1985-10-09

Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, things look pretty bleak in Montreal East. Thousands of jobs are in danger, now that Bombardier, Vickers, Gulf and other companies will have to close because three major industries in Montreal East have closed down.
The Prime Minister was supposed to create thousands of jobs as soon as he came to power. And now, a year later, they are closing down our hi-tech industries in Montreal East and thousands of jobs will be lost.
The Conservative Government has made no attempt to boost the morale of employees in the various industries who are about to lose their jobs. It had no hesitation, however, in handing over one billion dollars to Gulf and Petro-Canada, for a transaction that will take away 1,000 jobs from Montrealers.
Mr. Speaker, it is obvious the Conservative leader has kept the habits he had when he was president of Iron Ore, because now he is Prime Minister of Canada, he wants to close down an industry in Montreal East.


FAMILY VIOLENCE
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, during Family Week it is important to consider what can be done to reduce the high incidence of family violence in Canada. One in 10 women, or about 750,000 women, will be beaten this year by their partners.
Battering another human being is a criminal offence. Doctors, police, and parliamentarians must not cover up or avoid dealing with domestic violence. Incidents must be dealt with openly, not condoned with silence. Police officers must be trained to deal with family violence and the laying of appropriate charges. Doctors must be able to recognize abuse in order to help women. Governments must provide shelter and financial assistance for battered families. Treatment groups for batterers and support groups for victims also need funding.
The Prime Minister (Mr. Mulroney) promised that the Government would take initiatives to fund more tansition houses. Yesterday the Minister responsible for the Status of Women (Mr. McLean) said that this is a number one priority. However, discussions with the provinces are not enough. Again I ask that 3 per cent of the money used for the bank bail-out be used to fund 300 new transition houses.


SCIENCE AND TECHNOLOGY
Mr. Jim Edwards (Edmonton South):: Mr. Speaker, a recent article in The Toronto Star claims that, in the political world of Ottawa, science simply does not rate. Clearly, Mr. Speaker, this is not the case. Our Government is committed to encouraging scientists, universities and businesses to fulfil their research and development potential.

Canada is a rich country. Our population is well educated, our natural resources abundant and our industrial base is sound. If Canadians want to continue to succeed on the international market, they will have to raise the level and improve the effectiveness of their investments in research and development.

Canada's record of accomplishments in research and development is impressive, beginning with Mr. Bell's telephone in 1874 and ranging to the Canadarm of today. These achievements are a source of national pride. Encouraging further achievements poses an important challenge for the Government, for industry, and for the universities. Accordingly, the Minister of State for Science and Technology (Mr. Siddon) has identified three priority areas through which we can strenghten our ability to use our resources.
The first priority is encouraging innovation in the private sector. Second, we need a mechanism for monitoring the relevance and quality of research. The third and perhaps most important priority is education. As the Minister has said, we cannot do anything in science and technology without people. I say that we cannot hire and train the people without the necessary funding.

October 9, 1985
[Translation\


TERRORISM
Mr. Vincent Della Noce (Duvernay):: Mr. Speaker, the Italian community of Canada was both shocked and concerned at the news two days ago that terrorist commandos hijacked the Italian cruise liner Achille Lauro, already referred to as the "ship of doom", thus threatening the lives of more than 400 people, innocent victims, the most of whom are of Italian origin.
The Government of Canada strongly condemns this act of terrorism, something that cannot be condoned no matter where it occurs or the cause it is supposed to serve.
Mr. Speaker, considering the very difficult situation now facing the Italian Government, I shall, if I may, as a representative of the Italian community in Canada, express the support of our Government and of the Canadian people for the Italian Government.
We earnestly hope that the hijack victims will be promptly released, through peaceful means and not by resorting to force.


HARBOURS
Mr. George Henderson (Egmont):: Mr. Speaker, I rise today to bring to the attention of the House the deplorable condition of Prince Edward Island harbours. Wharves in Prince Edward Island that need immediate repair are being washed into the sea. The Government will not give an inch. It has turned a blind eye and a deaf ear toward fishermen.
To illustrate my point, on September 28 the fishermen at West Point Harbour spent the night at the wharf waiting for Hurricane Gloria to wash out their partially completed breakwater. Luckily Gloria was a spent force by the time it reached Prince Edward Island. If it had not been, the harbour and boats would have been destroyed. Even a sea turtle which swam into the harbour for protection left before morning to seek a safer haven.
In addition, a further section of wharf can no longer be used to tie up boats, another section is washing away, and pavement is sinking into the sea creating great holes in the wharf. Fishermen would have no worries if the planned wharf construction had beeen completed this year. If the Government does not act with celerity and fix the wharfs at Cape Egmont, West Point, Higgin's Wharf and many other places, the cost of repairs will increase as each day passes.
My repeated requests to the former Minister of Fisheries and Oceans have not been acted upon. I fear that the plight of Island fishermen will go unnoticed even longer under the Acting Fisheries Minister (Mr. Nielsen). The Hon. Minister
has so many portfolios on his plate that I am sure these concerns will be shoved aside.
The Prime Minister (Mr. Mulroney) so often boasts of acting with celerity on urgent matters. The state of small craft harbours in P.E.I. is an urgent and important matter. Can the Acting Minister of Fisheries (Mr. Nielsen) not see that? I urge him to act with celerity and fix these wharves immediately.


TERRORISM
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, last week Canadians were shocked and dismayed by the Israeli bombing of PLO Headquarters in Tunis. This week we have the same reaction to the PLM's hijacking of an Italian cruise ship. To the best of our knowledge no Canadians were on board the Achille Lauro when it was hijacked two days ago. However, all Canadians must join in condemning the growing cycle of terrorism and violence poisoning international relations in the Middle East.
Israel maintains that it will not give in to terrorists or bargain with black mail. We can understand that. But claiming to fight terror with terror is only another way of giving in to the terrorists-of letting them decide the rules of the game. Neither the Israelis nor the Palestinians can achieve their goals by the use of terror. Terror tactics result in a vicious circle where the innocent suffer on both sides.
We believe in the right of Israel to exist in security. We also believe in the right of the Palestinians to a homeland. Let Canadian and world opinion say very clearly that neither of these worthy goals can be achieved through the use of terrorism.
In the meantime, we join with those families and friends who hope and pray for a safe and peaceful outcome of the present crisis.


THE ADMINISTRATION
Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, the performance of the Canadian economy has been ever more promising since the election of the Conservative Government: close to 340,000 new jobs have been created, unemployment has gone down 1.5 per cent, inflation has been under 4 per cent over the past year, thus creating the most stable climate of confidence since 1971, and the real GNP has been rising at an annual rate of 4.1 per cent.
October 9, 1985

Indeed our performance since last year has been second to none among the seven major industrialized countries, and the confidence of investors over the past four years has been at an unprecedented level. The Bank of Canada rate has dropped from 12.38 to 8.99 per cent. The chartered banks' prime rate has decreased from 13 to 10 per cent, the lowest level in seven years. During the first eight months of 1985 bankruptcies declined by 13 per cent, retail sales rose by 10 per cent, motor vehicle sales were up by 23 per cent, the value of building permits is 17 per cent higher, and oil drilling activities have expanded by 19 per cent over the same period last year. The performance of the Canadian economy has also outranked that of the United States. The GNP and the net disposable income of individuals has grown twice as fast in Canada as in the United States.


Mr. Speaker:: I must inform the Hon. Member that his time has expired. The Hon. Member for Beauce (Mr. Bernier).


THE ECONOMY
Mr. Gilles Bernier (Beauce):: Mr. Speaker, aside from the negative comments being made by the Opposition and a number of insinuations that do not always reflect the truth, the Member for Beauce (Mr. Bernier) is delighted to see that increasingly, one can rely on Canadians to improve our economy. I am proud to mention, in this respect, the example being set by my riding for the rest of Canada.
One company, Les systemes Archimede in Saint-Frederic, signed a $6 million contract last Friday with France for the construction of 1670 modular housing units for two French villages. The company, which now employs 20 people, will increase its establishment to 90 permanent employees. Last year the company, which was established in 1981, grossed $1.3 million. This year, it expects that figure to be $8 million, and in four years probably $ 12 million.
The phenomenal growth of this company in the Beauce area which has already obtained international recognition, is due to the dynamic and constant efforts being made by its leaders, and that applies to many other companies in my riding. It is time for us to exploit our strengths, our potential and our skills to improve the economy of our country. The people in the towns and villages of Beauce have realized this and are acting accordingly.
In Beauce, we are not interested in so-called scandals and negative articles in the media. We are intent on improving the well-being of the people, and our energies are dedicated to economic development.
Oral Questions


INDUSTRY
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, one week ago Susan Shoe Industries of Hamilton announced the closure of its Oakville plant and the permanent lay-off of 100 employees. The decision to close this plant was directly linked to the failure of the Mulroney Government to state its policy on the extension of footwear quotas.
After the closure was announced, Susan Shoe arranged a meeting in Ottawa with its Member of Parliament and the political Minister for the Hamilton area. The owner of Susan Shoe had arranged to travel from Montreal, the president of the Canadian Union was to travel from New York, and the other company officials were to travel from Hamilton.
Yesterday, the office of the Hon. Member for Halton (Mr. Jelinek) informed Susan Shoe officials that this meeting would have to be cancelled due to an urgent family commitment which would entail a trip to Toronto. Imagine the surprise, Mr. Speaker, when the Hon. Member for Halton, the Minister of State for Fitness and Amateur Sport and Minister of State for Multiculturalism, was spotted at last night's Blue Jay game sitting smiling behind the Prime Minister. Amid cries of "tuna, tuna, tuna" at Exhibition Stadium, the Prime Minister (Mr. Mulroney) and his Minister of State for Fitness and Amateur Sport were striking out on the Government's promise of "jobs, jobs, jobs."
When is the Government going to start demonstrating some concern for Canada's footwear industry? While the Blue Jays won last night, the Hon. Member for Halton lost the respect of workers in Canada's footwear industry.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, confidence in the administration of justice in this country has been called into question. It is perfectly acceptable, and I would suggest accurate, for the Minister of Justice to accuse the staff in the Prime Minister's Office of not being up to scratch politically. What is not acceptable to the administration of justice is for that Minister, having made those statements-which are on tape and on the public record-to deny them later.
My question is for the Deputy Prime Minister in the absence of the Prime Minister. Does he agree that these statements, and the subsequent denial of them by the Minister of Justice, call into question the ability of that Minister to
7490

October 9, 1985
Oral Questions
command public respect which is sorely needed for the proper administration of our law?


Hon. John C. Crosbie (Minister of Justice and Attorney General of Canada):: Mr. Speaker, the only one calling into question the administration of justice in this country that I know of is the Hon. Leader of the Official Opposition who has so far forgotten himself in his desperate quest to acquire some notoriety as Leader of the Liberal Party that he would stoop to anything.


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: Luckily, Mr. Speaker, I am investigating a plan for compensation for persons wrongfully convicted. And I have been wrongfully convicted by the hon. gentleman opposite.


John Napier Turner: Mr. Speaker, he has been convicted by his own words on tape.


GOVERNMENT POLICY
John Napier Turner: have a second question for the Deputy Prime Minister. Would he defend the statement made by the Minister of Justice, a statement carried on tape? After the Minister was asked if the Prime Minister was telling the truth, the Minister replied:
He'd be crazy if he wasn't because these things are not important enough for him not to have told the truth about.
Does the Deputy Prime Minister agree with his Minister of Justice that the Government only tells the truth about unimportant matters?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, that question is unworthy of the hon. gentleman. He is, in his usual fashion, twisting and writhing in any direction in order to elicit an answer which might accomplish the objective, which is questionable, in the form of his question. The fact is that the explanations which have been offered by the Minister of Justice are not only supportive of the truth of the statements which have been made consistently by the Prime Minister over the several weeks during which Hon. Members in the Opposiiton have been asking these questions, but are also consistent with the conclusion, as pointed out by the Justice Minister, that he has full faith in the high calibre and quality of the individuals on the Prime Minister's staff. I would suggest that-


Mr. Speaker:: With respect, the answer is becoming very long.


Some Hon. Members:: Sit down.


Mr. Speaker:: Order, please.


GOVERNMENT STATEMENTS
John Napier Turner: Mr. Speaker, we would like to get on with the business of the country-


Some Hon. Members:: Oh, oh!


John Napier Turner: Yes, we would love to get on with the business of the country if the Government would only get its act together and get its agenda back on track.


Mr. Clark (Yellowhead):: What is the agenda, John?


John Napier Turner: The Deputy Prime Minister can twist all he wants, but he is a very thorough man and he has read the transcript. He knows that the Minister of Justice was calling in to question the integrity and honesty of the Prime Minister. Therefore, if he believes in the integrity of the Government, will he ensure that, with his Leader, the Prime Minister, this Government will begin to tell the truth, the whole truth and nothing but the truth, and give us the complete story on these issues?


Erik Nielsen: From my observation and my personal knowledge of the Prime Minister, he has been doing nothing but that over the past several weeks.


Some Hon. Members:: Hear, hear!


Erik Nielsen: With respect to getting our act together, Sir, we believe that we have, and I suggest that the Right Hon. Leader of the Opposition might wish to speak with his colleague from Shawinigan with respect to his own problems.


John Napier Turner: We are going to hear from him right now.


Mr. Hnatyshyn:: Quebec lieutenant.


Erik Nielsen: So I really do not see any purpose in pursuing this kind of questioning. It really is not the style of the Right Hon. Member to try to lead the now defunct rat pack.


GOVERNMENT POLICY INQUIRY
Hon. Jean Chretien (Saint-Maurice):: Mr. Speaker, my question is directed to the Deputy Prime Minister. As a former Minister of Justice, I am not very impressed by the performance of the current Minister of Justice and his buffoonery around the country.
Was the Minister of Justice enunciating government policy when he said on Monday: "Anyone, I suppose, can be tempted to shave the truth"? Is it the policy of the Government to shave the truth on important matters and just tell the truth in small matters?


John Carnell Crosbie: Mr. Speaker, perhaps the hon. gentleman
October 9, 1985

would be more impressed with the present Minister of Justice if he ever attended any of the important matters under way, such as the examination of the Divorce Bill and the Enforcement of Maintenance Orders Bill-


Some Hon. Members:: Where were you?


John Carnell Crosbie: -reforms never attempted by the former Minister of Justice. If, when he is not writing books, he came around to see what was happening, he might be a lot more impressed.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, with respect to the hon. gentleman's question, here is a four-page transcript of an interview 1 had on an open-line program in St. John's. The hon. gentleman and his Leader are scuttering through this transcript trying to find a word here and there on which they can pass an imputation. It is a prostitution of Question Period. It is not asking a question about public policy or what the Government is doing or not doing. It is a shameful exhibition of desperation.


Some Hon. Members:: Hear, hear!


REPORTED ALLEGATIONS OF MINISTER OF JUSTICE
Joseph Jacques Jean Chrétien: Mr. Speaker, I have a supplementary for the Deputy Prime Minister.
Was the Minister of Justice seriously stating Government policy when he said that he could only tell the truth in unimportant matters and tell lies in matters of great importance. Is it also true that there is a "bunch of dolts" in the Prime Minister Office or is the Minister of Justice a dolt?
Oral Questions TRADE


CANADA-UNITED STATES NEGOTIATIONS-CANADIAN POSITION
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. While the Government wants to play its secret poker game, the U.S. is busy defining the agenda on free trade talks with cultural industries and agriculture on the table, with countervail systems off the table, and with suggestions that Canadian lumber imports, for instance, should be cut back. Will the Government finally permit the Canadian people to have a clear sense of our hand in this poker game and to help us to set that bargaining agenda, or are we simply going to let the United States keep defining this game?


Charles Joseph Clark: Mr. Speaker, through the summer the Hon. Member himself was a member of a special committee of this House and the other place which looked into this question. He will know that there have been consultations on-going with sectoral groups, unions, business, and provinces for the last several months. He will know that further discussions will begin tomorrow with provincial Ministers of Trade in Halifax to ensure that positions which Canada might put forward, in the event that there are negotiations with the United States, are positions which reflect and protect the Canadian interest and stop the serious problem we face now of Canadian jobs being threatened in industry after industry after industry. It might be good enough for the NDP to sit there and see Canadians lose jobs, but it is not good enough for us.


Some Hon. Members:: Hear, hear!


Steven W. Langdon: I would have thought, Mr. Speaker, that this kind of partisan wrangling-


Some Hon. Members:: Oh, oh!


Steven W. Langdon: -would not merit consideration in an issue as crucial to the future of this country as these free trade talks.


Erik Nielsen: Mr. Speaker, I could say that questions from the opposite side would improve greatly if they paid greater attention to the truth, but I will not say that because it would be inappropriate parliamentary conduct and language as far as I am concerned. The Government policy, as the Hon. Member well knows, having been a Minister for many years, is that all Ministers are constrained to put everything right up front and tell the truth at all times when responding to questions from wherever they might come in the House of Commons, indeed throughout the carrying out of their responsibilities as Ministers of the Crown. That is exactly what has been done by Ministers in this Government as exemplified by the Prime Minister's conduct over the last three or four weeks.


John Carnell Crosbie: That's the pot calling the kettle black.


Steven W. Langdon: I would also remind the Minister that the committee which he talked about said that agriculture and cultural industries should not be discussed-


Mr. Speaker:: Order, please. Does the Hon. Member have a question?


OFFICIALS' DISCUSSIONS WITH INDUSTRY
Steven W. Langdon: Mr. Speaker, in view of the fact that minutes are available from groups like the recording industry indicating their discussions with the Government Opposition-


Mr. Speaker:: Order, please! Does the Hon. Member have a question immediately please?

October 9, 1985
Oral Questions


Steven W. Langdon: Would the Minister be prepared to release minutes of all the discussions that took place this summer between his Department and groups like this particular group indicating their positions on this free trade discussion?


Charles Joseph Clark: Mr. Speaker, that would depend on whether or not there was some understanding of confidence about those conversations. Just to emphasize the importance which we in the Government assign particularly to the question of the cultural sovereignty of Canada and the role of the cultural industries, I indicated again, as recently as Friday night, my intention, in harness with my colleague, the Acting Minister of Communications, to meet again in the next couple of weeks with representatives of Canadian cultural industries. We want to ensure precisely that Canadian interests are served in any negotiations that occur. The only way that we see that we can do that is to work closely with the people who will be involved, as we have been doing, as we are doing, and as we intend to continue to do.


GOVERNMENT POSITION
Steven W. Langdon: Mr. Speaker, that requires that Canada not be kept in the dark. Will the Minister make a commitment here in the House of Commons right now that the public position, from which the Government starts in these crucial negotiations about our future will be clearly laid out before the House of Commons within the next week so that we, as a Parliament, can debate them here in the House?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, I am not sure what the Hon. Member is seeking. If he is seeking the publication of discussions that were on the public record, of course we will give him that. If he is seeking continued public debate of the issues in the House of Commons in consultations, of course we will do that. If he is seeking continued consultation with the cultural industries, with the provinces, with business, labour and others, of course we will continue to do that.
If he is asking us to spell out here, now, the negotiating position of Canada before we enter into negotiations, so that we would be bound to lose on issues that were communicated by way of his office, by way of this House, to the very tough negotiators with whom we are dealing on the other side, then no, I will not sell out Canada that way.


Some Hon. Members:: Hear, hear!


FISHERIES
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, what is strange about this tuna affair is that the Prime Minister is not here to defend the Minister of Justice.
My question is directed to the Deputy Prime Minister. The Minister of Justice is quoted as saying in the Tory caucus, with respect to the tuna affair, that: "The only issue that might have been brought up was the complaint that fish inspectors, that bureaucrats were out of hand". Would the Deputy Prime Minister not agree that this statement lends substance to the initial claim of the Member for Carleton-Charlotte that he raised the matter of fish inspectors at Star-Kist in the Tory caucus months ago? Is it not time to appoint a parliamentary inquiry?


Erik Nielsen: No, it is not. It is time to tell the House that what the Hon. Member has said in his preamble and question is utterly false.


