bank began for two reasons, two reasons, Mr. Speaker. They began because of the National Energy Policy that destroyed the western economy-


Some Hon. Members:: Hear, hear!


Barbara Jean McDougall: -and they continued because that Government never did anything about increasing the supervisory capability of our regulators to look after our depositors.


Some Hon. Members:: Hear, hear!


Raymond Garneau: Mr. Speaker, I have heard similar nonsense from the Minister and the Prime Minister two or three times before.
Mr. Speaker, I am referring to Hansard of March 25, in which the Minister herself stated the causes of the Bank's bankruptcy and referred to the situation in the United States. Never, in the initial paragraphs of her statement, did she mention-


Mr. Speaker:: The question, please!


Raymond Garneau: I wish to put a question to the Minister. Why did she not appoint anyone when the bankers gave a list of former senior officials of their institutions who were retired and who were willing to come back and go to work to protect Canadian taxpayers?


Barbara Jean McDougall: Mr. Speaker, the Inspector General proceeded to do his job by sending in inspectors following the rescue package for the Canadian Commercial Bank. At a later time, people were sent in from the private banking sector. I want to remind the Hon. Member that-

-during the years when the Liberal Government was in power, your Government never did a single thing. Never!


REQUEST FOR LIST OF UNINSURED DEPOSITORS
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is in response to the Minister's decision to keep secret the list of depositors with over $60,000 who are receiving their pay-out from the taxpayers.
The Chairman of the Finance Committee has now come forward saying that a list of the uninsured depositors should be made public. That position is also supported by the President
of the Toronto Dominion Bank, and other bank chairmen have indicated that the decision is really a government decision. Would the Minister now stop stonewalling, or covering up, and make this list public?


Barbara Jean McDougall: Mr. Speaker, I have indicated that I will provide a categorical breakdown of the finest possible degree to satisfy the kind of information that is required by the committee. I would also point out that other bank chairmen and other members of the public, other lawyers and many people agree with my decision not to release these names at this time.


REQUEST FOR JUDICIAL INQUIRY
Nelson Andrew Riis: Mr. Speaker, my question is directed to the Prime Minister. In recent days it has become perfectly clear that the Government is not prepared to give the Finance Committee the necessary powers or information to conduct a thorough investigation into the fall of the Canadian Commercial Bank and Northland.
Rather than continue this charade, will the Prime Minister get to the bottom of the CCB mess and ask that a judicial inquiry take place into the demise of these two banks?


Ramon John Hnatyshyn: Let
me first say, Mr. Speaker, that I have had the opportunity of discussing these matters with the Hon. Member's House Leader. We have a firm rule that we will not have our Members make false statements in this House respecting negotiations. The Hon. Member ought to learn that right away because what he is saying is without foundation. We have been as open as possible with respect to every facet of the request being made. We are interested in getting to the bottom of this thing, even more so than the members of his Party, and we have taken steps to ensure that the full truth comes out. 1 would ask the Hon. Member's House Leader not to go about discussing what goes on in negotiations in public again.


Some Hon. Members:: Hear, hear!


Ian Deans: Sensitive. He didn't ask about the negotiations.


John Edward Broadbent: Did you hear the question?


ENTRY OF CANADIAN TECHNICIANS TO UNITED STATES
William James Kempling: Mr. Speaker, I have a question for the Minister of International Trade. I am sure the Minister is aware that as a result of a court action in California by the International Union of Bricklayers and Allied Craftsmen that Canadian tradesmen and technicians are being denied access to the United States to install and service Canadian commercial and industrial equipment. Could the
September 25, 1985

Minister inform the House of the status of this situation and whether any progress has been made to eliminate the problem?


Hon. James Kelleher (Minister for International Trade):: Mr. Speaker, immediately following the court ruling in California, we contacted the Acting Solicitor General for the United States and asked him to launch an immediate appeal and also to apply for a stop order. We then went back to the judge in question, that is the Solicitor General did, and he issued a partial reprieve in which he ordered that any contracts entered into prior to August 28, 1985, would not be subject to his ruling. So people going down to repair machinery delivered under contracts prior to that date will not be stopped. That was a partial reprieve. The Solicitor General is now appealing that ruling as well.


BANKS AND BANKING
Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, my question is to the Minister of State for Finance. [Translation]
What a nerve! She just said we as a Government never did a thing! But I can tell you-

-this Government never blew $ 1 billion and no other Government in Canadian history has ever blown a billion dollars. We want some answers here in the House of Commons.


Mr. Speaker:: Order, please. Perhaps members on the Government benches could allow me to hear the Opposition's question.


Donald James Johnston: Thank you. And no bank ever went bankrupt either. Yesterday the bankers finally made clear something that the Minister has waffled about consistently in this House, that they were ready, that they were willing and they were able to move in and review the assets of the Canadian Commercial Bank and they could have saved the taxpayers of Canada a billion dollars. Why did the Minister or the Minister of Finance or the Prime Minister refuse to accept that offer? Tell us this time. You have not told us yet.


Barbara Jean McDougall: Mr. Speaker, there have been a number of statements made by different bankers as to how long it would take to examine the books of the Canadian Commercial Bank. There were some commercial bankers in there looking at that loan portfolio. They have made that clear. Some of them said that it would take quite a bit longer than others have said it would take.
We came to a collective decision that we had to make a decision quickly on this bank. We brought our collective judgment to bear on this and in the end everyone agreed that that was the action that was necessary, by Monday morning.
Oral Questions GOVERNMENT DECISION


Donald James Johnston: Mr. Speaker, what was the collective decision? Who were part of the collectivity? Neither the Minister nor the Minister of Finance sat in that meeting during that fateful weekend. Will the Minister not confirm-we will throw her one more lifejacket-will she not confirm that the decision had already been made by the Prime Minister on the Friday so there was no point in reviewing the assets of the Canadian Commercial Bank?


Some Hon. Members:: Hear, hear!


An Hon. Member:: Right on.


Barbara Jean McDougall: Mr. Speaker, this was a collective decision on behalf of this Government that was made by a partnership and a collective action by the Government-


André Ouellet: Answer the question.


Barbara Jean McDougall: -a Government that stands together and makes its decision together in conjunction with the banking system-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, order. It seems reasonable if I ask members of the Government to let me hear the Opposition's questions that members of the Opposition would let me hear the Government's answer.


An Hon. Member:: There are no answers.


Mr. Speaker:: Maybe that will get on camera.


André Ouellet: You are on camera now.


CHARTER OF RIGHTS
Mr. Jim Jepson (London East):: My question is for the Minister of Justice, the Hon. Member for St. John's West, and it is on the subject of property rights.
Until property rights are given full protection under the Charter of Rights and Freedoms, Canadians truly will not enjoy either the freedom or the security that is inherent in being a citizen of this great country.
Can the Minister tell us when we might expect this very important matter to be brought before Parliament?


John Carnell Crosbie: Mr. Speaker, as the hon. gentleman probably knows, that provision would have been in the Constitution and the Charter of Rights were it not for the members

September 25, 1985
Oral Questions
of the New Democratic Party and their fellow travellers snuggled in the bosom of the Liberal Party.
I am happy to be able to tell the hon. gentleman that I have already asked that this item be put on the agenda for the next federal-provincial meeting of Attorneys General and hope to have some action on it, always keeping in mind that we wish to protect the rights of the women of Canada with references to family law. We will try to accomplish both of these things when another constitutional amendment comes forward.


BANKS AND BANKING
Mr. Simon de Jong (Regina East):: Mr. Speaker, my question is to the Minister of State for Finance. Given what we have just heard from the Government House Leader that the Government is anxious to move the question of the CCB into committee, and given the fact as well that the committee's report on the CCB is just riddled with statements that the committee could not complete its report because it did not have access to the proper information and that the Inspector General of the Banks was not forthcoming with information, how can she expect the committee to get to the truth of the matter if all these documents and information are not fully available to the committee?


Barbara Jean McDougall: Mr. Speaker, I have indicated that I will give every document to the committee that I am legally entitled to give them. I have offered to break down the categories of depositors in a way that should meet their satisfaction about the legitimacy of these claims. We are working through other channels to attempt to get the report from the Federal Deposit Insurance Corporation in the United States. We have bent over backwards to indicate that we will provide the committee with this information.


REQUEST FOR REASON JUDICIAL INQUIRY REFUSED
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, my supplementary question is for the Prime Minister. Considering that the auditors have indicated that the Canadian Commercial Bank loan portfolio would not be available, that the Minister will not provide us with the list of depositors, and that the bank inspector has refused-


Mr. Speaker:: Order, please.

It must be Wednesday. Does the Hon. Member have a question?


Michael Morris Cassidy: With that in mind, why can we not have a judicial inquiry to shed light on all facts pertaining to the Canadian Commercial Bank collapse?


Barbara Jean McDougall: Mr. Speaker, we have indicated from the beginning that we want the facts public on this very serious situation. I take this as a very serious situation which the Hon. Members on the other side do not seem to do. At my request I was in committee to give them an early explanation as soon as we made the announcement. I have offered to bring everything that 1 can possibly bring to the committee. I do not know what more the Hon. Member expects that we can do. We have been far more forthcoming than your Party has.


Ian Deans: We have given you everything we have.


NATIONAL DEFENCE
Mr. Howard Crosby (Halifax West):: Mr. Speaker, I have a question for the Minister of National Defence concerning the case of Walter Theriault. I know he is familiar with the sinking of the Lady Marjorie because it has been brought to the attention of the House by my colleague from South West Nova. Over six months have gone by since this unfortunate incident. The Minister knows that justice delayed is justice denied. Can he indicate to the House what action is being taken and when we can see this claim settled for the Theriault family?


Harvie Andre: Mr. Speaker, I am well aware of the interest of the Hon. Member in this unfortunate situation. A board of inquiry is looking at it. I gave instructions to officials in the Department that they should make haste so that this matter can be put to rest finally and in the near future.


FISHERIES
Hon. Jean Lapierre (Shefford):: Mr. Speaker, I have a question for the Right Hon. the Prime Minister.
After today's oral questions period, does the Prime Minister not find it passing strange that he should be the only one to be in step? His friend MacAdam never said that. The former Minister of Fisheries and Oceans withdrew his statement. The Member for Carleton-Charlotte is ill and cannot possibly have said that. He claims that the news media are imagining things.
September 25, 1985

I would like to know whether the Prime Minister thinks he can fool Canadians? How does it feel to have a monopoly on truth?


Martin Brian Mulroney: Mr. Speaker, I never claimed to be in secure possession of truth. In answer to a question I simply said that I gave the only answer possible, I told the truth.
My hon.* friend blames me for telling the truth! It is unfortunate but I can assure you that the facts as I related them to the Leader of the Opposition and the Leader of the New Democratic Party were in accordance with the situation-


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. members on Tuesday, September 24, 1985, meet the requirements of the Standing Orders as to form.


PRIVILEGE
Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, I have a very brief question of privilege. I know that as a Cabinet Minister I have to take responsibilities, and I do that. However, I very seriously urge the Right Hon. Leader of the Opposition (Mr. Turner) that when he asks questions to not make statements as to so-called facts. I did not know about the tuna issue until Wednesday morning last week. In the preamble to his question he said other than that as a statement of fact, and I would appreciate him staying very close to the facts.


Mr. Speaker:: Order, please. That is not a question of privilege.
Statements by Ministers



ROUTINE PROCEEDINGS


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, 1 have the honour of tabling, in both official languages, the first report of the Sub-committee on Revision of Copyright, of the Standing Committee on Communications and Culture.
If the House gives its consent, I intend to move concurrence in this report later this day.
[Editor's Note: For above report, see today's Votes and Proceedings.]


THE CABINET
Hon. Marcel Masse (Minister of Communications):: Mr. Speaker, this morning I was informed that I was the subject of an inquiry concerning an alleged violation of Sections 61 and 63 of the Canada Elections Act during the last election campaign, in the riding of Frontenac.
Although no complaint was lodged against me, today I have asked the Prime Minister (Mr. Mulroney) to relieve me of my duties as Minister of Communications. I made this decision since the prospect that a complaint might be lodged against me would cast doubts on my integrity, which would reflect on the Government. That is why I tendered my resignation to the Prime Minister today.
I am convinced that upon completion of the investigation, my innocence will be established.
Thank you, Mr. Speaker.


MINORITY RIGHTS
Hon. Benoit Bouchard (Secretary of State of Canada):: Mr. Speaker, I am pleased to announce today, on behalf of the federal Government, a new and expanded litigant assistance program.
The advent of the Canadian Charter of Rights and Freedoms has focussed the attention of Canadians and led to a host of projects by volunteer agencies. In the Throne Speech in the fall of 1984, the Government stressed its commitment to social justice and equity for all Canadians, especially for those who,

September 25, 1985
Statements by Ministers
in the course of our history, have suffered from discrimination. During the last election campaign, and on several occasions since then, our Government has said repeatedly that it supports the concept of providing financial assistance in cases based on the Canadian Charter of Rights and Freedoms and expected to have a national impact. The creation of a Committee on Equality Rights is one example of the many steps taken by our Government to bring the Charter to the people and to respond to the needs of volunteer organizations. The implementation of a new and expanded litigant assistance program is a major adjunct to this series of Charter-related initiatives.
Mr. Speaker, I am happy to say that the new program will not only support cases where language rights are at stake but will also provide for financial assistance in cases based on Section 15 (which says that all Canadians are equal before the law, without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability), Section 27 (which deals with the preservation and enhancement of the multicultural heritage of Canadians) and Section 28 (which stresses equal rights for men and women) of the Canadian Charter of Rights and Freedoms. The new sections of the expanded program will apply only to matters that fall under federal jurisdiction. It was thought that as far as equality rights are concerned, the federal Government should take the initiative and set an example to help Canadians in their search for clarification of these rights which are protected under the Charter. This is a very positive step which, it is hoped, will encourage the provinces to follow suit.
One of the important aspects of this new measure, Mr. Speaker, is that the Government, in addition to offering Canadians financial assistance in this very vital area, has done so in such a way that it can no longer be construed as in any way affecting the content of these court challenges. The new expanded program will be more directly concerned with areas under federal jurisdiction.


Mr. Speaker:: Order, please. I am sorry to have to interrupt the Hon. Minister, but perhaps Hon. Members who want to have meetings could have them somewhere else.


Benoît Bouchard: I appreciate your intervention, Mr. Speaker.
Were one to assume that the federal Government will directly administer this program, one might very well suggest there is a conflict of interest if the Government were to decide which challenges against itself should be funded. This initiative is an example of the novel relations this Government wants to have with volunteer organizations. Therefore the Government did not elect to fund only a few organizations because it thought that many groups should have ready access to these funds, especially individuals who might not belong to non-profitable groups. It thought as well that many questions such as systematic discrimination were of great interest to several groups-women, visible minorities, native people and
the handicapped, to name a few-and not only to the official languages communities. To a certain extent, the creation of the new body for which we have opted will reduce the possibility of duplication.

I therefore wish to announce at this time that the expanded program will be entrusted for its operation to a respected organization in the voluntary sector-the Canadian Council on Social Development. This national, non-governmental and non-profit organization provides a forum for citizen participation in the formulation of progressive social policy. The Council has undertaken, over the past four years, a number of initiatives to increase Canadians' awareness of and preparation for the impact of the new Constitution. Of particular note was the establishment of a task force which explored the judiciary's expanded public policy responsibilities, proposed a series of action strategies in such key areas as research and information support and examined the role of Constitution-based advocacy by the voluntary sector.
The council will be required to establish an independent body which will be charged with deciding which court challenges merit the provision of financial assistance under the program. The body so constituted will be composed of Canadians who are prominent in the fields of language and equality rights. This body will also deal with outstanding cases presently being considered for financial assistance.


Some Hon. Members:: Hear, hear!


Benoît Bouchard: Under the terms of the arrangement with the Canadian Council on Social Development, it has been agreed that the council will report annually to the Department of the Secretary of State.
The program I am announcing today will provide an amount of $9 million over the next five years to support this important development in the clarification and expansion of fundamental rights and freedoms for all Canadians. This represents close to a tenfold increase in the level of funding that existed under the original program.

As Hon. Members well know, Mr. Speaker, this program was set up in 1978 to support challenges related to the linguistic rights of minorities. Extended in June 1979, it was limited to challenges based on Sections 93 and 133 of the Constitution Act of 1867 and Section 23 of the Manitoba Act of 1970, for those provisions were the only ones that could be used to provide a constitutional base for official languages rights. Section 93 protects denominational rights in respect of education, whereas Section 133 of the Constitution Act of 1867 and Section 23 of the Manitoba Act of 1870 sanction the use of English and French in the legislatures of the federal Government, Quebec and Manitoba, as well as before the courts of those two provinces.
September 25, 1985

As a result of the proclamation of the Canadian Charter of Rights and Freedoms, the Court Challenges Program was updated in December 1982 so it would apply also to typical challenges where the plaintiff claims his rights concerning the official languages or his right to education in the language of the minority, pursuant to the provisions of Sections 16 to 23 of the Charter. Generally speaking, Sections 16 to 22 deal with the status and use of French and English in Canada, at the federal level, and in New Brunswick. Under these sections, it is the right of anyone to obtain services in either of the two official languages, when dealing with federal and New-Brun-swick institutions. Charter Section 23 guarantees the rights to education in the language of the minority.

To date, 17 cases have been funded in whole or in part under the program. A number of cases which enhance minority language education rights have been assisted in Prince Edward Island, Quebec, Ontario and Alberta. The issue of the use of official languages before the courts has been dealt with in Quebec, Manitoba, Saskatchewan, Alberta and the Yukon. The results of these cases have been encouraging and have underscored the important role that such a program has played.

Mr. Speaker, our Government is committed to promote social justice and equality for all Canadians and this new expanded Court Challenges Program is one way to achieve our purpose. This fresh approach signals a new era in relations between the federal Government and volunteer organizations.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I should like to start by congratulating the Minister on his promotion which, I think we can rightly say, is a token of the Prime Minister's confidence in the Minister's competence and capacility. We have high hopes and great expectations, and we trust he will be able to respond to the needs of various groups, whether they are official language groups or represent other linguistic communities.
Mr. Speaker, "expanding the litigant assistance program" is undoubtedly something many Members of this House have been looking forward to for some time. Since last April, when Section 1 5 of the Canadian Charter of Rights and Freedoms came into effect, many of us have asked this Government when it would be considering an expanded program to include Section 15.
As we know, and the Minister already said as much, the cases heard before the courts since December 1982 have dealt with Sections 93, 133, 23 of Manitoba and 23 of the Charter. The Government, that is the Liberal Government at the time, had established the program in 1978 and expanded it to include the schools issue, which is covered by Section 23 of the Canadian Charter of Rights and Freedoms.
Mr. Speaker, we feel it is absolutely vital that Canadians should be helped financially in bringing before the courts cases
Statements by Ministers
of national importance based on the Canadian Charter of Rights and Freedoms. I think it is a very good thing that the majority, that Canada as a whole should bear the costs incurred by those Canadians who want to challenge the Charter of Rights before the courts.
Mr. Speaker, I also approve because it gives Canadians across the country a chance to acquire a better understanding of the rights we have all been given under this Charter of Rights and Freedoms.
Therefore, my colleagues and I can only applaud the Minister and the Government for their decision to expand the Court Challenges Program to include Sections 15, 27 and 28. [English]
The purpose of this program is for the federal Government to make available financial and human resources to assist litigants in establishing before the courts the full meaning of equality and the full meaning of the rights given by the Charter in Section 23, 15, 27 and 28. Speaking for my colleague, the Hon. Member for York West (Mr. Marchi), who speaks as critic for multiculturalism, I can tell the Minister and the Government that indeed ethnocultural communities of Canada will be very happy to hear that the Government is enlarging the program to include Section 27 of the Charter. However, ethnocultural communities and other minorities have great concern regarding the limitations of the funds available. Until we know the criteria under which the program will apply, we cannot applaud too loudly. Hopefully we will see these criteria soon. Therefore, we will reserve judgement on the applicability of this program.
Speaking for my colleagues on this side of the House, I understand the Minister's concern about avoiding conflict of interest. I understand that the Government wants to give this to an outside agency so that the Minister of Justice (Mr. Crosbie) will not be in conflict with the Secretary of State (Mr. Bouchard) when deciding which cases will be financed and which will not. I, for one, endorse the idea that an outside body or bodies should be asked to administer this program. I am pleased the Government has heard the message clearly that there could be some conflicts. We all know that, for example, the Minister of Justice (Mr. Crosbie) was not too hot on the issue of allowing groups and individuals to have financial assistance from the federal Government.
The organization which will be charged with the administration of this program, the Canadian Council on Social Development, is a serious and competent body in social matters. I have hesitation with respect to language questions. To ask the council to perform the work which has been traditionally performed by the Secretary of State leaves me asking whether or not this is the proper organization to deal with language issues. It has not been my experience that the Canadian Council on Social Development has that expertise in matters of language rights. Therefore, I can tell the Minister that, with that reservation, I am happy to hear that the Government has adopted this arm's length position.

September 25, 1985
Statements by Ministers
I would indicate to the Minister that we are worried about the lack of consultation which went into this issue. I have personally phoned several organizations and have been told by them that they were not consulted on how this program would be put together. That worried me because there are different interests, be they covered by Sections 15 or 27. We have a panel which will be chosen, I take it, by the Canadian Council on Social Development, or on the advice of someone who will represent various interests. We do not know how large the council will be, nor do we know how the people will be named to it. All we know is that there will be a panel of competent, we hope, and understanding people, who will report annually to the Minister. We still have to see the modalities, as we say en frangais-

-in French, modalities of application, criteria, and we are anxious to hear the answers to these questions.
Mr. Speaker, I must also tell you that I consulted with my colleague from Outremont (Mrs. Pepin) and she made it quite clear that women do not agree. In this field she knowledgeably speaks on behalf of the Liberal Party. They do not agree because they had a council-the Women's Legal Education and Action Fund, if my memory serves me right-which was funded and whose role was to support legal or other action to promote the cause of women.
Through you, Mr. Speaker, I say to the Minister that perhaps the whole approach will have to be reconsidered so as to involve several organizations, not just one. I had suggested the Canadian Bar Association because I thought it was an independent body which, at least in case of litigation, might have given a reasonable judgment devoid of any special interest. My recommendation was rejected, but there are many other such organizations.
For instance I can tell you that the Federation des francophones hors Quebec has not been consulted. It feels frustrated, it feels ignored and it even feels hurt because the Prime Minister had told all those groups: "We will consult with you." Well, they were not consulted. So we are faced with the imposition of an administrative measure which makes us feel somewhat hesitant.
The Secretary of State (Mr. Bouchard)-I conclude with this and wish him well-must become the champion of official languages minority groups, the champion as well of all individuals affected by this court challenges program, be they handicapped, women, official languages minority groups or anyone covered under Sections 15, 27 and 28; the Secretary of State will be their spokesman in the House. We warn him that we expect much from him and we hope he will keep the House up to date on the program and its operation.


Mr. Svend J. Robinson (Burnaby):: On behalf of all my colleagues of the NDP caucus, Mr. Speaker, I am pleased to address the very important issue of the establishment of a fund to achieve equality rights in Canada.
Mr. Speaker, I emphasize that I am speaking on behalf of all these Hon. Members, including the Hon. Member for Vancouver-East (Ms. Mitchell) who is our party's critic on the status of women, the Hon. Member for Beaches (Mr. Young) who is our critic on the rights of the handicapped, as well as the Hon. Member for Churchill (Mr. Murphy) who is our critic on federal-provincial relations.
Mr. Speaker, I wish the Liberal Party critic had spoken out on this issue, because I am well aware that she does not agree with the views of the Government's spokeman and, frankly, 1 share her disappointment.

Mr. Speaker, I am pleased to indicate that while we in the New Democratic Party welcome at long last the announcement by the Government with respect to the funding of challenges of national importance under the provisions of Sections 15, 27 and 28 of the Charter of Rights and Freedoms, as well as the language rights provisions of the Charter, we are disappointed with the process which led to this announcement, as well as with significant elements of the substance.
It was with the objective, which I believe all Members of the House would share, that Canadians should not be forced into the courts that we welcomed the adoption of Section 15 of the Charter of Rights on April 17, 1982. However, we had hoped that in the three years which was given by Parliament and by the provincial Governments to change laws and practices to bring them into conformity with the spirit and letter of Sections 15, 27 and 28 there would have been far more substantial work done and that Canadians would not have to go to the courts. We were most disappointed with the minimal response, both by the previous Government and by this Government, to the challenge posed by Section 15.
Indeed, as a member of the committee of the House of Commons on equal rights, which travelled across the country, from one side to the other, I have heard from many witnesses who emphasized the importance of adequate funding for Charter challenges. In August of 1984 the Prime Minister announced that there would be adequate funding mechanisms established to ensure that potential litigants who wanted to bring forward important challenges under Section 15 of the equality rights section would have the resources to do so.
We know that the Minister of Justice (Mr. Crosbie) was not too excited about this prospect. In fact, in May of this year in response to a question from me he said:
Mr. Speaker, there is a Charter of Rights here in Canada. It is alive and doing well. Any citizen or any group can apply to the courts if they believe they have a case under the Charter. They do not require financing by the Government. If they believe they have a good cause, they can find the money for that cause. That, Mr. Speaker, is the way it is and always has been in our country.
Fortunately, saner heads prevailed. I am pleased to note that the view of the Minister of Justice was a minority view. In fact, it was recognized that funding was essential to make equality a reality in Canada today. Now, over a year later, the Government has in fact established a fund. What about the fund?
September 25, 1985

First, in the brief time I have available I wish to speak about the process which led to the establishment of this fund. There was an excellent proposal made by a very respected organization in Canada. I am referring to the Women's Legal Education and Action Fund, a group which represents women from right across Canada.
[ Translation]
The Women's Legal Education and Action Fund has carefully examined how the money should be spent to defend equality rights. In the opinion not only of this Fund but also of the New Democratic Party, it is essential that women should be able to choose among significant issues and decide on which to take action, as well as use the money as they see fit, and not as others might see fit.
That is why the Women's Legal Education and Action Fund has applied for financial assistance from the Government of Canada. It has a very specific purpose, Mr. Speaker. It applied for a grant of $20 million.
This amount would yield some $2 million in interests per annum, which is exactly what is required by a small organization the purpose of which is to defend public interests. And the Fund has emphasized that it is often necessary to go to courts to have the guarantees of the Charter enforced.
A concrete proposal was put forward for funding. What happened? Not once, not twice, but 13 different times they tried to talk to someone in Government-anyone; the President of the Privy Council (Mr. Hnatyshyn), the Secretary of State (Mr. Bouchard), the Minister of Justice, but no one would talk to them. This is the Government which prides itself on consultation. So much for consultation, Mr. Speaker. There has been no consultation whatsoever on this important question.
Had the Government consulted, Mr. Speaker, it would have found that this proposal is fundamentally unacceptable. It is a proposal which is a slap in the face to those groups who most hoped for action on equality, on the woman's movement, on the disabled, on visible minorities and other minorities. It is a paternalistic approach and one which denies the equality which Government is supposed to be promoting.
As Shelagh Day of the Legal Education and Action Fund said:
Once more, women are going to have decisions made for them by others. The point of equal rights at this particular time, you would think, would be to give women power to make decisions for themselves and to honor their capacity to do that. This is not a good equal-rights decision.
We echo that concern, Mr. Speaker, which has been expressed as well by representatives of the disabled and the ethnic communities in Canada, including the Canadian Ethnocultural Council.
I emphasize, Mr. Speaker, that we are not opposed to the principle of an independent arm's length agency which would
Statements by Ministers
have the power and, I might say, adequate funds to assist in funding important challenges under the provisions of the Charter of Rights. However, we say that the two principles are not exclusive. One can have a respected independent agency such as the Canadian Council for Social Development involved in funding decisions and, at the same time, recognize that it is women who should be determining priorities for women, that it is the disabled who should be determining priorities for the disabled, and that it is the representatives of minorities who should be determining their priorities, not others on their behalf.


John Carnell Crosbie: We agree.


Mr. McLean:: We agree. That is exactly what they've done.


Svend Johannes Robinson: The Government says it agrees, Mr. Speaker. Yet it is bringing forward a proposal which flies in the face of that fundamental principle.


John Carnell Crosbie: Narrow-minded McCarthyism.


Svend Johannes Robinson: The New Democratic Party believes-and we will hear from the braying Minister of Justice in due course-that the amount of money which has been allocated for this fund-[DOT]


John Carnell Crosbie: I'm not allowed to speak here because the loud-mouthed NDP are hogging the floor.


Svend Johannes Robinson: -is not adequate.


Ms. Mitchell:: The unjust Justice Minister.


Svend Johannes Robinson: The Legal Education and Action Fund estimated that it would cost some $2 million a year merely to pursue the very serious and historic inequities against women. This program would allocate $2 million for all court challenges, including challenges under the provisions of language rights. The structure which is proposed, Mr. Speaker, is awkward. It will result in delays and in reviews on a case-by-case basis and not on a priority basis.
In fact, as Mary Eberts, a chairperson of the Legal Committees of the Women's Action Fund, said:
The potential for the whole thing to become bogged down is really quite substantial. I'm convinced the method is guaranteed to slow down the pace of litigation to that of a snail.
Justice delayed is justice denied, Mr. Speaker-


Paul Wyatt Dick: Where did you hear that before?


Svend Johannes Robinson: And justice has been denied to Canadian women, to the disabled and to other minority groups for far too long. We in this Party believe that the establishment of a fund or funds is long overdue, and while the resources must be beefed up, we are most disappointed with the failure of this Government to consult with the groups affected and to bring forward recommendations which would have responded in a

September 25, 1985
Petitions
meaningful way to the concerns of the groups which are seeking equality in Canada today.


John Carnell Crosbie: You are a bleeding heart with a mouth.




Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, as a follow-up to a letter I wrote recently to the Acting President of Canada Post Corporation, I have the honour to present a petition on behalf of the residents of the 79 unit condominium in the Greenboro area of Ottawa-Carleton. They request that Canada Post commence full postal service in the Greenboro area of the City of Ottawa immediately.


Nelson Andrew Riis: Mr. Speaker, it is my pleasure to present a petition on behalf of a number of residents of Kamloops, British Columbia. They are concerned with the announcement of the Minister of Employment and Immigration (Miss MacDonald) that workers laid off after December 31 of this year will have their pension benefits deducted from their unemployment insurance benefits, thus effectively eliminating the benefit to the worker of the pension package he or she is about to receive.


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I have the honour to present a petition signed by several hundred residents of Sydney, Nova Scotia, who call upon Parliament to review and to recall the proposed section of the Unemployment Insurance Act which would see pension income being used as earned income for purposes of unemployment insurance.


Mr. Dan Heap (Spadina):: Mr. Speaker, it is my honour to present a petition from a number of residents of the City of Toronto in the Province of Ontario. They ask Parliament to amend the immigration regulations so as to allow sons, daughters, brothers and sisters, regardless of their marital status, to immigrate under the family reunification program.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, there have been discussions between House Leaders and I believe that if you were to present the following motion, you would find it would pass by unanimous consent without debate. The motions is as follows:
That, notwithstanding any Standing or Special Order of this House, the Order of Reference to a legislative committee of Bill C-71, An Act to amend the Customs Tariff, shall be discharged and the said Bill shall stand referred to a Committee of the Whole for consideration as the first item of business under Government Orders later this day;
Provided that not later than 15 minutes before the end of the time provided for the consideration of Government Business this day, the Speaker shall interrupt, if necessary, any proceedings then before the House and shall put forthwith all questions necessary to dispose of the then remaining stages of the said Bill without further debate or amendment;
That when the motion for the third reading and passage of Bill C-71, An Act to amend the Customs Tariff, has been disposed of, the House shall proceed to consideration of the motion for the second reading and reference to a legislative committee of Bill C-72, An Act to amend the statute law relating to income tax and to make a related amendment to the Tax Court of Canada Act, and when disposed of at the second reading stage the same shall stand referred to a Committee of the Whole;
Provided, that not later than the end of time provided for the consideration of Government Business this day, the Speaker shall interrupt, if necessary, any proceedings then before the House and shall put forthwith, all questions necessary to dispose of the remaining stages of the said Bill without further debate or amendment.


Mr. Speaker:: It is totally clear.


Ramon John Hnatyshyn: In short, Mr. Speaker, there is an agreement that Bill C-71 and Bill C-72 will pass all stages today. There will be an opportunity, of course, to debate in Committee of the Whole, but we have agreed that we will dispose of these two items of legislation so that their Honours in the other place will be able to deal with them at their early convenience.


Jean-Robert Gauthier: Mr. Speaker, I rise in my place just to congratulate the Minister for the clarity of his statement today. If we continue to have such clear and printed statements, it will be a lot easier for us to operate in this House. I give our Party's consent to this.


Ian Deans: Mr. Speaker, as always, when consulted in advance, we co-operate.


Mr. Speaker:: Somehow political connotations sneak into everything we say here, don't they?
The House has heard the proposal. Is there unanimous consent for the introduction of the motion?


Some Hon. Members:: Agreed.


Mr. Speaker:: There being such consent, shall the motion as read carry?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
September 25, 1985

Gabriel Fontaine: With leave of the House, Mr. Speaker, I move, seconded by the Hon. Member for Kamou-raska-Riviere-du-Loup (Mr. Plourde), that the first report of the subcommittee of the Standing Committee on Communications and Culture on the review of copyright which was tabled in the House today be concurred in.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Paul Wyatt Dick: Mr. Speaker, the following questions will be answered today: Nos. 253 and 422.


Mr. Blenkarn: Were any studies done by the Government with respect to the marketability of twin engine helicopters of the class and kind proposed to be built in Canada by Bell Helicopter Textron Inc. in accordance with the agreement the Government made with Bell Helicopter and, if so (a) what were they (b) will they be published?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Yes. (a) The market studies employed to assess the marketability of light twin engined helicopters, as the class of helicopter that is proposed to be built in Mirabel, were as follows:
(1)	A Study of Helicopter Manufacturing in Canada, April, 1981. E.A. Owen/Aerospace Systems Division, Transportation Industries Branch, Industry, Trade and Commerce.
(2)	Civil Helicopters/World Market Review, B. Metcalfe/ Market Research & Analysis Division, Defence Programs Bureau, July, 1982.
(3)	Canadian Civil Helicopter/Market Analysis and Forecast, Aviation Planning Services Ltd., July, 1982.
(4)	World Helicopter Forecast/Defence Marketing Services, (published annually).
(5)	Aircraft Forecast (Military & Civil)/Forecast Associates Inc., (published annually).
Order Paper Questions
(6)	Assessment of Historical and Projected Segments of U.S. and World Civil and Military Rotorcraft Markets 1960-1990/National Aeronautics and Space Administration. NASA CR-166151.
(b) Some of the marketing forecasts are available from professional agencies and can be obtained by contacting their publishers. Referenced studies Nos. 4, 5 and 6 cannot be published or copied by the Department for reasons of proprietary rights of the authors.
The Owen's study (No. 1) and the Aviation Planning Services study (No. 3) have been made available to the industry and can be made available on request. The remaining market study (No. 2) was an internal departmental working document, was never published and contains copyrighted information which the Department is not authorized to release.
In addition to the listed studies, the Department had access to various confidential market forecasts from helicopter and engine manufacturers. These forecasts contain proprietary information and cannot be released by the Department for reason of commercial confidentiality.


