1985-10-10

[Stage Direction]
[DOT] (U05)

["Order. It being one o'clock, I do now leave the chair until two o'clock this day.\nAt 1 p.m., the House took recess."]
Mr. Speaker:: The Parliamentary Secretary to the President of the Privy Council (Mr. Dick) rises on a point of order.


Mr. Dick:: Mr. Speaker, there have been discussions among all Parties and there is agreement to move to tabling of documents as the first item today, by unanimous consent.


Mr. Speaker:: Is the Hon. Member for Hamilton Mountain (Mr. Deans) indicating his agreement?


Mr. Deans:: Yes, Mr. Speaker. There have been discussions along that line and it is agreed.


Mr. Gauthier:: Mr. Speaker, I also understand there have been some negotiations and there is consent to do that right now.


Mr. Speaker:: Therefore, by unanimous consent, the House will proceed to tabling of documents.



Mr. Gabriel Fontaine (Levis):: Mr. Speaker, I have the honour to present the second report of the Sub-committee of the Standing Committee on Communications and Culture relating to the Revision of Copyright, in both official languages. Your Sub-Committee has adopted this report, including 137 recommendations, and, in accordance with Standing Order 70(16), requests that the Government make a comprehensive response to this report.
[Editor's Note: For above report, see today's Votes and Proceedings.]


Mr. Speaker:: I take it that what in fact was sought was unanimous consent to go to the presentation of reports.


FINANCIAL INSTITUTIONS DEPOSITORS COMPENSATION ACT
[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-79, an Act respecting the provision of compensation to depositors of Canadian Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect of uninsured deposits, be read the second time and referred to a legislative committee; and the amendment of Mr. Turner (Vancouver Quadra) (p. 7379).
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Just before the adjournment of the House yesterday, Mr. Speaker, 1 was saying that the purpose of this Bill is to refund uninsured deposits, meaning those exceeding the $60,000 insurable limit. According to the Government, people who in good faith deposited their money with the Canadian Commercial Bank because they relied on Government guarantees should not be penalized.
Mr. Speaker, did the Government give guarantees? If so, why does it not tell the House about them? Since Canadian taxpayers will have to repay the depositors, our responsibility towards those taxpayers is to find out who will get the money. The Bill provides that depositors must file an application to get their money back, so we can expect to know who they are, sooner or later. Therefore, since we are being asked to adopt the Bill now, it is quite reasonable that we should be given that information right away.
Passage of this Bill will cost the Canadian taxpayers nearly $1 billion. This is a very large amount especially for a Government which pretends to be money concious and which says that it cannot afford to pay family allowances or to maintain social housing, energy, investment of environmental programs, and the list goes on.
Mr. Speaker, last spring, while we were discussing the bail out of this bank, we also amended the Small Businesses Loans Act. In that case also, changes were made because the Government could not afford certain loans. Now, the small businessman must pay 1 per cent on his small business loan and provide an 85 per cent guarantee while the Government used to provide a 100 per cent guarantee.
Now, the Government is asking us to provide full reimbursement, or a 100 per cent guarantee, to these depositors whose names we do not even know.

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The fact is that we have seen the failutre of two western banks which were accredited to the international sphere as being sound and viable institutions in the financial forum. To see their lose credibility face is rather upsetting for everyone involved, especially the depositors who are questioning the return of their deposits. Today, we are being asked by the governing Party to agree to a Bill without having all the information before us. I must say that we will not fall into a blind-eye policy. It is evident that the unsecured depositors must apply in order to receive reimbursement; so why tell us who they are? Is the Government trying to hide something? Is there some type of cover-up?
On March 25, 1985, the Minister of State for Finance (Mrs. McDougall) said in the House, and I quote:
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.
What happened six months later? This bank was supposed to be viable after the pouring into it of S250 million. [Translation]
On March 28, 1985, the same Minister stated in this House:
Our concern as the federal Government must also extend beyond western Canada. We want to make sure that a ripple in the financial system does not spread from coast to coast and beyond, to overseas markets. The Government must also be concerned with the effect a failure might have on the stability, security and confidence of the entire financial system.
Mr. Speaker, since the summer of 1984, the Progressive Conservative Party has been repeating that we need confidence! Yet, one year later, what kind of confidence is there? Two banks have gone bankrupt.
Once more, I quote the Minister, who said:
By addressing the present matter quickly, we are guarding against a potential erosion of confidence in our financial system both at home and abroad. This decisive action is evidence that our financial institutions are safe for depositors.
Now, six months later, it is no longer safe for depositors, and to save face the Government is asking us to reimburse the depositors without giving us the names of those who are owed all this money.
The question all Canadians are asking today is this: Why does the Government not want to provide names? I would like to conclude my comments by saying that the Government might say that it is to protect banking confidentiality, but this matter is no longer confidential as the bank has gone bankrupt. When you go bankrupt, you have to give all the names. I shall therefore vote against this Bill because the Government does not want to provide us with names.


The Acting Speaker (Mr. Charest):: The Hon. Member for Beaches.


Mr. Keeper:: It is Winnipeg North Centre, Mr. Speaker.


The Acting Speaker (Mr. Charest):: Excuse me, the Hon. Member for Winnipeg North Centre.


Cyril Keeper: Mr. Speaker, I would be a bit disturbed with respect to being transferred to a riding in Toronto. At any rate, it is a pleasure to be able to enter into this debate under whatever designation. We only have a short time to contribute to this debate, Mr. Speaker, but there are significant points which need to be made. First, I think the public's attention with regard to this legislation to bail out these banks must be focused on the hearings which are going on right now and the press reports which are beginning to emerge.

For example, there was an analysis in The Globe and Mail today with regard to the Hitchman Report. The facts are coming out now with regard to the condition of the bank when the Government moved in to bail it out. The reports are pretty damning. While I cannot go into all the details, I believe we should take note of a couple of points. First, the Hitchman Report found that the files in these banks were in a mess, so even in terms of the basic keeping of information, they were in trouble. Second, senior officiers and directors endorsed questionable loans and the executives really did not understand the seriousness of the difficulty they were in as a financial institution. So the facts are beginning to come out and the picture is pretty dismal and disastrous.
These facts are crucially important right now because when the Government originally moved to try to prop up these banks, it did not have the facts. That is a tragedy. The Government espouses a commitment to the market-place. It claims to be a good economic manager, to know something about the economy and to be rescuing the Canadian economy from its present troubles and bringing about prosperity. But when it comes to dealing with two relatively small institutions in that sector of the economy, it has demonstrated complete and utter incompetence. The Canadian people are becoming aware that the Government is economically incompetent.
The Government rushed in to prop up these banks without having full understanding of their financial situation. That is why several months later it had to pull the plug. When the Government first stepped in, it was as if it stepped into a dark room without turning on the lights. It walked in where wiser men feared to tread. It rushed ahead without knowing what it was doing and it did this in order to try to preserve its public image of good economic managers. It tried to preserve the picture of a Government which was taking this country into prosperity. In fact, the Government shot itself in the foot.
The facts are coming out now about just what a terrible mess these banks were in, which shows that the Government acted in a situation without knowing what it was doing.
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There are a few key points I want to make, Mr. Speaker. We are talking here about $875 million of the public's money to bail out uninsured depositors in these two banks. Everyone here could think of many useful ways of using $875 million other than as a worthless gesture in trying to rescue a couple of banks which were bankrupt in the first place. Let us contrast the way this Government is treating banks and the way it treats ordinary workers. When the banks came knocking on the door saying they were in trouble and wanted access to the public Treasury, the doors were thrown wide open. The Government, without adequate information, acted in support of the banks. Contrast that with the lack of concern shown by the Government for the people who work in the banks. I am thinking specifically right now of the workers who have organized a union in the Canadian Imperial Bank of Commerce and who are struggling desperately to get a first and fair contract. Do we see any action by this Government to help that union? Not at all. All we get is utter silence. However, when the executives of these banks ask for assistance, the treasure house is opened and the money is just shovelled out.
The people who work in the C1BC Visa Centre have organized a union and are seeking a fair contract. They would like to have the support of the Government in that endeavour. We pride ourselves in this country on fairness, justice and freedom of association, all of which underpin collective bargaining in this country. Yet these workers are faced with a management which is offering a contract with no wage increases to employees who earn on the average $12 an hour. The bank has put forward the proposition that it should be able to reduce hours of work whenever it suits the bank and at the same time insist that part-time workers receive no overtime or shift premium, partial benefits or pension. Do we hear anything from the Government about that? Does the Government say to the banks that if it is going to support them financially they should treat their workers fairly? No, all we get from the Government side is utter silence.
The bank, in its offer to these workers, wants compulsory overtime and the right to fire an employee who has taken a part-time job elsewhere. The bank wants a contract under which employees would not take cases involving discrimination to the Human Rights Commission. Do we hear any outrage from the Government over the fact that the bank dares to offer that kind of contract to ordinary Canadians? The bank wants contract language which would exempt it from the provisions of the Canada Labour Code governing technological change. It also wants to be exempt from just cause provisions of a collective agreement.
In summary, Mr. Speaker, I want to make the point that when the bank executives came to the Government, it reacted very quickly and gave its full support to the banks. However, when workers are struggling for a fair and just contract, the Government is silent. It is important for the Government to realize that it is demonstrating not only the unfairness of the
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way in which it treats the elite of this country relative to ordinary Canadians, but it has also demonstrated to ordinary Canadians its incompetence in economic affairs. If it had simply done a little homework it would have known what a terrible financial mess this bank was in. The facts of the bankruptcies of the Canadian Commercial Bank are coming to light now and Canadians can now judge the Government and the folly of its actions.
It is time for the Government to wake up, to withdraw this legislation, and to make good use of the $875 million of public money that it is throwing away in a useless gesture to bail out uninsured depositors. The Government should have been prudent in the first place and acted on the full facts. If it had done so it would not now find itself in the situation of having to pour taxpayers' dollars down the drain at a time when there is great need for public money to be spent on daycare and employment programs.


Hon. Andre Ouellet (Papineau):: Mr. Speaker, I would like to speak in the debate on Bill C-79. Unfortunately, the ten minutes I have this morning are less than adequate to describe to the House the incompetence shown by the Conservative Government in this matter. I would like to recall the amendment moved by the Leader of the Opposition, the Hon. Member for Vancouver Quadra (Mr. Turner) in an attempt to inject some common sense in a debate into which we have been drawn by the Conservatives. My leader proposed that the House decline to give second reading to this Bill because its principle is to permit payments of large but unspecified amounts of public monies to unspecified persons or corporations. I think it must be the first time in the history of the Parliament of Canada that a Government is asking parliamentarians to vote on a blank cheque of this size. We are talking about $875 million, to be taken from public funds provided by all Canadian taxpayers to compensate a few wealthy corporations and individuals in our society that normally would not be entitled to compensation.
The Liberal Party is opposed to this Bill, and that is why we presented this amendment. The Bill should not be passed by this House because it substantially denigrates parliamentary accountability for expenditure of public funds. The previous speaker clearly indicated how these $875 million could better spent. However, I will not dwell on this aspect, except to add that this morning, after reading the papers and the testimony of that experienced banker, Mr. George Hitchman, we realized how seriously the Government had misled the Members of this House and the people of Canada throughout this debate.
The initial explanations that were given-


The Acting Speaker (Mr. Charest):: I would like to draw the attention of the Hon. Member for Papineau (Mr. Ouellet) and the House to the fact that there is at this moment a commis-

October 10, 1985
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sion of inquiry that is supposed to determine certain questions and that has received a rather broad mandate. I realize this is a difficult matter to rule on for the Chair, and I would ask you to be patient, but there are a certain number of issues which cannot be appropriately raised or dealt with in this debate. I am therefore asking all the Members of this House to be careful or to choose their words wisely in the course of this debate.


André Ouellet: I can understand the Chair's and the Government's unwillingness to deal with the Government's incompetence, which was clearly demonstrated in this morning's newspapers which reported Mr. George Hitchman's testimony. I should like to quote from a newspaper clipping which clearly states that the Government in this matter could have acted quite differently. What we know is that a scheme to save the Commercial Bank of Canada was proposed to the Minister of State (Finance) (Mrs. McDougall) and was turned down by the Government. So we are far from the truth when we are told that the failure of this bank in Western Canada has been caused by the energy crisis. As you certainly remember, Mr. Speaker, that is the excuse the Tory Government used at the beginning of this mess. The Prime Minister (Mr. Mulroney) and the Minister of Finance (Mr. Wilson) have told us. If the Commercial Bank of Canada has failed, it is because of the energy policy of the previous Liberal administration.
But we know now that if that bank has failed, it was only because it was badly administered, because its directors authorized bad loans and because of utter mismanagement. When a scheme was proposed to bail out this bank, this Tory Government chose to turn it down. If the Commercial Bank of Canada failed, therefore, we can reasonably say that it was partly because this Government turned down at the time a scheme to bail it out.
The Northland Bank is a second bank which is also in trouble. During this debate, my colleague the Hon. Member for Laval-des-Rapides (Mr. Garneau) has put forward a plan to save this bank. I hope all Members on the Government side will consider this proposal, because this second bank in Western Canada could be saved if the bail-out plan put forward by the Hon. Member for Laval-des-Rapides were to be accepted. When we are told that banks are now going bankrupt, Mr. Speaker, my response is this: if those banks go bankrupt it is because this Conservative Government has been intent on applying a political solution rather than an economic solution to that financial crisis which we are now going through. This is perfectly plain.
I will quote from an editorial written by Mr. Frederic Wagniere and published in La Presse on September 11, 1985. This is what he wrote:
By arranging the bail-out of the Commercial Bank in March, the Government did wrong, it made a disastrous goof.
Ottawa misjudged the situation: the Government underestimated the amount of capital needed to save the Commercial Bank, and it overestimated the banks'
willingness to save a competitor. That error in judgment is serious, and it is important that in the future, the Government, the Bank of Canada and the Inspector General of Banks should show a better understanding of our banking system.
And he concludes with the following remarks:
The Mulroney Government wanted to save a fledgling financial institution in a part of the country which finds it very hard to get over the impact of the depression.
So he said.
They overreacted by referring to a crisis of confidence in the banking system that only existed in their own imagination.
They will now have to live with the uncertainty which they themselves created.
This, Mr. Speaker, is the situation. It is clear. That journalist described it in a few words. We could have saved those banks had the Government acted more sensibly and more efficiently.
The Minister of State (Finance) (Mrs. McDougall) who introduced the Bill is not even here now, so I will refrain from making the charge I intended against her. I simply submit I have found her incompetent, irresponsible, and throughout the days that followed that bank fiasco, she has shown indescribable arrogance and self-complacency.
Today as we are told that a third bank is having problems, I think it is essential that the Government should assume its responsibilities and tell all Canadians that our banking system is strong, that it can overcome trials, that in spite of a few mistakes, the Government will learn from the painful lesson it was taught this summer, and will see that the situation is corrected to prevent any other bankruptcy in our banking system.
What I find totally incredible is that the Government is asking us to reimburse $875 million or so to persons unknown, to unidentified individuals and corporations. You know, Mr. Speaker, that under the current legislation, a small depositor who invests in a bank can be protected up to $60,000. Before concluding my comments, I would like to say this. The small depositors do not need the Bill now being considered. But who needs it then? The people who invested a few million dollars in that bank venture and are now sheltered under the cloak of anonymity by the Progressive Conservative Government. In my opinion, this is unacceptable, unfair, unspeakable and I shall vote against the Bill.


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I want to participate in the debate on this amendment to the bank bail-out Bill of Barbara's. The amendment proposed is correct, just, and fair. It says we ought not to proceed with second reading of this Bill, and I agree with that. Can we not have faith anymore in Conservatives being truly Conservative? Have they distroyed the confidence of the Canadian electorate that Conservatives would really act like Conservatives? Why can't Conservatives be true to their ideology? I know that
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Members over there have said they are red Tories and blue Tories, and some have even said they are "suppositories". But can they not maintain a basic Conservative principle, a principle which I heard all about during the last election and over the eight years I was here? They criticized the Liberals for it. They said the Government should stay out of business; it is free enterprise which is going to build Canada and we have to get the Government off the backs of business. The Government should not be involved in business. The business of business is business. So what do we have in Bill C-79? What are they proposing? What they are proposing is to insert themselves into the bankruptcy process.
We have a process whereby there is deposit insurance and depositors are insured up to $60,000. The Conservatives are proposing to go beyond that. They are saying to the business people, the large corporations of this country, you took a risk when you went after the high interest rates that the Canadian Commercial Bank and the Northland Bank offered, but it does not matter. We will insure that risk as well. It is all right to chase after the higher return. We will take the risk out of business.
In my riding two years ago when the major employer closed down for nine months, workers lost their homes. They lost their homes because they could not make the mortgage payments and no bank and no Government came to bail them out. Not one.
In this particular instance we have the spectacle of a Conservative Government wedded to the free market free enterprise concept and then running in to bail out its buddies from Bay Street and Wall Street.


An Hon. Member:: And maybe Saint-Jacques.


John R. Rodriguez: And maybe Saint-Jacques, the Hon. Member says. I accept the argument that some Conservative Members over there use that some of these depositors are municipalities like Kanata, some are hospitals and some are western credit unions. But why don't we apply the old Conservative truism that we pay on the basis of need? Why don't we apply a bail-out on a means test basis? Let the Citibank, the Chase Manhattan, Barclay's Bank, The Bank of Tokyo or The Bank of Singapore demonstrate a need. If they can prove that they need the 121 odd million dollars which have now been guaranteed by the Government, we would consider paying them. Why not apply the same principle which they were advocating for old age pensioners and for family allowances? Why not apply that to the Government's corporate friends? I suggest that Members opposite do that and not come in here and ask holus-bolus for a bail-out.
As well, this Bill is premature, because we now have a judicial inquiry into the whole collapse and bail-out of the Canadian Commercial Bank and the Northland Bank. Mr. Justice Estey is now conducting a judicial inquiry, and there are some very serious questions which need to be cleared up. One is the role of the Inspector General of Banks. What is his role, what is his function? What regulatory powers does he have and how does he use them? What is the role of the Bank
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of Canada in this mess? After all, it was the Governor of the Bank of Canada, Bouey the fourteenth, who was phoning The Globe and Mail at the time of the original bail-out last March and saying, oh, well, the CCB is a viable bank. What is his role in all this? What is the role of the Government in this whole mess? After all, it is the same Government which has put forward a Green Paper to deregulate the banking industry and allow the creation of all sorts of Schedule C banks. She wants to open it up now, to deregulate it, as if we did not have enough problems. Back in May, I believe it was, the Minister who approached Mr. Hitchman and asked him to go on the Board of directors of the Canadian Commercial Bank. He said: "No, I do not know enough about this bank and its loan practices; I would not think of doing that". In fact, that should have been a signal for the Government to take a good, hard look at the operations of that particular bank.
As we go through this judicial inquiry, all sorts of very serious questions are being raised. We require answers to those questions. What was the role of the Inspector General of Banks? What was the role of the Governor of the Bank of Canada? What was the role of the Government? What was the role of the auditors who were supposed to audit the banks? As a matter of fact, the auditors are quoted in Mr. Hitchman's Report as saying that the Canadian Commercial Bank was not as conservative in its loan practices as they would have liked. What was the role of the Minister of Finance (Mr. Wilson)? What was the role of the Minister of State for Finance (Mrs. McDougall)? These questions must be answered before Parliament can open up the Treasury doors and shovel out some 800-odd million dollars. That is just a down payment; the prospect is that this amount could run to $2 billion before it is all over. Parliament has a responsibility. When it spends taxpayers' money, it has to account for it. We, as Members of Parliament, are no wiser today about the smelly business in the Canadian Commercial Bank fiasco than we were about the tuna affair. The Government should not proceed with the Bill at this particular point. As I said, we need the answers to those questions. It would be wise to hoist the Bill until we have received the report of the judicial inquiry.
The matter becomes more curious as we go. For example, in this morning's edition of The Globe and Mail, we see the Minister of State for Finance or the Government running off to persuade banks to support the Mercantile Bank. It is like a house of cards. We now have the Government doing exactly what it did last spring. It is encouraging the banks and provincial Governments to support a shaky situation. The same situation is developing with the Mercantile Bank. According to The Globe and Mail this morning, "Ottawa persuaded banks to support Mercantile". Taxpayers need some answers. Parliament needs some answers. This Bill should not be proceeded with until we have received answers to the questions which we have raised in the House.
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, I am rising in opposition to Bill C-79

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which, as Hon. Members know, is a Bill to reimburse depositors with over $60,000 in the Canadian Commercial Bank and the Northland Bank. I am doing so because, as other Hon. Members have said, we are being asked to reimburse people who have not been identified. We do not know who they are.
It is very strange. We are being asked to vote for a Bill which is requesting between $800 million and $1 billion. On the one hand, the Government says that it believes in parliamentary reform, that Members of Parliament should be more involved in the process, that there should be a stronger committee system and so on. On the other hand, it asks us, as representatives of the Canadian people, to vote on this large sum of money without telling us who will receive it. We do not know whether they are foreign entrepreneurs, American, European or Japanese. We do not know even if they are large Canadian entrepreneurs. Entrepreneurs enter the market-place knowing that they have to take risks and knowing that the CDIC only insures deposits up to $60,000. These people put their money in the Canadian Commercial Bank because they would receive a benefit; a higher rate of interest, in certain cases. They took those risks as entrepreneurs. They knew about the CDIC limit of $60,000. We presume that there are large corporations involved, but we do not really know for sure. We are being asked to bail out these people by a Government which says that we must rely more and more upon the free market system.
As my hon. colleague who spoke earlier said, there is a certain ambivalence in the Conservative Party. That Party came to power and said that we must return to the free market system, that we should let the free market system be the ruling principle in business and economic matters. However, when we are faced with the bankruptcy of the Canadian Commercial Bank-and very likely, although it is not clear, a large number of corporate entrepreneurs are involved-the rules of the game change and we are asked to bail it out. This sets a very serious precedent for other situations of a similar nature which might arise.
Perhaps there would be some justification for helping small credit unions that are depositors, small municipalities or small pension funds, but we do not know how many credit unions or small municipalities are involved. In fact, we do not know how many large corporations are involved. We are being asked to sign a blank cheque of nearly $1 billion without the necessary information being given to us. We are supposed to represent Canadians in the spending of taxpayers' money, and we are being asked to write a blank cheque for the Government.
Last March, when the Government came to us and asked us to vote for a Bill, it was a crisis situation. I was led to believe that it was putting before us something which had been solidly researched, that the Government had done its homework, and that its proposals in March to bail out the Canadian Commercial Bank would put that bank back on its feet and make it profitable for shareholders and depositors. We took the word of the Ministers involved and of the Government that they had done their homework and that we had to vote quickly in order to put that bank back on its feet. We voted for it, but we were
misled by the Ministers involved. They did not do the audit which was necessary. They did not accept the advice of people who knew quite a bit about the situation. The Ministers did not participate in many of the negotiations which led to the bail-out package. We have the impression that the Prime Minister (Mr. Mulroney) and certain Members of the Government and of the Cabinet were willing to put forward the bail-out proposal at any cost, just to save face, in the hope-


The Acting Speaker (Mr. Charest):: Order, please. I am very sorry to interrupt the Hon. Member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand), who is a well experienced Member of the House. I remind the Hon. Member, as 1 did the Hon. Member for Papineau (Mr. Ouellet), that the Chair is in a very difficult position today in this debate. A royal commission of inquiry is proceeding on this very issue. The general principle remains the same, that there is liberty of debate in the House, but in this specific case there is also a royal commission which has as its mandate to investigate the whole matter. We are in a difficult position today. I remind all Hon. Members of the House not to refer to what the commission has, as its mandate, to investigate and not to prejudice the ultimate decision of this royal commission of inquiry.


Mr. Manly:: Mr. Speaker, I rise on a point of order. I can only respectfully submit, Mr. Speaker, that your limiting debate in this way means that what the Government is doing is a farce and the freedom of speech of the House of Commons is being impaired.


The Acting Speaker (Mr. Charest):: To make it clear, there are precedents on this very issue. To simplify what I am trying to say today, there is a royal commission of inquiry that has the mandate to look into this matter, to hear evidence and to submit a report. In view of this, it would not be appropriate for Members of the House, in the context of this mandate, to prejudge or, if I could use the expression, to jump the gun on the conclusions of the report. Since the commission has received this mandate, let us let it go on with its work. Therefore, 1 am asking Hon. Members to be careful. I do take into account the fact that in general it is a principle of this House that we do have liberty of speech.


Mr. Prud'homme:: On a point of order, Mr. Speaker.


The Acting Speaker (Mr. Charest):: The Hon. Member for Saint-Denis, on the same point of order, I presume?


Marcel Prud'homme: Yes, Mr. Speaker. I would like to submit, with respect, before the Chair draws any conclusions, that if this Bill is adopted, and it will be, despite the speeches of the Opposition and no matter how my Opposition colleagues vote, it will eventually have to be referred to a parliamentary committee. Does the Chair mean that a parliamentary committee responsible for considering a Bill referred to it by Parliament for consideration after second reading and that will
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have to go to work right away, would have to be limited in scope because there is a royal commission of inquiry as well? I find that absolutely incredible ... and you are getting close to a sub judice, since you called my colleague to order twice. Therefore, with all due respect, I find it rather hard to believe that just because there is a royal commission of inquiry, practically everything becomes sub judice, and that while in Quorum, which we get daily, the first page tells us exactly what happened yesterday, Parliament should be deprived of its duty to consider a Bill that is before the House. The Government introduced the Bill, not the Opposition. The Government asked for a commission of inquiry, not a royal commission of inquiry, but it was the Government that asked for and set up this commission. So I submit, with respect, since I know you have a legal mind and I think we should discuss this, that it was the Government's decision to introduce a Bill. It also decided to submit the entire matter to a Justice of the Supreme Court, and now we are being told here in the House, although it was in all the papers this morning, that the Members of the House of Commons, who have a mandate to consider a Bill introduced by the Government, may not allude to what is happening somewhere else-
I do not know how the Chair intends to decide or rule on this matter, but with respect, Mr. Speaker, I think that my colleagues should be allowed to continue their present approach to this debate, without considering what is happening elsewhere.


The Acting Speaker (Mr. Charest):: I shall, if I may, attempt a reply after listening with great interest to the Hon. Member for Saint-Denis (Mr. Prud'homme), who, as usual, has submitted arguments that reflect his experience in this House. Perhaps I may remind the House that I am somewhat reluctant to rise today and call Members to order on this question. I repeat that this is a very difficult situation for the Chair.
You are asking me a question indirectly, and since you mentioned my legal mind, I would like to inform the House that the Chair is not in the habit of making obiter dicta on questions that arise in the House, not on this matter or any other matter. Furthermore, we have the following situation: a commission of inquiry is considering a matter and will eventually have to submit recommendations. What we are asking the Members of this House today, and I suppose we cannot impose the same conditions on the media to which you referred, is that Hon. Members who have certain responsibilities and must observe certain traditions and rules refrain from prejudging the conclusions or recommendations yet to be made by the commission of inquiry, in other words, refrain from conducting a parallel inquiry. That is the main thing, and that is why 1 intervened in the debate. The general principle remains the same: you have the right to discuss the matter.
Certainly, there is a Bill before the House. That is clear. You have the right to discuss the matter, but you are being
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asked to be careful in your references to the commission of inquiry which has started its proceedings. 1 hope this has clarified the matter once and for all.
The Hon. Parliamentary Secretary to the Minister of Finance (Mr. Lanthier), to be fair, also on a point of order.


