1985-02-26

[Stage Direction]
[ Translation]

[Stage Direction]
The House resumed from Monday, February 25, consideration of the motion of Mr. Bissonnette that Bill C-23, an Act to amend the Small Businesses Loans Act, be read the second time and referred to the Standing Committee on Regional Development.
Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker,
I wish to thank you for giving me this opportunity to take part in the debate on the Small Businesses Loans Act. Having owned two small businesses myself, I believe I am in a position to appreciate the concerns of this sector.
However, I fail to understand the position the present Government seems to be taking with respect to small- and medium-sized businesses. It seems to me there are many contradictions between what I have heard from our Conservative colleagues and what I have read in Bill C-23, and I shall, if I may, Mr. Speaker, touch on a few that are particularly revealing.
First of all, the Hon. Members opposite have been very expansive about their desire to consult with the groups in question so as to better respond to their needs. This is an entirely worthy attitude, but I do not think the Conservatives are particularly innovative in this respect. Otherwise, small-and medium-sized businesses would not, as they do today, represent nearly 30 per cent of the Gross National Product. But let us be generous. Let us give them the benefit of the doubt and believe they are sincere in their desire for consultation. If they are, then how do the Minister of State and his colleagues propose to explain the fact that the vice-president of the Canadian Federation of Small Business and the president of the Canadian Federation of Independent Business have both protested against the provisions of the Bill concerning the 1 per cent fee to be paid by lenders to the Government? If these organizations had been consulted, this fee would not have been included in the Bill, unless the present Government, with all its
consultations, has been ignoring the views of the groups concerned. Not necessarily on purpose-I would not want to believe that.
Mr. Speaker, I can only hope the Government will make good use of these consultations it has been making so much of. In fact, when I was looking at the recent consultation paper on small business presented by the Minister of State (Small Businesses) (Mr. Bissonnette) and the Minister of Regional Industrial Expansion (Mr. Stevens), I noticed some very major paradoxes in the Conservative approach.
The first page of this document refers to some of the goals the federal Government has set for itself. One of these I found particularly interesting, and I quote:
"-to adopt policies that will lead to increased investment, further and more intense innovation, improving our international competitive position and establishing a climate favourable to creating and developing new enterprises."
A little further it says that job creation is a fundamental priority for the present Government and that Canada must strengthen this growth model and promote the start-up of new businesses.
Mr. Speaker, I am afraid the Party opposite has yet to come up with something new. It is as plain as the nose on anyone's face that small- and medium-sized businesses are the motor of any economy. I do not see why it took them six months to realize this.
Even worse, in Bill C-23, the Conservatives have neglected to observe these primordial goals by proposing incoherent policies and amendments.
I say incoherent, Mr. Speaker, because clause 2 of the Bill provides that from now on, liability for losses sustained on loans will be shared by the Government with the lending institutions, the latter to be liable for 10 per cent.
While the Small Businesses Loans Act is aimed at encouraging lenders to make loans to small businesses, the amendments proposed by the present Government will have the opposite effect. It is not at all unlikely that lenders will be reluctant to make loans if they are liable for 10 per cent of the losses sustained on such loans. Lenders will tend to exercise extreme caution and draw up more restrictive regulations, and one could hardly blame them for doing so.
However, this attitude will also make lenders less inclined to make loans to small businesses, which will certainly have an adverse effect on the emergence of new small businesses. The contradiction here is very obvious. On the one hand, the Government wants to make things easier for small- and medi-

February 26, 1985
Small Businesses Loans Act
um-sized businesses and promote the establishment and growth of such businesses, but on the other hand, it is obliging lenders to endorse 10 per cent of losses sustained on loans, which will force lenders to be more selective or to make fewer loans or fewer large loans. What the party opposite is urging is that we cripple a piece of legislation which has been the mainstay of Canadian small business for 23 years.
Our colleagues across the aisle openly brag about stimulating private investment and the Canadian economy, but they fail to take the proper approach-in fact, they throw cold water on businessmen and lenders who are anxious to participate in our economic growth. I hope they realize the disastrous consequences of the fresh approach they want to take with respect to small business. It is essential that you grasp the full implications of such measures. Perhaps I might be of some help.
Still referring to this consultation paper, I read that entrepreneurship and risk-taking are not sufficiently promoted. I fail to see how the provisions of this piece of legislation will enable you to promote and spur risk-taking by small business and lenders. You know as well as I do that no businessman or businesswoman will invest unless the chances of failure are extremely remote. Canadians are not risk-takers, and they should not be unless the economic climate and conditions are altogether favourable. To be frank, I am convinced that your proposition will never create the conditions conducive to and required for risk-taking. The more your Government will force lending institutions to pay for a high percentage of losses incurred on outstanding loans, the fewer loans those institutions will make, the less small business will take advantage of those loans and the less new businesses will want to set up shop.
Furthermore, I can read in this famous consultation paper- and, of course, you had no idea how many inconsistencies this paper would contain-that "small business considers that Governments and most financial institutions have an approach which favours the requirements of big business".
Then again, section 2 on loss sharing by the Government and lenders will do precious little to encourage the latter to make loans to small business. One might even suggest that this measure will be a boon to big business since the market will not be crowded by small business, and lenders will be more inclined to offer better conditions to big business. Hypothetical though it may be, this suggestion is not all that far-fetched.
It is a fact that the Progressive Conservative Government spent the first six months worrying about big business, foreign multinationals and the need to attract them to Canada. This Government has been concerned about making room for big rather than small business. What will be the impact of uncontrolled foreign investments in this country?
The answer is simple: they will corner the Canadian market. That being so, is it still possible to talk about promoting small business in Canada? I hardly think so. I would suggest that the Government will indeed be well advised to reconsider-as they so aptly put it-the regulations and policies that might hinder small business financing, including venture capital.
This is a priority, Mr. Speaker. It is a priority because the legislation contains so many nefarious provisions that will only hinder SMB financing. Among other things, their Conservative Minister will require lenders to pay a fee of 1 per cent of the amount loaned under the Act. This means that on each and every loan, the lender will have to pay 1 per cent to the Government as a guarantee. Assuming that total loans remain at the current level of $900 million a year, lenders will be paying out $9 million to the government to account for that 1 per cent fee. Those $9 million that will go the public Treasury will reduce by $9 million the amount of loans available to small businesses. This is one way for the Government to fill its coffers at the expense of lenders and especially of small businesses. We cannot be consistent and support such a measure. The Minister of State himself is entertaining doubts as to the true efficiency of such a policy. As he stated in this House last week, and I quote:
The total impact on the yield to lenders over that period or over the term will be minimal. Therefore, the volume of loans should not decline significantly.
Despite the weak-kneed phrases used by the Minister, clearly when he said "minimal impact" and "should not decline significantly" he meant that in fact, there will be negative results and the volume of loans will go down. The Minister is admitting therefore that his proposal implies a negative impact. When he says "not significantly" and "minimal", it is only to reassure those who are concerned and distract the attention of the people involved.
In fact his statement was conditional and this is therefore extremely hypothetical. His comments are fraught with uncertainty. "The volume of loans should not...", meaning that it could decline significantly. If we are to rely on assumptions, mine is just as valid as the Minister's. But I for one know very well that the odds are in favour of lenders reacting unfavourably. Who will be happy to pay out $9 million rather than investing the money?
Finally, Mr. Speaker, what the Government wants to achieve with Bill C-23 is to significantly reduce access to the Small Business Loans Act by lenders, and in turn by small businesses. In other words, they are limiting access to financial sources that are absolutely vital and that have in the past enabled a number of small businesses, small Canadian firms to start in business and prosper in this country.
Anybody who claims to support small businesses and view them as our society's economic locomotive must reject the
February 26, 1985

Government's proposals because they are inconsistent and unacceptable. This is a serious issue and so is our duty.
As you know, Mr. Speaker, in New Brunswick in 1980 there were 17,000 small- and medium-sized businesses with a sales volume of less than $2 million a year. There were 17,000 in 1980, and now there are many more. In 1983, with the Small Business Loans Act, 745 new small businesses obtained loans for a total amount of $22 million. You know also, Mr. Speaker, that in my province of New Brunswick, small businesses are essential. They provide most of the jobs and they also are vital to our people. The citizens in my province are born workers whose ability to earn a living is aleatory, greatly dependent as it is on the climatic conditions under which they operate. I refer for instance to our people involved in the fishing, farming and tourist industries.
As they operate already under difficult and uncontrollable conditions, the last thing we should do is to create new obstacles for them. On the contrary, we should try and find ways and means to alleviate these natural impediments. These ways and means are already at our disposal, Mr. Speaker. The party opposite preaches that Canadians should be encouraged to invest. But "preaching" is just not good enough. It should take action. What is more, it should take appropriate action.
So far, the new government has covered the first two stages. As to the third, I suggest that its first appropriate action should be to withdraw the provisions about the 90-10 per cent sharing of losses and the 1 per cent loan fee which lenders would have to pay on each loan to the government.
If the party opposite really wants to help small businesses, it should fulfill its promise.


Mr. Deputy Speaker:: Are there any question or comment on the Hon. Member's speech? If not, we will resume debate. The Hon. Member for Blainville-Deux-Montagnes (Mrs. Landry) has the floor.


Mrs. Monique Landry (Parliamentary Secretary to Secretary of State):: Mr. Speaker, it gives me great pleasure to take part in the debate on second reading of Bill C-23 to amend the Small Businesses Loans Act. The fact that I have decided to make my maiden speech in the House on this Bill shows how vital I consider the contribution of small businesses to be for the Canadian economy.
I also want to take this opportunity to thank my constituents of Blainville-Deux-Montagnes. Last September 4, the residents of Blainville-Deux-Montagnes showed unequivocally that they wanted a change in direction. The Progressive Conservative Government, under the leadership of the Right Hon. Prime Minister (Mr. Mulroney) has understood this crystal clear message. Anxious to meet the aspirations of Canadians, our Government has firmly committed itself to renewal, as
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evidenced in the Speech from the Throne and the economic statement of the Minister of Finance (Mr. Wilson).
Mr. Speaker, let me remind Hon. Members that the Blainville-Deux-Montagnes constituency, located to the north of the Riviere des Mille-iles and the Lac des Deux-Montagnes and to the south of Mirabel airport, includes ten municipalities. This federal district extends over 287 square kilometres in the greater Montreal area. At the 1981 census, it had a population of 112,000, of which 86 per cent were francophones, 12 per cent anglophones and 2 per cent belonged to other ethnic groups. In addition, the population of Blainville-Deux-Montagnes continues to increase at a rate which reached 22 per cent during the period from 1976 to 1981. This population increase reflects the attraction my constituency holds for many Quebecers.
The economy of this mostly urban constituency revolves around the manufacturing sector, commodity trade and sociocultural, business and personal services. Our primary industries are largely made up of family-type farming businesses. On the other hand, according to a survey conducted by a Department of Employment and Immigration economist, the importance of service industries in the community reflects the suburban character of the region.
The major employer is undoubtedly the Boisbriand General Motors plant, which has a manpower of about 3,500. Mr. Speaker, I would like to emphasize the importance of the auto industry for our local economy. Many subcontractors owe their survival to GM.
Last November, I learned with regret about the decision of GM not to invest $700 million in the upgrading and robotiza-tion of its Boisbriand plant. This unfortunate decision caused great concern to local businessmen who had contributed a lot of energy and effort to welcome the General Motors plant to Boisbriand. Prompted by Mr. Michel Gagne, Chairman of the Laurentian Development Regional Council and mayor of Boisbriand, a regional committee was formed to assess the impact of the cancellation by GM of its investment project. I was more than willing to join this committee which has already met twice. While its function is to examine the direction GM wants to give its Boisbriand plant, the committee fervently wishes for other auto industries to locate in the region, thus attacting more subcontracting business.
The contribution of the General Motors Plant to the economy of my riding is of great significance Mr. Speaker, and I trust that this company will continue to play a major role and will very soon go forward with its ambitious investment project. General Motors facilities in Quebec should be on an equal footing with those in southern Ontario.
In addition to the General Motors plant, the Blainville-Deux-Montagnes constituency has numerous small and medium-size businesses which provide stable employment to a

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considerable number of residents. Similarly Mr. Speaker, it should be pointed out that this constituency has major assets which allow it to face the future with great confidence. Indeed, because of its very advantageous strategic position it would be the envy of many Canadian constituencies. Located near two international airports and the Port of Montreal, Blainville-Deux-Montagnes has undoubtedly what it takes to become a major industrial centre.
Those few brief socio-economic data demonstrate very clearly, Mr. Speaker, that the bill amending the Small Businesses Loans Act is most important for many small businesses in my constituency.
I would now like to go beyond those strictly local considerations and deal with the importance of the private sector in Canada.
Our government hopes to create a favourable climate for investments, and it has realized that private enterprise had to be allowed to play its proper role as a full economic partner. The entrepreneurship shown by Canadian businessmen has substantially contributed to promote economic development in Canada.
We have to recognize, Mr. Speaker, that some 750,000 small businesses provide 26 per cent of jobs in Canada. Moreover, thanks to their vitality, those small businesses created 90 per cent of the new jobs in Canada during the past five years.
I would like to refer to the case of a small business operating in my constituency. In 1982, two local businessmen decided to set up Electromed International Limited whose aim was to establish a structure for the design and manufacture of high technology products and their marketing in Canada, in the United States and in France. In two short years, that young business has now increased its staff from 20 to 35. Within three years, it expects to have 70 employees. That company was recently awarded by the Quebec government the Stimu-lexport Price for its vitality. I take this opportunity to congratulate those business leaders. This short digression on a small business in my constituency is a vivid example of the economic impact of small businesses. If that kind of success was experienced at the Canadian level, our unusually high unemployment rate would be drastically reduced.
This government has realized that it should cooperate with small businesses to enable them to make a larger contribution to the economic recovery in Canada.
I am pleased that my colleague the Hon. Andre Bissonnette is undertaking this week a Canadian tour to consult businessmen, groups, financial institutions, labour, educational institutions and provincial governments. Our government knows quite well that our policies cannot be developed in isolation
but that they should take into account the proposals put forward by those directly involved.
Through public meetings, our government will gather information, constructive criticisms and suggestions which will help us to meet the needs of Canadian businessmen.
In the same spirit, Mr. Speaker, I am pleased to note to what extent the federal-provincial relations have improved during the past six months. As evidenced by the results of the First Ministers' Economic Conference which was held in Regina, both levels of government are determined to work in a spirit of full cooperation. By avoiding the pointless federal-provincial bickering which had unfortunately become our predecessors' trademark of sort, the Progressive Conservative government will significantly contribute to fostering confidence among private investors. These sterile federal-provincial quarrels have certainly played their part in destroying the confidence of Quebec businessmen. Our government has realized that reestablishing a climate favourable to new investments is a sine qua non for our continued economic recovery.
Mr. Speaker, I should like to emphasize that Bill C-23 should be perceived as part of a series of measures aimed at encouraging entrepreneurship within the private sector.
Over the past few years, small business representatives have made countless representations in their efforts to obtain a streamlining of government regulations. Our government recognizes that small businesses have been the victims of "over-regulation". So, we intend to simplify a good many regulations which have very often inhibited the extension of small businesses and the entrepreneurship of our businessmen. In my humble opinion, thanks to measures such as these, the lot of small businesses can only improve. The state must provide the private enterprise with more latitude to operate.
Mr. Speaker, I feel that this long preamble on the importance of the private sector was necessary before I dealt more specifically with Bill C-23.
Mr. Speaker, I consider this bill of utmost importance for many small businesses, and that is why I support it unreservedly. In the province of Quebec, for instance, for the year ending December 31, 1983, 9,908 small businesses representing some 38 per cent of the total for Canada have availed themselves of the Small Businesses Loans Act. Such a figure proves better than any theoretical demonstration the need for such a legislation. Let us not forget that these 9,908 Quebec businesses which have availed themselves of the provisions of this legislation have created within their communities thousands of jobs. Moreover, they have had locally, more often than not, a multiplier effect by increasing the demand for goods and services.
Together with my colleague Hon. Andre Bissonnette, I do not feel it would be indicated to rise the $100,000 ceiling for these loans. As a matter of fact, Mr. Speaker, the average loan granted in 1984 amounted to only $28,888. This $100,000
February 26, 1985

ceiling for these loans clearly seems to satisfy those who are directly concerned.
Mr. Speaker, there is a second aspect of the Bill that deserves further consideration, and that is the provision that losses will be shared between the Government and the lending institutions. Under the present legislation, the Government is liable for the full amount of losses sustained on loans. This is a situation which, in my view, is very unfair and should be corrected. In the Bill before the House today, the lending institutions will have to share the liability with the Government, that is, they will be liable for 10 per cent of losses sustained on loans to small businesses. The Federal Government will continue to pay the lion's share, since it will be liable for 90 per cent of such losses.
I do not think this puts any undue burden on the lending institutions, and I feel such a measure is entirely justified. I also think it makes very good sense to charge lenders a single fee which amounts to 1 per cent of a loan made under the Act. In this way, the Government will be able to recover part of the losses sustained on these loans.
Finally, Mr. Speaker, I would advise Members opposite not to delay unduly the passage of this legislation. The Small Businesses Loans Act can be said to have passed the test of time, and now, Hon. Members must act quickly to respond to the increasing number of applications under the Small Businesses Loans Act. As the Member for Blainville-Deux-Mon-tagnes and former owner of a small business, I realize how important this legislation is to many local small businesses.


Mr. Deputy Speaker:: Any questions or comments on the Hon. Member's speech?