REQUEST FOR APPOINTMENT OF COMMITTEE
David Charles Dingwall: Mr. Speaker, I am alleging that the Hon. Member for Carleton-Charlotte raised the question of inspectors at caucus and that the Minister of Justice has substantiated that claim by his comments yesterday.
Is it not appropriate now to appoint a parliamentary committee to review this entire matter, or is the Deputy Prime Minister going to leave open the charge of a cover-up?


Erik Nielsen: Mr. Speaker, despite the fact that the question was repeated, against the rules of the House, I will repeat my answer. It is no. Once again I repeat the truth that was stated by the Prime Minister on so many occasions over the last three weeks, that no such thing was said in caucus, and I do not know why the Hon. Member does not accept that. It was not said and it was not raised. The Minister of Justice has said nothing inconsistent with that.


BANKS AND BANKING
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is directed to the Minister of State for Finance. The Hitchman Report indicated to the Minister that she should consider assigning the assets of all the loans and securities of the failed banks to the six banks involved in the original bail-out. Why did the Minister of State not follow the advice that was given to her?
October 9, 1985


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, I think the documents that have been made available to the Estey inquiry were made available in order for the inquiry to come to its own conclusions on the action taken.
I would prefer not to comment on matters that are before a commission of inquiry and a noble judge.


Nelson Andrew Riis: My question had nothing to do with what is before the Estey inquiry.


MINISTER'S ACTIONS
Nelson Andrew Riis: When a bank in every other western industrialized nation gets into difficulty those countries ask the financial community to come to that bank's rescue. That has worked in every other country except Canada. She knows that the Hitchman Report, Mr. Hitch-man-


Mr. Speaker:: Order, please. Does the Hon. Member have a question?


Nelson Andrew Riis: Yes, Mr. Speaker, the Hon. Member has a question. Since Mr. Hitchman advised the Minister to do what every other country does, why did she decide to write a blank cheque from the taxpayers of Canada instead?


Barbara Jean McDougall: Mr. Speaker, there is no blank cheque to the Canadian people. I have reiterated in the House that we have taken into account the economy of western Canada. I am surprised that the Hon. Member has totally ignored the important things we have done for western Canada, which include paying the depositors in these banks so that the money stays in that economy.


GOVERNMENT EXPENDITURES
Sheila Maureen Copps: Mr. Speaker, my question is directed to the Minister of Justice. Last August, in Newfoundland, the Minister announced grants totalling more than a million dollars for a joint venture involving the Prime Minister's friends and political allies, Walter Wolf, Frank Moores, and Senator Bill Doody. The Minister also said that the venture will generate $18 million in sales within five years.
Will the Canadian Government recoup its give-away to Walter Wolf since it is paying 60 per cent of the costs of this joint venture?


Erik Nielsen: Mr. Speaker, that question has nothing to do with the ministerial responsibilities of the Minister of Justice.


Mr. Rossi:: He made the announcement.
Oral Questions


Erik Nielsen: My colleague, the Minister of State for Science and Technology, sits on the ministerial board of economic development and can provide details. However, I can assure the Hon. Member that nothing was done with this particular contract that is in any way inconsistent with the previous practices followed by the former Government, headed by the former Prime Minister, who, I understand, was a particular friend of Mr. Wolf in this particular joint venture.


INVESTMENT INQUIRY
Sheila Maureen Copps: Mr. Speaker, my supplementary question is directed to the same Minister who made the announcement on August 26 in Newfoundland. In his statement the Minister of Justice said that this investment of over a million dollars of Canadian money will result in 10 jobs. Is it not really just an example of the Mulroney Government-


Some Hon. Members:: Order.


Sheila Maureen Copps: -paying off political debts from Conservative leadership campaigns at the taxpayers' expense?


Mr. Speaker:: Order. The Hon. Member should know that the use of phrases like "the Mulroney Government" is inappropriate. However, the question may be answered.


Sheila Maureen Copps: May I rephrase the question?


Mr. Speaker:: No.


Some Hon. Members:: No.


Erik Nielsen: Mr. Speaker, I will deal with the question in a moment but I want to correct an error I made a moment ago when I referred to the former Prime Minister. It was not the Right Hon. Leader of the Opposition but his predecessor who is a particular friend of Mr. Wolf.
With respect to the question, the quick answer is no, and the implications are totally untrue.


CONFLICT OF INTEREST GUIDELINES
Mr. John Nunziata (York South-Weston):: Mr. Speaker, my question is directed to the Deputy Prime Minister. On September 9 the Prime Minister tabled in the House new conflict of interest guidelines and he promised "to adopt ethical standards worthy of the respect of the Canadian people". We are now told that hundreds of thousands of dollars in Government contracts have gone to the Prime Minister's friends, supporters, and former Tory Members of Parliament. Does the Deputy Prime Minister believe that the awarding of these contracts reflects the ethical standards worthy of the respect of the Canadian people?


Erik Nielsen: Mr. Speaker, let me begin by urging the

October 9, 1985
Oral Questions
Hon. Member to study the guidelines that have been tabled. That might do him and others like him a great deal of good. While I am on that subject, the Right Hon. Leader of the Opposition and the Leader of the NDP were communicated with by the Prime Minister with respect of the application of certain aspects of the package that was tabled here a few days ago.
Let us take one example in that so-called package published in The Globe and Mail today, to which the Hon. Member refers. An instance is singled out where an individual has been employed by the PCO at a dollar a year. I can tell him that there have been virtually hundreds of people who have assisted me in our work on program review, who have been employed at a dollar a year. Those citizens are to be lauded for the contribution they are making to this country, rather than condemned as suggested by the Hon. Member.


John V. Nunziata: What is at issue is the honesty, credibility, and the unimpeachable integrity of the Government.


PATRONAGE REFORM
John V. Nunziata: When does the Government intend to keep its pre-election promise to end patronage and reform that instrument of national life?


Erik Nielsen: Mr. Speaker, the implications in the Hon. Member's question are quite unworthy of a response at all. However, I can tell him that this Government, in applying its standards of conduct, is applying standards that represent a substantial improvement over the past practices of the Government formed by the Party of which he is a member, and we will continue improving not only the standards but the quality of individuals who are called upon to perform services for the public in this country.


WOLF SUB-OCEAN LTD.
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, my question is also directed to the Deputy Prime Minister. In the awarding of a contract to Wolf Sub-Ocean Ltd. in an amount of $362,761, will he tell the House whether a tendering process was followed and if that was the lowest tender?


Hon. Thomas Siddon (Minister of State for Science and Technology):: Mr. Speaker, in fact,, there was no such contract. The matter referred to which involved Cosel-Wolf SubOcean Ltd. systems was a consequence of the Canada-New-foundland subsidiary agreement on ocean development and, as with many other millions of dollars of projects which are reviewed by the management committee under that sub-agreement, all necessary contracting procedures were followed to the letter of the law.


PROCEDURES INVOLVED
Ian Deans: Mr. Speaker, my supplementary question-


John Carnell Crosbie: Why don't you cry wolf again?


Ian Deans: Don't you talk until after you know what it is you are saying.


Some Hon. Members:: Hear, hear!


Ian Deans: Are you going to sit there and babble all day?


John Carnell Crosbie: Why not? You are babbling, why can't I?


An Hon. Member:: Go back to sleep, John.


Mr. Speaker:: Order, order. The Hon. Member and other Hon. Members might all please just be quiet for a while.


Ian Deans: Thank you, Mr. Speaker. It just shows what happens when you try to ask a question without a preamble. I wonder if the Minister might be able to tell us, in determining the appropriateness of the procedures that were followed, were there tenders called for and was this the lowest tender?


Thomas Edward Siddon: Mr. Speaker, I repeat again, there is no contract involved here. This project was funded under the Canada-Newfoundland subsidiary agreement on ocean industry development-


An Hon. Member:: Answer the question.


Thomas Edward Siddon: -as a joint initiative approved by a management committee representative of both the provincial Government and the federal Government, to produce jobs and economic opportunity in a province which sorely needs that economic development.


ADMINISTRATION OF JUSTICE
Mr. Elliott Hardey (Kent):: Mr. Speaker, my question is directed to the Minister of Justice and Attorney General of Canada.


An Hon. Member:: Sock it to him.


Elliott William Hardey: Canada now has two American murderers enjoying our sanctuary and hospitality, having avoided justice in their own country and ours, by virtue of permissiveness in our extradition laws and treaties, and because capital punishment does not exist in Canada. Can the Minister assure the House and Canadians that our country will not become more of a haven for the worst elements in American society because of his discretion not to return fugitives when the death penalty may be imposed?
October 9, 1985


John Carnell Crosbie: Mr. Speaker, I can certainly assure the hon. gentleman that Canada is not going to become a haven for criminals who have escaped from the United States or any other jurisdiction; and the law will be carried out. In the case of Mr. Kindler, which I referred to yesterday, I am expecting to receive a brief from his solicitors shortly. They will be given a chance to make oral representations if they wish on that question before I make the decision on the matter as to whether Mr. Kindler should return without qualifications to the United States, or not. He escaped from there, having been convicted of a murder.
There is one other case which the public is much interested in, Mr. Ng, who is now under arrest in Edmonton. The United States has not yet requested extradition for that person. He is charged with offences in Alberta and he has to be tried there.


Mr. Speaker:: Order, please. May I suggest that this might be completed under Statements.


AGRICULTURE
Mr. Lome Nystrom (Yorkton-Melville):: My question is directed to the Deputy Prime Minister, Mr. Speaker. I am sure he is aware of the major farm disaster in western Canada, first of all the drought, and now the double disaster of crops under the snow.
On July 12 the Prime Minister appointed the Member for Assiniboia to head a task force on the drought. Can the Deputy Prime Minister tell us whether or not the Prime Minister's officials have informed him that this report is now completed; that it is sitting in the Prime Minister's Office; that there are recommendations? Can he tell the House why the report has not been made public, and make it public today?


Mr. Len Gustafson (Parliamentary Secretary to Prime Minister):: Mr. Speaker, I would like to thank the Hon. Member for Yorkton-Melville for the question. As he knows well, the task force on drought has made recommendations, first on phase one which related to livestock, and the Government of country has responded very positively with $48 million to the farmers of western Canada.


Some Hon. Members:: Hear, hear!


Leonard J. Gustafson: In relation to the crops, the oil seeds and grains, the Hon. Member will be pleased to know that recommendations have gone to the Government. He can expect action that will be in the interests of the farmers in western Canada.
I would also like to say, Mr. Speaker-


Mr. Speaker:: Order.


Some Hon. Members:: Hear, hear!
Oral Questions REQUEST FOR PUBLICATION


Lorne Edmund Nystrom: I wonder if the Deputy Prime Minister can answer my question. What the farmers want to know is when will that report be made public and does it include acreage payments to the grain farmers who have received nothing whatsoever from this Government?


Ramon John Hnatyshyn: And it snowed yesterday.


Erik Nielsen: I think the Parliamentary Secretary has answered the Hon. Member's question fully, completely, and most ably, in the best interests of the Canadian farmer.


Some Hon. Members:: Hear, hear!


Erik Nielsen: The report which he has mentioned and which is before the Government is under active consideration, and the results of any decisions will be communicated as quickly as possible to relieve the hardships that are being caused at present in western Canada.


Ramon John Hnatyshyn: Did Senator Argue write that question out for you?


CANADIAN NATIONAL RAILWAYS
Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, my question is directed to the Minister of Transport.
The Minister is aware that last summer over 2,000 persons marched in protest in Moncton protesting over strong rumours that CN might be closing its main railway shops in that city. At the rally the Member of Parliament for Moncton said that the Minister had given him the assurance that he would not support massive lay-offs in Moncton. Was the Minister sincere when he gave that assurance last summer, or was it just another case of a Minister saying one thing and doing another?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, I presume that there are varying interpretations of what is meant by massive lay-offs. I think in the context of this statement it was considered that the representations were being made in anticipation of a total shut-down of the CN Moncton station. I assured them that that would not be the case.
I am sure the Hon. Member knows that there has been a major decline in traffic across the country. Grain traffic is down by 30 per cent. Other agricultural products traffic is down by 19 per cent. The total traffic is down by about 7 per cent or 8 per cent. Consequently when the movement of goods is not taking place, there is a reduction of work. It is because of that fact that lay-offs occurred right across the country.

October 9, 1985
Oral Questions REQUEST FOR EXPLANATION


Fernand Robichaud: My supplementary is directed to the same Minister. A total of 225 jobs is considered massive lay-offs for the Moncton area. Can the Minister explain why the Moncton area was hit harder than the other areas in Canada?


Donald Frank Mazankowski: 
GOVERNMENT EXPENDITURES
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is for the Minister of Science and Technology: It follows from what he said just a moment ago about an agreement that was entered into between the Government of Canada and the Government of Newfoundland presumably, and Mr. Wolf, and involves expenditures of $362,000. Is the Minister telling us that the expenditures of large amounts of money like this can take place without any contract being signed?


Thomas Edward Siddon: Mr. Speaker, as I thought I had explained, and in answer to the Hon. Leader of the New Democratic Party, agreements of this sort come within the framework of the subsidiary agreements under the ERDA process, of which there are many subsidiary agreements in place across Canada. Their purpose is to develop new employment opportunities, particularly in areas of emerging industry and technology.


Some Hon. Members:: We know that.


Thomas Edward Siddon: This is an agreement of that sort. Its purpose is to create employment and economic advantage in a province where they are sorely needed.


Sheila Maureen Copps: Ten jobs.


METHOD OF PROVIDING FUNDING
John Edward Broadbent: Mr. Speaker, the Minister has just admitted that the Government is expending thousands of dollars without any contract whatsoever. That is public money.


An Hon. Member:: That is not what he said.


John Edward Broadbent: If the Minister is not saying that, will he tell us straight out: Was there or was there not a contract, and were bids submitted?


Charles Joseph Clark: More innuendo.


John Edward Broadbent: That was a question.


Thomas Edward Siddon: Mr. Speaker, I have clearly stated that a contribution has been tendered by the Government of Canada under a subsidiary agreement between Canada and Newfoundland. The purpose of that subsidiary agreement is to build new employment opportunities in the area of ocean technology.


John Edward Broadbent: Now answer the question.


Thomas Edward Siddon: There is nothing inappropriate with this approach. In fact, it is used to support worthy industrial initiatives in all parts of Canada by joint agreement between two levels of Government.


INDIAN AFFAIRS
Mr. John Gormley (The Battlefords-Meadow Lake):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. A growing number of people in the Saskatchewan native and non-native communities believe that less government in the lives of Indian people will mean more self-reliance for natives and a more efficient use of public funds. What are the Minister's precise plans for the Province of Saskatchewan? Would he detail them, please?


Hon. David Crombie (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am sure the Hon. Member knows, the entrenchment of selfgovernment for Indian people remains the constitutional goal of the Government. With regard to non-constitutional selfgovernment, as we call it, it is my responsibility to negotiate specific models of selfgovernment. The approach is community based and tailored to the specific needs of Indian communities. That is the approach nationally, and obviously it includes the Province of Saskatchewan.

[ Translation]


EMPLOYMENT
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the Minister of Employment and Immigration.
Not long ago, Montreal East first lost 1,000 jobs at Bombardier, then 650 jobs at Vickers and now Gulf has announced it
October 9, 1985
[Stage Direction]
is closing down its refinery, which will result in the direct loss of 450 more jobs.
My question to the Minister is as follows: What is she going to do now to keep this refinery open and protect those 450 jobs which are very important, not only to the workers themselves but to the industrial base of Montreal East? What is she going to do?
Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, my colleague, the Minister of Energy, Mines and Resources, has already responded very affirmatively to the request which the Hon. Member just put forward. On the other hand, I should like to remind him that in the past year 100,000 new jobs have been created in the Province of Quebec alone; that is in one province of the country, and the Government has undertaken to stimulate that growth. It has introduced the Canadian Jobs Strategy. It is already receiving applications to introduce new job proposals. These are coming forward, and they are being approved on a daily basis.


POSSIBILITY OF 450 JOBS LOST IN MONTREAL-GOVERNMENT POSITION
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, as usual, the Minister has failed to answer my question. She has even turned down 450 workers in Montreal East. Again I want to ask the Minister whether she is prepared to make a commitment today to protect those 450 jobs. Is she prepared to go to the same lengths for these workers as for bankrupt Canadian banks?
Flora Isabel MacDonald: Mr. Speaker, in all cases where there have been projected lay-offs, we have undertaken to work through the industrial adjustment service to assist people, and we have spoken on numerous occasions to different companies to assure them that the benefits package which they produce will be to the best advantage of the workers. However, I would say that the important thing is that the economy, over all, continues to be stimulated, that, with the growth of the numbers of people who are finding new jobs, is the way in which the Government stimulates and furthers the economy, indeed right across the country, but particularly in the Province of Quebec.


GOVERNMENT EXPENDITURES
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is directed to the Minister of State for Science and Technology. It is a very specific one. Why did the contract go
Oral Questions
to Mr. Wolf? What process was used to select Mr. Wolf for that job for the Government of Canada?


Thomas Edward Siddon: Mr. Speaker, the project in question was recommended by a committee of officials called the Management Committee. Those officials represent the Government of the Province of Newfoundland and the Government of Canada. Those officials recommend a project to their respective Ministers.


John Napier Turner: I bet.


Thomas Edward Siddon: As a consequence those agreements-and it is the practice under the administration of all subagreements, including those with the NDP Government of the Province of Manitoba-are properly negotiated. Offers are made in accordance with all appropriate and necessary conditions, to ensure that the public interest is protected.


SELECTION OF COMPANY
Iain Francis Angus: Mr. Speaker, I have a supplementary question for the same Minister. What the people and I want to know is this. After it was decided that the project would occur, how did they select Mr. Wolf to be the recipient of Government money? What process was used?


Thomas Edward Siddon: Mr. Speaker, I think the nature of these questions from members of the New Democratic Party reflect the naivete of their understanding of the situation.


Some Hon. Members:: Oh, oh!


Ian Deans: I dont think so, somehow.


Mr. Speaker:: Order, please.


John Edward Broadbent: Naive, eh?


Mr. Speaker:: Surely the Minister is entitled to give his answer with some respect and calm.


Thomas Edward Siddon: What this project represents-


Ian Deans: Pork.


Thomas Edward Siddon: -as with many projects which are funded either under the Industrial and Regional Development Program or subsidiary agreements-


An Hon. Member:: Oink, oink.


Thomas Edward Siddon: -is an opportunity to develop new areas of industry and technology-


Some Hon. Members:: Pay-off.


Mr. Speaker:: I am sorry to interrupt the Hon. Minister, but clearly Hon. Members do not want to hear the answer.

October 9, 1985
Oral Questions CAPITAL PUNISHMENT


REQUEST FOR REINSTATEMENT
Mr. Jim Jepson (London East):: Mr. Speaker, my question is directed to the Hon. Minister of Justice and it pertains to capital punishment. As we are now in the second year of our mandate, and in that a majority of Canadians have indicated a clear wish for capital punishment to be reinstated, will the Minister give the House some indication when we might expect to see relevant legislation brought before the House?


John Carnell Crosbie: Mr. Speaker, the longer this House continues, the more 1 become in favour of capital punishment.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: For whom?


John Carnell Crosbie: For certain people who will remain nameless.


Some Hon. Members:: Oh, oh!


Mr. Gauthier:: Resign.


John Carnell Crosbie: Mr. Speaker, when the donkeys are finished-


An Hon. Member:: Go back to the zoo.


Sheila Maureen Copps: This is the Minister of Justice!


John Carnell Crosbie: During the term of this Government arrangements will be made for a free vote in the House by Parties that are allowed to be free-and some are not-on the question of capital punishment. It will be put clearly and squarely before the House for Hon. Members to decide before the next election is called.


Some Hon. Members:: Hear, hear!


EMPLOYMENT
Hon. Jean Lapierre (Shefford):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. How can she possibly have the nerve to give out statistics to Gulf workers in the gallery? They are certainly not going to meet their monthly payments with the statistics dished out by the Minister of Employment and Immigration. How can she explain that her Government is doing everything it can to prevent a new buyer from acquiring the Gulf plant and saving 450 jobs? That is what they want to know!