Mr. Robichaud: 1.	(a) How many trains are there from Canada to the United States yearly (b) how many daily trains are there (c) what are the points of departure and arrival of such trains (</) what is the frequency of such trains?
2.	(a) How many trains are there from the United States to Canada yearly (b) what Canadian destinations are served (c) how many daily trains are there?
3.	Will the number of trains from Canada to the United States increase or decrease in 1985?


Donald Frank Mazankowski: 1. VIA
Rail operates one daily train service across the international border. This train, named the "Atlantic" operates from Montreal, Quebec to Halifax, Nova Scotia via the State of Main. Stops in Maine are made at Jackman, Greenville, Brownsville Junction, Danforth and Vanceboro.
2.	Amtrak operates two daily trains into Montreal. One train operates daily from New York City to Montreal Via Albany. The other daily from Washington, D.C. to Montreal Via Springfield, Massachusetts and New York City.
Amtrak and VIA Rail operate two daily services from Toronto to U.S. points. One train operates from Toronto to New York City with VIA responsible for its operation from Toronto to Niagara Falls. The second train operates from Toronto to Chicago with VIA responsible for its operation from Toronto to Port Huron.
3.	The number of trains from Canada to the United States increased by one daily train with the restoration of the "Atlantic" on June 1, 1985.


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

September 25, 1985


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


Some Hon. Members:: Agreed.


Mr. Speaker:: I am in receipt of a notice of motion under Standing Order 31 from the Hon. Member for Hamilton Mountain (Mr. Deans).


Ian Deans: Mr. Speaker, as you know, my Leader filed with you on two previous occasions a request for the adjournment of the House in order to discuss what we and I think others consider to be a matter of urgent and pressing necessity, the current financial situation at the Northland Bank. If you were to decide there is a prima facie case for allowing such a motion today, I would be prepared to move that motion.


Mr. Speaker:: Members of the House were apprised of my view earlier on the question of emergency which must be met under this Standing Order, and also some of my preliminary views about urgency. Therefore, I find that the conditions of Standing Order 31 have in fact been met.
I, therefore, ask the House if the Hon. Member has leave to move the adjournment of the House under Standing Order 31 for the purpose of discussing a specific and important matter?


Ramon John Hnatyshyn: No,
because we are still discussing the matter by consent.


Mr. Speaker:: Is it agreed?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Speaker:: All those in favour please rise?
And more than five but less than twenty Members having risen:


Mr. Speaker:: The Standing Order indicates that if 20 or more Members rise, consent is automatic. If more than five but fewer than twenty Members rise, I am required to call in the Members.
Therefore, call in the Members.
Before the taking of the vote:


Mr. Speaker:: On a point of order, the President of the Privy Council.


Ramon John Hnatyshyn: Mr. Speaker, the rules provide that if 20 Opposition Members do not rise then you have no alternative in this instance but to call in the Members. I have had an
opportunity of discussing with the Opposition Leaders the motion with respect to the adjournment of the House. I think you will find that there is a disposition by all Parties to have a debate on this matter commencing at eight o'clock tonight, and I would think under those circumstances we are quite prepared to proceed with the debate. If there is a disposition, since there is agreement to proceed with debate on this matter-


Some Hon. Members:: Oh, oh!


Ramon John Hnatyshyn: If the Liberals insist on having a vote, that is fine, we are prepared to vote for the debate. Otherwise we can save the time of the House and get on with the business without a vote. If the Opposition wants a vote, Mr. Speaker, you may as well go ahead and call the question.


Mr. Speaker:: On the same point of order, the Right Hon. Leader of the Opposition (Mr. Turner).


John Napier Turner: Mr. Speaker, the Hon. Member for Hamilton Mountain presented his motion with proper notice to Your Honour. After having properly considered the matter within the perview of Standing Order No. 31 of the Rules of the House of Commons you allowed him to seek leave.
The Hon. Member then rose to seek leave by unanimous consent which was refused by a voice from the Government side. That is the reason Your Honour rang the bells to convene the Hon. Members for a vote. That is perfectly clear. In other words, the Government side of the House by voice, requiring calling in of the Members, refused debate and in effect were overruling Your Honour allowing this emergency debate. If we want to talk about wasting the time of the House, the Hon. Members opposite and the House Leader brought it upon themselves by refusing the Hon. Member for Hamilton Mountain to present his motion for leave. We take the position, and since this goes to your authority in this House, we want a recorded vote to assure you that from all sides of the House you have the authority of the House and this debate should be allowed.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: 
John Napier Turner: You asked me a question, Mr. Speaker. I want to say that the Government side forced this vote which would have put the authority of the Speaker in jeopardy. We will not consent and we want-


Mr. Speaker:: Order, please.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Such an interpretation is not consistent with our traditions.


Ramon John Hnatyshyn: Mr. Speaker, I think that the way in which you articulated the circumstances is clearly the way things transpired. Unfortunately, there were not enough Members to rise in their places in order to have the vote. We are prepared to go ahead. We have been prepared to go ahead with the reference and with this matter for some days now. We are prepared to have a reasoned debate on this issue and I assure you, Mr. Speaker, that the people of Canada will understand our position.


Mr. Speaker:: Order. The Hon. Member for Hamilton Mountain does not need to indicate consent because it has been refused.


Ian Deans: Mr. Speaker, I have two concerns. One is that never since 1931 has consent for the moving of such a motion been denied by a Government. Therefore, the red herring of the 20-Member stipulation is quite obviously a stalling tactic on the part of the Government in an attempt to make it look as if it were in favour of having such a debate.
More importantly, I hope that nothing which has transpired here will stop this debate. It is an emergency matter and one that should be debated in the House of Commons.


Mr. Speaker:: Order, please. I understand that the Hon. Member was seeking consent and that that consent has been refused. The Hon. Member for Hamilton Mountain has requested leave to move the adjournment of the House for the purposes of discussing a specific matter requiring urgent consideration; namely, the financial difficulties of the Northland Bank. The question is that leave be given to the Hon. Member to move such motion.


Mr. Speaker:: I was hoping for a tie. Accordingly, debate on the proposed motion will stand over until eight o'clock p.m. this day.

September 25, 1985
Customs Tariff



MOTIONS FOR PAPERS


Paul Wyatt Dick: Mr. Speaker, would you be so kind as to call Motion for the Production of Papers No. 4 in the name of the Hon. Member for Mississauga South (Mr. Blenkarn)?
That an humble Address be presented to Her Excellency praying that she will cause to be laid before this House a copy of any agreement signed between the Government and Bell Helicopter Textron Inc. of Fort Worth, Texas with respect to the Government's investment with Bell Helicopter Textron Inc.


An Hon. Member:: Transfer.


Mr. Speaker:: Given the comment of the Hon. Member, the matter will be transferred for debate.


Paul Wyatt Dick: Mr. Speaker, I ask that the other notices of Motions for the Production of Papers be allowed to stand.


Mr. Speaker:: Shall all other notices of Motions for the Production of Papers stand?


Some Hon. Members:: Agreed.


Mr. Speaker:: I must inform the House that because of the ministerial statement earlier today consideration of Government Orders will be extended by 30 minutes this day.



GOVERNMENT ORDERS


[Stage Direction]
House in Committee on Bill C-71, an Act to amend the Customs Tariff-Mr. Epp (Provencher) (for the Minister of Finance)-Mr. Paproski in the chair.
The Deputy Chairman:: Order, please. House in Committee of the Whole on Bill C-71, an Act to amend the Customs Tariff.
Clause 1 to 7 inclusive agreed to.
On Clause 8-


Mr. Baker:: Mr. Chairman, with respect to Clause 8,1 would like to ask the Government representative the purpose of this Clause.


Mr. Nunziata:: On a point of order, Mr. Chairman. My colleague, the Hon. Member for Gander-Twillingate, has asked the Government to provide an explanation with respect to Clause 8. We have been waiting patiently for someone on the Government side to explain what Clause 8 is all about.


Steve Eugene Paproski: Order, please. That is not a point of order.
Will Hon. Members wait until the chair and table is put in place for the officials of the Department?


Mr. Lanthier:: If I understand well, it is a general matter. You want to know what the purpose of section 8 is. Well, excuse me then.
As stated in the speech delivered yesterday, Mr. Chairman, it is meant to update the French text in which there were a few inaccuracies. Now it is a technical clause which will make the French text more acceptable and more consistent with universal French usage.


George Baker: Mr. Chairman, I asked what the purpose of Clause 8 is.
Mr. Chairman, I wonder if the hon. gentleman can tell us what the purpose of changing the wording in Clause 8( 1) was?
[ Translation]


Claude Lanthier: Mr. Chairman, it is so obvious that it is almost funny. For a change in this House! We had the words combine d'arrosage in the singular as against combini d'arros-age. Is that it? Yes. It is merely a technical matter. Note that it is an "e" rather than an "i".
Now we have batterie d'arrosage instead of combine d'arrosage. That is all.


Jean-Robert Gauthier: Mr. Chairman, the last explanation given by the Parliamentary Secretary answers the question. However I would like to know what the difference is between a combine d'arrosage and a batterie d'arrosage!
Mr. Chairman, to gain time and avoid further delay, the Parliamentary Secretary could perhaps send me in writing the definition or the difference between both terms.


Claude Lanthier: I have to answer that I studied the legislation in depth. I even learned about terms I had never seen in my life, but these never caught my eye. However, we will be pleased, as a Government, to send him that technical definition.
Again, I repeat that the term and the Bill itself are of a technical nature. Therefore, this is a technical definition which we failed to notice, I am sorry. But it certainly will be sent to you.
Clauses 8 to 11 inclusive agreed to.


Steve Eugene Paproski: Shall Clause 12 carry?
On Clause 12-
September 25, 1985


George Baker: Mr. Chairman, on Clause 12, this section will come into effect on January 1, 1986. We just passed a clause in which certain sections of the Act came into effect May 24, 1985. Can I ask very simply and to the point why there is such a distinction between the dates? Was it because of the Budget date and the effectiveness of the Budget measures?
When one dates back an item such as this, it leads to a lot of problems. Perhaps the Parliamentary Secretary could supply us with the answer in writing as to why there is such a difference between the sections coming into force in Clauses 11 and
12?


Steve Eugene Paproski: Will the Parliamentary Secretary undertake to give the reply in writing?


Claude Lanthier: Very well, we will provide that reply also in writing, you may be sure.

Clauses 12 and 13 agreed to.


Steve Eugene Paproski: Shall Schedule 1 carry? [Translation]


Jean-Robert Gauthier: Mr. Chairman, this is for my information.
In the Ways and Means Motion, there was reference to a change in the amount of goods Canadians may bring back when they go abroad. I think the Parliamentary Secretary to the Minister of Finance (Mr. Lanthier) should tell us without making a long speech, with respect to this $100 change in goods which we will now be allowed to bring back with us each time we go abroad, whether the $300 cumulative total is to disappear or whether it will simply be $100 per visit for tourists or other persons travelling-


Claude Lanthier: As I said in my statement, Mr. Chairman, one can now use a $100 exemption for a two-day stay abroad. In theory, one could now use 182 exemptions a year, but the $300 amount remains. It is not cumulative, of course. The $300 amount in any year remains in force. It is not changed. It is only the $100 amount for a 48-hour stay abroad, which was formerly allowed every three months and that now becomes unlimited, within the limit of the number of days in a year.


Jean-Robert Gauthier: I would like to be very clear on that, because this is of interest to Canadians in general. A Canadian tourist coming back from a visit abroad is allowed to bring back one hundred Canadian dollars' worth of goods every 48 hours, without affecting the $300 he is entitled to once a year when travelling abroad. Therefore, we would be allowed, in principle, to bring in from abroad $300s' worth of goods and, 48 hours later, go back and return with $100s' worth of goods again. Did I understand correctly?
Customs Tariff


Claude Lanthier: Yes. Of course there is a difference, in that for the $300 amount, one must be away for seven days, while for the $100 amount one must be away for two days. Therefore, if we want to figure it out, if one goes abroad on three two-day trips, one still has the $300 but has three trips to make. What you said is perfectly right.


André Ouellet: Mr. Chairman, I have a question for the Parliamentary Secretary. Since we allow people who re-enter Canada after spending seven days abroad to bring back only for $300 of goods, would it not be more logical to allow people to bring back a lot more once a year since, as my colleague has just said, we are about to allow someone who leaves Canada for two days to bring back for $100 in goods? There is no limit to this allowance. Theoretically, someone could therefore go abroad every two or three days and bring back for thousands of dollars in foreign goods. If the Government is willing to make this concession to Canadian workers, and as the Government is always promoting free trade these days, it should understand that it would be appropriate to allow people who are away for seven days once a year to bring back for many hundreds of dollars in goods because what is permitted for someone who is away for only two days is not permitted for someone who is away seven days. I would like the regulations to be fair to those who travel abroad only once a year and I would like them to be allowed to bring back for a higher amount because this discriminates against those who are not that well-off. Not everyone has the opportunity or the means to travel abroad two or three times a week. It is only businessmen or people with lots of money who can travel abroad several times a year. Those who go on holidays once a year and who travel abroad, whether to the United States or to Europe, are penalized because they can only bring back for $300 in goods. I find this unfair and I would like the Parliamentary Secretary to correct this situation.


Claude Lanthier: That is debatable. I see here in my notes, Mr. Chairman, that the amount was adjusted in 1983 to compensate for inflation. Naturally, the amount was adjusted. However, I question the distinction made between the wealthy and the not so wealthy travellers. People who can afford to take holidays of seven days or more can naturally spend more than those who take only one-day trips. We could debate this issue, but as it was pointed out earlier, the law reflects an effort to dip one toe in what will be the great sea of free trade. In fact, I think this measure is a boon for people with modest incomes who make short trips outside the country and cannot afford to go very far. For instance, they might be going from my hon. colleague's riding or my own to Plattsburgh or Burlington. On the other hand, they should not be encouraged to do all their shopping down there. Nor should they be encouraged to go and buy a colour TV or a bedroom set, for instance, across the border.

September 25, 1985
Customs Tariff
Obviously, the Government's purpose in proposing this measure was to make things easier for the travelling public. In fact, such trips are becoming increasingly common, not necessarily among the rich and unfortunately not among the poor, but they are common among people with average incomes. People can take advantage of these exemptions without seeing them as some kind of complex problem. It used to be that when you went on a two-day trip, you would try to remember whether it was three months ago or two and a half months, and so forth. I think this is going to simplify things. A seven-day trip is a holiday, it is something you remember, and I believe it will add fairness and consistency to the new measure.


Steve Eugene Paproski: The Hon. Member for Papineau (Mr. Ouellet).


André Ouellet: Mr. Chairman, I thank the Hon. Parliamentary Secretary to the Minister of Finance (Mr. Lanthier) for his excellent reply. I think he provided us with a sound and defensible explanation. But I should like to push him a little further in his reasoning. If it is, as he stated, in order to promote free trade, he must be aware that some countries, especially in Europe, have eliminated all these custom barriers. People travelling within countries of the European Common Market no longer have to make declarations when they return to their respective countries.
Would it be possible for his Government to consider the possibility of fully eliminating the obligation for Canadians to report their purchases when they return from abroad? I think that customs officers would still have a part to play in controlling the incoming of drugs and goods deemed unacceptable. But in the case of souvenirs, pieces of clothing, etc., things that tourists normally buy and bring back with them, could his Government consider the possibility of sparing Canadian tourists upon their return to this country the aggravation of submitting a report and being searched and auscultated by our custom officers?


Claude Lanthier: I am sorry, Mr. Chairman, but let there be no misunderstanding. We are not trying to encourage free trade. I said that we were trying out a series of measures that seem to be popular throughout the world.
My hon. colleague referred to the Common Market. Heaven knows that we have not reached that point yet! We are still at the very beginning. And, as I said, it is nothing more than a little bit of toe dipping in the sea of free trade.
Also, the European countries have achieved their free trade after considerable negotiations and time. We have not reached the starting line yet. That is for the first part.
Second, the whole point of our Customs and Excise system is not to catch the person who crosses the border with $110 or $90 worth of goods or to find out whether he spent 48 hours or
47 and a half hours away from home. The point is to intercept certain people and goods at the border.
In this country we have a relatively simple situation, since we have only one neighbour and only one border, with the United States, so it is easy to establish rules, and of course we also have airports where people and goods can be intercepted.
In Europe, they had to compromise, because they have borders everywhere. A European country may have common borders with three or four other countries, cutting through areas where people can swim across or walk across on mountain paths. They had to cut down on all kinds of administrative formalities because they just could not cope.
However, in our case I do not think we should remove these controls. We must not go to protectionist extremes, but I think we have the right kind of controls here in Canada and we should enforce them. Of course, we want to get rid of administrative red tape. Now, if a person has nothing to declare over $100, no declaration is necessary.
Personally, I believe that our Government's policy favours some kind of control. We are not about to open the borders. People who think that free trade would mean opening the borders must be daydreaming. I believe that free trade must be controlled. Now controls may be mitigated or they can be very elaborate.


Mr. Redway:: Mr. Chairman, as I understand it, the purpose of this particular clause is to provide that someone returning to Canada after an absence of 48 hours will have a $100 exemption. This is in addition to the existing exemption of $300 once a year if you are out of the country for seven days. Can the Parliamentary Secretary tell me if it is possible to have a cumulative exemption? In other words, once a year, if you are out of the country for seven days, can you combine the $300 exemption and the $100 exemption and have a $400 exemption once a year?


Claude Lanthier: Mr. Chairman, the answer to that is a short and sweet no. These things cannot be combined. If a person wants a $400 exemption, that person has to make four two-day trips. He has to take the trouble to make four two-day trips if he wants to get an exemption of more than $300, and he can do so 182 times a year, theoretically speaking. However, exemptions cannot be combined. Each exemption is separate.


Jean-C. Lapierre: Mr. Chairman, I see that the Parliamentary Secretary is giving all kinds of explanations. I was looking at Schedule I, and I would like to ask the Parliamentary Secretary why, under item 49105-1, bolted steel tanks would enter this country duty free?


Claude Lanthier: Could the Hon. Member please repeat the number? He said it so fast I did not quite catch it.
September 25, 1985


Jean-C. Lapierre: It is tariff item number 49105-1 on page 21.


Claude Lanthier: I am delighted, Mr. Chairman. This is the first time I have been asked a question about engineering in the House. I feel right at home.
This item belongs to the broad class of goods that are either manufactured or not manufactured in Canada. This particular item is considered not to be manufactured in Canada.
I might add, in passing, that as far as the engineering aspect is concerned, steel tanks now tend to be welded instead of bolted.
This is an item that existed previously and it has now been included in the class of goods either manufactured or not manufactured in Canada.


Jean-C. Lapierre: About the same item, I was wondering whether there is any connection with the kind of containers required for heavy water, for instance? Is this technology used for heavy water containers?


Claude Lanthier: Though I cannot vouch for it, and as I said before, it is more a matter of engineering than anything else.
According to my knowledge of engineering, all heavy water containers are usually welded. Now, with due respect, the Hon. Member is asking me about a very specific question. If he is agreeable, I shall make enquiries at Customs and Excise and give the Hon. Member his answer in writing in due time.


Jean-C. Lapierre: I think the Parliamentary Secretary is asking me to buy a pig in a poke. If this is passed and I get a written reply in two months, the Bill will have become law by then, Mr. Chairman.
Mr. Chairman, I notice quite a few items and that surprises me. You say that no company in Canada makes surveying instruments, among other things. Your argument would also apply to instruments, hearing aids and similar items, yet as far as I know 1 thought Bell Canada for instance was also a leader in hearing aids technology. I would like to follow your line of reasoning.


Claude Lanthier: Mr. Chairman, all tariff items listed here have been reduced after inquiries and consultations with the private sector. Canada's entire private sector has been made aware of the fact that we were about to establish new tariff item numbers or to adapt the new numbers to current conditions. So if you have cases which were not considered by the technical or consultation committees that had been established I would suggest it is a bit late to raise the matter. There have been specific consultations, ongoing consultations with respect to the questions I examined in the Bill and those people who had representations to make were welcome. But now we have to make a decision today.
Customs Tariff


Steve Eugene Paproski: The Hon. Member for Papineau.


André Ouellet: Thank you, Mr. Speaker. I read with care the speech delivered the day before yesterday by the Parliamentary Secretary to the Minister of Finance in his opening comments on the Bill. He referred particularly to the Quebec Summit where the Prime Minister was very chummy with the President of the United States. I refer more specifically to page 6868 of Hansard where he said: "The Prime Minister of Canada and the President of the United States decided among other trading initiatives to put an end to protectionism in the exchange of goods and services between our two countries."
Does that mean that from now on large American engineering firms may compete on the Canadian market against Canadian companies? We know, Mr. Speaker, that Canada is very much at the forefront as far as engineering is concerned. Our prominent Canadian architects and engineers have no lessons to learn from any other firm.
Of course, our large firms do not have the financial resources nor the organization of some large American engineering firms and I am somewhat concerned following the speech made last Monday by the Parliamentary Secretary to the Minister of Finance, because indeed I am wondering whether his Prime Minister did not sell himself off bound hand and foot not only in areas such as Star Wars but also in one area which was then overlooked, yet is most important, namely Canadian technology as developed by large firms of architects and engineers in Canada.


Claude Lanthier: Mr. Speaker, first, I would like to put things in the proper context. It is not necessarily my Prime Minister, but the Prime Minister of all Canadians as well as your own, my Hon. friend. He is everyone's Prime Minister.
Second, I would have liked him to have quoted my words properly. I said "our valiant Prime Minister". I do not know if this was heard, but I said "our valiant Prime Minister".
To come back to the essence of this question, without speaking about free trade, but only about the issue under consideration, the agreements which have been concluded have not been blank checks, to use an expression that is very dear to Members Opposite. These are agreements in principle which will be phased in and include terms that take into account the production of goods and services in both countries.
You mentioned a specific issue. There are much more vulnerable areas in Canada than our engineering firms which have competed throughout the world. In this sector, Canada has proportionately the largest and best established firms there are. In fact, I believe that we shall now have to get ready to compete against the major American firms. As for not having

September 25, 1985
Customs Tariff
the necessary financial means, I believe that our major engineering firms can be compared with and do compete against firms in other countries, whether the United States or even Germany, and that they have already been successful on the international market. I must point out incidentally that the American firms are not the ones we fear the most in Canada.
As for the architectural or engineering firms, I believe that there are much more vulnerable economic sectors in Canada and that Canadians will eventually have to do like almost everyone else in the world and try to find the markets where they are. I believe that our Canadian firms will benefit from the opening up of the American markets much more than the American firms will benefit from a freer access to ours.


Simon Leendert de Jong: Mr. Chairman, would the section that allows a person to bring in $100 worth of goods every 48 hours allow a farmer to haul a tank down to the United States and get $100 worth of gasoline every 48 hours?


Claude Lanthier: If he stays outside Canada 48 hours, yes.


Simon Leendert de Jong: Does that mean that if he stays out for seven days he is able to bring back $300 worth?


Claude Lanthier: Yes, once a year.


Simon Leendert de Jong: Mr. Chairman, if he brings his whole family over he will be able to get his year's supply of gasoline in the United States, if he has three or four sons above a certain age. What is the age limit here?


Claude Lanthier: Mr. Chairman, I can answer that question with ease due to the fact that I am a fourteenth child. If my father had had a car, which unfortunately he did not, he would have been able to do such a thing.


Simon Leendert de Jong: Mr. Chairman, I have one more question. What is the age of eligibility for the $100 every 48 hours and for the $300 once a year? Is there any age requirement?


Claude Lanthier: Aside from the restrictions on alcohol and cigarettes, there is no age limit. If you bring your baby with you, he is allowed his $100 every 48 hours.
[ Translation]


André Ouellet: I would like to go back to the remarks made a few minutes ago by the Parliamentary Secretary. He is quite right. In the remarks he made on Monday, he called his Prime Minister a valiant Prime Minister. 1 realize that the way vacancies are coming up in the Cabinet, the Parliamentary Secretary has to be most polite and kind to his Prime Minister. That might prove to be in his interest sooner or later, and he has my best wishes in any case. However, his statement is very disturbing in my view, because if indeed the Prime Minister of Canada and the President of the United States agreed to allow free trade in goods and services, as he stated in his speech, unless his words went beyond his thoughts or beyond the facts, if indeed the Prime Minister of Canada and the President of the United States agreed to end protectionism in the trading of
goods and services, the example I gave him earlier, Mr. Chairman, concerning engineering firms, the example 1 used because knowingly the Parliamentary Secretary until very recently belonged to a large Montreal engineering firm, and that example would strike his imagination more than others. But I must say, Mr. Speaker, that services are not exclusive to engineering firms.
I used that example because it was an easy one to understand for the Parliamentary Secretary, but there is a whole range of services which are offered by Canadian firms to Canadians that could be jeopardized by such a decision to end protectionism which benefits small Canadian entrepreneurs performing important services for the Canadian people. I agree with the Parliamentary Secretary that there are three, four, or five large engineering firms in Canada that are capable of measuring up easily to any big firm in the world. But apart from those few larger ones, there is a considerable number of medium-sized and small firms that could lose important contracts to American firms under too harsh a competition. What I am concerned with, and I would like the Parliamentary Secretary to not only alleviate my fears but send a very clear message to all small entrepreneurs who provide Canadians with services and who might be forced into bankruptcy by too harsh competition from the United States.


Claude Lanthier: Mr. Chairman, there was no reference to free trade in the speech. The reference was to put an end to protectionism. Speaking of protectionism, very seldom do countries have laws to promote protectionism as such. Protectionism has a bad connotation. Whether one is for or against protectionism, the connotation is always bad.
So, I did not say that the two heads of state agreed on free trade. They agreed to end protectionism in both our countries. And I added: given time and the right circumstances. Understood? The idea is to put an end to protectionism in the exchange of goods and services between our two countries. So, there is a difference between putting an end to protectionism and establishing free trade. This is my first point.
Second, I must discuss market principles from a standpoint 1 am especially familiar with. I would remind my hon. colleague that the smaller firms which are now enjoying a high level of technology in Quebec and more generally in Canada are already competing against bigger firms. And I would point out that small engineering firms do not use the words big or small firms. They use the words large and small firms. There is a difference.
In that sense, of course competition is already there. It is not a matter of looking at the existing market, but of asking ourselves whether we will have another market. The larger and bigger engineering firms in Canada-and smaller ones too, and let me point out that there are engineering firms with no more than ten people which are now operating in Africa, Europe and the United States. It is a matter of opening up to markets. Then when we talk about ending protectionism with
September 25, 1985

regard to goods and services, we mean that markets have to be opened. When you tell me that you are worried about too much open-mindedness in protectionism, I do not think that small firms would be threatened in Canada. You would have to find another issue, because we are surprisingly well equipped from a technological viewpoint to compete anywhere in the world. If markets are opened, our Canadian technicians will be competing for them.


Alan Redway: Mr. Chairman, could you help me on a point of procedure in connection with this discussion? It seems to me that we are no longer on first or second reading nor are we any longer discussing general principles. We are into specifics in Committee of the Whole and we are into a clause by clause debate. My understanding is we have already passed, in discussions, up to Clause 12 and we are now looking at Schedule 1. Surely the remarks of Hon. Members should be relevant strictly to the matters set out in Schedule 1, which are particular tariff items setting out particular tariffs. There is nothing in there as far as I can see, Mr. Chairman, that indicates we are now going to be in a period of free trade. There are a great number of tariffs set out in that Schedule. I would hope all of the remarks will be relevant to that Schedule, which is the matter we are now discussing.


Steve Eugene Paproski: I agree with the Hon. Member. The Chair has been very lenient concerning the debate. I felt we should have some debate in this regard.


André Ouellet: We appreciate it.


Steve Eugene Paproski: I agree with the Hon. Member's comment. I will allow the Hon. Member for Shefford another question.


Jean-C. Lapierre: Mr. Chairman, my concern ... and I readily agree with my colleague that Schedule 1 is important, but there are underlying principles to the schedule which have to be discussed. I think it is important for our Parliamentary Secretary to give us the opportunity to benefit from his great learning.
And, as it happened, he made that speech on Monday last and the following day, the President of the United States (Mr. Reagan) announced a war chest of some $300 million.
I would like to ask the Parliamentary Secretary whether that is some sort of protectionism according to his definitions?


Steve Eugene Paproski: It is a general question. I would hope the Parliamentary Secretary would just answer it.
Customs Tariff


Claude Lanthier: Mr. Chairman, I believe that you have already ruled on this point. This is a general question and we are now having an item-by-item discussion. Once more, 1 do not want to get into general discussions. 1 believe that the call to order of my colleague earlier was quite appropriate and we should follow his advice if we want to get anywhere.

Schedules 1 and 2 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Paproski):: When shall the Bill be read the third time? Pursuant to an order made earlier this day, now?


Some Hon. Members:: Agreed.


Ramon John Hnatyshyn: that Bill C-71, an Act to amend the Customs Tariff Act be read the third time and passed.


Jean-C. Lapierre: Mr. Speaker, I am very happy to take part in this important debate, especially as the Government House Leader is here.
Mr. Speaker, we have tried to obtain explanations from the Parliamentary Secretary about the Customs Tariff, and instead of answering, he simply said that the industry had been consulted.
However, Mr. Speaker, I am certainly convinced that all industries were not consulted. For years, Mr. Speaker, this department has had problems setting tariffs, and it is not because we have a new Parliamentary Secretary that the department has changed. What we have found is that the tariffs are set by a small group of initiates.
My colleague for Papineau (Mr. Ouellet) mentioned small engineering firms. The situation is exactly the same as concerns the setting of tariffs.
I can see the Minister of State for Small Businesses (Mr. Bissonnette), who used to be a prosperous businessman. I would like this Minister to tell me later when he speaks on this bill whether or not he was consulted about various tariffs when he was in business. Did the officials in the Department of Finance or the Department of Industry, Trade and Commerce call the Minister to ask him: What do you think of this? Do you find this reasonable or not? I would like to know how many calls he received during his brilliant career as a businessman.
That is a fact and I am sure Hon. Members will agree with me it looks as if some insider groups are being consulted and often on issues which directly concern us.
6978

September 25, 1985
Customs Tariff
The third reading stage affords us an ideal opportunity to review the remarks of the Parliamentary Secretary who got sidetracked in a lengthy explanation on the merits of free trade, or rather on the disadvantages of protectionism. The Parliamentary Secretary had his say against protectionism but I would like to know whether he thinks that, in some cases, Canadians simply have to protect their industries.
I have two industries in mind, the footwear industry, for example, which at this very moment is trying to convince the Government to take a protectionist approach to save jobs in that sector. 1 regret having to say this, Mr. Speaker, but I have the impression that the Parliamentary Secretary had his speech drafted by officials of the Department of Finance who live in a world of their own. In today's real world thousands of jobs are on the line in the footwear industry. The Hon. Member for Saint-Jean (Mr. Bissonnette) knows full well that the textile industry employs thousands of workers in his own riding. That is why I find it hard to believe that the Parliamentary Secretary-presumably a Member who remains true to his origins-does not know the real situation in Quebec and in Canada, and I think he should not rise in the House to deliver speeches written for him by public servants who have lost touch with reality.
Mr. Speaker, I am convinced that the people from LaSalle, many of whom I know are employed in the textile and footwear industries, would not support the position of their elected representative who has stated that we should fight against protectionism at all cost. Even at the cost of many jobs in the Saint-Jean riding? I am sure that the Minister of State for Small Businesses (Mr. Bissonnette) would not accept that. I hope he will succeed in the representations which he is making and which I support, because that would also mean jobs for my own riding, as well as the whole textile, clothing and footwear industries in the Eastern Townships. It is all very well for the Parliamentary Secretary to introduce a bill and praise the virtues not only of free trade, but especially of the Prime Minister. We understand why he is praising the virtues of the Prime Minister.
Mr. Speaker, I suggest that, as an elected member of Parliament, the first and foremost duty of the Parliamentary Secretary is to protect his constituents, and he should place the interests of his constituents above the advancement of his own career. He should not take everything the Prime Minister says as Gospel truth. That is a mistake on the part of the Parliamentary Secretary. He should not let his desire for a ministerial appointment blind him, Mr. Speaker.
Over the past few weeks, we have had the opportunity to hear debates concerning matters of which the Parliamentary Secretary was perfectly aware. For instance, the Commercial Bank of Canada fiasco. Mr. Speaker, I just cannot understand how the Parliamentary Secretary can accept without flinching to share the responsibilities in this matter.
Mr. Speaker, I wonder to what extent, in the current debate ... and I regret the Minister's decision to entrust his second-in-command with the responsibility to explain to us not only the details of this important legislation, but the whole philosophy behind it. That is an aspect of this Government which I find somewhat disquieting. A while ago, there were hardly any Ministers in the House; now, there are a few of them, but they do not appear to be too concerned about the consequences of the Parliamentary Secretary's statement. I can see the Minister of State for Small Businesses and, because he is a very realistic man, I know that he did not agree with the Parliamentary Secretary when he said that we have to fight against protectionism at all cost. Over the next few weeks and months, Mr. Speaker, we are going to-
I think the Minister would like to rise on a point of order. Please.


Mr. Bissonnette:: Mr. Speaker, when the Hon. Member for Shefford (Mr. Lapierre) says and makes the assumption that I do not agree with the Bill, I would like to have some explanation as to why the Hon. Member for Shefford thinks I do not agree with this legislation.


The Acting Speaker (Mr. Paproski):: We are not in the
period provided for questions and answers, and that is not a point of order. The Hon. Member for Shefford (Mr. Lapierre) has the floor; the Hon. Minister can reply later.


