1985-09-10

Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, on a point of order.


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


Jean-Robert Gauthier: Mr. Speaker, I wish to raise a point of order. I notice that we do not have yesterday's Hansard, which is unfortunate because I wanted to refer to something that happened yesterday-

Something happened in the last hour of House business. The Government House Leader on a point of order asked that the House allow him to table a certain document, namely, a notice of Ways and Means motion.
Since yesterday was the first day under our new rules, some of us were uncertain about them, although I did voice some reservations about the Government House Leader's procedure followed at the time. I cannot see how a private Member would be allowed, for example, to adjourn the House on a bootleg by asking the House to be recognized on a point of order.
If the Minister had the floor, I agree he could table documents, but he did not have the floor. He interrupted the Hon. Member for Glengarry-Prescott-Russell who was speaking and when he had the chance during his point of order, the Minister tabled the document.
I know the rules say that a Minister can table such a document at any time but I take it that we underline "at any time when he has the floor". If I cannot move the adjournment of the House at any time in the deliberations, how can a Minister do what he did yesterday?
I just want to refer the whole question to you, Mr. Speaker, so there are no precedents set as a result of what happened yesterday. I would like to point out that motions to adjourn the House were covered under Standing Order 26 under the old rules. Beauchesne's Fifth Edition in Citation 283 reads:
A Member may not use a point of order to secure the floor in order to move the adjournment of the House.
I submit to you, Mr. Speaker, that a Minister also may not secure the floor on a point of order in order to table documents. To me, that would be contrary to the spirit of our rules.
Second, it may be impolite in terms of parliamentary procedure.
I would ask you take this question under advisement and give us a ruling if no such ruling has been made previously.


Mr. Hnatyshyn:: Mr. Speaker, I appreciate the point raised by the Hon. Member. All I can say is that this particular tabling of documents is as much in the interests of Hon. Members sitting in the Official Opposition as it is with respect to the Government. What we are doing is simply tabling for future consideration a Ways and Means motion. I explained to the Hon. Member during the course of yesterday's deliberations, that it was near the end of the day and normally I would have discussed the matter in advance, as I have in almost every other instance, but having found myself in this position I took a quick look at the rules. It seemed to me to be quite clear that the Standing Orders do not restrict in any way the method by which these particular documents can be tabled in the House.
Second, that impression I had was confirmed by the Acting Speaker in a ruling made at the time the documents were tabled yesterday. The Speaker in the Chair indicated that the Ways and Means motion was properly before the House in the way in which I had proceeded.


Mr. Speaker:: I appreciate the seriousness of the point and the issue. There is a minor dilemma for me. I think the Hon. Member for Ottawa-Vanier (Mr. Gauthier) knows that the only time at which a point of order about the tabling of documents can be raised is at the time of the tabling. 1 cannot allow the suggestion that today I would take the matter under advisement because in effect the Hon. Member for Ottawa-Vanier is appealing something that happened yesterday. I cannot now go back and re-open the question of whether it was in order to table the documents yesterday. I have no way to do that.
My understanding of what happened yesterday is not that a ruling was made but that a comment was made. 1 am not about to make a ruling, other than to say that there is nothing to rule on today because what happened happened yesterday.
I have some sense that we may want to consider collectively whether points of order are the way to do such things as opposed to rising to seek consent to revert to tabling of documents. This may be a procedure allowing the result that occurred without potentially-this is not a ruling-creating a situation on which the Speaker might have to rule.
I am afraid that in the existing situation I must find that there is no point of order.


Jean-Robert Gauthier: Mr. Speaker, what is the sense of Members of the House raising questions with the Chair? I said yesterday

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Canada Development Corporation
that I felt uneasy about this situation immediately after the tabling of the document. I wanted the Chair to look at it attentively because I felt it was not in order. If a Member of the House cannot raise a point at the time, which I did, and be told the next day that because he did not raise it at the time he cannot raise it today, we will all be going around in a circle.


Mr. Speaker:: I am sorry, I must have misunderstood the Member. I was not aware that a point of order had been raised yesterday.


Jean-Robert Gauthier: Yes, I raised one.


Mr. Speaker:: Today we do not have a Hansard. I am not sure why that is and I must find out.
If a point of order was raised yesterday and a decision reserved, then that decision remains reserved. If a point of order was raised yesterday and it was not reserved by the Chair, then nothing remains today. What I shall do is to look into whether a reservation was made yesterday.
I am saying to the Hon. Member that I am in difficulty this morning because I cannot accept the suggestion that the matter be re-opened this morning. I think the Hon. Member knows that. Let me leave it in that obviously clear circumstance, and maybe we can continue with Orders of the Day.



GOVERNMENT ORDERS


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion) moved: that Bill C-66, an Act respecting the reorganization of the Canada Development Corporation, be read the second time and referred to the Standing Committee on Regional Development.


Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order. Before my distinguished colleague, the Minister of Regional Industrial Expansion (Mr. Stevens), introduces this matter at second reading, Your Honour will recall that yesterday I brought to the attention of the House the fact that we were operating under new rules with respect to legislative committees. I have consulted with the Opposition House Leaders with respect to this matter, and we have come to an arrangement whereby in each of the instances of motions now on the Order Paper referring Bills to standing committees, the Bills in question would be referred to legislative committees, as contemplated by the Provisional Standing Orders.
Rather than going through this exercise on every occasion when every Bill comes forward, I think there would be a disposition to have an Order of the House to amend each of
the motions now standing on the Order Paper for second reading. Rather than having the motions read that the Bills would be referred to specific standing committees, in each instance the motions would be amended as follows:
That all the words after the word "that" be deleted and the following substituted therefor: "and referred to a legislative committee."
For the sake of pro forma, the motion would contain the appropriately numbered Bill, its title, and "be read the second time and referred to a legislative committee." If all existing motions on the Order Paper for second reading were accordingly amended, I think Your Honour would find unanimous consent of the House to accept that suggestion and my motion in each instance. Then we would not have to use the time of the House to make an amendment on each occasion.


Mr. Speaker:: For the sake of clarity, do I understand that the Hon. President of the Privy Council (Mr. Hnatyshyn) means government Bills and only government Bills?


Ramon John Hnatyshyn: Yes.


Mr. Speaker:: Not Private Members' Bills?


Ramon John Hnatyshyn: No.


Mr. Deans:: Mr. Speaker, I think we will deal with Private Members' Business some time later. I do not think it is necessary to do it today.


Ramon John Hnatyshyn: That is right.


Ian Deans: However, I agree. In the interest of speed, we can give unanimous consent to allow the Orders which now stand on the Order Paper to be changed so as to guarantee that each of the Bills, when referred, would be referred to a legislative committee.


Jean-Robert Gauthier: Mr. Speaker, in the interest of co-operation, this time I give my consent and agree to this suggestion.


Mr. Speaker:: Is there unanimous consent for the introduction of the amendment?


Some Hon. Members:: Agreed.


Mr. Speaker:: The House has heard the terms of the amendment. Shall the amendment carry?


Some Hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
Sinclair McKnight Stevens: Mr. Speaker, it was just three months ago, on June 27, that I introduced Bill C-66 respecting the reorganization of the Canada Development Corporation in the House for first reading.
As Hon. Members will realize, the Bill makes it possible for private investors to buy the majority of government shares in the CDC. It is in fact the first step in the Government's announced intention, indeed its commitment, to turn many of
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its business holdings over to the private sector where they properly belong.
We have begun this program with the CDC because, frankly, the corporation fulfils absolutely no governemnt policy objectives and has not done so for a long time. Reducing the Government's stake in the company will benefit not only the corporation and its investors but the Government and above all the people of Canada and, incidentally, will put approximately $250 million back into the country's Consolidated Revenue Fund.
As some Members will recall, there were earlier indications that the Government planned to divest itself of the CDC. Indeed, the previous Liberal administration stated its intention to get out of the corporation when the time was right. That being the case, I fully expect that this Bill will receive support from most parts of the House, and it is support which I would suggest is fully deserved.
As we will recall, the Canada Development Corporation was set up in 1971 as a government-owned corporation to develop Canadian-controlled corporations in the private sector. Initially the Government transferred to CDC ownership of some of its investments in the petrochemical industry. Subsequently, CDC acquired and developed major industry investments in petroleum and sulphur, mining, petrochemicals, office information, life sciences and industrial automation.
The corporation now owns all of Kidd Creek Holdings and Kidd Creek Mines and a majority portion of Canterra Energy Limited. It also owns Polysar Limited, the world's largest manufacturer of synthetic rubber, all of AES Data and most of Savin and has recently expanded into biotechnology with the acquisition of Connaught Laboratories. In fact, the corporation has been acting like a private company for many years. Since it no longer serves Government, we must allow it to continue successfully to serve private industry. Investors now will have an added opportunity to participate in a private company with the potential for tremendous growth.
As the House may be aware, the corporation has, in the past, made issues of voting shares available to the Canadian public, so the Government is now carrying only 47 per cent of the voting rights of the corporation. To divest our shares, we could have simply continued to offer them under the terms of the Canada Development Corporation Act. However, in proposing this legislation, we wish to change the rules governing share issues for several important reasons.
First, under the old Act the Government was obliged to retain at least 10 per cent of the voting shares of the corporation. We wish to permit the Government to divest its entire holdings in CDC, although it must retain a 10 per cent holding for another couple of years. As well, Canadian investors or groups of associated investors could each purchase only 3 per cent of the corporation's interests. We are raising the limit to 25 per cent to permit individual Canadian investors or groups of investors to have a significant stake in the affairs of the company. This is important for two reasons. It permits compa-
Canada Development Corporation
nies to meet equity accounting provisions with investments larger than 20 per cent and it provides the possibility for a large sponsor to take a direct and active role in the corporation's affairs. This will provide for a check on management, and all shareholders should welcome this move.
Additionally, in the past, non-Canadian investors were excluded from ownership in the corporation. We feel this restriction is no longer necessary and that non-Canadian investment in CDC can be beneficial for the fortunes of the company. As the Prime Minister (Mr. Mulroney) announced when this Government came to power, Canada is open for business.


Some Hon. Members:: Hear, hear!


Sinclair McKnight Stevens: However, we are proposing limits on nonCanadian investment in the Corporation. The Bill provides that any single non-resident investor, or group of investors, can purchase at most 10 per cent of the voting shares. Total foreign investment will be restricted to 25 per cent. In this way, we will still preserve, by a very wide margin, Canadian control of this major corporation.
One Hon. Member has been telling the media that this Bill could allow a non-resident to buy a controlling interest in the corporation. That is simply not so. The provisions limiting non-resident investment are detailed and make it impossible for a non-resident investor or group of investors to acquire a controlling interest.
On August 21, the Government offered for sale 23 million shares of Canada Development Corporation stock at an attractive price and under an innovative and tailor-made approach. 1 wish to explain that transaction in some detail.
In essence, we sold the shares on the instalment plan. Investors paid one-half of the purchase price by September 6 and received an instalment receipt. The second instalment is due when this legislation is passed and no earlier than one year from September 6. At that time, the investors will exchange the instalment receipts for CDC shares.
It was deemed a good time for the Government to sell its stock. Only a year ago, CDC stock was selling for less than $4 a share. Over the past 10 months the price has steadily moved up and we were able to achieve a price of $11.50 for each of our shares.
We expect to realize approximately $250 million from this sale, which will go to the Consolidated Revenue Fund over the next two years. We have already received our first cheque. Through the sale of the instalment receipts, we have already put in the order of $120 million into the Consolidated Revenue Fund.
Investors have reacted enthusiastically to the issue. They have given a clear indication that they approve of the Government's decision to move the company into the private sector. They like the corporation's mix of natural resources, technology and life sciences. They like its emphasis on long-range and

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Canada Development Corporation
high technology projects with strong futures. They like its profit and potential.
Frankly, why should they not like the potential of this company? The corporation has turned around from a loss position to a more profitable basis, and its performance continues to improve. Long-term indebtedness has been reduced and the outlook for the future is bright. As a result, the corporation is attractive to investors.
Our share issue has attracted a wide and rather broad base of shareholder support. 1 think, again, this gives an indication of the wide interest in the company. We are particularly pleased that Noranda Incorporated, a solid Canadian company, purchased receipts totalling 6.5 million shares, or 28 per cent of the issue. Obviously, Noranda sees the potential for tremendous growth in CDC. If the sale had been bound by the 3 per cent limit, Noranda could not have such a large investment in Canadian development.
There is another reason why a new CDC Bill is required to complete divestiture of the company. As some Hon. Members will be aware, the Canada Development Corporation, by virtue of its governing statute, is now an eligible investment for insurance, loan and trust companies under the legislation governing these institutions.
Investors appreciate the fact that under this legislation we will be phasing out the special treatment of CDC shares. The corporation will operate under the Canada Business Corporations Act, with its common shares treated like those of any other company for investment purposes.
Under the current CDC Act, the special provisions for CDC shares were to continue for the life of the corporation. We will remove that protection after a transition period of three years. I might add as well, Mr. Speaker, that CDC shares are also eligible investments for registered retirement savings plans under the Income Tax Act. Investors would not be able to buy up the Government's total interest in the Canada Development Corporation right away. Passage of this Bill will allow the Government eventually to sell its remaining 11.8 per cent interest in the corporation. However, the Government will not sell its remaining interest until after December, 1986. To do so would constitute a default under certain existing loan agreements. We will continue to maintain at least a 10 per cent holding until the CDC repays the loans or arranges to have these agreements amended by the lenders.
The transition period I am talking about is an important middle step. It will allow the corporation to move into the market on an equal footing with other private companies. During the next two years, the Government can still have a presence in the corporation as it will retain its right to appoint up to five directors to the board. In effect, the government will have the role of "watcher of the store". Our investment in the Canada Development Corporation will be properly supervised until the Canada Development Corporation completes its orderly move to private control. If, for any reason, the Government still holds 10 per cent or more of the company's interests
after the number of years to which I referred, the directors would remain on the board.
All of these measures in Bill C-66 paved the way for the Canada Development Corporation to change hands, to move from government ownership to private enterprise. Our route toward reducing the Government's stake in the CDC has been carefully planned to ensure the continued success of the company and to retain its objective of offering Canadian solid business opportunities.
In conclusion, Mr. Speaker, may I say that the legislation before the House will provide for the orderly transfer of the Canada Development Corporation to private hands. That is where it should be. That is where it belongs.


Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, this being my first opportunity to welcome the Minister back to the House after the recess, I want to do so and to congratulate him for showing such great judgment over the summer recess in travelling to Atlantic Canada. I think he ought to do more of that and, hopefully, he will make more visits to my own riding and perhaps have some positive things to say with respect to economic development.
The Minister in his remarks talked about the carefully planned, if you will, transfer from government ownership or involvement to the private sector. The Minister certainly is right. In fact, my Party approves of this transfer to the private sector. If one goes back, Mr. Speaker, and looks at the history of the Canada Development Corporation, one is reminded of statements which were made on February 22, 1971 by the then Minister of Finance, Mr. Edgar Benson. He said, as reported on page 3630 of Hansard:
This government believes that there is a role to be played by a new institution, backed by substantial sources of Canadian capital and managed by skilled, experienced Canadian entrepreneurs, to help make possible fuller Canadian participation in the growth and development of Canada. Such an institution will be able to work closely with the other members of the Canadian business and financial community and provide Canadian entrepreneurship with the access to more substantial concentrations of Canadian capital required to ensure a greater Canadian presence in the growth of our own economy.
As the Minister and other Members know, the purpose of the CDC was twofold: To help develop and maintain strong Canadian-controlled and managed corporations in the private sector; and to give Canadians greater opportunities to invest and participate in the economic development of Canada. I suggest, Mr. Speaker, that that has been achieved. However, in addition, the intention of the Government of the day was to have an orderly transfer, if you will, to the private sector of the shares referred to by the Minister in his remarks. It was also anticipated that the corporation would operate throughout the 1970s, as it did, on sound basic principles of good business with the profit motive being one of the primary objectives. Of course, Canadians were to be substantial investors in the initial days of the CDC. However, my Party agrees with what the Minister has just said about the transfer of the shares. It has been stated on numerous occasions that the shares would be sold under two conditions. The first was that they would be
September 10, 1985

sold at such time as market conditions would permit recovery of the approximate original investment and, second, that they would be sold in such a way as not to damage the company or its shareholders. I think those conditions have been met and it is time to sell the shares.
However, I am a little disappointed that the Minister did not touch on some of the issues I thought would be of some concern to him and his Government. For example, I refer to the comments made in The Financial Post by an analyst of First Marathon Securities Ltd. The article says:
From the $81-million bottom-line figure, he deducted a $49.5-million gain from the sale of certain investments, $136 million of capitalized overhead and financing charges, $50.5 million for the amortization of frontier exploration expenses, and $71 million from the sale of sulphur inventory, which ... is being drawn down at such a rate that it will be gone within 2xh years.
I had hoped the Minister would perhaps avail himself of this opportunity to put to rest some of these fears, speculation, indeed allegations. It has even been suggested, not by this particular financial institution but by others, that there may be an investigation by the Toronto Stock Exchange regarding the sale of these shares and how they have increased in price. I do not know that to be true but the Minister has information at his fingertips and I had hoped he would shed some light on that. As well, this financial institution suggests that the CDC is understating its debt to the extent of $330 million, because much of it is in U.S. dollars and the company has failed to account for changes in the exchange rate.
I am also a little concerned that the Minister failed to refer to consultations with labour organizations affected by the sale of these shares. Perhaps we will have an opportunity in committee to question him regarding that subject. I hope the information will be readily available from the Minister.
The original Act as legislated in the early 1970s, Mr. Speaker, restricted individual or corporate holdings to a maximum of 3 per cent. It did not permit foreign investors to sell shares. However, this new Bill has dramatically changed those rules. Clauses 5(a), 5(b) and 5(c) limit any Canadian or associated group of Canadians to 25 per cent of the voting shares. Non-residents are limited to 10 per cent of the voting shares. Total foreign investment is limited to 25 per cent of the voting shares. This Government seems to be pro-foreign investment and anti-Canadian investment. This legislation was originally drawn up so as to promote Canadian ownership and management, but the Minister has increased the limit of foreign ownership to 25 per cent. Some people can argue with some substance that 25 per cent is not a substantial amount. Well, it is substantial enough. I can see the point of allowing some foreign investment, but perhaps half that amount would be a more just and equitable figure.
I would like to take a moment to talk about polls. I do not like to put too much faith in Gallup polls for obvious reasons. However, I know the Government does and, in some instances, rightly so. Last July a Gallup poll was taken and it showed that the majority of Canadians polled, 51 per cent or 52 per cent, think we have enough foreign investment in this country. Yet, in the face of that fact, the Government has done the opposite. It is going against the wishes of the Canadian people.
Canada Development Corporation I am not suggesting we totally abandon foreign investment. I do not advocate that course of action. However, 1 do ask the Government and the Minister to be reasonable in the best interests of Canadian ownership and management. Just because one individual or Party wishes to limit foreign investment where practical-and I emphasize the word "practical"-government Members and their friends in the media should not accuse us of being anti-American. We are not anti-American. We are not anti-France, anti-Britain, or anti any other country. When dealing with the best interests of Canada one must examine, in a careful and prudent way, restrictions or lack of restrictions with regard to foreign investment.
[DOT] (U40)
I have indicated before in the House, and will indicate again, that Canadians want to own and manage their own companies and they want governments, particularly the national Government, to facilitate that process at every opportunity. I think, and I hope the Minister would agree, that the Canada Development Corporation has done that. I would ask the Minister to step back and examine the provision in this particular Bill with regard to foreign investment. We will have an opportunity to debate this in committee and to hear from the various witnesses which our Parties will want to have at the committee meeting.
In conclusion, Mr. Speaker, I would like to say that the Canada Development Corporation was conceived by a Liberal Government, and implemented by a Liberal Government notwithstanding the objections of the New Democratic and Conservative Parties. We believe very strongly that this transfer from government ownership to the private sector is right. We proposed it in 1972. The Conservatives had an opportunity to divest themselves of this at $16 a share in 1979 but, because of the total incompetence of the Government of the day, they did not avail themselves of that opportunity. I close by saying that I want to have this Bill referred to the legislative committee in order that we can debate its provisions in greater detail.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, it is a pleasure to add my welcome to the Minister to that of my Liberal colleague. I am particularly pleased to see him back after his recent trip because, although I should not want the House to collapse with shock, I have some words of congratulation for the Minister. I hope 1 can take some credit for aggressively urging him to be a little tougher in his negotiations with the Japanese because he has succeeded in getting commitments from Toyota, which are more important and more significant than the commitments we have had from other Japanese auto producers because Toyota has made it clear that it wishes to produce under the Auto Pact. That will mean a commitment on its part to Canadian content levels, which will create significantly greater employment in this country. I was very pleased about that. I was also very pleased about his success in discussions with Hyundai. Now that the Minister has heard my words of congratulation, it is possible that that will be the extent of them for this session.

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Canada Development Corporation
I would like to refer the House back to the early days of the establishment of this Bill. The Bill was put in place, the Act passed, and the corporation established at a time when I was a member of the Press Gallery here. I recall my pleasure and pride at that time that efforts were finally being made to deal with the serious matter of the extent of foreign ownership in this country and to try to establish at least one mechanism that would attempt aggressively, in partnership with the private sector, but very much with the influence and support of Government, to do something about that foreign ownership problem. I recall saying at that time that this was a minor step which, like so many things done by the previous Liberal Government, was caught up in contradiction and limited the potential impact step which it could have, but nevertheless represented an important step forward in giving us a series of Canadian corporations that could act effectively, especially in the manufacturing and resource sectors in which levels of foreign ownership were especially high.
It is interesting that the Minister said this morning that the CDC filled absolutely no government objective. 1 take that as a clear and unambiguous statement with respect to the commitment of the Government to those Canadianization objectives which the CDC has followed and could continue to follow given effective support and an attempt by the Government to make creative use of this instrument of industrial and technological policy. However, the Minister has made clear that these objectives do not exist, and I can therefore understand the logic, from the perspective of the Minister, of doing away with the instrument by passing it off to the private sector because his Government is not concerned with the Canadianization of our economy or with using creatively the industrial policy instruments and the research and technology instruments which exist under the jurisdiction of the Government to achieve social and industrial objectives. The Minister's honesty deserves respect even if his abandonment of those important, indeed crucial, objectives in terms of obtaining jobs for our people in the future merits derision.
I want to spend a few minutes talking about public ownership. That is something which is not popularly done in our country. It has become conventional wisdom that public ownership in this country represents an attempt to prop up bankrupt firms and to stick the Government's nose into places where it does not belong. According to those who propagate this myth, in virtually every case government ownership shows up in inefficiency, losses, and lack of attention to the interests of this country. According to the small "c" conservative view which is shared by both of the other Parties in this House, public ownership is generally a disaster, at best a temporary requirement, and never something which is central to the potential of building our economy. Therefore, it follows again logically that if there is an example of public ownership, control and initiative which is working like the Canada Development Corporation, you had better get rid of it because it is a serious embarrassment when you must face the fact that there is public ownership at work in this country, in living technicolor, presenting reports, indicating profits, demonstrating commitment to research and demonstrating success in export markets. What a disgrace. Let us get rid of it as fast as we can and by all means, get rid of it at a loss, because if it were sold at a profit it might demonstrate to the Canadian people that public ownership can not only succeed while it exists, but can be sold at a profit.
Never fear, the point at which the Government has chosen to get rid of its share in CDC is when it is certain that the S250 million which the Minister talked about would be less than the amount which the public originally put into this corporation.
It is clear that, in the opinion of the Governemnt, public ownership belongs in the realm of bail-outs. Public ownership is charity, taking money from the working people and the poor in this country and using it to subsidize, bail out or forgive institutions like the Canadian Commercial Bank of Canada and the Northland Bank. Public sector in this country, according to the Government, means a drain on the pocket books of Canadians. It is a cost to taxpayers and, therefore, when a public corporation operates successfully and does an excellent job for Canada, the Government must quickly get rid of that corporation and make certain that it cannot survive as an embarrassment to the myths that the Government wishes to propagate.
I must say that the Minister has an aggressive approach toward the sale process of our public sector. I once facetiously suggested to him that perhaps he should display his face on billboards throughout the world with the saying that Canada is once more open for business. I suggested that this may be a less costly way of fulfilling his ideological purpose.
Perhaps the Minister accepted the essence of my remarks because he went to Japan and has been operating there as the greatest salesman since Barnum and Bailey. I am not aware if he carried a sign over his shoulders, rang a bell as he walked down the streets of Tokyo to attract attention to himself or banged cymbals in good Japanese fashion to make certain that this message got across, but he stated, "If you are interested in buying into one or more Crown-owned companies, let us know". I can almost hear the sound of organ music in the background just as in other advertisements. I hope, for the sake of salesmanship, that the Minister at least used triumphant music that reflected the glorious records of many of these companies. However, knowing the Minister's proclivities in talking about public ownership, I fear that the music was probably a funeral dirge. I suspect that the low prices we may receive for these companies will in fact reflect the choice of funeral music. He stated, "We are currently offering two aircraft firms, a uranium company and a state of the art high technology electronics firm that is active in the satellite telecommunications field". He did not talk about a partridge in a pear tree but I am sure that it crossed his mine. He said, "See me later if you are interested".
With respect to his sales technique, I would suggest to the Minister that perhaps "See me later" will be met with a polite
September 10, 1985

"Indeed" in the case of the Japanese. I suggest that he must be more aggressive. He should change the music of funeral dirges which marks his speeches with respect to public ownership and promote the marvellous success of some of our experiments in public ownership in this country. If he is going to sell these companies, he should do it in a way that will return money to the Canadian people. Therefore, I would expect the Minister to make speeches throughout the world about the glories of public ownership in this country. In fact, since it has been some time since I have visited South Korea and Japan, if the Minister has difficulty delivering that part of the speech, I will do so for him. Perhaps he could let me deliver that part of the speech which talks realistically and honestly about the virtues of public enterprise in our history and our present economy. I would certainy choose the excellent record of the Canada Development Corporation as part of the biblical style lesson we would read to these foreign investors.
It must have been a terrible shock to the Minister to read the ten-year financial summary of the CDC and see that with the exception of two difficult years the company was consistently profitable. It increased its sales level from $470 million in 1975 to $4,079 billion worth of sales in 1984. Faith, hope and charity go together. I hope the Minister's faith will disappear if he is charitable to the real record of the CDC because that record has been superb, with a cash flow before financing charges which has gone up from $57 million in 1975 to almost a billion dollars in 1984. That is a magnificent record which I suggest owes a great deal to the excellent management of Tony Hampson and the team of people whom he brought with him in the CDC.
I also want to say that the CDC is not an exception. We in this country have used public ownership creatively and we have used it to develop our regions. We have used it to take us into new product areas as with the Polysar and its entry into rubber production during World War II. We have used it creatively at the provincial level to try to get us a fair share of revenues from the resource sector. Foreign ownership in this country is something of which we should be proud. It is something which has served the Canadian people and will continue to serve Canadians in the future. It is something which this country should realize is a crucial instrument as we face a much more powerful and extremely aggressive economy to the south of us.
It is not just by chance that the best company in the CDC, namely, Polysar, sells 38 per cent of its output in the U.S. market compared to 36 per cent here in Canada. Public ownership is the instrument that can get us the jobs. As the Prime Minister (Mr. Mulroney) told us yesterday in his amazingly insighful statement, trade leads to jobs. Yes, indeed, trade does create jobs, but you need to have the enterprises that aggressively seek trade opportunities. Public enterprise has done it in Canada and could continue to do so.
There is, a further question that emerges beside the question of whether we should take an ideological approach and get rid
Canada Development Corporation of as much public ownership as possible or whether we should take a pragmatic approach and use public ownership where it makes sense. There is a second question. What are we going to do to Canadianize our economy? Every public opinion poll taken demonstrates massive support for greater Canadianiza-tion of our economy. The CDC has been a very helpful instrument in achieving those Canadianization objectives. I have only to mention the successful, daring, and quite remarkable raid which CDC undertook on Texas Gulf Sulphur in the United States leading to the transfer to Canadian control of the important Kidd Creek Holdings in northern Ontario.
This Government has perhaps the most sorry, dismal, disappointing record on Canadianization of any Government in recent history. Near the end of the last session we threw five challenges, five ways in which the Minister could demonstrate that he was not totally insensitive to the aspirations of the great majority of people for more Canadian control. We suggested that the Government could take Canadian Porcelain and help its workers realize their dreams of controlling the company and at the same time giving to the community of Hamilton a greater sense of control over its future. The Minister did not accept the challenge. He helped the American company take over Canadian Porcelain, which company had been responsible, at least in part, for driving Canadian Porcelain out of business to start with by dumping in Canada.
We suggested to the Minister that he could assist White Farm. Here was a pretty brave, gutsy Canadian entrepreneur who, I think, had quite successfully started the rebuilding process within White Farm. The company had had a commitment from the Ontario Government. The trade union movement was strongly supportive of him but, once more, Mr. Speaker, this Government refused to move. Something like 600 jobs were lost and the potential for small Canadian enterprise to survive, prosper and make a contribution to this economy was undercut.
We suggested that the Minister could do something about Mitel. Unfortunately, he did not take my advice on Mitel despite the fact that he took my advice on the Japanese auto companies. I gave a warning in our earlier debates that the nature of British Telecom made it quite likely that the matter would be referred to British government authorities, with the potential of the Mitel takeover either being reversed or quite significantly changed from the position he had tried to defend in the House. Once more, the summer has demonstrated that to be the case. Mitel is now hanging in limbo, attacked by the British Monopolies Commission, under scrutiny from British Telephone regulation people, again exactly as we predicted. Again exactly as we predicted, instead of job gains, which the Minister talked about, we have seen over 100 job losses as production has shifted, again exactly as we predicted, to Britain, as a result of that fiasco. I could go on. I could review the case of de Havilland, which is still hanging in the balance. I could review the case of Gulf and Western in the Prentice Hall takeover, a very interesting subject. I have had assurance from the Minister of Communications (Mr. Masse) that this is

September 10, 1985
Canada Development Corporation
one case, by God, where he is going to see that Canadianiza-tion objectives are met.


