1985-01-22

GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, January 21, consideration of the motion of Mr. Stevens that Bill C-15, an Act respecting investment in Canada, be read the second time and referred to the Standing Committee on Regional Development; and on the amendment of Mr. Gray (Windsor West) (p. 1302).
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I want to continue my remarks with regard to the amendment and the Bill known as Investment Canada which is before the House. When this Bill was introduced I was somewhat concerned that it came at an inopportune time. I thought, as did many Canadians, that due to the statements made in the Throne Speech and the statements made by the Prime Minister (Mr. Mulroney), and more particularly the Minister of Finance (Mr. Wilson), that a great deal of consultation would take place in Canada with regard to legislation and the direction in which they wished to take the Government of Canada.
Unfortunately, the opposite is the case. The Minister of Regional Industrial Expansion (Mr. Stevens) really wants to be the Minister of Finance, as evidenced by his actions. The Minister of Finance talks of consultation on one hand, but on the other hand implements action without any consultation. I find it quite disturbing that there was no consultation on an important piece of legislation like Investment Canada. The provinces of Canada were not consulted.
All through the years that the Conservative Party was in opposition, and particularly in the pre-election days, the sentiment was expressed that provincial Governments across the country ought to be consulted on a regular basis, not only with regard to the process but with regard to the substance. Again, Mr. Speaker, there was no consultation whatsoever. I thought that perhaps the Conservative Government would have placed the issue of foreign investment on the agenda as an item to be discussed at the economic summit. Again we hear the Prime Minister and the Minister of Finance talk of consultation, mutterings if you will, and then they do the exact opposite,
which is unilaterally to bring in a piece of legislation which Canadians wish to be consulted upon.
There is a need in this country for consultation about foreign investment and foreign control because it affects the daily lives of Canadians across the country. Foreign investment is an important issue. I do not have to remind Members of all the industries that are foreign controlled in Canada, but I think it would be appropriate to list three or four. The tobacco industry is 99 per cent foreign controlled. The rubber products industry is 90 per cent foreign controlled. There is 75 per cent foreign control in the chemical industry and 70 per cent foreign control of transportation fuels. There are some very important industries in Canada that are foreign controlled and I am certain that Canadians, at least in my constituency, would like to have been consulted about those changes which the Government has brought in.
I take issue with some of the comments and statements made by members of the Conservative Party that the previous Foreign Investment Review Act was hindering foreign investment in Canada. The facts do not bear that up. The fact is that over 90 per cent of those applications which were submitted and processed were approved. That is a pretty good batting average in any game. I believe that it is not very logical to suggest that the fact that a small number of applicants have been refused or the process was slowed is reason to throw out the Foreign Investment Review Act. However, it is very valid to say that where the process was slow it ought to have been improved. We attempted to do that in 1982.
I think we have lessened the negative impact or criticisms made by individuals with regard to the Foreign Investment Review Act. I do not wish to suggest that the Foreign Investment Review Act was perfect because it was not. However, I wish to quote what Duncan McDowall said about the Foreign Investment Review Agency in Canada. He talked about Canada as a place for investment and said: "Canada has long been considered a stable and remunerative place for foreign investment".
The points which are trying to be raised by the Conservative Government are simply not valid. Canada is a good place for foreign investment and we had a very good regime in Canada to protect and enhance that foreign investment in order that we may create jobs.
Other countries like Canada have had apparatus put in place to guard against foreign investment. We need look no further than the United States to see such things as shipping, broadcasting and air transportation which have restrictions with regard to foreign investment. I point out to the House

January 22, 1985
Investment Canada Act
that Australia also has a regime for foreign investment. Japan also has a regime to guard against and promote, if you will, foreign investment in that country. Therefore Canada had a good regime with the Foreign Investment Review Act. It has been displaced by Investment Canada. I must say that this has been done through the back door in the sense that the Government has predicated the Investment Canada Act on the claim that it will create thousands upon thousands of new jobs.
I have asked the Minister and members of the Conservative Government to show the documented evidence which would prove unequivocally that thousands upon thousands of new jobs would be created by more foreign investment and by relaxing the standards that were already in place. Where is the evidence? There is no evidence. It is a smoke and mirrors situation put in place by the Prime Minister.
As we all know, the Prime Minister is kowtowing to the Americans at every opportunity. I believe this is threatening our sovereignty as a nation. I do not want Canada to become the next state of the United States; I want Canada to continue as an independent country both in terms of its foreign policy and in terms of investment and economic policy. It is utter nonsense to think that Canadians will believe that thousands of new jobs will be created with the introduction of Investment Canada. The same myth was perpetrated against the Canadian people during the election. The Prime Minister said: "Elect me and tens of thousands of new jobs will be created". That has not been the case. He said that overnight these jobs would be created, but that has not been the case, Mr. Speaker.
S)
What about Investment Canada? How many jobs will come out of this? Will it be one million jobs in four years or 1.3 million? What will it be? This type of thing shows a lack of depth by the Conservative Party, in particular by the Prime Minister and the sheep who sit behind him. I say to you in conclusion, Mr. Speaker, that this Tory Government bent on selling Canada to the United States will have a great fall in the next general election.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, in the view of the majority of Canadians the most serious problem facing this country is the tremendous number of unemployed. There are 1.5 million people unemployed. The Prime Minister (Mr. Mulroney) recognized that this was the main problem. During the election campaign he said the major issue that he wanted to address was jobs, jobs, jobs.
The Bill we have before us now is supposed to help us achieve the objective of job creation, according to the Government. The Government is arguing that if we only throw open the doors to more foreign investment and remove the very minimally slow downs created by the Foreign Investment Review Agency, the money will flow into Canada and create jobs.
Newspapers such as The Globe and Mail and The Financial Times have analysed this question and made it very clear, as a result of discussions with American investors, that there will
be no quick movement of investment capital into Canada as a result of the passage of this Bill.
This Government seems to believe that any investment is good investment. With very few exceptions the Government intends to open the doors and put this country on the sales block. Everything will go to the highest bidder.
In the few minutes I have I would like to deal with just one aspect of investment that leads to job creation, namely the critical ingredient of research and development. The Government has emphasized the importance of research and development, particularly in the dynamic sectors of electronics, manufacturing, telecommunications, software development and other high-tech areas. The fact is that among all the industrialized countries Canada is virtually at the bottom in terms of the percentage of our Gross National Product which is allocated to research and development. While we are still hovering at about a 1.5 per cent allocation of our GNP to research and development, many of other countries are now investing 2.5 per cent or more of their Gross National Product in research and development. They are forging ahead of us, Mr. Speaker, in the use of the newest technologies.
We are told to let the money come into Canada and there will be more jobs. But in the manufacturing sector where over 50 per cent of the enterprises are already foreign owned, we have virtually no interest in, no expenditure and no concentration on, research and development. I will come back to that if I have time.
We have found, and studies have made it clear, that major efforts in the field of research and development in Canada are carried out and have been for a number of years either in Canadian universities, Government departments or Crown corporations, such as the National Research Council. These bodies are the ones which have done the research and they are now suffering from the Government's unwillingness to play a major role in stimulating research and development activities because funds have either been frozen or, even worse, cut by the Government.
I want to give one specific illustration of what I mean, Mr. Speaker. There is no better signal of the Government's contradictory strategy than the move that has been taken to eliminate the Institute of Manufacturing Technology in my home city of Winnipeg. Winnipeg is a manufacturing centre in its own right. Also it is home to two major universities and several technical institutions. It was logical to choose Winnipeg as the home of this centre which had as an objective the kind of research and development work not now being done in this country-the revitalization of techniques, processes and methods which could be used in manufacturing in the country or marketed abroad as applications in other countries.
IMT was located in Winnipeg not as a result of the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) pushing the idea while he was a Cabinet Minister. It was not an example of porkbarrel politics. It was the result of long-term planning by the Manitoba Research Council which dealt with
January 22, 1985

a proposal by the then Conservative Government of Manitoba to the National Research Council in 1980. An enormous amount of planning went into IMT only to be scuttled by the Government which now intends to open the doors to the free and unfettered exportation of American jobs.
The intention was to tie in the academic resources of the Universities of Winnipeg and Manitoba, the research facilities of the National Research Council and the expertise and industry experience of the private manufacturing and production sector. This is the kind of labour-intensive activity which creates beneficial spin-offs. Already 42 of the anticipated 125-member staff of the institute have been hired. Major equipment has been ordered and received. Research projects have begun at various locations across the country. To eliminate this project now is the worst of mistakes and completely contrary to this Government's supposed policy.
It was at IMT that Canada was to begin to address the problems of adapting technology, developing new processes in such advanced areas as flexible manufacturing systems, sensors, robotics, computer-aided design and manufacturing, and artificial intelligence. All these areas offer great promise and are being investigated in other countries. All could aid in giving this country the advanced manufacturing capability it needs. Yet one of the first steps taken by the Government was to cancel a project into which so much effort had been put, a project which would have benefited not only my City of Winnipeg but manufacturing facilities all across the country.
As I said earlier, many people work in the manufacturing industries. More than half of this sector is U.S. controlled and very little research and development is being done by it. One of the largest corporations in Canada is General Motors. It is virtually doing no research in automobiles in this country. Not only is it conducting research in automobiles in the United States, but it is now branching into other important fields in that country.
I should like to refer to an article which appeared some time ago in The New York Times. It indicated that the General Motors Corporation was beginning a major new research effort to integrate computers, software, robots, sensors and telecommunications systems into a highly automated manufacturing process that might lower the cost of producing automobiles and conceivably revolutionize production processes in a range of other industries. Similarly, a major chemical company in Canada, du Pont, is embarking upon new research efforts, not in Canada but in the United States. The New York Times reported that du Pont was embarking upon research to penetrate the life sciences, biotechnological and electronic areas. Scientists at du Pont are studying such varied subjects as the structures of polymer chemicals, the genetic controls of tobacco plants, the molecular biology of immunology and leukemia, and optical laser recording disks, all in this in the U.S.A.
Are they proposing to do anything in Canada? Not at all. We have the beginnings of very interesting and competitive micro-electronic companies and the beginnings of companies involved in biotechnology. These are small companies but they
Investment Canada Act
can lead to whole new industries which employ many people. They are cash poor and are logical candidates for a takeover by American companies. When these companies are taken over, the jobs that have been developed will be moved to the United States.
For that reason among others, I and the members of my Party oppose this Bill.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, it is a pleasure to take part in this debate on the amendment to Bill C-15, as proposed by my colleague, the Hon. Member for Windsor West (Mr. Gray).

This Bill has been debated in this House for a number of days. It is becoming more and more evident that the people of this country do not want this type of legislation. If government Members across the way and those who are commonly referred to as the book-ends, those who sit on the opposite side of the Chamber from the rest of their colleagues, would take a few moments to do the following exercise, it would be of great benefit to them and their constituents.
Over the next few weeks I intend to consult the people of my riding on this issue. My next constituency mail-out will contain a questionnaire. I will ask the people of the great riding of Glengarry-Prescott-Russell how they feel about Bill C-15 and its potential effect of reducing Canadian ownership of our industries. From discussions I have had with the people in my riding I am sure that neither they nor the rest of the people of Canada favour this type of Bill.
When I was a member of the Ontario legislature, I sent out a questionnaire which included a similar question. The question was: "Do you feel that there is a sufficient amount of Canadian ownership of our industry at the present time?". Another question was: "Are you in favour of stricter measures to ensure that Canadian ownership of our industries is maintained?". The large majority of voters in my riding consistently expressed the view that we do not have enough control over our industries at the present time and that we should not allow the situation to deteriorate further.
The intent of this Bill is puzzling. The Hon. Member for Laval-des-Rapides (Mr. Garneau) described how this Bill leads us to believe that it proposes freer restrictions and wide open policies that we will be advertising in the United States and has certain hidden restrictions which, although not immediately apparent, are there. This schizophrenic feature of the Bill is somewhat confusing.
Let me give a few examples of how this Bill is confusing. We are told there will be exemption of all new business investment and all direct investments involving assets under $5 million. How does one determine whether the assets of a particular company are under $5 million? The only way to do that is to have the new agency review all pertinent documents, the books and so forth of that company, as was done in the past. Once

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Investment Canada Act
those companies are reviewed, we can tell them that we do not have to review them because they have less than the amount that was advocated by the new Bill. Of course, in order to find that out, we must go through the process.
I find that particular feature of the new Bill to be somewhat confusing. Perhaps government Members would seize the opportunity afforded to them by the speech rotation to explain to us specifically how one would be able to identify whether or not new companies qualify under this Bill for the reasons I have previously mentioned without going through the process of examining their books. It seems to me that that is inconsistent with what the Government is attempting to do.
We are told that the final authority is now to be vested with the Minister rather than the Cabinet and that no provision for appeal to a higher authority is formally stated. Again that is a rather confusing position on the part of government Members, who on the one hand attempt to attribute to themselves such adjectives as free, open and democratic, and on the other hand will now give power to one Minister rather than giving it to the entire Cabinet, which in my view is a more democratic way of doing things. Again this is inconsistent with the message government Members are attempting to send to Americans and to all foreign investors.
We have also heard that the criterion for permitting acquisition has changed from "significant" to "net" benefit. Whether one word is used or another, it is quite obvious that we will have to examine such benefit as is derived from an investor before being able to determine whether the benefit is significant or only net.
Regardless, I think it is obvious that a good part of the process which existed before will be retained even though government Members are attempting to say the opposite. Nevertheless, the clear message they are sending is that the previous legislation was ineffective and did not welcome foreign investment. If that was the case, then why was it, as pointed out by the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall), that the approval rate was 97 per cent? If foreign investment was not welcome, why did we approve 97 per cent of it? Presumably, Mr. Speaker, we did so because the previous legislation was indeed quite effective.
I think it is important to recognize that at one point the previous legislation needed amending and it was amended to reflect changing times. It is true that foreign investment is welcome. However, it is not true to say, as government Members are attempting to say to the Americans, that foreign investment shall be unrestrained.
We respect the United States. It is our very close neighbour, a very powerful nation in the world and a nation which has been very friendly to us. However, as I said when I spoke on this issue previously, just because someone is our friend does not mean that we open our door, give him a set of keys and let him in at any time. I have friends but I do not give them keys to my house. If I do, I do it sparingly and for very good reasons. However, doing that does not make our friends any
less friendly to us. It simply means that we assert the authority that we have as a nation. I do think it is time that we recognized that to be masters of our own house does not mean that we are to be unfriendly.
Some of my colleagues have stated that the United States and indeed several other countries do have restrictions like we have and some countries are even stricter than us with regard to the ownership of airlines, broadcast industries and so on. Recognizing that and recognizing that other countries surely have a right to such restrictions, we must recognize that we have a right to such restrictions as well.
I am thinking of the situation which now exists in this country with regard to restrictions planned for the area of agriculture. I am sure all Hon. Members of the House are familiar with the potential danger created by the Americans cutting off imports of pork products from Canada to the United States. Several thousands of jobs could potentially be affected by this. We do not hear that discussed much in the House. The only think we hear from the Government is that we should have our door wide open. When we greet a friend we sometimes do open the door, but we must recognize that we are our own masters and that foreign investment in this country, albeit welcome, should only be allowed when it is of the greatest benefit to all Canadians.


Mr. Gilles Bernier (Beauce):: First of all, Mr. Speaker, I would like to offer you and all Members of this House my best wishes for the new year, and I hope that what we do this year will be of benefit to all Canadians.
I represent the riding of Beauce, where Canada begins. We are on the U.S. border, with the State of Maine as our neighbour. As you may know, the people of Beauce tend to get along very well with their neighbours and to co-operate with them, so we are particularly aware of the benefits of good relations, and I am therefore on familiar ground when I speak to Bill C-15.
Canada's national policy must be based on international objectives. Economic renewal starts with renewed investment, a very welcome challenge for this Government. The people who elected us have faith in us. We must keep a level head and we must be realistic. We all want to succeed, but we will have to open our doors to investors, to those whose faith in our country and our government has been restored. Investment capital remains the basis for economic success.
Investment is the key to economic growth because it will help finance the facilities that will make Canada more productive and create more jobs for Canadians. That is what we want. Canadians will appreciate this new boost for the economy, because the unemployment rate in Canada is now 11 per cent, while the real rate is probably even higher. Considering this situation, Mr. Speaker, we must ask ourselves what FIRA has been able to achieve after ten years of operations and
January 22, 1985

whether it has any legitimacy. That is why our Government has decided to act by tabling this very important piece of legislation. We must remember that before the good years in the sixties and early seventies, Canada was built on foreign investment, first British and then mainly American, and that without such investment, it would have been impossible to industrialize this country.
Whenever measures to control foreign investment were introduced as an expression of nationalistic fervour, they have led to underdevelopment, and I am thinking, for instance, of Argentina and Mexico. Local capital has never benefited from such measures, since it is a fact that the specific nature of investment, a critical factor in industry, is to act as an engine, not as a dead weight. Our economic growth depends on investment. In Canada, a good example would be the oil industry. Sheltered like a hothouse plant by the Liberals' National Energy Program, Canada's oil industry has lost access to foreign capital, resulting in the unprecedented action taken by the Government, and I would refer Hon. Members to the monster Petro-Canada has become.
According to Jacques Forget, editorial writer for "Finance" in Montreal, in addition to investment being the economy's moving force, its impact is reinforced by what economists refer to as the multiplier effect. Traditionally, foreign investment in Canada has been the prime engine of economic development. A responsible government, as we claim to be, must act to bring down a federal deficit that has increased steadily under the Liberals.
This Government realizes that to encourage economic growth in this country, it will have to gag FIRA. After the Prime Minister's speech before the Economic Club in New York recently, foreign investors realized that with the advent of the Progressive Conservatives, Canada would again become a prime investment area, where investors would be able to invest safely and profitably. We are going to show our confidence in the long-term investors, in business and in the individual entrepreneur. The Canadian economy will benefit as a result of increased employment and a rising balance of payments, a decisive factor in determining the value of the dollar, all of which will certainly reduce pressure on interest rates.
All this can be done because this Government is a Government of people who work, people who save, people who invest, people who create businesses and jobs. Mr. Speaker, there is a renewed faith in the free market system, in the freedom of Canadians and in Canada.
For 20 years we have been living beyond our means because of an irresponsible Government, some of whose members are among the survivors opposite, now under a new leader with a recycled image. Since September 4, Canadians have had confidence in our Government and according to the polls they are showing that confidence today. It is a Government that is promoting realistic and courageous policies.
Investment Canada Act
Mr. Speaker, on the Opposition side we often hear a number of fantastic and I might even say frivolous comments. Why don't these people stand up to make speeches and give their point of view? All we hear are a lot of grunts and groans that tend to disturb whoever has the floor. We must make difficult choices for the benefit of future generations. Canadians put an end to Liberal rhetoric when they realized that Liberal Government was not the solution to Canada's problems because it was the problem.
Future capital requirements will probably exceed any since the industrial boom right after the Second World War. Expanding industries such as telecommunications, robotics, computer systems and genetic engineering all require massive investment and are thus capital-based. For instance, today's secretary works on equipment worth $3,000, but tomorrow's secretary who will be a computer specialist, will require an investment of as much as $25,000. The growth in productivity will certainly be considerable-that is not the point. When all is said and done, we have no choice. Increasingly, our labour force will consist mainly of people who are qualified for white-collar jobs. They will not be productive unless they have the tools this kind of work requires and unless we can benefit from adequate foreign investment.
Mr. Speaker, let us be realistic. We must understand and accept that any reduction in youth unemployment will have to be preceded by foreign investment. Those who are opposed to foreign investment are thereby opposed to reintegrating young people in the labour market. We must realize that we will not get the jobs Canadians need unless we invest the capital this requires. We must be realistic. We need others to help our economy grow. President Reagan has understood this. The economic upsurge in the United States is mainly due to an increase in investment which means greater confidence in the government. This has helped increase GNP growth from 0.7 to 1.8 points, thanks to the pro-business philosophy of the Reagan Administration.
Mr. Speaker, if the United States is able to attract foreign capital, why should Canada not attract capital from the United States and elsewhere? Our country has to rebuild capital supplies to meet the challenge of a new industrial revolution. This month, in his message on the State of the Union, President Reagan stated, and I shall end on this note: "America is back". We might add: "Canada will follow".


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, I rise to join in the debate on Bill C-15, the Investment Canada Bill, and I speak in support of the amendment before the House to read the Bill a second time six months hence.
I am opposed to any relaxation of a law which already allows decisions to be made regarding investments that are against national interests and will increase the possibility that such development of the Canadian economy will not serve the needs of Canadians, whether as Canadian investors, as engi-
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neers and developers of technology, or as suppliers of products. On a number of different points it is possible to demonstrate not that we need a relaxation of the law, but that instead we should administer more strongly the legislation which already exists.
1 would like to explore some of these areas because it is very important to appreciate what will be the consequences of these decisions. In the process of thinking about these decisions we must ask ourselves whether the Government has done more than to suggest in an ideological way, as an article of faith-as did the last speaker-that we need to open the doors wide, and that it is only by those means that we can ensure that the country will achieve full employment and that Canadians will again know prosperity.
The Foreign Investment Review Agency has been in operation for about a decade. The record of the Agency demonstrates the importance of political will. In particular, during 1984 it became obvious that a Government that was not concerned about the consequences of foreign investment- which was recognized time and again at the end of the 1960s and through the 1970s-could in fact ensure that the Foreign Investment Review Agency represented little hindrance to foreign investment. One could conclude from that that the legislation before us is to some extent designed to fly the flag, or perhaps to pull the flag down, before foreign investors, in a supine surrender to their investment decisions which would be exercised in Canada.
During 1984 FIRA approved many foreign investment decisions. In only a very small number of those cases did it actually require foreign investment to lead to the creation of employment in Canada. In few of the cases did it even require that there be new investment in Canada from outside. From the beginning of 1984, 16 per cent of the applications approved promised neither new jobs nor new investment. Of course, in those cases one had to ask what were the consequences of the investment decisions being approved, considering the change of control which was taking place in Canada with the foreign operators having a larger influence in the direction of the Canadian economy. On that point I could say that the consequences of these foreign investment decisions have become quite clear in my own community.
[DOT] (M50)
In the last week there has been concern in the City of Thunder Bay about the prospect that one of the stores which Canada Safeway operates is likely to be lost. During 1983 the food retailing business in Thunder Bay was significantly consolidated when Loblaws and Dominion Stores retired from the scene. The A & P and Canada Safeway took over these stores and established, as far as national retailing outlets are concerned, a "duopoly" in which the two of them were jostling for control of the market. The Foreign Investment Review Agency allowed that to go ahead even though it realized that Canada Safeway, in its acquisitions in Thunder Bay, Winnipeg, Regina and perhaps other centres, was significantly increasing its domination of the market. What FIRA apparently did was to
require some reduction of outlets as a means of trying to increase competition and reduce this domination.
It now seems that Canada Safeway has been using that decision as a means of closing down perhaps its oldest and smallest outlets in order to consolidate its operations in large centres. What this means for one area of Thunder Bay is the loss of an old and much patronized store, forcing its patrons to go some distance to shop. In the case of senior citizens who do not have cars this would mean travelling by bus or probably by taxi in making trips of some distance in order to buy their groceries. That is obviously a serious matter for people with very limited incomes.
Of course, blaming this on FIRA is taking the matter up in mid-course. What we have to consider far more is the activities of large food retailers, in this case two American-controlled companies, who have succeeded in establishing dominance in a community and then forcing people into that kind of unfortunate plight. Obviously one can only regret the disappearance of Dominion and Loblaws from Thunder Bay because they represented more competition in the market. Surely this is a demonstration of what the consequences of foreign investment can be.
I submit that we have not had any substantial demonstration in this country of the advantages of foreign investment. People say as an article of faith that it is necessary, but of course my colleagues have taken a leading part in focusing on the dangerous consequences. We have had a great deal of superficial discussion of foreign investment. However, there has been little recognition of the fact that the kind of foreign investment we are faced with these days is one particular style of putting capital to work which has much more far-reaching consequence than some of the other possibilities.
When this matter was being debated last December, someone asked about the extent of British investment in the United States through the 19th century. What that person failed to note is that that investment was very largely that of portfolio investment. That is to say, British investors bought shares in companies. They invested in American railway bonds or whatever. Unless they were brought together in a committee because the enterprise was not doing well, they were hardly involved in any kind of controlling interest in the activity.
Portfolio investment, joint ventures and possibly licensing agreements are all means by which capital can be obtained. But what is not being recognized by our colleagues on the government benches for the danger it represents to the Canadian economy is that foreign investment these days is in the form of a subsidiary. No matter how profitable it is, a closely held corporation will never be available for investment by Canadians unless we have a tightening of the law and we demand that the enterprise offer shares to Canadians so they can participate in the profits. Instead we have a subsidiary with presumably some injection of foreign capital at the outset, but after that it draws on Canadian capital sources. That surely, even on the theory our friends have on the other side, will represent a reduction in capital available to Canadians.
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In these various ways, where the subsidiary draws on foreign technology rather than encouraging Canadian technology and research and development, where it draws on the parent for products and encourages the importation of materials to Canada rather than production in Canada, we then see the way in which the activities of the subsidiary go against the national economic interest. In those circumstances I can only regret on behalf of the Canadian people that a government which calls itself national will undertake these actions of expressing a colonial mentality in selling out the interests of the Canadian people.


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, in the eighties, few people fail to agree with the need to increase investment capital, both foreign and domestic, in order to give our economic development a new impulse. Clearly FIRA, which approved more than 90 per cent of foreign investment applications over the last ten years, has played a major role in developing our economy.
FIRA was established in 1974 to respond to the concerns of the Canadian people over the ever-increasing foreign control of our economy. In 1973, for instance, foreign investments in Canada totalled $32.9 billion, as against a mere $20.6 billion in the United States, whose economy was then ten times greater.
In 1973 foreign interests, mainly American, were controlling 57 per cent of the Canadian manufacturing industry, 75 per cent of our oil and gas industry and 58 per cent of our mining industry. Surveys had shown that 70 per cent of all Canadians believed our economic opportunities were highly imperilled by such a degree of foreign control.
Over the past ten years, under the previous Liberal administration and thanks to FIRA's efforts, the level of foreign control on Canadian industries and especially the energy sector has decreased significantly. Over the last ten years, although investments have increased from $690 million in 1974 to $2 billion in 1983, the amount of foreign control has declined significantly.
What is the Progressive Conservative Government proposing in its foreign investment policy? First, any new foreign investment will no longer have to be reviewed. Second, any takeover of companies with less than $5 billion in assets may be done automatically. With these two provisions, the Government opens the door to the foreign control of 90 per cent of our industries and companies. Third, in the case of an indirect takeover, or in other words where a foreign company with a Canadian subsidiary is taken over by another foreign company, the transaction will be reviewed only if assets exceed $50 million.
The Progressive Conservative Government is thereby handing over our economy, bound hand and foot, to foreign capital, without concern for the actual impact of foreign investment on this country's economic growth.
Investment Canada Act
Canada is open for business again.