Mr. Lanthier:: On a point of order, Mr. Speaker. I did not object until now, for the debate was proceeding normally. However, in addition to your remarks which we fully endorse, perhaps the Hon. Member ought to be reminded that we are now on the amendment. I do not think he has been speaking directly to the amendment, he appears to be more interested in the main motion. I was called to order the day before yesterday, supposedly because the debate was on the amendment, nothing else. Perhaps he too should be called to order.


Mr. Frith:: Mr. Speaker, I rise on the same point of order. First, I think it should be clarified that the Estey Commission is a judicial inquiry and not a royal commission. Second, there has been a tradition in the House that despite the fact that the Government may wish to refer a very controversial item to a committee, the Opposition is still allowed during Question Period to put questions on the same matter.
Furthermore, and I do not say this with any malice, I think it is very important that those who are in the chair have some discussion prior to the beginning of the debate so that they have a common point of view. I would refer you to Hansard of the previous two days, Mr. Speaker. Believe me, Hon. Members of the House on both sides have not been inhibited from discussing the matter in the way that you are suggesting this Hon. Member must be inhibited at this time. 1 think it is very important that those who are going to be sitting in the chair understand exactly what the terms of reference will be and how we in opposition will be allowed to debate the matter. This is very confusing to all of us.


Mr. Waddell:: Mr. Speaker, I rise on the same point of order. I rise because I was once counsel to a royal commission which was looking into a controversial point and of course there were questions put in the House at the same time. 1 am personally very symptathetic to the Chair. I think in principle the Chair is right. However, the Chair is in an almost impossible position because this is a controversial matter on which a commission, judicial or royal, is sitting. We are debating the same matter. Of course, we have to approve the expenses regarding the matter. I think we all appreciate that.
I think that the Chair is going in the right direction in terms of setting out the parameters of the debate. With respect, Mr. Speaker, the debate is fairly wide open, but as you pointed out, references to the Estey Commission which would lead to the possibility of prejudicing its conclusions would be out of order. I think Members have to take a broad approach regarding the general issue but restrict themselves from actually referring to the Estey Commission and making specific recommendations to it. If they want to do that, they should appear before the

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Estey Commission. I believe that those broad parameters are acceptable to the House.


Mr. Allmand:: Mr. Speaker, I am resuming the debate that was interrupted by the points of order and your own attempt to call me to order. I might say that I appreciate the fact that there is a judicial commission looking into this matter. However, this Bill is also before the House and we have to vote on it. There is a certain overlap in the subject matter covered by the Bill and the subject matter of the judicial inquiry. The points I am trying to make are important for the debate because the Government is asking us to support a Bill which is a second attempt to deal with the Canadian Commercial Bank situation. I have to put on the record the fact that I am opposing this Bill at this time because we were misled the last time. I do not intend to be taken in twice. I have to put the facts on the record with respect to that point.
Finally, I would like to make it clear that under our constitutional system the Parliament of Canada is the supreme court of this land. There is nothing else which is more sovereign or more supreme under our Constitution than Parliament. We are not subject or limited in any way to any judicial inquiry or any royal commission. I do not want to suggest in any way that the commission be pre-empted from doing any work that it should do. However, I intend to put on the record as fully as possible in the short time that I have all arguments which relate to this Bill.
I have said that I felt we were misled the last time and I gave some examples with respect to that point. I also wish to say that the reason we were willing to believe the Government the last time was that we were told it supports regional banks. It was under Liberal Governments that several of these regional banks were set up. We think all the arguments for regional banks are good ones. It is not right to have westerners running to Toronto and Montreal for approval of loans and so on. I think that is wrong. In this country there is certainly a place for regional banks and we are in support of that. We went for the first bail-out on the information given to us, but we found out it was wrong. Again, I ask: Why did the bail-out group not consult the Canadian Commercial Bank's external auditors? Why did the bail-out group not look at the minutes of the Canadian Commercial Bank audit committee? Why did the Government and the Minister turn down the banks' offer of a full audit of the bank's books? I could go on asking questions.
What is interesting about this whole question is that if there was one thing that the Canadian people expected from a Conservative Government it was good economic management. We did not expect this Government to be strong on social policy. We did not expect it to be strong on foreign affairs or other matters; but we thought it would be a good economic manager. However, before us we have a situation in which the Government was sloppy. The Ministers were sloppy. They were negligent. They did not perform the audits required, nor did they do their homework. They were cynical and smug about the whole issue. They did everything quickly and they
asked us to vote for something. They asked the Canadian people to support something without doing the work which is required of responsible Ministers when a great deal of taxpayers' money is involved. What is damning about this whole issue is that the Ministers did it quickly without the work that should have been done in the first place. They did it sloppily, negligently and carelessly and now they are being asked to bail them out again.
The other question to consider is: Where will all this end? We are talking about between $800 million and $1 billion. If we accept the precedent that we must bail out depositors who are depositing over $60,000, where will it end? Is this just more ad hockery? Is this another situation in which there is no consistent policy on the part of the Government?
I do not intend to give a blank cheque to the Government. 1 will not ask the Canadian people to support any Bill which would give a blank cheque to the Government. I want to reach outside Parliament because it seems that with the large majority which this Government has, and with only 70 Members in opposition, the only way we can change the Government's mind is to appeal over its head to the people of Canada as we did with respect to the Bill to deindex old age pensions. 1 beg Canadians to look closely at this matter. I ask: What does this do to our priorities? The Government is asking us to spend $800 million on this matter. How does that line up with other matters such as family benefits, certain environmental questions, assistance to our native people and a great many other important matters which have to be undertaken in the country? Is this really where we should put $800 million or $1 billion? I say no; but I ask Canadians and our journalists to focus attention on these issues so that we can bring pressure to bear on the large group of Government Members who seem not to be saying very much in opposition to this very important question, even in contradiction to their own principles of free enterprise and the free market system. They are willing to violate that principle in this case because it is politically expedient to do so.
We will vote in favour of the amendment put forward by the Right Hon. Leader of the Opposition (Mr. Turner). We will not vote in favour of the Bill because we are not receiving the information we want. We do not know who will be the beneficiaries of this Bill. We feel it is contrary to all the principles of parliamentary responsibility to support a Bill such as the one before us.


The Acting Speaker (Mr. Charest):: Resuming debate, the Hon. Member for Vancouver-Kingsway (Mr. Waddell).


Ian Gardiner Waddell: Mr. Speaker, thank you for recognizing me as the next Member to speak in this debate. The amendment presented states that this House declines to give second reading, that is, approval in principle, to a Bill, the principle of which is to permit payments of large, but unspecified amounts of public moneys to unspecified persons or corporations, thereby substantially denigrating parliamentary accountability for expenditure of public funds. I think
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it is a good amendment. I will vote in favour of it and 1 wish to tell Hon. Members why.
Before I do that, I would like to address some remarks covered by the press this week. I am referring to remarks made in Vancouver by Mr. Edward Kaiser who is the Chairman of the Bank of British Columbia. Mr. Kaiser registered his concern with respect to the whole issue before us, he being the chairman of a small western Canadian bank. He criticized parliamentarians for attacking the Government on this issue. As a Member of Parliament from Vancouver where that bank is based, I would like to spend a few moments addressing Mr. Kaiser's remarks. I wish to say to him and to the House through you, Mr. Speaker, that I agree with him and I disagree with him. I wish to tell the House why.
I agree with him in the sense that it is pretty clear that we need to have some stability and confidence re-established in the Canadian banking system, especially the regional banking system which, as the previous participant in the debate expressed in his speech, is very important for the economic viability of the country, especially for the western Canadian region. Like Mr. Kaiser I, too, am unhappy with the rumours about the liquidity of the Bank of British Columbia, the Mercantile Bank of Canada and the Continental Bank. I wish to say to Mr. Kaiser that we have not been saying that there are problems with those banks. As far as I know there are no problems being experienced by those banks, especially the Bank of British Columbia which, I understand, is in an excellent position. I used to have an account in Mr. Kaiser's bank. When I return next week to Vancouver I tell Mr. Kaiser that I will place a little bit of the little money I have-being a Scotsman I don't have that much and I am careful with where I put it-in his bank to show my good faith in the Bank of British Columbia. I think it is a strong and important bank. I want Mr. Kaiser to understand that we are saying that.
I also want Mr. Kaiser to understand that our job here in the House is to ensure that the Canadian banking system is working. When one looks at the fact that we are being asked to spend $1 billion to bail out another bank-and we bailed one out a few months ago-and when we look at some of the evidence upon which I will comment later, about the banking system and banking practices in Canada, then it seems to me it is worth doing this job. It is a job which the Opposition is undertaking, not with relish. We do not want people removing money from their bank accounts. We want a strong Canadian banking system. We want a strong economy in western Canada.
I wish to buttress what I have been saying with an article from The Globe and Mail. I will just read the first paragraph. It says:
The long-awaited Hitchman report on the Canadian Commercial Bank paints a damning portrait of a financial organization in which the files were a mess, senior officers and directors alike endorsed questionable loans and executives did not know how serious their problems were.
I will not go into the details of that. I only raise it to show that it is our job in the Opposition to ensure that these inadequacies with respect to the banking system will not
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happen again. It is our job to put the Government on the hot seat in order that it will respond. The Government has a problem in a general way. It was giving very soothing assurances through Government regulators that these two western banks were in good shape. Contrast that, Mr. Speaker, with what is coming out in the Hitchman Report. The Government gave the word of the Governor of the Bank of Canada earlier on this year when it first bailed out the Canadian Commercial Bank. The argument the Government makes, I suppose, is that it agreed that these banks would be okay and, therefore, when the banks finally collapsed, it should morally and ethically bail out the depositors, not just for the $60,000 for which they were insured, but for the full amount of their deposits. That, of course, is unusual in the free market system where when people invest they take risks and if they lose, they lose, and if they gain, they gain. But the Government feels morally and ethically bound to bail out these banks, and that is one of the central parts of this debate today.
The second argument the Government would make, I suppose, is that it has to bail out these banks to the full extent of the deposits in order to ensure the stability of the banking system, which is the greater goal. I would think that these are the two main arguments of the Government and I would say they are false and dangerous arguments.
What do the people say in my riding? A 58 year old labourer who is unemployed asks, "Are you going to bail me out of my mortgage situation?" Someone else who is unemployed asks, "Are you going to bail me out? I don't have any money and I can't get another job". I know of a bank employee who was fired after 30 years of working for the bank because she had a nervous breakdown. Did the bank bail her out? Did it provide an early retirement and look after her? No, it just got rid of her. Ordinary Canadians look at these situations and ask, "Who is getting bailed out?" By and large, as far as we can figure out, after a lot of effort on the part of the Opposition and stonewalling on the part of the Government, we are bailing out foreign banks. We are giving a lot of money to foreign banks and to rich people. There may be a few poor people who could use their life savings and so on and perhaps we should establish a hardship fund for those people. But by and large these foreign banks do not need a hardship fund. The large Canadian banks are making lots of money presently and have in the last decade. We do not have to bail them out in this situation.
There is a feeling amongst the ordinary Canadians in my riding that there is a tremendous inequality here. Why should we bail out these people when we do not even know who they are? And we have evidence that we are basically bailing out foreign banks. The ordinary Canadians say that that is not fair. So I say to the Government, with respect to its argument, that it has to do this to keep the stability of the banking system that we must reform the banking system. We have to create a better regulated banking system. Some of the practices which were revealed by the Hitchman Report will be reported on in greater detail, such as speculative real estate loans, loans to

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companies in California and loans which were bad in the beginning and so on. We have to change the system which allows those things to happen.
The Minister of State for Finance (Mrs. McDougall) said in the House that she inherited this terrible system. I am distressed when the Associate Minister of National Defence (Mr. Andre) stands up and blames it all on the National Energy Program and on us for supporting that program. We in the New Democratic Party did not support the National Energy Program. I have the votes here to prove it. That is a myth. I ask Hon. Members to take a look at the record and the votes. The National Energy Program hurt western Canada, that is true, but at the same time Alberta's problem is that it had a boom and bust situation. There was a boom and bust situation going on in the American oil industry at the same time. These banks were investing in real estate. They were going down to California to invest, and that did not have anything to do with the National Energy Program. It is simple to blame the National Energy Program and to say that we are somehow anti-West because we feel we must look into the bail-out of these banks, but that is a red herring.
I would like to say in summation, Mr. Speaker, that we in the Opposition will not be fooled a second time. We are not going to agree to this bail-out. We were fooled with the first bail-out but we will not be fooled with this bail-out. If the Government asks the ordinary Canadians it will find out that they do not like bailing out foreign banks and real estate speculators. We are prepared to keep this debate going and to resist this legislation as much as we can. I tell Mr. Kaiser in summation that he should look at the Opposition's role in that respect. I will send him a copy of my speech and if I get a chance to speak again in this debate, I will read his reply into the record.


Marcel Prud'homme: Mr. Speaker, the Hon. Member for Vancouver Quadra (Mr. Turner) presented a motion which I will read slowly so that we can all understand exactly what it states, and I quote:
This House declines to give second reading to a Bill, the principle of which is to permit payments of large, but unspecified amounts of public moneys to unspecified persons or corporations, thereby substantially denigrating parliamentary accountability for expenditure of public funds.
I have not heard any Hon. Member speaking about what unites all of us here in this Chamber, and that is, the great tradition of the British parliamentary system. What we see at this time is a slow erosion of one of the best political systems, the Canadian parliamentary system which is based upon the British parliamentary system. The basic principle of the British parliamentary system is accountability. But the Government is asking us to vote blindly certain sums of money to unspecified persons or corporations. That is totally against the principles of this parliamentary system.
It is the duty of the Canadian Government to justify every expenditure of money. It is the duty of Her Majesty's Loyal Opposition and the other Opposition Party to oppose this Bill if we do not know what the money will be used for or who will receive it.
I will not, Mr. Speaker, talk about the event which took place yesterday in court. Mr. Hitchman was the first witness and others will come along and say something else so I do not want to prejudge anything, but he clearly said yesterday that the real subject matter was not what we were told in recent weeks. My colleague and friend-the name of his riding is so long I would rather say the Hon. Warren Allmand, but the rules say that I must say my colleague, the Hon. Member for Notre-Dame-de-Grace-Lachine East-said many of the things I wanted to say so I will not repeat them except to say that we were, in our evaluation, fooled once. There is a proverb, and my colleague from the NDP just said it, that we will not be fooled again. We all know the proverb that says, you can fool me once and shame on you, but if you fool me twice, shame on me. I can tell you that the Opposition will not, without fighting to the very last minute, be fooled twice.
You have heard recently, and my very good friend the Right Hon. Prime Minister (Mr. Mulroney) himself said, that the Opposition is against the interest of the West. I think my friend from Notre-Dame-de-Grace-Lachine East very clearly said that we created these western banks and we were very pleased and proud, and no one is going to say that we are happy to see them in difficulty. We created them because we believe that everyone should have an equal share, not in the wealth of this country but in the decision-making power centre, and that is why it was so important to have these two banks and other financial institutions created in the West. It was in the interests, first, of the West, but of course also in those of the majority of Canadians.

Mr. Speaker, we do not think we should vote blindly, and for the benefit of my French-speaking colleagues and our viewers I want to repeat the motion of the Right Hon. Member for Vancouver Quadra (Mr. Turner), the Leader of the Liberal Party, the Leader of the Official Opposition. As he said to the House, we maintain that:
-this House declines to give second reading to a Bill, the principle of which is to permit payments of large, but unspecified amounts of public monies-
-and I emphasize this-
-to unspecified persons or corporations, thereby substantially denigrating Parliamentary accountability-
Mr. Speaker, how can I explain, how can the Ministers and Government Members, how can we Members of the Official Opposition and of the New Democratic Party explain to our constituents that we are about to vote blindly on a piece of legislation whose economic impact will be far-reaching? We are talking about at least $875 million to be paid to people whom we do not even know, foreign banks, American banks which are not even prepared to cooperate with Canada and tell us how such deposits could have been made with those branches and those banks. They want to keep us in the dark, but the Government is getting ready to pay them huge amounts of money.
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Have we thought for a moment what we could do with that money? What can we tell other Canadians who call us to ask: Listen, I made a bad investment recently, the deal went sour. Now that precedents are about to be created, will the Government come to my rescue? How do we answer those people?
What can we tell them? I might say that the present legislation is sound, it was introduced by the previous Government. All those who have savings of less than $60,000 can sleep tight, they are fully insured. But the others who were prepared to take a chance and invest millions of dollars because the yield was better are having second thoughts now that things are going badly. They expect the Minister of State (Finance) (Mrs. McDougall) and the Prime Minister to come to their rescue, because everything goes these days, a real free for all. I see my colleague is smiling, but the fact is that we do not know what to expect next, anything can happen when the truth is hidden. Who are those people who pleaded with the Minister of Finance to have this Bill adopted? Who are those big wheels, those rich people? We can believe anything. Who pleaded with the Prime Minister who said to him: "Save us, we wanted to run a risk but things turned out badly, now please save us!" I remember that when the Opposition parties requested an emergency debate on the disasters befalling both those banks, the Government flatly refused. More than five Members opposite having risen and asked for a vote, the bells rang for a few moments and suddenly the Government changed its mind and asked us not to proceed with a vote because they would allow that emergency debate. We refused, we asked for a vote and the Minister of Finance as well as the Minister of State (Finance) after having said there was no emergency that afternoon, cringed and voted with the Opposition saying that there was cause indeed for an emergency debate.
We then saw the Minister of Finance leaving this House not to return; we saw the Minister of State (Finance) engaging in debate while she should have quieted the fears, because a Minister of Finance in Canada should not be as partisan as some of us may sometimes be. She was there to comfort us but that evening she delivered one of the worst partisan speeches that I have ever heard from a Minister of Finance during my 22 years as a member of Parliament.
1 would then say to you, Mr. Speaker, that the Opposition is not in the mood to vote blindly for that Bill. We will continue to demand, Mr. Speaker, by all possible means at our disposal under our Standing Orders, we will continue to demand- [English]
-demand, not request, but demand from this Government that we want to know to whom we are giving this money. People wish to know. The electors, the Canadian voters, are requesting us to fight in this House and not blindly vote sums of money to unknown people, unspecified corporations or persons. You can be assured, Mr. Speaker, that we are not going to rest and let this Bill go without fighting with every means at our disposal.
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James Douglas Manly: Mr. Speaker, I welcome the opportunity to make a few comments on Bill C-79 which provides for a bail-out of incompetence in these banks and in the Conservative Government. To be specific, we are dealing right now with an amendment which says that we do not give consent to second reading of this Bill. However, it is important to remember just what we are discussing here. We are discussing a bail-out which will cost some $875 million of taxpayers' money to pay depositors who had more than $60,000 on deposit at either the Canadian Commercial Bank or the Northland Bank. We must remember that depositors of up to $60,000 are fully covered by the Canadian Deposit Insurance Corporation and those who have more on deposit are covered for the first $60,000. Very few of the people in my riding will ever have more than $60,000 on deposit in any bank.
Upon looking at the very incomplete figures that have been provided through the profile of depositors in these two banks, we Find that this Bill is far from helping the little people of Canada. Seventy per cent of the funds will go to Canadian banks, foreign banks, investment dealers, large corporations, and provincial Governments. We must remember that this Bill does not deal with the needs of ordinary Canadians who, if they are lucky enough to have any money in the bank at all, very seldom have more than $60,000 on deposit. The $875 million which is called for in Bill C-79 amounts to asking every man, woman, and child in Canada to pay over $30. I apply that figure to my riding and ask what could be done with an additional $3 million in that area in terms of job creation and economic stimulus and in terms of helping community groups which are trying to develop alternate economic strategies in the face of the massive collapse of the economy which took place in British Columbia over the last two or three years.
Thirty dollars for every person on Vancouver Island would amount to $15 million. For the last year we have been thinking of the proposal of the Vancouver Island mayors that the federal Government should contribute to the $22.5 million forestry program that they have suggested. They feel that that program would provide jobs today and tomorrow, would ensure our forestry resource base, and would work toward a solid economy for that region. That program has been endorsed by the provincial Government, although that Government has not contributed any money to it. The Minister of State for Forestry (Mr. Merrithew) in the Conservative Government says that it is a good program, although he has only given the magnificent sum of $1 toward it. This money would really help the economy but, instead, the people of Vancouver Island are being asked to pay their share of this national bill for two incompetent banks. Instead of money coming on to Vancouver Island to help revive the economy, an extra $15 million is going off the island to bail out the incompetence of the banks and of the Government.
I respect your request, Mr. Speaker, that we be cautious and prudent in reference to the Estey Commission which is dealing with this subject. However, I want to emphasize that the

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Government has put both yourself as Speaker, and us, as Members of Parliament, in a very difficult position by proceeding with a Bill with which we so strongly disagree at the same time as the subject matter is referred to the Estey Commission. Your request, Mr. Speaker, that we be very cautious and prudent in referring to some of these matters gives a point to the amendment that we are discussing, namely, that we not give agreement to second reading at the present time.
I have no desire to prejudice the results of the Estey commission, but I think that some of the initial evidence that has been heard by that commission is most relevant to our debate on Bill C-79. We on this side would be most remiss if we did not bring that to the attention of the Canadian public. Hon. Members opposite should pay particular attention to some of that evidence, and I would like to see some of them on their feet, either defending it or asking questions of the Government. I am sure that in the ridings of all Hon. Members opposite the preponderance of people are facing very difficult times. How do they square their consciences with going into their ridings and saying that they will be taking $30 from every man, woman, and child to bail out a couple of incompetent banks because the Government made a mistake last month? I would like to hear some Conservatives saying what they think about this Bill.
Yesterday there was evidence presented to the Estey inquiry by Mr. Hitchman, whose report was made available to the Minister of State for Finance (Mrs. McDougall) on August 12. That report gave a very clear picture of a bank that did not know what it was doing, and when it did know what it was doing it was doing things wrongly. I would like to read very briefly from a summary of things contained in this report on the bank. It says that:
-almost half of the Edmonton-based CCB's loans may have been worthless at the end of May, even after a March rescue organized by the federal Government had taken $255 million of bad loans off the CCB's books.
Of the $2.4 billion in loans on the CCB's books, the retired bankers said, either $910 million or $1.06 billion-depending on which calculation is used- should be written off.
But they quoted CCB President Gerald McLaughlan as telling them in July that the bank was planning to make provisions for loan losses of only $45 million this year. In its last annual report, a year ago, the CCB allowed for only $14.8 million in loan losses.
The Hitchman Report says that these problems did not arise in the last little while but, rather, some of these loans were problem loans the day they were made. The summary continues:
During the same seven-month period from October to May, non-earning loans-those on which the CCB was not collecting interest-rose from $147.8 million, 6.26 per cent of its loans outstanding, to a staggering $458.2 million, 19.31 per cent of the total. Of the 84 loan accounts reviewed by Mr. Hitchman and his colleagues, 28 had no financial statements attached, 11 had financial statements more than a year old and the other 45 included financial statements, but lacked enough detail to make a proper assessment of the loans. Only Canadian loans were studied, since there were no files in Canada for any of the CCB's loans in the United States.
The report pointed to some of the unacceptable practices. It said:
It was also unacceptable to collect past due interest and provide for future interest payments simply by increasing the amount of the loan and to collect a fee on such loans, subsequently including such fees in the bank's profits and raising the amount of the loan.
In other words, Mr. Speaker, this is a picture of both incompetence and some rather cute practices on the part of the bank. This report was in the hands of the Minister in August, but she took no action until the Labour Day weekend. Now we are being asked to approve this Bill, which will require $30 from every man, woman, and child in Canada. An $875 million bail-out for that kind of incompetence is not something that we can agree to.
I have received letters referring to this kind of bail-out as a betrayal of Conservative principles. It certainly is that. 1 contrast that with the treatment of people on Vancouver Island who invested in Victoria Mortgage Corporation which was incorporated under British Columbia law. When that failed, they had no deposit insurance because it was not registered with the Deposit Insurance Corporation. Yet, because the people who invested in Victoria Mortgage are relatively unsophisticated investors, they lose everything. The people we are talking about, who invested in CCB, had over $60,000 invested. They should have known better. However, we are rushing to provide a bail-out of $875 million for them. Nothing is being done for other people, like those with the Victoria Mortgage Corporation. The contrast is unacceptable. We find the Bill unacceptable.
[ Translation]
Mir. Jacques Guilbault (Saint-Jacques): Mr. Speaker, I also want to speak for a few minutes on Bill C-79. First, I wish to say that ten-minutes speeches on such an important subject seem too short in my view.
My leader, the Leader of the Official Opposition (Mr. Turner), has moved the following amendment in the House:
This House declines to give second reading to a Bill, the principle of which is to permit payments of large, but unspecified amounts of public monies to unspecified persons or corporations, thereby substantially denigrating parliamentary accountability for expenditure of public funds.
First, Mr. Speaker, this amendment describes very clearly the position of the Liberal Party of Canada, which is to oppose this legislation, since a reasoned amendment such as this one objects to the very principle of a bill. We oppose this bill because what the Government is essentially asking us to do is to agree to a blank cheque of $875 million which would then be shared among a large number of depositors, even though we do not know their names or the amounts each one would receive.
Government Members are still hiding behind the confidentiality provisions of the Bank Act.
I must point out, Mr. Speaker, that the Official Opposition has at no time before, neither in the House of Commons nor elsewhere asked for publication of the names of the depositors
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or the amounts of the deposits in any bank in Canada. We are making this request now because this is a quite abnormal situation. As the representatives of the people, we simply want to do our duty which is to know where this money is going, how it will be sent and why.
Mr. Speaker, we are faced with a liquidation situation. The Government has therefore decided to do with a bank what creditors do with a business which is having problems and can no longer repay its debts. A bank in liquidation is like a business which is going bankrupt, and in such a case, the creditor who wishes to recover part of the money he is owed must make an application and expect this name to be published. This is always the case. We therefore suggest that, in abnormal conditions such as a bank liquidation, the Government has no choice but to provide Parliament with the names of all depositors who wish to be reimbursed and the amounts they will claim.
Why are we faced with liquidation? Because the Government made a wrong decision and decided to overlook the recommendations of the Hitchman report the Government itself had asked a great expert in the Canadian banking situation to prepare. Mr. Hitchman had examined the various options open to the Government. Of course, there was liquidation, but there was another solution he found much more logical and which he recommended, but it was unfortunately not the one chosen by the Government. As concerns liquidation, Mr. Hitchman did not recommend it and pointed out two dangers of such an action. First, the cost would be very high, and these are his exact words:

"The cost is unknown now but will be a very large sum of money". The phrase "very large sum" is printed in block letters in his report. He also went on to say that if the Government chose the liquidation route, "We would be dependent on the ability and the resources of people in the liquidators' organizations who have no experience in liquidating assets of a bank in Canada".