Mr. Riis:: Hold your breath.


Steven W. Langdon: I have been holding my breath. I must say it is a difficult experience holding one's breath waiting for decisions from this Government. You get verbiage and ideology, but when you are faced with a tough decision, as the Government has been in the case of Gulf and Western, nothing happens. Nothing happens, nothing happens and nothing happens. It has been nine months since the opening steps in this little saga and still there is no word.
Let me turn to the CDC itself. I have stressed the CDC as an example of creative, aggressive effective public ownership. I have explained why the Conservatives now feel they have to get it out of the public sector as quickly as possible. It is an embarrassment. At the heart of the CDC's success-and I want to bring this forward a little more forcefully than some of the other parts of the CDC story-is Polysar. Polysar demonstrates a lot to us as a country. It started with World War II. We had a war to fight. We had certain strategic and crucial concerns and we looked around to find out how to meet them. The private sector could not do it. American companies could not do it. We had to do it ourselves, and we did. We established Polysar. It was called Polymar in those days. It developed synthetic rubber production aggressively and effectively. After the war it took that technology and those sales to create jobs and establish exports throughout the world. Therefore, Polysar is now a powerful, progressive, exciting public Crown corporation with investments throughout the world.
I visited Polysar last January as part of my work as industry critic for my Party. Polysar representatives told me just how much co-operation they were receiving from the Government. The Conservative Party-and I remind Hon. Members of one of many promises which has not been kept-talked about a petrochemicals task force which would lead to Polysar being assisted quite effectively. As of January, when I visited, nothing had been heard of that great promise. As of September, I ask the Government: What has become of that commitment to that crucial section of our industry? Again, as with so much, it is a Government of ad hockery; it is a Government of quick responses to immediate crises; but it is not a Government which plans, thinks, organizes and prepares. As a result, it is not a Government which succeeds in economy strategy. Nothing demonstrates this more than the fact that instead of helping Polysar, instead of making it something to penetrate the United States market-and Hon. Members on the other benches claim that they are in favour of more trade-the Government is prepared to sell it off so that it can potentially be controlled by Noranda, with all of Noranda's expertise in high technology chemicals. Instead of helping Polysar through a response to the petrochemicals task force which the Conservative Party set up, it backs off. There has been no help, no assistance. It is typical. It is a Government which does not act.
It is a Government which talks. It is a Government which plays with words.
The point which we will be making very, very forcefully in the trade debate concerns the complete and utter failure of the Government to act on the aggressive back-door efforts by the United States to hurt our hog producers, our lumber producers in western Canada and our fish producers on the East Coast. Now there is talk about further aggressive moves against our steel industry. There is a lot of rhetoric, but no action. Government Members say: "Yes, we will get a freer trade agreement". If one believes them, two years from now we might get something. In the meantime, we have a crisis which is not being addressed and on which action is not taking place. It was our Party on the special joint committee this summer that called in city after city for urgent, immediate action on the problems faced by our exporters. The Government has refused to move. Talk about inaction, talk about bankruptcy! The bankruptcy in this country is not in our financial accounts; it is on our government benches.
Let me refer specifically to the Bill. It is a Bill which does three things. It follows through and allows the complete sell-off of CDC. This is consistent with the Conservative strategy to throw into the private sector anything that is doing well as a public corporation. Also, this Bill is designed to increase corporate concentration in Canada. Government Members, in their days on the opposition benches, used to talk about the need for competition and diversity and about the virtues of smallness. Now we have government Members in office who are permitting a couple of a large Canadian corporations to take over one more holding company in Canada. They are permitting Noranda to take what in effect will be an extremely strategic, perhaps even controlling, share in this company. It is a Bill which permits more corporate concentration. In the case of Noranda, that is consistent action on the part of Conservative Members in office. Noranda is a good friend of the Government and, now that it is in office, it is good to its good friends. Also it is a Bill which turns one of our instruments for Canadianization of the economy into an instrument of increased foreign ownership in Canada.
How any Government can bring forward such legislation without blushing is beyond me. There should be at least some sense of shame. If government Members bring forth a Bill which increases corporate concentration, we will attack them on that. Let us have a debate about their being in favour of the big guys and our being in favour of the small guys. It is a debate which has gone on for years; it is a debate which we will ultimately win. However, we have to add to that the fact that not only is the Conservative Government in favour of the large guys, it is in favour of foreign companies. Earlier I talked about funeral dirges on the part of the Minister. I say to the Government that dirges on the part of the Minister. I say to the Government that it is its funeral. If its Members want to take to the people of the country a philosophy which says: "Yes, we will sell off an active, viable company with good management, as demonstrated by an effective record, and open up the possibility of a large Canadian company, in conjunction
September 10, 1985

with three United States firms, having control of this corporation", it can go ahead and do it because we do not have the numbers to stop it. However, government Members, as they do it, should think of the lack of logic in their own position. They should think of the lack of logic for people who they say believe in small business including a clause in this Bill which allows 25 per cent of this company to go to one corporation. They should think of the logic of people who still talk about Canadianization on good days, taking this company and giving 25 per cent of it to foreigners. Perhaps Hon. Members opposite will say that it is necessary, but even that hollow excuse flies in the face of the facts. Their share issue has been fully subscribed. They did not require massive purchases by foreign companies. It was not necessary; it was quite possible to sell out these shares to Canadians. They could have taken the imaginative approach of certain other regimes and said to Canadians: "You originally paid for this company; perhaps you should get a piece of it without having to pay for extra shares". Instead we have a thoughtless effort to make this company part of another corporate empire, the Noranda empire.
My last point concerns the disrespect shown to Parliament as an institution as a result of doing this prior to the legislation coming before the House of Commons. Just so that Members are clearly aware of this, the shares have already been nabbed by Noranda. Noranda has 28 per cent or 6.5 million shares set up for it to take in the future. I am sure the Minister has found a technically legal way to do this, but I think it is contemptible to bring before Parliament a Bill which will allow something to take place before the Bill has even been debated. A share issue is being allowed to take place under conditions that permit Canadian companies to follow the new rules the Minister wants to follow, rules which have not even been debated in Parliament.
In the past, I believe that the Minister has at times displayed disrespect for this House. However, he has never reached these depths before. He has never before brought before us a Bill to permit something to take place after he has already set it in motion.
We are now operating under new Standing Orders. These Standing Orders are supposed to permit us some freedom of discussion and action in legislative committees which are to be set up. It is no longer to be a question of confidence if a Bill is amended within a legislative committee. I will certainly be moving amendments to this Bill within the legislative committee, amendments to cut down the extra boost to corporate concentration that this Bill will establish. Yet the Minister has simply assumed that the legislative committee will be formed of a group of trained seals who will accept his views and that he will be able to justify having gone ahead despite lack of parliamentary debate even of the principle of what he is doing, despite lack of parliamentary scrutiny of the details of what he is doing. He has had the effrontery and impropriety to allow this share issue to go forward and effectively to permit Noranda to take 26 per cent of these shares.
Canada Development Corporation
I have talked in this speech about many failures on the part of the Government. I do not want to go over that again, but 1 do want to underline to the House of Commons the fact that the lack of respect for Parliament and parliamentary procedure in the actions which have been taken by the Minister should lead the House to reject this Bill as an affront to its established procedures as well as a sign of the bankruptcy of the industrial policy of this Minister.


The Acting Speaker (Mr. Charest):: First, concerning the point of order brought to the attention of the Chair this morning by the Hon. Member for Ottawa-Vanier (Mr. Gauthier), having been in the chair yesterday, 1 brought to the attention of Mr. Speaker himself the fact that it was the intention yesterday to reserve on the question brought to our attention by the Hon. Member for Ottawa-Vanier. That being said, we shall now resume debate.


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, I am pleased with this opportunity to speak today to Bill C-66, the purpose of which is to continue the Canada Development Corporation under the Canada Business Corporations Act. The legislation provides for restrictions on share ownership. An explanation of these restrictions has already been given to the House and I do not think it is necessary to repeat them.
The passage of this Bill will make it possible to approve the sale of shares representing nearly 37 per cent of the Government of Canada's voting rights, as a first step. The share offer was very well received by the Canadian public, and reflects the new climate of openness vis-a-vis the private sector, which is the only approach that can lead to long term renewal of Canada's economic activity and development.
The Government is of the opinion that those who sit on corporate boards of directors should be accountable to the shareholders and not be able to hide behind the anonymity of Parliament, Crown corporations or government-owned companies.
The public has shown that it understands the approach taken by the Government. Attempts had been made by the former Government to take the place of the private sector and direct it from a number of central "laboratories" full of technocrats. Our Government, however, is aware that profitability, economic development and creativity should be left to the private sector. Our Government's faith in the private sector is clear for all to see and the sale of shares of the Canada Development Corporation is a very good example.
The public's faith in this Government is also quite clear. The share issue was a success. It is an initial step, and the Government intends to continue, in the same skilful manner, the process of share distribution and divestiture of corporations owned by the Government of Canada.
The magnitude of the CDC's assets and the range of its activities justify the continued presence of the Government

September 10, 1985
Canada Development Corporation through control over the ownership of shares sold, and its presence is also justified by the obligation the Government has to the first generations of shareholders. It means that not more than 25 per cent of CDC shares may be held by a Canadian shareholder or group of shareholders, not more than 10 per cent by foreign shareholders in Canada and not more than 25 per cent by a group of foreign shareholders in Canada.
The Government, with the same obligation to the historical evolution of the Canada Development Coporation, will temporarily retain a number of members on the board of directors of the Corporation.
The transaction, and this is very important considering the imbalance in the Government of Canada's Consolidated Revenue Fund caused by our predecessors, will bring to the Consolidated Revenue Fund the sum of $250 million. It was also an important factor in connection with cash flow considerations and it is clear that the Government's present state of indebtedness makes this transaction even more important.
The Government has been very skilful in its negotiations and its approach to marketing the shares of the CDC, the result being that a large number of new shareholders can afford the shares since they can purchase an option on a share worth $11.50 for $2.88, or buy the shares outright, paying only 50 per cent of the purchase price immediately and 50 per cent again a year later, in July 1986. This approach has ensured a broader distribution of the shares. It was therefore very sensible of the Government to divest itself of these corporations and to return to the private sector the administration and management of nearly $8 billion in assets. Granted, these assets have been profitable to some extent in recent years, but one may well ask what the situation would be if the initial capital cost were calculated as well and also what the profits might have been if the fate of these corporations had been controlled by the private sector.
Mr, Speaker, I think, and I hope, that after this example of divestiture of a Crown corporation, we will see a measure of continuity with similar occurrences in the months to come, for the greater benefit of the development of our economy.


The Acting Speaker (Mr. Charest):: Questions or comments? The Hon. Member for Essex-Windsor (Mr. Langdon).


Steven W. Langdon: Mr. Speaker, 1 have a question to ask about the subject I dealt with in my remarks. Can the Hon. Member tell the House whether he is in favour of a procedure whereby the Minister would sell the corporation through a share issue whose terms would differ from those prescribed under the current legislation, but with terms similar to those provided under this Bill?
Would that be an appropriate parliamentary procedure for now? Would the Hon. Member comment on that?


Gabriel Fontaine: First of all, Mr. Speaker, I thank my colleague and commend him for asking his question in French. I am trying to improve my command of the other official language, so I fully appreciate this initiative on your part and I expect to be able as well to answer you in your mother tongue in the not too distant future. For the time being, however, I would rather answer in French.
Considering that the corporation operates in a very important sector which has a significant impact on the Canadian economy, and considering as well its huge assets, I would suggest that the Government was justified in providing additional constraints besides those already prescribed with respect to foreign investors and in making sure that there will be some form of disclosure of foreign investments with a view to preventing such an important corporation from being completely taken over by foreign interests within a short time. That it why it was deemed advisable-and I fully agree on this-to limit foreign investments in voting shares to 25 per cent of the total, or again to 10 per cent for any share purchase by a non-resident investor.


Steven W. Langdon: Mr. Speaker, that was not quite the thrust of my question. Perhaps I would be more precise in English. [English]
As I pointed out in the last part of my speech, if we pass this legislation then there is no problem. Shares can be sold to the public and a given company, such as Noranda, can purchase up to 25 per cent of those shares. That is fair enough. Such legislation would be debated by Parliament. The details would have to be handled by the legislative committee. It would have to come back for final passage after we, as legislators, give it the go-ahead. Then, share issue could take place and Noranda could purchase its 25 per cent.
In fact, what has taken place is exactly the contrary to that scenario. The share issues has already been placed. Noranda has been permitted effectively to indicate its purchase of 6.5 million shares, representing 28 per cent of the issue. The issue itself is small enough. However, that does not mean Noranda would have over 25 per cent of the total shares. In fact, it is much higher than what the present law permits. The present law makes 3 per cent the limit. No other company is permitted to have more than 3 per cent of the shares of Canada Development Corporation.
What has happened is that a share issue has taken place under rules which are still being debated, as opposed to under rules which are presently the law of the country. My question is, as new Members of Parliament, do we feel that that is something which is legitimate? Is that how Parliament should operate? Or should the legislation be passed first and be put into effect, as opposed to putting the goal into effect before the legislation is even talked about? Which of those alternatives is the parliamentary way to proceed?
September 10, 1985

[ Translation]


Gabriel Fontaine: In answer to your question, I would suggest it is two-fold. First you seem to be concerned about the fact that Noranda acquired 28 per cent of the issue whereas the Bill under consideration sets the limit at 25 per cent of the total shares. Noranda is a private corporation which made its offer through brokers and that will be covered under the pending legislation. The Government will always be in a position to impose the 25 per cent limit.
Secondly, I would also point out to the Hon. Member that if the proposed legislation were not adopted the Canadian Government would refund 50 per cent of the amount paid by the buyers, it would refund one half of $11.50. The deadline for such refund would be July 1987 and the deal would bear interest at 10 per cent. The only inconvenience to the Government in such a case would be expenditures incurred for advertising and selling the shares.


The Acting Speaker (Mr. Charest):: Questions or comments. The Hon. Member for Yorkton-Melville (Mr. Nystrom).


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, 1 wish to say a few words on Bill C-66 which is before the House this morning. As the Hon. Member for Essex-Windsor (Mr. Langdon) has stated, and I wish to reiterate the importance of what he said, Canadianization of our econmomy is necessary in order to keep control of it. I agree with him when he stresses the importance of not trying to build up a corporate concentration and not allowing more foreign ownership and control in our economy.
The Bill before us makes a number of changes which will allow for total and complete privatization of the Canada Development Corporation. I was in this House a number of years ago, back in the late 1960s and early 1970s, when the CDC was a brand new piece of legislation. That was back in the days when members of all Parties thought it was important to make sure we had a bit more Canadian ownership in this country and more control over our own economy and destiny. The Bill before us today, Mr. Speaker, takes that away. I have known the Minister across the way for a great many years. He is a very honest and direct man. He is an ideological Conservative. He believes there should be privatization of a number of Crown corporations. In that way he is very much of an ideologue in terms of where he is going. However, I for one, do not believe that that is the way the people of Canada want to go.
Back in 1979 when Joe Clark was Prime Minister of this country for the brief "hiccup" in the history of this country, he wanted to sell off Petro-Canada and there was an outcry in this country that that was the wrong thing to do, that we needed a foothold in the oil industry. It was felt that the Canadian people deserved to have their own oil company. The fact that he was so determined to go in that direction was one
Canada Development Corporation of the reasons he was thrown out of office in February of 1980, which resulted in an increased number of seats in this House for both the Liberal and the New Democratic Parties.
I do not believe, Mr. Speaker, that this is the direction in which the Canadian people want to go. I appeal to my progressive friends in the Conservative Party-I know there are some in this House-


Mr. Gormley:: Many.


Lorne Edmund Nystrom: There are many, the Hon. Member for The Battlefords-Meadow Lake (Mr. Gormley) says. I ask my Conservative friends to look at the history and roots of their political Party. They can go back to the days of Sir John A. Macdonald with respect to building a free and independent Canada and the role of public ownership in this great country of ours. From the time of Sir John A. Macdonald right on through to the time of John Diefenbaker, the Conservative Party more so than the Liberal Party has been historically the nationalist Party of this country. It is the Party which started the CBC, the CNR and the Canadian Wheat Board, these great public institutions which sometimes intervened to a great degree in the economy of Canada. I ask the Conservative Party now: Why this change in direction? If John Diefenbaker were still in this House he would be furious to find this dogged ideological move made by the Minister of Regional Industrial Expansion (Mr. Stevens) in privatizing the CDC.
I appeal, therefore, to the individuality of the Conservative Members of Parliament. I appeal to their rugged individualism and ask them to stand up in this House and be counted, not to let themselves be pushed around by the Minister of Regional Industrial Expansion. They should not be trained seals sitting in the back-benches of Parliament rubber-stamping legislation. We now have parliamentary reform. We have legislative committees about to be formed. We can make changes in Bills without voting non-confidence in the Government of this country. So I appeal to Members of the Conservative Party to exercise their muscle. Do not prove that Pierre Trudeau was right when he said that Members of Parliament are nobodies. They should not let their Prime Minister push them around like the former Prime Minister pushed around his back-benchers. They should rise and speak their minds. I know there are many members of the Conservative Party who do not want to sell off the Canadian Development Corporation totally and absolutely and let all the shares be owned privately. Up to 25 per cent of these shares can be owned by a particular individual or corporation and a large number of these shares can be owned by a foreign company which means more foreign ownership and control in this country. I know that is not the way in which a lot of Conservative Members of Parliament want to go.
There is something else I find very repugnant about this whole procedure, Mr. Speaker. As a Member who has been here for a number of years, I have observed the Conservative Party when it is in opposition criticizing the Trudeau Government on the whole question of respect for Parliament and parliamentary procedure. The Hon. Member for The Batt-

September 10, 1985
Canada Development Corporation lefords-Meadow Lake sits in the front bench down there in the "rump", and that is about the place where John Diefenbaker used to sit in this House. Mr. Diefenbaker used to make speech after speech about the Government of the day showing disrespect for Parliament in doing things before it introduced legislation in the House, about the executive having too much power and the Prime Minister's Office having too much power. He used to make speech after speech about the Government's disrespect for this institution and, of course, this institution represents the people of Canada and, therefore, the Government was showing disrespect for the people of Canada by doing things without consulting Parliament. But what is happening with this legislation, Mr. Speaker? If I understand it correctly-and please correct me if I am wrong-these shares have now been offered in the market without this Bill being passed by the House of Commons, and without this Bill even being discussed in the House of Commons. The Government has done this without having the Bill go through the legislative committee of the House of Commons where it may be changed or amended because some of the Conservative Members of Parliament may agree with the Opposition on certain points and amend this particular legislation.


Mr. Lewis:: Never.


Lorne Edmund Nystrom: An Hon. Member of Parliament says "never". I believe that the Government has shown disrespect for this institution, for this Parliament, in offering to sell the shares of the CDC on the market, starting the whole process, and then coming to Parliament with a Bill. I see my friend, the Hon. Member from Ontario, sitting opposite. I am sure that if he were in the Opposition and this were being done by a Liberal Government, he would be standing here ranting and raving that we live in a parliamentary democracy and the executive in the Prime Minister's Office and the Cabinet should not prejudge what Parliament wants to do.
The honeymoon period is over. The election took place over a year ago now. If the Conservative Members of Parliament are going to make any changes now in terms of democratizing this institution, of making their Prime Minister more sensitive to what they want as individual Members, this is the year it will have to happen. They will need to have to have the guts and the courage to say, "Mr. Prime Minister, don't push us around. We are all equals in this House". Just because the Minister of Regional Industrial Expansion says jump, Conservative back-benchers should not ask how high. Just because the Prime Minister says jump, they should not ask how high. They should stand up and be counted. They should speak their minds and say to the Government that it should not prejudge this institution. It should not show that kind of disrespect for the people of Canada but should indeed consult Parliament. If the Government brings a Bill before Parliament and the Bill is passed, then, fine, we can disagree with it, we can complain, but at least the proper method will have been used and respect shown to the Canadian people. I can see many Conservative Members of Parliament restless in their seats, wanting to rise to speak their minds.


Some Hon. Members:: Oh, oh!


Lorne Edmund Nystrom: In fact, I see the Hon. Member for The Battlefords-Meadow Lake sitting there. He is leaning towards the front just as John Diefenbaker used to lean. But those Hon. Members are afraid, Mr. Speaker. The Prime Minister is everywhere. It is just like the book 1984. He is Big Brother. Those Conservative Members of Parliament may not get a Cabinet post, they may not become a Parliamentary Secretary and they may not receive things for their ridings if they speak their minds, but I appeal to them to have the courage of their convictions and tell the Prime Minister and the Minister of Regional Industrial Expansion that they should respect Parliament and the parliamentary tradition.
Perhaps my last word on that point is that if those Members of Parliament want any argument to prove what I have been saying, they should take a look at speech after speech made by Members of their Party when they were in opposition for many years. They should look up the speeches of John Diefenbaker, Ged Baldwin, Robert Stanfield, Joe Clark, Walter Baker and many other distinguished leaders of the Conservative Party. These speeches were all about how important it is to respect the parliamentary tradition and procedures and how the Conservative Party would never, if in office, do like Pierre Trudeau and prejudge what Parliament has to say. A Conservative Government would involve its back-benchers and make sure they were consulted rather than come to Parliament with a Bill which is a fait accompli.
I appeal on those two points to my friends in the Conservative Party and ask them to show a little courage and rise and tell the Minister of Regional Industrial Expansion where to get off.
We have a lot of problems in this country, Mr. Speaker. I come from a part of the country where there is a tremendous drought. We need action on things like assistance to farmers to make sure they get the income they need to stay on the farm. We do not need to bail out the big banks in this country. We have sitting across the way, "billion dollar Barbara".


Some Hon. Members:: Order.


Mr. Garneau:: Billion dollar woman.


Lorne Edmund Nystrom: Billion dollar woman. That is the kind of thing that is going to happen more and more often if members of the Conservative Party do not get up and speak their minds.
The CDC has had a pretty positive record. It has done a number of things to make Canada a much better country. The company's assets are fairly strong and it has made a fair profit in a number of areas over the years. I say that we should not be selling this successful Crown corporation. It is a move which reflects the Minister's ideology. We know what that is; more free trade with the U.S., greater corporate concentration here in Canada, greater foreign ownership. But I do not think that is the direction in which the Canadian people want to go. I think Canadians want more local initiatives, more self-reli-
September 10, 1985

ance in developing their own country, more assistance for small business, for co-operatives, worker co-ops, old people and farmers. They want to create jobs from the bottom up, yet this Minister comes in the House with a Bill which will open us up to much greater corporate concentration in fewer and fewer hands. That is the wrong way to go. The Minister said we are open for business. This Bill is not an open for business Bill, it is a sell out Canada Bill. We are selling out Canada to big corporate and foreign interests rather than providing Canadians with the tools to take over their own country's economy, an economy which is more self-reliant and which provides more and more jobs at the local level for the betterment of Canada.
I will take my seat after one last appeal to my friends in the Conservative Party to show a little bit of courage and conviction. Do not let the Minister and the Prime Minister push you around. This Prime Minister is becoming every day more and more like the former Prime Minister. There is no difference between his attitude towards the Parliament of Canada and the attitude of Pierre Trudeau. When the Conservatives were in opposition they found that to be a disgusting thing and said it would never happen to them. But this Prime Minister is doing exactly the same thing. For me, an even bigger disappointment is that the members of his Party are afraid to stand up to him. They are afraid to say, let's democratize this place and show more respect for Parliament and the Canadian people. Is it any wonder that more and more people see the Prime Minister as a phoney and insensitive person who is concentrating more and more power in his own hands? The people of this country are becoming more and more cynical about politicians in general. We can change that, but those people in the Conservative Party can only do it by getting up and showing us that they have some courage. They should show us that they respect the traditions of the Conservative Party, which historically has been a nationalist Party, one which believed in some public intervention in order to make this country much stronger.