Or rather, as the Bible so aptly puts it, it has sold its birthright for a plate of lentils.

Canada is open for business again.

But the way the Conservatives see it, it is the business of others before ours.
With respect to foreign investments, we ought to know that a great many subsidiary companies of multinationals and quite a few national companies operate under a patent or licence issued by a foreign firm and must do so within the limits of what is called restricted mandates, under which research and development activities, production and international marketing are limited. Restricted mandates quite often specifically ban exports to another country, but the public at large is unaware of this since the companies themselves generally keep such mandates secret. Obviously, those restricted mandates severely hamper Canada's export efforts and we will have to try to have some of those restrictions lifted. Whereas the Liberal government always stressed, through FIRA, the importance of attracting to Canada companies likely to spur our economy, the Conservatives would rather sell out the country to the highest bidder.

Canada is open for business again.

But I ask Mr. Speaker:

For whom? Business for those who tell us that our companies can no longer export as they wish, that they will no longer be able to invest the moneys required for research and development?

Over ten years, FIRA approved more than 90 per cent of investment applications. Rejected applications had often been filed by individuals or companies anxious to do business in Canada and take advantage of our resources without contributing anything to this country's development, since they would have saddled their Canadian subsidiaries with restricted mandates.
Whereas the Conservative government wants to implement a laisser-faire policy which will enable anyone, on any condition, to take over any Canadian company, the Liberal Party of Canada has always emphasized the urgency of securing foreign investments which would create real economic growth in Canada and long-term jobs for Canadians. We believe it is important to have a control mechanism such as FIRA so as to

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make it possible, among other things, to promote foreign investments in Canada which create subsidiaries with worldwide rather than restricted mandates. It is only because of tariff avantages that subsidiaries locate in a country, and these subsidiaries are fully dependent on the parent company for everything related to product design and product marketing. They will remain in that country only when the tariff advantages are financially beneficial to their investors.
If we want to promote economic growth in our country rather than increase the profits of foreign investors, we do need an agency like FIRA. The point is not to turn down investments offered by multinational companies, but rather to ensure that their subsidiaries have what are commonly called in economics world mandates.
It is the responsibility of the Government to ensure that companies created by foreign investments are independent production bodies which are asked by the parent company to design, manufacture and sell on the world market one or more than one product.
Through its policy, the Liberal Government always tried to encourage companies with world mandates to locate in Canada. You, the Conservatives, have just destroyed ten years of work. Through FIRA, we had always emphasized the international marketing aspect because we know that subsidiaries with a world mandate invest a lot in research and development.

On product design and on product engineering.

With the creation of Investment Canada, small businesses will become choice targets for foreign takeovers. The clause which exempts acquisitions of small businesses from any review is probably the most dangerous clause of this Conservative Bill.
Mr. Speaker, the Progressive Conservative Party will sell public corporations to their most dangerous competitor and allow the acquisition of our small businesses by interests which will take all they can out of them before going somewhere else. [English]
Instead of saying that Canada is open for business, we should say that Canada is ready for a close-out sale by the Conservatives.


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I want to participate in this debate on the amendment which effectively hoists Bill C-15 for six months. 1 think that it is a wise amendment because it gives the Government an opportunity to rethink its position.
I do not think there is anyone in this Chamber or this country who did not feel a considerable amount of pride when we repatriated our Constitution. I think that deep down Canadians started to feel a sense of being Canadian, that we can, within the borders of Canada, amend our own Constitution. It was a point of maturity to be able to determine the way
in which our country should be governed. I think that is very important to a sense of being Canadian.
Another aspect of Canadian maturity is the question of controlling our economic destiny; in other words, being in control of our economy and the way it develops and grows. That has been sadly lacking. An example of that is the climbing interest rates in this country in 1982. Pressures were being put on the Government in the House and across the country to do something about rising interest rates. The Government of the day, a Liberal Government, consistently said that it could not do anything about them because they are determined in Washington and on Wall Street. It is the American economy that determines the interest rates in this country. It is the American economy that by and large determines what takes place in this country. We all hoped and prayed that the economic recovery in the United States would be such that their interest rates would come down so that our people could get some relief from high interest rates.
Part of economic maturity is being able to determine where investment coming from outside the borders of Canada should be. We should be able to determine whether those investments ' are in the best interests of Canadians. When I consider my own situation as an immigrant to Canada, I believe it is a privilege to be a Canadian citizen. I realize that there is a contribution which must be made to the life of Canada. We immigrants believe that. I believe we should look at foreign investment in the same way. It should not come in, make a quick buck, rip and run.
I believe there must be a commitment to developing Canada. Of course, investors can derive benefits from this as all Canadians do. Screening foreign investment is important because we cannot assume that our good friend, the United States, can always be trusted. In the past, our good friends have been known to do very unfriendly things to Canadians. For example, the CIA paid money to Canadian psychiatrists to do tests on Canadian citizens.
There are other examples in which foreign parent companies have forbidden the Canadian subsidiary to sell to other countries because the United States Government does not recognize the political philosophy of those other governments. I refer particularly to the sale of Ford vehicles to Cuba. The American Government instructed Ford to instruct its subsidiary here not to sell vehicles because the American Government had an embargo on Cuba. Our former Prime Minister, the Right Hon. John Diefenbaker, never took such a position yet we had an American law being enforced on a Canadian subsidiary on Canadian soil. We also had the prevention of Robin Hood Flour, a subsidiary in Canada, selling to Red China, as it was called at that time. However, we have recognized the Government of China since 1970.
Those are examples of very unfriendly acts which are sometimes taken by our good friends. Occasionally the Americans get caught up in their own sense of power and view countries like Canada as an extension of themselves. That is a denial of
January 22, 1985

mature Canadian citizenship and that is why there is a need for screening.
It is interesting to note that the first place the new Progressive Conservative Prime Minister (Mr. Mulroney) visited after being elected was Washington, to pay a fealty and kiss the ring of king Ronald. The second place he visited outside of our borders was Wall Street, to tell the bankers-


Mr. Stewart:: Where it's at.


John R. Rodriguez: The Conservative Member on the other side says that's where it's at.


John B. Stewart: That is right.


John R. Rodriguez: He went to assure the bankers that Canada was up for sale. The Conservatives have tried that in Saskatchewan and in British Columbia. British Columbia was opened up by the Social Credit Government of Bill Bennett. It was up for sale. The foreign investors simply came in, ripped and ran. That province today is experiencing one of the most stifling unemployment rates in this country. It is a fantastic province with great potential but is being devastated by unemployment and hard times.
It is quite obvious that the Government is bowing down to the imperialistic monopolies of Wall Street. There is no doubt that they must give some assurance to the money bags of Wall Street that the country is up for sale so that foreign investment will come to Canada. The Government has assured them that foreign investment will not be screened.
Every mature country in the western democracies has some sort of review process. For example, Japan has a very effective review agency. Australia has a foreign review board through which they review foreign investment in their country. Our country needs a proper screening mechanism to ensure that the investments which come to Canada are indeed in the best interest of our country and do not come in to rip, run, rape and take off, leaving Canadians holding the bag.


Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, I rise to support the amendment to defer the Bill for six months. The recently tabled Investment Canada Act, Bill C-15, represents an attempt by the federal Government to reduce its ability to control and oversee foreign investment in Canada. The consequences of this legislation will reduce the number of transactions subject to review by 90 per cent as compared to the existing FIRA Act. It will totally exempt most new investments from any review and will limit the new agency's mandate to review acquisitions. The net result of this legislation will be an increase in the degree of foreign control over the Canadian economy.
I agree with the member who spoke previously about the-

-the pride of Canadians which is now becoming apparent, and I am all for that.
Investment Canada Act

Since the early 1970s the degree of foreign control has fallen. Part of this change can be attributed to FIRA and to the National Energy Program.
The Government claims that this new Act is intended to reverse the effects of these same programs. Since it is the avowed goal of this new legislation to increase direct foreign investment in Canada, it is useful to consider the implications that foreign domination of our industry might have on the economy. First, let us consider a few aspects of this particular Act. Let us examine the area of culture. There is the right to review all investment in culturally sensitive sectors. While this area has not been clearly defined, it does include the media and telecommunications.

That has me worried because our cultural life is involved, and I should think that at least we must have a broader and more comprehensive definition if we are to preserve what makes us different as Canadians.

Second, research and development. It has been argued that Canada suffers from a technologically weak manufacturing sector, that this sector is small in size relative to the Canadian economy, by OECD standards, and undertakes less research and development than other industrialized nations. According to data presented in the New Directions for Canada, Canadian private R and D funding ranks last at .8 per cent among the OECD countries. The Science Council of Canada has long noted that there is a strong relationship between our poor R and D performance and the level of foreign ownership in the economy. International companies tend to concentrate their R and D activity and the location of this activity in either the home country or where the largest market is located. Both of these factors work against Canadian R and D activity and I believe that this is a very serious concern.
According to the Science Council of Canada, foreign-owned firms engage in significantly less research here than do Canadian-owned firms. As foreign ownership increases and displaces Canadian firms, employment opportunities for our labour force in this area will fall. What will happen to all of our students who are presently studying in the field of science and research? This must be considered. Will we be concerned about a brain drain and perhaps not think about what the impact of this will be on research and development?
In this respect it is particularly relevant to note that the acquisition of small enterprises is exempt from review under this new Investment Canada Act. Yet it is precisely these firms which tend to be the most R and D intensive and innovative in the economy. This may be a particular danger in the high-tech area where we have shown tremendous expertise. Consider our pride in the Canadarm when our space shots took off. It is small innovative firms such as those, many of which are below the $5 million threshold set by the Minister, which will suffer the impact of the legislation. Something concrete will be lost. What will be gained? That is a very important key.

January 22, 1985
Investment Canada Act
I think we need this delay so we can really research the impact that this Act will have on Canada as an independent country. Having other U.S. firms buy up small Canadian corporations, meld them into their own over-all organization and withdraw them from the Canadian labour force I think is detrimental to ourselves. This Bill does nothing for small business, which we all know is the major key to regrowth and development in Canada. It is that very proof that we count on to revitalize our economy.
I want to emphasize that the Liberal Party is not against foreign investment. We welcome foreign investors, but as partners in the Canadian economy, not as controllers of our financial destiny. Through FIRA, which may have had a bad reputation but did not have bad results, the previous Government was able to negotiate benefits for Canadian workers. This Bill does away with a safeguard that I believe is necessary if Canada is not going to become the handmaiden of the United States. Our Leader has said time and again that we are open for business but we are not for sale. I want to re-emphasize that. I think we must maintain our Canadian perspective.
According to Glen Williams of Carleton University, Canadian branch plants have experienced a long history of export restrictions by their American parents with probably 75 per cent of all Canadian branch plants having their exports strictly controlled by their parent. This can be a serious matter for a country like Canada which relies so heavily on exports for our national income.
Look at the Americans who have complained loudest and have been the most protectionist of their interests. A recent study by the Brookings Institute demonstrates that the percentage of U.S. manufactured goods protected by non-tariff restrictions, such as quotas and other barriers, has risen from 20 per cent in 1980 to 35 per cent in 1983. The truth is the United States is as economically nationalist as we are here in Canada.
What the Tories have attempted to do with this Bill is to repackage a piece of legislation that in reality worked quite well. In the past five years, over 92 per cent of all applications for FIRA were approved. This is a perception that the legislation was an impediment to foreign investment, but these statistics do not bear that out.
Let us take a look at what a well-known journalist from the Toronto Star has said. He wrote that the Minister of Regional Development had announced that 90 per cent of all foreign investment transactions will no longer be reviewed. The criterion of "significant" benefit will be replaced by "net" benefit. Investment Canada will now actively seek out foreign investors rather than bargaining with them for the best deal; and instead of the full Cabinet deciding on the 10 per cent of large takeovers that even the Tories deemed to be too important to leave to the market, those decisions will now be made by the Minister alone. One single Minister will rule on billion dollar decisions. The biases of one man will decide the fate of thousands of workers or the interests of entire regions. There has not been such an imbalance between power and capability
since Caligula made a counsel out of his horse. I think that is a very important aspect of this Bill. I do not think that is what Members of this House expected, and I do not think that is what Canadian electors voted for when they voted for change. That is not a very democratic process.
I would like to bring to the attention of Hon. Members that other factors also have an impact. Regulations, both federal and provincial, have a direct bearing on the level of foreign investment in Canada. It is not enough just to change FIRA which represents only one layer of the various strata that govern our economy. The constraints are not addressed by this Bill nor have they been alluded to or addressed by the Minister. Maybe they have escaped his focus and myopic view of Canadian problems. We need increased productivity, true, and access to foreign markets, yes-jobs, growth and development. But when one has a fixation on setting climate with words and chooses to ignore the many factors that impact on our economic weather patterns, the forecast is clouded and unreliable.
I see my time is running out. I would really like to press you, Mr. Speaker, to consider the other factors that have been very important in having businessmen make decisions. I would like to underscore the importance of Canadians being encouraged to invest in Canada. We have experienced the flight of capital.


Mr. Dick:: Now that was the Liberal Government.


Sheila Finestone: I think there are ways in which we can prevent that and encourage Canadians to invest in Canada as well. I think the fixation is misplaced. All kinds of other issues are integral to the creating of a favourable climate, such as taxation structure, labour atmosphere, regulations and the availability of trained manpower. Regarding taxation, it is heaviest in Canada and certainly in Quebec.
In conclusion, I want to reiterate that we on this side of the House welcome foreign capital into Canada if it is going to improve our economy, help create jobs and be of significant benefit to Canada. Unfortunately, there is very little evidence in this Bill to substantiate these claims. I think we really need to have this delay so we can examine this legislation much more closely, legislation which appears to be like any other Tory charade and like the many the Tories played out in the election campaign on universality and jobs, jobs, jobs. The Minister's rhetoric is just a smokescreen which will soon disappear, leaving behind the real problems that still need to be addressed by this Government.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I welcome the opportunity to speak on this Bill that will have the effect of limiting Canadian control over investment in this nation. I rise to speak with three different roles in mind: first, as federal-provincial relations critic for our caucus; second, as the labour spokesman for our caucus; and third, as a constituency Member of Parliament. In all three roles I am concerned about this piece of legislation.
As the federal-provincial relations critic I am concerned that with this legislation neither the provinces nor the federal Government will be able to control or regulate the economies
January 22, 1985

of their various jurisdictions. We will be in a situation, as has so often been the case in Canada, where the real decisions that affect the development of our economy, that affect the employment prospects of our children and the development of our resources, will be made elsewhere. In other words, they will be made in other nations, in the board rooms of companies that are basically offshore.
It has been evident from past foreign investment in this country that Canadians have suffered as a result of foreign investment. Sure, there have been some jobs created. Sure, there has been some research and development. Sure, there has been some extraction of our natural resources and as a result there has been some benefit to Canada. But there are other statistics as well. Those statistics will point out that where there is foreign ownership there will not be as much research and development. They will point out that where there is foreign ownership there are more layoffs than there should be in comparison to what has happened in Canadian-owned firms. There are statistics that will show we have been a net loser in terms of interest and dividend payments ever since 1926. For that matter, in 1983 we had a loss of $9.4 billion which had to be paid to companies other than Canadian nationals. What that meant was a dollar drain on our economy, dollars that should have been used for more research and development, for more investment and for more jobs for Canadians.
We have also seen historically that foreign-owned corporations tend to do less manufacturing with our natural resources. In other words, they tend to take the natural product from the ground and move it in an unrefined state to their headquarters or to factories in other nations. If we had Canadian control over those corporations there would be more opportunity for secondary and tertiary employment of Canadians.
We are allowed to speak for only 10 minutes in this debate. That is unfortunate because there are a number of points I would like to make. However, I will talk about something now which affects all of us, whether we be on this side of the House or on the opposite side of the House. Last October I wrote to the Prime Minister (Mr. Mulroney) about a study of the Science Council of Canada. Certainly it was not done by a group of socialists or labour people; it was done by the Science Council of Canada and it examined the role of foreign investment over the last many years that the Liberals were in power. It contains some very interesting conclusions. First, it indicated that by and large foreign firms did not match the research and development dollars which they received from the federal Government or from provincial Governments. At the same time Canadian-owned firms were matching on a dollar for dollar basis the money they received from Governments.
That study was conducted by Frank Longo for the Science Council of Canada. It established that this was the pattern over the last many years in this nation. In other words, foreign firms would take the tax benefits, grants or whatever they could get from government and use them for some research and development but would not put in their own money. Any
Investment Canada Act
research and development conducted with their own money would be done in nations other than Canada.
What does that mean to Canadians? It means that research and development was not done here. It means that Canadians are less likely to receive the benefits of research and development. Also it means that young people lose the possibility of working in research and development because most of the money spent by foreign-owned firms in being spent elsewhere. Canadians either lose the opportunity or they must leave Canada to work in research and development in those corporations. Also it means that the many jobs resulting from R and D will not be located in Canada. We are the losers in many ways when corporations refuse to do research and development in Canada.
There is another interesting aspect of the Longo study. It was that the vast majority of foreign-owned firms did significantly less research and development with or without government grants than Canadian companies. In other words, they do not match the money they receive from the Government of Canada or from the provincial Goverments, although Canadian-owned firms at least match that money for research and development purposes, and in addition, these foreign firms, by and large, do not do as much research and development in the nation. This study for the Science Council of Canada which is headed by the former leader of the provincial Liberal Party in Ontario. He is not known for left-wing, radical thought. For that matter, on many issues he has been proven to be to the right of the Conservative Party.


Don Boudria: Now, now!


Rodney Edward Murphy: I know that is hard to believe, but certainly there are some Liberals who are right of the Conservative Party. The point is that that study examined the record of the previous federal Liberal administration. It pointed out that we were losing research and development dollars because of foreign investment and that the youth of the nation were losing opportunities because of foreign investment.
What is the Conservative Government doing about that? It says that even though the weak controls of the past were not working, they have to be disbanded and further weakened so that we have less control in the future.
I come from a riding with many natural resources. There is high unemployment among women, the youth and native people. The fact that there will be less control over foreign-owned corporations, which control so much of the industries and companies in the field of natural resources, means that we will have even less control or less say in the future in terms of what happens in Canada, particularly what happens in my riding.
For this reason I believe the amendment to postpone discussion on this Bill for six months is a good one. Then we could examine not only the studies of the Science Council of Canada but other information which proves that we cannot afford to weaken the very limited controls we have at the present time.

January 22, 1985
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Mr. Sergio Marchi (York West):: Mr. Speaker, I, too, am pleased to take part in the debate on our Party's amendment to Bill C-15. Parliament and the country needs that time to review this piece of legislation. Essentially the Bill will dismantle FIRA, to make way for a proposed new investment instrument which will be known as Investment Canada and thereby dramatically alter the process by which acquisitions are to be addressed by the new Tory Government.
In reality Bill C-15 is yet another attempt by a government far more interested in the art of public relations than in actual substance, a government prepared to sacrifice long-term economic planning and economic sovereignty for short-term, image-making propaganda.
The Minister who introduced the legislation late last year declared the following in his press statement:
We are back in business. This legislation sends a message to the world that, once again, Canada welcomes investment.
Of what world did the Minister speak? Where has he been for the last number of years? This country has always been open for business and has always welcomed investment. If this were not the case, we would not be witness to what is, on the whole, a very great, prosperous and thriving nation. In terms of economic investment, under a Liberal Government and through FIRA specifically Canada like any other country wanted and stressed what was good for Canada and for Canadians. Is that a negative attitude to take as a country? Is not that how a country attains a degree of respect in the international business community?
FIRA, introduced by a Liberal Government, was an essential and calculated policy instrument which sought to ensure that foreign investment also included significant benefits to Canada. FIRA allowed Canadians to bargain and negotiate with a huge variety of multinational interests from a point of strength. A case in point was the 86 per cent share of Canadian Reserve Oil and Gas Ltd. which Getty Oil acquired in 1980. Getty's initial application to FIRA in 1981 was rejected. Serious negotiation followed, which resulted in a stronger package for Canada being approved only a year later. This package included commitments by Getty to reduce its ownership of the Canadian company to 50 per cent and to spend $5 million in four years developing known reserves. It also agreed to spend many millions of dollars over a period of years on exploration and development. The company also agreed to buy Canadian goods and services whenever they were competitively available and to sponsor scholarships in Canadian universities. Finally, residents of Canadian origin had to make up 80 per cent of the directors of both companies. Getty was required to transfer technology to Canadian reserves and to spend money on research in Canada.
In this illustration, it is very clear that FIRA had an important role in ensuring that this foreign investment was totally beneficial to Canada in addition to satisfying the investor.
The objective of FIRA was never to prevent or discourage foreign investment, but rather to cater to the needs and aspirations of our country. It should be noted that since its inception in 1974, as was previously mentioned, FIRA approved an average of 92 per cent of the applications. This figure clearly demonstrates that foreign investors not only wanted to invest and did invest heavily in Canada, but that they were willing to meet the criteria established by FIRA. In short, these investors realized and appreciated that more jobs for Canadians, more research and development for Canada and greater Canadian exports was part of the investment deal. Our Party and Canadians are asking themselves, why should it be any different today?
It is doubtful whether FIRA discouraged in any significant way any foreign investor who was serious about investing his or her capital in Canada. In fact, the Conference Board of Canada, in a study last April, determined that FIRA provided a deterrent for only 11 per cent of foreign investment. This was tied largely to the time factor.
More importantly, Statistics Canada figures indicate that FIRA did not halt the flow of U.S. investment into Canada. In fact, the gross inflow of U.S. direct investment into Canada continued to expand during FIRA's time. Gross inflows varied between $1 billion and $1.4 billion throughout most of the 1970s before skyrocketing during 1980 and 1981.
Therefore, a quick analysis of the facts and figures effectively contradicts the Government's blinded portrayal that FIRA was the enemy of foreign investment and that the removal of FIRA, replaced by Investment Canada, would bring a new beginning. Nothing could be further from the truth.
As the Bill stands, direct acquisitions by non-Canadians of businesses in Canada with assets of less than $5 million are not subject to review. Neither are indirect takeovers resulting from the acquisition of parent companies outside Canada when the Canadian subsidiary has assets of over $50 million. This is of grave concern to the Canadian small-businessman, particularly in the increasingly competitive field of high technology. The Government will open the doors to takeovers of firms below these thresholds. What will Canada really gain if these small enterprises are more prone to shut-downs? What would we gain if these Canadian jobs are not guaranteed? What steps will be available to the Canadian Government to prevent such economic hardships? What action can the Government take to guarantee benefits to Canada and to ensure jobs for all Canadians? Unfortunately, the answer to these and other questions is that this Government wishes to wash its hands of its commitment to the small-businessman.
These economic concessions will no longer be possible through Investment Canada. Many firms that are below the new thresholds may in fact be small, but collectively they are the engine and the spirit behind the creation of new jobs in Canada.
To further compound the inequities of Investment Canada, the larger takeovers which dictate the fate of thousands of
January 22, 1985

Canadian workers and the interests of entire regions will now rest at the mercy of one single Minister. Under FIRA, these would be shared by the full Cabinet in order to incorporate and understand the variety of disciplines, interests and regional necessities. The perspective, in the end, was much more encompassing. Now, a billion dollar decision in the hands of one single Minister centralizes power to an unprecedented degree and with it imposes horrendous limitation as it relates to the spectrum of interests.
Not only is the concept that FIRA discouraged foreign investment a fabricated myth perpetuated by the Tories, but this inaccuracy is also complemented by a feeling that at the present time the United States is least likely to undergo active investment abroad. This growing view was echoed in a fascinating article in The Globe and Mail dated December 20, 1984, in which leading New York investment bankers claim that "those waiting for job-producing foreign moneys to flow into Canada should not hold their breath. You don't get the idea that there are a lot of folks with money bags at the border, waiting to get into Canada".
Consequently, when you combine this limited investment attitude with the reality that FIRA did not discourage foreign investment, one asks why Bill C-15, and how can we grow and profit as a nation from the establishment of Investment Canada? Investment Canada is the first major piece of Government legislation and it provides Canadians very quickly with the philosophical bent that handcuffs the Conservative Party. A debate of FIRA versus Investment Canada is a classic example which distinguishes a Liberal Government from that of a Conservative Government.
Firstly, FIRA was an instrument of nation building; an instrument to safeguard and promote Canadians and Canadian economic sovereignty. Investment Canada will do neither. Secondly, while foreign investment was viewed as an indispensable sector of the economic pie, FIRA was an initiative by Canadians to put Canadians first; it was an initiative that attempted to instil a sense of purpose, vitality and leadership. Investment Canada will merely perpetuate the often heard criticism that Canada lacks the drive and self-fortitude to make things happen. Thirdly, FIRA put Canada second to no one; it viewed Canada and the United States as co-tenants of the North American continent. Investment Canada views the U.S. as the owner and Canada as the subservient tenant.
I have other things to say, but I believe my time is up.


Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, I welcome the opportunity to rise on behalf of my constituents of Nepean-Carleton to speak against this amendment and in support of the Bill. This Bill recognizes that investment is central to economic growth and employment opportunities and the key to technological advancement.
I could hardly believe some of the speeches which preceded me this morning in support of FIRA, particularly when the Canadian Press last week carried an article with which I would like Hon. Members to be familiar entitled: "Canada ranked worst". I quote:
Investment Canada Act
A survey released Monday on the international competitiveness of 28 countries ranks Canada as the seventh-most competitive country, but dead last in terms of welcoming foreign investment.
The survey repeated oft-heard criticisms that Canadians are probably the world's most unfriendly recipients of foreign investments.
Presumably FIRA has contributed dramatically to this kind of perception by those who want to invest in Canada. In the case of Nepean-Carleton, a riding that is comprised in large part of small businesses, a riding that is the high technology centre for Canada, this new investment Bill is particularly welcome. The high technology industry must raise capital quickly. Twelve to 18 months is crucial for the turnaround period in that industry. Equally important is the desirability of cross-licensing within the high technology industry and of being able to move with cross-licensing very quickly. The small business industry and the high technology industry in Nepean-Carleton very much want this new Bill to be operative as soon as possible.
I would like to direct my comments for a few minutes to how the new Bill affects the mining industry in Canada. I am particularly delighted that the Minister of State for Mines (Mr. Layton) is in the Chamber today. This Government and this nation are particularly fortunate in having this Member to provide the legislative and policy leadership for Canada's great mining community.
We are the third largest mining community in the world, ranking after the United States and the Soviet Union. At the minehead or at the millhead, we produce approximately $33 billion to $35 billion of new wealth annually. That new wealth constitutes about 30 per cent of Canada's net exports. It is a very, very competitive industry. It is an industry that is being confronted with an array of problems, many of which relate to the investment community. I would like to share some of these problems with you for a moment.
In Canada, it is now taking about four to five years to find every new ranking ore deposit. That exploration program, when related back to each new find, is costing about $25 million to $30 million per deposit. Equally, in these worldranking mining institutions the cost of developing these mines is anywhere from $200 million to $400 million, a colossal amount of capital for anyone's investment portfolio.
In the mining industry there is a need for an inflow of large amounts of capital. Superimposed upon that need is also something which this House and those of us who are responsible for legislation relative to the mining industry ought to note, and that is that there is a tremendous time factor associated with the development of a mine. Exploration takes three to five years. The planning of a new operation takes another two to three years and it takes probably at least another five years to bring a major mining complex into production by developing the mine, the mill, the community infrastructure and everything else that is associated with it. The mine then enters into production and it needs a period of at least 10, 15 or 20 years of stability so that that mine can produce.