Flora Isabel MacDonald: Mr. Speaker, unlike the former Government, we do not just stand idly by and see people go down the chute
on these things. The fact is that we have been in touch with Gulf Canada. We have introduced the industrial assistance service to assist both workers in unions and those who are not in unions to make that kind of transition. We have introduced programs which will allow retraining. We have introduced programs which will allow mobility. These are the things which indeed the Government has seen fit to introduce because it is concerned about the needs of those who would be thrown out of jobs, usually by policies undertaken by the former Government.
[ Translation]


OFFER OF TRANSFERS TO WEST OF UNILINGUAL FRANCOPHONES
Jean-C. Lapierre: I have a supplementary question, Mr. Speaker.
The Minister is making statements which in fact are not true, and the workers are here to attest to that.


Mr. Speaker:: Order, please. I must remind the Hon. Member that references to the presence of someone in the gallery are entirely out of order.
[ Translation]


Jean-C. Lapierre: Mr. Speaker, I would suggest that those people are here to listen to the Government's answers.
How can the Minister talk about transition when those people want to keep their jobs? And how can she explain that instead of maintaining those jobs she is urging unilingual Francophones to accept transfers to western Canada?


Flora Isabel MacDonald: It is not true, Mr. Speaker!
The Hon. Member now knows that the workers have already been assured by the Minister of Energy, Mines and Resources that the companies will keep operating for a few months. [English]
The Minister has already announced that she would take steps to ensure that the company remains open in the hope that there will be discussions that will allow that company to continue operating. That is something that the former Government and the Hon. Member in that Party would not have done.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Tuesday, October 8, 1985, meet the requirements of the Standing Orders as to form.
October 9, 1985



ROUTINE PROCEEDINGS


Ramon John Hnatyshyn: Mr. Speaker, pursuant to the provisions of Standing Order 70(16),
I have the honour to lay upon the Table two copies in both official languages of the Government's comprehensive response to the second and third reports of the Special Committee on Reform of the House of Commons.


Mr. Speaker:: I am tempted to get one in a hurry.



REFORM OF THE HOUSE OF COMMONS


Ramon John Hnatyshyn: Mr. Speaker, the document that I have just tabled is more than a comprehensive response to the second and third reports of the Special Committee on the Reform of the House of Commons. It is a commitment fulfilled and a challenge issued.
During the last election campaign, the Prime Minister (Mr. Mulroney) made the commitment that the reform of Canada's central institutions of Government would be an early priority of his administration. The Prime Minister's objective was to ensure that Government became more open and responsive to the views and requirements of all Canadians.

It is not surprising that in the Speech from the Throne at the opening of this Parliament the Government advocated various mechanisms to set in motion the process of a detailed review of the Government's machinery. One of its initiatives was to propose the creation of a Special Committee on Reform of the House of Commons.

Under the invaluable leadership of the Hon. Member for St. John's East (Mr. McGrath), the other members of the committee, the Hon. Member for Papineau (Mr. Ouellet), the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie), the Hon. Member for Argenteuil-Papineau (Mrs. Bourgault), the Hon. Member for Prince Edward-Hastings (Mr. Ellis), the Hon. Member for Peace River (Mr. Cooper) and the Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen) worked together in a spirit of non-partisan co-operation that stands as a model for our deliberations in this House and its committees.
The Special Committee rose to the challenge given to it in its broad mandate and produced three substantive reports containing a wide range of proposals for reform. Those proposals touched on matters as diverse as the role of the private
Statements by Ministers
Member and the modernization of the procedure governing the granting of Royal Assent.
Both in the comprehensive response to the first report which I tabled last April and in the response which I have just tabled, the Government's appreciation of the substantial support for the committee's recommendations is evident. However, I would like to take this opportunity on behalf of the Government to express once again our sincere appreciation to the Hon. Member for St. John's East-


Some Hon. Members:: Hear, hear!


Ramon John Hnatyshyn: -and indeed to all the other members of the committee for their hard work and their excellent results. 1 am sure all Members of the House, as they have indicated by their applause today, join with me in that sincere expression of thanks.
Eleven months have now passed since the Speech from the Throne. In that period, the Government has taken several important steps to further the process of parliamentary reform. From the very first, the Government recognized the importance of parliamentary scrutiny and input into major policy initiatives and substantially increased the number of policy statements delivered by Ministers in the House. In June, I tabled a discussion paper which proposed a major change in the legislation governing the redistribution of electoral boundaries. That paper was referred to the Standing Committee on Privileges and Elections and, pursuant to the recommendations of that committee, legislation is now before the House, legislation which if passed, will limit the future growth of the House and thereby ensure that each Member has greater access to the time of the House and its committees. This is an important step because the special committee has called for smaller standing committees and this proposal can only be met in a House that is at or only slightly larger than its present size. [Translation]
In addition, the Government has taken another step to bring Parliament closer to modern times by introducing legislation which acknowledges the supremacy of Parliament but which, for the first time ever, gives collective bargaining rights to House of Commons and Senate employees.

Furthermore, following the tabling of the Government's response to the first report of the special committee, the House agreed to adopt on a trial basis the vast majority of the reforms proposed in that report. As a result, the House is now experimenting with the following: one, extension of hours for ministerial statements; two, legislative committees; three, committee budgets; and four, a new, more meaningful Board of Internal Economy.

Last July the Prime Minister announced the establishment of a sub-committee of the Committee on Priorities and Planning to consider the question of the reform of the House. During the summer my colleagues and I examined the sugges-

October 9, 1985
Statements by Ministers
tions of the Special Committee on Reform to ensure the orderly implementation of reforms.

Today the Government has provided its response to the Second and Third reports of the special committee. In that response, we have not only indicated our support for the vast majority of the proposals contained in those reports but have, in the spirit of those reports, gone further to recommend additional measures designed to enhance or restore the role and authority of the House of Commons. For example, whereas the special committee proposed that standing committees of the House be given authority to review certain limited classes of Order in Council appointments, the Government's response goes far beyond that proposal. As the Prime Minister announced a few weeks ago, although committees will not be given the power to veto appointments, they will have the authority to review all Order in Council appointments. Furthermore, in the case of appointments to quasi-judicial bodies, committees will have the right to call nominees prior to their appointment.
This tendency to build upon the foundations laid out in the second and third reports can be found throughout our response. Indeed, Sir, it is our hope that reform will be a living and continuing process in this House. To accomplish that goal, however, we need to ensure that adequate consultation takes place between the Parties and that achievable, short-term objectives are set. It is for that reason that I have already met with my colleagues across the aisle to discuss these reforms. In fact, several of the Government responses have been adjusted to accommodate the views and suggestions of Opposition House Leaders.
In the coming weeks, I will be meeting with my counterparts again to ensure that the vigorous start which the House has made is carried forward and sees the development of a new House of Commons in the near future. Without prejudging the outcome of those discussions, it would be my hope that the reforms now before the House could be in place by the time Parliament reassembles next January.
The reforms we have proposed in our response, along with the several related initiatives such as regulation of activity by lobbyists, will shape our agenda for action in the coming months and years. This is an evolutionary change, but an important one.

The ultimate assessment of the strength of our democracy rests on the ability of our institutions and of all Canadians to face that challenge: as parliamentarians we will not be judged by what we do today but, in the long run, by our ability to make the institution efficient and relevant to society and its future needs.

In closing, let me call upon all of my colleagues in the House to take up the courageous road which will lead to a
better House, a more effective and democratic institution and the best possible forum to ensure that our great diversity can be given legitimate expression in unity of purpose. That is our commitment and our challenge.


Some Hon. Members:: Hear, hear!


Jean-Robert Gauthier: Mr. Speaker, in the absence of my parliamentary House Leader, I rise to speak on behalf of my party in reply to the Minister's statement, and considering the fact that I was advised on very short notice, not more than an hour ago, I trust the House will bear with me if I do not cover all the questions or points raised by the Minister.
That being said, we are delighted with this opportunity to join the Minister in congratulating once again the Hon. Member for St. John's East (Mr. McGrath) who provided the leadership on the Committee, with, of course, the Hon. Member for Papineau (Mr. Ouellet) and occasionally, the Hon. Member for Cochrane-Superior (Mr. Penner).

The work done by the committee will be helpful to us all. 1 only wish the Government had taken most, if not all, its recommendations into serious consideration.

Mr. Speaker, the statement by the President of the Privy Council (Mr. Hnatyshyn) on the Government's comprehensive response to the Second and Third Reports of the Special Committee on Reform of the House of Commons seems incomplete, since it fails to mention that the practice of responding to committee reports was started during the last Parliament, on the initiative of the Liberal Government of the day, to enable committees to have more impact and to receive more comprehensive responses to their reports from the Government.
Mr. Speaker, parliamentary reform is only acceptable if it is the result of a consensus reached by all parties. It is never acceptable if it is treated as a partisan issue. To have a consensus, any parliamentary reform must first be shown to have as its objective the strengthening of the democratic process, not just increasing the authority of a Government that is already too powerful, as we see it.

As an example of how Government can try to smuggle in measures of advantage to it cloaked in the guise of non-partisan reform, we see in the Minister's statement a glowing reference to his redistribution Bill. The Minister should know that the jury is still out on that measure and that there are very serious doubts in the country about how that Bill may dilute even further the principle of one man, one vote. He should know that that measure is being looked at very skeptically and that he has yet to persuade the country that it is a reform of a positive nature.

October 9, 1985
Similarly, he should know that the proposals for procedural reform will be looked at with a skeptical eye. For example, the proposal for review of appointees looks very much like a paper tiger, an expression I like to use. However, in this case I think it would be more appropriate to say that it looks like a paper tiger without teeth. The Government has yet to provide details on how it sees the system working. More important, it does not propose that' committees reviewing appointments can do anything substantial about the bad choices which this Government makes. It borrows from the American system and says that all Order in Council appointments will be reviewed by the committee. The Government knows that the committee cannot do that. It is somewhat like saying that no right of veto will be accorded to committees. It is a paper tiger without teeth.

Now that the Government is proposing to adopt a broader set of reforms, Mr. Speaker, I can promise you that the Opposition will monitor very closely and critically the specific proposals that are being made.
For instance, in the comprehensive response tabled by the Government, we see a promise to agree to extend consideration of the Estimates by committees, accompanied by a condition that can or could make this reform totally meaningless.
I am thinking especially about the critical question of whether Members of Parliament should be independent from the Government when they sit in a committee or whether we should at least try to make them more indepedent. Recommendation 4.5 of the Committee states that if we want to reduce the size of standing committees and make them more independent, parliamentary secretaries should no longer sit on them.
The Government has rejected this proposal, even though we are trying to give more independence and powers to the committees. The Government insists that the parliamentary secretary, who is the assistant of the Minister, must be a member of the committee. Contrary to the committee recommendation to the effect that there be only seven members per committee, the Government says that there must be eight and adds the parliamentary secretary. I do not find this very serious, Mr. Speaker.

The entire tone of the response of the Government is, in my opinion, "If it helps us, we will do it. If it does not help us, we will see. If it slows us down, forget it". In its discussions with the opposition Parties, a greater disposition toward compromise and toward truly meaningful reform will be required of this Government.
In the brief period since the recommendations of the first report of the committee have been adopted on an experimental basis, we have already seen some areas where further adjustment will be needed.
Statements by Ministers

Mr. Speaker, it is interesting to note that the Government accepted the recommendations of the first report, but on an experimental basis, without getting away from the main issue. However, as far as the recommendations contained in the second and third reports are concerned, the Government has asked for more advantages before even putting these recommendations to the test.
Mr. Speaker, we plan on meeting soon with the Government Members and the Members of the New Democratic Party to discuss the important issue of reform. We congratulate once more the committee and its chairman for having discussed the matter objectively and for making special efforts to achieve a parliamentary consensus on the whole issue of reform.
We give notice to the Government that the only road to progress in parliamentary reform is to look for a consensus amongst all interested parties.
Mr. Speaker, I shall close by congratulating once more the committee and by asking this House to guarantee the independence of the committees and to examine closely and seriously the recommendations of the committee on reform, which I consider very serious and worthy of being implemented.


Ian Deans: Mr. Speaker, I will not be very long in dealing with this matter because it will be dealt with in much more detail some time later on. 1 wish to take a moment or two to make some points on matters which I think are quite important.
At the outset, I wish to congratulate the committee for its work, as did the Government House Leader and others. I know from my own experience how hard the Chairman of the committee and members of the committee have worked. I also know that it was able to do what many committees of the House of Commons are not able to do and, in fact, it was able to do what the House itself is unable to do, that is to say, work by consensus. As time passes, I hope that experience will rub off and that other Members of the House will recognize that it is better in the long run with respect to most issues to attempt to find a consensus than it is to push everyone to the wall on everything which is placed before us. Thus, I congratulate the Hon. Member for St. John's East (Mr. McGrath).
I also wish to say to him that the reports over which he has presided are, in my judgment, a great move forward in the modernization of the parliamentary system. Wherever we do have disagreements-and there are two or three areas which are up for further discussion, I can say on my own behalf, and, I hope, on behalf of the others, that we will attempt on every occasion to come down four square alongside the committee. We believe that the committee did its work and did it well. I say that to all members of the committee.
There are two or three matters which puzzled me a little. These are matters which could be, perhaps, reviewed again. I

October 9, 1985
Statements by Ministers
note with interest that the Government House Leader has indicated that that in fact will be the process.
As you know, Mr. Speaker, and I am sure the Hon. Member who chaired the committee knows, the House Leaders have in fact met on a number of occasions and have gone through the recommendations. They have looked at methods of implementation, taking into account certain of the problems which arise which have to be resolved in advance of implementation. And I am confident that over the course of the next two or three weeks, certainly in advance of the opening of the next session of this Parliament, we will have these rules in place, as we have all of the other recommendations in place which the committee recommended to the House.
I do, however, want to suggest one matter which is of major concern to me, that is, the recommendation which dealt with the question of petitions. There was a recommendation which I cannot quote verbatim but which I can paraphrase. The recommendation was that it would require a minimum of 25 persons in order to constitute a legally acceptable petition. I suggest that that is a dangerous precedent. I do think that it is the right of every individual citizen to petition his or her Parliament, and that has been the basis upon which the system has grown. If there is but one citizen someplace who feels aggrieved by the actions of his Parliament or by the results of the actions of his Parliament, he has the inalienable right to bring forward a petition and seek redress. I would be reluctant to go from that which I consider to be a very good principle to a principle which requires that a person have the support of 25 other persons in order to petition. I do not see that that is absolutely essential.
It does not seem to be too terribly onerous in a country which has a population of 25 million to find 25 persons to agree on one matter. However, a matter which is being brought to the attention of Parliament could well be a matter which affects one person directly or it may be matter about which one person feels particularly strongly. So I think I would, perhaps, beg of the House that at some point we not accept that change, well intentioned though it may be, and that we leave it as a right of every citizen to petition his or her Parliament in his or her own name asking for redress. I feel that that would make sense.
Another matter I would like to raise is one with which I know we are going to deal. We have had conversation about it and although it does not appear in the response of the Government, I am confident it is going to be dealt with when we sit down to discuss methods of implementation. It is the whole question of the numbers and definitions of committees. The Government House Leader will recall when he, the House Leader for the Official Opposition and myself gathered together one week ago tonight in the Commonwealth room to welcome a significant number of representatives of the ethnic communities of Canada as they celebrated the establishment of the ethnocultural committee. That is the committee which looks at questions directly related to ethnicity and the development of Canada in the future. We all said the same thing, that
this was a much needed, long postponed initiative on the part of Government and on the part of Parliament.
It would seem passing strange that we should, one week later, indicate to that group that we do not think it is necessary, but I do not believe that that was the intent of the Government House Leader-in fact, I know it was not. It was only after consultation with him that I decided to raise this question. I believe that he and I both agree, as does the Hon. Member for Windsor West (Mr. Gray), the House Leader for the Official Opposition, that there will be the necessity to add committees, albeit a few, to the list of committees recommended by the Committee on Reform of the House of Commons for the very reason that there are certain things which we all deem to be necessary and certainly advisable, and we should bear in mind that those committees may well have to be included, along with the others.
So I say to those who are in the ethnic community in Canada today, and who travelled all the way to Ottawa to join with us in celebrating the establishing of the committee: Fear not, it is not going to be done away with. We have already agreed to it.
As far as the balance of the recommendations are concerned, I say as delicately as I can to the Speaker that regarding recommendation No. 73, which indicates the Speaker's power to select, as well as to combine amendments at the report stage-I recognize that this is a power the Speaker has, and I say this not necessarily for the incumbent but for the future reference of others who might not be as attuned to the system as it now exists-in that selection process, great care should be exercised, if it were in fact to be utilized, to ensure that in that selection process the subject matter of the amendments are also taken into account. Not only would they have to be admissible in a technical sense but the subject matter, those areas to which the amendments address themselves, must in fact be appropriately addressed in some other way in determining whether or not there could be the removal of one or more amendments offered at the report stage to be selected by the Speaker.
In addition to that, we must recognize the political nature of the House of Commons. It may well be that for crass political reasons-and I know that rarely do we ever do anything for those reasons-it is necessary to pay recognition to the fact of whether an amendment came from the Government'side of the House or from the opposition side of the House and, even more important, I believe, whether it came from the two opposition Parties jointly. In all fairness, it may be necessary to recognize that both opposition Parties have submitted similar amendments in order that both can claim credit for having pushed the Government right to the wall-which is always what we are trying to do, in any event.
I realize you might find that hard to believe, Mr. Speaker, but I am prepared to admit it because there is not another soul in the world watching this. They are all watching the Blue Jays. I feel quite confident that I can say almost anything today. There is not a single person watching us on television, I am sure. Everyone is sitting watching the Blue Jays, and at the
October 9, 1985

end of the first half of the first inning, they are tied nothing each.
I am confident that we will get these changes into being by the first part of January and that we will see them working. It will not be easy. Change is difficult and we have just made some changes and I hear nothing but complaints about the way these changes are affecting people's lives. That does not mean the changes are wrong. It just means that politicians, by their very nature, resist change. That seems to be the case even with the changes to the House of Commons. However, may 1 say that I am looking forward to helping to implement these changes and to making sure we get the best possible results from what I consider to be an absolutely excellent series of recommendations made by a committee which worked diligently on behalf of all of us.


PETITIONS
[Stage Direction]
USE OF EVIDENCE FROM SOVIET UNION BY DESCH&NES COMMISSION
James (Jim) Stewart Edwards: Mr. Speaker, I have the honour to present a petition signed by residents of Edmonton, Alberta, protesting the use of evidence from the Soviet Union by the Deschenes Commission of Inquiry on War Criminals. The petitioners call upon the Canadian Parliament to oppose the use of any such evidence.


Mr. Speaker:: Is the Hon. Member for Scarborough West (Mr. Stackhouse) rising on a point of order?


Mr. Stackhouse:: No, Mr. Speaker, I was hoping that on an occasion when a report about the role of the private Member was introduced, there might be an opportunity for a private Member to make a comment.


Mr. Speaker:: I appreciate the Hon. Member's sentiments, but under the rules adopted to help the private Member that is no longer possible.


Margaret Anne Mitchell: Mr. Speaker, I have two petitions to present today. The first is from a group of residents of my riding, particularly the Hastings-Sunrise area. They call for reindexation of the family allowance. Its deindexation, combined with tax increases and budget handouts, has placed an extraordinary burden on families, especially on women, single parents and poor families. They call on the House of Commons to reinstate the full indexation of family allowances and rescind unfair tax increases.
The second petition is very interesting because many of the signatures are in Chinese characters. It is from residents of the Strathcona area and downtown east side of Vancouver, and
Order Paper Questions
they call upon the House of Commons to reinstate full indexation of universal family allowances and rescind unfair tax increases.


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, in the middle of National Family Week it is my honour to present a petition from constituents in the City of Thunder Bay who protest deindexation of family allowances and other changes in our family support system. They protest the hand-outs which the Government has proposed and which represent a burden on families. They call upon the House of Commons to reinstate full indexation of universal family allowances and rescind unfair tax increases.