The Acting Speaker (Mr. Charest):: Questions or comments?


John Kenneth Gormley: Mr. Speaker, I have a few comments in light of my friend's speech. He mentioned me several times and I appreciate that. I know that all of us from Saskatchewan think of ourselves as progressive, and I would like to thank him for his intervention. In the one year I have been in Parliament it has been interesting to listen to him, and I would like to compliment him on his remarks today. However, if you spend too much time reacting to what a lot of NDP Members say, you only dignify their comments and encourage them in their tilting at windmills.
I want to address a few comments to a specific matter relating to the CDC. Mention has been made this morning of Canterra Energy. The Hon. Member for Yorkton-Melville (Mr. Nystrom) will know that this company is an integral player in the oil and gas business in my constituency, it has excelled in its field. However, I have some difficulty with the Hon. Member's point that maintaining government ownership
Canada Development Corporation or control of that company will benefit the people of Canada. Recently the company issued some of its own shares but, if I am not mistaken, the CDC still controls about 90 per cent of the company. This company is doing some leading work in the heavy oil end of the business in my constituency, so would it not be a better idea to let the people of Canada buy shares in this company and directly participate in its success? It strikes me as odd that the Hon. Member wants the Government to hang on to this company and not let the people of Saskatchewan share in the ownership and control of a company which many of them admire.


Lorne Edmund Nystrom: Mr. Speaker, I made it very clear in my remarks that I thought the people of this country wanted to diversify ownership. They want more control at the local level.
I mentioned the importance of more self-direction and selfreliance, grassroots economics, in the creation of jobs. My complaint about this Bill is that it goes in exactly the opposite direction. It calls for greater corporate concentration. The present legislation requires that the Government maintain a minimum of 10 per cent equity. My God, that is not a stranglehold. It is only 10 per cent. But the Government and the Minister are allowing that to be reduced to zero. 1 do not see this as a black and white issue, although the Hon. Member seems to. All I am saying is that a 10 per cent equity participation by the Government is not very much. Some 90 per cent of the company would still be held in private hands. My beef, I suppose, is that the Government is now allowing this to be reduced to zero. I think that is absolutely wrong. We want to develop a country with equality between regions. We want fair development of small business. Therefore, the Government must have its foot in the door. It must have some say over the public policy of this institution. The problem my friend raises will become even more of a problem if the Government has no say whatsoever over the direction of the CDC. If it is totally in the hands of a small corporate elite, many of them foreigners, then it will have a lot more problems in developing projects such as the one he refers to than it would have if the Government had at least a 10 per cent equity.


Mr. Cassidy:: Mr. Speaker, I would like my friend to tell us whether he believes the Government's decision to sell this final 10 per cent it holds in the CDC is for economic reasons or would he say it was for ideological reasons?


Lorne Edmund Nystrom: Perhaps the Hon. Member was not here earlier when I said that the Minister of Regional Industrial Expansion is a very dogmatic person when it comes to ideology. He is a small "c" conservative, and the reason this Bill is before Parliament is to push his small "c" ideology on the people of Canada.


The Acting Speaker (Mr. Charest):: 1 am very sorry to interrupt the Hon. Member, but it being one o'clock, I do now leave the chair until two o'clock this afternoon.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS
[Stage Direction]

September 10, 1985
The House resumed at 2 p.m.


Hon. Andre Ouellet (Papineau):: Mr. Speaker, ever since the beginning of the labour dispute between Air Canada and the union representing about 3,000 flight attendants the Minister of Transport (Mr. Mazankowski) has strangely remained silent about the major issue of air safety.
Indeed it has been stated in some circles that the safety of passengers travelling aboard Air Canada flights these days may be jeopardized because of the lack of experience of hastily trained substitutes who replace the regular flight attendants. Mr. Speaker, the Canadian public has the right to be protected.
According to Air Canada flight attendants association member Paul Roy, in an emergency situation such as a fire aboard an aircraft, a passenger suffering from a heart attack, a case of highjacking or any other incident requiring the immediate evacuation of passengers, there is no assurance that the so-called flight attendants would show the calmness, discipline and competence required in such situations.
If the opinion of Mr. Roy is founded, Mr. Speaker, I think it is inconceivable that neither the Minister of Transport nor the Minister of Labour (Mr. McKnight) have seen fit to intervene to solve this Air Canada dispute before an air disaster occurs.



NATIONAL PARKS


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, we on this side of the House applaud the new Minister of the Environment (Mr. McMillan) for the announcement he made two days ago in Banff. It has taken several years to finalize arrangements for Ellesmere National Park. Everyone in the House will agree with the Minister that there is no finer way of establishing Canada's sovereignty in the Arctic than through national parks. We urge the Minister, therefore, to create a network of Arctic parks in which Ellesmere represents only the first.
We also applaud the new Minister for the will that he expressed in supporting the establishment of a park in South Moresby, one of the richest wilderness areas in the world. On
the eve of Expo 86 the eyes of the world are on us. Premier Bennett will want to let the world know that his Government is positive about preserving the rich ecology of South Moresby for keeps. The area in question represents only .2 per cent of the forest area in B.C. The number of loggers affected is 35. The native peoples are in favour of retaining the wilderness area. Now that the Minister of the Environment has made a strong positive statement, we urge him to negotiate speedily with Victoria.
Recently the federal Government was capable of finding over $250 million to rescue a bank, using taxpayers' money. It surely can find the money needed to protect the heritage of South Moresby considering the strong and enthusiastic support given to the Minister-
Mir. Speaker: I regret to advise the Hon. Member that his time has expired. The Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly).



CANADIAN ARMED FORCES


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, why is there one set of rules when the Government makes a mistake respecting rich people and another when it makes a mistake affecting ordinary Canadians? The Government made a mistake-a very high level mistake-when it took part in an attempt to rescue the Canadian Commercial Bank. As a result, depositors thought that the bank was basically sound. Now that the bank has failed in spite of the Government's assurances, the Government plans to make good its mistake and to use taxpayers' money to bail out depositors. That is how the Government acts when it makes a mistake which affects the well-to-do, but what happens when a Government mistake affects ordinary Canadians?
Between 1982 and 1984 the Government miscalculated and overpaid rent subsidies for married quarters at CFB Esquimalt. Now that this $.5 million mistake has been discovered by the auditors, the Government is deducting the overpayment from the pay cheques of those people who are still in the services. Individual debts range from $100 to $1,700. At the very time when rent increases will strain family budgets, service people face the additional burden of paying for a government mistake. Why can we not have justice rather than a double standard?



LITERACY


Mr. Andrew Witer (Parkdale-High Park):: Mr. Speaker, every September 8 is observed as International Literacy Day by the members of the United Nations around the world. One in four adults in the world cannot read or write. In Canada one


September 10, 1985

in four adults needs help just to read the daily newspaper. Four million Canadians cannot read street signs, fill out job applications, or read labels on consumer goods, simple daily activities which most of us take for granted.
In my riding the Parkdale Community Centre initiated the Parkdale Literacy Project last February through a federal constituency grant. The program presently co-ordinates 35 student-tutor pairs, publishes a monthly newsletter, and organizes such activities as film nights. The most telling success of the program is the student publication which is a collaborative effort of students and tutors. Imagine the sense of pride and personal achievement each student felt seeing words, once intimidating, now in print.
Literacy is an issue of human rights and social justice. Every person should have the right to and benefit of a basic education. Being able to read and to integrate in workaday activities is the first step toward individual advancement. It is the first step toward eradicating illiteracy in Canada. I call on all Canadians to support their local literacy projects. Through awareness and support we can all help the four million Canadians who are unable to read and write, become literate.



AIR SAFETY


Mr. Les Benjamin (Regina West):: Mr. Speaker, I am sure all Members hope the current round of negotiations between the Canadian Airline Flight Attendants and Air Canada will bring an end to the strike and a return to the excellent safety, security and service that the public has become used to with Air Canada. However, Members on this side are deeply concerned about the lack of interest displayed by the Government in safety standards and about its taking sides with the company in a labour dispute.
There have been several instances of underqualified flight attendants being removed from aircraft by the pilot in command because of incompetence, only to be returned to duty on a different aircraft without further training or scrutiny by the MOT. Several other reported instances of flight attendants' incompetence while in the air have also gone uninvestigated by the Ministry of Transport.
This morning the Minister of Transport (Mr. Mazankowski) asked CALFAA to do his job for him by asking it to provide the evidence for its concern about safety standards. Why is it that the Minister must rely upon the resources of CALFAA to monitor safety in the skys when it is his job? Why has he not increased the number of inspectors for cabin crews from the low level of eight to do his own monitoring, instead of asking the union to give him information that should be at his fingertips?
We are also concerned about the fact that Canada Employment Centres have been used as a recruiting tool by the airline to find strike breakers. This unprecedented move on behalf of the Minister of Employment and Immigration (Miss Macs'. O. 22
Donald) must discontinue because the Government is taking sides in a labour dispute. We believe that air safety should not be jeopardized for political ideology-


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



MULTICULTURALISM


Mr. Peter Peterson (Hamilton West):: Mr. Speaker, the Prime Minister (Mr. Mulroney) has chosen wisely in selecting Hamilton's own Lincoln Alexander as the next Lieutenant-Governor of Onatrio. Line, as he is known to us in Hamilton, clearly established an outstanding reputation among the voters of Hamilton West that is second to none. I have personally known him for more than 20 years and I can say that he is a man of few pretensions. He enjoyed an excellent rapport with his constituents which would be the envy of every Member today. His continued success in five general elections certainly bears that out.
Similarly, as the Minister of Labour in 1979, and more recently as Chairman of the Workers' Compensation Board, Line's name was synonymous with public sevice of the highest order. He is certain to bring qualities of dedication, compassion, and dignity, which are prerequisites, to his new position at Queen's Park. His appointment, Mr. Speaker, marks a proud day for my riding of Hamilton West and a historic day for Canada.



SHIPBUILDING


Mr. Joe Reid (St. Catharines):: Mr. Speaker, some things are hard to change. With Canadian shipyards on lay-off struggling for survival, Canadian ship construction, and now repair, refit, and conversion go to foreign yards. All Canadians contribute to the support of the fishing industry. Historically the fishing industry and the shipbuilding and repair industries have gone hand in hand. In the past those yards were there when the fishing industry needed them. It is in the interest of all those fishing that Canadian shipyards survive.
Now two major trawler conversion jobs are to be undertaken in an Icelandic shipyard. We know those off-shore yards are subsidized, but we know as well that it is cheaper to meet that subsidy and keep Canadians working than it is to support the unemployed on assistance programs.
The present government policies, which permit foreign-built vessels to be freely imported and major conversions and repairs to be carried out in foreign yards, result in the loss of thousands of Canadian jobs. If we are to meet the challenges

September 10, 1985
of tomorrow in our marine industry, there must be a review of our shipbuilding policies of today.



YOUNG OFFENDERS ACT


Mr. Gordon Taylor (Bow River):: Mr. Speaker, the objective of the Young Juveniles Act was to keep girls and boys outside of the criminal process, but it is actually training and encouraging young people who have criminal intentions to become the hardened criminals of the future. They know they can do almost anything they like without any punishment.
For example, a 17-year old man deliberately damaged the vehicle of a constituent of mine and then laughed at the police who had to treat him as a juvenile. The owner had to pay for the damage.
[DOT] (MIO)
A 10-year old boy who is already a seasoned criminal having been found guilty of theft, possession of stolen property, and arson, played the "big shot" when the police could only take him home to his mother.
In one major city in the first seven months of 1985 there have been over 1,000 offences committed by juveniles, ranging from sexual assault to arson.
I urge the House to give this legislation a major overhaul that will treat 17 and 18-year old youths as adults and not as children, that will lower the chargeable age to seven or at least allow the police and the courts some discretion, and that will permit the police to publish the names and descriptions of youths who are on the rampage and who may commit further heinous crimes.
We are not being kind to children by overlooking such crimes.
Let us change the Act, and take the handcuffs off our police and show our young people that crime does not pay and crime will not pay.



PUBLIC SERVICE


Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, I am sure that most Members of the House will share with me a sense of relief over the decision not to prosecute Mr. Richard Price, the former employee of the Department of Indian Affairs and Northern Development who was charged with allegedly revealing a confidential document which proposed drastic funding cuts to Indian and native programs.
We know that Mr. Price was guilty of no criminal offence. He did not breach any national security. He acted out of
conscience. The Government never did admit that the leaked document was authentic.
To the Indian people of Canada, Mr. Price acted courageously and heroically. He acted in the best interests of the Indian people of Canada. The concern and opposition generated in the House and across the country over the document's cynical and irresponsible contents no doubt prevented immediate government implementation of the $300 million suggested cut-back.
The decision not to prosecute Mr. Price was made by the Attorney General of British Columbia. The federal Government's treatment of this gentleman was vindictive in the extreme. Now Mr. Price should be reinstated in the Public Service of Canada. It should be done speedily and should be done graciously.



THE ECONOMY


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, Liberal rat packers and NDP naysayers notwithstanding, any objective observer will applaud the substantial accomplishments of the new national Government during its first year of office.
The economic recovery is well on its way. Some 300,000 more Canadians are working now than under the old regime. The Conservative low interest rate policy is working. Rates have declines and astonishing 2.75 per cent to their lowest level in seven years. As a result, housing starts are elevated to a rate of 155,000 units per year.
Business confidence is up, resulting in high investment intentions. Manufacturing orders are up 10 per cent, and retail sales are up 8 per cent.
Inflation has finally been wrestled to its knees. Wherever we look, glowing indicators of the new prosperity abound-all directly attribuable to the eminently sensible policies of the new Conservative Government.



PRESENCE IN THE GALLERY OF JAPANESE PARLIAMENTARY DELEGATION

Mr. Speaker:: Before proceeding to Oral Question Period may I draw to the attention of the House the presence in our gallery of Mr. Mutsuo Kimura, President of the Japanese House of Councillors and leader of a parliamentary delegation visiting Canada.


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

With regard to the other part of the question, I can advise the House that the training taken by the substitute employees is the same training that is given to flight attendants.
Concerning the level of safety, Transport Canada is monitoring the situation very closely.


Leslie Gordon Benjamin: What about the inspectors?


Mr. Mazankowski:: There are more than eight inspectors, Mr. Speaker. There are over 200 as a matter of fact.


Leslie Gordon Benjamin: Not for cabin crews.


Donald Frank Mazankowski: The whole effort of Transport Canada is behind monitoring, inspecting and ensuring a high level of safety as far as Air Canada's operations are concerned.



CONSEQUENCES OF LABOUR DISPUTE

André Ouellet: Mr. Speaker, I think the Minister was rather lukewarm in his comments to reassure the travelling public, and I think it is his duty or otherwise that of the Minister of Labour to intervene forthwith to help the parties settle a dispute that has gone on long enough-


Mr. Speaker:: The Hon. Member will please put his supplementary question!


André Ouellet: Is the Minister waiting for tragedy to strike before he decides to act responsibly?


Donald Frank Mazankowski: Mr. Speaker, as long as the Parties are negotiating, I think the Hon. Member would want that negotiating process to take place. Surely he does not want to engage in the collective bargaining process on the floor of the House of Commons. I am surprised at him.



BANKS AND BANKING


Mr. Simon de Jong (Regina East):: Mr. Speaker, my question is for the Minister of Finance or the Minister who has been answering the questions concerning the Canadian Commercial Bank. The question is really quite simple. When did the Inspector of Banks inform her that the major chartered banks were withdrawing their deposits from the Canadian Commercial Bank?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, we have a parliamentary inquiry that is going to go into every matter related to-


Some Hon. Members:: Oh, oh!
Oral Questions


Mr. Broadbent:: Answer the question.


Ian Deans: This is the House of Commons, answer the question.


Barbara Jean McDougall: -to the CCB and the Northland Bank. That is an action I volunteered.


Some Hon. Members:: Oh, oh!


Barbara Jean McDougall: I am asking members of the Opposition and members of the New Democratic Party to participate fully in a discussion around this inquiry.


Some Hon. Members:: Hear, hear!



TIMING OF WITHDRAWALS BY CHARTERED BANKS

Simon Leendert de Jong: Mr. Speaker, that indeed is a most amazing answer. Surely this is the most important committee in the land.


Some Hon. Members:: Hear, hear!


Simon Leendert de Jong: We deserve answers right now.


Some Hon. Members:: Hear, hear!


Simon Leendert de Jong: Considering that Governor Bouey informed the Finance Committee that he had people in the bank at all times, surely the Minister is in a position to tell us today when the commercial banks were withdrawing their deposits from the CCB. Please inform us today and inform the Canadian public on this important item. When did they start withdrawing the money?


Barbara Jean McDougall: Mr. Speaker, the Bank of Canada was standing behind the CCB throughout this, as the Hon. Member knows and as I know, and provided liquidity support to the CCB. The Government of Canada was investigating that time with its monitors, and when the problem became serious we sent in more people to look.


John Edward Broadbent: Wonderful.


Barbara Jean McDougall: We have taken responsible action. Since when is the NDP forgetting about the small depositors of this bank which we are supporting?


Some Hon. Members:: Hear, hear!

September 10, 1985
Oral Questions



NATIONAL DEFENCE


Hon. Jean Chretien (Saint-Maurice):: Mr. Speaker, I wish to direct my question to the Right Hon. the Prime Minister.
In light of the decision made Saturday and for which the Prime Minister deserved congratulations from the Opposition parties-and we are glad that we raised the issue as early as January with respect to Canada's non-participation in the star wars research program-would the Prime Minister assure the House, better than the Minister of National Defence did in the House of Commons yesterday, that Canadian public funds will not be used to assist any Canadian contractor whatsoever in the star war research program right here on Canadian soil?


Hon. Harvie Andre (Associate Minister of National Defence):: Mr. Speaker, the answer to that question was given by the Prime Minister on Saturday. It was repeated by the Deputy Prime Minister and Minister of National Defence yesterday in the House. I can only repeat again that the defence production sharing agreement which has been in place since 1959 will carry on. Any support the Government of Canada might or might not give to companies undertaking research will be done in accordance with existing procedures which were in place while the Hon. Member was in Government, and will reflect Canadian priorities and Canadian needs.



UNITED STATES STRATEGIC DEFENCE INITIATIVE-CANADIAN POSITION

Joseph Jacques Jean Chrétien: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. Will he come clean with the Canadian public? Are we or are we not involved in star wars research programs? Yes or no? Is he trying to do by the back door what he is telling Canadians that he does not want to do by the front door?


Right Hon. Brian Mulroney (Prime Minister):: I will tell you what we did not do, Mr. Speaker. We did not spring Cruise missiles on the Canadian people unannounced, like that Government ahead of us.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: That's what we didn't do.

I said so in both French and English. My hon. friend from Bay Street finds that somewhat difficult to understand. Again I repeat it, my words were clear and all Canadians got the message. It is unfortunate that my colleague had the rug pulled right from under his feet. As far as we are concerned,
we have made a decision to uphold the interest and integrity of Canada, and I am proud of it.



BANKS AND BANKING


Nelson Andrew Riis: Mr. Speaker, I want to return to this $1 billion bail-out for which the Minister of State for Finance is responsible. On a number of occasions she has taken steps to assist the domestic banks. However, does she really believe that it is appropriate to expect Canadian taxpayers to cough up $1 billion to bail out the largest depositors, which are the foreign banks? Is the Minister really saying that Chase Manhattan, Barclays, and Bank America need help from the taxpayers of Canada?


Barbara Jean McDougall: Mr. Speaker, I have told the House that the people we are moving to protect are small Canadian towns, hospitals, and colleges. They cannot have it both ways. They are saying that the domestic banks pulled out and that we should not pay the foreign banks. What are they talking about?



BANK AUDITORS' REPORT

Nelson Andrew Riis: Mr. Speaker, my supplementary question is directed to the same Minister. Ordinary Canadians on Main Street are being asked to bail out the foreign bankers on Bay Street. We in this Party think that that process must now come to a start-come to a stop.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. It is a good time to stop the preamble and to start the question.


Nelson Andrew Riis: I think I will try that again, Mr. Speaker.
During the collapse of the bank, of course auditors were sent in and they reported to the Inspector General of Banks. Did the Minister communicate directly with the bank auditors? She knows that the financial statements which they are presenting ought to be in the fiction section of a library. Knowing that, did she actually sit down to talk with those auditors about the real state of the of the Canadian Commercial Bank?


Barbara Jean McDougall: Mr. Speaker, the auditors of a bank report to the shareholders. The parliamentary committee looked into that to a very considerable extent. The monitors were in from the Inspector General's office through the spring. We were watching the situation very carefully with our own people and through our officials. We sent in bank examiners and private sector people to take a look at that bank, and we took the most responsible action of any Government in response to a situation which was created long before our time.
September 10, 1985



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Minister of Finance. Having forced the collapse of the Canadian Commercial Bank, I hope the Minister will stand in his place today and respond to questions completely within his jurisdiciton.
I know how concerned he is about the deficit and I know that the Prime Minister has added to the uncertain climate of the country by saying that Canada is broke. However, what will he do to repair the SI billion-plus loss as a result of the liquidation of the Canadian Commercial Bank? Will he raise taxes? Will he withdraw aid from Canadian farmers or Atlantic fishermen? Where will he find that $1 billion?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, first, I am not going to say to the House of Commons that the Governor of the Bank of Canada misled the House of Commons, as the Leader of the Opposition did yesterday.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: He owes an apology to the Governor of the Bank of Canada, or should step outside the House and repeat those allegations and substantiate them.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: In response to the question from the Right Hon. Leader of the Opposition, the figure that he has mentioned is not necessarily the right one. We don't know what that figure will be-let us be frank-it is a substantial figure. At that point in time that amount will be added to the size of the deficit and any further action will have to be taken at the time of the next Budget.


John Napier Turner: I think my remarks about the Governor will be borne out if Hon. Members will read the transcript of the Standing Committee on Finance, Trade and Economic Affairs for Thursday, May 9. I will leave it at that.


WITHDRAWAL OF DEPOSITS BY FINANCIAL INSTITUTIONS
John Napier Turner: Mr. Speaker, my supplementary question for the Minister of Finance relates to obvious insider trading in the deposits of the Canadian Commercial Bank before the plug was pulled by the Minister.
Did he personally or did his aides communicate directly or indirectly with senior executives of the major financial institutions, trust companies, banks, insurance companies, in Toronto or Montreal during the months of July or August? If not, how does he explain the coincidental withdrawal of deposits during those months conveniently before the plug was pulled, leaving
Oral Questions
the pensioners with pension funds in Air Canada and Canadian National to bear the brunt of the loss?


Barbara Jean McDougall: Mr. Speaker, I think the allegations made by the Right Hon. Leader of the Opposition are extraordinarily serious and are a subject for the Ontario Securities Commission, as he well knows.


John Napier Turner: The Minister of State for Finance is obviously not able to respond to that question. It was a personal question to the Minister of Finance relating to his conduct and that of his staff.
[ Translation]


EXPLANATIONS REQUESTED FOR GIVING FOREIGN BANKS MILLIONS OF DOLLARS
John Napier Turner: Mr. Speaker, I have a third question.
Could the Minister explain why he is paying millions of dollars to foreign banks which had deposits with the Canadian Commercial Bank but is refusing to pay a cent to pension funds that had shares in this bank?
How can he give millions of dollars to foreign banks and not provide any compensation for Canadian pension funds?


Barbara Jean McDougall: Mr. Speaker, we have moved to meet a situation whereby we are paying uninsured depositors in this bank. They include such things as small hospitals in the Province of Alberta.


MINISTER'S MARCH STATEMENT
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is directed to the Minister of State for Finance. On March 25 the Minister stated that the bail-out package for the Canadian Commercial Bank was based in part on an on-site assessment of assets. We now learn that at the end of June the Minister appointed an independent consultant to examine the bank's assets and that the decision to liquidate was later, after he reported on August 14. Does the Minister still stand behind her statement of March 25?


Barbara Jean McDougall: Mr. Speaker, I have indicated in this House many times that we took advice in March and that we acted on the best possible advice. We continued to pursue the matter in the interests of the Canadian taxpayer and took a different decision later.


DEPOSITS WITHDRAWN BY CHARTERED BANKS
Aideen Nicholson: Mr. Speaker, 1 have a supplementary question. By August the Minister had the consultant's report, the Inspector of Banks had talked to the

September 10, 1985
Oral Questions
six banks which participated in the bail-out, and the CCB's president had been called to Ottawa for meetings. Can the Minister assure the House unequivocally that none of this activity and knowledge resulted in certain depositors in the financial institution being able to move their money while the hospitals of which the Minister spoke were left unprotected?


Barbara Jean McDougall: Mr. Speaker, 1 think we have indicated by the action we have taken with the uninsured depositors that we have not left them unprotected.


WITHDRAWAL OF DEPOSITS FROM CANADIAN COMMERCIAL BANK
John Edward Broadbent: Mr. Speaker, my question is directed to the Minister of State (Finance). In March, the chartered banks co-operated with the federal Government in order to save the Canadian Commercial Bank. Yesterday we were told that a number of banks had removed their deposits from the Canadian Commercial Banks.
My question is as follows: Could the Minister inform the House today whether the same banks were involved in both cases?


Barbara Jean McDougall: Mr. Speaker, I think that the chartered banks, like other business organizations, make decisions, commercial decisions, every day. The depositors that we have moved to save include some small towns in Alberta and some small towns in British Columbia.


MINISTER'S KNOWLEDGE
John Edward Broadbent: Mr. Speaker, I say to the Minister that all kinds of small groups of Canadians, whether in hospital funds, pensioners, or municipalities, were not asked to participate in the original bail-out. The banks were, and that is why this question has to be answered.
I would like to ask her again, if, as has been suggested, the banks that participated in the bail-out shortly thereafter withdrew funds from the bailed out bank, surely they helped scuttle a project they were supposed to save. Can the Minister tell us if she found out, or if she had her officials find out at the time whether the banks involved in the original bail-out shortly thereafter took funds out of the bank they were supposed to help save?


Leslie Gordon Benjamin: Insider information.


Barbara Jean McDougall: Mr. Speaker, the banks took part in a support package in March in order to help us reach a decision on the basis of the banking system. Whatever actions they took thereafter, they would take in their commercial interests.


Some Hon. Members:: Oh, oh!


An Hon. Member:: The revolving door again.


Mr. Speaker:: Order, please.


REQUEST THAT MINISTER MAKE INQUIRIES
John Edward Broadbent: I want to say to the
Minister that she has an obligation to be speaking for the people of Canada here, not for the banks of Canada.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: She should understand that.
Considering that the people of Canada put up millions of dollars in March and are now being asked to put up perhaps in excess of $1 billion, will she find out for the House, use her ministerial office and exercise her responsibility, whether the banks that participated in the original bail-out with the people of Canada subsequently helped scuttle the project by taking money out themselves? Will she exercise her responsibility for once?


An Hon. Member:: Resign.


Barbara Jean McDougall: Mr. Speaker, I find it very interesting that the Leader of the New Democratic Party has totally lost interest in what we have tried to do in the last week, namely, to look after the small depositors in this bank, which include small businesses and others-


Some Hon. Members:: Hear, hear!