This means that this Government, in spite of the warnings given by the expert who had been asked to report, has chosen to override his recommendations and done the opposite of what Mr. Hitchman had recommended. Because actually Mr. Hitchman recommended a two-point plan. First, the assets, other securities and loan portfolio should be assigned to the six chartered banks, and divided among them in order that they may manage them. The Government has chosen not to follow that recommendation.
Also, Mr. Hitchman suggested the setting up of a task force with genuine powers, the responsibility of which would be, first, to take over complete control of the operations of the Canadian Commercial Bank, to dispose of the remaining assets and to report every month to the Minister of State (Finance) (Mrs. McDougall). Also, he recommended that an
Depositors Compensation
investigation conducted concerning the operations of the Canadian Commercial Bank, with a report to the Minister of State (Finance). How is it, Mr. Speaker, that the Government, after hiring such a recognized expert as Mr. Hitchman, decided to override his recommendations, to come before Parliament and ask for a $875 million blank cheque, with the idea that we, Opposition Members, were going to forfeit all our responsibilities, which are to monitor public expenditures?
In fact, I am asking these questions, Mr. Speaker: What are this Government's priorities? Are they concerned with helping those who are most in need? This is not clear to me, from the measures the Government has put forward until now. Are its priorities, for instance, concerned with helping families in need? This does not seem to be the case, because they intend to deindex family allowances. They even intended to deindex old age security pensions. And they only backed down when there was a public out cry. Do they intend to prevent job losses that are occurring throughout Canada, and most tragically now in the East End of Montreal, where the industrial base is being eroded? No, Mr. Speaker, those do not seem to be the priorities of this Government which stated only two days ago, through the Minister of Energy, Mines and Resources (Mrs. Carney), that it was not ready to help Motoco buy the Gulf refinery, an operation which would save 450 jobs.
In fact, the Government's priorities seem to be to compensate large depositors, the ones with deposits exceeding $60,000, because all the smaller depositors are already reimbursed under the Deposit Insurance Act.
In fact, what I think the Government is trying to do is to conceal its previous errors. The Government, which arranged a poor bail-out program that has actually flopped, is now cornered. They were scared to do what they had to do, which was to follow Mr. Hitchman's advice. It would have required a lot more courage, a lot more competence from the Government, to ensure for months on end the day-to-day monitoring of a faltering bank, and thereby to protect all its depositors and by the same token the average taxpayer of Canada who would not have had to contribute such large amounts as this Government is now getting ready to pay out. The reason is the Government goofed beyond measure when it arranged that rescue package, and is afraid of following the appropriate recommendation, which is to keep the Canadian Commercial Bank in operation, to ask chartered banks to continue their support and extend their technical help to the Canadian Commercial Bank. It was this same Government that turned down an offer by the chartered banks to inspect the loan portfolio of the Canadian Commercial Bank. It was an ill-considered rescue package, and with the legislation now before us, history is repeating itself.
It is no surprise, Mr. Speaker, that on this side of the House, we are unwilling to accept the legislation put forward by this Government. It is an ill-conceived Bill. We are going to fight against it, and we are committed on behalf of the Canadian

October 10, 1985
Depositors Compensation
people to ask here and now a number of questions from the Government. Why did they not follow the recommendations presented to them? Why did the Government choose the winding-up route, which was considered as most dangerous by the expert, Mr. Hitchman? The Government will have to answer all those questions before they can expect the Official Opposition to give their support and allow them to sign a $875 million blank cheque. We will not accept that, Mr. Speaker.


Hon. Jean Lapierre (Shefford):: Mr. Speaker, it is somewhat unwillingly that I take part in this debate which, as my colleague the Hon. Member for Saint-Denis (Mr. Pru-d'homme) pointed out, is breaking with all Parliamentary traditions. How is it that we are called upon today to deal with Bill C-79, Mr. Speaker? I feel it is important to remind the House of the events which have culminated in this colossal fiasco.
Last March, Mr. Speaker, the Minister of State (Finance) (Mrs. McDougall), the Minister of Finance (Mr. Wilson), and the Prime Minister (Mr. Mulroney) gave the House every assurance that the Commercial Bank of Canada could and would be saved. Based on these assurances, Hon. Members on this side of the House decided to go along with the Government, because they felt it was necessary to save this institution and because they thought these three individuals had done their homework.
You can imagine just how surprised we were when we realized a few months later that, not satisfied with lying deliberately to the House, the Government had failed to do its homework and created a mess which will cost Canadian taxpayers an arm and a leg.
Mr. Speaker, we have learned, to our dismay, that the Minister of State (Finance) has put together a package to bail out the bank without even checking the bank's books. We have learned also that at the height of the crisis, the Minister of State (Finance) has failed to keep abreast of the new developments, preferring to go to Europe at a time when $1 billion in our taxpayers' money was in jeopardy. In my opinion, this was the epitomy of irresponsibility!


An Hon. Member:: Absolutely!


Jean-C. Lapierre: Today, the House is being called upon to make up for the blunder of the Minister of State (Finance) by asking the Canadian people to spend $875 million.


An Hon. Member:: That is outright incompetence!


Jean-C. Lapierre: Mr. Speaker, that is certainly the biggest bill Canadians have ever had or will ever have to foot to save the skin of an incompetent minister. If you listened to what they are saying throughout the land, you would realize that they are not at all happy with the part they have to play in this cover-up operation and the contribution they will have to make at the end of the line.
Mr. Speaker, we know that these decisions were made hastily-


Marcel Prud'homme: The Government panicked.


Jean-C. Lapierre: We know the Prime Minister was too busy taking care of his image at the Economic Summit to spend time on this particular question which has now come before the House. Mr. Speaker, what is the Prime Minister asking us to do today? What is the Minister of State (Finance) asking us to do? They are asking us to save their skins, and to spend $875 million, not for the little guy but for depositors who had more than $60,000 in the bank, for depositors who knew that deposit insurance would cover the first $60,000 and who decided to take a risk in order to get a better rate of interest.
Mr. Speaker, today, this Government has the nerve to ask Canadian taxpayers to please save these money bags! Mr. Speaker, it is a little like telling the Minister of State (Finance) to go to Las Vegas and if she played for money and lost, not to worry-the Government would pay the bill. Mr. Speaker, that is exactly what the Minister of State (Finance) is asking us to do today. In fact, what she is asking is even more incredible, namely that we give her a blank cheque. Last March she told us: "Just trust me, I'll save the bank", and today she is telling us: "Trust me, I am going to make payments as I see Fit". We all find this rather alarming, Mr. Speaker. Why should taxpayers trust a Minister who deceived them once before, and tell her: Sure, we will give you a blank cheque for $875 million and you can give the money to whomever you want.
Mr. Speaker, this is . . . My hon. friend says that is the price you pay for incompetence. I must say it is a very high price. In fact, it is hard to imagine what $875 million represents. Well, you could build 15,000 homes and buy 100,000 cars with $875 million. Mr. Speaker, that amount of money would pay for all kinds of projects in ridings throughout Quebec.
I see the Hon. Member for Drummond (Mr. Guilbault) is in the House, and I am sure that he would prefer the money to be used to support projects in his riding. I am sure the Hon. Member for Argenteuil-Papineau (Mrs. Bourgault), whose riding needs funds for highway construction and that sort of thing cannot vote in favour of given away $875 million to anonymous recipients. Mr. Speaker, I know that you yourself have projects you are concerned about and that you will not approve this particular priority of this Government.
Mr. Speaker, I think we have here an example of glaring incompetence, and we must ask ourselves: What duties does me have as the administrator of public property and public funds? Does this Government have the right to use taxpayers' money to compensate a minority that is better off than the average taxpayer in this country? Is it morally correct to take money out of the pocket of the small taxpayer and give it to somebody else who already has more than $60,000 in a bank account? In my judgment, Mr. Speaker, that can only be done by someone whose conscience is asleep or who has something to hide. Never in this Parliament have we heard of a Government asking the House for a blank cheque. 1 doubt whether a
October 10, 1985

responsible Member would agree to give the Government a blank cheque. For instance, I know that the Hon. Member for Drummond would never sign such a blank cheque in his own business dealings. Knowing his business acumen and his sense of equity, I would expect him to oppose this measure.
We are creating an unbelievable precedent, for I am sure you too have read this morning's newspaper reports about other institutions being in trouble. We have all heard the interview given this morning by the Parliament Secretary to the Minister of State (Finance). He told the people of Quebec and the people of Canada that they should not depend on the banks. People used to say that the banks were as sturdy as a rock-


An Hon. Member:: Who said that?


Jean-C. Lapierre: The Hon. Member for LaSalle (Mr. Lanth-ier). One has to wonder. He said that this morning. Can you imagine! Mr. Speaker, the Parliamentary Secretary himself has reservations about the credibility of our banking institutions. In his capacity he attends all Department briefings and has access to data unavailable to the House. Mr. Speaker, I am worried after hearing such a categorical statement from him. 1 hope, Mr. Speaker, that you have conveyed to your constituents the wise advice of the Parliamentary Secretary to the Minister of State (Finance), to the Minister of Finance, because when an authorized spokesman for the Government questions the soundness of our banks, I am concerned. I have dutifully conveyed the message to my constituents following that interview.
1 think Bill C-79 cannot be allowed to go through subsequent stages. I do not think we can support that Bill and all Members of Parliament, even Government Members, should listen to their conscience and assume their responsibilities.
Mr. Speaker, accountability exists in public affairs. We are asked to give up that principle and I hope that during the discussions which will go on and on for months, because Canadians will never accept... and we hope that they will convince the Government that they are not ready to sacrifice themselves.


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, on the subject of nuclear tests it is interesting to note that, of the 1,507 nuclear tests so far, India has held one; China, 29; the United Kingdom, 38; the Soviet Union, 556; and the United States of America, 756. The proposed nuclear test in the Pacific to be conducted by France any day will be the 128th nuclear test by France.
It would be difficult to find one Member of the House who supports nuclear tests or, indeed, one Canadian who would have any positive feeling for the impending test by France. Therefore, I call upon the Secretary of State for External Affairs (Mr. Clark) to speak up for all Canadians and register publicly Canada's strong disapproval with the French Government, and indeed rejection of the proposed nuclear test in the Pacific. It is sheer lunacy to proceed with a 128th nuclear blast, which ultimately contaminates the environment, driven by a senseless race for more destructive power, mindless of the long-term consequences and danger to mankind and the ecology.
These are the reasons we have to speak up as a nation every time a nuclear test is planned. The record of 1,507 nuclear tests so far-


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



CONSUMER AFFAIRS


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, today the National Anti-Poverty Organization is blitzing Parliament Hill to advise Members of Parliament and the media of its concern about income tax discounting. Its campaign is not a new one. The organization brought the attention of the former Liberal Government to this pernicious practice, and it has been calling upon the Conservative Government since the day it was elected to take steps to stop this rip-off of some of the poorest people in Canada of their income tax refunds.
It is the poor people who feel they cannot wait for a month or two to obtain their income tax refunds. They go to tax discounters who take a very substantial fee off the top for giving them their refunds. Among those who are hurt the most are those people who obtain almost their entire refund from the child tax credit.
It has been estimated that tax refunders obtain $20 million of the $41 million which they earn per year from people who cash in their child tax credit. The Government of Quebec and the Government of the United States have forbidden that

October 10, 1985
practice; they passed legislation prohibiting discounting. I call upon the Government to stop this practice-


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



NATIONAL FAMILY WEEK


Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, I would like to take this opportunity to underline an event we are celebrating for the first time in Canada, National Family Week.
It must be recognized that the family is an important concept for Canadian men and women. The family is the basis of our society, our starting point in life and the focus of our growing environment. It is within the family that we learn about sharing, love and compassion.
Mr. Speaker, during National Family Week, we must also realize that the family faces all sorts of challenges in our society. Yet, it is a delicate entity in need of protection. The family is the most precious institution of our society. The family is a cell, and its members take care of their children and are proud of them. They are proud of their growth and their success. Mr. Speaker, we rarely recognize the value of the most important cell in our society, one which is at the very root of our personal and collective development.
This week is an appropriate occasion for all Canadian men and women to do some personal reflection on the important contribution of the family to our society.



REFORM OF THE HOUSE OF COMMONS


Mr. Reg Stackhouse (Scarborough West):: Mr. Speaker, yesterday the House focused its attention on the Government's comprehensive response to the second and third reports of the Special Committee on Reform of the House of Commons. Well deserved recognition was given to the work of the chairman and members of that committee. I should like to take a moment to add recognition of the Prime Minister (Mr. Mul-roney) for the active interest which he took in the work of that committee from the time it was convened until it reported. Without his commitment, it might well have not been formed as a committee. Without his commitment, its reports might well have not been implemented.
It is part of our tradition and our Constitution that our Prime Minister is a Member of Parliament. Some Prime Ministers throughout history have taken more interest in
Parliament than others. I pay this brief tribute to acknowledge the work of the Prime Minister who involved himself actively in the work of his fellow Members of Parliament.


DIGNITY AND ECONOMIC EQUALITY
Mrs. Lucie Pepin (Outremont):: Mr. Speaker, I would like to reply to the Prime Minister (Mr. Mulroney), who stated last weekend that he had done more in one year for the pride and the economic equality of women than all previous Governments-


Some Hon. Members:: Hear, hear!


Lucie Pépin: Not at all!-and who challenged anyone to contradict him. This is what I am about to do.
I shall be practical and honest. Very few things have been done by the Progressive Conservative Government for women, beginning with the percentage of women appointed to important positions, which is about 20 percent.
In my opinion, the meeting of Conservative women last weekend was very significant in this regard. There was no mention of the Divorce Bill, the Prostitution Bill, the deindexing of family allowances and the reduction in the grants for Planned Parenthood, and so on.
The Prime Minister seems to forget that he is no longer in the Opposition and that promises are no longer enough. What women really do not need are promises of studies!
In this regard, the Conservative women have nothing to complain about. They have been promised a task force on daycare centres, on the victims of criminal acts, family violence and sexual aggression, and on child pornography.
I would like to point out to my colleagues opposite, and more especially to the Prime Minister, that there are already tons of reports on these matters, including the Badgley and Fraser reports-


Mr. Speaker:: I am sorry to interrupt the Hon. Member, but here time has expired. The Hon. Member for Hamilton Mountain (Mr. Deans).


BANKS AND BANKING
Ian Deans: Mr. Speaker, day after day we hear Conservative Members make speeches or statements about what caused the problems with the banking
October 10, 1985

system, or at least with the two banks in western Canada, statements which I contend are false.
The problem in the western Canada banking system has nothing to do with an east-west division. The problem in the banking system in the West has to do with the size of the banks and the management of the banks which have gone under. It is about time Conservative Members recognized that and started speaking out on the more serious problems which in fact confront the people of western Canada. What about the forestry workers who were ignored by the Liberals and abandoned by the Conservatives? What about the grain farmers who have faced tremendous problems as a result of drought and are being ignored by the Conservatives? What about the hog producers who have been crippled by U.S. barriers to trade and abandoned by the Conservatives?
It is not just crimes of omission. For six months the Government has blamed the collapse of the CCB and the Northland Bank on past Governments. Canadians listened to the Minister of State for Finance (Mrs. McDougall), the Minister of Finance (Mr. Wilson) and the Prime Minister (Mr. Mulroney) as they berated the western economy. That was not the finding of Mr. Hitchman. The Canadian Commercial Bank suffered, not because of the western economy but because of bad management which was allowed to continue even after this particular situation was brought to the attention of various Ministers-


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


EXTERNAL AFFAIRS
Mr. Fernand Ladouceur (Labelie):: Mr. Speaker, I believe it is in order today in this House to underline in a special way the outstanding job done by the Minister for External Affairs on the occasion of the Canadian Government participation in a feasibility study on the hydro-electric project to develop three gorges in China.
When this Government speaks about creating jobs, about giving back Canadian men and women their pride of belonging, about implementing a policy of opening up this country to the world, here we have an initiative all of us have reason to be proud of. Such an exchange of expertise and know-all held specially by Quebecers could not better reflect a climate of mutual trust, a spirit of co-operation between the various partners to the building of gigantic works that certainly will justify our pride.
Mr. Speaker, let us stop this small-time politicking and let us look up to the future. Let us join in implementing a blueprint of society for which we all have been given a mandate by the Canadian people.
[DOT] (N10)


AUTOMOTIVE INDUSTRY
Mr. Gilbert Chartrand (Verdun-Saint-Paul):: Mr. Speaker, the entire population of Quebec is currently following the negotiations going on with respect to the establishment in that Province of the Toyota and Hyundai corporations assembly plants.
Quebec buys close to a third of all the cars imported in Canada and deserves the utmost consideration in the decisions that will be made.
My constituents of Verdun-Saint-Paul, and Quebecers in general who are well-informed consumers, are anxious to play a much more important role in the automotive industry. Over the coming years they will remember the companies that will have invested in the vitality of Quebec. Our province no longer has to show its mettle in the area of high technology, and the worldwide success of Bombardier equipment is an eloquent proof.
Both Toyota and Hyundai are expected in Quebec. Those two corporations could restore a desirable balance with Ontario, where traditionally the big automotive corporations have located.
At a time when the East End of Montreal is going through a difficult period as far as its refineries are concerned, when many skilled workers are wondering about the future, it would be advisable to immediately revive Montreal's industry with such projects, thereby creating jobs that are vital to the area. [English]
People of Quebec, it is time to talk business now.


TERRORISM
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, in sadness we learned today of the murder of a handicapped American Jew, Mr. Leon Klinghoffer, an innocent traveller. It is these ongoing personal tragedies and the taking of human life that revolt people of good will. We learned today that the Palestinian hijackers of the Italian ship who murdered this man in cold blood and surrendered to Egyptian authorities have been released. We learned that these hijackers and murderers have been turned over to PLO leader Yasser Arafat.
There has been an escalation of violence in the world since the murder at Munich of the 10 Israeli athletes in 1972. Terrorism has become a strategic weapon. Violent acts by the PLO cause grief, continued hatred, and disrupt the peace process in the Middle East. The PLO cannot be trusted. It has

October 10, 1985
no responsible, universally accepted leader, notwithstanding Mr. Arafact's claim to the contrary. The United Nations continues to clothe his murderous activities in the aura of respectability.
Now is the time for the civilized world to deny sanctuary to murderers and hijackers and to unite against terrorists. Now is the time to deny safe haven and denounce those countries which give succour to terrorists. The world must isolate these states like the pariahs they harbour.


FISHERIES
Mrs. Mary Collins (Capilano):: Mr. Speaker, as we all look forward to the Thanksgiving weekend, I am delighted that the residents of West Vancouver and the fishing community of British Columbia will have something special for which to be thankful. Today, on behalf of the Acting Minister of Fisheries and Oceans, I was delighted to announce that tenders will be called for the construction of a new fisheries research complex in West Vancouver. The Government's decision to proceed with this $8 million project shows its commitment to scientific research, to fisheries enhancement, and to economic development in the West.
Since the late 1960s dedicated research scientists have carried out a wide variety of fisheries research activities at the West Vancouver site, contributing significantly to salmon enhancement, aquaculture, habitat protection, and lake enrichment. They have worked in overcrowded, temporary facilities on the site of one of the first buildings on the North Shore, a fish cannery, which was built about 1891. Needless to say, the construction of these new facilities will provide much needed employment in the Lower Mainland area, reinforcing the Government's support of economic activity in British Columbia.
The work of the fisheries research scientists in West Vancouver has won international acclaim. Now, with new adequate facilities, they will be able to enhance further their contribution to maintaining healthy, vibrant commercial and sports fishing activities on the West Coast.


THE MINISTRY
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, from time to time the House deals with issues that transcend partisan politics. I am pleased to deal with one of those issues this afternoon, and I am sure all Conservative Members of Parliament will join with me.
I rise in defence of our poor, bedevilled, beleaguered, befuddled Minister of Justice (Mr. Crosbie). He is being assailed by
the media, by cartoonists, and now by the Prime Minister (Mr. Mulroney), all for telling the truth. He is no hangashore. All he said was that the Prime Minister's staff cannot smell political danger.
Can a Minister speak with more candour? What was his reward? It was a tongue-lashing from the Prime Minister who was acting in his Orwellian capacity as Minister of Doublespeak. Senior officials who are always correct said that the Prime Minister read him the riot act and chewed him out, all of this in front of his colleagues.
The poor Minister desperately needs our help. He emerged befuddled, confused and redfaced, and put his tongue in reverse. All of a sudden, black became white, Thursday became Monday, tuna became trout, and the Blue Jays became the Maple Leafs. Is it not time the Prime Minister left this poor man in peace? Is it not time he accepted his resignation as Minister of Truth?


PRESENCE IN GALLERY OF UNITED STATES SECRETARY OF DEFENSE
Mr. Speaker:: May I draw to the attention of Hon. Members the presence in our galleries today of the Hon. Caspar Weinberger, Secretary of Defense for the United States.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, my question is directed to the Minister of State for Finance. I must say that we have come to a time when Canada requires firm direction. Until now, the members of Her Majesty's Loyal Opposition did not believe that it was in the country's national interest to require a statement by the Minister regarding the Mercantile and Continental Banks. However, today's media reports compel us to question the Minister. I have given the Minister advance notice of my question. Can the Minister inform the House of the true state of affairs at this time of the Mercantile Bank and the Continental Bank?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, there are and have been many rumours floating around, many of them unsubstantiated. I do not comment on individual institutions like the Mercantile Bank. The Mercantile Bank itself made a statement this morning.
October 10, 1985

1 would like to point out to Hon. Members and to the people of the country that Canada has one of the best banking systems in the world. It is recognized as such internationally and it is recognized as such domestically. It has served us well for a hundred years, and it is continuing to do so. I think this is reflected in the fact that today the prime interest rate moved down to 8.85 per cent, its lowest level since-


Some Hon. Members:: Hear, hear!


Barbara Jean McDougall: Confidence is being maintained within the banking system.


PARLIAMENTARY SECRETARY'S ALLEGED RADIO COMMENTS
Raymond Garneau: Mr. Speaker, I am tempted to repeat my question, for the Minister has failed to answer it. But in view of the circumstances, I shall not compound her distress.
However, my question to the Minister is this: Because she certainly feels as 1 do that hon. members should do their utmost to maintain confidence in the Canadian banking system, could she possibly ask the Parliamentary Secretary to Minister of Finance to abstain from comments such as those he made this morning on the radio to the effect that Canadians have now lost confidence in our banking system?


Barbara Jean McDougall: Mr. Speaker, I will take the question as a representation. I repeat for the House and for the people of Canada that our system remains stable and deserves the confidence of the people of this House and of Canada.


MINISTER'S ATTENDANCE AT INTERNATIONAL MONETARY FUND MEETINGS
Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is for the Deputy Prime Minister. Speaking of the current banking situation in Canada the Minister of Finance said in this House on September 30, as reported in Hansard, and I quote:
-the Minister of Finance is in charge. The Minister of Finance is watching very closely over the things which are happening today ... the Minister will continue to take those responsibilities very seriously.
The Minister has been away, albeit at an important meeting of the International Monetary Fund in Seoul where he had to make a set speech. While the situation in the banking world has continued to deteriorate in his absence, and considering the fact that he has general responsibility for banking and financial institutions in this country, why is he not here dealing with this situation directly?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, the Right Hon. Leader of the Opposition answered his own question when he pointed out
Oral Questions
to Hon. Members that the Minister of Finance is attending very important meetings of the IMF in Seoul. I spoke with the Minister of Finance last night. 1 am sure he is in constant touch-


John Napier Turner: I bet you told him to come home.


Erik Nielsen: -in this world of the telephone which, as the right hon. gentleman once pointed out to me, does, in fact, exist. So, we are in close touch. I know that he is also in close touch with the Minister of State for Finance.
I would simply like to draw the attention of the right hon. gentleman to the words of the Minister of State for Finance who said just now that Canada has one of the finest banking systems in the world.


DIFFICULTIES OF CERTAIN INSTITUTIONS-GOVERNMENT POSITION
John Napier Turner: in
view of the current situation, Mr. Speaker, the Minister of Finance himself should be here in Canada. My question is for the Minister of State (Finance).
Apparently, she is supposed to have taken charge of the Commercial Bank of Canada on March 25 of this year. How is it that the bank continued to make questionable loans, as George Hitchman clearly indicated in his testimony yesterday? Why did the Minister not put an end to these unsound practices of the bank? Why did she wait three months before appointing Mr. Hitchman? Finally, why did she not even reply in July to Mr. Hitchman's interim report?


Barbara Jean McDougall: Mr. Speaker, I have indicated in the House previously that the Inspector General was in the Canadian Commercial Bank in the spring-


Ian Deans: Doing what?


Barbara Jean McDougall: -performing his statutory functions.


David Orlikow: That is not what Hitchman said.


Barbara Jean McDougall: I have indicated previously that during that period of time I was approaching people to become directors of the bank and Mr. Hitchman arrived to augment the team which was led by the Inspector General in assessing the valuation of the CCB's portfolio.


ADMINISTRATION OF CANADIAN COMMERCIAL BANK
John Napier Turner: Mr. Speaker, Mr. Hitchman's report and his testimony yesterday before the Estey Commission make it quite clear that, in his view, the failure of the bank was not the fault of the economy

October 10, 1985
Oral Questions
or of the National Energy Program. It was the fault of bad management and lack of supervision. Why did the Minister not supervise the administration of that bank once she took control in the month of March?


Some Hon. Members:: Hear, hear!


Barbara Jean McDougall: Mr. Speaker, I would like to remind the House that this matter is before an inquiry.


Some Hon. Members:: Oh, oh!


Barbara Jean McDougall: That is why the inquiry was established. It was established to find all the facts.


John R. Rodriguez: To hide behind it.


Barbara Jean McDougall: I have indicated to the House previously on many occasions the events surrounding the hiring of Mr. Hitchman.


STATE OF MERCANTILE BANK
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, it has already been noted that the Minister of Finance is not in the House. I would like to point out that the Prime Minister, who has not been here now six days out of nine, is not in the House.


Some Hon. Members:: Order, order.


Mr. Speaker:: Order, please.


John Edward Broadbent: My question is for the Deputy Prime Minister. We have just heard from the Minister her expression of confidence is another bank. Given the importance of ministerial and prime ministerial responsibility to our whole banking system, will the Deputy Prime Minister inform the House whether or not the circumstances surrounding the state of the Mercantile Bank have been brought to the attention of the Prime Minister?


Erik Nielsen: Mr. Speaker, naturally, I would fully expect that that has happened. However, the hon. gentleman should not lead Members of the House and the public to believe that he has not been fully apprised of these matters, since it is my understanding that the Minister of State for Finance went out of her way today to brief him, as well as the Right Hon. Leader of the Opposition, in the hope that irresponsible questioning from opposition Members-


Some Hon. Members:: Oh, oh!


John R. Rodriguez: You are irresponsible.


Erik Nielsen: -would not undermine confidence in the banking system in this country in which we have full confidence.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, if Members on the other side of the House were doing their jobs the country would not be in such a mess.


Some Hon. Members:: Hear, hear!


