1985-03-29

Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, I rise today to express my anger and extreme disappointment at the Government for its complete disregard of the people of Cape Breton. We have waited long enough for some action on the second phase of the business plan for the Sydney Steel Corporation. We are not talking just about economics here, we are talking about the future of an entire area.
The first phase of the business plan was put into effect by the former Liberal Government. Most of that work was completed months ago, long before the deadline runs out this Sunday. It's now almost April and there are still no answers, no plans, and no financial assistance being put forward by the Government and its counterpart in Nova Scotia for the second phase of modernization. How can the Government justify treating people like this? To say it is unfair is a gross understatement.
People are depending on the life of this plant for their existence. It is especially unfair when you consider what the work force has done to make Sydney Steel Corporation a viable operation. The workers have set production records. Liquid steel production increased by 40 per cent in 1984. Rail mill production and total production shipments have increased by 50 per cent. The operating losses for Sydney Steel Corporation have been cut in half, and Sydney Steel will not require any operating grants from the province this year because of an outstanding performance by the work force.
The workers have accomplished this against some incredible odds. There are now just, 1,400 people working, down from 3,000, and 1,000 of those people-


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member but his time has expired.


EMPLOYMENT
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, on February 6 the Minister of Employment and Immigration (Miss MacDonald) announced a program called "Challenge '85" in which private industry was to be pivotal in providing 95,000 career oriented wage subsidized jobs for students. On this, the deadline for applications, we have written the Minister in part as follows:
It is now clear that some of our worst fears have materialized. The private sector response you anticipated has not been forthcoming. Many areas of greatest need are not receiving adequate assistance, and the numerous career-related jobs you promised have not occurred. Moreover there appears to be much confusion in the administrative process and a lack of publicity and adequate information almost everywhere.
It is not my intent in writing merely to point out that the program has been a dismal failure, but rather, to offer some constructive advice on how to ensure that as many students as possible will work under the program this summer. In this regard I submit the following:
Eliminate all deadlines for employers and students submitting applications; allow any type of meaningful job-creation program to be considered, including all project applications; and, launch a full scale media campaign to advertise the new changes. Finally, provide Members from all sides of the House with sufficient detail that they may be effectively involved in publicizing the program. Admit ideologically produced failure and get on with the job of creating jobs.


FORESTRY
Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, I rise in this House to bring to light an important issue that is of bilateral importance to Canada and the United States. I am speaking of our most precious resource industry, forestry. 1 have just returned from intensive meetings in the United States along with the Minister of State for Forestry (Mr. Merrithew). In our discussions with the U.S. Forestry Service we were able to forge some meaningful lines of communication and co-operation.
Forestry is a resource that transcends boundaries. It is a North American resource, and many of the issues facing the industry, such as insect control, fire fighting, and forestry research, can best be dealt with if both Canada and the U.S. work together. More important, we are working to maintain a secure trading relationship which will be of benefit to both of our nations.
Our Prime Minister (Mr. Mulroney) really paved the way for such productive relations between our countries. His decision to appoint a Minister of State for Forestry is not only

March 29, 1985
recognized as an important step for the forest industry in Canada but has also received praise around the world. The Quebec summit meeting also contributed to the excellent relationship that now exists between Canada and its greatest friend and trading partner, the United States. This co-operative relationship is going to produce real benefits for Canada's vital forest industry.


TOURISM
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, the Minister of State for Tourism (Mr. McMillan) is a real devil for punishment. He is trying to introduce himself to his leader. Not satisfied with spending money to show his face in advertisements on tourism, he is now asking Hon. Members of this House to put his picture in their next householders. A camera ready kit has been sent to all Members of Parliament, complete with a nice photograph of the Minister.
What will the Minister think of next so that his leader will notice him? I pity the back-benchers on the government side who do not have a ministerial budget to advertise their own faces across the country. If only they could stand up in this house, perhaps their leader would notice them. They should ask permission to speak if they can't be discovered, or request an increase in their budget so they, too, can advertise their faces like the Minister of State for Tourism.
I am sure that seeing Tom peeping from a government advertisement will cause millions of Canadians to hit the road and visit other parts of this country. The Minister of Supply and Services (Mr. Andre) said that no more shall we see government advertising that would have geese flying into the sunset, but we certainly did not expect to see "peeping Tom", the lone stranger, riding in the sunset. Hi, ho! Tory away, Mr. Speaker!


UNEMPLOYMENT INSURANCE
Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, this is a sad day for the workers of Canada. As of midnight Sunday, March 31, 1985, vicious changes to the Unemployment Insurance Act will come into effect. These changes will see severance pay and vacation pay being used in the calculation and duration of unemployment insurance benefits. The severance pay change, in particular, is a calculated and cruel blow to those who lose their employment through no fault of their own.
Such workers have traditionally used the severance pay to offset travel expenses in finding alternate work. Now they will be forced to use this lump sum amount to keep body and soul together until they become eligible for unemployment insurance benefits. In such cases it could be up to a period of 20 to 30 weeks, depending on the amount of severance pay.
[DOT] (mo)
Other workers have rolled their severance pay into a registered retirement savings plan in order to prepare for their retirement years. With this change coming about on Sunday, the individual will now be forced to use the money to subsist on a daily basis. This is the ultimate irony from the Government which says it believes in individual self-reliance. This is the last appeal to this Government which claims it will save $60 million by this measure, but is prepared to put $60 million into a bankrupt bank.


THE ADMINISTRATION
Mr. Darryl L. Gray (Bonaventure-Iles-de-la-Madeleine):: Mr. Speaker, I take this opportunity to stress the significance of the change in Government last September 4.
Given the new climate created by this Government, the residents of Saint-Alphonse-de-Caplan in my beautiful riding of Bonaventure-iles-de-la-Madeleine have done an outstanding job working as a team. With the co-operation of the provincial and federal Governments, they carried out a sawmill project which will create about 150 permanent jobs.
Mr. Speaker, that is proof positive that we are quite prepared to invest our money and our energy to develop our region in a spirit of co-operation which shows once and for all that we, the people of the Gaspe area, the people of the riding of Bonanventure-iles-de-la-Madeleine-

-are open for business. We are willing to work together to repair the horrendous damage caused during 22 years of Liberal rule in my riding. I congratulate the Hon. Minister of State for Small Businesses (Mr. Bissonnette), and I congratulate the Conservative Government for its optimistic and confident attitude regarding the future of Canada. Finally, I congratulate the citizens of my riding who have worked so hard to permit 150 permanent jobs to be created.

We will continue to work together, Mr. Speaker, and I extend to you and to all my colleagues in the House an invitation to visit our beautiful riding of Bonaventure-Iles-de-la-Madeleine.

We have the beef, Mr. Speaker!
March 29, 1985


AGRICULTURE
Mr. Bill Vankoughnet (Hastings-Frontenac-Lennox and Addington):: Mr. Speaker, southeastern Ontario has always been proud of its agricultural industry and the important role it has played in producing food at a reasonable price for consumers not only in Canada but throughout the world. Today in eastern Ontario there is considerable concern in the agricultural community that this sector of the economy is being burdened with an unfair proportion of the cost associated with maintaining food prices affordable by everyone. A recent proposal by the federal Government to implement a cost recovery program for services such as grading, would result in increased costs to the consumer or, worse, to the already hard hit producers.
One such problem which has been brought to my attention is that of the cheese producers in eastern Ontario who, under this proposal, will have to pay for the grading of cheese which is to be exported. As many Members are aware, many cheese factories have closed. Knowing the federal Minister of Agriculture (Mr. Wise) and his concern for the agricultural community, I trust that through consultation and communication a fair and reasonable solution will be found which will be acceptable to the cheese producers and agricultural communities of eastern Ontario.


HOUSING
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, with thousands of Canadians, I would like to express my disappointment as a result of the cutbacks made by the Progressive Conservative Government in its home renovation and home improvement policy. In Newfoundland, 37 per cent of the budget was cut. In Prince Edward Island, 42 per cent, in Nova Scotia, 30 per cent, in New Brunswick, 34 per cent, in Quebec, 35 per cent and in Ontario, 9 per cent, in Manitoba, 27 per cent, in Saskatchewan, 20 per cent, in Alberta, 16 per cent and in British Columbia, 35 per cent.
Mr. Speaker, I think this Government should have continued what the Liberals were doing. They should be getting rid of substandard housing instead of getting involved in Star Wars. I realize the Prime Minister (Mr. Mulroney) would rather compete with Mr. Spock, to improve his image, but I speak for all Canadians when I say that the Residential Rehabilitation Assistance Program has played a very important role in improving the quality of our housing and also in creating jobs, and it was far less costly than the amount of taxpayers' money that will be wasted on star wars.
Oral Questions


IMMIGRATION
Mr. Dan Heap (Spadina):: Mr. Speaker, the right to marry must be defended against interference by immigration officials. Irene McLaughlin, a Canadian citizen, has enjoyed a commonlaw marriage for four years with Hugo Cobos. However, Mr. Cobos has been detained in the immigrant holding centre at the Waldorf-Astoria Hotel in Toronto for six months. Ms. McLaughlin's request to marry him has been denied by Immigration enforcement authorities in Ontario who will neither permit him a day's leave to marry her nor permit them to be married in the Waldorf-Astoria.
Surely Mr. Cobos should be treated no worse than a criminal. Even convicted criminals are allowed to marry in prison. I believe that that right is protected by the Canadian Charter of Rights and Freedoms. This is one more reason why, four weeks ago, I asked the Minister to inquire into conditions at the immigrant holding centres. They deny not only the Charter of Rights and Freedoms but also the United Nations minimum standard for prisoners, which Canada has signed.
I am glad the Minister and the Committee on Labour, Employment and Immigration have finally undertaken the inquiry into the immigrant holding centres, but meanwhile let Ms. McLaughlin marry Mr. Cobos. I call on the Minister to take immediate action to defend Ms. McLaughlin's right to marry.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Minister of Energy. The energy deal she announced yesterday imperilled the investment off Nova Scotia and Newfoundland and affected the venture in Hibernia. In order to meet that point, the Hon. Minister said in the House that she had just received assurances of reinvestment of S800 million a year in these offshore resources.
Would the Minister reassure the people of Newfoundland that she has commitments in definitive terms from the oil companies off Hibernia? If she has those commitments, would she table them in the House of Commons so that the people of Newfoundland will be assured of the job potential in that development which may well have been interrupted by the energy deal?

March 29, 1985
Oral Questions


Hon. Pat Carney (Minister of Energy, Mines and Resources):: Mr. Speaker, I can really only say that I can seek the consent of the provinces concerned to table any documents. If that will satisfy the Right Hon. Member, I will do that. However, I can assure him that there is nothing in the Accord that does any damage at all to Newfoundland and Nova Scotia. In fact, it does exactly the reverse. It will create the kind of climate which will lead to the kind of investment that Newfoundland and Nova Scotia need to bring Hibernia and other ventures on-stream.


John Napier Turner: It is not as important to assure me, Mr. Speaker, as it is to assure the thousands of people in Newfoundland who are depending on those jobs.


PRICE OF GASOLINE-PROMISES MADE TO QUEBEC
John Napier Turner: The
Prime Minister has already contradicted the Minister of Energy on the question whether Canadian consumers are going to pay more for gas. He said he did not know yesterday, but we know that during the election campaign, Progressive Conservative candidates promised consumers in Montreal, Trois-Rivieres and Quebec that if a Progressive Conservative Government was elected, it would reduce the retail price of gas.
Why did the Minister not keep the promises made to voters in Montreal, Trois-Rivieres, Chicoutimi, Sherbrooke and other cities and towns in Quebec?


Pat Carney: Mr. Speaker, the Right Hon. Member represents a Party which caused hatred and division in this country with the NEP.


Some Hon. Members:: Hear, hear!


Mr. Gauthier:: You are the worst of the gang.


Pat Carney: Now the Right Hon. Member is following the same tactics by trying to maintain that the Western Accord hurts Atlantic Canada and Nova Scotia, and that is a shameful statement. That Accord was negotiated with the interest of Canada in mind. I would ask the Hon. Member to stop using energy as a tool of division in the country.


Some Hon. Members:: Hear, hear!


John Napier Turner: The weaker the case, the louder the pleading, Mr. Speaker.


POSITION OF ONTARIO PREMIER
John Napier Turner: Would the Minister make the same accusation against her colleague, Premier Miller of Ontario, who said yesterday that
he was concerned for the consumers of Ontario and that he was seeking a meeting with the Prime Minister of Canada? Would the consumers of this country prefer to believe that attempt at phoney outrage on the part of the Minister or would they feel concern, as the Premier of Ontario does, for the people of his province?


Pat Carney: Mr. Speaker, if the Right Hon. Member wants phoney outrage, let him try peddling that line in St. John's or Calgary.
With respect to the Premier of Ontario, his Government has been kept fully informed, through his Energy Minister, of our negotiations with the western provinces. As I have repeatedly said, there is nothing in the Western Accord that hurts consumers. Going to deregulation and going to world prices mean that we create an environment in which prices should go down if world prices go down. We have frozen natural gas prices. The Liberal regime had two natural gas increases in place. By removing the Canadian Ownership Charge we have removed a tax that is paid by the consumers.


PETROLEUM INCENTIVES PROGRAM
Russell Gregoire MacLellan: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. The Government has completely done away with grants under the Petroleum Incentives Program. Executives and consultants in the energy sector, not politicians, are saying that this will mean a drastic reduction in exploration at Hibernia and Venture, and could postpone production indefinitely in these regions. In order to assist Hibernia and Venture, what will the Government put in place to replace the grants under the Petroleum Incentives Program?


Pat Carney: Mr. Speaker, again, the allegation that the Western Accord hurts Nova Scotia is a malicious and false statement. The companies involved in drilling ventures told me personally that the removal of the PGRT, which is a revenue tax, would be one of the greatest incentives for them to continue drilling in the Scotian South. We have done that. We have supplied offsets to Canadian companies, and we have maintained $3 billion worth of PIP programs. We will be continuing an incentive program to replace PIP in the future.


Russell Gregoire MacLellan: It is not the Accord with which we find difficulty; it is doing away with the grants under the Petroleum Incentives Program.


HIBERNIA OILFIELD DEVELOPMENT
Russell Gregoire MacLellan: Mr. Speaker, the Minister says that she has these assurances from the industry. I wonder if the industry gave her a bag of magic beans. Will she admit that she has actually abandoned the
March 29, 1985

fiscal regime for Hibernia and, as a result, the Newfoundland energy arrangement means very little because there may not be any production without a fiscal regime?
Hon. Pat Carney (Minister of Energy, Mines and
Resources): Mr. Speaker, in terms of Hibernia, the whole thrust of the Western Accord is to create jobs and investment in developments like Hibernia in the interest of energy security for all Canadians. The Hon. Member should know that the Atlantic Accord allows the provinces to set their own royalties, just as the western provinces do. In that case the abandonment of the tax field by the federal Government should be nothing but good for the Province of Newfoundland.


REDUCTION OF TAX ON OIL INDUSTRY
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. First, let me say that I agree with her. It is no longer an East-West conflict but a conflict between big oil and the ordinary Canadian consumer who will be hurt.
The Alberta Minister of Energy is quoted today as saying that the Western Accord provided the oil industry with an extended Christmas. Will the Minister, the spring Santa Claus of the oil industry, explain why, since November 8, the Government cannot help ordinary Canadians with respect to social programs, environmental programs, $800 furnace conversions, and arts and cultural programs because they will raise the deficit, yet when it comes to giving $1.3 billion to the oil industry that does not seem to affect the deficit at all? How does the Minister explain this double standard in which there is one rule for the Canadian oil industry and another for ordinary consumers?
Hon. Pat Carney (Minister of Energy, Mines and
Resources): Mr. Speaker, there are many Canadians who want jobs. The Western Accord will provide jobs. That is what will interest ordinary Canadians, and that is what we have attempted to accommodate.


Ian Gardiner Waddell: I would like to know where the Minister gets that line about jobs. I can only find it in the Canadian Petroleum Association brief. The President of the Canadian Petroleum Association is quoted today as saying: "We got everything we asked for one year ago."


JOB CREATION FORECAST
Ian Gardiner Waddell: Mr. Speaker, let me ask a supplementary of the Minister of Energy, Mines and Resources. In view of the fact that the Minister said in committee that her Department does not have any studies of how many jobs will be created by deregulation, and in view of the fact that the Deputy Minister of Ontario says that there will be a loss of jobs with deregulation, where does the Minister get this figure of 300,000 jobs created by a capital intensive industry?
Oral Questions


Mr. Blackburn (Brant):: Right out of thin air.


Pat Carney: Mr. Speaker, the forecast of 100,000 jobs came from the Economic Council of Canada in an independent study. The forecast of 300,000 jobs has come from a variety of sources. I will be quite happy to settle for somewhere between
100.000	and 300,000 jobs.
Let me tell the Member where these jobs are. Hibernia,
6.000	in construction, 1,000 permanent; Venture, 5,000 in construction, 700 permanent; Vancouver Island pipe line, 2,500 in construction, 100 permanent; Western LNG, 1,750 in construction, 450 permanent; Syncrude, Phase I, 2,500 in construction, 350 permanent; Phase II, 3,000 in construction, 500 permanent. I could go on and on, and on. Those are where the jobs are.


Some Hon. Members:: Hear, hear.


Mr. Deans:: You are going to have to get to 100,000.


Ian Gardiner Waddell: Mr. Speaker, the Minister had better go on. She sounds more and more like Bill Bennett. She had better go on and start adding up to 100,000.


EXPLORATION AND DEVELOPMENT WRITE-OFFS
Ian Gardiner Waddell: Mr. Speaker, I have a final supplementary question. Clause 6 on page 5 of the agreement reads:
To assist companies which are not currently paying corporate income tax-
Can you believe this, Mr. Speaker? It continues:
-the Government of Canada will allow new exploration and development write-offs-
Here are some more goodies for the oil industry.
Given that there is a Budget coming up, will the Minister give a guarantee to the Canadian consumers, because the Canadian consumers form the vast majority of people in Canada, that the Government is not going to try to equalize this equation by raising excise taxes, or whatever, to get the money back that it has given to the oil companies?


Pat Carney: Mr. Speaker, I think, for the purposes of clarifying the record, I should finish the quote the Hon. Member gave. Clause 6 reads:
To assist companies which are not currently paying corporate income tax, the Government of Canada will allow new exploration and development write-offs which are not immediately usable under the federal corporate income tax to reduce the Petroleum and Gas Revenue Tax otherwise payable.
That is the clause that helps Canadian companies. They are the ones that are most often in the position described there. We are giving Canadian companies an extra bonus of an extra write-off so that they can maintain an enhanced Canadian participation in the energy field.


Some Hon. Members:: Hear, hear!


Mr.   de Corneille@: A write-off on nothing is nothing.

March 29, 1985
Oral Questions


ONTARIO CONSUMER INTERESTS
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is also for the Minister of Energy, Mines and Resources. Yesterday the Minister stated that the oil deal would not mean extra cost to consumers. Yesterday, the Prime Minister said we would have to wait until May to see if prices go up. This morning the Minister also said we must wait and see. What guarantees or concessions were given to the Premier of Ontario, the main oil consuming province, to protect consumer interests?


Pat Carney: Mr. Speaker, I can only report that there is again nothing in the Accord that will increase consumer prices. 1 have already said that I have been in constant touch with the Government of Ontario, and 1 fail to understand the purpose of the Hon. Member's question.


POSITION OF ONTARIO PREMIER
Aideen Nicholson: Mr. Speaker, the Conservative Premier of Ontario has requested an emergency meeting with the Prime Minister and is quoted as saying that he will fight for consumers. Clearly he does not believe that the agreement was good for consumers. The Minister says that the Premier was kept fully informed through his Energy Minister. Why was he not consulted before the fact?


Pat Carney: Mr. Speaker, there is no emergency meeting between the Premier of Ontario and the Prime Minister. It is not considered an emergency for a provincial Premier to meet a Prime Minister of Canada since the Conservatives were elected.
We assure the Hon. Member that the Minister of Energy for Ontario was kept fully informed of the negotiations. I received the position of the Government of Ontario and that was considered in forming the Western Accord.


PRICE OF GASOLINE-GOVERNMENT POSITION
Jean-Claude Malépart: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources.
The accord signed by the Minister yesterday shows clearly that she has elected to sacrifice the consumer in favour of the multinational oil companies. The Minister knows perfectly well that if the price of oil is allowed to vary according to market supply and demand, it is false to state that prices will necessarily drop. I may remind the Minister, and her Quebec colleagues will remember, that when the Quebec Government reduced its escalating tax by 20 per cent, this did not benefit the consumers, since the oil companies immediately increased
their prices. I therefore would ask the Minister what guarantees she can give Canadians that this will not happen again.


Pat Carney: Mr. Speaker, the whole purpose of the Western Accord was to create jobs for Canadians. Those jobs will be in the West. They will be in Ontario. They will be in Quebec. They will be in the Maritimes, and in the North. As I have said repeatedly-and he can read it himself-there is nothing in the Accord that would lead to increases in consumer prices. When you go to world prices, you are going slightly down, or in an environment of declining prices. We have frozen natural gas increases, and we have removed a tax. There is nothing in that regime which would be reflected in increased costs to consumers.


DEMAND OF QUEBEC GASOLINE RETAILERS
Jean-Claude Malépart: Mr. Speaker, the Minister said there was nothing in her accord that could keep the price from dropping, and what I have to say to that is that there is nothing in her accord that could prevent the price paid by the consumer from rising. She has clearly shown that the purpose of the Western Accord was to create jobs that would be paid for by Eastern taxpayers. I hope Quebec Members will soon wake up to that fact. The Hon. Member for Duvernay, for instance.
I would like to ask the Minister why she failed to consider the request made by the Association des detaillants independants du Quebec for a protection mechanism for consumers.


Pat Carney: Mr. Speaker, again I would like to remind the House that the Hon. Member is once again practising the Liberal policy politics of hate by suggesting that eastern consumers are paying for western jobs.
Again, the job creation in energy is spread right across the country. If he doubts it, he can look at the plants in the Province of Ontario and in the Province of Quebec which supply goods and services to the oil patch. I can also point out to him that the Quebec Minister of Energy, with whom I consulted, supported the move to deregulation.


ONTARIO CONSUMERS
Ian Deans: Mr. Speaker, my question is also directed to the Minister of Energy, Mines and Resources. Given that the Premier of the Province of Ontario stated that he was not kept informed with regard to the impact of the newly signed Western Accord on the consumers of Ontario, what guarantee could the Minister give to Ontario consumers that they will not be asked to carry the additional burden which will be brought about as a result of the dropping of the tax on oil, and the imposition of a new cost to the

March 29, 1985

Government of Canada, by way of an increase in the deficit or by way of an increase in tax?


Pat Carney: Mr. Speaker, again I can tell the Hon. Member that the purpose of the Western Accord is to create jobs right across the country. We designed an Accord that has the minimum impact on the federal Budget and the maximum impact on exploration and development, which will spin economic benefits right across the country, including his home riding. If he is against jobs in his home riding, I suggest that he had better state it.


TAX REDUCTION
Ian Deans: Mr. Speaker, clearly the Minister does not understand. My riding does not have any industry in it.


Pat Carney: Maybe it will now.


Ian Deans: My riding does not have any industrial development. If the Minister is basing her research on the kinds of responses she gives with regard to the riding of Hamilton Mountain, then she ought to go back and do some more research.
How, on the one hand, can the Government give away SI.3 billion of tax revenue and, on the other hand, claim to be going to reduce the deficit in Canada without in one way or another increasing the cost to the consumers of the Province of Ontario?


Pat Carney: By good fiscal management, Mr. Speaker.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


HOUSING
Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, my question is directed to the Acting Minister responsible for housing. In the consultation paper on housing the Minister noted that there was serious concern about whether federal housing assistance was being directed to those most in need. Could the Minister tell the House what measures are being taken to aim federal housing assistance to those in most need? Specifically, do they involve a change or an improvement in the limited dividend program?


Hon. Andree Champagne (Minister of State (Youth)):: Mr. Speaker, I would like to take this opportunity to give the Hon. Member and this House the assurance that the Government
Oral Questions
and the Minister concerned are continuing consultations with these groups and intend to take every action necessary to ensure that Canadians have access to adequate, reasonably priced housing.
As for the Hon. Member's specific question, it has been noted and the Hon. Member will receive a reply as soon as the Minister responsible has returned.


AGRICULTURE
Don Boudria: Mr. Speaker, I usually ask questions about porkbarrelling, but I am ready to drop the barrel for today and ask questions of the Deputy Prime Minister about pork. Yesterday the Minister for International Trade said that the pork industry was in a very serious predicament. In view of the election promise of the Prime Minister to fast track agricultural practices and trade, could the Minister tell us what specific fast track actions have been taken over the last 24 hours to deal decisively with the crisis in the agricultural industry?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, I defer to the Hon. Member and his Party with respect to expertise in the pork industry and porkbarrelling, but I will take his question as notice and draw it to the attention of the Minister responsible.


SITUATION OF FARMERS
Don Boudria: Mr. Speaker, since the President of the United States said he was as close as the telephone, I assume that the Prime Minister called his friend yesterday, and in that case, could the Prime Minister inform the House what the results were of these telephone conversations and when the House will have the assurance that the President of the United States will intervene, not just to help his friend, the Canadian Prime Minister-or should we say the Canadian President-but also and especially this country's farmers who need help today, since prices are dropping about 2 cents a day, while we are waiting for the Minister's decision?

Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, if the Hon. Member were interested in the facts, which I am sure he knows, he would know that the situation regarding the decision in the United States affecting pork is a matter that, naturally and obviously, concerns the Government of Canada, pork producers, and the House. He would also know that it was a preliminary determination and that that may be modified when the U.S. Commerce Department revisits the situation in June.
3504

March 29, 1985
Oral Questions


EFFECTS OF NEW POLICY
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources and concerns the Western Accord on oil. Mr. Speaker, my question is as follows: Recently, people across Quebec saw the reluctance of this Government to provide assistance for the Domtar project that involves 5,000 jobs for Quebec, because of the deficit. The Government has now concluded an accord that will give the multinational oil companies $1.3 billion, without any guarantee of jobs. Could the Minister explain to the House why the deficit is an excuse for not creating jobs in Quebec and is not considered when granting $1 billion to international oil companies?


Pat Carney: Mr. Speaker, obviously the Hon. Member has forgotten that the pulp and paper industry itself said that grants were not appropriate for that industry. On the other hand it has been our objective to create jobs in energy, which is an industry that goes from coast to coast to coast. That is our objective, and we are working to achieve it, with or without the help of the Hon. Member.