Jean-C. Lapierre: To accommodate the Minister, who is not acquainted with our Standing Orders, I certainly will answer him, and I hope he will soon be on this side of the House so he can ask more questions and we will be able to answer them in greater detail.
Meanwhile, Mr. Speaker, let me explain what the real situation is. This Bill, and especially the speech made by the Parliamentary Secretary to introduce the Bill ... The Parliamentary Secretary said we had to fight protectionism at any cost. Now, on the assumption that the Minister of State for Small Businesses (Mr. Bissonnette) is an intelligent man who protects the interests of his constituents, I also assumed that he could not go along with the statement that protectionism had to be controlled at any cost.
Mr. Speaker, I know the Hon. Member for Saint-Jean and Minister of State for Small Businesses is concerned about the well-being of his constituents, and if that were not the case I would be terribly disappointed. I am sure that in the months to come, his constituents will be able to test him and find out to what extent he is prepared to defend their interests. Then we will know whether the Minister of State for Small Businesses is Quebec's spokesman in Ottawa or whether he is now, as he
September 25, 1985

told the press, Ottawa's spokesman in Quebec. Mr. Speaker, I would ask him quite frankly to come right out and talk about the virtues of protectionism. I ask him to give us his perception of the future of the shoe industry. I invite him to give us his perception of the future of the textiles industry. The Minister knows all about the industry.
If he agrees with every single word the Parliamentary Secretary has said, this means that the Minister is prepared to let a vital sector of the economy in his riding go down the drain. I cannot believe a Minister could be so irresponsible, and that is why I assumed the Minister did not agree with his colleague for LaSalle (Mr. Lanthier) on protectionism and probably a host of other subjects as well.
Now to get back to the substance of the Bill, I believe that where certain items have been removed or tariffs have been substantially reduced, in some cases this will be very useful, and I am thinking for instance of hearing aids for the deaf and safety face-shields for workers. However, what I really hope is that instead of saying: We are going to allow greater penetration of the Canadian market by imported products, the Minister of State for Small Businesses, and others with him, will encourage the manufacture in Canada of most of the items we have here. Before opening up our markets, I wish the Government would take a look at appliances that are not manufactured in Canada,-and I hope the Minister has looked at everyone of them,-and let us know which products we are now importing duty free cannot be made here in Canada. I am thinking, for instance, of earthenware and other clay tiles and a lot of other items for which I am sure Canadian manufacturers could be found.
All this means that in the coming months we will have a chance to start a real debate on free trade.
Beyond the amendments to the Customs Tariff, we are going to talk about principles and, in that respect, I think it will be very important for all Hon. Members to realize how serious the decision of the Prime Minister might be when his only concern is to please his American big brother. I think everyone will have to realize how dangerous it is to have a Prime Minister who is used to taking his orders from the States. And you know, that's the way things worked in his professional career. Besides, we notice that since coming into office he has been following the very same pattern. Therefore, you cannot blame the Opposition for wondering how sound is this Bill and how sound are the remarks of Hon. Members opposite. That is why I believe it is our role to make sure that their rhetoric is not detrimental to our Canadian workers.
Mr. Speaker, Canadian workers will never accept to lose their jobs for the sake of the so-called friendship with the American big brother, which is what the Government here is prepared to do. Therefore I invite them to be careful and moderate in their remarks, because I think that an over-all move towards free trade might be detrimental to the future of Canadian workers and of Canada as a whole.
Customs Tariff
In conclusion, Mr. Chairman, I know that this Bill is of minor importance in relation to this whole debate, and 1 am sure that in the months ahead we will have the opportunity to further discuss it at length together.

Mr. Alan Red way (York East): Mr. Speaker, I listened with great interest to the comments of my hon. friend. They were most surprising to me. He spoke as if we were debating a Bill which would do away with all the tariffs of this country. In fact, we are dealing with a Customs Bill which will put in place some modest changes to some of those tariffs. It is not a revolutionary Bill at all. It is in many respects a housekeeping Bill. In fact, I suppose the most significant feature of the Bill is to increase the dollar amount of exemptions that a visitor coming back from the United States to Canada within 48 hours can bring with him which, after this Bill is passed, will be $100. That seems to me to be something that my friend should be applauding.
In addition to that he singles out the fact that tariffs are being removed on hearing aids and protective equipment for workmen as something that is frightening and that the Canadian public should shrink with fear when they hear about it. Surely my hon. friend cannot object to providing hearing aids at the lowest cost possible for those who have problems hearing and surely my hon. friend cannot object to providing protective equipment at the lowest possible cost.
The other item that he mentioned had to do with footwear. In fact there is nothing in this Bill at all that affects footwear. It does not change the situation one iota. There continues to be a tariff; there continues to be a quota.
My hon. friend seems to have missed the point of what we are talking about here and I hope that in future he will listen a little more carefully to the debate on the Bill in principle.


André Ouellet: Mr. Speaker, I am pleased to take part in this debate on Bill C-71 and I will take this opportunity first of all to remind the previous speaker that he has misunderstood the statements of the Hon. Member for Shefford (Mr. Lapierre). Obviously, the Hon. Member for Shefford does not take exception to some clauses of Bill C-71 but to the general principle of the Act to amend the Customs Tariff. The purpose of this Act to amend the Customs Tariff is to show once more to the Canadian people that the Conservative Government is kowtowing to important American interests. This legislation is simply unveiling another aspect of the total abdication of authority of our Prime Minister to the President of the United States.
One remembers the Polar Sea incident, when the Secretary of State for External Affairs (Mr. Clark (Yellowhead)) rose at the beginning of the sitting of the House and made great statements of policy, telling us that this time, he was decided to act, while the American ship crossed our borders without

September 25, 1985
Customs Tariff
our permission and nothing was done over the whole summer to advise American authorities of our deep concern.
Secondly, Star Wars. One has the feeling that the Conservative Government, under the pressure of public opinion, said "Nyes" to the President of the United States, that is a private yes and a public no in order to save its neck because the Canadian people do not want the Canadian Government to take part in Star Wars.
Since a statement was made on this matter, we now know that some Crown corporations and the National Research Centre might take part in Star Wars with the blessing of the Deputy Prime Minister and Minister of National Defence (Mr. Nielsen), when the Prime Minister said to us in the House that the Government would not be involved.
Thanks to Bill C-71, we now know where the Conservative Party really stands as shown in the statements made by the Parliamentary Secretary to Minister of Finance (Mr. Lanth-ier) himself. Mr. Speaker, I want to quote from the speech made in the House by the Parliamentary Secretary during the debate on second reading of Bill C-71. He said that at the Quebec Summit, and I quote the Parliamentary Secretary to Minister of Finance:
At the Quebec summit, our valiant Prime Minister of Canada (Mr. Mulroney) and the President of the United States (Mr. Reagan) decided, among other trading initiatives, to put an end to protectionism in the exchange of goods and services between our two countries.
The Parliamentary Secretary, with his close relationship with the Minister of Finance, must know what he is talking about. Something certainly happened at the Quebec Economic Summit. What happened is that once again the Prime Minister of Canada abdicated his responsibilities as the Prime Minister of a sovereign state before the President of the United States. Mr. Speaker, the Americans now consider us as a 51st State much more than as an independent and autonomous neighbouring country, and we cannot accept this situation.
The Minister of State for Small Businesses, who is in this House today, knows very well what that means: the abolition of protectionist measures. A decision will have to be made very soon by the Cabinet whether the Government of Canada will maintain the quotas imposed by the previous Liberal Government, with special protective measures in the textile, footwear and garment industries. A number of the decisions made by the previous Government are coming to an end, and I do not have to remind the Minister of State for Small Businesses that Dominion Textile has just closed its plant not only in the most important town in his constituency, Saint-Jean, but also in the most important town of the neighbouring constituency, Valley-field. Hundreds of workers were laid-off because of that decision by Dominion Textile, and why? Because that company is in a difficult position, because it has to face very tough competition from abroad.
The Parliamentary Secretary to the Minister of Finance tells us that the Prime Minister of Canada and the President of the United States embraced in Quebec City, and that they decided to put an end to protectionist measures. Well, I cannot support Bill C-71 which amends, which reduces certain customs tariffs to let Canadian products compete with American or foreign products; that is what will happen. What will the passing of that bill bring? The possibility that Canadian manufacturers will lose jobs. All these liberalizing, free trade measures, all those measures putting an end to the protectionism put in place by the previous Government, will jeopardize job security directly for hundreds of Canadian workers.
I hope the Parliamentary Secretary to the Minister of Finance when he spoke on Bill C-71 was wrong, that he did not say precisely what happened behind closed doors during the discussions held between the Prime Minister of Canada and the President of the United States and that this Progressive Conservative Government will continue to accept its responsibilities and protect thousands of jobs in the Canadian textile, footwear and clothing sectors.

Motion agreed to and Bill read the third time and passed.


TAX COURT OF CANADA ACT
[Stage Direction]
The House resumed from Monday, September 24, consideration of the Motion of Mr. MacKay (for the Minister of State (Finance)) that Bill C-72, an Act to amend the statute law relating to income tax and to make a related amendment to the Tax Court of Canada Act, be read the second time and referred to a legislative committee.
George Baker: Mr. Speaker, as I was about to point out yesterday, this particular Bill before the House includes some minor changes to the Federal Tax Court of Canada Act. It does not really make an amendment of any substance but it does provide that someone must justify a request for an in camera proceeding before the Tax Court. The Bill also makes amendments to other Acts including an Act to amend the statutory law relating to income tax and to make related amendments to the Canadian Pension Plan and the Unemployment Insurance Act, 1971.
I believe a problem will arise with the overload of cases that will appear before the Federal Tax Court of Canada as a consequence of the actions of the Government which decided to cut back in various government Departments. When the unemployment insurance scheme is cut back by $250 million, for example, more cases end up before the Federal Tax Court of Canada.
Why do they end up there? When people are judged ineligible for unemployment insurance, they appeal that decision
September 25, 1985

and a determination of the question is made by the Department of National Revenue. If that decision is appealed, it is appealed to the Minister of National Revenue (Mr. MacKay). The Minister of National Revenue, 99.9 per cent of the time, agrees with the Departmental ruling and then the only recourse people have is to the Federal Tax Court of Canada.
When looking at extreme cases of hardship created by laws that we have on our books, one need not look any further than the cases that go before the Federal Tax Court of Canada relating to the determination of a question of eligibility. Let me give a few examples of this so that the record will show exactly what I mean.
When the Unemployment Insurance Commission is given orders to cut down on the numbers of people drawing unemployment insurance, all unemployment insurance applications are automatically reviewed. Take for instance the case of a student who is attending school in the day time and had worked during the evenings prior to going to school. Say that student felt as though he had a case in favour of drawing unemployment insurance because he was looking for work in the evenings. Say that that application was turned down by the Commission on a determination of eligibility made by the Department of National Revenue. That student would then carry that application through to the Minister of National Revenue and then to the Federal Tax Court of Canada.
Sometimes it is very difficult to try to figure out what is wrong with our system. People who collected unemployment insurance for working certain hours doing certain jobs are not allowed to collect benefits if they are not available between nine and noon. That kind of a case would go to the Federal Tax Court of Canada.
As another example, say there was an employer who was in the wholesale business and had an employer's number with the Department of National Revenue. Say he hires someone to do some building. Under the present system within the Government of Canada, there are 700 employees in the unemployment insurance trying to knock people off the unemployment insurance rolls. Therefore, a case like the one to which I just referred would be sent to the Department of National Revenue to determine whether or not that person is eligible. We will see more and more of those kinds of cases. What happens when a case goes to the Department of National Revenue? A person who received unemployment insurance benefits from doing building for an employer whose business is not normally building things will be judged to owe the Government of Canada all the money he received from the fund.
There are a great many cases like the one to which I just referred before the Federal Tax Court of Canada today. People are getting stuck having to pay back $10,000, $15,000 or $20,000. Whether it is right or wrong-and it is wrong-it is the law. That is the way the judge will interpret the law when cases come before the Federal Tax Court of Canada.
Cases will now be referred to the Federal Tax Court of Canada because of the policy of the Government to cut back. People will be judged ineligible because they are not available for work. What does that mean? If a person was receiving
Tax Court of Canada Act
unemployment insurance benefits and helped someone build a barn or a house, he is judged by the law not to be eligible for unemployment insurance and this case would go to the Minister of National Revenue who would make a judgement which, if appealed, would go to the Federal Tax Court of Canada. Because of the policies of this heartless Government many cases that never before would have been referred to the Federal Tax Court of Canada will now be referred there.
A great many cases that will be referred to the Federal Tax Court of Canada will involve women. Women who work in non-traditional occupations are usually ruled ineligible by the Department of National Revenue when it comes to collecting unemployment insurance. There will also be an over-abundance of cases before the Federal Tax Court relating to women and men in the fishery industry because of mistakes that are made by employers. These are mistakes with which employees have absolutely nothing to do.
Instead of amending this Bill to deal with in camera proceedings at the Tax Court of Canada, it would be more worth while if the Government were to do one of two things. First, it should take that responsibility away from the Federal Tax Court of Canada because it does not belong there. The Minister of National Revenue should have nothing to do with the determination of questions of eligibility for unemployment insurance. This is the first action the Government should take. The second action would be that all such cases be simply referred to an umpire, as is the case with most questions concerning unemployment insurance. The same situation would occur, that is, a Federal Court judge would be the umpire. In both cases, they are Federal Court judges and must be addressed as "My Lord". The point is that they are two completely different courtroom situations. When something is referred to the Tax Court of Canada not only is the judge referred to as "My Lord" but a statement of fact must be prepared by the Attorney General's office. This is a statement of fact which is used in the determination of the question for the Minister of National Revenue. Therefore, what is being done when one appears before the federal tax court is proving, by additional evidence, that the determination was incorrect.
A great many of the cases which I have outlined cannot be disproven on the basis of additional information. Nor can they be disproven on the basis of additional witnesses. A great many people who are faced with this situation cannot afford to hire a lawyer. Some 90 per cent of them do not know the courtroom situation. However, if the Federal Court judge is looked at as an appeal judge, say, an umpire for the determination of Unemployment Insurance Act issues, then the normal courtroom situation does not prevail. It is not necessary to prove on the basis of new evidence that the determination made by the Attorney General's office was wrong. The case can be argued before the Federal Court judge and a fair hearing could be held.
Basically, what I have stated is what we wish to put on the record. We wish to put it on the record because of the changes

September 25, 1985
Tax Court of Canada Act
made by the Government of Canada and because we now now that there will be hundreds and hundreds of cases which will clog the system because of what the Minister of Employment and Immigration (Miss MacDonald) has had to do because of here being forced by the President of the Treasury Board (Mr. de Cotret) to cut $250 million from her Department's budget. We recommend and encourage all these people who will be latched on to by the Unemployment Insurance Commission to appeal to the federal tax court. If representatives of the Unemployment Insurance Commission say to these people: "You are not eligible because it has been determined by the Department of National Revenue that you are not eligibile," what I say to those people is: "Appeal your case to the Minister of National Revenue. If the Minister says that you do not qualify, you have 90 days in which to appeal to the federal Tax Court of Canada." That is what will happen because of the cuts to the budget of the Department of Employment and Immigration. When that happens the system will become clogged and there will be just too many cases before the federal Tax Court of Canada. Too many people will be receiving a statement in the mail which reads: "In the Tax Court of Canada pursuant to-" and then there will be the appellant's name and the respondant will appear as the Minister of National Revenue. Following that will be the statement of fact. The poor person receiving this document will wonder what it is all about and how on earth he will defend himself. He will say: "I know that I am right and that the Government is wrong." What can a person do in that situation? Most Members of Parliament have appeared before the federal Tax Court of Canada. I am sure they have appeared before it in order to fight for their constituents because their constitutents cannot afford a lawyer. It is quite a different thing to go before the federal Tax Court of Canada with respect to a case which is similar to another case which is simply a hearing by an umpire. Both situations involve Federal Court judges but in different courtroom situations.
I see that the time is passing quickly and that we have to go through all the clauses of the Bill, as I understand it, as well as third reading, before we conclude today's sitting, which will be at 6.30 p.m. I hope that if we conclude by 6.20 p.m., the Government House Leader will call it 6.30 p.m.


Nelson Andrew Riis: Mr. Speaker, I am pleased to have this opportunity to say a few words with respect to Bill C-72, a 239-page Bill, inclusive of 150 amendments in an effort to simplify the Tax Court of Canada Act.
This is something which actually happens two or three times a year when Members of Parliament are faced with 200 or 300 pages including somewhere between 125 and 175 amendments to the Income Tax Act in an attempt to simplify and clarify the existing Act. When one begins talking to an average citizen about tax provisions, or changes to the Income Tax Act, there is about the same amount of clarity as there is with Egyptian hieroglyphics. Believe me, what we have before us is no Rosetta Stone. In looking at Bill C-72 we see that it is simply one more step in the march toward complexity, misunderstanding and baffle-gab. I do not think it is the intention of
anyone here to create a more confusing tax system. However, that is the process in which we Find ourselves today.


William Alexander (Bill) Blaikie: Just another job-creation project for lawyers.


Nelson Andrew Riis: As the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie) says, it is just another job-creation project for lawyers, tax accountants and all those folks who live in the backrooms drafting this type of legislation.
If there is one thing which has become clear in the last while it is that the tax system of the country is too complex for virtually anyone to comprehend. I can remember distinctly a year and half ago when the Minister of Finance (Mr. Wilson) stood up in the House and said: "Listen, I have just an average income. I have no complex financial affairs and I have to go to the tax adviser at the corner in order to have my tax return filled out at the end of the year." If the Minister of Finance cannot do his own income tax return, then I think it is indicative of the point we find ourselves in today in terms of a document which is impossible for any ordinary Canadian citizen to comprehend, let alone fill out and submit.
Perhaps there is a more important aspect to this issue. When one looks carefully at the Bill before us, as 1 am sure all Members in the House have, and when one tries to understand each of the amendments put forward, what becomes clear is that our tax system is geared in favour of certain groups within our society and, in a sense, it acts against other groups. To be more blunt, it is an unfair tax system. It tends to be biased in favour of upper income earners at the expense of ordinary Canadians. It tends to be biased in favour of the large corporate sector at the expense of the small business sector. That is one of the reasons we in the New Democratic Party have decided it is time to take the matter seriously-to take the bull by the horns. That is why we have indicated we plan to spend the next number of months criss-crossing the country in order to hold public hearings. We intend to talk with tax experts and those who understand the tax implications of their sectors of the economy. We intend to do this in an effort to find ways and means of making the tax system not only more fair but more simple, so that people do not have to hire a contingent of legal experts and tax accountants to fill out some of the most simple business forms when it comes to taxation.
We are anxious to get out into the countryside. We will be sending out something in the neighbourhood of 2,000 questionnaires to ordinary Canadian citizens. We want them to indicate to us in these questionnaires how the tax system in their particular line of work could be made more fair, more simplified and how it could reflect the concerns of the average working man and woman in our country. One of the concerns our Party has is that more and more of the economy of Canada is moving underground. One of the reasons it is moving underground is because of the feeling that the system is unjust. The average earner hears about all those wealthy, or perhaps not wealthy, but upper income earners who pay no income tax at all year after year. The average earners out there paying his or her taxes each year faithfully and not being able to take advantage of the avalanche of loopholes and
September 25, 1985

concessions the Tax Act provides for certain upper income earners, get the impression that it is an unfair system. The owners of those small business enterprises who file their tax returns are well aware that Shell Oil and the Royal Bank of Canada, just to name two large corporations within the Canadian context, and international corporations in their scope of involvement, pay no income tax at all in some years, not a single cent. When Shell Oil does not pay any income tax and when the Royal Bank of Canada does not pay any income tax in a certain year, we know who is paying more than they should be paying, and that is the small business sector and the ordinary working Canadian. This is something which has worked its way into this system so that people now feel it is time to be a little less than honest. As a result, much of the economy of Canada, something in the neighbourhood of $30 billion and $50 billion each year, is driven underground and no taxes, of course, are paid on those transactions. The barter system is taken advantage of or cash is used instead of cheques so there is no record of the transaction. This just gets worse every year and the result, of course, is that the taxes which ought to be flowing into the federal Government's coffers from sales tax, personal tax and corporate tax, simply are not there. That is one of the reasons we have a large and growing deficit. It is because the tax flow simply is not there any longer. Part of the reason that tax flow is not there is because people have lost faith in the system. They have lost any faith that the Government is interested in a fair and equitable tax system and I would challenge anyone, particularly those from the Government benches, to stand and tell us our tax system in this country treats all Canadians and all types of businesses fairly. I do not believe anyone can make that claim any longer.
There is a positive aspect to Bill C-72, and it is a refreshing change. Over the years, I recall whenever we were dealing with a number of very technical amendments, the Liberal administration would always include them with controversial legislation. They would bring in technical amendments with some very controversial aspects in an attempt to bury the controversial tax amendments in amongst all sorts of technical rather minor bookkeeping changes. It would take a lot of ferreting to find out exactly what was going on. To give the Government credit when it is due, I would say, having gone carefully through 150 items in Bill C-72, that I found they are by and large an attempt to clarify various issues and update practices which have been in place for some time. It is a new approach, Mr. Speaker, and I do hope we see this on an ongoing basis in the years in which we are forced to have a Conservative Government.
There is one aspect of this Bill which I would like to point out as being of particular importance to the taxpayer. That is the change in the statutory provisions regarding the payment of those taxes which are in dispute. In the past, when a taxpayer wanted to dispute the tax assessment made against him or her by Revenue Canada, they first had to pay the taxes allegedly owing to the Government of Canada and only then could they begin proceedings in the Tax Court of Canada to
Tax Court of Canada Act
have a judicial reassessment. We are told and there is adequate information to believe that this practice has been discontinued. I think that is appropriate. Now Revenue Canada will await the outcome of the judicial proceedings before requesting payment of tax owing.
This is a welcome reform. I am sure all Hon. Members have been urged to work toward its implementation. Many of us are only too familiar with those constituents from our own ridings, or from elsewhere in the country, who have been before the courts and have had to pay up in some cases vast sums of money, particularly in the corporate and small business sector, only to find that Revenue Canada has made an error and there might have been $2,000, $20,000, $50,000 taken out of the accounts of those small businesses which the Government held over a period of time. No longer will this be the case, Mr. Speaker, and it is a welcome reform. We welcome this change of heart. Bill C-72 will simply implement into law what is now being practised by Revenue Canada.
On the other hand, Mr. Speaker, without getting too excited about accolades or recognition of positive changes, I think there is a bit of a myth in the land that now things have changed in terms of the attitude of Revenue Canada toward the taxpayer, that there is a change in practice in terms of dealing with the taxpayer. We on this side are still receiving too many letters and representations, too many briefs, too many telexes and communications from people who are still being harassed by officers of Revenue Canada. I do not know if Hon. Members opposite are receiving the same types of communication, but people are still concerned about the attitude of Revenue Canada toward the hard-pressed Canadian taxpayer. It is out there still, if I can use the term, using "jack-boot" tactics on innocent taxpayers.
Let us recognize, Mr. Speaker, that while there might have been some progress made toward an attitudinal change in some parts of the country with some Revenue Canada officers, it has certainly not been universal. There are still serious attitudinal problems and practices in terms of how Revenue Canada is behaving these days.
We have an understanding that we are going to deal with this Bill today. This is basically a technical Bill. As I said, there is nothing particularly controversial. However, there are many things which still have to be done in terms of improving the tax system, for example, the quarterly income tax payment system for seniors who now have to pay in the first quarter tax on bonds and so on, when they do not really receive the money until the end of the year. That is blatantly unfair and it punishes unfairly vast numbers of senior citizens in this country.


William Alexander (Bill) Blaikie: They are taxed on money they don't have.


Nelson Andrew Riis: As my colleague, the Hon. Member for Winnipeg-Birds Hill indicates, they are taxed on money they do not have.


William Alexander (Bill) Blaikie: The Conservatives promised to do something about it.

September 25, 1985
Tax Court of Canada Act


Nelson Andrew Riis: No one says that is an appropriate practice. The Conservatives promised the seniors that this would be a priority when they became Government. A year has passed and it is a simple item. It would require five minutes of the time of the House of Commons because I know there would be no opposition to such a progressive element. However, here we are today debating a tax Bill which could have included such a measure.
Again, I urge Hon. Members opposite, including the Minister of Transport (Mr. Mazankowski) who I know is concerned about these kinds of issues, to use his good office and his voice within Cabinet to ensure that a Bill bringing fairness to the taxpayers as it pertains to senior citizens is brought forward as quickly as possible. I believe I have said what I wish to say about this particular Bill. Bill C-72 is welcome. It is not very exciting. It is 239 pages of attempts to simplify the tax system which somehow to me seems to be a contradiction. Nevertheless, Mr. Speaker, we will do what we can to facilitate as a New Democratic Party the passage of this Bill through all stages today.


Alan Redway: Mr. Speaker, I want to make three brief comments about Bill C-72. The first is to comment on the remarks of the Hon. Member for Kamloops-Shuswap (Mr. Riis) relating to the main change contained in this Bill with respect to the Income Tax Act. That, of course, is the whole concept of making sure that the taxpayer is considered to be innocent and not guilty from the outset. In the past our tax laws and the Income Tax Act assumed that the taxpayer, once the assessment was made, was guilty and had to pay the tax bill before appealing the matter. This has now been changed and there is a presumption of innocence, not guilt. However, Mr. Speaker, I was most disturbed by the remarks of the Hon. Member for Gander-Twillingate (Mr. Baker) because he made no reference to this aspect of the Bill. That is remarkable because when the Ways and Means motion relating to this Bill was introduced, his Party actually voted against the motion and opposed the concept that the taxpayer should be assumed innocent rather than guilty from the outset. That, of course, was the system under the previous Liberal Government of which the Hon. Member was a part. Apparently he and his Party want to see that continue because they opposed the change and called for a recorded vote when the Ways and Means motion was before the House. I hope he and his Party are going to change their attitude when this Bill comes to a vote today.
There are two other points I want to make which were raised by my friend from British Columbia. They have to do first of all with the simplifying of the tax system and, secondly, with the question of fairness of the tax system. As far as simplification is concerned, my hon. friend is quite aware that there were discussion papers released with the Budget which provide for discussion this whole issue. We now have that opportunity, it is out there for discussion, and I hope he and his Party will be commenting on it. The second question is that of fairness. Once again, the Budget indicated we were going to be bringing in legislation regarding a minimum tax effective
January 1, 1986. It provided for the elimination of tax shelters and income splitting. All those things will be contained in legislation to be brought forward shortly to implement the Budget. This Bill is strictly a housekeeping measure, as my hon. friend points out, with the exception of that very important principle that a taxpayer is considered innocent from the outset. I trust, having said all that, that there will be unanimous agreement by all Parties very quicly on this Bill.


George Baker: Mr. Speaker, just a very short comment. I just wanted to say that if the principle of being innocent until proven guilty were applied to all cases before the Federal Tax Court of Canada, it would indeed be a very good Bill. As I pointed out in my remarks, the point is that most of the cases before that court really do not relate to taxes at all; they relate to other matters which the Minsiter of National Revenue is responsible for such as the Unemployment Insurance Act and other Acts. Certainly this principle is not carried through.
As far as the Liberal Party being against the Bill is concerned, I think I pointed out why we wanted more changes in this Bill. The fact is that we are really objecting to the fact that this Government got elected on a lot more promises than that simple change to the Income Tax Act.


Donald Frank Mazankowski: And we are fulfilling them one by one, and you know it.


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


Some Hon. Members:: Question.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Paproski):: Accordingly, pursuant to an order made earlier this day, the Bill stands referred to Committee of the Whole.


[Stage Direction]
Motion agreed to, Bill read the second time and the House went into Committee thereon, Mr. Paproski in the chair.
Steve Eugene Paproski: Order. House in Committee of the Whole on Bill C-72, An Act to amend the statute law relating to income tax and to make a related amendment to the Tax Court of Canada Act.
Shall Clause 1 carry?
On Clause 1-


Nelson Andrew Riis: Mr. Chairman, the Parliamentary Secretary will probably be well aware of the points raised at second reading concerning the quarterly payments seniors are prepared to pay and the problems associated with that. Are we going to be seeing some rapid legislation brought forward on that matter in order to bring some relief to those hard-pressed seniors?
September 25, 1985


Claude Lanthier: Mr. Chairman, we consider that it is a matter of policy and as we already said in our statement on second reading, it is a rather technical bill which deals with a special political aspect. My colleague's proposal is now under consideration.


Nelson Andrew Riis: Mr. Chairman, I hate to say this but I switched all the dials and 1 could not pick up the translation. Is it my problem or is it the system's problem?


Claude Lanthier: Again, this is a more technical Bill aiming toward a principal item and we considered that the point raised by the Hon. Member is a point of policy and that will be discussed eventually. The Department is studying this matter right now.
Tax Court of Canada Act Clause 1 agreed to.
Clauses 2 to 150 inclusive agreed to.
Schedules 1 to 3 inclusive agreed to.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.
The Acting Speaker (Mr. Paproski):: Wednesday, September 25, 1985


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

Mr. Speaker:: The Hon. Member for Hamilton Mountain (Mr. Deans) has been authorized to move the adjournment of the House pursuant to S.O. 31 for the purpose of discussing a specific and important matter requiring urgent consideration, that is the Financial difficulties of the Northland Bank. Therefore the motion is as follows:


Ian Deans: That this House do now adjourn.

He said: Mr. Speaker, I have for some time been contemplating the possibility of a debate such as this, especially over the last two or three days. I want to put it into a somewhat different perspective from that which might be expected. This is indeed a crisis, but the crisis confronting the banking system is equalled, I would offer, by the crisis confronting the parliamentary system as we try to find a way to deal with the problems.
There is no doubt, and I think the majority of those who have viewed the events of the last month or more, that there is a problem not only with the Northland Bank-the Northland Bank is unique but nevertheless not a single situation, unique in its own right-but also with the Canadian Commercial Bank. Our problem is that while we get hints of the difficulties of both of those institutions, the House of Commons, ultimately charged with the responsibility of approving, if not deciding upon a solution to the problem, receives very little information. We are being asked to make decisions on a day-to-day basis about events occurring in the banking system, and, in particular, within the two banks we are talking about, without sufficient knowledge of what is taking place.
I want to begin by saying to the Minister of State for Finance (Mrs. McDougall) that not all of the problem is hers, not all of the difficulties that we have confronted rest solely with her. I do not deny for the moment that certain of the information we have sought could well and legitimately be claimed to be outside of her responsibility. I do want to say that certain of the information that has been sought with regard to these two institutions is within her responsibility to provide. As a result of decisions that she has made that
information is not forthcoming, will not be forthcoming, as we understand it. Yet we, as a House of Commons, and the committee that will be struck as an arm of the House of Commons, will have to make some kind of decision based on that scanty information currently available. It is that we want to concentrate on tonight, Mr. Speaker.
We read in the newspapers from a variety of different sources the concerns of those who are most expert in the field about the information flow currently available. We hear from the President of Northland, for example, that the Government, together with others, has not provided the necessary support to enable that institution to become more viable and, in the process, to become capable of operating within the normal business practices.
When we ask questions about the appropriateness of those comments we are given information from the ministries that serves no useful purpose in our search for the truth. For example, last weekend we suggested that it would be appropriate in the light of the circumstances that had come before us as a result of a statement made by the President of Northland, that the Finance Committee of Parliament be asked to sit during the weekend in order to come to grips with what was the truth.
We agree that this is an extraordinary request, that this is not the way we normally deal with things, yet the Government's response was "We do not have to do that. If you just accept the committee everything will be fine. If you just accept the reference presently on the Notice Paper then the Finance Committee could get on with its job and look into these things."
The problem is, and the Minister well knows, that the information being sought by the Opposition in particular, and I suspect by many back-benchers in the Government, is not forthcoming. Therefore, to approve of the terms of reference as they presently exist would be to hamstring that committee in its efforts to get to the bottom of what is a very serious problem. We recognized that, and we understood the ongoing nature of the discussions that were under way. We were sensitive to the problems confronting not only the Government but confronting the banks in question and others who have associated with the banks over many years. We decided that rather than press on with the reference to the committee of both CCB and Northland it would be appropriate taking into consideration the President's own concern, that an extraordinary session of the parliamentary committee ought to be undertaken.

September 25, 1985

-Si
What did the Government do? It said no. It was not prepared to do that. It was not necessary. It was not a crisis. But what in heavens name is a crisis, Mr. Speaker?


Barbara Jean McDougall: I am.


Ian Deans: The Minister says "I am". Let me put to the Minister as she quietly mumbles under her breath, the crisis, my dear lady, was created by you, not by me. I sat with you during the deliberations on CCB in the early going.


Mr. Towers:: Order.


Ian Deans: Through you, Mr. Speaker, I sat with the Minister during those deliberations and made very effort to facilitate the requests made by the Government at the time. I defy her to deny that. We made every effort to accommodate what the Government wanted to see done, albeit we were opposed to the measure, but we still recognized that the crisis in the CCB was serious enough that we ought to prolong the debate.
We said we were opposed. We said we thought the measures offered were wrong. We said that what the Government was doing could not possibly bring about the result which the Government, through the Minister, was claiming would happen. Nevertheless, acting responsibly in the case, we said we would not delay it. We would allow it to happen though we opposed it. Unlike the Official Opposition, as its Leader said, we were not misled. We understood the consequences of the Government's actions and what would happen. For the Minister to suggest that somehow or other, or in one way or another, we are involved in the crisis is not true.
The difficulty has been, from that day to this, that although we set up a committee to look into the problem the committee was not given the information it needed in order to come to some reasonable conclusions about the problem. Our fear now is that the same kind of situation will pertain to the committee which is about to be structured for the purpose of looking into CCB and Northland.
What is it that we are asking? What is it that we would like to see which is so difficult to produce? We suggest, for example, that the information available to the Government, upon which it is basing its decisions, must be made available to the members of the committee in order that they too can look at it, deliberate upon it and make reasonable decisions about it. We are not suggesting that it be made public in the sense that everyone has to know everything about what is going on.
We appreciate the sensitivity of certain aspects of the banking industry and the sensitivity of certain matters within those institutions. However, there is no effort on the part of the Government to guarantee that the Members of the House of Commons, who ultimately will have to vote on the bail-out
package, will have available to them, in the kind of detail that the Government has, all available information. That is the crux of the cricis in a parliamentary sense. That was what was wrong with the original review of the CCB situation. That is what is wrong with what is being offered now. That is why we believe that the Parliament of Canada is being bypassed, ignored and snubbed by the Government. We are not asking for more than is reasonable to expect. We are saying to the Government that if it is necessary for it to act in order to save the financial institutions of Canada, it is equally necessary that the Parliament of Canada be taken into the confidence of the Government. Unfortunately that has not been the case.
What did we ask for? We asked to be given the information which the Inspector General of Banks had available to him. We suggested that it was not unreasonable that we should know about the cash flow of both banks, about the loan portfolios of both banks and about the auditors' conclusions about both banks. If we are to pay out nearly $1 billion in one case and, hopefully not, but nevertheless perhaps, some half a billion dollars in the other case at some point, it is not unreasonable to ask that the people who are to receive the taxpayers' dollars be identified. Why? Because it is unreasonable to suggest to the public of Canada that we can find $1 billion to hand over to unnamed individuals.
We say to the Minister that we should deal with this bankruptcy as we deal with all other bankruptcies. Those who are creditors, depositors in this case but nevertheless creditors, and are to share in the assets of the institution, remembering that the assets in this case will be made up by the Government to 100 cents on the dollar for those who are depositors, should have to go through the same process as all other people in similar circumstances who are faced with having an asset claim against any other bankrupt institution. We are saying that banks are no different in this instance.
We are suggesting that there is in place now protection to the level of $60,000 for those who had deposits with either of the banks. We are saying more than that. If people put in more than that amount, and if it is deemed advisable by the House of Commons-and at this point we are not sure whether or not that might be true-to pay them more than the insured value, a value which they well knew was the insured level, then the taxpayers who have to foot the bill are entitled to know who is to get the money.
We cannot solve this problem, this crisis, and we cannot maintain or redevelop the confidence of the people of Canada in this system which we now have unless they feel that the Parliament of Canada has a handle on it, unless they feel that the Parliament of Canada understands what caused the problem, understands how the problem is to be solved now and what changes will be made to ensure that these kinds of things will not occur in the future. That confidence cannot possibly be gained from the public unless it knows that its parliamen-

September 25, 1985

tarians have been given all information upon which to base their decisions.
I put to the Minister that it is not good enough to hide behind sections of the Bank Act. When it was drafted and considered by Parliament, the Bank Act was never considered in the light of a collapse of a major institution. It was written for the ongoing operations of the Banking system. It was written to protect people from prying during the ongoing and normal operations of banks as they had operated in Canada for some 10 years, 50 years or more. This is a different situation and must be seen as such because it is the first bank collapse in 60 years.
The problem is that when the Bank Act was written, modified and reconsidered, no one thought for one minute that there would be a collapse of a bank or a near collapse of a bank, as may well be the case in Northland. No one thought that that secrecy provision in the Bank Act would ever be applied when the assets, deposits or otherwise of a bank were to be distributed among those who were entitled to claim.
In order that this crisis situation can be resolved, we require the Government to be more forthcoming and more straightforward. When we ask questions in the House of Commons-and there is no other place which can claim precedence over the House of Commons regarding the right to ask questions and to receive answers to questions-we do not appreciate for one moment that the Minister would hide behind the possibility that some phony inquiry might take place. If the Government had dealt openly, honestly and fairly with the House of Commons in the first place the crisis we now face could have been avoided.