CANADIAN COMMERCIAL BANK-MINISTERIAL RESPONSIBILITY
John Edward Broadbent: Mr. Speaker, I have a question for the Minister of State for Finance with respect to the question of ministerial responsibility. Will she explain why she was fiddling while the banks and the Canadian taxpayers were burning for three months after the Government took action on the Canadian Commercial Bank? Why did she wait a full three months to appoint someone to deal with this serious question involving hundreds of millions of dollars of taxpayers' money?


Barbara Jean McDougall: Mr. Speaker, I have explained in committee and in the House the sequence of events in the spring which led up to the hiring of Mr. Hitchman. The matter is before a judicial inquiry. It will not be helpful to the outcome of that inquiry if we have a blow-by-blow comment on every remark which is made at the hearing.


Some Hon. Members:: Hear, hear!


BANK'S LOAN PRACTICES
John Edward Broadbent: Mr. Speaker, it is in this House and not before an inquiry that the Minister has to answer to the people of Canada.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Since the Minister refused to do it about the earlier period leading up to the appointment of Mr. Hitchman, I ask her why, after she received the report, was nothing done? She received an interim report and nothing was done for two weeks. Nothing was done for many weeks, during which period of time the bank continued to make millions of dollars of irresponsible loans. Why did the Minister not act?


Barbara Jean McDougall: Mr. Speaker, the action taken on September 1 was thoroughly responsible based on all the information, of which Mr. Hitch-man's report was one part, which came to me during that period of time. The inquiry is the place where all the acts will be determined.
I am accountable to this House. I have been in the past and I will continue to be in the future.


Some Hon. Members:: Hear, hear!
October 10, 1985


MINISTER'S LETTER TO SHAREHOLDER
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is for the Minister of State for Finance. The Minister has told us that although she was out of the country for all of July she was in touch with her officials by telephone. The Minister's office received an interim report from Mr. Hitchman at the end of July. Will the Minister tell the House, since she knew the state of affairs at the Canadian Commercial Bank, how she can justify writing to a shareholder on August 9-three days before the final Hitchman Report-stating that she believed the Government's action on March 25 had ensured the long-term viability of the bank?


Some Hon. Members:: Hear, hear!


Barbara Jean McDougall: Mr. Speaker, I have told the Hosue previously that during the month of August we were examining all possibilities for the Canadian Commercial Bank. I stand by what I said.


POSITION OF SHAREHOLDERS
Aideen Nicholson: Mr. Speaker, since the Government's Bill providing for ex gratia payments to the CCB's uninsured depositors indicates that the Government feels some responsibility for the statements and promises it made, does the Minister consider that her letter creates a comparable obligation to the shareholders?


Barbara Jean McDougall: Mr. Speaker, I stand by my earlier statement that we took all appropriate action leading up to the closing of the bank. The bank remained open in August as we considered all the possibilities.


MINISTER'S STATEMENTS
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is also for the Minister of State for Finance. The Minister's own envoy, Mr. Hitchman, advised her that it was the state of the management and mangement practices which caused the collapse of the CCB. Would the Minister, then, immediately stop damaging the reputation of all western based institutions with the politically expedient excuses which she gives us day after day?


Mr. Hnatyshyn:: We're trying to stop you from doing the damage.


Barbara Jean McDougall: Mr. Speaker, the reason there is a judicial inquiry is to deal with the facts of this situation throughout the whole series of events leading to the unfortunate closing of these two banks. Our banking system remains strong and there is nothing irresponsible about what I have said. We are continuing to stand by our banking system, as we have in the past, and the confidence in that system continues.
Oral Questions STATE OF WESTERN ECONOMY


Nelson Andrew Riis: Mr. Speaker, my supplementary question is directed to the Minister of State for Finance whose own envoy indicated that the problem was management, not the state of the western economy. Will the Minister and her colleagues stop bad-mouthing the state of the western economy-


Ramon John Hnatyshyn: The evidence will bear it out.


Nelson Andrew Riis: -and start talking positively about what is going on in western Canada? Give those financial institutions a chance.


Mr. Jelinek:: What was the question?


Barbara Jean McDougall: Mr. Speaker, I would be very happy to talk confidently about the western economy. Thanks to this Government and thanks to the Western Accord-


Some Hon. Members:: Hear, hear!


Barbara Jean McDougall: -there have been more jobs created in the western economy in the last six months and it is recovering. As I have said in this House before, that is a priority of this Government.


SHIPBUILDING
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, my question is for the Minister of Supply and Services. I learned this morning from the President of the Vickers employees' union that, unfortunately, the company had advised him that the decision was final and that the contract for the frigates which had been awarded first to the Montreal area would go to Levis. Moreover, the company has advised workers of the possible closing of the plant. Could the Minister confirm that he missed the boat this time around?


Hon. Stewart Mclnnes (Minister of Supply and Services):: Mr. Speaker, I indicated to the House two days ago that this whole matter was under review. I have met with the union. Appropriate representations have been made. Its concern is very legitimate.


Jean-Robert Gauthier: Jobs.


Stewart Donald McInnes: On the other hand, I have also met with the vice-president of Vickers and we are still awaiting a legal opinion. We may not have any latitude to intervene at all. However, I assure the Hon. Member that we are aware of the concerns of the union and we will do what is appropriate in the circumstances having regard to our contractual obligations.

October 10, 1985
Oral Questions


SITUATION IN EAST-END MONTREAL-PRIME MINISTER'S POSITION
Jean-Claude Malépart: Mr. Speaker, 1 have a supplementary question. The Minister is daydreaming.
The company has just advised its employees that the decision is final, and the Minister would like us to believe that he is still working at it. Would the Minister recognize that his meeting with the company was a failure, and what is he planning to do to save these jobs in east-end Montreal?


Stewart Donald McInnes: 1
repeat, Mr. Speaker, that no firm decision has been made on behalf of the Government.


Mr. Guilbault (Saint-Jacques):: That we know.


Stewart Donald McInnes: The real question is: Has the Government the opportunity to intervene? It may be a matter of contract between the parties in question. That is why I am still awaiting legal advice.


BANKS AND BANKING
Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, in the absence of the Prime Minister my question is directed to the Deputy Prime Minister. How long does the Deputy Prime Minister think it should have taken the Department of Finance to discover the massive mismangement of the Canadian Commercial Bank on which Mr. George Hitchman has reported?


Ramon John Hnatyshyn: Order.


Erik Nielsen: Mr. Speaker, we are embarked on a highly questionable procedure here with this kind of question-


Some Hon. Members:: Oh, oh!


Erik Nielsen: -coming from the Opposition, which deals with a matter that is under the scrutiny of Mr. Justice Estey who is heading up a commission to inquire into all of the facts.


John Edward Broadbent: It's a ministerial responsibility.


Erik Nielsen: 1 would suggest that it would be hardly productive to examine the evidence flowing from the commission on a day-by-day basis, to subject it to scrutiny here, at the same time as it is receiving an impartial-


John R. Rodriguez: Where is your responsibility?


Erik Nielsen: -objective, professional scrutiny by a highly respected jurist.


Mr. Penner:: That's a lot of nonsense, and you know it.


PUBLIC CONFIDENCE
Abram Ernest Epp: Mr. Speaker, how can the Canadian people ever have confidence again-


An Hon. Member:: Question.


Abram Ernest Epp: -in Ministers of Finance whose mistakes have saddled them with a $1 billion bill?


Ramon John Hnatyshyn: Order.


An Hon. Member:: Question.


Cyril Keeper: Boy, you're arrogant.


Mr. Murta:: Stand up and say that.


Mr. Taylor:: Show a few manners.


Barbara Jean McDougall: Mr. Speaker, this kind of question is exactly the kind of question which should not be dealt with in this House at this time. We are attempting to come up with all the facts-


Mr. Gray (Windsor West):: Cover up.


Barbara Jean McDougall: -on the unique situations involving those two banks. In the meantime, we have taken a number of steps around the inspection and regulatory climate in other banks, and I can assure this House that the Ministers of the Crown are totally responsible and acting in a responsible way with regard to the banking system.


John Edward Broadbent: That's what you said in March.


INDUSTRY
André Ouellet: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion, but in the absence of the Minister, perhaps I may direct my question to the Minister of State (Small Businesses).
The Minister is probably aware of the fact that some 450 jobs may be lost in east-end Montreal because of the Gulf refinery shutdown.
Is the Minister prepared to guarantee, on behalf of the Government, that any companies interested in buying the refinery will be given the same opportunities by the Government as the Reichmann brothers were given when they purchased Gulf?


Hon. Andre Bissonnette (Minister of State (Small Businesses)):: Mr. Speaker, first of all, the Minister of Energy, Mines and Resources answered this question last week. The
*
October 10, 1985

Government said that the refinery belongs to the Reichmann brothers, who can sell it to whom they see fit, and the Government will not interfere. The decision is up to the Reichmanns.


REQUEST THAT MINISTER FULFIL RESPONSIBILITIES
André Ouellet: Mr. Speaker, this is a totally unsatisfactory answer from a Minister who has a responsibility to small-and medium-sized businesses in Canada. I had expected him to inform the House that he would try and obtain the same conditions for small companies that his Government is prepared to provide for big corporations. Does he intend to act responsibly?


André Bissonnette: Mr. Speaker, the Government has acted responsibly. It has asked for time to find a buyer, and a postponement was granted by the Reichmanns. We know exactly what is happening, and we are helping the process along so that the company can be sold.


CLOSING OF PLANTS IN SAINT-JEAN AND VALLEYFIELD, QUE.
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, my question is directed to the Minister of State (Small Businesses) and has to do with the Domtex plants in Saint-Jean and Valleyfield.
Earlier this week the Minister said he would make sure that jobs are maintained and the plants kept open, but the company stated through its public relations officials that its decision is irrevocable. Is it really irrevocable, and is the Government committed to keeping the 850 workers affected by the shutdown of those two plants?


André Bissonnette: Mr. Speaker, that is the same question I was asked two days ago when I said I had met with the president of Dominion Textile Limited in my office Monday night. The decision is not final and discussions are going on. Mr. Speaker, I also said that it is a private company, so the management can do as they please. The Canadian Government is working with the company to find a solution.


POSSIBILITY OF LAY-OFFS-GOVERNMENT POSITION
Michael Morris Cassidy: Mr. Speaker, yesterday my leader and I met with representatives of the company and of the Sherbrook Domtex Union, and it is obvious that the company, the unions, the workers and the Textile and Clothing Board support. . .


Mr. Speaker:: Order, please.
Oral Questions


Michael Morris Cassidy: Is the Government prepared to unveil future quotas to protect textile production in this country?


André Bissonnette: Mr. Speaker, that policy is now under consideration. A lot of work is being done concerning the textile policy and answer will be given when we are ready to announce the policy.


AGRICULTURE
Mrs. Lise Bourgault (Argenteuil-Papineau):: Mr. Speaker, my question is for the Minister of Agriculture. As he will know, an excellent milk bread is now made in Quebec thanks to the action taken by the Federation des producteurs de lait du Quebec to increase the nutritional quality of bread and use the surplus of powdered milk. My question is therefore as follows.
Can the Minister now assure the Members of this House that he will never authorize the use of natural substitutes for milk powder, such as legumes, chick peas, beans and so on, in the baking of enriched bread?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I certainly appreciate the question and I share the Hon. Member's concern, particularly as expressed by the dairy farmers of Canada. If a substitute product of this kind were used it could lead to losses to the industry of $1.5 billion. The Hon. Member can rest assured that I will be making some recommendations to the Department of Health and Welfare because the final decision will be made by Food and Drug-


Mr. Speaker:: I think the Minister has answered the question.


EMPLOYMENT
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the Minister of Employment and Immigration. Contrary to what she told us yesterday, neither the Minister of Energy, the Minister of Supply and Services nor the Minister of State for Small Businesses will make any commitment to save those jobs in the East End of Montreal at Vickers, Bombardier and Gulf, and now Domtex.
[Stage Direction]
October 10, 1985
Oral Questions
When the Minister spoke yesterday of a new job strategy program-
Some Hon. Members:: Order!


William Warren Allmand: Is she telling this House that she and her colleagues have accepted the closing of these plants, and their only solution is to retrain already skilled workers and relocate them to some other place? Is that her only solution?


Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, in fact I did make a mistake yesterday when I said that 100,000 new jobs had been created in the Province of Quebec since this time one year ago. It is 185,000 new jobs.


Some Hon. Members:: Hear, hear!


Flora Isabel MacDonald: I would like to advise the Hon. Member that the Canadian Jobs Strategy, and employment opportunities and training connected thereto, will continue to offer opportunities for employment for people right across the country, and certainly in the Province of Quebec.


William Warren Allmand: What the Minister has just said is no comfort to the 2,000 workers in the East End of Montreal and the 1.3 million Canadians still unemployed. No comfort at all.


JOB-CREATION PROGRAM
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, I have examined the Minister's program. Can she show me any part of that program which will keep those plants open and save those jobs? Just show me one part that will do that.
Flora Isabel MacDonald: Mr. Speaker, a representative of a Party which took great delight in closing down one plant after another, including oil refineries over a period of years, has very little to speak about. The Canadian Jobs Strategy, I can tell him, with its emphasis on job development, job entry and skills investment for those whose jobs are threatened, will indeed help people who are either unemployed presently or whose jobs are threatened.


André Ouellet: Full of words but no jobs.


AGRICULTURE
Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, my question is directed to the Minister of Agriculture, whom we welcome back from his trip to the Soviet Union because the
House has been awaiting for some time the Government's decision on what it is going to do about the report prepared by the Hon. Member for Assiniboia. That Member made a recommendation to Cabinet some weeks ago. Will the Minister now take the opportunity to announce what the acreage payment will be for western farmers who were hurt by the drought? Will it be in accordance with the recommendation by those farmers to the Hon. Member for Assiniboia?


John Wise: Mr. Speaker, I want to take this opportunity to congratulate my colleague, the Hon. Member for Assiniboia, for doing an excellent job.


Some Hon. Members:: Hear, hear!


John Wise: He has worked very industriously.


André Ouellet: Watch it, he will get your job.


John Wise: He has stayed on schedule and brought forth-


Lorne Edmund Nystrom: Back to Russia.


John Wise: -two recommendations, and I can assure the Hon. Member that there has not been one day lost throughout this whole process. The report has been received and is being prepared in the form of a memorandum to be presented to Cabinet a week from Tuesday.


TIMING OF ANNOUNCEMENT
Victor Fredrich (Vic) Althouse: Mr. Speaker, will the Minister explain to the House why we have to wait months and months for an answer to the problems of western farmers when one weekend is enough to answer the problem of a bank collapsing? Why do farmers have to stand in line while banks get immediate attention?


John Wise: Mr. Speaker, I think the Hon. Member knows some of the problems associated with bringing together a report and making recommendations.


John Edward Broadbent: Forty-eight hours for the banks.


John Wise: If we had brought forth a recommendation four weeks ago, it would have been inappropriate and inaccurate because the Hon. Member knows we have had a great deal of rainfall since that time. Even if we had brought forth the report perhaps today, we do not know how long the snow is going to last out there either.
October 10, 1985


PRIME MINISTER'S OFFICE
Mr. George Henderson (Egmont):: Mr. Speaker, my question is directed to the Deputy Prime Minister. Last Monday the Minister of Justice criticized the staff in the Prime Minister's Office. He said they were not politically astute. We all know, of course, that was later denied. It has now been reported today that in a telephone conversation with radio CJCW in Sussex, the Hon. Member for Fundy Royal supported the Minister of Justice's original statements, saying that they were interesting and legitimate.
Does the Deputy Prime Minister agree with the statement by the Hon. Member for Fundy-Royal and his Minister of Justice that the staff in the Prime Minister's Office are not politically astute, or should we expect yet another retraction from a Member?


Some Hon. Members:: Hear, hear!


Erik Nielsen: Mr. Speaker-


Mr. Nunziata:: We love you, John. Keep it up.


Erik Nielsen: Mr. Speaker, I have not seen the radio program to which the Hon. Member refers-


John Napier Turner: Have you heard it?


Erik Nielsen: -but-


Mr. Speaker:: Order, please.


Douglas Cockburn Frith: Erik, it is d-o-l-t.


Mr. Speaker:: Order, please.


Erik Nielsen: But from his own account I can see nothing inconsistent with either-


Some Hon. Members:: Oh, oh!


Erik Nielsen: -that which has been said by the Minister of Justice, myself, or himself.


Mr. Crosbie:: Hear, hear!


Some Hon. Members:: Oh, oh!



MEMBERS' STATEMENTS

['Mr. Speaker, the Hon. House Leader of the Official Opposition is quite right. We are now in the process of consultations with respect to the order of business for the course of next week. I hope to be in a position, therefore, to complete these consultations with both Parties and come back to the House possibly before the conclusion of Government business for the purpose of announcing the business.']
George Roland Henderson: Mr. Speaker, can he tell
this House why so many of his Members of Parliament continue to issue statements regarding this matter only to trip over their words and retract them? How can the Deputy Prime Minister justify the Hon. Member for Fundy Royal support-
Oral Questions
ing the statements of the Minister of Justice after the Prime Minister told that Minister to retract and change his story? What is going on?


Mr. Speaker:: Order, please. The Hon. Member may wish to make a statement tomorrow, but that is clearly not a question of ministerial responsibility.



Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is directed to the Minister of Transport. What luck has the Minister had over the summer months in convincing his Cabinet colleagues that the skimming off of $30 million from the St. Lawrence Seaway Authority will have a very negative effect on the movement of bulk commodities from western Canada to an export position in Ontario, Quebec and the Maritimes? What luck has he had in convincing his colleagues to leave that money where it is in the next fiscal year?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, as the Hon. Member knows, there has been a tremendous downturn in traffic on the Seaway, something in the order of 27 per cent to 29 per cent. That has had a very devastating impact on its financial performance. As well, 1 think the Hon. Member knows that we have had to engage in a very expensive maintenance program with respect to bridge repairs and things of that nature. Taking all these things into consideration, this matter is currently under review.


REQUEST FOR REVIEW OF TOLLS
Iain Francis Angus: Mr. Speaker, 1 appreciate the Minister's response. That is the first positive indication we have had something will be done for the Seaway.
Given the growing support in the industry, and now from the head of the St. Lawrence Seaway Authority himself, for a full public review of Seaway tolls and charges, would the Minister be prepared to indicate whether his Government supports that review at this time?


Donald Frank Mazankowski: Mr. Speaker, I think that is an issue with which clearly the Standing Committee on Transport could be seized. I do not think I would have any objection to reviewing the operations of the Seaway, including the matter of tolls. I think the Hon. Member is aware that tolls are established in consultation with the United States. I would certainly welcome any suggestions or mechanisms that Hon. Members may put forth to improve the viability and performance of the Seaway.

October 10, 1985
Oral Questions


CHILDREN
Mr. Alan Redway (York East):: Mr. Speaker, my question is directed to the Minister of Justice. The Minister is aware that last week this House talked out a Private Member's Bill dealing with the matter of locating missing children. He is also aware that last year the United States established an information centre called the National Centre for Missing Children, to co-ordinate information concerning missing children in the United States. Will the Minister advise the House whether he would be prepared to consider establishing a similar centre for missing children in Canada?


Jacques Guilbault: What about missing Ministers?


John Carnell Crosbie: Mr. Speaker, I know that the Hon. Member appreciates the fact that this has already been the most productive year in the Department of Justice in the last 20 years. I will not, of course, outline the many pieces of legislation that we have produced or had this House enact.
In connection with the specifics of his question, which is the first one today on a public policy issue, I will advise the Hon. Member that the RCMP have a centralized computer system and that they are already doing much work in this area. My hon. colleague, the Solicitor General, would be better able to enlighten the Hon. Member, but they are exploring the feasibility of establishing such a national registry. I thank the Hon. Member for his interest and his promotion of the concept.


INDIAN AFFAIRS
B. Keith Penner: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. The all-Party report on Indian selfgovernment tabled in 1983 made particular reference to the distressing situation of the Lubicon Indian Band in Alberta. The way of life and the economy of that band have been virtually destroyed by development activity which has taken place there. Last winter the Minister appointed E. Davie Fulton to make an inquiry into this situation. Is the Minister prepared today to table any and all reports that the Hon. E. Davie Fulton has made concerning the situation of the Lubicon Lake Indian Band?


Hon. David Crombie (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I would like to thank
the Hon. Member for his question and ask him for some patience on the matter. I spoke with Mr. Fulton yesterday, and also with Mr. Pahl. Mr. Fulton, of course, is mediating the matter between the two levels of Government and the Indian people involved. He wants to make a further report to me. I expect that that report will be helpful and I ask for the Hon. Member's patience in the matter.


GOVERNMENT POSITION
B. Keith Penner: Mr. Speaker, I am quite prepared to be patient, but the Lubicon Indian Band is today facing the real possibility of extinction. Can the Minister give this House the assurance that before the end of next week there will be some positive announcements based on the recommendations of the Hon. E. Davie Fulton?


David Edward Crombie: Mr. Speaker, the Hon. Member is quite right, the Lubicon Lake matter has been a running sore in this country for 45 years. I have had it under my own advisement and have been attempting to do something about it for the last three months. I expect that we will have a positive statement; I certainly hope so.


SASKATCHEWAN INDIAN NATIONS LEGISLATIVE ASSEMBLY
Lorne Edmund Nystrom: Mr. Speaker, my question is also directed to the Minister of Indian Affairs and Northern Development. I have a copy of a telegram sent to the Government House Leader and another telegram sent to the Minister of Indian Affairs from Sol Sanderson, the President of the Saskatchewan Federation of Indians. It requests an answer by tomorrow to the request that they discuss with the Minister the request for a grant for $250,000 to help operate the Saskatchewan Indian Nations Legislative Assembly. Apparently most of the bands in Saskatchewan have telexed the Minister. Can the Minister provide us with an answer today since their internal deadline is tomorrow and it is important they know whether or not this funding will be forthcoming?


David Edward Crombie: Mr. Speaker, I thank the Hon. Member for the question. The matter of funding for this conference is under review under my own advisement and that of the Department. Up until this time in the fiscal year 1984-85 almost $1.5 million has been expended for the FSIN for matters of this sort. I have the request, the Department is reviewing it, and an answer will be forthcoming.

October 10,1985


NATIONAL DEFENCE
Mr. Howard Crosby (Halifax West):: Mr. Speaker, my question is directed to the Associate Minister of National Defence. The Chronicle-Herald of Halifax issued today reports:
A leaked Canadian Coast Guard report has vindicated the Canadian Navy of its April 28 shelling and sinking of the trawler Lady Marjorie-
I think all Members of the House are aware of the case of Walter Theriault and the difficulties he has suffered as a result of the event. Will the Associate Minister of National Defence confirm whether there is such a Coast Guard report and, if it does vindicate the Navy, will he please temper justice with mercy and honour the claim of Walter Theriault?


Erik Nielsen: Mr. Speaker, I believe my colleague, the Associate Minister of National Defence, answered similar questions not long ago. The matter is the subject of an inquiry which is complete and hopefully a detailed response will be forthcoming in the very near future.


GOVERNMENT EXPENDITURES
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, my question is directed to the Minister of Science and Technology. Yesterday the Minister stated that the Walter Wolf give-away of $363,000 was standard procedure, that the final decision was made by a joint federal-provincial committee and, to quote the Minister, "there are no other companies in Atlantic Canada capable of undertaking such a project". Does the Minister stand by those statements?


Hon. Thomas Siddon (Minister of State for Science and Technology):: Mr. Speaker, in fact, the proposal that came to the Economic Development Board operated by my colleague, the Hon. Minister of Regional Industrial Expansion, contained only one recommendation, and that was that this particular project be supported. To my knowledge there were no other proposals and no other firms whch had been submitting such proposals.


Some Hon. Members:: Oh, oh!


STATEMENTS ATTRIBUTED TO PROVINCIAL OFFICIALS
Sheila Maureen Copps: How does the Minister explain statements reported today in Canadian Press from officials in Premier Brian Peckford's office who have stated that five other companies applied for the same moneys and
Oral Questions
that the final decision was made by the federal Government with all federal Government money and no involvement from Newfoundlanders?


Thomas Edward Siddon: Mr. Speaker, the spokespersons for the Government of Newfoundland are entitled to say what they wish. The facts are, Mr. Speaker-


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: Retract.


Thomas Edward Siddon: Are the opposition Members prepared to hear the answer, Mr. Speaker?


Some Hon. Members:: Yes.


André Ouellet: We love it.


Thomas Edward Siddon: The fact is, Mr. Speaker, that the decision which was forwarded to the federal Minister was taken by a committee of public servants drawn from the Governments of Newfoundland and Canada under the terms of the subsidiary agreement on ocean industry development, and there was only one recommendation forthcoming from that committee of civil servants to this Government.


BANKS AND BANKING
Ian Deans: Mr. Speaker, my question is directed to the Minister of State for Finance. Why did she not accept the recommendations for action proposed by George Hitchman with regard to the Canadian Commercial Bank given to her Ministry at the end of July?


Barbara Jean McDougall: Mr. Speaker, I have told the House time and time again that we considered every option, including Mr. Hitchman's recommendation, before the final decision was reached on the Canadian Commercial Bank. I am sure that Mr. Justice Estey will ask the same question and will get the same answer when we get this into that forum.


Ian Deans: I am sure that Justice Estey will do an excellent job. The question I have, however, is for the Minister, not for Justice Estey.


MINISTER'S ACTION
Ian Deans: Is there any good and valid reason why the Minister did not accept the recommendations for action offered by George Hitchman after he had
7554

October 10, 1985
Petitions
analysed the conditions of the bank and presented his interim report at the end of July?


John R. Rodriguez: Only you can answer that question.


Barbara Jean McDougall: Yes.


Ian Deans: Well, supplementary!


Ramon John Hnatyshyn: You have to think about your question.


Ian Deans: Barbara, sometimes you can be too cute by half.


FOOTWEAR INDUSTRY
Alfonso Gagliano: Mr. Speaker, my question is for the Minister of State for Small Businesses. According to a survey by Decima Research, 82 percent of Canadians are in favour of a five-year quota system to guarantee Canadian shoe manufacturers access to 50 percent of the domestic market. Will the Government believe its favourite survey firm Decima, which has stated that two out of three Canadians think it is more important to protect jobs in Canada than to bring about any price reductions? Will the Government announce that the quotas will be maintained?


André Bissonnette: Mr. Speaker, first of all, I am happy to see the Hon. Member for Saint-Leonard-Anjou in the House today. We had not seen him for a month and a half.


Mr. Speaker:: Order, please. Such comments are not allowed.


André Bissonnette: Mr. Speaker, I would like to tell the Hon. Member for Saint-Leonard-Anjou that the policy of the Government for the shoe industry is still under review. It should be made public soon.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Wednesday, October 9, 1985, meet the requirements of the Standing Orders as to form.


BUSINESS OF THE HOUSE
Herbert Eser (Herb) Gray: Mr. Speaker, I recognize that consultations are still under way with respect to the business for the coming week. However, I thought I should formally pose the question in that regard to get a confirmation of the situation from the Government House Leader.