Mr. George Henderson (Egmont):: Mr. Speaker, my concerns about Bill C-23, an Act to amend the Small Businesses Loans Act, is not so much its contents but what is not contained in the bill. The small business sector of our economy certainly has the potential to create jobs but I suggest that it is facing severe difficulties in Canada.
Under, the Small Businesses Loans Act in my province, only 101 loans were submitted in 1983. The total amount of money that was borrowed was $2.4 billion and the average loan in P.E.I. in 1983 was approximately $23,000. That is down significantly from the national average loan of approximately $28,000. The problem related to national programs for small business is the geographic difference and population difference in various parts of the country.
There are three main industries in Prince Edward Island: agriculture, which is the primary industry, the fishery industry, which is basically the inshore fishery; and tourism.
If we look at tourism, Mr. Speaker-I listened to my friend from Carleton-Charlotte (Mr. McCain) yesterday, and I see him coming in now-he made the point that with the lower
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dollar we should see more tourists in the Atlantic Provinces, certainly in Canada in general. This is an area that Canada can certainly continue to develop, but in Atlantic Canada we find that while there may be one aspect of an industry or program which is helpful, we run into all kinds of other things that work in the opposite direction. In the tourism sector I think it is mainly high gasoline prices which will have a very serious effect. The increase in ferry rates to my province is also going to take away from any benefit we may have gained by a cheaper dollar.
Small business is faced with many, many problems. High interest rates affect small business in a very detrimental way. With the fall of the dollar it is likely that we will see another round of high interest rates which would have a serious effect on small business, including our tourist operators.
In Prince Edward Island, as in Atlantic Canada generally, we have only a three-month tourist season because of climatic conditions. In my province we have high operating costs because of high energy and transportation costs. This will certainly make people who come to my province look twice. Most of the tourists that we get come from either the New England States, Quebec or Ontario. Therefore, transportation adds to their costs. If they have x number of dollars to spend, if most of them are blue collar workers, and it is going to cost them more at their vacation site, they will shorten their stay by a day or so. Therefore there will be no net benefit.
If we look at agriculture in Canada today, Mr. Speaker, it is in serious trouble. In my province the main agricultural product is potatoes. We are noted for potatoes, as my friend across the way knows. Yesterday we discussed briefly the contemplated increase in inspection fees and what effect that will have on our farmers in Atlantic Canada. As well, hog and dairy producers are affected by high freight rates which are reflected in the price of feed grain in Atlantic Canada. The picture is not bright for the agricultural and tourist communities.
How are we going to create the jobs which all Members from Atlantic Canada believe are going to be necessary in our part of the country over the next few years? It seems as though every time we see a break coming, there is something else that the bureaucracy or the Government bring in to offset that slight advantage. That concerns me a great deal. Look at the fishing industry. In my province it is mainly an inshore fishing industry. Here is an opportunity for some sort of expansion in that industry for value-added products, and research into value-added products, but there is a tremendous problem with the small fishing industry today as it relates to processing.
I have in my riding a very, very good fishing operation called Acadian Fishermen's Co-Op. I think I used this as an example of how small business is having some real difficulties. This Co-Op was formed many years ago, expanded in the early 1970s with great anticipation of the advent of the 200-mile zone, and they thought they could take full advantage of a lucrative fishery and processing in the 1970s. That company, like all other fish processing companies, got into some very serious difficulties through over-capitalization, and high interest rates put a tremendous squeeze on them. As well, they were

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in competition with some of the larger processing companies in Atlantic Canada and elsewhere.
One of the problems which small business has is cash flow. In many cases they buy a raw product, process it, and then it has to sit in warehouses for many weeks, sometimes as much as a year, before it is actually sold on the market. Of course, when that happens we sometimes get panic selling by those companies. That tends to bring the price down on world markets to a point below the cost of production. You must remember that holding on to a large inventory of goods means high costs. Even if the company is in fairly good financial shape, it has to bear the burden of those dollars tied up over long periods of time. That puts these companies at a tremendous disadvantage if they cannot recover the cost at the other end, in the market-place. Of course, it is then mostly larger companies which get into these problems of high inventory and they start dumping at the wholesale and retail levels. No small business can cope with that sort of situation for very long. Where do they turn to? This legislation does very little for them, because if you have to borrow money at high interest rates, it does not do you an awful lot of good. I think we have not addressed the interest rate situation.
Getting back to the Bill specifically, local credit unions are usually the financial institutions that loan money to small business in my area. They have not used this Act in the past because it has simply no profit margin for them, and being a small financial institution, they cannot bear the cost. It presents some great problems to certain areas of our country. It may not have the same effect in what I call the Golden Triangle of Montreal-Toronto-Ottawa, or in areas that are very close to American markets or markets within our country.
Then we take a look at some other areas of potential growth. We look at a company or a business operator, someone with a good idea who wants to put that idea in the form of a business. I went through this myself a number of years ago in the shellfish industry. I set up Canada's first commercial oyster factory. This was a totally new and innovative idea. It was the first in Canada. I had worked on the research stages with the Fisheries Research Board of Canada. We had the theory worked out in the lab stages in what I called the beaker stages. You bring oysters into holding tanks at a certain water temperature. You take the oysters and you spawn them artificially. You put them in tanks, rear the larvae, and have the larvae set on culch, as they call it. Then you take them from there and put them in the natural environment. You then raise them through to maturity, which takes about five years. In nature that would be a 12-year process.
One of the problems I had in setting up the business was that I needed buildings, tanks and equipment. In some cases I needed very innovative equipment, equipment that had to be designed specifically. That is quite a capital outlay. Then one needs staff and technicians. In the long run you have to wait five to ten years to get any amount of money back from your
investment. But what happens in the interim? Like most people, you find yourself with a cash flow problem.
Where do you turn? When you are setting up the new business today you may be able to get help. In most cases Governments do have vehicles, grants systems, that will help you with your capital infrastructure. But that is only part of the problem of operating a business. The real problem is to be able to operate and carry on in the interval between the time you develop a product, sell it and have cash coming in. That is one of the problems. The Government today and Governments in the past have not had the proper financial mechanism in place for that to take place. Research and development is an area which should be taken full advantage of. We are not doing enough research and development which is needed to create jobs. It will have to be done in the future if we are to create the kinds of jobs that are necessary.
Just last week I talked to a man who is into fox farming. Many years ago Prince Edward Island was noted for its silver fox. Prices back in the early 1900s were as high as $250,000 for a pair of fox-breeding stock. For many years that industry was flat. In the last number of years it has started to come back to a point where there is a profit in it.
For a person interested in fox farming today once again there is a tremendous capital outlay required to start. First, you have to have your ranch in place, which costs a good amount of money. You have to set yourself up with breeding stock. It takes a while to get into the business, three or four years. Those involved with it who understand the genetics of raising foxes, and one thing or another, sometimes are not the ones to benefit. You will find that corporations exploit that kind of an industry, which should be left to those who can do it best, those who understand the industry. Understanding and being able to operate a business is no good unless you have access to the dollars to carry on the business.
These are some examples of how small business is having great difficulty today. Some of our small contractors in rural areas have a tremendous impact on job creation. Once again, they have difficulty getting the required dollars. Contractors do two or three jobs and they have five or six people working for them in the summer months, sometimes year round. They are, however, restrained. They could get lots more business if they had the cash flow, the dollars to tide them over. This is very difficult and this piece of legislation is not doing much for it.
Let me come back to the agricultural industry. Certain areas of small business have to have some support from government. I am speaking about infrastructure. What if you grow potatoes and you do not have the transportation to take those potatoes from the farm to the market? You would find yourself in great difficulty. In my own area we ship about 80 per cent of the potatoes from Prince Edward Island. We were looking for a deep water berth which amounted to $3.5 million to $4 million contract, which was approved. I am now told that is being held up. Governments have to take a look at providing the infrastructure to our industries so that small business can
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provide the jobs that this Government and I am sure every Member of Parliament would want to see provided.
We can no longer carry on with the welfare state. We have to make sure the dollars we spend in government are spent properly. We should ensure that things are helpful to business and not a hindrance. I come from the business world. There is so much red tape about. Every time you turn around something is in the mail which has to be Filled out. I hope the Government would seriously consider what is happening out there. I hope the Government keeps its ears to the ground to do something to help the people of this country rather than hinder them.
I thank you, Mr. Speaker, for your indulgence. Those are just a few suggestions I wanted to make to add to this debate
today.


Mr. Deputy Speaker:: Are there any questions or comments?
The Hon. Member for Louis-Hebert (Mrs. Duplessis), for questions or comments.


Mrs.   Duplessis@: For comments, Mr. Speaker.


Mr. Deputy Speaker:: Please proceed.


Mrs.   Duplessis@: Mr. Speaker, I was quite disappointed in the speech made by the Hon. Member opposite. He obviously does not seem to understand what is happening today to small businesses. I do not know whether he is satisfied with the so-called climate of trust the previous Government tried to create with respect to small- and medium-sized businesses when it was in power, but that is not what this Government intends to do. Just so he will understand, allow me to explain to him what I think of the main features of this Bill and tell him to what extent the Government is anxious to continue to play its role of catalyst with respect to the initiatives of small business in the private sector. I will not insist on what I feel is an administrative re-arrangement of the basic and lasting purposes of the legislation, namely the additional $300 million provided under this measure.
However, the new definition of small business in the Bill is finally geared to the economic situation which has changed radically since 1977. True, the new $2 million ceiling no longer jibes with the definition given by Statistics Canada and the Small Business Secretariat, as the Minister of State (Small Businesses) pointed out. On the other hand, this amendment calls for a broadminded approach in the sense that our Government readily acknowledges that the sales of a small business are expected to grow along with its activities and that the inflationary trend in recent years has put a damper on sales figures, with the result that some businesses which need financial support had been left out in the cold.
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Mr. Speaker, is there need to point out that the sales of most Canadian small businesses are in line with the standards advocated in the Bill? When I say most businesses, I mean that more than 95 per cent of Canadian companies account for at least 30 per cent of the GNP, as the Hon. Member for Saint-Leonard-Anjou (Mr. Gagliano) reminded us on behalf of his Party. Our colleague may have been carried away by his own oratorical flight, so I can appreciate why he forgot to mention that the Bill finally reflects the reality of our economy.
Without a doubt, job creation has to be the most significant contributive role of those economic components. According to the Canadian Federation of Independent Business, all new jobs in Canada between 1980 and 1982 were created by small businesses with fewer than 50 employees, including 18 per cent by companies less than two years old.
It is further evidence that we do need those entrepreneurs, and we will encourage them through this Bill. We must encourage them, not take their place. Let me explain. Last February 6, Gulf Canada President John L. Stoick addressed the Greater Barrie Chamber of Commerce and stated-


The Acting Speaker (Mr. Taylor):: I hesitate to interrupt the Hon. Member, but the comments in question should be very brief. I think his comments are now verging on a speech. Would he complete them and then ask a question, please?


Mrs.   Duplessis@: Mr. Speaker, far from making a speech, I was just commenting on the red tape for which the Hon. Member opposite was reproaching us. I should like to follow my point to the end, in order to provide explanations and directly respond to his speech. I continue.
The President said this: The various governments should not forget that what the people with entrepreneurship and owners of small businesses desire is a more discreet presence of the state in their endeavours, and not an increased participation.
It is this more discreet presence that must be provided to these businessmen, and the purpose of this bill is to encourage them to act without, however, the government taking the initiative in their places. So, the difficulties small- and medium-size businesses meet when trying to secure financing are among the major problems they face when they reach their full development. That is why I like the provisions dealing with amalgamated borrowers and the possibility for them to obtain loans under the new program. Indeed, under the new program, increased loans may be obtained through an amalgamation. The amendment which the Hon. Minister has proposed ensures to the corporations the reimbursement of the loans made under the program-


Mr. Rossi:: Mr. Speaker, I rise on a point of order.

February 26, 1985
Small Businesses Loans Act
Mr. Speaker, this sounds much more like a prepared speech than questions and comments.


The Acting Speaker (Mr. Taylor):: I think the point of order is well taken. The Hon. Member has now spoken for five minutes. I would suggest that you put your question, if you have one. We will give you 30 seconds to finish your comments. Is that satisfactory?


Mrs.   Duplessis@: I hope, therefore, that Hon. Members opposite will support this bill which could create new jobs and ensure our economic recovery, for it is well known that small businesses are the engine of the economy.


George Roland Henderson: Mr. Speaker, I certainly did not hear a question in the Hon. Member's comments, so it is very difficult for me to reply. I have to give her some credit because it looked like she had a prepared text which was typed out while I was speaking; I do not know where the secretary was.
However, I think the Hon. Member has missed the point because there was no correlation whatsoever between what she said and what I said. She is supporting this Bill. I mentioned earlier that I am not so much against what is in the Bill but what is not in it for small business. Anyway, this Bill has a regressive aspect to it inasmuch as there is a 1 per cent charge on loans to banks. I have talked with representatives of financial institutions in my riding. I hope the Hon. Member has talked with her financial institution representatives in order to obtain their feelings on it. I challenge her to visit my riding and discuss it with the managers of banks, credit unions and other lending institutions. They will tell her that this 1 per cent stipulation will not work for them. Therefore they will not be very co-operative as far as lending money to those who really need the dollars is concerned.
That is the point I am trying to make. I certainly respect the Hon. Member's comments and views, but in the real world out there it is extremely difficult for small business. It is extremely difficult for them, unless the business was inherited from a family member or from someone closely related, or some government came along with a substantial grant. Even with a government grant, provincial and/or federal, they require operating capital. This is where many small businesses fall down. It is the fact that they do not have the capital with which to operate after they have established themselves. That problem is not dealt with in the Bill. I hope the Government takes a look at it in committee to see if it could bring in some program which would be of real assistance to small business.


Mr. Andre Plourde (Kamouraska-Riviere-du-Loup):: Mr. Speaker, I wish to thank you for giving me my first opportunity to speak to this honourable House. My reason for making my maiden speech as the Member for Kamouraska-Riviere-du-Loup at this particular time is that the Bill before the House today is an excellent one and is worthy of the set of measures the Progressive Conservative Government is proposing to restore the health of our economy. It is therefore an honour and indeed a duty for me to express today the concerns of the people of Kamouraska-Riviere-du-Loup with respect to Canada's economic future, because it is my sincere conviction that if we are to restore this nation's economy, we must start with the regions. They must have a say in the matter. The fact that I am speaking today to the Parliament of Canada on their behalf is the most precious gift I could ever offer my constituents and is also the measure of the thanks I wish to extend to a team of workers and representatives in my constituency, because in Kamouraska-Riviere-du-Loup, we also live by the words: "Co-operation, co-ordination and collaboration", a motto that honours this Government of which I am proud to be a Member and which reflects honourably on all Canadians.
But, Mr. Speaker, what do the people of Kamouraska-Rivie-re-du-Loup want? They want jobs, and they want food on the table. The Bill before the House today is concerned with exactly that, because if we stop to think for a minute, we will realize how important small business is to our economy.
In fact, it is very easy to understand. We only have to ask: What sector generate the greatest number of jobs? The answer is easy: small business!
Over the period 1978-1982, at the height of the recent depression, they generated almost all of the new jobs that were created. Today, they account for 30 per cent of the Gross Domestic Product in the private sector. Numbering over three quarters of a million, they make up 96 per cent of Canadian businesses and are managed by a class of entrepreneurs who reflect both this country's economic vitality and the image of our changing society. Their average age is 35 to 45, with women on the increase. Their number has increased threefold between 1964 and 1980. And people under 30, anxious to take risks and confident of investing in this country are now twice as numerous as they were 15 years ago.
But for the SMBs to fully exercise their role as the locomotive of our Canadian economy, they must have the means to do so. In order for a business to create jobs, it must operate. And in order to operate at a fair rate, it must provide for a minimum of competition, which means that it must improve, modernize and adjust itself. And in order to do that, the owner of that industry must have access to the funds that are available.
Already, Mr. Speaker, the Progressive Conservative Government has taken a major step towards the promotion of financing for Canadian SMBs by creating Investment Canada, which will build a climate of confidence liable to attract foreign capital and to strengthen the backbone of our economy. All our regions will benefit.
In the case of the Province of Quebec especially, an ancillary agreement under the Canada-Quebec RDA has been
February 26, 1985