January 22, 1985
Investment Canada Act
The point I would like to make is that from the time one starts to invest one's money in the mining community to the time one receives the total return on that mine, a period of at least 20 to 30 years can go by. Therefore, there is a need for stability in the tax system and in the investment world for the mining community to grow and thrive.
One of the great problems from which the mining community has suffered over the years, beginning in about 1971, 1972 and 1973 is the bewildering array of legislation which applies to taxation and investment. That has tended to hinder this great industry, slow it down and give it a lack of confidence in what Canadian legislators and policymakers would want from the industry. I hope that through this new Bill that is before us we as legislators can provide the Canadian mining community with an opportunity to attract large amounts of new capital into Canada and that we will very shortly defeat the amendment that is before us and proceed with this very valuable piece of legislation which the business, high-technology and mining communities in Canada, and in fact all Canadians, need so desperately.


Some Hon. Members:: Hear, hear!


Mr. Simon de Jong (Regina East):: Mr. Speaker, I too welcome the opportunity to participate in debate regarding the amendment introduced by the Liberal Party to put a six-month hoist on Bill C-15, the Bill dealing with foreign investment in Canada. After hearing the addresses of some of the Hon. Members of this House, I am somewhat amazed- though I suppose I should not be - by the fact that some of the economic theories that I have heard are really 19th century economic theories, as is the understanding of political and economic realities. I also find amazing some of the speeches I have heard by my Liberal colleagues. On the one hand they take great credit for FIRA, yet on the other hand they bend over backward to point out how FIRA has not in fact stopped or interfered with foreign investment in Canada.
I believe all those who recognize the political history of the country know that it was the New Democratic Party which, in the early 1970s, really created the public and political pressure within this House that forced the Liberals to introduce FIRA to begin with. Since then we have seen an erosion of FIRA over the last number of years.
It is not surprising at all that in the last number of years FIRA has been approving some 95 per cent to 98 per cent of all foreign-investor takeovers in Canada. It is not surprising that after all these years of Liberal rule and management-or I should say mismanagement-of our economy we find that, per capita, Canada has more foreign ownership and control than any other industrialized nation in the world and more than many developing nations as well. That is why I was somewhat surprised when I heard the Hon. Member for Nepean-Carleton (Mr. Tupper) claiming that Canada is considered the country that is the most unreceptive to foreign investment. Oh boy, that is some unreceptivity!
This country or at least a great deal of it is already controlled by foreign investment. We have more foreign ownership than any other industrialized nation in the world on a per capita basis. Yet this is not quite good enough for our Conservative friends. How much do they want? Do they want 100 per cent foreign ownership? Do they just want to sell it all? Do they want us to be totally controlled by multinational corporations? Do they want Canada's economy to be a totally subservient branch plant economy? How much more do they want? How much further must we go? How much more should we sell out? Do we not already hold the world record for this?
I wish some of my Conservative colleagues would tell us how much more foreign investment they would like to see. There is no doubt that foreign investment is needed. However, I am speaking of the type of foreign investment that is needed. Let me put it this way. As an individual, I could rent for most of my life and end up never owning my own home. On the other hand, I could borrow money from the bank, put a down payment on a home and eventually pay it off. Then I would own my home, the roof over my head. But what has occurred in our country is that we have become renters or tenants in our own homes. We will never end up owning the factories, the mines or the mills. We continue paying rent. That is why in 1983 Canada had a deficit of some $9.4 billion in interest and dividend payments.
Since the record began in 1926, Canada has been a net exporter of interest and dividend funds. In other words, while foreign investment provides short-term immediate benefits, people do not invest unless they expect to receive more out of it than they put in. That is simple Adam Smith economics. I am sure my Conservative friends can appreciate that anyone who invests in Canada expects to get more out of it. That has been the case. More dividends and interest payments from past investments are leaving Canada than are coming back in. If the solution is to borrow more money to make up the difference, we are only mortgaging the future.
I call it one o'clock, Mr. Speaker. I wish to continue with my remarks later this afternoon.


The Acting Speaker (Mr. Charest):: It being one o'clock,
I do now leave the chair until 2 p.m. this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
January 22, 1985


Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, just before the Christmas recess I asked the Hon. Minister of National Defence (Mr. Coates) whether he was using the purchase of the CF-18A fighter aircraft and the six new patrol frigates to prop up his Party's image with NATO, at a time when these decisions had actually been made by the previous Liberal Government and were well under way.
Prior to that, and during the rather habitual absence of the Minister of National Defence, I put the same question to the Acting Minister of National Defence, who is the Minister of Veterans Affairs (Mr. Hees). The Minister of Veterans Affairs did not know anything about the speech which was delivered by the Minister of National Defence at NATO, but he assured the House that the Minister did make a very good statement at NATO, and also assured the House that what he had said made a great deal of sense, even though he did not know what the Minister had said.
As the record has since shown, the Minister of National Defence was in fact making use of decisions which were made by the previous Liberal Government, and the new equipment which was purchased by the previous Liberal Government, to try to give the impression to NATO that this brand new Government was doing such a fantastic job. In his statement before NATO, the Minister of National Defence is quoted as having said:
We are completing project definition for the acquisition of weapons to enable our forces in Europe to counter the threat of tow level air attack. We are replacing our CF-104 aircraft in Europe with far more capable CF-18 aircraft on a one-for-one basis. We intend, with the transition to the new aircraft, to increase both the operational readiness and the operational capability of the Canadian Air Group-


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



AGRICULTURE


Mr. Pat Binns (Cardigan):: Mr. Speaker, livestock producers in the Maritime region are recommending that feed freight assistance be increased by the federal Government to a level which will ensure that producers are in a fair and competitive position with the remainder of Canada.
In 1941 the Feed Freight Assistance Program covered 90 per cent of freight costs incurred in bringing feed grain into the Maritimes. However, by 1984 assistance only covered 20 per cent of the cost of importing feed. During the same time period freight costs increased fourfold, and this has resulted in unfair feed grain prices in eastern Canada. The cost of producing a hog is now $20 higher in the Maritimes than in Ontario, because of the feed cost difference.
Obviously the survival of the maritime hog industry is threatened, and a heavy burden is also placed upon dairy, poultry, beef, and sheep producers.
Left unattended, we stand to lose 4,000 to 5,000 jobs in our livestock and food processing industries over the next few years. I therefore ask the Government to implement a feed cost equalization plan for imported western and Ontario grain, and for imported protein concentrates. In addition, I would recommend that Agriculture Canada establish a schedule of bonus payments to Maritime producers for high production levels in feed grain and protein crops.



THE ADMINISTRATION


Abram Ernest Epp: Mr. Speaker, an unfortunate tradition which was practised continually by previous Liberal Governments is being continued by the Conservative Government. That tradition, the appointment by the Prime Minister of old friends and supporters to positions of influence and power, was sustained during the Christmas recess when the Prime Minister (Mr. Mulroney) made over 90 appointments, including 24 top level bureaucracy jobs and 66 to other bodies such as boards, commissions, and that dusty old place, the Senate.
Decidedly obvious by their absence were the ethnic appointments the Prime Minister promised he would make. He was quoted as saying:
The Progressive Conservative Party of Canada will appoint competent and qualified men and women who reflect our cultural diversity to positions on government boards, agencies. Crown corporations and the senior Public Service.
Now, more and more Canadians are asking themselves and the Prime Minister: "When?" Indeed, the only appointment of a Canadian from our ethnic communities of over eight million people was that of the Saskatchewan neurologist, Dr. Efstathios Barootes, to the Senate.
The Prime Minister is reportedly furious that he has not been given the names of more members of visible communities in Canada from which to choose. Yet we are told by the President of the Canadian Ethnocultural Council, Mr. Navin Parekh, that he himself submitted 70 resumes of his most qualified members to the Prime Minister's appointment chief. Not one of those candidates has received an appointment to date.
Is the Prime Minister, in his failure to appoint any of these people, saying that they are not qualified to serve Canada? I honestly hope not.


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

January 22, 1985



S O. 21 VIA RAIL REINSTATEMENT OF ATLANTIC LIMITED

Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, it is my pleasure to convey to the Minister of Transport (Mr. Mazan-kowski) and the Government of Canada the profound delight and satisfaction of the people of Fundy-Royal and southern New Brunswick over the reinstatement of VIA Rail's Atlantic Limited.
My constituents, and all those residing in southern New Brunswick, are pleased that the Government has righted a grievous wrong, has listened to their wishes, and has reinstated a service that is efficient, economic and, most important, wanted.
Three and one-half years ago a Government more intent on saving face than saving rail passenger service, ignored the wishes of thousands of Canadians who vigorously and vocally pushed for the reinstatement of this line; ignored the findings of the Progressive Conservative Task Force Report on Passenger Service in Canada; and neatly circumvented the Canadian Transport Commission which may well have prohibited such a cancellation. Its reward for this arrogance and arbitrary action is its much deserved languish in opposition.
Once again, Canadians will enjoy a direct link between Montreal, Saint John, and Halifax. Once again, Maritime rail passenger service will be more efficient and economical for its patrons. And once again Canadians will be provided with a service which they demand.
In November, 1981, I rode the last Atlantic Limited run between Saint John and Montreal. It is my intention to be on the June 1 Atlantic Limited victory run as Canadians celebrate the reinstatement of this noble line.


Some Hon. Members:: Hear, hear!



YOUNG OFFENDERS ACT


Hon. Bob Kaplan (York Centre):: Mr. Speaker, I would like to speak about a rumour, which I am hearing and reading in the media, that relates to the Young Offenders Act. A reform measure was passed in the last Parliament and is being phased into effect under regulation. On April 1 it is supposed to be extended so that all 16 and 17-year olds in Canada will come under the jurisdiction of the Young Offenders Act.
A few months ago Brian Smith, the Attorney General of British Columbia, reported that he had had some success with the Solicitor General (Mr. MacKay) in convincing him to make changes in the legislation. More recently, Gordon Walker, an Ontario Minister, urged the federal Government to delay the coming into effect of the application of that law to 16 and 17-year olds.
I think it is extremely important that the Government stick to the schedule. I hope that the Solicitor General will let the
country know that the Government has no intention of backing away from a schedule which would make a law uniform across this country on April 1. I think it will violate the Charter of Rights and Freedoms, after the equality sections come into effect, if there are different ages across the country.
In addition, I think that by encouraging-through not speaking out on the subject-provincial Governments to believe that there may be a delay, the Minister is perhaps having the effect of failing to see the law brought in as it should be brought in, with all of the arrangements made, and with Governments across the country-


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



AIR SAFETY


Mr. J. R. Ellis (Prince Edward-Hastings):: Mr. Speaker, on October 17, 1984, at approximately 3.30 p.m., a Piper Cheyenne aircraft, No. C-GAPT, crashed on the approach to the Lester B. Pearson International Airport, killing all on board. While any loss of life in a situation such as this is a tragedy, the successful past and the brilliant future of the owner, Grenville Martin, makes it doubly distressing. When, as it now appears from all reports, the pilot had been cheating on his medical examinations, the waste of life is even more senseless.
I ask the Minister of Transport (Mr. Mazankowski) to consider seriously sending a reference to the Standing Committee on Transport asking it, either in whole or through a sub-committee, to investigate and report on the seriousness of this kind of cheating, and to recommend ways in which it might be eliminated.
As a pilot for over 25 years, who is now grounded due to a minor health problem, I am well aware of the struggle that takes place. But if new or tightened regulations will save even one life, it will be well worth the time and effort.



SCIENCE AND TECHNOLOGY


Rodney Edward Murphy: Mr. Speaker, on the number of occasions I have risen in the House to speak about the Government's intention to cancel research projects in both Gimli and Churchill, Manitoba, I have asked both the Prime Minister (Mr. Mulroney) and the Minister of State for Science and Technology (Mr. Siddon) for a reversal of that decision.
In addition to my own pleas I would now like to enter the pleas of professors from the Department of Physics, at the
January 22, 1985

University of Toronto, and also from the University of Calgary. In their letters they state:
Our research is directed to the measurement of trace gases important in climatic problems... I shall have to give up five years' development time so far, plus the time and resources it takes to initiate a world-class research effort... We concurrently a facility which is active and in many respects unique in the world.
[DOT] (UIO)
The abrupt cut-off of this programme means that student degree research will be disrupted, international agreements will be broken, and recent "discovery" science will not be exploited, with a loss of leadership position for Canadian scientists involved in balloon and rocket research.
That is the result of just one government cut-back, Mr. Speaker, a program which costs $1 million per year and which will cost the federal Government $10 million to terminate because it has to restore the site to its natural condition.



INTERNATIONAL YOUTH YEAR


Mr. Gabriel Desjardins (Temiscamingue):: Mr. Speaker, I sincerely deplore the reprehensible behaviour of Opposition Members in the House yesterday when the Minister of State (Youth) (Mrs. Champagne) made a statement concerning International Youth Year.
Mr. Speaker, Members of the Opposition were scornful and mean towards the Minister, yet she responded with calm and dignity. Their cheap and unwarranted attacks concerning the earlier accomplishments of the Minister will never lessen her spirit and determination. The Opposition parties lost a golden opportunity to support the Minister and emphasize the importance of International Youth Year. They should have been cooperative and proved they are prepared to do their utmost to improve the lot of young Canadians, the generations of the future. Unfortunately, as usual they chose to make petty politics by shamelessly accusing the Minister of being responsible for everything that is wrong in our society. What irresponsible behaviour, and just what have our predecessors done for the half-million youths who cannot find jobs in Canada?
Mr. Speaker, I for one call upon the common sense and good judgment of young people who realize that our Minister and our government will work tirelessly to make their future brighter. Henceforth, young people will know who in this House is really defending their interests.


Mr. Rossi:: The Minister has not done anything.



COMMUNICATIONS


Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, I ask the Minister of State for Youth (Mrs. Champagne) and the Minister of Communications (Mr. Masse) to put pressure on the CRTC on behalf of young Canadians so that public hearings may be held on the issue of television programs now available to our teenagers.
The National Film Board is sponsoring a request on behalf of a non-profit foundation which includes youth associations and members of the public for the setting up of a television service for young people.
This request has just been denied by the CRTC which also rules out the possibility for the public to take part in the debate on the future of our youth-oriented television services.
I therefore ask both Ministers to take the future of our young people in hand and to allow the various groups of young people and adults to take part in the CRTC hearings. The time has come to show our interest for better Canadian television programming for young viewers between the ages of 12 and 17.



CANADIAN BROADCASTING CORPORATION


Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, it used to be that one would rise in the House on a matter of urgent and pressing necessity.
The year 1985 is International Youth Year. It is a year dedicated to the young people of the world, a year to enhance youth opportunities in Canada and around the world, to judge and decide on matters concerning themselves as individuals. As a young Member of this House I have fond memories of many household words like Mickey Mouse, Donald Duck, Snow White, Buck Rogers, and many other imported fictional characters. As someone who grew up during the "me" generation but maintained an unselfish attitude towards sharing what was right and good, I think it is without question in poor judgment, poor taste, and downright selfish that the CBC has coincidentally-and I underline the word "coincidentally"- cancelled The Friendly Giant.
Household words like Rusty, Jerome, and Friendly will be around for a while as reruns, but the Canadian youth of tomorrow will be deprived of an unmistakable element of pure Canadian goodness. I think I am speaking for hundreds of thousands of Canadians under 40, and for future generations, when I say that we have so few good Canadian fictional characters that we should keep what we have. Would the people of Quebec cancel Bonhomme, or would Montrealers do in Youppi? Let us reopen the drawbridge to the castle of

January 22, 1985
Oral Questions
warmth and friendship, and keep Friendly, Rusty, and Jerome any action for partisan or other reasons in this country which in business for generations to come.	rnay throw those talks off the rails.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, I regret that the Prime Minister is not here this afternoon. He did not respond to my questions yesterday afternoon, and I hoped that we could recommence a dialogue. In his absence I would like to direct a question to the Deputy Prime Minister, who can perhaps reply on behalf of the Government.
I believe the Hon. Member for Yukon knows my commitment to a strong defence posture for Canada. I believe he also understands the commitment of the Party I lead to the principles of the North Atlantic Treaty Organization. However, we are also committed to an independent Canadian foreign policy, particularly in pursuit of peace. Would the Deputy Prime Minister accept our request, made in this House yesterday, to call upon the United States to agree to placing on the agenda of the superpowers in their arms control discussions the item of the space based missile defence system called the Strategic Defence Initiative of the U.S., popularly known as star wars? Will he review with his colleagues and the Prime Minister the position of the Canadian Government, in order to urge that that vital element in arms control be placed on the agenda for discussion?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, a similar proposal was put forward by the Hon. Member for Winnipeg-Fort Garry prior to the beginning of those talks when he suggested it would be useful for Canada to suggest items for the agenda between the superpowers. It was our conclusion then that it would not be helpful to the success of the negotiations to have people who were not at the table inserting themselves in the procedure of negotiations. That judgment has proven to be correct, and the freedom from that kind of insertion from outside was undoubtedly one of the factors which led to the success of the first round of the Geneva talks. I think the reasoning that was successful before, and allowed the talks to get off to a good beginning, stands now and will hold the best promise of success.
As i said yesterday, in our view the most important development internationally in recent months has been that the superpowers have come together to talk. We do not want to take


John Napier Turner: I would have hoped that the Prime Minister would eventually address himself to this very important subject, which is not a partisan subject. It is advanced on behalf of Canadians as members of the human race in support of a very important peace initiative.


POLICY REVIEW
John Napier Turner: Mr. Speaker, the Secretary of State for External Affairs has purported to have undertaken a review of the foreign policy of this country, on behalf of the Prime Minister, including arms control. I ask him where is that particular research or report? Is there anything in it that would justify the inconsistency in the Canadian Government's position on the peace initiative? Will he publish this report so it can become a vehicle for Canadian public debate?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, I have always respected the respect for Parliament of the Right Hon. Leader of the Opposition. I knew that he would be putting to me today questions that would relate to my capacity as a Minister of the Crown replying on behalf of the Government. Consequently I assume that the report to which he is referring is the report we have promised that would be the basis of parliamentary study, the first full parliamentary study, by the way, of Canadian international relations, in a long time, if not ever. That is under preparation and I expect to be able to lay it before the House of Commons within a matter of weeks. I look forward to extensive public debate in the country and in this Chamber on the appropriate positions Canada should take on various aspects of our international relations.


FORMER PRIME MINISTER'S PEACE INITIATIVE
John Napier Turner: What we are trying to get at here, knowing the Minister's previous public position on this subject, is whether there is anything in this report or in his further investigation of the situation that would have persuaded him to convince the Prime Minister and the Government to discontinue, in effect, the important peace initiative of my predecessor, Pierre Elliott Trudeau. This would render what I believe to be a very inconsistent position of getting all the available subjects and potential weapons systems, offensive and defensive, on the agenda for discussion by the two major superpowers.
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, I frankly do not think it would be particularly productive at this point to discuss the pros and cons of the initiatives taken by the predecessor of the Right Hon. Leader of the Opposition. I would like to make the point that he was taking his initiatives at a time when there were no negotiations, the superpowers were not meeting together, and

there was a stalemate. We are in a very different situation now. That dangerous stalemate has ended. The superpowers are together and are talking. It is the purpose of the Government, and I would hope it is the purpose of the Leader of the Opposition and of all Members in the House of Commons, to do everything we can to ensure that those talks succeed, including resisting whatever temptations might arise to take actions in Canada which would have the effect of putting those talks off the rails.


MILITARIZATION OF OUTER SPACE
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I can say on behalf of our Party that we have no reservation at all in endorsing the objective of having those arms talks succeed. We are concerned about what this country can do to help them succeed. I would like to refer to the Hon. Minister's statement made to the United Nations on September 25 last when he said that multilateral efforts, led and encouraged by middle-sized powers, can put specific workable ideas on the agenda and that "we shall encourage the superpowers to ban weapons in outer space". That was confirmed in a similar statement to the U.N. by the Ambassador for Disarmament, Mr. Roche, who said that we call for all urgent efforts toward preventing an arms race in outer space.
If the Minister was prepared in September to call for a major urging of the superpowers to stop militarization in outer space, we now have a direct reversal. Is that reversal because of discussions held between the Minister and U.S. officials? Were we directly requested to change our position?


Charles Joseph Clark: Mr. Speaker, to answer the suggestion that was smuggled into Question Period directly, no, we were not instructed to do anything by the Soviet Union, the United States, or anyone else. We have come to a judgment as an independent and sovereign Government interested in advancing the cause of peace, and contributing what we can to the stopping of the arms race. We have made an independent judgment that it would not be helpful for us, or indeed for other countries, to try to put items on the agenda that might have the effect of turning the successful arms talks off the rails. That, I hope, is a position which would commend itself to the Parliament of Canada, as I am sure it has commended itself to the people of Canada.
As to the preface of the Hon. Member's question, he quotes a speech I made on behalf of Canada in September. In September the superpowers were not at the table. In September there was a stalemate in the arms talks. That stalemate has ended. We do not want to take action that would return the world to stalemate.


Lloyd Axworthy: Mr. Speaker, that was one of the most convoluted descriptions of how the arms control talks work.
Oral Questions GOVERNMENT POSITION


Lloyd Axworthy: How does the Minister explain that somehow we will end up in stalemate if the other countries and Governments of the world express, on behalf of their people, the fact that we do not want an arms race in space, which is what the SDI Program would bring about? Is it not the responsibility of the Government, confirmed by the consultations in the Roche discussions, which I would ask the Minister to confirm, to take a strong stand against any effort or initiative to have any form of military application in outer space? That would represent the interests and sentiments of Canadians, and it would be useful for the great powers to know what those interests and sentiments are. Why is the Government insisting on going against the interests and sentiments of Canadians?


Charles Joseph Clark: Mr. Speaker, there is a natural partisan temptation to try to have it both ways on this question. I suggest that this matter is too important to the country and the world to play politics with.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: The Member for Winnipeg-Fort Garry is suggesting that he would not want to interfere with the process that is working now to lead toward arms control. Then he proposes specific means to interfere. We do not propose to act in such an inconsistent fashion.


Some Hon. Members:: Hear, hear!


NUCLEAR ARMAMENTS
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, the Minister will guess that the Liberals are preparing to refuse Cruise missile testing. They are just preparing the ground for that.


Some Hon. Members:: Oh, oh!


Pauline Jewett: Since we are not getting anywhere with the Minister on star wars, which he has obviously accepted completely, I will pursue with him the question of the nuclear deployment plans of the United States. Is he, unlike his colleague, the Minister of National Defence, aware that the most recent plan was signed by the President of the United States in March of 1984? Is he aware that the latest plan, which involves sending nuclear depth bombs to the two bases in Canada, was not signed in 1975 but 1984? Is he also aware that Norway, Denmark, and indeed Japan, have declined to be included from now on in any of the U.S. nuclear deployment plans abroad? Is he now prepared to agree that to be consulted about it at times of crisis is far too late, because we would have to say yes?

January 22, 1985
Oral Questions


Charles Joseph Clark: Mr. Speaker, I am aware that the Government of Canada has a firm guarantee from the United States administration that there would be consultation before any actions were taken which involved Canadian territory. What is more important, the Government of Canada would have the right to refuse any plan which might be conceived which would affect Canadian territory.
With respect to the Hon. Member's preface, I am acutely interested in watching the shifting positions opposite, whether on the Cruise or on NATO.


Some Hon. Members:: Hear, hear!


CANADIAN POLICY ON NUCLEAR WEAPONS
Pauline Jewett: I thank the Minister for his interest. Are we to believe or not to believe the Prime Minister who, in July of this year, when announcing the removal of the Genie air-to-air missiles from Canadian soil, said that there would not be further nuclear weapons on Canadian soil? Was the Prime Minister expressing a view, such as Denmark and Norway have done, that there will not be nuclear weapons on Canadian soil?


Charles Joseph Clark: The policy of the Government of Canada is, as it has been, that there will not be nuclear weapons on Canadian soil. The guarantee of that is that we have sought and received an assurance from the United States that before any plans what they might have, or might develop, which would affect Canadian territory are implemented, there would not only be consultation but there would be the right to refuse in Canada. If it were considered in the interest of Canada, the Government would exercise that right to refuse. It is very simple.


REGIONAL INDUSTRIAL EXPANSION
Hon. Jean Lapierre (Shefford):: Mr. Speaker, I have a question for the Hon. Minister of Regional Industrial Expansion (Mr. Stevens).
The medias have reported that the Minister is not at all surprised by the closedown decided by Wabasso and that he has even predicted the same fate for many other communities.
I would therefore like to ask the Minister how he can relate his own defeatist comments with those of his leader who said in Sherbrooke last July 26 that these were certainly not sunset industries and also made 10 commitments in order to ensure the stability and development of the industry. Who was speaking the truth? Do the promises of his leader no longer mean anything or does the Minister intend to take the promised action immediately to save the Saint-Maurice area?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, let me assure the Hon. Member that the words that he attributes to me are not accurate. The fact is that we are deeply concerned about the closedown of the Wabasso Company. SERB has been taking steps to try to ensure that whatever can be salvaged from the closedown, such as what Dominion Textile is doing, may be furthered.
In specific terms, Shawinigan and Three Rivers should receive whatever aid is necessary to ensure that the unemployment situation, that will only increase as a result of the closedown, will be relieved as soon as possible.


WABASSO-GOVERNMENT POSITION
Jean-C. Lapierre: Mr. Speaker, I am happy to see that the Minister is now aware of the situation. Since he has received the Vachon report and knows that the CIRB has already invested $5.3 million in Wabasso, will the Minister ensure that the company will not dispose of its assets in a piecemeal fashion and at a discount before a general proposal is made by the recovery committee to save as many jobs as possible?