Ramon John Hnatyshyn: Mr. Speaker, the Hon. House Leader of the Official Opposition is quite right. We are now in the process of consultations with respect to the order of business for the course of next week. I hope to be in a position, therefore, to complete these consultations with both Parties and come back to the House possibly before the conclusion of Government business for the purpose of announcing the business.



ROUTINE PROCEEDINGS


Ramon John Hnatyshyn: Mr. Speaker, there is an order that would receive the unanimous approval of the House for adoption. There have been consultations between the Parties with respect to the following order:
That, notwithstanding the order of reference on Tuesday, March 5, 1985, the Standing Committee on Justice and Legal Affairs be empowered to report its findings on the subject matter of that order no later than Friday, October 25, 1985.
The effect of this is an extension of the reporting date for that committee from October 15. That has the support of all Parties.


Mr. Speaker:: Is there agreement to the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Chuck Cook (North Vancouver-Burnaby):: Mr. Speaker, I have the honour to table the seventh report of the Striking Committee in both official languages.
[Editor's Note: For above report, see today's Votes and Proceedings.]
October 10, 1985


PETITIONS
Douglas Cockburn Frith: Mr. Speaker, I rise on behalf of the people of the riding of Central Nova who submit a petition indicating their opposition to the Government's intention to remove full indexation of family allowances and to make changes to the child tax credit system. They ask that the Prime Minister of Canada (Mr. Mulroney) reverse his plans as outlined in the May 23 Budget.
I also rise to present a petition on behalf of people from Edmonton, Nickel Belt and Sudbury who are also opposed to these proposals to deindex the family allowance.
In addition, I rise to present a petition on behalf of the people of Regina, represented by the Government House Leader (Mr. Hnatyshyn), who indicate as well that they are opposed to the removal of the full indexation provisions of the family allowance and the changes to the child tax credit system.
I also rise to present a petition on behalf of people who live in the riding of Western Arctic who are also opposed to the Government's intention to remove full indexation provisions of the family allowance.
I also have petitions from the people of Winnipeg and Saskatoon who also express their displeasure.


André Ouellet: Mr. Speaker, since this is Family Week, I am privileged to present to this House a petition signed by fathers and mothers from my constituency of Montreal-Papineau.
In these petitions, the Government is asked to restore full indexation of family allowances and the child tax credit. This is just plain social unjustice, and they regret the unfortunate effects this measure would have if it were not amended. The Government should back-


Mr. Speaker:: Order, please! Surely the Hon. Member is well aware that all that is allowed is a short summary.


André Ouellet: I was concluding my remarks, Mr. Speaker.


Mr. Speaker:: I believe they are concluded.


Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, I rise on behalf of a number of members of the United Automobile, Aerospace, Agricultural Implement Workers of America who demand that Isabel Goligher be either reinstated to her former job or given an alternate position of equal status and pay with all benefits and that Isabel Goligher's reputation be cleared of the false allegations of lesbianism and that she receive written appologies from all parties concerned.
Petitions
I have a second petition from the Public Service Alliance of Canada concerning the same matter. This union demands that Isabel Goligher be reinstated by the Government of Canada with all pay and benefits, retroactive to the date she was forced to resign.


Mr. Nell Young (Beaches):: Mr. Speaker, I have a petition from the citizenss of the Guelph and Waterloo region who state that in the opinion of your petitioners, the recent federal Budget policy to deindex family allowances is clearly an attack on the working poor and poor alike, and as a result strongly urge the Government of Canada to restore full indexation of family allowances.


Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, I too have a petition from a number of residents of the City of Vancouver who also ask that the proposal to deindex family allowances be withdrawn. They point out also that the changes recommended in the child tax credit will make even the poorest families worse off by the year 1990.


Jean-Robert Gauthier: Mr. Speaker, I should like to present to this House a petition signed by a dozen constituents of Ottawa West asking the House to reconsider the Government's measure aimed at deindexing family allowances and the child tax credit and to restore full indexation of both programs.

I also have a petition from two dozen residents of Etobicoke, North York and Weston who state in their petitition that it is both immoral and inconceivable that the Government is asking families to make sacrifices during National Family Week, but at the same time can find $1 billion to save Canadian Commercial Bank depositors having $60,000 and more. They ask that the full indexing of family allowances and the child tax credit be re-established.


Nelson Andrew Riis: Mr. Speaker, it is my pleasure to present a petition on behalf of a large number of British Columbians who are of the opinion that the deindexation of family allowance and the massixe cut-backs in public commitment to child benefits are an unfair attack on women and families with children, especially single-parent mothers, and therefore call upon the House of Commons to reinstate full indexation of universal family allowance and to rescind the unfair tax increases.


Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, I rise on behalf of a number of constituents in Burnaby who are concerned about the plan to cut back on the full indexation of family allowances and to cut back on the public commitment to child benefits. They call upon the Government to reinstate full indexation of family allowances and rescind the most unfair tax increases.

October 10, 1985
Petitions


Ian Gardiner Waddell: Mr. Speaker, I rise to present a petition from a number of women from the ridings of Vancouver East and Vancouver Kingsway, who point out that the deindexation of the universal family allowance and the massive cut-backs in the public commitment to child benefits are an unfair attack on women and families with children, especially single-parent mothers. They point out that the Government has prepared a billion dollar bail-out for the banks but has cut back on these family benefits.


Michael Morris Cassidy: Mr. Speaker, I have a petition signed by some 350 residents of the Maritime Provinces as well as the area around London. They demand that Isabel Goligher be reinstated to her former job or given an alternate position of equal status and pay and that she be given pay and benefits retroactive to the date that she was forced to resign.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, it is my honour and duty to present to the House a petition signed by a number of citizens, mostly from the City of Montreal, who ask the House of Commons to reinstate full indexation of universal family allowance and rescind the unfair tax increases.
[ Translation]


Cyril Keeper: Mr. Speaker, I have here a petition stating that in the opinion of the petitioners deindexing family allowances is an unfair attack against women, especially women who are single-parent mothers with children.
Your petitioners ask that full indexation of family allowances be restored.


Mr. Dan Heap (Spadina):: Mr. Speaker, it is my honour to present a petition on behalf of a number of residents of Toronto and to point out to the House that a proposed deindexation of the family allowance hurts the poorest people the most and is inconsistent with the generosity of the Government in its great donations to the rich through capital gains, all exemptions and through the billions of dollars given to the banks and the oil companies. Therefore, they ask that the House should reverse the action and restore full indexation of family allowance.


Sheila Finestone: Mr. Speaker, I bring to your attention on behalf of the people of Ottawa, Ontario their concern that the Government of Canada in its recent Budget intends to remove the full indexation provisions of the family allowance and make changes in the child tax credit which will cut in 1987, $55 million in benefits for 3.5 million Canadian families.

And Mr. Speaker I draw to your attention that those individuals from Sudbury, Ontario, are requesting the reinstatement of the full indexation of family allowances and child tax credit because they feel that those cuts are unacceptable.


Mr. Sergio Marchi (York West):: Mr. Speaker, 1 too am pleased to place before the House a number of petitions, two are from York West, one submitted by Carlos Adam and one by Mario Pin; and one is from Etobicoke from Mr. Gino Lenorduzzi. These petitions ask the Prime Minister (Mr. Mulroney) and the Government to restore full indexation of the family allowance and child tax credit and to eliminate a regressive budget measure which would take away from families a total of $55 million by 1987.


John V. Nunziata: Mr. Speaker, it is my pleasure to present a petition that was circulated by Mr. Ottavio Marchi of Muir Avenue in the City of North York. This petition, signed by a number of petitioners, asks the Government of Canada to restore full indexation to the family allowance and the child tax credit.


Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, I have a large number of petitions from the people in the London, Tillsonburg and St. Thomas area in support of Isabel Goligher recommending that she be reinstated to her position or that alternative employment in the federal Government be found for her. Some of the petitions come from United Automobile Aerospace Workers and others are from other citizens. I might add that a large number of people in support of Isabel Goligher demonstrated on Saturday to show their support and to urge an independent-


Mr. Speaker:: Order, please. The Hon. Member is dealing with petitions, I presume, not announcing the demonstration. Does she have further petitions?


Lynn McDonald: I have a very large number of petitions and I am giving you a very succinct rendition of a large amount of support for Isabel Goligher.


Lynn McDonald: I have one further petition on behalf of a number of Vancouver residents who are protesting the deindexation in the Budget and wish to have full indexing of all of these social programs. Thank you, Mr. Speaker.


Iain Francis Angus: Mr. Speaker, it is my privilege to present a petition on behalf of over 100 residents of the London area who demand justice now for
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Isabel Goligher and ask that she be reinstated to her former job, or be given an alternative position of equal status and pay in London with the Government of Canada.


Abram Ernest Epp: Mr. Speaker, I am honoured to present a petition on behalf of constituents protesting the decision to deindex the universal family allowance and to make other changes in taxes and in family benefits which will by 1990 reduce the benefits for all Canadian families, even the poorest. These petitioners call on the Parliament of Canada to reconsider and again to index fully the family allowance.


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, I am honoured to present before the House a petition signed by nearly 200 citizens of Canada supporting the reinstatement of Isabel Goligher.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Doug Lewis (Parliamentary Secretary to President of the Treasury Board):: Thank you, Mr. Speaker, I wish to advise the House that Question No. 417 will be answered today, and I ask that the remaining questions be allowed to stand.


Mr. Robichaud: 1.	Were ferry rates increased following the budget cuts and, if so, by what percentage?
2.	In 1985, will ferry services be (a) abolished (ft) increased (c) decreased in the Maritimes?
3.	How many passengers used ferries in (a) 1983 (ft) 1984?


Donald Frank Mazankowski: 1. Yes, by about 15 per cent. Some decreases were implemented as well, affecting senior citizen and certain tourist traffic.
2.	In 1985, ferry service levels in the maritime provinces will be essentially the same as in 1984 with the exception of the CN Marine Yarmouth, N.S./Bar Harbor, Maine service which will see a somewhat lower level of frequency during the winter months when demand is down considerably.
3.	The number of passengers using the East Coast ferry service subsidized by the federal Government was 2,879,000 passengers in 1983 and 2,881,000 passengers in 1984.
Depositors Compensation


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


Some Hon. Members:: Stand.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-79, an Act respecting the provision of compensation to depositors of Canada Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect to uninsured deposits, be read the second time and referred to a legislative committee; and the amendment of Mr. Turner (Vancouver Quadra) (p. 7379).
Stanley J. Hovdebo: Mr. Speaker, I am honoured to have the opportunity to speak on the battered bank bail-out Bill. This whole operation of bailing out the bank is almost incomprehensible to a layman. Many people across Canada take risks in their daily work. Every time a farmer plants a crop he takes a risk. He knows that there is a possibility that he will lose his investment. Every banker who makes a loan takes a risk. He knows that there is a possibility that that loan will not be repaid. The banks justify their interest charges by saying that they are taking a risk, may lose that money, and therefore must charge interest at a rate which will compensate them over the years. The banks recognize, just as well as the farmer does, that they may not be able to reclaim their investment on a particular loan. As the farmer does, they should prepare for the eventuality of not having that loan repaid.
The Canadian Commercial Bank obviously was not prepared to lose the money that was loaned and, over the years, was not prepared to back up those wrong decisions. This is not a matter of a farmer planting a crop and then being affected by the weather or by the conditions of that particular year. This is a bank which took a risk and by its bad judgment is now faced with the loss of those moneys loaned.
Why did they make those loans, Mr. Speaker? Obviously the purpose was to make more money. If we are to believe the reports which have been made, they made those loans knowing that they were providing that money at great risk. They made those loans without the kind of production we usually expect of an investment. For example, when a farmer spends money on his crop, he expects to produce something of value. When one purchases something at a store, one expects something of value in return. These banks made these loans and they expected

October 10, 1985
Depositors Compensation
money in return without producing anything. I think that statement sums up the whole situation.
The western world has now reached the stage in the control and development of its economy where financing has become the most important part of any project. It does not make any sense. It is not a logical approach to the economy. The Government and its cohorts made much of trusting the market system. They suggested that by trusting the market system they could guarantee growth and prosperity. Obviously their confidence is often misplaced. In this particular case it was grossly misplaced. A dependence upon financing also involves a dependence upon the greed of people and organizations to work. The financial market system depends upon the greed of people. The greed of the Canadian Commercial Bank pushed it to make unsecured loans. In order to obtain money for those loans, the bank appealed to the greed of depositors by offering a point or two higher interest rate than was available on the general market. The actions of the bank and of the depositors were based upon greed, that is, they wanted to obtain more than they should have expected to obtain. This had a destabilizing effect and contributed to the downfall of the bank.
At one time a person went out to make a fortune or to earn a living by producing something. Apparently those days have gone. Now one makes a fortune by lending money and depending upon the greed of other people. We have reached a stage in our economy today when money is more important than production. We have been manipulated by the financial institutions to the point where production has become more dependent upon money than upon work. In any enterprise today, be it farming, small business or construction, it is seldom that the entrepreneur will make more profit than the bank or financial institution which lent the money in the first place. This seems to be backward. When the money-lender is the only person who is guaranteed profit in an enterprise, we are depending far too much upon money.
Even now as we in the House look into the downfall of the Northland Bank and the Canadian Commercial Bank, we should be looking at the basic financial structure of Canada. The values of the country have been changed to the point where production has less value than money and where it is possible to make money without any production. That was wrong when I was growing up, and it is wrong today.
Thus far almost $1 billion is being touted as the total amount necessary to bail out the depositors in the two banks. The Government has suggested that it will give only $48 million or one-twentieth of the bail-out amount to western farmers who find themselves in a disastrous situation because of drought. Who are the winners and who are the losers in this bail-out Bill? The borrowers and depositors are the winners; the losers are the taxpayers and to some extent the shareholders. Obviously someone will get this money. I hope that in the judicial investigation or elsewhere we will find out where the bail-out money is to go. Perhaps we require a list of borrowers as well as a list of depositors, so that Canadians will know not
only who is being repaid but who obtained money in the first place.


John V. Nunziata: Mr. Speaker, I am pleased to participate in the debate on Bill C-79. In this morning's edition of The Globe and Mail there was a report about the Canadian Commercial Bank which was headlined "CCB report describes bank in chaos". A more appropriate definition of what has occurred would be: "CCB report describes a Government in chaos".
The Minister of Finance (Mr. Wilson) and the Minister of State for Finance (Mrs. McDougall) have mismanaged the affairs of these two banks. As a direct result of that political mismanagement, we are here today debating this Bill. The Minister stated that the purpose of this particular piece of legislation was to assist or bail out individuals who are uninsured depositors in the Canadian Commercial Bank and the Northland Bank. This Bill is an attempt to bail out two incompetent Ministers. The record speaks for itself in respect of what transpired in terms of these two banks.
We have been told today that we have a responsibility as parliamentarians to bail out uninsured depositors. Canadians are asking, as we in the Opposition are asking: Who are these people to whom Canadian taxpayers will have to pay $875 million? It is incumbent upon the Government, the Minister of Finance and the Minister of State for Finance to tell us and the people of Canada specifically who these people are.
Hon. Members know that depositors with less than $60,000 are insured; they are protected. Those with deposits of up to $60,000 are protected by law. Through this particular piece of legislation, the Government is asking that we bail out others who have on deposit in excess of $60,000. Why should we do that? Why should Canadians have to bail out individuals who have in excess of $60,000 on deposit in those two banks? The Minister has said it is because we have a moral obligation to do so.
Indeed, the Government might have a moral obligation. The Minister told the people of Canada, including those depositors, that the banks were on a solid footing and that, as a result of the bail-out made earlier this year, the banks were solvent and would survive. She was wrong. The Government was wrong. The Minister of Finance, the Minister of State for Finance and indeed the Prime Minister (Mr. Mulroney) and others misled the House. I am not suggesting that they misled the House deliberately but indeed they misled the House by saying that the banks would be sound if we supported the bail-out package. They were wrong.
Government Members told us that based on the best information available at the time, the bail-out would help the banks and the banks would survive. What information was available to the Government? We asked the two Ministers involved and the Prime Minister what information they had to give the undertaking to the Opposition and to the depositors of these two banks that the banks would survive. The fact is that they
October 10, 1985

did not have full information. Were they negligent in not obtaining all the information that was necessary to make such a crucial decision affecting so many Canadians?
Where was the Minister of State for Finance? A few short days ago, the Minister of State for Finance admitted to the House that she was not in Canada during the month of July, a crucial month in the unfortunate history of these two banks and the Government's involvement in them. What could possibly be more important than being in Canada to monitor the situation? We have been told that she was vacationing somewhere in Europe and indeed she told us that she was in telephone contact with officials. That is not good enough. We expect a Minister of the Crown who is responsible and accountable for the banks of Canada to be here in Canada when an issue of such importance and magnitude arises. No, the Minister had other priorities. Her vacation was more important than the issue of the Canadian Commercial Bank and the Northland Bank.
Where is the Minister of Finance? I can appreciate that the rules of the House dictate that Hon. Members cannot comment on the absence of a particular Member from the House. I am not going to comment on the fact that the Minister has been absent from the House but I would like to comment on the fact that the Minister is not in Canada. He has gone to some meeting in Europe. Some would argue that it is an important meeting of the IMF, but I would suggest to Hon. Members opposite and to the Minister that this issue is far more important than a meeting of the IMF in Europe. The Minister should be here in the House of Commons to answer questions put by opposition Members. He should be here to be held accountable for what is happening.
We heard today that the Government is getting a little fidgety about questions asked in this House. The Government has suggested that because the Estey Commission has been mandated to investigate the affairs surrounding the collapse of these two banks, opposition Members should not be asking questions. I submit that it is our right as members of the Opposition to ask questions and to hold Ministers accountable for their actions.
We were told today by the Hon. Member for Trinity (Miss Nicholson) that the Minister of State for Finance sent a letter to a shareholder indicating that the banks in question would be on a solid footing. That was an undertaking made by a Minister. If the Government feels that it has a moral obligation based on statements it made with respect to the uninsured depositors of the Canadian Commercial Bank and the Northland Bank, does it not believe it has an obligation to the shareholders of the Canadian Commercial Bank and the Northland Bank? After all, the shareholders were given the same irresponsible undertaking and assurance by the Minister that the banks would be solvent. As a result of that undertaking, I suspect, certain shareholders of the Canadian Commercial Bank and the Northland Bank continued to hold shares in those banks. Does the Government not feel that it has a moral obligation to the shareholders as well?
Depositors Compensation
I began my discussion today by suggesting that we are seeing a Government in chaos. Indeed it is a Government in chaos. Canadians are asking who controls the finances of our country. The banking industry has been shaken by the collapse of these two banks and we are now told that a third bank may be in trouble. I would suggest that it is as a result of the incompetence of the Minister of Finance and the Minister of State for Finance that the banking industry is in trouble. Had they taken appropriate action in the early stages, the collapse of these two banks might have been avoided and Canadians would not be asked to pay out $875 million to uninsured depositors. We in Her Majesty's Loyal and Official Opposition are not prepared to give the Government a blank cheque.
The Leader of the Opposition (Mr. Turner) has moved an amendment which reads as follows:
This House declines to give second reading to a Bill, the principle of which is to permit payments of large, but unspecified amounts of public moneys to unspecified persons or corporations, thereby substantially denigrating parliamentary accountability for expenditure of public funds.
In closing, Mr. Speaker, I wish to indicate on behalf of my constituents of York South-Weston that Canadians condemn the Government for its mismanagement of this particular matter. We hold the Government accountable for the failure of these two banks.


Lynn McDonald: Mr. Speaker, I rise to address Bill C-79, an appalling measure that is before us today. The Canadian taxpayers are being asked to spend $875 million to bail out the uninsured depositors of the Canadian Commercial Bank and the Northland Bank. Canadians are quite scandalized that they should be asked to pay out this kind of money when the names of the individuals and corporations affected are not to be revealed. This runs entirely contrary to principles of accountability and it is entirely unacceptable.
We are very concerned about the financial priorities the Government is displaying in this bail-out Bill. We are concerned that the Government can find nearly $1 billion to make this pay-out, and indeed, by the time the pay-outs are finished, the sum may well be above $1 billion. We are concerned that the Government can suddenly find this amount of money when in its May Budget it proposed that old age pensions should be deindexed. We had to fight the Government on that measure, as we are currently fighting it with respect to the deindexation of the family allowance, a measure that would save approximately $200 million this year. The Government does not have that amount of money for child support programs because they are of low priority. Yet, it has nearly $1 billion, and possibly more, to pay out individuals, corporations, foreign banks, rich municipalities, large organizations and sophisticated investors who knew what they were doing. It can find money for these types of purposes which are surely less important than support of our social programs.
This is a matter which shows the Government at its most incompetent and its most negligent. The Minister of State for

October 10, 1985
Depositors Compensation
Finance (Mrs. McDougall) has tried to blame previous Liberal Governments-and perhaps the blame should be shared-for the lack of improvement and the lack of attention to inspection procedures which would have made it possible to determine the failures of these two banks before a bail-out of this size would be needed. While I admit that perhaps some of the blame should be shared, I do not think that the explanation which the Minister of State for Finance has offered is remotely adequate enough. Certainly, all the blame cannot be placed where the Government wishes to place it. It is clear that the Government acted with insufficient information and that it did not obtain the information which it should have obtained.
Last March, it took the matter much too lightly when it announced its bail-out of the Canadian Commercial Bank. At that time depositors were told that the situation was solved and that with a certain modest sum of money the bank would survive. Indeed, right into the month of August the Minister of State for Finance was writing letters to inquirers stating that the long-term viability of the bank had been ensured and that it was in fine financial condition and that there was no need for concern. Simultaneouly, the major chartered banks were withdrawing their money, as were other investors, making it necessary for the Bank of Canada to infuse more money just to keep the bank going. It was one of the arrangements of the bail-out that the Bank of Canada would come to its rescue as there was a run on its deposits. Indeed, there was a run on its deposits and an enormous amount of taxpayers' money has gone into the continuing operations of these two banks under bad management and with large numbers of loans which were not viable. The whole mess was allowed to continue so that the bail-out with which we are now faced is considerably greater than it would have been if the Government had taken some responsibility and found the information it needed last March to come up with a more prudent decision at that time.
Let us consider the situation in which the Canadian Commercial Bank finds itself. It is a fairly young financial institution, having been incorporated in 1975 in Edmonton. Its loan portfolio was primarily western and very much in the risk sector. It was in the Field of construction, real estate and energy. Of course, one does not have to be very experienced in business, or in the economy, to know that these are sectors which are vulnerable to economic turn-around. Therefore, when there was a set-back in the energy field, that had an impact on the related fields of real estate and construction. When companies began to fold in the energy sector it meant the decline of the whole business sector. If construction is hit, people lose their jobs and move out of the province. As real estate markets are hit, people who once wanted to buy or build sell and leave for greener pastures. Here is a bank which very imprudently concentrated in a highly vulnerable area and did not learn its lessons in that area. It now wants the Canadian taxpayer to pay for its imprudent decisions.
Before us we have a further complication which, indeed, is a very sad one. The Canadian Commercial Bank bought into an American bank in California which was in a similar field with similar weaknesses. Initially, it bought a 40 per cent interest of
the Westland Bank. When that bank ran into financial difficulty the CCB bought the bank outright, supposedly to protect its investment. However, the Westland Bank had precisely the same type of over-concentration in vulnerable areas. Thus, we see the irony in western Canada when a set-back is experienced in the economy. They send their money out to purchase in an area which has precisely the same problems and is vulnerable to precisely the same economic downturns as the Alberta economy has been faced with. The failure of the California bank has certainly had an impact on the parent company in Alberta.
All of these difficulties did not just happen in July or August. They did not happen after the bank was bailed out in the first instance. This is information which was available. However, what we find is that the Government in setting the course which it did in March to bail out the Canadian Commercial Bank did so without obtaining full information. An estimate of bad loans or high risk loans was grossly under-estimated. It need not have been. It was simply that it did not require the information to be provided at the time. A hasty decision was made and, unfortunately, it was the wrong one.
I would like to read a statement made by the auditors of the Canadian Commercial Bank which they made in their appearance before the Finance Committee. It states:
A review of the annual reports and financial statements of the bank for the past three years clearly indicates a trend of declining net income, a rapidly escalating loss experience on loans coupled with very substantial increases in the total of non-earning loans and the percentage of non-earning loans to total loans.
In other words, information for a period of three years preceding the failure of the bank was like writing on the wall. What are non-earning loans? They are mistaken loans, loans that should not have been made. This information was in place but the Government did not insist that it be obtained and reviewed. It did not insist that an accurate estimate be made of the extent of the bad loans, the number of them or the bad decision making involved in them.
While we oppose the over-all bail-out, let me say that there is reason for the establishment of a hardship fund. There is reason to bail-out individuals and some groups which deposited their money, unsophisticated investors who certainly did not have any inside information and who would be particularly hurt. We think on a case-by-case basis these hardship interests should be considered. We are very much opposed to a blanket bail-out with no names attached. We oppose hard-earned taxpayer's money going to bail out foreign banks, large corporations and municipalities. This is an improper way for Parliament to be using taxpayers' money. We are profoundly opposed to this Bill.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in participating in the debate on Bill C-79 one cannot refrain from commenting with respect to the conclusion which is emerging throughout the country in the minds of many Canadians who follow the activities and accidents of this Government. The Bill before us should actually be called the "Incompetence Bill" of the Government of Canada in 1985. As such, it would receive
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five stars in any competition to determine the inability of a Bill to deal with the public's interest. We are debating today an amendment put forward by our Leader in which we urge this House to decline to give second reading to this Bill because the principle of the Bill is to permit payments of large but unspecified amounts of public monies to unspecified persons or corporations, thereby substantially denigrating parliamentary accountability for expenditure of public funds. I submit to you, Mr. Speaker, that this amendment is a perfectly legitimate amendment. It is consistent and falls squarely within the prerogative and traditions of Parliament. To be asked to permit payments of substantial sums blindly, so to speak, without the knowledge of who are the recipients, is a measure which would offend any parliamentarian worth his or her salt and would be deeply resented no matter what Party is in opposition. I am certain that the Conservative Party, if it was in opposition, would oppose this Bill tooth and nail, just as we are doing today. I wonder, therefore, how on earth this situation developed, considering the assurances which were given to us only six months ago in this House by the Minister of State for Finance (Mrs. McDougall). On March 25 she is reported in Hansard as stating:
We are satisfied that this Bank is now a viable Bank, that it will be profitable in the future, that we will be repaid as will other members of the support group out of the future profits of the Bank.
This was an undertaking. It was a clear statement. It was not conditional and there was no hedging about it. On the same occasion, on March 25, the Minister of State for Finance went on to say, and I quote:
This particular problem was triggered by something that happened within the bank's loan portfolio in California which then of course created problems with the organization as a whole.
The Minister did not, on that occasion, thank God, bring in the red herring of the National Energy Program as did some of her colleagues. She just identified the source of the problem. That was the position of the Minister at that time. The problem was not the bad economy in western Canada, nor was it the National Energy Program, it was the bank itself. The bank had invested very heavily, not in Canada but in Texas and California, into loans directed at the oil and gas industry. I am happy the Minister of Energy, Mines and Resources (Miss Carney) is in the House today to hear this because I believe this Bill has relevance to her efforts in Canada as well.