signed in order to foster among other things the setting up in our areas of industrial infrastructures. This is another initiative put forward by this Government to encourage industrial expansion and promote SMBs.
All those measures taken in a relaxed and harmonious atmosphere have had a most beneficial impact on our economy and what I might call the "troups' morale".
I spent all of last week in my constituency, where I had the chance to take the pulse of the people, not only of industrialists and workers, but also of all those men and women who on the surface are very remotely involved in that sector. The response was unanimous. The feeling is the same everywhere. Now they can relax! Now, they see the light at the end of the tunnel. But those initiatives, Mr. Speaker, are but a first step. With the legislation now before us, we are taking another step along the road to the summits of excellence which Canada has every right and every duty to look forward to.
That goal is apparently being lost from sight. Too many years of mediocrity, too many years of unhappy results have made us forget that Canada can have its place in the sun. Not in the shadow of another country, but in the full light of day, side by side with our partners from around the world-the Americans, the Japanese or the Europeans. Too many years of neglect under a Liberal administration have led us to forget that we must look far ahead and set our sights high. Such are the secrets, such is the recipe for success. Still, we have let them gather dust.
However, the clean-up has started, and times have changed. With the help of measures like Bill C-23, we have rediscovered the recipe and we can once more aim at those summits. Because with a legislation such as this, our economy can not only tap the international resources to strengthen itself, but it can also turn directly to our national heritage.
I am indeed a bit surprised that our Liberal colleagues would oppose this Bill which promotes Canadian participation in our economic recovery, as this is precisely what they were asking so vehemently a few days ago when Bill C-15 was under consideration.
However, we should not be too upset, Mr. Speaker, because it is not the first time that the Official Opposition contradicts itself. We can see this contradiction in statements like those of the Liberal critic for regional industrial expansion about the 1 per cent fee being charged. He seemed to be suggesting that this fee would be charged every year. This is false, Mr. Speaker, and I fail to understand why the Official Opposition would want to put such doubts in the minds of Canadian men and women. This fee will be charged only the first year and it only affects the return by 0.25 per cent over the average term of a loan, which will do nothing to discourage lending institutions from taking part in the program.
As for the allegations by one of the more vocal Members of the Opposition that the banks will not agree to share 10 per
Small Businesses Loans Act
cent of the losses incurred for guaranteed loans, 1 wonder how the Hon. Member for Hamilton East (Ms. Copps) can presume such a thing when we know from experience that the losses have been relatively low in the past. The risk taken by the banks is therefore minimal compared to the benefits.
However, these trivialities brought up by Hon. Members opposite make me digress. Let me come back to what I was saying.
Bill C-23 will be an excellent tool to help our national economy which is now on the rise. We must not follow the example of Sisyphus and let the stone roll back down the hill. We would then have to start all over again. This is exactly what would happen if we did not approve this Bill immediately. We would have to start all over again. One of the main purposes of this Bill is to provide supplementary funds to allow the banks to continue to administer the program until March 31. Is it our fault if lenders and borrowers have confidence in this program, which meets a real need, and if they make use of it?
Interrupting this program, even only for six weeks, even only for one week, even only for one day, would be enough to destroy all the confidence which surrounds it and which is the main reason for the success of a service which has amply proven its usefulness since its implementation 24 years ago by the Conservative Government led by the Right Hon. John Diefenbaker. Mr. Speaker, any interruption in this program would undermine the efforts made by people throughout the country to promote economic recovery.
Indeed, why dillydally? Why not pass this bill immediately? In addition to the sense of continuity I have just described, a clear evidence of the trust we have in the business sector, the other aspects of the Bill only show plain common sense. This bill does not radically alter the current program but only makes it more consistent with the economic realities of 1985. It simply recognizes the role of each economic sector. Thanks to a deeper involvement, the banks will feel more comfortable while relying on a firm government support.
In addition, the bill will enable small businesses to expand and to diversify into research and development, which is so essential for the growth of our economy and its adjustment to world markets.
Through the comprehensive measures advocated by our government, Canadian businesses will now have the means to devote part of their energy to research and development. This sector has been neglected for too long. In 1968, Canada allotted 1.3 per cent of the its Gross National Product to R&D. Fifteen years later, that percentage has remained unchanged while our economic partners throughout the world doubled or tripled their investments in that sector. During that period, strangely enough, Canada has known stagnation. We have spent less per capita for research and development than

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any other industrialized nation except Iceland and Ireland. The time has come to change that. Through its actions, among which Bill C-23 which I wholeheartedly support, the Progressive Conservative government intends to set a new direction.
However, we do not want to act unilaterally nor impose our views. We leave that to others I need not name. This desire to consult and meet the needs and demands of people, especially in the industrial sector, has been warmly welcomed as shown by businessmen's statements reported in the great Toronto daily, The Globe and Mail:
[English)
Small business groups say they like the sound of the Government's word. [Translation]
Does this not prove beyond doubt that Canadian businessmen are receptive to the various initiatives taken by the Mulroney Government?
And if it is true for the whole country, it is also true for my constituents.
Some will say that the economy of my riding is primarily based on agriculture. Some might even suggest that a Member from such a riding has no need to be concerned with the problems of small business.
They are wrong, Mr. Speaker. First of all, I must say that I have great respect for people living of the land. As a matter of fact, there are many in my riding and they have special problems. I am well aware of that and throughout my campaign, I made representations on their behalf and demanded policies geared to their needs. Since my election, I did everything in my power to carry out the plans of action developed jointly by farmers and myself.
So, this group is very important, but it is not alone. There is too often a tendency to forget the offshoots of small business located on the fringe of large centres like Montreal and Quebec City.
It is about time our regional industries had their say and a place in the sun as well. As I have been all my life in small business at every level, from the position of clerk to that of chief executive officer, I certainly speak from experience rather than in the abstract.
Mr. Speaker, small business is certainly as important for regional economies as for larger centres, but it is wrong to suggest that the problem should be dealt with in the same manner.
It would therefore be illusive to think that megaprojects are a must before a region can be put on the map, for what is needed is presence and visibility. We must not be afraid to show dynamism in strong regions. I would point out that the provinces were not the only victims of the centralizing mentality which the Liberals made us endure for nearly twenty years-centralization was so powerful that its impact was felt even in the regions.
For too long now, Mr. Speaker, people have forgotten that we cannot have a strong economic country unless the regions are strong as well-there is no way the whole can be strong if the parts are weak. It is unthinkable and illogical, and that is something the team to which I belong has long since recognized. As evidence of that, take the agreements signed with the provinces-including the Atlantic Accord-or again the spirit of open-mindedness and co-operation that prevailed at the Regina conference hardly a few days ago.
Indeed, Mr. Speaker, national prosperity can come only through sound regional development policies. The regions have no need for gigantic projects and white elephants, but there are other options available.
We can pave the way for regional development by encouraging small business, particularly with respect to natural resources. We have to look around us and exploit what we do have. What is the point in trying to get and develop a resource which abound in the next region? Let us make an inventory of the resources around us. Let us develop them, so that we will have strong regions.
In Kamouraska-Riviere-du-Loup, for instance, we do have several promising resources which are often neglected-fishing, and particularly eel fishing. How is it that eel fishermen have only one outlet for their product, which is to ship it to Montreal from where it is exported to Europe? How is it that we have this resource back home, yet its economic fallouts can barely be felt?
The same goes for peat. Why not start up small businesses to process that nearly inexhaustible resource, while peat bags from Riviere-Ouelle, Riviere-du-Loup or elsewhere are for sale on Toronto, Winnipeg or Vancouver markets?
What about our forests? There again the response is unsatisfactory at the economic level. Some industries are leaders in that field, but they can never be really competitive because they are often short of cash. We are strangling them instead of lending them a hand. That practice has to stop. In terms of tourism, my region is nothing more than a throughway between Quebec City and the Gaspe area. What are we waiting for before we develop that tourist industry, that natural and cultural wealth which lies idle along that throughway? The resource is there all right, but it is left unused.
As far as farming is concerned, unfortunately we lack SMBs to process foodstuffs in our area. We have a few which we often look upon as economic pillars for the region, but there are too few of them considering the potential we have.
Also needed are economic development agencies in the area itself. Agencies such as the Corporation de developpement economique de La Pocatiere, which is in charge of industrial promotion for the whole of the Kamouraska County Regional Municipality. This is a Quebec first in that field, and my area is proud of it. Other projects may follow such for Les Basques
February 26, 1985

and Riviere-du-Loup, and this goes to show the positive spinoffs of a healthy decentralization.
There is another kind of agency that could have quite an influence. I am thinking of job creation agencies which cause the most productive interaction, the almost ideal form of co-operation between the private and the public sectors. Being aimed at providing venture capital to the SMBs of a CRM, the key companies can easily become a vital element for the economic survival of a region. The areas of La Pocatiere, Les Basques and Temiscouata are waiting for the setting up of such agencies that would complement the work done by other agencies while responding to the real needs of CRMs. Those companies are proving to be a first rate effort in regions that have been neglected up till now as far as economic development is concerned.
Finally, one has to rely on the vitality of the regions and in ours just as elsewhere in Canada people have rediscovered on September 4 a climate of confidence, conducive to innovation and progress. To illustrate that, we are organizing a seminar on subcontracting which has been labelled a major economic event in Eastern Quebec. The purpose of that seminar is to publicize the region and get entrepreneurs and potential investors to consider our area-


The Acting Speaker (Mr. Taylor):: Order, please. I hesitate to interrupt the Hon. Member, but his time has expired. He may continue with the unanimous consent of the House. Is there unanimous consent?


Some Hon. Members:: Agreed.


André Plourde: Looking at our area from the business location point of view, it is inconceivable that a number of our own industries, such as Bombardier for instance, cannot farm out more of its operation in the region itself, for lack of adequate industrial resources.
As I said, the time for centralizing imperialism is over. As reported in "La Presse," more than 60 percent of Quebec's SMBs are located in Montreal. What is left for the regions? Tidbits only. Enough of that! We must think out another formula, a winning formula this time. Such is the purpose of that seminar on subcontracting at which the public sector and private entrepreneurs will be able to meet, to explore new markets, to strike out good deals. That seminar fills a gap and also reflects the economic enrichment that can be generated through consultation between all parties concerned in a given region. In our area, it is the first time that such an exercise is attempted. It was about time, and it is to be expected that its results will be quite beneficial.
Mr. Speaker, as we have been saying, it is our firm belief that the private sector is the power supply of the economy. But
Small Businesses Loans Act
the private sector alone cannot do everything. This is why the various levels of government must also play their roles. The current government, Mr. Speaker, is leaving to the private sector the free hand it needed to provide a healthy leadership. But the Government will also be there when the time comes to help the private sector by means of efficient and positive incentives. And among those incentives we have Bill C-23, now before us.
This Bill is clear, simple, farsighted and logical. It meets the needs of the business community by guaranteeing initial loans for industrial expansion. It meets the needs of the people because it will foster job creation.
I therefore support this legislation and I urge all Hon. Members to do likewise.


The Acting Speaker (Mr. Taylor):: Are there any questions or comments on the speech of the Hon. Member? On debate, the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan).


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, I am privileged to be able to speak on this Bill today.
I noticed the remarks of the Minister of Regional Industrial Expansion (Mr. Stevens) in his press release on January 25, which stated:
This initiative demonstrates the federal Government's recognition that small business is the engine of economic growth.
He seems to be in conflict with the Minister of Energy, Mines and Resources (Miss Carney), who says that energy is the engine of economic growth. It now seems that we have two engines in the country which do not work. The people of Canada are counting on those two engines for economic stimulation, growth and jobs. It is a tragedy. What the Bill does is ruin the benefits which the Small Businesses Loans Act has been providing over the last number of years.
The Government has indicated that small businesses are creating about 80 per cent of net new employment and that is the reason the Bill is important. I agree with that statement and I believe there is general agreement with it. This Bill is important. Small business is extremely important for Canada. If we do not have a healthy small business sector, we cannot hope to develop the economic headway which we want. This Bill does the exact opposite. It ruins the benefits that the Small Businesses Loans Act has been providing to small business.
The Government says that small business plays an important role in generating activity in the lesser developed regions. Potentially, that is true, but it is not happening. Anyone who looks at the statistics will realize that small businesses are going bankrupt in areas where the economy is not healthy. There is a growing gap between the economically successful regions of Canada and the areas which are undergoing regional disparity. It is a tragedy. There is no longer a common denominator in Canada. Certainly, the Government, in saying this, is misleading Canadians because it is not true and it is becoming less true every day.

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I would like to read into the record two of the goals that the Department of Regional Industrial Expansion has set forward for small- business. One goal states:
To support the development of an economic climate that promotes the small business sector's strong sense of competitiveness, entrepreneurship, creativity and risk taking.
Another goal states:
To encourage and support the important role of small business in economic and regional development.
If anything could be further from the truth, it is the role and the activity of this Government in using small business to generate activity in the area of regional development. It is a travesty. It is tragic because we are losing valuable time.
Any Member of the House could tell us that small businesses are closing down across the country. During the recession a great many small businesses were forced to close. The small businesses which we have today are hanging on by their fingernails. If interest rates increase, those businesses will not be able to withstand a second assault on their sphere of interest and they will close in large numbers.
What happens every time a small business closes in an area which does not have sufficient economic growth? What happens in an area where there is not a large population base which does not have convenient modes of transportation for the shipment of goods? What happens when that area does not have a market nearby? When a small business closes in those regions, in most cases the business does not return. If that business is to open again, it will open in a larger centre. That small business will be lost to the community and it will not return. That is a tragedy.
How is this Bill supposed to help small business? First, the funds to March 31, 1985 were originally $1.5 billion. That figure was increased by $300 million to $1.8 billion. That is a good decision on the part of the Government and I congratulate it on that decision. However, by saying that only $1 billion will be available from April 1, 1985 to March 31, 1990, we are sending a signal to the small business community that we are losing interest and that there is not a commitment to help small business. That signal will be readily grasped by the small business community in Canada.
The Government has said that we must be careful. Yes, we do want to help small business, but we do not want to help it that much, because in 1984 $43 million was lost. That is really something. That amount of money is important. However, on the one hand the Government is saying that it wants to help small business, and on the other hand it is keeping a score-card on small business. Which will it be? Does the Government want to help small business or not? The Government does not want to lose money on this program. It wants to provide guaranteed loans for small business, but it does not want to have to pay for it.
Where is small business really going to get the assistance it so badly needs? The Federal Business Development Bank's fiscal requirements are almost as bad as the chartered banks
and other financial institutions. It is worried it is going to lose money. The Government says it has to help small business financially but it gives with one hand and takes away with the other, and that is wrong. Clause 2 of Bill C-23 relates to Section 3 of the Small Businesses Loans Act. There is a very pertinent subsection in this Bill. I quote Subsection 3(2)(c). This relates, Mr. Speaker, to how a bank can get reimbursed for any losses under the Small Businesses Loans Act. One of the requirements is that the bank has to be able to say, through a responsible officer of the bank, that it certifies, I quote:
-a responsible officer of the bank certified that he had scrutinized and checked the application for the loan and the statements contained therein with the care required of him by the bank in the conduct of its ordinary business:
That is a section which puts an onus on the bank. It was one thing when the banks were reimbursed 100 per cent for losses under the Small Businesses Loans Act, but what the Government is now saying is that it is only going to reimburse the banks 90 per cent. I can see that perhaps the Government does not want to be overly generous with the chartered banks, but the present and preceding Governments have put the chartered banks in the position where they have complete say over where the money goes. The Government only requires that the banks tell them when loans are made and when loans are defaulted upon.
This Bill puts the chartered banks in the position of social institutions by giving them control over loans to small businesses through the vehicle of the federal Government, and the federal Government is saying that the banks will get back 90 per cent. The banks got back 100 per cent before this and they are not philanthropic. No one can ever say that about them. So what initiatives are the banks going to show? I believe it is going to mean less and less of a concentration upon and concern with areas of this country which have economic difficulties. I would challenge any Hon. Member of this House, or indeed anyone, to check with the financial institutions in areas of regional disparity in this country and find out how much money the banks have allowed under this particular Act for those particular regions in the past four or five years.
I know that under the Small Businesses Loans Act in my area of industrial Cape Breton-which now has an unemployment rate of 40 per cent-not one cent has been received in recent years under the Small Businesses Loans Act. The banks are not prepared to take a chance on these areas. On what basis are they providing nothing? It is only because they had to account to the federal Government that they acted in a business-like way. They couldn't be bothered. They said: "Let's give this money to regions of the country where we don't have to give that accounting; where the presumption that we might help someone or show a little consideration, kindness or leeway to a particular industry which needs help would not be there".
The schedule of provincial distribution which was given to us by the Government shows that Nova Scotia received 1.8 per cent of the money; Prince Edward Island received .3 per cent of the money and Newfoundland received 1.3 per cent of the
February 26, 1985

money. This is ridiculous, Mr. Speaker. This is not helping the areas which need help. Quebec received the highest amount, 38.4 per cent. 1 defy anyone to go into the Province of Quebec and break that down into regions to find out where that money went. I would say without any hesitation that the money went to the more successful economic regions in the Province of Quebec. 1 am just using the Province of Quebec as an example to show what is happening.
The banks now have to pay 10 per cent. The banks are going to say thank you very much. They will consider this Bill interesting reading and will file it, and if they happen to get a client who is perhaps a little marginal but who would have received the loan anyway because he's not a bad guy and they have to keep up some kind of facade, they don't have to take much of a chance. The Government is guaranteeing 90 per cent of the loan. That's the difference in emphasis. The Act is going to be less and less useful to the small business which really needs that money.
In Bill C-23 there is a very interesting concept. I quote from Section 3(4)(b):
the bank has, at the time the loan is submitted for registration or at such other time as is prescribed, paid to the Minister a fee of one per cent of the amount of the loan or such other fee as is prescribed or calculated in the manner prescribed.
Not only are the banks going to get 90 per cent instead of 100 per cent, but they are now paying a fee of 1 per cent. The banks are anything but a social institution or a philanthropic group. We know they are not going to be bothered with this. What kind of nonsense is it? The Government is saying it wants to help small business but it does not want to lose any money. Second, it is saying it wants to help small business, it does not want to lose money, but it wants to make 1 per cent from the banks before it even starts on those loans. What kind of convoluted reasoning is this?
The small-businessman is lost in the Government's mumbo-jumbo and smoke and mirrors in this small Bill. It is just not going to work at all. So who loses? The small-businessman, of course. The banks will not lose, we can be sure of that. They will make sure of that. They are not going to take a chance on losing money by lending it to Canadians. If it were a multibillion dollar firm like Dome, I suppose the banks would take a chance, or if the loan was to a foreign country. But they will not take a chance on the small-businessman and the average citizen in this country. They will foreclose on them at the first opportunity. It is the ordinary citizen and the small-businessman who are picking up the cost of the losses on these loans to large corporations and foreign countries. I am telling the Government that this is not only not going to work but it is a regressive step in helping small business in this country.
What about the other problems of the small-businessman? He is absolutely smothered with regulatory requirements. There is a paper burden on the small-businessman which needs some relief. He spends nights and weekends filling out forms which could be compressed into one form or which may not even be needed at all. When we look at this Bill which is
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supposedly a vehicle of appreciation of what the small-businessmen are doing for this country, we wonder why they would want to bother being in business for themselves at all.
I ask the Government to reconsider this Bill. It is retrogre-sive. I am sure all Hon. Members of the House want to do something for small-businessmen. Let's not make their situation worse than it was before. This Bill is not going to work and the Government is going to suffer as a result of it. The banks are not going to put themselves out and the small-businessman once again is going to suffer.