Sinclair McKnight Stevens: Mr. Speaker, again I can assure the Hon. Member that our Department is looking at this situation on a daily basis. As far as we are concerned, the moneys have been expended in the earnest attempt to keep Wabasso solvent and viable are there. Perhaps they have not produced the result that we hoped for, as the company lost $7 million to $8 million last year and we are now faced with the unfortunate situation to which the Hon. Member is referring. However, let me assure him that we will do all that we can to minimize the effect on the unemployed who will come on the market as a result of this closedown.


FINANCE
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of Finance. The Government has expressed a concern about job creation in the coming months. At the same time the Minister of Finance indicated in the House yesterday that there would be no major change in corporate tax policy in the forthcoming Budget.
The Minister said this in the knowledge that a government report, which I released in the House, and which the Minister has had time to read, indicates that current corporate tax policy is the most costly for job creation, and also has the worst negative impact on the deficit. If the Government is
January 22, 1985

concerned about job creation and fairness, why is the Government not looking at reform of the corporate tax system in the Budget?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, first let me say that that report to which the Hon. Member refers is not a government report. It was prepared for the previous Government. The first time I saw it was when it was handed to me outside the House.
I want to draw his attention to some of the weaknesses in the report that was produced. It is a very short term outlook. In the November 8 statement we have set forth some long term policies that will result in permanent job creation that will give Canadians confidence which will be there for some years ahead, and on which they can plan.
In response to the specific question about tax reform, there will not be a major tax reform that will be disruptive and undermine the small business community in particular. However, there have been, and will continue to be, specific initiatives taken by the Government to remove the inequities in the tax system as we identify these, and I would welcome any suggestions which the Hon. Member has.


REQUEST FOR POLICY CHANGES
John Edward Broadbent: Mr. Speaker, it is not only the New Democratic Party of Canada but such different groups as the Auditor General and a number of businessmen, including the head of one of Canada's chartered banks, if I remember correctly, who have indicated that there is grotesque waste of money coming from the taxpayers of Canada because there is no rational corporate tax policy. It is being thrown out in the rather naive hope that it will be used to create jobs. That is the kind of documented evidence that has been produced by various people.
In light of this, and because he has not hesitated to slash $4 billion from programs that affect ordinary people, why will the Minister not have a tough-minded look at this corporate tax polilcy, and introduce changes that insist if a corporation gets a tax break it must produce jobs in order to get that tax break?


Michael Holcombe Wilson: Mr. Speaker, let me make it quite clear to the Hon. Member that we are looking at individual aspects of the tax system and we are making changes. Last year we made a change on the scientific research tax credit quick flip. That was cancelled, and it was widely acknowledged that that should have been cancelled. There will be additional questions as we identify them.
I stress the point that I made a minute ago, that if we embark on a major tax reform it will be enormously disruptive and will undermine the confidence of the small business community. It is the small business community that I believe Members of the House are looking to, to create the jobs on a permanent basis, not the short term jobs from the job creation programs that the Hon. Member would like to have. Those
Oral Questions
short term jobs will not create confidence or long term growth for our country.


DISTRIBUTION OF TAX REVENUES TO CORPORATIONS
John Edward Broadbent: Mr. Speaker, the Minister knows, or should know, that the small business community pays a much higher effective tax rate than do big corporations, and the same small business community does not benefit from the corporate tax breaks, most of which goes to big companies. If he is interested in dealing with small business in an effective and creative way, he will have our support.
We are asking the Minister to call into question, in a fair and tough-minded way, the mindless handout of millions of the tax dollars of ordinary people that are not going to create jobs, but only create excess profits for many companies that don't deserve them. Will he change this process?


Michael Holcombe Wilson: Mr. Speaker, I have indicated that we are looking at a wide range of matters in the course of trying to assess the effectiveness of the individual tax incentives that are there. We will not have a major disruptive tax reform that the Hon. Member seems to be calling for. I would remind him that the task force headed by the Deputy Prime Minister is studying each one of these tax incentives on an individual basis, with the help of a wide range of people from the private sector, in order to identify where we can make changes. But it will be in a careful, non disruptive way, unlike the way the Hon. Member proposes.


TRANSPORT
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, in the absence of the Minister of Transport, my question is directed to the Minister of State (Transport). The Minister is no doubt aware that if we are to have an efficient and cost-effective passenger transport system, we must have modern maintenance centres as well as modern equipment. As far as transport policies are concerned, Member of the Progressive Conservative Party have been referring repeatedly to a national passenger transportation policy. My question is as follows: How do the Government and the Minister of Transport intend to set up a national policy unless they immediately start modernizing equipment and building maintenance centres in Montreal, Halifax and Winnipeg?


Hon. Benoit Bouchard (Minister of State (Transport)):: Mr. Speaker, the Hon. Member for Laval-des-Rapides associates maintenance centres with modernizing equipment. Last week at a press conference, the Government announced it would be reinstating six railway routes, which will guarantee the na-

January 22, 1985
Oral Questions
tional dimension of VIA Rail. We intend to evaluate very carefully the plans for construction of a maintenance centre in Montreal. We have already announced that the Winnipeg and Halifax centres will be scrapped. We will conduct this evaluation with the action group, which is now doing the necessary studies. On their recommendation we can assure the Hon. Member that the VIA Rail network will be national and that we will meet the demands of-


Raymond Garneau: I have a supplementary, Mr. Speaker.
The recent statement by the Minister of Transport is like having the icing without the cake. If we want a national railway service, we need equipment but we also need maintenance centres. How does the Minister of Transport intend to make this a national policy if he concentrates all maintenance operations in the Toronto region?


Benoît Bouchard: Mr. Speaker, the Government is not putting icing on a non-existent cake. We have identified equipment as a major problem, and that is what Canadians have told us. To us it is not a matter of Montreal or Toronto. It is a matter of providing a service for Canadians no more and no less.


FINANCE
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, my question is for the Minister of Finance. Given that within three months of the September election the Minister was able to move to make substantial cuts in the area of social policy, environmental policy, and in other related job policies, why does it take longer than seven months for the Government to conduct a study which would lead it to the inevitable conclusion that the least effective way of creating jobs in Canada is to continue with the corporate tax give-aways?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member forgot to mention also that in those first three or four months we created 100,000 jobs.


Some Hon. Members:: Hear, hear!


Mr. Blackburn (Brant):: You sound like the Liberals of a year ago.


Michael Holcombe Wilson: Let me respond to the specific question. If I can put it in somewhat different words, the Member has asked me why we addressed the cash expenditures before the tax expenditures. The cash expenditures are very direct. They are very easy to measure and there are not the complexities or the inter-relationships that there are in the tax system. It is those complexities and the inter-relationships between different elements of the tax system that have to be
studied very carefully, and with the assistance of those in the private sector who are directly affected by them. That is what we intend to do after we have identified the key areas where we think we can attack the tax expenditures program.


Ian Deans: Let me say quite simply to the Minister, Mr. Speaker, that it may well be there are 100,000 new jobs in the economy, but there are still 1.5 million people unemployed.


REQUEST THAT MINISTER CHANGE STRUCTURE
Ian Deans: I want to ask the
Minister of Finance another question. Given that it has been proven quite conclusively that corporate tax give-aways not directly tied to job creation are the most costly way to try to create employment for people in Canada, why does the Minister not move now to tie tax concessions and corporate tax relief to the creation of jobs directly?


Michael Holcombe Wilson: Mr. Speaker, let me make it quite clear to the Hon. Member that we are not happy that there are still over 1.3 million people out of jobs. We have addressed that problem very clearly in the agenda paper issued on November 8. There is a clear economic program there, but I want to draw a distinction for the Hon. Member. The programs he is advocating for direct job creation are short-term programs.


John Edward Broadbent: No, we are not.


Ian Deans: That is not what I am talking about.


Michael Holcombe Wilson: They are short-term in nature. They do not have a long-lasting effect of assisting in the strengthening of the economy.


Ian Deans: That is not what we are saying.


Michael Holcombe Wilson: That is what we are trying to avoid with the longer term approach that will create longterm jobs, a more competitive economy and, therefore, a permanent reduction in the level of unemployment.


PETRO-CANADA ROLE OF CORPORATION
Mr. Vincent Della Noce (Duvernay):: Mr. Speaker, I have a question for my colleague, the Hon. Minister for Energy, Mines and Resources.
During the recent gas price samba in Quebec, a spokesman for Petro-Canada was reported in La Presse of January 10, 1985, as having said that last summer, Petro-Canada sent 68 million $1 coupons to car owners, for a stated cost of $10 million in Quebec. My question is this, Mr. Speaker.
January 22, 1985

For a Crown corporation, a consumer-oriented attitude might be better. Is Petro-Canada changing over to a new mandate as Petro Burger Canada?


Hon. Pat Carney (Minister of Energy, Mines and Resources):: Mr. Speaker, in answer to the Hon. Member's question I could point out that the particular marketing plan he has brought forward was adopted last July when Petro-Canada was under the management of a board of directors, most of whom we have since replaced.


Some Hon. Members:: Hear, hear!


Pat Carney: Our Government's policy toward Crown corporations is that they are to act as if they are in the private sector. In that regard I would suggest that if the Hon. Member does not like the marketing practices of Petro-Canada, he should simply ask its officers: "Where's the beef?"


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


WILDLIFE
Hon. Charles Caccia (Davenport):: Mr. Speaker, I wish to address my question to the Minister of the Environment. It flows from press reports that Canada's provinces and territories told the Minister of the Environment last week that they cannot take over responsibility for wildlife research which fell victim to her budget cuts. The Minister, at the Fisheries and Forestry Committee meeting on December 20, said:
-the cutbacks in the Department of the Environment reflect our approach and our philosophy. Provinces are our true partners and able to assume their own responsibilities.
Will the Minister now indicate to this House who will undertake the wildlife research programs that were axed which the provinces have declared they cannot take over?


Hon. Suzanne Blais-Grenier (Minister of the Environment):: Mr. Speaker, at the ministerial conference on wildlife last week, the issue of research was considered. We realized that there was a consensus and all provincial ministers agreed with me that we needed much more toxicological research in Canada but that the definition of priorities was in a state of chaos. And we immediately created a subcommittee in order to define more accurately our research priorities. And I am convinced that as a result of that process, toxicological research will be intensified and more precisely targeted to meet our real problems.
Oral Questions


REQUEST FOR RESTORATION
Charles L. Caccia: Mr. Speaker, I have a supplementary question for the Minister of the Environment. Evidently the Minister does not seem to take into account the statement made by her colleague in Manitoba. Therefore, 1 must ask the Minister, in light of the rejection on the part of her provincial colleagues of her pie-in-the-sky assumption that provincial Ministers will assume this cost, will she undertake to return to Cabinet and continue, or initiate efforts so that the research programs undertaken by the Canadian Wildlife Service will be restored?
[ Translation]


Suzanne Blais-Grenier: Mr. Speaker, the comments of my Manitoban counterpart have been taken out of context to a certain extent. Indeed, he told me that the federal government should not expect that all cutbacks will be made up by the provinces because his own province and other provinces had to reduce their expenditures the same way the federal government has to. In view of that, we agreed with all other provincial ministers to meet more often to improve the management of our shared wildlife responsibilities. That will certainly be in the interests of the Canadian people.


FINANCE
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, my question is for the Minister of Finance. The Minister has said that corporate tax reform is too complex for us to expect any progress toward fair taxation in the April budget. Would the Minister not agree that one of the most complex issues of our time is the ecological interrelationships which are disturbed and interfered with by various forms of human activity? If he does, will he, out of respect for genuine complexity, order a moratorium on these simplistic cuts in wildlife research and environmental monitoring, cuts which many in his own caucus have criticized? Would he tell us why so swift in this complex area, and why so slow to challenge inequities in corporate taxation?


Michael Holcombe Wilson: Mr. Speaker, 1 think the Hon. Member neglected to listen to my previous answers. We are moving in the area of corporate tax reform. We are looking individually at specific items, but we will not embark upon the major tax reform which seems to be the objective of his Leader. I say that with a clear understanding, having discussed this matter with a number of people in the small business community who say that that type of tax reform
January 22, 1985

Oral Questions
will be disruptive and will cause them to be less effective in creating the jobs we all want.


REQUEST THAT MINISTER RECONSIDER
William Alexander (Bill) Blaikie: Mr. Speaker, could the Minister expand his imagination to the point of seeing that a fiscal deficit is not the only kind of deficit, and that there can be such a thing as mortgaging our future in an environmental way that could never be paid back? If he can expand his imagination to that point, would he please reconsider the short-sighted cuts in the wildlife research and environmental monitoring areas, and show some sensitivity not only to the criticisms on this side of the House but to his own caucus?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member does not have a monopoly on all the ideas in the world. We are saying that in our approach to deficit management and expenditure control we are taking into account as many things as we can in arriving at the objective. We have looked carefully at the effects of policies as they relate to the environment. My colleague has addressed these with great eloquence in the House, not least of which today. I say to him that there can be many other ways of achieving the same goal rather than simply throwing money at the problem as the Hon. Member would suggest we do.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: You are throwing it at the corporations; that is the point.


Mr. Speaker:: Order. The Hon. Member for Moose Jaw.


FARM CREDIT CORPORATION
Mr. Bill Gottselig (Moose Jaw):: Mr. Speaker, my question is directed to the Hon. Minister of Agriculture. It was widely reported last week in western Canada that the Farm Credit Corporation was taking over ownership of large amounts of land as a result of the financial crisis in agriculture. Will the Minister tell the House whether the intent of the FCC is to lease this land back to the previous owners for a specified period of time, with a buy-back clause, or to establish a land-bank system?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, perhaps I could clear the air if I answered the second part of the question first. It is not the intention of the Farm Credit Corporation, it is not my intention, nor the intention of this Government to establish a land-banking scheme or system.
I think the confusion is in the fact that there was some misunderstanding and perhaps some misrepresentation-not intentional, I am sure-of the internal study which is going on within FCC today. Indeed, we are looking at ways and means
to amend the Act and to change the policy to adapt to the serious situation facing the Corporation and Canadian farmers.


VISIBLE MINORITIES
Sergio Marchi: Mr. Speaker, my question is directed to the Minister of State for Multiculturalism. It relates to the serious breakdown in negotiations with the Japanese community. The Minister will know that the Japa-nese-Canadian Association is very disturbed about the two-day process and about the perception that there might be some unilateral action. Therefore, is he prepared to abandon the rush to meet his own Government's timetable, and perhaps return to the table to resume negotiations in a very genuine and structured manner?


Hon. Jack Murta (Minister of State (Multiculturalism)):: Mr. Speaker, in reply to the Hon. Member I would say that in view of his Government's past history in that regard I would expect him to be applauding any initiatives we would take, or any discussions we would have with the Japanese-Canadian community.
We have had what I consider to be very good and fruitful discussions with the Japanese-Canadian community, the leadership within that community. I will consult further with my Cabinet colleagues on the matter. As I have said before to the Hon. Member in the House, he will be one of the first to know the outcome of that discussion.


REQUEST THAT NEGOTIATIONS CONTINUE
Sergio Marchi: Mr. Speaker, the Minister seems to dwell on the past. According to the Association, discussions have not been fruitful. There still are differences. The Minister implied that there was a wide gap. Therefore I appeal to his sensitivity to this issue. Will he assure the Japanese community that negotiations around the table will continue in a structured way until a modification or agreement has been attained, rather than have one of the two parties leaving the table very unsatisfied?


Jack Burnett Murta: Mr. Speaker, the Hon. Member's information comes from news reports, basically from second-hand reports. Over the course of the last number of weeks we have had what I consider to be very positive discussions with this important community, in order to try to settle what many people believe-certainly the majority of people in this country-is a blot against the rights of a particular group of people. I believe the outcome of our discussions with them, and what we hopefully do collectively on the floor of the House of Com-
January 22, 1985

mons, will do credit not only to ourselves but to Japanese Canadians.


Mr. Speaker:: Order, with great respect.


CANADA MORTGAGE AND HOUSING CORPORATION
Mr. Dan Heap (Spadina):: Mr. Speaker, my question is directed to the Minister responsible for CMHC who is responsible for housing. Before Christmas he promised not to cut co-op housing. Why did he permit Canada Mortgage and Housing Corporation to cancel housing unit allocations committed to five Toronto co-operatives and non-profits which had been told firmly in mid-December that they met all CMHC requirements? They were cancelled without warning of a change of rules on the last possible day, December 31.


Hon. Bill Mcknight (Minister of Labour):: Mr. Speaker, I draw the Hon. Member's attention to a letter he has in his possession, signed by me. It explains that there was no change in criteria, no change in policy, and that the policy which Canada Mortgage and Housing used was the same one it used for the last three years. The difference this year is that there was a back up of committed co-op non-profit and private non-profit units to go ahead on December 31 because some units had not received municipal approval, some units had not received their drawings, and some units did not have firm prices and therefore did not meet the criteria established by CMHC over the last three years.


DISTRIBUTION OF UNIT ALLOCATIONS
Daniel James Macdonnell Heap: Mr. Speaker, how can the Minister justify the fact that he and CMHC gave more than 500 of the left over unit allocations intended for community based co-operative and non-profit groups not to other non-profit groups which were ready to go in Georgetown and Mississauga, but to one favoured private developer who is linked to the DelZotto brothers, on the last possible day of the allocation year, December 31 ?


William Hunter (Bill) McKnight: Mr. Speaker, again I draw to the attention of the Hon. Member that the units which were available were not exclusively for co-ops, not exclusively for public non-profit, and not exclusively for private non-profit.
It is my understanding that throughout the rest of Canada the Corporation could not find other units put by other groups that were available and could start under the criteria of a hard commitment on December 31. The Hon. Member shakes his head. I would ask him to assist me by giving me the names of those groups which were turned down, who met the criteria of
Petitions
Canada Mortgage and Housing on December 31, 1984. I ask him to assist me in that way.


CLERK OF PETITION'S REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Monday, January 21, 1985, meet the requirements of the Standing Orders as to form.



ROUTINE PROCEEDINGS


Mr. Bill Domm (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, I have in my hand a petition that was sponsored and circulated by Mrs. Ruth Ross whose husband, Ontario Provincial Police Constable Jack Ross, was tragically murdered while on duty on October 7, 1984, Thanksgiving weekend. Mrs. Ross, her family and friends, managed to obtain 14,277 signatures on their petition which demands that Parliament deal immediately and effectively with the question of capital punishment either by a free vote or a national referendum. I challenge police officers across Canada. If one widowed police officer's wife can collect-


Mr. Speaker:: Order. The Hon. Member knows that I have several times said that the purpose at this moment is to introduce the petition. I understand how seriously the Member takes the subject and I understand its importance, but I do not think it would be wise for me to depart from that rule, with great respect.


Mr. Doug Lewis (Parliamentary Secretary to President of the Treasury Board):: Mr. Speaker, I have the honour to present a petition to this House on behalf of some 1,700 residents of the riding of Simcoe North and other ridings in Canada who request that the closing of the Wye Marsh Wildlife Interpretation Centre in Midland, Ontario, be reversed.


Lloyd Axworthy: Mr. Speaker, I have the privilege of presenting a petition on behalf of over 1,000 residents of the City of Winnipeg who beseech this House for some redress of a serious cutback and setback to

January 22, 1985
Petitions
scientific development in our city, namely the cutback of the $41 million National Research Technology Centre. I hope that the House will be able to provide some redress as this is very important to the future of western Canada and the future of technology in Canada.


[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, I have the honour to present these petitions from many concerned Canadians about the situation in Central America. They urge the Canadian Government to state publicly and clearly its unequivocal opposition to United States' military intervention in Central America, including, one, violations in Nicaragua's territory; two, direct U.S. involvement and aggression against Nicaragua by supporting Contra attacks; three, escalation of United States military presence in El Savador; and four, direct U.S. military involvement in a broader regional war.
William Alexander (Bill) Blaikie: Mr. Speaker, I have the honour to present a petition signed by residents of the riding of Swift Current-Maple Creek, in the Province of Saskatchewan, who are protesting the closing of the Prairie Wildlife Interpretation Centre and the reduction of opportunity for students and the public generally to learn more about their wildlife heritage.


Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I have the honour to present a petition from numerous residents of Hamilton, Ontario, who are protesting against the United States escalating the war in Central America, specifically by increasing military aid from $44 million in 1981 to over $50 million in 1983. They pray that Canada speak out against American support of the Contra attacks on Nicaragua and the violations of international territory, the violations of the territory of Nicaragua as well as the escalation of the military presence. I present that petition.


Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, I have the honour to present on behalf of some 700 constituents in my riding of Ottawa Centre a petition calling for the Government of Canada to state clearly and publicly its complete opposition to the U.S. military intervention in Central America, including support for the Contras, the mining of harbours in Nicaragua and the U.S. military presence in El Salvador.


Mr. Maurice Foster (Algoma):: Mr. Speaker, I have the honour to present a petition from a number of constituents in
Algoma who are protesting the Government's plan to cut back on our universal social programs and are calling on the House of Commons and the Parliament of Canada to ensure that no legislation be enacted which would have the effect of taking away from the citizens of Canada universal social security programs.


Daniel James Macdonnell Heap: Mr. Speaker, I have the honour to present a petition from some 550 people urging this House to urge the United States to cease its aggression against Nicaragua, its mining of the harbours, its aggressive military presence in El Salvador and its broadening of the regional war to places such as Guatemala. And as in duty bound, your petitioners will ever pray.


Don Boudria: Mr. Speaker, I beg leave to present a petition on behalf of the residents of the community of Orleans in my constituency asking for improvements in the door-to-door mail service in the Town of Orleans. It is signed by 330 constituents.


Daniel James Macdonnell Heap: Mr. Speaker, I have the honour to present a petition from a number of residents of the City of Toronto who call upon this Parliament to enact legislation to ensure that the income tax will be revised so that the tax breaks to large corporations are given only in consideration for their guarantee to provide jobs, and that the number of jobs created will be reported every quarter to Parliament. And as in duty bound, your petitioners will ever pray.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Paul Wyatt Dick: Mr. Speaker, the following questions will be answered today: Nos. 7, 43, 74, 108, 129 and 137.


Mr. McGrath: 1.	Was the report of the Royal Commission on the loss of the drill rig Ocean Ranger made public in August, 1984 and, if so, were recommendations made dealing with Search and Rescue off the coast of Newfoundland?
2.	Will Canada's Search and Rescue Capability Upgrade Program be completed and, if so, on what date?
January 22, 1985

3.	In the event of rig evacuation under emergency conditions, what recommendations, if any, were made dealing with the training of key personnel onshore and offshore of SAREC AND RCC?
4.	Is it the government's intention to deploy SAR helicopters to St. John's Newfoundland where they will be closer to offshore activity and, if not, for what reason?


Mr. Robert Wenman (Parliamentary Secretary to Minister of National Defence):: 1. Yes, and six recommendations were made concerning Search and Rescue.
2.	The Search and Rescue Capability Update Program (SARCUP) was completed in June, 1984. Three additional Voyageur helicopters and being upgraded to SARCUP standards with an estimated completion date of June, 1986.
3.	National and Regional Major Marine Disaster Search and Rescue Contingency Plans have been developed. Contingency plans, developed by companies involved in offshore exploration, and reviewed by DND, CCG, and COGLA officials are tested in joint exercises with the RCC, SAREC, SAR Squadrons, industry on shore, on drilling rigs and on supply vessels.
4.	A Canadian Forces SAR helicopter will be deployed on a routine basis from its base in Gander to St. John's during the winter months.


Mr. Howie: On (a) January 1, 1983 (b) January 1, 1984 by rank, what number of persons were serving in the regular force of the Canadian Armed Forces?


Robert Lloyd Wenman: January 1,1983	January 1,1984
Total All Ranks	82,207	81,701Total Officers	15,912	16,835General	2	3Lieutenant-General	8	10Major-General	26	27Brigadier-General	80	84Colonel	341	337Lieutenant-Colonel	976	992Major	3,099	3,208Captain	6,181	6,410Lieutenant	1,658	1,751Second-Lieutenant	1,004	1,138Officer Cadet	2,537	2,875Total Other Ranks	66,295	64,866Chief Warrant Officer	836	854Master Warrant Officer	2,272	2,278Warrant Officer	4,522	4,552Sergeant	10,096	10,206Master Corporal	11,226	11,612Corporal	14,955	16,913Private (Trained)	6,071	6,975Private (Basic)	15,435	11,397Private (Recruit)	882	79
Order Paper Questions DND-INCREASE IN EXPENDITURES


Mr. McKinnon: What is the increase in real terms in the Department of National Defence's expenditures, including statutory costs and expressed in percentages, for each fiscal year 1970-71 to 1983-84?


Robert Lloyd Wenman: Fiscal Year	Real Increase/!Decrease) as a Percentage
1970/71	(6.7)
1971/72	(2.8)
1972/73	(5.4)
1973/74	4.2
1974/75	(4.3)
1975/76	4.0
1976/77	2.5
1977/78	3.0
1978/79	2.5
1979/80	(0.2)
1980/81	3.2
1981/82	3.1
1982/83	5.3
1983/84	7.1


Mr. de Jong: 1.	Did the Department of National Revenue undertake or did it have undertaken for it any studies as to the matter of the implementation and administration of a value added tax in Canada and, if so (a) did such studies examine the federal jurisdiction only or did it also examine the tax with respect to its application on a federal-provincial scale (b) how many were completed and, in each case, on what date?
2.	Are any studies presently under way and, if so (a) how many (b) who are the participants (c) what is the estimated cost, in each case?
3.	Flave any studies been completed and, if so, will they be tabled or released to the public in some other manner?


Hon. Perrin Beatty (Minister of National Revenue):: The
Department of National Revenue has not undertaken a formal study relative to the implementation and administration of a value added tax in Canada.
Officials of the Department are co-operating with officials of the Department of Finance who are presently undertaking a study of the value added tax. (See reply to question No. 107 answered January 21, 1985.)
As indicated in (1) above, the Department has not undertaken a study of the value added tax.


Mr. Rodriguez: 1.	From April 1, 1984 to September 17, 1984, what was the amount spent in the departmental office of the Minister Responsible for the Status of Women?
2.	Were the budgetary guidelines exceeded and, if so, by what amount?
3.	For the same period, how many exempt staff, including those on personal services contracts, were employed by the Minister and what were their names, date of appointment and salary?