Mr. Della  Noce@: She is here just for you.


Mr. Caccia:: I am very touched by that fact. The bank's investments were also directed to real estate in Texas and California. Six months ago we were given one set of assurances and six months later we must face a Bill which demands a phenomenal sum of money from the taxpayers of Canada without knowing who will be the recipients of the funds. The fact is that in March the Government made a political decision without searching and digging for the necessary facts. It made a decision based on partial information and it decided to do so because it felt that that was the political thing to do at the
Depositors Compensation
time. The Government cannot deny the fact that if it had made the effort to dig for the information, it would have been able to use it. However, the information was not used and by deciding not to use that information, it could not look at the facts. It disregarded a valuable tool which would probably have prompted this Government to make quite a different decision.
I was very impressed, Mr. Speaker, with the alternative course of action put forward in the course of this debate by my colleague, the Hon. Member for Laval-des-Rapides (Mr. Gar-neau). He put forward a four-pronged approach by way of an alternative Bill. He recommended, among other things, that an investment be made in the equity of the Northland Bank and that, in his opinion, this should amount to $ 150 million to $200 million, and that the composition of the Board of Directors be changed to a more competent team. He also recommended that the Government of Canada guarantee the deposits in the Northland Bank for the next five years so that the depositors could regain confidence in this financial institution. I thought this was a rather constructive effort on the part of the Hon. Member for Laval-des-Rapides as he attempted to come to grips with this situation. He also put on record the fact that it is extremely difficult for us in this House of Commons to debate Bill C-79-the Progressive Conservative incompetence Bill-while at the same time the Estey Commission is trying to get to the facts which this Parliament does not as yet have. This exercise becomes even more difficult because it is, first, clouded by political incompetence and, second, it is carried out without full knowledge of all the facts. The Estey Commission exercise is taking place at the same time outside of this building in another place in an attempt to provide information to the public, and to the politicians, in order for them to do a proper job. For all of these reasons, Mr. Speaker, we have moved this amendment. It is highly reasonable that in order to approve the expenditure of $875 million, every Member of Parliament should know how these funds are to be expended. That is the basic thrust of our amendment and I commend it to you, Mr. Speaker, for your consideration, and that of the Government.


Daniel James Macdonnell Heap: Mr. Speaker, I am glad for the chance to speak against Bill C-79. It is called the Financial Institution Depositors Compensation Act but everyone knows it simply as the tax bail-out Bill. This Bill is both unfair and destructive. People can accept something which is unfair if it is really needed and good for the country. People can accept something which perhaps costs the country a little bit but which creates a situation which is more fair. However, this is both unfair and destructive to the country.
We are being asked to approve an expenditure of $875 million now, and there is every reason to think that this is only the start. The Government will tell us how much more later on. What is notably unfair about it is that this money goes mostly to the very big depositors. These depositors looked around for a high interest rate and found it in this bank which was making questionable loans in order to get a high return. It

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Depositors Compensation
turns out that for many months before last March there were suspicions in the banking community that the Canadian Commercial Bank was not operating in a prudent way. Yet the big banks, which should have and probably did know better because that is their business, took the risk and put their money in figuring: heads I win, tails you lose. If the CCB does all right, they get the profit. If not, they ask the Government and the taxpayers to pay their loss. That is where we are now.
Let us look at some of the CCB depositors. There was more than $108 million on deposit from foreign banks. There was $65 million on deposit from Canadian Schedule A and Schedule B banks. There was $1 million on deposit from trust companies. There was $56 million from investment dealers and brokers, and $51 million from other corporations. These outfits can stand to lose money better than the average worker or small business person. They can stand to lose it, not easily but better than most Canadians can, and they are also the ones who knew best what a risk they were running. By their own standards, they ought to pay for that risk because they demanded the profit that comes with the risk. When we ask these institutions why they take 6 per cent more interest on the money they lend out than they have to pay on the money they borrow, they say that is because of the risk. Now they have the profit for the risk but they want the taxpayers to bear the risk. That is what is unfair.
It is also very unfortunate, Mr. Speaker, that some other groups have put a good deal of money into this bank. I do not think they should have. The credit unions deposited $67 million. Municipal Governments deposited $30 million. Provincial Governments deposited $69 million. That is either taxpayers' money or the deposits of small business people and workers. That money should not have been put at risk. We used to have a principle that when money like that was in effect placed in someone's care, such as a municipal or provincial Government, credit union or union pension fund, it should be invested carefully. They should not take risk with what is essentially other people's money, particularly that of ordinary working people who cannot afford to lose it and who do not have any means of participating in the decision-making involved. However, that was a small part of the portfolio. In fact, between 40 per cent and 50 per cent of the total deposits were from Canadian and foreign banks. This situation is principally a rip-off by the banks who are happy to devour the carcass of one of their brothers and get the taxpayers to pay as much as possible of the risk that they take.
It is unfortunate in another way as well. There is a very interesting situation which illustrates the unfairness. The Canadian Imperial Bank of Commerce has forced hundreds of its employees at its Visa Centre to go out on strike. It refuses to bargain in good faith and follow the 20th century concept of honest labour relations with its employees when they organize a union. This is one of the banks which is going to get money from the taxpayers, including those employees it has forced out on strike. They are being forced to subsidize an employer who refuses to let them have normal union rights. It may be only two or three hundred people but it symbolizes the policy
of not only the CIBC but of banks in general. They are very hostile to working people and small business people in this country. In fact, it is the working people and small business people who are being asked to shell out a total of $1 billion and it will soon be more than that, primarily to help the rich. That is what is unfair.
What is it that is destructive? There are many ways this money could be better spent. What does giving $108 million to foreign banks do for the Canadian working people who will have to pay it in the form of taxes? The banks do not pay much in taxes. Some years they do not pay any taxes at all, they get a rebate. If they make less than $200 million or $300 million they cry poor and get a tax rebate. Why should the taxpayer be foreced to pay $108 million to foreign banks? Indeed, why should working people be forced be forced to pay more than $100 million to Canadian banks over and above the donations already made over the years through a tax system rigged in favour of the banks? What if, for example, this money was spent on building homes? We need them. The Government says it has to cut back, and it did cut $29 million in the Budget for this purpose. Here is $1 billion which would easily build 20,000 homes and that would be a great deal better. It would employ unemployed construction workers and house people who the Government knows lack decent housing. We also know that the drinking water of Lake Ontario is dangerously polluted. The Government of the United States and, to some extent, the Government of Canada have allowed industry to dump their poisonous wastes into the Niagara River or on the land beside the river where it soon runs into the river. That is what we are getting in Lake Ontario. That is what they are drinking tonight throughout Metropolitan Toronto and many, many other communities around the lake. There are ways of reducing those poisons. There is new technology for purifying water but it costs money. The Government could do this but it says we do not have the money, and that is false. The Government does have the money. It has the money to go a long way toward purifying the water in Lake Ontario for millions and millions of people. Yet it refuses to spend the money in that way because it would rather give it to its friends in the banking system.
This is an unfair Bill, Mr. Speaker. It is destructive, it promotes unemployment in Canada, and prevents us from doing the things we need to do. It can provide housing and clean up the drinking water through which we can be poisoned by cancer-causing chemicals which industry has put in the water. I fully support the amendment of our Liberal colleagues and I hope this Bill will never see third reading.
October 10, 1985



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Pursuant to Standing Order 46, it is my duty to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Halifax West (Mr. Crosby)-National Defence-(a) Compensation for sinking of the Lady Marjorie; the Hon. Member for Winnipeg North (Mr. Orlikow)-Consumer Affairs-(a) Discounting of income tax refunds. (b) Request that practice be banned.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-79, an Act respecting the provision of compensation to depositors of Canadian Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect of uninsured deposits, be read the second time and referred to a legislative committee; and the amendment of Mr. Turner (Vancouver Quadra) (p. 7379).
Sergio Marchi: Mr. Speaker, I, too, am very pleased on behalf of my Party to rise and address Bill C-79. As Members have stated before, it is basically a Bill to bail out the two banks which we have been debating for a number of months in this Chamber, namely, the Canadian Commercial Bank and the Northland Bank. Specifically stated, this Government is asking this Parliament, and this Party specifically, of course, to grant it a blank cheque to the tune of $875 million to pay for uninsured depositors of over $60,000. It would seem to me and, as I have learned from discussing this issue with constituents on the weekend, it would seem to constituents in York West, that the logical thing to do with respect to this Bill would be, at the very least, to tell this Parliament, and through this Parliament Canadians from one coast to another, who is going to be receiving this money. Yet, the Government comes to this Chamber and will not tell us where the money is going, just that we should co-sign the cheque and that we will be told later. Of course, Mr. Speaker, the individuals involved will have to make an application for reimbursement and their names will then become public. The Government is asking Parliament to put the cart before the horse.
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The Government goes on to say that if the Opposition Parties do not co-sign this $875 million cheque we will be against individuals, perhaps farmers, or some municipalities which must legitimately be reimbursed by Parliament. This Party is not prepared to say that we should not help the harder hit individuals on a case-by-case basis. However, if we were prepared to support that type of philosophy it would seem logical and appropriate that Parliament would be able to take a look at those individuals to determine whether we should be studying them on a case-by-case basis. However, the Government is not prepared to give us the names and the sources.
The Minister of State for Finance (Mrs. McDougall) rises in her place and says that we have a moral obligation to sign this cheque. What a perverse sense of definition, Mr. Speaker! The Minister of State bases her claim on morality. We on this side of the House ask where the morality was on March 25 when that Minister got up in her place and assured Parliament and the Canadian population at large that the Government knew what it was doing, that it had the appropriate information to lend the bail-out package which the House agreed to on March 25. I ask you today, based on the information that we have and on the inquiry information that is leaking out day after day, where the morality was on March 25 when that Minister assured the House that those banks would be viable if we approved the package. Now, Mr. Speaker, if we do not co-sign this blank cheque we are somehow going to be immoral about the entire affair.
Where was the morality of the Government when it knew about the mismanagement of the banks and continued to ask for support through Parliament? What about the bad administration and the 25 per cent of loans which were determined to be very risky and very poor in judgment and the poor documentation of the banks? Where was the morality of the Government, the Minister of Finance (Mr. Wilson), and the Minister of State for Finance when they did not tell this House and Canadians about the mismanagement? Where was the morality in not allowing this House to set up its own parliamentary committee to investigate those two banks and any other banking matters? Where was the morality of not allowing Parliamentarians to delve into the facts, to take a look at the depositors, to look at how much money individuals or farmers or municipalities had on deposit with those particular banks?
Where was the morality, Mr. Speaker, in hiding the political fortunes of the Minister of State for Finance, the Minister of Finance and the Prime Minister (Mr. Mulroney) himself by running to a Supreme Court Justice to have him take a look at the entire affair? Mr. Speaker, I do not say that to begrudge the integrity of any Supreme Court Justice, but because the individuals across the country have voted for the 282 men and women here Parliament has a moral obligation and a right to look into these questions without having to have a request through an outside body, let alone a judicial body, to look into what is purely and basically a politically motivated decision coming from the top of the Government.

October 10, 1985
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I ask you, Mr. Speaker, where is the morality in denying this Parliament a committee and where is the morality in refusing to get up during Question Period and answer questions genuinely asked, and in simply refusing to answer by saying that there is an inquiry? What are we doing here, Mr. Speaker? Why do these Ministers and the Prime Minister continue to come to Question Period if that is the type of answer that they are going to provide Canadians through this Chamber? Why bother at all, Mr. Speaker?
Where was the morality of the Budget that was introduced? They say that if we do not sign this blank cheque it will be immoral, yet the Government supposedly did not have the money, until Canadians made it change the policy to allow indexation for our senior citizens. In May it was saying that senior citizens had to help bring down the deficit and it was trying to legitimately justify something that could not be justified. It was the seniors of this country who forced the Government to reverse its perverse sense of logic absolutely lacking in morality.
Where is the morality in the deindexation of family allowances? It tried it with seniors and did not succeed so now the Government is hitting the mothers and children of the country. The Government says it has to remove indexation because it does not have the money in the coffer, yet it has the morality to turn around and ask for billions of dollars to bail out these banks. Where was the morality in the Budget which provided that as a result of all taxes, hidden and unhidden, by 1990 a family earning $15,000 to $20,000 is going to face a 36 per cent increase while a person earning $200,000 is going to face a 2 per cent increase? Where is the morality in that, Mr. Speaker? Yet the Minister of State comes to us today and tells us to sign the $875 million cheque. Is she serious? Is the Government serious? Canadians are laughing at the Government. It is unfortunate that Canadians are laughing at a serious and very delicate issue, but they are laughing at the incompetence of the Government.
Where was the morality in eliminating the RHOSP programs that allowed young Canadian families to buy homes? They removed the RHOSP because Canada could not afford it, but now Canada can afford billions of dollars for these banks. There are small businessmen which cannot get the assistance of the federal Government to compete internationally with Germany, Great Britain and Japan because we do not have the money to subsidize contract negotiations. Two specific companies lost contracts because they did not have the financial backing of the Government.
I detest profoundly, as do my constituents, when the Government and the Minister of State for Finance say that if we do not sign the $875 million cheque we are immoral. I submit to you with all due respect, Mr. Speaker, that the actions and decisions leading to the fiasco of these banks is a reflection of the immorality that sits on the other side of the House. It is for that good reason that I am supporting the amendment put forward this morning by my Leader.


Howard Douglas McCurdy: Mr. Speaker, I was quite intrigued by the argument presented by the Hon. Member for York West (Mr. Marchi) who questions the morality of the Government in this bail-out. While I suppose an argument can be made for a lack of morality, I do not know whether one could deem it immorality. Perhaps amorality is a much more likely and appropriate term since it is evident that the Government engages in rather too little thought to deliberately do something immoral. It is a Government of ineptitude. It is a Government that, on the evidence, does not give careful consideration to what it does.
We know that Hallowe'en is approaching and as it approaches we begin to think in terms of masquerades. Certainly from all that we have seen over the last few weeks, we see a group of people who are masquerading as a Government. They are pretending and seem to trip from one error to another, one pratfall to another with their masks hiding their true stupidity.
The other day we engaged in a brief discussion in this Chamber in examining what is transpiring within the context of what purports to be the Conservative philosophy. I believe it is worth repeating a couple of points raised at that time. As a result of its election, this Government has certainly dramatically encouraged the free enterprisers-especially those on the extreme right wing-to visit upon us all the slogans of the Darwinian notion of free market enterprise. These include the notion that we should get Government out of the board rooms of Canada, unleash free enterprise and get the Government off the backs of business people. It is a notion that there should be virtually no intervention on the part of the Government and that we should encourage risk taking because it is a tremendous stimulus to creativity and inventiveness. The very notion that one might lose is the process which encourages innovative approaches to economic development and growth.
Now we see a Government that is prepared to spend the money that belongs to ordinary Canadians, many of whom are suffering immeasurably in the present economic context, to pay for the losses of those who must have assumed by virtue of the return that they sought that there was a risk.
As my colleague, the Member for Spadina (Mr. Heap), has indicated, the differential between the cost of borrowing and the interest paid to depositors reflects that kind of risk. However, that risk has completely disappeared. Suddenly the Government is no longr interested in risk or a free enterprise economy without Government intervention. Now, the Government must rush in where I suggest others might have feared to tread. The Government's action has clearly denied its philosophy or shown us clearly that the philosophy was not as it was described at all. The Government is not opposed to welfare, it is just that the target is different.
It would have been at least tolerable to see this inconsistency in all of this debate, but as we have heard consistently in the debate, the Government says that all of this mess-it can be described as nothing else but an incompetently derived mess- is caused by an awful conspiracy on the part of the East to do
October 10, 1985

in the West and that the National Energy Program was part of that conspiration action.
The Government would have us believe that one need not examine the issues here. One only has to make sure that enough money is poured into these two banks to demonstrate that the Government is not against the West.
The fact is that the Hitchman Report and any other number of facts would have demonstrated the utter fallaciousness, if not the malevolence of that argument. That argument is the moral equivalent of racism. It is divisive, inappropriate and diverts us from looking at the real issues.
The real issues stem from the fact that a number of factors may have made it difficult to survive in the recessionary period during which the downfall of the banks was initiated. However, to suggest that the Liberals are responsible for the failure of the Northland Bank, as has been implied by the arguments inferred from the Government side, is so bizarre as to suggest that indeed perhaps there are elements of immorality in this situation. Mr. Hitchman has pointed out that any close examination of the practices of the Canadian Commercial Bank would have exposed sloppiness and ineptitude, if not crookedness. None of this was revealed.
When I think about the machinations surrounding this bank bail-out, I am reminded of a peom about the blind man and the elephant. Let me read the first verse of the poem, which is familiar to many people:
It was six men of Indostan To learning much inclined.
Who went to see the elephant (Though all of them were blind),
That each by observation Might satisfy his mind.
Of course, one blind man touched the elephant and thought it might be a tree, another thought it was a a snake and so on. This is analogous to the Inspector General of Banks looking at the CCB, the auditors looking at the CCB and Governor Bouey looking at the CCB, as well as the Minister of Finance (Mr. Wilson) looking at the CCB. The result with which we are all familiar reminds us of the last verse of the poem which states:
So, oft in theologic wars The disputants, I ween,
Rail on in utter ignorance Of what each other mean.
And prate about an elephant Not one of them has seen!
Indeed, no one saw the bank. They poured money into the bank without ever seeing it. Mr. Hitchman has pointed out what should have been seen in the bank.
People in this country are suffering from inhumane tax measures directed at children. Let me cite one more quotation. It is very interesting in the present context. It states, "The Government can find hundreds of millions of dollars for bail-outs but the same Government refuses to allow our badly underfunded education system the money it needs to produce the highly trained manpower this country needs. Those are
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strange priorities, bizarre in the extreme". A Conservative said that, referring to a bail-out which is ant sized as compared to the elephant in this instance.
What is disturbing about this situation is that the Government talked about eliminating the deficit but now we see the spectacle of $1 billion being taken away from the taxpayers, which could have met the needs of ordinary Canadians, to bail out the Government and those involved in the bank as a result of their stupidity. This amendment must be passed.


Mr. Gaston Isabelle (Hull-Aylmer):: Mr. Speaker, although not a financial expert, I thought it was my duty to take part in this debate where it concerns the motion by my leader to amend the motion on Bill C-79. I think the Bill should have been split in two, the purpose of the first part being to reimburse according to law, deposits not exceeding $60,000, and the second part would have been called Part II, for gamblers, because as far as amounts over and above $60,000 are concerned, only gamblers or people taking risks deposited their money with the Canadian Commercial Bank.
1 simply want to say there is a matter of principle at stake here. We have said that the prestige of our banks has not been affected. However, as far as the public is concerned, a crack has appeared in the solid structure of our banks. We all know that money is a sensitive matter. When people say that a bank is in bad shape, the first thing you know, depositors are withdrawing their savings.
If we consider this for a while, we realize that our Canadian banking institutions have always been strong and sound, with a formidable reputation and one of the best banking systems in the world. I am sure that our bankers, who have always worked quietly and unassumingly, will be able to repair this crack in the prestige of our Canadian banking system.
I may add that the Government has a duty to provide for regular inspection of our banks. In fact, that is why we have a system with inspectors who see to it that banking operations are carried out in a normal way that is beneficial to the public. In this particular case we are talking about new banks, and I want to refer more specifically to the Canadian Commercial Bank which was established in 1975. I think the Government had a duty to provide more and closer supervision than it did in the case of other institutions with an established reputation and the stability that is typical of our Canadian banking system. If we refer to Hansard when the bank was created in 1975, we find the following description of the bank's activities, in the Senate Debates:
They will specialize-
-the branches of this Bank-
-their lending in higher yielding business loans, resource financing, real estate financing, term loans, loans to small businesses, and the like.

October 10, 1985
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And also the following:
The risk that is sometimes associated with these assets will be minimized by close, specialized management and forms of insurance, such as mortgage insurance.
Mr. Speaker, with hindsight, it would appear that management was poor. That is why I am saying that perhaps this particular bank, like the Northland Bank, should have been the object of closer monitoring since it was a new bank. Ten years in the life of a bank is not very long, Mr. Speaker, but now we know what can happen: with assets of $40 million it ended up in a $4 billion-plus bankruptcy. Again I refer to the history of the creation of the bank in 1975. After the sponsors made their statements to convince the Senate that the Bill ought to be adopted, Senator Heath asked a very relevant question, and I quote:
Is there any provision for a restriction on the percentage of shares that can be owned or controlled by individual, corporate or government shareholders?
Here is Senator Hays' answer:
This will be a private bank, and its innovators would like to see, as principal shareholders, Canadian institutions, primarily pension plans. There may be 25 such institutions, each holding 4 per cent of the shares. There are laws to ensure percentage of holdings.
So no provision was made for shares held by individuals. Senator Molson found it rather strange-he still had a sharp mind with respect to financial matters-that the sponsor of the Bill would react like that, so he asked:
When my honourable friend says it will be a "wholesale" bank, does he mean there will be no phase of its activities that deals with the ordinary, small individual; that there will be no banking for the ordinary, small operator or depositor? I am not quite clear about the term "wholesale" in this case.
So there is the crux of the problem, Mr. Speaker, and that is what led to the collapse of the bank. It is unfortunate that at that time some senators managed, so to speak, to dig the grave of the bank even before it was born. For this reason, the various Governments should have paid a special attention to this bank from the start, since the basic principles were, should I say, perverted. According to a basic economic rule, the higher the yield, the higher the risk. All those institutions, organizations or Governments which had invested in this bank more then $60,000 wanted to make more money. It was high-risk capital, therefore, which should be excluded from this Bill, at least until we are advised of the names of those who will benefit from the Government's generosity.
The City of Hull, which is part of my own riding, had invested $12 million in this banking institution. Do you know why? Simply because it wanted to get more interest on its investment. In other words, it took a risk, and the people are going to suffer, but in the end they are likely to punish those they had elected not to risk the capital entrusted to them but to protect it. The duty of any appointed or elected administration of a public organization, municipality or group is to make sure that the invesments he or she makes on behalf of the community are secure investments and not high-risk ones. That is precisely the point I am trying to make and that is why
I will support this amendment, together with my colleagues, so that we do not waste the taxpayers' money to compensate those gamblers who invested more than the $60,000 limit of insured deposits.


Neil Young: Mr. Speaker, I am pleased to have an opportunity to speak on Bill C-79 which is a proposal by the Government to bail-out a major bank in the country.
Before this debate began, before this issue was raised in the House of Commons, I, like most other Canadians, never gave too much thought to the banking industry. This debate has been a particular eye-opener for me and for average Canadians who are not involved in the field of high finances in their daily lives.
For example, I always considered the Inspector General of Banks to be just that. I always had the vision of some person who was high in authority and was in fact a general, in the sense that his main role would be to police the operations of the banking industry. It has come to light during this debate that the Inspector General of Banks has a total staff of some eight people to police the expenditures and investments of billions of dollars of ordinary Canadians' money. If we examine what the Inspector General and his staff of eight people are required to do, we find that they are financed and paid for by the banks. In other words, the banks are paying the Inspector General and his eight inspectors to police themselves. This may be one of the reasons that we find ourselves in the kind of difficulty with which we are faced today.
It must be realized that we are talking about a first instalment only. The House is being asked to provide a first instalment of $875 million of taxpayers' money. This money is not for people who invested or saved $ 1,000 in a bank account or even $5,000 or $6,000. All those people will be covered under depositors' insurance for investments up to $60,000. We are talking about $875 million of taxpayers' money, and 70 per cent of that amount will be directed to large corporations and foreign banks. We are talking about people who are used to high risk investments in the banking and financial industry. They knew what the risks were before putting money in. Having known that risk, they are now not prepared to absorb it. It looks as if the Government, in this Bill, fully supports what these corporations and foreign banks are demanding of Canadian taxpayers. It is totally unfair. What makes it doubly unfair is that the Government will not even tell us who are these people, making the argument that the information is confidential and that confidentiality would be harmed if Canadian taxpayers were told to whom they were paying this money. The Government argues legalities. Legalities or no legalities, Canadian taxpayers are entitled to that information.
As a Member of Parliament, I represent a constituency that does not have an over-abundance of rich people. My constituents work extremely hard for their money. They are fully entitled to that information so that they can make a judgment on whether or not the payment of $875 million is actually
October 10,1985

justified. What they have told me is that they do not see the justification for it and certainly do not accept the argument of the Government that depositors have to be protected both in name and in their investments. In fact, people have written to me on other issues and have made comparisons. When the Government decided to reduce the deficit, it made the argument that senior citizens were prepared to support its effort to do so by accepting the deindexation of their Old Age Security. The Government made the argument that senior citizens would accept that for the sake of the national economy. If I recall correctly, the Minister of Finance (Mr. Wilson) tagged on to that argument that as soon as the economy improved, the Government would try to move to improve pensions. I find it passing strange that the Government could put up that kind of argument in defence of attacking senior citizens, but could not put up the same one when it came to protecting foreign banks and large corporations. It had absolutely no difficulty reaching into the taxpayers' purse overnight to find $875 million as a first instalment, and the Government will come along later with a request for another several hundred million dollars for foreign banks and large corporations. The Government attempted to attack senior citizens until they said that enough was enough and made it back off. In addition, it proposed a reduction in transfer payments to the provinces for the provision of medicare and post-secondary education to the tune of $2 billion over the next five years or six years. What is the Government's argument for doing that? It is because the deficit is too large. It has to reduce the deficit, and it believes that the only way to do it is by going after people who are sick and who need assistance and by going after students who need assistance to attend university. That is how the Government wants to reduce the deficit, but it does not make the same argument when it comes to banks and corporations.


Nelson Andrew Riis: What about family allowances?


Neil Young: We know what the Government is trying to do to the family allowances. It is attacking families, women and children who are a major resource to the future of Canada. It has no compunctions in that regard, but it feels sorry for the corporations and for the foreign banks and goes out of its way to protect them.
There is a housing crisis in Canada. There are people in Metropolitan Toronto and elsewhere who cannot find decent, affordable housing. What is the Government doing about that? It is cutting back in the funding for housing under CMHC programs. If the Government was elected by Canadians to represent their best interest, it sure has a funny way of carrying out that mandate. If there is a shortage of affordable, adequate, good housing, surely the Government should be finding the money to stimulate housing growth in the public sector. It would not only provide a socially useful purpose; it would provide jobs. The more jobs created, the better the economy. It is general knowledge that for every job created in housing construction, another three to four jobs are created in spin-off industries, such as electrical manufacturing, appliance manufacturing, plumbing and housing materials. We could
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create many jobs in Canada if there was a political will to do it. The money is there. There is $875 million for the corporations and foreign banks, but there ain't any money for ordinary Canadians who need financial support at the present time.
In my remaining minute, let me indicate that I was a member of the Standing Committee on the Disabled and the Handicapped which produced a report containing 130 recommendations. To my knowledge the Government has hardly acted on any of them. The total amount of money required to implement every one of those recommendations would be less than 1 per cent of the total expenditure in the social services budget. If the Government seriously wanted to do something in the best interest of Canadians, and if it had the political will to do so, then that is the direction it would take. It would stop chumming with the banks and corporations and take into account the severe hardship which exists for many Canadians and do something about it.