Mr. Murphy:: Mr. Speaker, I would like to remind the Hon. Member that a lot of the problems which he saw, the excesive number of forms, problems in dealing with the banks and the federal Government, are not things which occurred strictly after September 4. They have developed over many, many years, and the Liberals formed the Government for most of that time. It is not my purpose to get up and defend the record of the Conservative Government; I suspect there may be a few Members left in the House who might do that. But to be intellectually honest, I think we must recognize that a lot of the blame must be placed at the feet of those who served in the last Government, and the Hon. Member was part of that team.
I think he raised some good issues, Mr. Speaker. In dealing with the banks small businesses do not have much clout. We need a legislative proposal which will give those small businessmen and women the opportunity to say there is legislation that provides that the banks should be supporting small business.
I also hope the federal Government, in looking at other problem areas, would not just do what I am afraid is happening at the present time with the Minister of Supply and Services (Mr. Andre), who is putting on a huge ad campaign indicating how much this Government supports small business. I would rather that there actually be a program in front of this House showing that the Government is going to support small business; but we do not have that. The legislation in front of us is really not much different from what we have had in the past from the Liberal Government. If this Conservative Government is going to be true to its call for change, which is the basic reason it was elected, then we should be seeing new legislation to help small business.
Perhaps in responding to my comments the Hon. Member could indicate some of the things he would like to see done which his Party, when it was in government, did not do.


Russell Gregoire MacLellan: Mr. Speaker, I thank the Hon. Member for his comments because they give me a chance to deliver a commercial. I was a member of the Task Force on Regulatory Reform in the last Parliament. We came forward with a report which we felt very strongly about. I agree that the former Government did not act upon that report to the extent we would have liked. I will accept that. But it was not only a question of the former Liberal Government. This problem of regulatory reform exists in all the provinces of this country, provinces with Progressive Conservative Governments and one

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province, Manitoba, with an NDP Government. It is not just a problem of the federal Government. But it is getting out of hand.
I am afraid that all Governments are afraid to tackle this problem. I honestly do not think that government feels it can get a handle on the problem of regulatory reform. It is not an exciting thing. As good as the report is, I do not think Hon. Members will take it home and read it before they go to bed. But it is a tremendously important subject which has to be dealt with. It is needlessly costing this country millions of dollars and it is getting worse and worse every year. I would recommend that the Government read the report on regulatory reform which the task force prepared in the Thirty-second Parliament.


Mr. Nickerson:: Mr. Speaker, the speech by the Hon. Member was most passionate. I can well understand why it should be since he comes from an area of the country where things are not as well as they might be and there is a need for stimulus of business of all types, large and small. It was a great pleasure to listen to him because I sat in this House for some five years and I do not think I heard him speak on more than one or two occasions. A turn in opposition loosens the tongue; I found that myself. But after listening to his passionate speech I was unable to determine whether or not it is his intention to vote for or against the Bill. I wonder if he could advise us what his intention is, Sir?


Russell Gregoire MacLellan: Yes, I have no difficulty with that, Mr. Speaker. I am against the Bill for the most part. I think it is regressive. My only concern is, will the Government use this money for small businessmen starting April 1 as a carrot to get the Bill passed? I know that as insufficient an amount as this is over the next five-year period, it is tremendously important that some money be made available to small business rather than none at all.


Dave Nickerson: Which way are you going to vote?


Mr. Orlikow:: Mr. Speaker, I would like to ask the Hon. Member a question. Does he not realize that in the early 1980s, when interest rates went up very dramatically, many small businesses which had borrowed money to permit them to operate and expand and become more efficient were really forced out of business and put into bankruptcy because they could not live with the very high and rapidly fluctuating interest rates? That happened under a Liberal Government and we are seeing the beginnings of a repeat of that situation in all likelihood happening again. Interest rates are going up and are likely to continue going up.
While this Bill may help a little, what is really needed for small business people is stable and low interest rates through programs which are in effect in other countries but which we have not put into effect in this country.


Russell Gregoire MacLellan: Mr. Speaker, I thank the Hon. Member. Certainly interest rates are going to have a very large role in the success of a large number of small businesses in this
country. Not only is there a question of high interest rates, but you have a lot of small businessmen who are just recovering and holding on from the high interest rates of the early 1980s, as the Hon. Member said.
He mentioned that the former Liberal Government allowed high interest rates. Well, the former Liberal Government was in power at the time, but all Governments in the western world allowed these high interest rates. Certainly it hurt, and it is one thing to allow it at that time, but if it is allowed again it will be a lot like the fellow who lost $5 in the hockey game and then lost another $5 on the instant replay. This Government will be losing $5 on an instant replay and that, I think, would be an incredible situation. So I ask Members opposite to monitor and consider this very serious problem very carefully.


George Roland Henderson: Mr. Speaker, I enjoyed the speech by the Hon. Member here today. He mentioned something about how sometimes government programs work in opposite directions. I know that in Glace Bay a fish plant was burned to the ground, creating even more havoc in that area, where employment is concerned, than was caused by the downturn in steel production and mining. But at the same time the Minister of Finance (Mr. Wilson) in his statement dropped the generic promotion of fish products in the United States. This once again is a prime example of how government programs work in a direction opposite to one another. In other words, they take away from one area and give a little bit to another area. As a result there is no net growth.


The Acting Speaker (Mr. Taylor):: I regret to advise the Hon. Member that the time for questions and comments has expired.
It being one o'clock, I do now leave the chair until two o'clock this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS The House resumed at 2 p.m.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, last summer during the election campaign Members opposite were promising the Canadian people that, if elected, they would become miracle workers, they would create jobs, reduce interest rates, increase the value of the dollar, along with 336 other promises. The people of Canada now realize that this was just a lot of "bulroney". The Government's biggest accom-
February 26, 1985

plishment so far has not been to the benefit of Canadians but to the benefit of its Tory friends.
The Tory Leader who was to reform patronage has been playing Santa Claus on almost a daily basis, by handing out gifts to his friends, such as advertising contracts, plum appointments, and so on. Even there the Prime Minister (Mr. Mulroney) showed his typical way of messing things up by forgetting to advise the people he appoints, who usually find out about their appointments through the media.
He goes on further by appointing people who openly admit that they have no qualifications whatsoever to undertake their tasks and have no idea why they were chosen in the first place. This is the Tory job-creation program. Successful applicants must be Tories, and qualifications are irrelevant.



SEARCH AND RESCUE


Mr. Jim Edwards (Edmonton South):: Mr. Speaker, shortly after dark on February 8, a 22-year old pilot from Edmonton South took off from the border airport of Massena, New York, in a single engine Cherokee Arrow, on a three stage flight to La Guardia. Twenty minutes out, he radioed back to the tower that he had encountered a blinding snowstorm and that he was turning back. He was not heard from again.
Young Bruce Squair's dream was to become a commercial pilot. He needed to build up his hours, and, with the aid of a small inheritance, he rented a white aircraft with a red tail from the Edmonton Flying Club, and set off around North America. On the leg out of Massena he wore a down-filled flight jacket, a flight suite, and sneakers. He carried with him no food, and only a can of diet drink.
By dawn Saturday, units of the U.S. Civil Air Patrol and the Canadian Forces were in the air, flying a search pattern. Mr. Speaker, 1 met with young Bruce's parents the next day on a flight from Edmonton to Ottawa. Bruce had then not been heard from for over 36 hours and, while they were praying for his safety and survival, they knew it didn't look good.
I am happy to report that Bruce Squair is back home in Edmonton today with just a fractured cheekbone and a black eye. The Cherokee aircraft is a write-off. But the personnel of the Trenton Rescue Co-ordination Centre not only spotted Bruce's last flare and rescued him, throughout they maintained a friendly, helpful and positive posture with his anxious parents. They were honest but positive, and their sensibility respecting the family's concern and worry was constructive and assuring.



CO-OPERATIVES EMPLOYMENT CO-OPERATIVES' POTENTIAL

Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I would like to draw to the attention of Members of the House a conference which will be getting under way this evening in Saskatoon. It is a conference on employment co-operatives, and I want to take a few moments to indicate the vital role that such institutions can play over the next few years.
Day in and day out in the House we search for ways and means to resurrect our economy, to create new employment and enhance job security for those who are still working, as well as to promote regional development and increase productivity.
Given time, and a supportive legislative environment, employment co-operatives can fulfil all of these functions. I not only believe they can, I also believe that they will.
Throughout the country Canadians are demanding a new approach to our economic problems. They are tired of quick fix promises. They no longer have faith in the ability of government and they are suspicious, with good reason, of the motives of big business. They are demanding control over their own affairs. Employment co-operatives can satisfy this demand. They are institutions which arise from the grassroots, by the initiative of individual Canadians, not from government or the corporate sector.
It is incumbent upon Governments to follow the lead of their people to create an environment in which employment co-operatives can develop and prosper.
The New Democratic Party was founded on a belief in economic democracy, that people should have control over their own economic destiny. We believe strongly in the potential of employment co-ops, and will do everything in our power to help this important third sector.



THE SENATE


Mr. Fernand Jourdenais (La Prairie):: Mr. Speaker, in view of the delayed passage of Bill C-ll resulting in additional expenditures, a situation due to the fact that the second chamber is unelected, I wish to say on behalf of all Canadians that the government should consider the reform of the second House.
I regret, as many Canadians do, that the leader of the Official Opposition (Mr. Turner) did not keep his word and willfully contributes to the predicament in which the government is at present.
Mr. Speaker, I think that the Official Opposition has lost the confidence of Canadians and that the New Democratic Party seems to be the real official opposition. Therefore, I
2498

February 26, 1985
demand the immediate resignation of the Hon. Member for Vancouver Quadra (Mr. Turner).



EXTERNAL AFFAIRS


[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, last week, on February 21, President Reagan and Secretary Shultz once again escalated their allegations and threats against the Government and people of Nicaragua. In making these threats, the U.S. Government is ignoring the most basic principles of international law and the United Nations Charter. If the United States, a country of 250 million people, is free to bully a small sovereign country of 2.5 million like Nicaragua, then any larger country, including the Soviet Union, can justify bullying smaller, neighbouring countries.
How can the United States condemn the Soviet interventions in Afghanistan and Poland when it is attempting similar tactics in Nicaragua? While Nicaragua may have adopted social and economic policies that are different from the United States, this does not mean that it is a puppet of the U.S.S.R. or a closet member of the Warsaw Pact.
I would urge our Government, which supports the Con-tadora peace process, to recommend a similar commitment to the United States when our leaders meet in Quebec on March 17. Our Prime Minister (Mr. Mulroney) might recommend that President Reagan should visit Nicaragua, like many of us have done. If the President spoke to the people and examined many of their successful development programs, he might change his mind and support Nicaragua, rather than trying to crush this small, besieged country.


Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, I recently had the privilege to represent the electors of the constituency of Ottawa-Carleton during a trip to British Columbia and both northern territories. 1 accompanied the dynamic Minister of Indian Affairs and Northern Development (Mr. Crombie).

We met with government leaders of the Yukon and the Northwest Territories, with Indian, Dene, Metis, and Inuit leaders, and we participated in the impressive opening of the Tenth Legislative Assembly in Yellowknife. We learned a tremendous amount about the frustrations, concerns, and aspirations of northerners and our aboriginal peoples.
There are no simple solutions to their very complex concerns of land claims, Indian status, control of resources, constitutional rights, and many more. I urge the Government, however, to keep trying.
Just as important, however, I participated in the historic First Ministers' Conference on the economy in Regina. I am proud to say that the new spirit of co-operation, harmony, and confidence referred to by all Premiers will generate a renewed strength in the fabric of our federation. Premier Rene Levesque and Premier Howard Pawley both spoke of the positive benefits for the whole of Canada.
A cynical opposition Member was heard to say at the conference that the Tories were just patting each other on the back for two days. It sure beats kicking each other in the teeth.

The economic conference was good for Regina, for Saskatchewan, for all provinces, but still more important it was good for the people throughout our great country. Long live the new government and its leader!



LABOUR RELATIONS


David Orlikow: Mr. Speaker, I wish to draw the attention of the House to recent actions of Bell Canada International in its acquisition of companies in Great Britain and its intention to eliminate the union representing the employees of Cable and Wireless U.K. Services as a precondition for purchasing the company.
I draw to the attention of the House that such an action is illegal under Canadian law, which gives employees the right to belong to unions, and it is contrary to any accepted practice in Great Britain.
Bell Canada has had a privileged monopoly position for developing in Canada, and is now using the power and wealth derived from that position to coerce British citizens who belong to a recognized trade union. This action has created a black eye for Canada in international labour circles. The Government should be aware that Bell's action has not gone unnoticed.
Until such time as Bell meets the legitimate wishes of its employees in Great Britain, by recognizing the trade union of their choice, I call upon the Government to delay any consideration of Bill C-19, now before the House, which permits the reorganization of publicly fostered Bell Canada holdings.
February 26, 1985



FARM CREDIT CORPORATION


Mr. Michel Champagne (Champlain):: On January 21, Mr. Speaker, the Hon. Minister of Agriculture (Mr. Wise) announced a reduction in the interest rates on loans provided by the Farm Credit Corporation. This initiative will affect over 5,600 farm producers who had obtained loans with interest rates ranging from 14 per cent to 16.75 per cent. Thanks to this initiative, these interest rates will be brought down to 12.75 per cent. This represents for these producers a reduction of their total burden of some $16 million.
Mr. Speaker, this decision will affect directly or indirectly the whole of the Canadian economy. Young farmers will consider with increased optimism the possibility of taking over the family farm. It will reduce the number of farm bankruptcies which are caused in part by the usurious interest rates accepted by the previous government. It especially announces the coming of better days for our farm producers.
I should like to remind our hon. friends opposite that this decision is the accomplishment of an election promise our party had made and is the mark of a government which is both responsible and concerned about the future.
Mr. Speaker, you may rest assured that our government, through its Minister of Agriculture, will continue its consultations with the various representatives of the agricultural industry, in order to offer Canadian producers concrete solutions.



REGIONAL INDUSTRIAL EXPANSION


Carlo Rossi: Mr. Speaker, the decision concerning the Domtar Corporation's $1.2 billion investment project in Windsor, Quebec, demonstrates unequivocally the complete weakness, inertia and indifference of the Quebec wing of the Progressive Conservative caucus as far as the major economic projects within our province are concerned.
Although the real strong men of the Progressive Conservative Party in Quebec are the non-elected personal friends of the Prime Minister (Mr. Mulroney) in Montreal, Quebecers can rightfully wonder why Quebec members of the Progressive Conservative Party caucus have accepted such a decision.
This morning's issue of La Presse provided part of the answer. The Minister of Public Works (Mr. La Salle) and the Hon. Member for Megantic-Compton-Stanstead (Mr. Gerin) both learned about it through the media. The Minister of State (Small Businesses) (Mr. Bissonnette) and the chairman of the Quebec caucus of the Progressive Conservative Party were
unaware of the issue. And, of course, the Prime Minister is holidaying in Florida.
Mr. Speaker, it is clear that Quebec members of the Progressive Conservative Party are not getting any information about the major issues. For that matter, they are not seeking information about them either. This political decision is altogether unacceptable, and I hope that the silent majority, in this case the Quebec caucus of the Progressive Conservative Party, will put an end to its idleness and demand that the Minister either reverse his decision or resign.



MEMBERS OF PARLIAMENT


Gordon Edward Taylor: Mr. Speaker, I am not the
only one who is disgusted with the character assassination of two Hon. Members of this House by some of the Liberals and segments of the media. Here are some extracts from a letter that I have received:
Some of us back here in the riding have been wondering at some of the goings on in Ottawa and thought you could explain it to us ... .It is true that an Ottawa newspaper and a television media spent thousands of dollars sending reporters and a camera crew over to Germany to discover that one of our Ministers, on his own time, took a drink at a night club? I can tell you that doesn't raise any eyebrows back here-we are more concerned about the price of pigs .. . I'm pretty sure they could take a tour around Ottawa or Hull any night of the week and they could find Ministers and Liberals and even the press boozing it up. Wouldn't that be a lot cheaper? Is this what they call new journalism? Or yellow journalism? Or is it just muck-raking?-
And that there security investigation ... .Is it right that the media and Liberals want to know who they talked to and what they said? If the Government told them, there wouldn't be any more security, would there? ... I wish those Liberals would shut their traps so the Government we elected could send us our stabilization cheques-
I conclude that if the Liberals are serious about rebuilding their Party, they would be well advised to build it on truth and justice, not on innuendoes and character assassination veering on persecution of honourable men.