AIR CANADA
André Ouellet: Mr. Speaker, in view of the strike by some 3,000 Air Canada flight attendants which is entering its fourth week, I would like to ask the Minister of Transport whether he can advise the travelling public that it is perfectly safe to fly Air Canada. More specifically, does the Minister believe that the training being given to those who are replacing the flight attendants is adequate?
Furthermore, could the Minister give the House the assurance that the Pratt & Whitney engines used on Air Canada's 727 and DC-9 aircraft have been checked and that these engines are in perfect condition?


Donald Frank Mazankowski: First, Mr. Speaker, I think the Hon. Member and other Members will be pleased to know that the negotiations have resumed between CALFAA and the airline. We hope those will be productive.
September 10, 1985


BANK'S LENDING PRACTICES
Raymond Garneau: Mr. Speaker, my question is directed to the Minister of State (Finance). [English]
Last night the CBC television program Venture highlighted the fact that the bad lending practices continued in March after the Government stepped in. For example, we have learned that the Canadian Commercial Bank gave a second $4 million loan at a 30 per cent rate of interest to a construction company in Nova Scotia. That was not in the energy sector of western Canada.
The Minister of State for Finance just told us that many people were looking at the affairs of the bank. Why did she allow the Canadian Commercial Bank to continue these bad lending practices which were responsible in the first instance for the bankruptcy of the bank? Why did she not stop those bad lending practices?


Barbara Jean McDougall: Mr. Speaker, the reason that we were watching the bank very carefully throughout the period of the spring and summer was to ensure that it would serve the interest that we had helped to support, which was the interest of western Canada. We looked at the bank from every aspect over the course of six months and, when we came to the decision that the bank should be closed, we closed the bank.


ALLEGED DISCUSSIONS WITH TORONTO INSTITUTIONS
Raymond Garneau: Mr. Speaker, I have more questions, but we still have most of this week to get back to these aspects of the case. I would like to get back to the Minister of Finance.
Oral Questions
Did she know at any time prior to Labour Day weekend, when the announcement was made, that the Canadian Commercial Bank was to close? Did she know that the Canadian domestic banks were withdrawing substantial sums of money from the Canadian Commercial Bank?


Barbara Jean McDougall: Mr. Speaker, yes, there was evidence that some of the banks were withdrawing their deposits. I have no power to stop that. We will have a parliamentary inquiry into everything which happened surrounding CCB and Northland. I would hope that those questions would be addressed to the bankers and to the people involved.


SIZE OF WITHDRAWALS
Ian Deans: Mr. Speaker, my supplementary question is directed to the same Minister. Did she investigate the amounts being taken out by the Canadian domestic banks? Did she determine whether in fact those banks were the same ones which had entered into the agreement with the Government to bail out the Canadian Commercial Bank? Did she take steps to insist that those banks live up to their responsibilities and protect the small shareholders?


Barbara Jean McDougall: Mr. Speaker, 1 have already indicated to the House that I have no power to direct the banks to leave their deposits in or to take them out. The banks were shareholders in this bank along with ourselves. It was in their interest to act in their best interest and in the interest of the Canadian Commercial Bank.


PUBLIC WORKS
[Stage Direction]
Earlier, the Leader of the Official Opposition asked a very specific and very clear question, which none of the Ministers in the House could answer. I would like to repeat the question put by the Leader of my Party.
[Stage Direction]
Did the Minister of Finance or any of his personal staff call the senior management of Toronto financial institutions in July or August to discuss the potential collapse of western Canada's Canadian Commercial Bank? It is a very simple question. Could the Minister answer it?
Michael Holcombe Wilson: Mr. Speaker, I saw those allegations in the press this morning. I checked in my office. I have been unable to find out that there is any way to substantiate those allegations.


WITHDRAWAL OF DEPOSITS BY CHARTERED BANKS
Ian Deans: Mr. Speaker, my question is also directed to the Minister of State for Finance.


CONSTRUCTION OF CANADA PLACE IN EDMONTON
Mr. William G. Lesick (Edmonton East):: Mr. Speaker, my question is directed to the Minister of Public Works. Last June 1 asked the Minister why the construction of Edmonton's Canada Place had been delayed. Two and a half months have now gone by and there is still no action. Can the Minister give me a definite date for construction and can he tell me why it has taken a full year for this project to get on the road?


Hon. Roch La Salle (Minister of Public Works):: Mr. Speaker, I remember clearly answering the Hon. Member that 1 hoped construction on Canada Place in Edmonton would start during the summer. I think Hon. Members will understand that, considering the scope of the project in Edmonton, there are some adjustments to be discussed by the City of Edmonton, Public Works and the company in charge. Today, I am delighted to be able to inform the Hon. Member that according to information I received this morning, my Alberta

September 10, 1985
Oral Questions
colleagues and I will be attending the first sod-turning before October 30.


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Minister of Agriculture. Considering that the Government is willing to spend $1 billion on the Canadian Commercial Bank fiasco and considering the desperate situation that is facing thousands of farmers in western Canada because of the worst drought since the 1930s, which is driving many of them to welfare and off their farms, can the Minister tell us when he will announce a program to assist the grain growers of western Canada? Can he tell us when funds will be put in the hands of the grain growers so that they may be compensated for this situation?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I appreciate the Hon. Member's question and I know that, if he takes the time to check the record, he will find that there has been more action taken by this Government in the past eight months than was taken by the previous Government in the last eight years. He will also realize that we have had a team on the scene in western Canada chaired and provided with great leadership by my colleague, the Hon. Member for Assiniboia. He will know that shortly after that, within about a 10-day period, a report was given to us and we responded by providing $48 million through Phase I of the Government's commitment to action with respect to the very serious drought condition in western Canada.
I hope to receive a report prepared by this same excellent federal-provincial committee within the next two weeks with reference to other actions that we may take with respect to the crop-


Mr. Speaker:: Order, please.


REQUEST FOR DIRECT PAYMENTS TO FARMERS
Maurice Brydon Foster: Mr. Speaker, obviously the Minister did not answer my question. He has been procrastinating not only on this matter but on the matter of tripartite red meat and many other issues. When the Minister makes a decision about drought compensation for the western grain sector, I wonder if he will ensure that the payments are made directly to the farmers so that the benefits will not be grabbed off by the provincial Governments as occurred in Saskatchewan with the assistance that was provided for the livestock producers.


John Wise: Mr. Speaker, if the Hon. Member had the patience, he would find that when we make a decision with reference to the crop loss aspect of the matter, Phase II, we will be dealing as fairly and equitably
as we did in the first phase with respect to the livestock contributions.


GOVERNMENT POSITION
Lorne Edmund Nystrom: Mr. Speaker, my question is directed to the Minister of Finance and concerns the devastating drought in western Canada and the fact that the Minister has not spent one cent to help western grain farmers. Can the Minister explain to the House and to western grain farmers how the Government can find millions of dollars, courtesy of "Billion Dollar Barbara"-


Some Hon. Members:: Order.


Lorne Edmund Nystrom: -to bail out foreign bank depositors, without finding a single penny to help western grain farmers suffering from a devastating drought? Can he explain that to the House?


John Wise: Mr. Speaker, that observation is completely inaccurate and erroneous. If the Hon. Member would look at what we have done in the last eight months he would find that the total amount of action that we have taken amounts to something in the vicinity of $1.4 billion in the hands of Canadian farmers-


Some Hon. Members:: Hear, hear!


John Wise: The Hon. Member will certainly recall our commitment to amend the Western Grain Stabilization Act so that we could make an interim payment, and my colleague, the Minister of State for the Canadian Wheat Board, amended that Act and indeed placed in the hands of western farmers-


Mr. Speaker:: Order, please. That is both a long answer and a speech.


SITUATION OF GRAIN FARMERS
Lorne Edmund Nystrom: Mr. Speaker, my question was put to the Minister of Finance as he controls the purse strings. I would like to know from him why the Government has not spent one penny to assist the western grain farmers. I know the Government has spent a few peanuts, like $48 million for the cattle producers in the West, but why has nothing whatsoever been spent on western grain farmers while millions of dollars are spent bailing out the big shareholders and depositors because of the collapse of the Canadian Commercial Bank? Explain that to the ordinary farmers.


Michael Holcombe Wilson: Mr. Speaker, first let me remind the Hon. Member that there are a number of farmers who deposited in and borrowed from the Canadian Commercial Bank and the Northland Bank. That is one of the principal reasons why the Minister of State for Finance did what she did. The second reason why I did not answer the first question is that my colleague, the Minister of Agriculture, has so many things he has to say that he did not have an
September 10, 1985

opportunity to get them all out before Mr. Speaker asked him to sit down.


RAILWAYS
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is directed to the Minister of Transport and concerns the future of Terratransport, the Newfoundland Railway, and the approximately 1,000 people who depend upon that railway in the Province of Newfoundland. Can the Minister tell the House whether or not the federal Government has taken a decision with respect to its future commitment to the Newfoundland Railway and can he tell us as well whether or not, after approximately six months of negotiations with the Province of Newfoundland, the federal Government is now prepared to commit the funds necessary to modernize that railway so that it may continue its operations?


Donald Frank Mazankowski: Mr. Speaker, I am sure the Hon. Member knows that the last five-year agreement respecting the Newfoundland Railway was put together by this Government when it was in office in 1979. The agreement has expired and there are negotiations and discussions taking place with the province. I will be meeting with representatives of the province next week and I will be visiting Newfoundland later next week.


FUTURE OF RAILWAY
Brian Vincent Tobin: Mr. Speaker, the Minister knows that rumours are running rampant in Newfoundland that the railway is going to be shut down by hook or by crook. Is the Minister now prepared to make a commitment in this House that the Government of Canada, in conjunction with the Government of Newfoundland, will not pursue a course of action that will cause either the immediate shutdown of the Newfoundland Railway or the strangulation of the railway over the next year or two because of the pricing practices that are currently going on in that railway? Is the Minister prepared to tell the 1,000 employees today that their jobs are safe and that they will have them five years from now?


Donald Frank Mazankowski: Mr. Speaker, most of the rumour, innuendo and fear was started by that Member.


Some Hon. Members:: Hear, hear!


Donald Frank Mazankowski: Most of it bears no resemblance to fact and has no foundation. The Government does not move unilaterally. It will discuss with the province the future of transportation in the Province of Newfoundland in its global context. There are more issues that need to be addressed than simply
Oral Questions
the railway. There is the issue of roads and ferry services as well. We are going to be discussing this with the province next week. When a decision is reached, I am sure that I will be very pleased to let the Hon. Member know about it.


BANKS AND BANKING
Michael Morris Cassidy: Mr. Speaker, 1 have a question for the Minister of State for Finance arising out of the failure of the Canadian Commercial Bank and the billion dollar bail-out for which she is responsible. Can the Minister say, now that we have established that chartered banks which were part of the rescue effort back in March began soon after to withdraw their deposits, when she became aware that the chartered banks that were meant to help save the Canadian Commercial Bank were in fact working to scuttle it?


Barbara Jean McDougall: Mr. Speaker, we were aware during the spring of many of the activities in the Canadian Commercial Bank. There were many depositors who withdrew their deposits at that time. They had every right to do so, no matter whether they were a chartered bank, a union or anything else. The depositors that remained, including a major Canadian cultural organization and a major Canadian union, are the organizations we are looking after.


INSPECTOR'S DISCUSSIONS WITH CHARTERED BANKS
Michael Morris Cassidy: Mr. Speaker, the Inspector General of Banks indicated to the committee yesterday that he had confidential discussions with the chartered bank presidents, or with their officers, about the condition of the Canadian Commercial Bank. Will the Minister agree, therefore, that the banks were working on the basis of that confidential information as well? Why should the banks be privileged to get their deposits out when other depositors did not have that type of information on which to act?


Barbara Jean McDougall: Mr. Speaker, that is exactly what a parliamentary inquiry is all about.


Some Hon. Members:: Oh, oh!


Barbara Jean McDougall: That is why I have asked the House for a parliamentary inquiry. I hope it will be conducted in a spirit which will help us create a better environment in the future with respect to our financial institutions.

September 10, 1985
Oral Questions YOUNG OFFENDERS ACT


REQUEST FOR AMENDMENTS
Gordon Edward Taylor: Mr. Speaker, my question is for the Solicitor General. It deals with saving young Canadians from lives of crime. Will the Minister consider bringing in amendments to the Young Offenders Act which will enable the police to deal more effectively with crimes committed by 17 and 18-year old youths and by juveniles?


Hon. Perrin Beatty (Solicitor General of Canada):: Mr. Speaker, as I take up my new responsibilities, may I start by thanking the Right Hon. Prime Minister for giving me something easy for a change.


Some Hon. Members:: Oh, oh!


Henry Perrin Beatty: Mr. Speaker, jealousy will get those fellows nowhere.
The Hon. Member has had long-standing concerns, as have a number of other Members, with respect to the Young Offenders Act. I have asked my staff to bring me up to date at an early stage on the provisions in the Act, the philosophy behind it, and the provisions of the previous legislation, with a view to ensuring that I am made fully aware of what concerns there are and of what problems may have to be addressed in a legislative sense.
It is still early in the life of the new Act to make any final decisions. However, I can assure the Hon. Member that I will be consulting broadly.


EXPORT DEVELOPMENT CORPORATION
Hon. Bob Kaplan (York Centre):: Mr. Speaker, since I am on my feet now I would like to take this opportunity to wish the new Solicitor General well in a tough job.
Mr. Speaker, my question is for the Prime Minister. Last Saturday's The Citizen, of Ottawa, reported a favour conferred by the Export Development Corporation, a Crown corporation, on a close personal friend of the Prime Minister in the form of taking legal business from an existing firm and awarding it to another firm which the close personal friend had just joined. Bill Fox in the Prime Minister's office told CP that categorically and absolutely the Prime Minister's office had no involvement in the matter whatsoever. Did the Prime Minister himself play any role whatsoever, direct or indirect, with respect to Sam Wakim's firm obtaining the Export Development business, or was it merely a coincidence?


Martin Brian Mulroney: Mr. Speaker, no, I played no role in business going to that very reputable firm, even though-and I do not wish to offend any legal spirits-it is widely known that the Leader of the Opposition
did not join McMillan Binch to write trust deeds. It was widely known that he had a certain attractiveness to clients.


John Napier Turner: Point of order, Mr. Speaker.


Martin Brian Mulroney: All lawyers try to get business. What is wrong with that?


INQUIRY OF PRIME MINISTER
Robert Phillip Kaplan: Mr. Speaker, did the Prime Minister discuss the prospective work with Mr. Wakim before it was awarded, or with any government office holder, to use the terms of the new conflict of interest guidelines?


Martin Brian Mulroney: Mr. Speaker, I have had no such discussions. However, may I ask the Hon. Member-


Some Hon. Members:: No, no.


Martin Brian Mulroney: Has the Hon. Member personally visited law firms in Toronto to ascertain whether he could secure any allegations against Mr. Wakim? Perhaps he could tell the House whether or not that was the case.


Robert Phillip Kaplan: The answer is no, Mr. Speaker.


APARTHEID
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, my question is for the Right Hon. Prime Minister. Yesterday I was denied the courtesy of a response when I asked the hon. gentleman, as I ask him again today, what loud voices he is listening to which are more compelling than the 77 per cent of black South Africans and their most respected leaders who are demanding strong economic sanctions against the South African regime?


Martin Brian Mulroney: Mr. Speaker, I have made statements, and the Secretary of State for External Affairs has announced serious policies and sanctions, which convey this Government's attitude of absolute adhor-rence with respect to the policy of apartheid practised by the Government of South Africa. I have had conversations, as has the Secretary of State for External Affairs, with people ranging from Bishop Tutu to other leaders involved in the process who have shared their views with us.
The Secretary of State for External Affairs announced in early July, prior to many other friendly nations, serious policies which indicate the strong abhorrence of this Government vis-a-vis apartheid. I believe the Secretary of State shortly will be announcing further stands which I think the Hon. Member will find helpful and appropriate for the Government of Canada.
September 10, 1985


CANADA'S ROLE IN COMMONWEALTH
Howard Douglas McCurdy: Mr. Speaker, yesterday Bishop Tutu expressed utter contempt for the American action, which was cited as an example by the Prime Minister's colleague. Will the Prime Minister not accept the judgment of oppressed South Africans that tough sanctions are necessary, even if it requires their sacrifice, impose mandatory sanctions and go to the Commonwealth Conference to exert the kind of leadership that black South Africa expects?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, as the Right Hon. Prime Minister has indicated, I will be making another statement with respect to South Africa later this week. However, I simply wish to anticipate that somewhat to say that it is the view of this Government that one of the cards which Canada holds, which may have some influence on ending a totally unacceptable regime in South Africa, is, in fact, our membership and our influence in the Commonwealth. That involves a patient exercise of that influence, which is the way we intend to proceed.


INDUSTRY
Mr. Russell MacLelian (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of Regional Industrial Expansion. On May 17 last I asked the Minister: When will the federal Government let the people of Sydney, Nova Scotia, know when the second phase of the modernization of Sydney Steel Corporation will begin? He stated, on that day, "very soon". I wish to ask the Minister the same question today, September 10. When will this announcement be made? Give us the exact date.


Sinclair McKnight Stevens: Mr. Speaker, even sooner.
However, I would like to continue by telling the Hon. Member that yesterday I had an opportunity to speak to Premier Buchanan of Nova Scotia on this subject. We have arranged to meet in the coming week to discuss, first, a report which is now in hand with respect to the alternatives with regard to Sysco. I think we will be able to make an announcement, as I say, even sooner.


TIMING OF ANNOUNCEMENT
Russell Gregoire MacLellan: Mr. Speaker, the meeting with Premier Buchanan will bring the same results as did the last ones. When will the Minister make an announcement approving the second phase of the modernization of Sydney Steel Corporation? Give the people an exact date. Stop leading them down the garden path.
Privilege-Mr. Turner (Vancouver Quadra)


Sinclair McKnight Stevens: Mr. Speaker, as the Hon. Member knows, this is not by any means solely a federal matter. It is a Province of Nova Scotia matter. I am consulting with the Premier and after that meeting we will be in a much better position to give an answer, such as a possible date to which the Hon. Member is referring.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Monday, September 9, 1985, meet the requirements of the Standing Orders as to form.
The petitions presented by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) by filing with the Clerk of the House also meet the requirements of the Standing Orders as to form.
The petition presented by the Hon. Member for Peace River (Mr. Cooper) by filing with the Clerk of the House does not meet the requirements of the Standing Orders as to form.


PRIVILEGE
Mr. Speaker:: I am in receipt of notice of a question of privilege, I take it, from the Right Hon. Leader of the Opposition (Mr. Turner).


John Napier Turner: rise on a question of privilege. 1 would not have entered into the issue of whether Sam Wakim, the former classmate of the Prime Minister at St. Xavier, had received legal business from the Export Development Corporation had not the Prime Minister (Mr. Mulroney) gratuitously intervened the way he did to suggest or to imply that when I was in private law practice, the firm in which I was honoured to be a partner received legal business from the federal Government. That happens not to be a fact. I never sought any business during my private law practice from the Government of Canada, nor have I received it. I want the Prime Minister to be clear about that.
I also want the House to understand that the connotation of the Prime Minister's question in return to my colleague, the Hon. Member for York South-Weston (Mr. Nunziata), as to whether the Hon. Member had telephoned or sought information from law firms in Toronto, illustrates that the Prime Minister knew more about this issue that he let on to the House.


Some Hon. Members:: Oh, oh!

September 10, 1985
Privilege-Mr. Turner (Vancouver Quadra)


John Napier Turner: And if the right hon. gentleman would like, I would suggest that we bring the whole issue before the Committee on Privileges and Elections to find out what Sam Wakim did to peddle his wares to a number of law firms in Toronto to see whether he could get that business and then invite two members of the law firm of Gowling Henderson to leave that law firm and join him with the new business.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: There is no question of privilege involved.


Some Hon. Members:: Up, up, up!


Mr. Speaker:: Order. The Right Hon. Member knows full well that I must find that he has not raised a question of privilege.


Martin Brian Mulroney: To my
recollection, I may be wrong-and if I am, I will apologize to my hon. friend-I think he raised the name of Mr. Wakim yesterday. I think the Right Hon. Leader of the Opposition (Mr. Turner) raised it yesterday, which is the first time it was placed on the floor of the House of Commons.
Mr. Wakim is a former Member of this House. He is a former distinguished chief counsel to the Ontario Securities Commission. He is a very honourable man. I am honoured to have him as my friend. There was no suggestion at any time that any lawyer, be it the Hon. Member from Shawinigan or be it the Hon. Member for Vancouver Quadra when he was practising law, or myself when I was practising law, that when we were all out looking for business and got business, there was anything wrong with looking for clients.


Mr. Lapierre:: That's not what he said.


Martin Brian Mulroney: It is widely known that lawyers do that. I have never at any time impugned the integrity of my right hon. friend.


Ms. Copps:: Ten minutes ago.


Martin Brian Mulroney: But I think my hon. friend would think less of me if I sat in my place and allowed anyone directly or indirectly to slander someone who is not here in the House to defend himself. And that is exactly what I am going to do.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: I want to say that the Hon. Member for Shawinigan is associated with a distinguished Toronto law firm-


Sheila Maureen Copps: Oh, sit down. That's not a point of order.


Martin Brian Mulroney: The Hon. Member from Shawinigan represents clients here and in Toronto, New York and Montreal. They are very important clients. He goes out and seeks them and represents them and I wish him well because that is an
honourable calling. I do not criticize him for it, and I won't stand for criticism of anyone else in that situation.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: And you protest too much.


Mr. Blaikie:: There are too many lawyers in here anyway.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Perhaps l am forced to come to the defence of lawyers. That would pain me.


Some Hon. Members:: Oh, oh!


POINT OR ORDER
Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order. I indicated to the Right Hon. Leader of the Opposition (Mr. Turner) my intention to raise this point of order at the beginning of Proceedings today once I had the opportunity of seeing Hansard from yesterday which came late today as Your Honour will know.
I rise on the basis of exchanges yesterday between the Right Hon. Prime Minister (Mr. Mulroney) and the Right Hon. Leader of the Opposition. It is to be found at page 6391 of Hansard. I am sure you will be aware, Mr. Speaker, of Citation 321(3) of Beauchesne's Fifth Edition which states in part:
The Speaker has traditionally protected from attack a group of individuals commonly referred to as "those of high official station". The extent of this group has never been defined. Over the years it has covered senior public servants-
The Right Hon. Leader of the Opposition clearly made an attack on the integrity on the Governor of the Bank of Canada. He said in the House yesterday, and I quote:
The question really relates to the fact that the House was misled ... being misled by the ... Governor of the Bank of Canada.
The point of order which I wish to raise is a very serious one. An unsubstantiated accusation has been made by the Right Hon. Leader of the Opposition, who is an officer of the House, Sir, which constitutes an attack on a senior public servant who, in discharging his responsibilities, gave advice to the Government.
When the Right Hon. Leader of the Opposition, who is an experienced Parliamentarian, engages in a partisan attack on a leading public administrator, our system is undermined. The Prime Minister can defend himself. The Minister of Finance (Mr. Wilson) can defend himself. The Governor of the Bank of Canada cannot.


André Ouellet: Come on.
September 10, 1985


Ramon John Hnatyshyn: To say that the Governor misled the House is, I suggest, Sir, using the privileges of Parliament to protect oneself against an action which, very simply, if stated outside the House of Commons and outside of the protection of the House of Commons would be libelous in nature and subject to the commencement of legal proceedings, in my estimation.


Jean-Robert Gauthier: What a lawyer!


Ramon John Hnatyshyn: It has been the custom here for Hon. Members of this House, when they have uttered words which in effect constitute an attack upon a senior government official-with whom the Right Hon. Leader of the Opposition has had personal contact in his ministerial capacity-to do the honourable thing; stand in their place and withdraw the offending words and apologize, in this case, to the Governor of the Bank of Canada. I would ask you, Mr. Speaker, to find that there has been a breach in terms of Beauchesne and to ask the Right Hon. Leader of the Opposition to withdraw his remarks and apologize to Mr. Bouey.


Some Hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, I would like to address the point of order raised by the House Leader. He did give me verbal notice of his intent to do this as the House began proceedings this afternoon. What I said was, and I quote:
The question really relates to the fact that the House was misled, including this side of the House, when we supported the Minister of Finance in the original bail-out Bill for that purpose. That is what it gets down to-the question of incompetence and the House being misled by the Prime Minister, the Minister of Finance, and indeed, the Governor of the Bank of Canada.
Those are the words which are being challenged. Let me go to the technical point first. If one looks at Citation 320 in Beauchesne's Fifth Edition we find, in looking at the word "misled", that it has been consistently held by the House that it must be "deliberately misled".
I submit to Your Honour that if you go further to Citation 321, which relates to protected persons, that is to say not just Hon. Members of the House but those persons traditionally protected, you find they are a group of individuals commonly referred to as "those of high official station". I am not going to argue for the purposes of your ruling, Mr. Speaker, whether the Governor of the Bank of Canada is of high official station or not, but I will assume he is. I will concede that point. However, 1 submit to Your Honour that the same judgment you have to apply concerning misleading statements or unparliamentary language regarding Members of this House should also be applied against protected persons. In other words, I used the word "misled"; I did not use the words "deliberately misled". I also want to refer Your Honour to Citation 323(2) regarding unparliamentary language, which reads:
The proper time to raise such a point of order is when the words are used and not afterwards.
Even if there were a point of order, it is already too late. The Minister of Finance (Mr. Wilson) points out that it was
Point of Order-Mr. Hnatyshyn challenged by the Prime Minister (Mr. Mulroney) yesterday, but not on a point of order. I also refer Your Honour to Citation 324(2), which reads:
An expression which is deemed to be unparliamentary today does not necesari-ly have to be deemed unparliamentary next week.
Let us get down to the substance. What I said to the House, and the tone of my questions to the Prime Minister and the Minister of Finance, who ducked, and to the Minister of State for Finance (Mrs. McDougall), was that when they came before the House in March and then in April to ask for the support of the House for the original bail-out of $255 million, we on this side of the House were assured-and the Liberal Party agreed to the bail-out only on the basis of the assurance-that it would render the bank viable.


Mr. Dick:: Where?


John Napier Turner: Let me just cite the words of the Minister of Finance. This is the issue, and I am going right to the substance, Mr. Speaker. This is what the Minister said on March 25, 1985.


An Hon. Member:: This is no point of order.


Robert Phillip Kaplan: You asked for it.


Joseph Jacques Jean Chrétien: You raised it.


John Napier Turner: I am now saying that not only did I not use the words "deliberately misled", but there was a misleading. This is what the Minister of Finance said, as reported at page 3321 of Hansard:
So I think that is a very broad support program for the bank indicating the confidence that not just the Government of Canada but the Province of Alberta, as well as the Canadian chartered banks, have in the future viability of the Canadian Commercial Bank-
They have confidence in the future viability of the Canadian Commercial Bank. We took that assurance. The Minister of State for Finance said on the same day, as reported at page 3310 of Hansard'.
-an agreement was reached this morning ... which will ensure the long-term viability of this Edmonton-based bank.
Now, Mr. Speaker, what did the Governor say?