Some Hon. Members:: Hear, hear!


Ian Deans: If we had received straightforward answers from the Minister of Finance (Mr. Wilson) or from the Minister of State for Finance, rather than vague references, I doubt very much if the situation that now pertains in the country with regard to both of these institutions would have created the sense of crisis in the country or the sense of crisis in the House of Commons which is now felt.
I say to the Minister on behalf of my colleagues that our requests are not unreasonable. What we are saying in essence is that if, as a country, the taxpayers are to be asked to bail out institutions in this country, financial or otherwise, it is the responsibility of the Government to make sure that those who are asked to vote the money are given all the information. That is the key to it, that those who are being asked to vote on it are given all the information.
I apologize to the Minister. I cannot take just on faith that she and the Minister of Finance know what they are doing. I would like to do that.


John Edward Broadbent: You can take on faith the opposite.


Ian Deans: I would like to be able to take it on faith like Tory back-benchers that somehow or other the Government knows exactly what it is about and everything is working exactly as it should.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: You are the only people in Canada who believe it.


Ian Deans: I would be delighted to stand here and say that I have so much confidence in those two Ministers that they will always make the right decisions that I am prepared to place my entire trust in their abilities to both understand the problem and to seek the solutions. To be quite honest with you, Mr. Speaker, reluctant though I am to say it, the events of the last few months have led me to believe that that would be asking too much.
So what I am saying now on our behalf is that this crisis was brought on by this Government's neglect; this crisis is the result of this Government's inability to see beyond a few advisers who were ill advised; this Government asked for the Parliament of Canada to assist it in finding solutions to problems without making available the necessary information upon which to base decisions. We are saying that that is not good enough and we are saying to the Government if you want Parliament to operate effectively, if you want to be able to deal with the problems then bring us the information.


Some Hon. Members:: Hear, hear!


An Hon. Member:: All 12 applauded.


Aideen Nicholson: On Sunday, September 1, the Minister of State for Finance (Mrs. McDougall) announced that the Canadian Commercial Bank and the Northland Bank were no longer viable, that curators had been appointed at 7 p.m. that day to take over the bank's affairs. The Canadian Commercial Bank would be wound up but Northland would be given, "a limited time period to reorganize its affairs or amalgamate with another financial institution".
At this point the first question that comes to mind is about the wisdom of the Government's actions in this matter. By dealing in one press release with both institutions, one of which was being wound up immediately, the other which was being given a certain time limit to arrange a merger, did the Minister imply doubts that Northland would survive? Did she or her officials, by dealing with both institutions together, help create a climate in which Northland would not be a welcome partner in a merger? Was the language of the press release such as to imply that Northland too would close?

September 25, 1985
For example, on page 3 of the press release, we read:
It is legally necessary to launch immediately a winding up application for each bank. In the case of Canadian Commercial Bank, it will be proceeded with as quickly as possible. In the case of Northland Bank the court will be asked to postpone the appointment of a provisional liquidator to allow time to work out a reorganization or amalgamation. The legal requirements necessary to allow CDIC to make payments to insured depositors will, however, be taken as quickly as possible.
This may all be factually correct but does it enhance confidence? Would this be reassuring to any institution considering an amalgamation with Northland?
The Department of Finance backgrounder which was attached to the same press release also uses language which, although technically correct, would certainly not encourage confidence or does not give the impression that the Government had any great confidence in the ability of Northland Bank to find a solution.
I think we must ask the question then, if the Government had doubts about the ability of Northland to survive, on what were these doubts based? The Canadian Commercial Bank bail-out in March from the non-answers we get in the House looks more and more like a political decision made without any rational economic analysis. We have heard now from three banks that they offered personnel to do a full appraisal of the loan assets of the Canadian Commercial Bank before the bail-out was done but that their offer was refused. We hear that the banks were prepared to offer as many as 50 experienced personnel from each bank to go in and examine all the loan assets and their offer was refused for two reasons: one, that the Government representatives at the meeting, and neither the Minister of State nor the Minister of Finance were at that meeting but one of the Government officials who was there said there was not enough time as the decision had to be made by Monday morning. The Minister of Finance (Mr. Wilson) confirmed that he had presigned the winding up order.
The other reason that we were given in committee was that the Canadian Commercial Bank said they did not want their competitors looking at their books. I find it almost unbelievable that a bank which has come to Ottawa asking for a bail-out of $255 million, was in a position to dictate terms and that those terms would be accepted by the Government; but quite clearly the decision to go ahead with that bail-out was made on the basis of the figures provided by the Canadian Commercial Bank itself on a segment of its bad loans, not on the total picture. So that decision was clearly taken without full knowledge and we have to ask, was the decision about the Northland Bank taken on the basis of any fuller knowledge or was this another leap of faith?
In the September 1 release the Minister stated:
The conditions of these banks-
Again joining together the bank which was being wound up immediately and the other which we were told might have a chance, the Minister continued:
-are unique and reflect the unusual concentration of business in the commercial real estate market in Alberta which continues to be depressed.
At different times in the House and in committee other reasons have been given for the failure of the Canadian Commercial Bank or for the difficulties prior to the March bail-out. We have heard that the difficulties were due to the California energy situation and certainly in committee we had a lot of information about the lending practices of the bank and the management of the bank, which were certainly a factor.
In the case of Northland, what does the Minister know? Is its circumstances entirely different from the circumstances of the Canadian Commercial Bank? The treatment of those two banks, of course, has been quite different. The Government bailed out the Canadian Commercial Bank in March and gave many assurances that it would then be viable. The Canadian Commercial Bank operated for five months thereafter in the glare of publicity which may very well have hurt Northland. However, in the case of Northland, there was no bail-out; it was simply a period of time. One must ask why the treatment was different.
The Department of Finance background paper which was attached to the Minister's press release referred to loss of depositor confidence in both banks following the bail-out. One must ask if government actions contributed to the loss of confidence in the case of Northland. The question of dealing with the two banks together in the Minister's press release is, 1 think, very important and that is why I have mentioned it more than once. Surely the comparison must inhibit any organization considering a merger.
The Minister held a press conference in early September, perhaps September 1 or September 4, and again it was interesting to note that in the press conference, the Minister dealt with both banks but the journalists' questions for most of that press conference dealt with the CCB's lending practices and its bad loans. When questions about Northland came at the end of that session, surely a certain implication was drawn that must have made it difficult for Northland to continue.
In fact, Northland has been in limbo since September 1. Last week the president met with the Minister of State for Finance and was obviously unhappy with that meeting because after the meeting he called a press conference to express his unhappiness with the situation. He said that in his view, the Government was not seriously trying to assist the bank in finding a merger or a reorganization. I think we should know why the president had such a lack of confidence in the Government and what had led up to that lack of confidence.
I do not want to point a Finger at the Minister of State for Finance alone because she has often said here in the House that this was a decision taken jointly by her, the Minister of Finance and the Prime Minister (Mr. Mulroney). However,
September 25, 1985

quite clearly the decision to bail out the bank that was taken during the weekend of March 22 to March 25 was taken without full information. I think we are entitled to know whether or not the Minister had better information on September 1 and whether or not she has full information now. Should the Canadian Commercial Bank rescue have been attempted in the first place?
The Official Opposition was asked and agreed to let the resolution and the legislation authorizing the bail-out go through the House with minimum debate. We agreed with that because we accepted the word of the Government that it was important to take these steps in order to restore confidence or to avoid a crisis of confidence in our financial institutions and that given this amount of help the bank would be viable. We accepted this because we thought the Government was speaking with knowledge. We later discovered that the Government had not done a full examination of assets and that this decision was not soundly based.
The Minister has repeatedly said in the House that the decision was made on the best advice available at the time. Unless the Ministers have information that they have not given us, there was very little soundly based advice on which to make the decision because the books had not been examined.
Let us look at what happened after the bail-out. The Minister of State for Finance and the Minister of Finance both referred to monitoring the situation during the summer. Of what did this monitoring consist? The Inspector General has also referred to some kind of supervision or monitoring occurring during the summer.
It seems as though it was not until mid-August that the Government knew that the Canadian Commercial Bank's loan assets were really very much lower than the figure originally given. While the bail-out was based on a worth of approximately 55 cents on the dollar, when it came time to dispose of those assets, 30 cents on the dollar seemed to be the working figure.
What was happening throughout the summer? Although a proper asset evaluation would surely have given the Government the correct figures in March, that was not done. Looking at the kinds of loans the CCB was making during the summer, with the limited amount of information available to us, we find that some very high loans at very high interest rates were being made. Was anyone monitoring that? Was anyone checking to see that the loans made after the bail-out were sound?
An interesting article entitled "Did the Northland fall or was it pushed?" appeared in an Alberta paper. While the writer of that article has a particular bias that I would not share, some interesting facts are raised. For example, the writer of the article said that the highly publicized rescue of the CCB had shaken faith in other western-based lenders, notably the Northland in Calgary, and that it too began losing large corporate depositors who reckoned that the Northland
might be floundering. In August the Northland denied press reports of a run on deposits but somehow on September 1 we learned from the Minister's press release that the Northland too was about to be closed down.
Traditionally, of course, banks have operated as much on confidence as on capital. Can confidence be maintained by stonewalling? This surely is the issue that is facing us now. We have heard very few straight answers in the House since this entire issue came up. There was a referral to the Standing Committee on Finance, Trade and Economic Affairs where we were refused access to a number of essential documents. Conflicting statements have been made in the House. The Minister of State for Finance has said that there was no indication the Canadian Commercial Bank was in trouble before March 14. On another occasion, the Minister of Finance said that the Inspector General of Banks consulted with him last September. We know that there were reports from the U.S. regulatory authorities in mid-February which triggered a great deal of activity, such as telephone calls and visits between the Inspector General and the American regulators.
All this evasion does not enhance confidence; it merely sets off more and more speculation. In refusing to answer questions, the Minister has often suggested that we wait for the committee to convene. However, what guarantee have we that we will receive any better answers in committee?
This is an important matter and perhaps it is time to recognize that confidence will have to be based on disclosure and knowledge; it cannot be based on secrecy. Both the Minister of State for Finance and the Minister of Finance have often spoken about the need to be responsible in relation to depositors. We can accept this, provided we know who the depositors are. For instance, if the Province of Alberta is one of the main depositors and if, as has been rumoured, it has deposits amounting to $10 million, is the Minister seriously suggesting that the taxpayers of Canada should make up that amount of money? To ask Canadians to give a blank cheque with respect to the reimbursement of uninsured depositors without knowing the circumstances, even in a broad brush sense, is surely unreasonable.
The other matter on which we will need more information or discussion concerns shareholders.


The Acting Speaker (Mr. Charest):: Order, please. I am sorry to interrupt the Hon. Member but her time has expired.


Barbara Jean McDougall: Mr. Speaker, the House Leader of the New Democratic Party has indicated that the current situation is one of crisis. The critic for the Liberal Party has indicated that the situation is one of crisis. I would not deny in any sense whatsoever that we face a very difficult situation in the House on an issue which

September 25, 1985
we have tried to bring before committee where it can be discussed with some sort of calmness and rationale. However, the crisis is not as described. The crisis has to do with the regulatory environment in which we live. The crisis was not created by this Government, it was created by the former Government, which ignored, ignored and ignored the problems which arose.


Some Hon. Members:: Hear, hear!


Ian Deans: That is a compelling argument!


Barbara Jean McDougall: Our laws regarding financial institutions are antiquated, particularly the federal laws in this country. Despite many proposals for reform and modernization many key federal statutes, such as the Trust Companies Act, the Canadian and British Insurance Companies Act, the Loan Companies Act, the Foreign Insurance Companies Act, and others, have not been reviewed in any significant respect for decades. We have too long relied on overburdened regulators to use the limited tools available to them so imaginatively as to remedy the defects in the existing system. In order to remedy the defects some action is required.
Even the Bank Act is outdated despite its decennial revisions. The last revision unleashed fundamental changes in the Canadian financial system. I am speaking of new Canadian banks, subsidiaries of foreign banks and new definitions of their authority. This involved substantial new responsibilities for the Inspector General of Banks. However, the implications of those changes were not thought through and adequate regulatory authority and staff were not provided. In fact, they were treated in a totally desultory and offhand manner.
In Ontario the Crown Trust-Greymac-Seaway Affair clearly demonstrated problems with the regulatory system. Ontario faced up to its responsibilities under the Progressive Conservative Government of the day. It produced two major reports, a discussion draft of an entire new law and a restructuring of the supervisory system. Until the advent in Ottawa of the present Government nothing was done, despite the obvious relevance to Ottawa of the happenings in Ontario and even apart from the fact that they cost the Canada Deposit Insurance Corporation, a federal institution, hundreds of millions of dollars.
In the meantime, there were changes in the market-place. A review and change of our institutions and our supervisory structure would be necessitated in any event by those very vast and profound changes, not just in Canada but changes around the world. Technological change is reshaping how the markets operate. However, our regulators are prevented from reacting flexibly and quickly because they are restricted by rules written in the age of the quill pen. Futures instruments, options and other new trading vehicles can vastly increase risk; but properly used they can aid the conservative investment manager. Internationalization of the trading markets is steadily
increasing. All these fundamental changes have been largely ignored by our laws by that Government.
The CDIC developments since 1982 abundantly demonstrate the need for action to decrease the risk involved in its further exposure, the exposure of other institutions and of Canadian depositors.
There is additional competition through smaller entrants into the business. No one is more committed than we are to the importance or regional banking and the need for greater competition in the financial services market when business conditions warrant and when they can be made within a suitable regulatory competitive environment.
The prior Government accepted the constraints of ownership restrictions and therefore tried to meet the need for competition through the admission of foreign-controlled and freestanding Canadian corporations which tended to be small because they could not have major investors. Some fine companies have entered the market under this approach but the desirable level of competition has not been reached. A new approach is needed because that competition was achieved without proper regulatory supervision.
For the first time this Government has attempted to take some action around this regulatory environment. We have a Green Paper which proposes a new regulatory pattern which would meet the need for more effective competition by permitting greater flexibility in organizational arrangements. However, regulatory concerns are at the forefront. In the principles laid out in the Green Paper, consumer protection is at the top of the list.
The Green Paper proposes a modernization of all federal statutes in this area. We produced this paper as a priority item. We have moved ahead with it and we are prepared to proceed as quickly as possible after the conclusions of the parliamentary committee have been made known. We have attempted, for supervisory purposes, for the first time in Canadian history, to deal with the financial services industry, as an industry in which all depositors have an interest. And we have attempted for the first time in Canadian history to harmonize our policies with those of the provinces in a responsible way so that our regulatory and supervisory capability is enhanced across this country and under every jurisdiction.
This Government also commissioned Mr. Robert Wyman and his colleagues to produce a far-ranging report on the Canadian Deposit Insurance Corporation. I have already announced that I will be implementing important aspects of their report in the very near future. I have also announced my intention to appoint a private sector advisory panel to recommend improvements to the federal financial institution regulation system so that we can go down a little deeper. This committee will concentrate on operational details, staffing, procedure, co-ordination and the use of technology.
September 25, 1985

Hon. Members may be interested in some of the issues I would like to place before a committee. There are many issues to be explored. As I have said, they relate to operational arrangements as well as to broad structural issues, and as such are meant to round out the matters dealt with by the Green Paper and the Wyman Committee.
We want to co-operate with the provinces. They carry, and will continue to carry, major responsibilities for regulation. Co-operation exists now but it must be constant and instantaneous if the public, the depositors of this country-my responsibility for whom I take very seriously-are to be protected. How can this be done? Should they be co-ordinated through data banks and computer links for regulatory and examination purposes? What other steps can we take? Parliament can help me reach those decisions.
With respect to co-operation amongst federal agencies, the Green Paper recommends that the office of the Inspector General of Banks be combined with that of the Superintendent of Insurance to improve co-ordination at the federal level. Close links are also needed with the director under the Corporations Act, and perhaps also with the director under the Combines Investigation Act. I am looking for guidance from the committee as to what is necessary here and how it can be put in place with maximum efficiency and minimum cost. These are issues, Mr. Speaker, that I would very much like to bring before committee so that Parliament will have a chance to comment on those aspects of our regulatory system. These are some of the thoughtful things to which we think Parliament should make a contribution.
There should be some early warning signals, some red flags, to identify at an early date when a financial institution may be encountering problems. Low earnings are one signal, obviously, but may not be serious from the depositor's standpoint. Above market interest rates on deposits can be more troubling. Mismatched maturities on assets and liabilities, speculative investment activities and unusually rapid growth are other signs.
What I am not interested in this evening, Mr. Speaker, is that while I am speaking, the people on the other side of the House who want to discuss this issue have taken it upon themselves not to listen.


Ian Deans: I have listened to every word. The question I have for you is when do we get involved in the process?


Some Hon. Members:: Order.


Barbara Jean McDougall: I am involving you right now.
In the United States there has been much work done on how these signs can be studied to determine when problems are on the horizon. I know Canadian regulators have also worked on the problem. But I will ask the committee to guide me as to whether more can be done, and should be done. I am interested in the use of technology. I mentioned two or three ways in
which technology can help regulators, improving the quality of supervision. This seems to be an area of great promise to which I hope the committee will give particular attention. Technology has reshaped financial institutions and it should now reshape the regulators.
We must always remember, Mr. Speaker, that while the current problems are serious, they effect only a small portion of financial institutions and their assets in Canada. The system is a healthy one and it is our job to ensure that it continues to serve Canadians well. This Government has demonstrated its commitment to improving the system further by removing some of the constraints, by giving the regulators the access they need to take a more pro-active role, and everything that we have done, and will continue to do on behalf of the depositors, will be in the context of effective supervision and regulations in the public interest.


Mr. Waddell:: Mr. Speaker, I seek leave of the Minister and the House to put a short question to the Minister.


Some Hon. Members:: No.


Some Hon. Members:: Agreed.


Nelson Andrew Riis: Mr. Speaker, it is quite incredible to think of what is happening tonight.


Some Hon. Members:: Agreed.


Nelson Andrew Riis: Let me remind you, you were forced into this debate tonight. This was not your choice. We are not here discussing this crisis because you thought it was appropriate. It is because of the responsibility of the New Democratic Party that this discussion is taking place.
I simply want to point out that the Speaker has indicated this is a crisis situation. It was called to the Speaker's attention by the Hon. Leader of the New Democratic Party (Mr. Broadbent), and subsequently by our House Leader, the Hon. Member for Hamilton Mountain (Mr. Deans). The Speaker agreed that this was in fact a crisis and today we have an opportunity, for the first time, to debate the collapse of two banks in Canada, the first in 62 years, because the Opposition Parties thought it was an appropriate thing to do, not the Government. And I want to make the point that when we discussed this in the House the last time it was the New Democratic Party which said at that time that we do not believe we have adequate information to bail out the Canadian Commercial Bank with $60 million-


Donald Alex Blenkarn: Mr. Speaker, I rise on a point of order. This debate is in connection with the Northland Bank. It has nothing to do with the Canadian Commercial Bank.


Some Hon. Members:: Oh, oh!

September 25, 1985


Donald Alex Blenkarn: The Hon. Member for Kamloops-Shuswap (Mr. Riis) knows that. He and his Party proposed this motion. It has to do with the Northland Bank. It has to do, then, with information to do with the Northland Bank-


Jean-Robert Gauthier: Tell the Minister that.


Donald Alex Blenkarn: -and with administration of banks and the inspection of banks. I say to you, Mr. Speaker, that any reference to the Canadian Commercial Bank is totally out of order.


The Acting Speaker (Mr. Charest):: I think the Hon. Member for Mississauga South (Mr. Blenkarn) did make his point. In his last phrase the Hon. Member for Kamloops-Shuswap (Mr. Riis) did refer specifically to the Canadian Commercial Bank. I would like to remind all Hon. Members of the House, in case there may be any confusion, because it would be quite-


Jean-Robert Gauthier: How about the Minister?


The Acting Speaker (Mr. Charest):: Order, please. It is quite easy to confuse the two issues but the motion is on the Northland Bank.
The Hon. Member for Kamloops-Shuswap.


Nelson Andrew Riis: Thank you, Mr. Speaker. The point I was getting to before I was rudely interrupted by the Hon. Member for Mississauga South (Mr. Blenkarn) was that the reason there is a problem with the Northland Bank today is because the Government mismanaged, mishandled and misdealt with the Canadian Commercial Bank. Had the Government dealt with that bank failure appropriately from the beginning, the Leader of my Party would not have called for an emergency debate.
The President of the Northland Bank precipitated this discussion tonight. A few days ago he decided to break an oath that he and his colleagues had with the Government of Canada because in their minds the Government had cut loose the bank. It was their impression that the Government had turned its back on western Canada. In the President's opinion the Government had turned its back on western financial institutions. He said that the Government of Canada was scuttling, sabotaging their efforts to make that bank viable. Without debating the merits of those comments, we felt they were serious enough allegations to call for an emergency debate. We thought it was important enough to hold a special session of the Standing Committee on Finance, Trade and Economic Affairs last weekend in order to hear the President of the Northland Bank, the Minister of State for Finance (Mrs. McDougall) and the Minister of Finance (Mr. Wilson) to get to the bottom of this. However, the Minister of Finance said that is not necessary. The Minister of State for Finance said that is not necessary, "trust us". These are the same two
people who, along with the Governor of the Bank of Canada and the Inspector General of Banks, repeatedly said over the summer that the banking system in western Canada is safe, there are no banks in trouble, the Canadian Commercial Bank is viable and there are no serious difficulties in western Canadian banking. We know those statements were absolutely false. I am not suggesting for a moment that they were purposely misleading people. Either they did not know what was going on with those two banks or they did. I will give them the benefit of the doubt and suggest at this point that all the information we have indicates that all those people did not have a clue what was going on with those two banks in western Canada. Not a clue. I am not convinced by anything we have heard in the last few days that things have changed much.
A few weeks ago the Minister of State for Finance said there will be no more trust company bail-outs in Canada. A few days later she said, "except for Pioneer Trust. We are going to bail out that company". Then she said in the latter part of August that there would be no more bank bail-outs in this country, we are finished. A few days later she said there was at least one exception, possibly two. They decided to bail out the CCB, including all of the uninsured depositors, and if need be they would do the same for the Northland Bank. Mr. Speaker, when you have one opinion one week and exactly the opposite opinion the next week, does that build confidence in the ability of this Government to properly manage the financial institutions of this country? Absolutely not!
When the original bail-out request first came to this House we said we did not have enough information. We were asked to provide $60 million of taxpayers' money and we felt we did not have enough information. However, we had faith at that time in the Minister's suggestion that this had to be done. We said we will not support it because we do not believe in principle that this is the right thing to be doing to ensure a stable banking system and maintain the confidence of domestic and foreign investors in Canada. We said it was not an appropriate thing to do but we would take her word for it. In retrospect, God knows why we did it, but we did it. In return for our co-operation we demanded an inquiry take place. This was putting the cart before the horse just a little bit, but we took her word this had to be done. She said if we take this step the bank will be viable. That is what she said. She said to the people of Canada, the depositors, the shareholders, debenture holders, and everyone else, that the bank would be viable. We said this at least merits a full-scale inquiry by the Standing Committee on Finance, Trade and Economic Affairs. Thanks to the NDP we got that inquiry, albeit after the fact.
During that inquiry, as we peeled off the layers of the banking system, what emerged was a financial horror show in the CCB. Loan officers were being financially rewarded; the more loans they wrote, the more chances they would get on a condominium in Maui. Commissioned loan officers! This is unheard of in prudent banking practices. During that inquiry
September 25, 1985

we had people lie to us and provide incomplete and inadequate information. People refused to provide information; for example, the Inspector General of Banks. In other words, it turned out to be a bit of a sham.
We wrote a report that pointed out to the best of our knowledge these were the problems in the banking system and there were many, many more but we could not get any co-operation from the people appearing before the committee. Then the Government comes along and says it is going to cost the taxpayers $1 billion but don't worry, it is going to carry out an inquiry where the witnesses can mislead Members of Parliament, lie to us, leave out information and refuse to answer questions. We have asked for documentation we feel is appropriate to carry out a decent, responsible inquiry and the Government says no, we cannot have that information.


Mr. Holtmann:: You just don't have any clout, that is all.


Donald Alex Blenkarn: On a point of order, Mr. Speaker. Will the Hon. Member table in the House or tell us the exact information and the exact documentation he believes the Government ought to supply in the proposed motion the Government has before the House?


The Acting Speaker (Mr. Charest):: The Hon. Member knows full well that is not a point of order.


Nelson Andrew Riis: Mr. Speaker, the Chairman of the Standing Committee on Finance, Trade and Economic Affairs ought to know because what he has requested is public information. What he is asking for has been filed and if he does now know that, he should bloody well know it.


Donald Alex Blenkarn: Tell us. Put it on the record right now.


Nelson Andrew Riis: We asked for details of the loan portfolios but Price-Waterhouse said they would not provide that to the committee.


Felix Holtmann: They don't trust you with it.


Nelson Andrew Riis: They said that publicly. They don't trust us with it?


Ian Deans: They trust the Minister.


Nelson Andrew Riis: Mr. Speaker, if that is the attitude of Government Members toward that committee, then they better have a discussion with the chairman. They have no faith in the ability of this committee to carry out this inquiry properly.


Donald Alex Blenkarn: Mr. Speaker, I want to make it very clear that I am asking the NDP to outline in detail in this House what they insist be made available to the committee because I think it is important that it be on the record.


The Acting Speaker (Mr. Charest):: Order, please.


Donald Alex Blenkarn: Everything will be made available if at all possible.


The Acting Speaker (Mr. Charest):: Order, please. Once again, that is not a point of order.


Nelson Andrew Riis: Mr. Speaker, it is not a question of whether Government Members trust what is going on in the committee. It is a question of whether the people of Canada have the right to know what has been going on.


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: At the moment the Government has refused to provide what it says is reasonable and responsible information.


Donald Alex Blenkarn: We agree.


Nelson Andrew Riis: I want to mention one critical point, Mr. Speaker.


Donald Alex Blenkarn: I want to know what you want.


Nelson Andrew Riis: It is the list of the uninsured depositors who the Government says will be receiving about $1 billion of taxpayers' money. These are phantom depositors. Faceless! Nameless! They have only $200,000 on deposit or maybe $10 million. They may be the Bank of Hong Kong, the Bank of Singapore, the Bank of America or Wells Fargo. We do not know who these people are and the Government refuses to provide the list. The chairman of the committee has said that in his opinion that list should be provided. The Chairman of the Toronto-Dominion Bank, who was a participant in the original bail-out of the CCB, says that list should be provided. No way should we be taking taxpayers' money, writing out cheques to nameless depositors who had their money in the bank knowing full well it was not secure at all. It was not insured. But that is all we are asking. We are asking for a list of depositors.


Donald Alex Blenkarn: Is that all?


Nelson Andrew Riis: The Minister of State for Finance has indicated that this will not be forthcoming and neither will other pieces of information such as the details of the loan portfolio. We are concerned about the Hitchman report. We recognize that it may be beyond the ability of the Minister to provide the report of the United States Reserve Board, yet, based on all the other items which the Government says it cannot provide, we wonder how hard it tried to get that report which describes the problems of the Canadian Commercial Bank's subsidiary in California.


Mr. Benjamin:: Pick up the phone to Ronnie.


Nelson Andrew Riis: We, as responsible parliamentarians, are being asked to carry out an inquiry into the collapse of the Canadian Commercial Bank and the problems associated with the

September 25, 1985
Northland Bank knowing full well that nothing has changed since the last committee, the work of which was incomplete.
We are dealing with a unique situation in this country, Mr. Speaker. There has never been a bank failure like this in Canadian history. I know it is easy for the Government to tell us not to worry and to have faith because it is going to take care of things by shovelling taxpayers' money into the sacks of the uninsured depositors. We are concerned about the banking system of the country. We are concerned that the right steps be taken. The Minister of State for Finance is somewhat correct when she says that we would not have got into this problem so deeply if we had decent regulatory and supervisory powers. Because for years and years the previous administration did not bother to do anything about this, a very serious situation has developed in our country. However, the Minister of State for Finance refused to act when she had the opportunity.


Donald Alex Blenkarn: I have a point of order.


Ian Gardiner Waddell: Sit down.


Nelson Andrew Riis: Mr. Speaker, we have heard on a number of
occasions-


Leslie Gordon Benjamin: Don't see him.


The Acting Speaker (Mr. Charest):: The Hon. Member for Mississauga South (Mr. Blenkarn), I presume on a point of order.


Donald Alex Blenkarn: Mr. Speaker, it is clear that it is a point of order. The Minister of State for Finance has said she was prepared to act and go to the committee. The question is-


Ian Gardiner Waddell: You can't ask a question.


The Acting Speaker (Mr. Charest):: No, no.


Daniel James Macdonnell Heap: Sit down.


The Acting Speaker (Mr. Charest):: May I point out for the
benefit of all Members of the House that in this debate they will all have an opportunity to rise and debate the issue. It is the sincere hope of the Chair that they will rise when their turn comes, rather than on points of order. The Hon. Member for Kamloops-Shuswap (Mr. Riis).


Nelson Andrew Riis: Mr. Speaker, I suggest that the Hon. Member is making these interventions because he is afraid to speak his mind. I would like to conclude my remarks by suggesting that the Minister of State for Finance had an opportunity to act at the very beginning. The banks tell us that they were prepared to provide experienced bankers, with considerable expertise, to evaluate the situation in the Canadian Commercial Bank. They knew that their information was incomplete. The Minister of State for Finance and the Minister of Finance took the material presented by the management of the CCB as fact.


Donald Alex Blenkarn: But not the Northland.


Nelson Andrew Riis: It was perfectly clear to any prudent banker that these individuals had carried on imprudent banking practices, but the Minister of State for Finance said that that was good enough for her, that she had full faith in these characters. Mr. Speaker, the bankers involved did not and they offered to send in SWAT teams of sophisticated bankers to examine the Canadian Commercial Bank. The Minister of State and the Minister of Finance did not take advantage of that offer. They said that they had all the faith in the world in the ability of the Inspector General of Banks and of our old friend, the Governor of the Bank of Canada. They obviously did not know what was going on but they did not need that information.
We found out today that all summer long the bankers were saying that they thought there was a real problem in the bank and were prepared to send in expertise to assist. They asked to be allowed to participate. They were told no, no, no. Mr. Speaker, that tells me that the Minister of State for Finance and the Minister of Finance have not carried out their responsibility to protect Canadian citizens who invest, deposit money, or do business through our banking system. To ask us now to have faith in their ability to deal with the situation any further, or to deal with the financial management of this country after they have failed so abysmally, is asking too much. We in the New Democratic Party no longer have faith in the two senior Ministers with regard to banking, and I do not think the people of Canada have faith in them either.
If we ever get this whole affair into the open, Mr. Speaker, 1 suspect we are going to be smelling an awful lot of tuna. An awful lot of messy material will come to the surface. We will open up a hornet's nest with regard to what the Government, its senior Ministers, and the senior officials in the office of the Inspector General of Banks have failed to do. Mr. Speaker, that is why we, as responsible parliamentarians, plead for an opportunity to do the job that we were elected to do, that is to ensure that every dollar of taxpayers' money is wisely spent. To ask us to buy a pig in a poke, to shovel a thousand million dollars of taxpayers' money into sacks of uninsured depositors who remain faceless, is something that we in this Party simply cannot accept.


Harvie Andre: Mr. Speaker, in his opening remarks the House Leader of the New Democratic Party (Mr. Deans) said something to the effect-and I paraphrase, but I think not inaccurately-that what we are talking about tonight is not a banking crisis but a parliamentary crisis.


Ian Deans: I said it was both.
September 25, 1985


Harvie Andre: Well both, okay, a banking crisis and a parliamentary crisis.


Ian Deans: Right.


Harvie Andre: Mr. Speaker, I have to agree with the latter part of that because for years and years he and I, on that side of the House-unfortunately I spent a lot of time over there, but not as much time as he is spending-spent our time fighting with the then Liberal Government to please allow Parliament to work, to please allow committees of Parliament to look into issues that came up from time to time. We fought and fought but that was not the practice of the Liberal Government. It was only in 1979, during the short Conservative Government, that we had freedom of information legislation. With the new Conservative Government, we now have committees that can set their own references. However, the pattern of Mr. Mac-Eachen, the denizen of the other place, was to stonewall by keeping everything on the floor of the House of Commons where he knew full well that an issue could only last a few days then would disappear from the psyche of the angels up on high in the press gallery, and therefore the public.
That is not our pattern. There was a change of Government last year which the House Leader of the New Democratic Party apparently does not recognize. Right from the start the Minister of State for Finance (Mrs. McDougall)-


Ian Gardiner Waddell: It doesn't seem any different.


Daniel James Macdonnell Heap: We can't see any difference.


Harvie Andre: -said that we want Parliament to look into the banking crisis of western institutions. We want Parliament to study why it happened and how it happened and to make recommendations on what can be done to ensure that it does not happen again. That was the position of the Minister of State for Finance and it is still her position. Several times in this House the Minister of State said that she would provide every bit of information that she is legally allowed to provide. The NDP say, "Stonewall, you are trying to cover up". We want Parliament to study all aspects and we will provide all the information that can legally be provided.
That is not good enough. "We want you to provide information that is illegal. We want you to break the law. Furthermore, we are not going to let Parliament work. We are not going to let committees of Parliament meet until you agree to break the law and provide us the information that you are not allowed to provide by law." That is the position of the House Leader of the New Democratic Party, Mr. Speaker. He says we have a parliamentary crisis. You are darn right we have, as long as we have Members like him espousing such absurdities as we have heard here tonight.
The NDP Member says, "Do the people have a right to know?" The question answers itself. Of course they do. We believe the people have a right to know. That is why we have changed the rules of Parliament to allow committees to meet at any time. That is why the Minister of State for Finance said that we want a committee in this House to look into all aspects of this question. That is why she said that we will provide all the information we can legally provide because Parliament, in that proper forum of a committee, can look at and study the figures. The NDP says no. Why does the NDP say no, Mr. Speaker?