SPACE WEAPONRY


Mr. Derek Blackburn (Brant):: The Minister of National Defence (Mr. Clark) says Canada, as an ally, has to support the American Strategic Defence Initiative because it brought the Soviets back to the bargaining table.
But now it is the United States that risks splitting the alliance and wrecking any chance of peace.
The Americans now say that star wars is the core of their long-term strategy. It is not just research to keep up with the Soviets.
They refuse to give it up. They say SDI is not a bargaining chip. But it seem likely that the Soviets will offer cuts in

February 26, 1985
Oral Questions
intermediate-range and strategic nuclear missiles in return for a ban on space weapons.
Those cuts are precisely what the West has been pursuing for years, but the American precondition will prevent us from realizing that goal.
And yesterday the Norwegian Defence Committee told us they feared this American position could damage the alliance and ruin the hope of reducing the threat of nuclear war.
It is in the interests of Canada, of Norway, and of all mankind, to achieve real cuts in offensive nuclear weapons and so bring the world back from the brink of nuclear war. These cuts, and not the development of defensive space weaponry, should remain the primary goal of the West.
The Minister of National Defence should make it clear that this is the position of the Government of Canada. He should tell the Americans that they, not Canada nor the European states, risk splitting the western alliance with their illogical obsession with the development of star wars technology.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is for the Minister of Finance. The current crisis in the Canadian dollar is being aggravated by lack of precision on the part of the Government and the Minister of Finance regarding his intentions as to the future monetary policy of the Government. Yesterday, to reporters he declared that there was no change in the policy of the Government. Yet in the House earlier yesterday afternoon he told my colleague from Laval-des-Rapides:
-that interest rates would be higher today had it not been for the policies that have been followed by the Bank of Canada and the Government in the past two or three weeks.
If special policies have been taken in the last two or three weeks, what were those special policies? Do they constitute a difference or not? Has the Minister come to the conclusion that he is prepared to devalue the Canadian dollar in order to stabilize Canadian interest rates?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, the Leader of the Opposition says that certain things are aggravating the situation with the level of the Canadian dollar today.


Derek Nigel Ernest Blackburn: Like you.


Michael Holcombe Wilson: I can tell the Leader of the Opposition that there is one thing that definitely is aggravating the level of the Canadian dollar, and that is the action of
members of his Party in the other place which is costing upwards of $10 million.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: I read here that the Leader of the Opposition is backing the Senators in blocking that Bill-


Some Hon. Members:: Shame.


Michael Holcombe Wilson: -causing uncertainty which is costing taxpayers $10 million or more. He should call off that sort of irresponsible action.


Some Hon. Members:: Hear, hear!


MONETARY POLICY
John Napier Turner: Mr. Speaker, that remark was absolute nonsense. The Minister does not know whether, having had to borrow on the short rate, he will do better in the long run than having had to borrow on the long rate. He may have saved $10 or $15 million. He does not know. He has been absolutely irregular before the House in that respect.

Mr. Speaker, yesterday the Minister stated before the House that his policy was aimed at stabilizing the foreign exchange market. However, in view of the confusion which still exists some clarification about his intentions seems to be in order. If he does not bring down a budget in the near future, would he reverse his decision and make an official statement in the House about the monetary policy of the Government or could he convince his colleague, the Governor of the Bank of Canada, to make such a statement himself?


Michael Holcombe Wilson: Mr. Speaker, I say to the Right Hon. Leader of the Opposition the facts are there. Based on the level of interest rates today compared to the amounts of money that could have been raised about two or three weeks ago, and were not raised because of the actions in the other place, the cost to taxpayers has been at least $10 million. Those are the facts, and I ask him to reconsider his position.


Derek Nigel Ernest Blackburn: Why don't you abolish the place?


Michael Holcombe Wilson: In relation to the specific question which the Right Hon. Leader of the Opposition has just asked, I have made quite clear what the response of the Bank of Canada is. It is to moderate the movements in the exchange rate and also to moderate the movements in interest rates.
I ask Hon. Members to consider what has happened today. The Canadian dollar hit a low at about 71.13 cents U.S. earlier today. It was up to 71.97 cents just before lunch. We are in a very volatile situation, Mr. Speaker. We are trying to
February 26, 1985

moderate those swings in the exchange rates to introduce a greater degree of stability and confidence so we can get back to a more normal situation.


POLICY INQUIRY
John Napier Turner: Mr. Speaker, the Minister takes some encouragement from the dollar rising in value up this afternoon, but I want to recall to his attention that the dollar reached a new low this morning.
I recall his words to a former Minister of Finance, Mr. MacEachen, when he said, "Does he not realize"-


Some Hon. Members:: Oh, oh!


John Napier Turner: This was the Minister of Finance when he was finance critic, putting a question to Mr. MacEachen: "Does he not realize that every time the level of the dollar reaches a record low, his credibility reaches a record low as well?"

I repeat to the Minister that his contradictions and the fact that he did not have a clear policy are making the dollar crisis even worse.
He told the press yesterday that his policy had not changed, but he also said to my colleague, the Hon. Member for Laval-des-Rapides, that as a result of his policies of the last two weeks interest rates had remained stable.
Can he tell us whether or not he believes that a devaluation of our Canadian dollar would stabilize interest rates? Would he reassure the Canadian people by making an official statement immediately?


Michael Holcombe Wilson: Mr. Speaker, I am glad the Right Hon. Leader of the Opposition has quoted his oracle, Mr. MacEachen.


Some Hon. Members:: Hear, hear!


Mr. Gauthier:: He quoted you.


Michael Holcombe Wilson: I would suggest to the Hon. Leader that he might search for another place for questions to ask in the House.
Let us address the situation which we have today, what the causes of the problem are. It is not a weak Canadian dollar. It is a very, very strong and very volatile United States dollar. In terms of the United States dollar against the pound sterling today, sterling hit a low of $1.03 and it is back up to $1.07. The swing in the Deutschmark is between $3.47 and $3.39. It is not just a question of what the Canadian dollar is doing against the U.S. dollar in this very, very volatile international situation, so the comments he has made are simply without foundation.
Oral Questions


STATEMENTS ATTRIBUTED TO PRIME MINISTER
Hon. Herb Gray (Windsor West):: Mr. Speaker, the Minister of Finance has expressed concern about irresponsible action. If he is that concerned, doesn't he realize that the profane and inaccurate comments made by the Prime Minister in his current Fortune magazine interview are contributing to the weakness of the Canadian dollar and a loss of confidence in the Canadian economy? If he really wants to do something about irresponsible statements, will he not insist that the Prime Minister retract those inaccurate and profane statements, and thereby restore confidence to the dollar and to the Canadian private sector?


Michael Holcombe Wilson: Mr. Speaker, the comments which the Prime Minister made to the people in Fortune were related to the problems this country has been encountering over the last 10 or 15 years and the situation we are facing today. However, the point of the comments by the Prime Minister was simply to point out that we in Canada are living in a very competitive international world, that we cannot expect, just because we have the products, that they will be sold, and that we have to work hard and get our costs very competitive with the international market-place. That is the substance of the Prime Minister's comments.


REQUEST FOR MINISTERIAL ACTION
Herbert Eser (Herb) Gray: Mr. Speaker, the Minister of Finance overlooks the fact that the Prime Minister was speaking in the present tense, and that he and his Government have been in place since last September. I want to remind the Minister of Finance that in 1982, when the dollar was under pressure, but far less than today, he said: "There have been many times in the past when the Canadian dollar and the U.S. dollar were strong against other currencies, but why is the Canadian dollar weak and the U.S. dollar strong today? It is because the Canadian Government is not following sound policies". Will the Minister of Finance not realize and admit that what he said in 1982 is even more true today? Why won't he take action to restore confidence in the Canadian dollar and in the Canadian economy? Why is he dithering? Why won't he act now?


Michael Holcombe Wilson: Mr. Speaker, I would ask the Hon. Member to think back to November 8 when we set in train a series of policies which were designed to strengthen the economy of Canada and lead, over a period of time, to a much stronger situation in the country.
The situation back in 1982 was entirely different. It was weakness between Canada and the United States. Surely the Hon. Member can understand the fact that this is not just a Canada -U.S. problem with which we are faced today. It is an international problem encompassing every major industrial currency. I would expect that he would use a little more broadminded point of view and take that into account.


Mr. Deans:: Shades of Marc Lalonde.

February 26, 1985
Oral Questions


LEVEL OF BUSINESS CONFIDENCE
Ian Deans: Mr. Speaker, I want to ask about confidence. The Minister of Finance will recall that just prior to the last election he, his Leader, and others in the Conservative Party, indicated that if the country would elect a Conservative majority a renewed business and investment confidence would take hold in Canada almost immediately. I want to ask the Minister of Finance whether the most recent increases in interest rates, together with the decrease in the value of the dollar, are a clear indication of this renewed business confidence.


Michael Holcombe Wilson: Mr. Speaker, 1 have spent since November 8 meeting with a number of groups, business, labour, and others, across the country. I can tell the Hon. Member, as well as other Hon. Members, that there is a distinct change, a distinct improvement in business confidence throughout the country because of the policies which we introduced on November 8. I can also tell them that I spent the last two days of last week in New York talking with members of the international financial community who said exactly the same thing with regard to their attitude toward Canada. That change in business confidence is coming, and it is coming fast.


MORTGAGE RATE INCREASES
Ian Deans: Mr. Speaker, my supplementary question is directed to the same Minister. Are the recently announced mortgage interest rate increases, together with the highest one-month increase in unemployment in the last five years, indications of a new increased confidence, both in the business and investment sectors?


Michael Holcombe Wilson: Mr. Speaker, I said yesterday that I am not happy with the increase in interest rates. 1 made it quite clear why I believe interest rates have increased. I have also said that the policy of the Bank of Canada has been to moderate the increase in interest rates. I would hope that, once we get some degree of stability back into the market-place from the very unusual times we are encountering today, we would see some decline in interest rates, and that should follow through in the mortgage rates as well.


FORECAST OF ECONOMIC GROWTH
Ian Deans: Mr. Speaker, would the Minister attribute the recent forecasts by Wood Gundy of a real GNP increase of 2.9 per cent, or almost 3 per cent for 1985, over and against the increase of 4.4 per cent which took place in 1984, to be an indicator of this renewed business and investment confidence which he promised to the people of Canada would take place immediately after the Conservatives were elected? Are these the indicators on which the people of Canada are supposed to rely?


Michael Holcombe Wilson: Mr. Speaker, last November, if the Hon. Member will recall, I estimated that the real growth in the Canadian economy in 1985 was going to be about 2.4 per cent. Subsequently I have revised that projection upwards.


An Hon. Member:: It is down from 1984.


Michael Holcombe Wilson: I am not happy with the drop in the rate of growth from 1984, but we are moving in the right direction. We are getting the expectations for 1985 up, and I would expect-


Ian Deans: Higher interest rates, lower dollar, higher unemployment!


Michael Holcombe Wilson: Mr. Speaker, if the Hon. Member would listen to the answer, he might learn something. What I am saying to the Hon. Member is that all economists throughout the economy are increasing their projections for 1985 from what they were last fall. That is a very good sign of progress.

[ Translation]


INTERNATIONAL TRADE
Hon. Jean Lapierre (Shefford):: Mr. Speaker, my question is for the Minister for International Trade. In the last few days, we have seen how the Minister of Regional Industrial Expansion has tried to stab Quebec in the back, especially in the case of Domtar and Windsor, and we have heard the Minister of Regional Industrial Expansion say that one of the reasons why he jeopardized an investment of $1.3 billion was his fear of American retaliation. However, American spokesmen said this morning, that the Minister is confusing apples and oranges because sacrificing jobs in the fine paper industry has no effect on the lumber sector.
Can the Minister tell the House how his Government can reconcile having cancelled a project in the fine paper sector to try to improve Canada-United States relations with the situation of the lumber industry?


Hon. James Kelleher (Minister for International Trade):: Mr. Speaker, in reply to my hon. friend, I am not sure whether he is confused or not. If he is attributing ministerial statements on this to me, I suggest he is incorrect. All I can tell him is that, under existing U.S. legislation, if grants are in fact given to Canadian companies, there is the possibility of countervail by the American Government against us with respect to those grants.
February 26, 1985

[ Translation]


REQUEST FOR DECISION-DOMTAR
Jean-C. Lapierre: Mr. Speaker, the Minister seems to have come out of a popcorn box. This is an issue which has been discussed by all Canadian media and which concerns the possibility of retaliation by the American Government against an investment in Canada by his own Government. I understand that the President of the Treasury Board and the Minister of Regional Industrial Expansion have settled this issue in secret, but I would like the Minister for International Trade to tell us whether, as Minister responsible for foreign trade, he is now telling us that the Domtar subsidy was jeopardizing the lumber negotiations. He does not know the answer!


An Hon. Member:: Of course not!


Hon. Tom McMillan (Minister of State (Tourism)):: Mr. Speaker, since the question relates to the portfolio of my colleague, the Minister of Regional Industrial Expansion, I will answer in his stead as Acting Minister, especially since it relates to something that I said yesterday, about which I am now being misquoted.
I said in the House, and outside the Chamber, that there were several problems that weighed heavily on the minds of the Minister and his colleagues, among whom I include myself, in connection with the refusal of the Government to fund the relevant application, only one of which related to the possibility of countervail in the United States. The major consideration that was taken into account by the Government of Canada was the fact that a subvention of the size that was being contemplated and applied for would have disruptive influence in the domestic market-place. There are several other major companies waiting in line for a similar subsidy. If we were to give it to Domtar, we would have to give it to the others too.


THE ECONOMY
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I have a question for the Minister of Finance. The Minister will certainly appreciate how fragile is the recovery these days. I notice people watching the continual falling of the dollar very carefully. More important, people are concerned about interest rates. We saw what the Liberal Government did when it was in power in terms of interest rate policy-up, up, up. Canadians tossed them out because they wanted a real change. In the last little while, what has become clear to the people of Canada is that that change might not be taking place with the new Minister of Finance.
Will the Minister of Finance give a very clear signal to the investment community and consumers across the country that he has the courage to say that interest rates are not going to be
Oral Questions
going up any longer, that they have reached their height and they will be coming down from this point on? Will he send that very clear signal out to people, rather than the usual waffling around we have been getting in the last little while?


Michael Holcombe Wilson: Mr. Speaker, I think the Hon. Member should understand that neither the Minister of Finance nor the Bank of Canada pull a big lever and say that is what interest rates are going to be. Interest rates are decided by the individual decisions of many thousands of investors. The Bank of Canada can lean against that movement in interest rates, and it has been doing that. As I said in the House yesterday, interest rates would have been higher had it not been for the action of the bank over the past two or three weeks. I am not happy with interest rates going up. I would like to see interest rates going down. However, until we can get some degree of stability back into the exchange markets, that will not happen. That is the direction that the Government is taking to try to re-inject that confidence and stability in the exchange markets through the stabilizing process.


REQUEST FOR MINISTERIAL STATEMENT
Nelson Andrew Riis: Mr. Speaker, I remember hearing Marc Lalonde and Allan MacEachen repeat that same line month after month after month, saying there was nothing they could do.
There is a great deal of questioning by the public as to whether the Minister is leading the Government in terms of financial policy. Is the Minister going to send a very clear signal, a powerful signal, that he is, in fact, the Minister of Finance, that he will be making some hard decisions, making a decision on interest rates and telling the people of Canada that they will not be going up, that they will be coming down? Will he say that to the people of Canada?


Michael Holcombe Wilson: Mr. Speaker, this type of rhetoric on the part of the Hon. Member does not prove anything to anyone. What is going to be the proof is what came out in the November statement which I gave in this House, as well as what is in the Budget. There we are sending some very clear signals as to the directions we feel the country should be going in order to re-introduce a greater degree of growth and job creation.


Derek Nigel Ernest Blackburn: And look what happened.


Michael Holcombe Wilson: If the Hon. Member would listen, he might learn something from the answer. The November 8 statement, and the Budget that is to follow, will send out the very clear signal that what we are trying to achieve here is a more competitive economy, a lower level of interest rates, and a greater sense of competitiveness in the economy that will create those jobs.

February 26, 1985

Oral Questions THE SENATE


COST OF DELAY IN ADOPTION OF BILL C-I I-BORROWING AUTHORITY
Mr. Clement M. Cote (Lac-Saint-Jean):: Mr. Speaker, I have a question for the Minister of Finance.
Have no fear, today I am not going after the other place again. Two days in a row is too much!
First, we are well off here. Luckily for us a Member can be there two three days in a row answering questions without having to take a day off.
Here is my question: Can the Hon. Minister tell us, Mr. Speaker, how much the taxpayers will have to pay for the delay in passing Bill C-l 1, the borrowing authority legislation?


Michael Holcombe Wilson: Mr. Speaker, I have said on a number of occasions that the irresponsible actions of the people in the other place, supported-


Mr. Speaker:: Order, please. Members of Parliament are Members of Parliament wherever they sit, in this Chamber or in another Chamber, and they are to be treated with respect.
*
[DOT] *


REGIONAL INDUSTRIAL EXPANSION
[Stage Direction]
constituency, and it is the obligation of the national Government to reconcile those interests where possible.
We will, therefore, do our best to work with the company, the union, and the Hon. Member, to see whether there is not a possible source of alternative funding for the company's planned expansion.
Mr. Tardif:: Mr. Speaker, I would remind the Minister that my constituents are not concerned here. What is concerned is the whole area of the Eastern Townships and a major segment of Quebec's economy. I would also remind the Minister that, when the Prime Minister was Leader of the Opposition, during a visit in the Eastern Townships, he said: "A Conservative Government will not taunt you. Ottawa will support you." I therefore ask this House, what do you intend to do to save those jobs? Those people want jobs for tomorrow and for next year. And I am asking you what you will be doing, keeping in mind that this is a vital matter for Quebec's economy.