OIL COMPANY BENEFITS
Michael Morris Cassidy: Mr. Speaker, the Hon. Member for Champlain said a few weeks ago that he was starting to believe that we were being held hostage by those companies concerned only with personal profit, that is, the multionational oil companies. Can the Minister explain why it is that she has gone to such measures to provide assistance to oil companies that are not now paying any corporate tax at all, and yet the Government is not prepared to come to the assistance of the 1.5 million workers in Quebec and across Canada who cannot pay taxes because they do not have jobs?


Pat Carney: Mr. Speaker, we hope that the Western Accord will correct that situation by putting those people back to work. I can just repeat what I have already told the House. The measure about special offsets for companies that do not pay taxes in a clause to help enhance the role of Canadian companies in our oil and gas industry. If the Hon. Member and his Party do not support Canadianization of the energy field, I suggest they are on the wrong track.


AUTOMOTIVE INDUSTRY
Hon. Herb Gray (Windsor West):: Mr. Speaker, two days from now the current arrangements with Japan regarding restraint on the exports of Japanese cars to Canada will expire. Is the Minister of Regional Industrial Expansion going to make a statement in the House today about what the Government is going to do regarding this important matter?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, in reply to the Hon. Member I know that I do not have to remind him that in 1984, in a similar situation, discussions with respect to the ongoing VER arrangement with Japan started in January. There was a further meeting in Tokyo in March. There was a meeting in Ottawa in April, one in Banff, and finally by June 12 of last year there was sufficient agreement to allow a communication. At the present time we are in such negotiations. I believe the Hon. Member will be pleased to learn that the officer who headed the negotiation team with the Japanese last year is heading the team this year.


TIMING OF ANNOUNCEMENT
Herbert Eser (Herb) Gray: Mr. Speaker, I think it is remarkable that yesterday the Minister told the House there would be an announcement today about the Government's policy on the matter of Japanese exports of cars to Canada. We assumed that it would be in this House. He now suddenly discovers that the Government has been handling this matter in such a desultory and lack-lustre fashion that he is not able to make the announcement. If the Minister is not able to make the announcement today, will he pledge to the House right now that, if there is no agreement March 31, the Government will have in place standby arrangements to prevent the Japanese from flooding our market with cars and imperilling thousands of Canadian jobs? Will he at least do that?


Sinclair McKnight Stevens: Mr. Speaker, let me assure the Hon. Member that we fully intend that there be a stable market in Canada as far as the automotive industry is concerned. Our discussions with the Japanese are certainly to that end, but we feel that it would not serve anyone well to have these discussions and negotiations taking place in public. I want to assure the Hon. Member, further to what I said yesterday, that my colleague, the Minister for International Trade, and myself will be giving, if you like, a progress report, or statement, later this afternoon-


Herbert Eser (Herb) Gray: Where?


Sinclair McKnight Stevens: -bringing the public up to date on where these negotiations stand.


Ian Deans: How about the House of Commons being brought up to date?
March 29, 1985


Sinclair McKnight Stevens: Let me assure the Hon. Member from the NDP that, when a negotiation has come to a more definitive stage, we will be making an appropriate statement in the House.
Oral Questions



HUMAN RIGHTS


John R. Rodriguez: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Yesterday the Minister made the day for an already very wealthy oil industry in Canada. However, it was a sad day for Newfoundland. In light of the serious ramifications for the Government and the people of Newfoundland in terms of developing the Hibernia project, I want to ask the Minister whether she consulted the Premier of Newfoundland, Brian Peckford and, if so, did he endorse this Western Accord?


Pat Carney: Mr. Speaker, we have an incredible situation here. This Government in six months has negotiated two energy accords that have brought healing to those regions of the country that were split off from Confederation by the former administration. No one on that side of the House can say congratulations. Do you know who did say congratulations, Mr. Speaker? The Minister responsible for energy, Bill Marshall, called my office to give his congratulations for an accord that he knows will benefit Newfoundland.


Some Hon. Members:: Hear, hear!



HIBERNIA OILFIELD DEVELOPMENT

John R. Rodriguez: Mr. Speaker, it is an incredible day indeed in terms of the Western Accord. It is because of the fact that we did agree with the agreement that this Government had with Newfoundland, which the previous Government could not reach, that we are so concerned. Since the Minister did not consult the Premier of Newfoundland, how does she justify putting the whole Hibernia project into jeopardy and rendering the Newfoundland Accord null and void?


Pat Carney: Mr. Speaker, even for election rhetoric, I think that that goes beyond an excuse. There is nothing in this accord that hurts Hibernia. It helps Hibernia. First of all, by taking off the PGRT, which is a tax that is hated all across the country in producing areas, that will improve the economics of Hibernia. By going to decontrol, that will improve the markets for Hibernia. This accord is good for all producing regions of the country. Newfoundland will have the power to set its own royalties and its own fiscal regime free of federal government intervention. That is what Newfoundland wants.


Some Hon. Members:: Hear, hear!


Mrs. Lucie Pepin (Outremont):: Mr. Speaker, my question was intended for the Minister of Employment and Immigration but, in her absence, I direct it to the Acting Minister.
Severe criticism has been levelled at the promotion system for immigration officers, which is based on the number of illegal immigrants caught at points of entry into Canada. The Minister has launched an inquiry into this matter, and I should like to know who are the people in charge of the inquiry and the scope of their mandate. I would also like to know whether those people have ready access to all files and are authorized to summon witnesses.


Andrée  Champagne: In
the absence of the Minister of Employment and Immigration, Mr. Speaker, I take note of the question, and the Minister herself will answer the Hon. Member at the first opportunity.



WESTERN ACCORD-VANCOUVER ISLAND PIPELINE

Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources as well. The Minister will recall very clearly that a few moments ago she was commenting on all the jobs that would be created by the Vancouver Island pipeline. She will also remember that during the summer of 1984 both herself and the Prime Minister promised the people of British Columbia that the federal Government would enable that pipeline to be built by providing a financial grant to the Province of British Columbia. Does the Minister still plan to provide that financial grant which would make that gas pipeline possible, or is she going to leave it to the private sector?


Pat Carney: Mr. Speaker, as I have already informed the House, my officials are having discussions with the energy officials in British Columbia on the economics of a pipeline. 1 will report back to the House on the status of that project when the discussions are completed.



WINDFALL PROFITS TAX INQUIRY

Nelson Andrew Riis: Mr. Speaker, the Minister indicated that this new accord will assist in Canadi-anizing the oil industry. She will know that the main beneficiaries of this accord will be those oil companies that are able to take advantage of the world price for old oil. Those are almost exclusively foreign-owned companies. Will the Minister explain why she has not considered a windfall profits tax,

March 29, 1985
Oral Questions
because the increase in price per barrel for that old oil will be in excess of $4 a barrel. Why not use an excess profits tax on that old oil to help offset the cost of this accord, as opposed to the consumers of Canada paying the cost?


Pat Carney: Mr. Speaker, the Western Accord provides that all benefits flowing from the Accord are reinvested in new jobs in Canada, so the main beneficiaries of the accord are all those Canadians who want work. They will now have a chance to have work.



PUBLIC WORKS


Mr. Edouard Desrosiers (Hochelaga-Maisonneuve):: Mr. Speaker, my question is directed to the Minister of Public Works.
If I may, on behalf of all Members of the House, I should like to commend the Minister for the excellent work he has done. I would like to ask him when the moratorium on Mirabel land resales will be lifted?


Hon. Roch La Salle (Minister of Public Works):: Mr. Speaker, I am pleased to answer the question of my colleague. In less than five months, as you know, we have managed to find a solution to the land resale problem, a solution which both parties have endorsed, and this agreement will now become a Cabinet document. Quite confident that Cabinet will approve the document, I think 1 can tell the House that land resales might begin before the end of this session-and that spells efficiency in a matter which had been on the back burner for 16 years.


John Napier Turner: Mr. Speaker, I wonder if the Minister would get someone to endorse that $13 million cheque which he gave to the pork producers during the election.



WESTERN ACCORD-VANCOUVER ISLAND PIPELINE

John Napier Turner: My
question is directed to the Minister of Energy, Mines and Resources, and it arises from the remarks she made on the Vancouver Island pipeline. In response to the Hon. Member for Kamloops-Shuswap she said that she was still in negotiations with the Energy Minister for the Province of British
Columbia, yet, earlier this morning she included the job potential for the Vancouver Island pipeline among the jobs which she anticipates from the recent energy deal. Are she and the federal Government now committed to the building of the Vancouver Island pipeline? If not, why would she include those figures in the job potential which she cited?


Pat Carney: Mr. Speaker, in response to the Right Hon. Member, again I say that we are in discussions with the officials in British Columbia. We are trying to come to an agreement on a time line which permit the pipeline to be built.



OIL COMPANY BENEFITS

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is also directed to the Minister of Energy, Mines and Resources and it deals with the Western Accord, which I think might be more appropriately called "ordinary Canadians versus Big Oil".
Yesterday afternoon the Minister announced $1.3 billion of welfare for big oil. Yesterday morning the Government announced that it would cut back on the initial grain price for western farmers. Why this double standard? Why in the morning could the Government not afford a better grain price for western farmers, when in the afternoon it gave $1.3 billion to big oil? Why the double standard?


Pat Carney: Mr. Speaker, the Hon. Member comes from Saskatchewan which has got one of the most impressive records in the development of oil and gas energy reserves, by using tax holidays, royalty holidays, and other measures, which have created jobs, created new revenues through land sales, and which have been very beneficial for his province.


Some Hon. Members:: Hear, hear!


Pat Carney: I am really shocked that a Member from Saskatchewan would be knocking the Western Accord that the Energy Minister of Saskatchewan initialled as good for his province.



GOVERNMENT POSITION

Lorne Edmund Nystrom: Mr. Speaker, I think the time for b.s. is over. 1 want an answer from the Minister. Why the double standard? Why can this Government say in the morning-


Mr. Clark (Yellowhead):: Why are you against jobs?


Lorne Edmund Nystrom: Shut up, Joe.
Why in the morning did the Government say to western Canadian farmers that it could not afford better grain prices and it would cut the initial price, when a few hours later in the House it gave $1.3 billion of welfare to the oil companies? Why the double standard? I want an answer.
March 29, 1985


Pat Carney: Mr. Speaker, the Hon. Member's Party holds a record for double standards, by supporting the NEP, which hurt western Canada and which we are now moving to heal.



OLYMPICS


Mr. Sergio Marchi (York West):: Mr. Speaker, my question is directed to the Minister of State for Fitness and Amateur Sport. Yesterday in the House the issue of the 1988 Calgary Winter Olympics was raised, but the Minister refused and failed to address his comments to the $200 million commitment which his Government had made to the games.
The Canadian Olympic Organizing Committee and all Canadians are still awaiting those answers. The time for organizing an event of such national magnitude is short. Therefore I ask the Minister when will he inform the House how he will raise the $200 million and what mechanisms will he put in place? We need the assurance to ensure that all Canadians and Olympic participants will have faith in the commitment which has been made by the Government.
Hon. Otto Jelinek (Minister of State (Fitness and Amateur
Sport)): Mr. Speaker, I appreciate the opportunity to respond to that question. I have been waiting six months for the Hon. Member to stand up and ask one.
I can assure the Hon. Member that the $200-million commitment to Calgary will be kept. As he knows, the Olympic coin program has already been approved by the House and the estimated revenue from that program will be between $40 million and $50 million. As the Hon. Member also knows, the circulating coin program is now before the Standing Committee on Miscellaneous Estimates.
As far as my ongoing negotiations with the provinces for the remaining $100 million are concerned, I can assure the Hon. Member that I am comfortable with those negotiations. I have always maintained that an agreement would be signed before the end of this summer. I still believe that the agreement will be signed. In fact there will be a meeting of Ministers on April 19 in Ottawa which will iron out any remaining difficulties. I am confident that an agreement will be signed shortly thereafter.



FUND RAISING METHODS

Sergio Marchi: Mr. Speaker, it is interesting to note that the Minister is complaining about the lack of questions, but when he gets a question he refuses to answer in any different way. We were told in September that an agreement would be made with the provinces. He gave away the lottery without any guarantee. We were told that an agreement would be forthcoming before Christmas, and at Christmas the Minister told us that it would be forthcoming in the
Oral Questions
new year. Now it is March and he says there will be an agreement in the summer. We need a little more sense of action.
How will the Minister raise the $200 million, when the coin program will be lucky if it raises $30 million? How are the provinces going to come in, and when will they come in? Could he give a sense of direction to the Olympic Committee and Canadians in general?


Hon. Otto Jelinek (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, if the Hon. Member had listened to my previous answer he would know that I have already given that commitment. He referred to us closing down of the Sports Pool. I would hope that we would have closed down the Sports Pool as it was losing $1.5 million a week. It was a Liberal-orchestrated Sports Pool detrimental to all Canadians.


Some Hon. Members:: Hear, hear!


Otto John Jelinek: I repeat that I have consistently said, and the Hon. Member should check the record, that hopefully an agreement would be signed with the provinces before the end of the summer. I maintain that position. Beyond the other areas which I have already mentioned, there are numerous private sector moves which are currently being discussed and negotiated. I am confident that we will raise not only the $200 million non-tax revenue dollars for the Olympic Games, but well beyond $200 million.



AUTOMOTIVE INDUSTRY


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion. I can understand his embarrassment today, because he stated yesterday that an announcement would be made. It is outrageous that this announcement is not to be made in the House of Commons, when thousands of jobs are at stake. The United Auto Workers office in Toronto was informed that a specific agreement was to be signed stating that quotas would continue. Why has this situation changed between yesterday and today? What has happened to sweep the rug out from under the Minister and his commitments?


Sinclair McKnight Stevens: Mr. Speaker, in reply to the Hon. Member, I would ask him to follow my words more closely. Yesterday I said, "The Government of Canada will have an announcement with respect to this matter tomorrow". We will be making a statement. The Hon. Member takes exception to the fact that it could be made later this afternoon. If he would prefer that it be made in the House, I am sure the House Leaders could at least discuss that matter and some suitable time could be arranged. I have no objection to taking up House time if the Hon. Member feels it is desirable.

March 29, 1985
Point of Order-Mr. Gray (Windsor West)
However, the point 1 wanted to stress is that certainly nothing has changed from yesterday to today. We do want to give the nation a report on where this matter now stands, where discussions stand, and I emphasize once again that the last time the nation went through this it took until June before we could get a satisfactory agreement with the Japanese.



CLERK OF PETITIONS' REPORTS

['I must inform the House that the Minister of Energy, Mines and Resources has withdrawn the words to the satisfaction of the Chair.']
Mr. Deputy Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Thursday, March 28, 1985, meet the requirements of the Standing Orders as to form.



Herbert Eser (Herb) Gray: Mr. Speaker, I want to raise a point of order with respect to certain words used by the Minister of Energy, Mines and Resources (Miss Carney) in answer to a question asked of her by the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan). She said that the Hon. Member made a malicious and a false statement.
I refer you, Mr. Speaker, to Beauchesne's Fifth Edition, page 107. It quite clearly states there that the words "false statement" have been ruled by previous Speakers to be unparliamentary on more than one occasion. Therefore, Mr. Speaker, 1 ask you to apply the clear precedent that the words used by the Minister of Energy, Mines and Resources are unparliamentary and call upon the Minister to withdraw them according to our clear rules and traditions.
The Hon. Member for Cape Breton-The Sydneys in asking his question was simply carrying out his duties to speak out for all Canadians in a forceful but fair and accurate manner. He is entitled to a response from the Minister which is informative and within the rules. This he did not receive and he is entitled to better from the Minister.


Pat Carney: Mr. Speaker, I withdraw the word "false". I was considering "spiteful" but I will settle for "inaccurate".


Ian Deans: Mr. Speaker, 1 rise on the same point of order. The Minister cannot substitute another word. She either withdraws the word or she does not. She cannot substitute another word she thinks is satisfactory.


Hon. Ray Hnatyshyn (President of the Privy Council):: Mr. Speaker, in the heat of debate in Question Period, I think statements are made by Hon. Members on both sides of the House which, on reflection, are considered unparliamentary. I fully subscribe to the position which has been taken by my colleague, the Minister of Energy, Mines and Resources. When confronted with a word which is clearly unparliamentary, she did the right and proper thing, and that is to withdraw it unequivocally.


Ian Deans: That's fine. That's all, I agree.


Ramon John Hnatyshyn: There are other unparliamentary terms for the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria). The reference to drinking works both ways. Sometimes we on our side wonder whether he has had too little or too much.
The situation, Mr. Speaker, is really one in which there has been a categorical withdrawal. I don't think the word "inaccurate" is unparliamentary.


Mr. Deputy Speaker:: I regret to interrup the Government House Leader. Does the Opposition House Leader have something to say before the Chair comes to a decision?


Herbert Eser (Herb) Gray: Mr. Speaker, I think the rules and precedents are clear. If a word is unparliamentary, it must be withdrawn clearly and unequivocally, without any skating around in an attempt to insert by surreptitious means some other word to make up for the fact that the Hon. Minister did not follow the rules and traditions of this House.


Mr. Deputy Speaker:: I must inform the House that the Minister of Energy, Mines and Resources has withdrawn the words to the satisfaction of the Chair.



BUSINESS OF THE HOUSE

Ian Deans: Mr. Speaker, there was an indication earlier today that the Minister for Regional Industrial Expansion was going to make a statement outside of the House with regard to the Japanese car quotas. Later he indicated that he would be willing to make the statement inside the House if some suitable arrangement could be made. Since time is of the essence today, I would like to suggest that we would be prepared to sit through the lunch hour in order to allow the Minister to make the statement now, and our commitment to complete the bank Bill by three o'clock will still be kept. If the Government House Leader would accept that suggestion and have the Minister make a statement now, we would be willing to have that occur.


Herbert Eser (Herb) Gray: Mr. Speaker, we in the Official Opposition believe that the rights of Parliament are such that statements of the kind intended to be made by the Minister of Regional Industrial Expansion should be made here in the House. We will certainly be happy to work with the Government House Leader to facilitate that being done.


Ramon John Hnatyshyn: Mr. Speaker, let me say that I have had an opportunity to discuss this matter with my distinguished colleague, the Minister of Regional Industrial Expansion. The fact is that it was hoped that we would be able to make a statement at the usual time. However, as he pointed out during
March 29, 1985

Question Period, there are certain elements in terms of negotiation which made it necessary to forestall any announcement and statement. I believe there may be a disposition, for example, if we were agreeable to sitting through the lunch hour, to see what we could do. I think we could probably arrange to have something announced in the vicinity of two o'clock this afternoon, which would allow Hon. Members to hear the Minister and to respond. In this way we can accomplish our common objective, and that is to pass the legislation so that the other place could consider the Bill at or about three o'clock this afternoon.


Herbert Eser (Herb) Gray: Will we get a copy of the statement so that we will be able to prepare a reasoned and meaningful response?


Ramon John Hnatyshyn: The House Leader of the Official Opposition knows that I have instituted a scheme, which has not been in existence up to this point, which will ensure the earliest possible distribution of all statements to be made not only to the critics, but also to the Opposition House Leaders.
1 will give the Hon. Member the undertaking that as soon as the statement is ready, I will try to get it to the Opposition Parties at the earliest possible time so that there will be ample opportunity for them to make a considered and, hopefully, responsible response.


Mr. Deputy Speaker:: Am I to understand that there is agreement to sit during lunch hour? Is it so agreed by the House?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: Agreed and so ordered.



ROUTINE PROCEEDINGS


Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, I have the honour to present a petition from the people of the riding of Saint-Michel-Ahuntsic, in the Sault-au-Recollet area. These residents have been waiting for home postal delivery since June 1983. It is intolerable that they should be penalized by the Government just because they are in a new residential area. This reflects the indifference and arrogance of the Minister and the Canada Post Corporation, and I therefore ask the Government and the Minister responsible to take appropriate action.
Petitions


Don Boudria: Mr. Speaker, I have a petition signed by 375 persons who object to the abolishment of the employee assistance program on Parliament Hill. It is signed by staff and Hon. Members of Parliament.


Michael Morris Cassidy: Mr. Speaker, I would like to table with the House a petition signed by a number of people who are concerned with the closure of the National Postal Museum. They are petitioning this House and the Minister responsible for the post office to intervene and ensure that the National Postal Museum is retained. That it find a new location near Parliament if it has to move from 180 Wellington, and that the staff continue to serve the public in their present capacity.


John R. Rodriguez: It gives me a great deal of honour and pleasure to present a petition on behalf of several people from Calgary who oppose the imposition of the severance pay provisions on the Unemployment Insurance Act. They ask this House to intervene and withdraw these provisions.


Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, I, too, have a petition from several residents of the Province of Alberta asking that workers laid off after March 31, 1985 not have severance pay deducted from their unemployment insurance benefits. To do so would greatly increase the economic hardship for the families of the laid-off workers.


Daniel James Macdonnell Heap: Mr. Speaker, it is my honour to present a petition signed by a number of residents of Canada in which they humbly pray and call on Parliament to ensure all laid-off employees will keep their severance pay and receive their unemployment insurance benefits without deduction of severance pay.


Nelson Andrew Riis: Mr. Speaker, I have the pleasure of presenting a petition on behalf of many thousands of Canadians who are concerned that as of March 31, 1985, they will have their severance pay deducted from their unemployment insurance benefits. They call upon Parliament to stop this legislation.


Steven W. Langdon: Mr. Speaker, I, too, have a petition to present signed by constituents in Essex-Windsor. They make the point very strongly that an injustice will be done to working people in this country if this new system of severance pay being deducted from UIC benefits is put into effect as of March 31.

March 29, 1985
Petitions


Howard Douglas McCurdy: Mr. Speaker, I, too, have the pleasure of submitting a petition on behalf of the citizens of Canada protesting the intent of the Government to steal the severance pay of workers who are laid off. They ask the Government to withdraw the provision.


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, although the petition I am presenting is contrary to the belief of both myself and many people in my riding, I feel duty bound to present this petition signed by 110 people who are opposed to Pro-life and opposed as well to the inclusion of unborn human beings in the Charter of Rights and Freedoms.


Mr. Fred King (Okanagan-Similkameen):: Mr. Speaker, 1 have the honour to present to this House a petition attesting to the environmental concerns expressed by 942 residents of Merritt, Lower Nicola and the Nicola Valley. Their concerns stem from the proposal to locate a waste dump at the Craig-mont mine site in the Nicola Valley. Their anxiety stems from evidence in a brief presented to the Thompson-Nicola regional district by the Home Sweet Home Organization of Lower Nicola, British Columbia, which suggests that there is great likelihood that severe damage to the environment of Merritt, Lower Nicola and the Nicola Valley would result. As a result of these convictions, they pray and beseech the House to support in every way possible their opposition to the location of a waste dump at the Craigmont mine site in the Nicola Valley.


Mr. Vincent Della Noce (Duvernay):: Mr. Speaker, I have the honour of presenting a petition signed by four residents from the Quebec City area. The petition was signed by students who are asking for the price of natural gas in Canada to be regulated.
In order to stimulate demand for an energy resource that produces less pollution than other kinds of fuel, a resource that is underdeveloped in this country at the present time, the petitioners humbly pray that Parliament ask the Minister of Energy, Mines and Resources (Ms. Carney) to intervene in order to help the industry achieve its full potential.
I therefore present this petition and urge the Government to act upon it forthwith.


Mr. Deputy Speaker:: Am I to understand that the Hon. Member for Ottawa Centre (Mr. Cassidy) wishes to present a second petition?


Michael Morris Cassidy: That was my intention.


Mr. Deputy Speaker:: We have a ruling by Madam Speaker Sauve to the effect that when a Member presents a number of petitions, they must be presented at the same time, which has not been the case today. Is there unanimous consent for the Hon. Member to present a second petition?


Some Hon. Members:: Agreed.


Michael Morris Cassidy: Mr. Speaker, this petition is on a separate subject and I had not realize they should all be presented at the same time.


Michael Morris Cassidy: Mr. Speaker, I have the honour to present a petition on behalf of a number of workers in Edmonton protesting the Government's decision to roll severance pay into unemployment insurance benefits. They point out that the compensation of workers for the loss of their employment and the investment of their labour and time in a company's operation is represented by severance pay and should not be taken away by the Government of Canada.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Paul Dick (Parliamentary Secretary to Minister of State (Government House Leader)):: Mr. Speaker, the following questions will be answered today: Nos. 76 and 184.


Mr. Nunziata: 1.	(a) In the past five years, how many inmates have, because of behavioral and other problems, lost their earned remission under mandatory supervision (b) in which correctional institutions were they incarcerated?
2.	By category, what are the most common reasons for inmates losing earned remission?
3.	Have any inmates who have lost earned remission been subsequently released under mandatory supervision?


Hon. Elmer M. MacKay (Solicitor General of Canada):: am informed by the National Parole Board as follows:
1.	(a) The National Parole Board's automated system cannot produce this type of information prior to the fiscal year 1983-84. For 1983-84 there were 1,066 inmates who lost their earned remission under mandatory supervision.
(b) This data is available, however, it would require extensive manual research of 1,066 inmate files and result in a very costly exercise.
2.	The common reason is through revocation which is brought about by breach of conditions or committing another crime.
3.	In 1983-84, 2,908 persons were released on mandatory supervision and in that same period 1,087 were revoked.
,
March 29, 1985

Remission was recredited in only 21 cases. Of the 1,087 revoked, about 713 were eligible for release again on mandatory supervision.


Mr. Stackhouse: In 1983, how much aid was given to (a) the Contradora Group (b) Mexico (c) Venezuela (d) Columbia (e) Panama?


Hon. Monique Vezina (Minister for External Relations):: The "Contadora Group" per se is not a development aid recipient institution. It exists primarily to assist the countries of Central America in resolving the regional conflict.
1 am informed by the Canadian International Development Agency as follows: During the fiscal year 1983-84, Canadian official development assistance was as follows:
(a)	The Contadora Group (as such) - Nil
(b)	Mexico - $ 1,340,000
(c)	Venezuela - $	170,000
(d)	Colombia - $10,200,000
(e)	Panama - $	780,000
I am informed by the International Development Research Centre as follows: In 1983, IDRC has provided funds totalling $3,363,837 for the support of scientific research and related activities within the Contadora Group countries as follows:
(a)	The Contadora Group (as such) - Nil
(b)	Mexico - $ 335,477
(c)	Venezuela - $ 187,200
(d)	Colombia - $2,762,560
(e)	Panama - $	78,600
[English}


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded with consideration of Bill C-37, an Act respecting the provision of financial assistance to the Canadian Commercial Bank-Mrs. McDougall-Mr. Danis in the Chair.
Canadian Commercial Bank
The Deputy Chairman:: The Hon. Member for Ottawa-Vanier (Mr. Gauthier), on a point of order.