Some Hon. Members:: Oh, oh!


B. Keith Penner: He is the Leader of the Opposition!


Charles Joseph Clark: He is a fool nonetheless.


Mr. Speaker:: Hon. Members will know that I have a duty to remind the Right Hon. Leader of the Opposition (Mr. Turner) that I need to find where this argument ties into the point of order. I therefore-


Jean-C. Lapierre: Well, listen to him first.


Mr. Speaker:: The Hon. Member for Shefford (Mr. Lapierre) will please bear with me. Therefore, since I sense that he is attempting to reintroduce into this discussion the question of a fact with regard to a misleading statement, which

September 10, 1985
Point of Order-Mr. Hnatyshyn 1 think he will know departs from the question of the point of order, I must ask him to restrict himself to the issue of a point of order and not to a factual question which may or may not have occurred sometime in the past.


John Napier Turner: Mr. Speaker, I am addressing the point of order not only with regard to procedure but also with regard to substance. My submission is that not only did the Minister of Finance tell this House that the bank would then be viable, but the Governor of the Bank of Canada, appearing before the Standing Committee on Finance, Trade and Economic Affairs, on several occasions which I could recite to Your Honour, said categorically that this arrangement would render the bank viable. That is what I said.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order. It is only day two.


Ian Deans: Mr. Speaker, I do not know whether or not the Liberals were misled in March and April. Frankly, I do not know whether or not the Speaker should find that if they were, the acceptance and admission of that by the Leader of the Official Opposition constitutes a breach of order or privilege. The same applies to the use of unparliamentary language. All I do know, Sir, is that we were not misled and we voted against the package because we saw through it.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I thank the Hon. Member for Hamilton Mountain (Mr. Deans) for a speech which was so clearly on a question of order.
The President of the Privy Council (Mr. Hnatyshyn) has raised a point of order relating to the use of language in yesterday's Question Period. The Right Hon. Leader of the Opposition quite properly cites Beauchesne's regarding when it is appropriate to draw matters such as this to the attention of the Chair. He goes further to ask me to consider questions of fact. I think he knows full well that I cannot do so even though, for his reasons, he may wish to put them in the record.
I must find, under the practices of the House, that whatever happened yesterday happened yesterday, and it happened yesterday.


Some Hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


Charles Joseph Clark: Mr. Speaker, sovereignty can be a very emotional issue in this country, and that is quite understandable, since sovereignty involves the identity and the very character of a people. We Canadians want to be ourselves. We want to manage our own affairs and control our own destiny, but we also want to go beyond this to play a constructive role in a world that is become increasingly inter-dependent. We have something to offer and at the same time we have something to gain.
Since it came to power, this Government has shown a keen interest in the sovereignty issue. We have consolidated national unity, because a house divided cannot stand. We have reinforced the national economy, because sovereignty means nothing without solvency. Unity and strength: these are the hallmark of sovereignty and of the policies and achievements of this Government.

We have declared a Canadian ownership policy in respect of foreign investment in the publishing industry. We have made our own Canadian decisions on controversial issues of foreign policy, whether in Nicaragua or South Africa. We have passed the Foreign Extraterritorial Measures Act to block unacceptable claims of jurisdiction by foreign Governments or foreign courts seeking to extend their writ to Canada. We have arrested foreign trawlers poaching in our fishing zones. We have taken important steps to bolster and improve Canada's defences, notably in increasing Canadian forces in Europe and in putting into place a new North Warning System to protect Canadian sovereignty over our northern airspace.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: As well, Sir, we have reconstructed relations with traditional friends and allies who have welcomed our renewed unity and strength and the confidence they generate.
Sir, my colleague, the Minister of Communications (Mr. Masse), and other Ministers of this Government on other occasions, will be making announcements through the life of this Parliament on other steps this Government intends to take to assert and guarantee the sovereignty and independence of Canada. In domestic policy, foreign policy, and defence policy the Government has given Canadian sovereignty a new impetus within a new maturity. However, Sir, much remains to be done. The voyage of the Polar Sea demonstrated that Canada, in the past, had not developed the means to ensure our sovereignty over time. During that voyage, Canada's legal position was fully protected, but when we looked for ways to
September 10, 1985

exercise our sovereignty we found that the Canadian cupboard was nearly bare. We obtained from the United States a formal and explicit assurance that the voyage of the Polar Sea was without prejudice to Canada's legal position. That, Sir, is an assurance which the Government of the day in 1969 did not receive for the voyage of the Manhattan and of the two United States Coast Guard ice breakers. Sir, whatever was done this summer, and however it may contrast with what was done before, nonprejudicial arrangements will not be enough in the future.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: The voyage of the Polar Sea has left no trace on Canada's Arctic waters and no mark on Canada's Arctic sovereignty. It is behind us and our concern must be for what lies ahead. Many countries, including the United States and the Federal Republic of Germany, are actively preparing now for commercial navigation in Arctic waters. Developments are accelerating in ice science, ice technology, and in tanker design. Several major Japanese firms are moving to capture the market for ice breaking tankers once polar oil and gas come on stream. Soviet submarines are being deployed under the Arctic ice pack and the United States Navy has, in turn, identified a need to gain Arctic operational experience to counter new Soviet deployments.
The implications for Canada are clear. As the western country with by far the greatest frontage on the Arctic, we must come up to speed in a range of marine operations that bear on our capacity to exercise effective control over the Northwest Passage and our other Arctic waters. To this end, Sir, I wish to declare to the House the policy of the Government in respect of Canadian sovereignty in Arctic waters, and to make a number of announcements as to how we propose to give expression to that policy.
Canada is an Arctic nation. The international community has long recognized that the Arctic mainland and islands are a part of Canada like any other, but the Arctic is not only a part of Canada, it is a part of Canadian greatness. The policy of the Government is to preserve that Canadian greatness undiminished. Canada's sovereignty in the Arctic is indivisible. It embraces land, sea and ice. It extends without interruption to the seaward-facing coasts of the Arctic islands. These islands are joined, and not divided, by the waters between them. They are bridged for most of the year by ice. From time immemorial Canada's Inuit people have used and occupied the ice as they have used and occupied the land. The policy of the Government is to maintain the natural unity of the Canadian Arctic archipelago and to preserve Canada's sovereignty over land, sea and ice undiminished and undivided.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: That Canadian sovereignty has long been upheld by Governments of this country. However, no previous Government has defined its precise limits or delineated Canada's internal waters and territorial sea in the Arctic.
Statements by Ministers
This Government proposes to do so. An Order in Council establishing straight baselines around the outer perimeter of the Canadian Arctic archipelago has been signed today and will come into effect on January 1, 1986.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: These baselines define the outer limit of Canada's historical internal waters. Canada's territorial waters extend 12 miles seaward off the baselines. While the Territorial Sea and Fishing Zones Act requires 60 days notice only for the establishment of fishery limits, we consider prior notice should also be given for this important step of establishing straight baselines.

Canada's jurisdiction over its continental margin and 200-mile fishing zone is unchallenged in the Arctic as elsewhere. Canada also exercises jurisdiction over a 100-mile pollution prevention control zone in arctic waters, in order to protect the unique ecological balance in the area. That too has been recognized by the international community, in a special provision in the United Nations Convention on the Law of the Sea.
However, no previous government had ever extended the application of Canadian civil and criminal laws to offshore zones in the Arctic and elsewhere. The present Government will take this action. To this end, one of our priorities will be the speedy passage of legislation covering the offshore application of Canada laws.
The exercise of functional jurisdiction in Arctic waters is essential to Canadian interests. However, it is no substitute for Canada's full sovereignty over the waters of the Arctic archipelago. Only with full sovereignty can we protect the entire range of Canadian interests. Full sovereignty is vital to Canada's security. It is vital to the Inuit people. And it is vital to Canada's national identity.
The policy of this Government is to exercise full sovereignty in and on the waters of the Arctic Archipelago and this applies to the airspace above as well. We will accept no substitute. [English]
The policy of the Government is also to encourage the development of the navigation in Canadian Arctic waters. Our goal is to make the Northwest Passage a reality for Canadians and foreign shipping as a Canadian waterway.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: Navigation, however, will be subject to the controls and other measures required for Canada's security, for the preservation of the environment, and for the welfare of the Inuit and other inhabitants of the Canadian Arctic. In due course the Government will announce the further steps it is taking to implement these policies, and especially to provide more extensive marine support services, to strengthen regulatory structures, and to reinforce the necessary means of control. I am announcing today that the Government has decided to construct a Polar Class-8 ice-breaker.

September 10, 1985
Statements by Ministers


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: My colleagues, the Minister of National Defence (Mr. Nielsen) and the Minister of Transport (Mr. Mazankowski) will shortly bring to Cabinet recommendations with regard to the design and construction plans. The costs are very high, in the order of $.5 billion, but the Government is not about to conclude that Canada cannot afford the Arctic.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: Meanwhile, we are taking immediate steps to increase surveillance overflights over Arctic waters by Canadian Forces aircraft. In addition, we are now making plans for naval activity in Eastern Arctic waters in 1986. Canada is a strong and responsible member of the international community. Our strength and our responsibility make us all the more aware of the need for co-operation with other countries, and especially with our friends and allies. Co-operation is necessary, not only in defence of our own interests, but in defence of the common interests of the international community. Co-operation adds to our strength and in no way diminishes our sovereignty. The policy of the Government is to offer its co-operation to its friends and allies and to seek their co-operation in return.
We are prepared to explore with the United States all means of co-operation that might promote the respective interests of both countries as Arctic friends, neighbours and allies in the Arctic waters of Canada and Alaska. The United States has been made aware that Canada wishes to open talks on this matter in the near future. Any co-operation with the United States or with other Arctic nations shall only be on the basis of full respect for Canada's sovereignty. That too has been made clear.
In 1970, the Government of the day barred the International Court of Justice from hearing disputes that might arise concerning the jurisdiction exercised by Canada for the prevention of pollution in Arctic waters. The Government of that day said to that court, "Your jurisdiction shall not affect Canada. We will not put our case before that court". This Government will remove that bar. Indeed, we have today notified the Secretary General of the United Nations that Canada is withdrawing the 1970 reservation to its acceptance of the compulsory jurisdiction of the World Court.
The Arctic is a heritage for the people of Canada. They are determined to keep their heritage entire and to keep their heritage intact. The policy of this Government is to give full expression to that determination.
We challenge no established rights, for none have been established except by Canada. We set no precedents for other areas, for no other area compares with the Canadian Arctic archipelago. We are confident in our position. We believe in the rule of law in international relations. We shall act in accordance with our confidence and belief, as we are doing
today in withdrawing the 1970 reservation to Canada's acceptance of the compulsory jurisdiction of the World Court. We are prepared to uphold our position in that Court, if necessary, and to have it fully and freely judged there.
In summary, Mr. Speaker, these are the measures we are announcing today: first, immediate adoption of an Order in Council establishing straight baselines around the Arctic archipelago, to be effective January 1, 1986; second, immediate adoption of a Canadian Laws Offshore Application Act; third, immediate talks with the United States on co-operation in Arctic waters on the basis of full respect for Canadian sovereignty; fourth, an immediate increase of surveillance overflights of our Arctic waters by aircraft of the Canadian Forces, and immediate planning for Canadian naval activity in the Eastern Arctic in 1986; fifth, the immediate withdrawal of the 1970 reservation to Canada's acceptance of the compulsory jurisdiction of the International Court of Justice; and sixth, construction of a polar, class 8 ice-breaker and urgent consideration of other means of exercising more effective control over our Arctic waters.
These are the measures which we can take immediately. We know, however, that a long-term commitment is required. We are making that commitment today.


Some Hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Mr. Speaker, I was pleased to receive the Right Hon. Minister's statement. My only objection is that it is exactly three months too late. When I rose in the House in the middle of June to raise this issue, the Minister remained silent, and today he rose in the House to propose a series of measures that would have been unnecessary if the Government had been truly in control of the situation last summer, when the problem arose.

We have been hearing about the great friendship between the Prime Minister of Canada (Mr. Mulroney) and President Reagan of the United States for many, many months. For 15 years the Americans have protested the Bill that I introduced in the House of Commons in 1970 concerning the prevention of Arctic pollution. For 15 years the Americans did not want to challenge the sovereignty of Canada which was reinforced at that time. They never sent a ship through our waters for 15 years.
In September, 1984, when my leader was Prime Minister, they did not come to challenge our sovereignty. They did not do so in the 14 previous years with former Prime Minister Trudeau. However, this summer, with their great friend, the Prime Minister of Canada in office they came and humiliated him. They also came and humiliated the Secretary of State for External Affairs (Mr. Clark). Worse still, they came and humiliated the whole nation by challenging our sovereignty in the north.
If it is true that the motto of the two Governments today is "good frienship", it would have been so easy for the Prime
September 10, 1985

Minister to call President Reagan and simply explain our case. The first argument given by the Americans for the voyage was that it wanted to save $500,000. Imagine, the poor little Defence Department of the United States needing to save that money. We could have sent them a cheque for $500,000 and offered to pay the gas to go through the canal rather than challenge our sovereignty. However, the Government was silent. Now that the horses have left, it is attempting to close the gate.
It did the same thing yesterday. After appointing one Tory person every three hours since it came to power, suddenly it closes the gate on patronage appointments because the number of Tories needing jobs is decreasing. I hope the Minister recognizes what he is doing. There was a strategy behind what took place in the past with regard to our sovereignty because the key in international affairs was he exercising of jurisdiction and we have had that jurisdiction and we have exercised it. This began under Louis St. Laurent when we ensured for many years that there were RCMP, Armed Forces and viable Inuit villages in these areas in order to inform the world that it was Canadian land.
Time is a very important element. When sovereignty is exercised for 100 years, no one can challenge it. Today, the Minister is taking a gamble and making a bold move which might cause the court to look into this case. Now we will either win or lose. The Minister could have been prudent and carried on with our acts of sovereignty protection this summer, without anyone being able to challenge it. We could have used all the "supposed friendship" this government has in the world to make sure our sovereignty was not challenged. Our sovereignty would have been greater in 50 or 100 years.
I hope the Minister will not have to get up in the House in the future to say he is sorry but it is typical of how this Government reacts. It does not know where to go. It makes a decision and then backs off. Last summer my leader challenged the Government to call President Reagan. I raised this problem many times during the summer and I raised this question in the House of Commons. However, the Minister is too late again, fumbling and trying to repair the disaster and humiliation of the nation which his inaction has caused.
We will have to support that action now because we have no choice. He has opened the case in court. 1 hope we will win but I believe that 50 or 100 more years of sovereignty exercised by the Government, with no challenge from anyone, would have been better. If it is true that there is a policy of friendship with the Government of the United States, it is a shame that President Reagan sent a quasi military ship in our water this summer despite the requests and pleas of the Secretary of State for External Affairs. If we had a Prime Minister who did not always go to the President on his knees, we would have been in a position to challenge the President and say that we will not tolerate such action. We would not be put in the shameful position we are today.
Statements by Ministers
I hope in this case the Minister is sure of himself. 1 hope we will not lose. I wish the Minister well. He would have been well advised last summer, rather than to laugh at my question in the House of Commons, to have taken the problem seriously and acted.


Some Hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: We would have more positive results now. Probably it is now too late. If the Government wanted to act, why were these actions not proclaimed in July? It was not a technical problem.


Ramon John Hnatyshyn: Or last year.


Joseph Jacques Jean Chrétien: Yes, or last year or 10 years ago. In court, it is not for the one who occupies land to provoke a case. At least I know that. When I have a good case I do not necessarily go to court myself. I wait for the other guy. You never know what the court's decision might be. When you own land, you do not go to court yourself. You wait until your ownership is challenged. That is basic law I learned at university.
Let me tell you, Mr. Speaker, I fear it is too late. I pray to God that the Minister has not created a situation on which we will be prematurely challenged. I am sad today because the danger is now more than ever caused because we had a Government that did not know what to do. The Government was afraid to offend President Reagan. This Government let him challenge and humiliate Canadians. After the humiliation lasted all summer, the Government comes with an ice-breaker. I am not impressed with the ice-breaker. With the disaster of the Canadian Commercial Bank, we could build two more ice-breakers.


Some Hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: I just pray the Minister knows what he is doing. If he had not acted as as slowly on such an important matter, he does all the time, we would not be in the awful situation in which we are today.


Some Hon. Members:: Hear, hear!


Mr. Jim Fulton (Skeena):: Mr. Speaker, I agree with one of the remarks of the previous speaker that Canadians were humiliated by the Polar Sea incident. The image many Canadians have of the new Conservative administration is that a green light has been given to the White House to use our Arctic as a military and economic playground. The image of our Arctic as the new battle-line of fortress America toward the Soviet Union is not without foundation.
Let me deal first with the matter of the Polar Sea. I have confirmed today with the Canadian Coastguard that not one but seven Canadian Coastguard ice-breakers could have gone through the passage ahead of the Polar Sea. This is a matter of marine sovereignty. The films of overflights from Canadian aircraft were interesting at best, but did little to express the Canadian mood on this issue or to achieve basic requirements
6466

September 10, 1985
Statements by Ministers
under international law. The Louis St. Laurent was available, the Sir John A. Macdonald was in the area and was available and, the John Cabot was available. Three R-class 1200s, the Des Groseillers, the Pierre Radisson, the Sir John Franklin and even the Norman McLeod Rogers were available. One of these vessels should have preceded the Polar Sea and the U.S. should have been billed every maple leaf penny of the cost. Only in Viscount Melville Sound did pack ice even slow down the Polar Sea, and throughout this so-called without prejudice journey, we should have followed our own precedent of 1969 when the Sir John A. Macdonald accompanied the Manhattan.


Some Hon. Members:: Hear, hear!


James Ross Fulton: Parliament then moved quickly to enact the Arctic Waters Pollution Prevention Control Act just months after the penetration of our sovereignty by the Manhattan. Parliament then should have moved to designate closing line or straight baselines as they are known around the outer perimeter of the Arctic archipelago. I pay tribute to the Right Hon. Minister for putting in place today such law to become effective January 1, 1986.
By demarcating our headland to headland closing lines, we will demonstrate to the international community our internal waters, which was at issue with the Polar Sea, our 12 mile territorial sea, our 100 mile pollution prevention control zone, our 200 mile fishing zone, our 200 mile limit and our 200 mile and beyond continental margin. These are pressing and urgent matters of national sovereignty, and I look forward to seeing them in The Canada Gazette and on all international marine charts.
1 also pay tribute to the Minister for producing the Canadian Laws Offshore Application Act. I look forward to seeing it, although I accept the Minister's words that it fully extends the application of Canadian civil and criminal laws to offshore areas, the Arctic included.
In 1975, the Polar 10 was considered for construction here in Canada, a nuclear-powered class 10 ice-breaker. The Government did not proceed. Since 1977, the conceptualization and design of the 100,000 horsepower gas-diesel electrically-driven Polar 8 has been on the drawing board, some eight years now. Tenders will be complete by December, I am advised, and this vital new vessel to exert Canadian sovereignty will be under construction, we hope, in the new year. All Canadians should support this vital component of our Arctic sovereignty.
On our boundaries we have successfully negotiated agreements with Greenland in such areas as the Davis Strait and Baffin Bay. Now we must move on the Labrador Sea. By demarcating these boundaries headland to headland with Greenland, let us not forget the crying need to move on the 141st meridian with Alaska in the western Arctic, Dixon Entrance and our rights in the Gulf of Alaska as well as the Straits of Juan de Fuca off Vancouver. Previous administrations have been lax, and under former Prime Minister Trudeau
to the point of losing ground on some of these boundary issues with the United States.
Let us not forget that as recently as last summer during the election, the United States Secretary of the Interior had a piece of Canada for sale off the Queen Charlotte Islands for gas and oil development. It was only under pressure from my Party that steps were taken that resulted in the withdrawal of that sale.
On this point, I urge the Minister today to direct Petro-Canada under the Canada Oil and Gas Lands Act, Bill C-48, to register submarine rights to the maximum, to all our boundary positions as outlined by myself and the new declarations. This is vital as we so sadly learned concerning the Georges Bank case most recently before the World Court.
The Right Hon. Minister, like many of his predecessors, climbs on the backs of the Inuit and other aboriginal Canadians to plant Canada's flag. To be intellectually and constitutionally honest, the Government must now move forward promptly to deal with the matter of aboriginal title and rights thereto.
There are no legal treaties with our first citizens north of 60, despite our constitutional recognition and affirmation of their rights. Do not forget, Mr. Minister, that in 1953 and again in 1955 the Inuit were taken from their homes by the federal Government to Cornwallis and Ellesmere Island. On that point, as recently as yesterday, I received a letter from the Minister of Indian and Northern Affairs (Mr. Crombie) indicating that he does not intend to move on that very important Inuit matter, particularly regarding the elders who want to move home from those two communities. They were transplanted to exert Canada's sovereignty. I urge the Minister will all sincerity to move now with this House to settle their title, which as the Minister says, has been outstanding since time immemorial, on the land, water and ice of the Arctic. Now is the time to act on this vital constitutional matter.
On the matters of the Territorial Sea and Fishing Zone Act, I trust the Minister intends to move forward quickly with notice on these new fisheries limits. I trust that he and his colleague, the Minister of Fisheries and Oceans (Mr. Fraser), will ensure that these matters are referred to the Standing Committee on Fisheries and Forestry.
On the matter of notifying the Secretary General of the United Nations today of our intention to withdraw the 1970 reservation, to accept compulsory jurisdiction to the World Court regarding disputes that may arise concerning Canadian jurisdiction for the prevention of pollution in Arctic waters, 1 warn the Minister that there are steps he must now urgently take to set our house in order first, some of which I have touched upon. In particular, I advise the Minister to look with care at the matter of the MV Arctic. The Minister's colleague, the Minister of Transport (Mr. Mazankowski) just this summer exempted that vessel by Order in Council from the strict requirements of the Arctic Waters Marine Prevention Control Act to carry crude oil south from Cameron Island, as part of Pan Arctic's Bent Horn project. This would mean that
September 10, 1985

we would end up litigating against ourselves under the Minister's proposal by withdrawing the 1970 reservation.
In conclusion, let me congratulate the Right Hon. Minister on his new-found interest in boundaries, the Polar 8 and accompanying declarations. I think they are very Canadian. Let me ask the Minister to move now on aboriginal title, complete boundary actions,-including a movement today, I hope, because the Americans no doubt will have listened, under COGLA which is very important in terms of law- submarine rights, economic development in the north and with caution in the environment so sensitive to change. It is the great desert of the north.
I heard great applause from that side of the House encouraging navigation, but we have to deal with Lancaster Sound and many other very serious and sensitive ecological matters first.
Finally, I ask the Right Hon. Minister to understand the fear of Canadians of connecting the North Warning System and the forward bases for F-18 interceptors to missile bases, star wars and the front line of Fortress America. It is a powerful image. The previous Hon. Member who spoke touched on the humiliation of the summer, but it is a matter of imagery about which Canadians are very frightened. Our North was penetrated this summer. With all the overlying factors, there is a real fear in the country about the whole issue.
In conclusion, let us somehow make the Arctic nuclear-free and fully sovereign from the psychological rape this summer by the penetration of the Polar Sea.


Some Hon. Members:: Hear, hear!


PETITIONS
Michael Morris Cassidy: Mr. Speaker, I have in hand a petition signed by a hundred workers from Quebec who are asking that all retired employees keep their pension benefits and receive their unemployment insurance allowances without any deduction from their pension income.

The problem toward which this petition is directed affects workers across the country.


Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, I have the honour to present a petition from a number of Winnipeg residents who protest the move by the Government to deduct benefits from unemployment insurance benefits. It will have a detrimental impact upon family income and robs people who have worked a lifetime of the pension benefits
Order Paper Questions
which they have earned. The petitioners call upon the Government to reverse its intention in this regard.


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I have the honour to present some petitions. One is from the Province of New Brunswick and it is signed by several residents of that province. The others are from Edson, Alberta; Prince George, British Columbia; and Scarborough, Ontario.
These petitioners ask the Government to change the particular provision of the Unemployment Insurance Act which would make pension income deductible from unemployment insurance.


Nelson Andrew Riis: Mr. Speaker, it is my pleasure to present a petition on behalf of a number of residents of Vancouver and Kamloops, British Columbia. They are concerned that after the end of this year they will have their pension benefits deducted from their unemployment insurance benefits, thus effectively eliminating the benefit of the pension package to the worker.



COMMITTEES OF THE HOUSE


Ramon John Hnatyshyn: Mr. Speaker, there have been consultations among House Leaders with respect to the operation of the new rules relating to legislative committees. I think Your Honour would find disposition to allow the following motion to be put and to be passed without debate at the present time. It reads as follows:
That, notwithstanding the provisions of Standing Order 70(5), the Striking Committee shall meet and report not later than six o'clock p.m. on Monday, September 16, 1985.


Mr. Speaker:: That motion requires unanimous consent. Is there unanimous consent?


Some Hon. Members:: Agreed.


Mr. Speaker:: The House has heard the terms of the motion. Shall it carry?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[ Translation]

Paul Wyatt Dick: Mr. Speaker, the following question will be answered today: No. 60.

September 10, 1985
Order Paper Questions


Mr. Howie: What are the (a) names (A) positions of the persons who occupy positions on the Executive and Board of Directors of Canadair Inc. and, in each case, what amount was he/she paid in respect of that position in the fiscal year ended March 31, 1984?
Hon. Sinclair Stevens	(Minister of Regional Industrial
Expansion): As of March Ltd. is as follows:	31, 1984, the reply for Canadair
(a) Name	(b) Position
Board of Directors	
Guy J. Desmarais	Chairman
Hon. Jean-Pierre Goyer	Vice-Chairman
J.l. Bell	Director
G.S. Bennett	President and Chief Executive Officer
David M. Culver	Director
John P. Fisher	Director
Milton E. Harris	Director
Charles 1. Rathgeb	Director
J.P. Sullivan	Director
Compensation paid to members of the Board of Directors as of March 31, 1984 is as follows:	
Name	Amount
Guy J. Desmarais	$16,300
Hon. J.P. Goyer	$16,300
J.l. Bell	$12,600
G.S. Bennett	nil*
David M. Culver	$ 7,575
John P. Fisher	$ 6,600
Milton E. Harris	$ 8,400
Charles 1. Rathgeb	$11,400
J.P. Sullivan	$ 8,400
* Mr. Bennett is an employee of Canada Development Investment Corporation and was not compensated as a board member of Canadair Ltd.


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


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


Mr. McKinnon:: Mr. Speaker, I call the attention of the Parliamentary Secretary to Question No. 379 which has been standing in my name since May 24. That question is a companion question to Question No. 383, which was answered yesterday. As these two questions are closely related, it is not understandable to me why they could look up the status of the Supplementary Retirement Benefits Accounts for several sets of government employees but were unable to look up the Canadian Forces Superannuation Account at the same time. I wonder whether he would ask them to hurry along with the second part of this duet of questions.