Hon. Walter McLean (Secretary of State):: 1. The operational expenditures for the period of April 1, 1984 to Septem-

January 22, 1985
Investment Canada Act
ber 17, 1984, for the departmental office of the Minister responsible for the Status of Women were $33,486.
2. No, the budgetary guidelines were not exceeded.
^	Name	Date	SalaryJane Youngson	October 3, 1983	up to 536,729Rebecca Butovski	October 3, 1983	up to $36,729
No personal services contracts for the above-mentioned period.


Mr. Nickerson: 1.	What rates of interest are borne by the special non-marketable bonds issued by the government to the Canada Pension Plan Investment Fund with respect to Canada Pension Plan contributions made by residents of the Northwest and Y ukon Territories?
2.	Is this information omitted from the Public Accounts of Canada and, if so, for what reason?


Hon. Barbara McDougall (Minister of State (Finance)):: 1. The securities received by the Canada Pension Plan Investment Fund bear interest at rates equal to the average market yields of Government of Canada bonds with maturity of 20 years and more, compounded semi-annually. These rates are applied each month to new securities, which include securities with respect to Canada Pension Plan contributions made by residents of the Northwest and Yukon Territories. The average interest rate for all Canada Pension Plan Investment Fund securities outstanding at March 31, 1984 was 10.59 per cent.
2. The average interest rate on the special non-marketable bonds of the Canada Pension Plan Investment Fund as at March 31 of each year, is published in the Public Accounts of Canada (Public Accounts of Canada, 1983-84, Volume I, Page 11.9.)


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


Mr. Speaker:: The questions as 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 resumed consideration of the motion of Mr. Stevens that Bill C-15, an Act respecting investment in
Canada, be read the second time and referred to the Standing Committee on Regional Development; and on the amendment of Mr. Gray (Windsor West) (p. 1302).
Simon Leendert de Jong: Mr. Speaker, not being accustomed to seeing you in the chair when resuming debate, I am ready to proceed and wish you a good afternoon, Sir.
As I was mentioning before the noon recess, I am finding problems with some of the rhetoric we hear in the House. The Government apparently hopes that by weakening even further the FIRA provisions in Bill C-15, increased foreign investment will come into Canada. I was pointing out to the Government some of the problems this country experiences with the tremendous amount of foreign investment and control that exists in Canada today. I mentioned that the high level of foreign investment means in the end that more capital leaves the country than comes in. Nobody invests in Canada without expecting to get more back in the long term. We find today that Canada has a deficit of some $9.4 billion in interest and dividend payments on the Canadian deficit, one of the highest in our history.
I would like to go on to point out some of the other negative effects of foreign ownership. Of all imports to Canada, 72 per cent were designated for foreign-controlled firms. Again, this has a further deteriorating effect on the balance of payments and on the Canadian dollar.
The fact is that branch plants existing in Canada do most of their ordering from their parent companies in the United States even though they may be able to buy supplies cheaper from Canadian producers in Canada. In other words, they do not become good corporate citizens. They do not invest in Canada. They do not support Canadian enterprise because, after all, they are just a branch plant of their parent corporations which are located mainly in the United States.
The other point I would like to make is that when looking at Canadian lay off records compiled over the last number of years, one notices that it is the foreign-owned companies that have laid off the most workers. In a downturn in the economy, they are the first ones to lay off workers. Again this has a negative effect on the Canadian economy as a whole.
I would like to point out something else which has a negative effect on the Canadian economy and that is the situation regarding research and development. When looking at the statistics, one sees that foreign-owned companies do not spend the same amount on research and development as Canadian companies. During a good hunk of the 1960s and the 1970s, Canada fell far behind in its commitment to research and development. In fact, our commitment to research and development as a percentage of our Gross National Product is almost equivalent to that of many Third World underdeveloped countries. When investigating this further, as various organizations have, one discovers that the major fault lies with the multinational corporations. Branch plants simply do
January 22, 1985

not do their research here. They do it back home in the country of the parent firm, which is usually the United States.
In a report that was released earlier this fall by the Science Council of Canada entitled The Canadian Industrial Development: Some Policy Directions, the effects of the multinationals on research and development in Canada are discussed. What do we find? We find that the branch plants operating in Canada have lower productivity than Canadian firms. Let me read the following from that report:
A comparison of the productivity of industries in Canada with that of their counterparts in the United States showed that, for manufacturing, the productivity gap between the two countries is about 25 per cent. A number of factors contribute to poor productivity performance in Canada, but possibly the most surprising is the effect of foreign control. As Saunders has found, high foreign control of an industry in Canada contributes to Canada's poor productivity performance.
I find it surprising that the Government looks at more foreign control as the economic solution to the mess in which Canada finds itself. Surely that is not the road to follow when solving our long-term problems. The solution surely lies in becoming more self-sufficient within this country. It lies in being able to produce the goods and services that we need for ourselves. It means taking a different approach toward becoming self-sufficient. It means taking an approach toward developing new types of technologies, new types of research and development in areas that would allow for small-scale production that is as efficient, if not more efficient, than large-scale production. It means following a road on which we begin to conserve the capital that is available in this country. It means moving down the road toward decentralization, community control and control by workers. It means a new vision for Canada. It does not mean a continuation of the Liberal vision which sees us becoming a branch plant economy under the large economic unit of the United States. It means that we truly become masters in our own house.
I see, Mr. Speaker, that you are indicating to me that my time is up. I have a few minutes left and would seek the unanimous consent of the House to allow me to continue with my remarks and be able to conclude them.


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Charest):: I am sorry, but the Hon. Member has heard that there is not unanimous consent.


Jean-C. Lapierre: Mr. Speaker, I am pleased with this opportunity to take part in this important debate in the House on foreign investment in Canada. I firmly believe that Canada should not become a mere warehouse for foreign corporations. We all realize that foreign investment is important to Canada's growth, but the Government must remain vigilant and ensure that new foreign investment will have a long-term beneficial impact on the entire country. Unfortu-
Investment Canada Act
nately, eliminating FIRA and replacing it by a blank cheque, as it were, means that large American corporations will ignore the wishes of Canadians and thumb their noses at policies designed to protect and promote Canadian interests.
I shall, if I may, give a short history of foreign investment in Canada to illustrate the shortcomings of Bill C-15. In the past, a number of reports have been tabled in the House, describing the harmful effects of letting foreign investment infiltrate Canada's economy. We had the Gorden Report in 1957, the Watkins Report in 1968, the Hahn Report in 1970 and finally the Gray Report in 1972. Mr. Speaker, all these studies described major problems arising from extensive control of our economy by foreign corporations.
In fact, before 1974, the drawbacks of extensive foreign control included the proliferation of branch plants, the effect being to reduce competition by setting up oligopolies within Canadian industry.
American anti-trust legislation prevented corporations from modernizing and upgrading their branches, thus leading to low productivity, greater inefficiency and higher prices for the consumer.
There was also the matter of branch profits that were siphoned away to the parent corporations outside Canada instead of being reinvested in this country. This was done in various ways, such as establishing transfer prices or through abnormal imports.
There is also the manner in which the branch is controlled by the parent corporation. Branches are often excluded from international production contracts and are run in accordance with decisions taken in a foreign country.
Furthermore, many branches have no research and development facilities, their only purpose being to assemble and sell their products. I may refer to the excellent point made on another occasion in the House by the Member for Kamloops-Shuswap (Mr. Riis), who stated that the total amount of research and development done by Canadian corporations is five times that done by foreign corporations located in Canada. The House is of course aware that research and development are a vital part of Canada's economy growth and economic renewal.
Those were the main problems arising from the excessive powers wielded by foreign-controlled corporations within the Canadian economy before the creation of FIRA.
In 1974, the Foreign Investment Review Agency was created by the Government to deal with the problems I have just mentioned.
Foreign investment proposals were examined by Cabinet to ensure they presented a significant benefit for Canada. The review process was supposed to consider five criteria. First, the effect of the investment on the level and nature of economic activity in Canada, including employment, resource processing

January 22, 1985
Investment Canada Act
and exports. Second, the degree and significance of participation by Canadians in the business enterprise and in the industry to which the enterprise belongs. Third, the effect on productivity, industrial efficiency, technological development, product innovation and product variety, another set of criteria that were used to determine whether an investment was justified. Fourth, the effect on competition, and fifth and last, the compatibility of the investment with national industrial and economic policies, taking into consideration industrial and economic policy objectives enunciated by the provinces likely to be significantly affected by the investment.
Mr. Speaker, when FIRA was created, the Americans did not take offence. The United States ambassador at the time, Mr. Thomas Enders, said the following in May 1979: "We were afraid that FIRA would be an obstacle to new investment in Canada. However, we have found that FIRA has been faithful to its mandate, which was to ensure that investment proposals contain certain benefits for Canada". The U.S. ambassador went on to say: "The Agency's present approval rate of 90 per cent is an indication of the quality of the proposals it receives". The ambassador also said: "I understand Canada's position, as a country that is so heavily dependent on foreign investment, that it finds it necessary to have such a mechanism to ensure that its interests are known and respected."
Mr. Speaker, this was said by a representative of the United States who, in 1979, was not making a big thing about the existence of FIRA. However, FIRA has clearly been effective, and Canadians have benefited from this legislation.
Yes it is true that afterwards, on the other side of the border, criticism was levelled at FIRA, but the negative remarks had to do with FIRA's procedural requirements and administrative difficulties rather than on the right or even the obligation of Canada to ensure that foreign investments were more properly geared to our interests.
Unfortunately, Mr. Speaker, the new government seems more interested in kowtowing to the United States than in solving problems related to a foreign-controlled economy.
According to the Minister of Regional Industrial Expansion (Mr. Stevens), the new agency, Investment Canada, will be given:
-a new positive mandate to promote and encourage investments.
After reading the Bill, I can see that the Minister is interested in two things: the United States and more wide-ranging powers for himself.
According to Bill C-15, the new investment proposals to be reviewed will have to bear the approval of the Minister rather than the Cabinet, as was the case with FIRA. In other words, the opinion of one person will decide about takeovers which will create or eliminate thousands of jobs for Canadians. The objectivity-the political will, in fact-will be the exclusive realm of one Minister who will make decisions within the
confidential confines of his office. That is far too much responsibility and power for one Minister, particularly when one knows who will be the Minister responsible for FIRA or Investment Canada. Mr. Speaker, giving that responsibility to the Minister is somewhat like putting Dracula in charge of a blood bank.


An Hon. Member:: And how!


Jean-C. Lapierre: The Minister has replaced the concept of significant benefit by the concept of net benefit. In other words, the government is more concerned about making profitable investments than ensuring that Canada's foreign trade is in our own interest. It used to be that we were in a position to negotiate and make foreign investments as profitable as possible for Canada. But now the Americans can come to Canada and do practically anything they like. While the Minister responsible extends a welcoming hand to the United States, the Americans are threatening to raise non-tariff barriers against Canadian products.
I see Members opposite and I am sure that they have hog producers among their constituents. They ought to realize that kowtowing to the Americans is not going to do wonders for hog exporters. I am quite concerned about the way things are going and about those Ministers who are walking on their knees before President Reagan and American interest groups that want to continue to control Canada. On the other hand, we find out that all kinds of barriers are raised against Canadian products going to American markets. We now find out that they have been walking on their knees without asking for anything in return. Mr. Speaker, that is not what I call negotiations.
We have heard the Secretary of State for External Affairs give full support to President Reagan and his star war. Well, Mr. Speaker, you know very well that the Secretary of State for external Affairs does not have enough imagination to think in terms of a strictly Canadian policy.
Once again he thinks that following in the footsteps of the United States is the correct approach for Canada. Mr. Speaker, I can tell you that, with Investment Canada and the kowtowing of the Secretary of State for External Affairs, they are destroying the independence, sovereignty and pride of Canadians.


Mr. Bob Brisco (Kootenay West):: Mr. Speaker, I had an opportunity to listen to some of my colleagues on both sides of the House who were addressing the amendment to Bill C-15. I have to say that I unalterably oppose it.
I was surprised at the Hon. Member for Shefford (Mr. Lapierre) who spoke about Canada giving everything to the United States, Canada's largest trading partner. Obviously he was talking about a country which he does not seem to realize is the most powerful nation in the world. He does not seem to realize that we are its neighbour and principal trading partner.
January 22, 1985

The Hon. Member does not seem to realize that Canada has bonds which do not weld it inextricably together with the United States, but that there are bonds which weld us together in many other contexts-in a cultural sense, in a linguistic sense and in multicultural composition.
I had an opportunity to examine and to consider the comments which were made by the Hon. Member for Regina East (Mr. de Jong). Before he called it one o'clock he made some rather strange allegations about foreign investment. He stated-perhaps accurately so; I have not seen the figures-that of all the industrialized nations Canada has the greatest component of foreign investment. Obviously, in his mind that is bad. He went on to say that Canada has a greater component of foreign investment than some Third World countries. So what? I can think of some Third World countries in which no one in their right mind would care to invest because those countries are so politically volatile and unstable.
We listen to the NDP, with its clarion call and its shrill voice about nationalism, bemoaning foreign investment on the one hand, and then on the other endorsing Weyerhaeuser in acquiring the timber limits which it has in British Columbia. It endorses Weyerhaeuser in the United States and denies Canadian participation. There was a Canadian group which was prepared to take over the operation at the time Weyerhaeuser applied. Whom did the NDP support? It supported the U.S. application. It is a matter of record and I would challenge any Member on the other side to prove otherwise. What was wrong with that? I would say that there was nothing wrong. Weyerhaeuser happened to be one of the very few good managers of the forest sector.
I could provide a better example, that of St. Regis Pulp and Paper. It is an American company which is based in New York and operates in Hinton. It has one of the largest forest nurseries that can be found. At any time that company will not have to go any farther than 45 miles in order to cut trees. It is in a northern climate, it has an excellent nursery system and an ongoing system of silviculture which could well be emulated by the forest industries in Canada which are Canadian-owned and operated.
Those Members from British Columbia who know anything about the forest sector should know whereof I speak. But St. Regis Pulp and Paper is an American company and for some reason it has to have some shadow over it. There has to be some cloud or some element of doubt and concern in the heads of the NDP Members because of that. Well, their economic nationalism is fine until they get to the point of explaining to Canadians that they are going to have to undergo a very serious reduction in their lifestyle and standard of living if we deny the foreign investment they would have us deny.
I listened to the Hon. Member for York West (Mr. Marchi) earlier today talking about Conservatives going out of their way to draw in foreign investment. He did not give us the other side. He did not tell us about his own Government going out of its way to drive foreign investment out of Canada, aided
Investment Canada Act
and abetted by the NDP. They created the National Energy Program and not only killed the largest single tax-paying component of the industrial sector of Canada, they also killed off thousands of jobs for blue-collar Canadian workers in the Alberta oil patch. They did that very successfully.
The NDP Members say that they are well informed on that subject. They are so well informed, Mr. Speaker, that the former energy critic for the NDP did not know the difference between heavy oil and tar sands when he talked to people from Alberta. That is how well informed they are. Let us face the fact that obviously the Opposition is unaware of the FIRA process. It is unaware that an application involving $4,000 to take over a car wash in Windsor had to have Cabinet approval. What stupidity. What a waste of the time and talent of any Cabinet. Just a total and absolute waste. Then there was the fellow from Massachusetts who wanted to provide a certain component in the programming sector of the computer industry. One small businessman with a small investment. How long did he wait for a decision, because that intrusion into Canada might have had a horrendous effect on our economy? That gentleman waited ten months for a Cabinet decision. That is the kind of thing that fits the mind-set of the opposition Members. That is the kind of thing they can understand. They know what the bureaucracy is. They live with it, they love it, they created it. But that is not the way we want to operate. That is not the way we intend to operate. We intend to give Canadians the opportunity for jobs which can only be created by, in part, encouraging that foreign investment component.
I would now ask the NDP and the Liberals to give me their answer about the auto makers. Where do Canadian auto workers stand on this position? Tell me about General Motors, Ford, Chrysler and others. Tell me about those and other American giants operating in Canada. I mean, I am sure I could have caught one of those dear fellows sitting down eating a Big Mac from McDonald's. That is a bad name because it is an American name. Well, they take you right from the sublime to the ridiculous. They talk about state of the art. I can tell you what their policies are, Mr. Speaker, they are state of the ark.
I had the opportunity in my constituency at one time to lock horns with a rather big American concern. I am not suggesting that any foreign controlled firm investing in Canada is icing on the cake or is all sweetness and light as well as a very good neighbour. That is not the case. I can recall very vividly one U.S. company which decided to go into a small community in my constituency in the forest sector. It applied to FIRA and was denied. Its representatives came to me and asked if I would assist them, and I did so. When they applied again, they were successful. If I had the opportunity, Mr. Speaker, to deny that application today, I would deny it because they lied to me and did not employ one single worker. That is the exception and we are watching those exceptions.


Ian Gardiner Waddell: Mr. Speaker, I would like to welcome the Hon. Member for Kootenay West (Mr. Brisco) to the House and reply to him as well. He said that we in the NDP were the shrill voice of nationalism. I

January 22, 1985
Investment Canada Act
would invite him to read the works of the Right Hon. John George Diefenbaker. I think he was a Conservative and he used to speak about the values of being a Canadian, how proud he was to be a Canadian and how hard we had to fight to keep an independent Canada. I hope he would not call that being shrill. He was a Progressive Conservative of the old school of which we would like to see more in this new group of Conservatives who have become virtually Mr. Reagan's poodle. He takes them out for a walk occasionally when the Prime Minister (Mr. Mulroney) meets him in Washington or speaks in New York.
The fact is, Mr. Speaker, I think the Hon. Member misunderstands what FIRA was trying to do. We do not want to reduce the lifestyles of Canadians, not like the conservative Social Credit Government of British Columbia. That is reducing the lifestyles of Canadians. Poverty goes up and you get 15 per cent unemployment. We had that kind of radical restraint, that kind of policy which would open up to foreign investment, except that foreign investment did not arrive. Well, that is not the kind of policy we want to see.
Let me put to you the Conservative position as I understand it. It is that Canada needs foreign investment, but that FIRA is a hostile symbol to that investment. Because of that we are not getting our proper share of foreign investment, therefore we are not getting enough jobs. That, it seems to me, is what the argument is. I think that is superficially seductive in the sense that you want to say, yes, we want the jobs so let us open up to foreign investment. But we have to remember that we are a small country next door to a huge neighbour, but a neighbour we like very much, let us make no mistake about that. They are our allies and friends. The fact is, however, as Tommy Douglas used to say, that the elephant dances among the chickens and says: All right, boys, it is everyone for himself. There is a huge country there and we are much smaller and we have to consider that. There are costs as well as benefits to foreign investment. We would be stupid if we did not face that fact.
The reality, Mr. Speaker, is that FIRA asks a number of questions regarding foreign investment or takeovers. It says that the company coming into Canada has to show significant benefits to Canada. It sets out 10 tests. Will it provide jobs for Canadians? Will it improve Canada's export performance? Will it contribute to having more of Canada's raw materials processed within our own borders? Will the application provide new investment within Canada? Will the applicant buy supplies in Canada, provided they are competitively priced? Will there be new opportunities for Canadians to become shareholders, directors and managers of that enterprise? Will it improve Canada's access to new products and processes? Will it improve Canada's industrial productivity? Will it increase the level of competition? And is it compatible with the Government's industrial and economic policies?
Surely Conservative Members, and especially the Member who last spoke, cannot object to those kinds of tests. Surely
those are reasonable tests to protect Canadians against some of the problems and costs of foreign investment. There have been lots of studies done on this. We know that American branch plant companies tend to go home to buy their materials from their parent plant. They buy a lot more of their raw materials from the home company abroad instead of buying them in Canada.
There have been studies done by the Conservative Party's own task force on technological change which show that foreign companies tend to have their research and development done abroad. We know that is a problem. I think all rational Members, which almost all of the Members in the House are, can agree that that is a problem. We know that they tend to repatriate profits more than Canadian companies do. I am the energy critic for my Party and I have found that Canadian industry in the energy area will invest more in Canada than do the foreign multinationals. I invite you to ask Bob Blair of Nova Corporation, a Canadian businessman, who will tell you the same thing.
In other countries investment is screened. Do you know what they call FIRA in the United States? They have an agency which they call the American Congress. At this moment while we are debating, an American congressional committee is holding hearings on the objections from some American politicians and businesses to the fact that Canada has too great a share in the gas industry. We have a 6 per cent share of the gas industry in the United States. They have this continuing FIRA. Other countries have the same thing. We are not a country that is out of step because of our having an organization to consider or screen foreign investment.
The Hon. Member gave an example of a car wash in Windsor with a $4,000 investment which Cabinet has to consider. That is terrible. Let's get rid of it. Let us reform FIRA, but let us not throw it out. Let us not go further by letting the Minister of Regional Industrial Expansion (Mr. Stevens) have the final say in certain applications. I think that would be a mistake. It seems to me that the worst of all possible worlds this country could have is what the Conservative Party may be aiming for, that is, free trade with a branch plant economy. That is the absolute worst because in the long run that will mean a decline in jobs and in the economy of Canada.
We could end up with an economy with an even higher degree of foreign ownership than at present and a diminished capacity to export and innovate and, hence, to make our own way in an increasingly competitive world. Therefore, in the long run, passing this legislation and getting rid of FIRA rather than reforming it could result in fewer rather than more jobs for Canadians.
An editorial in the Toronto Star dated December 9, 1984 reads as follows:
The agency's greatest role, indeed, has not been in screening out foreign investment, but in acting as a bargaining lever to persuade would-be investors to sweeten the pot in terms of providing more jobs and benefits for Canadians.
It is the Conservatives who are being ideological here. They are living in a world that is not real. They are being shrill and
January 22, 1985

selling out the Canadian worker in the long run. It is a seductive argument for people, especially in these bad economic times, but we need an agency such as other countries have which will in fact screen foreign investment, rather than throw it out, and make sure that there are significant benefits to Canada. Only in that way can we have an economy that really works.
That is why we in this Party support the amendment to hoist this Bill for six months so that the Government can come back with some decent legislation which will protect us from the costs of foreign investment, rather than just taking this kind of Pollyanna look at the benefits which are supposed to result.


Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, I am happy to participate for a few minutes in this debate on Bill C-15 to create Investment Canada. What I will attempt to do briefly is to show that the intended purpose of the present debate is to score political points rather than attracting the foreign investment we need in Canada.
First of all, it must be said that we do need investments from abroad. Everyone in Canada complains about the fact that there are 1.5 million unemployed. We have vast natural resources, qualified workers who are willing and eager to work and many of whom cannot find a job. We therefore all agree on the general objective of attracting foreign investment. However, I must point out immediately that there are two risks involved. The first is that most of this foreign investment would come from the same country, which has sometimes been the case in the past, thus leaving Canadians wide open to damaging consequences should this foreign country, which has invested massively in Canada, brings about legislative changes detrimental to our interests. Another danger, of course, would be to let foreign interests invest in all areas of Canadian activity without bothering about the fact that some of these areas must be protected in the interests of all Canadians. I am thinking of areas such as finance. As Canadians, we certainly do not want foreign interests to control our financial institutions. At the same time, there is the cultural danger that foreign investors might take over our medias, our publications, or our radio and television stations.
What I wish to emphasize is that, while doing everything in its power to attract investments from abroad, the previous Liberal Government had provided adequate safeguards to protect us from the first danger namely that, to a large extent, the investments would come from the same country. We can recall the initiative of Mr. Trudeau who had tried to provide an alternative by personally approaching European countries in an effort to attract investments from that part of the world. I repeat that the danger would be that most investments might be made by the same country. In this regard, everyone knows that I am thinking about our neighbours to the South.
The attempt to diversify investments from abroad was a laudable effort on the part of the previous government. There
Investment Canada Act
is nothing in the present attitude of the Progressive Conservatives to show that they are trying to diversify our foreign investments. On the contrary, their whole public relations operation consists of going down on their knees before the American giant, before Uncle Sam, and of begging our neighbours to invest in Canada. For our part, we certainly want American investments, but we also want investments from Japan, from Germany, from France, from Australia and from most other industrialized countries. The record clearly shows that, in the past, we took action to try to diversify the source of foreign investments in Canada, but the same cannot be said about the present government which is trying something rather strange. Its rhetoric aims at attracting investments by suggesting that the previous government wanted to prevent and reject foreign investments. Of course, this is ridiculous.
Another message that the Progressive Conservative Government is trying to convey is that the Foreign Investment Review Agency, FIRA as it is called in English and sometimes even in French, systematically turned down most foreign investors and blocked the influx of foreign capitals. Nothing could be further from the truth! If we look at the decisions made by FIRA, we realize that, at the most, about 3 per cent of applications were rejected. It is therefore spurious to blame the Liberal Party of Canada for having created FIRA and to say that by doing so it prevented foreign capital from entering Canada.
Quite the opposite, I would suggest that over the last two or three years, the repeated attacks by the Progressive Conservative Party in the House of Commons, and outside the House in the media, their constant criticism of FIRA has scared away foreign investors because of their unrelented allegations suggesting that it was hard to get capital into Canada because with FIRA the Liberals were blocking the entry of capital. Well, with 3 per cent only of past applications being refused, it is readily obvious that all this is pure rhetoric. It is a public relations game designed to have Canadians believe that the Conservatives have such an insight into the economy, that they are so much more eager than we Liberals are to get foreign capital, which of course is an outright invention.
Be that as it may, I look forward to hearing details of how this Government will go about ensuring that foreign investments coming into Canada will not jeopardize certain particular Canadian interests, especially in the cultural and the financial fields I was referring to earlier.
The Government has already suggested that it was going to closely monitor those fields in order to protect them from foreign control. But in saying this, the Conservative Government is actually endorsing the Liberal policy under which FIRA, the screening agency, was established specifically to pursue those goals.
So please let us put an end to all this rhetoric here. Let us stop accusing one another. It is my view that all parties in this House are in agreement as to the importance for Canada of investments coming from abroad and from south of the border,

January 22, 1985
Investment Canada Act
to develop our resources and create the jobs that are in such dire need.
In any case, as far as the Liberal Party of Canada, the Official Opposition, is concerned, let it be clear that we support foreign investments in Canada, let nobody fall for our opponents rhetoric, which would have people believe that we are opposing foreign investment.
As well, we want these foreign investments to be diversified and to come from several countries rather than one country. We do not want to be at the mercy of legislation passed south of the border that could be detrimental to us. We advocate more investment but from more countries. That is the policy of the Liberal Party of Canada.

Therefore, let us stop accusing one another. And as the Hon. Member for Vancouver-Kingsway (Mr. Waddell) who spoke before me has suggested that Bill C-15 was superficially appealing, I would suggest for my part that it is a rather superficial piece of legislation. Indeed, this is the reason why my party has introduced a motion to postpone discussion on this Bill, to give the Government a chance to review the problems that must be solved if we want Canada to attract more foreign investments, and especially to make sure that such investments will be in the interest of Canadians. No doubt that some reflection will help the Government introduce a more comprehensive piece of legislation, reconsider its rhetoric and realize that we will not attract foreign capital just by criticizing the previous government.