Jean-Robert Gauthier: Mr. Chairman, yesterday, copies of Bill C-37 were distributed to Hon. Members. The House will note that the French text required some corrections. The text was corrected in pencil in the margin. I wonder whether the Bill has been ordered to be reprinted, so that we can all have the same copy with the same words. I am asking this so that today we can all use the same Bill with the same wording.


Ramon John Hnatyshyn: Mr. Chairman, I became aware of the deficiency in the French version of the Bill and attempted in a rather rudimentary way to correct it, and I apologize to the Hon. Member. It is my understanding that the corrections have been made and the printed version will reflect the correct French version. I anticipate copies will be available directly.


Marcel Danis: Order. House in Committee of the Whole on Bill C-37, an Act respecting the provision of financial assistance to the Canadian Commercial Bank. Shall Clause 2 carry?
On Clause 2-Agreement to Provide Financial Assistance.


Aideen Nicholson: As our House Leader explained yesterday, we voted for the Bill at second reading so that it would go into Committee of the Whole and we would have an opportunity to ask some questions. I must say that I was concerned by the speech made by the Hon. Member for Edmonton South because one would have assumed that, since the Bank was in his constituency, he would have been able to give us some very persuasive reasons for this bail-out. His reasons were weak in the extreme and certainly did not inspire me with confidence. In fact, they reduced my enthusiasm for the Bill. The main thrust of the comments of the Hon. Member for Edmonton South was that this Bank should be rescued because it is a western bank. 1 sincerely hope that the taxpayers of Canada are not going to be asked to contribute this amount of money simply because the Bank is in Alberta and the Minister of Energy was having a difficult time negotiating an agreement with Alberta.
The Hon. Member for Edmonton South attempted to cast the blame for the Bank's difficulties on to the National Energy Program. There was nothing in the National Energy Program that obliged that Bank to invest in a California bank which had a loan portfolio which was distinctly shaky. In view of the speech of the Member for Edmonton South, we must ask more questions about the management of the Canadian Commercial Bank and the quality of the business decisions it took. We must ask if the same management team is still there and a lot of questions about the information that the Government had.

March 29, 1985
Canadian Commercial Bank
When the Minister of State for Finance made her statement in the House on Monday, we were given the impression that the Government received its first information that the Canadian Commercial Bank was in serious difficulty quite recently in the month of March. Later, in response to questioning, the Minister of Finance said that he had received information from the Inspector General in September. Now we learn that even two years ago the American regulatory authorities had been in touch with the Canadian authorities. At that time they were apparently expressing concern about the California bank in and around the time that the Canadian Commercial Bank invested in it.
I would also like to know if the Inspector General of Banks had advised the Canadian Commercial Bank at any time to diversify its holdings. I made a reference in the House a couple of days ago to the statement that is in Part 3 of the Estimates, that it is part of the Inspector General's duty, if he foresees trouble, to encourage a bank to diversify. I would like to know if this obligation was exercised, and when it was exercised.
I would also like an explanation of diversification. As far as I can see from the information we have, the holdings of this Bank were all in the energy field. They may have diversified geographically, but is that to be taken seriously as diversification? Is that what the Inspector General of Banks intended?
I have several other questions, Mr. Chairman, but perhaps I might afford the Minister an opportunity to answer those.


Mrs. McDougall:: Mr. Chairman, I hope I have kept all the questions straight. If I haven't, 1 know the Hon. Member will ask them again. I would like to start by congratulating you, Mr. Chairman, on your excellent role today in Question Period.
Perhaps I could explain in a little detail the history of the relationship with the California operations. In 1981 the Canadian Commercial Bank acquired a 40 per cent interest in the Westlands Bank. The Westlands Bank was largely involved with real estate loans. The move by the CCB into California was an attempt to diversify geographically. It was involved in the Westlands Bank in the real estate area. At that point real estate markets were very strong. The real estate market in California, as in other areas, later began to decline. The Canadian Commercial Bank, as the major shareholder in the Westlands Bank, increased its participation in the Westlands Bank with an injection of capital to strengthen that operation. The recent problems were through the CCB's agency in California. The agency was involved with oil service and drilling rig loans.
Whether it is a good business decision to diversify geographically within the same industry is obviously a question of where the Board of Directors is heading. Certainly within some kinds of companies one would want to stay in the area where presumably one has expertise. Rather than going into an area where they did not have the expertise, it was better to diversify
geographically and stay with the industry they were familiar with and could bring the best judgment to.
As we know, the Bank was substantially more profitable in the late 1970s. It looked like an aggressive, moving bank. After the real estate market in California began to decline the difficulties were recognized. The oil service industry in California got into difficulty very recently. The Bank has also made other efforts to diversify. It now has branches in Vancouver, Winnipeg, Toronto, Montreal, and Halifax, as well as in western Canada. I think the correct business decisions were taken with regard to diversification. They perhaps did not work quickly enough, but I think the Bank made some appropriate moves on diversification.


Aideen Nicholson: Could the Minister also give us the history of the involvement of the Inspector General of Banks? There is a newspaper report that the Inspector General's office has been receiving a steady stream of inquiries from the Federal Deposit Insurance Corporation, the U.S. equivalent of the Canadian Deposit Insurance Corporation, from the U.S. Federal Reserve Board, and from the California banking superintendent's office over a two-year period. If this is the case, could we know what action was taken over that two-year period?


Barbara Jean McDougall: Since there were overlapping jurisdictions, there was a connection made early in 1983, I believe. An official of the Inspector General's office went to California to look at the Westlands acquisition. There was not, as was implied in the newspaper, a steady stream of phone calls and telexes. There was simply, on an occasional basis, as would be normal, conversations between the two regulatory bodies. They were actually quite rare. There was evidence that the West-lands Bank was improving. As I understand it, both regulatory agencies were satisfied that, while the problems were obviously severe, they were not critical.


Nelson Andrew Riis: Mr. Chairman, I trust that we will be hearing questions from a variety of Members today as we go through this Bill.
I would like to return to the point that my colleague from Trinity was referring to a moment ago. On January 25, 1983 the Governor of the Bank of Canada was obviously concerned enough about the situation to phone the national newspaper. The Globe and Mail. He convinced The Globe and Mail, at least, that everything was fine, that the Commercial Bank was profitable, solvent and there were no problems. Will the Minister explain if that was an accurate statement at that time when the Governor of the Bank was saying that it was solvent and profitable? Did he actually have evidence at that point on which to make that statement or was he simply trying to calm down investors in Canada as well as elsewhere?
March 29, 1985


Barbara Jean McDougall: Mr. Chairman, I think that statement was made by the Governor after consultation with the Inspector General. It was made in relation to the resignation of Mr. Eaton as the Chief Executive Officer of the Bank. Over the two or three months prior to that, there had been some building up of concern around Mr. Eaton's relationship with Mr. Rosenberg. Throughout that time, as the concern and the pressure on the trust company situation arose, I think the Governor took responsible action by indicating that this Bank was not connected with that scandalous affair because of action taken through the resignation of Howard Eaton.


Nelson Andrew Riis: Mr. Chairman, I have a general question for the Minister. My office, and I suspect many other offices, has received many phone calls and telegrams from people who are very concerned about what kind of signal is being sent by the Government. According to this Bill, the Government is spending at least $75 million; $60 million of that is coming from the federal Government directly, to bail out this failing bank and ensure that it will not fail.
Does this mean that from this point on it may be well recognized that any bank that gets into financial difficulty will have the full support of the federal Government, that it will be guaranteed that the federal Government will bail out any failing bank or financial institution in the country?


Barbara Jean McDougall: Mr. Chairman, this situation was caused by an isolated incident. There are no other financial institutions in the country at the moment that are appearing to be insolvent in any way. I would like to make it clear that other institutions are not being looked at under the circumstances that we are talking about now. I want that absolutely clear for the House, the people of Canada and the depositors in our financial institutions.
If any organization under my legislative or regulatory jurisdiction was to come to me with difficulties, I would look at each situation as it stood. I can make no commitment at this time either for or against what happens in the very unlikely event that we are faced with this again.


Nelson Andrew Riis: Mr. Chairman, why is there an interest-free loan? I realize that we are asking the taxpayers of Canada to provide $60 million-a loan, in a sense-to this troubled bank to assist it to get back on its feet. I think we support that notion but when other people obtain money from the federal Government in one way or another, they usually pay interest. Why would we not charge a bank interest as well?


Barbara Jean McDougall: Mr. Chairman, the support package was designed so that the participants would be repaid the principal amount interest-free, except that in addition there would be warrants to purchase equity in the Bank issued on a pro rata basis to the support group, which could be exercised for ten years after the principal is paid back, so that there is a return
Canadian Commercial Bank
to the taxpayers and to the support package participants in general. The warrants can be exercised at a very modest price and the warrants, as the Bank is profitable, will have a trading value and be able to be sold. That will be a return to the participants in the support package, including the taxpayers.


Nelson Andrew Riis: The Minister says that we will be able to purchase these warrants at a very modest price. Since it is a failing bank and because its shares have virtually collapsed on the stock exchange, is it any surprise that we are able to obtain these warrants at a very reasonable and modest cost? Assuming that the Bank will eventually get back on its feet, we will in fact receive a fair return for an equity position, in a sense.


Barbara Jean McDougall: Mr. Chairman, I find the Hon. Member's vocabulary somewhat hysterical. This is not a failing bank.


Nelson Andrew Riis: It has already failed.


Barbara Jean McDougall: The Bank is not failing. It is not failing because it has had a very strong support package from the private sector, from the province and from the Government of Canada. This Bank is a solvent bank.


Nelson Andrew Riis: Mr. Chairman, the point I want to make to the Minister is that we are in the House today at Committee of the Whole stage of a Bill that is meant to bail out a bank. Regardless of the title, we are bailing out the Canadian Commercial Bank. The reason we are doing this is that it had failed. Its stocks had crashed on the stock market. People were very concerned about its future. It is perfectly clear that if this bail-out package had not been assembled, that bank would not be in existence. I realize that by doing this we will rescue what had been a failed bank. It is not going to be failed after this package is stickhandled through its various jurisdictions.
Why is this Bill necessary if this bank was, in the past, in a healthy, solvent situation? Why is this bail-out situation to the tune of almost a quarter billion dollars-$225 million-necessary if the bank was in good health?


Barbara Jean McDougall: I am trying to indicate to the Canadian public in a responsible way, unlike the Hon. Member, that we came to Canadians and to the House and presented a problem which had arisen, together with a solution to that problem. If he wants to make irresponsible statements about failing institutions, they can all come crashing down around our heads. The point is that there was a problem and a resolution of that problem. Therefore the Bank is not failing. Could we please make that very clear?


Nelson Andrew Riis: It had failed.


Jean-Robert Gauthier: Mr. Chairman, let me return to the reasons for the failure of the Bank. Following some strong advice from the Inspector General of Banks, Canadian Commercial Bank was told to diversify in 1981, I believe. It diversified with the

March 29, 1985
Canadian Commercial Bank
purchase of Westlands in the United States. They also opened offices in Montreal, Toronto and Halifax.
To my knowledge, unfortunately Westlands was in the same business as the Canadian Commercial Bank. The Minister has told us that it was in the real estate business but my research indicates that it was involved in financing oil rigs and that, because of the OPEC prices and the world situation, the oil rigs were selling quite cheaply on the market. 1 see the Minister of Transport laughing.


Mr. Mazankowski:: You started it all.


Aideen Nicholson: In California?


Jean-Robert Gauthier: The Minister of Transport knows that they do not have a National Energy Program in California.


Donald Frank Mazankowski: Why did they go south in the first place? You drove them out.


Jean-Robert Gauthier: Mr. Chairman, the Minister of Transport said we drove them out. I am asking questions to get information. If the Minister of Transport wants the floor, he can ask the Minister questions and make his points then.


Donald Frank Mazankowski: You should ask intelligent questions to begin with.


Jean-Robert Gauthier: If the Bank moved out of Canada to go to California to finance oil rigs, which is different from the answer given a moment ago to my colleague-the Minister said the Bank was going into real estate,-if the oil rigs were going at a tenth of their value in California and this Canadian Commercial Bank was indeed trying to diversify, why did it go into the oil business in California? Why did the Bank go, as the Minister implied in her answers a minute ago, into real estate? I am perplexed by these two avenues.


Barbara Jean McDougall: Mr. Chairman, the Bank moved into California with an agency. It purchased a 40 per cent interest in the Westlands Bank. The Westlands Bank was involved in real estate. The agency was involved with oil rigs. I am trying to separate out a very complicated corporate structure.
The Westlands Bank went through some difficulties with its real estate. There appears, as I understand it, more stability. The Westlands Bank was also involved with computer software. There was an effort to diversify in other areas, and it went through a difficult period. The softwave end is now consolidated into the Canadian Commercial Bank, is a profitable operation and over time will be contributing to the consolidated earnings of the Bank.
The agency, on the other hand, was involved with these oil rig loans. Those have become a problem really very recently. I want to read from something that appeared in The New York Times describing what had happened in a similar market in Texas. I shall give the Hon. Member the clipping and it will provide an idea of what has happened over the last three months and why this appeared to come out of nowhere. This
article is headed "Oil Industry's bad cold. Starts to give explorers, drillers, shippers, and banks pneumonia. Exploration and production are the heart of the industry. But the pulse is weakening". In another area of the article it says: "2,175 drilling rigs are operating in U.S., down 612 from December", and I think it is "299 from last February".
The problem really came out of nowhere. There is another line in this article which will indicate how recently this had bubbled up from underneath.


Jean-Robert Gauthier: I appreciate the answer, Mr. Chairman. It was given in an informative manner and 1 thank the Minister for that. I thought the OPEC price breakdown, the international market being what it was, had had a direct effect on oil exploration in California and I do think there is merit to that argument.
The Minister will remember, I think it was yesterday morning when she made her statement, when one of our Members asked her about the warrants that were going to be issued by the Canadian Commercial Bank. He asked her, if my memory serves me correctly, whether it was not illegal for a bank to own shares in another bank. Warrants being whatever price they are-25 cents is the price they are paying for these-can the Minister tell us today if she has looked into this as she said she would yesterday? Could she give us the assurance that there is no illegality here of seven Canadian banks owning warrants in a Canadian bank, and can she reassure me that it is indeed legal?


Barbara Jean McDougall: Mr. Chairman, let me deal with both parts of the Hon. Member's question. The Hon. Member had two paragraphs in his question and so I shall give him a two-paragraph answer. One was the declining oil prices which did lead to triggering the need to write down oil rigging equipment. I agree with that. Obviously if oil prices were going through the roof, people would be looking for oil like crazy.


Jean-Robert Gauthier: The Minister of Transport doesn't, but you do.


Barbara Jean McDougall: In terms of the warrants, they are an option to purchase. They are not a purchase in themselves. Warrants normally have a trading value, so the banks will not own stock in another bank unless they exercise the warrants, which under the Act they will not do. They will sell the warrants.


Jean-Robert Gauthier: Mr. Chairman, is there a ten-year limit on the warrants which they have to exercise before the warrants expire?


Barbara Jean McDougall: Mr. Chairman, it is ten years following the payback of $255 million. That is what triggers the warrants.


Herbert Eser (Herb) Gray: Mr. Chairman, I have some questions for the Minister of State for Finance. Unfortunately,
I was outside the House at the beginning of the Committee and I apologize if some of the questions have already been placed.

March 29, 1985

I would like to know the number of depositors the Bank had as of the moment on March 14 when the Bank came to the Government to tell the Government about its problems, problems I suggest the Government should have known about.
Second, 1 want to know about the size of the deposits. In particular, how many of them would have been covered by the Canada Deposit Insurance Corporation under other circumstances and how many would not have been?


Barbara Jean McDougall: Mr. Chairman, I cannot give a precise figure on the number of depositors. There were a very large number. I do not think I could give an answer with any precision. 1 can tell the Hon. Member that there were total deposits of about S2.8 billion, and $400 million were covered by deposit insurance.


Herbert Eser (Herb) Gray: Mr. Chairman, could the Minister repeat that answer?


Barbara Jean McDougall: There are approximately $2.8 billion in deposits and approximately $400 million were covered by deposit insurance, Mr. Chairman.


Herbert Eser (Herb) Gray: Mr. Chairman, with the utmost respect to the Minister. I would have thought this would be the kind of information she would have had readily available for discussion in Committee of the Whole. Perhaps her officials could get it and present it to her before Committee of the Whole ends.
If I could ask another question, Mr. Chairman, I would like to know how many loans the Bank had on its books as at March 14, first in Canada, and second in the United States. Could she give us some breakdown in size? For example, how many were under $20,000, how many were under $50,000, how many were under $100,000 and how many were under $500,000?


Barbara Jean McDougall: I can certainly ask my officials to check this, Mr. Chairman. We are dealing with very large numbers. Some will be very small and some will be bigger. I will be happy to provide them today if I possibly can. If not, perhaps we could provide that when the inquiry comes before the Finance Committee of the House. We will do our best to get it today.


Herbert Eser (Herb) Gray: Mr. Chairman, we have a very important piece of legislation before us. I would have thought the kind of information I am seeking would have obviously been the kind the Minister would have expected the House to have before it in order to make a decision on this Bill.
If I can move on to another area, the Bill says that moneys are to be appropriated for this bail-out for the Canadian Commercial Bank from the Consolidated Revenue Fund. Could the Minister tell us whether the moneys in question are to come from an increase in the Government's deficit or from a reallocation created by the cancellation or reduction of other existing government programs? If it is the latter, which ones?
Canadian Commercial Bank


Barbara Jean McDougall: Mr. Chairman, we are asking the House for new money today; we are asking for authority to raise new money.


Herbert Eser (Herb) Gray: This means that the Government will be adding to the deficit. I see that it is all right to add to the deficit in rescuing this Bank but that it is not all right to do so when it comes to helping Domtar in Windsor, Quebec, to expand and create jobs.
I should like to ask another question and then I will be happy to yield the floor to other members of the committee. If the warrants, about which the Minister has been talking, are exercised, what will be the effect on the value of the shares of the bank already issued?


Barbara Jean McDougall: The dilution of the existing equity will be about 75 per cent. In terms of what will be the value, it will depend upon the Bank's future profitability and how that is regarded by people who are buying and selling the stock. I could not give him an answer on that.


Herbert Eser (Herb) Gray: In view of the fact that the Minister said there would be a dilution of 75 per cent of the existing shares, what steps will the Government take to prevent this dilution from harming the investment in employee pension funds, representing thousands of employees in all parts of the country? What will the Government do to prevent damage to these funds or some possible risk to the base which these pension funds are supposed to represent?


Barbara Jean McDougall: Most of the pension funds represented among the shareholders are defined benefit plans whereby they are both employee and employer contributions. However, as the Hon. Member knows, as defined benefit plans the employer is obligated to ensure that the defined benefits are paid at the time of retirement. There will be no negative impact on the payment to either current retirees or future retirees.


Aideen Nicholson: Mr. Chairman, understandably the Minister objected to the use of the world "failing" in terms of the Bank. Indeed, the Bank is now in very good shape, having had a large infusion of new moneys.
I want to question the use of taxpayers' money in this bail-out. Regional banks in Canada have not had a conspicuous record of success but in the past, when it has been necessary to rescue a regional bank, it has been done by the banking authorities. Indeed Canada's banks have a most enviable reputation. In this country we do not have banks fail, of which we can all be very proud. In the past the banks themselves have acted and used their own money to ensure that their good reputation was maintained.
In this case we have the banks contributing but we also have large requirements for tax dollars. Would the Minister care to comment on the reports which are being carried in the newspapers that we are in this situation because the Government of Alberta wanted control to remain in Alberta and would not allow "eastern banks" to rescue them?

March 29, 1985
Canadian Commercial Bank


Barbara Jean McDougall: Mr. Chairman, I think that was a somewhat misleading report. There have been mergers in the past. We looked at a number of possibilities and we came up with what we felt was the most attractive solution for everyone. If a bank gets into trouble and gets merged into one of the big five banks, we could end up with no regional banks. I am not sure that is where we want to go. I think we would like to have some regional banks as long as they are viable. Maybe that requires our help. It required the help of the province. The province indicated its commitment. We indicated that we felt it was responsible for the Government to be involved. It is in all our interests.
In connection with some of the things that have been going on in the States, simply the rumour of potential trouble in the Texas banking system triggered a move in the U.S. dollar. It is not only in the interests of Toronto or Calgary, it is in our interest to indicate to Canadians and to the world that we have faith in the system and in this Bank. We want to ensure that there is a place in Canada for regional banks, provided they are viable, solvent and contributing to local businesses in an economic way.


Aideen Nicholson: We all fully support the position that confidence is important and that it is important to move quickly. However, I have not had a clear answer to my question as to why taxpayers' dollars have to be used or the one as to why the banks, as they have done in the past, did not assume responsibility for protecting their very excellent reputation.
The total assets of this particular bank are less than 1 per cent of the assets of big banks. Is the Minister saying that the policy of the Government is that small regional banks are so important ideologically or philosophically that we put taxpayers' money into them rather than ask the banks to come to their aid when they are very well able to do so without taking taxpayers' money?


Barbara Jean McDougall: 1 think the banks did come to the aid of this bank. After all, as a group they are putting in $60 million and through the Canada Deposit Insurance Corporation, which is funded by financial institutions, there is another $75 million. I think they have indicated very strong support for the Bank and are committed to helping to support the system. There is a partnership which I believe is perfectly valid in, first, indicating confidence in the system and, second, in looking at a regional institution.


Nelson Andrew Riis: Mr. Chairman, I seek two or three points of clarification from the Hon. Minister. In the letter the Minister wrote to my Leader, a copy of which was sent to my House Leader, she said that the undertaking by respective Governments to purchase the subordinated debt of the CCB would cost the Canadian Government $13 million. Could she elaborate on that? I do not understand to what that particular paragraph refers.


Barbara Jean McDougall: Mr. Chairman, there is within the capital structure or framework of this Bank subordinated debentures.
The subordinated debentures carry interest. The three levels of Government have purchased those debentures and they will be repaid. We then become creditors of the Bank at that level, in addition to the $60 million.


Nelson Andrew Riis: The Minister knows that the last clause in the Bill refers to $75 million to be paid out of the Consolidated Revenue Fund. We in the House consistently refer to the $60 million which it will cost Canadian taxpayers, yet the Bill indicates $75 million. Could the Minister explain the difference between those two figures?


Barbara Jean McDougall: The amount referred to includes the $60 million in the support package and the $13 million worth of debentures.


Nelson Andrew Riis: I have another couple of questions, and then I will turn the floor over to some of my colleagues.
With regard to this whole business of a bank that in the past got itself into some financial difficulty and is now going to be okay, this is certainly a reflection on the Board of Directors and the management of the Bank to a certain extent, perhaps to a large extent. Since we are asking in this Bill for the taxpayers of Canada to come up with $75 million to assist this Bank and presumably launch it in a new and successful direction, can the Minister explain what has happened to the people who were responsible for causing the situation and in fact approved imprudent loans and approved a financial program that resulted in the Bank getting into severe financial difficulty? What has happened to the senior management? What has happened to the Board of Directors? Does the Minister have any observations on reports that a number of senior officials of the Bank sold stocks of the Bank prior to this particular item becoming public information, presumably at least saving their own necks in terms of stocks they held?


Barbara Jean McDougall: Mr. Chairman, in terms of the management of the Bank, as far as I and my officials are aware, and my judgment at this stage, the chief executive officer acted very responsibly in coming to us when he did with the difficulty. The attempts at diversification across Canada and into California were essentially responsible moves. The board has acted in a responsible way, as has management. We would indeed seek representation on the Board of Directors of the Bank. The Inspector General will have two people monitoring the problem loans. We would hope to add to the Board of Directors. If indeed we find it to be different than our impression is now, we will take the appropriate action.
There have been a number of changes in the management since the departure of Howard Eaton and there have been moves to strengthen both the board and management since that time. Unfortunately, the stronger management and the stronger board came at a time when the situation was becoming more difficult. Our understanding is that they have acted responsibly.
March 29, 1985

I am obviously most disappointed to find out today that one executive of the Bank did indeed sell his preferred shares. There was no indication to the management of the Bank at that stage of the extent of the difficulty. It would have been clear to anyone who read the annual report that the deferred dividend was not in fact covered by earnings. 1 am extraordinarily disappointed to see that and we will be looking into it.


Herbert Eser (Herb) Gray: Mr. Chairman, the Minister said that the amount to be appropriated under this Bill is to cover the $60 million as part of the main rescue package and $13 million to purchase subordinated debentures. That comes to $73 million and the amount requested in the Bill is $75 million. Can she tell us what the other $2 million will be used for?


Barbara Jean McDougall: Mr. Chairman, what will be spent will be no more than is necessary. There is the possibility of some accrued interest that would have to be covered on debentures over and above the $13 million.


Herbert Eser (Herb) Gray: Mr. Chairman, 1 wish to turn briefly to another matter. With respect to the loans in the oil sector in California that went bad, can the Minister tell me when they were made? In particular, how many were made after the visit by the Inspector General of Banks to the Minister on September 14?


Barbara Jean McDougall: I am not quite clear, Mr. Chairman. There was no visit on September 14. Is the Hon. Member referring to the letter from the Inspector General of September 24 last? The letter was as a result of the Inspector General's annual review which he undertakes for all banks under his jurisdiction. Probably many of the oil service loans would be rolled over. They would be financing rigs once the industry started to face some difficulties. As the oil business declined, that is when it would have shown up.


Herbert Eser (Herb) Gray: Mr. Chairman, I am asking these questions to try and determine-and I would have hoped the Minister would have had this breakdown-how many of these problem loans were already on the books in a way that they should have been brought to the attention of or discovered by the Inspector General of Banks and his staff, and how many were made after September for the first time.
With respect to the latter category of loans, I would like to know what changes, if any, had been made in the executive officers of the Bank who were in place from September to March 14 as well as in the board of directors which was in place from September to March 14. If no changes have been made, what changes are contemplated?