Neil Young: Why?


Mr. Althouse:: You won't find the answers.


Harvie Andre: You know and I know, Mr. Speaker, because the New Democratic Party is not interested in getting to the bottom of the matter. The New Democrats are not interested in doing good, honest work in committee. They want scandal.


Victor Fredrich (Vic) Althouse: We want answers.


Harvie Andre: They want hints of impropriety. They want to try and create some evidence of wrongdoing-


Mr. Axworthy:: We keep finding it every day. We find more and more.


Harvie Andre: -so the House Leader of the New Democratic Party can get red in the face in righteous indignation and say that he is concerned about the people.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Lloyd Axworthy: Take a look at your own face.


Harvie Andre: Yes, the House Leader of the New Democratic Party says "I am defending the people. I am concerned about the taxpayer." What absurdity. If he and his colleagues in the New Democratic Party were responsible parliamentarians they would not have been stonewalling and preventing the Government House Leader from getting this committee established. That committee would be meeting tonight.


Some Hon. Members:: Hear, hear!


Harvie Andre: Instead we are sitting here tonight engaged in this debate where we are not getting at the facts. The New Democratic Party Member over there says he is interested in getting at the facts. But that committee could be sitting tonight looking at all the information. If Members of the New Democratic Party were responsible parliamentarians, which they are not, that is what we would be doing tonight.

September 25, 1985


Victor Fredrich (Vic) Althouse: The committee can get no more facts than we are getting tonight.


Neil Young: Resign.


Harvie Andre: Every single person in the Province of Alberta, at least, and I would not be far wrong if I said western Canada knows what the fundamental problem is.


Jean-C. Lapierre: The Government.


Harvie Andre: Yes. It was the Government, the Liberal Government in 1980 that brought in the National Energy Program. There is no question about that.
This is a good opportunity, Mr. Speaker, to remind those of short memory what that National Energy Program did.


Jean-C. Lapierre: U.S. loans.


Lloyd Axworthy: Where did you get your lobotomy?


Harvie Andre: On October 28, 1980, applauded by the Hon. Member for Vancouver Kingsway (Mr. Waddell) and the New Democratic Party, the Hon. Marc Lalonde brought in this document which put western Canada on its knees.


Jean-Robert Gauthier: Baloney.


Harvie Andre: If the New Democratic Party is interested in facts, let them bring out the documents and look at the facts. Let them look at the Budget of November 1981 when the NEP was in place and let them look at the taxes that were being collected.


An Hon. Member:: What has this got to do with the Northland Bank?


Harvie Andre: It has everything to do with the Northland Bank.
In fiscal year 1980-81, the Government of Canada collected about $2.3 billion in taxes from the oil and gas industry, representing about 10 per cent of corporate taxation. The oil and gas industry was about 10 per cent of Canadian industry.


Neil Young: What about the companies you were involved with?


Harvie Andre: The next year under the the National Energy Program the taxes doubled. The next year the taxes doubled again. In the course of four years, the NEP took out $20 billion from the western Canadian economy. Let me repeat that, the NEP took out $20 billion. That is not the complete story, Mr. Speaker.


Neil Young: Poor Rosenberg and Eaton. Those are the boys you are protecting.


The Acting Speaker (Mr. Charest):: Order.


Harvie Andre: As I indicated, the New Democratic Party is not interested in facts. Facts have a way of destroying a good issue, I agree. I understand their fear because facts are not of interest to them over there.
The National Energy Program introduced on one industry, not corporate income taxes which apply evenly and equally across the country-


Ian Gardiner Waddell: To oil companies.


Harvie Andre: -but the Liberal Government introduced in addition the Petroleum and Gas Revenue Tax. That only collected $82 billion, $83 billion, $84 billion.


Jean-Robert Gauthier: Mr. Speaker, I rise on a point of order. Some half an hour ago, Mr. Speaker, you brought to order a Member of the New Democratic Party because he was talking about the Canadian Commercial Bank. I wish you would bring it to the attention of the Minister that we are talking about the Northland crisis tonight and not about something that happened in 1981. Get back to the facts.


An Hon. Member:: It is all relevant.


The Acting Speaker (Mr. Charest):: An Hon. Member in the House says it is all relevant. It is relevant. I would like once again to invite all Members to keep in mind that the subject matter of debate tonight is a motion concerning the Northland Bank. The Hon. Minister is referring to the reasons that the Northland Bank is in difficulty now.


Lloyd Axworthy: Alleged reasons.


Harvie Andre: The National Energy Program imposed on one industry, one sector of the country, Mr. Speaker, these extra taxes borne by no other industrial sector. The Petroleum and Gas Revenue Tax in 1982-83 raised $3.7 billion from one industry in extra taxes. The incremental oil revenue tax, the natural gas and gas liquid tax, the oil export tax, the Canadian ownership charge, only five separate different taxes to collect a total of $20 billion. Any economy, any nation, let alone a part of a nation, subject to that massive increase of exorbitant taxes will feel economic pain. In addition, the National Energy Program provided for confiscation of 25 per cent of oil and gas company assets offshore. It imposed a new regulatory regime, the Canadian Oil and Gas Lands Administration with a bunch of bureaucrats to look after the regulations and, FIR A was instructed to take a fine look at any transactions of oil companies.
What happened as a result of that, Mr. Speaker? According to estimates of, I believe, the Conference Board, something like $18 to $22 billion of Canadian capital left Canada. Let me emphasize that, $18 to $20 billion dollars. That translates at a bare minimum to 250,000 jobs that were poof, gone.


Lloyd Axworthy: This is fantasyland.
September 25, 1985


Harvie Andre: It was because of that program. The Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) got jobs for half of those people in his office.


Some Hon. Members:: Oh, oh!


Lloyd Axworthy: That's right. Only half as many in your office now.


Harvie Andre: It took a quarter of that many to fly him around. There were pictures on television every day in western Canada. Admittedly people here in the east remained blissfully ignorant of drilling rigs lined up for miles at and above the border heading south. The Member for Winnipeg-Fort Garry laughs. That is why the Liberal Party did so well in western Canada in the last election.


Some Hon. Members:: Hear, hear!


Harvie Andre: That is why the Liberals did so well because of the attitude of the Member for Winnipeg Fort Garry.


Lloyd Axworthy: I just appreciate a good clown.


Harvie Andre: What happens when you lose $20 billion of capital in a short period of time? Your dollar plunges, interest rates shoot up, they were high generally but Canada's were five to six points higher than in the United States. That supposedly great national Liberal Government imposed an extra $20 billion of taxes on one region, and the predictable happened-property values sank and businesses went bankrupt. The economic carnage was tragic to everyone with any sense of concern for their fellow Canadians.


Lloyd Axworthy: Is that what happened with your companies?


Harvie Andre: It happened to the companies with which your Leader was involved; I read that in the paper.


Lloyd Axworthy: What about yours?


Harvie Andre: Not mine.


Lloyd Axworthy: What about the ones which went bankrupt?


Harvie Andre: The Hon. Member does not have to seek advice across the aisle on bankrupt companies; he should ask his Leader who was the chairman-


Lloyd Axworthy: You were under investigation.


Harvie Andre: I was not the chairman of any bankrupt companies as was your Leader.


Lloyd Axworthy: Tell us about the investigations you were under.


Harvie Andre: Ask your brother.


Lloyd Axworthy: I am asking you; it is your companies.


Harvie Andre: You will have a chance to speak.


Lloyd Axworthy: Yes.


Harvie Andre: When that kind of massive damage is done by a federal Government, the inevitable happens. In Alberta or in western Canada we did not suffer a recession; it was a depression. Thousands of young families had to abandon their homes because they lost their jobs. The companies could not carry them. Interest rates were exorbitant. I should like to refer to the list of projects which were actively under way and were cancelled as a result of the NEP-the Syncrude expansion, the Cold Lake project, the Alsands project, the Petro-Canada/Nova oilsands project, the Saskatchewan heavy tertiary project and Judy Creek light tertiary project. As a result, tens of thousands of important high-tech jobs were wiped out. People without jobs cannot pay their mortgages. People without jobs do not buy, and businesses go bankrupt. That is what happened as a result of the National Energy Program. That was the carnage as a result of the Liberal Government. Any bank with a primary market in that area was bound to feel the consequences. That is what happened.


Some Hon. Members:: Oh, oh!


Harvie Andre: Any responsible Member of Parliament will acknowledge that. I do not put members of the Liberal Party and the NDP into the category of responsible Members of Parliament.


Nelson Andrew Riis: You are a Minister now; you are above that.


Harvie Andre: Many of my friends were forced into bankruptcy, were forced out of Alberta and were forced into foreign countries. I doubt whether we could find a resident of Alberta who does not have a friend, acquaintance or family member that was not personally or financially devastated by the National Energy Program and the policies of the Liberal Government supported by the NDP. The fact that in the last year, because of the Western Accord and a change in attitude, I am happy to report to the House-


Some Hon. Members:: Oh, oh!


Harvie Andre: I hope opposition Members will applaud the fact that things have changed and are changing. In fact, growth-


Ian Gardiner Waddell: What about the banks?


Lloyd Axworthy: Tell us about the banks.


Harvie Andre: Members of the Liberal Party and the NDP find good news about the western economy to be atrocious. They become excited and upset when I tell them that things are looking up since the Western Accord.


Victor Fredrich (Vic) Althouse: Why don't the banks believe that?

September 25, 1985


Harvie Andre: Opposition Members think that is terrible. They were happier when the National Energy Program was destroying people; that made them happy. When the Western Accord is giving people hope again, they are upset. Dare this Government actually come to the aid of a western Canadian financial institution, my goodness! What a travesty! Dare this Government look beyond Ottawa and to western Canada! We are concerned about those who do business with the banks. We are concerned about depositors and the impact of these bank difficulties on the people and the economy of western Canada. The Opposition says: "That is terrible". We have nothing to hide. This is why the Minister of State for Finance said: "Let's take it to committee". She will provide all the information she can legally provide so that it can be studied, and the New Democratic Party does not want that. Its Members would rather stand in the House of Commons, look for scandal, look for misrepresentation and look for problems, so that they can sing in righteous indignation. They feel that that is more fun than getting to the truth and being responsible, worth-while Members of Parliament. We dismiss that, and the people of Canada dismiss that.


Some Hon. Members:: Hear, hear!


Raymond Garneau: Mr. Speaker, this evening's debate falls within a very special context not only from a procedural standpoint but also with respect to the matter under consideration.
I do not think that the failure of a bank and the shutdown or eventual bankruptcy of another financial institution should be taken lightly. Quite a large number of our fellow citizens, as depositors, will be affected by these incidents. I have in my riding-as undoubtedly most Members have in theirs- borrowers, businessmen who provide work for hundreds and thousands of Canadians. This debate therefore is set in a context which I would describe as "the black years" or "the black days" of the administration of this country.
What is at stake here-and 1 want to look at it from that angle because we will eventually have an opportunity to dig deeper into this matter in committee-is a matter of credibility, the credibility of a Government, the credibility of a Minister of Finance (Mr. Wilson), and the credibility of a Minister of State for Finance (Mrs. McDougall).
If I may, I should like to go back in time, back to last March 25th when the Minister of State for Finance made a statement in the House, a statement I would like to quote, keeping in mind the remarks made by the previous speaker.
Here is what the Minister of State said, and this, Mr. Speaker, is the first time the House was officially told about the matter. I hope the Minister of State for Finance will listen to what she said, perhaps she might not repeat the nonsense we heard from her in the House today. I quote from Hansard of March 25th, 1985, page 3310:


Barbara Jean McDougall: Mr. Speaker, I would like to advise the House that an agreement was reached this morning to provide the Canadian Commercial Bank with an infusion of capital which will ensure the long-term viability of this Edmonton-based bank. The agreement is a co-operative effort which brings together three Governments, six banks, and the Canada Deposit Insurance Corporation to provide a support package which will enable this bank to remain viable, thereby protecting the interests of small- and medium-sized business in western Canada.
The Minister went on to say in the House:
The bank-
-referring to the CCB-
The bank recently experienced a sharp deterioration in its U S. loan portfolio, particularly as a result of lower oil prices. This situation significantly depressed the value of the Canadian Commercial Bank's loan portfolio. The management of the bank realized that they could not continue to operate a viable banking operation given the magnitude of the problem loans. While many of these loans had been considered manageable, it became evident in recent weeks, given the severity of the situation in the U.S., that a high proportion of them should be written off or significantly reduced on the books of the bank.
That is what the Minister of State for Finance (Mrs. McDougall) said in the House on March 25th of this year. Nowhere in her statement did she make a connection between the bankruptcy or financial difficulties of the Canadian Commercial Bank and the National Energy Program. 1 could go on to quote what the Minister had to say in answers she gave on March 29th of this year, in reply to questions by my hon. colleague, the Member for Ottawa-Vanier (Mr. Gauthier). This is what she said in answer to a question from the Hon. Member for Ottawa-Vanier: "Mr. Chairman, the Bank invested in California through an agency. It purchased a 40 per cent interest in the Westlands Bank. The Westlands Bank was involved in real estate. The agency was involved with oil rigs. I am trying to separate out a very complicated corporate structure". Those were the words of the Minister.
I wish she would stay in the House and listen and refrain from repeating the nonsense she uttered today. "The West-lands Bank", said the Minister, "went through some difficulties with its real estate. The agency, on the other hand ... " The Hon. Member for Beauce (Mr. Bernier) will have time for a speech later on, if he wants to make one. He can tell us what he thinks of all this. "The agency, on the other hand, was involved with these oil rig loans. Those have become a problem really very recently. I want to read from something that appeared in the New York Times describing what had happened in a similar market in Texas". Mr. Speaker, I could go on reading passages from the Minister's statements in this House, clearly establishing that the root of the problems experienced by the Canadian Commercial Bank lay in its operations in the United States. At least, that is what she told us.
I would like to go back to what I said at the beginning of my remarks, when I suggested that today's issue revolves around credibility. I would like to quote from what the Minister said on March 25th. You heard what was said by the Hon. Member who spoke before me.
September 25, 1985

I would also like to raise another question, and this will bring me to the subject of my motion, the Northland Bank. On March 29th, in this House, an Opposition member from the NDP asked the Minister if other financial institutions might face difficulties. Referring to page 3513 of the Debates of March 29th, 1985, and I have here before me the English text, here is the answer given by the Minister of State for Finance:
Mr. Chairman, this situation was caused by an isolated incident. There are no other financial institutions in the country at the moment that are appearing to be insolvent in any way.

This was on March 29th, 1985, the very day that Western Capital ended its operations.
At the time we were told, on March 29, that there were no ... and here are the words used-

The words that are being used are pretty clear:
There are no other financial institutions in the country at the moment that are appearing to be insolvent in any way.
[ Translation]
And thus on the strength of the Minister's comments, having faith in the figures we were given concerning the Canadian Commercial Bank, accepting as true and verified the facts reported in this House, we supported the bail-out package on behalf of the Canadian Commercial Bank. But because of this Government's incompetence, we came to be faced on September 1st with another statement that flew in the face of what the Minister had told us. I am now referring to a press release issued on September 1st: "The Minister of State for Finance, the Hon. Barbara McDougall, today announced that the Inspector General of banks has informed her and the Minister of Finance that the Canadian Commercial Bank and the Northland Bank are no longer viable and cannot honour their commitments falling due".
Mr. Speaker, this is indeed a very serious situation when a Cabinet Minister rises from her seat and states that no other financial institution appears-let alone is-to be in difficulty, but a few months later, CCB and Northland are bundled up in the same basket. I submit that precisely by doing this, the Government of Canada, the Minister of Finance, the Minister of State for Finance had signed the death warrant of a financial institution. A financial institution, Mr. Speaker, for which, according to information published recently in the Financial Post, a trustee was appointed and a liquidation order applied for. That is what the press release told us on September 1st. We were told that an application had been filed for the liquidation of a financial institution about which the following figures were published in the Financial Post:

For the three months ended January 31, 1985, net income was up 24 per cent to $777,000 or 72 cents per share-
For the year ended October 31, 1984, net income rose to $3,347,000- [Translation]
Mr. Speaker, putting in the same bag a financial institution called the CCB and the Northland Bank doomed the second institution. During the long debate which has taken place in this House throughout September on the banking affair and the tainted tuna affair, we always come back to the same issue, namely credibility. How can we believe a Minister who stated that the CCB would be saved with $255 million? How can we now believe a Minister who, a few days later, said that no financial institution seemed to be in trouble? How can we believe a Minister who tells us that the whole bail-out operation was effected in close co-operation with the banking sector when the newspapers are full of statements by bankers who appeared before the Finance Committee and said that they had accepted this operation only because their arm had been twisted nearly out of its socket?
We asked the Minister to examine the assets of the CCB. This was refused. We asked the Minister to appoint qualified administrators to replace a management who had lost the confidence of the financial sector. This was refused. Today, during the oral question period, my colleagues and myself were told that no one had been found. Yet, one after the other, the bankers informed us that they had provided the Minister with the names of qualified people, of respected retired bankers who would have accepted such responsibilities.
Mr. Speaker, how can we believe a Minister who says that she is working tirelessly to save the Northland Bank when, in Calgary, the president of this same institution gives a press conference to inform the public that, before it is too late, he wants to state publicly that he has taken position against a Government whose mismanagement will cause the bank to close?
Mr. Speaker, we are certainly faced with a question of credibility. When I look at this whole operation, I say to myself: Here are two institutions, one worth $3 billion, or $2.7 billion, and one worth $1 billion. The one with assets of $3 billion has already been loaned $1.3 billion by the Bank of Canada. However, we were told in committee, Mr. Speaker, that the $1.3 billion were guaranteed by assets worth $1.8 billion. In an institution worth $2.7 billion, this means a difference of $1 billion, I wonder how come, in view of the direction it took earlier, the Govemement is now asking the taxpayers to pay out $1 billion when there will no longer be any bank in Western Canada. Borrowers will continue to have problems for months and even years before that problem is solved.

September 25, 1985
The depositors who have placed their savings ... There is at least one of them in my riding who has been living in anguish since then because he deposited at this bank the $160,000 he had managed to save in his lifetime. Why waste the taxpayers' money, send it down the drain, for all practical purposes, because there will not be a single job left when the banks go. The problem is the same with the Northland Bank. How much money did it get from the Bank of Canada? What is the real value of its assets? We have no accurate and up-to-date figures. Those which are available date back to October 31, the end of the fiscal year for the banking institutions, and indicate $1 billion in assets. I checked ... A major part consists in very worthwhile investments. I ask myself: If we are to use the taxpayers' money, is there no way we could save the Northland Bank?
The purpose of my remarks, Mr. Speaker ... I returned from Quebec City to take part in this debate for one single reason. I suggest that we could save the Northland Bank if the Government withdrew ... and found a way to get out of the unthinkable maze in which it got stuck by placing the CCB and the Northland Bank in the same bag. You can imagine the reaction of the depositors when they read in a press release from the Minister of State for Finance (Mrs. McDougall) that the Government was asking for the liquidation of the bank but was asking the court to postpone its decision on a liquidation application. If you had $100,000, Mr. Speaker, would you place it in a financial institution for which the Government of your country has sought a liquidation order? It does not make sense, and the whole operation, day after day, is a further demonstration of the incompetence of the Minister of Finance and the Minister of State for Finance.
My colleague the Hon. Member for Saint-Henri-West-mount (Mr. Johnston) and I have often pointed out the empty seat across the floor that is reserved for the Prime Minister, and I urged very strongly my hon. friends to read from A to Z, as reported now by the Canadian Press, the various stages of this operation, and all evidence points in the same direction, the same as in the tuna fish disaster: The Office of the Prime Minister ... As I said, I believe the Northland Bank could still be saved. It is a regional institution. Personally, as a Quebec Francophone, I would feel terribly humiliated if I heard that our "caisses populaires" were on the brink of bankruptcy. However, today, I feel that western Canadians have heard just about enough of the Prime Minister's statements.
But if I were a westerner, Mr. Speaker, I would be humiliated to see a regional bank go belly up, after years and years during which those people kept asking for their own financial institutions-two banks established during the 1970s. I will not launch into a political debate as did the Associate Minister of National Defence (Mr. Andre) earlier this evening. They were established under a Government and prospered for a while. Some errors were made. If on March 25th I had been told that
nothing could be done, that the institution was bankrupt, but with no request for taxpayers' dollars to put it back on an even kneel, I would have understood, I would have accepted the situation, difficult though it would have been to do so. But in this case they asked for $225 million, not to save one or two individuals but to save a financial institution which was, in my judgment, the result of years of work and negotiations by the people of Western Canada to have their own financial institutions. So they are going to spend taxpayers' dollars to repay all depositors, they will clean up the whole mess. Perhaps it will end up costing $1 billion by the time this is over, but then when will the residents of Edmonton, Calgary, Winnipeg or Regina get back on their feet and try to get another regional bank going? I am saying that the full responsibility should be borne by the Prime Minister, the Minister of Finance and the Minister of State for Finance.
If the Government had been more serious and had taken the time it needed instead of panicking and trying to avoid the effects that such a decision could have had on the Summit organized by the Prime Minister, we might have been able to save some money in closing the CCB. With half these amounts, we would probably have been able to save Northland and to keep a regional bank in the Prairies to continue to serve the population, not only of Canada as a whole, but especially of the Western provinces.
In my opinion, it is a shame to have acted in this way and the debate this evening has at least had the advantage of clearly showing the incompetence of the Minister of State for Finance and the Minister of Finance who both washed their hands of the whole business and let the Prime Minister make the political decision.
In all the issues that are being raised one after the other, we see how badly the credibility of this Government is affected and how the Western provinces and financial institutions will have to pay for it.


Mr. Doug Lewis (Parliamentary Secretary to President of the Treasury Board):: Mr. Speaker, before I begin my remarks, I would like to say to my colleague, the Hon. Member for Laval-des-Rapides (Mr. Garneau) who just spoke, that when we talk about credibility, we talk about being here for the beginning of the debate.


Jean-Robert Gauthier: You've got to be kidding.


Douglas Grinslade Lewis: I welcome him back to the House. I am pleased to have this opportunity to enter the debate with the perspective of a Member of Parliament from central Canada. This matter goes to the very heart of what this country is ail about. It goes to the very fact that this is a country of various regions which is tied together by a common bond and that common bond is the fact that when one region encounters difficulty, the other regions pitch in to help out.
September 25, 1985

For most of the past 20 years, the help in this country was distributed to Liberal ridings. That is all finished because we are distributing the help in this country right across the country.


Raymond Garneau: You killed two banks and you're happy with that?


Douglas Grinslade Lewis: You were not here but you know darn well that that is what your colleagues did. That is why there is only 40 of you in the House. There are only three here now but 40 all told. For years the Liberal Party either ravaged the West or ignored it depending on its whim. It is necessary to know the background to realize why we are having this debate tonight.
During the 1980s, under the Liberal Government, we saw the worst recession since the 1930s. This recession was visited upon most of the world but only in Canada did we have a government that helped it along. As a result, we had high interest rates, high unemployment, plants closing down, foreclosures, housing starts plummeting and no action was taken by the Liberal Party.
What kind of action did the Liberal Party take? It did take some action and it was called the National Energy Program. The recession was complicated by a deliberate action on the part of the Liberal Party in the form of the National Energy Program. If the National Energy Program was the child of the Liberal Government, its godparents were the NDP. There is no question about that.
When the NEP came along, the economy of the West ground to a halt and that is not something that is known only by MPs from the West, it is known throughout the country. We know exactly who ground the economy of western Canada to a halt. It was the Liberal Party helped by the NDP.


Ian Gardiner Waddell: Why helped by us? We voted against the program more than you did.


Douglas Grinslade Lewis: I want the House to know what happened. When the NDP and the Liberals shut down the economy of western Canada, do you know what it meant to eastern Canada, Mr. Speaker? Factories in my riding shut down and people were laid off. Do you know what that meant to the City of Orillia, Mr. Speaker? It meant that it became Filled with cars with yellow licence plates. Young people from Orillia went out West to work, worked hard, had good jobs and then the Liberals and the NDP shut down the energy industry and they had to come back home. That is what my colleagues said.
During this time, new banks were established. I think we all agreed that some competition in the banking industry would not hurt so several new banks formed in Canada including several in the West. These banks took advantage of the opportunities that existed out West in the 1970s. However, the Liberal Government-there being no members of that Party in the House to refute this-failed completely to put in place a regulatory regime which would take care of the problems banks might encounter under the new legislation and which we might wish them to avoid. I will refer to that point in a minute.
As a result, we saw a concentration of loans in the energy industry. There was a concentration of loans in one region. The failure to put in place a regulatory regime by the Liberal Party, complicated by the recession and the National Energy Program, led to problems. We saw falling real estate prices and falling real estate values. We saw bankruptcies. As a result, banks could not collect on their loans. They could not collect the interest or the regular payments and more and more of their loans became non-current.
I appreciate this debate is about the Northland Bank. However, I think it fair to suggest that the Canadian Commercial Bank encountered the same problems as those encountered by the Northland Bank. The House knows that the Government, along with the banks, the provinces of Alberta and British Columbia, and the CDIC, moved in with a support package which was designed to restore depositor confidence and to assist a fledgling western bank maintain its confidence in the Canadian banking system. At the same time we all know that there were difficulties with the American banking system.
Our efforts were justified by our responsibility as a national Government to help all regions of this country. We felt the support package would rectify the problems of the Canadian Commercial Bank and that that would spill over and strengthen all banks regardless of location. We felt it would enable all banks in the West to remain as players in the game and to bring some competition into the system. We all know that the situation did not get better. We all regret that. I think all Members of the House share that point of view. We found that the loan portfolios were in more serious condition than we first felt. We found that the market confidence was not restored. Thus, the Minister, on September 1, moved to take over the CCB and put curators in place at the Northland Bank.
There was a feeling at that time, and there still is, that with the directors in management and with the Government that the bank could be preserved. We gave, have given and are giving the Northland Bank time to rearrange its affairs. I am sure all Members in the House want that to happen. We want the confidence in the banking system maintained. I am sure that on behalf of all depositors and shareholders we would like to see that the Northland Bank has an opportunity to survive.
What we should look at in this situation is what we have learned. First, we have learned there is a desperate need to examine and improve our regulatory regime. There is no question about that. It was left in chaos by the Liberal Party. I suggest to Hon. Members that any Government is entitled to rely on auditors and is entitled to rely on inspectors.


Paul Wyatt Dick: There is but one opposition Member in the House.


Douglas Grinslade Lewis: I am addressing my remark to that one member of the Opposition who is in the House. I know him as a hardworking colleague and I am certain he is listening to my remarks.

September 25, 1985
We are entitled, as is any Government, to the best information possible. Thus, what we have done is set up a committee to investigate the regulatory reform situation. We have released discussion papers. We have had the benefit of a private sector task force report on the CDIC. We intend to introduce legislation which will strengthen the regulatory powers of the federal Government. We will demand that federal regulators place realistic values on real estate which is held by the institutions which we regulate. We will institute legislation to empower the Minister of Finance to prevent the transfer of ownership of federally-incorporated financial institutions in cases where we deem that transfer to be against the public interest. We will take action to enable the supervisors to fully examine all activities.
I commend to the House an article by Seymour Friendland of the Financial Times of Canada dated September, 16, 1985, wherein he goes a couple of steps further. He suggests that if we are to have regional banks and trust companies-and 1 think we are all in favour of that-that we force them to diversify their loans. 1 think that makes some sense. We should look at that situation in order that we do not have all of the loans in one industry and in one region. It is just the same old story of having all your eggs in one basket. Mr. Friedland suggests we take a look at that point when we put in place the regulatory reform regime. That makes sense.
What can we learn from this situation? We have learned that we need a new regulatory regime for federal financial institutions in this country.
Second, we have learned the real interest of the Official Opposition, none of whom are in the House to hear my remarks. I hope they will read them in Hansard. When the debate commenced there were two Members out of forty in the House. I commend my colleagues from the New Democratic Party. They were serious about this debate. They had people in the House to participate in it. We all listened to the well researched, several-page address, of my colleague from Hamilton Mountain.
Third, we heard unbased allegations made by both the Hon. Member for Hamilton Mountain (Mr. Deans) and the Hon. Member for Trinity (Miss Nicholson) with respect to what we will divulge to the House. They have asked for the following. They have asked for the auditor's letter to the Board of Directors. We have agreed that the letter shall be released to the committee. They have asked for the letter from the Inspector General of Banks to the Minister of Finance (Mr. Wilson) dated September 24, 1984. We have agreed that the committee shall receive that letter. They have asked for a copy of the participation agreement of the support package. We have canvassed permission from all parties involved and they have agreed to release it to the committee. They have asked for the report of the U.S. Federal Reserve Board. We have asked permission of the Federal Reserve Board, both through official channels and diplomatic channels. It is U.S. officials who refuse to release the document to us. However, we are still pursuing the matter. They have asked us to release the names of the uninsured depositors. Members of the House know that
Section 251 of the Bank Act and that Section 24 of the Access to Information Act make this disclosure impossible. Those sections protect the privacy of individuals, which is fundamental to the banking system. It is fundamental to our beliefs.
What is ludicrous about this is that the Hon. Member for Hamilton Mountain has suggested that we put in place retroactive legislation. He suggests that since this was not thought of when the Bank Act was drafted and amended that we should think of it now, pass an amendment and have retroactive legislation. I can think of nothing more odious, nothing more undemocratic than the passing of retroactive legislation as the Hon. Member for Hamilton Mountain proposes.
It has been suggested we are stonewalling. I suggest to the House that the New Democrats and the Liberals are far more interested in television time than they are in the truth. They know they can stonewall this matter in negotiations between House Leaders and prevent the matter from going to committee. They know they can come back to the matter with question after question in Question Period, none of them making any sense. In this way they can have their cake and it too. I do not really think they will find that the Canadian people will believe them.
Perhaps the most important thing we have learned is that we have one of the best Ministers of State for Finance that this House has ever seen.


Some Hon. Members:: Hear, hear!


Douglas Grinslade Lewis: The Minister entered the house in 1984 after a varied career in financial circles. She had an excellent reputation in our Party as a political organizer and as a very competent person. I suggest to the House, Mr. Speaker, that since then she has been tested as no Minister of State for Finance, has been tested, in my experience, and perhaps as no Minister of this Government has been tested. At no time, Mr. Speaker, has she been found wanting either by our Party, by the Government, by the Cabinet or by the Opposition. She has made the difficult decisions and she has stood by the difficult decisions. She has answered the questions. She has made the statements. She has been the witness in committee. She has done everything and she has done it in a determined, forthright and convincing manner. As colleagues, we are all proud to serve with her. I suggest that that would include Hon. Members of the Opposition. I have watched their daily frustration because they have thrown their best questions at her and have not made a dint.
The best line the Opposition can take up is the $1 billion bail-out. I would like to specifically address that issue in this national House of Commons.
We, as a Party, campaigned on national reconciliation. We said that every region of this country is important, and it is important to us all. I suggest to the Liberals and I suggest to the New Democratic Party, that if we put $1 billion worth of transfer payments into the Atlantic region, we will bail out
September 25, 1985

that bank and the depositors in western Canada. If we put $ 1 billion into bailing the eastern banks out of the Dome situation, we will put $1 billion into trying to rescue this bank and these banks. If we put $1 billion into Canadair in Quebec so that we could maintain an aircraft industry in this country yes, we will put $1 billion into this effort on behalf of western Canada.
We make no apologies whatsoever for what we have done on behalf of western Canada. I say that as a proud Member of Parliament and especially as a Member of Parliament coming from Ontario. I want the entire House, especially the New Democratic Party and the Liberals, to understand that. I suggest to my colleagues who go back to towns and cities like Yorkton, Regina, Kamloops and Prince Albert, that on Saturday and Sunday they walk down the street and tell people that they were ridiculing what we were trying to do for western Canada. They should try that on for size when they go back home.
We have learned something else, Mr. Speaker. We have learned that the Liberals, bereft of policy, with their leadership problems, are fastening on to this issue as their only hope to divert attention. We have learned that the New Democratic Party, which does not have a leadership problem-yet-has western Members of Parliament from Manitoba, Saskatchewan-none from Alberta-and British Columbia, who ridicule our efforts to help western Canada.
We have learned most importantly, Mr. Speaker, that the Progressive Conservative Party is determined to make Canada work. We are determined to eliminate regional differences. We are determined to stand by our friends in all regions of this country.
I say to you, Mr. Speaker, that we support unequivocally the efforts of our colleague, the Minister of State for Finance (Mrs. McDougall), in the case of the Northland Bank.