Mr. Carlo Rossi (Bourassa):: Mr. Speaker, it is with pleasure that I lend my support today to an amendment moved by the Right Hon. Leader of the Official Opposition, Mr. John Turner, the Member of Parliament for Vancouver Quadra.
Mr. Speaker, if I may, I would like to read this amendment:
This House declines to give second reading to a Bill, the principle of which is to permit payments of large, but unspecified amounts of public moneys to unspecified persons or corporations, thereby substantially denigrating parliamentary accountability for expenditure of public funds.
What are the important words in this amendment, Mr. Speaker? These words are, and I quote:
-large, but unspecified amounts-
I repeat, large, but unspecified amounts. Mr. Speaker, we are being asked to give blindly $875 million, and probably even more eventually.
In my humble opinion, it is shocking that, because of the lack of concern, the negligence and the incompetence of the Minister of Finance (Mr. Wilson), Member for Etobicoke Centre, and the Minister of State for Finance (Mrs. McDou-gall), Member for St. Paul's, the Government wants to bleed ordinary people, workers and small wage-earners.
Mr. Speaker, the amendment also says the following:
-to unspecified persons or corporations-
I would like to know which Conservative Member, which Government Member, in his own private business, would give a blank cheque to a company before seeing what he will be getting in return. Mr. Speaker, I think that this shows total incompetence. It is unacceptable. The Ministers have the audacity to ask us for an enormous blank cheque. As I have said, Mr. Speaker, I would very much like to see a Member on the other side make out a blank cheque to any business

October 10, 1985
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whatsoever without knowing what he will get for it. Canadians have the right to know where these $875 million are going.
How can we explain to the Canadian people what is going on? Who asked the Prime Minister (Mr. Mulroney) for this Bill? What does the Bill introduced by the Minister of State for Finance hide? Mr. Speaker, has the Government examined what this will mean for the economy of our country? What will be the consequences of all this? The Ministers ask us to trust them. But what are we trusting them to do? We are signing what? We are paying out to whom? Who are the people, who are the corporations to whom we will be giving the money? Mr. Speaker, let me tell you that on this side of the House, we no longer have any confidence in this Government. We no longer have any confidence in its bad managers. We no longer have any confidence in this Progressive Conservative Government that is replete with incompetence people on that side of the House. Moreover, they are keeping from us the names of the beneficiaries, of those who will be receiving those $875 million, of those who will be receiving all that money. I submit to you, Mr. Speaker, that since that money belongs to the Canadian people, to every Canadian man and woman, we all are entitled to know, you Tory gentlemen, where you are going to put those $875 million.
Imagine for a moment what we could do . . . Madam Minister, you could pay attention, this will be of much interest to you also. Anyway, you were just elected in this House. Imagine, Mr. Speaker, what we could do with that money. Let us for a moment turn our mind to our senior citizens, let us consider for a moment the family allowances. Let us remember our poor mothers you want to deprive of their money, and think of the de-indexing of family allowances. Think of our senior citizens. They wanted to clip their wings off recently, cutting down part of the indexation. Think of senior citizens, of artists living on very small salaries.
Think also, and 1 am sorry the Minister of State (Small Businesses) (Mr. Bissonnette) is not in this House, yes, think a little, Mr. Minister, about the small and medium-sized businesses you claim you want to help. Instead of paying out those $875 million to people, to businesses the names of which you refuse to disclose . .. Are you hiding something, you Tories? Are you afraid to tell us whom this money will be going to? To people in the Montreal East End, to Quebecers, to Canadians of both sexes? Everyone has the right to know to whom you want to give those $875 million. Have you thought a little of the people working for Vickers, for Gulf Canada, for Bombardier to whom you may want to make other proposals?
Therefore, as a Member of this House, when I am asked to sign a blank cheque for $875 million, my reaction is I would even forbid those who are close to me, my children, my wife, and everyone else to sign a blank cheque to anyone. You have no right to do that, gentlemen!
The Government House Leader is looking at me and laughing. I will ask him this question: In your own business would
you sign a blank cheque for goods to be delivered without knowing who will make the delivery and to whom the cheque should go? I would therefore ask you gentlemen to be more conscientious and responsible. 1 think you are mature enough. You were called upon as a result of an election to represent your constituents. Have you taken a poll in your constituency to learn how many persons are ready to sign a blank cheque for $875 million?
The Minister of Transport (Mr. Mazankowski) is rising and seems quite surprised. Now, Mr. Minister, I ask you personally: Are you ready to sign a blank cheque? You are pointing at me, but you only have to nod to say that you would sign a blank cheque and I think you will then be told that you lack maturity.
There is not one responsible indidivual in this House who would dare to sign a blank cheque, whatever the amount, payable to anybody ... I see that you are giving me the signal, Mr. Speaker, and I thank you.
Finally, I would ask all my colleagues to support the amendment introduced by the Leader of the Opposition, the Right Hon. John Turner.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, I wish to inform the House that there have been consultations among the representatives of the Parties of the House and that it has not been possible to reach an agreement pursuant to Standing Order 82 or 83 with regard to the allocation of time to the second reading stage of Bill C-79, an Act respecting the provision of compensation to depositors of Canadian Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect of uninsured deposits. Therefore, at the next sitting of the House it is my intention to propose the following motion pursuant to the provisions of Standing Order 84:
That, in relation to Bill C-79, an Act respecting the provision of compensation to depositors of Canadian Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect of uninsured deposits, one sitting day shall be allotted to the consideration of the second reading stage of the said Bill; and
That 15 minutes before the expiry of the time provided for the consideration of Government Business on the above-mentioned sitting day, any proceedings then before the House shall be interrupted, if necessary, for the purpose of this Order and, in turn, every question necessary to dispose of the said stage of the said Bill shall be put forthwith and successively, without further debate or amendment.


Mr. Deputy Speaker:: On a point of order, the Hon. Member for Kamloops-Shuswap (Mr. Riis).


Nelson Andrew Riis: Mr. Speaker, I think that what we have just heard is an absolute disgrace. At a time when such a matter is before
October 10, 1985

a judicial inquiry, costing the taxpayers of Canada in excess of $ 1 billion, to think that we are not-


Mr. Deputy Speaker:: Order, please. The President of the Privy Council (Mr. Hnatyshyn) on a point of order.


Ramon John Hnatyshyn: Mr. Speaker-


Jean-Robert Gauthier: Another phoney point of order.


Ramon John Hnatyshyn: Mr. Speaker, I would not have termed the point of order of the Hon. Member for Kamloops-Shuswap (Mr. Riis) a phoney point of order, just an improper point of order.
I rise, as I indicated I would earlier this day, to announce the business of the House for the next week.


Marcel Prud'homme: We should not even listen to you after what you have just said.


Ramon John Hnatyshyn: Mr. Speaker, the reality is that we have legislation which we would like to deal with. Tomorrow it is my intention to call as the first item of business a report from the Senate on a Bill with respect to amendments to the Criminal Code concerning pari-mutuels. Your Honour will recall, as will Members of the House, that this Bill received all three readings in the House. There has been an amendment proposed in the Senate which the Government is prepared to accept. 1 understand from my discussions with representatives of the opposition Parties that they are agreeable to dealing with that amendment. It is proposed as the first item of business for tomorrow in order that it can be passed and that the Bill can be prepared for Royal Assent.
Second, there is a Bill with respect to the Yukon Territory and the Northwest Territories with respect to certain ordinances as has been reported, without amendment, from the committee. I believe there would be a disposition to deal with that Bill as the second item of business and to deal with the report stage and third reading tomorrow so that the matter can be referred to the other place for consideration.
Finally, for tomorrow, the Bill with respect to the salary adjustment for the Governor General, Lieutenants-Governor and judges will be called as the third item of business for debate. Hopefully, the matter can be given second reading so that the committee can consider the provisions of the Bill.
Next week the sequence of Bills to follow would be Bill C-75, a Bill relating to amendments to the Canada Shipping Act, followed by the Bill with respect to employment equity, followed by the Bill with respect to the dissolution of Canagrex.
That is the sequence of legislation which we can look forward to in the course of next week. As I have indicated on previous occasions, we will be monitoring the progress and we will continue our consultations with opposition House Leaders and if there is any change I will make an announcement at the earliest possible date.
Business of the House


Herbert Eser (Herb) Gray: Mr. Speaker, the Government House Leader has just indicated the business he wants to call for tomorrow and next week. Particularly with respect to tomorrow, I wish to say that while there have been consultations earlier today with respect to what business might be called tomorrow, these consultations took place before we knew that the Government House Leader would rise in his place this afternoon and move a motion of closure to choke off debate on a measure for which the Government wishes to hand out $1 billion of taxpayers' money to a number of unidentified people, likely unworthy millionaire friends of the Government. I say on behalf of the Canadian people that this is a shocking move. The legislation which the Government wants to call tomorrow is worthy legislation; but none of the Bills are as important as the Bill to bail out the uninsured depositors with $1 billion of taxpayers' funds. The Government should be ashamed of itself for trying to choke off debate on that Bill without adequate debate. The Government is moving a motion for a $ 1 billion cover-up-


Sheila Maureen Copps: Muzzle.


Herbert Eser (Herb) Gray: It is a $1 billion muzzle. Surely, it will be called to account by the Canadian people for this effort to choke off debate when it should be leaving debate before this House so that this matter can be properly explored, understood and defeated.


Ramon John Hnatyshyn: Mr. Speaker, I appreciate the representation made by the House Leader of the Official Opposition. Indeed, he will confirm that we have had discussions about the Bill which were unsuccessful, as I indicated in my remarks, with respect to limiting the debate on the second reading stage of the Bill concerning the CCB. The hon. gentleman will be the first to acknowledge and appreciate the fact that this will not spell the end of debate by any means. This is just the beginning. We have had over eight hours of debate on this matter at the second reading stage. There will be an opportunity to refer the matter to committee where it can be examined in detail. There is also the report stage and the third reading stage when the matter will come back before the House after the committee stage. I am sure Hon. Members opposite will realize by that time that there are many small people out there who are depositors in this institution, people in western Canada who will want an indication from the Opposition that they have an interest in the situation. There are credit unions, municipalities and people of all walks of life who are involved and who want to know that the Government of Canada-


Sheila Maureen Copps: They want answers from the Government. On a point of order, Mr. Speaker.


Mr. Deputy Speaker:: I cannot recognize the Hon. Member-


Sheila Maureen Copps: It is a point of order with respect to the business question.


Mr. Deputy Speaker:: The Hon. Member for Hamilton East (Ms. Copps) on the business question.

October 10, 1985
Business of the House


Sheila Maureen Copps: Mr. Speaker, I have just heard the Government House Leader state that there is no new information that can be brought forward. There are a number of Members on all sides of the House, including myself-


Some Hon. Members:: Order.


Mr. Deputy Speaker:: Order, please. The Hon. Member for Kamloops-Shuswap.


Nelson Andrew Riis: Mr. Speaker, I wish to confirm that, indeed, discussions did take place with my Party's House Leader. There was agreement with respect to the nature and flow of business in the order as presented by the Government House Leader. Since the time allocation motion has been introduced, will the Government House Leader indicate that while it is prepared to muzzle the discussion at this particular stage that it will provide full opportunity once this matter reaches the legislative committee to ensure that all the appropriate witnesses can appear and be questioned by Members from all sides of the table?


Mr. Deputy Speaker:: The Hon. President of the Privy Council.


Ramon John Hnatyshyn: Mr. Speaker, I will answer those matters which fall within my jurisdiction. Obviously, the sequence of business has been discussed with the House Leaders so we do have an indication of the business for tomorrow. With respect to the procedure on second reading, it is hard for me to comment except to say that the Hon. Member will be the first to acknowledge that there will be a reasonable examination of this matter in committee. That has been the practice of our Government with respect to all legislation.


Marcel Prud'homme: Mr. Speaker, once more the House Leader of the Government is making arrangements with the House Leaders. It is his right, of course, to announce the legislation for tomorrow so we are not taken by surprise, so we know what is going to be discussed. That is fair. However, he should give us more than a few hours' notice when he again intends to call Bill C-79. There are people who want to speak on the Bill and they may be out of town on legitimate political business. I submit to you, Sir, with a Bill of such importance there must be long and careful debate. I have spoken with my House Leader. He is not aware when the Government House Leader intends to again call the Bill.
As an Hon. Member of this House who has spoken only 10 minutes this morning and who has a great interest in this Bill like every other Hon. Member, I would like to participate in the debate. I know my colleague, the Hon. Member for Hamilton East (Ms. Copps) would like to participate in the debate but she may now be cut off. There are other Hon. Members who would like to participate. They do not want to be taken by surprise.
Would the Government House Leader tell us when he intends to call that Bill?


Mr. Deputy Speaker:: There has been a question.


Ramon John Hnatyshyn: Mr. Speaker, I appreciate the representation of the Hon. Member. He will understand that it is not a question of calling the Bill, it is a question of having the motion brought forward with respect to time allocation.
I try to give reasonable and adequate notice of all of the intentions of the Government with respect to moving these Bills forward, as I have in the past. I can only reiterate the fact that there are a lot of opportunities for further discussion of this Bill. This is not the end of the Bill. The Hon. Member's protestation would be effective if we were ending the discussion, but we are not. We are only in the midst of discussion of this Bill. We still have the committee stage, the report stage, third reading stage and I think by that time there will have been adequate opportunity for the proper examination of the legislation.
I am simply appealing to Hon. Members to keep this matter in perspective. I assure them that in bringing forward legislation we like to ensure that there is a reasonable opportunity for participation in debate. We have extended the debate all this week. We are now going into committee where there will be a possibility of having a thorough examination clause by clause. Ultimately the Bill will come back to the floor of the House and there will be an opportunity for the Hon. Member, I suppose, to address himself to this legislation again.


Jean-Robert Gauthier: Mr. Speaker, on the same point of order, I would like to point out to the House that the Government seems to be using closure for Bills when it wants to impose its authority.
Yesterday in the House, the Minister tabled the comprehensive response to the Second and Third Reports, and said: "We are in favour of parliamentary reform". I submit to the Minister that parliamentary reform means that parliamentarians are able to participate fully in debate and are not gagged by the Government.


Mr. Deputy Speaker:: 
PRIVATE MEMBERS' BUSINESS-MOTIONS   NUCLEAR ARMAMENTS ADVISABILITY OF DECLARING CANADA A NUCLEAR ARMS FREE ZONE
Neil Young: That, in the opinion of this House, the Government should consider the advisability of declaring Canada a nuclear arms free zone by prohibiting the deployment, testing, construction and transportation of nuclear weapons and associated equipment through and within Canada, the export of goods and materials for use in the construciton and deployment of nuclear arms and further, the Government should encourage cities, provinces and states throughout the world to undertake similar action.
He said: Mr. Speaker, the terrible potential of nuclear weapons entered into the public consciousness shortly after the first atomic bomb was dropped on the Japanese cities of Hiroshima and Nagasaki. Never before had human beings unleashed such a powerful and concentrated form of destruction. Since that time, when the nuclear arsenal was very small, nuclear fire power has grown so that now it is estimated that there are more than 50,000 weapons in existence globally with a total explosive power equal to 1.5 million times that of the bomb which devastated Hiroshima. Every year the nuclear arsenal grows in destructiveness and sophistication.
Even if we pass this resolution, we will not solve the problem overnight. Canada is not a superpower. Canada does not have the ability to unilaterally end the arms race. However, as a middle power, with a well respected reputation as a peace keeper, Canada does have a role to play in preventing nuclear war.
Nuclear war is what is at stake here. I am not being melodramatic when I say what we have to worry about is the survival of the earth. If nuclear weapons are ever used, it will mean the complete destruction of human society. Some theorists talk about a limited or winable nuclear war. In my view, Mr. Speaker, this is pure folly and I believe it is understood as that by most people. The solution is not to develop better weapons to ensure our side will win in any conflict but to ensure that the stockpile of nuclear armaments is never used.
The destructive capability of nuclear weapons is well known. The missiles all over the world are posed and ready. There is little question that any nuclear engagement would surely escalate so that major population centres across the world would suffer severe damage. It is estimated that in an all-out nuclear war, 1,150,000,000 people would die and 1.1 billion people would be injured. These numbers would be considerably increased as the effects of radiation took their toll.
Those injured would not have access to medical help because the bulk of our medical facilities and personal are in the areas targeted by nuclear missiles. As it was put in an article in the United Nations Chronicle, and I quote:
The whole infrastructure required for dealing with serious injuries-operating rooms, nurses, blood, antibiotics, drugs, water supplies, electricity, telephones, heating, transport services-would be in disarray.
Nuclear Arms Free Zone
It goes on to state that those not killed or injured by the blast would be the victims of radiation.
It was not until 1962 that researchers discovered the existence of the phenomenon called electromagnetic pulse. It is a surge of electromagnetic energy caused by a nuclear explosion which disables telephones, radio, television, computers, radar systems and power grids. According to Princeton University physicist Daniel L. Stein, writing in the Bulletin of the Atomic Scientists, and I quote:
Even if permanently damaged, computer memories would be erased, digital systems might process incorrect signals, trajectories of missiles in flight could be altered, and power outages might occur.
The electromagnetic pulse means that there would be even less chance of a partial nuclear war being possible because with the failure of electronic communications across the world, who could be able to order a stop to the attack or counter-attack?
This is an example of the unknowns which we must face in the nuclear age. The power we are dealing with in nuclear weapons is awesome and irreversible but it is also largely unknown.
Another example is the recently discovered and widely discussed concept of nuclear winter. Even a much smaller number of nuclear devices than could be expected, say, in an all-out nuclear conflict, would cause serious environmental damage, making the earth a very inhospitable place. Aside from the short-term effects of nuclear blast and thermal waves, survivors would face extreme cold, water shortages, lack of food and fuel, heavy burden of radiation and pollutants, diseases and severe physilogical stress, all in twilight and darkness.	'
Another study released in January of this year by the Royal Society of Canada, on the environmental impact of nuclear war, concluded that a nuclear exchange between the superpowers would probably destroy Canadian agriculture even if no Canadian targets were bombed. It is frightening to think that this was nearly 40 years ago, after the development of nuclear weapons technology and before this particular effect became widely known. That makes me wonder what other results so far unimagined are going to be discovered.
There is no doubt that this escalation of the arms race has heightened the fears of not only Canadians but of people around the world that the threat of a nuclear exchange is indeed a real threat. All of this at a time when we should be developing programs to assist people around the world to live a better life is unforgivable. Moneys and other resources we put toward the arms race are money and resources which we cannot dedicate to providing safe drinking water to everyone in the world, eliminating illiteracy, improving health and developing agricultural resources. The United Nations sponsored a three-year study of the linkage between disarmament and development by 27 experts from every area of the world. The group concluded in its 1981 report that the world has a choice. It can continue to pursue the arms race or it can move with

October 10, 1985
Nuclear Arms Free Zone
deliberate speed toward a more sustainable economic and political order, but it cannot do both. The arms race and economic development are in a competitive relationship. Even the Brandt Report emphasized that one-half of 1 per cent of one year's military expenditures would pay for all the farm equipment needed to increase food production and approach self-sufficiency in food deficient, low-income countries by 1990.
In the developed world, military expenditures are often defended because of the alleged jobs they create. Everyone should know that in fact military spending is one of the least effective ways of providing people with employment. One of the supposed advantages of Canadian involvement in the Strategic Defence Initiative is its job creation potential. Any serious look at this proposal would show that in this area, as in many others, the SDI proposal is a bad one. Studies have shown that, in comparison to other uses of the same money, military spending is one of the least effective ways to stimulate job creation. U.S. Labour Department figures show that 28,000 jobs are created for every $1 billion spent on military procurement. That same amount would create 32,000 jobs if spent for public transit, 57,000 jobs if spent for personal consumption, or 71,000 jobs if spent on education. For those workers presently working in arms production, the solution is the conversion of those facilities to non-military and socially useful production. Obviously this cannot be done overnight and not without considerable research, but it is something the Government will be forced to consider over time.
As I said earlier, the proposal to make Canada a nuclear arms free zone will not solve all the world's problems with regard to the nuclear threat. It is, however, an appropriate response for Canada as a middle power in the world with a considerable reputation as a peace-keeper. By bringing about the aims of this resolution we would enhance Canada's reputation and prestige on the world stage and set an example for other countries.
After considerable controversy, Mr. Speaker, the previous Government acquiesced to U.S. requests to test the Cruise missile. The Conservatives, while in Opposition and now in Government, supported this decision. We in the NDP have opposed this testing all along. Canada has a considerable arms industry. Some manufacturers are involved in nuclear weapons technology. Litton Industries, which is working on the guidance system for the cruise missile, springs to mind. Several U.S. weapons with the potential to be nuclear armed when deployed were and are being tested at the Canadian Maritime Experimental and Test Range at Nanoose Bay on Vancouver Island. Included among these weapons is an anti-submarine rocket. This rocket is fired from surface ships, weighs half a ton and consists of a rocket motor and either a MK 46 torpedo or a nuclear depth bomb of one kiloton. With a range of six miles, this weapon is the primary anti-submarine warfare weapon of U.S. frigates, destroyers and some cruisers. It has been the U.S. military's policy to neither confirm nor deny whether American vessels visiting Nanoose and other bases in Canada carry nuclear weapons. Our Government is content to
leave it at that. Along with many other Canadians, I say that is not good enough. The intent of this resolution would prevent visiting vessels from carrying nuclear arms.
For over a year the Nanoose Conversion Campaign has had a peace camp at Nanoose to arouse public awareness about the possibility of submarines carrying nuclear arms. My colleague, the Hon. Member for Cowichan-Malahat-The-Islands (Mr. Manly), has raised the issue of whether visiting U.S. submarines at Nanoose Bay and Esquimalt are armed with nuclear-tipped Tomahawk cruise missiles. He has presented petitions to the House from people opposed to these vessels which are possibly armed with nuclear weapons. The Tomahawk has a range of 1,350 miles and, according to William M. Arkin, Director of the Arms Race and Nuclear Weapons Research Project of the Institute for Policy Studies in Washington, D.C., it is the nuclear weapon most likely to be in on the start of both World War III and World War IV. To quote Arkin a little further, the Tomahawk can also, the Navy believes, contribute to fighting a controlled and limited nuclear war. This concept is absurd and Canada should let the Americans know we think so. One way would be to forbid nuclear-armed Tomahawks in Canadian waters. The Canada-U.S. agreement for the base at Nanoose expires in April, 1986. Needless to say, this agreement should not be renewed. There are other examples of Canadian nuclear involvement. Our Department of Energy, Mines and Resources gathers gravitational data in the Arctic which is used to improve the accuracy and the counter-force capability of U.S. ballistic missiles. The Government recently came forward with its decision on star wars. Because of widespread and strong opposition to the Canadian participation in SDI, the Government declined the U.S. Government's invitation to participate directly in SDI research. It left the door open, however, for the participation of, and even grants and subsidies to, Canadian companies.
There has been considerable debate on the star wars issue in Canada. The NDP has come out solidly against the proposal. The theory of deterrence in nuclear strategy holds that because the U.S. and the U.S.S.R. have the ability to destroy each other, the threatened use of this ability in a retaliatory strike prevents one superpower from attacking the other. Although it is possible to question and challenge deterrence from a number of perspectives, no one in political or military power has advocated abandoning deterrence. The concern has been of technological advance which could give one side a momentary advantage over the other. Star wars is just that sort of destabilizing technology. Foreign policy, defence and strategic thinking would move from seeing nuclear weapons as an unthinkable retaliatory force, to nuclear war as a useable, potentially successful tool of international and military policy. According to the former U.S. Ambassador to the UN, George Ball, the SDI announcement in March, 1983, was "one of the most irresponsible acts by any head of state in modern times".
There are a number of reasons why star wars would not work. It is dangerous because it is the abandonment of deterrence by the United States. Star Wars will be destabilizing,
October 10, 1985

dangerous, costly and will never be able to make the United States safe from a nuclear attack.
Discussion of the concept of a nuclear weapons free zone has a long history in some parts of the world. In Canada the legislature of the Province of Manitoba passed a resolution declaring that province a nuclear weapons free zone. Over 80 municipalities in Canada have declared themselves nuclear weapons free zones. Last year nearly half a million Canadians signed a peace petition calling for, among other things, a nuclear weapons free zone in Canada.
The final report of the United Nations Special Session on Disarmament in 1978 declared that "the establishment of nuclear weapons free zones on the basis of arrangements freely arrived at among states in the region concerned constitutes an important disarmament initiative. The process of establishing such zones should be encouraged with the ultimate objective of achieving a world free of nuclear weapons".
This is an area in which Canada can play a responsible role in reducing nuclear tension. There is already an international agreement signed in 1967 prohibiting nuclear weapons in Latin America. In the Nordic countries proposals for a nuclear weapons free zone has become one of the most debated foreign policy initiatives. In 1983 the Finnish President discussed the prospect with then Soviet Prime Minister Andropov who declared that the Soviet Union was willing to discuss the possibility of including the Baltic Sea in such a zone. The discussions are a long way from being settled on this issue, but that this debate is even taking place is a hopeful sign.
The possibility of a nuclear free zone in the Balkans has been discussed by Bulgaria, Greece, Romania, Yugoslavia and Turkey. Progress has been limited in these multilateral talks, but the concept is frequently discussed in bilateral talks among the Balkan countries. According to Nikos Andrikos, a special counselor to Greek Prime Minister Andreas Papandreou, one must be optimistic that the denuclearization of the Balkans will soon become a reality.
The South Pacific is another area that is proposed as a nuclear free zone. In August of 1984, the leaders of the 13 member states of the South Pacific Forum endorsed an Australian proposal to establish a nuclear free zone in the region. There are some substantial differences of opinions between these states, but despite these differences they have been able to give their initial agreement to proceed based on the Australian formula.
It is time for Canada to take the initiative in this area. Canada has viewed its options too narrowly and has not been willing to take an independent enough foreign policy position. I do not agree with those who say that taking a more independent course will lessen the stability of the world. Making Canada a nuclear weapons free zone will set an example for others in the world and will be a concrete step toward making the world a safe place.
I hope that Members on the Government side do not opt to talk this resolution out as is often the case, but will take a
Nuclear Arms Free Zone
realistic and humanistic view of this resolution and agree to have it referred to committee where witnesses can appear to give testimony and where we will be able to listen to the views of ordinary Canadians who are extremely concerned and becoming increasingly so about this particular issue.
Finally, if the Government were to adopt a more mature attitude toward matters such as this, we could provide an awful lot of good to people who are less advantaged than us throughout the world. We could use the moneys we are spending on armament build-ups to serve that purpose. I hope that the Government Members have listened to me. I know that my good friend the Member for Simcoe North (Mr. Lewis) has. I can see it in his eyes and I know that he will be persuading the Members on that side of the House to come around to my point of view.