Barbara Jean McDougall: Mr. Chairman, I believe that the Board of Directors is the same now as it was on September 24. September 24 was a letter from the Inspector General to the Minister indicating that the Bank was facing some difficulties. The situation at that time, if I remember, going through the annual report and the quarterly financial statements, was that the Bank was profitable in the first and third quarters of its last
Canadian Commercial Bank
fiscal year which ended March 31. Somehow it is written in stone that that is when the bank year ends. In the second and fourth quarters, it was not profitable. It was marginally profitable in the first quarter of the current fiscal year. Therefore, it has been dealing with an unstable situation.
There was no evidence that the board or the management was acting in an inappropriate way. Along with its efforts to expand their business base, either geographically or into other industries, there was also a retrenching within the energy sector. I think these were normal business decisions, faced with a difficult situation.


Jean-Robert Gauthier: Mr. Chairman, I want to come back to try and understand this question of warrants. There is a participation agreement that will be drafted. There are participation certificates that are going to be issued. I take it that this is synonymous with the warrants we are talking about. In the memorandum of intent, we read at page 5:
The rights or warrants shall expire ten years after the day that CCB has paid to the Support Group an amount of money equal to the full amount paid by the Support Group for their Participation Certificates.
The sentence following surprises me:
It is recognized that the rights provided for in this paragraph may not be granted under present legislation.
Can the Minister explain that to me?


Barbara Jean McDougall: Mr. Chairman, I should have the agreement here somewhere, I apologize. This was a degree of protection asked for by the banks. Our lawyers have satisfied us, and we have been dealing not only with Department of Finance lawyers but with Tory and Tory in Toronto-


An Hon. Member:: That's understandable.


Barbara Jean McDougall: -who assure us that this is legal at the moment. We are assured on that point. As this was being drawn up, this was essentially a comfort clause for the participants.


Jean-Robert Gauthier: The Minister was asked a few minutes ago by my colleague from Windsor West if she had the list of loans and depositors. In that same agreement, it states that the schedule of assets will be printed soon. I wonder if she could tell us what the schedule of assets is and when can we expect the schedule to be made public?


Barbara Jean McDougall: Mr. Chairman, the schedule refers to the problem loans. It involves clients of the Bank and there are certain sensitivities in making that list available. 1 am prepared to discuss it, but I would have some difficulty in making it public. Certainly I could provide a breakdown of the numbers of the loans in particular categories. I have some of that in broad strokes at the moment, but I do not have a complete and individual list. The support group will be participating in that schedule of assets.

March 29, 1985
Canadian Commercial Bank


Herbert Eser (Herb) Gray: Mr. Chairman, the Minister has suggested that giving the full details of the problem loans-the amounts, the names of the borrowers and so on-may create a problem. I presume she is referring to the secrecy provisions of the Bank Act. I would like to know whether any of that information would otherwise be available under U.S. law-the U.S. securities law, the U.S. banking law or the access to information law. If that is the case, I trust that the Minister will not hide behind our law in not disclosing that information.


Barbara Jean McDougall: Mr. Chairman, I would be happy to explore that. Our understanding is that in both countries common law protects the public under those circumstances. Indeed, if there is a difficulty with that we will have further discussions on it.


Herbert Eser (Herb) Gray: Mr. Chairman, I would like to return to the matter of problem loans. There is something about the whole aspect of problem loans in the United States oil sector which I find puzzling. The Government has said over and over again that the national energy policy created difficulties for the oil and gas sector in Canada. Yet the loans which got the company into difficulty were loans that were made to the oil sector in the United States. As far as I know, the United States does not have a national energy policy. In fact, when the Government was in opposition it always pointed to the American policy on energy as a model which we should follow. Can she explain how it was that the loans which tipped the balance and precipitated this very unusual bail-out situation were in the oil sector of the United States?


Barbara Jean McDougall: Mr. Chairman, with respect to the financial institutions within Canada, if we look at any economic statistics we will see that western Canada has faced a considerable amount of difficulty over the last three or four years. That difficulty resulted in part because investment capital left the country as the energy business declined. As well, some Canadian capital left. That situation was not unique to western Canada, but it was certainly endemic there, and some of the later prosperity in the oil industry in the United States was not shared in western Canada.
I do not think I have ever stated that the fact oil prices are now declining, and drilling activity in California is on the decline, had anything to do with the national energy policy. The point is, there was a period when the industry was profitable and the United States was benefiting but our industry was not.


Herbert Eser (Herb) Gray: Mr. Chairman, the Minister has made my point, which is that there can be problems in the oil sector quite apart from the national energy policy. That was proven by what happened in the United States. The argument of her Party is that outside Government and inside Government there is some type of ongoing nirvana in the energy sector in the United States because it did not and does not have a national energy program. Yet the loans which got this Bank into trouble were loans made to the oil sector in the United States.
In the Minister's press release of March 25, she indicated that if those loans had been made to the oil sector in a country where there was no equivalent national energy policy and had not gone bad, we would be doing something else today. The French version of her press release of March 25 reads as follows:

The support program is designed to provide the Canadian Commercial Bank with enough funds to maintain its solvency, following a recent and serious deterioration in its loan portfolio in the United States.

It was explained that this was particularly in reference to loans in the oil sector in the United States. I want to put on the record that the type of energy policy which is followed by the United States has certainly not prevented a decline in that sector which led to the loans made by the Canadian Commercial Bank going bad, and that in large part precipitated this bail-out situation.


Barbara Jean McDougall: Mr. Chairman, if the energy industry in Canada had participated in that more profitable time in the early 1980s after the national energy policy, which triggered an earlier decline in the oil industry in Canada than in the United States, then perhaps the Bank would have been stronger and have had the resources to absorb its other losses. I do not particularly want to carry on this argument all afternoon, but I would be happy to do so if the Hon. Member wants to pursue it.


Michael Morris Cassidy: Mr. Chairman, I have just begun to focus on this particular question. Frankly, I am appalled at what the Government of Canada is doing in terms of rushing in to rescue this particular private enterprise, particularly in view of the many statements which were made by members of the Conservative Party before they assumed government. When Conservative Members were in opposition, they criticized the bail-out of losers in other sectors, particularly in the industrial sector. I am also appalled at the double standard which is being applied here.
Perhaps I could begin by asking the Minister whether any similar type of terms, in terms of a rescue, will be made available to any western Canadian companies which were put into bankruptcy by the action of the Canadian Commercial Bank in the last two or three years by calling in its loans.


Barbara Jean McDougall: Mr. Chairman, I have tried to explain to the House that this solution was arrived at because, in the judgment of knowledgeable people-including the Governor of the Bank of Canada, a group of six chartered banks, the Inspector General and the Province of Alberta-the Bank would have been a viable operation if the capital was provided to resolve its loans problems. I have looked at the situation and I believe we came up with a solution which was in the interests of the small business community of western Canada. If we had liquidated the Bank, those people would be in enormous difficulty today. I believe we looked at the operation in a fairly
March 29, 1985

hard-headed way and decided that it was in the interests of all to participate, along with the banks and the two provinces.


Michael Morris Cassidy: Mr. Chairman, I have to say that hard-headed looks awfully soft-headed to me. I am sure that any small business which faced bankruptcy or had its loans called could have been rescued if a deal such as this had been brought in and money was offered which was equivalent to twice the equity which was shown by that particular entity a few months before.
I would like to put on the record that the equity for the Canadian Commercial Bank, which it showed in its 1984 annual report, was in the order of $110 million, or $115 million in terms of capital and attained surplus. So the money which is being brought in, which is tantamount to equity because of the terms of repayment-which are on a never-never basis-is equal to more than double the equity of the Bank. Sure, we can rescue it on that basis but that does not suggest to me that it is a particularly good deal.
I return to my question: What arrangements are being made in order to provide similar terms to any western Canadian small business which was forced to go into receivership, bankruptcy or forced to close by having its loans called by the Canadian Commercial Bank?


Barbara Jean McDougall: Mr. Chairman, we have undertaken to look after the borrowers and the depositors of this Bank. The Bank is keeping them on its books because they are viable operations. If business decisions have been taken around other institutions, I have not made them, and in the judgment of the people who are lending the money to the public, these decisions are viable.
What the Hon. Member is assuming is that the Bank should have kept on its books all of the bad loans, in which case it would be even worse off today.


Michael Morris Cassidy: I am suggesting there is a double standard. The Minister acknowledges that there was no assistance provided by the Government of Canada, by the other chartered banks or by the Governments of Alberta and British Columbia in the case of borrowers from the Canadian Commercial Bank who, for various reasons, were forced into bankruptcy, had to cease business or had their loans called by this particular bank over the last two or three years. It's a double standard when a bank get rescued and its customers do not. It's a double standard where if you are big enough the current Government of Canada is prepared to bail you out, but if you are a little guy or gal, you are not going to get bailed out. Will the Minister not acknowledge that there is a double standard there?


Barbara Jean McDougall: I will not acknowledge that there is a double standard.


Michael Morris Cassidy: Then the Minister is wrong in failing to acknowledge that, Mr. Chairman.
Canadian Commercial Bank
I would like to go into the terms of this financial assistance and then ask the Minister if she can give us in present value terms-her officials can begin to work on this now-what the Government of Canada and the CDIC portion of the rescue package is going to be. She has acknowledged that the takeover of the subordinated debentures is going to cost the Government $13 million. Since that is at the very end of the queue in terms of any potential repayment or commencement of interest payments, that is $13 million which is a net cost to the people of Canada and which effectively we will never get back.
According to the Memorandum of Intent which was given to my Leader yesterday, the money which has been given to the Bank is not generally for support of all of its obligations. It is specifically related to $544 million of problem loans which have an estimated realizeable value of $289 million. The difference between those two figures is $255 million. That is the money which is being advanced by the support group, including the CDIC and the Government of Canada.
It is my understanding that at least a substantial portion of those problem loans are in fact in the United States. What the devil a regional bank is doing in California, when it's based in Alberta, is beyond me. The terms of payments are: heads, the bank wins, and tails, the Government of Canada and the other support group members lose. Specifically, if any payments on any loan in the portfolio are made, those payments will be applied not to the Government of Canada but to the CCB. I am told the written down portion has in fact been paid up. This is in the agreement. In other words, if there is a $5 million loan which has been written down to $2.5 million, and the borrower repays $1 million, the Government of Canada does not get a nickel back. That entire $1 million goes to the CCB, and the next $1 million goes to the CCB.
I would record for Hansard, Mr. Chairman, that the Minister is looking extremely puzzled as though she does not realize that the Bank wins-


Barbara Jean McDougall: I am concentrating on what you are saying. Don't say things like that. Retract it, please.


Michael Morris Cassidy: Mr. Chairman, the Minister states that she is concentrating. I say that she looks puzzled to hear exactly what this means spelled out in terms that ordinary people can in fact understand. That is what I think we have to look at. While my Party has agreed that we will facilitate the passage of this Bill, I want to say that as one Member of Parliament I think it is an appallingly bad deal for the people of Canada. I think it is an appallingly bad message to give to all of those farmers, mortgage holders and other people who have had their lives destroyed by the banks over the course of the last few years.


Paul Wyatt Dick: Speak up, we can't hear you.


Michael Morris Cassidy: The banks have made huge profits on the backs of Canadians and now what happens is that we come along and spend $60 million or $73 million-goodness knows how much money-in order to bail out one particular bank.

March 29, 1985
Canadian Commercial Bank
No heads are being made to roll. That particular bank executive who profiteered by selling his preferred shares when he could see that the handwriting was on the wall for the Bank is not being forced to resign. The Minister has no sense of anger at what was being done. Whether or not the ultimate decision was made to rescue the Bank, it would be at least good to see some anger coming from the other side, Mr. Chairman, to indicate that the Government of Canada does not like the people of Canada to be held up to ransom the way this is occurring in this particular case.


Barbara Jean McDougall: Mr. Chairman, I can shout just as loudly as the Hon. Member.
I am trying to carry on a reasonable and rational discussion around what we are trying to do. I am trying to be as open as I possibly can with Hon. Members of this House. I do not appreciate the tone taken by the Hon. Member opposite who has decided to use his anger for dramatic purposes. 1 am attempting to do something for the people of this country and I do not hear a whole lot of support coming from the Hon. Member personally around the kinds of things we are attempting to do for the small borrower in Alberta. I would like to bring this discussion to a close and get on with providing information.


Michael Morris Cassidy: Mr. Chairman, I want to say to the Minister in a calm way that I have been dealing for the last couple of days with the case of a small business person who has a contract with a Crown Corporation-which I will not mention-of the Government of Canada. That Crown Corporation has determined to drive that small business person out of business. He may in fact have to go into receivership. I hope not. My efforts to intervene and try to get the Crown Corporation to at least extend the contract in a reasonable way have failed. The Crown Corporation states by way of a reason that it is under pressure to do better and not to contribute to the deficit. So one small business person, with five or six jobs depending on his particular business, is being put to the wall and in fact will probably close effective this afternoon.
If I am angry, Mr. Chairman, it is because there seems to be such a difference in the treatment of the rich and powerful in this country compared to the little guy and gal. I speak of that because I happened to have spent two or three hours this week on that particular case. I know the Minister has worked long and hard and I appreciate her sincerity with respect to her efforts to rescue this particular corporation. However, when I mention the double standard, I am saying that certainly the Government of Canada did not intervene on behalf of a lot of small business people in the Province of Alberta who faced, as we all know, very difficult times. It has been really tough over the last two or three years. But the Government of Canada has not intervened.
All of the banks, including the private banks which are part of the support group, have in fact forced people to the wall and beyond. As the Minister well knows from her contact with western Canada, mortgage holders and home owners have had to walk away from their homes and drop the keys into the mail
slot of the nearest bank because they could not afford to continue. That kind of treatment has not provoked the Government of Canada-either the old one or the new-to act. When interest rates were up around 18 per cent or 19 per cent, the Government showed no mercy. But now mercy is shown in the case of this particular bank which, to put it mildly, has made a series of extremely unwise investments, particularly the extension of its regional mandate to go down into California.
I appreciate that the Minister wants to have some constructive comments. I will seek to make them. But it is difficult to do so in light of the agreement which has been entered into. As I stated before, any payments on any loan in the problem portfolio will first go to the CCB. Then any additional amounts to be paid will go to Canada, Alberta and the bank group in proportion to their participation. The CDIC is at the end of the queue.
In view of the fact that these are problem loans and any money which accrues as a result of those loans to the three prime members of the support group would accrue only if the loans returned more than the currently written-down value, I think I would be fair in suggesting to the Minister that the chances of repayment to the Government of Canada under Clause 3(a) would be limited and probably negligible. Is that fair?


Barbara Jean McDougall: Our loans are repaid out of the profits of the Bank on the good loans, so that we are getting a participation from their good loans by getting 50 per cent of their pre-tax earnings. We tried to negotiate the deal in such a way that the Bank would have the capital to get on with its responsibilities as a bank, that we would take 50 per cent of earnings and share the proceeds on the problem loans.


Michael Morris Cassidy: Mr. Chairman, I would point out to the Minister that the Bank's pre-tax earnings back in 1984 amounted to $804,000. If the Government of Canada and the other members of the support group were to be repaid out of those pre-tax earnings, it would take approximately 62.5 years before the people of Canada were repaid. I recognize that a good portion of the problem loans may yield some revenues, but all we are doing with the $250 million is basically subsidizing the Bank for those portions of the problem loans which it does not now expect to be repaid. Therefore, the $225 million package cannot be expected to contribute appreciably to the pre-tax earnings of the Canadian Commercial Bank; is that correct?


Barbara Jean McDougall: The profitability of the Bank will depend on a number of things, First, I think there will be a better recovery within the Bank's markets. Secondly, it has its bad loans off the books. Thirdly, it has an injection of $250 million in cash on which it will earn a return, so that will contribute to its profits. So we would expect the Bank's profitability to improve quite materially.
March 29, 1985


Michael Morris Cassidy: I am not quite sure if I understand that because the Bank is going to have to record in its statements a write-down of approximately $255 million. That will mean that it may well record a net loss of a very substantial amount of money. 1 would suggest that, as a consequence of that, there is not likely to be an increase in net profit.
Perhaps the Minister could indicate to us for the fiscal year 1984-85 and the fiscal year 1985-86 what she now expects the new pre-tax income of the Bank will be.


Barbara Jean McDougall: Payment to the support group we expect will begin in fiscal 1986. In fiscal 1985 we are not looking for the Bank to be profitable. We are looking for it to be profitable in 1986, with a payment of approximately $6.2 million. Those payments should increase after that to $16.4 million in 1987, $17 million in 1988, and $18.8 million in 1989, with payments of around $19 million thereafter. Should the economic situation improve, we would expect a better performance than that.


Michael Morris Cassidy: Mr. Chairman, are these the amounts of profit or the amounts that the support group would expect as repayment?


Barbara Jean McDougall: The support group.


Michael Morris Cassidy: Therefore, since that is 50 per cent of pre-tax profit, she is saying that a bank which made $6 million in 1983 and $800,000 in 1984 will expect $12 million profit in 1986, $32 million in 1987, $34 million in 1988, $38 million in 1989, and $38 million per annum thereafter; is that correct, Mr. Chairman?


Barbara Jean McDougall: Mr. Chairman, this Bank, in terms of its profitability and return on assets during the 1970s, indicates that this kind of return over the next few years is not unrealistic. Obviously we are dealing with forecasts and projections, but given the kinds of returns the Bank was able to earn on a very small asset base in the late 1970s, and looking ahead, we see no reason to believe that the Bank cannot return to the kind of profitability that is appropriate.


Michael Morris Cassidy: According to the terms of the agreement it is a condition that the CCB shall not make any dividend or other payments on its common or preferred, or redeem any shares until all participants have been repaid in full. As I understand it, that would mean that effectively the CCB would not be able to issue fresh equity until the support group has been repaid or substantially repaid, since it is very unlikely that new equity would flow to the market if it was not dividend-paying equity.
Am I correct, therefore, that for a substantial number of years in the future the CCB will not be able to expand its capital base because it will not be able to issue fresh equity?


Barbara Jean McDougall: Mr. Chairman, the Bank will be retaining 50 per cent of its earnings for reinvestment in the Bank. As it becomes profitable, that will become a significant source of capital for the Bank.
Canadian Commercial Bank


Michael Morris Cassidy: The Minister's figures would indicate a stable rate of profit, not a growing rate of profit. I am suggesting that I think there is an awful lot more uncertainty in this than perhaps she is indicating.
Could she say in how many years, based on this very optimistic forecast, it is anticipated that the Government of Canada would have its $60 million returned, and in further years is it expected that the $13 million in subordinated debentures would be recoverable by the Government of Canada?


Barbara Jean McDougall: Obviously when something is being paid out of earnings it is very difficult to be precise about when it could be returned. It could be as long as 15 years. We are not unrealistic about the outlook and I would not want to mislead the House that we expect all this back in five years. But we believe we have made a reasonable long-term arrangement and it is not out of line with other debt arrangements that one would make in the private sector as a return.


Michael Morris Cassidy: I pointed out before that such arrangements are not available to ordinary small businesses and people who have been driven under in the past few years.
Perhaps the Minister could say for the current fiscal year the cost of forgone interest on the Government of Canada's contribution. As well, the CDIC contribution will amount to about $13 million or $14 million. Perhaps she could tell us what the value today would be of all the forgone interest which the Government of Canada is going to contribute to this particular deal. In other words, if you had to buy out this package today, what is it worth?


Barbara Jean McDougall: That would depend on all sorts of assumptions around the present value, term of repayment and interest rates, as the Hon. Member knows. I might also point out that the Canada Deposit Insurance Corporation is funded by member institutions. That is not in any way a direct contribution from the Government of Canada.


Michael Morris Cassidy: Although the CDIC is funded by member institutions, it is ultimately funded by me, the Member for Kamloops-Shuswap, the Member for Trinity, and all the other citizens of Canada as customers of the Canadian chartered banks and the trust companies which are members of the CDIC. As a member of the Ontario Legislature I was involved in the Crown Trust affair. Appalling bad supervision of financial institutions led to that situation. As the Minister knows, there was some involvement with the CCB as well.
Bearing in mind that assumptions must be made, could the Minister let us have the figures which have been computed by her officials as to what the current dollar value of this particular rescue effort is? How much is it costing the people of Canada in terms of actual spending?


Barbara Jean McDougall: We are working on that and will get it to the Hon. Member as soon as we have it.

March 29, 1985
Canadian Commercial Bank


Michael Morris Cassidy: Could the Minister undertake that we could have that figure in the next half-hour? I think it is germane to this particular debate and to our discussion on third reading.
My own reckoning is that between the CDIC and the Government of Canada, not counting the banks and the Government of Alberta, we are looking at a present dollar cost, on the assumptions made by the Minister, of $45 million to $60 million in actual cash out the door in order to save this particular bank. I also think that the Minister's calculations are extremely optimistic on the pay-back on the $250 million. 1 therefore suggest that that is quite likely an underestimate and $70 million to $90 million may actually be paid out by the people of Canada to keep this Bank alive.


Barbara Jean McDougall: Mr. Chairman, we will have the information as soon as it is available. I am assuming that in the Hon. Member's present value calculations he also imputed a value for the warrants.


Aideen Nicholson: Mr. Chairman, I would like to ask the Minister a question about the income tax treatment. Paragraph 9 on page 6 of the Memorandum of Intent states:
Members of the Bank Group have entered into this arrangement on the understanding that they will be entitled to deduct for income tax purposes, to the extent that it is adjudged that repayment is doubtful, the amounts paid by them for their Participation Certificates. Canada assures the Banks that such deductions for purposes of Section 26 of the Income Tax Act will be deemed to be within the reasonable requirements of the Banks.
As I understand it, Section 26 in general empowers the Minister of Finance to determine what amount is appropriate for banks to deduct as bad debts. Could the Minister explain exactly what follows from this paragraph? As I read it, from the memo of agreement, the banks themselves will decide how much of what they paid will be written off. I have never heard of any taxpayer being allowed that kind of discretion. Doubtless the Minister has in mind to put some limits and safeguards on this. I would appreciate knowing what they are.


Barbara Jean McDougall: Mr. Chairman, what the banks are essentially buying for the $60 million are problem loans. Within the Bank Act they are allowed to write down problem loans in the normal way. There are pre-tax loan loss provisions. This is once again sort of a comfort statement to indicate that they are not just buying a piece of paper, they are buying loan losses. The way they are written off will be worked out with the auditors of the Bank in keeping with the Bank Act, and subsequently approved by the Inspector General, if I am right. This is normal bank accounting around loan losses. Those losses are offset if there is a repayment on the loans. That is what is set out in Section 26.


Mr. Baker:: Mr. Speaker, I would just like to make a couple of points for clarification. I must be quite honest, Mr. Chairman, and say that I do not know all that much about the Canadian banking system. I would first like to make reference to the Minister's change of mood during her presentation a few moments ago. It was the first time that I have ever seen the Minister depart from her normal composure. I must say that from time to time it would perhaps be advisable for the
Minister to do so. I am sure that we will not see it happen again. One must note that it was the New Democratic Party and the Progressive Conservative Party that were engaged in that exchange and that the Liberals showed their restrained, quiet determination as usual.
What did this Bank do in Canada that was different from what the other banks did? The Minister has said, if I remember her words correctly, that the financial condition of the Bank was determined by a down-swing in the economy and real estate values. When one looks at the net annual income in the financial statement of the Bank that we are talking about today, one sees an incredible drop in 1984. From 1980 to 1983 there did not appear to be any substantial drop. Other banks invest in real estate. Other banks invest in oil companies in Canada. What did this Bank do that was drastically different from what the other banks did?


Barbara Jean McDougall: Mr. Chairman, I thank the Hon. Member for his kind remarks about my normally rational behaviour. It is in light of his always rational behaviour, of course, that it is easy for me to carry on on this side of the House.
This Bank has served, in a very aggressive way, the middle and small business market in Alberta. In any competitive industry, which the financial services could certainly be classed as, there are always gaps to fill and specialties to be carved out. As I indicated earlier, we are trying to work on some detailed figures with regard to the service of this Bank to the middle and small business market. This Bank concentrated on the small and medium-sized business market. It was locally managed. It was aggressive in finding financial solutions to serve the customers' needs. It was fast and decisive and understood local economic conditions. It essentially marketed itself as a regional bank with an understanding of regional circumstances. I think that was appropriate and it served that market extraordinarily well through the 1970s until it had some problems.


George Baker: Mr. Chairman, I do not like to repeat my question. The answer given by the Minister is, of course, a very good answer, and I would have to say that every bank should do that. Every bank certainly has a responsibility toward the establishment of new business. Every bank looks at those business enterprises on a factual basis. They do not make out-of-line projections on income. They certainly do not take collateral at something other than face value.
1 still do not comprehend what this Bank did differently from the other banks. Is the Minister saying that this Bank provided a function that the other banks did not provide? Is the Minister saying that the Bank provided loans to customers that the other banks did not or would not provide?


Barbara Jean McDougall: I am saying, Mr. Chairman, that it added to the capital base that was available to businesses in western Canada in a very particular way. The other banks and financial institutions are obviously serving this market as well. Financial institutions have specialties and they bring capital into the system. This Bank brought capital into that middle
March 29, 1985

market system that would not have been there had it not been there. It raised the capital, then loaned it to business.


George Baker: I am afraid if I keep pursuing this question the Minister might get angry. I will leave that for a moment.
The other area where the Bank got into trouble was with its investment in the United States. What were the actual or projected losses in the U.S. portfolio, as a percentage? Does the Minister have an exact figure of the projected losses of the Bank in the U.S. portfolio?


Barbara Jean McDougall: The problem loans in that sector amounted to $115 million. The total write-offs would have amounted to $85 million. I believe that would be 4 per cent of their over-all portfolio. However, it was also equivalent to their equity base.


George Baker: That is incredible. Then roughly 80 per cent is a write-off, or 80 per cent in the total portfolio. Was it just loaning money for those things indicated by the Minister, that is, for oil exploration? How is it possible to lose 80 per cent of the total amount of money loaned out?


Barbara Jean McDougall: If these loans were against something like oil rigs or related equipment-which I am sure the Hon. Member knows something about-and those rigs are working and under contract, earning a return, they are worth 100 cents on the dollar. If the oil drilling business falls apart, those rigs are not working and are not worth very much. It is very easy to have that happen.
Let me go back to the quotation I gave earlier. Approximately 2,175 drilling rigs are operating in the United States, which is down 612 from December and down 299 from last February. Four hundred more rigs could be idle by the spring. A rig that is not working is not worth a lot.