Paul Wyatt Dick: Certainly.


Mr. Speaker:: The questions as enumerated by the 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-66, an Act respecting the reorganization of the Canada Development Corporation, be read the second time and referred to a legislative committee.
Mr. Speaker:: I am advised that when the House rose at one o'clock there were five minutes remaining in the question and answer period. Is the Hon. Member for Ottawa Centre (Mr. Cassidy) rising to participate in the debate?


Michael Morris Cassidy: Yes.


Mr. Speaker:: Before recongizing the Hon. Member, may 1 indicate that according to Standing Order 19(4) the sitting of the House will be extended by 33 minutes.


Michael Morris Cassidy: Mr. Speaker, 1 rise with regret to speak on this Bill to privatize the Canada Development Corporation because I think that the CDC, whether it is under the Conservatives or whether it was under the Liberals, in the period since its foundation some 15 years or 18 years ago represents a failed opportunity for Canadians. It represents a failed opportunity in terms of diversification of the Canadian economy, in terms of its original goals, and in terms of the possibility of creating a different model of the way an economic organization or corporation would work to serve the people of Canada, its owners, and to serve the workers, customers and suppliers who dealt with and worked for the various entities under the control of that corporation. It is a failed opportunity in terms of a kind of model which could have been created for our future development.
The Macdonald Commission report has just been brought down. Unfortunately it is retrograde; it looks backward rather than forward. It seems to be looking into a rear-view mirror in terms of its idea about the kind of corporate Canada we could have in the future.
It is regrettable because during its earlier stages the Macdonald Commission asked appropriate questions about what kind of future organization we could have in our economy to ensure that we were flexible and adaptable to change and to ensure that ordinary working people could feel that they were
September 10, 1985

a part of our economic society rather than feel that they were simply pawns, that they were exploited by society or that they had no say in the wayin which things were run.
The Canada Development Corporation has grown to a $4 billion or a $5 billion corporation in a few short years. It could have been a model by which working people could have in fact had a say in the future of the enterprise within which they were involved. The Liberal Government, which went down in defeat last year, did not see it that way. In fact, it successively loosened its grip on the CDC until it was almost not worth the bother to try to resuscitate it as an instrument of public policy. However, there was still a strong case to be made that the CDC as an instrument of public policy or as a public corporation could have shown how the public sector could in fact be different and still be efficient, profitable and all the other things which were put forward as its goals and objectives.
Under the Conservatives there simply was not a chance. I now have the honour to be the critic of the Minister of Regional Industrial Expansion (Mr. Stevens). Once that Minister came to power, he was determined to proceed with privatization. In that goal he had the support of the Minister of Finance (Mr. Wilson) and, I suppose, the tacit support of other Members of the Government. They did not stop to see whether there were some other alternatives. They did not stop to see what might be the consequences of letting this major portion of our economy go into private hands. They did not stop to ask themselves whether or not this really was in the best interests of Canadians. As far as the Minister of Regional Industrial Expansion was concerned, it was a good thing if it was in the private sector and it was a bad thing if it was left in the public sector and therefore it had to go. One of the reasons offered by the Minister for this was that Crown corporations should be sold in the event that they were not fulfilling a public policy purpose. I think it can be argued that the Canada Development Corporation has ceased to fulfil a public policy purpose becuase it was being run as a private sector conglomerate corporation with next to no input as far as the public sector was concerned.
Through the years, the Canada Development Corporation did play somewhat of a public role. It made some investments in high tech early on. It Canadianized the Texas Gulf Mine in Timmins which is now known as the Kidd Creek Mine and brought it into Canadian hands. It has pioneered investments in the field of biotechnology. The Canada Development Corporation took over control of Connaught Laboratories and sought to modernize that particular institution which had belonged to the University of Toronto for many years. It sought to make it effective, efficient and competitive in order to allow it to continue to make a contribution to Canadian life as one of the only pharmaceutical companies in the country carrying out indigenous research and developing products here in Canada rather than simply importing patents from elsewhere.
The fact is that the CDC, in its early years, did seek to fulfil a public policy purpose but it lost its direction quite quickly. I
Canada Development Corporation cannot think of anything that it has done in the last few years which really indicates a particularly strong thrust. 1 think it epitomizes one of the problems of public ownership which has been endemic under both the Liberal and Conservative Governments which is that when there are governments that do not believe in public ownership and accountability and when there are governments that do not understand that public ownership should be something different from private ownership, then it fact Crown corporations will not be particularly effective. That has been the case with Canada Development Corporation.
What is happening now? As my colleague, the Hon. Member for Essex-Windsor (Mr. Langdon) has said, the Government has finally announced its plans. On June 27, a day or two before the House rose for the summer, a Bill was put before the House by the Minister. There was a long summer recess and now the Bill is being rushed through the House by the Government. Did the Government at least have the grace to wait until the Bill was enacted before it acted as though it were law? The answer is no. Not only is the answer no, but quite specifically the share offering which was undertaken this summer in Toronto and on the Financial markets of Canada directly contravened the existing Canada Development Corporation Act and permitted a private-sector corporation, Noranda, to effectively take over 25 per cent control of the Canada Development Corporation despite the fact that the law currently reads that until this Act is amended if it is to be amended, no individual shareholders should have more than 3 per cent ownership of the Canada Development Corporation with the exception of the Government of Canada.
Noranda is effectively buying operating control of the Canada Development Corporation. I am not sure if that was intentional on the part of the Government. Did Mr. Zimmerman of Noranda meet with the Minister of Regional Industrial Expansion in order to arrange all of this? Is the fix in so that the Kidd Creek Mine will be absorbed into the mining operations of Noranda and the rest of the Canada Development Corporation will be spun off to private sector shareholders? Will there be any limitations if Noranda decides to sell off Polysar, a corporation which has been a Crown corporation for some 40 years, into American hands so that the synthetic rubber activities will become a part of Goodyear, B. F. Goodrich or one of those companies? We do not know. We may find out during the course of the committee hearings but the fact is that we do not know.
Major elements of our economy are being privatized. If we ask what has happened when we find that companies have been shut down, that ownership has been spun off or that they have been bought piece by piece by foreign multinationals, we will be told by Ministers of the Crown that those are commercial activities over which they do not have any control.
Today in the House of Commons the Minister of State for Finance (Mrs. McDougall) gave us an example of something like that. Last March, she was involved in the bail-out of the Canadian Commercial Bank in which six commercial banks contributed $60 million to a rescue operation that we were assured would make the CCB a viable entity once again.

September 10, 1985
Canada Development Corporation
Shortly after that, those banks and other Canadian chartered banks proceeded to systematically bring their deposits in the CCB down to the lowest tolerable level. They brought their deposits down to a mere $5 million from $41 million in the course of a few short weeks. When the Minister was asked today if she did anything about that, if she knew about it and if she tried to stop it, she said that those were commercial activities and she had no power to stop them.
The Bill before us not only allows the Government to reduce to nothing its shareholdings in the Canada Development Corporation, it also effectively provides a blueprint for the destruction of the Canada Development Corporation. For one thing, its name can be changed without recourse to Parliament. The Canada Development Corporation can become Noranda (CDC) Incorporated or it can be changed to Uncle Sam Incorporated if the new owners or controllers think that that is a good idea. The company could easily be controlled by Noranda and by a couple of other shareholders who do not have to be Canadians because foreign share ownership is to be permitted up to 25 per cent and individual foreign multinationals will have the right to own up to 10 per cent of what is now known as the Canada Development Corporation.
Now there are controls on the CDC but once the corporation is in private hands, will there be anything to stop the CDC from continuing the program of divestment that it has taken over the course of the last couple of years? Last year I was contacted by a friend of mine who was very concerned about what was happening with Connaught Laboratories. CDC systematically puffed up the value of Connaugh in order to sell the shares on the private market. It boasts about that in its most recent annual report. It stripped assets from the pension fund in order to help bolster the company's cash reserves.
Connaught represents only a modest proportion of CDC's total assets. However, the same thing could be done with Kidd Creek. Kidd Creek could be sold off through a share exchange with Noranda. It could be done with Canterra, a corporation which accounts for 8 per cent or 9 per cent of the annual sales of the Canada Development Corporation. It could be done with Polysar or with Petrosar, companies which are both wholly owned by the CDC and which account for half of the value of its sales on an annual basis.
In a few months, we may well read in The Globe and Mail Report on Business that these corporations have been spun off in very much the same way as were portions of the CDC's ownership in Connaught Laboratories. In other words, this entire entity may simply disappear or it may turn into a totally different type of conglomerate, certainly one which would serve no functional purpose at all in terms of public policy. It would simply be a vehicle for making money, for providing jobs for corporate leaders and perhaps incidentally for helping to maintain a certain sector of the economy by contributing to the prosperity of Canadians, but only incidentally. I find that very disappointing.
It seems to me that a new Government which was elected on a mandate of change and which has revealed itself prepared on a number of occasions to rethink the shibboleths which it
brought into office when it was elected last September 4 might well have looked at the Canada Development Corporation not as a problem, not as a dog to be divested of in the manner of the Harvard Business School, but as an opportunity for Canadians.
I draw to the attention of Members of the Government Party the contrast between the development of the CDC on the one hand and la Caisse de depot and Placements de Quebec on the other. The Caisse de depot was established in 1966 or thereabouts as a vehicle for Quebec Government investments around the same time the Quebec Pension Plan was being established to parallel the Canada Pension Plan. It used funds which were invested in it from the Quebec Pension Plan. It was assured, therefore, that as an investment of public policy, it would have a continuing and growing source of capital which could be used for the diversification and expansion of the economy of the Province of Quebec. Since Quebecers were the contributors to the fund, it was quite natural that it was used as an instrument of public policy. Many corporations in manufacturing, textiles, steel and pulp and paper industries have now had major shareholdings acquired by the Caisse de depot. Canadian Pacific is now partially controlled by the Caisse de depot and in fact the Caisse de depot has become such a large operator in the financial markets of the country that the private sector is crying uncle and saying that it is suffering from unfair competition. The previous Liberal Government tried to pass a piece of legislation which would have clipped the wings of the Caisse de depot in order that it would not get too large. It is one of the curiosities of the private sector that when it feels that the heat is on it comes to the Government asking that the rules be changed in order to favour it. It does this when the going is getting a bit too competitive.
That is something which has been done by a pension fund in one province. The Caisse de depot has become a major actor in financial markets right across the country. The Canada Development Corporation could have done that as well. However, it was not done because the Liberal Government of the day, after an initial burst of enthusiasm, did not carry out what it intended to do when the idea of a Canada Development Corporation was dreamed up by Walter Gordon, when the nationalists within the Liberal Party-and there were a few in those days-saw it as an instrument of the Canadian economy, of an economy that would be owned and controlled by Canadians.
The CDC stopped its efforts to Canadianize our economy God knows how many years ago. It simply settled down into a corporate very much like any other. I had a look at the Board of Directors of the corporation which, even up until today, is something in the order of 87 per cent or 90 per cent controlled by the people of Canada, who are currently the shareholders until this Bill is passed, if it is passed, and until the tentative share issue made in the summer has been legitimized by Parliament. I looked to see how this public corporation had been made somehow different from any other conglomerate in the country. I wanted to see how it reflected the vast diversity
September 10, 1985

of our country and of our population. I have to say, with regret, that I could find no difference between this corporation and Power Corporation, CP Investments, or any other private sector corporation. Of the 20 people on the Board of Directors,
I found one representative of the Government of Canada. That is the Deputy Minister of Regional Industrial Expansion. There were no other representatives of the people of Canada, despite the fact that we, as the people of Canada, hold 87 per cent or 90 per cent of the shares. There are two women on the Board of Directors-hardly bold leadership of a Government dedicated to showing that women should have a place of equality in the economic life of our country. In 20 years no government ever got around to appointing more than women to the Board of Directors.
It is common knowledge on Bay Street and St. James Street that the direction of the Canada Development Corporation has been very much in the hands of Anthony Hampson and the group around him and that they have successfully fought off overdue influence and participation from the chief shareholder. That chief shareholders, the Government of Canada, has simply sat back and taken it rather than saying that the Canada Development Corporation is different to ensure that it will be run in a manner which, in fact, is different.

Mr. Speaker, we in this Party are against this Bill to privatize the Canada Development Corporation. We intend to vote against this piece of legislation because we believe the Government missed a good opportunity when it decided to get rid of its shares in this corporation instead of seeking an efficient and novel way to use this group of companies, with assets of about $5 billion, to the benefit of all Canadians.
We have in this country an economic culture which readily lends itself to a mixed economy. We have Crown corporations such as Air Canada, Canadian National Railways and, until now, the Canada Development Corporation, Ontario has Ontario Hydro, Quebec has Hydro-Quebec, and practically all provinces have power companies in the public sector, telephone and transportation companies, marine companies, communications and satellite companies which belong to us as Canadians. A great many of those companies are healthy and quite profitable and they must remain under public ownership so that Canadians will have the necessary means and tools to control and direct their own economy and make sure that it is managed in the best interest of Canada as a whole. Unfortunately, notwithstanding the wide variety of public companies and Crown corporations existing in Canada, we have been unable to find the means to manage those corporations in a way that is significantly different from the way privately owned companies are managed. For instance we have failed to find ways to ensure the participation of workers, possibly those who buy from or sell to those companies. We have not really developed different ways that would enable those companies to operate much differently from privately owned companies.
Canada Development Corporation

That is a pity because it seems to me that we are different in this country. One of the reasons our economy differs from that of the United States is because of the fact that, essentially, the United States does not have public ownership. It does not have the ideology which believes in public ownership and, therefore, there is little or no public sector involvement in the economy of the United States.
I recall going to Minnesota some years ago and talking to the Secretary of Commerce there. I asked him what activities there were in the State in the public sector. After describing what we did in Ontario, where I was an MPP, he thought for a long time and said: "Well, I think that our sewers are publicly owned." That was all. That is a great pity because there is a role for the public sector.
We, in Parliament, responding to the people of-my time is up.


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


Michael Morris Cassidy: In responding to the people we recognize that and we have set up these public corporations. We should not allow them to dwindle away into insignificance.


Some Hon. Members:: Order, order.


Michael Morris Cassidy: That is why we are opposing this particular Bill, Mr. Speaker.


The Acting Speaker (Mr. Charest):: The Hon. Member was quite right in saying that his time was up.
Questions or comments? The Hon. Member for Winnipeg North Centre (Mr. Keeper).


Cyril Keeper: Mr. Speaker, the remarks of my colleague have given me reason for reflection. Can he elaborate on the potential damage to the Canadian economy with respect to eliminating the role of the public sector in the Canadian economy? Will he tell us just how much of a risk we are running in terms of our economic health by going on a privatization binge?


Michael Morris Cassidy: I would like to respond to the Hon. Member and give a specific example, which is Polysar. Over the last 40 years, Polysar has become a genuine success story and a Canadian multinational corporation. It was founded during the war to produce artificial and synthetic rubber because of the needs of wartime. It was maintained in public ownership since 1945. Now, for what amounts to a modest amount of revenues to the people of Canada, we are receiving about $200 million from the sale of all of the corporations in the conglomerate called the Canada Development Corporation. We are giving up control of Polysar. While the corporate shell, the Canada Development Corporation, is meant to stay in Canadian hands, there is nothing to stop CDC, under its new ownership, from selling off Polysar. This is a successful Canadian multinational which has operations in 40 or 50 countries around the world. There is nothing to stop the CDC from

September 10, 1985
Adjournment Motion
selling that corporation off into American, British, French or-God forbid-South African hands. God knows, it might not even be operating within the country in a few years.


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


Some Hon. Members:: Question.


The Acting Speaker (Mr. Charest):: Mr. Stevens, seconded by Mr. Hnatyshyn, moves that Bill C-66, an Act respecting the re-organization of the Canada Development Corporation, be read the second time and referred to a legislative committee. Is it the pleasure of the House to adopt the motion?




[Stage Direction]
The House resumed consideration of the motion of Mr. Stevens that Bill C-66, an Act respecting the reorganization of the Canada Development Corporation, be read the second time and referred to a legislative committee.
The House divided on the motion which was agreed to on the following division.
Some Hon. Members:: Agreed.
(Division No. 110)


Some Hon. Members:: No.
++YEAS


The Acting Speaker (Mr. Charest):: All those in favour will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Charest):: All those in favour will please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Charest):: In my opinion, the yeas have it.
And more than five Members having risen:


The Acting Speaker (Mr. Charest):: Call in the Members.
And the division bells having rung:



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised at the time of adjournment are as follows: The Hon. Member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand)-Apartheid- South Africa-Request for economic sanctions, (b) Request for immediate action; the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie)-Canadian National Railways-Retention of Winnipeg as regional headquarters. (b) Government intentions; the Hon. Member for London East (Mr. Jepson)- Status of Women-Request for funding for REAL Women organization.
Allmand
Attewell
Axworthy
Baker
Beatty
Belsher
Berger
Bernier
Bertrand (Mrs.)
Bissonnette
Blackburn
(Jonqui&re)
Blais
Blais-Grenier (Mrs.)
Blenkarn
Blouin (Mrs.)
Bradley
Brightwell
Brisco
Caccia
Cadieux
Caldwell
Cardiff
Champagne (Mrs.)
(Saint-Hyacinthe-Bagot)
Champagne
(Champlain)
Charest
Clark
(Yellowhead)
Clark
(Brandon-Souris)
Clinch
Cochrane
Comeau
Cook
Cooper
Copps (Ms.)
Cossitt (Mrs.)
Cdte
(Lac-Saint-Jean)
Crofton
Crosbie
(St. John's West)
Crouse Dantzer Darling de Corneille de Cotret Della Noce Dick Dingwall Dor in Duguay Ellis Epp
(Provencher)
Messrs.
Ferland
Fontaine
Foster
Fraleigh
Fraser
Fretz
Friesen
Frith
Gagnon
Garneau
Gass
Gervais
Girard
Gravel
Gray
(Bonaventure-lles-dela-Madeleine)
Gray
(Windsor West) Greenaway Grise Gurbin Gustafson Halliday Henderson Hicks Hnatyshyn Hockin Holtmann Hopkins Horner Hudon Isabelle Jacques
(Mrs.)
James
Jardine
Jepson
Joncas
Kaplan
Kelleher
Kempling
Kilgour
King
Landry (Mrs.)
Lanthier
Lapicrre
La Salle
Lawrence
Layton
Lesick
Lewis
Lopez
MacDougall
(Timiskaming)
MacKay
MacLellan
Mailly (Mrs.)
Malone
Mantha
Marchi
Marin
Martin (Mrs.)
Masse
Mayer
Mazankowski
McCuish
Mclnnes
McKenzie
McKinnon
McKnight
McMillan
Minaker
Mitges
Moore
Murta
Nickerson
Nowlan
Nunziata
Oberle
O'Neil
Oostrom
Ouellet
Pennock
Pepin (Mrs.)
Peterson
Pietz
Plourde
Porter
Price
Reid
Ricard
Robichaud
Rompkey
Rossi
St. Germain
St-Julien
Schellenberg
(Nanaimo-Alberni) Schellenberger
(Wetaskiwin)
Scott
(Victoria-Haliburton)
Scott
(Hamilton-Wentworth)
Scowen
Sparrow
(Mrs.)
Stevens

Tardif
(Richmond-Wolfe) Tardif (Mrs.)
(Charles bourg)
September 10, 1985

Taylor	Turner	WhiteThacker	(Ottawa-Carleton)	WilsonTobin	Valcourt	(Swift Current-Towers	Vankoughnet	Maple CreekTremblay	Vincent	Winegard(Quebec-Est)	Warner	WiseTupper	Wenman	Witer-168.NAYS	Messrs.	Althouse	Fulton	Mitchell (Ms.)Benjamin	Jewett (Ms.)	NystromBlaikie	Keeper	OrlikowBroadbent	Langdon	ParryCassidy	Manly	RiisDeans	McCurdy	Rodriguezde Jong	McDonald	WaddellEpp	(Ms.)	Young-23.
(Thunder Bay-Nipigon)
(Broadview-G reen wood)


Mr. Speaker:: 1 declare the motion carried.


Jean-Robert Gauthier: Mr. Speaker, I rise on a point of order. I did not vote in this division because I own interests in CDC and I intend keeping them.


B. Keith Penner: Mr. Speaker, 1 abstained from voting because 1 am very proud to be a minor shareholder in a great Canadian corporation.


[Stage Direction]
Motion agreed to, Bill read the second time and, by unanimous consent, referred to a legislative committee.
 *

Hon. Robert de Cotret (President of the Treasury Board) moved: that Bill C-60, an Act to authorize procurement of the dissolution of certain Crown corporations and to amend or appeal other Acts in consequence thereof, be read the second time and referred to a legislative committee.


Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order. There have been discussions among the Parties with respect to Bill C-60. Notwithstanding the motion before the House, 1 think Your Honour would find an inclination to accept the following motion rather than have the Bill referred to a legislative committee. There is an inclination to accept it, by unanimous consent, and to pass it without debate. The motion reads as follows: .
That, notwithstanding any Standing Order, when Bill C-60, an Act to authorize procurement of the dissolution of certain Crown corporations and to amend or repeal other Acts in consequence thereof, is read a second time, it shall stand referred to a Committee of the Whole and shall be read a third time not later than the end of the time provided for Government Orders tomorrow.


Mr. Speaker:: The House has heard the proposal which requires unanimous consent. Is there unanimous consent?.


Some Hon. Members:: Agreed.
Crown Corporations


Jean-Robert Gauthier: Mr. Speaker, does the word "tomorrow" mean the next day, the next sitting of the House?


Ramon John Hnatyshyn: The next sitting of the House.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
Douglas Grinslade Lewis: Mr. Speaker, I should like to speak briefly to this Bill and to review why the Government is putting it forward for consideration at this time. It is part of our effort as a Government to rationalize the Crown corporations which we found in the portfolio when we assumed office. We have made efforts to privatize some, but the purpose of the Bill which we are discussing today is to remove four Crown corporations which serve no useful public purpose. Indeed, three of these Crown corporations are completely inactive and the fourth merely holds a piece of property for the Crown.
For the edification of the House, I intend to run through the intent behind the Bill as it deals with each of the four Crown corporations. The first is Canadian National (West Indies) Steamships, Ltd. which was incorporated under the Dominion Companies Act in 1927 to provide a steamship service to the West Indies. The corporation has been inactive since 1958 when its fleet of ships was sold to Banco Cubana of Havana. In 1959 the corporate management was transferred to federal Government officials for the purpose of collecting the proceeds from the sale. An irrevocable letter of credit was issued through the Bank of America to cover the final principal payment which was not honoured due to the passing of the Cuban Assets Control Regulations by the Government of the United States on July 3, 1963. The sole purpose of maintaining the company is to collect the outstanding principal plus interest totalling perhaps $900,000 as of December 31, 1984. These funds are frozen today in the Bank of America in New York.
The Department of Finance, in the name of the Minister of Finance (Mr. Wilson), is the registered holder of the share certificates. That Department and the Department of External Affairs are making efforts and representations, now that our relations with Washington have been improved, to secure the release of the frozen funds. If that approach does not succeed within a reasonable period of time, steps will be taken to ensure that the present obligation owing to Canadian National (West Indies) from the sale of its steamships would become an obligation enforceable by Her Majesty. This would necessitate a written agreement with the Bank of America that it would eventually reassign the payment to Her Majesty if Canadian National (West Indies) were dissolved. In any event, that will go forward if in fact this Bill is passed. We do not intend to dissolve the corporation formally until we are certain that the outstanding balance of approximately $1 million will be paid to the Crown.

September 10, 1985
Crown Corporations
The second Crown corporation to be dissolved is the Societa a Responsibilita Limitata Immobiliare San Sebastiano which was acquired by the Department of External Affairs as a means of purchasing, without tax penalties, the official residence of the Canadian Ambassador to the Holy See in Rome, Italy. This was a private Italian company whose sole asset was a residence. I might say that it was the subject of some discussion in one of the Auditor General's reports some time ago. Normally External Affairs purchases these residences directly on behalf of Her Majesty. What we are proposing now is to change the company into a limited partnership and subsequently to have the property donated to the Crown. We will then proceed to have approval of the acceptance of the gift by Her Majesty the Queen in right of Canada authorized by the Government of Italy pursuant to Article 10 of the Italian Civil Code. Officials are pursuing the ramifications and methods of doing that at the moment.
The third Crown corporation to be wound up is St. Anthony Fisheries Limited which was established in 1982 to reopen and operate but not own a dormant fish processing plant at St. Anthony, Newfoundland. It was agreed that the plant's owner, Fishery Products which, as the House will know, has now merged with Fishery Products International Limited, would market production during the 1982 season. This plant is now owned and operated by Fishery Products International Limited which is the combined entity set up in Newfoundland under the Atlantic Fisheries Restructuring Act.
Because FPIL has now taken over the operation of the St. Anthony plant, St. Anthony Fisheries is an inactive corporation. It continues to exist as a shell corporation in order to collect arrears from FPIL with respect to sales made on behalf of St. Anthony Fisheries by Fishery Products. The corporation will not be wound up until these arrears are collected.
When the corporate plan for St. Anthony Fisheries Limited was approved by the Treasury Board in March 1985, the Treasury Board requested that the Minister of Regional Industrial Expansion (Mr. Stevens) settle the arrears of FPIL to St. Anthony Fisheries prior to or in conjunction with his next request for funds for FPIL. Action on this request is expected before the end of this curent calendar year.
The last Crown corporation with which we are dealing in this Bill is Uranium Canada, Ltd. which was created in 1971 pursuant to Appropriation Act No. 1, 1971, and the Atomic Energy Control Act with a mandate to purchase $29.5 million worth of uranium concentrates on behalf of the Crown from Denison Mines Ltd. over the period 1971 to 1975.
During the period 1971 to 1980, Uranium Canada sold or made loans of portions of the stockpile and returned some $114 million to the Crown. During this time, uranium prices increased and Canada's known reserves increased dramatically, primarily due to the discovery of large, rich deposits in Saskatchewan. Therefore, the need for a Canadian Government stockpile or government support of Canadian mines disappeared.
In May 1981, the Government transferred the ownership of the remaining stockpile having a book value of $96 million to Eldorado Nuclear Ltd. and directed the Minister of Energy, Mines and Resources to wind up Uranium Canada. However, the House will recall that the company was subsequently charged along with five other uranium companies with offences under the Combines Investigation Act. The matter was finally settled on December 15, 1983, when the Supreme Court of Canada ruled that Uranium Canada, as an agent of the Crown, was immune from the terms of the Combines Investigation Act.
Uranium Canada is now dormant, having no operations, no staff and assets totalling $9. The company's affairs are conducted on an as required basis by Public Service employees and its resource requirements are minimal. There being no further use for the corporation, the Minister of Energy, Mines and Resources (Miss Carney) is requesting the authority of Parliament to dissolve it.
These are the corporations which we are planning to dissolve at this time. I think they can best be described as loose ends. I would refer to one other Crown corporation which is not referred to in this Bill. For the edification of the House, there was a fifth Crown corporation, Mingan Associates, a corporation which it had been our intention to dissolve as well. It was the owner of some land in Quebec which the Government subsequently transferred to native people. This action is being challenged in the courts by the Province of Quebec and therefore the Government does not feel that dissolution would be appropriate or diplomatic at this time.
That is the information that I have at my disposal to give to the House in order to explain why we are taking this housekeeping action. I would urge the House to support the Bill.