Mr. Gerry Weiner (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I consider it an honour and privilege to be able to speak on this subject this afternoon. When we discuss humane and realistic approaches, the position which Canada has taken with regard to human rights in the world today is the position we took when we went to the Soviet Union with the Secretary of State for External Affairs (Mr. Clark), and is a continuation of the position that we have taken in South Africa with regard to apartheid. We have taken this position with dignity and force in Central America and I look forward to being involved with human rights wherever there are people who suffer. For me it is an honour to be able to speak on this particular subject.
Last March 18 the House had a full debate on Bill C-218, an Act to declare Canada a Nuclear Weapons Free Zone. Today we are asked to debate the question of declaring Canada a nuclear arms free zone which would prohibit the deployment, testing, construction and transportation of nuclear weapons and associate equipment through and within Canada and the export of goods and materials for use in the construction and deployment of nuclear arms. From my point of view, there is no difference in substance between a nuclear weapons free zone and a nuclear arms free zone. This being the case, although the Government position on this matter has not changed between March 18 and today, this is a good opportunity to repeat certain aspects of our policy on nuclear weapons free or nuclear arms free zones.
On June 30, 1984 Canada removed the last remaining nuclear-tipped Genie air-to-air missiles which were to be used in wartime in an air defence role by Canadian CF-101 Voodoo interceptors. The air defence role has now been taken over by CF-18 aircraft which can do the same job using conventional weapons systems only. There are no nuclear weapons stationed on Canadian soil which is not the case, however, for at least eight of 16 members of NATO. Overflight of American aircraft with nuclear weapons, or port visits by nuclear-powered war ships, some of which may bear nuclear weapons, were they to occur, would do so only with the express permission of the Canadian Government. The same consultations and permission would be required for the deployment of any other nuclear weapons within Canadian territory.

October 10, 1985
Nuclear Arms Free Zone
Thus, while in some respects Canada may be regarded as a de facto nuclear weapons free zone following the withdrawal of the last nuclear capable aircraft from service with the Canadian Armed Forces, we continue to participate fully in the defence alliance, NATO, which employs a nuclear deterrent. Accordingly, possible comparisons with the practices of other countries which are not members of NATO are not particularly valid.
Canada is a member of the North Atlantic Alliance and has now been for more than 36 years. We joined the Alliance because we believed in the concept of collective security-a united effort to deter aggression or to counter it should conflict occur. There were many advantages to such an Alliance. However, the most telling advantages were then, and continue to be, the united strength which accrued to the Alliance enabling it to resist undue external political and military pressure to reduce the cost of defence by dispersing the burden of armaments among the member states.
Similarly, NATO has enabled the West to speak with a unified voice on critical issues of international security and to pursue the progressive development of east-west relations in a coherent fashion. It is an invaluable forum for nations such as Canada to express their views and to exert a constructive and moderating influence on the policy directions taken by the western powers in their relations vis-a-vis the East Bloc.
However, while Canada enjoys the collective security and influence given by membership in NATO, Canada also recognizes the need to share the burden of this collective security. It should be noted here that no NATO country has declared itself unilaterally a nuclear weapons free zone. As a point of clarification, Iceland has not declared itself a nuclear weapons free zone as has been erroneously reported in some news media. The Icelandic Parliament, in its resolution of last May, simply reiterated its old policy that no nuclear weapons be situated in Iceland without the prior consent of Icelandic authorities. The Icelandic Parliament has also envisaged that its Foreign Affairs Committee explore possible participation and further discussions of a nuclear weapons free zone in northern Europe encompassing an area from Greenland to the Ural Mountains.
The proposal to make Canada a nuclear arms free zone might have the effect of prohibiting the testing of the cruise missile in Canada. The decision by the previous Government to allow the United States to test unarmed air launched cruise missiles in Canada was seen as consistent with that Government's support for NATO's two-track policy which led to the deployment of ground-launched cruise and Pershing II missiles in several NATO European countries. This Government decided to allow the United States to continue with its testing program because it believes that the cruise missile is an essential element in the global balance of deterrence and is part of the western response to the modernization by the Soviet Union of its offensive and defensive nuclear systems
during the 1970s. This Soviet modernization continues into the 1980s.
It must also be remembered that NATO has had to rely on nuclear weapons to overcome the potential threat present in the great preponderance of Warsaw Pact conventional forces. It would not be in NATO's interest to give up the option of the possible use of nuclear weapons as a deterrent should the Warsaw Pact forces ever contemplate an attack on the West. At the same time, however, it should be noted that NATO upholds the United Nations Charter which lays down that all members shall settle their international disputes by peaceful means and that there be no use of force-any force-against the territorial integrity or political independence of any state.
The proposal would also prohibit the construction of any components of nuclear weapons in Canada. Regarding Canadian co-operation in the production of U.S. cruise missiles, Litton Systems Canada Limited was awarded the subcontract by the U.S. Department of Defence through its parent company in the United States, Litton Industries, to produce a portion of the inertial guidance system for the cruise missile. Litton's participation in a small part of the cruise missile vehicle program should not be taken as a change in Canadian policies instituted at the end of the 1960s to divest our armed forces of a nuclear weapon capability. It is, however, consistent with joint defence efforts with our NATO allies who rely in part on the maintenance of a credible nuclear deterrent in the face of the growing military threat from hostile forces.
The proposal before us today also calls for the Government to encourage cities, provinces and states throughout the world also to become nuclear weapons free zones. While someone else will speak on the question of regional nuclear weapons free zones, I would like to comment on the question of Canadian cities and provinces declaring themselves nuclear weapon free zones. We recognize that there is an important symbolic value in the declaration of a nuclear weapons free zone as an expression of the desire of mankind to be free from the threat of nuclear war. However, any responsible Government must look at the real implications of what a nuclear weapons free zone means from the point of view of security.
The Hon. Member has reminded us that there are over 50,000 nuclear weapons stockpiled, 90 per cent of them in the United States and Soviet Union with the other 10 per cent dispersed throughout the United Kingdom, France and China. There may be other countries with that same capability.
I remind the hon. gentleman that some 40 years ago, before the advent of the first nuclear weapon, mankind found ways of destroying tens of millions of lives during the Second World War. In another war, some 70 years ago, many others died. There were no nuclear weapons.
There is no doubt that the world today is subjected to strains and tensions that are unique in modern history. Humanity is faced with the awful alternatives of seeking a process to reduce international tensions or creeping to the brink of nuclear devastation. Therefore, we must all be heartened with the upcoming meeting between President Reagan and Secretary-
October 10, 1985

General Gorbachev in Geneva. That is where the issue should be discussed and where we may see hope and inspiration. We all hope that ways can be found to reduce nuclear and conventional weapons. This can be achieved when speaking together as friends with confidence in each other. Hopefully we can begin to lay down those arms that have destroyed so many lives. What a useless waste of mankind.
It is a difficult subject to address but I can say that it is a subject which is very dear to me. 1 have had immediate members of my family lose their lives in battle. We do not want to see that repeated with our grandchildren. We are at a point in history where we will not survive nuclear confrontation, nor can we afford a conventional war that might lead to the ultimate countdown.
Nuclear weapons cannot be disinvented. They are a terrifying reality which political leadership must seek to constrain. Yet, a failure to incorporate a credible nuclear component within NATO's over-all strategy would be an invitation to nuclear blackmail with consequences too terrible to contemplate. In this sense, the real question before us is how we can best achieve policies which will reduce the recourse to nuclear weapons in Europe and elsewhere. Our Party has approached this through three fundamental principles. Canada's foreign policy should rest on a bipartisan search for consensus. The cornerstone of our security is NATO solidarity and only through strengthening the non-nuclear deterrent can we reduce the present reliance on nuclear weapons.
In April, 1969, Prime Minister Trudeau unilaterally cut our NATO commitment in half, saying that Canada had no foreign policy of any importance except that which flowed from NATO and this was a false perspective for any country. Under that Prime Minister, defence spending as a percentage of Gross National Product had been cut by 30 per cent. This policy of wilful neglect of our contribution to the collective security of our alliance has led to a situation in which Canada spends less per capita on defence than any other nation in the NATO alliance, with the exception of Luxembourg.
The Hon. Member who presented the resolution today comes from a Party that would also want to remove us from NATO. He would pull us back from an alliance to which we are a party. We very much support that alliance and believe it is a cornerstone for peace. He wants us to bring our people home and shake that foundation.
This pattern of neglect of the conventional deterrent has damaged our reputation for reliability among our allies. Such neglect of a conventional deterrent has also contributed to an over reliance on nuclear weapons. A determined effort must be made to reduce our present dependence on a possible use of nuclear weapons by substantially improving the conventional component of our defence. We believe that the overwhelming majority of Canadians are prepared to accept this approach. That is why they gave us that overwhelming mandate on that famous day in September, 1984. That is how our Government plans to act.
I am glad that my hon. friend raised the issue of aid because that is a subject that is very dear to all of us who work in
Nuclear Arms Free Zone
External Affairs. It is probably one of our proudest accomplishments. We contributed some $1.8 billion in the last Budget to an aid program which is always geared to improving the quality of life for people whom we intend to help. It is never tied to political considerations, but based strictly on technical grounds. Whether it is Central America or elsewhere, we want to do what we can to improve the social and economic conditions of the people whom we are trying to help. We believe that is the basis for removing confrontation. We know that it will encourage people to talk to each other. Currently, there are many countries in the world whose young people are trained to do only one thing-to fight. They know no other end or no other approach. We have attempted to go to those areas to build programs that will give them a usefulness. Through this means I believe they will come to understand that by improving their quality of live they can build a better world for all of their citizens.
I will be an important moment when President Reagan and Secretary-General Gorbachev talk. There are many issues on the table, including nuclear weapons, Strategic Defence Initiatives and many other issues. As long as there is conversation and consultation, we can look forward to another generation of peace and tranquility. The last 40 years has not been bad for most of us.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in view of the fact that this motion is being debated for the second time and that it is triggering a number of intense and committed interventions on every side of the House, I wonder whether it would not be the better approach to allow it to go to committee for full debate which would give it an opportunity to be fully examined by all interested Parties. It has an outlook and breadth of scope that, in consideration of the present international climate, deserves the full intention of all interested parliamentarians. It is with that thought in mind that I would urge the Government not to talk it out and not to put up other speakers but allow it to go through.
Therefore I will refrain from making the intervention I intended to make so as to give a signal to the Government that we would like very much to see this motion go to committee.


Mr. Marcel R. Tremblay (Quebec East):: Mr. Speaker, I welcome this opportunity to speak on a subject that is very important to me: nuclear deterrence and a Canada without nuclear arms. The formidable power conferred by nuclear energy has probably created the greatest dilemma of this century. One of nature's powers which man is now only starting to learn to control, this power is neither good nor evil. Solar energy, another form of nuclear fusion, is essential to life on this planet. If it is misused in nuclear arms, atomic energy may well put an end to humanity as we know it today. Controlled nuclear energy can help man in his daily life. It can cure diseases or be a source of destruction. How we use it will determine whether this kind of energy is good or evil.

October 10, 1985
Nuclear Arms Free Zone
Nuclear arms exist already, and we cannot make them disappear that easily. We know that one of the goals of Canada's foreign policy is, and has been for a long time, the ultimate elimination of all nuclear arms. Books such as The Fate of the Earth by Johnathan Schell, films like If You Love This Planet and the television special The Day After have given millions of people in the Western world a horrifying picture of the effects of a nuclear conflict. No one can seriously doubt the outcome of such a war. The debate on limited nuclear war and whether a nuclear war could be won is purely theoretical. Our conclusion must be that a nuclear war cannot be won and that it would be disastrous to this planet.
Unfortunately, Mr. Speaker, the threat of nuclear war still exists, and will continue to exist as long as man knows how to manufacture nuclear arms. Technology cannot be completely eliminated. We can only attenuate its impact. And what can governments do to diminish this threat?
One of the main things Canada or any other country can do for its people is to protect them against such a threat. And the best way to do so is for the countries concerned to negotiate balanced and verifiable agreements on armament and disarmament control. Progress has been made but much remains to be done. And until this task has been accomplished, the principal guarantee for Canada's security and that of its allies must lie in a deterrence policy.
The fundamental principle of deterrence is quite simple: we must ensure that a potential aggressor knows that if he attacks us, the price he will have to pay will be so high that no conceivable objective could justify doing so. Of course this is not the ideal way to ensure one's security, but it is the only realistic approach available in the present circumstances, and it has served us well for nearly 40 years, despite the problems in East-West relations. Mr. Speaker, we must continue to support this principle while seeking a better solution.
Declaring Canada a nuclear arms free zone would do absolutely nothing to diminish the threat of nuclear war to Canadians. Does anyone really believe that Canadian cities would no longer be a target for nuclear arms if we were to declare this country a nuclear arms free zone? At the same time our withdrawal from NATO might force us to triple or quadruple our defence budget, if only to maintain our present level of security.
Although it has adopted a deterrent policy with respect to NATO, the Canadian Government has not given up its objective to reduce the nuclear arms arsenal to the lowest level possible through verifiable disarmament and arms control agreements. That is one of the major aspects of our policy on security. Canada is an active participant in the activities of the United Nations and of the Geneva disarmament conference, not to mention the Vienna discussions on mutual and balanced force reductions. As a NATO member we are also party to the organization's consultations on the nuclear forces reduction negotiations. As you know, Mr. Speaker, Canada is also
represented at the Stockholm conference on confidence and security measures and on European disarmament. As the Secretary of State for External Affairs (Mr. Clark) stated before the United Nations last September, and 1 quote:
"-I offer Canada's encouragement and support in our quest for the climate of confidence required to conclude disarmament agreements. However frustrated we may feel, we must never fail in our determination to build a world wide security system based on a decrease rather than an increase in weaponry. If stronger political will is necessary, let us indeed show such political will, particularly on the eve of 1986 which has been proclaimed the Year of International Peace... Canada will continue playing an active role in all multilateral representations and contributing even more to restore confidence. In that respect Canada has set up an action program for the second phase of the current disarmament decade. Through this program we will double our efforts to improve the verification processes necessary to ensure compliance with the existing agreements.
Mr. Speaker, thank you for giving me this opportunity to make a statement on this issue.


MESSAGE FROM THE SENATE
Mr. Deputy Speaker:: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill C-77, an Act to amend the Criminal Code in relation to pari-mutuel betting, an amendment to which concurrence of this House is desired.



ROUTINE PROCEEDINGS


Mr. Deputy Speaker:: The Hon. President of the Privy Council on a point of order.


Ramon John Hnatyshyn: Mr. Speaker, thank you very much. Earlier this day I brought forward a motion by unanimous consent with respect to the extension of time for the report of the Committee on Justice and Legal Affairs with respect to equality of rights. There was a technical error in that motion inasmuch as I had referred to the date of the original order of reference incorrectly. I have had a chance to speak to Memberes of the other Parties and 1 think you will find there will be unanimous consent to correct the motion for extension to show the original order of reference as Friday, June 28, 1985.


Mr. Kaplan:: As a Member of the Justice Committee I can report that that is our agreement. We have agreed to an extension and although the Government seemed incapable of drafting one, they have corrected it and we are prepared to support it.
October 10, 1985


Mr. Deputy Speaker:: The House has heard the Hon. President of the Privy Council correcting the original motion. Is there unanimous consent to accept the correction?


Some Hon. Members:: Agreed.
Motion, as amended, agreed to.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 46 deemed to have been moved.

Howard Edward Crosby: Mr. Speaker, my purpose in rising this evening is to present to the House once again the claim of Walter Theriault in respect of the sinking of the Lady Marjorie on April 28, 1985. I think I should begin by pointing out to the House that one of the most ancient rights of Canadians is to present their case to the House of Commons. I have no hesitation-and I make no apology-in bringing to this national Chamber the case of one person who feels aggrieved under the laws of Canada and indeed by the officers of the Government of Canada.
I should explain that the incident which gave rise to Mr. Theriault's claim arose in the following way. His fishing trawler, the Lady Marjorie, was proceeding off the coast of Nova Scotia in the course of fishing and developed some difficulty. As a result of that difficulty over a period of a few days, the crew who were of a relatively young age decided to abandon the fishing trawler and at that point summoned assistance.
The vessel most readily available to provide assistance was the H.M.C.S. Nipigon, a destroyer which was part of the naval fleet of the Maritime Command. Therein the difficulty arose. I will not pretend to know the facts which transpired between the abandonment of the fishing vessel, Lady Marjorie, by its crew and the sinking which resulted from the gunfire of the H.M.C.S. Nipigon, but the end result was that the ship was a total loss; it was sunk.
One would hope and think that in this modern world, a world in which Government respects the rights and duties of individuals and of the collective society, this kind of case could be worked out in fairness to all concerned, considering the might and the power of the Government of Canada, on the one hand, and the difficulties faced by an ordinary Nova Scotia fisherman and owner of a fishing trawler, on the other hand. However, that has not been the case.
I think this is what prompted my colleague, the Hon. Member for South West Nova (Mr. Comeau), to raise the
Adjournment Debate
case in the House of Commons on May 2, 1985, when he questioned the Minister of National Defence (Mr. Nielsen) in respect of the advancement of the claim of Walter Theriault resulting from the loss of the Lady Marjorie.
At that point in time it was indicated by the Minister-and it has been repeated many times in the public press and by other media-that the sinking resulted from a decision that the Lady Marjorie constituted a hazard to navigation and had to be disposed of in the manner in which it was disposed of, that is to say, sunk.
The House of Commons plays no role in the arbitration of that kind of dispute, but it plays a role in the area of justice for all Canadians. That is what I sought by raising a question on September 25, 1985, and I do so again this evening in the House of Commons. What I seek for Mr. Walter Theriault, his family and all those involved in the operation of the fishing vessel, Lady Marjorie, is justice from the Government of Canada and from the officers of the Government of Canada.
I say this because of a report today in The Chronicle Herald of Halifax indicating that the board of inquiry, apparently commissioned to inquire into the events which led to the sinking of the Lady Marjorie, has concluded that there was no fault on the part of the Canadian Navy. Presumably that might result in a decision by the Government of Canada or the relevant Minister to deny any claim or responsibility to Walter Theriault. That would be an unfortunate decision at this point in time because Mr. Theriault faces the following difficulties. The insurers of the vessel, Lady Marjorie, say that the vessel was not in danger, could have continued afloat, and could have been salvaged. They deny any claim of the onwer, Mr. Theriault, on that ground. Apparently the advisers to the Government and the Canadian Navy indicated that the ship was about to sink, was a danger to navigation and could not be salvaged and therefore it was right and proper to carrying out its destruction by sinking and on that grounds deny any liability.
Mr. Theriault is between the proverbial rock and a hard place. On the one hand the insurers have refused payment because the ship was salvageable. On the other hand, the Canadian Government refuses assistance because the ship was a total loss.
How is this difficulty going to be worked out? I am afraid 1 do not know, but I call upon the Government to work toward some resolution, and I am not the only one to do so. On September 16, 1985, an editorial in The Daily News, a newspaper that circulates in the Halifax area, quite properly asked the question, "Will somebody please help Mr. Theriault?" I shall quote very briefly from that editorial;
Hindsight is fine in saying the Nipigon should have stood by the vessel until towing arrangements were made, and we are sure that the gunfire decision was not made lightly. But now it is clear it was made wrongly.
I do not necessarily agree with that conclusion but 1 do agree with this proposition: the Lady Marjorie has been lost to Mr. Theriault and his family and they are on the brink of
October 10, 1985

Adjournment Debate
bankruptcy as a result of the loss. Somebody should assist them, either the insurance company or the Government. I ask the Government to intervene directly and resolve this matter to the satisfaction of the Theriault family.


Mr. Robert Wenman (Parliamentary Secretary to Minister of National Defence):: Mr. Speaker, I would like to agree with the Hon. Member regarding his ancient right to represent the problems of his constituents in the House of Commons. 1 hope it is not only an ancient right but a present right and a continuing right for many generations to come. I would like to confirm that not only has the Hon. Member done his duty and represented his people ably in the House of Commons but in addition to that he has made very direct recommendations to all those concerned including the Minister of National Defence (Mr. Nielsen) and the Associate Minister of National Defence (Mr. Andre) in his attempt to find a resolution to this problem on behalf of his constituent.
As the Hon. Member is probably aware, the Department of National Defence, because of its concern, did set up a board of inquiry to investigate the circumstances surrounding this unfortunate incident. The Ministry of Transport has also carried out investigations which are being prepared by the Marine Casualty Investigations Branch of the Coast Guard. In so far as the Department of National Defence Board of Inquiry is concerned, the Hon. Member will be pleased to know that the inquiry has now been completed. I understand that the Ministry of Transport has yet to finalize its report but it should be made available to the public in the very near future.
The legal representative of the Lady Marjorie's owners has been in touch with DND's legal agent, the Department of Justice. I understand that intensive discussions on the subject are ongoing. I share the Hon. Member's concern that this matter be dealt with as expeditiously as possible. It is important, however, that this matter be dealt with in the most proper and deliberate way to ensure thoroughness and that justice and equity will be served. This will ensure that the important elements concerning the specific circumstances of the sinking and the legal implications are thoroughly worked out and that the appropriate action therefore follows.


CONSUMER AFFAIRS-DISCOUNTING OF INCOME TAX REFUNDS. (B) REQUEST THAT PRACTICE BE BANNED
David Orlikow: Mr. Speaker, today there was a media and Member of Parliament information briefing by the National Anti-Poverty Organization with regard to income tax discounting, a practice which is growing at an alarming rate. The position of the National Anti-Poverty Organization is one which is supported by organizations as diverse as the Co-operative Association for Family Economy in Quebec, the Consumer's Association of Canada and the National Working Group on the Economy and Poverty of the United Church of Canada.
These anti-poverty, consumer and church groups want the abolition of tax discounting. They want that because they
realize that tax discounting is now permitted and encouraged by an Act passed in 1978 by the then Liberal Government. The Tax Rebate Discounting Act of 1978 was brought into effect because it was believed that with no legislation people, particularly poor peole, were paying exhorbitant rates for small amounts of money. The Act of 1978 set the maximum rate of interest which could be charged at 15 per cent. We are talking about a rate of interest which does not last for a year. It lasts for four, five or eight weeks, after which time people would receive their income tax rebate. Therefore, the actual rate of interest calculated on an annual basis is probably closer to 100 per cent than it is to the 15 per cent permitted by the Act.
We know now that almost two-thirds of those people who used the tax discount in 1984 had incomes of $8,000 or less. Yet, the same people, of whom there are now almost 400,000 were entitled to $274 million in refunds, or an average of $714 each. For a fairly simple paper work task, the tax discounters have been picking up an average of $170 for each transaction, according to the administration of the Tax Rebate Discounting Act in the Department of Consumer and Corporate Affairs. The Department, as keeper of statistics on tax discounting, has defined the problem as being far too much of poor people's money being diverted into the hands of what are usurious lenders officially brought into being and permitted to operate by this legislation.
Since the problem is quite clear and since the people most adversely affected are people who very frequently get all or almost of their tax discount as a result of a child tax credit, it seems to us that what the Government should do is simply repeal the Act. After all, this was a Liberal Act and it was in Liberal times that organizations such as those I have mentioned started to call upon the Government to repeal the Act in order to prohibit tax discounting.
The Hon. Member who preceded me as spokesperson for the New Democratic Party on consumer and corporate affairs called on Liberal Governments to repeal the Act. Since the Liberals have been in opposition, members of their Party have called on the Government to repeal the Act. I have frequently called upon the Minister to repeal the Act.
The child tax credit system this year will deliver $367 to each person receiving that credit, a payment which will rise to $524 in 1988. By the Government's own reckoning, almost $20 million of the $41 million taken by discounters in 1984 came from the child tax credit. Why do we permit this to take place? I wonder what the Auditor General would think of this misuse of funds voted by Parliament. Far worse, how can the poorest of Canadians afford to give up this kind of money? They are forced to do it because the Government legislation permits it and the slow processing of income tax returns sees to it that they try to get their money quickly.
I ask the Government to act. We have been raising this question, as have the organizations I have mentioned, almost from the day this Government was formed. The studies which the Minister has promised have gone on almost from the time the Government took office. There were studies carried out by
October 10, 1985

the Liberal Minister of Consumer and Corporate Affairs. If this Government can bring in legislation to pay out $1 billion to depositors of the Canadian Commercial Bank and the Northland Bank, surely it can deal with this. The Minister has promised studies. He has consulted with the provinces. I understand that the Ministers of Consumers Affairs of all the provinces have agreed that the discounting of the child tax credit, at least, should be probited. That is not all that organizations such as NAPO have been calling for, but at least that would be a beginning. I therefore say to the Minister to stop dithering, get on with the job and bring in legislation to repeal the Act which has permitted this tax discounting.
The Minister says there are problems. I say to the Minister that the Province of Quebec has prohibited tax discounting and the United States, with the most pro-business Government the country has had in 50 years, has prohibited tax discounting. I say to the Minister to stop dithering and bring in a proposal which can be passed by Parliament quickly. I ask him to bring in legislation which would prohibit income tax discounting before the next income tax year. We have had enough of studies. We have had enough of waiting. Let the Minister show some concern for the consumer. After all, he is the Minister of Consumer and Corporate Affairs (Mr. Cote).


Mr. Bill Domm (Parliamentary Secretary to Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker, the purpose of the Tax Rebate Discounting Act is to protect the interest of taxpayers who give up their rights to anticipated tax refunds in order to receive immediate cash. The statute was enacted in 1978 at the urging of the provincial Governments. Prior to 1978, the discounting business was unregulated and discounters often charged rates of 40 per cent or 50 per cent of the value of the refund. The legislation now limits the legal discount rate to 15 per cent. Thus, Canadians who wish to receive immediate cash can freely choose to patronize a legitimate discounter without fear of having to pay the "loan shark" rates previously charged.
Adjournment Debate
Nevertheless, some conditions have changed significantly since 1978, and this Government must determine whether the protection given by the Tax Rebate Discounting Act is still appropriate. For that reason, the Minister of Consumer and Corporate Affairs (Mr. Cote) began dealing with the question early this year by initiating extensive consultation and study.
A major step in this process of consultation was the release of a discussion paper on discounting in June of this year. This paper was made available to the general public. In fact, copies were sent to all Members of Parliament. In addition, a number of interested parties were invited to respond to the Minister and to meet with him personally.
A special conference of representatives of major interested social welfare groups, discounters and business groups was held in August. The issue was on the agenda of the federal-provincial Territorial Conference of Ministers of Consumer and Corporate Affairs in September in Manitoba.
Contrary to the assertion of the Hon. Member, outlawing tax rebate discounting is not universally accepted as the solution to the problems associated with discounting. The Hon. Member surely appreciates that the discounting issue involves considerations of social policy, economic policy, federal-provincial relations and interdepartmental co-ordination. The intention of the Minister is to ensure an appropriate balance between the values represented by the market-place economy and freedom of choice, on the one hand, and the need for consumer protection on the other. This House can expect an indication soon of any adjustments which need to be made in order to maintain that balance.
In summary, the answer to the Hon. Member's question is simply that the tax rebate discount in question is being dealt with at this very moment and in the proper fashion.


Mr. Deputy Speaker:: The motion to adjourn the House is now to have been adopted. Accordingly the House stands adjourned until tomorrow at 11 o'clock p.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.20 p.m.
[Stage Direction]
Friday, October 11, 1985