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, I rise in this assembly today for the first time to comment on the legislation which plans the creation of Investment Canada, as it is somewhat speculatively called, and on the motion to hoist this legislation for a six-month period. In doing so, since this is my first speech in the House of Commons, I should like to take the opportunity to comment on my constituency and on several aspects of the parliamentary process that I feel are worthy of being on the public record.
Let me commence by paying tribute to my immediate predecessor, the Hon. John Reid, who represented Kenora-Rainy River for a period of over 17 years and whom I, eventually and at the third try, replaced here. One of my colleagues charitably says "third time lucky", but he knows as well as I do that luck is when preparation meets opportunity. It is that preparation upon which I will comment later.
Mr. Reid served his riding well, according to his lights and principles and certainly for a long time. He said that he had spent more than half of his adult life in this Chamber and that now he has the opportunity to spend his time in other pursuits.
I should like to pay tribute to his predecessor, the late Senator William Benidickson, who passed away a matter of
days ago and is survived by a very devoted and great lady, his wife Agnes. Mr. Benidickson served in this Chamber for nigh on 20 years and as a Cabinet Minister in several posts. He also had a great commitment to democracy, a great commitment to his legal profession and to the people of the Kenora-Rainy River riding.
For me it is an historic day in that this is the first time that a Member for Kenora-Rainy River has ever risen in the House from a seat any place other than on the benches of the Liberal Party. I stand to be corrected, but it may be that the campaign team that put me in this place broke the longest winning streak in Canadian political history.
The riding of Kenora-Rainy River is among the five largest in the country. It is the size of both Germanys put together. It has a population of nearly 80,000, which is spread out in an average density of one for every four square kilometres. For those of us who are not bilingual or bicultural, it is something less than one person for every square mile. They have a diversity of occupations which is truly incredible. It ranges from farmers to trappers, hunters, pilots, miners, lumberjacks and factory, plant, mill and railroad workers. There are many who are employed in the service of either the federal or provincial Governments and many who, like myself before coming to this place, were private businessmen or professionals in private practice.
I dare say that, with over 100 communities in an area the size of Germany, mine is one of the most diversified ridings represented in this Chamber and possibly also one of the hardest to represent.
During our recess-referred to so often and so inaccurately by journalists as a vacation-I personally travelled well over 5,000 miles in the service of my constituents. That is besides a two-week vacation during which I also travelled.
I should like to comment briefly on the ethnic background and make-up of my constituency. Most of this part of Canada was formally ceded to the Crown, formally recognized the sovereignty of the Crown, as late as 1929, 1930 and 1931. There are people alive today who remember the time when a large part of my riding was not part of Canada but was the sovereign territory of the Anishinabek, whose descendants still occupy it today.
It is a great privilege for me to represent the Anishinabek. Napich keechee-enandan kai-seck che-a-anee to-mou-ka anishinabek. I am grateful to them for their strong support. Ga-chee-enan-dan ka-ke wee-chee (ka-pou-tou) show-watch. [Translation]
I also consider it a privilege to represent people of various linguistic groups, the Francophones in my constituency and people of Ukranian, German, Dutch, and Polish origin, people from every European nation probably, from most nations in the world that are represented either by immigrants or descendants.
January 22, 1985



I think it would also be appropriate for me to tell the House today that I am a new Canadian myself. The general election which saw me elected to this Chamber was called on the fourteenth anniversary of my arrival in Canada. That day, of course, will always stay in my memory. One of my favourite themes when I have the opportunity and the privilege to address a gathering, be it in my riding or anywhere else, is the degree of opportunity that is available to us in Canada today. I cannot conceive of having the sort of opportunities I have had in Canada had I elected to remain in my own country. I tell my friends, and it is only partially in jest, that I am a refugee from English beer, from tea, and from Toryism.


Some Hon. Members:: Oh, oh!


John Edmund Parry: There would be those who would say that I have got my come-uppance. I have managed to avoid both tea and English beer. It seems that Toryism, and I must say this with some regret, has a certain air of inescapability about it, particularly in this Chamber. I would say to my friends opposite, and I would caution them very strongly, not to take it too much to heart because there are, after all, those among them who differ. Let me say that I would much rather be sitting across from them even with their swollen numbers than across from the Tories who presently rule my native country and who are so busily engaged in wreaking destruction upon that country's economy, trade, and social fabric, a destruction which I trust my friends across the way not to repeat in this our Canada.


Some Hon. Members:: Hear, hear!


John Edmund Parry: I would not be here today, Mr. Speaker, without the support of my Party, without the support of my many personal friends and political friends in the Kenora-Rainy River riding, and particularly not without the support of my wife and family. I shall always acknowledge that support and will always be grateful for it. It will always stand in my mind as one of the great thrills of my life.
As I said before, Kenora-Rainy River is made up of over 100 communities ranging from tiny villages of less than 100 people to the prosperous bustling communities of up to 10,000 people in the case of Kenora. It includes such mill towns as Dryden and Fort Frances, railroad and government communities such as Sioux Lookout, and mining towns such as Ear Falls and Red Lake.


The Acting Speaker (Mr. Paproski):: Order, please. I regret to tell the Hon. Member that his time has expired. I know this is his maiden speech but I am sure he will have many more opportunities to speak in this Chamber.


Mr. Manly:: I rise on a point of order, Mr. Speaker. Considering it is the Hon. Member's opening speech, would it be possible to ask for unanimous consent to allow him to continue?
Investment Canada Act


The Acting Speaker (Mr. Paproski):: Is there unanimous consent to allow the Hon. Member for Kenora-Rainy River to continue?


Some Hon. Members:: Agreed.


Mr. Hnatyshyn:: Mr. Speaker, I understand it is the Hon. Member's maiden speech. I am sure that so long as he exercises the same degree of restraint, which I have personally shown this House with respect to time, we would be very pleased to allow him to conclude within a reasonable time.


John Edmund Parry: Mr. Speaker, I would like to thank the Government House Leader and his colleagues for extending that courtesy and civility-


Mr. Keeper:: And our friends to the right.


John Edmund Parry: And our friends to the right, as I am reminded by my colleagues, for extending that courtesy and civility for which I am sure in time he will become universally renowned.
I was embarking on a comparison of my constituency with many others in this country. While I feel they are not more favoured, more blessed or more richly endowed, they are in many ways more privileged. But I will stay those remarks for another day and perhaps will briefly conclude with some remarks on the subject matter of this motion and the Bill before us.
We are familiar with the various analogies that have been used to describe our state of economic affairs as compared with those of our neighbour to the south. I recall one person who was long in this place, although he never demonstrated great respect for it, saying that the Canadian situation was similar to that of a mouse sleeping beside an elephant. It would appear from some of the public statements and also the privately expressed views of our neighbours to the south that we are sometimes seen as the Fifty-First state. It is perhaps fortunate, but in other ways unfortunate, that we are part of a continental economy whether we like it or not and that whatever barriers we erect in the way of that continental economy, or indeed whatever paths we smooth the trade that exists between our country and the United States of America is like an umbilical cord. It provides nourishment. However, from our perspective, it works north to south rather than south to north. There the analogy to our co-operation with this economic giant ends.
I should like to dwell on the difference between investment and purchase and to say that what is investment from the point of view of the investor is not necessarily investment from the point of view of a country in which the investment is made. When a Canadian business is purchased, the investment should surely be judged, not by the price paid nor by the change of control of the corporate structure that is used to effect such investment, but on what accrues to Canada as a result of that purchase or change of control. Investments are only made, in the strictest sense of the word, when new productive assets are put in place such that there will be benefits not only to the person making the investment but also

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Adjournment Motion
to the community or country and, yes, to the workers in the plant or establishment in which that investment occurs.
We have seen in our country the use of foreign investment to further our development. We have also seen the degree to which foreign investment has meant a repatriation of profits. We have seen a patriation from Canada to the United States of the engineering and research and development components of the company or enterprise that has been taken over. We have seen Canada used as surplus capacity because of such investments. We have seen decisions taken that will not be in the economic interests of Canada, Canadians or the communities affected.
We cannot afford to let Investment Canada be perceived as fire sale Canada. The coincidence between the establishment of this agency and the Government's expressed intention to sell off any Crown corporations for which it can find buyers is surely a little too compelling, particularly in the minds of the observers, those who have the cash and the capital and who might make investments. Therefore, I call upon the House to support this motion and to delay for a six-month period consideration of Bill C-15.


Some Hon. Members:: Hear, hear!



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Algoma (Mr. Foster)-Agriculture- Effect of bank interest rates on farmers, (b) Government action; The Hon. Member for York Centre (Mr. Kaplan)- Administration of Justice-Unlicensed cable television operators-Prosecution query, (b) Minister's position; the Hon. Member for Ottawa Centre (Mr. Cassidy)-Government Advertising-Awarding of contract, (b) Measures taken by Government.



GOVERNMENT ORDERS

[Stage Direction]
[ Translation]

[Stage Direction]
The House resumed consideration of the motion of Mr. Stevens that Bill C-15, an Act respecting investment in Canada, be read the second time and referred to the Standing Committee on Regional Development, and the amendment thereto by Mr. Gray (Windsor West) (p. 1302).
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I am very pleased to take part in this debate on the amendment proposed by my colleague from Windsor West (Mr. Gray), namely that Bill C-15 be not now read a second time but be read a second time six months hence. As you know, Mr. Speaker, we proposed this amendment to give all Members of this House a chance to speak to this very important legislation, Bill C-15. No great feats of imagination are necessary to find clear-cut examples of foreign takeovers in Canadian industry, business and the economy in every riding and every region in our country, and the reason this screening agency was proposed a number of years ago was to strengthen our Canadian economy, not only for its own sake but also to safeguard jobs and, by promoting research and development, to create more economic activity that would produce more jobs.
We are not the only country in the world to set up a screening agency. The Americans have their own procedures and Japan and several other countries have government agencies that are supposed to control foreign takeovers. In the United States, foreign companies may not control companies in certain economic sectors including marine transportation, broadcasting, air transportation and defence production. It is absolutely impossible for a foreign country or corporation to take control of such industries. Australia, for instance, has a Foreign Investment Review Board very similar to our own and Japan exercises very extensive control over foreign investment.
This kind of measure is not out of the ordinary, in that it is already being used in many countries to screen investment.
Mr. Speaker, according to a number of observers, this Bill more or less proposes to open wide the doors of this country to foreign investment, which obviously implies foreign control over very significant economic sectors, whether industrial, commercial or other. I am thinking of a few examples in my own riding of Ottawa-Vanier, which is not an industrial riding, since it has a high percentage of professionals and public servants who are employed by the Government to indeed serve the public. The largest employer in my riding is the University of Ottawa, which has 3,000 employees in Ottawa-Vanier.
Two years ago, the University was having serious problems with its bookstore. Sales were declining, administration costs were very high, and the bookstore was losing between $100,-
January 22, 1985

000 and $200,000 per year. No rent was charged and the bookstore was perpetually in the red. The University looked for ways to get the bookstore out of the red. Canadian industry, including both publishers and distributors, showed an interest. An American company, Brennan College Service Inc., also became interested and made the University an offer. Negotiations, which lasted nearly a year, made it clear that it was not in Canada's interests to let an American company take over this bookstore and thus, according to some people, become a threat to the Canadian book industry and professional and academic publishing.
FIRA examined and rejected an initial application by Brennan College Service Inc., for the simple reason that it did not meet FIRA's requirement for generating significant benefits for Canada. This is a very important point: significant benefits for Canada, which means there seemed to be nothing to justify a foreign takeover. Following FIRA's refusal, the administration of the University of Ottawa signed a new agreement with the American company under which the University would retain ownership of the bookstore and Brennan College Service Inc. would work with the University on restructuring the bookstore which, as I said before, was in the red.
I was speaking yesterday to the Vice-Rector for Administration who said that things were going well, that the Canadian company, Ottawa Brennan Inc., was operating satisfactorily, that everything seemed to indicate that they would make a profit of around $100,000 this year and that the University of Ottawa was very pleased to have a foreign company as the minority interest within a Canadian company. I have nothing against foreign technology if it can help us acquire new expertise, in administration or manpower training, for instance. In fact, the Vice-Rector of the University commented that they were able to take advantage of the expertise of Brennan College Service Inc. and training provided by the company for employees of the University of Ottawa Bookstore. The outcome was very fortunate, since in the process, an American company was prevented from taking full control of a business in my riding of Ottawa-Vanier, and also the business was able to continue, because I think that otherwise, the University would have been forced to close down the bookstore. So it was a fortunate experience, but it was FIRA's final decision which helped to bring about this agreement. So that was my experience during the past two years with the federal Government's Foreign Investment Review Agency, and I must say it was very worthwhile.
Without FIRA, the University of Ottawa Bookstore would probably have gone out of business and become U.S.-owned. Many people, including myself, feel that the American company does not have the cultural expertise and the biculturalism of the University of Ottawa, nor the University's bilingual capacity. This was not part of the company's makeup, and we might have lost some of that respect for both languages we have been trying to build up as well as the positive attitude to
Investment Canada Act
the many cultures thriving in our community. I therefore feel this was a very fortunate solution to a rather serious problem.
This government has introduced Bill C-15, Investment Canada, which provides that 90 per cent of proposed acquisitions of Canadian small and medium-size companies will not even be subject to review by the Investment Canada agency.
Given such a Bill, how can we possibly expect to meet our long-sought challenge-to have a Canadian product patterned after Canadians?
Before establishing its trade strategy, Canada must be in a position to control its economic base. If that base belongs to foreign interests, Canada's decision-making power on the international scene will be severely limited. The government was not given a mandate to make Canada lose its national identity. Canadians love their country, they are friendly people in the widest and deepest meaning of the word, but they are not the kind of people who would sell out their national identity simply to cut a striking figure before the United States.
The government must have misunderstood its mandate. Recent economic history shows clearly that, in times of recession and various crises, the interests of creditor countries take precedence over those of debtor countries. Foreign takeovers can also lead to lost national identity, particularly when sensitive sectors such as education and culture are involved.
Earlier, Mr. Speaker, I was talking about education. I see that you are about to rise to interrupt me. Perhaps I will have another opportunity to speak to the House on that issue. I respect your ruling and close my remarks.


Hon. William Rompkey (Grand Falls-White Bay-Labrador):: Mr. Speaker, I rise to take part in this debate with some regret about the Bill we are debating. What we have in front of us is only more cosmetics and superficiality. I see nothing in the contents of this Bill that will advance the cause of job creation anywhere in the country. The Bill provides more of the smoke and mirrors that we have become accustomed to over the past several months.
The implication is given that by changing the name of FIRA and by making other superficial changes, somehow investment from the United States will suddenly speed up. The implication is also that this did not happen before. That is a myth that we should put to rest right away.
Anybody who cares to research The Globe and Mail- FIRA applications were all published the day after they were approved by Cabinet-will see laid out very clearly that over 90 per cent, the vast majority, of applications that came before FIRA and Cabinet were approved. It is a myth to say that somehow there was a bottleneck or stoppage of applications from the U.S. or any foreign country. That is a myth that
1570

January 22, 1985
Investment Canada Act
should be laid to rest right away. This is one reason why the Bill is superficial.
The Hon. Member for Vancouver-Kingsway (Mr. Waddell) used that application, and he was right. It is wrong to tell people through this Bill that suddenly, if you make those changes and call the corporation Investment Canada and stop calling it FIRA, with those cosmetic changes U.S. investment will flow. It will not happen as simply as that. U.S. analysts have said publicly that by doing that, it ain't going to change overnight.
Investment in the United States, even within that country, is moving from the northeast to the southwest. They have a problem within their country of declining industries and declining areas. New industries are taking over and they are attracting investment. Even within the United States that kind of situation is taking place. To suggest that because you introduce this Bill and change the name U.S. investment will flow over the border is not correct. It is not as simple as that.
What the Government should be putting before us instead of this Bill is ways and means to encourage the right type of industry in the various regions of Canada. We have Silicon Valley in California and we have silicon valley right here in the National Capital Region. What we should have before us instead of these cosmetics is a strategy whereby new futuristic industries can be encouraged in the regions of the country. That is what the Government should be putting in front of us. How can we attract more high tech firms to the Atlantic area and to various areas in western Canada? That is the kind of policy I would like to see the Government put forward instead of these cosmetics.
Whatever happened to a regional development policy? When is the Government going to tell us how it intends to build up the regions of this country? Certainly we have not seen those measures so far. I would like the Government very soon to spell out very clearly its policy on regional development. When this Party was in power, there was a key element of our policy devoted to regional economic development, but I have not heard that mentioned. I have seen the negative effects of the cut-backs that have been put in place. We have not seen that U.S. investment until now.
The fact is that apart from keeping out U.S. investment, we have been trying to encourage it. When we created Fishery Products International in Newfoundland, many people tried to get private sector investment for that company wherever it was available. All of us, no matter what side of the House we are on, agree that only through private sector investment are we going to create long-term jobs. That did not come and Governments had to step in and provide the capital that was needed.
Another industry will be familiar, namely, the iron ore industry. Apart from attracting new American capital, we are seeing the Americans pull out capital and emphasize operations other than those which they hold in Canada. The Hon. Member for Vancouver-Kingsway made that point very clearly, and he was right. Just because you have an American branch plant in your country does not mean that you have a secure future. In fact, the opposite may be true. Let us not fool
ourselves that by attracting American capital we are automatically going to be on easy street. The fact is that they have been looking after their own interests first and ours second. We should be very wary of that.
We have no hesitation, certainly in my province, about having American capital. We have had a long, warm relationship with the Americans. I remember my grandfather sailing to New England in the days of sail when it was known in my province as the Boston States. We have a very lucrative trade with the eastern United States. Atlantic Canada still does, as we do on the West Coast and in the areas represented by Members all over this Chamber. They have a very healthy trade, particularly the border provinces, with the U.S.
At the time of Confederation in 1949 when we joined Canada, one of the options put before the people of Newfoundland by Don Jamieson, a former colleague in this Chamber who is now elsewhere, was economic union with the United States. Throughout World War II we had five important bases in my province. Many American servicemen in Newfoundland married Newfoundland girls who then went to live in the United States. The real reason for the boom in the economy in the United States at the present time is not Reaganomics. It is all those Newfoundland girls who married American servicemen and created the new Americans who are adding to the vitality of that country at this time.
We have no hesitation in welcoming the Americans with open arms. We have been friends of theirs for decades, indeed centuries. Let us not kid ourselves that they are somehow the enemy at our gates that we have to keep out. They are not. We want and need that investment. That is the only way to create long-term jobs. However, it cannot be done through cosmetics and superficialities. We must come forward with something with more substance than that.
If I may, Mr. Speaker, I would like to plug something here. It is a bit of a black market operation and a bit of a subterfuge. However, let me say that one of the reasons given for the screening of investments being processed through the new Investment Canada is the protection of the Canadian cultural heritage. That seems to be all right on the surface of it. There is nothing wrong with being in favour of the Canadian cultural heritage. However, let us not let the Government encourage it on the one hand and discourage it on the other. The Government cannot say that it will screen investments through a Bill like this for possible detraction from the Canadian cultural heritage while at the same time making cut-backs to the CBC.
If something is damaging the cultural heritage of the country, it is the closing and downgrading of various CBC stations, and particularly those in small, remote communities in northern Canada. The only voice, mirror or self-image that those people have is their local CBC station. Now when many communities are fighting for survival, the very means of protecting their self-image and indeed their cultural heritage is being taken away from them. I would ask the Government to
January 22, 1985

review that policy and to intervene with the CBC in order to see that those stations that we need so badly for the protection of our cultural heritage are not taken away from us.
I can give as an example of this the station in Labrador City which is in a remote area formerly served by the Prime Minister (Mr. Mulroney) when he was President of the Iron Ore Company of Canada. Communities such as that one are fighting for their lives at the present time. As we know, the iron ore and steel industries are struggling for survival. I do not believe that they are sunset industries by any stretch of the imagination, but they are going through some very rough times. Now, when they are struggling for survival, it seems to me that it is wrong to take away their voice, their self-image and the protection of their cultural heritage. I do not believe that the Government can, on the one hand, say that it can protect this and, on the other hand, take steps to destroy it. If I may, Mr. Speaker, I would ask government Members to review that policy.
I am afraid that what we have before us at the present time is nothing of substance but more fluff and more cosmetics from a Government that has certainly become known for that in the economic fields. Perhaps government Members need time. I know that the Secretary of State for External Affairs (Mr. Clark) has put forward policy statements which have some substance. We may agree or disagree with these statements, but at least there is some substance to them. The same thing must happen in terms of economic policy.
The Government must put before us meaningful measures for job creation. Instead, what we have are cut-backs. For example, there have been cut-backs in unemployment insurance at a time when job creation is at an all-time high in my own province. For example, there have been cut-backs in the fisheries infrastructure at a time when that particular industry is struggling for survival. There have been increases in the ferry rates to Newfoundland. Ferries are the very lifeline of islands like mine and Prince Edward Island. If the ferry rates are increased, not only will it discourage business and add to its costs but an added burden will be put on the consumer who has the least ability to bear that burden.
Instead of receiving meaningful job-creation measures, we have received cut-backs which will have a negative effect on our economy. I say to the Government that now is the time to forget the posturing, the rhetoric and the public relations and get on with putting before us real policies for meaningful job creation in the country.


Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, I am pleased to rise in my place today and take this opportunity to address this Bill. I find that I must rise today to caution against what seems to be the unbridled enthusiasm of the Government for advertising Canada as being open for business with no strings attached. I of course have no complaint with the notion that Canada is open for business. I applaud any initiative that brings legitimate investment capital into the country. I remind the Government that approximately 97 per cent of the applications that were brought before FIRA in the past year were approved in any case. Simply changing
Investment Canada Act
the name of this agency from FIRA to Investment Canada, while it is a lovely cosmetic change, will not in and of itself have much impact on job creation in the country.
At the very time that the Prime Minister (Mr. Mulroney) is telling Canadians and the assembled group of boardroom chairmen from the United States that Canada is open for business, there are certain groups in the United States telling us that the United States may not be open to Canadian exports. Canadians know that a few friendly words which passed between the President and the Prime Minister in March do not mean influence over the administration, much less over Congress or various sectors of the U.S. economy. In particular, I speak of the softwood lumber industry for which efforts have been renewed in the last few weeks to curb Canadian exports.
Canada is by far the world's largest exporter of lumber. We supply over 40 per cent of the world's total supply of lumber. More than 66 per cent of those exports from Canada went to the United States in 1982. Of that amount, 56 per cent came from the Province of British Columbia alone.
It seems to me to be somewhat frightening that, on the one hand, while we are advertising that Canada is open for business and has been open for business for some time, on the other hand the United States has increased protectionist tendencies. The softwood lumber sector in the United States is moving rapidly not by means of protest but, in its own mind, by means of legislation to prohibit or restrict to a minimal amount the importation of lumber from Canada.
The forestry industry is the single largest producer and generator of jobs in this country. There is no bigger industry. In terms of our balance of trade, it is bigger than agriculture, fisheries, mining and oil and gas all put together. That is how critical this industry is to Canada. Unfortunately, in the House of Commons and, I would suggest, across the country among the public at large and in particular in the Cabinet, there is not much appreciation of that very real and very startling simple economic statistic.
Rather than getting on with the business of making cosmetic changes to the names of agencies, rather than managing by media manipulation, rather than tying its appearance of competence to the ability of its media managers, I would like to ask the Government when, in addition to practising its love-in with the current United States administration, it will stand up and defend Canadian interests. This administration recently signed an agreement restricting Canadian shipments of duty-free newsprint into Europe to 600,000 tonnes annually. Our quota used to be 1.5 million tonnes annually. I have just told the House about the importance of softwood lumber. Let me tell Hon. Members as well that newsprint is the second major component in the value of the Canadian forestry industry. Over 100 communities in Canada are single-industry towns which are dependent on this industry. Yet an agreement was signed during the Christmas recess, the details of which were announced on December 27 when nobody was paying attention. That agreement restricts Canada's ability to go duty-free into that market. An industry spokesman in The

January 22, 1985
Investment Canada Act
Chronicle-Herald of Halifax a few days ago described it as an unfair decision which was reached without any consultation with industry representatives. If the industry was not consulted, can we assume that other Canadians were consulted?


Charles Joseph Clark: The industry was consulted.


Brian Vincent Tobin: I would say to the Hon. Secretary of State for External Affairs (Mr. Clark) that The Chronicle-Herald indicated that the industry was not consulted and has described the decision as "an unfair decision". Where is the commitment for consultation that the Government promised? I should point out that the agreement was rejected by the previous administration. The previous administration refused to sign it and saw it as being basically unfair. The previous administration recognized-if we understand the growth that will occur in this sector by the year 2000-that it would foreclose in advance Canada's job creation opportunities for the future. The previous administration turned it down, but this administration signed it and announced its decision on December 27. What was it trying to hide?
Some time ago I suggested to the Prime Minister that he would do himself and the country a great service if he would bring with him into the House a set of ear-plugs. The House has had the unfortunate spectacle of a Prime Minister who has misunderstood the applause of 211 cheering and, with all due respect, mindless supporters, and has taken that applause as being the approval of the people of Canada for the policies which are being announced. I want to tell the Prime Minister that, if he has misunderstood the applause of his tribe for the approval of the people of Canada, he ought to go out with his Secretary of State for External Affairs and his Minister for International Trade (Mr. Kelleher) and consult the people in the forest industry about the agreement which was signed with the EEC that will foreclose Canada's future possibilities for growth in that industry. He ought to find out how people in the lumber industry feel about the renewed threat of a limitation on Canadian exports into the U.S. But we have not heard a peep out of the administration.
When I see a Government which has been in power for four months and has not put forward one piece of original or substantial legislation, and which wastes the time of the House by changing the name of FIRA to Investment Canada, I am reminded a bit of the little old lady in the Wendy's commercial. The people of Canada have sent 211 sets of buns to the House. I want to ask, "Where the hell is the beef?"
May I humbly suggest that a six-month hoist is appropriate and is in order at this time.


Mr. Kempling:: You have never been humble in your life.