Mr. George Baker (Gander-Twillingate):: Mr. Speaker, while listening to the Hon. Parliamentary Secretary introduce this Bill for second reading, I was wondering if the President of the Treasury Board (Mr. de Cotret), under whose name the Bill has been introduced into the Chamber, would perhaps have a few words to say about this supposedly important piece of legislation. As the Parliamentary Secretary has stated, this is a matter of priority and of government policy.
As the Parliamentary Secretary said just a moment ago, these are the only Crown corporations the Government wishes to dissolve at this time. A few moments before that, we heard the House Leader say that there is now agreement to sit for the rest of the afternoon and then all day tomorrow to do this. With all of the important issues facing this nation, with the President of the Treasury Board announcing such incredible cuts to government Departments across the country without really answering to them in the Chamber, with the Government proclaiming all kinds of great policies to help the Canadian people, what does the Government do on the second day of sitting? It introduces a Bill. What is this Bill to do? The Government has indicated that it wants to wind up a Crown corporation that used to sail ships into the West Indies, a corporation that is no longer in existence. It also wants to wind
September 10, 1985

up a Crown corporation that was created in 1981-82 for a one-year period, a corporation which is no longer in existence and it wants to dissolve Societa a responsibilita Limitata Immobiliare San Sebastiano along with Uranium Canada, Ltd. The second last corporation to which I referred was set up to purchase a residence for the Ambassador to the Vatican and the last one was to be dissolved because, as I understand it, all of its stockpile was passed over to Eldorado. This was a Crown corporation created in the 1960s which was passed over to Eldorado in 1981. The question that should be before the Chamber is why the President of the Treasury Board should take up so much of the time of the House to get rid of these Crown corporations.
The fact of the matter is that this Government is a Government of contradictions. It cannot synchronize professed policy with what it is doing. We can examine the Crown corporations that are being disbanded. The first one is called Canadian National. We are going to get rid of a corporation which is now on the books under the name Canadian National. In the November statement, the President of the Treasury Board announced a new Crown corporation under the name of Canadian National to take care of ships. He announced that CN Marine would be created to save $20 million. He created a new Crown corporation. Where does that mesh with the great government policy of doing away with Crown corporations? What about all the criticism government Members levelled at the previous Government? Now what is the President of the Treaury Board doing? He wants us to deal with this important Bill which will do away with some Crown corporations that are not even in existence and have not been operative for years.
Members of the Canadian public are watching us in this Chamber and wondering what we are doing here in Ottawa. They wonder why we are using up days discussing things that are not even in existence. Surely there are more important priorities than that.
Let us look at the next Crown corporation on the list, St. Anthony Fisheries Limited. We are now going to do away with that Crown corporation that is not even in existence. We are going to do away with it because it is government policy to get rid of Crown corporations. The Parliamentary Secretary did not say that the very thing which is replacing that Crown corporation in the operation of those fish plants we are talking about here is another Crown corporation, a Crown corporation to which the President of the Treasury Board and the Government of Canada has committed all the money necessary to maintain the operation of that fish business. Even the Premier of Newfoundland, a famous Progressive Conservative Premier, said that Crown corporation, to use his words, "is the greatest thing that has happened since Confederation with Canada".
Thus, there is really no continuity with respect to what the Government says, on the one hand, and what it is actually doing on the other. Perhaps the President of the Treasury Board in addressing this Bill, since a portion of it deals with the Crown corporation which was created under Canadian
Bankruptcy Act
National, and another Crown corporation that was created to take care of some of the problems in the fisheries, should explain to the Chamber, and to the people of Canada, how he is carrying out the $20 million cut with the other Crown corporation. What does the Minister propose to do with respect to the problems which still face the fishing industry and the fish plant that was under the control of this particular Crown corporation about which we are speaking in this Bill?
Mr. Speaker, approximately 20 seconds ago you told me that I had but one minute left. Perhaps I could speak for a few moments longer and pick up tomorrow where 1 leave off today.
I am sure that the President of the Treasury Board will be making an address tomorrow. I am sure he will spend tonight preparing that address since this piece of legislation cannot wait until next week, next month or next year. It is so important to the President of the Treasury Board that I am sure he will give us a complete address in the House tomorrow.
Is my time up, Mr. Speaker?


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

It being 17.33 p.m., the House will now proceed with the consideration of private members' business as listed on the Order Paper today.


PRIVATE MEMBERS' BUSINESS-MOTIONS   BANKRUPTCY ACT SUGGESTED AMENDMENT RESPECTING PRE-BANKRUPTCY ARBITRATION
Maurice Brydon Foster: That, in the opinion of this House, the Government should consider the advisability of amending the current bankruptcy legislation to provide farmers and fishers with a pre-bankruptcy arbitration procedure which would provide them with, as a last resort, a court ordered settlement to be fully binding on all creditors and the farmer(s) or fisher(s) involved.
He said: Thank you, Mr. Speaker. The motion I have before the House today is inspired by the terribly serious situation which we have in agriculture at this time. It is a situation which we have had for the past year or so with regard to the loss of farm equity, the loss of farms, and so on.
Hon. Members will note that the motion is dated April 1, 1985. It is so dated because it became apparent at that time, after an experiment which was carried out in Bruce County, which was a pilot project, that there really had to be legislation of this nature put before the House and adopted by Parliament in order to deal with bankruptcies in the farming sector. 1 would like to quote a couple of figures in that regard. Last October, we received a report which indicated that some 17 per cent of farmers were in serious financial difficulty. This

September 10, 1985
Bankruptcy Act
year, when that report was examined, some 18 months after the original study was carried out, the percentage of farmers in serious financial difficulty had risen to some 23 per cent. Farm asset values had dropped by 12 per cent from $116 billion to $102 billion, a massive loss of equity by farmers.
The discouraging part of the reports, which indicate the serious financial difficulty in our farming communities, were even more distressing because most of the farmers in difficulty were our youngest, our most productive and our most technologically advanced. Apart from that, the studies indicate that some 50 per cent of all the food produced in our country was produced by these young farmers who are in serious financial difficulty.
In the past weeks, the crisis has heightened. For instance, I have been told by representatives of the Farm Credit Corporation that in the first two months of this fiscal year there were 169 foreclosures by the Corporation. That is a rate of 87 per cent faster than in the previous year. That works out to 11 farms a week which are being taken over by the Farm Credit Corporation.
The Bruce County study indicated that the Farm Credit Corporation, because of its current rules and regulations, is not willing to write down any of the debt which it holds with young farmers. The procedure proposed in my motion would allow for this to take place.
In Bruce County, recently, the Ontario Federation of Agriculture passed a resolution suggesting that there be a declaration of a moratorium on farm foreclosures. This took place at a meeting in Chesley on August 29 which was attended by some 200 or 300 farmers who were calling on the Government to take action. The OFA will be considering that resolution further at its regular meeting on September 18.
Clearly, the situation is chaotic. There needs to be better procedures. I suppose we are more concerned because the Government has really taken no action to provide, in the Budget, for instance, a special write down procedure for lower interest rate loans. We have seen action by the new Ontario Liberal Government; but there has been no action taken by our Minister of Finance (Mr. Wilson).
I have had contact as well with young farmers in the Maritimes who are calling for action in this regard, as is proposed in the motion. I have heard from farmers in western Canada. In July, I had an opportunity to visit some of the areas hit by drought in southern Saskatchewan. I met with dozens of farmers at a conference in Moose Jaw. At that time we saw the ravages of the massive reduction in farm values and the continuing low commodity prices.
We recently heard a call from the Saskatchewan Wheat Pool for a $500 million program to assist the grain growers of western Canada. We have all seen the clips on television news reports of farm families applying for welfare and many farmers desperate with thoughts of losing their farms.
The motion before the House today proposes that the Government get on with the legislation which was before the House in the previous Parliament under Bill C-17. The Minister of Agriculture (Mr. Wise) on July 10 said that he would be bringing forward such legislation. Thus far we have not seen it.
I hope that when the Parliamentary Secretary speaks this afternoon he will be able to indicate that in fact the Government is not just stalling and that it will get on with such legislation. Clearly, there is a question in everyone's mind because the same press clippings indicated that the Minister was going to bring forward such legislation while the Minister of Consumer and Corporate Affairs (Mr. Cote) has indicated that he did not know anything about it. He was in charge of the legislation so it seems highly in doubt that the Government is actually moving on this. Perhaps the Minister is just talking because of the tremendous need for action, but maybe no action is forthcoming.
In Bill C-17 of the previous Parliament there was a provision for people facing serious financial difficulty in that they could apply to the bankruptcy court to make arrangements with respect to their debt. Amendments were proposed at that time with respect to arrangements which would have applied to bankruptcies of more than $1 million in that a similar provision would be available for fishermen and farmers. The procedure, as I understand it, is one in which the farmer facing serious financial difficulty and on the verge of bankruptcy can file a notice of intention to secure an arrangement from the bankruptcy court. This would prevent his creditors from moving in on him. It would allow a trustee, secured by the farmer or fisherman, to negotiate an agreement with the creditors. Where an agreement was arranged around the table for a write down of debt, it would allow for that agreement to be simply filed with the registrar of the court and it would become effective on the debts of the individual. Where there was no agreement, the farmer could apply to the judge of the court and if the judge agreed to establish an arrangement for writing down the debt, he could appoint an expert panel of qualified people to assist the court in reviewing the circumstances of the situation and make a recommendation to the court and the judge could accept or reject or modify the panel's recommendation. If there were no agreements reached or if an agreement was rejected by the judge, it still would not deprive the farmer or fisherman of their rights in that they could not be petitioned into bankruptcy. Therefore, it would protect the rights of the farmer or fisherman in that regard.
So often we see in bankruptcies too much money and property lost. Everyone loses. In fact, the Farm Credit Corporation has said that in every bankruptcy they see something like $90,000 to $100,000 lost regardless of the circumstances of the bankruptcy. This procedure which was originally proposed in Bill C-17 would allow an arrangement for agreements between creditors and farmers in serious financial difficulty and perhaps in many cases would allow them to continue on in business while at the same time writing off substantial debts instead of not allowing them to continue in business.
My concern would be that this motion pass tonight to indicate the will of the House to support it and to indicate to
September 10, 1985

the Government to get on with it and bring in such legislation at any early date. 1 wish Government had adopted the recommendation of the Committee on Finance, Trade and Economic Affairs which recommended a massive program of assistance to those farmers who are facing serious financial difficulty. However, Government did not do that and it will have to live with the political consequences of not taking action like the Ontario Government and other provincial governments.
I think there is a place for such legislation as is proposed in this motion. Clearly it seems like the Government has been procrastinating. The legislation was before the Committee 15 months ago. They have gone through the reports of the FCC indicating these serious financial difficulties. They have gone through a moratorium on foreclosures and they have studied the Bruce Country pilot project. There is apparently no money forthcoming from the Government in the Budget to deal with these serious financial difficulties. Now is the time for the Government to indicate that it is prepared to bring in this modest action which would help a certain number of farmers. The Minister indicated on July 10 he wants to do that.
We are waiting on so many things. We are waiting on the tripartite red meat decision by the Minister. We were disappointed there was no money in the Budget for the financial debt crisis. We are waiting on a dairy policy. We are waiting on aid for the western drought assistance program. We just hope that the Minister will get on with at least this legislation in order to bring it into the House at any early date because the situation in the West is desperate. It is going to become apparent with the rallies and marches which will take place this fall by groups like the Ontario Federation of Agriculture and other agricultural groups. They are desperate for help, especially those farmers in the grains and red meat industries because of the economics and climatic circumstances in other parts of the country.
I hope that the Government will not talk out this motion but allow it to pass. The support of the House has already been indicated. The Minister has already promised to introduce this legislation at an early time in this session.


Mr. Pierre Blais (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, first 1 want to take this opportunity to congratulate my colleague from Algoma (Mr. Foster) for having been maintained in his capacity as agriculture critic. Perhaps one might have wished to see, who knows, the Hon. Member for Hamilton East (Ms. Copps) or somebody else take his place, to be different, you know, because I have to keep on listening to the same speech I have been hearing for weeks and months, in fact ever since the session began last year.
Still it takes a lot of nerve on the part of my colleague to say that the Minister of Agriculture (Mr. Wise) has done nothing at all to help the agricultural sector since last year, considering that farm producers had to come to grips with interest rates ranging from 18 to 20 per cent under the previous Govern-
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ment. It takes a lot of nerve to stand here today and say that the Minister of Agriculture has not done anything. Either they are not aware of it, or they have taken leave of their senses, or again they have lost their memory, or perhaps they have forgotten that the Hon. Member for Saint-Maurice (Mr. Chretien) was proud to say on September 4 he was glad he could go leaving the treasury empty. There is no mistake about it. Now that interest rates have dropped by more than 2.5 per cent since last year, the lowest they have been in nearly eight years, I think they could at least have the decency to acknowledge those facts which are clear and unmistakable in the mind of everybody else.
When they claim they are still waiting .. . My colleague from Richmond can take the floor later on, that is if he has anything to say besides the redundant utterances we have usually been hearing from him for a number of months.
As to the other matters, they talk about the drought, they talk about red meat tripartite programs, but they should at least read the newspapers. The Hon. Member might find out that for many weeks now certain groups have been working and trying, along with the provinces and producers' federations, to find solutions to the problems facing the Canadian agricultural community.
Mr. Speaker, on behalf of the Minister of Agriculture (Mr. Wise), I think it is important to respond to the concerns expressed by my colleague from Algoma (Mr. Foster). I think they may be legitimate, particularly with respect to bankruptcies in agriculture and fisheries. More specifically, the Opposition critic feels that the Government should consider the advisability of amending the current legislation in that field. He would be in favour of another pre-bankruptcy arbitration procedure for agricultural producers or commercial fishermen. Indeed we might abide by a prior ruling by the courts which would be rendered before the bankruptcy. As we know there exists a rather clear and specific bankruptcy procedure which makes it possible to draft propositions in advance of what might be a de facto bankruptcy situation. In my opinion, my colleague from Algoma ought to know that the Minister of Consumer and Corporate Affairs (Mr. Cote) is responsible for the Bankruptcy Act, that it has nothing to do with the Minister of Agriculture and that, as it happens, he has appointed a committee of experts in bankruptcy matters. His colleague the Minister of Agriculture gave him his views on this question.
I should think that the committee of experts will advise the Minister of Consumer and Corporate Affairs concerning amendments likely to improve the existing legislation. The Minister of Consumer and Corporate Affairs has already said that major amendments to the Bankruptcy Act will be announced within a few weeks.
I believe that we now have to let time do its work. Action has already been taken to bring interest rates, which were in

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the range of 14, 15 and 16 per cent, down to 11, 12 and 13 per cent. That is much more acceptable for farmers, for instance.
In addition to the recommendations of the experts, Mr. Speaker, we shall also have to take into account the various representations which have already been made and which will probably be made in the near future. The Committee has had consultations throughout Canada, and with all due respect, my colleague for Algoma will have to admit that during the 20 years before we came into power, the experts in the opposition did not have the kind of great success that could be considered an example for us to follow today.
Mr. Speaker, we are well aware of the financial problems which many farmers and fishermen now face and of the fact that these problems can make it difficult for many of those people to make it through this crisis. That is understandable. We would of course like every operation likely to be viable in the long term to continue. That is something with which we all agree. However, we must use the present legislation and correct it in accordance with the recommendations that will be made by the Hon. Minister in the coming weeks.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, it is a pleasure to rise in support of the motion before us today which calls upon the Government to amend the current bankruptcy legislation to provide farmers and fishermen with a pre-bankruptcy arbitration procedure, which would in turn provide as a last resort a court ordered settlement to be fully binding on all parties concerned. This proposal has been before the House for some time. As you will be aware, Mr. Speaker, it involves the Bankruptcy Act but it has a great effect on farmers. Farmers, as well as parliamentarians on this side of the House, are very patient people. We have waited a long time for a solution to the problems that changes to the Bank Act created for farmers some 15 or 18 years ago. We thought that Bill C-17 in the previous Parliament would redress the situation. As you know, we went into an election before that Bill proceeded through the House and we have waited over a year for it to be reintroduced. I am not sure what the problems in this respect have been, but when you go back and read the speeches in the last Parliament, particulary those by the Hon. Member for Cambridge (Mr. Speyer) and the Hon. Member for Mississauga South (Mr. Blenkarn), who is now chairman of the Standing Committee on Finance, Trade and Economic Affairs, it appeared that we had at least achieved agreement on the question of how farmer and fishermen bankruptcies should be dealt with.
I pointed out that the problem seems to have arisen with changes to the Bank Act. That seems to be an oblique way of attacking the question, but in reality the bankruptcy legislation we have worked under has been pretty much the same since 1919. There were some minor amendments in 1949, but there were no real changes to the way a bankruptcy is proceeded with. Why, then, have there been problems in the intervening years? I submit it is because the Bank Act has resulted in some radical changes in the way security for loans to farmers and fishermen is handled. Under the old Farm Improvement Loans Act and the Fisheries Improvement Loans Act, lending institutions could provide a loan to a farmer or a fisherman under the following conditions. The borrower would have to put up 25 per cent of the cost of a new piece of equipment and the balance would be financed by the lending institution. The terms of the loan were very clear. The interest rate was fixed, usually at 5 per cent, sometimes 6 per cent. The term of repayment was made quite clear, from three to five years in most cases. The bank took security only on the equipment being purchased. If it was a fishing boat or a new tractor, that was the security. The Government of Canada insured the loans so that there were no untoward losses under this program.
Under that system the old Bankruptcy Act worked fairly well. Then we had changes to the Bank Act. The first change was in the late 1960s. Section 88 was added and the terms of the loans were changed quite dramatically. Instead of taking as security only the equipment being purchased, it was extended to the grain, livestock and machinery; in short, all of the movable inventory the borrower had on his farm or in his business. That was a substantial change in the amount of security required for a loan. Fortunately, the bank rate stayed the way it was written up in the original loan and the terms for repayment were spelled out quite clearly. However, when the Bank Act changed in 1980 or 1981, Section 178 dealt with these types of loans. Under that section we still offer all of our movable goods as security. As well, the interest rate changes whenever the bank decides it should and the loan is on call. It is no longer repayable over three to five years but is due any time the lending institution decides to call it.
Under those circumstances the old Bankruptcy Act is no longer adequate. Previous Governments have recognized that. The Liberal Governments of the 1970s, the short-lived Clark Government, and the last Liberal Government all attempted to change the Bankruptcy Act, but none of them succeeded in getting a new Act through the House. Just before the summer recess the then Minister of Consumer and Corporate Affairs (Mrs. Erola) succeeded in achieving a consensus of the three Parties which would have treated farmers and fishermen in the same way as bankrupts of $1 million or more would be treated. The farmer or fisherman would have had the right to appear before a tribunal which would have examined all of the circumstances of the proposed bankruptcy and decided whether that farmer or fisherman had to go through the bankruptcy procedure or whether the lender should grant further time for payments to be made, or even go so far as to reduce the amount of the payments. That is quite a dramatic change from the way in which farmers and fishermen are treated under the present legislation.
Under the current Bank Act the rights of the lender have been over-extended and the borrower does not retain the protection which existed prior to the upsetting of the careful balance that had been struck between the old Bankruptcy Act and the old Bank Act. As the Bank Act changes there is
September 10, 1985

obvious need for changes to the Bankruptcy Act to recognize that new circumstance. We must ensure that the borrower has some rights in the arbitration between borrower and lender. That does not exist in the current Bankruptcy Act or in the current Bank Act. Nearly all of the rights and privileges lie with the lending institution and the borrower is very much at the mercy of that lending institution.
It is absolutely vital to farmers and fishermen in this country that there be immediate changes to the bankruptcy provisions of the Bankruptcy Act. There seemed to be universal agreement in the last session of Parliament and I had hoped that there would have been a new attempt to introduce a new version of the previous Bill C-17. We were near the end of a long road of attempting to make major amendments to the bankruptcy laws of this country. I urge the Government to reinitiate that process and reintroduce Bill C-17 which was agreed to just before the last session of Parliament adjourned.
We waited and watched as the current Government went through the Bruce County experiment. We hoped that something would develop from that which would be of use to farmers and could be adapted to fishermen. It appears that we waited in vain. It is now time to introduce a new version of the old Bill C-17 which will deal fairly and adequately with bankruptcy problems which have arisen due to changes in the Bank Act as they affect farmers and fishermen. I am sure that the Government is aware of the major financial problems that face farmers and fishermen in particular and I would urge it to reintroduce the necessary legislation as quickly as possible in order that farmers and fishermen can again be fairly dealt with in the process of bankruptcy.


Mr. Alain Tardif (Richmond-Wolfe):: I also welcome this opportunity to take part in this debate, but first of ail I would like to congratulate my hon. colleague from Algoma (Mr. Foster) for presenting a motion that, considering the circumstances, should be seen as a very positive contribution.
I was listening earlier with a great deal of interest to the Parliamentary Secretary to the Minister of Agriculture (Mr. Blais), who seemed very proud and very pleased with his Government's performance over the last year. I am not going to discuss the Government's record, because I would probably need far more time than I am allowed, but I would like to say that not long ago, in a newspaper that has a great readership among Quebec farm producers, the Government's record after its first year was discussed and I was really surprised, and agreeably so, when I read a comment by Mr. Proulx, the President of the UPA. He said that farm producers were being offered cute little programs, but that agriculture did not need cute little programs. Farmers needed help in dealing with their problems and concerns. To my mind, the few announcements that were repeated earlier by the Parliamentary Secretary to the Minister of Agriculture were just so many cute little programs that have made farmers feel very disappointed and
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also made them very anxious about the future, about whether they will be able to make a living on those operations in which they have invested tens of thousands of dollars.
We are still waiting for the long-term dairy policy that was promised with a great deal of fanfare and is now being promised again. We are still waiting for the $13 million and for what the Government is going to do with Bill C-25, the legislation on agricultural stabilization. In other words, there is a lot of anxiety, insecurity and trauma. There are many, many producers in Quebec, like everywhere else in Canada, who are worried about the future and are wondering whether this year it will be their turn to be hit by bankruptcy. 1 think they have every reason to be worried.
This brings me to the motion presented by my hon. colleague from Algoma which, in the circumstances, appears to be a very interesting and fascinating proposal, I am surprised the Government did not itself initiate the appropriate corrective action.
First of all, Mr. Speaker, when we are talking about the agro-food sector, I think every self-respecting society tends to have, or should have, self-sufficiency in the agro-food sector as its objective. I feel this is a generally recognized principle and a goal we all want to achieve.
Mr. Speaker, in my view, this presupposes that the Government is prepared to help and support those who are helping to feed the country.
Agriculture over the last decades has enjoyed, and rightly so, a number of privileges in terms for instance of subsidies, loans, special treatment as a vital industry in our society, and in fact it needs that support for a good many reasons. Here we have an industry that is dependent on nature. It is dependent on markets. And, finally, when things go wrong, it is not necessarily because of mismanagement or neglect. In many cases it is the result of a number of factors beyond the control of producers.
Mr. Speaker, ever since I entered politics I have always been surprised to see from time to time, and increasingly over a number of years unfortunately, that many farm operations are forced into bankruptcy. When I see a family farm that has been in operation for years being liquidated, the question that comes to my mind is: Who benefits? The corporation more often than not takes over the assets; these assets are left to themselves and deteriorate over the years. There are virtually no offers to purchase in 1985, because of the market situation, for it is extremely difficult to earn one's living on a farm. Those assets deteriorate to such an extent that they become useless at some point. And when we consider the situation in the months that follow the bankruptcy, we realize that finally everybody has lost. The family who lived from the industry, who used to produce, to contribute to the regional, provincial and national economy, who made an honest living on the farm simply lose all that, after having worked on it as a family, to a truly unbelievable extent. Who benefits? In what way? The

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answer is, no one benefits whatsoever. The community loses a lot of money, the bank loses, because there are less and less potential purchasers for that kind of assets.
And I say: Why not? Knowing that with the current legislation, we are going to lose a lot of money anyway. Why not, through regulations or legislation of sort, try and find a way to allow these families or these farmers to keep their farms and facilities and continue in the agricultural industry.
A major problem within the farm community is who will take over the farms. As my honourable friend mentioned a while ago, our youngest, most productive and technologically advanced farmers are those who are facing the most serious financial difficulties. These same young farmers who are willing to work hard and who are responsible for most of the food produced in our country are unable to meet their financial commitments because of high interest rates, natural disasters, the market uncertainties and are on the verge of bankruptcy.
If we had means or mechanism to keep these young farmers on the farm, in my view they could continue to perform and contribute very significantly, because I believe the continued success of our agricultural community is fundamental and vital to the economic well-being of their areas and the whole of Canada.
To my mind, the interesting aspect of a measure such as this one, Mr. Speaker, is that the Government keeps telling us day in and day out: Listen, our financial situation is so precarious that the Government simply cannot make new expenditures. We cannot secure the funds required to implement this or that measure. Well now, this is one measure which does not require any kind of funding. It is a measure which can be implemented without any investment whatsoever. As I see it, it is strictly a matter of political will implying that we have faith in our young farmers, that we have faith in men and women who are faced with problems and who, as I said, are in no way responsible for the current financial woes. It seems to me that, if not as a Government, at least as a society we might help those who have been forced to live with such problems, and that would not be tantamount to giving them a chance since nobody would stand to lose anything at all. It seems to me we might actively and openly support any measure to improve the agricultural food sector, an initiative which would surely boost productivity and benefit the agricultural community as a whole.
So I quite sincerely hope that, if we have so much faith in our agricultural food industry, if we are ready to support it, if we are quite willing to make a special effort, I sincerely hope, Mr. Speaker, that the initiative of my colleague will be approved and supported to that it will lead to concrete measures at the earliest opportunity.