Thomas Michael McMillan: Mr. Speaker, the Hon. Member will appreciate that we are concerned about the 700 jobs that are at stake in that particular town, just as we are concerned about the jobs that are at stake in other mill towns. We have been assured by officials, by experts whom we have consulted, by Members of Parliament, and by the Minister's colleagues in Cabinet, that to give the requested subvention would be to place in jeopardy some five or six competing companies in the same sector within Canada. This would jeopardize jobs not only in Windsor but also right across the country. We do not want to see that happen.


Mr. Alain Tardif (Richmond-Wolfe):: Mr. Speaker, my question concerns the Domtar issue and I will put it to the only minister who seems to be authorized to answer it. Mr. Minister, since the workers at Domtar and in related industries, and I am referring to the lumber industry, the manufacturing industry and all the small and medium businessmen who depend on the operations of that company do not accept the reasons given by the Minister for refusing to grant the $100 million subsidy, I ask you: What do you intend to do exactly over the next few days to protect and confirm those thousands of jobs in the Eastern Townships?


Thomas Michael McMillan: Mr. Speaker, I would like to make it very clear that I share the concerns that were expressed by the Hon. Member on behalf of his constituents. We on this side of the House understand that the Hon. Member has an obligation to voice the concerns of his constituents. He has a constituency to represent, but we on this side of the House have a constituency as well, and that is the national constituency. From time to time, the interests of a local constituency will not be in the interests of the national


AIR CANADA
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, is the Minister of Transport aware that Air Canada is negotiating unlimited part-time jobs which will force women employees in particular out of full-time work and into parttime jobs, with inadequate pay and benefits, little job security, and fewer career options? Does the Minister support this policy of Air Canada which flies in the face of employment equity?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, I am not sure whether or not the Hon. Member is referring to the CALEA negotiations that are now going on. I understand that they are before conciliation at the present time and it would be inappropriate for me to comment further.


EMPLOYEE EQUITY
Margaret Anne Mitchell: Mr. Speaker, I think it is perfectly clear that, on the question of part-time
February 26, 1985

work in general, women need to eat full time, and many women are raising children. They do not want to be forced into taking part-time jobs.
I would like to ask the Minister about government policy in general. Does he believe that this policy is appropriate? Will the Minister intervene in this dangerous precedent to make sure that employee equity, which the Government apparently supports, becomes reality for women?


Donald Frank Mazankowski: Mr. Speaker, I will certainly take notice of the question and make sure that the representations of the Hon. Member are passed directly to Air Canada officials.


LUMBER EXPORTS TO UNITED STATES
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, the Government has thrown Domtar and hundreds of Canadian workers like crumbs to the wolves south of the border. Now at the request of the United States, the Government will throw thousands more Canadians onto the UIC rolls by making a secret deal on the Canadian export of lumber into U.S. markets. Will the Minister for International Trade tell the House whether or not there have been any representations from his U.S. counterparts requesting that the Canadian Government assist in establishing voluntary Canadian quotas on the export of Canadian softwood lumber into the U.S. market?


James Francis Kelleher: Mr. Speaker, I am very happy to answer the question of the Hon. Member. It just so happens that representatives from my Ministry and from Mr. Brock's Department met this morning in Ottawa. We have fully and thoroughly discussed the problem between the two countries at this time, and I can advise the Hon. Member that at no time were the matters of voluntary restraint arrangements or agreements raised, nor were any requested.


FORTHCOMING MEETING BETWEEN PRIME MINISTER AND UNITED STATES PRESIDENT
Brian Vincent Tobin: Mr. Speaker, my supplementary question is directed to the Secretary of State for External Affairs who indicated some weeks ago that, if this matter was not resolved quickly, he would put it on the agenda for the March 17 meeting. The matter has not been resolved. Will the Secretary of State for External Affairs tell the House whether or not both countries have agreed to put the question of Canadian softwood lumber exports to the U.S. on the agenda of the March 17 meeting? Will he further confirm that it is the position of the Canadian Government that neither voluntary controls nor externally imposed controls restricting exports of Canadian lumber are acceptable to this country?
Oral Questions


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, I appreciate the support of the Hon. Member for the summit meeting of the Prime Minister of Canada and the President of the United States. I must say it is rather surprising for me to hear support for any positive action taken by Canada and the United States, coming from members of the Liberal Party. Perhaps with their change in leadership and reassertion of Mr. MacEachen, that is one of the changes we will be seeing.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: I confirm the undertaking 1 gave in the House some weeks ago that, if the matter is not resolved, it will be on either the agenda of the President and the Prime Minister or the agenda of Secretary Shultz and myself in Quebec City.


AIR CANADA
Rodney Edward Murphy: Mr. Speaker, my question is directed to the Minister of Transport and deals with Air Canada's treatment of women workers. Is the Minister aware that in a confidential file entitled "Operation Saskatchewan", which dealt with the closing of the Air Canada offices in Regina, Air Canada deliberately moved to make sure that its married women employees could not move to Winnipeg, and is he aware that, in doing research into the closure of those offices, Air Canada compiled information on each of its employees according to age, marital status, and sex?


Donald Frank Mazankowski: Mr. Speaker, I am not aware of the assertion made by the Hon. Member. I will certainly take it upon myself to look into the matter.


POLICY AFFECTING MARRIED WOMEN
Rodney Edward Murphy: Mr. Speaker, if in his research the Minister finds that it is a deliberate policy of Air Canada to make decisions based on age, marital status, and sex, will he see that the policy of making sure that married women no longer have full-time jobs is not adhered to in the negotiations referred to by the Hon. Member for Vancouver East? Will the Government give a policy direction to Air Canada instructing it to make sure that married women are entitled to full-time work, with decent salaries?


Donald Frank Mazankowski: Mr. Speaker, I have already indicated to the colleague of the Hon. Member that I would look into this matter and report back to the House. As well, it is my understanding that there is an interdepartmental committee composed of the various Depart-

February 26, 1985
Oral Questions
ments of Government that is undertaking to look at, and examine thoroughly, the question of part-time work.


USE OF ALACHLOR HERBICIDE
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. As you know, Mr. Speaker, the public is very alarmed by the fact that officials in the Minister's Department have failed to convince the Minister of Agriculture of the necessity of banning Alachlor, a herbicide used for crop spraying, which, as a result of updated research, has been considered as having the potential to cause cancer in human beings. Will the Minister fulfil his mandate by speaking to the Minister of Agriculture and having him reverse that decision in order to protect the health of Canadians from this very dangerous substance?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, I would like to thank the Hon. Member for conveying to me his intention of asking this question, and the seriousness with which he takes it. The Hon. Member is possibly aware that this product was initially tested by a firm which came under a very deep cloud of suspicion in terms of its findings. He also knows that Alachlor is used extensively in the agriculture industry.
The Hon. Member asked me whether or not I would speak to my colleague, the Minister of Agriculture. I would like to tell him that that has been done. Also, the various positions have been exchanged with my colleague, and he has given the examples of methods for 1985 on how the safety factors could be maintained. That is still not finalized between the two Departments, but it is the state of the matter at the moment.


RESPONSIBILITY FOR DECISION MAKING
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, would the Minister undertake to ensure that his Department, not the Department of Agriculture, will be the Department that makes the final decision on the approval or banning of herbicides and pesticides, for the sake of public health?


Arthur Jacob (Jake) Epp: Mr. Speaker, having been in Cabinet before, the Hon. Member knows that the research is done in the Health Protection Branch of the Department of National Health and Welfare, and then the decision is made by Agriculture Canada. In terms of the protection of the health of Canadians, not only do I have the responsibility, but the Minister of Agriculture also takes that matter very seriously. If there are alternate plans- and the Hon. Member also knows there are other products which might be available-that matter is under advisement.


AUDITOR GENERAL'S REPORT
Mr. Edouard Desrosiers (Hochelaga-Maisonneuve):: Mr. Speaker, my question is directed to the Minister of Finance or the President of the Treasury Board. I would like to know what instructions will be issued by the Minister or Ministers concerning the greatest Liberal scandal in the history of Canada. Some time ago, the Auditor General of Canada presented his report and I would like to know what the Minister, Ministers or the Government will do about it.


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, I can certainly assure my colleague that serious consideration has been given to many of the recommendations made by the Auditor General concerning a fair number of management practices. Already the new Government has taken steps about, for instance, cash management and real estate management, and other such measures will be announced in the near future with a view to making an attempt to upgrade the management of Canadian public affairs.


VIA RAIL
Hon. Andre Ouellet (Papineau):: Mr. Speaker, I have a question for the Minister of Transport. Does the Minister know that the decision of the Canadian Government to allow VIA Rail to do its own car repair and maintenance has been a source of concern for some 3,000 rail workers? Can the Minister assure the House that no one directly or indirectly working for VIA Rail will be affected by this new Government directive and that no worker will be laid off?


Donald Frank Mazankowski: Mr. Speaker, it is the intention of VIA Rail to undertake to take over the operations of all the maintenance. There will be a transfer of employees from CN to VIA Rail. Those negotiations are ongoing, and I understand that they are proceeding very smoothly and satisfactorily.


André Ouellet: A supplementary question, Mr. Speaker.
Mr. Speaker, I would suggest that the Minister of Transport cannot evade the responsibility of making sure that workers will enjoy job security, because it was a Government decision to let VIA Rail assume responsibilities it did not have before.
First, can the Minister assure us that CN workers anxious to go on working for the company will be able to do so and,
February 26, 1985

second, that those who will invoke the seniority clause to practice what is commonly known as bumping will make it possible for others who have been bumped to expect employment with VIA Rail?


Donald Frank Mazankowski: Mr. Speaker, as I previously indicated, the negotiations are taking place very smoothly between VIA Rail and the respective unions. I can assure the Hon. Member that a deal will be resolved which will be satisfactory to both parties concerned.


RAILWAYS
Mr. Les Benjamin (Regina West):: Mr. Speaker, I would also like to direct a question to the Minister of Transport regarding technological change in the transportation industry, which relates to another CPR wreck in Petawawa of a train that was carrying sulphuric acid and sulphur nitrate. It was due to the fact that a conductor was in the caboose at the rear of the train that the fire-fighting organizations were immediately informed of the contents and how they could fight the spills. Does the Minister require further evidence of the value of conductors who are located at the rear of the freight trains, especially those trains which are carrying hazardous goods? Will he enunciate a policy that technology will be used only as additional tools for employees to do their jobs more effectively?


Donald Frank Mazankowski: Mr. Speaker, the Hon. Member knows full well that the issue of the testing of the cabooseless train is currently a matter which is before the Canadian Transport Commission, and that it is about to render a decision. Surely he would not want the Minister of Transport to interfere with the decision-making process of the CTC.


Some Hon. Members:: Hear, hear!


Leslie Gordon Benjamin: Mr. Speaker, this is the seventh Minister of Transport I have been through. They all want someone else to make their policies for them. They always want the CTC, or someone else, to do it.
In another area of the Minister's Department, would he assure the House that he will come up with a policy which will provide technological change in the marine industry, of his Department


Mr. Speaker:: Order, please. I am afraid I find it hard, on a supplementary question, to mix rail and water. The Hon. Member for Athabasca.
Oral Questions PENSIONS


VESTING AND PORTABILITY OF PRIVATE PENSIONS
Mr. Jack Shields (Athabasca):: Mr. Speaker, I would like to direct a question to the Minister of National Health and Welfare. I wonder if the Minister could inform the House how the negotiations are proceeding with the provinces as they relate to the vesting and portability of private pensions?


Arthur Jacob (Jake) Epp: Mr. Speaker, I would like to tell the Hon. Member, as he will recall, that the Ministers of Finance have held a meeting with regard to the Canada Pension Plan. In terms of the meetings with the provinces on the two issues which he has raised, those meetings have not yet been scheduled nor have they taken place.


Leslie Gordon Benjamin: Mr. Speaker, I have a supplementary question.


Mr. Speaker:: Does the Hon. Member for Regina West have a supplementary question with regard to rail policy?


Leslie Gordon Benjamin: Mr. Speaker, my questions to the Minister of Transport were on technological change in the transportation industry. One dealt with rail, and one dealt with marine.


Mr. Speaker:: I take it the Hon. Member does not have another question with regard to rail policy. The Hon. Member for Glengarry-Prescott-Russell.


THE ADMINISTRATION
Don Boudria: Mr. Speaker, my question is directed to the Deputy Prime Minister. When interviewed by the Ottawa Citizen on February 16 concerning his appointment to the Textile and Clothing Board, Tory fundraiser, William Hawkins, is quoted as having said that he had no idea that he had been appointed to the Board, that he did not feel qualified, and that he knew nothing about textiles. Can the Deputy Prime Minister tell us how he can reconcile this appointment with the pledge which was made on July 16 by the Prime Minister, when he said:
We are going to bring in a brand new dimension of objectivity and representation and fairness for all Canadians.
Would the Deputy Prime Minister not agree that this is nothing more than "a fraud, a deceit and a sham", to use words that have previously been said?


Hon. Erik Nielsen (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I am not well versed on the textile industry. However, I am quite certain that all of the appointments which are made, are made with respect to men and women of quality, honesty, and integrity, and that these men and women will fulfil their responsibilities in the very highest traditions of Canada.

February 26, 1985
Royal Assent


Some Hon. Members:: Hear, hear!
Government House, Ottawa


POLITICAL APPOINTMENTS-GOVERNMENT POSITION
Don Boudria: Mr. Speaker, considering that, in response to my question of February 5, the Right Hon. the Prime Minister announced that the House committee on parliamentary reform would review political appointments, is the Deputy Prime Minister in a position to assure the House that there will be a moratorium on all important political appointments until the recommendations of the committee have been tabled in the House?


Erik Nielsen: Mr. Speaker, I have answered part of that question.


John Napier Turner: What part did you answer?


Erik Nielsen: I answered the first part on a previous occasion. With respect to a moratorium, I am afraid that-


Charles Joseph Clark: That's what the Senate is doing.


Erik Nielsen: -it would be the heighth of irresponsibility to bring the business of the country to a grinding halt in order to satisfy the whim of the Hon. Member.
We certainly would not want to do in this House what the Liberal Party is doing in the other place.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions, with the exception of two, presented by Hon. Members on Monday, February 25, 1985, meet the requirements of the Standing Orders as to form.


Mr. Speaker:: The petitions presented by the Hon. Member for Kamloops-Shuswap (Mr. Riis) on Monday, February 25, do not meet the requirements of the Standing Orders as to form.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the House that a communication has been received as follows:
February 26, 1985 Sir:
I have the honour to inform you that the Honourable Antonio Lamer, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate chamber today, the 26th day of February, at 4.45 p.m., for the purpose of giving the Royal Assent to certain Bills.
I have the honour to be. Sir,
Your obedient servant, Edmond Joly de Lotbiniere, Administrative Secretary to the Governor General



ROUTINE PROCEEDINGS


[Stage Direction]
A message from Her Excellency the Governor General transmitting Estimates for the financial year ending March 31, 1986, was presented by the Hon. Robert de Cotret (President of the Treasury Board) and read by Mr. Speaker to the House.

Hon. Ray Hnatyshyn (Minister of State (Government House Leader)):: I would like to move, pursuant to the provisions of Standing Order 63:
That the Main Estimates, 1985-86, tabled this day, be referred to the several standing committees of the House as follows:
Since the list is naturally rather lengthy, and there is a detailed allocation of the Estimates to committees, if it is agreeable to the House, Mr. Speaker, I would ask that the list be printed in Hansard as if it had been read. I have sent my colleague House Leaders of each of the Parties a copy of this particular motion and the references to committee so that all Parties are aware of the specific reference. Perhaps the list can be printed as if read.


Mr. Speaker:: The House has heard the suggestion of the Hon. Government House Leader (Mr. Hnatyshyn). Is the suggestion agreeable?