Brian Vincent Tobin: I would suggest to the administration that when it has some beef and some measures of meaty substance to bring before the House for our humble consideration, it should attempt once again to attract the undivided and serious attention of this humble House.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I am privileged to rise today to discuss a motion to delay the implementation of the Investment Canada Bill for six months for further study. It is an excellent and necessary amendment.
The Government is proposing to protect the cultural heritage of Canada, and government Members have stated during the course of the debate that that is why the Government is not permitting foreign investment in the areas which it deems to be cultural-broadcasting, newspapers and the like. However, one of the arguments which we have made on this side of the House is that a cultural heritage cannot be protected by allowing the economy to be controlled by outside forces. I will not spend much time arguing that point, except to point out something of which we are all very aware, which is that in Canada the cultural heritage of our native people was not very well protected once their economy was taken away from them. I submit that there will be no cultural heritage for Canada if the Canadian economy is gradually eroded, taken away from us and allowed to fall into foreign hands.
I believe good use could be made of the six months to study further the implications of the Bill. I have identified seven problems in the approach which the Government has taken. The Government is assuming that if it attracts foreigners, business will develop and jobs will be created. I have a great deal of difficulty with that, because Canada has been following that line of reasoning since the Second World War, with only the minor change of the establishment of the Foreign Investment Review Agency. The problems are numerous, but I will only outline seven problems which are evident in the legislation.
The first problem is that foreign companies do not spend nearly as much on research and development as do Canadian-controlled companies. Research and development is a key source of economic growth and productivity in our economy. Yet, if we look at the track record of Canadian firms versus foreign-controlled firms, we find that Canadian firms have a much better record of performing research and development than do foreign firms. I would refer the House to two studies, one which was done by the Economic Council of Canada in 1983 and another which was done by the Science Council of Canada in 1984. Both of those studies had similar results. They found that Canadian firms with less than 50 employees spent about 11.2 per cent of their sales in research and development, whereas an operation of the same size which was owned by foreign interests only reinvested 3.3 per cent of its sales.
The studies present a long table which I will not go into, but the proportions get worse as the companies get larger. Canadian-controlled companies with more than 500 employees invested 10.3 per cent of their sales in research and development, while foreign-owned companies reinvested a paltry 2 per cent. Research and development ensures long-term jobs. I submit, on the basis of the findings of the Economic Council and the Science Council-and each organization performed separate research and had results which were very much the same- that foreign firms do not do a good job in R and D. Subse-

quently, they will not produce as many jobs as Canadian-owned firms.
The second problem that is evident with the concept the Conservatives are pursuing is that foreign-controlled firms import much more than Canadian-controlled firms. Again, I have some numbers that I would like to put on the record which indicate that the spinoff benefits which would accrue from purchases from Canadian companies, mostly inside the country, which create other jobs subsequent to the original purchase, do not accrue when the company doing the purchasing is a foreign-owned company making its purchases from head office in the home country. In fact, foreign companies imported 22 per cent of their sales, which is five times the amount imported by Canadian companies. Of the companies which are involved in manufacturing, foreign companies imported 30 per cent of their sales, which is four times the amount imported by Canadian companies.
It is evident from these figures that foreign companies have a predilection to import from the country of their origin and do not provide the necessary multiplier effect to keep the Canadian economy growing and to prepare the way for jobs to be created in Canada.
The third problem we have with the move to more foreign control of our economy is that foreign-controlled firms make a higher proportion of payments outside of the country. I am speaking now of interest and dividend payments and service charges payable to the head office. This reduces the resources available to Canada, and reduces the opportunity for more jobs and more investment resulting from those profits. As an example, American-controlled firms holding 36 per cent of the industrial assets in Canada in 1981, accounted for 61 per cent of all external remittances. So you can see that, compared to Canadian firms, they exported capital at the rate of two to one. Foreign-owned firms do not have a record nearly as good as the Canadian-owned operations and are not as useful in recycling money and creating jobs in Canada. In fact, they exacerbate the problem by creating a large wound in the economic body of the country which drains money outside of the country.
A fourth problem which I would like to deal with today is that multinational corporations seek to maximize global profits by minimizing tax payments. Some of the countries in which they operate have high taxes and others have low taxes. They then do internal shifting of funds by charging various service fees so that their profits are larger in those countries with the lowest effective tax rate. As an example, a study of the computer industry found a $50 million tax loss through this mechanism, equal to an amount 30 per cent lower than what should have been paid given the amount of money actually earned in our country. That comes from a report done in 1981 by the Evans Research Corporation. I think that in the course of the next six months the House would be well advised to become acquainted with the research which shows that this
Investment Canada Act
particular policy decision the Tories have embarked upon is a hazardous one for the country.
The fifth problem we see with this approach is that foreign-controlled companies export much less real product in relation to sales than do their Canadian competitors. In fact, some studies indicate, as the Gray report did, that 90 per cent of the exports of Canadian subsidiaries went to U.S. parents in 1978, when the report was completed, and that 57 per cent of U.S. subsidiaries restricted exports from their Canadian plants. The head office makes certain that the home country gets the advantage of having that subsidiary in a foreign country, in this case Canada, and that the country being colonized, if you like, gets very minimal benefits.
To go quickly to the sixth problem, Mr. Speaker, a high ratio of foreign control of Canadian industry contributes to poor productivity performance by reducing competition, a conclusion that the Science Council found as recently as 1984.
I would conclude by noting that studies by the U.S. Senate and the Harvard School of Business have found that U.S. direct investment in Canada produces a significant net creation of jobs for all sectors of the U.S. workforce but for Canada, the other side of the coin, there is a net loss of jobs. I think that makes the point, Mr. Speaker, and I will now allow another Member to speak.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I rise to speak in favour of the motion to hoist the Bill and delay its consideration for at least six months. I think this makes sense because, once again the new government has got caught up in its own rhetoric. It believes so much in the free enterprise principle that it cannot fully appreciate the impact of this legislation.
There are two elements in what I guess will probably be a two-part presentation, Mr. Speaker. I would like to deal with how they affect my region of northwestern Ontario. We are at the western end of Ontario and we probably think of ourselves more as part of western Canada than of eastern Canada. One of the problems we have had since the area was first settled was how to attract the investment dollars we need to develop employment and the wealth that so often we miss out on. Just like western Canada, we see money being spent in the Golden Horseshoe around Toronto. Manufacturing is developed there using our resources, the raw materials taken usually from one-industry towns over a period of 20 to 30 years. Those towns are then left without any kind of secondary or tertiary industries to fall back on. In the Foreign Investment Review Agency we at least had a mechanism to try to focus, funnel or, if you like, control where investment, albeit foreign investment, could be placed. That is not to say that I agree with the manner in which FIRA was operating because I believe, and I am sure you will concur, that a government which philosophically does not believe in intervention in the marketplace has really no business intervening because it usually mucks it up. It puts on so many checks and balances to protect its interest that it is an inefficient mechanism and really does not do what it was meant to do. We saw how the Liberals dealt with FIRA in that manner.

January 22, 1985
Indian Self-Government
Without the controlling mechanism which could have been used in FIRA, and which is definitely not in Investment Canada, any foreign money invested here will go to the Golden Horseshoe area of Ontario to boost the manufacturing sector. But we in northwestern Ontario, and I suggest every other part of this country, will not get the investment we need in order to produce new wealth. It will not focus investment in a community like Atikokan, in Ear Falls, which is currently undergoing a severe employment crisis. It will not help the community of Thunder Bay which has in excess of 14,000 men and women currently seeking full-time employment. I suspect that before this winter is out that number will rise to over 15,000. Investment Canada is not going to steer money to northwestern Ontario and those communities.
I think that if we gave this government six months to do the kind of research that my colleague referred to, to rethink the Bill, perhaps instead of a weakening of our control over our own destiny, we will have a mechanism which will ensure that the money, whether it be Canadian or otherwise, will be used to benefit the Canadian public.
I will take my chair for the moment, Mr. Speaker, and resume tomorrow.
[ Translation]


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



PRIVATE MEMBERS' BUSINESS-MOTIONS

["I regret to interrupt the Hon. Member, but I am sure he will have many opportunities to continue his remarks.\nOrder, please. The hour provided for Private Members' Business has now expired.\nJanuary 22, 1985"]
The Acting Speaker (Mr. Paproski):: Shall all orders and items preceding No. 27 stand by unanimous consent?


Some Hon. Members:: Agreed.



[Stage Direction]
The House resumed, from December 4, 1984, consideration of the motion of Mr. Penner:
That, in the opinion of this House, the government should consider the advisability of promoting Indian self-government by:
1.	Announcing support for an affirmative policy of constitutional recognition of aboriginal self-government;
2.	Pursuing actively, a bilateral process of discussion with representatives of first nations on such issues as self-government, natives claims and the elimination of the extinguishment policy; and
3.	Introducing legislation to recognize first nations self-government which should be developed by means of a joint process and utilization of the Standing Committee on Indian Affairs and Northern Development.
Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, it is a great pleasure for me to speak on a motion which was introduced a few weeks ago with regard to Indian self-government. When I left off my remarks a few weeks ago I had not had the opportunity to go into detail in some of the areas I feel we should be considering. Over the last number of weeks and months I have sat on the Standing Committee for Indian Affairs and Northern Development. I have been able to study in more detail what Indian Affairs is all about and what the problems of native people are. I would like to relate my remarks strictly to the riding of Timiskaming in northern Ontario. There we have bands in the Moose Factory area, the Temagami area and in the North Bay and Sturgeon Falls areas.
We as elected officials have to study the problems facing the native people of Canada. One and a half years ago the committee of this House toured Canada to deal with some of the problems affecting native people. Native housing in the area of James Bay, for example, is an area that we will be addressing. The previous Government failed over the last 16 years to deal with the tragedy which has affected the native people's livelihoods over a long period of time. The previous Government did not deal with the medical problems in the James Bay area. I am very pleased to say that this Government and the Minister of Indian Affairs and Northern Development (Mr. Crombie) will certainly be dealing with that. The Minister of Indian Affairs and Northern Development will be in Thunder Bay tomorrow to meet with the chiefs of Treaty 9 which comprises the James Bay, lower mainland area.
This Government is trying to co-operate and work with the native people to solve the problems which have affected them over the last number of years. That is why I have a problem with dealing so quickly with this motion on Indian self-government. This Government wants to work with the native people and the provinces to resolve the problems which have been caused over the years. We will be dealing with housing problems and the health care system which have been neglected over the years.
One area that we must address very quickly is the unemployment problem of native people, whether on reserve or off reserve. Native people across the country have not been given the opportunity to have the steady employment which other Canadians across the country enjoy. It is no wonder that native band councils across the country want to resolve this problem with Indian self-government. All Canadians must be very sincere, concerned and aware of this.
The Standing Committee on Indian Affairs and Northern Development has addressed many issues affecting native people in the last number of weeks and will continue to do so. Sitting down as we do with the officials from the Government and the officials from the band councils across Canada is the proper procedure to resolve the problems. I am looking forward to being able to say, at the end of our four-year term, that we have worked closely and freely and resolved problems which native people have had for years. The prior Government
January 22, 1985

could not say this. It did not sit down with the provincial officials, the federal officials, and the officials of the band councils in order to solve the economic problems which the native people are facing. However, I feel very confident that this Government, my Minister, and officials from coast to coast will be able to do something to resolve the economic problems facing native people. We will be able to help them to have a stronger place in Canada.


Mr. Jack Shields (Athabasca):: Mr. Speaker, on December 4 my colleague, the Hon. Member for Cochrane-Superior (Mr. Penner), moved the following motion in the House:
That, in the opinion of this House, the government should consider the advisability of promoting Indian self-government by:
1.	Announcing support for an affirmative policy of constitutional recognition of aboriginal self-government;
2.	Pursuing actively, a bilateral process of discussion with representatives of first nations on such issues as self-government, natives claims and the elimination of the extinguishment policy; and
3.	Introducing legislation to recognize first nations self-government which should be developed by means of a joint process and utilization of the Standing Committee on Indian Affairs and Northern Development.
I have had the distinct pleasure of serving with the Hon. Member for Cochrane-Superior on the House of Commons Standing Committee on Indian Affairs and Northern Development. I would like to congratulate him for his sincerity and hard work. As Hon. Members of the House probably know, he chaired the special Standing Committee on Indian Self-government, of which I was a part, which resulted in what is commonly known as the Penner report.
That committee travelled across Canada, visited with bands and councils, and heard from native groups. It became clear that as a result of government legislation in the past we have relegated the Indian peoples of this country to a servitude that no sane Canadian would accept in this enlightened day and age.
I agree with the Member for Cochrane-Superior that the Indian people have been mistreated by the very paternalistic approach adopted with respect to their very livelihood. We must remember that it was not too long ago-clearly I can remember it distinctly as a young boy growing up in northern Alberta-when Indian people, if they wanted to leave the reserve, had to go to an Indian agent and ask for permission to do so. First they had to ask permission, then they had to sign out, and finally they had to tell the Indian agent when they would return. It was not so long ago when Indians could not leave the reserve.
Members will recall that Indians were not allowed to vote in any election in Canada. In other words, they were totally disenfranchised from the vote. They could not participate in the democratic process.
Today, Indian people elect their chiefs and have band council members who are elected by the band members on the reserve to administer the law, the band and the band members. This council may pass a resolution to spend funds which they
Indian Self-Government
have generated through resource revenue. However, that resolution must go to Ottawa to the Minister of Indian Affairs and Northern Development. The Minister must then approve that resolution because, through legislation, he is the trustee of all the Indians in Canada. This is clearly unacceptable in this day and age and in this country.
I agree with the Member for Cochrane-Superior that we must address this issue. Let me refer again to some of the problems we face in extinguishing this paternalistic attitude and method of dealing with Indian people. I want to compliment the Member for Cochrane-Superior for his initiative in bringing this Private Member's Bill forward. I want to compliment him for his sincerity and hard work. I believe he is a credit to the House of Commons in everything he has done on the Standing Committee on Indian Affairs and Northern Development. I want that to show clearly on the record, because in the future I think we will look back on his activity in chairing the special committee that travelled across the country and produced the Penner report as a very clear milestone in the inclusion of the Indian people into the mainstream of society. I think we will be very proud of him for having worked for that.
I have one problem with giving unlimited support to his Bill today. I suggest it would be useful to remind not only him but all Members of the House of the recent constitutional developments that have taken place with respect to aboriginal peoples.
In February of 1979, the national native organizations attended the First Ministers' Conference on the Constitution as observers. An agenda item was adopted on "Canada's Native Peoples and the Constitution". In September, 1980, another First Ministers' Conference on the Constitution was held with the national native leaders in attendance as observers.
In late 1980 and early 1981, the Special Joint Committee on the Constitution in Canada held hearings and submitted its final report. It made several specific recommendations, including one on the rights of aboriginal peoples in Canada and on the participation of the aboriginal peoples in constitutional conferences. I believe that a significant milestone was reached at that time.
In 1981, the federal and provincial Governments agreed to the inclusion in the Constitution of a clause recognizing and affirming the existing aboriginal and treaty rights of the aboriginal peoples. We all know the difficulty we had in inserting that clause by way of provincial and federal negotiations and even in discussions in the House and Committee to ensure that that clause was included in the Constitution of Canada.
In April of 1982, the Constitution Act was proclaimed with several references to aboriginal peoples. For example, Section 25 said:
The guarantee in this Charter of certain rights and freedoms shall not be construed so as to abrogate or derogate from any aboriginal, treaty or other rights or freedoms that pertain to the aboriginal peoples of Canada including:
(A) Any rights or freedoms that have been recognized by the Royal Proclamation of October 7, 1763; and

January 22, 1985
Indian Self-Government
(B) Any rights or freedoms that may be acquired by the aboriginal people in
Canada by way of land claims settlement.
Section 35 says:
(1)	The existing aboriginal and treaty rights of the aboriginal people of
Canada are hereby recognized and affirmed.
(2)	In this Act. 'aboriginal peoples of Canada' includes the Indian, Inuit and
Metis peoples of Canada.
The requirement for a constitutional conference within a year of proclamation was also included.
In March, 1983, a First Ministers' Conference was held on the rights of aboriginal peoples, with the full participation of aboriginal leaders. It is the first time in the history of Canada that this very sensitive issue was addressed with the full participation of the aboriginal leaders. The outcome of that meeting was a Constitutional Accord to amend the Constitution Act, 1982, and to hold constitutional meetings over three years to identify and define the rights of aboriginal peoples.
The substance of these amendments was to ensure that aboriginal and treaty rights applied equally to male and female persons. I believe that we all know the problems we are facing with that issue. Second, it was to ensure that aboriginal peoples would be involved in formal conferences prior to any amendments to certain sections of the Constitution Acts 18671982. If I may pause for a moment, let me say that the fact that that section alone was agreed to by the leaders of the aboriginal peoples at the constitutional conference precludes us at this time from moving forward with this Private Members' Bill, as much as I and many Members in the House would like to see it moved to committee.
Third, rights acquired through existing and future land claim settlements would be recognized and affirmed in the Constitution in the same way as treaty rights. That is where we face difficulty. We cannot put the cart before the horse.
In March, 1984, a further First Ministers' Conference on the rights of aboriginal peoples was held. No agreement was reached on the four agenda items. The four agenda items, as you will recall, Mr. Speaker, were equality rights: aboriginal title and aboriginal rights; treaties and treaty rights; land and resources; and aboriginal self-government. That bears repeating. No agreement was reached on the four agenda items. You will note, Sir, that the fourth agenda item is aboriginal self-government.
In the spring of 1985, another First Ministers' Conference on aboriginal constitutional matters is scheduled. It is to be followed by another one by April, 1987.
I think clearly, and with great respect to my friend and colleague, the Hon. Member for Cochrane-Superior, this Government is moving and is committed to move in the direction that we want to go, and that is, to bring Indian people of this country along with aboriginal peoples elsewhere, the Inuit, into the mainstream of Canadian society so that they can take their place fully within the total mosaic of our country. They do not like, we do not like, and clearly the Hon. Member for Cochrane-Superior does not like the situation as it is today. I do not
like the fact that individuals in this country, and some of them first Canadians, grown, capable, industrious men still and women, from a white father in Ottawa, a Minister of Indian Affairs and Northern Development, to live and to do the kind of things that we take for granted every day of our lives. Clearly we have to correct this injustice and clearly the present Minister of Indian Affairs and Northern Development (Mr. Crombie) is committed to doing that. We on this side of the House, this Government, is committed to doing that and we will do it.
The issues involved in these constitutional negotiations are complex. We all know that. They concern the relationship between aboriginal peoples and the rest of Canadians. The resolution will mark the creation of a new relationship. We have to resolve it and when we do, it will be a new relationship. The relationship under which the Indian people in Canada now function is the kind of relationship that makes them second-class citizens. This has to be changed. We are going to resolve this question. But it will create a whole new relationship with the rest of Canada because of the aboriginal rights, because of the land titles, the land entitlements, the land settlements and the treaty rights. All of these have to be taken into account in this complex issue. In time we will eliminate the terrible bureaucracy that we have known as Indian Affairs and Northern Development or DIAND.
In the area of aboriginal government, the complexity of jurisdictional issues is very obvious. Careful negotiations are needed based on a full and frank expression of aims and needs and the determination to develop a set of intergovernmental relationships that will work well. As we all know, reserves exist in every province in the Northwest Territories and in the Yukon. Because of the complexity of working with another government, some of the reserves work very closely or are very closely aligned with municipalities, such as, for example, the Hobbema Reserve and the Sarcee Reserve in Calgary. The urban sprawl of Calgary is now starting to surround portions of the Sarcee Reserve. We see the same thing happening in Edmonton where the urban sprawl toward the west has started to encompass parts of the reserve. In both cases the band councils of those reserves, with permission, by the way, of the Minister of Indian Affairs and Northern Affairs of previous governments, have developed subdivisions. We find the same thing in Vancouver and Victoria. The jurisdictional issues are obviously very complex.
The Canadian political tradition is based on interdependence and co-operation among several orders of government. How then are we to fit them in when Indian self-government becomes a reality? How do we fit them in with what we have existing today? Clearly our tradition is based on co-operation. We have gone through a period now of 10 to 15 years or so when there was not too much co-operation between the provincial and federal governments. This new Government is changing that. The signs and the results of that change are showing up right across the country. Because of the powers and functioning stemming from the Constitution, aboriginal government will have to fit into and be part of this political tradition.
January 22, 1985

I am sorry that I cannot support sending this Private Member's Bill from a colleague whom I admire very much. We will all be proud that he was a Member sitting in this House of Commons when we were here, because we will look back on the work he has done on behalf of aboriginal native people with sincere and distinct pride. I see that my time has elapsed, Mr. Speaker. I am sorry that I must sit down because I had a few more comments to make. Because of the complexity of the issue, we will be addressing it again, and I know the Hon. Member will play a very significant role in any decision that comes out of this House of Commons, or indeed out of the Standing Committee on Indian Affairs and Northern Development.


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, it gives me pleasure to speak on this Bill this afternoon and to outline some very serious concerns that I have on the matter of native self-government.
I think everyone in this House believes that the native people in Canada do have the right to self-government. It is a right that must be re-established. It was never sold, it was never surrendered, and this Government must take responsibility for recognizing and returning that right to the native people as quickly as possible.
If there is no doubt on that particular issue, I would like to outline briefly the activities of an Indian band in my riding. I am speaking of the Sechelts. The Sechelts have been in the forefront of a campaign to make the relationship with the Government of Canada and the native people in Canada more human. They have taken a very positive, dynamic and energetic stance on this question, particularly the question of native self-government. They have expended a great deal of their resources. It has been a major priority of Chief Stan Dixon, with the Sechelt Band council and people. The expenditure of time and resources on this project has been enormous.
I should like to refer to the basic approach of the Sechelt people. As a result of their experience, their administration in the past, their development, execution and planning of projects, the Sechelt people have developed their band resources to the maximum under the present restrictive nature of the Indian Act. They have taken advantage of all discretionary options that are available. They are still hampered. The quality of life and the potential of the Sechelt people are still hampered by the colonial and fraternalistic legislation which the Government of Canada imposes on all Indian people.
In the face of that difficulty, the Sechelt people, the Sechelt Band Council and Chief Stan Dixon produced a suggestion for the Government of Canada. It was produced a number of years ago and was called the Sechelt Indian Band Act. Their proposal was that the House of Commons should consider this legislation. It was simply an enabling piece of legislation which recognized the right of these people to develop a constitution appropriate to their community. Also it would allow them to pursue activities, as other Canadians under their forms of
Indian Self-Government
self-government could do, to improve the quality of life of the citizens of that community.
Unfortunately, as time went by they ran up against government obstacles. I will go back a step and describe what happened. They had approached the district level of Indian Affairs and had received support and assistance for their concept. At the regional level in the western region of Indian Affairs, they obtained financial support and assistance in developing a concept for a Sechelt Indian Band Act and their constitution. They obtained support from the regional district and then came to Ottawa where the concept was supported once again. They approached Members of the House and obtained support for the concept. They approached the last Minister who gave them support. He said that he would be prepared to introduce legislation which would allow the Sechelt Indian people to move forward with their particular form of self-government.
Unfortunately, it became tangled in the race for the leadership of the Liberal Party. It was delayed and delayed until the end of the last Parliament. Instead of becoming discouraged, the Sechelt Indian people again approached all Parties in the House of Commons. They approached the Department of Indian Affairs. Once again they are ready to place before this institution a piece of self-government legislation which would enable their band to develop a constitution appropriate for their community.
It is my understanding that the Government and the Minister of Indian Affairs and Northern Development (Mr. Crom-bie) are familiar with this particular piece of legislation, and that they have accepted it as a pilot project to be used in the development of the concept of native self-government and will be introducing it in the House before the end of January. It is my hope that the Minister will be introducing that legislation. He can be certain of the support of the New Democratic Party in expediting that piece of legislation through the House of Commons to meet the needs of the Sechelt people.
The Sechelt Indian Band produced a piece of legislation which I think is appropriate for a pilot project to begin the process of native self-government. Parliament must do something quickly and effectively to recognize and restore that right to native people in the country. In the development and application of this project, the Sechelt people could act as a model which may or may not be appropriate for other bands. Certainly it would be a positive move. If the Minister acts quickly to expedite that piece of legislation through the House, it would allow the Sechelt people to put their construction in place, begin to develop the process of self-government, to remove themselves from the restrictive nature of the Indian Act, and to begin the process of setting up a pilot project with this particular piece of legislation.
Certainly there is a financial side to the situation. It is recognized that the Government of Canada has a financial responsibility to native communities. The Sechelt Indian Band and its people have put forward a proposal to expedite and make more meaningful the financial relationship between the Government of Canada and those people, as well as others who

January 22, 1985
Indian Self-Government
would organize their self-government process. This financial commitment must be recognized. Certainly in passing the membership legislation in the last Parliament to remedy the problems under Section 12(l)(b), we ran squarely into the question of whether it is correct to restore membership to a native community over the heads of the people in that community. We failed to recognize the critical need to provide financial resources to those communities to establish those new members in a fair and equitable way. We must deal with that.
It is my hope that the Government will live up to its commitments to the Sechelt Indian people. I hope it introduces the legislation before the end of January so that the House can deal with it in a quick and expeditious manner and possibly implement one of the first solid endeavours in native self-government in Canada. It would be a credit to the Government and to the Sechelt people who have worked so long and hard on this particular matter.
I should like to read into the record a couple of quotations of Chief Stan Dixon. The first one was reported as follows:
The Sechelt band has steadily maintained its interest in being "masters of our own destiny." They feel implementation of proposed legislation would leave them free of the Department of Indian Affairs, and in control, but still enjoying the aboriginal and constitutional rights of indigenous people.
Another quotation read:
Our proposal is simply an interim step which will permit us and others who wish to free themselves from the rigidity of the current Indian Act, to do so with a charter developed at the band level.
What could be simpler? What basic right could be more easily recognized than this particular situation?
It goes without saying that many of the aspects with which the House has failed to deal are extremely important. However, none is more important than the aspect of native self-government. It is a right of the Indian people. That right has to be recognized. It was never extinguished. It was never bought. It was never surrendered. It must be restored.
In the self-government issue there are a number of very important matters. One is education. The right of Indian people to develop a quality of life which is normal and expected in the country has been hampered ever since the present Government of Canada took office. There are enormous drop-out rates in native communities. I was astounded when I visited a number of those communities to learn that drop-out rates are still enormous. The average level of education of a native child in my area reaches up to about grade 10. Certainly there are many communities which receive even less than that. The federal Government has cut back on its funding for native education. Indian children do not have anywhere near the same opportunities as those enjoyed by any other children in Canada. That is a complete disgrace. That disgrace on the country could be eliminated by a decision of Parliament to accept its responsibility to provide Indian children in Canada enough in the way of financial resources to provide education. The Government, in its narrow and tight policy, is failing to meet the educational needs of Indian children. It is destroying the quality of life by that single act, as well as the quality of opportunity for native children.
I spoke with a chief on the central coast of British Columbia who indicated that their problems were financial. He also indicated that they had transportation problems, as well as problems in terms of establishing their rights as a people in the country. He indicated that above all else one of their greatest problems was the problem of human resources. They cannot educate their children because the Government will simply not give them the funds which it gives to other children in the country. Even with the funds which they are given under the master tuition agreement, for example to the Province of British Columbia, they have no guarantees that they are expended in the best interests of Indian children.
This Government must give control over education dollars to those who would direct them most appropriately. The native people of British Columbia, and indeed of all Canada, must have some say in exercising the expenditure of those dollars. One small school district represents tens of thousands of dollars each year. Although the particular school district collects those dollars each year, it does not do what is required for native people. It does not happen and will not hapen until we give control over those federal education dollars to the native people, particularly in the case of British Columbia. It is widely believed that the Province of B.C. is expending those funds in an inappropriate manner. They do not recognize in an effective way the rights of native people to an education.
There are serious questions about the use of those funds. I believe it would be appropriated for the Minister of Indian Affairs to launch an investigation into the expenditures by the Province of British Columbia which we provide under the master tuition agreement and other federal programs. It is widely believed that those funds are not being expended according to the wishes and the programs of the federal Government.
The recognition of those students and the provision of funds to enable them to obtain a post-secondary education or technical training is not being done by the federal Government. It is my understanding that it cut off those funds. It is my belief and the belief of many other people in this House that the federal Government has a responsibility to native children to ensure that they obtain a proper education, take their rightful place and establish a quality of life. It is time we restored that funding to ensure that native children have an opportunity to attend university, technical schools, vocational schools and community colleges. We must provide the resource base to those bands in order that they can begin to develop. This is critically important. It is a serious neglect of our responsibilities in terms of the Government of Canada not to provide those funds.
There is another matter that is important in the issue of self-government. In establishing the needs of native communities through some kind of access, it is important to have a financially stable economic base. This Government must push harder. It must make a solid commitment to resolve questions of the aboriginal land claim. The Province of British Columbia
January 22, 1985

is completely negligent and completely irresponsible in resolving this matter, in recognizing the rights of aboriginal people to the area which they inhabit and the resource base they used in former times. Much of this has been usurped and used for the benefit of communities other than native communities.
One example brought to me time and again is that of the small reserves that were given in the Province of British Columbia. They were not given access to minerals, fossil fuels and timber as was done in other areas of Canada because of a large land base. They were not given access to those resources even though they use they in them in their day to day lives. The reason for the small land reserve base in British Columbia was that those communities were so heavily dependent on fishing. That reason was stated time and again. Native people in British Columbia have been removed from the fishing resource to a large degree. The reserves are too small to handle the people who live there. That is one reason why so many people live in other communities. Often 50, 60 or 70 per cent of the people cannot live on the these small reserves with the inadequate funding.
It will be clearly established that native people have the right and have a claim against territories and resources they previously used. If we provide access to the resource base, the land, fish, timber and mineral resources used in previous times in areas over which those bands had jurisdiction, it would be a way by which those bands could establish some financial and economic security. Unless we give them access, they are not going to be able to re-establish any wealth or financial security.
This Government must move quickly, in advance of the settlement of the land claims, to provide, where possible, access to resource where the native communities have the resources and are in need of assistance. We had an example in the House the day when the Conservatives raised the matter of forestry and criticized the forestry policy in Canada. There was agreement among all Parties to press development of a forestry program within the Department of Indian Affairs for native people. As yet, nothing serious has happened on that. I challenge members of the present Government who stood on the floor of this House in opposition and made a commitment to do something to provide now access to forestry and to do so in a very thorough manner. That is one example.
Access to the fishing resource must come about. Where land is available, it has to be provided. In short, we must begin the process in advance of convincing our colleagues in British Columbia, who are almost neanderthal on this concept, that something can be done to provide a base of wealth for native people.
I see my time is up, Mr. Speaker. Thank you for the opportunity to express my thoughts.