Mr. Rod Murphy (Churchill):: Mr. Speaker, 1 also have a petition signed by Canadians right across this land who would like to add their voice to those calling upon the Government to reinstate full indexation of universal family allowances and rescind the unfair tax increases in the Budget.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Ramon John Hnatyshyn: Mr. Speaker, the following question will be answered today: No. 412.


Mr. Robichaud: 1.	In 1984, how many United States tourist publications were sold in Canada and what income accrued to the government from the 10 per cent tax?
2.	(a) In 1984, how many Canadian tourist publications were sold or given away (i) in Canada (ii) abroad (b) what income accrued to the government from the 10 per cent tax?


Ramon John Hnatyshyn: 1 am
informed by the Departments of National Revenue and Regional Industrial Expansion as follows:
1 and 2. There is no mechanism to record the number of United States tourist publications sold in Canada or of Canadian tourist publications sold or distributed in Canada or abroad.
Revenue Canada advises that its own records do not differentiate between tourism literature and other forms of printed matter. Therefore, the information pertaining to the income from the 10 per cent tax on tourist publications is not available.


Ramon John Hnatyshyn: I suggest, Mr. Speaker, that the remaining questions be allowed to stand.

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Depositors Compensation


Mr. Speaker:: The question mentioned by the Hon. President of the Privy Council has been answered. Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.


Ramon John Hnatyshyn: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Shall all notices of motions for the production of papers be allowed to stand?


Some Hon. Members:: Agreed.


Mr. Speaker:: May I advise the House that because of the ministerial statement, consideration of Government Orders will be extended by 27 minutes this day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-79, an Act respecting the provision of compensation to depositors of Canada Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect to uninsured deposits, be read the second time and referred to a legislative committee; and the amendment of Mr. Turner (Vancouver Quadra) (p. 7379).
Mr. Nic Leblanc (Longueuil):: Mr. Speaker, today I would like to speak in support of Bill C-79, which concerns the provision of compensation to depositors of the two financial institutions, for the portion not insured by the Canada Deposit Insurance Corporation. The Bill was tabled by the Minister of State (Finance) (Mrs. McDougall) in the House on October 7 of this year.
Through this Bill, the Government intends to compensate all depositors who had invested their savings with the Canadian Commercial Bank and the Northland Bank, and who would not otherwise have been compensated by the Canada Deposit Insurance Corporation. Last March, when the Government
took emergency action to improve the financial situation of these institutions located in Western Canada, it made certain commitments to the depositors of these institutions, and today, it intends to meet those commitments. Last March we had created a climate of trust in these institutions, but repeated attacks by the Opposition created a climate of panic and uncertainty in the financial world, especially among small depositors and business people. Mr. Speaker, how can the Government be expected to build something solid when the Opposition, in an unprecedented way and without consideration, is constantly undermining the commitment we made to preserve those financial institutions, together with many private depositors and small businessmen, over six major chartered banks and the provincial Governments that were directly concerned. Today, we must meet the commitments we made to these people. They trusted us, and thanks to the criticism by Opposition Members, today they might have lost everything. We are going to meet our obligations to the bitter end, and the Opposition should do likewise and support the Bill, since it would not have been necessary without the Opposition's attacks on the bail-out program we proposed last March, and the consequences of those attacks. In fact, why did these financial institutions have to close their doors? I will try to define several significant developments these institutions have had to deal with in recent years.
First, the energy policy of our predecessors, who today are the Official Opposition, has had a disastrous impact on Western Canada, and it is in fact Western Canada, Mr. Speaker, which has been most severely affected by the failure of these financial institutions. The Liberal Government took a series of energy measures which resulted in a dramatic drop in oil consumption, and these measures included energy transfer policies such as programs to help people convert from oil heating to electricity and also increased taxes in this sector.
Second, rising interest rates which our predecessors merely encouraged, plus inflation which they were unable to control, both led Canadians to review their consumption habits, such as gas for motor vehicles, and so forth. This dangerous legacy we were left by the previous Government is now forcing us to take the measures before the House today. The Opposition, the Liberals, did not foresee the consequences of their actions at the time they took these economic initiatives, as a result of which today, so many people in Western Canada are facing serious economic problems.
And now, Mr. Speaker, what about the regulation of our financial institutions? As soon as it came to power last September, our Government asked for a major review of our financial institutions, since we were aware of the disastrous consequences of the regulations left to us by the previous Government. Mr. Speaker, as you know, only a few months ago we referred a green paper to the Committee on Finance, Trade and Economic Affairs, for the purpose of assessing the consequences of poor regulation of these financial institutions.
October 9, 1985

Last summer we heard evidence from spokesmen for most banks, trust and insurance companies to launch a basic reform to avoid the reoccurrence of such incidents in the future.
Our only regret-and there is nothing we could do about it-is that we did not come into office a year sooner, for we certainly would have been able to avoid the shutdown of the two Canadian banks which are now the subject matter of this Bill. As a result of those policies, both banks-the Canadian Commercial Bank and the Northland Bank-had to cope with all kinds of problems. Unemployment increased, the market value of real estate declined, and the special nature of mortgage legislation resulted in those two institutions finding themselves stuck with boxes full of keys to houses on which they held mortgages. Homeowners were no longer able to meet their obligations. In turn the banks were unable to meet theirs.
That sums up the reasons which explain how Western Canada found itself in the midst of an economic crisis. Since we are a national Government we have to lend a hand to a region of our country, Western Canada, which finds itself in dire straits. Our duty is to help that region solve the problems it is facing. More than that, we have to assess the consequences of our action if we were to refuse to help the depositors of those two financial institutions which are now in the process of being liquidated.
Private individuals had deposits of about $27 million in the two banks, and I would suggest we cannot let them fend for themselves because there are too many of them. Nor can we forget the unions and their deposits of about $7 million. As we all know union funds come mostly from low wage workers. Are we going to ignore all those small depositors?
The problem is the same when it comes to municipalities: if we do nothing about their deposits we will be asking small depositors, people who must pay taxes on their homes, to bear the brunt of this whole affair, and we are talking about roughly $82 million.
Credit unions are in the same predicament. Religious organizations stand to lose close to $22 million. If one remembers that the money was collected cent by cent, one can imagine just how many people are involved. We cannot ignore those organizations for the sake of $22 million and it is imperative that we continue to protect them. Pension funds and small businessmen account for an additional $6 million, so all told we are looking at about $230 million which directly affect individuals in a relatively small region.
What, then, would be the cost of the measures the government would have to take in this area if we did not compensate them now? It would have to help them directly or indirectly through various social schemes, including unemployment insurance and welfare programs, which would probably cost a lot more than what we are giving now.
We can imagine what loss in income tax the government would incur if we abandoned these people to their own
Depositors Compensation
resources, for small businesses would probably have to close and the Government would lose major fiscal revenues; $230 million for those who have adhered to our bailout package, that is very little.
In other words, what would be the price we would have to pay to rebuild this region which is the most severely affected by these bank failures and to ensure the economic future of its people?
The $875 million provided for under this Bill is certainly a large amount of money, but it is not much in term of helping these people to operate in a recovering economy. The economic policies implemented by our Government over the past few months have already made possible the creation of some 284,000 jobs; what is more, a large number of foreign corporations which have confidence in our economy are currently negociating possible investments in Canada, which should create hundreds of thousands new jobs in this country. Also we should not forget that our policies for the past year only have reduced unemployment by 1.5 per cent to restore the steadiest climate since 1971: bank rates have been greatly reduced, automobile plants have increased their production by 23 per cent, construction has increased by 17 per cent. And if we specifically refer to the West, oil drilling companies have increased their operations by 19 per cent.
It was for all those reasons that I mentioned a while ago that if we had had the opportunity to come to power a year earlier, we would not have experienced all those consequences. We do not want to bail out the bank or the financial institution as suggested by the Opposition. They alter the facts. It is far more dramatic not to compensate the small businessmen and the ordinary Canadians who have so painfully saved.
We may not be happy today to have to pay out such a sum. However, we have to do so to protect and maintain the parliamentary spirit. It is due to the irresponsibility of the previous government that we have to pay and Canadians know it, they are not easily deceived. They know that we are paying for the administrative mistakes of the team now sitting opposite.
For those reasons, Mr. Speaker, I support this Bill as a responsible parliamentarian and all parliamentarians either on the Government side or in the Opposition should do likewise.


Mr. Deputy Speaker:: Order. Are there comments or questions on the Hon. Member's speech? If not, we will resume debate with the Hon. Member for Laval-des-Rapides (Mr. Garneau).


Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, 1 heard the comments made by the Hon. Member who spoke before me. He referred to the reasons why the Government stepped in and introduced this legislation. And like all Conservative Members, he was anxious to put the blame on the previous Government.

October 9, 1985
Depositors Compensation
However, Mr. Speaker, if the Hon. Member for Longueuil (Mr. Leblanc) had taken the time to read the statmenet made by the Minister of State (Finance) (Mrs. McDougall) in this House on March 25th, certainly he would have changed his speech, because according to a Member of this Conservative Government the Canadian Commercial Bank's difficulties were due: "to the Canadian Commercial Bank's operations in the United States and the losses incurred in the United States by that bank".
Moreover, for the benefit of the Hon. Member for Longueuil, I am going to quote what the Minister, a Conservative Minister in his Government, had to say in this House, and since I have the English text, he will allow me to read it in English. Mrs. McDougall had this to say:
The bank recently experienced a sharp deterioration in its U.S. loan portfolio, particularly as a result of lower oil prices. This situation significantly depressed the value of the Canadian Commercial Bank loan portfolio.

If I understand correctly the comments made by the Minister on March 25, 1985, when she announced that the Canadian Commercial Bank was having difficulties, I believe these were in the nature of the difficulties known to exist in the United States rather than difficulties facing the Canadian economy in western Canada. For sure, if the Minister who is now on the spot wants to change the speech she made on March 25, she will give us the reasons. But one thing is certain. If the Hon. Member for Longueuil (Mr. Leblanc) had read that statement made by his colleague, a Minister of his Government, he would not have made such comments.
Mr. Speaker, when dealing with Bill C-79 I have the feeling I am taking part in a demolition project, the demolition of two financial institutions, and the demolition of something which was certainly part of the pride shared by Canadians living in the Prairies and Western Canada. Because this Bill is the death sentence passed on two financial institutions, two regional banks which operated in Western Canada, even though they had operations elsewhere in this country.
What the Government is proposing is using the taxpayers' money to actually cover that part of the assets of those two banks which was in trouble. It is clear to me, according to the statements we heard from Government Members, that the cost-it is not yet known and I will come back to this-will be based on the amount of bad loans and the ability of liquidators to get the best price possible for the assets. I will also come back to this later, and refer to the Hitchman Report which seems to indicate that the Government, faced with the options outlined by the expert, chose the one that was least recommended by Mr. Hitchman himself.
What this demolition project undertaken by Bill C-79 boils down to, is that the overall cost to the Government and its
agencies totals $3.3 billion. In the case of the Northland Bank, it is first a sum of $1,232 billion, which breaks down into $414 million for uninsured deposits, $318 million for insured deposits and a $500 million advance from the Bank of Canada, for a total cost of $1,232 billion with respect to just one bank.
In the case of the Canadian Commercial Bank, there will be an expenditure of $2 billion, of which $532 million will be for uninsured deposits, $275 million for insured deposits and $1.3 billion for the money advanced by the Bank of Canada, for a total of $3,332 billion.
This is a substantial amount, and it will come either from the Government directly through this bill or from the Bank of Canada, which will try to recover its losses. Whatever amount the Bank of Canada succeeds in recovering will lower the amount that the Government can recover under Bill C-79, and whether we want it or not, there will also be the amounts paid by the CDIC, which will be passed on to consumers. Instead of being a tax to be paid at income tax time, this will be passed on as additional costs for banking operations throughout the system.
What will be the real cost of this operation? That is the question, Mr. Speaker. Until now, a figure of $1 billion has been quoted. In other words, after the Government has recovered whatever it can, the net cost would be about $1 billion. For those who have examined the Hitchman Report which was tabled this morning-and I am pleased that it has finally been made public after we had been asking for it such a long time- I can point out that this report states on page 6 that the necessary reserves for bad loans in the case of the Canadian Commercial Bank would be of $1 billion. This is only for one bank. If the report is true, the cost will be $1 billion for a single bank.
How much will it cost for the Northland Bank? We do not know yet, but apparently, it will certainly be around $225 million, which means that the real cost to the Crown will not be $1 billion as we had thought until now, but more like $1.2 billion.
Mr. Speaker, we have asked the Minister of State for Finance and the Minister of Finance, who has the ultimate responsibility for the financial administration of this country, to provide clarification about the real cost of this operation. However, in her comments last Monday, the Minister of State for Finance candidly admitted that she had no real idea of the true cost to the taxpayers, but she certainly did not deny that this cost would exceed $1 billion.
I do not want to go over the entire speech that I made in this House during the special debate on the Northland Bank which the Chair granted to us some days ago, more specifically last week, I believe. At that time, we thought that the Minister would rise to inform us about what was happening to the second bank facing financial problems. However, nothing happened; the Minister spoke for about 20 minutes, and during all that time, she succeeded in evading the issue completely and
October 9, 1985

not saying a word about the Northland Bank. Because of that, we now have no information about this financial institution. We simply know what the newspapers have reported and what we have learned in our conversations with certain officials, which is very little. Yet, the Members of Parliament are being asked to approve a Bill which requests hundreds of millions of dollars, to be paid by the Canadian taxpayers.
Hon. Members will recall that during the emergency debate, the Government was asked some very specific questions, and in particular why the Department of Finance had decided to tie together the fates of the Canadian Commercial Bank and the Northland Bank, which amounted to giving the latter the kiss of death, and in fact simply forced it to close its doors.
Why are we now discussing Bill C-79? Why is the Government now being forced to introduce a Bill dealing with nearly $1 billion? I suggest that the basic reason goes back to last March, when the Government made a commitment, and assured the House and the people of Canada that the bail-out which was being attempted by putting up $255 million for the Canadian Commercial Bank was going to be a success, that the Bank was going to become solvent again and that depositors were not to have any fears of leaving their deposits in that financial institution of Western Canada.
Some of my constituents, Mr. Speaker, had deposits in the Canadian Commercial Bank which came due in April, one month after the bail-out operation, and hesitated to renew those deposits. They phoned the Bank of Canada, and I have the number they dialed, I even have the name of the person they talked to, and that person told them: "If you do not trust the Canadian Commercial Bank, you might as well not go to any bank at all, for they are all alike". This is the information that was given to one of my constituents who phoned the Bank of Canada to find out if the Canadian Commercial Bank was safe. The officer involved was of course not providing an answer on the basis of his own knowledge, he was passing on the Government's message, he was to all intents and purposes repeating the statements made by the Minister of Finance, the Minister of State for Finance, the Prime Minister, the Inspector of Banks and the Governor of the Bank of Canada.
Consciously or unconsciously, whether it wanted it or not, the Government misled depositors in this country who were dealing with this financial institution. They were giving information on the basis of data that were inadequate and incomplete. And now the Minister of Finance, the Minister of State (Finance) and the Prime Minister are obliged to make amends for their oversight and incompetence and to ask this House for authority to spend nearly one billion dollars to compensate depositors. It is because the Conservative Government gave false indications that taxpayers are now obliged to pay the bill. Is it normal that all Canadian taxpayers should be asked to pay for the incompetence and nonchalance of a Conservative Government that last March was more concerned with publicity, with the coverage of the Economic Summit when the Prime
Depositors Compensation
Minister sat on his television commentator's throne in front of Canada's business and labour world? Of course he did not want to give Canadians the bad news that a bank was going to go bankrupt. However, this desire on the part of the Prime Minister to play to the media led him to make a decision in a few hours, and the papers amply documented the process and the sequence of events to make them plausible for the public.
So a decision was made in a few minutes to avoid casting a pall on the Economic Summit, and today, the Government has to make amends and ask the House to consider a Bill that will total expenditures of nearly $1 billion. This is entirely inconceivable and irresponsible!
Mr. Speaker, today we are being asked to consider a very important Bill. In fact I do not think that within our lifetime as parliamentarians, in this Parliament, at least not until the next election, we will again be asked to vote on a Bill whose sole purpose is to spend $1 billion. It is not a social program, it is not an economic development program but just a Bill involving nearly one billion dollars.
In my view, to ask us to do that without having Mr. Justice Estey's report, to ask us to pass a piece of legislation without any indication of the causes which brought about Northland Bank's financial difficulties, as to whether that bank actually is in difficulty or concerning other aspects of its financial statements-We are now asked, yes, the Minister has the gall to ask us to rush through this Bill involving $1 billion without any information, without any data concerning Mr. Justice Estey's report, without information on the Northland Bank, without any reasonably precise information as to the value of the assets of those banks. This, Mr. Speaker, I feel is unacceptable. Coming from a Government I find it amateurish, I find it shameful to ask representatives of the people to rush this through without the basic information needed to make a judgment.
Besides, they will not give us the names of the persons or institutions to whom the money would be paid. 1 totally support the views expressed by the Leader of the Opposition (Mr. Turner) when he introduced the amendment namely that the Bill should not... the principle itself should not be recognized and accepted by this House if we do not have full information, total information, about whom that kind of money is going to be paid to. I think this is the minimum that could be asked from a democratic institution such as this Parliament.
Mr. Speaker, I would also like to recall that another reason why we are asked to pass this Bill today is the statement made by the Minister of State (Finance) on March 29, 1985. Because on March 29, we only knew about the case and situation of the Northland Bank and Members in this House then asked the Minister of State (Finance) whether other institutions were in trouble.

October 9, 1985
Depositors Compensation
The Minister had answered:
I would like to make it clear that other institutions are not being looked at under the circumstances that we are talking about now. I want that absolutely clear for the House, the people of Canada and the depositors in our financial institutions.

We had been told that no other financial institutions were in trouble. So depositors, businessmen, individuals, institutions and municipalities heard supposedly responsible people-at the very least accountable for managing public funds in this country-telling them that no other financial institutions were in a bind. Well, no wonder those institutions and those individuals continued to have faith in the Northland Bank! But now, on September 1, we find out that the Minister had not told us the truth. So today we are again forced to make up for a factual error or mismanagement, but whether we like it or not the ultimate result is the same for the taxpayers-they have to pick up the tab. They have to pick up the tab, Mr. Speaker, and there is something unfair in all this.
A few days we heard that another financial institution, Continental Trust-about which the Minister did not say a word either last March 29-has collapsed, or at least is being liquidated. The depositors? They can be found in every region of Canada even though this financial institution did most of its business in Ontario. Some of them live in Quebec City and they called me. Others are from the Montreal region and they too called me. Among others, I have received a call from Mr. Henri Jones of St-Sauveur who wants me to ask the Government to explain why the foreign banks will be reimbursed in the case of the Northland Bank and the CCB while the depositors are not being compensated in the case of the Continental Trust. How can this be logically explained?
Mr. Speaker, you are indicating that I have two minutes remaining. I shall have to condense my comments substantially. I would have liked to speak about the Hitchman Report, but as far as the Northland Bank is concerned and based on the recommendations contained in this report, I am asking the Government to postpone consideration of this Bill to see whether there would not be another solution to the problems of this bank.
I would like to suggest to the Government a four-part program the purpose of which would be to save the Northland Bank from liquidation and closure.
First, we know that the costs will be at least equal to the losses or bad loans. In one way and another, the costs will be approximately the same. Especially if we look at the Hitchman report, liquidation seems to be the least desirable solution when a bank is having this kind of problem.
First, therefore, if it is true that the potential losses exceed the assets of the shareholders in the case of the Northland
Bank, which means that the assets of the shareholders are zero, I would suggest that the Government purchase for SI and other considerations the assets of ordinary shareholders.
Second, the Government should introduce a special bill, different from this one-the money we are spending now will be lost entirely-to invest in the equity of the Northland Bank about as much as we will have to spend to cover the bad loans of the bank. How much would that cost? Between $150 million and $200 million. We are spending that much anyway.
Third, it should change, if need be, the composition of the board of directors and appoint, if necessary, a new and more competent team.
Fourth, it should guarantee the deposits in the Northland Bank for the next five years, so that depositors could regain confidence in this financial institution.
The purpose of this four-point strategy would be to bail out the Northland Bank at a cost to the Canadian taxpayers, based again on the recommendations of the Hitchman report, which would be a lot lower than the current liquidation of the assets.
This way, we would undoubtedly save money, we would at least keep some people at work and probably save for Western Canada a financial institution which did not deserve to fail.