George Baker: The Conservative Members keep talking about the national energy policy. That is very interesting, when we consider that this involves loaning money to a party in the United States that is not affected by a national energy policy and 80 per cent of the loan is lost.
In her introductory remarks to this legislation, the Minister talked about the magnificent future of this Bank in western Canada because of the Western Accord. In other words, when there is 80 per cent loss in the United States, she is saying in the same speech that we will have the same system in Canada and there is a great and glorious future in western Canada for this particular Bank.
Is the Minister concerned with the philosophy of the Government, as I see it? The subject matter of this Bill will be referred to the Finance Committee.


Aideen Nicholson: No.


George Baker: All right. It should be. That committee and the Government is considering the elimination of the Federal
Canadian Commercial Bank
Business Development Bank. The Minister is shaking her head and perhaps that is something I will not get into.
How many people sold their shares? Did the Minister mention just one individual? Does she think that that person lost money or perhaps should have held on and made money?


Barbara Jean McDougall: Mr. Chairman, to our knowledge, this kind of information is filed through insider reports and this has come to our attention only this morning. We have only seen the one name. For all I know, he innocently sold his shares to make a downpayment on a house.
I am sufficiently concerned that I am looking into the matter. However, to my knowledge there is only one.


George Baker: Mr. Chairman, the Minister stated that 70 per cent of the domestic loans made by the Bank in Canada were made in western Canada. I presume 30 per cent were made elsewhere. When the Bank expanded outside of western Canada in 1980, from 1980 to 1983 certainly the financial position of the Bank, as I recall, was not bad. Its net flow was rather good.
1 presume most of the remaining 30 per cent would have been in the major centres of Halifax, Montreal and where the Bank established its business. With respect to the domestic loans, could the Minister comment as to whether or not there is any breakdown showing whether the loans given in eastern Canada and central Canada paid better than the loans given in western Canada?


Barbara Jean McDougall: Mr. Chairman, the bulk of the losing loans were in western Canada. This was the area where the Bank had its largest customer support base. One assumes that the Bank and its customers try to stick together to work out a solution to problems.


Nelson Andrew Riis: Mr. Chairman, with respect to the amounts that the federal Government must produce as part of this package and the request for $75 million, we come to a total of $73 million. What is the other $2 million being used for?


Barbara Jean McDougall: Mr. Chairman, there is some accrued interest that is probably owing on the debentures. We have allowed for every contingency but we will not pay any money beyond what is in the package. We will not spend money that is not required.


Nelson Andrew Riis: Mr. Chairman, 1 think this is a serious consideration. I appreciate that $60 million is required as part of the agreement. There is a requirement for another $13 million. With respect to this $2 million that will be used for contingencies if they arise, I believe we could be somewhat more precise than that. The officials are before us and I do not think it is unreasonable that we at least know where the $75 million will be spent before we fall over ourselves co-operating in the passage of this legislation. After all, our job here is to be accountable to the taxpayers of Canada. Where will this $2 million that is yet to be defined be spent? If the Minister cannot give us an answer now, perhaps she could do so later.

March 29, 1985
Canadian Commercial Bank


Barbara Jean McDougall: Mr. Chairman, our information at this stage is that this will amount to approximately $1.25 million. We cannot be more precise than that at the moment.


Nelson Andrew Riis: The Minister may have another comment to add to that. Whe can add it to her answer to my next question.
Will she outline what tax breaks are a part of this agreement? According to the Bank Act, the Minister has the right to do such things as put off taxes to be paid. Could she elaborate as best she can on how these tax breaks will be utilized?


Barbara Jean McDougall: Mr. Chairman, I discussed the tax situation a little earlier. There are no tax breaks. The Bank Act provides for banks to be able to write off bad loans or to make some provision for bad loans. Since this package is essentially the purchase of troubled loans, then a formula worked out by the banks and their auditors will assess how those are best provided for. That is in Section 26 of the Bank Act and subject to the approval of the Inspector General. I might add that these loans would have been written off in any case if the CCB were in a position to continue. It would a have had the right under the Bank Act to write off these loans under the formula provided within the Bank Act.


Nelson Andrew Riis: Mr. Chairman, I want to go back to an old point and bring up an additional point. Let me go back to the Board of Directors and senior management. It seems to me that the Government is asking us to buy a little bit too much here today. Somebody has to accept the responsibility that things have not gone well for the Bank recently. It seems that asking Canadian taxpayers to come up with $75 million and the taxpayers of Alberta to come up with $60 million, yet keeping the same senior management in the Bank and the same Board of Directors, is rather inappropriate. I am a bit surprised that the Minister has not taken the position that we would want to see some substantial changes, see the leadership of the Bank both at the directorship level and some of the senior management officials changed.
The Minister said she would be adding two or three people, particularly from the Inspector General of Banks group, and that there had been some changes but basically it is the same old gang that is there. They have been there over the last number of months. I do not think it unreasonable for taxpayers to expect a new group or at least a substantial change in senior management. That is my first question.
My second question deals with Mr. Rosenberg.


Barbara Jean McDougall: Could I answer the first question first, Mr. Chairman?


Nelson Andrew Riis: Yes, Mr. Chairman.


Barbara Jean McDougall: Mr. Chairman, what I indicated earlier in a discussion about the board and its management was that the Inspector General in the agreement will have two people monitoring the loan portfolio. That is separate from and in
addition to anything that happens at the Board of Directors level. I have already indicated that changes in or additions to the Board of Directors are under active consideration.


Nelson Andrew Riis: I will have more to say about that a little later today, Mr. Chairman.
I want to go now to Mr. Rosenberg. The Minister has quoted the Bank Act and the Bank Act says that no one is able to hold more than 10 per cent in the Bank, and Mr. Rosenberg at one time held 33 per cent. Could the Minister of State for Finance explain how, in spite of the Bank Act, in spite of the Inspector General of Banks, a single individual was able to accumulate a 33 per cent holding in this Bank?


Barbara Jean McDougall: Mr. Chairman, the interest of Mr. Rosenberg in this Bank was not 33 per cent. The Bank Act is clear on what defines 10 per cent and what defines associated companies. Mr. Rosenberg and some of his, if I may use the word, associates accumulated stock but not associated within the definition of the Bank Act. It was due to the quick action of the Superintendent of Insurance and the Inspector General of Banks that that was rolled back and out.


Nelson Andrew Riis: Mr. Chairman, I see the clock and I realize there has been an agreement between the three Parties to hear the Hon. Minister for Regional Industrial Expansion make a statement on automobile quotas. I am prepared to stand down for the moment to allow him to make that statement with the understanding that we will be able to continue this line of questioning.


Ramon John Hnatyshyn: Mr. Chairman, I rise on a point of order. There have been discussions between the parties. Today my colleague, the Minister of Regional Industrial Expansion, indicated he would like to make a statement which would normally come under Statements by Ministers. I think you would find a disposition to revert to Statements by Ministers at this point in time by unanimous consent to allow the Minister to make a statement and to allow the usual responses and questions in accordance with the practices relating to Statements by Ministers.
If you were to conclude at this moment, report progress and revert to Routine Proceedings, we could then have the statement delivered by the Minister.


Marcel Danis: Shall I rise, report progress and request leave to sit again later this day?


Some Hon. Members:: Agreed.
Progress reported.


Mr. Speaker:: Is there unanimous consent to revert to Statements by Ministers?


Some Hon. Members:: Agreed.
March 29, 1985



ROUTINE PROCEEDINGS


Sinclair McKnight Stevens: Mr. Speaker, if I may I would like to thank Hon. Members for accommodating me. I understood earlier in the day that because of the pressure of House business it was going to be very difficult for me to make a statement and presumably receive a few questions afterwards.
If I may, this statement that I am making is really on my own behalf and on behalf of the Minister for International Trade (Mr. Kelleher) who is in Sault Ste. Marie today.
There have been, as we know, a number of so-called voluntary export restraint understandings with respect to Japanese automobile exports to Canada in the last four years. These understandings are often referred to as VERs. The current arrangement is scheduled to expire March 31, 1985. These VERs have been intended to provide an orderly development of Japanese exports while the Canadian automotive industry was undertaking substantial efforts to restructure and modernize its operations, and to preserve the large number of jobs in this sector. Canada has not imposed import quotas on Japanese passenger cars. They have been administered by the Japanese Government in co-operation with the Japanese Automobile Manufacturers Association.
In recent weeks ministerial discussions have taken place with the various private sector groups directly concerned with the question of Japanese motor vehicle exports to Canada, including representatives of the Motor Vehicle Manufacturers Association, the Automotive Parts Manufacturers Association, the United Auto Workers, the Japanese Automobile Manufacturers Association and the Canadian Association of Japanese Automobile Dealers.
These consultations allowed us to consider the implications for Canada of the rapid changes in the international competitive environment, including the United States of America's decision to allow its restraint understanding with Japan to lapse at the end of March, 1985; the very low level of Japanese automotive investment in Canada; the tendency of the Japanese vehicle manufacturers to concentrate their North American investments in the U.S.A., as well as the emergence of new suppliers of passenger cars to Canada. The impact upon Canadian consumers of restrained access to Japanese passenger cars was also reviewed.
Taking these consultations into account, the Government has reviewed its policy and is now affirming its commitment to a strong and internationally competitive Canadian automotive industry. It also recognizes that the automobile industry is crucial to the growth of the Canadian economy and provides
Automobile Quotas
an essential market for many other industries throughout the country.
Given the expiry on March 31 of the current voluntary restraint understanding on Japanese automobile exports to Canada, senior Canadian officials met recently with Japanese authorities to emphasize the differences between the U.S.A. and the Canadian situation, as well as to explore possible ways and means of avoiding the disruption of the Canadian market.
In addition, the Minister for International Trade has written to the Japanese Minister of International Trade and Industry to bring to his attention the very low level of participation by Japanese motor vehicle producers in the Canadian automotive industry. The letter also stressed the need to maintain a stable market environment in Canada after April 1.
The Government anticipates a response from the Japanese Government in the near future. While the Government fully expects that the Japanese share of the Canadian automotive market will not increase during the forthcoming period of consultations, it will monitor the situation closely to ensure that the Canadian market is not disrupted and that Canadian jobs are not put at risk. The Government intends to give high priority to this important issue and will continue discussions with Japanese authorities with a view to developing a longer term, mutually beneficial automotive relationship.


Some Hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: Mr. Speaker, I must begin by expressing disappointment in the Minister's statement, not only on behalf of the Official Opposition, but on behalf of some 125,000 workers in the Canadian automobile assembly and parts sector and some 600,000 to 700,000 other workers in a whole range of other sectors whose well-being depends upon the well-being and health of the Canadian automotive industry. We, they, and the communities in which they live, expected more from the Government, although it is not the first time we have been disappointed at the inaction of the Government, and I am sure it will not be the last.
After all, the Government had since last September to conclude new arrangements on quotas with the Japanese. Yet on the basis of pretty solid information, we find that meaningful discussions by our officials in Japan with Japanese authorities began only some 10 days ago. We now find that the deadline of March 31 is fast approaching, and the Government is saying nothing more than that the discussions are continuing.
The Minister has disappointed us in another important way. In his statement he said that the Government had reviewed its policy, but that is all he said. He did not take this opportunity to disclose to the House and to Canadians exactly what is and what will be its policy on the Canadian automotive industry, yet the industry is absolutely crucial to the well-being of the Canadian economy.
All or almost all of the increase in the Gross National Product in Canada last year came from the recovery of the Canadian auto industry. All or almost all of our record trade

March 29, 1985
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surplus last year came from the exports of the Canadian auto industry. This recovery came from a firm and definite public policy, put into place and successfully carried out by the previous Liberal Government. The previous Liberal Government was willing to step in, in support of business and labour in the automotive sector, to help that sector modernize, restructure and fight back against the onslaught of the world recession and competition from Japanese and other imported cars. It negotiated the arrangement with Chrysler which enabled that company to survive, to flourish and to save 10,000 jobs directly and triple that amount in supplier firms. It stepped in and worked out an arrangement with the Ford Motor Company which prevented its key plant in Oakville from closing and encouraged that company to remodel that plant to produce a new line of front-wheel drive cars.
It created the Industry and Labour Adjustment Program which provided Canadian parts manufacturers with the capital they needed to invest in the high-tech equipment, which was essential if these companies were to be able to compete for the parts business of North America. It also put in place the Industrial and Regional Development Program which succeeded ILAP. Before the Government changed it was responsible for levering, along with FIRA, some $2.5 billion in new automotive investment-for example, the American Motors project in Brampton, as well as the General Motors projects in Oshawa and St. Catharines.
All this was done in the context of the achievement of the previous Liberal Government in getting the Japanese to enter into quota arrangements-let us call them that, because that is what they are-to restrain the pace of exports of Japanese cars into the Canadian market. These arrangements gave the industry a needed breathing space to carry out the already highly successful task of restructuring and rebuilding.
Now, when the industry is saying very clearly that although it has made progress in that restructuring a further period of breathing space is required, the Government, despite all the time it had to do so, is saying only that it is continuing discussions with the Japanese.
Also, when the industry is saying to the Government that Canada needs the levers provided by the quota arrangements in order to get the Japanese to make commitments to put in Canada something they have not done already, that is, a fair share of their investment, production and jobs in the North American auto sector, all the Government can tell us is that it is continuing discussions.
What the Government should be doing privately, and more important publicly, is saying to the Japanese that the quotas we now have will remain unless and until they make meaningful and binding commitments to invest, to produce and to provide jobs in Canada equivalent proportionately to what they have already begun to do in the United States. Those quotas, the Government should be telling the Japanese, have to remain in place until the Japanese agree to accept the same rules as North American producers for production, investment and jobs in Canada as a condition of access to our market.
Why did the Minister not have the courage to rise and send that clear message in the forum of the House of Commons to the Japanese today? All he said was that the Minister for International Trade (Mr. Kelleher) was sending a letter to his Japanese counterpart. We need more than that. We need the Minister in Japan having some tough discussions with the Japanese to get the kinds of results about which I am talking for the Canadian auto worker and the Canadian economy in general.
I want to be fair about this. At least the Minister responded to one of my requests, and that was, to tell the Japanese that they would not be allowed to flood the Canadian market if no agreement was in place on March 31. The Minister's words were vague-and that is unlike him-and loose.
[DOT] (M20)
I trust what I have said about the meaning of the Minister's word is correct and the Japanese get the message, not only that the Government is going to monitor what the Japanese do regarding sending cars to Canada while the discussions are continuing, but that it is prepared to take firm and definite action in order to prevent a flooding of this market by Japanese cars, if that should be necessary.
The Government has to tell the Japanese that what is going on in the United Sates does not provide a basis for arrangements between Japan and Canada on the sending of cars from their country to our country. The United States is the largest and most powerful economy in the world. It has an economic clout without quotas. To get the kind of commitments for investment in this country which we have just begun to get without the levers of quotas or measures like the IRDP and FIRA measures, which the Government is already, unfortunately, starting to weaken. The Americans seemed to have made an arrangement with the Japanese to allow a 24 per cent increase in exports from Japan to that country. We have to send the Japanese a clear message that that is not right, that that is not what should be done for Canada.
We have a very different position. As I said, we have to send a clear signal to the Japanese that the quotas at the present level have to remain until the kinds of arrangements sought by the auto task force, a unanimous consensual recommendation by the assemblers, parts manufacturers and the union, are put in place. If this is not by negotiation, then the Government has to be willing to proceed by legislation, if that alternative is necessary.
It appears what the Minister is doing is to facilitate the efforts by Mr. Miller of Ontario to get re-elected. We have to be afraid that there is bad news in store for the auto workers of Ontario. The Canadian Government wants that Ontario election out of the way. At the very least, the statement today is sending a message to Mr. Miller that he does not have the clout he is telling the people of Ontario he has with this Government.
In conclusion, this is a very disappointing statement from the Government. It told the Canadian people it would do more and produce better. It has not done so. It is a matter of
March 29, 1985

concern, and I say this on behalf of the Official Opposition, the auto workers and the Canadian economy, that so little has been done by a Government which claims it has the authority and the mandate to do more. It has let down the Canadian people once too often.


Steven W. Langdon: Mr. Speaker, I first want to thank the Minister for coming to the conclusion that he should make this statement in the House. We appreciate it. We also appreciate having received prior copies of it.
Let me begin by noting from our point of view the logic of the voluntary export restraints which have been established in the automotive industry. As we see it, the existence of these restraints has provided the period within which the industry could do the restructuring that was necessary to give it a viability, a sense of changing technology that would make it a key world player in the future. We have noticed, for example, that 20,000 to 25,000 new jobs have been established within the industry because of new investments that these VER arrangements have encouraged.
Second, we have also had the sense that these VER arrangements were absolutely crucial to push the Japanese to put into this country the kinds of levels of investment which Canada deserves. We heard from the Minister that something in the order of $100 million in investment has been made by Japanese car companies in this country compared to $5 billion in the United States. Therefore, these arrangements have been crucial. We must continue to enforce that kind of bargaining leverage that we need. It is important to note that public opinion polls which have been done in the last few weeks indicate that the great majority of Canadians support these quota arrangements. They recognize the important employment implications of it.
That being said, I have to turn to the statement which the Minister has made today. Frankly, it is the most outrageous non-statement that I have yet heard from this Government.


Some Hon. Members:: Hear, hear!


Steven W. Langdon: The Minister, like the grant old Duke of York, has marched his troops to the top of the hill and marched them down again. He has stated the argument. He said there is a very low level of Japanese automotive investment in Canada, that there is a tendency for Japanese vehicle manufacturers to concentrate their North American investment in the United States. He made the point that new suppliers of passenger cars have emerged. Those are all arguments for movement, arguments for urgency on this issue. Having put the arguments, he has moved into a retreat. The white flag should be flying today because the Minister, frankly, has lost the battle. That is what this statement is about.
It is a battle which not only he has lost, but the country has lost because this statement has within it absolutely no assurance at all that this Government wants to keep the set of arrangements that will restrain the onslaught of Japanese imports into this country at this crucial time. There is no statement to that effect. There is nothing whatsoever about the
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report of the automotive task force. The Government talks magnificently about labourers and employers getting together, coming to agreements, reaching consensus. That was done in the case of that report and nothing has been done in this statement to follow it up.
In this respect, the Government simply follows, as in so many respects, in the footsteps of the previous regime. That previous regime, though it talks now of Canadian content, of a response to the automotive task force report, when it had the chance to do so would not provide a response. It would not put into effect the clear-cut message of that report that we need Canadian content laws in this country to give us the jobs and the sense of future investment that the automotive industry needs.
If we are talking in terms of fair allocation of time, there should be a reasonable amount remaining to me, Mr. Speaker.


The Acting Speaker (Mr. Charest):: Yes. I may remind the Hon. Member that the Minister spoke for five minutes.


Steven W. Langdon: In fact, Mr. Speaker, the official representative of the other Party spoke a great deal more than that.


Mr. Lapierre:: He had something to say.


Steven W. Langdon: So have I. Let me make the point that nothing in the statement of a clear-cut, forceful nature has been said about what will take place from April 1. There is absolutely nothing that says to the people of this country, those who go to work on Monday morning in the auto plants in my constituency and in the constituency of the Minister, that they can count on the Canadian Government through interim arrangements continuing to provide some security. I have been trying to figure out what has happened. Frankly, I have been monitoring this decision very closely. I had talks with the United Auto Workers, the Motor Vehicle Manufacturers' Association and, indeed, with the Minister for International Trade (Mr. Kelleher) about what was taking place. It is quite clear that last weekend our negotiators returned from Tokyo with a package that they thought would be acceptable. It is quite clear that the Minister for International Trade (Mr. Kelleher) felt that he had the capacity at that point, as he told me, to bring together the Minister himself, the Minister of Regional Industrial Expansion (Mr. Stevens) and the Minister of Finance (Mr. Wilson) to make a decision on the issue. All the signals this week told us that an agreement was coming, in fact, to the point that the United Auto Workers national office was informed by media people that, indeed, an agreement was coming which would continue the quotas and give an increase of perhaps 10 per cent to 15 per cent to the Japanese.
What has happened to change that? All that I can determine is that a Cabinet meeting took place yesterday and the Minister of Regional Industrial Expansion and the Minister for International Trade were left dangling. They have been left hanging in the wind, having put themselves on the line, and they lost. That is why the white flag should be carried as the

March 29, 1985
Automobile Quotas
Minister leaves the Chamber. He has brought a statement to the House that he must recognize, and the House should recognize, as the articles of surrender on the part of his people and his arguments in the face of the Minister of Finance. I wish the Minister would have the courage to stand up and admit that. If he did that I would applaud him, and I do not applaud the Minister often.
I urge him, and 1 pose these questions to him. Let him give us a clear and honest explanation why his Government has backed off from the position which he and the Minister for International Trade clearly wanted to have adopted. The cost to this country, thousands of auto workers, small-parts manufacturers and the national economic recovery will be immense. We desperately need clear signals on this issue. I wish to God the Minister had been able to get the agreement of his colleagues to give those signals to us.


Jean-C. Lapierre: Mr. Speaker, first of all, I would like to join my colleague in expressing my disappointment with the Minister's announcement. A three-page statement that says absolutely nothing is very disappointing, not only for the Members of this House but also for the Canadian public, and especially for workers in the automobile industry.
Last week, the Minister's colleague, the Minister of External Trade (Mr. Kelleher), promised, and this is reported in the press, that when a policy or something resembling a policy would be announced with respect to the automobile industry, the Government would be very careful to specify how it would deal with Korean motor vehicles, and today, in the three pages of text the Minister read to the House, there is nothing to indicate the Government's position or what action it intends to take with respect to Korean motor vehicles, namely the Hyundai Pony.
Could the Minister inform the House whether he has decided to break the promise made by his colleague for External Trade and take no action, or is he going to procrastinate once more?


Sinclair McKnight Stevens: Mr. Speaker, I have now listened to the third response to our statement. Certainly, I can only suggest that the first two responses could have been made just as easily before either of those Members heard my statement. Clearly, they felt that much of what I said had not been said. I thought that I very succinctly put virtually every argument upon which they touched.
I would like to reply to the Member's specific question concerning Korean automobile exports to Canada. As the Hon. Member knows, that is a tariff item and it is the responsibility of the Minister of Finance (Mr. Wilson). The Minister of Finance will be dealing with that in due course. As far as the actual importation of Korean cars is concerned, of course we feel that there must be negotiations with Korea in very similar terms to the present negotiations which are now being held in Tokyo with respect to Japanese cars.


Jean-C. Lapierre: Mr. Speaker, I am in possession of a communication which was made by Premier Miller and sent to the Prime Minister (Mr. Mulroney). In the communication Premier Miller stated:
-I am concerned that the elimination of quotas on imports without the implementation of a new regime such as the one recommended by the industry itself will have negative effects on all sectors of the domestic economy. Therefore, 1 would urge the continuation of quotas as a first step towards implementing the recommendation of the Federal Task Force Report.
Does the Minister not think that his statement today is a slap in the face to Premier Miller?


Sinclair McKnight Stevens: Mr. Speaker, I can assure the Hon. Member that Premier Miller is completely at ease with the statements which the House has just heard. He knows the intentions which we have and he has been following the negotiations which are taking place. I would urge Hon. Members not to be alarmist about something which, in fact, will not happen.
As I stated in my remarks, we fully expect that the Japanese share of the Canadian automotive market will not increase during the forthcoming period of consultations. I also made it clear that we will be monitoring the situation every week to ensure that if there is some unforeseen increase we will be able to move quickly to ensure that there will not be a disruption of the Canadian market and that Canadian jobs will not be put at risk. There is absolutely no doubt on our part that that is the situation.
I am a little surprised that the House Leader of the Official Opposition was not more moderate in some of his language. He knows that in 1984 there was a very similar situation, that negotiations stretched from January to June and that the VERs which then existed lapsed on March 31. There was never any suggestion that the Japanese took advantage of that situation. Both sides negotiated in good faith to arrive at an eventual agreement.
The Hon. Member from the NDP said that our delegation came back from Tokyo with good news, and he interpreted it as an agreement. The truth is that there was good news. The Japanese were very forthcoming. They indicated that they did not want to impact our market. The question of an agreement is something which is still being negotiated. There is no suggestion of any ill will on the part of the Japanese, or that they will not try to come to an agreement with us. I emphasize that the situation is very much in hand. There is no reason for alarm, or in any way to convey an impression to the workers in the auto industry that their jobs are in jeopardy.


Howard Douglas McCurdy: Mr. Speaker, I find it very difficult to understand how it was possible for the UAW to have the conviction that there was going to be continuation of the quotas and that there would be a specific figure with perhaps a slight increase in the quotas. I also find it difficult to understand how the Minister could have indicated yesterday that he would make a statement and then changed his mind, did a flip-flop and created all kinds of confusion, unless something changed between the first of this week and the end of this week.
March 29, 1985

I put it to the Minister: Did the officials who went to Japan believe that they had an agreement of any kind? Is there not a basis for this exercise? I cannot believe that he would go to all this trouble to have this bit of nonsense presented to the House with such fanfare.


Sinclair McKnight Stevens: Mr. Speaker, it is so curious that an Hon. Member would react in that way, an Hon. Member who presumably was in his seat yesterday. He knows that I was asked the direct question, what is our position at the current time with respect to the Japanese importation, by the House Leader for the Official Opposition. I replied that there would be a statement or announcement-I think I used that word- on that subject, or related to that subject, today. We have made that statement. This is the statement to which I was referring. The suggestion that earlier in the week we were going one way and later in the week we changed, is absolute rubbish. Where the Hon. Members opposite are picking this up, I have no idea.
As far as our delegation to Tokyo is concerned, it felt it had good discussions. Its members learned the Japanese position. But, frankly, they did not come back and tell us they had any agreement. They outlined to us what they felt the Japanese bargaining positions would be and what in fact were the Japanese intentions. We, of course, in no uncertain terms, advanced many of the arguments which have been raised by various Hon. Members from the Opposition who have spoken. I note, though, that all those Hon. Members have missed a very important ingredient in the negotiations. We have been asking the Japanese for better access to their market. We have given them a shopping list of items we would like to see Japan import from Canada more readily than has happened in the past years.
All I can say is that we are in a situation today where we felt some statement should be made, bearing in mind the lapsing on March 31. It is a situation where we are encouraged with respect to the negotiations to date. We intend to be quite firm. We believe that the Canadian industry, as I have stated, must have its stability preserved. To that end, we earnestly hope that we can reach a suitable arrangement with the Japanese on this question and, of course, we will be reporting back when that arrangement is arrived at.