Mr. F. Oberle (Parliamentary Secretary to Minister of State (Mines)):: Mr. Speaker, I take pleasure in contributing briefly to the debate this afternoon. As Hon. Members will know, along with the Hon. Member for Cochrane-Superior (Mr. Penner), I shared the responsibility for developing a
Indian Self-Government
blueprint for the future, as the Penner report has come to be known, in terms of the future relationship between the Government of Canada, the other partners in Confederation and our native people.
I naturally applaud my hon. friend for bringing this motion before the House. However, I must tell him immediately that there is a fundamental flaw in his motion. As all of us know, if this motion were to pass the House this afternoon, it would be referred to committee.
The flaw that I see in the Hon. Member's motion is that the committee has already dealt with this matter. The Hon. Member and myself, together with several of our colleagues, worked one and a half years and travelled throughout the country in developing a self-government report with 58 very distinct recommendations incorporated in it. That report was tabled in the House. The committee has spoken. It has done its work. As I said, the committee produced a blueprint for the future and, indeed, that is what it is.
Naturally the Hon. Member has to use this opportunity to highlight the affair throughout the country again. However, absolutely no purpose would be served if this matter were once again referred to committee.
I have little problem with the Hon. Member's motion which proposes to affirm the concept of aboriginal rights. As my colleague from Athabasca (Mr. Shields) stated, that is no longer a question. That concept is entrenched in our Constitution in a manner which can no longer abrogate from the distinct rights which native people have in this country, dating back to the Royal Proclamation of 1763.
There is no need to reaffirm this concept. It is done. The question we have to come to grips with now is, what does the concept of aboriginal rights mean? It means different things to different people. There are 258 bands or so-called nations throughout this country. If you meet with all of them, as we attempted to do, you discover that the concept of aboriginal rights and title means something different to all 258 of them. However, there are certain recurring themes, trends and principles that the committee immediately discovered as being consistent throughout. We found, for instance, that to all people, the concept of aboriginal rights means the right to self-determination and the right to self-government. That became very apparent and there was no dissension. It is proper for the Hon. Member for Cochrane-Superior who was the chairman of that special committee to remind the House of the fact that there is, first, the recognition of the concept of aboriginal rights and, second, that it means the right to self-determination and the right to self-government.
Regarding the form, nature and responsibilities of these self-government structures, the committee report is mute for a very good reason. Again, throughout our deliberations in all parts of the country with different tribal associations, bands and nations, we discovered that everyone had a different idea of the kind of structure they would like to see and which would serve best their heritage, traditions, culture and religion. It

January 22, 1985
Indian Self-Government
would have been wrong for us, the committee, and indeed it would be wrong for the Government to impose a structure of government that would not be suitable to these legitimate aspirations of our native people. For that reason, the committee did not lay out any distinct form of government but laid out a general framework of a self-government structure which would then be left to negotiations between Indian nations and a special representative of the federal Government to define.
Much of the definition of self-government deals with the responsibility that these native leaders would have to assume and with how they would be accountable to the people they lead and govern. Should they be accountable in the same way as we are responsible to our constituents or, as natives, and because of their distinct and traditional form of governing themselves, do they have a better way? That must be discussed. I would venture to guess that there would be a number of different ways in which native people could prove to us that they are and can be responsible to their constituents.
Previous speakers have mentioned the economic foundation upon which these governments will be built. Membership is a critical issue. Another subcommittee dealt with the question of membership and the discrimination section of the Indian Act which has a bearing on this critical question.
I would like to call these forms of governments distinct forms of governments because they will not be municipal or provincial governments but will be distinct forms that will operate within the framework of Confederation. This is another item that the committee established. It is the committee's wish and determination that Indian people join Confederation in a distinct and different way.
We will have to establish how these new governments will relate first to other governments, municipal, provincial and federal, and how they will relate to other native people including the Metis, the so-called non-status people who call themselves the forgotten people, and the Inuit who are not embraced within this discussion. All of these things must be discussed.
It is unfortunate that the Hon. Member for Cochrane-Superior is not present today. I would not like to see the new Government proceed with the same indecent haste with which the former Government proceeded five minutes to 12 before the election. It brought in a Bill giving all things to all people without consultation or dialogue. The Bill was designed for no other purpose than to get it past the election and earn it the affection of the Indian people who had been so thoroughly disappointed by the former Government. I would not* support that kind of initiative and I do not think that the Hon. Member for Cochrane-Superior would either.
I believe that our dialogue with native people should proceed in the same way as our dialogue is proceeding with the provincial Governments under a new form of co-operative federalism because, after all, we do intend to incorporate and embrace Indian governments in a new scheme of co-operative federalism. We would want very much to know from the native people how they would want us to proceed.
I can tell the House, the country and you, Mr. Speaker, that it is the intention of the new Government to proceed expeditiously, with care, fairness and sensitivity but with firmness as well toward the development of a better relationship with our native people. We will proceed in a manner that is more consistent with the Canadian tradition and is fair, just and designed to repair some of the injustices of the past.


Mr. Thomas Suluk (Nunatsiaq):: Mr. Speaker, I am very happy indeed to take the first opportunity in the House afforded to me to speak on a subject other than a statement or a question. The reason I wish to speak on the issue of Indian self-government is that I myself am one of the people. Even though I am not a member of one of the Indian tribes, I am of the Inuit people who were commonly known in the world as Eskimos. However, I do not consider myself to be an Eskimo. That is a term which is offensive to the Inuit.
I was one of the past directors of land claims and one of the chief negotiators of our organization from the Northwest Territories for the past four years. We have been negotiating with the Government of Canada since 1974-75. When the Inuit discuss self-government, they want to include everything which governments normally include. However, over the years, we have found, as the Parliamentary Secretary mentioned, that there were so many concepts that it is difficult to come to terms with this unless one goes through a long process.
One of the processes which the Inuit of Nunavut have attempted to use is the political route. We have attempted to use the Territorial Government route by calling for the division of the Northwest Territories. I am happy to inform other Members of the House that a little over one week ago, the groups from the eastern Arctic and the western Arctic had come to some terms over the issue of boundaries. I am sure that over the next few weeks and months, more issues will arise and be clarified.
I would want to see the Government of Canada deal first with the large issue of the division of the Northwest Territories, an issue which has been a consistent theme of the Inuit people in my riding. It is not a radical concept, but a concept which follows the traditional forms of debate in terms of the formation of public governments.


The Acting Speaker (Mr. Paproski):: I regret to interrupt the Hon. Member, but I am sure he will have many opportunities to continue his remarks.
Order, please. The hour provided for Private Members' Business has now expired.
January 22, 1985



PROCEEDINGS ON ADJOURNMENT MOTION

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

Maurice Brydon Foster: Mr. Speaker, on November 20, 1984, I asked the Minister of Agriculture (Mr. Wise) if the Government intended to keep its promise to write down all outstanding farm loans to present-day interest rates. The Minister waffled a bit and gave a lot of verbiage, but did not indicate much action in his response.
There is a very serious crisis facing thousands and thousands of young farmers in Canada today. A recent study by the Farm Credit Corporation indicated that 39,000 farmers in Canada are in serious financial difficulty. The criterion for judging that difficulty is that those farmers are paying more than 40 per cent of their gross revenues to cover payments on their properties. The second criterion is that the actual ownership of the farm operations, the equity, is less than 15 per cent. The third criteron is that the farmers are borrowing more than they are investing in capital on the farm. When we apply those criteria we find that each of the 39,000 farmers is subject to one or more of those criteria. It is a very serious situation.
The personal tragedy of all this is that most of the 39,000 farmers are young. They are our most innovative farmers, the farmers who have applied new technology. In fact, they produce half of all the produce produced in Canada each year.
The Government to this point has not taken any decisive or effective steps to help the vast majority of those farmers who are facing bankruptcy or total collapse. The Minister of Agriculture brought in a modest program a few weeks ago which would reduce interest rates from 14 per cent or 15 per cent down to 12.75 per cent for a specific period, during 1981 and 1982. However, we must look at that measure in light of the recommendation which was made by the Canadian Cattlemen's Association, the National Farmers Union and the Canadian Federation of Agriculture that certain commodity groups require interest rates in the area of about 8 per cent.
An announcement was made last week by the Minister of Agriculture for Manitoba that legislation would be brought in to block all farm foreclosures unless the Government and the bank reduced interest rates to 8 per cent. The disturbing part of this is that the Minister of Agriculture for Saskatchewan has already done that. If the Minister of Agriculture for Manitoba does the same thing, I believe there will be chaos in the farm financing situation. Fist, credit will dry up from the bankers in Manitoba to the farm producers. That credit would enable farm producers to put in their crops next spring. Bankers in other provinces, in anticipation of the action of those provinces, will impose a debt moratorium and will continue with foreclosures. There are currently thousands of
Adjournment Debate
cases in which foreclosure action could be taken. It will end up in chaos in farm financing.
If we compare what this Government has done, essentially nothing, to forestall these bankruptcies, with what the Farmers Home Administration is doing in the United States, we will see that they have a program which sets aside one-quarter of the farm debt for up to five years. We will also see that they have already processed something like 477 applications in the first month of that program. They anticipate 150,000 applications and are ready to look after them. They have already lowered the rates on 8,000 approved loans from 11 per cent or 12 per cent to 7 per cent or 5 per cent. What we have in the United States is a very effective program to set aside a portion of the debt to forestall these bankruptcies and stop the kind of chaos we see developing among these 39,000 farmers affected by low commodity prices, decreasing land value and high interest rates. I hope the Parliamentary Secretary will be able to respond in a positive way this evening.


Mr. Pierre Blais (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, speaking on behalf of the Minister of Agriculture and the Government of Canada, I am pleased with this opportunity to answer the question put by the Hon. Member for Algoma (Mr. Foster). The question raised on November 20 referred to high interest rates and what the Government was doing to help farmers beset by financial problems. Unfortunately, the Hon. Member for Algoma does not seem to recall, although I agree farmers are faced with a difficult and in some cases precarious situation with interest rates of 16 and 17 per cent, that our Government was not in power when those rates were in effect.
Last week in Quebec City, the Minister of Agriculture announced that we were fulfilling yet another of our election promises. We had promised farmers we would make available immediately the necessary funds to help them refinance their loans at current-day interest rates.
I should explain that we have received many requests for assistance from farmers with long-term loans locked in at high interest rates with the Farm Credit Corporation. They took out loans when interest rates, and I think you will remember that, had reached their maximum and the FCC refused to let them set the due date. As a result, they were committed to repayment of their loans over periods of as much as 20 or 30 years at rates varying from 14 to 16 % per cent. Most of them are unable to refinance their loans at a lower rate with a commercial financial institution or through small business bonds.
That is why the Minister announced that all farmers who took out loans with the Farm Credit Corporation between April 1, 1981 and December 8, 1982 will be able to write down their rates to 123/4 per cent as of January 1, 1985. This decision will affect 5,600 FCC customers, who have already been

January 22, 1985
Adjournment Debate
informed of the details and the procedure to be followed. All this will be retroactive to January 1, and represents an annual saving of $16 million over the next five years for this group of borrowers. The announcement may have an impact on a number of foreclosures ordered by the FCC. The temporary suspension expired on January 16, but all borrowers whose assets have been seized may now have their case reviewed by an independent appeal board. Measures to that effect were also announced last December. Furthermore, these borrowers can have their case reassessed and if possible have their interest rates written down to a lower rate.
Mr. Speaker, yesterday we had some more positive announcements with respect to farm credit. The FCC has lowered its interest rates as of January 21. Rates have been reduced from 13 Vi to 12% and finally, Mr. Speaker, I would like to say that it would of course be nice, as my colleague from Algoma suggested, to reduce interest rates to 6 and 8 per cent, but I think everyone will agree that we have already made some headway if we consider the rates of 16 and 17 per cent we had a few years ago under the previous government.


ADMINISTRATION OF JUSTICE-UNLICENSED CABLE TELEVISION OPERATORS-PROSECUTION QUERY (B) MINISTER'S POSITION
Robert Phillip Kaplan: Mr. Speaker, on December 3, 1984 I called on the Minister of Justice (Mr. Crosbie) to bring justice to the area of the cable TV operators, licensed and unlicensed, in this country. Instead of dealing with the problem an incredible confusion in the industry has been created. This confusion is risking the destruction of the Canadian broadcasting system. It is damaging the rights of licensed cable operators and is leading to very serious financial losses to them.
I rise today to state the case in somewhat more detail. I understand there are two Parliamentary Secretaries here to answer this, but I think it would take a fleet of Parliamentary Secretaries. I do not think there is a good answer to it.
There are now two classes of operators in the cable TV field in the country. There is one class which went to the CRTC and was awarded licenses. They are Canadian owned and carry Canadian content. They are restricted in the amount of American programming they can carry. They pay the Americans for the programming that they use and, in addition, pay a 6 per cent tax to a special fund to create financing for Canadian content and programming in our country. They operate in this country.
At the same time, within their territory, there are operators who did not go to the CRTC, or if they went were turned down and not given a licenses. They established anyway. They are not necessarily Canadian owned and definitely do not carry Canadian content. They pick up American signals from the air without paying the Americans anything for them. They can pick up whatever they like, even channels which are not
available to the licensed broadcasters, such as the Disney channel, some channels that carry spicey movies, HBO and Cinemax. They can pick up a whole bunch of lines which are there but which the licensed operators cannot carry. They offer all of these at lower cost to the same people who are now being served by the licensed TV operators. As well, that they do not pay the 6 per cent tax to this fund for Canadian programming.
The former Government began to prosecute the unlicensed cable operators in order to protect the rights which had been awarded to the licensed operators. For example, in Salmon Arm, British Columbia I understand that the two operations are right across the street from each other. One person holds a license and is meeting all of the conditions that I just described, and his competitor across the street is not meeting any of them, and was going to be prosecuted by the former Government when the present Attorney General of Canada directed that these prosecutions be stayed.
I think the reason that they were stayed was because of the last election campaign. I understand there are over 500 unlicensed cable operators in the Prairie provinces alone operating against the licensed operators without licenses or restrictions of any kind. Tory candidates must have gone to them and told them to keep going, that they would bail them out if they won the election. They won the election. The unlicensed operators have been bailed out. When they heard that the prosecutions had been stayed they went ahead and announced that they had won a great victory. They increased their numbers of subscribers, damaging those who were carrying Canadian content, paying the tax and paying the Americans for the channels they were taking from the United States. A great victory was won by the others.
This is a terrible mess. The broadcasting system is suffering as is Canadian content. The property rights of individuals who applied for licenses and got them are suffering. The Government is doing nothing about it.


Mr. Chris Speyer (Parliamentary Secretary to Minister of Justice and Attorney General of Canada):: Mr. Speaker, in fulfilling the role of chief law officer of the Crown, the Attorney General of Canada is called upon to exercise the judgment and discretion which he feels is in the public interest. He is guided by certain parliamentary, legal and constitutional principles and may look to a rich heritage in the tradition of the holders of that high office both in Canada and Great Britain.
In arriving at a decision whether to proceed with a prosecution, the Attorney General is entitled to seek information and advice from others. That is not to say that he is directed in the course of his discretion by his colleagues or by Parliament itself. Nor is it suggested that the Attorney General is not accountable to Parliament for his decision, which he obviously is.
Anyone who properly understands the position and function of the Attorney General will be able to appreciate that the
January 22, 1985

recent decision with regard to the Broadcasting Act cases was undertaken properly in accordance with our best traditions of both principle and traditions.
As the Minister of Justice and Attorney General of Canada (Mr. Crosbie) has already stated, his decision was based on considerations of public order and policy. He ascertained, with reference to one of his colleagues in Government, that an imminent change in the Government's Broadcasting policy was being planned. As everyone knowledgeable on the subject is already aware, it has been increasingly difficult in recent years to harmonize the law with the realities of the evolving technology as it relates to the distribution of television programming signals to rural and remote communities in Canada.
In these circumstances, with a handful of cases about to be tried in the criminal courts and reconsideration of regulatory policy about to be undertaken, the Attorney General came to the conclusion that the prosecution of those cases should be stayed, pending reconsideration which might well affect some or all of these cases which, by that time, would have been tried. That is the reason for the position that was taken by the Attorney General.


GOVERNMENT ADVERTISING-AWARDING OF CONTRACT. (B) MEASURES TAKEN BY GOVERNMENT
Michael Morris Cassidy: Mr. Speaker, during the federal election campaign, one of the major promises of the Progressive Conservative Party was to clean up the mess of patronage left by the Liberals during their last years of office.
Last July, in one of the few acts in office, the Turner Government awarded a 21-month contract as Agency of Record to a consortium of four advertising agencies known as Canadian Media Corp., with strong ties to the Liberal Party. When that deal became known, the present Minister of National Revenue (Mr. Beatty) was quite forthright about it; a deal which was carried out in top secret without any bids being called. He said the Turner Government was "dipping low into the Liberal porkbarrel".

Mr. Speaker, I asked for this adjournment debate because I find it impossible to distinguish the contract awarded in January to Media Canada as the federal Government's Agency of Record from what the Liberals have done before, except that now the Progressive Conservatives and not the Liberals are going to benefit. Hon. Members are aware of the comments made by Mr. Roger Nantel of Montreal, one of the directors of Media Canada, when the contract was made public. He was the Progressive Conservative Party's chief of communications in Quebec City during the election campaign. His comments implied that the company had made some kind of agreement with the Progressive Conservative Party as one of the conditions of the contract with the Government of Canada.
Mr. Speaker, these statements are now being investigated by the RCMP. It is quite clear that. . . regardless of the competence of Mr. Nantel and his partner, Mr. Simpson, they were
Adjournment Debate
awarded the contract mainly because they are Progressive Conservatives who in the past have worked for the Progressive Conservative Party and who are continuing to work for the Progressive Conservative Party.

When I raised this question yesterday, I suggested that the Government's rules for contracting for services were being grossly violated by the decision to negotiate a contract with one supplier of media buying services with no effort to call tenders or look at the capabilities of other suppliers. The Minister of Supply and Services (Mr. Andre) suggested that the advertising business is not amenable to tender. His office told my office that a contract like this one is exempt from tendering under Treasury Board regulations.
I have checked those regulations and the answer is, that is just not so. The Government's own regulations about service contracts indicate otherwise. Paragraph 3.1 of the contract with Media Canada states specifically that "This is intended to be a service contract within the meaning of the Government Contracts Regulations (PC 1975-2042)". These were the regulations that I quoted from in the House on Monday. Section 8 of these regulations is explicit in calling for a contracting authority to invite tenders, "before any contract is entered into" except for emergencies, for small contracts where it would not be in the public interest or where only one person or company is capable of performing the contract.
The amendments made to this government contract regulations since 1975 contain no exemptions for advertising. Nor was that step taken by the Clark Government when it established the Agency of Record system. A change in the Agency of Record is not an emergency. It is a substantial contract. It is hard to see how it would be against the public interest to invite tenders. Also more than one company is capable of fulfilling a contract.

Mr. Speaker, it is quite clear that part of the problems facing us today are due to abuse of the tender system for service contracts with the Government. In some newspaper articles it was said that 85 per cent of service contracts, representing a value of over $2 billion annually, are awarded without tender.

However, if the new Government were permitted to change it, it would be seeking to clean out the system left by the Liberals, not perpetuating it.
Mr. Andre says that contracts like this are not amenable to Canada. Yet it is common in the advertising business for agencies to compete for contracts, not on the basis of price, but on the basis of the quality of their presentation. Moreover, Mr. Andre-


The Acting Speaker (Mr. Paproski):: Order. The Minister, please.

January 22, 1985
Adjournment Debate


Michael Morris Cassidy: -prides himself on the fact that he got a lower price. If that is the case, why not tender to see what lower prices might have been given. He says there is going to be competition for individual departmental contracts. If that is the case, then why not compete for this particular contract?
The tendering rules of the Government are not complicated. They could have been followed in this case. There are at least six companies capable of having a go at this contract. There is: Media Canada; Canadian Media Corp. and Foster Advertising in Ontario, an Agency of Record for Ontario, which has good Tory credentials. There is also Harrison, Young, and Pesonen of Toronto; Media Dimensions of Toronto; and Media Specialists of Toronto. All of them could have been asked to compete for this contract, Mr. Speaker. They were not.
I want to suggest that when Brian Mulroney said during the election campaign-


The Acting Speaker (Mr. Paproski):: Order, please. It is the Right Hon. gentleman, the Right Hon. Prime Minister, and the Hon. Minister.


Michael Morris Cassidy: During the election campaign the present Prime Minister (Mr. Mulroney) said:
The vulgarity of the Liberal patronage machine is such that we're all going to have to take a second look at our partisanship.
On the evidence it appears that a second look has been taken and that the Conservative Government has decided that it will be just as vulgar as the Liberal Government was when it was in office.


Mr. Geoff Scott (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, first let me make it clear that no contract for $1.8 million has been awarded as the Hon. Member suggested in his question the other day. The company headed by Messrs. Nantel and Simpson, to which my hon. colleague refers, is in receipt of a contract worth $375,000.
This amount, it is true, is for three months work, from January 1 to March 31 at $125,000 a month. The old contract, the Hon. Member should note, was for $143,000 a month. This Government has saved $18,000 a month in terms of those advertising contracts. If the comparison were to be drawn between this contract and similar awards made under the previous regime, it would be seen that on a monthly basis this
Government has saved the taxpayer

I repeat-$18,000 a month. The new deal that was entered into was negotiated bearing in mind this Government's commitment to working in the interests of the Canadian taxpayer wherever possible. Let us make one thing clear.
Traditionally the appointment of the Agency of Record was never one that was subjected to the competitive process. Indeed, I should point out that the principle of the Agency of Record, introduced by Peter Simpson in 1979, has resulted in substantial savings to the Government. In fact, by using the Agency of Record, the Government has achieved savings of some $3.6 million since 1981.
I have already said that the Government is committed to acting in the interests of both this country and its taxpayers. The objective of this Government is not patronage, not costly prestige, but solid savings so that our national economy can gain much needed momentum.
The Minister of Supply and Services (Mr. Andre) has already stated in this House that the business of advertising does not lend itself readily to the competitive process. It should be possible to select the most appropriate organization able to provide its client the services that are required for each specific program or project.


Michael Morris Cassidy: Why wasn't anybody else asked?


Geoffrey Douglas Scott: From a creative point of view, this would be ideal. It can be made possible if agency charges are made uniform throughout the Government, and this is the intention of my hon. colleague, the Minister of Supply and Services.
The criteria to be met will be those of creativity and competence, responsiveness and trust and individual creditability.
In conclusion, I repeat that the new Agency of Record contract has saved money for taxpayers. The principle of Agency of Record, founded by Peter Simpson, has brought large savings to the Government-$3.6 million since 1981. Our objective, unlike that of the former Government, is not patronage but to save taxpayers money.
At 6.26 p.m., the House adjourned.

Wednesday, January 23, 1985