Mr. Deputy Speaker:: Questions or comments on the Hon. Members remarks? Debate. The Hon. Member for Don Valley East (Mr. Attewell) has the floor.


Mr. Bill Attewell (Don Valley East):: Mr. Speaker, I rise to speak on Bill C-79 which is an Act respecting the provision of compensation to depositors of Canadian Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect of uninsured deposits.
I believe that when all the facts are known, when cool rational judgment prevails, the decision to assist the uninsured depositors in these financial institutions will be seen as being fair, based on all the facts that were available at that time, based upon the unique situation at that time-and I will deal with that point in a little more detail-based on the competence of the individuals who were giving information, and based on the honesty of the individuals who were giving information at that time.
I would just like to quote from the Financial Times of October 7 of this week. It says:
The Mulroney Government's decision to create a commission of inquiry to look into the failures of the Canadian Commercial Bank and the Northland Bank makes good sense. In fact, it will be downright healthy to remove the banking fiasco from the House of Commons, where the matter is getting blurred instead of clarified with each passing day.
In appointing Supreme Court Judge Willard Estey to head the commission, Prime Minister Brian Mulroney said "the factors affecting the situation of the two banks are complex and require thorough and dispassionate analysis."
October 9, 1985

It has become increasingly-sometimes alarmingly-clear in the weeks since the banks' critical conditions became known that neither Parliament nor a parliamentary committee would be likely to deliver the kind of "dispassionate analysis" the whole matter is begging for.
The objectives of the decision included the very strong and supportive ideal to nurture and foster the development of regional banks. Also they included the need to maintain confidence in the banking system. We have a record which is well worth defending, going back some 62 years or 63 years. As Hon. Members know, one has to be very careful in pulling the plug, so to speak, on a financial institution. It can cause a domino effect which not only ripples through the financial factor but comes down very hard on small businesses. The bottom line in terms of the total impact upon Canada could be a tremendous loss of jobs. We have a record worth protecting. I believe the record will show that we tried to act in fairness to thousands of average Canadians. These Canadians, either directly or indirectly, had a stake in the confidence of the CCB and Northland. However, as I indicated already, Mr. Justice Willard Estey has been asked to look into all aspects of the collapse of these two banks. We are hopeful-in fact, we know it because of his competence-that he will explore in depth many roles-those of the external auditors, the Inspector General of Banks, the board of directors, the audit committees of the board of directors, the senior management of the company and the government officials, both at the federal level and at two provincial levels. He will also explore the loan practices, accounting practices, insider information and conflict of interest.
I was a member of the Finance Committee. We looked in some detail at the circumstances in May and June of this year, prior to the summer recess. Based upon the information which we were given-and we were refused certain documents-we had some very clear indication at that time that the renewing of bad loans and the advancing of more funds just to pay for past due interest was not a normal, sound practice. The practice of accruing interest when the principal was not even being paid and taking it into income was not sound. The practice of changing names on accounts just to renew the account and bring it into current standing was not correct. Adding substantial fees to the balance in renewing the account was not correct. Loans made to 100 per cent of the cost, in other words no equity whatsoever in the transaction, was not correct. Spreading the cost of the goodwill in connection with the purchase of the Westland Bank, which I recall was some $18.4 million, was intended to be spread over a 40-year period.
Possibly the record will show that all participants were misled in this situation. I am speaking about information being misleading, being faulty and being incomplete. If the true level of the assistance required was $255 million at that time, that bank would be thriving today. If criminal charges are warranted, I am sure they will be instituted. If other disciplinary action is necessary against organizations or individuals, that will be taken.
I should like to talk a little about the role and the importance of regional financial institutions. The Government believes in regional banks. They are of great benefit to local
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men and women as well as business people, particularly small business persons. Canada is dominated by five very large banks of world class size. In contrast, the United States of America has about 13,000 banks, partly as a result of the interstate banking regulations, but the situation in that country is far different from the one here. Our five large banks have something like 7,000 to 8,000 branches in Canada. Indeed, to start up a small regional bank is not an easy task. One of the principles of making loans is to spread risk. However, when one has started in a given region, obviously there will be some concentration in that local area. If the local area happens to have a concentration of energy industries, that also goes slightly against the risk factor. Those things have to be taken into consideration. There will be some ups and downs.
We feel it is very important, regardless of whether it is western Canada, Atlantic Canada or northern Ontario, to have regional banks. In 20 years or 30 years from now there should not be a total concentration in the financial industry by five or six very large conglomerates. Timing is also important, whether one is starting up a bank or any other type of business. Also there is a little luck involved. Of course luck can be good or it can be bad. In this particular case these institutions were just getting going when a very severe recession hit the country. That was compounded by developments in western Canada, particularly in Alberta. If only very large institutions survived, what would happen to competition and to pricing? I think some bad things could happen. We have seen some early indications. For example, a Minister of the Government of Alberta spoke on television this morning and indicated that some small and medium-sized borrowers were having difficulty borrowing funds.
I should like to talk about legislation for a moment. The Liberals discussed new legislation in 1982, but no concrete action was taken. The laws of the country governing the role of insurance companies and trust companies are some 50 years outdated. My Party, after forming the Government last fall, took action very quickly. A study was commissioned of the Canada Deposit Insurance Corporation; it is known as the Wyman Report. It was completed in April, 1985, and it is under review. A Green Paper was also commissioned by the Minister of State for Finance (Mrs. McDougall). It included nine principles in total. It is very interesting that the first was: improve consumer protection; the second was; strictly control self dealing; the third was: guard against conflicts of interests; and the fourth was: promote competition and efficiency. There were several other key ones as well.
The revisions to The Bank Act in 1980 created a flood of new banks. The figure rose from something like 11 to 70. However, the former Government did absolutely nothing to improve supervisory control.
I should like to deal with the background of the Canadian Commercial Bank at this point. It received its charter in July, 1975. It started business in 1976, with the opening of two offices, one in Edmonton and one in Vancouver. It decided as a strategy to specialize in loans to small and medium-sized

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businesses in the energy service and real estate sectors. Its rate of growth is already on record.
I have already touched upon some of the risks facing new institutions in the growing stage. However, let me get right to the very serious decision in March, 1985. The federal Government agreed to a restructuring, but there were several other very competent, very able people at the table when that package was discussed. I refer, of course, to representatives from the Alberta Government who obviously wanted to see small banks survive, representatives of the Government of British Columbia, representatives of the CDIC, very senior officers from every one of the top six banks in this country, and representatives of the federal Government including the Governor of the Bank of Canada and the Inspector General of the Banks. They, in their wisdom, obtained all possible facts. As I recall, they began on a Friday evening. The deadline to make a decision was not three or six months away, it was that Monday morning.
I can still recall that the Chief Executive Officer of one of the large banks indicated at our hearings that, given the adequate, correct information available at that time, it was not unusual to make a decision of that type based on solid, hard, sound facts. Of course, part of that information is the valuation of loans, which is normally done in a competent way and over-viewed by external auditors from other areas.
There have been some hints, and I believe they are quite incorrect, that valuation is a relatively easy exercise. After all, the bank had something like 3,000 loan files. There are those who wonder why it could not have brought in 200 people to do these valuations on the weekend. It is not that simple, Mr. Speaker. Most lending officers with any experience would agree with me. One must be able to rely on the key people who supply information.
Let me give you a couple of examples of the difficulties involved in valuation, Mr. Speaker. Let us say that a file showed a piece of raw land as an asset. One cannot decide in one weekend exactly what that land is worth. It may be that it is abutting on a very profitable industrial development, but it may turn out that, according to the city plans, the trunk line sewers end there. If so, it is not going to be very valuable. In cases like that, one needs to know the city's development plans, the zoning of the property and how that property might be changed. The valuation of an industrial building, for example, cannot be determined by its number of square feet, number of bricks or tonnes of mortar. The value of a building like that is based upon the value of rentals and the cash flow. One has to have a very solid idea of the nature of the tenants and the expiry dates of leases to know what value could be placed on that building. The same criterion goes for equipment, whether it is oil rigs or construction equipment. To know the value, one must know things like the current contracts for the equipment and the income raised from those contracts. In summary, on the issue of valuation, any five experts in this country must rely upon the information they are given.
I submit that this decision had to be made in quick order. We are not discussing the possible closing of a Gulf refinery, something which one might take six months to discuss. Confidence is key to a financial institution. We could not expect to maintain confidence with people running around all over the place.
All the options were explored. I have already touched upon the people who were involved. They were very senior people and they came to a unanimous decision, based upon the information they had, to go ahead with this support package. Realizing the very unique circumstances that existed at that time and the difficult economic situation, they realized that they were dealing with the future and survival of regional banks. They also decided to try to find a marriage partner for the Northland Bank.
Once the decision was made, those involved had to speak with confidence from that point on. Some people have been critical of the statements of confidence made by the Governor of the Bank of Canada, the Minister of Finance (Mr. Wilson), the Minister of State for Finance and the Inspector General of Banks. Someone who would argue with that is someone who just does not know what he is talking about. Having made that decision, one does not begin to say, "I think that bank might survive", or "Maybe it will succeed". Once that decision has been made, those who have made the decision have to get behind it and do everything possible to support it.
I would like to touch briefly on the profile of the uninsured depositors. With the CCB, there were credit unions with deposits totalling $6.8 million. In other words, thousands of average Canadians had their savings in that institution. Municipalities had $41.1 million on deposit. Again at risk is the money of many Canadians. After all, a municipality receives its money through special surtaxes on property taxes or other measures. Shool boards had $3.1 million on deposit; religious organizations, $2.3 million; labour unions, $6.5 million; and hospitals, $5.2 million. The Northland Bank's depositor profile is very similar, except that charitable organizations had a total of $13.2 million on deposit.
Yes, many foreign banks were trying to help the institution survive. As well, some other large depositors were helping it to survive. We have asked members of the Opposition, without receiving any clear answer, what the criteria for choosing would be, if it would be valid to start to pick and choose which depositors should be saved, and I do not think it is valid.
Looking ahead, I think we need to get on with the new legislation, with dealing with the CDIC and with the reform of financial institutions. Clearly we must strengthen the supervisory role over banks. Clearly we must give the Minister more power to act when the alarm rings. That supervisory role has not been in place in a strong enough way.
Regarding the CDIC, we should decide what the limit of insurance should be. We need to decide if the limit should be greater than $60,000 and if there should be co-insurance. Dealing with the reform of financial institutions, there are many, many items with which we must come to grips. These include ownership limits, concentration of power, self-dealing,
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conflicts of interest and leverage. Should all institutions be able to leverage 20 to one or higher? The role of the financial holding company, the role of Schedule C banks and the rest are all matters with which we must come to grips in order to put in place the mechanism that will establish on an ongoing basis a proper control of financial institutions so that we can return to making the record of which we in this country have been so proud for so many years.
In summary, I have made three points. First, I believe Bill C-79 should pass so that we may assist the many unions, school boards and municipalities that stood by this bank. Second, I think we should have confidence that Mr. Justice Estey's examination will determine all the facts and whether or not there was any wrongdoing. I think it was a great move to place the matter under his stewardship.
I would like to touch briefly on the important matter of privacy. I believe Mr. Justice Estey is the one who should decide on the matter of privacy. There is a law in this country that provides for privacy for both borrowers and depositors. I think it is critical that we maintain that. Mr. Justice Estey can look at the matter of privacy to help him determine if there was any wrongdoing, but I do not think we should see a knee-jerk reaction to a law that has been in place in Canada for over 100 years.
Finally, let us get on with revising the legislation regarding the CDIC. Let us get on with the reform of the regulations governing financial institutions to prevent the recurrence of situations like the one faced by the CCB and the Northland Bank.


Mr. Wilson (Swift Current-Maple Creek):: Mr. Speaker, I would like to congratulate the Hon. Member for Don Valley East (Mr. Attewell) on his excellent contribution to this debate and also for his outstanding work on the Finance Committee. At the end of his remarks, he touched briefly on the matter of the privacy provisions and the revealing of the identities of depositors. My personal view is that to reveal those identities would cause irreparable damage to financial institutions because most people expect that their own names and the amounts of their deposits ought indeed to remain confidential. That is basic to our deposit-taking system. Would the Hon. Member care to comment with respect to the rationale behind the comments of those who would seek to apparently destroy those privacy provisions?


Bill Attewell: Mr. Speaker, I wish, through you, to thank the Hon. Member for his question. Privacy is critically important to all individual Canadians for a number of reasons. We need to have confidence in any dealings we have that they will remain private. We have laws under our Income Tax Act which state that no person, including Members of Parliament, is permitted to have access to the income tax files of an individual unless the individual says, in writing, that access is permissible. That is important.
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In the committee deliberations we spoke about the possible risks in this country of more and larger data banks being built. These data banks contain a great deal of personal information with respect to loans, income and other facts. We have some genuine concerns in this regard which will be dealt with in our recommendations with respect to tide selling, whether it is information passed on from magazine subscriptions or what have you. If these data bases contain critical information, and they will, which should be for the private and sole use of whatever individual institution the person has dealt with, be it a mortgage company or a bank, it should not be passed on the someone else. When individual Canadians take a loan from an institution, or when they make a deposit to an institution, they are doing so in keeping with the 100-year old tradition which says that if something is private it is private. Because of the regrettable problem, and it is regrettable, we should not break the principles of this long held tradition which is so important to so many Canadians.


Mr. Penner:: On a comment, Mr. Speaker. I listened to the reply of the Hon. Member. I can only say that his argument with respect to privacy and confidentiality is fatuous in the extreme. We all recognize the right of confidentiality. However, when one comes to the Government of Canada and its taxpayers and asks for an ex gratia payment, is the Hon. Member saying that should be kept private? Surely, if one wants privacy and confidentiality then ones does not come with both hands out asking for an ex gratia payment. They can have their confidentiality but they will not receive their payment. They cannot have it both ways.


Mr. Deputy Speaker:: Does the Hon. Member for Don Valley East (Mr. Attewell) wish to reply?


Bill Attewell: Mr. Speaker, I think the Hon. Member has missed the point. Confidentiality and privacy must be maintained. I wish to ask the Hon. Member this rhetorical question. What does he want the particular information for? I am strongly in support of Mr. Justice Estey having the complete information available to him so that, in his wisdom and with his legal advisers, he can decide if any wrongdoing has occurred. If there has been any wrongdoing, then let him proceed with alacrity and haste. However, I do not think that such private information should be within the purview of a 20-member committee of the House or any other group. We can look at the objectives with respect to why the Hon. Member may want to have some facts, but let us face them so that we can maintain the tradition while getting on with the purpose of why they may be interesting and available to use.


B. Keith Penner: Mr. Speaker, the Hon. Member has not helped the situation at all. He is talking about the Parliament of Canada which is being asked to award unspecified amounts to unspecified persons or corporations and he dares to ask: Why does the Hon. Member want this information? It is as if the Hon. Member is someone who just wandered in from the street to see what was going on and was nosy about this particular issue. That is the Parliament of Canada. Parliament is being asked to award to people whom we do not know a total of more

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than $1 billion. We do not even know the exact amounts. Yet, the Hon. Member dares to say that we should not ask any questions about who these people are or how much they will receive. That is nothing more or less than a downgrading of the Parliament of Canada. It is an insult to this institution. Surely, the Hon. Member ought to recognize that.


Bill Attewell: Through you, Mr. Speaker, I would like to tell the Hon. Member what is insulting. It was insulting to work on the Finance Committee which for five or six months held hearings across the country-and I was in attendance at practically every one of those meetings-while some Hon. Members opposite seemed to spend more time with the television cameras in Vancouver and Calgary than they did at the meeting table. Having heard all the deliberations, we now come to decide what we do about the situation. Let us deal with the report-writing stage which started last week and which met for three full days. Members of the Hon. Member's Party were in attendance at the hearings over the number of months which they took place and yet his Party did not send one of its members to help in the preparation of the report. They did not even send a message to the Chairman to explain why they would not be able to attend that critical stage of the whole process. I admire the Hon. Member who can get to his feet with his histrionics and rhetorics waving his flag. However, I wish the members of his Party would have had a little more respect. The meeting with respect to the report writing was behind the scenes. It was an in camera meeting and television cameras were not in attendance. If members of his Party had attended, then they would have had to roll up their sleeves to do some work. If they would contribute in that way, then the Hon. Member might make a little more sense as well.
In closing, I stick to my comments. I think they are valid and right for Canadians. I think if we were to take a poll of Canadians we would find them telling us to stick with it because that is what they want.


Mr. Deputy Speaker:: Resuming debate. The Hon. Member for Thunder Bay-Nipigon (Mr. Epp).