Howard Douglas McCurdy: Mr. Speaker, surely the solution is that if you have nothing to say, announce that you have nothing to say, and we could have spared ourselves all of this. Is it or is it not true that the Minister for International Trade (Mr. Kelle-her) had arranged a meeting among the three key Ministers to discuss what the Japanese response would be to the Canadian position with respect to automobile quotas?


Sinclair McKnight Stevens: We are becoming almost ludicrous now. The three Ministers to which the Hon. Member refers have met at least four times, possibly five. Over the last few weeks we have discussed this situation. There is absolutely no mystery about that. There is no disagreement. We have indicated to our
Automobile Quotas
delegation who went to Tokyo the position of the Canadian Government. It presented that position to the Japanese Government. We received the response of the Japanese Government.
As far as the letter sent by the Minister for International Trade is concerned, it has not been responded to as yet. What we are waiting for now is the response to that letter which was sent by our Minister for International Trade.
This period of negotiation is one which I would emphasize. Surely it does not behoove Hon. Members to unnerve people, to create a sense of alarm for their petty political reasons. The truth is that the industry to which we are referring, the automobile industry in Canada, has had a good position. We want to preserve that position as far as the Canadian market is concerned. We believe that the negotiations which we are now conducting with the Japanese will ensure that the jobs of Canadians will be preserved and that we will have a healthier automobile industry with more Japanese investment here in Canada connected with its own automobile business.
That is our objective. There is no disagreement on that. I would think that in some way to try to undermine that objective by suggesting that negotiations have broken down, or there is something unique about this year's negotiations as compared to last year's, is not doing a service to the workers in Canada and to the Canadian people generally.
Bear in mind that our delegation is headed by the same officer who worked out the negotiations last year. Why do we feel this year that he will be less successful than he was then?


Herbert Eser (Herb) Gray: Mr. Speaker, I wish I could make a statement instead of asking a question. However, I will ask the Minister if he does not realize that one difference is that there is now a different Minister and a different Government in charge. I also want to ask him, in particular, what the Japanese position is and why did the Government learn of it only last week? Finally, does the Government not realize that no matter how much we want to have greater access to the Japanese market, the prospects of that are very limited? After all, the Americans, with all their economic clout, have been trying to get greater access to the Japanese market for a range of products for years. They have achieved almost nothing. They are so upset about that that the Congress is threatening retaliatory action. If that is the case, should the Minister not be giving priority to getting a proportionate share of Japanese production and jobs in the North American auto industry in Canada, instead of chasing what I hope will not turn out to be a will-o'-the-wisp? Certainly, that is what the Americans found.


Sinclair McKnight Stevens: Mr. Speaker, again I say in reply to the questions put by the Hon. Member that we did not just learn of the Japanese position last week. We learned of their position weeks ago. What we learned last week was what is their current position, has it changed, do they have any new thoughts to convey to us. In turn, we wanted to make sure that they knew of our current thinking.

March 29, 1985
Automobile Quotas
As far as the entry to the Japanese market is concerned, Hon. Members of the Official Opposition are such pessimists. They are always assuming one cannot do things. We believe we can get better entry into the Japanese market. Surely, that is one of the things on which we should be negotiating with the Japanese at a time when they are asking for the privilege of maintaining their exports to Canada. That is one of the things, in addition to inviting them to invest more in Canada, that we are stressing during our negotiations. To expect us to open up and specify specifically what is the Japanese and the Canadian positions, would be negotiating in public, and I don't think that is the proper way to negotiate.


John R. Rodriguez: Mr. Speaker, in view of what took place in Quebec City two weeks or three weeks ago, where we gave away the store on acid rain to the United States, and the fact that we are now giving away the store to the Japanese, it seems we are going to get a reputation as being international saps. The only thing missing in the Minister's statement with respect to negotiating this deal with the Japanese is Bill Davis for a buck. That is the only thing missing in the Minister's statement.
In view of the fact that the reason we put this particular VIR in place a year ago was our concern, and we did need a voluntary quota system for the Japanese having access to our markets for automobiles, if the Minister wanted to clear up what he accuses us on this side of the House of doing, namely, creating some unrest and unease among Canadian automobile workers, why would he have not asked the Japanese to keep in place the voluntary agreement with respect to quotas while he worked out our access to their markets and a better deal? Why did the Minister not keep the quota system in place until we had reached an agreement with the Japanese? Why did he give away the store? Why did he play all of his cards, put them all out on the table, before we had some sort of agreement with the Japanese that they would put more of their manufacturing into this country?


Sinclair McKnight Stevens: Mr. Speaker, let me, for the benefit of the Hon. Member, repeat for the third time just what we have said. Our statement is that the Government fully expects that the Japanese share of the Canadian automotive market will not increase during the forthcoming period of consultations. That is our understanding with them. Is that clear?


Howard Douglas McCurdy: Understanding or expectations?


John R. Rodriguez: Great expectations.


The Acting Speaker (Mr. Charest):: Pursuant to special order made earlier today and pursuant to Standing Order 58, I do now leave the Chair for the House to go into Committee of the Whole.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in committee of Bill C-37, an Act respecting the provision of financial assistance to the Canadian Commercial Bank-Mrs. McDougall-Mr. Charest in the chair.
Steve Eugene Paproski: Order, House in Committee of the Whole on Bill C-37, an Act respecting the provision of financial assistance to the Canadian Commercial Bank. Shall Clause 2 carry?
On Clause 2-Agreement to provide financial assistance


Michael Morris Cassidy: Mr. Chairman, I recognize that time is short because the House has agreed to try to get this Bill through by approximately 3 p.m. However, the Minister promised to have some figures for the House with respect to the present value of the financial assistance from the Government of Canada and the CDIC to the Canadian Commercial Bank. Perhaps she can give us that information now.


Barbara Jean McDougall: Mr. Chairman, we have done some estimates on this but I would like to make it clear that they are estimates and that we can explore this somewhat further in the committee of inquiry which comes next. In working out this figure we have taken into account the fact that these are floating interest rate debentures. We have to assume an interest rate on the other funds and we have to make a profit forecast. Our view, taking all that into account, is that the present value is probably just under 50 per cent of the deal. That is our best estimate.


Michael Morris Cassidy: In other words, the Government of Canada is putting forward $148 million, including the CDIC, and the net cost would be about $73 million or $74 million. Am I correct in that figure? It is roughly the same figure I indicated in the House.


Barbara Jean McDougall: That is without imputing a value for the warrants too. So we are dealing in very approximate numbers.


Michael Morris Cassidy: I will be brief. I appreciate the fact that the numbers, which are comparable to mine, are approximate. I also appreciate the fact that the warrants today have no value. If the Bank were to start to come together later on, then they might ultimately have some value although in present terms that would not be very much.
Before sitting down, I would just like to put on the record that I have done some estimates in looking at the rate of profitability on assets of the Bank and pre-tax income. The Minister will appreciate that my figures are also very rough because I have not had a lot to go on. In 1980, the best year on
March 29, 1985

record that 1 have, the pre-tax income of the Bank was equivalent to .85 per cent of its assets. In 1981 it was .8 per cent. In 1982, it was .55 per cent. In 1983 it was .35 per cent. In 1984, the Bank actually had a pre-tax loss of $8 million, although that is carefully disguised from the shareholders in the annual report. Its loss was equivalent to a return on assets of minus .25 per cent. In 1985 the Bank can expect about $25 million in income if it lends the $250 million at 10 per cent for half the year, which is what it will have the money for effectively. That will give it an income of $12 million from the injection of funds. However, it is going to have a pre-tax profit of zero according to the Minister so it is going to lose $12 million on all the rest of its business, based on some $3 billion worth of assets, for a negative return on assets of .4 per cent.
The Minister says that the Bank will have a pre-tax income in 1986 of around $12.4 million, half of which will be available for repayment, according to the Bank's estimates. If the pre-tax income is $12 million, and if $25 million is earned on that $250 million which is coming from the support group, then the Bank's loss on its other business will be of the order of $12 million, for a negative return on assets of .35 per cent. In 1987 the Bank, according to her figures, will have a profit of about $32.8 million, but $25 million of that, if interest rates stay at present levels, would come from the injection from the support group. Therefore, the Bank's profit on its other business will be $7 million, approximately, or equivalent to .2 per cent on assets, bearing in mind that the assets are likely to grow because some of the retained profit will allow an increase in assets.
In 1988 there will be $34 million in pre-tax income, $25 million will come from the revenue earned on the interest free loans from the support group, and $9 million will be earned on some $4 billion worth of assets. That is equivalent to about .2 per cent. In 1989 I reckon that the return will be about $13 million apart from what is earned on the Government's $250 million, or .3 per cent.
These figures are open to correction but that is a pretty lousy outlook and this is an outstanding example of corporate welfare. We used to have corporate welfare from the Liberal Government of Canada, and now we have it from the Conservative Government. Of course, this does not factor in the specific and unusual risks, given the fact that more than one third of the Bank's assets are concentrated in a foreign jurisdiction, in California, which could be open to completely different circumstances than here in Canada. Perhaps the Minister can comment.


Barbara Jean McDougall: I can comment, yes. The Hon. Member has made some calculations. He has gone through them very quickly and I am not going to argue my numbers versus his numbers or the best estimates we have on this side. I am quite prepared to see that go into the next phase of this discussion. I think, based on our best efforts analysis, based on the Bank's view of its portfolio, and in conjunction with our officials, looking ahead, that we have come up with some estimates because we felt that it was important we had some before the House. The Hon. Member has also come forward with some
Canadian Commercial Bank
estimates, and I think debating those numbers at this stage is probably not useful. The point is that the borrowers will be able to carry on their business and will hopefully remain as customers of the Bank. A return will be earned as the economy recovers. The kind of confidence we are trying to express in western Canada is that the economy will recover.
There may be other cost savings which can go into the equation, but at the moment, given the work we have done, these are the estimates we are prepared to present.


Michael Morris Cassidy: I would just like to make a final comment, and that would be that-


Steve Eugene Paproski: The Hon. Member for Ottawa Centre.


Michael Morris Cassidy: Thank you, Mr. Chairman. It seems to me that an enormous effort has been made to rescue the Bank rather than simply to look at the loans and the borrowers. If that was the goal, the loans could have been passed over to other institutions. The Bank itself says it is not a regional bank. That is a quotation from the last annual report. It is seeking to expand in Ontario and in California. Perhaps what happened is that Premier Lougheed injected the rescue of the CCB into the discussion on the energy package. Who knows? But it certainly seems rather bizarre that all of this effort would go into a bank whose return on its own business is going to be decidedly subnormal relative to chartered banking experience for the next decade.


Barbara Jean McDougall: Mr. Chairman, I really do not have anything more to add to this discussion. Based on the information we have, we think the Bank will be profitable and viable. We think its customers are far better off this way. If the Bank had emerged or liquidated, the losses would still have to be picked up by somebody. So our assessment is that this is a valuable and responsible act.


Nelson Andrew Riis: Mr. Chairman, I have one last question. As the Minister has indicated, we will have ample opportunity during the investigation in committee to pursue these questions. I want to ask her, as an astute financier, three questions. If she were interested in purchasing corporate shares these days, would it be likely that she would be quite eager to buy shares in the Canadian Commercial Bank? If you were planning on making a sizeable deposit in a bank, would you likely choose to make that deposit in the Canadian Commercial Bank? If you were planning to borrow a substantial amount of money and had the choice of going either to another Schedule A bank such as the Royal Bank or the Bank of Montreal, or to the Canadian Commercial Bank, why would you choose the Canadian Commercial Bank?


Barbara Jean McDougall: Mr. Chairman, if I were a member of the public I would look at the package which has been put together with the support of the banking industry, the provinces, and the Government of Canada. I would think that if all those people had faith in the bank, I would have faith too.

March 29, 1985
Canadian Commercial Bank
Clause 2 agreed to.
Clause 3 agreed to.
Clause 1 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Charest):: When shall the Bill be read the third time? By leave, now?


Some Hon. Members:: Agreed.


Barbara Jean McDougall: that Bill C-37, an Act respecting the provision of financial assistance to the Canadian Commercial Bank, be read the third time and passed.


Nelson Andrew Riis: Mr. Speaker, I appreciate the decision that this Bill must go to the Senate today, but I would like to put two or three comments on the record today.
First, we in the New Democratic Party feel that we have put the cart before the House in this case. An all-Party consent shows there is obviously a need to carry out an investigation into the recent collapse and rescue of the Canadian Commercial Bank which is based in western Canada and now operates across the country. 1 believe that the time to carry out an investigation is before we agree to bail out the Bank. We felt that if we were going to do this, the least we could do is to call for a special investigation. We are pleased that that opportunity will follow, but it does seem to be putting the cart before the horse to pass this Bill in order to build confidence within the financial community. Sometime in the future we will find out what went wrong.
I appreciate the comments of the Minister of State for Finance (Mrs. McDougall) in response to our questions today, but they leave many unanswered questions. There are a variety of questions regarding the role of the Governor of the Bank of Canada in this process. There are questions about the ability of the Inspector General of Banks to carry out his responsibility of overseeing the banking community of Canada. It is questionable whether he has the appropriate authority and staff to do the job which is required during these difficult times. We have questions about the ability of a single individual, using shady and questionable means, to obtain a considerable portion of this particular Bank, which goes against the principle of the Bank Act limiting ownership by one individual or corporation to 10 per cent.
The Government's enthusiasm to bail out this or any particular bank is brought into question. The Bank itself has unquestionably foreclosed on all sorts of individuals, small businesses, ranchers, and farmers in western Canada. It has become traditional for banks across the country to act very callously in many cases. In order to look good on their quarterly reports and to enable their loans officers to have a good track record, they rip the rug out from under small businesses. They have little care for the small business community. When it comes time for the Government to respond to the banks, rather than the small businesses, farmers, ranchers, or
homeowners, it falls over itself with enthusiasm for bailing out this corporate institution.
Traditionally banking colleagues would have come together to bail out this Bank. However, in this case they knew they had a good partner. The banks contribute substantially to the political coffers of the Progressive Conservative Party and they knew they could count on the Government of Canada when it came to a crunch. While they as bankers would have to come up with a few hundred million dollars, they knew they had buddies in the Government of Alberta and the Government of Canada whom they could call upon to come up with an extra $75 million of the people of Canada. Taxpayers' dollars are being used to bail out the tenth largest Bank in Canada. That is the ultimate in corporate welfare.
If there is a set of financial institutions that do not require assistance from the taxpayers of Canada, it is certainly the banking community. After all, it is not uncommon at all to find return on equity of 15 per cent to 18 per cent during these very difficult times. If any sector of the economy can move in to save its brethren, it is certainly the banks. It is certainly disappointing that the Government has seen fit to ask the taxpayers of Canada, who are struggling simply to keep afloat, to use those dollars to bail out the Bank.
We have many concerns, Mr. Speaker. We have had an opportunity to mention a few of them today. We will look forward to pursuing the questions that we have raised, and many more, during the inquiry of the Standing Committee on Finance, Trade and Economic Affairs. At the moment we will step down to allow the persons in the other place to deal with this piece of legislation today.
Miss Aideen Nicholso,n (Trinity): Mr. Speaker, I will speak very briefly because we have agreed that this Bill should go forward to the Senate as soon as possible after three o'clock.
The Canadian banking system has had a very well earned and unusually good reputation in international circles. We have not had a banking failure since 1923, and I am sure that none of us expects to have one in the future. On two occasions in the last 15 years, when two regional banks were in difficulty, the banks themselves moved to provide solutions by mergers.
In this case there never would have been any question of liquidation. Everyone would have wanted this Bank to be restructured and to have some assistance given to it to protect the depositors and shareholders. The shareholders here include a lot of pension funds of Canadians who are not high earners and to whom those pensions matter a lot.
We all wanted to see assistance, but we on this side still have a lot of questions about the government intervention and why, as is traditional, the banks themselves did not provide the solution. We continue to have many questions about the use of taxpayers' money in this way, particularly by a Party which has always said that the taxpayers' money should not be used for bail-outs. We look forward with interest to pursuing in the committee the answers to the matters we have raised today as well as others.
March 29, 1985


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


Some Hon. Members:: Question.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: On division.
Motion agreed to on division, and Bill read the third time and passed.


STATUTE LAW (CANADIAN CHARTER OF RIGHTS AND FREEDOMS) AMENDMENT ACT MEASURE TO AMEND
[Stage Direction]
The House resumed from Thursday, March 28, consideration of the motion of Mr. Crosbie that Bill C-27, an Act to amend certain Acts having regard to the Canadian Charter of Rights and Freedoms, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
George Baker: Mr. Speaker, I wish to make a few comments regarding this legislation. It is interesting to note, from the remarks of the Minister of Justice (Mr. Crosbie) and other speakers, that the discussion has primarily centred on certain changes that will take place in April as certain aspects of the Charter come into force.
Bill C-27, an Act to amend certain Acts having regard to the Canadian Charter of Rights and Freedoms, will amend existing federal legislation to bring it in line with the Charter of Rights.
We have heard Canadians talk about the various sections of our society that they feel are being discriminated against by certain laws in this country, both federal and provincial. Today I would like to refer to certain discriminatory federal regulations that were introduced by the present Government. There are cases which have come to the attention of many people since last year. Let me cite a case that was referred to the Minister of Justice by the town council of Centreville. They objected to the fact that the Department of Manpower and Immigration was demanding that the town council repay funds to the Government because one of the council's employees should not have been hired by the town council. In fact, that particular employee was a student and the son of the town clerk of this particular council.
I have a copy of the letter that was written to the Minister of Justice. It says that the Town of Centreville sponsored a program employing six students. One week after the project commenced, the council was asked by an official from the Department to fire one of the students because he was the son of the town clerk. The letter went on to state that the fact that
Statute Law Amendment Act
the student's mother worked for the town council was, in the opinion of the council, insufficient reason to fire the student. Therefore he was employed for the duration of the project.
The council went on to make a very interesting statement. It said that the federal Government officials are trying to save a mere $1,110 on a technicality that is unfair and violates the human rights regulation that prohibits the council from asking any prospective employee questions regarding relatives.
The town council of Centreville has written to the Minister of Justice to ask for his intervention. The Minister of Justice has not intervened. The town council has been asked to pay this money to the federal Treasury at least 12 times since the letter was written to the Minister of Justice.
I have given this example because it raises some interesting questions. According to the human rights regulations, this town council is not allowed to ask about the family of a prospective employee. I took the liberty of writing to the Canadian Human Rights Commission because this same rule applies to every municipal body in Canada. Every municipal body that receives a student employment program is not allowed to hire a student who is the son or daughter of someone who signs the contract for the project.
There are provincial laws which say that in order for a municipality to sign a contract with the federal Government or other agency, any contract must be signed by the mayor or, deputy mayor and the town clerk. In the case of rural Newfoundland, the town clerk might be making $50 a week, that person might have nothing to do with the hiring of students, but because provincial regulations obligate that person to sign the contract, his or her son or daugher is not allowed to work on any federally funded project.
The importance of this question relates to hundreds of municipalities in Newfoundland alone and to every municipality in Canada.
I received a rather interesting response from the Canadian Human Rights Commission. It says that the Canadian Human Rights Act specifies that it is discriminatory for an employer to pursue a policy or practice which adversely differentiates on the basis of race, national or ethnic origin, colour, religion, age, sex, marital status, family status and so on.
The assertion by the town council was absolutely correct. It was not allowed to distinguish between the employees it was hiring and it was not allowed to discriminate on the basis of the family status of that particular student.
The Canadian Human Rights Commission goes on to point out that as far as this particular problem is concerned:
I have been informed that all programs administered by the Federal Government includes such a "Conflict of Interest" clause. The relevant policy comes from Terms and Conditions approved by the Treasury Board-
On the one hand, municipalities are not allowed to hire a family member of someone who signs a contract because of conflict of interest regulations. Yet the town council in this particular case is not allowed to question the family relations of the person whom they are hiring.

March 29, 1985
Statute Law Amendment Act
The legislation before us today contains no method for correcting that single aspect of the Student Employment Program or of any particular grant given by the federal Government to any agency or association in this country. The bottom line is that the town council of Centreville in this case is being hounded and told that it must pay the money back to the federal Government that was paid to this university student who came home for the summer and was hired and just happened to be the son of the town clerk in that community.
The Minister of Justice and the Minister of Employment and Immigration (Miss MacDonald) received a letter from that town council saying, "Will you please forgive this money because we cannot afford to pay it back". There was no answer. The only answer sent was from the Minister referring to conflict of interest guidelines. In other words, in that particular community there were two university students who came home for the summer. There were five jobs. People were told they were not allowed to hire one university student, that they must take the other university student plus four students from grade 12 or grade 11 because the mother of the student who came home for the summer was making $50 a week as the town clerk. The other university student was not allowed to be employed through that particular grant. Letters were written to two Cabinet ministers and the answer was, "No, you have to pay up from your municipal taxes".
This is a case of outright discrimination, Mr. Speaker. 1 cannot think of a more specific case of outright discrimination in a student employment program. It is outright and total discrimination.
To continue for a moment on that particular program, let me say that what you perceive in the House of Commons and what reports that are done for the Government of Canada show, with recommendations on how to do away with discrimination, is that sometimes when you get down to the grass roots those very reports and rules and regulations that are adapted and put into legislation are seen to discriminate against the ordinary person in the small rural areas. I give you as an example, Mr. Speaker, the regulations that were sent down last week by the Minister of Employment and Immigration to all the Manpower offices saying that the residency requirement for federal jobs must be removed. In other words, if you have a grant going into the community of Centreville or any other community across Canada this summer, then that grant could be used to fill jobs with students from St. John's, Newfoundland; Gander, Newfoundland; Corner Brook, or Quebec City, if the job suits somebody in Quebec City. Every Member of the House, except me, would say yes, that the residency requirement for federal jobs should be lifted, that you should be free to move within a system right across this country.
Just as you have a rule on conflict of regulations in effect, so you should not have the residency requirement lifted for grants to high unemployment areas. The reason is quite simple. The federal Government assigns student employment money
mainly on the basis of unemployment rates. To allow the total mobility of students in works programs could mean that students from high employment areas could be filling jobs in the high unemployment areas. The reason is that the first people who are normally hired are the university students, and post-secondary students, and only after that are the secondary students taken on. I just wanted to mention that as it will be seen as discrimination by the people who live in those small communities.
I point to another discriminatory clause in the Student Employment Program. It says here that only those students can be hired who wish to return to school on a full-time basis in the fall. It is funny, isn't it, that somebody who has to go back to university for only one term is not a full-time student for that next year, somebody who has to go back and pick up two courses instead of five is not a full-time student for that year? Therefore, by regulation no part-time students, no student going back for one period of the year, one semester, is allowed to be hired by a student employment project this summer, none. That is another example of what people would perceive to be discrimination.
When you look at the Bill that modifies federal laws you are looking at changes to laws that satisfy a particular philosophy that the Government comes up with as a result of reports and investigations and commissions appointed by the Government. When you look at the grass roots level, the discrimination remains and it even intensifies sometimes because you try to remove discrimination. That is the point. It is unfortunate that the Government of Canada cannot see that.
I will give you another reference, Mr. Speaker. This is a letter that was sent to a newspaper from the chairperson in a community called Too Good Arm. This letter was published in a newspaper two days ago. It reads;
Please allow me space in your paper to express my views on a Canada Works project in our community. Our committee applied for a grant in October, 1984-
It received a project. The letter goes on:
The next step was to wait for Manpower in Gander to refer names of people needing jobs. When they sent out the names we had 12 names including one man who's been in Alberta since September 1984. Our committee was not satisfied with these names. So we contacted Canada Manpower in Gander for more names. Our committee had a list of names taken from our community who wanted jobs, and who needed them badly, but Manpower refused to even discuss the list of names we had.
After fighting tooth and nail with Manpower they finally sent out another list of names. On this list was mostly fishermen and fish-plant workers. Why, we asked, did Manpower send out those names to us. Because these people had jobs waiting for them in April or May of 1985.
We, as a committee, were very disappointed because we had citizens from our community who needed this work. We had young people who needed it badly. We had workers, who worked on our Project in March of '84 and needed five more UlC weeks to qualify for UIC benefits, but Manpower would not refer their names so we could not hire them.
Our committee contacted the MHA from our area and we also had James Morgan working on this problem but no way would Manpower go along with any of us.
We would like to know why Manpower is so strict with our citizens who are not in the labour force.
March 29, 1985

It concludes:
When election time rolls around again let's just keep our votes or let's vote for Manpower in Gander because apparently they are the voice of our province.
It is signed by Madeline Hale, Chairperson for Local Improvement Committee, Too Good Arm. I have made reference to this before. There it is in black and white in a letter to the editor. The fact is that in all direct federal employment programs a person who has not drawn unemployment insurance is not allowed to be referred to a job. The fact is that a woman who has been out of the workforce for more than a year and a half is not allowed to be referred to a federal works program. The fact is that in order for a person to get a job he or she would have to be on unemployment insurance.
We are talking about high unemployment in rural areas across the country. What do people see? They see a student program for the summer to hire students with a built-in discrimination in it that I have already mentioned. They see a federal works program coming into their community with built-in discrimination in the program. Then they turn on their television sets and see the Minister of Justice introducing a Bill in the House of Commons to end discrimination in federal laws. They ask whether that means that young people are now allowed to go to work, that women are allowed to go to work or that people who have never been in the workforce will now be able to get referrals on federal works programs. No, it does not. That has not even been touched. In other words, the very things which matter are not even under discussion.
The Student Employment Program starts this summer, and the discrimination continues. If we looked at all the reports, studies and commissions, we would not even see the matter receiving a footnote reference. In the case to which 1 referred in the community of Centreville, the Minister of Justice should relent and get in touch with the Minister responsible to forgive that $1,110 bill of that student who found employment last summer. The same should be done for every student across the country who was penalized and discriminated against, as well as every student who will be discriminated against this summer.
The Minister of Employment and Immigration should take a look at her own programs and end the discrimination in them. She talks about ending discrimination against women and young people, yet they are the ones who are being discriminated against in her own programs. Even the Minister of Justice talks about curing the problem of discrimination. They may be curing the problem of discrimination in the eyes of people who do not really know what discrimination is. They may be doing that in some cases. They may be solving a national problem which should be solved, but they must take a second look to see what effect the removal of the residency requirement from jobs in Canada Manpower or what effect discrimination in the terms of reference or on priority lists for hiring on federal projects will have on small communities.
When the Minister of Justice returns from trying to get the Tories elected in Newfoundland, which he will not be able to
Statute Law Amendment Act
do, he should deal with the real problems facing people in high unemployment areas and end the real discrimination against the very poor caused by the Government of Canada.