Mr. Jim Caldwell (Essex-Kent):: Mr. Speaker, it is indeed a pleasure to participate in this debate on the proposal by the Hon. Member for Algoma (Mr. Foster). 1 know that he is very serious about that matter and has given it much consideration.
However, it should be pointed out that one reason why we are debating a motion concerning bankruptcy today is that the previous Government simply did not take agriculture very seriously. Rather than debating the future of agriculture we are debating how to cure some of the ills of the past.
The Hon. Member for Algoma would indicate that farm bankruptcies only started a year ago last September 4. However, farm bankruptcies have been increasing since the late 1970s and one reason for that is the unreasonable interest rates which young farmers have had to pay as a result of mismanagement by the previous Government. They have had to pay the highest interest rates in the history of Canada.
They were also told to borrow, plant large amounts of crops and modernize their equipment. They were told that what they would grow would be sold by the Government. Unfortunately, those words ring rather hollow today. Those farmers are now facing bankruptcy.
The Hon. Member mentioned a program which is now in effect in Ontario. We know that that program is simply an election gimmick. The farmers will receive a small amount of money now but will lose it after the next election. I do not believe that Ontario farmers want election gimmicks to solve their problems.
Many farmers owe hundreds of thousands of dollars but their equity is not enough to cover their debts. Today we are discussing how to save them from bankruptcy. One of the first steps taken by our Minister last fall was to impose moratorium on farm bankruptcies. This was followed by an interest rate adjustment program to lower those high interest rates imposed on farmers by the previous Government.
As was mentioned, the Government also set up a pilot program in Grey-Bruce to determine whether something could be done to help those farmers in cases of arbitration. Studies showed that farmers face very grave problems, especially those involved in the beef business. Those of us who represent rural areas realize how tragic it is that a farm that began generations before must now go on the auction block because of bankruptcy.
I would like to go over some of the figures and bring this House up to date on the present situation regarding the Farm Credit Corporation. There are serious financial difficulties in agriculture today. A Farm Credit Corporation survey published last year, and a more recent update, suggests that some 23 per cent of farmers are experiencing financial difficulty.
The difficulties in the farm sector are well reflected in the FCC lending. In the 1984-85 fiscal year, the demands for loans dropped by 59 per cent from a record level the year
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before. This year the level of lending is likely to be even lower, which reflects just how bad the farm economy is.
Other evidence of difficulties can be found in the arrears figures for the Farm Credit Corporation. On August 1, about 17,000 or 22 per cent of Farm Credit accounts were in arrears. This is a sign of the difficulties farmers are facing. It is a reflection of the fact that the FCC's role is to provide credit to beginning farmers unable to obtain financing from commercial sources. This means that FCC's borrowers represent the riskiest part of the agricultural credit market.
Although it is not possible to save every farming operation, the Corporation is sensitive to the cyclical nature of agriculture. Thus it has a compassionate policy with respect to those in arrears. The Corporation has been known to carry some accounts in arrears for several years, something that few other creditors would be willing to do. This policy is meant to give borrowers time to explore every available option to keep them in business. Unfortunately, in some cases there are few options and a farmer has little choice but to close down.
At the moment, over 6,000 loans are under recovery action. A total of 42 FCC borrowers filed for bankruptcy between April 1 and July 31, 1985. During the 1984-85 fiscal year, 96 FCC borrowers declared bankruptcy. The year before there were 121. Often, of course, it is not the FCC that forces the farmer to declare bankruptcy, but other creditors. However, the Corporation's employees are working closely with farmers to try to help them organize their finances to cope with today's difficulties in which they find themselves. Currently over 3,000 of the the Corporation's borrowers are receiving formal financial counselling through the Corporation's advisory services program.
The legacy of a large federal deficit has given this Government very little room to manoeuvre to respond to these difficulties. Despite this, I believe that our Government has taken a number of positive steps to solve the credit problems of agriculture.
Soon after taking office, the Government responded by suspending the Farm Credit Corporation recovery actions for two months to give the Government and the FCC's borrowers breathing space in which to look for solutions for farm financial problems. Subsequently, the mandate of the FCC appeal board was extended to include the review of FCC foreclosure cases. These boards are made up of practising, experienced farmers who can offer an impartial, third-party analysis of each borrower's situation. From January 15 to July 31, 1985, about 65 cases have been heard by the appeal boards. In 14 cases, alternatives to foreclosure were recommended and FCC concurred. In 49 cases, the appeal boards upheld the FCC decision. Decisions are pending in the remaining two cases.
During the past year, the over-all trend in interest rates has been downward. This has been of tremendous benefit to the agricultural sector. Farm Crown Credit corporation charges 11 Vi per cent on its loans with five year interest rate terms and 11.5 per cent on its shared risk mortgage program. While we would like interest rates to fall even lower, these are, in fact, the lowest rates charged by the Corporation since 1979.
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In 1981-82, interest rates had reached record levels. Some FCC borrowers were locked into long-term mortgages at interest rates as high as 16.75 per cent. We know this is when many of our young farmers first got into difficulty. To assist these borrowers, the Minister of Agriculture (Mr. Wise), announced earlier this year that borrowers who took out loans in 1981 and 1982 at rates above 14 per cent would be helped by an interest rate reduction program.
Over 5,400 FCC borrowers accepted the conversion of their mortgages to a five year term at 12.75 per cent. This important assistance was provided through foregone revenue to the Government of Canada. The FCC was allowed to use about $600 million of its 1984-85 borrowing authority to refinance its outstanding high interest rate loans at a lower rate. Over five years, this will provide a benefit of approximately $80 million to the borrowers who took part in this program.
In April, 1984, the FCC expanded its credit options to farmers. It began to offer five, ten and 20 year fixed interest terms. This gave borrowers a greater range of choices compared to the single 10 year term offered previously. More choice meant more flexible financial planning.
Since then, another option, a 15 year term, has been added. As well, in April, 1985, the new FCC shared risk mortgage was introduced. This innovative mortgage is meant to respond to the economic forces affecting today's farmer.
In the 1980s, one of the problems that farmers faced was not just high interest rates, but the fact that interest rates fluctuated greatly. This increased the risk to farmers and made financial planning more difficult. At the same time, fixed interest rate loans taken out at a time when rates were high offered farmers little chance to benefit when rates fell.
The shared risk mortgage program offers protection against interest rate volatility. This unique mortgage offers security against increasing rates while also allowing borrowers to take advantage of decreases. The risk of annual interest rate changes are shared between borrower and lender. Moreover, a ceiling of 2.5 per cent is placed on increases.
Since its introduction, 190 or 17 per cent of FCC borrowers have opted for the shared risk mortgage. It is a realistic and innovative lending program. Farmers appreciate this act taken by the Government.
However, the Government's quest for solutions to the difficult financial problems of agriculture have not stopped with these initiatives. FCC officials are researching new programs. For example, a form of indexed loan is being examined.
The federal Government is very conscious of and deeply concerned with the problems facing farmers. In July, the Minister of Agriculture announced plans for an in-depth review of the role and mandate of the Farm Credit Corporation. The Minister invited anyone to submit ideas on the subject of the federal Government's role in the field of farm credit.
Farm Credit Corporation officials have been consulting with farmers, commercial and public sector lenders, provincial Governments, commodity groups and university researchers. A

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diverse range of opinion has been offered, often reflecting common concerns about the level of interest rates and the need to help beginning farmers. The results of this consultation process are being compiled and will be ready in the near future.
I think, Mr. Speaker, that this points out just some of the actions our Government has taken to try to help farmers who have found themselves in great financial difficulty, and of course, we will continue to do so.


Mr. Felix Holtmann (Selkirk-Interlake):: Mr. Speaker, I am very pleased to speak on the motion put forward by the Hon. Member for Algoma (Mr. Foster). I realize I do not have a great deal of time to express my views. It is ironic that the Hon. Member for Algoma introduces a motion of this magnitude today. Does he really think that he and his Party are going to be the saviours of the farmers.
1 recall in 1981 as my colleague, across the way stated, when interest rates were 22 per cent. Where was his Government then? Where were the Liberals? Were they trying to help me? 1 was caught in that bind with 22 per cent rates at the bank. What kind of a policy did that Government come out with to help me, my neighbours, and the neighbours across western Canada? I will tell you where the Liberals were, Mr. Speaker. At that time they had a Prime Minister who came west and said: "Why should I sell your wheat?" Do you recall those days, Sir? The Wheat Board, by the way, was run by the federal Government. That attitude prevailed during all the hard times in the 1970s and 1980s experienced by the farmers of western Canada. Today the Member for Algoma stands up and says "We better start helping farmers". I want to tell you, Mr. Speaker, and the Hon. Member for Algoma that our Party and this Government is determined to do everything we can to help farmers.


Some Hon. Members:: Hear, hear!


Felix Holtmann: We will not on some ad hoc basis throw something at the farmers by saying "I will help you a little bit today. We will chuck this little bit of legislation in here to help your group". That is not our way. We will determine the needs and the importance of their problems and how we can affect them in the long term.
When they introduced a Bill of a similar nature, Bill C-17, that mighty Government of the past could do nothing with it to help farmers. The Hon. Member referred to that Bill and how great it was. When there was an amendment by the Opposition Party, the Conservative Party at the time, they never let it come to the floor. They debated it for days and days, but we must remember that it really added some substance. If we follow it all the way through, it finally died on the Order Paper when a leadership convention was called. That was how they treated farmers. I cannot help but believe that its actions today will reflect on its importance as an Opposition Party. They had an opportunity and could do nothing with it.
In the House of Commons today-and they were supported by some hon. colleagues in the New Democratic Party-they were very upset with the Government of Canada supporting a bank foreclosure. Although the figures are not out as yet, 20 per cent of the investors in that bank could very easily be farmers who retired after working all their lives for that money.
They feel that it is wrong for the Government to support that action. Shame on such an attitude! They are not really for farmers, those farmers who perhaps worked for 40 years and invested all their hard-earned money in that bank. When we say that we are prepared to support a bank which has gone down, we are supporting farmers. Today they did not consider that at all. Why did some important legislation fail during their administration? It failed because they had no will or determination to do something for agricultural people.
I come from a farm background. I have farmed. I have gone through the tough times. Yes, we have to be very concerned whenever problems develop in agriculture. Today we do have many problems. We have problems in western Canada, some involving more than just one year of drought. The Province of Manitoba was looking forward to a tremendous crop. As of today it has now had 3.5 weeks of rain. It will now be very difficult to get off a crop which is so important to western Canada. It is not only important to the Province of Manitoba; it is also important to those provinces which need feed and fodder. Indeed it will not be in the best of shape after all this rain. However, Manitobans are prepared to help out wherever they can and to give supplies to needy farmers in southern Saskatchewan-stocks of fodder, straw and so on.


The Acting Speaker (Mr. Charest):: The hour provided for the consideration of private members' business has now expired.



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

[Stage Direction]
Hon. Warran Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, on April 15, I asked the Secretary of State for External Affairs (Mr. Clark) whether, considering the escalation of violence in South Africa, he was then ready to implement economic sanctions and a mandatory program with respect to Canadians doing business in South Africa. 1 also asked whether he would consult with the Opposition
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September 10, 1985
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Parties in order to develop a united national position with respect to South Africa.
In answering my question, the Minister replied that a review of this policy was under way at that time and that he would consult with the Opposition Parties. On the other hand, he was not ready at that time to announce any new policy. To his credit the Minister, through his Parliamentary Secretary, convened a meeting of representatives of all Parties. I attended on behalf of the Liberal Party; there was also a representative of the New Democratic Party. We met three times in an attempt to develop an all-Party position with respect to South Africa. Our purpose was to explore the possibility of developing a position on apartheid which would have all-Party support and would result in a unanimous resolution in the House of Commons.
At those meetings, I had proposed that the Government consider the following approaches: first, that he ban all new investment in South Africa; second, that there be a program of disinvestment; third, that there be no bank loans allowed to South Africa; fourth, that we stop Krugerrand sales in Canada; fifth, that we stop the landings of South African airlines in this country; sixth, that we completely boycott sports, cultural and scientific exchanges; seventh, that we have a mandatory code of conduct for Canadians doing business in South Africa; eighth, a full arms embargo; and ninth, a full energy embargo. I pointed out that many of these measures were already implemented or were in the process of being implemented in other countries; as a matter of fact, there are 22 Bills going through the American Congress this year in an attempt to implement all or several of those measures to which I have referred. The most important of those Bills are House of Representatives Bill 1460 and Senate Bill 635. As well, the Swedish Parliament passed a law banning all new investment in South Africa.
Unfortunately, it was not possible for Parliament to pass an all-Party resolution during the last week of the Session due to the many other matters which preoccupied Parliament. As a result, the Minister made a statement on his own behalf on July 6, a week after Parliament adjourned. While that statement of new policy was a step in the right direction and imposed more severe restrictions on South Africa with respect to Canada, it was not enough. The code of conduct is still a voluntary code. It is not mandatory and, stricktly speaking, there were no economic sanctions imposed against South Africa although there were measures to discourage Canadian trade with South Africa.
Since July, the situation in South Africa has deteriorated. There are now emergency measures in place in that country. Violence is escalating and deaths are reported each day, particularly in the black townships. Arrests of political leaders who are working for the good of the black African people are occuring.
Yesterday the President of the United States introduced some measures to deal with the South African situation. These
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measures go beyond those that have existed in the past against South Africa and go beyond those which were announced by Canada. However, they do not go as far as measures already voted on in the U.S. Senate and the U.S. House of Representatives. They are not even acceptable to the moderates in South Africa.
I understand that the Secretary of State for External Affairs will make a statement later this week, perhaps tomorrow. I would urge him to go at least as far as the American Congressional Bills to which I have referred and at least as far as the Swedish Parliament. In the past, the Minister has rejected sanctions because he felt that they would destroy communications with the Government of South Africa and that they might hurt the blacks. That might have been a reasonable position at one time but it has been tried for several years and has not worked. It is time for something new.
In conclusion, I would say to the Government and the Parliamentary Secretary who is present that we have reached the point of no return. Everyone agrees that apartheid is wrong, injust, cruel and immoral. It is time to play hard ball with South Africa. We await the Minister's statement later this week. If it is a tough statement, I can assure the Parliamentary Secretary and the Minister that the Government will have the support of this Party and that we will be behind him 100 per cent in imposing tough measures on South Africa.
Mr. David Kilgour (Parliamentary Secretary to Minister for External Relations):: Mr. Speaker, through you, 1 hear my hon. friend loud and clear. We are discussing here today a tragedy which touches Canadians in their hearts. The revulsion felt by Canadians toward apartheid and indeed toward all forms of racial discrimination is very clear. Apartheid shrieks against everything that our multicultural society stands for.
The South African Government would have us believe that it is engaged in substantive reform. No one denies that blacks there have made economic and social progress in recent years. However, the fact remains that there are more than 300 apartheid laws still on the books which dictate where blacks must live, where their families must live, where they may work, where they may own land and where they may open and run a business. These laws deprive three-quarters of the population of basic civil rights, citizenship and the franchise.
It is not by incremental, piecemeal reform aimed at diluting such a system gradually that peace and elemental justice will come to South Africa. On this side of the House, we believe that something more basic is required from the present white minority Government. It is the heart of the system itself, not the tattered edges, which must be removed.
Do you know, Mr. Speaker, who is a white in South Africa? According to the law of the land, and I quote, it means:
-a person who (a) in appearance obviously is a white person and who is not generally accepted as a coloured person or (b) is generally accepted as a white person and who is not in appearance obviously not a white person.

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In deciding whether any person is in appearance obviously a white person or not a white person, within the definition of white person, his, and I quote again, "habits, education and speech and deportment and demeanor . . . shall be taken into account".
How can reasonable people anywhere accept this in the 1980s at the close of the 20th century? Who can blame the black population for their rising anger and frustration? Their plight is one which moves us; their struggle is one which we must share.
The situation in South Africa calls out for vigorous action. The Government of Canada has already acted in the right direction. In fact, Canada was the first major western country to take concrete steps, as announced on July 6-you are indicating that my time is up, Mr. Speaker.
Further measures are by no means ruled out at all. We will be working closely with our Commonwealth partners in the coming weeks on the run-up to the Heads of Government Meeting in Nassau next month. The Secretary of State for External Affairs (Mr. Clark), as my hon. friend pointed out, will be making a statement shortly on the matter.
Speaking personally, I am delighted that the Hon. Member has indicated for his Party that they will support us if we make a strong statement.


CANADIAN NATIONAL RAILWAYS-RETENTION OF WINNIPEG AS REGIONAL HEADQUARTERS. (B) GOVERNMENT INTENTIONS
William Alexander (Bill) Blaikie: Mr. Speaker, my intention today is to follow up a concern which I first raised in a public way back in April, and one which I raised in the House on May 2 with the Minister of Transport (Mr. Mazan-kowski) concerning the consequences of the CNR appointing a Senior Vice-President for Western Canada to be located in Edmonton.
On May 2 I rose in the House and asked the Minister of Transport a question pertaining to that appointment because I was concerned that the CNR might be planning to revive a plan which it had in place a couple of years ago to amalgamate the Prairie Region, headquartered in Winnipeg, and the Mountain Region, headquartered in Edmonton, into one single region, the Western Canada Region, headquartered in Edmonton. I asked the Minister of Transport for assurances that that was not the case and that that action would not be carried out. The Minister of Transport said, and you can check the record, Mr. Speaker, "Yes, Mr. Speaker, I can give the Hon. Member those assurances".
Subsequent to those assurances it became clear to me through documents which I received from various people who worked at the railway, and from documents which others such as the MLA for Transcona, Mr. Wildon Parasiuk, received, that this type of amalgamation and consolidation of the two regions was going on and that Winnipeg stood to lose its position as a regional headquarters of the CNR.
It took a long time for those of us who knew this was happening to get the message across to those in Winnipeg who did not want to believe that it was actually happening. We knew that this was happening. On a number of occasions we released documentation to that effect. At one point 1 wrote to the Minister of Transport providing him with a document which came from the office of the senior vice-president. This document talked about the amalgamation of the Prairie and Mountain Regions. Yet when I received the Minister's answer after some time it simply referred me to a statement that Dr. LeClair had made in which he indicated that the CN had no plans to do this. Subsequently he had to come to Winnipeg and say that they had reversed their plans to do this. He apologized to the people of Winnipeg for the anxiety caused by the CNR through this move and said that it was now all cancelled, that it would never surface again and that the 10 appointments which had been made, and which constituted transfers of senior positions from Winnipeg to Edmonton, were cancelled. Those of us, Mr. Speaker, who were on to this move on the part of the CNR from the very beginning were very pleased to hear Mr. LeClair, as the chairman of the board of the Canadian National and chief executive officer for that company, say that this was now stopped and that it would not surface again.
But what 1 am concerned about is that over the coming few weeks we need to know whether or not the positions which were created in Edmonton called manager, Western Canada, have actually been abolished and whether or not the positions which were formerly abolished in Winnipeg have been recreated, because it will not be enough, Mr. Speaker, to simply cancel those appointments which constitute an actual transfer of certain people from Winnipeg to Edmonton. What we want to know is that the reorganization which caused those transfers to be made in the first place is actually cancelled. Otherwise, we will have only achieved a partial victory which will not in the long run protect Winnipeg from the kind of erosion of its status as a transportation centre. Therefore, I hope it will become clear to me and others who are concerned about this matter, Mr. Speaker, in the coming days and weeks that these new positions which were created in Edmonton and filled by people in Winnipeg-some of whom no longer have a job in Winnipeg because their old job as the senior regional person has been abolished-will in fact be abolished.
I am also concerned, Mr. Speaker, with the over-all attitude of the Government towards the transportation sector in Manitoba. There are a series of federal-provincial agreements with respect to building up the transportation sector in Manitoba which came about as a result of negotiations between the Province of Manitoba and the federal Government prior to the last election. One that I am particularly concerned about, for instance, has to do with agreements pertaining to the future of the Port of Churchill and a program for the rehabilitation of rolling stock, in this case, boxcars, which would serve the Port of Churchill. This is a program which has been agreed to and has been on the books for a long time now
September 10, 1985

but it seems to have a great deal of difficulty actually happening. It is of crucial importance to railway carmen in my riding who came back to work this week after a two-month lay-off, an extended shutdown, and were hoping that they would not be facing another lay-off in the very near future.
I am hoping that whoever is speaking for the Government-
I see the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie) here, who perhaps will be responding on behalf of the Government-can indicate to us whether or not those federal-provincial agreements are now to be honoured and whether or not they have assurances from the CNR now that those positions which were created in Edmonton as part of the new western region have in fact been abolished and the senior positions which were abolished in Winnipeg have in fact now been reinstated. That is what we need to know, Mr. Speaker.


Mr. Dan McKenzie (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, in answer to the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie), on May 2, 1985, in respect to transferring CNR workers to Edmonton, the Minister stated, and I quote from Hansard at page 4342:
-this Government has no intention of downgrading the role of Winnipeg as a transportation centre and as an important part of the CNR. The fact of the matter is that the growth in western Canada should augur well for the future of the CN operation in Winnipeg, including Transcona, because as the traffic increases it will clearly provide more jobs and more activity in western Canada, particularly in Winnipeg.
A vice-president in Winnipeg acted against Government policy and without any authorization sent out announcements that personnel would be transferred.
After I made a public statement in Winnipeg that this vice-president should be fired for insubordination, the Hon. Member for Winnipeg-Birds Hill said that I should be fired. He defended the actions of this vice-president in announcing the movement of CNR personnel from Manitoba to Edmonton.


William Alexander (Bill) Blaikie: That is not the way it worked, Dan.


A. Daniel McKenzie: Winnipeg, Manitoba, is and will remain one of CN's greatest areas of activity. Over 7,000 CN employees work in Manitoba, representing more than one-third of the CN workforce in western Canada. Between 1978 and 1986, CN will have spent approximately $41 million in the Winnipeg area. This includes a material handling facility at Transcona, modernization of the wheel shop, the installation of a paint and grit blast shop, and the development and application of computer technology to the industry. As well, the Winnipeg Symington yard has grown to become the busiest of all six major yards in the CN system. Concurrent with the importance of their operations, CN has developed in Gimli, Manitoba, one of the finest transportation centres in North America.
Maurice LeClair, chairman of the CNR, had to come to Winnipeg on August 21 to make an apology to the people of Manitoba for the actions of this vice-president, who acted without any authorization at all from the chairman of the
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board or the board of directors itself. That is why 1 called for his dismissal. That is out and out insubordination. Dr. LeClair did not say that the decision had been reversed. He had no knowledge of the decision in the first place. He blamed this senior vice-president in Edmonton and said that no such proposal had ever surfaced at the board. There was no approval whatsoever of this move. He said the company did not give this officer more decision-making power and that these transfers went beyond that officer's limits. Dr. LeClair said that Winnipeg is and will be the greatest area of activity. He also said that Winnipeg will not be downgraded in favour of Edmonton.
Contrary to statements made by the Hon. Member for Winnipeg-Birds Hill that he does not trust the CNR and is skeptical of CNR's plans, I want to assure him that the CNR has learned a real lesson from this. They will not pull another stunt like this. I called for this man's resignation or firing and I stand by that. As a Member from Manitoba I am not going to tolerate this kind of insubordination from senior vice-presidents of Crown corporations. As Dr. LeClair pointed out, this has caused all kinds of anxiety and concern in Manitoba.
I want to assure the Hon. Member that I will never at any time tolerate any shenanigans like this from senior civil servants, the heads of federal government Departments, or whatever. I am glad to see that the Winnipeg media covered this incident well and pointed out that it was all a mistake. I have never seen a man eat humble pie like Dr. LeClair had to do when he came to Manitoba. I hope we never see a repeat performance like this by any senior personnel in Crown corporations or government Departments.


STATUS OF WOMEN-REQUEST FOR FUNDING FOR REAL WOMEN ORGANIZATION
Mr. Jim Jepson (London East):: Mr. Speaker, it is my pleasure to take this opportunity to speak on behalf of the REAL Women organization. This group was formed in Toronto in 1983 by professional women and homemakers who joined together with 20,000 members from all across Canada. Their objective is to secure for all women a meaningful, equal and progressive role in the 1980s, an objective broadly embraced by the Government in freeing women from the effects of discrimination over the years.
REAL Women, although desiring equal opportunity for women in the workforce, as well stresses the importance of the family unit and the role of women as mothers and homemakers. Having witnessed the drastic changes that have altered our society in the last 20 years, the supporters of REAL Women have come forth with a very important point.
Throughout history the family has been the building block of our society and it is becoming increasingly obvious that the fragmentation of the family leads to a poorly functioning society and widespread social disorders are seldom unaccompanied by weakening family bonds. Alienation and delinquen-

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cy are most often the result of broken homes, in whatever circumstance.
REAL Women is a group that is sensitive to these dangers and they make this awareness a constant companion in their efforts to secure wider opportunities for women in society. In other words, Mr. Speaker, their agenda has been conceived to offer the greatest possible hope for progress for women while maintaining the family as a basis of Canadian society.
To date there has been a reluctance on the part of the Government to fund REAL Women, even though many other women's groups do receive such funding. I believe that if the Government is going to fund some women's groups, such as the National Action Committee for the Status of Women, it certainly should be funding another legitimate point of view like that of the REAL Women's organization. I strongly believe, Mr. Speaker, that it is not for a group of bureaucrats in the Ministry left over from the previous administration to decide which values best represent the interests of the women of Canada. REAL Women is a rapidly growing organization representing a view which I believe is widely held by a majority of Canadian women.
Many Members of the House have indicated to me their support for the approach taken by REAL Women. Also, thousands of women across Canada have shown their support through their membership and activism. The ideas put forth by this group represent a positive way for Canadian society to undergo important changes.
I have taken the opportunity of consulting with the new Minister, the Secretary of State of Canada (Mr. Bouchard), who has given me assurances that he will be looking into this situation and rendering a decision. I look forward to that news.


Mrs. Monique Landry (Parliamentary Secretary to Secretary of State):: Mr. Speaker, I would like to start by thanking the Hon. Member for London East (Mr. Jepson) for the interest he has shown in women's rights, thus demonstrating that all Progressive Conservative Members, irrespective of their sex, are concerned about the status of women.
Mr. Speaker, I would like to take this opportunity to describe the role and the mandate of the Women's Program of the Department of the Secretary of State and explain why the Department decided against funding for REAL Women of Canada.
In 1973, a women's program was created at the Department to implement one of the recommendations of the Royal Commission on the Status of Women. Recognizing the important role played by women's voluntary associations in women's struggle for equal rights with men, the Commission recommended that the Government provide funding to encourage these associations to pursue their efforts, and also provide funding for other voluntary associations working in fields of particular concern to women.
The Women's Program is funding a broad range of women's groups across the country and in a broad cross-section of society to help them improve significantly the status of women in Canada.
The program tries to fund groups which through their activities are trying to make a positive contribution to the status of women, which are representative of the female population and whose work will benefit all Canadian women.
Although the work of women in the home constitutes an important contribution to society, the fact remains that in its efforts to improve the status of women-which were specifically referred to in the Throne Speech-the Government is not necessarily trying to promote a particular prototype of the family. This particular goals of REAL Women is not one of the objectives of the Women's Program, which tends to fund groups that see it as their task to explore the entire range of options women have in their struggle to achieve full equality.
Mr. Speaker, it is interesting to note that women's rights groups have been working constantly to obtain recognition of the non-remunerated work done by women in the home. For instance, a number of organizations such as the National Action Committee on the Status of Women have been promoting for many years the concept of providing a pension for women in the home.
Mr. Speaker, in concluding, I can inform the Hon. Member for London East (Mr. Jepson), as in fact he himself said earlier, that the Secretary of State who is responsible for the Women's Program intends to review and analyze all programs under his jurisdiction as part of a comprehensive study of his new duties.


The Acting Speaker (Mr. Charest):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 3(1).


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The House adjourned at 7.01 p.m.
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Wednesday, September 11, 1985