Abram Ernest Epp: Mr. Speaker, I am pleased to join in this debate on the amendment that the House decline the giving of second reading to Bill C-79 to compensate the uninsured depositors in the Canadian Commercial Bank and the Northland Bank.
The brief exchange during the last period of questions and comments has usefully disposed of the key points which the preceding speaker has made. What I would like to do in considering the question is return to some of the larger matters before us which the Government should have considered and which the Parliament of Canada has a real obligation to consider. Clearly, we have an important problem before us. We have a matter of bank failure. No one can doubt that. We have the fact of a ministerial failure, a failure by Government, which it would seem to me is equally apparent and which the Prime Minister (Mr. Mulroney) should long since have recognized in providing some type of an answer.
Late last winter we saw the difficulties with respect to the Canadian Commercial Bank and a rescue package was put forward. Gradually we had a revelation of what was wrong with the situation. Then, suddenly, just before this session of Parliament resumed, it was announced that not only had the Canadian Commercial Bank fallen but the Northland Bank had fallen as well. At an earlier stage we were told that the situation could be saved. The Government put together a rescue package. Then, we had the failure. Now, we have the suggestion being made that the cause of the failure was not necessarily the mismanagement of the bank. In fact, we have heard a good deal of partisan slanging in the House with respect to the preceding Government's policies being responsible for the difficulties which have arisen.
Whatever the source of the problem may have been, the reality is that the Government's supervision of the financial system of Canada has been inadequate, which has led to the taxpayers of Canada being faced with the need to pay hundreds of millions of dollars. In fact, when this Bill becomes an act, if it does, it will mean a cost of $875 million. It is possible that the cost of this liquidation will be a lot more than that. The Deposit Insurance Corporation, which is responsible for the insured depositors up to $60,000 under the existing law, is $1.2 billion in the red. If there is to be rapid repayment to the insured depositors of their $420 million, it is quite possible that the taxpayers will have to advance that money, if they don't end up to be actually responsible for it. They policy this Government is following will put us over the $1 billion mark in its attempt to clean up the mess which has developed in these two banks.
I would like to say something about how that situation developed. I am talking in terms of the economic difficulties of the early 1980s. The high interest rates forced on us by the Americans were just as hard on us as any policies followed by the Canadian Government. Those high interest rates slowed down economic activity in this country.
The failure of these banks is because of a long history of arbitrary power held by Canadian banks. They have refused to be subject to inspection by any public authority. In fact, there is a very long history of the banks of Canada saying "We will take care of ourselves. You stay out of it". One can go back to the time of the last bank failure in the early 1920s, and find, quite interestingly, that the bankers held to the position they had always held back to the beginning of the century and earlier, that they would take care of themselves, their investors, shareholders and depositors. The public authorities had to stay out of it. Back in those days, one banker, H. C. McLeod of the Bank of Nova Scotia, argued that there should in fact be inspection of the banks but he did not really get very far. The system of inspection which gradually evolved with the Inspector General of Banks is, I believe, recognized by all of us to be inadequate. Given such a situation, which I think the last Government knew about, and which is certainly no secret to the present Government, there should have been the most anxious care taken when it became clear that there were
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difficulties in some of the banks. The Minister of Finance (Mr. Wilson) should have immediately looked at this situation when the present Government assumed power.
The arbitrary power of the banks, incidentally, Mr. Speaker, is very well exemplified in their opposition to organization by their workers. This is the situation in Toronto at the Canadian Imperial Bank of Commerce where its workers are attempting to achieve recognition and negotiate a first agreement. The attempts of the banks, not just in Toronto but across the country, to prevent the workers from exercising their right of association, which the Charter of Rights and Freedoms has attempted to establish for Canadians in all their varied circumstances, is a good illustration of how the banks today will still have it their own way and the devil take the hindmost. It does not seem to matter whether the issue involves overworked and underpaid workers, or the taxpayers of the country who must face the consequences of abusive power and irresponsible lending and the bank failures which result from that.
The matter of the irresponsibility of the Ministers involved is quite vital to the confidence of Canadians generally, and of the people in our financial institutions, in our Government. It seems to me that there is no choice but to say that the Department of Finance, whether under the Minister of Finance or under the Minister of State for Finance (Mrs. McDougall) acted irresponsibly in this situation. Whatever the causes of the difficulties may have been, the fact that a bail-out package was put together so quickly, and others were sucked into it, that guarantees were given and then the institutions were allowed to go on about their business for several months before it became clear what the situation was, allows one to conclude that the responsibility which the Minister of Finance should have exercised was entirely lacking.
It is laudable, after 62 years of no bank failure in this country, to be determined not to let the first one occur at this early point in a new Government's life. However, it is not laudable to think that the statements of the bank were accepted. If the Minister of Finance had known anything of Canadian banking history, he would have realized that these institutions got into difficulties sometimes because their officers and executive were irresponsible and loaned money on assets which were not sufficient and they were prepared to play fast and loose with the books. One would have thought that anyone with any measure of prudence when faced with this situation would have decided that a very close look should be taken. I am not particularly impressed when the Hon. Member for Don Valley East (Mr. Attewell) argues that it takes a great deal of expertise to assess the quality of land, buildings or what have you, because it is not really the buildings or land which are the banks assets, it is the loans which have been incurred by others which are owed to the bank. It should not take a very long time to consider the payment record on those loans and determine whether in fact they are solid assets.
It seems to me that a relatively small group of people, given the free run of the bank, as they should have had that weekend, would have discovered pretty quickly that there were all kinds of supposed assets on which payment was not forth-
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coming, assets which would have to be drastically written down if not tossed out completely. It is precisely out the failure of the Department of Finance, and its officials, to ensure that that kind of review was taken that a profound difficulty arose. Instead, the Government put together a package and tried to assure Canadians that this institution was safe, and it is that action which Ministers and private Members support as responsible action. Once the Government had involved itself in that way, it would feel politically and, at the very least, morally responsible for the institution. The taxpayers of Canada face the abominable result. They face a situation in which the existence of a Canada Deposit Insurance Corporation is inadequate to solve the problem. They face a situation in which the Government thinks it has no choice but to turn to them to provide the funds to cover these enormous deposits which the insurance would not cover.
Therefore, it is in fact the failure of the Minister of Finance and of the Minister of State for Finance and their officials. They the Ministers, of course, are the persons responsible to this Parliament. It is their failure to ensure that what they were doing was properly done. It is their failure, once they had involved themselves, to ensure that what they were presuming to guarantee would in fact continue to stand which has created a situation in which $1 billion, give or take, and who knows how much more by the time the banks have been liquidated, is going to come out of the pockets of the taxpayers of Canada.
The Minister of Finance is preoccupied with deficit reduction. He is very concerned about reducing the call on the lenders of Canada. Yet he faces a situation in which his deficit is increased by $1 billion. What does that do to create confidence in this Government which presumed to be so businesslike? There have been appalling failures in regulation, in supervision and in the responsibilities of the Department of Finance. If we did not have such a shabby Government, Mr. Speaker, as it appears to be these days, with the departure of some Ministers while others-admittedly higher in the Cabinet pecking order-continue on, we would surely have had happen what, in the long traditions of Parliament, is the only honourable course. The Minister of Finance would have given up his position, would have said, "If I am compelled by the mistakes I made last winter to demand $1 billion from the Canadian taxpayers, I have to go". The Prime Minister would then have to find someone who could renew the confidence of the Canadian people in the Government, the House of Commons, these persons in the Canadian financial system and throughout our society. The Prime Minister should have long since asked for the Minister's resignation. He should have found himself a Minister of Finance who was not such a babe in the woods, who recognized the importance of his job and that it was just not a matter of trying to reduce the deficit he is responsible for, but that the institutions of the Government, and the financial and economic institutions of the country have to be maintained in their proper way.
When, because of the irresponsibility of this Government, the taxpayers face a Bill to totalling $1 billion, what are they

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to do? It will be three years before the next election but I do not imagine they are going to forget these things. If the ladies and gentlemen to the number of 211 who came here thought they would reign on for some indefinite period, I suspect that the further back one goes the more doubt there must be about this piling up of mistakes and irresponsibility on the part of Ministers. One can only hope that because of the wisdom gained through contemplating the next election we will see some measure of responsibility.
This Bill does not deserve to be passed. The taxpayers of this country do not deserve to pay the Bill. If they have to pay it, they demand that responsibility be exercised by the Prime Minister. They demand that the Minister of Finance go and that we get someone we can really trust.


Mr. Deputy Speaker:: Questions or comments? Resuming debate.


James (Jim) Stewart Edwards: Mr. Speaker-


Mr. Deputy Speaker:: I am sorry to interrupt. I would like to advise all Members that from now on speeches will be limited to 10 minutes without questions or comments.


James (Jim) Stewart Edwards: Mr. Speaker, I appreciate this opportunity to speak in the debate on Bill C-79. I was disappointed in the paucity of verisimilitude displayed by the previous speaker. I am also disappointed in a newspaper which used to portray itself as one of Canada's great newspapers, my own city's Edmonton Journal, which said in an editorial on October 2:
By trying to blame the Liberals for the collapse of the Canadian Commercial Bank and the Northland Bank, the government shows it is bankrupt of any sense of responsibility for its actions.
We have an example here of responsibility to small depositors, credit unions, and charitable organizations across Canada. We have a demonstration of responsibility not only to western Canada but to all parts of this country. Come election time I think that responsibility and its exercise will be recognized in the most positive fashion.
We have as well a responsibility in some way to redress the wrongs whereby, due to the National Energy Program, $17 billion were sucked, sumped and siphoned out of the economy of western Canada. To compound that indignity by siphoning another $1 billion out of the western economy would be the most grievous fault, immoral, unethical and wrong politically. We could have slimed out of it, I suppose, but we face our responsibilities. We do not slime as others might have done.
Western banks will some day grow and thrive and we hope that time of healing will arrive soon. There are some nascent western banks now which we hope will weather this storm. We hope that a new atmosphere of trust can be built on the solid plan which is before us in Bill C-79. The consequences, had these banks gone under in March, would have been absolutely devastating to western Canada.
Why should we compensate the uninsured depositors? That is the first question that has to be answered. As the Minister of State for Finance (Mrs. McDougall) has said many times in
this House and outside, we are compensating these ordinary Canadians because the situation facing the Canadian Commercial Bank and the Northland Bank reflects unique and particular circumstances. These two banks accounted for less than 1 per cent of the total assets of the Canadian banking system. However, they provided important support to economic activity in western Canada at a critical time.
A word now, Mr. Speaker, about the context in which these banks grew. The western economy grew rapidly because of the energy boom in the late 1970s. During that boom capital was short in Alberta, and the new banks recognized their opportunity to supply the demand. Because of the boom conditions the banks depended mainly on the energy, real estate and construction sectors which were growing most rapidly. That is the context in which the banks fell. No one in Alberta or in western Canada, or indeed anywhere in Canada except perhaps the cabal which perpetrated the NEP upon us, predicted the critical recession which hit in the early 1980s and came to its nadir in 1982. No one could predict the depth of that depression, for that is what it was in Alberta, from which the western economies have still not recovered. To a large extent that depression was imposed on the western economies by the national Government in the form of the NEP. This policy gravely destabilized the economic situation in western Canada and it came at the same time as major fluctuations in world energy market conditions and the U.S. deregulation of gas prices. Alberta and the other energy producing provinces experienced much uncertainty and loss of confidence in the oil and gas industry, and consequently in the real estate industry, especially regarding investment. These were, of course, the very sectors upon which the CCB and the Northland Bank depended.
I would like to make reference, if I may, to the remarks of the distinguished Right Hon. Leader of the Opposition (Mr. Turner) made in this House on October 7. That gentleman said, and he was referring to September 1 and September 9 when Parliament reconvened:
We on this side of the House were conned that time. We were conned. The chartered banks were sucked in.
Earlier in the same speech he also said:
That bank was badly managed from its inception.
The question that remains is: If the bank was badly managed, where was the right hon. gentleman's Party for the first seven or eight years of its life? Where were they?


Mr. Taylor:: He was where he is right now, out of the House.


James (Jim) Stewart Edwards: The Right Hon. Leader of the Opposition said that the Official Opposition supported the emergency procedures, the bail-out if you like, because it was told the bank was experiencing a few temporary problems due to some questionable management decisions. The bail-out, Mr. Speaker, was designed to be successful and render the bank solvent and viable once again. That was the basis for our Government's decision at that time. The western Canadian economy was far less stable than was thought at that time. That is not the whole explanation for the collapse of these banks, but that
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is for Mr. Justice Estey to decide. However, it must not be underestimated in any discussion of the banks' failure. The economy of Alberta in particular is still suffering the effects of the NEP. According to figures from the Conference Board and Statistics Canada, the unemployment rate in Alberta, which rose from 3.9 per cent in 1979 to 10.8 per cent in 1983, is down slightly this year but it still stood at 9.7 per cent last August. Housing starts numbered 39,947 in 1979 and fell to 17,000 in 1983, and the Conference Board forecast for 1985 is a mere 5,900. Clearly this sector has not recovered from the devastation of the NEP. Some further statistics. In the construction industry the value of work purchased in millions of dollars went from a peak of 14,491 in 1981 to 9,674 in 1984. The Conference Board forecast for this year is 10,835. The real estate industry is still in a serious slump. There are sales going on in the residential field but the prices are bottoming out. While the average value for a Multiple Listing System transaction reached $106,788 in 1981, in the second quarter of 1985 it was down to $79,053, the lowest in a decade.
What is the responsibility of the Government in this whole situation? It has to be to recognize that the blame for the collapse of these banks cannot be placed squarely on any one Party. Our bank regulatory system certainly needs improvement. I think the Hon. Member for Don Valley East (Mr. Attewell) detailed that for us. The CCB's loan portfolio was in a more serious condition than was made apparent in March. The support package did not entirely succeed in restoring market confidence in the CCB and deposits eroded steadily. As the Minister of State for Finance said, those who kept their deposits in these western banks during the depression helped to cushion the serious impact of the recession on western Canadians. As the Minister of State has also said, unless those depositors are compensated quickly, their losses will result in job lay-offs.
The uninsured depositors of these banks include provincial Governments, municipalities, Government agencies, colleges, hospitals, individuals, small businesses, small financial institutions, Canadian and, yes indeed, foreign banks, investment dealers, and credit union centrals. The Government depended on the support of the depositors who continued to participate in the effort to preserve the viability of an important financial institution.
At stake is a larger element of credibility. The long-term larger issue has to do with our credibility world-wide. Much can be made of the inter-relationship of the banking system of Canada with that of the world. We have to recognize that the Government of Canada must send a strong signal to the rest of the world that banking in Canada is safe. This legislation does a great deal to drive that point home. I notice that the Federal Reserve Board of the United States has said that it will increase the frequency of bank examinations and make other changes to strengthen bank supervision. That is another country where these difficulties are being recognized and met head on.
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I would like to say a few words about the responsibility factor of the Government. The Member from Thunder Bay appears not to have confidence in the Cabinet Ministers responsible for this decision and this legislation. I would like to go on record saying that I have nothing but the highest admiration for the steadfastness, serenity, consistency and candour of the Minister of State for Finance and the Minister of Finance (Mr. Wilson) of this country. For that reason, I am speaking in support of this Bill as an Edmontonian, an Albertan, and a Canadian. It is time to stand in defence of our banking system, of regional banks, and of Bill C-79 which will restore confidence and bring justice and equity to the ordinary people of Canada.


B. Keith Penner: Mr. Speaker, as has been mentioned on several occasions in the House, it was only last March that the Minister of State for Finance (Mrs. McDougall) stood in her place and gave the House unequivocal assurances. She said in effect that if Parliament would approve an aid package, a bail-out for the Canadian Commercial Bank of $225 million, all Members of the House could be assured of several things. First, she said that they could be assured that the bank would then become viable. Second, she said that in short order the bank would become profitable and, third, that in due course the money that the Government had advanced would be returned to the Government so that the taxpayers would not be out of pocket in the long run. Finally, she said that by doing this we would ensure that other banks would be protected from failure.
These assurances were given and my Party accepted them in good faith. Among the reasons that we did so is that my Party believes in the decentralization of the banking system. We believe that well-managed, well-run, competently administered regional banks are good for Canada. There is no question that they are needed. However, the corollary is that badly run banks, trust companies, credit unions, or any other financial institutions deserve no support whatsoever and certainly deserve no special consideration from the Parliament of Canada.
Let us talk about good management. We now all have copies of the report by George C. Hitchman. On page 3 he said that he advised Mr. McLaughlan, President of the Canadian Commercial Bank, that moving a bad loan to a new name and showing it as a good loan was unacceptable. Well, Mr. Speaker, so much for well run or badly managed regional banks. The Minister of State for Finance gave the House assurances which were backed up by her senior colleague, the Minister of Finance (Mr. Wilson), himself. Those Ministers have been proven wrong. Now that we are faced with Bill C-79, my Party says, "Fool me once, shame on you; fool me twice, shame on me". That is why we will not support Bill C-79.
The incompetence that has been demonstrated in this bank fiasco goes well beyond the two Ministers in question. It involves the entire Government and that is frightening. When the Minister of State for Finance was asked whether the Prime Minister (Mr. Mulroney) had interfered and caused her and the Minister of Finance to act against their better judgment

October 9, 1985
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she replied that it was a collective decision. That is an admission that in dealing with this matter and making a $1 billion blunder the entire Government of Canada revealed its lack of competence and that it does not possess good judgment. That is the issue with respect to Bill C-79. The Canadian people and Parliamentarians are not being fooled at all by hiding the truth behind some far-fetched and phoney reference to the National Energy Program or the lack of concern for regional financial institutions or the lack of caring about western Canada. We can all see through that guise.
This bank failure fiasco is the most distressing and most disturbing public issue perhaps in this century, certainly within the time of my generation. This fiasco is costing Canadian taxpayers $1 billion. It is a $1 billion error at a time when there is little money available for genuine needs in this country. There is no money for expanding regional development programs or for all the direct job creation that we ought to have. There is not enough money to help the farmers. Laid-off workers who have lost their jobs as a result of plant closures have to spend their precious severance pay before they can draw unemployment insurance benefits. There is not enough money for foreign aid. There is no money to help native communities by giving them such basic things as a good supply of drinking water or the means to deal with sewage treatment. There is not enough money for any of those genuine needs, yet Parliament is being asked to provide $1 billion for uninsured depositors. Most of that money will go to foreign banks, Canadian banks, corporations, and other wealthy individuals.
There is one simple principle that I subscribe to which is shared by members of my Party and that is that we should help first those who need it most. Bill C-79 is the reverse of that, it says to help first those who need it least. I know that some of my friends on the Government benches have already asked and would want to ask again what is to become of those charitable organizations, those poor municipalities, those small credit unions, and those pension funds. Let us clear up that issue. First of all, most of the payout will not go to those organizations at all. It will go to the foreign banks, Canadian banks, well-to-do corporations and wealthy depositors.
Second, we know that in cases of genuine need as a result of this or any other bank failure, the Government could be generous with the full support of Parliament and the bill would be much less than a billion dollars. Where hardship can be shown, help can be extend. There would be no problem because Canadians would expect no less of the Government and no less of Parliament.
However, I expect that in this list of depositors there would be very few who would fall into that category. Take, for example, the concern some Members have expressed for pension funds. Let us remember that nothing at all is being done for pension fund shareholders. They are at the end of the line and will, in all likelihood, get nothing.
Bill C-79 cannot be justified or rationalized on the basis of helping the poor, the needy or destitute. Bill C-79 is not a
"little guy's'' Bill. This bank fiasco issue can be understood in these terms: very big Government, the Government of Canada, new and inexperienced, became mixed up in the complexities of the financial world and got its fingers burned along with some of its well-to-do friends. Bill C-79 is not really a Bill to help anyone, it is a Bill to bail out the Government at taxpayers' expense. It is a Bill to save the Government from acute embarrassment caused by its inexperience and incompetence.
What we have seen in this bank fiasco issue is serious and grave mismanagement on the part of the Government of Canada. My constituents would be outraged with me if I were to vote in favour of Bill C-79.
While talking to my constituents in the last while, I have been saying that we must reduce our demands. We are living in a time of rising Government deficits and we must focus our attention on needs and may have to postpone our wants. Bill C-79 is not a needs Bill. It is a Government face-saving Bill.
Canadians are rapidly beginning to see that what is in charge and control here in Ottawa is incompetence. This bank failure fiasco will continue to haunt the Government until the dying days, just a few years hence. Parliament has been fooled. Its traditions have been trampled. There has been bad judgment and mismanagement. There has been a monumental bungling.
Now, the taxpayers of Canada are asked to dig down and fork out at least a billion dollars and perhaps more. Bill C-79 must be stopped dead in its tracks. That is my position and the position of my Party. When Canadians once again go into the polling booth, most of them will say that that was their position too.