Pauline Browes: Mr. Speaker, it gives me a great deal of pleasure to rise today to talk about Bill C-27 and about the very broad issue of equality rights. Throughout history, legislators, philosophers, judges, kings and queens have all wrestled with the concept of equality. Here in Canada, our jurists and politicians have debated the issue of equality for over 100 years. In 1960, the Government under Prime Minister John Diefenbaker took a major step in protecting basic human freedoms by introducing the Bill of Rights. For the first time in history, Canadians had a document which set out the fundamental rights and freedoms to which each and every person was entitled. Then in 1982 the Government introduced as part of the Constitution Act a Charter of Rights and Freedoms. My Party supported a fair, just and practical Charter. We spoke out for all Canadians and fought to ensure that the provinces were given their rightful place in the patriation process.
Today, three years following the passage of the Constitution, we move forward to April 17 when the equality provision, Section 15 of the Charter, comes into force. Section 15 of the Charter provides for equality before and under the law. It also provides for equal protection and equal benefit of the law without discrimination based upon race, origin, colour, religion, sex, age or mental or physical disability.
The challenge before us as Members of the House is to define exactly what equality means. How do we judge equality in our laws? What is a just or an unjust law? St. Thomas Aquinas defined an unjust law as a human law which is not rooted in eternal law and natural law. A just law, according to St. Thomas, was any law that uplifts human personality. Any law that degrades human personality is unjust.
Martin Luther King defined an unjust law as a code that a numerical or power majority group compels a minority group to obey but does not make binding on itself. A just law is a code that a majority compels a minority to follow and that the majority is willing to follow itself. It is this latter code of just law that our Government under the Charter of Rights must develop.
The challenge now before us in the House is to define equality and apply that definition to over 1,000 federal statutes. The process will not be easy. It will take a great deal of cautious and careful consideration. Bill C-27 marks the beginning of enacting Section 15 of the Charter of Rights.
Some specifics, as Section 15 relates to certain existing legislation, are addressed in Bill C-27. As I have listened to Hon. Members speak on the Bill, it has been my opinion that although they are in favour of it, they feel it does not go far enough. Section 15 of the Charter of Rights raises many basic and far-reaching questions. For example, should mandatory retirement be abolished? Do the Unemployment Insurance Act and federal pension laws discriminate unfairly against women? What laws should be changed to ensure equality for the
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March 29, 1985
Statute Law Amendment Act
physically or mentally handicapped? These far-reaching questions, as well as many others, will be the subject of review by a parliamentary committee of the House. This committee will reach out to Canadians, will listen and will hear the views, ideas and suggestions of the people as they relate to these many issues.


An Hon. Member:: From coast to coast.


Pauline Browes: Yes, my hon. friend is correct. The committee will travel from coast to coast to hear the views of all Canadians. It is my privilege to be one of the seven members of this committee. I am pleased to be one of the vice-chairpersons of it, sharing my position with the Hon. Member for Lotbiniere (Mr. Tremblay).
Section 15 will touch upon every aspect of Canadian life. Literally, millions of words clarifying, shaping, defining and moulding Section 15 to the realities of Canadian society can be expected in the months, years and decades ahead.
I want to mention briefly a few areas of particular concern to me and to the people of Scarborough Centre, the riding which I represent. I wish to speak of the equality provisions and our great multicultural heritage. Canada has been built by a unique blend of cultural identities. Our country takes pride in the cultural diversity and a multi-ethnic heritage. Thousands and thousands of people come to Canada every year because in Canada they can be free. Indeed, Canada is a nation of immigrants and we must ensure that cultural equality is protected and enhanced. As Section 27 of the Charter states, and I quote:
This Charter shall be interpreted in a manner consistent with the preservation and enhancement of the multicultural heritage of Canadians.
Our laws must protect this cultural diversity. Cultural equality means giving all Canadians, regardless of their race or ethnic background, an equal opportunity to live, to work and to prosper in this great nation of ours.
Let me turn to Bill C-27. There are three important issues addressed in Bill C-27. First, there is the elimination of in camera hearings as currently provided for under the Immigration Act. These are going to be eliminated, with the exception of those cases where undue publicity may be generated by an open hearing. This will ensure that immigration hearings will be open, in the public and fair.
Second, the Canadian Human Rights Commission will no longer have the power to select members of tribunals established to rule on discrimination cases under the Human Rights Act. Rather, tribunal members will be chosen by an independent official to be appointed by the Governor in Council. Third, persons 18 years of age will now be able to serve as corporation board members. This will bring some uniformity to the law which presently allows persons of 18 years of age to vote, but does not recognize his or her right to serve as a responsible member of a board of directors.
On the broader issues, a group of people in our society who will be anxiously awaiting the application of Section 15 is the disabled. Discrimination, especially in the job market, based on mental and physical disability must be eliminated. Canadians are becoming more and more aware of the important contribution disabled people are making to our society. Numerous equality questions relating to the disabled in relation to military service, immigration and unemployment insurance must be answered. Most recently, last week there was a demonstration held in relation to the opening of a new transit line in Scarborough. An outstanding activist for the disabled, Beryl Potter, led the demonstration at the opening of that transit line. She was demonstrating for access to public transportation in the Toronto Transit Commission. I applaud her for the actions she took.
There are many issues affecting the lives of millions of Canadians that are part of Section 15 of the Charter. A significant piece of legislation that will need review is the National Defence Act. A greater degree of equivalency between the code of service discipline and criminal law must be established. We must ensure that all legal rights and guarantees provided to citizens under the Criminal Code are applied equally to the members of the military.
A variety of equality issues relating to age and sex will also need careful examination as a result of Section 15. Is the calculation of pensions sexually biased? In addition, is it fair that home-makers in this country are denied the right to contribute to and benefit from the Canada Pension Plan? This is a national program in which a large number of Canadians are denied access to participate, although they maintain and foster the family values by caring for the children who will become the next generation of Canadians. This is an important issue that we will be discussing, and it is an issue on which we will be looking for action in the near future.
In addition, there are further issues that have been dealt with by other Ministries relating to this section of the Constitution. In particular, the Minister of Indian Affairs and Northern Development (Mr. Crombie) recently brought forth legislation, part of which relates to the reinstatement of the status of Indian women who have married outside their culture. Having attended and participated in a number of the meetings of the Standing Committee on Indian Affairs, I understand the complexity of this issue and that it will take time to resolve. The legislation is courageous. It is the first step in correcting a serious injustice to Indian women.
Similarly, our Government has taken action in relation to the Abella report. Crown corporations must begin implementing employment equality by September and begin reporting annually within a year. Federally-regulated businesses with more than 100 employees must develop plans and begin reporting within three years. Companies tendering on government contracts for goods and services must certrify their commitment to employment equality and show results. These announcements were made recently by the Minister of Employment and Immigration (Miss MacDonald) on behalf of this Government. That Minister has been a strong champion
March 29, 1985

and a consistent voice for human rights and equality rights. She must be commended for her oustanding efforts and now for her actions. To ensure a broad range of discussions on issues, the Minister of Justice (Mr. Crosbie) has wisely set up a subcommittee of the Justice Committee to solicit the views of Canadians from coast to coast.
Following discussions with Canadians in the next few months, it is our duty as legislators to outline the policy options for just and fair laws. The ideas, direction and principles must come from the people, through the committee to this House. We cannot simply declare that Section 15 will now suddenly come into effect. Our Government believes in establishing the direction and the principles for Section 15 here in Parliament and with the Canadian people. That is the purpose of this committee. It will meet Canadians from all walks of life to discuss their views, their interpretations and their feelings on Section 15.
The work of the committee is crucial in establishing a format for the equality provisions. The people have a right to be heard on such an important matter and they will be heard by this Government. My Party believes that the principles of law must be established here in Parliament with input from the people and not in a courtroom by a judge. Canadians want Section 15 to apply in a practical and workable fashion. Canadians have entrusted to us the huge responsibility of ensuring that it applies justly and fairly to the Canadian way of life.
On April 17, Section 15 will become a vibrant and real part of our society. Let us hope that as long as Canada exists as a nation, the pursuit of equality and justice will be paramount in this House of Commons.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Charest):: Are there questions or comments?


Jean-C. Lapierre: Mr. Speaker, first of all, I would like to congratulate the Hon. Member on an excellent speech. I am convinced she is eminently suited to act in the capacity of vice-chairman and to share the chairmanship with the Hon. Member for Lotbiniere (Mr. Tremblay). I hope that in the months to come, since the Hon. Member said she was anxious to hear what Canadians had to say about equality... 1 thought that before coming here, the Hon. Member knew what Canadians thought and that the Members of this Government did as well, but now . . .


An Hon. Member:: That is obviously not the case.


Jean-C. Lapierre: And we see evidence of this every day. When we realize that the Government. . . My hon. friend who always talks from his seat should take the trouble to rise, from time to time. That way, his party might get to know him.
Statute Law Amendment Act
What I wanted to ask the Hon. Member is... She mentioned the possibility that young people eighteen years of age or over could sit on boards of directors. Is her Government prepared to go beyond a minor amendment to the legislation and put this into practice or will it remain just a few words on a piece of paper? Has her Government taken any steps in this direction, a Government that "supposedly" controls too many Crown corporations? Could the Hon. Member name a single young person appointed to a federal corporation since this Government came to power, a single Canadian in any corporation at all? I would appreciate it if she could name just one.


Pauline Browes: Mr. Speaker, I am very pleased that the Hon. Member asked that question. I believe that he has raised a couple of questions. One is the larger question of consultation. In 1980, 1981 and 1982, consultations were held on the Constitution and many groups participated and presented briefs to the committee. They were happy to do that. It was important. Those groups were looking at the Constitution as a whole. They looked at many items which related to the Constitution.
In 1982, the Government and all Members of the House of Commons thought it was important to have a three-year delay before Section 15 was brought into effect. We have now been reflecting for three years. It is time to sit down and talk about the specifics as they relate to Section 15.
From the research which I have done recently, I understand that the Department of Justice reviewed the Constitution in relation to many statutes, and that the Department started to review Section 15 in January 1984. Therefore, it is time for us to talk to the people of Canada with respect to this particular section and how it should relate to the law.
In relation to his suggestion regarding younger people being appointed to boards, I would like to say that I am very much in favour of that. I have three young children who are very much a part of the decision-making process in our family. I think it is important for people who are eligible to vote at age 18 also to have an opportunity to serve on a board. I think his suggestion that that should be done in Crown corporations as soon as possible is an excellent example.


Jean-C. Lapierre: Mr. Speaker, I am delighted with the Hon. Member's reply, namely that she was very well intentioned. As you know, Mr. Speaker, we are all in favour of motherhood, but the truth of the matter is that this Government, which is preaching equality before the law, is unfortunately not practi-cising what it preaches. In recent months we have seen that, for instance, the Minister of State (Youth) (Mrs. Champagne) who in the past had a number of responsibilities has suddenly found herself without any power at all in this Government. In fact, a number of Ministers have been treated this way, but... And we have seen Hon. Members who realized, as did the Hon. Member for Duvernay (Mr. Della Noce), that they did not have all that much power, but what I want to say . .. what

March 29, 1985
Statute Law Amendment Act
I want to ask the Hon. Member is that the section on equality . . . and I want to get back to the minimum age: Can the Hon. Member explain why at 18, a person can now serve on a board of directors, become a Member of Parliament or even Prime Minister, at least theoretically, but cannot become a senator? Is the Hon. Member, in the course of her research across the country, going to consult people to find out why one needs two qualifications to become a member of the Senate? A person must be so many years old and also own property worth more than $3,000, or something like that.
Does the Hon. Member intend to examine this problem for any length of time, since her Leader is getting ready to make appointments to the Senate? Today, there is a vacancy, unfortunately due to the death of Senator Beaubien. Does the Hon. Member intend to review this section of the Constitution which I think should be considered discriminatory, and I hope that in the course of her broad consultations across the country, the Hon. Member, and I wish her bon voyage, in fact, Mr. Speaker, this Government's solution to dealing with so many Members is to make them travel. . . My question is: Does the Hon. Member intend to undertake many consultations, not only on the proposal as such but more specifically on the minimum age of senators, and will the House, in the months to come, be able to benefit from her increased knowledge of Canadian public opinion?


Pauline Browes: Mr. Speaker, I think that the Hon. Member's suggestion on a Friday afternoon is rather novel. As one of the members of the committee, I will take it as a suggestion. However, I do not see it as having a high priority in the number of issues which will be discussed by the committee across the country. I refer to the suggestion about Senators being 18 years of age. But it could be one of many issues.
I want to emphasize the importance of consultation. I have been most disturbed by the Opposition Party's lack of enthusiasm for consultation on this issue. I would like to quote from two letters which I recently received concerning consultation. One letter read:
This letter is to thank you for your efforts in contacting us, and asking our opinion on such important and germane questions-
The only contact which we had with the previous administration was a stream of letters from their bagmen, which needless to say ended up in our litter bins.
The second letter read:
Your correspondence and efforts to create communication ... are much appreciated.
I think that the people of Canada will appreciate the consultation concerning Section 15, which is a very important part of the Constitution.


George Baker: Mr. Speaker, I wonder if the Member has enough time remaining to comment on whether or not subsection (b) of the section to which she referred would allow affirmative action programs, in other words, whether the Government will be allowed to discriminate against somebody
on the basis of sex or age if it concerns an affirmative action program. Does the Hon. Member agree with that principle?


Pauline Browes: Mr. Speaker, what this Government and myself personally believe we must have is equality of opportunity. I do not believe in the quota system, if that is what the Hon. Member is getting to. I believe that we should have equal opportunity for women, the disabled, and young people in order that they can reach their potential at the highest level so that we really will have equality rights in Canada.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order. I did not have an opportunity of announcing the business for Monday. As I mentioned in the usual Thursday House business statement, because we are hoping to make progress with respect to different items of legislation, I am planning to try to consult with my colleagues and work on a day-to-day basis until April 3. At the present time it is contemplated that on Monday we will carry on with Bill C-27, and if we make progress on that Bill on second reading and reference to committee, we would then bring forward Bill C-19 with respect to the reorganization of Bell Canada.
As I have indicated, if there is any change in that sequence, I will certainly advise representatives of each of the Parties at the earliest possible time so that they can prepare themselves for an informed and reasonable debate.


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



PRIVATE MEMBERS' BUSINESS-MOTIONS

['It is so ordered. I do now leave the Chair until later this day.\nAt 5.15 p.m. the sitting of the House was suspended.']
Mr. Deputy Speaker:: Is there unanimous consent for the House to proceed to Item No. 178?


Some Hon. Members:: Agreed.
March 29, 1985



[Stage Direction]
SUGGESTED NEW LEGISLATION Mr. Edouard Desrosiers (Hochelaga-Maisonneuve) moved:
That, in the opinion of this House, the government should consider the advisability of introducing legislation to:
(1)	dissolve the Canadian Broadcasting Corporation and establish a new broadcasting corporation devoted to Canada's cultural development;
(2)	terminate the present mandate of all members of the Corporation's Board of Directors and its offices abroad, including the management of CBC International; and
(3)	provide for a mechanism for replacing the new corporation's management, including the ratification of their appointment by a Parliamentary committee.
He said: Mr. Speaker, only a few years ago, the Government was urging the CBC to "build the future", to pave the way to a distinct society, and it defined its philosophy as follows: to act now.
First, ensure that our broadcasting system supports our social and cultural orientations, recalling our commitment to the objectives defined in the Broadcasting Act in 1968.
Second, offer all Canadians a substantial number of attractive Canadian programs in all programming categories, while promoting the development of our broadcasting and visual production industries.
Third, to provide for diversified and expanded programming in both official languages and in all regions of Canada. The Government even suggested a thorough study. What has happened since then?
Mr. Speaker, using as an excuse the much needed budgetary cutbacks of $75 million, last November CBC administrators decided to create an uproar among the Canadian public. That is the way it is perceived by many Canadians. I have been receiving many letters and documents as well as telephone calls to this effect, and my colleagues as well. We have learned some troubling facts, and they should be taken seriously. We are a responsible Government that will not bow to threats or blackmail or let itself be influenced by undemocratic activities as low and unconscionable as those I am going to discuss with you now.
To raise a surge of protest among the Canadian public, the CBC has gone so far as to flout elementary decency and deprive Canadians in various regions across this country of a service to which they are entitled. Always claiming the pressure of budgetary restrictions instead of putting a stop to its own profligate spending, the CBC has cut what are commonly referred to as the antennae that relay programs from the stations to Canadian viewers and listeners. This is despicable, Mr. Speaker.
Under the same false pretences, the Corporation has cut popular programs to shock and win over public opinion. It asks the average employee to resign so that it can maintain the jobs
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of friends who have long outlived their usefulness and to maintain jobs that themselves have become useless.
During this period of austerity, at a time when it is supposedly lacking in funds, the CBC is still publishing a kind of weekly that is sent from coast to coast across this country. In addition, just when the Government wants the CBC to cut expenditures, the corporation buys full-page ads in newspapers throughout Canada. How much does that cost, Mr. Speaker? No wonder people are asking questions.
Here is another example of outright waste of money, Mr. Speaker. Recently the management of engineering on Montreal's Cote de Liesse practically turned the place upside down-nothing new for them, but quite unacceptable to us. More than half of the 300 employees were moved from the second to the third floor, and vice versa. Some of those people have been uprooted anywhere from seven to twenty times over the years. The entire telephone system has to be changed, which entails more unnecessary expenses for such things as printing new business cards, cardex files and telephone directories. They change carpets, paint, move walls, doors and furniture. I suspect the scenario is the same in other buildings across Canada, Mr. Speaker. Yet, long-time employees will tell you that they still do not know why. They are simply told that the money has to be spent before the end of the fiscal year. How much does all that cost, year in and year out? The question is relevant indeed. Still in that same building, there are at least seven directors, or engineers, or senior architects, or supervisors-unilingual anglophones, all of them. So they were given seven francophone assistants to answer the phone.
Mr. Speaker, did you know that some of the program managers in Montreal graciously invite relatives or friends of their guest artists to go along when they travel outside for live shows or to tape certain programs? Did you know that the production and support crew are forced to stay at the hotel of friends? During that time, low-paid employees are laid off, supposedly owing to budget cutbacks imposed by the Government. Elsewhere, other employees must be kept silent, so they are appointed assistants to the director, no less. How much does that cost Canadian taxpayers who are deprived of certain programs?
You may have noticed that I spared you much of the figures in dollars and cents, but quite soon we will call in some people and unveil for everyone to see the scandalous outlays at the CBC. If you knew how much certain artists among the friends of the CBC are paid, Mr. Speaker, you would be sick. And what about the close pals of management who get the cushy jobs? Those people like to move around, so they attend various cultural or cinema festivals on company time, they travel throughout the world, bragging about our culture and our visual cultural products. After spending tens of thousands of dollars of the Canadian taxpayers, they always come back
[Stage Direction]
March 29, 1985
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without even a single sales contract to show for it. If and when they do bring something back, it does not amount to very much anyway.
In 1982-83, our exports were worth $5.7 million and the service cost us $6.8 million. That is the kind of management you get at the CBC. Instead of sending these people on a holiday trip at our expense, they should have given away our programs abroad to promote Canadian culture throughout the world and we would have saved more than a million dollars.
More about poor management at the CBC. In a number of warehouses across the country, there is expensive equipment that is never used. It could be sold or rented to increase the Corporation's revenue, but no! They could rent their studios regularly to independent producers if they would only follow the recommendations arising from the inquiries and reports on the CBC, but no! Mr. Speaker, last June they decided to stop filming the superproduction called "La course au bonheur", although they had already spent over a million dollars. Mr. Juneau's response appeared in La Presse on June 30, and 1 quote:
We got more than we bargained for.
Mr. Speaker, do you not think it is high time we got rid of him? Is this supposed to be the CBC's new management approach? Should the blame not be put on the incredible lack of planning and lack of economically efficient management policies? Let Hon. Members and the Canadian public be the judge.
Mr. Speaker, another case in point is that of reporter Louise Arcand, where the umpire's decision handed down recently blamed news management for having made a discriminatory decision. And now the CBC, though it has already lost twice, is thinking of appealing the case to the Supreme Court. It would seem that budgetary cutbacks have not had any effect on funding for the CBC's legal services. And why should they? They get the money back by firing the average employee, by cutting programs, by cutting down on broadcasting across the country, by reducing production, and it is all the Government's fault, the fault of the Progressive Conservative Party. Incredible! They really have a lot of nerve.
Mr. Speaker, we can no longer tolerate these demagogical attitudes and this kind of behaviour.
And what about the case of reporter Richard Vigneault? Consider: he was fired two months ago for refusing cuts in an interview he did with the President of the CBC on the budgetary cutbacks. Obliging an honest reporter to edit the truth!
Mr. Speaker, because of poor management, the CBC has been outrageously wasting tens of millions of dollars a year. Remember the Applebaum-Hebert Report in 1981 and what the CRTC said in 1977: that the CBC had failed to meet its obligation to respond to the specific needs of the various regions in this country. Who can say today that the CBC has improved its record in this area? It is a joke! Everyone has been asking the Corporation to adapt its programming to the realities of the day, to rationalize its spending and improve its
management policies, but to no avail. Mr. Speaker, enough is enough. We must have a new Crown corporation, new administrators and new directors who are competent and who will truly respond to the aspirations of the people of this country. This applies as much to the English as to the French network. They do not talk to each other and they refuse to collaborate and to exchange news items on public affairs broadcasts. No, they each hold on to their own territory. They each have their own clique and their own gimmick, and they will not part with them. Well, all those administrators will have to get off the stage, because the curtain is closing on the last act!
I see some of my hon. friends from the Lower St. Lawrence, and this reminds me that early this week, some vicious cuts were made at five radio stations in Chicoutimi and Lac-Saint-Jean. And so it goes.
Major and radical changes are being prepared which will affect the parliamentary television broadcasting. Two weeks ago my colleague from North Vancouver-Burnaby (Mr. Cook) warned us and told us how greatly concerned he is about the regressive behaviour of the CBC. Allow me, Mr. Speaker, to refer to an article which appeared in the very serious Maclean's magazine of last March 18 and which was written by columnist Barbara Amiel. She describes Mr. Pierre Juneau as being the compleat bureaucrat. When asked an awkward question, she writes, he responds by answering a question of his own choice. He changes the meaTqng of the conversation and manages never to answer any question^ She accuses him of a whole series of woes. She accuses him of acting deliberately. In conclusion she wrote this:
[Stage Direction]
It is immoral to change the game's rule and penalize people for two decades of laxity.
[Stage Direction]
She even asks him to have the decency to resign before the CBC is dissolved. Everybody talks about it, but the CBC does not do anything. The Auditor General denounces the incompetence and bad management of the CBC, but that does not change anything, and nothing will change, Mr. Speaker, unless we assume our responsibilities and take firm action as required in full respect for the Canadian people. We must now take appropriate measures to put a stop to that hemorrhage of public funds-tens of millions of dollars.
As you have noticed, Mr. Speaker, I did not attack the employees of the CBC. On the contrary, I have always maintained that there are very competent people, serious people, excellent producers, intelligent secretaries and researchers, clever technicians and honest reporters. Unfortunately, it happens that some employees are compelled, forced or threatened by management, so they do not always act properly. Let us
March 29, 1985
[Stage Direction]
give those people an opportunity to work with dignity and fairness, and thus do our share to improve the services of the CBC and put an end to wasteful expenditures.
For those rasons and for other which I cannot express today for lack of time, Mr. Speaker, I appeal to my colleagues who received from the Canadian people a clear mandate to change the course of its history. I urge Hon. Members of the Opposition to join forces with us and help us finally to do justice to this nation which has been consistently demanding CBC cleanup. Are we going to betray their confidence and deny them something they have a right to demand? Essentially, Mr. Speaker, 1 am respectfully asking the House to say that the Government should introduce in the House of Commons legislation that would:
-dissolve the CBC, Radio Canada, Radio-Canada International, Entreprises Radio-Canada Enterprise, shut down their offices in New York, Washington, London, Paris, Moscow and wherever they may be, all their existing production centres, in other words the French-language T.V. and radio stations, the English-language T.V. and radio stations and all other components and/or affiliates;
-create a new corporation under a new name to be established by law;
-provide for the immediate termination of any mandate given to, and/or by any member of the Board, management, French-language services, English-language services, the Ottawa area, and any other existing council and committee, whether advisory, executive, audit, industrial relations or whatever;
-provide for mechanisms to immediately replace those people by other qualified people, with provisions for every other then employee of the CBC to immediately resume his or her respective job or even apply for any other then vacant job, according to his or her only qualifications and ability;
-immediately recognize all existing labour unions and all existing collective agreements.
And even before the Government decides to pass such legislation, we should require the CBC to be put under immediate guardianship. Thus the Government of Canada clearly will have the broadcasting Crown Corporation arrange within the shortest possible time for a distinctive, self-sufficient programming and a more Canadian content, and the implementation of the principles so dear to the hearts of Canadians, a vital tool for the cultural development of French speaking and English speaking Canadians, a true springboard for all the artists and workers of our two great Canadian cultures and other ethnic groups, an ethical framework that will finally present a solid moral character, a new sound spirit and new fair-play tendancies consistent with justice and merit, to finally achieve sound management of public monies.
Finally, Mr. Speaker, I am calling on all Hon. Members from both Opposition parties to even suggest and recommend to us in each province qualified Canadians who, above political
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affiliations, can work together to reach for the goals that Canadians have long since set for CBC officers. Almost on the eve of the Easter holidays, Mr. Speaker, let us rid ourselves of evil and celebrate a new era for our national broadcasting that will fulfill the true expectations of the Canadian people!
Jean-C. Lapierre: Mr. Speaker, after the speech and the performance given by our friend for Hochelaga-Maisonneuve (Mr. Desrosiers), I can only say that we in the Official Opposition are ready to recommend him as chairman of the new organization. I am convinced that he could certainly earn a good living as an actor.
However, what worries me is that the Hon. Member has made disturbing revelations about the CBC. He has made never-heard-before and exclusive revelations, as would say Photo-Police. In this context, Mr. Speaker, something was missing from his speech as he did not ask for the immediate resignation of the Minister of Communications (Mr. Masse), because these matters are the responsibility of his own Government, and if the Hon. Member for Hochelaga-Maisonneuve is aware of such horror stories, instead of simply raising the issue in the House, he should go and see the Prime Minister (Mr. Mulroney) and the Minister of Communications and demand an immediate investigation on the actions of the CBC.
And what worries me for instance ... I hope that the Hon. Member for Hochelaga-Maisonneuve, who did not mention any names or quote any figures, would be able, if the House or the Auditor General were to make an investigation, to provide authentic proof to back up his statement because, thanks to parliamentary immunity, anyone of us can easily make speeches and with great oratory question the credibility, morality or civility of certain people. As for me, 1 frankly believe that it is a bit simplistic to talk in general terms about the gangrene at the CBC. By doing so, our friend for Hochelaga-Maisonneuve has cast doubts over the entire management of the CBC.
Is he suggesting, for instance, when speaking about the seventh or twentieth move, that all Canadians paid for this, Mr. Speaker? If this is true, 1 would like him to tell the Minister of Communications. I do not understand why he would have to use this forum to do so. I thought that the Hon. Member for Hochelaga-Maisonneuve had some influence, but if he did, the Minister of Communications would be here today to reply to his allegations and order immediately a complete investigation. He was satisfied to send his Parliamentary Secretary, who will certainly be able to speak about his own experience and tell us whether, during his years at the CBC, he was aware of the horror stories denounced by the Hon. Member for Hochelaga-Maisonneuve.
Mr. Speaker, the Hon. Member spoke about fantastically high fees. Let me tell him that I think we could use his quite creditable performance of today to start a new television series if we wanted to recall the years of the Credit Social. And I am convinced, Mr. Speaker, that the late Real Caouette would be