Simon Leendert de Jong: Mr. Speaker, the debate which is occurring tonight is a very important one. The stakes are high. In a period of economic restraints and contraction, the sums of moneys involved are indeed very significant. It is with some regret, Mr. Speaker, that I heard the Minister of State for Finance (Mrs. McDougall) deliver her speech this evening. It is unfortunate that she said very little about the state of the Northland Bank. I was hoping that the Minister would tell the House and the nation where things are with the Northland Bank in terms of the negotiations and trying to work out a financial package with some other financial institutions which would allow that financial institution in western Canada to survive. Unfortunately, she said absolutely nothing.
It would seem to me that this opportunity for a debate on the Northland Bank, in particular, would have been used by the Minister to explain to the House what the situation is, where things are right now and why she has committed herself and the Government to bail out all of the uninsured depositors if that institution should go into liquidation. Again, it is unfortunate, Mr. Speaker, that so far no member of the
Government has risen in the House and really addressed this central question.
Something I find similar between the Canadian Commercial Bank and Pioneer Trust of Regina, Saskatchewan, is that in both places we have Conservative Governments who have the reputation of being business like and knowledgeable in the business world but which are making business decisions without knowing all the facts. They did not know what they were getting into when they made certain decisions. And when they made those decisions, Mr. Speaker, they committed their respective Governments and the taxpayers to millions of dollars.
In the case of the Province of Saskatchewan the Minister of Finance wrote a letter, which became public, stating that the Government of Saskatchewan would guarantee a preferred share issue which, in turn, would bail out Pioneer Trust. He did it without having a look at its books. What business person in his right mind would make a commitment of millions of dollars without having a look at the books? It's unimaginable. Of course, he did finally get around to looking at the books and discovered the true situation. In the words of the Minister of Finance of Saskatchewan, they discovered it was an endless pit and decided that they had better draw back from the brink. It has cost the Province of Saskatchewan some $24 million or $28 million. Who knows what the final number will be? In terms of our national Budget, that is not a great sum. To the people of Saskatchewan, that is a very great sum because the Government of the Province of Saskatchewan is cutting back on health care and road construction, on social assistance and on all sorts of important programs. But there is money for the banks.
On the federal level, we have the case of the Canadian Commercial Bank. The same mistake is made. A Tory Government, a Government of men and women who pride themselves on their business acumen, who stated in the last election campaign, "Elect us because we have a good business sense and we are going to restore sound business practices to Government", makes a commitment which is going to cost well over $1 billion without having a proper look at the books. The Minister of Finance (Mr. Wilson) and the Minister of State for Finance have told us they had the best information available. We must now, Mr. Speaker, as guardians of the public purse, ask that one central question: Was that good enough? Should they have known that that information was not sufficient? Were there enough indications, warnings and signals that the Government at that time should have realized that the information which was available was not good enough? I believe the answer is a resounding "yes".
One could stand here, Mr. Speaker, and speak for many hours on all the incidents and indications which showed that the Canadian Commercial Bank had some major problems. 1 understand that when the Minister took over there were warnings about CCB in her briefing book. The very fact that such financial actors as Rosenberg and Howard Eaton were involved in that bank should have been reason enough for the Government to know that things might not be all right. The

September 25, 1985
Government should have known that the figures the Inspector General of Banks had were not sufficient on which to base a sound economic decision.
Tonight the Minister of State for Finance lambasted the Liberals for leaving behind a regulatory regime which was inadequate and inefficient and I totally agree with her. But surely that should have been reason enough for her to mistrust the figures they were supplying her. She knew the regulators did not have the proper manpower or the mandate to get the proper figures. Why did she trust the figures they supplied to her? Therefore, there is every reason to believe that the Government should have rejected the figures that were available.
Those figures are important, Mr. Speaker, because an investment decision was based on whether the package was adequate to meet the needs. If the figures supplied by the management and auditors of the company, and by the Inspector General of Banks, were as accurate as they said they were, then the rescue package would have been adequate and it would have worked. But the fact is the figures were not adequate. They were not correct. The loan losses were much higher. The Government should have known that but it proceeded on the basis that those figures were accurate.
The bankers themselves warned the Government. Every banker we had in front of the committee stated, one after the other, that they warned the Government they did not trust the management of that company or those figures. They proposed to send in teams, sworn to secrecy, to bring back a more accurate picture on the state of that company and the Government refused. That was sin number one from people who pride themselves on having good business acumen.
Sin number two was that the Government did not seem to have any game plan. Once the Bank of Canada had been committed to opening its vaults and providing continuous liquidity to the CCB, which in the end came to around 1.3 billion, the Government did not have a game plan. These Ministers did not say they were going to supply the rescue package today; on day two they were going to change the board of directors; on day three they were going to start changing the management and management practices and get this institution back on track.
Well, Hon. Members opposite laugh and say this is a socialist scheme; Governments are not into banking. No, they are just into bailing out the banks. Yet in the United States, when the Continental Illinois Bank was going under, the U.S. regulators insisted that all the directors of the bank resign. A new management team was put in. Those regulators insisted on that before they put one cent into the bail-out of that bank. That is the U.S. experience. Had this Government, once it was committed, thought through the whole process to step number two in order to get the bank properly on track, meaning a new board of directors and new management, this package might have worked. We might still have had a viable bank in western Canada. But mistake number two was committed.
The Government had every reason to know the management of CCB was not adequate, and nor were the board of directors. The board was often totally out in the cold as to what management was doing at that bank. When the bail-out package was put together on that weekend, the bankers themselves warned the Government-and some of them were very insistent-that management changes should occur. Again, unfortunately, the Government chose to ignore that advice. The Minister has said she made some attempts to recruit some new people to the board of directors but she had some difficulty. We understand from testimony given by the other banks that they had nominated people, and certainly one thing we will want to look at with intense scrutiny is why the Government failed to immediately appoint a new board of directors and new management once this commitment was made. Again, mistake number two.
So we have two fatal mistakes: not knowing what the proper state of the bank is; and, having committed the Government of Canada, not having a game plan in place to make sure that this financial institution would remain a viable institution. With those two mistakes this Government did a tremendous disservice to western Canada. The Government greased the already deteriorating skids under that financial institution.
Why did the Government proceed with this bail-out, Mr. Speaker? I have to come to the conclusion that it was totally naive and believed the management of CCB, accepted it all in good faith despite the warnings of the bankers and-


The Acting Speaker (Mr. Charest):: I have been listening very attentatively to the Hon. Member for Regina East. He has been referring for quite a while to the situation at the CCB and the whole subject matter of this motion concerns the Northland Bank.


Some Hon. Members:: Oh, oh.


The Acting Speaker (Mr. Charest):: Oh yes. I have been listening very carefully. In all fairness, I have been listening very attentatively for some time and I feel I may suggest to the Hon. Member that he should refer more specifically to the motion.


Simon Leendert de Jong: Mr. Speaker, I would point out that I doubt if the Minister in her remarks once mentioend the Northland Bank.


Jean-Robert Gauthier: She didn't.


Ian Gardiner Waddell: The Associate Minister of National Defence (Mr. Andre) spent all his time talking about the Bank of-


Simon Leendert de Jong: All right. The point I am trying to make ties directly into the Northland Bank and whether it will become a viable operation or not. I used the experience of the CCB in order to show the mistakes this Government made, the mistakes it should avoid making with the Northland Bank.
I come back to the question of the bail-out. Why do we have a bail-out of the CCB? There was very indication that the support package was inadequate and a game plan for changing
September 25, 1985

management and so on did not exist. So I wonder whether this Government is capable of dealing with the situation of the Northland Bank. Why did we have this bail-out of uninsured depositors? The Government has given the reason as being the Governor of the Bank of Canada, the Inspector General of Banks, the Minister of Finance, and the Minister of State for Finance, have all made public statements as to the viability of the bank and, therefore, the Government has a moral responsibility to the uninsured depositors. But they never made that commitment to the Northland Bank.
Why bail out the uninsured depositors of the Northland Bank? In the past the Minister stated that she will not bail out any more banks but will let the discipline of the market take place. For example, before the collapse of the CCB and the reported demise of Northland on Labour Day a statement of the Minister was reported in The Globe and Mail as follows: "Henceforth, she declared, depositor insurance levels will be adhered to religiously". That was before the CCB bail-out, Mr. Speaker. There is a double standard here.
I stood in my place day after day and asked the Minister if she was going to enter into an agreement with the Province of Saskatchewan to bail out the uninsured depositors of Pioneer Trust. She played cat and mouse and said, "No, because we have to draw the line somewhere". Finally the Government admitted that it had some responsibility because Pioneer Trust had issued guaranteed income securities for longer than five years with the CDIC's stamp. The Government took responsibility for those depositors but not for the others. A group of small trust companies have gone under and uninsured depositors have lost their money.
There is a double standard in this country. If you are big, if you are a foreign bank, the Bank of Nova Scotia, or the Toronto Dominion Bank, and you have several million dollars on deposit you will be bailed out. But, if you are a retired farmer in Saskatchewan with life savings of $100,000 or $120,000 in a small institution, forget it. What a signal to send out to the Canadian people through the financial institutions of the country. The Government must become clear on when it will bail people out and when it will not. It must make some public statement as to what its policy is. So far the Minister has totally skirted that issue.
We are beginning to suspect that the reason for the bail-out is political. The Associate Minister of Defence and a fair number of his friends were probably applying pressure within Cabinet to have these people bailed out. I note an article in The Toronto Star today by Diane Francis in which she wonders about the political connections between the Northland Bank and the Conservative Party. It reads:
Richey B. Love, Q.C., partner in one of Calgary's most respected law firms and a Tory bagman in Alberta, bailed out of Northland in August, selling about 550,000 shares. Did he sell on information other shareholders lacked? Love says he knew nothing about the impending receivership on Labour Day.
I suspect that the Government is afraid to let a committee of Parliament with the proper powers study this because some dirt will be uncovered. I suspect that the Northland Bank and the Canadian Commercial Bank, like Pioneer Trust in Saskatchewan, were known as the Tory Banks.
The Government has stated that the bail-out was to save the economy of western Canada. It can save the economy of western Canada by spending $1 billion helping the farmers who were hit by drought and rain in my province. However, helping foreign depositors and multinational banks with deposits in the Canadian Commercial Bank is not going to help western Canada. The Government has done a disservice to western Canada and the Financial institutions there, and on that they will hang.


Claude Lanthier: Mr. Speaker, it may seem rather odd for a junior Member of the House to rise at this stage in the debate, before those Members who are particularly well versed in parliamentary procedure and who spoke previously to the subject of this special debate on the Northland Bank.
I believe, however, that as a new Member fresh from the business world, I could shed some light on this matter by removing it for a moment from the political subtleties of a debate that seems to be getting us nowhere and putting it in a more business-like perspective.
There were some allusions, and I am thinking more specifically of the Hon. Member for Laval-des-Rapides (Mr. Gar-neau), who said that he was going back to March 22nd of this year, when the whole affair started. Mr. Speaker, you do not have to be an experienced politician to realize that there was a very close connection, as the Hon. Member said, between the Northland affair and the Canadian Commercial Bank.
However, the problems of the Northland Bank did not start with the events of March 22nd. In fact, they started with the Liberal energy policy. If the Hon. Member for Laval-des-Rapides, and especially the old Liberal Opposition-I said the old Liberal Opposition to make myself perfectly clear-would have us govern by extrapolating the outdated methods of a party that had cost its vitality in recent years, I think they are mistaken.
The Liberal Party should have, as it has a right to do, delegated two of its Members to the Committee on Finance, Trade and Economic Affairs. They would have gone to Western Canada to see for themselves where the whole problem started. And it did not start on March 22nd It started as a result of the energy policy imposed by a Government, by an Old Opposition and a small Opposition.
Mr. Speaker, I would first like to inform the House of the circumstances that led to the problems experienced by the Northland Bank and a number of other financial institutions in Western Canada. The entire country was hard-hit by the recession in 1982. But as a junior Member and as a businessman who knows what it means to invest his own money in a

September 25, 1985
business, however small it may be, let me tell you that the trip made by the Standing Committee on Finance, Trade and Economic Affairs to western Canada, to Vancouver, Calgary and Winnipeg, opened up a whole new world to us. We found out how our brothers in western Canada had suffered, yes, just listen ... Unfortunately, we were not altogether aware of this in Quebec, and I must admit that we were ignorant of the terrible impact of the energy policy of the old Liberal Government that was tottering towards the end of its reign.
Mr. Speaker, in 1982, as I said earlier, there was an economic recession everywhere in Canada. However, I believe, as a Francophone out there told us, that western Canada was literally paralyzed by the constraints imposed on its economic development, constraints that were imposed by the Old Opposition, the aging Government at the time, and by the small Opposition, who, as our valiant Prime Minister (Mr. Mul-roney) said recently, "were holding hands behind the curtains".
Mr. Speaker, why did the Liberal Government's National Energy Program aggravate the recession in western Canada? Everyone knows, everyone has seen the exodus, as indicated a while ago by an experienced man who lived in his constituency when he was in the Opposition and I would say to the Members who are shouting on the other side that I may not have been a member of the Government like he was . . . Moreover, let me tell you that as a Canadian citizen, I was then a victim. And today this gives me the right not only to speak but also to complain officially during the time allotted to me in this House, and to tell once and for all the Members opposite that they are directly responsible for that crisis. It did not originate on March 22nd, Mr. Speaker. It all started with the energy policy: it is actually responsible for the financial problems in western Canada.


Jean-C. Lapierre: Why did you vote for the Liberal party then?


Claude Lanthier: I make a distinction between the federal Liberal Party-
Mr. Speaker, the National Energy Program destroyed the drilling industry in the West. Indeed, how many times have we not heard about complete drilling rigs leaving Canada to settle definitely in the United States where they found better conditions for economic development? Almost 50 per cent of drilling rigs left us. Throughout the world, we were listed as a country ready for development which had fantastic energy resources. Unfortunately, our Canadians had to leave the country if they wanted to make some progress in that area. The real troubles of the Northland Bank, because we are dealing with that bank even if we are trying to relate the issue, as the member for Laval-des-Rapides (Mr. Garneau) said a while ago, to the
Canadian Commercial Bank, originated with the energy policy of the old Liberal government.


Mr. Malepart:: The Liberals are also responsible for the tuna problem-


Claude Lanthier: But what is more serious, Mr. Speaker, the small Canadian businessmen who were part of a secondary or ancillary industry revolving around a major industry in a given area ... I come from the great constituency of LaSalle where the people of Ville-Emard and Ville-LaSalle work in cooperation with large basic industries and I would have been worried that perhaps one day a Liberal Government could have prevented the growth of our industries thus giving rise to the bankruptcy of all those small surrounding industries.
When we were travelling, and especially in Calgary, we had the opportunity to see what trouble can result from ill-conceived policies.


Jean-C. Lapierre: You should have stayed there!


Claude Lanthier: I believe that what we saw in western Canada during our trip was that the Liberal delegation could have been more important. They had one worthy representative in the Hon. Member for Trinity (Miss Nicholson). She did her duty, but, in the first place, she was chosen at the last minute, and second, she was alone in her group. I must here pay tribute to the New Democratic Party which had permanently delegated two Members of Parliament who were familiar with this issue. There were two of them to defend at least the interests of their own party.
What is still more serious, Mr. Speaker, is that the small Canadian businessmen in the support or secondary industries, such as small suppliers, were even more affected than the large oil companies. Naturally, the major oil companies had branches throughout Canada and they were able to absorb these disastrous losses by distributing them throughout the country. However, what do you think happened to the small industries in Western Canada, to the small businesses which are so dear to our hearts in Quebec? Those which got their money from financial institutions-


Jean-C. Lapierre: That was not where they did business.


Claude Lanthier: -what do you think happened to them in Western Canada? Well, I can give you my word about this. I am sorry, but I believe that with assets of at least $60,000, you qualify as a small business.


Jean-Claude Malépart: Business was good.


Jean-C. Lapierre: He does not know anything.


Claude Lanthier: The Opposition Members have not been in business for a long time, Mr. Speaker, if they do not know that you are still a small business with assets of $60,000 or more. The Western economic infrastructure based on energy was destroyed by the Liberals, by the Federal Whigs. The ones that
September 25, 1985

suffered the most were the construction, service and maintenance companies and the small manufacturers. All the financial institutions which operate in western Canada must act in consequence. The financial institutions which supported these companies were naturally affected too. The true story of the financial trouble of the Northland Bank does not therefore begin on March 22, but with the energy policy of the former Government. The same is not true of financial institutions which have their main office in western Canada. Indeed, the great majority of loans granted by these institutions are directly or indirectly related to the energy industry. If this industry has problems, the financial institutions suffer the consequences.


Jean-C. Lapierre: What about the United States? Tell us about the American loans.


Claude Lanthier: Mr. Speaker, something was mentioned earlier and I think it is unfair. I am not too familiar with Parliamentary procedure, but I thought that a debate was an opportunity for us to have an exchange. However, it is somewhat unfair because the last ones to talk can speak about the first speakers, but the reverse is not possible.


Jean-C. Lapierre: The last ones will always be first.


Claude Lanthier: There was a reference to twisted arms earlier. It was mentioned a while ago that certain bankers are supposed to have said that their arms were twisted. For my part, I can say that I was there, which is not the case for all the Liberal Members, as we saw at the Committee on Finance, Trade and Economic Affairs that the Liberal Party was absent when we were interviewing those who appeared before us.
However, having heard all the bank presidents, especially the president of the Bankers' Association, Mr. Speaker . . .


Jean-C. Lapierre: Guilty!


Claude Lanthier: . . . who said that all the banks supported . . . the Bankers' Association . . . was asked by a New Democratic Party member whether his arm was being twisted by the Minister.


Jean-C. Lapierre: Were you there?


Claude Lanthier: They answered with a formal no. First, these were concerned people who were directly involved in the negotiations, when those people formally stated and directly answered questions, the same questions that were raised in this House earlier. Second, we asked them: Did you feel forced to endorse such a bail-out package? The answer was yes. But forced by whom? The Government? Again the answer was no, by the events themselves. Everyone was convinced there was nothing else to do at that point.


Jean-Claude Malépart: He meant the Government.


Claude Lanthier: You can rest assured that these events did not originate with this Government. If ever they were created, it was by the previous Government.


Jean-Claude Malépart: So, the bank president issued the list.


Claude Lanthier: Second, I would like, Mr. Speaker, to take up something the Hon. Member for Laval-des-Rapides (Mr. Garneau) said earlier, namely that there were anxious people in his constituency.
Mr. Speaker, we cannot be blamed for having done two things. If this Government decided to assume its responsibilities and compensate everybody, even people with more than $60,000, they cannot blame us on the one hand for compensating people with over $60,000 and on the other for getting people anxious. There is no anxiety, the Government discharges its responsibilities. All depositors are insured, on the one hand, by the Federal Deposit Insurance up to $60,000, and over and above that, following the joint commitment entered upon by the Government with its associates at the time of the bail-out, the major Canadian banks, everybody came aboard to say we were compensating everyone. The Government is assuming its responsibilities.
Therefore, the anxiety which the old Liberal Opposition is trying to stir up has no hold on people, in my view, Mr. Speaker.


Jean-Claude Malépart: You are taking money away from families to give it to the rich!


Claude Lanthier: Everyone will be compensated. That is clear. There is no doubt about that, everyone will be compensated as soon as the Opposition understands that this Government's responsibility is to make full payment.
Now, they referred earlier to the Caisses populaires. Last night, Mr. Speaker, we heard in the Standing Committee on Finance, Trade and Economic Matters representatives of the Caisses populaires Desjardins from Quebec, a group that is given as an example both of financial solidity and citizen involvement in their banking institutions, not only in Quebec but all across Canada.


Jean-C. Lapierre: On a point of order, Mr. Speaker.


Mr. Speaker:: The Hon. Member for Shefford (Mr. Lapierre) on a point of order.


Jean-C. Lapierre: Mr. Speaker, the Hon. Member is referring to what goes on in committee. Can the issues debated in committee be debated in the House as well? Would you explain to me what the Standing Orders are?


Mr. Speaker:: Hon. Members know very well that committee proceedings cannot be discussed in the House but from what I heard I wonder whether the Hon. Member used committee
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September 25, 1985
evidence to shore up his argument here? Ele may do that. Hon. Members know that very well.


Claude Lanthier: Mr. Speaker, you are right if you assume that the only source of my remarks, irrelevant though they may appear, are arguments which have already been made.
Last night the Caisses populaires-represented not by one individual or only by the president but by the entire board of directors-stated formally that they supported the Minister. We did not have any choice, it was our moral and contractual responsibility to do what we are doing now, it was quite clear. The people were disappointed when they asked that question. Their answer was unequivocal and there was no arm twisting, Mr. Speaker.
Those people support the Government. The National Bank which had been accused of being a regional institution but has branches in five Canadian provinces where it is strongly represented said the same thing last night: those people fully support the Government in this operation, not only the rescue operation but the other operation whereby all depositors will get their money back.
So if I may, Mr. Speaker, I think those things need to be said if we want to set the record straight. If anything at all has been twisted, it was not the arms of bankers but rather the truth as the tired Liberal Opposition sees it.
Mr. Speaker, 1 think reference was then made to decisions taken without full knowledge of the facts. Earlier someone said something about remarks allegedly made by some bankers who apparently offered the services of their staff to make an audit. What they omit to say, Mr. Speaker, is that the offer was accepted. The books were audited by the Inspector General of Banks with the help of experts sent by the banks.
Of course, we were under pressure. But the banks. . . the Canadian Bankers' Association said that it had been involved in the study. The Bankers' Association was invited. All the big bankers, that weekend, were not on holiday but on duty. And the bail-out of the Canadian Commercial Bank was endorsed by all and they all had the choice to open or not to open the bank on Monday morning. Everybody decided to open the bank. It was a common decision, a joint venture, a partnership. This decision was not imposed by the Government.
Therefore, Mr. Speaker, the decision regarding both banks that some tried to lump together in the debate tonight, in particular the Northland Bank, was I believe a difficult one to take. I am proud that it was taken by such a responsible and able person as our Minister of State for Finance (Mrs. McDou-gall). Her integrity is unquestionable and her decisions have been endorsed by all the leading experts on banking institutions in Canada. I wish I had been there when they took the reverse position and when the Opposition Leader was called to order by our valiant Prime Minister (Mr. Mulroney) when they said to him: Bring out the real facts or, if you are unable
to prove them, say it outside the House, and then we will be armed to ask you questions.
As I said before, Mr. Speaker, this institution was endorsed by the leading banking institutions. We have taken our contractual and moral responsibilities towards all Canadian citizens and the decision was not only made by an honest and able person but also with full knowledge of the facts ... I am happy not to have been cornered into taking that decision and I am proud as a Canadian that it was taken by such an able person.


Jean-Robert Gauthier: Mr. Speaker, I would like to ask the House whether we could let our pages go, as well as some of those who work for members of Parliament in the lobbies, before we go on with the debate. I wish to thank them and if there is unanimous consent, we might let the pages go home.


An Hon. Member:: This is very kind of you.


Mr. Speaker:: I am sure the Pages also appreciate, as I do, the suggestion of the Hon. Member. That possibility has been investigated. As you can imagine, I was interested in that subject a little while ago, and I am told by the Pages that, this being such a rare experience, they would be interested in staying.
However, what I am going to do is to advise the Clerks in charge of the system that those Pages who wish to stay may stay and those Pages who wish to go may go.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Except for the two right in front of me. I am not put into a difficulty, but I think rotation will solve that problem.


Lloyd Axworthy: Mr. Speaker, I think your comment-


An Hon. Member:: Let's hear the truth now.


Lloyd Axworthy: Mr. Speaker, I think your comment is an opportune introduction to my remarks, when you say that the Pages would be most reluctant to leave as this is such a rare opportunity.
There is no question that Canadians would have found in these days in Ottawa an incredibly rare and rich opportunity to tune up on one of the most bizzarre and incredible occurences in the history of the Government of this Canada. I am sure that Canadians tuning in on their television sets mistakingly thought that they had found a new comedy series calles "Amateur Night on the Rideau". When trying to look at their new Government, they are seeing perhaps one of the most incredible records of bumbling and fumbling and stumbling that has ever been accomplished in so short a period by so many people at this time. Really, we do not have to go through the events of the last 48 or 64 hours, because each day and
September 25, 1985

each hour adds one more illustration of a group of people who lurch from lamp post to lamp post trying to find some support for something they know nothing about. It looks like a delegation of drunken sailors have arrived en masse here in Ottawa, simply to find themselves-


An Hon. Member:: Tell us more!


Lloyd Axworthy: -simply to find themselves without any direction, any development, any way of knowing what they are doing.


An Hon. Member:: We will listen to your comedy routine. I can bet you know what you are talking about.


Lloyd Axworthy: And Mr. Speaker, for all of the mistakes that have been made, for all of the errors that have been committed, for all of the droppings and fumblings and misinterpretations, nothing was more incredible than the performance tonight of the Minister of State for Finance (Mrs. McDougall).
We have watched that Minister for the past two or three weeks adopt the fetal defensive posture trying to defend the indefensible. But tonight was the most incredible performance, because here we are having an emergency debate on the future of the Northland Bank, a very valuable institution in western Canada, an institution which those on the Tory benches have said is their sacred trust to try to defend. And, Mr. Speaker, not once did she mention the Northland Bank!


An Hon. Member:: That is true.


Lloyd Axworthy: Not once did she ever give any evidence that she knew it existed; not once did she even show that she cared in the slightest for the thousands of depositors in that bank who live day by day in a state of limbo, not knowing whether they will be secured, protected; not once did she show that she even understood the kind of predicament in which she and the Minister of Finance (Mr. Wilson) and her Government have put the people of that bank, the depositors and investors in that bank, by simply not being able to make a decision.
There is an old phrase that they used to use in sociology classes talking about academics, that they lecture on navigation while the ship is going down! What a prime example of that was the Minister of State (Finance) tonight, coming to this House to lecture the Members of the House of Commons on the need for "regulatory reform" in our financial system when a ship called the Northland Bank was going down.


Some Hon. Members:: Hear, hear!


Lloyd Axworthy: What an incredibly incompetent performance, and it only indicates-


Mr. Speaker:: A point of order, the honourable Parliamentary Secretary.


Thomas Gordon Towers: Thank you, Mr. Speaker. The Hon. Member (Mr. Axworthy) should be known as the last Liberal west of Ontario when he makes these comments.


Lloyd Axworthy: What a truly pertinent observation to make! The Conservative backbenchers are showing such great acumen in parliamentary procedure!


An Hon. Member:: Get the wind out of your sails or you will not be here next time.


Lloyd Axworthy: They are showing us that they are able to strike so incisively to the point. We stand in awe of the parliamentary skill and dexterity of the Members opposite. If that is the best they can do, it is no wonder they are in trouble. Believe me, it is no wonder they are in trouble!


An Hon. Member:: We couldn't find a good cartoon so we came here to listen to you.


Lloyd Axworthy: Mr. Speaker, let's get back to the point. We are talking about the responsibility of the Minister of State (Finance) and her colleague the Minister of Finance for the banking system, and in particular in this case the fact that the Northland Bank has been hung on the peg and is still left dangling day after day with no resolution. We have to ask ourselves why.
The first reason, Mr. Speaker, is the incredible state of the illusion that exists in the Progressive Conservative Government as to what the problem is. We saw it tonight in the incredible performance of the Associate Minister of Defence (Mr. Andre). I was reminded, listening to him speak, of a news item I reads in a magazine a couple of weeks back about a new defence acquisition by the United States called the "Sergeant York gun," a weapon on which they spent about $1.5 billion. After all that investment of time and money it was found that it made a lot of noise but did not function.
Well, Mr. Speaker, we have our own "Sergeant York gun" right here in the House of Commons in the person of the associate Minister of Defence. Our new acquisition! We didn't invest $1 billion in him. One couldn't even begin to get that price. One couldn'teven get $ 1 for him. But he certainly is the Canadian equivalent of a "Sergeant York gun": a lot of noise, a big bang-but it doesn't work. It can't hit the target; it has no ammunition. The Secretary of State of the United States junked the Sergeant York gun and I suspect, from what we have seen in the last several days, that it will soon be the turn of the Associate Minister of National Defence to be junked by his Prime Minister (Mr. Mulroney), just like he is junking everyone else as he proceeds down the pathway of glory. He used the argument that somehow, in the convoluted sense of logic across the way, everything was a result of the National Energy Program, that the real cause was the NEP. That is fantasyland. I do not ask you, Mr. Speaker, to take my word for it. You should take the word of the Minister of State for Finance. What did she say in her September 2 statement as to why they had to take action against the Canadian Commercial Bank and Northland? It was because of the bad U.S. loans they had made and because of the bad management of those loans. It had nothing to do with the nonsense and fiction which we are hearing from other Hon. Members. At least the Minister of State for Finance, probably reading from a press

September 25, 1985
release of her officials, got that one straight. There were $300 million, or whatever is the figure, of bad loans in energy development in southern California and in bad real estate speculation on the West Coast. They were a large part of the problems of those western banks.
Hon. Members opposite became involved in a debate about the NEP. Obviously I am a great servant of the Speaker of the House and would not want to deviate from the rules.


Thomas Gordon Towers: Oh, oh!


Lloyd Axworthy: I know the Hon. Member opposite does not read much, so I will draw to his attention something which came out on the wire today concerning the great energy policies of his own Government. A Canadian Press report today indicated how the Conservative Government, this so-called great Government based upon wise business experience, has just lost another $1 billion of taxpayers' money by making a ruling on the Gulf take-over which allowed the particular company involved to find a loophole in the tax system so that it would not have to pay $1 billion in taxes on that particular energy deal. Let us see all those Members rising in their places and cheering, as they did five times during Question Period, for that particular piece of brilliance on the part of their Government in its energy policy. It only lost $1 billion on the banks and another $1 billion this week on the Gulf take-over! We are reaching the point where "what's a billion" is the label of this Government. It just does not care. It does not even understand it any more. The fact of the matter is that that financial institution overextended its capacity and, when it came time to make a judgment on what to do about it, the problems began. In that event a Minister of the Crown must be held accountable.
Let us look at the record of what took place. The auditors for Canadian Commercial Bank were not even asked for their opinion on that weekend. In a statement before the Finance Committee, representatives of Clarkson Gordon, the auditors, said that they were not even asked for their advice. These were the people who were looking after the financial affairs. The bankers who were invited to come in-and they said so in very clear terms-had their own misgivings. The Royal inspection team which was asked to inspect it indicated that it made no recommendation because it could not uncover enough information. Also, according to the CP story, the fact that the bankers could not do a detailed analysis of the Commercial's books was making them nervous during the meetings that weekend. One banker complained that when additional information was requested, the Government handed out the same quarterly statements which were given to shareholders. A decision of incredible and major proportions was being made by the Government and the people who were asked to investigate could not get the information they requested. Then, these so-called brave guardians of the new economic order, the Minister of State for Finance and the Minister of Finance, were not even at the meetings. They could not be bothered. I suppose there was a party down in the annex which they had to
attend. They could not get around to going to the meetings when $1 billion was at stake. The Minister of State for Finance said: "That is not my responsibility; it is that of the officials".
Just this week a Minister resigned because he overruled his officials and stepped in on the tuna fish case. Now we have the Minister of State for Finance saying that it is only $1 billion and that it is only the first failure of a bank since 1923. She had something else to do that weekend and could not be bothered to attend. The Minister of Finance, the Minister who is ultimately accountable, could not be found either. Is that ministerial accountability?
They want to know why Canadians were worried and were asking who was in charge, when the two accountable Ministers were nowhere to be found on a weekend when $1 billion was going down the drain. Perhaps we should ask where the Minister of Energy, Mines and Resources (Miss Carney) was at the time of the Gulf deal. We know that she was on an island somewhere in the Straits of Georgia. She was not around when these rulings were made, either. Yet, they want to know why Canadians are concerned and why we are having an emergency debate. The fact of the matter is that that serious misstep, that incredible lack of accountability displayed by the Ministers of the Government on that March weekend, set in motion the sequence of events which is now putting the Northland Bank in jeopardy. It is an incredible fallacy for the Prime Minister, the Minister of Finance and other Ministers to rise and say that they are defending western Canada. They are the ones who started to put the Northland Bank down the drain on March 22. Rather than taking the action they should have taken on that weekend, they began to pull the plug. As the officials of that bank said, they were going through their own rescue operations beginning in the summer. At the very time when they were getting their line of credit reduced down to zero and beginning to reorganize their portfolio, the Government stepped in on the September weekend, tied the two banks together and said that Northland was in the same predicament as CCB. Suddenly they want to know why people get nervous and start pulling out their deposits and why Northland is in trouble. Is this the saviour of western Canada? Is this a Government which stands up for the West? It had the opportunity to provide major support for at least one of those institutions and, instead, we will lose both of them. That is the simple equation, that is the simple result. Because of a serious lack of judgment and a serious lack of responsibility on the part of the two Ministers responsible for our financial arrangements, we are not only in the position of losing one major financial institution in the west; we are in danger of losing both.
As one of my colleagues said earlier in the debate, the reason for this emergency debate is to say that we still do not believe that it has to happen. We still believe that Northland might be saved, if only the Government would start exercising its responsibility, acting like a Government and making decisions, rather than dodging, weaving, defending, protesting and misinterpreting day after day in the House of Commons. We
September 25, 1985

have heard the Minister of State for Finance and the Minister of Finance plead: "Oh, if you only understood" and say that if the Opposition acted as their spiritual counsellor, everythig would be all right. We ask them to stand up and act like Ministers. We ask them to do their duty and to live up to their responsibilities. They are not doing these things. As each day goes by, the situation becomes more perilous and the future of Northland Bank looks more dim. That is why this emergency debate was called. I pay my respects to the members of the New Democratic Party for putting forward the motion against the opposition of the Government.
I know that I am not supposed to say that there is a distinct lack of ministerial representation in the House. We are talking about hundreds of millions of dollars of Canadian money in the bank and about a potential $500 million bail-out. Mr. Speaker, look at how much care and concern there is on the part of Members of the Government, especially the Ministers responsible. Ask yourself whether that is the way to behave. Is that the way the Government will win plaudits, justify its mandate and go on to the new millennium which has been promised? It is hardly likely. I know that it has been a tough day, a tough week, a tough month and a tough year for Government Members. It is going to get a lot tougher because the track record up to now simply shows that they are becoming confused and immobilized, and there is a wonderful word "immobiliser" that was attached to all the French Governments during the 1950s and 1960s. It described a state of mind of members of the Government at that time in the French Fourth Republic which was an incapacity, an inability to decide, to know what they wanted to do, to give direction. That is the problem that we see prevalent. That is the disease that is spreading day by day on the government side of this House.
We can go to the sources. I do not necessarily want to start saying who is to blame although in our system there is only one person to blame and that is the person who forms the Government, sets the tone, sets the framework. What we are seeing in this financial institution is that very same state of paralysis. My colleague tonight laid out some steps that should be taken to come to grips with the Northland situation, to try to deal with that bank's problems and responding to them. Instead we have, in hockey terms, a team that only knows how to play defence and doesn't know how to shoot the puck any more, it doesn't know to go on offence. It simply does not any longer know how to mount a well co-ordinated attack upon a problem.
I stand here as a westerner who has managed to survive there. I fully agree, a mandate was given, but mandates can be burned out. I only remind the House of the wonderful mandate that was given to the Diefenbaker Government back in 19571958. They burned that out in four years and wore out their welcome very quickly for exactly the same reason, confusion, indecision and lack of direction. If there is any lesson in history it should be that lesson how a strong mandate given by the Canadian people was frittered and flustered away by a
Government that did not know what it wanted to do or how to get there.
History is repeating itself day by day. That is what we are seeing taking place. The tragedy is that a lot more was expected. There was a lot more benefit of doubt being offered and it is still there but the fact of the matter is that it is not being earned.
I believe that if the Minister of State for Finance could somehow forget the posturing, get away from the excuses, get away from trying to defend what is indefensible and begin zeroing in on the problem we could still have a Northland Bank working in western Canada, as a viable institution, but I do not think there is much time left for her and her colleague, the Minister of Finance to take that action.
If there is any message that should come out of this debate tonight it is that the clock is ticking, the time is short and a lot of Canadians are looking to them for some decisions very soon.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, we called for this emergency debate because we are not satisfied that the Government is prepared to give all the information which is required by the people of Canada through their Members of Parliament who represent them, to know what ought to be done with the Northland Bank. Indeed, Mr. Speaker, we have every reason, based on past experience, to believe that not only is the Government not prepared to give us all the information but the fact is that the Government does not have all of the information. I say that because when we ask questions about the Northland Bank we are not talking about one isolated case of a financial institution which is in trouble. We have had a whole series first of financial institutions and trust companies and now banks which are in trouble.
How did the Minister try to deal with our criticisms, with the questions we asked tonight? She had two arguments. First of all, she blamed the difficulties of the financial institutions on the former Government. She said quite properly and correctly that the former Government had not passed the necessary legislation, did not have the adequate monitoring or supervisory system to deal with the kinds of problems that have arisen in recent years.
She was correct, and for that the former Liberal Government needs to be criticized in the strongest terms. But we have had three very serious financial situations, two failures and one probable failure, the one we are discussing tonight, since this Government took office. We had the Pioneer Trust problem; we had the Canadian Commercial Bank problem and now we are dealing with the Northland. When this Government took office it knew that there were tremendous problems. We have been accused by members on the Government side of using scare tactics. We have been told that we do not know anything about business. It is as if, Mr. Speaker, because we are frequently critical of the way the so-called free enterprise system works that therefore we cannot contribute anything useful.
We are not the only ones saying these things. A recent issue of The Globe and Mail "Report On Business" lists 17 finan-

September 25, 1985
cial institutions, trust companies and banks, which have gone sour, which in fact have gone bankrupt since 1980. According to Arthur Johnson who started one of these articles in this "Report On Business", the headline on his story is "A Billion-Dollar Bailout":
Belying its pinstripe image. Canada's bank, trust and loan industry is in a mess. The cost of cleaning things up: $1.2 billion of public money.
Mr. Speaker, I believe Arthur Johnson underestimated the cost because what he did not include there was the money which the Canada Deposit Insurance Corporation is going to have to put in. I understand that they will be required to put in $1.5 billion and that they have more than $1 billion in property which they took over as a result of the collapse of the Rosenberg trust company. That money which the CDIC will be putting in comes through premiums paid by the banks but we ought to be under no illusions, the premiums paid by the banks have become part of the cost of the banks' operation and will be paid for by the banks' customers, by the people of Canada, so we are talking about billions of dollars of public money.
I say, Mr. Speaker, yes, the seeds of the difficulties were created by the failure of the former Liberal Government to put into place the kinds of laws and the kind of monitoring and regulatory system that would have obviated the difficulties, but this Government had enough time to learn the facts of life so that we should not be in the situation which we are at the present time with the Northland Bank.
I was asked by my colleagues to be a member of the finance committee last May and June when we were looking at the Canadian Commercial Bank. The committee held a great many meetings. We heard evidence from officials of the banks, from the Inspector General, from the Governor of the Bank of Canada and from representatives of two of the largest auditing firms in this country. We heard one story of disaster after another. We heard one story of misrepresentation and failure to act after another. When it was all over, the Government did not listen to the evidence or realize that the system was not working. It did not realize that the Inspector General had neither the ability nor the desire to do the job he should have been doing and that the Governor of the Bank of Canada vouched for the Canadian Commercial Bank without any information at all. After all the evidence had been given, he still maintained that in his view the officers of that bank were still capable of managing the bank.
At that time, we said that the Inspector General of Banks had been derelict in his duties. At that time, we said that the Governor of the Bank had vouched for the bank without having any knowledge on which to base that kind of statement. We did not have all the evidence before us and as has already been pointed out by some of my colleagues, the Inspector General, who we thought worked for the Government and people of Canada although his salary is paid by the banks, refused to give us this very important evidence that was required.
Did the Inspector General learn of the difficulties of the Canadian Commercial Bank only a few weeks before the crisis came up? I say that if he did, he is totally incompetent. About two years before the bank got into the difficulties which became known by everyone, the Superintendent of Insurance became aware that Leonard Rosenberg of whom we now know a great deal had become involved with the Canadian Commercial Bank. The Superintendent became aware that either he himself or other members of his family had control not of 10 per cent of the bank's shares, the limit permitted by the Bank Act, but that he controlled more than 20 per cent of the shares. He became aware as well that Mr. Rosenberg was involved in some very fancy financial deals with the then President of the Canadian Commercial Bank, Mr. Eaton.
We never learned whether or not the Superintendent of Insurance contacted the Inspector General of Banks to tell him about these things. Surely that was the point at which the Inspector General should have known that he ought to keep a very close eye on the operations of the Canadian Commercial Bank. However, he did not do so.
There was another point at which the Inspector General would have heard a warning bell if he were listening. That was when the regulatory agency in the United States which monitors bank operations took a look at the Westland Bank which was 100 per cent owned by the Canadian Commercial Bank. At that time, the regulatory agency in the United States put the Westland Bank on notice that it was operating contrary to the rules and regulations of the policies of the American banking system. What happened then? The Directors of the Canadian Commercial Bank proceeded to buy, rather than a minority part of the Westland Bank, 100 per cent of it.