Geoff Wilson: Mr. Speaker, as a western member of the Finance Committee, I am glad to enter debate on Bill C-79 because I believe it is of particular importance to western Canada.
In March of this year, in good faith and based on available regulatory information, an attempt was made to preserve the viability of the Canadian Commercial Bank. That western regional-based financial institution, like all others in the western region, suffered considerable hardship as a result of global inflation and the disastrous effects of the National Energy Program. That program chased billions of dollars in investment out of Canada. It was a program of confiscation without compensation. It robbed Alberta of its vitality and caused serious ripple effects in the neighbouring provinces of British Columbia and my own Saskatchewan.
It should, therefore, be no great surprise that real estate values collapsed, along with other energy related assets in western Canada. The western based institutions, with a heavy loan concentration in energy and real estate, suffered a considerable erosion of their own security portfolios. In 1980, that security may have been fairly valued at 100 cents but today it is valued at perhaps 30 cents. The fate of those institutions that lent 50 cents or 60 cents on the dollar, on the face of that security, is quite evident.
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The prime cause of failure of all of these western regional institutions, be they Canadian Commercial, Northland, Pioneer Trust, Western Capital Trust, Northwest or some of the credit unions, is quite clear. It was the tremendous loss of asset value owing to that infamous National Energy Program.
The Liberal Opposition whose policies caused these difficulties now seek, incredible as it may seem, to castigate the Government for an earnest attempt to preserve the integrity of the financial system and its western Canadian institutions. Had the Government allowed CCB to fail back in March, imagine the fuss, the hue and cry, the weeping and wailing and recrimination from the Opposition. The Government would have been categorized, quite properly, as being insensitive to western Canada. We would have displayed that same uncaring attitude to western Canada that characterized the previous administration.
The Opposition Parties, correctly I believe, agreed to the efforts to save CCB. Admittedly, with 20/20 hindsight, it now appears that attempt was doomed for two reasons about which neither the Government nor the Opposition was aware. The first was the run on deposits and the other was the eroded state of the loan portfolio. The key to this is the loan asset values-a faulty foundation which collapsed the financial house.
Why was more information not readily available? It now appears that the regulatory system was at fault. The rules for reporting, inspection, enforcement and supervision of the financial institutions are grossly deficient for today's marketplace. Some of these rules date back 60 or 70 years. They permit double counting of capital and the reporting of loan interest arrears in a way which make the loans appear current. They permit the taking of income on phoney restructuring deals, self-dealing and the milking of CDIC.
Most financial institutions are well run and well managed by competent and capable people. However, there are exceptions and today's rules require updating to deal with the unscrupulous. The financial community has shifted from the days of the clerk with the quill pen and green visor to the modern age of computers and electronic processing of information. It is an age in which even national boundaries mean little. We are now living in a global economy and the rules pertaining to the changing circumstances must be rewritten and codified.
It may be asked why this was not done earlier. I suggest that such a question be directed to the previous Government whose survivors now pretend to be in some state of anxiety over this Bill, one which enables payment to the depositors of these institutions who listened in good faith and lent their support to the rescue attempt. The Official Opposition, when in power for the previous 20 years, not only laid the seeds for destruction of these western institutions, not only destroyed Canadian unity, but also had the opportunity to write new rules and regulations for the conduct, management and governance of the institution. Did they do so? No. They failed in the area of financial regulation just as they failed in the energy sector and in every other way. They left our Government with a mess of monumental proportions and now stand in the House, apparently
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without shame, seeking to shift the blame for their mismanagement and inadequacies, their lack of concern and squalid performance.
They seek to load all this baggage on a new Government which noted the need to reform the regulations of the institutions from the day it took office. Our Government announced its intention to do so last November. During the winter, the Government developed a discussion paper-the Green Paper on the Regulation of Institutions which was issued in the spring. This Green Paper has been studied almost daily by the Finance Committee. Extensive hearings have been held and its report is now being formulated. That report will lead to new legislation that will update and modernize regulations and provide means for inspection, supervision and enforcement. It will provide for sanctions and penalties for self-dealing and conflicts. That report will deal with deposit insurance and hopefully signal a new era in federal financial regulations so that all Canadians will know the rules and limits and adhere to them.
Clearly, the Government has paid more attention to the financial institutions in the past 12 months than the previous Government did in 20 years. The Government is committed to national reconciliation and economic renewal. The rescue attempt was part of that process. So too is this Bill which should now be read a second time and sent to committee.
Some of the questions being raised by Members do not appear to be related to the principle of the Bill. I believe that the committee is the appropriate place to deal with some of those questions. We must remember that it is the principle of Bill C-79 that ought to concern us today.
The Bill is intended to do something that is not without precedent in our system. Just last spring we were dealing with another Bill which did very much the same thing for depositors in Pioneer Trust. At that time I do not recall any prolonged call for the names of the individual depositors who were to receive reimbursement for the uninsured portions of their deposits. When we look at the contents of this Bill we must be struck by the element of simple justice that it contains. It offers an unusual but appropriate solution for the problems faced by many people in western Canada.
I know that some members of the Official Opposition may find it difficult to relate to the problems of western Canada but this Government considers it a priority and a duty to respond to legitimate calls made on it from all parts of the country.
What is the solution? Clearly the solution is to move to reimburse the uninsured depositors.


Ian Deans: No, it is not.


Geoff Wilson: The Minister of State made the very point on Monday, when she spoke to this Bill, that its provisions were not to be taken as precedents. The provisions are unusual but they are also appropriate to a

October 9, 1985
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particular situation, and they meet reasonable expectations of those most intimately involved with the present problem, the depositors.
Although this point of view has been dismissed by the Opposition I think it is important as we look at this matter to remember why many of the individuals and small businesses are involved at all in the affairs of CCB. After the events of last March it would be unreasonable to have expected individual depositors to conclude that the bank was unsound and to have removed their deposits. Indeed, fairly clearly the federal Government, the chartered banks and the two provinces which participated in the rescue package did not want depositors to withdraw.
It may well be that if there were a way to differentiate between depositors as to those who were sophisticated enough to take a chance, knowing their options, that they could be excluded from the Bill. However, there would still remain those who trusted the words and actions of two levels of Government and the chartered banks. Such depositors, by and large, are those who do not have the facilities to make complicated judgments about banks. They are people who have savings, perhaps after a lifetime of hard work, which they left in the CCB on the apparent recommendation of the Government.
Yet, Mr. Speaker, it appears that some Hon. Members are suggesting that there is no urgency about helping these people out of a problem which they did not create themselves.
As for the option of reimbursing some depositors, but not all, I find it hard to believe that this could be seriously entertained by anyone. It could not be done by class of depositor without singling out one or two groups of institutions for discriminatory treatment. Would we send the message that foreign banks could not expect equal treatment? Would we tell labour unions or pension plans that they are not to expect the same treament that we propose for individuals and small businesses?
I see no advantage to anyone in keeping this Bill from committee. There is urgency in the matter, and I ask all Hon. Members to agree to give this Bill second reading, and let the committee start its work. Thank you.


Ian Deans: Mr. Speaker, I want to begin by saying that I am sick up to here listening to the Conservatives try to tell the public that somehow or other the legitimate objections that have been raised to this Bill have something to do with an anti-western feeling.


Donald Frank Mazankowski: Right on.


Ian Deans: I am fed up with it. It is wrong, and to continue to say it is an abomination on Parliament.


Donald Frank Mazankowski: You are certainly not going to get any western sympathy.


Ian Deans: Let me put it quite bluntly-


Donald Frank Mazankowski: You do it every day.


Ian Deans: This attempt by this ragtag group sitting over here to try to convince Canadians that somehow or other because we are concerned about the Government of Canada spending, inappropriately I might say, something in the order of $3 billion is somehow to be considered as anti-western Canada is a shame on the Conservative Party and not on the rest of the Parliament.


Thomas Edward Siddon: What about the depositors?


Ian Deans: Let me deal with the problem as I see it. This is not an east versus west problem. This is a large bank versus small bank problem. There is not a small bank in this country that is not now suffering because of the economic policies pursued by the right wing Liberal and now Conservative Governments that have ruled this country since its inception.


Mr. Gurbin:: You ought to know, you put them in.


Ian Deans: Let me tell you about this. Do you know why this bank is in trouble? Large banks, the big ones, the Royal, the Bank of Montreal, the Imperial Bank of Commerce and the others can afford to loan money at lower interest rates. Why? They can afford to do it because they are able to cream off the best possible customers. They get the first crack at the best customers. Small banks on the other hand, in order to lure depositors, offer higher interest rates on deposit. Nobody disagrees with that, I hope. However, in giving higher interest rates for deposits they must charge higher rates for loans. The best customers are not prepared to pay the higher interest rate for loans so the small banks therefore have to settle for less than the most affluent, less than the best, risks.
What they end up doing, and these banks are good examples, and there are others, is loaning money to people who are a higher risk. The end result of that is that they have a much higher risk portfolio, and the chance therefore of failure when you carry the highest of the high risk portfolios is clearly more evident. That is the problem in the banking system, that the big banks get the best and the smaller institutions have to take what is inevitably a much higher risk portfolio. It has nothing to do with east and west. It happens all across the country. So for God's sake start dealing with the reality. I am offended when this kind of ridiculous argument is proffered by certain people that somehow or other because you do not happen to live in Calgary that you do not understand the problems of a Calgary businessman, or you do not understand the problems of a Calgary home owner, or you do not know what it is like to be unemployed in Calgary.


Donald Frank Mazankowski: You don't understand it.


Ian Deans: Damn it all, it is no different being unemployed in Calgary, my friend-


Donald Frank Mazankowski: You are full of nonsense.


Ian Deans: -than it is to be unemployed in St. John's, than it is to be unemployed in Halifax, than it is to be unemployed in Hamilton. If you cannot find a job it makes no difference where you live.
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Donald Frank Mazankowski: You don't know anything about Alberta.


Ian Deans: And that is the trouble with these people.


Donald Frank Mazankowski: You know nothing about Alberta and
spare us the pomposity.


Ian Deans: Let me go back a bit to the early part of the 1980s, for the benefit of the Minister of Transport (Mr. Mazankowski) who likes to shout but does not like to listen.


Donald Frank Mazankowski: I don't have to listen to your nonsense.


Ian Deans: Back in the 1980s when interest rates were up in the high teens and reaching into the low twenties, back in the 1980s when we were saying to the then Government-


Donald Frank Mazankowski: Sanctimonious pomposity.


Ian Deans: -that a serious economic problem was being brought about in a variety of different sectors of the economy and that unless the Government moved in to protect those sectors by bringing interest rates down there were going to be bankruptcies in almost every single area, the Conservatives together with the Liberals said nothing could be done about it.
We argued that there had to be measures taken to bring the interest rates down in order that home owners who were on the verge of losing their homes because they could not afford to pay the 20 per cent and 21 percent being asked by the banks. When we said that the Government should move to protect those individuals from losing everything they had worked for, the Tories joined with the Liberals and said nothing could be done about it.
When we said that small business people in every community, including in western Canada, were facing difficulty as a result of very high interest rates, that they could not afford to carry the merchandise and when they could afford to carry the merchandise they could not find markets because there was unemployment in much larger numbers than they could anticipate, and we said to them that the banks were taking unfair advantage of those people by charging them in the high teens and low twenties for the necessary moneys to carry on their businesses, and forcing them into bankruptcy, we said to the Conservatives, join with us in a battle to bring down interest rates. They said nothing could be done.
When the farmers were outside here complaining about the fact that they could not keep their family farms because the interest rates were so high that they could not meet their commitments, they could not even pay their feed costs; they could not pay their seed costs; could not pay the costs of running the farms, and when we said to the Government of the day back in 1982 and 1983 that we needed to bring down interest rates in order to save those individuals, the Conservatives joined with the Liberals and said nothing could be done about it.
If nothing could be done for the people losing their homes, their businesses and their farms, if nothing could be done for
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the 1.5 million unemployed people who were losing everything for which they had ever worked, why is it that, because of a few friends who happen to be in the banking industry, the Conservative Party, now that it is the Government of Canada, can find $3 billion to bail them out?


Thomas Edward Siddon: Why is the steam coming out?


Ian Deans: I will tell the Hon. Minister why the steam is coming out. I am sick and tired of listening to the garbage which is being spewed across the floor of the House by certain Hon. Members who do not know what happened in the period leading up to this Parliament. The problem with which we are now dealing stems from the time when the Conservative Party, in Opposition, refused to join with us in a battle against high interest rates. I remember the Minister of Finance (Mr. Wilson), as the then opposition finance critic, standing at a podium in Montreal when high interest rates were the issue of the day and saying that if they were the Government, they would not do anything much different, that what the Liberals were doing was really all that could be done. After driving people out of their homes, off their farms and out of business, after failing to recognize what it was like when unemployment insurance ran out and there was not a penny available, there is no way to convince me that I should acquiesce and rush this Bill through to committee or that I should hurry it through so that this money can be paid. Small depositors are covered to $60,000 immediately. I say to the Conservatives that those depositors who need it will get their $60,000.


Thomas Edward Siddon: How about the municipalities?


Ian Deans: The municipalities are well covered by the provinces, at least those in the Province of Ontario.


Thomas Edward Siddon: What about British Columbia?


Ian Deans: I cannot answer for the Social Credit Government of British Columbia. I mean, it is anachronism.


Thomas Edward Siddon: What about Manitoba?


Ian Deans: Let us deal with reality. The fact of the matter is that we are being asked to say to those people for whom nothing could be done when the banks were ripping them off right, left and centre, that they should dig into their pockets after having lost everything they own and pay higher taxes to give the banks their money. I want to say, with only one minute remaining, no way. Those same banks sat and looked into the eyes of people who were crying because they were losing everything. Those same banks said to them: "We cannot help you because the banking practice demands that we have adequate collateral for a loan. Since you do not have it, you will have to lose your farm; we will sell off everything you own". When those same banks are crying at my doorstep and asking me to help them, I say to hell with them.


Mr. Roland de Corneille (Eglinton-Lawrence):: Mr. Speaker, I am now being provided with an opportunity to speak on Bill C-79 and the amendment thereto. The Government is

October 9, 1985
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asking us to appropriate $875 million, to be paid out of the Consolidated Revenue Fund. In more simple terms, it is asking us to pay $875 million out of the pockets of taxpayers. I am speaking in support of the amendment of the Right Hon. Leader of the Opposition (Mr. Turner), which makes clear that we on this side of the House in the Official Opposition wish to decline to give second reading to a Bill that in effect does not give us any idea as to whom these funds are being given. We have been denied the right to know the identity of the recipients of this money.
Traditionally, at least in the British tradition, in the Mother of Parliaments, for century upon century, the House of Commons has been responsible for the raising and spending of funds. It is our right and our privilege to say that and to do that as the Parliament. In the Parliament of Canada it is the duty of everyone of us, whether on the Government benches or on this side of the House, to demand to know where the taxpayers' money is going. Every Member of the House should not allow a Bill to be passed which in effect writes out a blank cheque. This is a general observation but if for no other reason than principle alone, we have reason to say that we will not pass this Bill. We also have further reasons to be doubtful about the wisdom of passing it.
We remember with great anguish and disappointment last March that when the Canadian Commercial Bank was experiencing difficulties, the Government came to Parliament and proposed that Parliament participate in a $255 millon bail-out. We were urged to participate in it. We were assured by the Government that it had to be done quickly, that time was a factor, and that we had to pass it so that others would not suffer. Having listened to the promises made, we were also assured by this Government which claims competence that the $255 million bail-out would in fact set the situation straight or set the bank up in a sound or solid condition, and that from then on we could look to a good future. That was back in March when we were told that all would be well. However, what we did not know and what the Government did not tell us was that many people in the Department of Finance had grave doubts about the package and about whether they had enough information to make an assessment or to recommend to the Parliament of Canada that it should participate in a $255 million bail-out package. The more we read, the more we learn and as more layers of the onion are peeled, we discover that the Government knew very little about the situation at that time. As time went on it began to discover that perhaps 30 cents on the dollar was the worth of the bank and that things were not well. Many of the players involved were wondering about whether they had enough information. The Government of Canada did not tell us the truth. It did not tell us what these other people were saying. It did not breathe a word of doubt, but it assured us that all would be well. It was bad judgment, which means that billions of dollars will be ultimately spent by the Government to buy its way out of its mistakes. Of course it is now saying to us that we should look after the depositors in these banks, that we should put up this $875 million to pay 100 cents on the dollar back to the depositors.
We are not talking in every case about depositors who have their life savings in these banks. Those with their life savings are at least protected up to $60,000. For example, if such a person has $60,000 in some kind of deposit account and another $60,000 in an RRSP, he or she might be protected up to the $120,000. No, it is not the little person who is being hurt. In fact, it is those who gambled their money in order to obtain high interest rates. We are being asked to protect depositors but, interestingly enough, the Government has not asked us to think about the shareholders. Why, I have to ask myself, in the name of morality, common sense and decency, is the Government making two categories of people? One category is the depositors who are protected up to $60,000 and the other is the shareholders who are not protected. It could be that some people became shareholders in these banks and put up their life savings thinking that such banks were good investments. The Government has once again failed to show intelligence and common sense. There is a double standard here. The depositors are treated one way and the sharehoolders another.
We are being asked to put up this money. The Government is not giving any money to the shareholders but it wants to give money to all the depositors. We want to see a list of these depositors. The Government wants us to take the taxpayers' money and pay it out to a list of faceless people and faceless international banks, corporations and speculators. It wants us to pay them with the taxpayers' money and it will not even tell us their names.
Those who simply want to collect their $60,000 need not tell us their names. However, why should we be paying in some cases over $1 million to an individual without knowing who that individual is? Why should we be paying millions of dollars to faceless organizations about which we know nothing? Members of Parliament are to write out a blank cheque made out to "To Whom It May Concern". I suggest that we have a bigger responsibility than that and we have a right, as the Leader of the Opposition has said, to demand of the Government a list of the names of these depositors.
Indeed, after looking back over what has happened and seeing the circumstances under which we were initially sucked into this bail-out scheme, I have to say that once bitten, twice shy. The Government assured us that everything was all right but we saw that things did not go as well as it promised. We saw that the Government did not take the time to allow bank executives, experts and auditors to look over the situation facing the Canadian Commercial Bank but told us that everything was fine. We certainly do not believe any longer that the Government has the trust and confidence that is required in order for us to vote for an $885 million blank cheque payable to unknown depositors.
When asking why the Government did this, I am afraid that we would have to come to some negative conclusions. We would have to come to the conclusion that the Government asked us to become involved in this scheme for political
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reasons or perhaps to help out its friends but not because it knew the facts.
There has been much said about the deficit. Through the last Budget, we were told that the Government had to make certain cuts including billions of dollars worth of cuts in the education of young people. In fact, cuts to the old age pensions were proposed as were cuts to the family allowances, yet the Government can apparently afford to spend billions of dollars to bail out faceless depositors in a bank. The rich get richer. Their money is protected. The poor get poorer. They can lose their money and they can be reduced to further poverty. That is acceptable to the Government.
I do not see the deficit being refuced. I see the deficit rising because of the incompetence of the Government and its inability to deal properly with the problem of the Canadian Commercial Bank. I appeal to members of the Conservative Party to give to every Member of the House a list of the depositors so that we will not be asked to write out a blank cheque, something which is contrary to all traditions.


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, it is for a tragic instance of the irresponsibility of this Government that we have to debate this Bill today. When I was elected, I little thought that we would see so quickly and completely a retreat from Tory principles as enunciated during the election campaign, but this is exemplified by the Bill before us today.
It does not surprise me that there are few members of the Government present in the House. Who would want to hear of the terrible record of the Government? It does not surprise me that they are sitting far apart and not speaking to one another. If they were speaking to one another, it could only be in terms of the abnegation of everything for which they campaigned as represented by this Bill.
I believe that the $875 million for which we are being asked to bail out the two failed banks is simply a down payment. We have it on the Minister's authority that this does not represent the final bill. Not only that but we have heard one of the most incredible statements I have ever heard a Minister make in this or any other democratically elected assembly. The Minister of State for Finance (Mrs. McDougall) has said:
-I want to make it perfectly clear that it is not the Government's intention to set a precedent in compensating uninsured depositors in our financial institutions.
With all due respect, Mr. Speaker, that is horse feathers and absolute nonsense. Every bankruptcy is a tragedy for the people involved. Every bankruptcy involves unique circumstances and unique situations. For the Minister to suggest that she is not setting a precedent is, with all due respect, unbelievable and 1 cannot believe that she does not recognize that that statement cannot be true.
The fact is that through this bail-out we are being called upon to authorize today, the Government is setting a precedent and avery dangerous one. Forgotten is the election rhetoric about freeing the free enterprise system and about opening Canada up for job creation. We are now looking at a bail-out of such gigantic proportions and such cataclysmic effects on
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the budgetary accounts of the country that it is almost worthy of a Liberal Government rather than a Progressive Conservative Government.
The sort of bail-out at which we are looking is unprecedented both in its amount and in its purpose. As well, it is unpredecented in the circumstances that led to the Government considering its necessity. It would appear from the legislation that has been tabled in the House that the Government has been hijacked. It would appear that the Prime Minister (Mr. Mulroney) and his ever-diminishing ruling circle are merely Liberals who got into the Conservative Party just like the worm got into the apple and ate it out from the inside. They are saying to themselves, "Look what the other guys did for their corporate cronies. We had better show them that we can do just as well by our friends as the previous Government did by its friends". That would appear to me to be the entire motivation behind this Bill.
Much has been said from the Government benches. I am glad to see that Government members have enough self-respect to have now fallen silent. Much has been said about this Bill being for the protection of ordinary Canadians. I have not heard one argument that could sustain such an impertinent, nonsensical statement as that. Let us face the facts. We are not looking at mass unemployment as we might be if we were dealing with a manufacturing concern going bankrupt. We are looking at losses distributed right through the economy affecting people who ought to have known enough to verify the integrity, stability and strength of a financial institution before they put a penny into it, let alone the sort of sums that have been mentioned.
We are indeed being asked to sign a blank cheque because we are being asked to bail out a whole range of depositors who should have known better. These depositors include sophisticated investors, foreign banks, municipalities, provincial Governments, credit unions and smaller investors, the largest number of which should have and I believe did have access to the sort of information that would have warned them. For example, the City of Hull, whose manager spoke on the radio yesterday, sounded the warning which should have gone off in a lot of brains in Canada's financial community.
Notwithstanding the fact that the $60,000 will be paid to all depositors, with respect to insured portions, we are prepared to look at funding for those depositors who will undergo real hardship if this bail-out does not take place. However, a blank cheque in addition to the deficit of Canada or an increase in taxes for the people of Canada to pay for this bail-out-no, never, that is something that the Progressive Conservative Government should blush at introducing in the House, given the election rhetoric with which we were inundated during the last election campaign. I think it is worth repeating that the $60,000 sum is the statutory limit. If the Government goes ahead with its plan to pay depositors for investments above the $60,000-limit, where will the insurance industry in Canada be? What is the point in insuring against any form of risk?
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Where is the morality in doing so? If one is big enough, powerful enough and well connected through the executive dating service which has flourished in Ottawa under this Government, then one can go and cry on one's big brother's shoulder and receive the sort of bail-out which Hon. Members know is frankly not to be available.
I recall having listened to Conservative candidates, those who are now Ministers and he who is now Prime Minister over television during the last campaign. They said in all tones of voice, but always with an evident facade of sincerity, that this type of action, this bail-out, was not to be contemplated by the Government of Canada if they were ever to form it. I for one very much regret the day they did form it. This country will, in time, almost unanimously regret the day when they did form it. Let us face facts. We are not talking about widows' savings in this instance, nor are we talking about persons being reduced to ruin. We are not talking about the type of misery which a great financial loss can impose upon a single individual because, with good sense, we have the Canadian Deposit Insurance Corporation insuring deposits of individuals up to $60,000. Frankly, if it were not for the obvious lack of attention which the Government paid to this dossier over the summer, we would not now be facing the consequences of the improperly structured bail-out package which was put together last March.
Much has been made by the Government of the fact that these are both western financial institutions which were, indeed, adversely affected by the collapse of the western economy brought on by certain aspects of the National Energy Program introduced by the previous administration. I think that is something which is worthy of consideration and examination. We should say that apart from the unfortunates who are employees of the said banks, the losses, will be spread across Canada-rather, not the losses but the costs the Government will impose upon the country by this breath-takingly irresponsible piece of legislation. We have not heard one single spokesperson from the Government side speak about whether the $1 billion, or whatever it adds up to, is to be raised by taxation or whether it is to be raised by further borrowing. That is a clear dereliction of the Government's duty, along with its concealing of the list of depositors. They are also concealing from the people on which side of the ledger the bill will come down. Is it to be by a further augmentation of the deficit? One of the main planks in the Conservative campaign platform was that it would not raise the deficit. Will the Government increases taxes on the people of Canada when every inclination it has shown thus far is that it will try to hold the line with respect to taxation by cutting benefits to the elderly and the poor while paying off some of its supporters through numerous and sundry tax breaks and incentives such as the $500,000 capital gains exemption?
Mr. Speaker, my time is up, which is just as well because my breath is almost exhausted from the indignation and outrage which I feel at this most irresponsible action by the Government.


Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, I was going to say that I am pleased to rise in my place today. However, if I said that I would be misleading the House right off the bat. I am not pleased. I am irate. I am upset. I am disappointed. I wish to get a few things off my chest.
I wish to remind the House that we speak today on the amendment proposed by the Leader of the Opposition (Mr. Turner) to Bill C-79 which the Government has put forward to bail out its corporate buddies. The amendment indicates that the House declines to give second reading to a Bill, the principle of which is to permit payments of large, but unspecified amounts of public moneys-not the Government's money, not my money, not the money of the Minister of Finance (Mr. Wilson), the Minister of State for Finance (Mrs. McDougall) or the money of the Cabinet but the taxpayers' money. We decline to pay out in a blind, deaf and dumb fashion without any knowledge of where the dollars are going and to whom they are going. The process of doing that in a blind, deaf and dumb manner reduces not only the right of Parliament-I don't give a damn about Parliament's right-but the responsibility of Parliament to be accountable for taxpayers' dollars. That is the first responsibility of any Opposition in a parliamentary system. It is an adversary system. They separate us by two sword lengths to keep us apart because it gets heated at times. However, we are not here because we want to spend our days nit-picking over departmental expenditures. It is our responsibility to be the public watchdog of the taxpayers' purse. We are being asked to spend handsome sums from that purse with no accountability whatsoever as to where and how that money is to be spent.
I have been in my riding in recent days. I have had an opportunity during those days to spend some time talking to people who understand the notion of taking a risk. These people understand the concept of having the right to succeed. They also understand the concept of having the right to fail and expecting no one to pick them up. I met a small contractor in the Bay of Islands in the great riding of Humber-Port-au-Port-St. Barbe who spent 15 years putting together a family business. He performed various work around the west coast of Newfoundland. In the middle of a contract he had a bank step in and call a demand loan. When the bank called the loan he saw 15 years of sweat, hard work, hope and aspiration crumble before his very eyes.
I had a chance to talk to a fisherman on the great northern peninsula. This man has been fishing for 30 years. This year the fish just did not come to the great northern peninsula. We do not know why but it was a miserable season. That fisherman got four or five weeks of fishing in this year. He knows that in two weeks he will have to make his annual boat payment. He cannot make it because he has had a miserable year. They are going to call his loan, grab his boat, and he will not be a fisherman anymore. He is sad and disappointed and his aspirations have been crushed.
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I talked to a small businessman in the town of Deer Lake who, together with his wife, mortgaged his house and went into the furniture business. They did a subcontract job for a large contractor. They spent several hundreds of thousands of dollars installing kitchen cabinets in an apartment building. But they did not get paid for the subcontract because the major contractor, who had the job, was in financial trouble. It ends up that the fellow who made no mistakes, who had done nothing wrong, is going to go under because the bank is calling his loan. And he is sad, disappointed and his dreams have been crushed.
Not one of these people, be it the fisherman, the small contractor or the furniture maker, who have had their lifesav-ings taken away from them have asked the Government of Canada to bail them out; nor has the Government of Canada offered to bail out these three people. We live in a system where we all have the right to take risks. We all have the right, or at least the opportunity, to succeed beyond our wildest dreams, but if we fall on our face and go broke, if we make a mistake, we must face the consequences.
It is more than I can swallow to know that honest, hardworking Canadians who have invested their time and capital and a good part of their lives in ventures and who, for whatever reason, have failed, have failed in silence, and no one has offered to bail them out, yet when a bank which is involved in bad lending practices, which is riddled with poor management, fails, we find that deposits of over $60,000 are going to be bailed out by the Government of Canada. The Government is going to step in and give them all this money, 60 per cent of which will not even stay in western Canada. I am tired of hearing this line that the bail-out is an attempt to help western Canada. Sixty per cent of the funds will not even stay in western Canada. It is a bail-out of large corporations. These people want the right to make $1 million but do not want the right to fail. They want the Governement to provide a cushion for them.
Every Prime Minister has to wear two hats. The first hat is a political hat. He puts that hat on when he is involved in an election campaign and goes out to stir up the troops, to inspire the team, to address the people, to sell his message, to garner support. That is his political hat. The other hat the Prime Minister must wear is that of chief executive officer. He is the man who is in charge, who is minding the store and looking after the taxpayers' purse. He is the man who makes the intelligent, rational, responsible and defensible decisions. This Government has a Prime Minister who has only one hat. It is his political hat. He has lost the hat of chief executive officer. He does not know where it is and neither do his Ministers.
A political decision was made by the Prime Minister last spring in the middle of an economic summit. He would not allow a bank to fail and ruin his television image. We could not have the veneer which was being developed scratched. We could not have a blip on an otherwise well managed media campaign. As a result, the people of Canada are being asked to
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pay nearly $1 billion blindly to people whom the Government refuses to identify to Hon. Members of this House.
I serve notice on the Government that this Bill will not be supported by the Liberal Party. We will have no part of bailing out incompetence in the bail-out of the banks. We will stand as often as we can to make the case and drive home the point, to convince the people of Canada to rise up and be heard. The people of Canada must speak their minds and tell the Government that they do not accept this kind of irresponsible action.
We do not seem to have a quorum in this House, Mr. Speaker. Would you call a quorum?


Mr. Deputy Speaker:: We do not have a quorum. Ring the bells-


Jean-Robert Gauthier: Ring the bells.


Brian Vincent Tobin: Ring the bells.


Mr. Deputy Speaker:: I find there is now a quorum. We will continue with debate.


Brian Vincent Tobin: Mr. Speaker, may I humbly suggest to the Chair that if the Government can afford $875 million to bail out unknown people, it ought to be able to find a couple of dollars to give a key to the gentleman down at the end of the room so he can ring the bell when the Speaker directs him to.


Mr. Deputy Speaker:: Resuming debate.


Iain Francis Angus: Mr. Speaker, I would like to join in this debate which deals with fairness, with how we treat banking institutions in this country and how clearly under this Government there are two classes; there are those which Government will help and there are those which it will not.
Ever since this Government was elected, Mr. Speaker, we have heard that we do not have the money to do the kinds of things we should be doing as a society. We are told that we do not have the money to continue to ensure that family allowances are fully indexed to the cost of inflation. We do not, it seems, have the money to ensure that, for example-while the Minister of Transport (Mr. Mazankowski) is here-the St. Lawrence Seaway Authority can retain its assets and make improvements in order to keep tolls and fees down. As a result, we are now seeing the development of some difficulties. However, we do have enough money to bail out two banks. Whether it is $1 billion, $2 billion or $3 billion, only time will tell. But the reality is that it will cost the taxpayers of this country a large amount of their hard-earned dollars-their tax dollars-to pay for this decision of the Government of Canada.
Ironically, Mr. Speaker, I would suspect that those individuals who are being bailed out-and I suppose there are some 96 individual depositors between the two banks-are those who have the ability to hire accountants and lawyers so that they

October 9, 1985
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can get out of paying income taxes. Those 96 individuals will receive somewhere in the neighbourhood of $13 million. That is a small amount when compared to the over-all amount of money. But these are individuals, some of whom, on their own, have over $1 million on deposit. 1 question whether we, as a society, should be bailing out people with that kind of money at a time when we are desperately in need of housing facilities and we have soup kitchens in various communities. I think very clearly our priorities are all wrong, Mr. Speaker. They are wrong when we send in excess of $112 million across our borders to bail out foreign banks.
I really do not understand why the Government has taken this approach when other financial institutions have gone under and their depositors were not protected over and above the amount of $60,000. I have had some of those depositors call my office and question the fairness of this Government.
One individual, who had spent years putting money aside for retirement, had a deposit of $66,000 in one of those institutions which went under. He got the $60,000 but not the extra $6,000. For him it is a matter of principle as well as the money, and he is frustrated and angry that the Government is bailing out these two financial institutions but not the one he was involved in. He does not believe it is fair, and neither do I.
As I looked at this situation I asked myself what else this money could be used for. My riding and that of the adjoining riding, Thunder Bay-Nipigon, comprise about 113,000 people. If we spread that $1 billion among those people it would be a very nice little Christmas present, $9,000 per individual. We could say the same for any community in Canada. They would have more money to spend on consumer goods and they would pay more taxes. There are many innovative ways we could use that money. The way this Government has established its priorities in the bailing out of these two banks is inappropriate, and that is why I would be more than happy to join my colleagues in voting against this Bill, and to continue speaking against it through all stages.
The question has been raised concerning municipalities and the provinces and the money they had on deposit in these banks. While I appreciate the situation they may be in, I think it is a warning to municipalities and provinces to be careful about what they do with their taxpayers' money. They should not put it into risky situations. Rather, they should ensure that the money is in an institution which will not only continue to pay interest but continue to be viable. Therefore, I suggest to the Government that it would be wise to reconsider this attempt regardless of whether or not we get the names of the people involved. I do not believe in principle that we should be supporting this bail-out.
[ Translation]


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, since the end of the summer recess, all we have heard about in the House is scandals and the integrity of the Prime Minister's word.
Mr. Speaker, today again, Bill C-79 refers to one of the biggest scandals we have had since the Progressive Conservative Government came to power. Mr. Speaker, I have before me two Bills, C-79 and C-70. I think it would be useful to explain to each Member of this House what these two Bills entail. First, Bill C-70, whose purpose is to de-index family allowances and which affects 3 million families in Canada, and then Bill-


Mr. Deputy Speaker:: Order, please. I realize the Hon. Member probably wants to draw a parallel between the two Bills, but I may remind him that he is to speak mainly to Bill C-79.


Jean-Claude Malépart: Mr. Speaker, on the amendment now before the House and Bill C-79-I am getting there-Bills C-70 and C-79 are related to financial questions and in fact, concern sums of money that the Government wants to take from the Canadian taxpayer.
Referring back to my bill on de-indexing family allowances, the Government is taking away $55 million from 3 million families. In Bill C-79, the Government is taking one billion dollars in taxpayers's money and giving it to a hundred friends of the Progressive Conservative Party. Mr. Speaker, just think, one billion dollars in taxpayers' money to compensate people who had $60,000 and more in a bank account. I do not think there is a single constituent in Montreal-Sainte-Marie who will get compensation. I do not think there is a single constituent from Montreal East, for that matter.


Jean-Robert Gauthier: And not from Ottawa-Vanier either!


Jean-Claude Malépart: And not from Ottawa-Vanier either. And I am convinced . .. Even the Hon. Member for Laval says: There is nobody from Laval, and I am convinced that these people with deposits of $60,000 or more are people who know the banking system very well. They are not just someone who hit the jackpot in a lottery. These are people who are supposed to be economic experts, people who advise this brilliant Conservative Government, and they played a risky game. Even administrators of pension funds and people administering municipal funds took a risk to get more money. And just because they lost, the Progressive Conservative Government wants us to compensate the incompetent.
The authorities of the City of Montreal had money in one of those two banks, but as soon as they saw there were problems, as serious administrators they withdrew their money. These people behaved responsibly to their municipality and to the taxpayer.
Ever since this Conservative Government came into office, Mr. Speaker, it has led the attack against senior citizens, sick people and families with children. Now, all of a sudden, we are expected to feel sorry for people who had $60,000 or more in their bank accounts. Looking over the figures, can you imagine, two individuals each had $1 million! A $1 million bank
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account, how hard pressed can one be! It is really pitiful to see the 211 Conservative Members rush to the rescue of million-naires. Worse still, they want a blank cheque but the people involved will remain anonymous. It is unacceptable, and the population will not stand still and watch a Government, regardless of its political persuasion, mismanage so ineptly the money of Canadian taxpayers.
Eastern Montreal residents have to cope with major problems, but the Conservative Government does not even lift a finger. A $100 million loan guarantee would be needed to save jobs in eastern Montreal, at Gulf among others. The Conservative Government says no because of the deficit. But some of its pals are caught. The Government does not want to reveal the names of people who had $1 million or $500,000, there are two; people who had $400,000, one of them, and 1,100 with $99,000. If we had the names and compared them with the list of those who contributed to the election fund, we might have surprises! If the Progressive Conservative Party does not have anything to hide, then it should open its books. Why hide the names? The bank presidents said to the Conservative Government: If anyone is to be repaid with taxpayers' money, he should be honest enough to put his name on the application. Anybody who does not want his name to be made public should simply refuse any financial assistance from the Government, Mr. Speaker.
But no; suddenly, all those Conservative Members must save their friends who have millions of dollars. At the same time they are introducing a motion for closure to prevent Members from expressing the views of mothers raising children. They tell those mothers: "Well, you will lose $22, but that is only $22". They cannot make both ends meet. But the poor fellow who had a million, do not expect me to believe this is all he had. And if he was stupid enough to put all his money in one banking institution, well, he deserved what he got, because he knew very well he was not insured above $60,000. They would like us to believe that there were small pension funds there. But when it comes to shareholders, are they not looking after them?
Mr. Speaker, there is something fishy about this Bill. It is this Conservative Government's irresponsibility and incompetence. 1 can understand why the Prime Minister (Mr. Mul-roney) is not in his place here and prefers to sit in a stadium watching the Blue Jays. He is more than fed up with his Ministers' incompetence and his own, Mr. Speaker.
Never, no never will the Liberal Party, let alone the people of Quebec, accept that the Quebec taxpayers' money be used to save Government friends in a western province. When we in Quebec had problems with the Quebec banking system, not one single Tory Member then in Opposition rose to help Quebec. Not a single one! Not one Tory Member ever thought of it. No, Mr. Speaker.
In open-line programs in the Eastern Townships, in the Sherbrooke area, people are saying: "When we had problems,
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we accepted our responsibilities". If banking institutions have trouble in another province, let the people there accept their responsibilities! If unwise municipal managers risked their taxpayers' money, Mr. Speaker, they should be fired because of their incompetence. Unfortunately, it cannot be done immediately with this Conservative Government. But the time will come, yes, in 1988.
Mr. Speaker, there is another point I would like to make, the impact of this Conservative Government's positions. In connection with the Child Tax Credit, what would be the difference if some 15 people had $60,000 or $70,000 in a bank, the Government will ask all Canadian taxpayers to bail these poor pitiful people out. At the same time, it will introduce a bill to the effect that a family with a $26,330 income is considered a rich family, according to Tory standards. Then, it turns around and says that a family with 3 children where both the father and mother work, the income ceiling will be reduced from $26,000 to $23,000, so that these families, come next year, will loose $400. A family with one child earning $25,000 will loose $125.
Tory members, including the Boy from Baie Comeau, would like us to adopt this bill to compensate two guys with a million dollars in a bank account on the backs of Canadian mothers.
Mr. Speaker, I can assure you that I am going to vote against this Bill, no matter whether or not the Government provides us with the names of the depositors.
I should like to remind you-and 1 will end on this-that when the Government first introduced a legislation to bail out or try to bail out the two banks, I abstained from voting, because I knew the Government was misleading us. Now I know for sure, Mr. Speaker, and you can bet your last dollar that I am going to vote against Bill C-79. If Tory members, including the Minister of Transport (Mr. Mazankowski) who is here and considered competent, had the guts, the convictions and the honesty, they would call on the Government to tear up Bill C-79 to protect the $55 million belonging to our Canadian mothers with dependent children.


Alfonso Gagliano: Mr. Speaker, Bill C-79 is the Government Bill to allow reimbursement of the uninsured deposits at the Canadian Commercial Bank and the Northland Bank.
However, the Leader of the Opposition moved the following amendment:
That the motion be amended by deleting all of the words after the word "that" and by substituting the following:
This House declines to give second reading to a Bill, the principle of which
is to permit payments of large, but unspecified amounts of public monies to
unspecified persons or corporations, thereby sustantially denigrating parliamentary accountability for expenditure of public funds.
Mr. Speaker, the Government states that its decision was based on the best information available at the time. Why did the Government reject the offer made by the banks to have a

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complete audit of the Canadian Commercial Bank? Why did the support group rely on the information which the Canadian Commercial Bank alone agreed to make available?
Mr. Speaker, the decision to bail out the bank was based on political factors. The Prime Minister (Mr. Mulroney) is personally responsible for this decision. The crisis of the Canadian Commercial Bank occurred at the time of the National Economic Summit, and therefore at a time when the bankruptcy of a bank would have had serious consequences.
Mr. Speaker, when my Hon. colleague for Laval-des-Rapides (Mr. Garneau) responded to the statement made by the Minister of State for Finance (Mrs. McDougall) announcing the bankruptcy of the Northland Bank last week, he asked
for the resignation of both the Minister of Finance (Mr. Wilson) and the Minister of State for Finance.
Mr. Speaker, for my part, I shall go even further. I am also asking for the resignation of the Prime Minister because he is the major culprit. He is the one who, to be able to watch himself on TV, urged everyone to make a settlement with a bank which was forced to go bankrupt six months later.
Mr. Speaker, this Bill aims at allowing the reimbursement of ininsured deposits, or in other words, deposits-


Mr. Deputy Speaker:: 1 regret to interrupt the Hon. Member, but he may continue his speech the next time this Bill is debated in the House of Commons.
It being 6.27 p.m., the House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.27 p.m.
[Stage Direction]
Thursday, October 10, 1985