Some Hon. Members:: Agreed.
[Editor's Note: List referred to above is as follows:]
That the Main Estimates for the fiscal year ending March 31, 1986, laid upon the Table earlier this day, be referred to the several Standing Committees of the House as follows:
To the Standing Committee on Agriculture:
Agriculture Votes 1, 5, 10, 15, 20, 25, 30, 50, 55, 60 and 65 External Affairs Votes 20 and 25 To the Standing Committee on Communications and Culture:
February 26, 1985

Communications Votes 1, 5, 10, 15, 20, L25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80 and 85
Secretary of State Votes 1,5, 10, 15, 20, 25, 30, 40, 45 and 50 To the Standing Committee on External Affairs and National Defence:
External Affairs Votes 1, 5, 40, 45, L50, L55, L60, L65, 70 and 75 National Defence Votes 1, 5, 10 and 15 To the Standing Committee on Finance, Trade and Economic Affairs:
External Affairs Votes 10, 30 and 35 Finance Votes 1,5, 10, 15, L20, 30 and 35 National Revenue Votes 1,5, 10 and 15 Privy Council Vote 20
To the Standing Committee on Fisheries and Forestry:
Agriculture Votes 35, 40 and 45 Environment Votes 1,5, 10, 15, 20, 25 and 30 Fisheries and Oceans Votes 1, 5 and 10 To the Standing Committee on Health, Welfare and Social Affairs:
Consumer and Corporate Affairs Votes 1,5, 10, 15 and 20 External Affairs Votes LI5
National Health and Welfare Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75 and 80
To the Standing Committee on Indian Affairs and Northern Development:
Indian Affairs and Northern Development Votes 1,5, 10, 15, 20, 25, 30, 35, 40, 45, 50, L55, L60 and L65 To the Standing Committee on Justice and Legal Affairs:
Justice Votes 1,5, 10, 15, 20, 25, 30, 35, 40 and 45 Solicitor General Votes 1,5, 10, 15, 20, 25, 30 and 35 To the Standing Committee on Labour, Manpower and Immigration: Employment and Immigration Votes 1,5, 10, 15, 20, 25 and 30 Labour Votes 1,5, 10, 15, L20, L25 and 30 To the Standing Committee on Management and Members' Services:
Parliament Vote 5
To the Standing Committee on Miscellaneous Estimates:
Finance Vote 25 Governor General Vote 1 National Revenue Vote 20 Parliament Votes 1 and 10 Privy Council Votes 1, 5 and 25
Science and Technology Votes 1,5, 10, 15, 20, 25, 30 and 35 Secretary of State Vote 35 Supply and Services Votes 1,5, 10 and 15 Treasury Board Votes 1,5, 10, 15, 20 and 25 To the Standing Committee on National Resources and Public Works:
Energy, Mines and Resources Votes 1,5, 10, 15, 20, 25, L30, 35, 40, 45, 50, 55, 60, 65 and 70
Public Works Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80 and L85
To the Standing Committee on Northern Pipelines:
Transport Vote 115
To the Standing Committee on Privileges and Elections:
Privy Council Vote 10
To the Standing Committee on Regional Development:
Regional Industrial Expansion Votes 1,5, 10, 15, L20, L25, 30, 35, 40, 45 and 50
To the Standing Committee on Transport:
Transport Votes 1,5, 10, 15, 20, 25, 30, 35, 40, L45, L50, 55, 60, 65, 70, 75, 80, 85, 90, 95, 100, 105 and 110 To the Standing Committee on Veterans Affairs:
Veterans Affairs Votes 1,5, 10, 15, 20, 25 and 30 and
Motions
That Privy Council Vote 15 be referred to the Standing Joint Committee on Official Languages Policies and Programs; and
That a message be sent to the Senate to acquaint Their Honours thereof.


[Stage Direction]
Motion agreed to.

Ramon John Hnatyshyn: Mr. Speaker, I wonder if I could just move two further items with unanimous consent? There have been consultations with the Opposition House Leaders. The first motion has to do with the state visit to Canada of His Excellency Javier Perez de Cuellar, the Secretary General of the United Nations. I believe if you were to ask for leave of the House, Mr. Speaker, you would find unanimous consent that the following motion be adopted:
That, notwithstanding any Standing Order, when the House adjourns on March 6, 1985, it shall stand adjourned 11 a.m., March 8, 1985;
That the address of the Secretary General of the United Nations, to be delivered in the House Chamber on March 7, 1985, before Members of the Senate and the House of Commons, together with all introductory and related speeches, be printed as an appendix to the House of Commons Debates of that day and form part of the records of this House; and
That the aforementioned proceedings be made available to the media for transmission in the usual way by the House of Commons broadcast system.


Mr. Speaker:: The Government House Leader is seeking unanimous consent for the introduction of the motion.


Herbert Eser (Herb) Gray: Mr. Speaker, on behalf of the Official Opposition, I am certainly prepared to grant consent to that motion. However, I want to suggest to my hon. friend that consideration might well be given to working on another approach in respect to hearing from distinguished visitors. When we have a special sitting of the nature covered in this motion, it means that we do not have a Question Period, nor any other House business. I suggest that my hon. friend and other Hon. Members of this House may want to examine the practice in Westminster where distinguished visitors are invited to address Members of the United Kingdom Parliament in a special room for that purpose so that the ordinary business of Parliament is not interrupted. I hope that this will be taken under consideration.


Ian Deans: Mr. Speaker, I would like as well to indicate our acceptance in the granting of unanimous consent for the change. I believe, Mr. Speaker, you are probably aware that for some time I have been concerned about the practice which has developed of leaders speaking to the joint session of the Commons and Senate and the disruption which that causes, not only to the business of the House.
I want to suggest that perhaps the committee on procedure might be an appropriate group to ask for some guidance as to a procedure we could use to try to accommodate both the desires of important international leaders to speak to Canada and to its Parliaments, while at the same time recognizing that

February 26, 1985
Main Estimates, 1985-86
there has to be some way to avoid the potential embarrassment of perhaps denying someone who does not find favour at that particular point in time with the Government of the day from being able to address the Parliament of Canada as perhaps his or her predecessors had been permitted to do.
Therefore, I would like simply to say that we are happy to give the consent. We look forward to hearing the address of the Secretary General of the United Nations, but we would certainly ask the Government to consider a reference to the committee to look at some different type of procedure.


Ramon John Hnatyshyn: I appreciate the observation which has been made by both of my colleague House Leaders with respect to other Parties in this House. They will understand, and I think fully agree, this being the fortieth anniversary of the creation of the United Nations, that we will look forward to the visit of the Secretary General with great enthusiasm in this country. The points which have been raised will certainly be matters of ongoing discussion. I know we have worked well together in the past and I look forward to working on this arrangement in the future for many years ahead.


Mr. Speaker:: Does the Hon. House Leader have unanimous consent for the introduction of his motion?


Some Hon. Members:: Agreed.


Mr. Speaker:: The House has heard the motion. Shall I dispense?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Robert René de Cotret: Mr. Speaker, I would also like to table in support of the Estimates, Part I, the Government expenditure plan. In addition, I have tabled with the Clerk of the House on behalf of my colleagues Part III of the Estimates, consisting of 71 department expenditure plans. These documents will be distributed to members of the Standing Committees to assist in their consideration of the spending authorities sought in Part II of the Estimates.


EXPLANATORY STATEMENT BY PRESIDENT OF THE TREASURY BOARD
Robert René de Cotret: Mr. Speaker, I am pleased to table in the House today the Main Estimates for 1984-85. The total estimate of expenditures is $103.6 billion, an increase of 7.3 per cent over last year's Main Estimates. This represents the latest Government expenditures forecast for the coming fiscal year and conforms
in every respect to the level of expenditures announced by my colleague, the Minister of Finance (Mr. Wilson) in his economic message last November.

Those planned spending levels for 1985-86, which include the Main Estimates, the reserves and a provision for the lapse, will total $105.4 billion and represent only a 4.7 per cent increase over the current forecast for 1984-85. I am pleased to announce that there has not been a lower rate of growth in 17 years.


Some Hon. Members:: Hear, hear!


Robert René de Cotret: If we focus on program outlays, that is excluding public debt charges, the growth in spending levels amounts to just over 2 per cent, well below the rate of inflation.

This low rate of increase in expenditures demonstrates our commitment to limiting expenditures, even though we had to meet commitments made well before this Government came to power. However, I can assure Hon. Members that the increase would have been much higher if the Government had not acted as it did last November to reduce Government spending.
Before elaborating on certain details in the Main Estimates, I would like to say a few words about the presentation which has evolved in recent years. This year is the first time the complete set of budgetary documents has been published in the new format. Individual Members will now have access to information provided in a way that is better suited to their particular needs and that will help them understand the Government's over-all expenditure plan and the individual departmental plans.

Part I, which was first published in 1981-82, analyses the Main Estimates in relation to the Government's over-all expenditure plan by policy sector or envelope at a governmentwide level. Part II, which is commonly referred to as the Blue Book, appears in its new format for the first time. It supports the spending proposals which Parliament will be asked to authorize through an Appropriation Act, and provides detailed forecasts for items already approved through existing statutes. The Blue Book is more streamlined than in previous years because it no longer duplicates information which is included elsewhere in the Estimates documents. Part III of the Estimates is a series of departmental expenditure plans prepared by individual departments and agencies with guidance from the office of the Comptroller General and which I am tabling on behalf of all my Cabinet colleagues.
A complete set of departmental expenditure plans is being published this year for the first time marking the end of the phase-in period. Each plan outlines what the Government expects to achieve as a result of its proposed expenditures in the specific area of activity with which it deals. These detailed plans provide a comprehensive picture of each department's
February 26, 1985

program and will be of particular use to the members of the Standing Committee examining the Main Estimates. Some of the information has been relocated within the three parts to provide a more logical presentation. For example, much of the government-wide summary information, which has traditionally been found in Part II or the Blue Book, is now dealt with in Part I or the Government expenditure plan. Also, some of the details related to departmental expenditures which appear in individual departmental expenditure plans are no longer included in the Blue Book. A complete explanation of a new form of the Estimates is provided in Chapter 5 of the Government expenditure plan.
Since individual Members will likely be more interested in some detailed expenditure plans than in others, the Part III document will not be automatically distributed to all Members. Members will be provided with a list with which to indicate to the Parliamentary Distribution Centre those volumes they would like to have sent to them.

Mr. Speaker, I would now like to address the Main Estimates as such. As I said earlier, these estimates conform to the expenditure plan for 1985-86 announced last November by the Minister of Finance, a plan that includes funds for contingencies or reserves for the various envelopes. These reserves serve two purposes: first, they can be used to cover the costs of planned initiatives that could not be included in the Main Estimates because of the time factor, and second, to cover cost adjustments to existing programs during the fiscal year. In either instance, parliamentary approval will be sought through Supplementary Estimates or other legislation.
In 1985-86, these reserves will total $4.6 billion. Not counting job creation projects announced recently, the total reserve level for the new fiscal year is lower than in previous years, which again demonstrates this Government's firm commitment to limiting expenditures.

The Main Estimates component of the total spending plan amounts to $103.6 billion. Included in this amount is $37.2 billion which Parliament is being asked to authorize or vote, as well as an estimated $66.4 billion in previously authorized statutory expenditures. The expenditure reduction initiative taken by this Government last November has limited the growth in the annually voted portion of these Main Estimates from those tabled a year ago to two-tenths of 1 per cent.
The Main Estimates total plus the $4.6 billion in reserves adds up to $108 billion in that period but actual spending will be less than that for two reasons. First, one must allow for the amount by which departments and agencies will collectively underspend the levels authorized by Parliament. This underspending or lapse, as it is called, occurs each year because the voted amounts in approved Estimates represent an upper limit beyond which departments and agencies cannot legally spend. Secondly, repayments of loans from previous years which have
Main Estimates, 1985-86
not been offset against new loans in 1985-86 will reduce actual spending from the total amounts authorized.
The 1985-86 Main Estimates provide for budgetary expenditures of $102.5 billion, $8 billion higher than last year. As I indicated, Mr. Speaker, that almost two out of every three dollars the Government spends is due to some legal requirement, that is through federal statute, which determines the basis whereby individuals, businesses and other Canadian Governments receive federal assistance. These statutory payments account for virtually all of the increase in budgetary expenditure. I will mention but three forms of payment.

Public debt charges show an increase of $5.2 billion, which accounts for nearly two thirds of the $8 billion increase, because of the higher debt level and higher average interest rates on the outstanding debt; transfer payments to individuals have increased by $1.2 billion, mostly because of indexation and other statutory provisions; transfer payments to other government levels for insured health services, post-secondary education, fiscal transfers and under the Canada Assistance Plan have also increased by $1.2 billion. All these payments are based on formulas established under existing legislation.
These three major payments, over which the Government has little control in the short term, account for $7.6 billion of the $8 billion increase mentioned earlier.

The Government has substantially greater control in the short term over the bulk of the remaining programs. This was made evident last fall when the Government announced a $4.2 billion deficit reduction package, of which $3.5 billion represented decreased spending plans.
First, certain programs are being terminated or trimmed back. In the energy field, for example, the Canadian Home Insulation Program will be phased out and the Canadian Oil Substitution Program terminated. Second, a number of capital projects have been cancelled. Third, as a result of its review of defence and foreign aid, the Government was able to reduce spending growth in these two areas while still meeting Canada's international commitments. Fourth, the Government is placing much of its services on a more business-like footing by increasing the prices it charges to users. The services affected include such things as the registration fee for patents and airport taxes.

Mr. Speaker, I have the pleasure to announce that, following the intervention of the Government last November, the increase in the expected cost of non-statutory programs for 1985-86 has virtually been eliminated. This clearly shows our commitment to put back some order into the financial affairs of the country and our decision to play a leading role in the economic recovery.

February 26, 1985
Main Estimates, 1985-86
The Estimates 1 have tabled today reflect the expenditure reduction process initiated last fall. However, they do not take into account the other initiatives already taken or planned by the Government within the framework of its longer term project to develop a sound public expenditure policy. The structural review of Government programs now being undertaken by a work force under the leadership of the Deputy Prime Minister (Mr. Nielsen), will enable us to rationalize Government activities, which will result in a more effective and productive administration of existing programs and in major ongoing savings.
These Estimates also do not reflect the expected results of the intensive consultations undertaken by this Government with other government levels in Canada, with business, labour and other groups and individuals.

Treasury Board has also undertaken a number of initiatives to improve management in the Public Service. In addition to providing Parliament with spending plans, the tabling of the Main Estimates has traditionally been an occasion to focus on the size of the Public Service as measured by the number of person-years under the direct control of the Treasury Board. The 258,222 person-years in these Main Estimates represent an increase of less than one-half to one per cent over the comparably defined 1984-85 Main Estimates figures. The low growth figure is totally consistent with the objectives which the Government announced last November.
In conclusion, I would urge all Hon. Members to read the documents I have tabled today as well as the related media material we are distributing to them. These documents provide a comprehensive picture of these Main Estimates in relation to both over-all spending plans and individual departmental programs. Never has more information been given to Parliament on the Main Estimates.
It has been a pleasure for me to table these documents today, especially in view of the fact that the growth in the portion of these Main Estimates which Parliament is being asked to authorize or vote, the non-statutory portion, is virtually zero. These Estimates bring to light the measures this Government has been able to take thus far in restoring fiscal responsibility. I believe they are a concrete step forward in the deficit reduction efforts of the Government and will go a long way toward reassuring Canadians that proper expenditure management and control is effectively being established by the Government of Canada.


Some Hon. Members:: Hear, hear!


Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, I would like first to congratulate the President of the Treasury Board because this is his first tabling of Estimates and Heaven knows how much work the preparation of such documents entails. I am also happy about the fact that, this year, we shall have completed our examination of Part III for each department and Government agency, which means that the critics for
the various departments will be in a better position to do their job in the committees. In a report published a few days ago, the C.D. Howe Research Institute, after determining the economic situation in which Canada will have to operate in the next few years, stated the following:

The new Federal Government must state bold and innovative steps to cut its deficit in order to restore the Fiscal stability and private sector confidence so necessary for growth.

We have before us today the first major decision made by the new Government since its election last September 4. However, in spite of its election promises, the Conservative Government has included nothing in these estimates which would indicate a serious reduction of the deficit.
Mr. Speaker, the President of the Treasury Board (Mr. de Cotret) spoke earlier about the growth rate for expenditures, but when we look at the over-all budget of $105 billion and the true budgetary expenditures of $102 billion, we can see that budgetary expenditures have a growth rate of 8.4 per cent, which is more than twice the rate of inflation in Canada. I must hasten to add that, in view of these estimates, if the Minister of Finance (Mr. Wilson) wants to meet his formal commitment to the Canadian people of lowering the deficit, his only alternative will be to increase taxes.
Indeed, in an article published last February 17 in The Toronto Star, newspaperman Richard Gwyn said the following:

To an extent that is really quite extraordinary, it is now taken for granted that the Mulroney government lacks the nerve to bring down the budget in April or May that would do something about the deficit.