The Acting Speaker (Mr. Paproski):: Order, please. I would like to know when the Hon. Member for Winnipeg North (Mr. Orlikow) will deal with the Northland Bank. He has a few minutes left. I hate to call anyone to order on relevancy and particularly a senior Member of the House. However, I would hope that he would deal with the Northland Bank.


David Orlikow: As I indicated at the beginning of my speech, Mr. Speaker, we are not merely dealing with the Northland Bank. Unfortunately, this is not an isolated case. It is one more illustration of the failure of our system to see that these kinds of things do not happen.
I cannot deal in detail with the Northland Bank as I can with the Canadian Commercial Bank because we have not yet held hearings. We do not know about all the things which happened at the Northland Bank. However, we do know some of what happened at the Canadian Commercial Bank. I am saying that the Government should have learned a lesson and it did not. That is the point which I am trying to make.
The Inspector General was derelict in his duties. If he did not have the staff or the authority-both of which are possible-then he could have come to Parliament to say that he could not do his job because he did not have the staff or authority and I would not have been critical of the Inspector General. However, he did not do any of those things.
September 25, 1985

Let us take a look at the Governor of the Bank of Canada. When the financial sections of newspapers began to report that there was trouble at the Canadian Commercial Bank, the Governor of the Bank of Canada did something which was unprecedented. One evening he called The Globe and Mail to say that he vouched for the Canadian Commercial Bank as a viable operation. How could the Governor of the Bank of Canada have said that? That was when the Canadian Commercial Bank was in trouble.
A couple of days ago, the Governor of the Bank of Canada made a speech in Toronto. Let me read part of what the Governor of the Bank of Canada said as reported by The Globe and Mail of September 25, 1985:
"The Bank of Canada," ... "is not involved in monitoring the financial soundness of individual banks and supervising their behaviour. Parliament has not given us that responsibility or the powers that would enable us to fulfil that function. The Bank of Canada has no bank auditors, no bank examiners, no power to require details of individual loans, deposits or any other kind of private transaction."
The Governor of the Bank of Canada has condemned himself with his own words. If that is true, and of course it is true, then the Governor of the Bank of Canada had no business vouching for the Canadian Commercial Bank. Not only did he vouch for the Canadian Commercial Bank before it became obvious that its survival was very unlikely but he came before the committee of which I was a member in June after we heard evidence from the bank officials, the Inspector General and the auditors to say that he still had confidence that the officers of the bank could do an adequate job. The mistake this Government made was to take the advice of the Inspector General of Banks and the Governor of the Bank of Canada.
I wish to say something about the auditors as well. I hope that the organization of auditors will take a serious look at what happened at the Canadian Commercial Bank and at the responsibility of the auditors, not just to their customers who pay their auditing accounts, but to the people of Canada. What did these auditors do? They reported to the directors of the bank that the bank had serious problems. They did that, I presume, after a fairly careful examination of the bank's business operation. However, that was in a report given to the directors of the bank, a report which was never made public. What they provided to the bank was a statement which was made public that the bank was a viable operation. I say there is something seriously wrong with a situation in which auditors would carry out that type of action. They helped in misleading the people of Canada. They put the depositors in great trouble.
I would like to conclude my remarks by saying to the Minister, and to the Government, that we accept her criticisms of the former Government. We accept her promises that there will be better regulations in upcoming legislation. If we had not looked at the record of this Government since it took office and how it has failed to look at the realities of the situation, and how it has failed to take the advice of the top officers in
Government service, we would have reason to believe that something better would come about in the future. When the Minister promises she will encourage more companies to get into the financial services field and when she promises more competition, I ask: How many regulators? How many monitors will we have? What more competition will mean is more failures and hundreds of millions of dollars more down the drain.


Some Hon. Members:: Hear, hear!


Jean-Claude Malépart: Mr. Speaker, for all Hon. Members to have to sit in the House at 11.30 p.m. is a sign that the situation is very serious, that hardly one year after assuming power, this Government, which had been in the Opposition for sixteen years and which, during the last election campaign, had promised the moon to the Canadian people claiming that it would know what to do once in power, Mr. Speaker, we have reached the point where, because of incompetence-
Mr. Speaker, the impossible situation in which the Government and especially the Prime Minister (Mr. Mulroney) have placed Canadian men and women, the disastrous failure of these two western banks and the absence of satisfactory explanations concerning the decision made by the Minister of Finance (Mr. Wilson), the Minister of State for Finance (Mrs. McDougall) and the Prime Minister to save these two banks-
Mr. Speaker, when the Minister of State for Finance introduced a Bill for the purpose of spending $250 million of the taxpayers' money to try and save this bank, I must say I left the House because I would not vote on it.
Some people told me: Claude, you do not trust the Prime Minister enough. Perhaps they were right, but I do not want to be stuck and to have to vote with him to help these banks, because at the same time he was seeking to de-index the Old Age Security Pension and the family allowances, while taxing sick people. Today, the time has proved me right! I would not vote because I did not want to be an embarrassment for my party. I would rather leave than vote with the current Prime Minister.
At the time, Mr. Speaker, we were going to spend $250 million of the taxpayers' money; today, because of the Government's incompetence, it is $1 billion we will have to spend to try to help the individuals and corporations who have accounts of over $60,000 with these banks.
This afternoon, I was in my riding visiting a number of mothers from the Montreal region, and I can tell you that none of them had a bank account of over $60,000. The challenge, Mr. Speaker ... In front of the media, these mothers were begging the Prime Minister not to de-index the family allowances. These mothers had to submit to the humiliation of coming before the media and explaining how they use their monthly family allowance cheques and tax credit.

September 25, 1985
But despite that, since they could not make themselves heard by the Conservative members from around my riding, they came before the television cameras and told the Prime Minister: "Do you know how we spend our family allowance cheques every month? We use them to make both ends meet in the middle of the month so that we can buy food. Do you know, Mr. Mulroney, what we do with our family allowance cheques? We use them to buy boots and winter shoes for our children. We use them to buy school supplies."
And this Government, this Prime Minister would have us give a blank cheque to the investors, the depositors in that banking institution for the over $60,000 accounts.
But this Government, this Prime Minister do not even want to give us a list of the names of those people who are going to dig in the pockets of the taxpayers in my riding, in the riding of Valleyfield, and in the riding of Levis, to give it to those people when we do not even know who they are. Why should the taxpayers pay for the mistake-


Gabriel Fontaine: On a point of order, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: Order! The Hon. Member for Levis on a point of order.


Gabriel Fontaine: Mr. Speaker, I was referring to Standing Order 39 because we feel that the Hon. Member is totally off topic. This is called "irrelevance and repetition". I just wanted to raise that point, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: I have made a note of the Hon. Member's remarks. I realize he will be coming to the financial difficulties of the Northland Bank very shortly.

The Hon. Member for Ottawa-Vanier (Mr. Gauthier), on a point of order.


Jean-Robert Gauthier: Yes, Mr. Speaker, I have a point of order.
If the Hon. Member would go on to read the appropriate citation in Beauchesne's, Fifth Edition, he would see under relevance that a Member may be given the benefit of the doubt, and in this case I think the Hon. Member is addressing himself to the subject before the House.


The Acting Speaker (Mr. Paproski):: I appreciate the Hon. Member for Ottawa-Vanier (Mr. Gauthier) bringing that to my attention.


Jean-Claude Malépart: Mr. Speaker, the comments made by the Hon. Member for Levis (Mr. Fontaine) reflect the ignorance and incompetence of the Progressive Conservative team. Mr. Speaker, this insignificant gentleman has just made it clear he
did not know it was going to cost Canadian taxpayers one billion dollars to make amends for the mistake made by his Prime Minister-his and not mine-to compensate depositors with deposits of over $60,000. He did not know that. The Hon. Member for Levis is ignorant of that fact and I think that is absolutely shocking!
Mr. Speaker, just think what we could have done with one billion dollars. Just think what the Canadian taxpayers could have done with that money. Here, not a word about the deficit, Mr. Speaker. Well, they will not be able to use Brian's deficit to play on the public's emotions anymore, because we remember the $56 million wasted on changing our military uniforms. We remember the party they had with the President of the United States. The honeymoon is over now and this kind of show certainly must not go on.
If we think of the excess staff in the Ministers' offices, it is easy to see why things are such a mess with all those scandals. There are just too many employees, and nobody knows who is running the show. Mr. Speaker, with all the scandals around us, Ministers resigning . . . actually, they should schedule these events because we are running out of time to discuss them and the newspapers are running out of pages to print the news about the scandals cropping up in this Government. How can Opposition Members, Members who are responsible, and certainly not incompetent, be expected to give the Minister of State for Finance a blank cheque for one billion dollars, without blinking an eye, and it does not matter who is getting the money?
Mr. Speaker, I am a factory worker, 1 belong to a union and I am still paying into a company pension fund. I would like to know who they are talking about when they refer to small pension funds. I would like to know who is administering my pension fund and whether he was gambling with my money by investing it in a bank that was not very reliable, Mr. Speaker. The pension fund administrator will have to answer for his actions, because these people knew that all amounts exceeding $60,000 were not insured. These people gambled with the money and savings of the average taxpayer. They went to the races and bet on the nose, and now these incompetent administrators whom we do not know, have lost their shirt, and the Progressive Conservative Government wants to sign a cheque for a billion dollars and give the money to God knows who.
Mr. Speaker, I find it intolerable that Members of this House who are supposed to be responsible people should ask the Government to do this, while at the same time, the Minister of National Health and Welfare (Mr. Epp), the Minister of social injustice, the first one in the history of Canada and this Government, are proposing a motion of closure in order to cut $55 million-not one billion, but $55 million.


The Acting Speaker (Mr. Paproski):: Order, please. From the family allowance program.
September 25, 1985


Jean-Claude Malépart: Mr. Speaker, $55 million, you are right, from the family allowance program. If they had not goofed ... If the Government had not made this mistake and had listened to the bank presidents, it would have said: Just a second! Before advancing $250 million, we are going to retain the services of banking experts and we are going to check the situation. If that had been the case, today the Minister would not be obliged to table a motion of closure to keep us from talking about this subject as well, because we have two scandals. One billion dollars for the rich, and they are taking away $55 million from families on modest and low incomes, Mr. Speaker.
Mr. Speaker, there was a newspaper article-


The Acting Speaker (Mr. Paproski):: Order, please. I believe I have been very patient. I am sure the Hon. Member realizes and I know that the whip of the Liberal Party and the Acting House Leader understands what relevancy is. I feel the Chair has been very kind and I would like the Hon. Member to get into the difficulties with respect to the banking institution, particularly the Northland Bank. I hope he will take my words into consideration.


Michael Morris Cassidy: Mr. Speaker, I rise on a point of order. I was listening to the Hon. Member with attentiveness. He was talking about the spending priorities of the Government-


The Acting Speaker (Mr. Paproski):: Order, please. I think the Chair will decide that, and if the Hon. Member for Ottawa Centre (Mr. Cassidy) would like to speak, I will listen to him also.


Jean-Claude Malépart: Indeed, Mr. Speaker, I was just wondering how much it is going to cost taxpayers. The money belongs to the taxpayers, Mr. Speaker, not to the Conservative Party, and it will be spent on two financial institutions, the Northland Bank and the other one in Western Canada. This money will come from the pockets of the taxpayers in my riding and in your riding and they have absolutely nothing to do with that banking institution, yet the Government would rather we did not talk about that and focus the debate only on the mismanagement of those financial institutions.
Will the presidents of the Northland Bank and of the other western financial institution which has failed, explain to the people why they are in this mess? The Toronto-Dominion Bank president made a suggestion which ought to be kept in mind, I think. He said that the names of any individual or corporation, or anyone else for that matter, that will accept the grant-it is a grant, money from the taxpayers-to bail out those depositors who stand to lose more than $60,000, ought to be made public. Anyone who would rather not have his or her name made public has one simple way out-turn down the Government grant.
Mr. Speaker, we are talking about $1 billion provided by all taxpayers throughout Canada for the select few whose deposits exceed $60,000.
Although there are probably very few people watching the debate tonight, I think it is important to let Canadians know what is going on. It is amazing what we could have done with this $1 billion if we did not let the Government throw it down the drain. It will be a total loss resulting from mismanagement on the part of this Conservative Government, notwithstanding the claim of my colleague for LaSalle (Mr. Lanthier) who has been trying to make us believe that the whole mess can be traced back to the energy policy.
Mr. Speaker, the mistake was made when the Government did not come clean and failed to tell everything it knew; things simply got worse when this inept and incompetent Government decided to go ahead without even knowing whether those two banking institutions would be able to pull through. Without knowing the actual figures the Government put up $250 million and forced the other banks to be party to this so-called rescue operation.
We Quebecers know all about such shenanigans, Mr. Speaker. We had our caisses d'entraide, but at least the Quebec Government was a responsible administration-it was the PQ Government for which I hold no brief. Then Quebec Finance Minister Parizeau was involved in a similar situation. Having called in the management of the banking institution, the Minister of Finance acted openly instead of attempting to sweep everything under the carpet to save the face of the premier. He did not want to have anything to do with the likes of our camera-conscious prima donna, no Sir, he brought in responsible people and laid all the cards on the table because his only aim was to make it as easy as possible for the depositors. They did not simply appropriate the taxpayer's money without having a clear financial picture of the situation. That is what I call responsible people.
Mr. Speaker, I am not afraid to say that it was a party I fought against, the Parti quebecois. However, I tip my hat to them because they have shown what they could do. Now, without knowing what is going on, the Federal Government decides to come in and organize a bail-out by using the taxpayers' money. Mr. Speaker, we have to say who will pay for all this. I said that it would be families with children. It is my duty to say so. I understand .. . there is not a single Conservative Member left in the House, Mr. Speaker! They have all gone. They are all absent.
Mr. Speaker, I understand that these people would not want to hear about it. If I were in their place, I would be ashamed because it is a scandal. It is our duty to denounce it. If we look at all that has happened, when it comes to the point when a Government accepts, to save its so-called friends and help a certain company, to put on the market tainted fish, we have to be twice as careful because we can expect nearly anything

September 25, 1985
from this Government. How many times ... I woke one up, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Levis (Mr. Fontaine) on a point of order.


Gabriel Fontaine: Mr. Speaker, I see here in Section 2 of Standing Order 39 that the Speaker, if a Member
-persists in irrelevance, or repetition, may direct the Member to discontinue his or her speech.


The Acting Speaker (Mr. Paproski):: Thank you for bringing that to my attention. I appreciate that. The Hon. Member still has two minutes to go.


John V. Nunziata: Mr. Speaker, we are debating an issue which has been deemed by you, Sir, to be an emergency issue and we in Her Majesty's Loyal Opposition agree. I am somewhat shocked by the fact that-


The Acting Speaker (Mr. Paproski):: Order, please. I do not find that to be a point of order, I find it to be a point of debate.


Jean-Claude Malépart: Mr. Speaker, there are two Conservative Members in the House, including the most incompetent of the lot.
Mr. Speaker,. ..


The Acting Speaker (Mr. Paproski):: I would like to bring to the attention of Members the fact that it is getting quite late in the evening. There are some Members outside the curtain, and whether they are in the House or not, I do not want to see a Member saying there are Members in or outside the House. It is not up to the Member to do that, please.
[ Translation]


Jean-Claude Malépart: Mr. Speaker, this is the second time but I shall continue my speech. I shall not rise on a point of order, but it is the second time that the Hon. Member for Levis (Mr. Fontaine) has risen on a point of order. As usual, he is beside the point. As responsible people, I believe that we should ... When you do not know what you are talking about, you remain seated and stay quiet instead of talking nonsense.
Mr. Speaker, I would like to come back to the issue under discussion. Mr. Speaker, the Hon. Member will rise for a third time. Our Lord said: "You will disown me three times before you understand." There he is again!


The Acting Speaker (Mr. Paproski):: The Hon. Member for Levis (Mr. Fontaine) on a point of order.


Gabriel Fontaine: Mr. Speaker, Standing Order 40 deals with "disrespectful or offensive language". In my opinion, the Hon.
Member should use a somewhat more reasonable vocabulary in this House and show his own awareness of the facts instead of repeating himself for 20 minutes.


The Acting Speaker (Mr. Paproski):: That is a point of debate.


Jean-Claude Malépart: Mr. Speaker, I am quite willing to pay compliments to those who deserve them, but I have to speak the truth about the calibre of the Hon. Member.
To come back to the subject under discussion, Mr. Speaker, I believe that it is very important, even though the Hon. Member for Levis does not want me to repeat myself: I understand his point and his desire to prevent us from speaking about the serious situation of the Northland Bank because, if I were in his place, I would be ashamed.
However, Mr. Speaker, he will have to live with it. I shall conclude with that comment.


The Acting Speaker (Mr. Paproski):: I regret that the Hon. Member's time has expired.


John R. Rodriguez: Mr. Speaker, there are as many Members on the Government side for this important debate this evening as there are inspectors in the Department of the Inspector General of Banks. Actually, there is one more.


Ramon John Hnatyshyn: There are more people on the Government side than there are people watching you on television.


The Acting Speaker (Mr. Paproski):: Order, please. The Hon. Member is a very senior Member and he knows that one is not to comment on the presence or absence of Members in the House. He knows what is happening behind the curtain this evening. There are other functions. I am sure that Members are listening to the Hon. Member for Nickel Belt.


John R. Rodriguez: I must confess, Mr. Speaker, 1 am not aware of what is happening behind the curtains but I suspect we can nose it out, as Shakespeare said.
I wanted to participate in this debate and not be long because I want my comments to be very precise and exact.


John V. Nunziata: As they always are.


John R. Rodriguez: As they always are, correct.
One of the sacred cows in our society is, of course, the banking system. In fact, we were told that banks never go bankrupt because we Canadians have done it better than the Americans have done it. We have a Bank Act and we have not had a bank go belly-up for 62 years, until the Canadian Commercial Bank, of course, and the spin-off effect on the Northland Bank. Everyone has come to think of banks as pillars of strength in the economy. Somehow or other these
September 25, 1985

banks are the pillars of Canadian society. They are symbols of stability and continuity. Indeed, last spring I suggested that the Minister of State for Finance was launching a new bank when she came in here and said they were going to rescue this bank and restore the confidence of Canadians in the banking system. We will not let them down! She called on Members of Parliament to support her in this bail-out effort, this rescue attempt. But we on this side of the House recognized what was happening; that the Minister of State for Finance and the Minister of Finance were like the Captain on the deck of the Titanic rearranging the deck chairs as the ship was going down.
As we have witnessed over the last few weeks, this thing has become more an more curious. It has unfolded in strange and bewildering ways. Let us look at how this thing has happened. You have to imagine this. We have a Bank Act and an Inspector General of Banks. You do not get a title like a general unless you can give some orders. So they have nice titles such as the Inspector General of Banks. I will bet you always thought this chap investigated banks. I bet you think and the public always thought that the Inspector General had an army of inspectors; that they would march up to the great columns, to the very stability of the capitalists in this country, to the very halls, to their Valhallas and knock on their doors and say: We have come to inspect your bank!


Some Hon. Members:: Oh, oh!


John R. Rodriguez: I thought that. In my naivite I thought that was the way it worked.


Nelson Andrew Riis: A lot of people did.


John R. Rodriguez: But I found out since this episode that that ain't the way it is. It ain't the way it is!


Nelson Andrew Riis: How is it?


John R. Rodriguez: Well, you see, the banks inspect themselves.


John V. Nunziata: No.


John R. Rodriguez: Yes! That is like putting Count Dracula in charge of the Red Cross Blood Bank.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: Mr. Speaker, someone said that was like asking Evel Knievel to park your car!


Some Hon. Members:: Oh, oh!


John R. Rodriguez: This thing is laughable, it really is. But when these chaps come and knock on the doors and say they have come to inspect, it is actually Royal Bank employees coming to inspect the Royal Bank's books. They will check everything and report back to head office that the branch is fine. Head office then sends this report to the Inspector General of Banks. One would think that he would send out his inspectors, but he only has seven inspectors. I always thought that the Inspector General was paid with taxpayers' money. I
thought that we allotted a sum of money to the Minister of Finance (Mr. Wilson) to pay the Inspector General and his army of seven inspectors and 42 stenographers and filing clerks.


Nelson Andrew Riis: Who pays them?


John R. Rodriguez: That is a good question. I found out that they are paid for by the commercial banks. They put money in a pot.


Nelson Andrew Riis: The bank inspector is paid by the banks?


John R. Rodriguez: Yes, that's it. You got it. Mr. Speaker, he's got it. In that way you can be assured that you are getting a real tough inspection. The poor chap does not know what the devil is happening in the branches. He is sequestered in the basement of the Bank of Canada building with a few pictures on the wall. He sits there stamping documents thinking he is working hard.
I thought that the Bank of Canada had a role to play in this. What role does the Governor of the Bank of Canada have? We all thought this guy spoke with some knowledge of what was going on in the bank, but he said:
The Bank of Canada is not involved in monitoring the financial soundness of individual banks and supervising their behaviour. Parliament has not given us that responsibility or the powers that would enable us to fulfil that function. The Bank of Canada has no bank auditors, no bank examiners, no power to require details of individual loans, deposits or any other kind of private transaction.


Nelson Andrew Riis: How does he know what's going on?


John R. Rodriguez: That is the thing, he doesn't know. The Minister of Finance and his sidekick, "Billion Dollar Barbara", are sitting over there and they have a problem. They wonder from whom they should seek advice. They ask advice of the Governor of the Bank who doesn't know a bloody thing about the loan. They also ask the Inspector General of Banks, the minion of the dominion banks. Can you imagine that, Mr. Speaker? That reminds me of the story of the fellow who brought an elephant to two blind fellows and asked if they could feel the animal and tell what it was. One of them felt it and said that he thought it was a camel because it had a hump. The other one said he thought it was a coyote, but they were both wrong. That is the same problem we have here.


Nelson Andrew Riis: Who is in charge?


John R. Rodriguez: Well, that is a good question. No one is in charge.


John V. Nunziata: Who's supposed to be in charge?


John R. Rodriguez: The Government has the responsibility.
There are no regulations enforcing how the banks operate. I want to put on record a case history of how they do operate.
1 received a letter from the firm of Pharand Kuyek, Barristers. That firm appeared for a poor fellow by the name of Robert Newcombe in a bankruptcy trial involving the Nation-

September 25, 1985
al Bank of Canada. I will read the relevant parts. This is a public document so I am not revealing anything that is secret. The letter reads in part:
I acted for Mr. Robert Newcombe who was involved in an action with Mr. Tom Leroy and Leroy Trucking Limited. Mr. Newcombe had gone to the bank, purchased trailers and financed those through the bank and entered into an oral agreement with Mr. Leroy to the effect that Mr. Leroy would make all bank payments, maintain the trailers and that those sums paid and the maintenance of the trailers would be equivalent of lease payments to Mr. Newcombe who was leasing the trailers to Mr. Leroy.
Of course, Leroy went belly-up and they came against Mr. Newcombe. The evidence disclosed that the bank loaned the sum of $60,000 to Tom Leroy and a second amount of $60,000 to Leroy Trucking Limited. They could not lend any further moneys to Mr. Leroy or his company because the supervisors in Toronto would learn that the second loan to the trucking company in the amount of $60,000 was contrary to the rules and regulations of the bank. That is why they set Mr. Newcombe up as the strawman in that loan. It was interesting when they go to the bankruptcy hearing and put one of the bank agents on the witness stand. The court transcript reads in part as follows:
Q. I see. So, what you're really saying is that you were working for the Bank and you were preparing false reports, is that what you're telling us?
A. Not on my own accord.
Q. But you were doing it?
A. Well, under supervision, yes.
Q. You were all doing it?
A. Yes.
Q. So the employees at the Bank were actually creating false reports, credit reports, so that people could borrow money?
And the answer, Mr. Speaker, was "yes". That is just one small example of how the regulations governing the Bank were never enforced. In the same way, the Canadian Commercial Bank made loans that were not secured and the regulations that should govern those transactions were never enforced.
It is not only this Government that is responsible for not putting the proper mechanisms in place to enable the banks to live up to the regulations Parliament set out in the Bank Act. The responsibility has to be shared by the previous governments which, from 1968 to 1984, with the exception of the nine-month Clark fiasco, were all Liberal. The previous Government must take responsibility for the fact that it never lived up to its responsibility to ensure that the proper procedures were put in place. With these two fiascos on the horizon the present Government is running for cover. It will not produce this document and that document and the big cover-up is on. It did not even want this debate to take place tonight. It wants the matter to go before a committee, but there is no point in having a parliamentary committee if the conclusions of the committee are already ordained. If the committee cannot have all the necessary documents, it obviously cannot come to any conclusions that would give confidence to the Canadian people again.
When the Minister brought forward the Bill to save the bank in the spring I remember telling her that she was launching a bank. We were told that everything would be fine
now and that they would never have to come back to Parliament again. Considering she was depending on Bouey XIV and the other fellow, the Inspector General of Banks for advice-two peas in a pod who knew as much about the banking system as the Minister of State for Finance (Mrs. McDougall)-they blindly led the blind and all four fell into the pit. Now they are asking the taxpayers of Canada to bail them out.
This deposit insurance covers people with deposits up to $60,000. It is great for those folks, the ordinary Canadians. But the Government wants to go beyond that. It is talking about picking up people with deposits of over $60,000. If people have more than $60,000 to invest, they ought to have more brains than to put their money in that institution.
Furthermore, I can say it bluntly, one has to question that if it was not a matter of good old-fashioned greed trying to grab for greater interest rates on their deposits, then they went for what might only be called rather questionable investments that promised higher rates than they could get at the other domestic banks. One has to wonder about that.


Barbara Jean McDougall: This is also a domestic bank. It shows how little you know.


John R. Rodriguez: You knew a lot. That is how much I know. I am not the Minister of State for Finance.


Barbara Jean McDougall: At least I know it is a bank.


John R. Rodriguez: You are the Minister. You made the boo-boos. Who is bailing out the bank? I am not. I could not bail out my friend the Hon. Member for Windsor-Walkerville (Mr. McCurdy). She is the Minister of State for Finance. She says to me "That is how much you know about banks". She knows a lot about banks.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: I just wish she knew more about banks, Mr. Speaker. Then we could save the taxpayers $1 billion.


Some Hon. Members:: Hear, hear!


John R. Rodriguez: There is "Billion Dollar Barbara". She earned that name. She did not inherit it.
I heard this Government talk about fighting the deficit. I cannot disagree. We did not start with this $1 billion. Now we have another $1 billion. I do not know what we will deindex next. I think we have to have a few more Cabinet Ministers-


Mr. Speaker:: Order, please. Could I, in the interests perhaps of the rule of relevancy, ask the Hon. Member every 30 seconds or minute or two simply to say Northland Bank?


John R. Rodriguez: Mr. Speaker, as I was saying, the Northland Bank is connected to the Canadian Commercial Bank which is connected to the other domestic banks which are connected to the Government.
September 25, 1985


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


John R. Rodriguez: I do not want to introduce a tone of levity into the proceedings this evening. I do not mind that the banks put their money up to save the Commercial Bank which ultimately, hopefully, would save the Northland Bank.
Incidentally, I see that there is a Northland Bank over on the plaza. I did not see any lineups there today.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: I did happen to see one person standing at the Northland Bank at, believe it or not, the withdrawal booth. It was the Minister of State for Finance.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: I understand the bank chairman of-they do not call it Imperial Bank for nothing-the Canadian Imperial Bank of Commerce said that he will consider legal action if Ottawa does not repay the bank's contribution to the bail-out of the Canadian Commercial Bank. I think that guy deserves to get his $22 million back if everyone else can get back their $60,000. We do not want the Canadian Imperial Bank of Commerce to be out of pocket $22 million. One of the bank presidents was laughing. Thank you, Mr. Speaker. I see the time is drawing to a close. I wish I could go on.


Some Hon. Members:: You can have unanimous consent.


John R. Rodriguez: I have the unanimous consent of my colleagues on this side of the House, Mr. Speaker.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: It is early in the morning. Frankly it has been a delight to expose the intricacies and the machinations of the banking system in this country. I would be prepared to carry on and do an examination of the way they operate.


Jean-C. Lapierre: Mr. Speaker, I am both very happy and very disappointed to take part in this special debate which has no precedent in the history of this Parliament. In fact, the last time Parliament was faced with a similar situation was in 1923. Mr. Speaker, it is late for everyone, especially for my neighbors, but to have to sit so late to discuss such a fundamental issue, an issue which goes to the heart of the credibility of the Government, the credibility of financial institutions, certainly the credibility of the Minister of Finance (Mr. Wilson) and his Minister of State for Finance (Mrs. McDougall), as well as the credibility of the Prime Minister (Mr. Mulroney), and naturally, I was going to forget it, the credibility, such as it is, of the Parliamentary Secretary to the Minister of Finance (Mr. Lanthier).
On March 25. 1985, you heard the Minister of State for Finance announce officially that this Government was committed to bail out a Canadian financial institution faced with bankruptcy, by way of a $200 million plus package. The
Minister assured the House that the bank would be safe and viable. But to our surprise and yours certainly, a few months later we saw that this Government's great promises and the word of the Prime Minister and his Ministers were not worth more than the bank's own assets. We found out that this Government had miserably failed on the whole issue. And this became more serious still when we learned that not only did the Government make a disastrous blunder but that the taxpayers would be called upon to foot the bill. In that sense, Mr. Speaker, at a time when money is so hard to earn, so hard to get by for Governments, so scarce, seeing that a Government which claims to save on expenses, which claims to be sparing of its money, can afford to spend $1 billion simply to save, first, the Prime Minister's ego, second, the Minister of Finance's ego, and third, the Minister of State for Finance's ego, to name but a few. This is because I am also making fun of the Hon. Member's ego. Mr. Speaker, after rigging that huge historic fiasco, because they like the term "historic", I say this is a historic fiasco. And then, to save their skins, these great champions of national unity claimed they had goofed all the way simply to save an institution that was highly popular in western Canada.
Mr. Speaker, I took it upon myself to call friends of mine living in western Canada and enquired as to how much that institution was basic and important in the minds of our westerners.
Let me tell you about their experience, their experience as ordinary westerners. You know, Mr. Speaker, that if you were applying for a loan of less than $1 million and were told to get lost ... Those who would compare that kind of bank with the caisses populaires are way off, because that institution was strictly reserved for very, very, very large borrowers and the ordinary John Doe had no access to their golden room. So, trying to have us believe here in this House that such an institution was close to the hearts of westerners is sheer fabrication. That institution only served the interests of the richest people, especially friends of the Government.


John Horton McDermid: Now I know why you have trouble in the west.


Jean-C. Lapierre: The nitwit on the other side, Mr. Speaker, does not understand anything and will never understand anything.


John Horton McDermid: I know how many seats we have in the west and why you don't have any.


An Hon. Member:: Why don't you go back to bed?

September 25, 1985


Jean-C. Lapierre: Why don't you go back to bed? That is a good suggestion for you. You have lost your head already.


Some Hon. Members:: Hear, hear!