March 29, 1985
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pleased to hear the comments of the Hon. Member for Hochelaga-Maisonneuve. In his day, he also attacked the management of the CBC and I am convinced that our friend from Hochelaga-Maisonneuve, when his short political career comes to an end, will be invited by the CBC to revive the sixties. But till then, Mr. Speaker, I am concerned because there are people of good will and good faith at every level of the CBC and they must take offence today because they are unable to defend themselves and appear in this forum to tell Canadians the other side of the story. And this is why I ask my colleague from Hochelaga-Maisonneuve to convince the Minister of Communications to launch a thorough inquiry on those allegations.
I ask the Hon. Member for Hochelaga-Maisonneuve to call immediately the Auditor General, state the complaints which he receives, provide some grounds for his allegations and then we could discuss concrete facts with figures on the table. And I urge him to do so, Mr. Speaker, in a responsible way. He referred to a new morality. The last thing that I would like to see in Canada would be anyone among us trying to impose his morality to the mass medias. It would be a great disservice to Canadians if politicians decided to interfere as in Russia in the contents of programs. The great strength of the CBC has always been its independence. I am convinced that if politicians were allowed to control programs and information, according to their whims, it would always be based on their self-interest. This is the real danger which would confront us if we tried to interfere with the medias.
He spoke about qualified Canadians. Who are we, Mr. Speaker, to gauge the qualifications of each member of the CBC board of directors or each of its officials? It is too easy to do that. If there are some inefficient people, they should be fired. There is no question about it. However, regular procedures should be followed. These people can be laid off although the Hon. Member for Duvernay (Mr. Della Noce) says no. Of course, he co-sponsored this bill, and I congratulate him for doing so; I am anxious to hear his remarks as co-sponsor and supporter of this bill. As I said, I am anxious to hear his remarks and, if he has new arguments to put forward and new facts to communicate to us, I hope he will not hesitate to rise and speak out. Meanwhile, I should like him to listen to my recommendations. Together with his colleague the Hon. Member for Hochelaga-Maisonneuve, he should investigate all the weaknesses and shortcomings of the CBC. In this endeavour, they should seek the assistance of the Minister of Communications and, failing action, they should demand his resignation. If they did, the cultural community in this country would breathe a sigh of relief, not to mention that this would possibly make room for one of them within the Cabinet. In this connexion, I suggest that the Hon. Member for Duvernay for instance could easily replace the Minister of Energy, Mines and Resources (Miss Carney). I am sure that with his revolutionary ideas, the Hon. Minister of Hochelaga-Maisonneuve
could replace the current Minister of Communications. It is up to the Prime Minister to decide. For the time being, he allows them to stand by the curtains. Their turn will come. Mr. Speaker, to return-


Michael Morris Cassidy: Behind the curtains.


Jean-C. Lapierre: Or behind the curtains, as my hon. friend suggests. But before the curtain falls at the end of the last act, Mr. Speaker, and before you call me to order, I should like to say that this motion has certainly helped the government to consider the situation within the CBC. I am sure that the Parliamentary Secretary will be able to tell us how seriously the government is taking the allegations of the Hon. Member for Hochelaga-Maisonneuve, and that he will stand in a little while to announce the establishment of a commission of enquiry. Let him speak, Mr. Speaker.


Michael Morris Cassidy: Mr. Speaker, I want to dissociate myself completely, both personally and as a Member of the New Democratic Party, from the comments that were just made by the Hon. Member for Hochelaga-Maisonneuve. [English]
I want to say a few words in English because there may well be Canadians watching the parliamentary television channel right now who are wondering what this debate is about, particularly when we reflect upon the fact that it is a CBC channel which is carrying the record of the House of Commons debates into Canadian homes.
The proposal by the Hon. Member for Hochelaga-Maisonneuve (Mr. Desrosiers) is to dissolve the Canadian Broadcasting Corporation and establish a new broadcasting corporation devoted to Canada's cultural development. He wishes to terminate the present mandate of all members of the Corporation's Board of Directors and its offices abroad, including the management of CBC International, and he wants a mechanism for replacing the new corporation's management, including the ratification of their appointment by a parliamentary committee. Let me deal with these points in reverse order.
During the election campaign, the present Prime Minister (Mr. Mulroney) promised that there would be a means by which all appointments could be ratified or at least considered by parliamentary committees. Nothing has been done about that in the last eight months. Yet the Member for Hochelaga-Maisonneuve seems to indicate that we should focus on CBC-Radio Canada. I suggest it concerns a broader question to which we should have had answers by now. 1 urge the Hon. Member to consult with his Prime Minister and suggest some action.
I believe there can be only one purpose behind the idea to terminate the present mandate of all members of the Corporation's Board of Directors. The Conservative Party wants to take similar action with the CBC-Radio Canada as it did with Air Canada and VIA Rail. In other words, the Conservatives want to appoint Conservatives with a good record of service to
March 29, 1985

the Party and put that above the service of the Board of Directors of CBC-Radio Canada to the people of Canada.
More important, if I understood the Hon. Member correctly, he is suggesting that all offices of the CBC abroad should be closed. He mentioned cities like London, Washington and Moscow. I presume that he believes that our news service abroad through the CBC should be shut down. That is the major activity in those offices abroad.
Perhaps he thinks we should no longer be trying to sell award winning programs like the Nature of Things around the world through the facilities of CBC offices abroad. He must believe that we should not seek to protect those kinds of images of Canada in other parts of the world.
The Hon. Member suggests that the management of CBC International should be shut down. I do not know if he wishes to terminate CBC International, but it broadcasts now in 12 different languages to Africa, Latin American and Europe. It is a major means of communicating what is happening in Canada. In fact, my hon. friends who have travelled to the United States will know that certain programs such as As it Happens from CBC Radio are regularly broadcast on public radio networks in the United States and are a very good voice for Canadians visiting our neighbours to the South.
The Hon. Member suggests that we should dissolve the Canadian Broadcasting Corporation and establish a new broadcasting corporation devoted to Canada's cultural development. The mandate of the CBC is Canadian cultural development.

What I am afraid of particularly is that the comments of the Hon. Member for Hochelaga-Maisonneuve will affect the future of the CBC. Even if we do have a problem with American penetration on television channels, even in English Canada in Ontario, in the Western provinces and of course in Quebec, the vehicle of French culture, of Canadian culture in French in Canada is Radio-Canada, and I fail to understand why the Hon. Member wants to get rid of all Radio-Canada services and all the executives and terminate the contracts of all the performers and producers and all those people who work on Radio-Canada's news programs in the hope that we might be able to improve services.
Mr. Speaker, I think such comments do a disservice to the people of Quebec who have been very well served by Radio-Canada.

I am suggesting that it is particularly irresponsible to say that Radio Canada, the French language service of the CBC, should be terminated. The Hon. Member should know that Montreal is the first or second largest production centre of French language programming anywhere in the world and that it rivals the one in Paris, France. Certainly in quality we can easily stand up to Radio Television Frangais. This has been accomplished by Quebeckers, Canadiens Frangais, and I find
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it totally irresponsible that the Hon. Member, who represents les Quebecois, should make that suggestion.
I think it is totally irresponsible to suggest that the CBC English services should be disbanded and thrown to the six winds, as the Hon. Member suggests.
He is confusing a need which may exist for some cleaning out of the administration of the CBC on Bronson Avenue in the heart of Ottawa, with what happens in terms of programming. The Hon. Member may recall the report which came out on the CBC in 1960s, which said that the most important thing about the CBC is its programming, and everything else is housekeeping.
The institution has been with us for 50 years. There may be some need to improve the housekeeping. I have had some concerns that perhaps the cuts that have been imposed on the CBC by the Government have borne more on the programming content than on the administration, which does not actually deliver the programs. That is a specific problem on which I would not mind seeing some action. However, you do not throw the baby out with the bath water. You do not disband the CBC in order to reform it. It would be total wishful thinking to believe that we could, by terminating the CBC, establish and improve the service that would automatically enhance Canada's cultural development.
We must recognize that the problems facing the CBC now in terms of being an authentic voice for Canadian cultural development are related to the policies of the former Liberal Government, which are being continued by the new Government in terms of the misunderstanding of the mandate under the Broadcasting Act to use broadcasting in Canada as an instrument of Canadian cultural development.
The fact is that although that was the proposal in the Broadcasting Act, it has been substantially ignored. The situation has gone from bad to worse.
In the 1950s, the CBC was the vehicle of Canada's cultural expression, at least in television, because it was the only television in the country. With the creation of private broadcasting through the CTV, the CBC became responsible for half of the television broadcasting in this country. As a result of technological change which has permitted cable access to communities like Edmonton and Chicoutimi in the north, we have a situation where three-quarters of the television broadcasting in this country is not native broadcasting but comes from the United States.
In Europe they speak of the Canadianization problem. We think Canadianization is good, but in other countries Canadianization means the takeover of a country's broadcasting service by another country. Canada is the only major country in the world which allows its television broadcasting to contain the complete program output of another country. In our case it is the United States.
It is a fact that due to the neglect of the former Government and the present Government, a tremendous volume of television programming does not come from Canadian sources but from American sources. We must be aware of that situation

March 29, 1985
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and seriously address it. In considering this problem, let us not undermine and disband the major vehicle by which we identify and show Canadian cultural identity, the CBC and Radio Canada.
Let me comment on some of the points made in the Hon. Member's motion. The McKinsey review of the CBC indicated quite clearly that in operating in two official languages and covering a widely dispersed geography of 4,000 miles, the CBC faces more difficult and cost broadcasting challenges than do other public broadcasters. Notwithstanding that, the Corporation is substantially more efficient than other public broadcasters, measured by hours of programming output per employee and per dollar expenditures.
The major conclusion of the Auditor General's report a year or so ago was that the CBC needed long-term planning, but the CBC cannot do long-term planning unless it is assured of long-term dollars from the Government and neither the present nor the former Governments were prepared to make that particular commitment.
The McKinsey report said that, in comparison with the private sector:
-replacing the CBC with the private sector with its current economic structure would cost Canadians substantially more on a annual basis.
The CBC, despite some problems in delivering programs which may well exist, nonetheless, if you look at the over-all record, is quite extraordinary. The CBC produces twice as many hours of television programming per employee as other public networks. In prime time, Canadian content of the CBC runs 20 per cent to 40 per cent higher than CTV or Global. The CBC, which the Hon. Member wishes to disband, provides more prime time hours of Canadian content than both the CTV and Global combined.


Mr. Oberle:: It gets a billion dollars for it.


Michael Morris Cassidy: The Hon. Member said that there should be wholesale firings at the CBC despite the fact that, according to polls conducted by Paul Audrey in 1984 and Martin Goldfarb in 1983, there is very strong support on the part of the Canadian public for the CBC's Canadian programming. Between 85 and 90 per cent of Canadians watch and listen to the CBC on a regular basis. Mr. Speaker, 75 per cent of Canadians believe that CBC programming should continue to provide an expression of our Canadian identity. Eighty per cent of Canadians believe there is not enough Canadian programming. [English]
Despite all of that, the Hon. Member is not saying that we should have more CBC programming. He says we should get rid of it and then trust this new Government to ensure that something else will come in its place.
In prime time, less than 25 per cent of programming on television is Canadian. Of that, three-fifths comes from the CBC. Only 5 per cent of TV drama that we see on our air
waves here in Canada is Canadian, most of it comes from the United States. I am talking about situation comedies such as "Dallas".
It is a deplorable fact that we are out-gunned 20 to 1 in terms of what appears on our air waves when it comes to drama. But 90 per cent of the t.v. drama which comes from Canadian sources is in fact Canadian. My hon. friend, the Member for Hochelaga-Maisonneuve, is suggesting that we disband the CBC in order to have more sitcoms that come from Hollywood and from New York and Chicago. That would appear to be the case he is making, Mr. Speaker. I would suggest to you, Mr. Speaker, that the CBC is the only broadcasting company that has made a serious attempt to meet the Broadcasting Act, which calls for a broadcasting system that is predominantly Canadian.
If you want to speak about a Canadian cultural identity, "The National" on CBC reaches 5 million Canadians a week. Those are adult English-speaking Canadians. You are talking about 5 million Canadians a week out of a total audience in English Canada of perhaps 11 or 12 million adults. "The Journal" reaches 4 million Canadians a week. "The Fifth Estate", which is shown once a week, reaches 1.5 million Canadians a week. "Fraggle Rock" reaches 1.5 million children a week. "Tommy Hunter" gets 1.5 million people a week. "The Beachcombers" gets 1.25 million a week, a program that has entertained Canadians for years.


Mr. Turner (Ottawa-Carleton):: What about "The Friendly Giant"?


Michael Morris Cassidy: I would like to see "The Friendly Giant" there. "Hockey Night in Canada" brings in between 2 and 3 million Canadians.
When a program like "Chautauqua Girl" on CBC, rivalled by programs in the United States which are extraordinarily well financed, gets 2.6 million people, blowing "The A-Team" and stuff like that right out of the water, when "The Grey Fox", a Canadian film on the CBC, drew 2.1 million people, and "Hockey Night", the drama about a girl who was kicked off a boys' hockey team, drew 2.2 million viewers, let us stop short-changing what we Canadians can do and are doing through the CBC.
I would like to point out to my hon. friend that what we are getting for that $800 million we spend on CBC amounts to 10c. a day for my family. Actually I think it is a little bit less than that, about 8 or 9c. a day. The English t.v. network cost only $200 million. It is not that expensive. We get 4,700 hours of programming, of which 2,000 hours is produced by the CBC. The AM radio network gives 5,000 hours, the stereo network 6,000 hours-

The CBC French television network, which is costing us $138 million every year, has 6,000 hours of programming, including 3,500 hours produced by the CBC. That, Mr. Speaker, exceeds the quality and quantity of French TV programs in Paris. On French radio, the 6,500 hours of AM programs cost
March 29, 1985

only $26 million a year, and on the French stereo network, only $8 million a year are spent for 7,000 hours of programs, including 6,000 hours produced by the CBC.
In addition, Mr. Speaker, we have 22,000 hours of programming, half of them from the CBC directly or regional TV stations, the CBC's 18 English regional TV stations, and 2,500 hours of programming on the CBC French regional TV station.
I could continue my remarks, Mr. Speaker, but all that goes to show that we do have a very important institution which is part of our existence.

To conclude, Mr. Speaker, if I can Find the quote, I would like to read a comment from David Suzuki, an eminent Canadian scientist and an eminent Canadian broadcaster. Mr. Suzuki has this to say:
The CBC has been a mirror for us to see ourselves as a people, the scope of this land, the challenge and our problems. Without the CBC, we would be a very different people and the poorer for it. Today, when we seem hell-bent on a path to greater integration into a North American context, 1 can't think of anything more important than the CBC for preserving that sense of difference that keeps many of us in this country. But now the CBC is in danger from a poorly thought-out attack.
I would say to my hon. friend from Hochelaga-Maisonneuve that really this is a poorly thought-out attack. He endangers Radio-Canada, and the CBC, the English-speaking network. He should realize that that has been one of the vital links, along with institutions like the Canadian National, the Canadian Pacific Railway, and Air Canada, which have helped bind this country together despite all the very strong influences from our North-South relationships with our friends to the South in the United States. The existence of the CBC for more than half a century has been one of the things that has enabled our country to maintain an independent sense of itself and has kept us from being swallowed up into the United States-


Mr. Cadieux:: That is south of the border.


Michael Morris Cassidy: Well, Mr. Speaker, it may be rather difficult from time to time for my friends in Quebec to understand. We, English Canadians, feel especially threatened by the cultural expansion of our American friends from south of the border. Quebec can safeguard its culture thanks to Radio-Canada for instance, and also to the fact that Quebec being a French community on an English-speaking continent, the cultural and language barriers make it easier for Quebecers to maintain their own culture. But for us in English Canada, this is a very serious and difficult task. We see in the CBC one of the strongest supports for Canadian culture and identity in English Canada.

It is for all these reasons, Mr. Speaker, that my Party and I entirely dissociate ourselves from this irresponsible and badly thought through resolution coming from the Hon. Member for
Broadcasting
Hochelaga-Maisonneuve. We ask him to reconsider and to work with us in order to ensure that in future the CBC can do a more effective job in terms, as he put it in his resolution, of ensuring Canada's cultural development and the maintenance of our identity as a nation.


Mr. Geoff Scott (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, I consider it a privilege to address the motion before the House presented by the Hon. Member for Hochelaga-Maisonneuve (Mr. Desrosiers). I may have only a few moments before the Gentleman Usher of the Black Rod from the other place raps on the door. I am sure the Hon. Member would understand that if his motion passed, the lights would go out in this place and the CBC parliamentary service would be discontinued. However, on behalf of the Minister of Communications (Mr. Masse). I want to say that we respect some of the viewpoints of the Hon. Member for Hochelaga-Maisonneuve. He is a distinguished former President of the Union des Artistes in Quebec. He has reason to have very strong views about the Corporation, particularly about Radio Canada. However, I do not think it will come as any staggering surprise to him that the Minister of Communications and I will be arguing against his motion.
A few moments ago my colleague pointed out to the House that the Government had no control over CBC management under current legislation. We have no control precisely because it would hinder the Corporation from making truly independent program and journalistic decisions. He also referred to the importance of preserving the creative autonomy of the CBC. I should like to expand on this, if I may, for there is an implicit danger as I see it, particularly in the third part of his motion, which I feel should be articulated more explicitly.
The third part of the motion proposes the establishment of an appointment procedure for CBC management as distinct from its Board of Directors. The danger of interference in the CBC's day-to-day operations and administration, and especially in its programming matters, is something which concerns me and many of my colleagues, particularly those MPs like myself and like the NDP Member who spoke before me, who were trained in journalism.
Under current legislation, the Broadcasting Act, the executive vice-president is the only member of CBC management whose appointment is subject to ratification. The President of the Corporation recommends the appointee to the Board of Directors, and the Minister of Communications, in turn, recommends approval of the Corporation's appointment to the Governor in Council. In essence, the Corporation is the sole active agent in the appointment of its executive vice-president.
The Minister's recommendation to the Governor in Council acts as an indirect measure of accountability to the people of Canada. It is further desirable that Board of Directors appointments also involve some mechanism of accountability such as that described earlier by my colleague. However, senior management undertakes day-to-day operations and internal administration of the Corporation with the executive

March 29, 1985
Broadcasting
vice-president acting as the overseer. Especially with regard to program decision making, there should be no more involvement by government or Parliament. The CBC is free to appoint its senior management, and presumably selections are based upon the qualifications which perspective appointees have to offer to the competent administration of the Corporation and the Corporation's response to the needs of its audience.
I fear that if a parliamentary committee ratified CBC management appointments, the ability of the Corporation's management team to respond to the needs of Canadians, to respond effectively and decisively to the constantly changing Canadian broadcasting environment and to make competent, objective, independent decisions would be severely curtailed. How could a manager manage effectively when he or she is constantly looking over his or her shoulder? This is the kind of corporate planning that the third part of this motion could instil.
Recently the Minister of Communications reiterated the Government's commitment to public broadcasting, saying that the commitment was unswerving and fundamental. I should like to quote him. He said:
There are some principles which are clear now, and which will remain unchanged . .. (These include) our commitment to the need for a national public broadcaster, to the service to the country that such a broadcaster must provide, and our commitment to this country itself... (Canada is) a nation of diversity, of differing goals and ambitions and methods . . . But above all, a nation of talent and expression and dynamism ... a nation of greatness, which not only needs, but deserves, a public broadcaster equal to this greatness.
I simply do not see a CBC which would be equal to the greatness of Canada if it is forced to function in the kind of corporate environment this motion could create. This motion would contradict the Government's stated commitment to public broadcasting if it were allowed to pass, and programming would suffer.
Management is ultimately responsible for what we see and hear on the CBC. If CBC senior management appointees were to be ratified by a parliamentary committee as this motion proposes, there looms the potential for political or governmental interference in what we see and hear on the public network. I, for one, would find it difficult to trust the validity of news and information programming particularly. As a broadcast journalist by profession, I would be the first to jump up and down in protesting any involvement by Big Brother government in what we see and hear on the CBC. Simply knowing that the vice-president of news was appointed by a political process rather than by the Corporation itself would leave me to question everything I saw on "The National" or hear on "The World at Six". I wonder what viewers and listeners would think when the CBC reports on the parliamentary committee which would be responsible for ratifying the appointment of the manager who is ultimately responsible for the newscast in the first place.
This is not paranoia. This is fanciful hypothesizing. The motion would connect the CBC's programming, including news, to the political process. As has been argued countless times before, this is a dangerous connection to make. I can
quarrel and have quarrelled, as have many of my colleagues, with the CBC's treatment of news stories and its occasional bias in one particular political direction, but the Corporation has the right to determine its own programming. Even if there were no actual influence, the conenction to the political process would still exist and would make the CBC be seen by the public to be influenced by political pressures. That perception alone would be enough to undermine the trust which Canadians put in the CBC's information programming.
That is what is really at issue here. How would the CBC be perceived by its audience? This is a significant issue in the consideration of the motion before us which so far has gone neglected. If I may, I should like to discuss this in the remaining few moments.
As I mentioned, I have no doubt that some Canadians disagree from time to time with information which is broadcast by the CBC or dislike the way it is presented. With respect to entertainment programming, well, we are all critics, aren't we? Certainly the CBC broadcasts programs which some Canadians do not like. There is no way it could possibly please everybody all the time when it is in the business of entertaining. No medium can.
To be sure, none of the media is perfect, not even the television stations for which I used to work in the parliamentary Press Gallery. However, they serve an important social function as purveyors of information. The CBC's function is perhaps the most important of all Canadian media, given its audience reach and its excellent reputation in news and public affairs programming. The CBC, like the private networks, like the newspapers and like the weekly magazines, does not always tell us what we want to hear, but we need to hear it all the same. Perhaps the CBC does not always inform us as completely or as accurately as we would prefer, or as completely and as accurately as more ideal news-gathering conditions might permit. However, the CBC, and indeed all the media, strive to be as objective, accurate, fair and professional as possible. In the case of the broadcast media, licensees can be called to account for their programming when they appear before the Canadian Radio-Television and Telecommunications Commission for licence renewal. The public has a certain amount of trust in the media as sources of information, particularly in television, as studies have shown. Given the CBC's reputation for excellence, 1 would not be surprised if Canadians trust its news and information programming the most.
This motion would cause an element of doubt to be introduced into the relationship between the CBC and its audience. This could be considered as preventing the CBC from fulfilling its mandate.


Mr. Deputy Speaker:: The hour provided for the consideration of Private Members' Business has now expired. 1 recognize, on a point of order, the President of the Privy Council (Mr. Hnatyshyn).
March 29, 1985

[DOT] (noo)


Ramon John Hnatyshyn: Mr. Speaker, my understanding is that Black Rod is expected here in approximately 15 minutes. Under the circumstances, 1 have consulted with the representatives of the other Parties in the House. 1 think you will find there is unanimous consent that, notwithstanding any Standing Order, the sitting be suspended to the call of the Chair in order to accommodate the other Members.


SITTING SUSPENDED
Mr. Deputy Speaker:: Is there unanimous consent of the House that the sitting be suspended to the call of the Chair?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: It is so ordered. I do now leave the Chair until later this day.
At 5.15 p.m. the sitting of the House was suspended.


SITTING RESUMED
[Stage Direction]
The House resumed at 5.20 p.m.
Royal Assent
Governor General, will proceed to the Senate Chamber today, the 29th day of March 1985, at 5.20 p.m., for the purpose of giving Royal Assent to certain Bills.
I have the honour to be.
Sir,
Your obedient servant,
Edmond Joly de Lotbiniere,
Administrative Secretary to the Governor General

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the Chamber of the honourable 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-37, an Act respecting the provision of financial assistance to the Canadian Commercial Bank, (without amendment) to which the concurrence of this House is desired.



Mr. Speaker:: I have the honour to inform the House that a communication has been received as follows:
Government House Ottawa
March 29, 1985
Sir:
I have the honour to inform you that the Honourable Gerald E. LeDain, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy
Accordingly, Mr. Deputy Speaker with the House went up to the Senate Chamber.
And being returned:


Mr. Deputy Speaker:: I have the honour to inform the House that when the House went up to the Senate Chamber the Deputy Governor General was pleased to give, in Her Majesty's name, the Royal Assent to the following Bills:
Bill C-23, an Act to amend the Small Businesses Loans Act-Chapter No. 8.
Bill C-37, an Act respecting the provision of financial assistance to the Canadian Commercial Bank-Chapter No. 9.
Bill C-34, an Act for granting to Her Majesty certain sums of money for the Government of Canada for the financial year ending the 31st March, 1985- Chapter No. 10.
Bill C-35, an Act for granting to Her Majesty certain sums of money for the Government of Canada for the financial year ending the 31st March, 1986- Chapter No. 11.
It being 40 minutes after five o'clock, this House stands adjourned until Monday next at eleven o'clock a.m. pursuant toS.O. 2(1).


[Stage Direction]
The House adjourned at 5.41 p.m.
[Stage Direction]
Monday, April 1, 1985