John Horton McDermid: I know who wins in the west. It is obvious why you don't.
[ Translation]


Jean-C. Lapierre: Mr. Speaker, you know the Hon. Member always speaks from his seat but seldom rises. I would like him to speak more often from the floor, because it would be a tribute to everything that can-
But I would rather not comment, Mr. Speaker, lest I use unparliamentary terms, and rouse your displeasure.
What I can tell you is that they are just dragging a red herring when they claim now that Central Canada was against Western Canada, suggesting that because we were concerned about $1 billion of the taxpayers' money, we were against Western Canada. This, Mr. Speaker, is a novel argument. Because in March when the Minister of State for Finance (Mrs. McDougall) rose to explain the situation in which those famous banks were caught, she never referred to western problems; she merely referred to the problems those banks were facing with respect to their loans in the United States. This is the funny thing about their elastic conscience. They have now decided it is no longer a matter of American loans defaulting but, for obvious political reasons, this has become western loans, in an attempt at covering up a major scandal. Coming from people who say they speak for national unity, they should be ashamed of trying to divide the country simply to cover up their own mismanagement.
Never have we seen such a flop in the history of Canadian banks, never have we seen such incompetent Ministers buying what we call in the Magdalen Islands a pig in a poke. The Minister of State for Finance decided that she would do the utmost to rescue that bank without even looking at its assets. Have you ever seen such a thing, Mr. Speaker? I am sure that as an experienced business man you would never have purchased a business without at least looking at its financial statements and assets. There is no so-called businessman on the other side of the House who would have been naive enough to buy a company without looking at its assets. However, this is what the Government did with regard to those two banks and it is absolutely aberrant.
I refer to the testimonies made during the past few weeks, of which that some chartered banks offered to send inspectors.
But no, it was too urgent! But, why the rush to attempt a rescue when everything was coming out in the open? It was urgent because it happened the same weekend that the Prime Minister (Mr. Mulroney) was performing on his televised
show. It did not coincide with the Prime Minister's public relations plan for that weekend.


John Horton McDermid: A point of order.


Mr. Speaker:: A point of order, the Hon. Member for Brampton-Georgetown.


John Horton McDermid: Thank you, Mr. Speaker. I hate to interrupt my hon. friend, because I always enjoy his discourses here in the House-


An Hon. Member:: That does not show from your comments.


John Horton McDermid: I have been listening now for exactly 11 minutes. I understand that this debate is on the Northland Bank and its trials and tribulations and what it is going through at the present time. For the last 11 minutes I have listened to this speech and I have heard no reference to the Northland Bank or the problems it is experiencing. The Hon. Member is discussing another bank and another issue entirely. I feel we should get back to the subject matter of this debate or else adjourn the House.


Mr.   de Corneille@: A point of order.


Mr. Speaker:: A point of order, the Hon. Member for Eglinton-Lawrence.


Mr.   de Corneille@: Mr. Speaker-


Mr. Speaker:: Is the Hon. Member in his seat.


An Hon. Member:: No.


Mr. Speaker:: Then, the Hon. Member cannot raise a point of order.
The Hon. Member for Shefford.
[ Translation]


Jean-C. Lapierre: Mr. Speaker, the futility of the point of order raised by my colleague shows to what extent he does not see the relation between the status of the Canadian Commercial Bank and that of the Northlands Bank.
Is the Hon. Member now suggesting that the two are entirely different?
Mr. Speaker, we all know that since March the survival of those two banks has been closely related. And I think that the Hon. Member, rather than trying to raise futile points of order, should listen and learn something from what the members of the Opposition are telling him. If he were to make a self-examination, he would perhaps feel guilty.
Mr. Speaker, not only-


John Horton McDermid: I haven't heard a thing about the Northland Bank yet. What is your solution to the problem. Come on!
September 25, 1985


Jean-C. Lapierre: Mr. Speaker, my colleague a while ago offered his apologies for interrupting me but he is still doing it.
1 should like-


Mr. Speaker:: With due respect, the speaker who now has the floor does the same thing during other debates. The Hon. Member for Shefford (Mr. Lapierre) did the same thing an hour or so ago.


Jean-C. Lapierre: Mr. Speaker, I could not have interrupted my colleague because he did not speak. I agree with your comment. It is sweet of you to try and generalize the rule, Mr. Speaker-
Mr. Speaker, to come back to that very important issue, that dark spot in the history of Canada which is the Northland Bank affair, whether my poor friend likes it or not, I am thinking of the Hon. Member for Portneuf (Mr. Ferland) who does not understand anything about banks or any other political issues, because as the president of his association told us on television, the Hon. Member for Portneuf is ignorant but I urge him to continue with his English lessons.
In my opinion, Mr. Speaker, the incompetence of the Government and the Prime Minister is obvious to any objective observer. The Government Member will surely tell us that there is nothing there, that the Prime Minister is a great one, as the Hon. Member for LaSalle (Mr. Lanthier) was saying a while ago. I understand the eagerness of the Hon. Member for LaSalle to praise the Prime Minister. He is so anxious to get a ministerial appointment that his nose is turning brown.
But, beside that ... The reason I want to take part in this debate in the wee hours of the morning, Mr. Speaker, is to tell you just how concerned I am to see how easy it is to find $1 billion overnight and to spend it to bail out big depositors. In fact, it is not your ordinary Joe Blow in Calgary who is a depositor of $60,000 and over. It is not your ordinary Joe Blow in Edmonton either.
I find it strange that the Government would want to rescue these depositors, while refusing to provide us with their names, Mr. Speaker. They insist that we should not debate this issue in the House, claiming that a committee would be a more proper forum. Mr. Speaker, why is it that the Minister of State for Finance is not in the House? Why is it that the Minister of Finance is not in the House either?


An Hon. Member:: He is nowhere to be found.


Jean-C. Lapierre: I think it is against the rule to mention the absence of Hon. Members, and I can see in your eyes that you were about to remind me of that. However, I can tell you, Mr. Speaker, without mentioning any names, that there are only four or five Government Members present in the House, which worries me no end because this is a major debate, $1 billion being at stake. Although this is an item of over $1 billion, the Progressive Conservative Members behave like so many Pontius Pilates, they wash their hands off the whole mess,
preferring to follow blindly the Cabinet Members who have disappointed them so much over the past couple of weeks. My only hope, Mr. Speaker, is that tonight's debate will at least give them a little guilty conscience, because if all Parliamentarians did wash their hands of such an important matter, how could we convince the Canadian people that we are not operating under a double standard in the House?
When large sums of money are involved, the Government reacts immediately; however, when ordinary citizens are faced with difficulties which are enormous in their eyes, it is always very slow to react, claiming that we are stuck with the deficit.
That is double standards, and I hope that my Progressive Conservative friends, who visit their ridings to praise the Government and complain about the deficit, will remember that the night the House dealt with this $1 billion of our taxpayers' money, they were safely tucked away in bed.


Michael Morris Cassidy: Mr. Speaker, I should like to begin my remarks with a reference to Jesus Christ. Jesus Christ threw the money-changers out of the temple; the Conservatives bail them out. That is what we are talking about in the debate tonight. We are talking about a $1 billion bailout of two banks-the Northland Bank and the Canadian Commercial Bank. I regret the fact that the Hon. Member of State for Finance (Mrs. McDougall) hardly talked about that during the course of her remarks. In fact, during the last 4.5 hours, Progressive Conservative Members talked about the national energy policy and how they think the NDP has been delaying matters. However, they did not come up with cogent reasons why the Government got us into the present mess with regard to the Northland Bank and CCB.


John Horton McDermid: To whom are you referring?


Michael Morris Cassidy: I am referring to the Party of the Hon. Member for Brampton-Georgetown (Mr. McDermid). His Party is the Party which is bailing out the money-changers.


John Horton McDermid: Who made a derogatory remark about you? Name them.


Michael Morris Cassidy: I am referring to all members of the Conservative Party. The Conservative Party is bailing out the moneychangers at very great expense to the people of Canada. That is what is happening right now.
In this emergency debate we are talking about the competence of a Government which was elected just over a year ago today. Many Canadians may still be watching the debate tonight. It is surprising the number of people who watch us on television. Ever since we returned on September 9 they have been wondering what on earth is going on in Ottawa. First they hear about "Billion Dollar Barbara" and her blank

September 25, 1985
cheque to the banks. They wonder how on earth we can get out of such a mess. They know about the CCB perhaps vaguely, because of a bail-out which took place six months ago. They know that over Labour Day weekend the Government said there was another bank in which there were $470 million of uninsured deposits and that it would pay those off as well, to bring the total up to $1 billion. Then the Minister of State for Finance assured the House that we were not losing any money at all because they knew back in March that they would have to pay that much, or words to that effect. She turned around and said: "Of course I was acting on the best judgment I could act on". Also she repeatedly told the House that they were acting because the bankers told them that it was okay to act.
I took the opportunity to participate in the hearings before the Finance Committee. I listened to some of the bankers over the course of the last week and a half. They were quite consistent in saying that they felt that the CCB was a can of worms. If they had been asked back in the spring, I suspect they would have said the same thing about the Northland Bank. However, they were being asked then for a judgment on the Canadian Commercial Bank.
Let us face it, the CCB and the Northland Bank are inextricably intertwined and the money which we will have to pay for the two of them is inextricably intertwined as well. The bankers said that they only went in because they were told that the CCB was viable by the Inspector General of Banks and by the Government of the Bank of Canada. They went in, not because they were able to make an independent judgment, but because they were told to go in by the Government or perhaps by a Prime Minister determined to do something for western Canada.
The questions of competence which have arisen boggle the mind. Suppose, Mr. Speaker, that you had not been elected to the House of Commons. In fact, you were in business in Toronto before coming to Parliament. Suppose your business considered the take-over of a substantial operation, some business that was up for sale. Would you have put a downpayment on that particular concern and made an irrevocable commitment without looking at the books of that particular company? Would you have looked at its receivables, its credit rating, its accounting system, its management or at its track record over the course of the previous few years? The answer is that if you were a competent businessman, of course you would have done all those things. However, in the case of CCB, none of those things were done.


Mr. Speaker:: Order, please. I do not like interrupting Hon. Members on the question of relevancy. At one point I was asked to rule whether the Canadian Commercial Bank was the subject of discussion, and I said that it was not. Therefore, I invite the Hon. Member to restrict his comments to the matter before the House under an emergency debate, the Northland Bank.


Michael Morris Cassidy: I would point out, Mr. Speaker, that during the course of the speech of the Hon. Minister of State for Finance, as I recall it, the Northland Bank was not mentioned
once, and she was not called to order. Just because I happen to be the final speaker in this debate-


Mr. Speaker:: Order, please.


Michael Morris Cassidy: I suggest to you, Mr. Speaker, that it is extremely relevant because the two banks are closely intertwined I am talking about the Northland Bank-


Mr. Speaker:: Order. The Hon. Member is coming awfully close to challenging a comment of the Chair. Therefore, I simply make the point to the Hon. Member which I have made to other Hon. Members tonight. The Hon. Member may not have been here to hear it, because all Hon. Members have not remained throughout the entire debate; I accept that fact. Whenever I have felt that someone was departing from the relevancy rule, I have tried to return the Member to the relevancy of the debate. I have some difficulty with the Hon. Member's suggestion that I am acting differently as between Members. I choose deliberately never to do that.


Michael Morris Cassidy: I accept your judgment, Mr. Speaker. Of course several officers were in the chair, and possibly there may have been some discrepancy there as well.
I have spoken to Canadians who wonder what has happened to $1 billion of their money, particularly at a time of deficits. They know that the Government is in serious financial difficulty and that that difficulty has been greatly worsened by actions over the last few weeks.
Over the course of the spring a run took place in which a great amount of liquidity was withdrawn from the Northland Bank as well as from the CCB. The money was taken from Northland Bank as a consequence of questions about the viability of two western banks, both of which shared a number of things in common. It is difficult to comment fully about the Northland Bank because that we do not have as much information as was made public about the CCB.
In commenting upon the Northland Bank and in calling for this emergency debate, we were moved to do so because of unprecedented actions last week. After being taken into trusteeship, and after the Government said that it would seek new management or some form of maintenance of the Northland Bank, the President of the Northland Bank-and that was approximately 18 days after it had been put into curatorship- said that contrary to the assurances of the Government on September 3, the Government appeared to be doing everything possible to put it under.
I should like to raise the following question of competence. If the Government was wrong about the one bank, then in fact it may well be wrong about the other. If the Government was wrong in failing to look at the assets of one bank, it seems to me that it may well have failed in looking at the assets of the other. If the Government was wrong because it failed to send in anyone to look at what was happening in the one bank where we had the details, it seems to me that it was wrong in failing to find out what the devil was happening with the Northland Bank. If the Government was wrong in saying that
September 25, 1985

the one bank was viable, as was said by the Minister of State for Finance, the Inspector General of Banks and the Governor of the Bank of Canada, one has to believe that it was wrong as well in stating that the Northland Bank was viable. If the Government was wrong in permitting or telling Mr. Bouey of the Bank of Canada to pour billions of dollars into the Canadian Commercial Bank, one has to say that it was likely wrong in putting large amounts of liquidity into the Northland Bank as well.
Now I admit that we are talking about far more questions than we are answers. We have heard repeatedly, as these two subjects, which are intertwined, have come up in the House over the course of the last couple of weeks, the Government say let us get it off to a committee and the committee can decide. I am sure there are some people watching this debate who have heard members of the Government say that and then suggest that it is our Party which has prevented this matter from going to committee.
I would point out to you, Mr. Speaker, that the Government has the carriage of the business of this House in their hands. They could very easily have brought forward their motion and simply pushed it through. They have the numbers to enable them to pass the motion if they had chosen to send the matter out to committee regardless of the fact that there was disagreement over the terms of reference to the particular committee.
I would point out as well, Mr. Speaker, that we in the New Democratic Party wanted to avoid having a committee that would simply serve as a whitewash for the waste of $1 billion of taxpayers' money on the Northland Bank and on the Canadian Commercial Bank. We felt that at the very least the people of Canada were entitled to some basic information and that we had to have some assurance that the committee could do an effective job.
We asked for the report that was prepared on the one bank that was investigated. We were not assured we could get it. We sought auditors' reports. We were told that they would be barred. We sought material from California. We were told that the Americans would not give it up. We sought the list of depositors who were going to be bailed out regardless of the fact that the depositors in the Northland Bank and the CCB were uninsured and had absolutely no legal claim on the Government of Canada or the Bank of Canada, and finally the Minister of State for Finance told us unequivocally in response to a question of mine the other day, "No, you will not have that information".
It was not just the Hon. Member for Ottawa Centre speaking when I put that particular question; it was not just me as a spokesperson for my Party. I was speaking on behalf of taxpayers across Canada from Vancouver Island to St. John's who were saying, if we are going to spend $1 billion we want to know who is going to get that particular money. What I was hearing from the Minister of State for Finance was that not only was she refusing to make that list of depositors available
so that we could judge about the bank itself, so that people would know where the money was going, but I think the Government was going a step further.
I think that the Government is saying that when the Public Accounts come out in a year or two years time the whitewash job will have been applied to the statements about spending of the Government of Canada to the point where it will be impossible to know to whom payments have been made in the light of the failure of the Northland Bank and the Canadian Commercial Bank. The Government is so intent on protecting the interests of the financial community, the large investors and depositors who will stand to get the largest amount from this particular bail-out, they are prepared to distort the Public Accounts of Canada in order to keep that material away from the people of Canada, even though it is a year or two years hence.


John Horton McDermid: I thought you defended individual's rights.


Michael Morris Cassidy: That is why when a company does business with Canada and when it enters into a contract with more than $5,000 or $10,000-I am not sure what the figure is-the sums paid to that company are identified and the company is identified by name.
All we have said is that if a company does not choose to take the money for the bail-out then it can keep its confidentiality. But if it wants to receive a cheque that I am paying for, and the Hon. Member for Brampton-Georgetown (Mr. McDermid) is paying for, as well as all of our constituents, surely we should know. But no, the coverup is a coverup of incompetence of the Government in handling this banking situation. We may never know for sure exactly why it got that bad.
It is fair to say that the problem began with the former Liberal Government. They failed to put into place an adequate system of bank regulations. Six months after the new Government took office they cannot claim that this was something that was simply inherited. They cannot claim irrelevantly, as one of the Ministers claimed in this debate, that it was the national energy policy that "made us do it".
I remember the Prime Minister (Mr. Mulroney) making cracks about patronage and suggesting "It was the devil that made John Turner do it," and it was very funny during the course of the election campaign, Mr. Speaker. But a year after they took power, almost on the anniversary of September 4, 1984, Mr. Speaker, the new Government cannot claim that they were simply landed with a mess from the previous Government and that they can abdicate responsibility.
I commend the Minister of State for Finance for the coolness with which she has faced the situation, but I cannot commend her for the competence she has shown in this particular affair. She worked in the financial industry. She was a consultant and a former vice-president of an investment firm. She was in a position, as was the Minister of Finance who was in fact a president, I believe, of a financial firm on Bay Street, to know that no one loans money without first checking out the recipient. No one loans billions of dollars without looking at credit ratings, or buys a pig in a poke

September 25, 1985
without checking to see if the things that they have been told are true. We cannot allow ourselves to be stonewalled, Mr. Speaker, as has happened with the banks in question by managements which have proven themselves to be questionable, whose credibility is at stake and whose stewardship in terms of their responsibility to the public was seriously in question.
This debate is coming to a close. The matters we have raised are going to continue to be matters of debate. I want to say to all Hon. Members of this House that we in the New Democratic Party are going to continue with every device at our disposal to find out who is getting that money from the taxpayers and why $1 billion of taxpayers' money is being wasted on these bank bail-outs when that money need not have been spent.


George Baker: Thank you, Mr. Speaker. Perhaps I could conclude what most people have observed here this evening and all through the day and over the last month.


An Hon. Member:: That is a Tory plot.


George Baker: That is a Tory plot-a serious problem of contradictions, of absolute and incredible contradictions. If someone watched this debate or read the debates afterwards, they would see incredible contradictions, particularly if they knew what happened in the Standing Committees and in the House of Commons the last several weeks.
Members stand up here tonight in this debate and claim that the bankruptcies of the banks in western Canada were due to the Liberal policies of years ago. Then we had, as anybody knowledgeable on this subject would know, the Minister of State for Finance (Mrs. McDougall) stand in this chamber and say that the problems of these banks were created in recent months. In fact she even said to the Liberal Opposition "I have never said that the problens of the western banks were ever created by the national energy policy". Those are the exact words of the Minister of State for Finance. She went further and said in this chamber on March 29:
-how recently this had bubbled up from underneath.
Quoting figures from the United States she said:
-2,175 drilling rigs are operating in U.S., down 612 from December. .. 299 from last February.
The problem really came out of nowhere. ... how recently this had bubbled up from underneath.
Then we had the incredible statement by the Minister of State for Finance when she even said, as has been mentioned in this debate:
There are no other financial institutions in the country at the moment that are appearing to be insolvent in any way.
Then she went on to say "the bank is a solvent bank", referring to the CCB. She said "that the bank is not failing," and "could we please make that very clear. I find the vocabulary somewhat hysterical", and "this is not a failing bank". The Minister of State for Finance made those statements yet Conservative Members stand up in this chamber and claim
that the responsibility lies with the previous Government because of the national energy policy. We have the Minister of State for Finance contradicting that clearly. Even their own Minister contradicted what those Members have been saying. Even a Cabinet Minister from western Canada made a statement totally contradictory to what the Minister of State for Finance said.
The other main point that was missed must be put on the record. Here is a good question. Who was it who said, "We looked at a number of possibilities and we came up with what we felt was the most attractive solution for everyone. If a bank gets into trouble and gets merged into one of the "Big-Five" banks, we could end up with no regional banks. We indicated that we felt it was responsible for the Government to get involved."
Is this the Government of Canada not wanting a bank to merge with another bank when it was in trouble?
What happened with Northland? When the Bank of Canada cut off its deposits, the curator was brought in and the Minister of State for Finance said, "You go ahead and merge. We will even give you a bank that wants to merge with you". That particular bank did not know what she was talking about. It was a complete reversal of the policy stated by the Minister herself in this Chamber. It was the Minister of State for Finance who said the words to which I referred earlier. The contradictions are amazing. If I were outside of this Chamber, I could use another word which I am not allowed to use in the Chamber. It is absolutely incredible.
With what are we left? A Member of the New Democratic Party rose to make fun of the Inspector General of Banks. He said that the Inspector General of Banks is paid by the banks. That is not exactly correct, Mr. Speaker. The Inspector General of Banks is paid by the depositors to the extent of one-tenth of 1 per cent of depositors' money. That is the way it was until this Minister came along and tripled that amount. Why did she do that? Because the Canada Deposit Insurance Corporation brought in about $37 million last year and about $125 million this year. The Canada Deposit Insurance Corporation is broke and owes over $1 billion. What does it have to do to fulfil the commitment in the legislation and pay the insured depositors? It has to borrow money. From where does it borrow that money? It borrows it from the Government of Canada. From where does the Government of Canada get the money? It borrows it and increases its own deficit. That is very interesting, Mr. Speaker.
That borrowed money covers the $420-million worth of insured depositors. From where does the money come for the $900-million worth of uninsured depositors? Does that come from the Government of Canada? Yes. Why does it come from the Government of Canada? Because this Government made an error. The Government made a moral and legal commitment to guarantee a return on the money of the depositors of that bank. It was a $900-million error.
September 25, 1985

Add that error to the money that has been borrowed to cover the Canada Deposit Insurance Corporation funds, another $420 million. Let us not forget the $255 million used for this infamous bail-out which will supposedly be recovered on the sale of the assets for which the Government may only receive 50 cents on the dollar.
Who made the error? We can talk about the Inspector General of Banks who is indirectly paid by the banks through the depositors. Who is responsible for the state of Northland today? Who took this action? The banks said that they did not want to have anything to do with this. If they did want to have something to do with it, they should all be fired. What bank manager would give the ordinary man on the street $60 million with no evidence at all? However, that is what these bank executives did. Surely they had something upon which to base their decision.
Was it the Inspector General of Banks who made the error? No, because let us not forget that he was not allowed to look at the figures. He was allowed to look at an American report for a moment but he was not allowed to take a photocopy of it.
Was the error made by General Bouey, as some people refer to him? No, it was not his responsibility. He does not know anything about the banks. Who was at fault? Who was responsible for making this commitment? I will tell you who was responsible, Mr. Speaker. I am going to make a guess because nothing else makes sense.
On the one hand there is the Government of Alberta and on the other there is the Government of British Columbia which dealt with subordinate debentures. The Government of Canada shared equally with the Government of Alberta. Then the banks came in with money. Surely someone somewhere made the decision to put it all together. Who made that decision? The only conclusion to which I could come is that this happened as a result of a phone call from a provincial premier. Perhaps that is the answer. Perhaps a provincial premier, in this new spirit of federal co-operation, phoned the Government. It was not a premier from New Brunswick this time but probably the Premier of Alberta.
The taxpayers of Canada were committed to something through a political judgment which influenced the banks. Why else would the banks have loaned this money? The banks would only give the money if they got certain guarantees. They wanted to be able to write this money off on their bottom lines and they wanted to be recognized as depositors so that they would be covered if this thing did not work out. However, they really did not think that this was a good deal.
After all of this occurred, the Minister of State for Finance rose in the House to say the following, as reported on page 3518 of Hansard:
Mr. Chairman, I have tried to explain to the House that this solution was arrived at because, in the judgment of knowledgeable people-including the Governor of the Bank of Canada, a group of six chartered banks, the Inspector General and the Province of Alberta-the bank would have been a viable operation if the capital was provided to resolve its loan problems.
Who made the judgment relating to Northland? Again it must have been a political judgment. It was made because the
CCB bail-out did not work out. The Bank of Canada froze its assets as deposits. The curator went in and ordered that this bank would merge with that bank and that bank did not know what they were talking about. However, the Minister of State for Finance has made it pretty clear. She said that the previous judgment was made on the recommendation of the six banks, the Governor of the Bank of Canada and the Inspector General of Banks.
The evidence before the committee indicates that the banks say that they did not recommend this. The hon. gentleman who sits behind me has just said that someone is not telling the truth. As Hon. Members know, I cannot say that someone is not telling the truth here in this Chamber. In fact, I cannot even say it in such a way as to even suggest it. I wonder what the people of Canada are saying? We have heard nothing but absolute and total contradictions beyond any scope of the imagination. How can the Minister of State for Finance make a statement one day and then make a different statement the next? How can the bank make differing statements? How can the Inspector General of Banks make differing statements? Now, every single one of the presidents and chairmen of the boards of six banks are making statements contradicting each other. The conclusion one has to come to is that the aftermath of all this is an awfully big bill.
We now have two banks involved in similar situations. We have uninsured depositors being paid by a deposit insurance corporation which is almost broke. That corporation is borrowing from the Government of Canada to the tune of $1.4 billion. The Government is borrowing money when its policy is to not increase the deficit. Thus, our taxes have got to go up. Then there are the uninsured depositors. They are the ones who are being paid directly by the Government. Then there is the Government of Canada adding on to the deficit and having to borrow to make up the difference. It is pretty clear to an ordinary person like myself from Newfoundland that this is a bloody disaster. It is a scandal of the first order.


Some Hon. Members:: Hear, hear!


George Baker: It is an absolute political scandal of the largest magnitude that one can imagine. It is one which involves a couple of billion dollars. It also involves unfair treatment to the Northland Bank. To put it more succinctly, it involves contradictory statements. It involves the contradiction of other statements. It involves statements made by the participants which are completely opposite to what the Minister of Finance (Mr. Wilson) has said. The Minister of State for Finance says one thing one week and another thing the next. Where has that got us? The Minister of State for Finance, like a great many Ministers in this Chamber, was simply following the orders given to her by the Government. She was following the orders of the chairman of the board. The chairman of the board is the Prime Minister (Mr. Mulroney).
Can anyone figure out why the decisions which have been made regarding the two banks have been made? No one who is

September 25, 1985
a rational person can come to the conclusions which these Ministers have come to-no one. It could not be concluded that it was the Inspector General of Banks who was definitely responsible. It could not be concluded that it was the Governor of the Bank of Canada who was definitely responsible. Nor can it be concluded that it was the six banks which were responsible. The administrations of the two banks we are talking about were not responsible for this $2 billion bail-out. It was a political decision. Sometimes people do not believe how much influence a Government can have, even on financiers and on experts in banks who should know better to sit down in a room and commit $60 million.
I am glad to see that the Conservatives voted in favour of the motion which is before us.


John Horton McDermid: Why did you vote for it?


George Baker: The Hon. Member asks me why I voted in favour of the motion. I will tell him why, Mr. Speaker.


Jean-Robert Gauthier: What a fool you are. Listen to him, fool.


George Baker: The Minister of State for Finance said in the House that she had the backing of two provincial Governments and six banks. She told us that a vote against this measure would be a vote against western Canada. She told us there was an emergency which had been checked out, double checked and triple checked and that the measure would save the bank. "This is a solvent bank," said the Minister. Who are we not to believe a Minister of the Cabinet who come to the Chamber with a rescue package on behalf of western Canada? After all, that is the way the Minister put it. I can guarantee Hon. Members that never again will we ever take the word of this Government with respect to any emergency Bill which involves money.
I note that you are indicating, Mr. Speaker, that I should conclude my remarks.
In conclusion, I would like to say that the aftermath involves $2 billion. That is the aftermath. The conclusion we come to from the Statements of the Minister of State for Finance is that she makes statements at any time depending upon the mood she is in. That depends on what she says, which determines exactly what the policy of her Department will be. The statements do not make any sense.
Who is responsible? None of the participants are responsible. As I mentioned before, the responsibility goes back to a political decision made between a provincial Premier and the Prime Minister of Canada. As we all know, those telephone calls have got this Government into one heck of an amount of trouble.


Some Hon. Members:: Hear, hear!


Brian Vincent Tobin: Mr. Speaker, thank you for giving me this opportunity to speak. I wish to be brief, unless, of course, I am provoked into being expansive. I wish to say that I came here to this Chamber after having spent hours preparing my contribution to this debate.
However, having heard the words of wisdom and having been witness to the skill and the powers of persuasion of the Hon. Member for Gander-Twillingate (Mr. Baker) I have come to realize that anything I could possibly add would be mere trinkets lost in the hurricane of logic which has been put before the Members of the House this evening.
Having said that, I simply wish to say to the Hon. Member for Gander-Twillingate touche and touche again. May God bless you and may you continue these contributions.
Thank you, Mr. Speaker.


Some Hon. Members:: Hear, hear!


Jean-Robert Gauthier: Just a brief interjection, Mr. Speaker.


Mr. Speaker:: The Hon. Member for Ottawa-Vanier (Mr. Gauthier).


Jean-Robert Gauthier: Mr. Speaker, I know we are all impatient to bring a close to this debate.


Mr. Speaker:: We can stay here all night if you like.


Jean-Robert Gauthier: I will be brief and tell the House that, indeed, there are still some members of my Party who would like to participate in this important debate because there is a crisis which preoccupies Canadians and which has preoccupied our thoughts. I was perplexed today to see how reactionary this Government can be. What we have today in Canada is a Government which reacts. It does not lead anything; it reacts to events, whether it be fish or banks or something which happens to a member of its Party. By God, this Government reacts. My second point, Mr. Speaker, is that the Minister of Finance (Mr. Wilson) and the Minister of State for Finance (Mrs. McDougall) showed us how logical one can get in this House. They voted in their places today that, indeed, they wanted this debate. They wanted this emergency debate. They voted with the opposition and said, yes, there is an urgent, pressing emergency in the banking business of this country.
The Minister of State for Finance made a very partisan speech. She never mentioned the Northland Bank once. The Minister of Finance we did not see. Yet he voted in this House with all of us that there was an emergency. In protest against his absence, Mr. Speaker, and in his neglect and lack of understanding of how serious this question is, we are trying to make an issue of this crisis. We are trying to make you, Mr. Speaker, and the people of Canada, understand that, indeed, we are preoccupied with this problem. As the Hon. Member for Gander-Twillingate (Mr. Baker), and other Members of my Party have said today, we are, indeed, very preoccupied with this problem.


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, I will be very brief. Hon. Members opposite know my style.


John Horton McDermid: That's what I'm afraid of.
k:

September 25, 1985


Marcel Prud'homme: I will be brief, but if otherwise provoked, Mr. Speaker, I will deliver as violent and as partisan a speech as the Minister of State for Finance (Mrs. McDougall). She did not address herself to the question. She only wanted to play politics. I can tell you, Mr. Speaker, that nothing would please me more, even at this late hour, to do the same.
The point I want to raise, Mr. Speaker, is of great concern to me as an Hon. Member who has been here for many years. We will come back to it because I know this is not the end. My concern is this new approach that the Government seems to be developing as it tries to say that we on this side, we in this Party, do not care about what is going on in western Canada. If that is to be the approach and the defence of the Government, it is an immense mistake as was so well described by my colleague, the Hon. Member from Newfoundland, who spoke prior to me. I think we will have to object. I think we will have to prolong the debate. I think we will have to ask for a new debate on the same issue.
It is my view, Mr. Speaker, and also those of us who read very attentively the mood of the country-which is well expressed by various editorialists from western Canada as well as from central Canada and the Maritimes-that the attitude that seems to be developing here will be very bad for the unity of this country. It is an attitude that the New Democratic Party or what is more important to us, the Official Opposition, which governed for so long-perhaps too long, and that is what Canadians decided-are not concerned about western Canada. The Canadian people decided to give the new Government a chance to show what it could do but if that new Government is going to pretend again and again, either directly or indirectly, that this debate, which was suggested by us, means that we do not care about western Canada, I believe we will play into the hands of those who believe in the division of this country. It is not healthy and I do not beg of my colleagues but I certainly urge my colleagues to tackle this very immense difficulty. We see the credibility of the banking system in this country being attacked and that is very serious.
I come from a province where the people are very conservative minded when it comes to the question of money. Many do not have the same faith in the banking system as some of my colleagues opposite. It is traditional. It is historical. It is well known that-

In French, we refer to this as la politique du bas de laine. [English]
They prefer to keep their money at home instead of putting it into the system. If there would be no more confidence in the banking system of our country, it would be disastrous economically for those who want to invest and for those who want to borrow money in order to create employment, because people will say, "We will invest somewhere else and not in Canada's banking system."
I was very saddened and upset and so were a lot of people when I, as well as the country as a whole, heard the Righ Hon. Prime Minister of Canada (Mr. Mulroney) say, "This country
is bankrupt". Let us analyse this phrase, "the country is bankrupt". What is the meaning of that phrase outside of Canada? I just happen to have been to a banquet tonight given by Her Excellency the Governor General, for the President of Tanzania. I was asked by one of the guests who sat not far from me to try to explain to him what the effect on foreign aid would be if a country as wealthy as Canada, so well respected as Canada, so generous in external aid as Canada, was to be known as bankrupt. I must admit I forgot partisanship. When we talk to outsiders, we have to defend the country as a whole and not as a representative of a political Party. I had to agonize to find a good argument. I did not say the country was bankrupt. I was trying to explain that it is a phrase and did not mean exactly what it inferred.
For that person, however, it meant exactly that. For the people in my province it means it is a terrible situation, that the banking system does not work. If we are going to go on and on pretending that the banking system in this country is going down the drain, I can imagine where the people who have some wealth-I am not talking about those people who have $60, but those people who have more than $60,000-are going to recoup their money. I am in agreement with the President of the Bank who said, "Tough luck. If the workers of this country, the little people, through their tax, are going to bail out a lot of people, we want to know who is going to be bailed out. We want to know how much it will cost and what kind of money those people will receive". 1 am in agreement with that.
I could go on, as I said, Mr. Speaker. It was because of the tone of the Minister of State for Finance that I felt 1 must speak. The Minister made a very partisan speech and tried again to sneak into the debate the question that this Party does not care about the interests of western Canada. That is the reason I rose to speak tonight. I want to put on record that we in this Party try to the best of our ability to give fair treatment to all parts of this country. To try to make Canadians believe that we are debating the issue because we do not care for western Canada would only be divisive and anything which would be divisive is not good for the country. Therefore, I would like to bring to the attention of my colleagues who like to participate again and again in this debate not to use that kind of argument. If they were to do so-which is their right because, after all, we live in a democracy-I can assure them that in a much better prepared way, we would tackle any Hon. Member who would like to use that as an argument. I repeat, and I conclude, Mr. Speaker, that any Hon. Member who uses that kind of argument will find us standing and answering tit for tat any insinuation that we are going to divide this country, that we do not care for western Canada and that these people of this new Government care more than we do.
[ Translation]


Some Hon. Members:: Say it in French!


Marcel Prud'homme: My colleagues are asking me to repeat the same thing in French. Although we have an excellent

September 25, 1985
interpretation system, I will say that this is an argument which my hon. friends should not use, to wit, that the Party of the Official Opposition does not give a darn about Western interests, because the history of our party is there as evidence to the contrary, and that if they did continue to use these arguments, they would play right into the hands of those who want to divide Canada, something which would not be healthy for the unity of our country. This is not a matter of partisan politics, but a matter of saving our institutions throughout Canada.


An Hon. Member:: Excellent!


Mr. Speaker:: Pursuant to Section 13 of Standing Order 31, I am satisfied that the debate has now been concluded and 1 therefore declare the motion carried.
Prior to adjourning the House, may I thank the pages, the clerks, the translators, the Journals Branch, and all of the rest of the staff who have had to stay late tonight. 1 think they understand as well that this was important.
The House stands adjourned until this morning at 11.00 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 1.22 a.m.
[Stage Direction]
Thursday, September 26, 1985