The Estimates tabled today confirm the truth of Mr. Gwyn's statement and directly contradict the formal commitments made by this Government during the election campaign. With an expenditure forecast showing an 8.4 per cent increase, more than twice the inflation rate, this Government cannot give us a total spending figure of $105 billion without a series of lapsing appropriations and reserves and, especially, increased facilities for contracting loans and obtaining advances. And I wish the Minister the best of luck with his plan to lower lapse amounts without resorting to increases in the Supplementary Estimates. Good luck.
It is truly amazing: an 8.4 increase in spending, twice the inflation rate! Mr. Speaker, the Members opposite, and I realize the Chair is on neutral ground, but just the same, the Members opposite have been waiting sixteen years to solve Canada's problems and to form the Government. These are the people who have been criticizing successive Liberal Governments for sixteen years and saying that they had all the answers, the same people who, especially in recent years, were criticizing the former Government because the Canadian
February 26, 1985

dollar had fallen below the 80-cent line ... Imagine! We are now almost down to 70 cents, a drop of 4 cents in two weeks. These are the people who during the last election campaign criticized the former Government for its lack of economic policies. These are the people who for years have been saying that job creation is very important, and now job creation programs have been cut by $125 million for 1985-86, compared to last year. These are the people who were going to solve the problems of the forestry and energy industry overnight, if they were elected. There is nothing in the Main Estimates that gives any indication of specific action to be taken in these industries. These are the people who were going to introduce programs aimed at promoting the status of women-no increased spending on that side. These are the people who were going to introduce programs to fight pollution and acid rain: the budget for the Department of the Environment has been cut.
With all these promises and formal commitments, we had a right to expect that the first Main Estimates tabled by this Government would reflect at least a considerable part of the commitments made to all Canadians during the last election campaign. However, the Main Estimates tabled in the House today reflect none of these election promises nor any of the formal commitments made by the Progressive Conservative Party to fight the deficit, which was one of the Party's main themes during the election campaign, and none of the formal commitments with respect to job creation.
It will be remembered, Mr. Speaker, that last year, when the 1984-85 estimates were tabled, the former President of the Treasury Board indicated that the total expenditures projected for 1985-86 were $103 billion. Those projections, prepared last year, were based on an inflation rate of 5 to 5.5 per cent.
Now we know that the policies put forward to fight inflation have reached their objective, and the inflation rate has slowed down to some 3.5 per cent. But because of that decline in the inflation rate, Mr. Speaker, the Government could have lowered by 2 per cent those $103 billion, it could have lowered the total 1985-86 expenditures by something like $2 billion. But commitments notwithstanding, and despite the announcements made on November 8, 1984, expenditures are totalling $105 billion. And, Mr. Speaker, $105 billion account for 23.5 per cent of the Gross National Product, a 0.6 per cent increase over 1983-84. This Government is giving us figures in the document tabled, Part I, on page 41 or 42. I saw the figures a while ago and they indicate that the total expenditures at $105 billion account for 23.5 per cent of the Canadian Gross National Product, as against 22.9 per cent only in 1983-84.
So much for the so-called effort made to reduce the Government's participation in the over-all economy.
Therefore, in reviewing the projections tabled earlier today by the President of the Treasury Board (Mr. de Cotret), we
Main Estimates, 1985-86
realize that the Tory Government has done practically nothing to seriously address the deficit it has been decrying all along. The only thing they did, Mr. Speaker, was to juggle with loans and advances, reserves and lapsed votes.
I therefore submit, Mr. Speaker, that if the Government is serious, what with the mandate entrusted to the Minister of Finance (Mr. Wilson), if they really want to fufill their election promise, they should increase taxes. But then, they also promised that there would be no tax increases.
In conclusion, I must admit that the comments published in The Toronto Star were right to the point.
Moreover, if we consider some items or budgetary envelopes such as Regional Economic Development. .. the budget of that Department, can you imagine, is reduced from $16 to $12 billion. We are left wondering whether with such a cut expenditures will be reduced, but no, the expenditures will be increasing just the same. If we take the reserve fund into consideration, it represents a cut of $ 1.4 billion.
Let us consider other sectors affecting our regions; Fisheries and Oceans, a cut of $61 million. Mr. Speaker, confidence and leadership were among the main themes of the election campaign which ended on September 4. However after 5 months of a Conservative government, this new Government, which claimed to have solutions for every problem during the election campaign, has failed to take position on all issues of any significance in the entire country,
The Prime Minister (Mr. Mulroney) and the Minister of Finance (Mr. Wilson) are constantly repeating that the restoration of a climate of confidence would be sufficient to enable the private sector to create employment so urgently needed in Canada. And we constantly hear the party opposite say that confidence in the private sector would be restored as a result of reduced expenditures and controlled deficit. There is no indication in that budget that steps will be taken to cut the deficit.
Mr. Speaker, I do not want to go on too long, but some time ago, I issued a challenge to the Government to create in 1985 some 345,000 new jobs, which would be in line with the average before the recession at the beginning of the 1980's but nothing in that budget leads us to believe that aim could be attained in the slightest degree.

Since September 4, Canadians have been waiting for the Government to take action and to state its policies. The first months of this administration have been marred by contradictory signals. On November 8, 1984, the Minister of Finance (Mr. Wilson) announced his intention to cut dramatically into the Budget and the deficit.
After November 8, the Prime Minister (Mr. Mulroney) contradicted his Minister of Finance and even led us to believe that the social programs could be expanded. More recently in Regina, the Government tried to create the impression that a lot of new money would be put into job creation. Today we

February 26, 1985
Main Estimates, 1985-86
know that there will be not only no increase but a cut of $125 million in the job creation program.
After looking at the Estimates tabled today by the President of the Treasury Board (Mr. de Cotret) the confusion seems to be increasing. The budgetary items increase by 8.4 per cent, twice the inflation rate. All those who were waiting for these Estimates in order to understand in what direction the Government wants to lead the Canadian economy, Members of the House, the business community, social groups, have all been disappointed.
After reading part one of the Estimates, I would have to conclude two things: first, the Government has not stated its policies on any issue. The Estimates do not clarify the direction in which the new Government wants to take the economy. Second, this Government, based on its electoral promises, was committed to job creation. Thousands and thousands of jobs were supposed to be created as soon as the Government was sworn in. In fact, in the last quarter of 1984 the Canadian economy has created fewer jobs than in the second quarter, and 1985 has started off on the wrong foot with a loss of jobs.
The Estimates which were tabled today gave us a confused picture. This picture is not very promising for unemployed Canadians. For the regions of Canada that need help there is a cut of $4 billion in the economic development envelope. As regards summer jobs, the training program, et cetera, we see a cut of $125 million in these programs. On top of that, interest rates are rising and the Canadian dollar has reached an historic low.

Mr. Speaker, I suggest that the Official Opposition will have have only two positions to adopt when dealing with the analysis of the Estimates which the Government tabled today. First of all, we will have to continue to insist, just as we are doing now, that government members take clear-cut positions, in order to re-establish a climate of certainty within the economy. Second, we will have to continue to demand that all government policies be directed first and foremost toward the creation of jobs and the reduction of unemployment. While trying to please everybody at once, the Government is deluding the very people who put their trust in it when they elected it on September 4. It is especially deluding the regions in Canada which need help most. There is the case of the Domtar decision, and if I pause to reflect on the Quebec situation, I can list the cuts made to VIA Rail investment, the branch lines to the pipe-line, the Wabasso shut down, the Melchers shut down, the Tupperware shut down in Cowansville; now, there is the Domtar decision, without forgetting the Cloridorme and Newport fish plants, the loss of jobs and the Marine Industries contracts; Mr. Speaker, these are only some of the issues which come to mind when we consider these estimates and compare them with the promises which have been made. That is why I say that we will take a firm stand in the analysis of these estimates, Mr. Speaker.


Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, since this is our first opportunity to address matters concerning Treasury Board, I would like to congratulate the Minister, who at one time held the riding of Ottawa Centre. I also wish to congratulate his departmental officials who have now completed the changeover to the new format of the Estimates, especially Part II, which is now much easier to understand than the previous version.
Mr. Speaker, I am rather confused by the presentation just made by the Liberal Party's financial critic, because we are new seeing a change in position in these two Parties. The Liberal financial critic is apparently adhering to the position taken by his leader during the leadership campaign last spring. At the time, the leader of the Liberal Party saw reducing the deficit as his Party's priority. He later seemed to have abandoned this position, but apparently the answer is no. It is the official position of his Party.
As far as the Progressive Conservative Government is concerned, which was in favour of reducing the deficit, it is starting to forget this priority. It is now in the same situation the Liberals were in at the time, and today's Liberals are taking yesterday's Conservative position.
Right now it is really hard to tell which Party is which. Certainly, on listening to the comments of the finance critic for the Liberal Party, I heard him say quite specifically that the Liberals now believe there should be even more spending cuts. During the course of the consideration of the Estimates in committee, I hope they ensure that their critics in every area put forward the specific spending cuts they intended to propose had they had the opportunity to be in government. It also underlines the confusion which many people in the country must feel with respect to the new Government because of the fact that its members are acting in office like the Liberals they used to criticize when they were in opposition.
I also note-and this is where those two Parties are so alike-that not one word is really said, either by the Official Opposition or by the Government, about the biggest reason that spending for the Government of Canada in 1985-86 is to go up to $105 billion or thereabouts. Most of the increase is owing to high interest rates. The cuts which are being taken in many areas of activity that affect ordinary Canadians are most of all being taken in order to pay off the banks and financiers in order to pay high interest rates. My Party and I say that it is about time the Government put as much energy as possible into bringing down interest rates rather than constantly looking at spending cuts. The Government has only looked at half of what it should have been looking at in this particular exercise of developing the spending Estimates.
I recall in the summer of last year that the Government attracted a lot of votes from Canadians because of the promise of change. Of course, the Estimates are the first comprehensive chance for the new Government to demonstrate the kind
February 26, 1985

of change for which it actually stands. After all, the huffing and puffing we have had from the Government, frankly, is almost exactly the same as what we would have had from the Liberals. I can think of no Canadian who would really be happy with this particular set of spending Estimates, except perhaps bankers and other financiers who support the Conservative Party. The most striking feature of the Estimates is that in its first six months the new Government has in fact done nothing to confront high interest rates, which are pushing up spending in the country to such a high degree and forcing it over the $100 billion mark.
When the Government announced its spending cuts, important areas were affected. That is reflected in the Estimates. The CBC, which serves all Canadians from coast to coast, is one of the vital links in the country. I am glad to see that the Minister is nodding his head in agreement with me. It has been cut now by $50 million. The National Research Council has been cut savagely by $60 million or $70 million despite the Government's commitment to increase spending on science, research and development. Regional development is down by $1.5 billion or more, depending how one measures it in the Estimates. Employment and immigration is very strongly affected, particularly when it comes to the service which can be offered to 1.5 million Canadians who are currently out of work and to the three million or four million Canadians who, I am afraid, can expect to be out of work at some point or another during the course of 1985 or 1986, thanks to the policies of the old Government and of the Government which is in power right now.
If the Government had acted when it took power to give the country an independent interest rate policy, we would not have required those cuts in the CBC, in services in the Department of Employment and Immigration or in terms of science, research and development spending, because every nickel which is being cut in those areas is going to pay off banks and other people in terms of high interest rates on borrowing by the Government. We would not have needed those cuts if interest rates had been brought down. Canadians who are losing services are paying for interest on the public debt. I remind the President of the Treasury Board and the Government that last October, despite promises to the contrary made in opposition, the Government enacted Liberal tax increases on ordinary Canadians to the tune of $500 per family. That $500 tax increase, which has been directly translated in a move upwards in the unemployment rate, would not have been necessary had the Government moved to bring down interest rates rather than buy the high interest rate policy which it inherited from the Liberals who were in office before.
If I were a banker I would be smiling from ear to ear after seeing these Estimates. The stories abound, in The Wall Street Journal, in The Toronto Star and so on, that the new Minister of Finance is rapidly turning into a wimp, a man who bids fair to compete with the former Prime Minister of his Party in terms of the public image he has across the country, a man who has not been prepared and a Government which has not been prepared to confront financial interests that are holding
Main Estimates, 1985-86
the people of the country in thrall and having an effect on employment, as well as upon every Canadian.


Charles Joseph Clark: Step outside and say that.


Mr. Fulton:: You would think the President of the Treasury Board is an escapee from the Senate.


Michael Morris Cassidy: Yes, he is. We should congratulate him on escaping before it is abolished.
I want to turn now to the cuts in the Estimates, bearing in mind, among other things, from where the Liberal Party has traditionally drawn its strength. The Conservatives have always had strength in Atlantic Canada. For a long time they have had strength in western Canada. Most recently they have begun to acquire a lot of seats in the Province of Quebec, even though that may be temporary. The biggest single cut in the Estimates-


Ramon John Hnatyshyn: You forgot Ottawa Centre. We are getting stronger there every moment.


Michael Morris Cassidy: Well, we keep on winning elections. The single biggest cut in the Estimates of which we were not aware before is the cut of $400 million in lending by the Farm Credit Corporation. It is seeing its lending cut in 1985 down to about $90 million, a fifth of the level recorded in the Estimates for the year before. I presume that cut was included so that the Minister could rise and say, "Look what I have done; I have kept our discretionary spending to an increase of .2 or .5 per cent". He does not talk about the impact on the farm sector. He does not talk about the way farm spending and the farm sector, in turn, have an impact on the rest of the Canadian economy. At a time when farmers need access to credit in order to survive, they are taking it in the neck.
Shipbuilding subsidies are being cut by $40 million. That is a direct blow to the regional economies of the St. Lawrence region of Quebec, of St. John's and Halifax, of Newfoundland and of British Columbia. Although it is a little difficult to discern exactly what is happening, it appears that funds from the Government for economic development in the forestry sector are being cut from $91 million to $54 million. In other words, rather than implementing promises of massive increases in an industry which is responsible for 10 per cent of economic activity in the country, the Government is cutting back in that particular area.
[Translation\
Mr. Speaker, this week the Government refused to support Domtar's investment project in the Eastern Townships in the Province of Quebec. This decision will affect a major sector of Quebec's economy and it shows once again how remiss this Government is in meeting its commitments to the forestry industry.

Petro-Canada is now the leading company in terms of frontier oil development, not only in the Beaufort but in the Hibernia field and offshore in eastern Canada. Its frontier

February 26, 1985
Main Estimates, 1985-86
exploration and development program is down by more than $200 million. This is a direct blow to all those people who trustingly voted for the Conservatives and for the Prime Minister when he said, "Come along with us, my program is jobs, jobs, jobs; let's have some change", during the course of the election campaign.
Many people in my area of Ottawa Centre, in the Ottawa region in general and in many other parts of Canada, had just begun to develop an important new industry in conservation and renewable energy. That cut was announced in the fall. It amounts to some $50 million or $60 million by the time it works its way through the NRC at the end of this coming fiscal year. That is a direct blow to another promising industry, and industry which creates more jobs and has the potential to create more jobs than Atomic Energy, which is still well funded.
Finally, six months after the election, the unemployment rate last month rose higher faster than for any month in the previous five years, yet the Government is cutting 600 positions from Canada Employment and Immigration. A pregnant mother who visits the Canada Employment office in my riding of Ottawa Centre to check on her maternity benefits is told that she has to wait for more than an hour to talk with a counsellor, and the Government is going to cut 600 more positions. In the riding of the Hon. Member for Kamloops-Shuswap (Mr. Riis) 30 per cent of the population is unemployed. People are beside themselves with the problems of unemployment in that riding and in many other parts of the country, yet Canada Employment is suffering yet another cut. As I said before, farmers and people who hold Government of Canada bonds do not have to stand in line when they go to clip their coupons, but ordinary Canadians are hurt by the cuts which are here.
Canada Employment has been talking about $1 billion of extra spending for job-creation, but its basic Estimates are being cut-back by half a billion dollars. When you take the two together, it means that the Government's additional commitment to job creation in the coming year, by my accounting, amounts to one-half of one per cent of the over-all spending of the Government of Canada. The changes in the Estimates are profoundly unfair and unjust. Loggers, farmers and workers suffer. Banks and big corporations benefit.
I would point out that in 1979 the Conservative Party in government with its Budget published a compendium or estimate of what tax expenditures were costing the people of Canada. At that time it was some $30 billion or $40 billion. I hope that the President of the Treasury Board (Mr. de Cotret) and his Government will ensure that we get that list again.
I am distressed over the fact that while cuts are made that affect ordinary Canadians, so far nothing is being done to affect those privileges and hand-outs to major corporations. In fact, the Government has made it clear that it will not tinker with the corporate tax system after it has imposed major tax increases on ordinary Canadians.
If there have to be sacrifices, let them be fair. If there have to be sacrifices, do not just impose them on ordinary Canadians. If there have to be sacrifices, let us see them made by big oil companies, multi-national corporations, and foreign-owned corporations which control more than half of our manufacturing industry, by those people who control large amounts of capital and who are now speculating. Some Canadians are actually speculating against their dollar. Let them carry their burden rather than simply seeing it imposed on ordinary Canadians.
My time is up. We will have a chance to resume this debate elsewhere in this House and its committees.

I wish to congratulate the Minister on his presentation, but not unreservedly on the contents of his Main Estimates.


Mr. Speaker:: Questions?


Mr. Foster:: Mr. Speaker, on the Estimates that were tabled today, I would like to ask the President of the Treasury Board (Mr. de Cotret) exactly why the Government has chosen to reduce the Estimates of the Farm Credit Corporation by some $400 million. Surely farmers are facing the most difficult financial stress that they have faced in this country since the 1930s. According to the estimates of the Farm Credit Corporation, 39,000 face serious financial difficulties. They are looking to the Government for assistance, either in reducing interest rates or setting aside programs such as the United States Farmers' Home Administration Program.
This Government, facing the most distressful time in our history, is cutting the budget from some $490 million to $90 million. I wonder if the Minister of Agriculture (Mr. Wise) or the President of the Treasury Board (Mr. de Cotret) have chosen to abandon completely this very serious problem of the farmers. Will he explain why the Government is doing this at this time?


Robert René de Cotret: Mr. Speaker, I will be happy to give the Hon. Member some exact facts before he draws his conclusions. In the Estimates there is a reduction under this item. I can assure the Hon. Member that that reduction, when explained, means that there will be exactly as much money, if not more, in 1985-86 for that particular constituency as there was in 1984-85.
There are two important things to keep in mind. The first is a change that allows the Corporation to borrow on its own account. Obviously that will reflect itself in the numbers in the Estimates. Second, despite the claims that the Hon. Member is making, the revision was made in light of the fact that there was a very appreciable drop in the demand for this kind of credit in 1984-85. We have readjusted the numbers in 1985-86 to ensure that that very important constituency in our country is well served by the Government, certainly as well served as it was in the last year. Therefore, there is no decline there at all.
February 26, 1985


James Ross Fulton: Mr. Speaker, can the President of the Treasury Board (Mr. de Cotret) advise the House why Canada's largest industry, the forest sector, which, according to his own documents, was valued last year at $25.9 billion, is having $31,690,000 chopped in the 1985-86 Estimates? Where $207 million was spent last year, only $175 million is expected to be spent in the coming fiscal year. Why is this being done at a time when it is recognized in British Columbia and in other provinces that we are in the midst of a falldown effect? We will have to cut back by 30 per cent the number of people employed in British Columbia.
It is recognized that there is a need for in excess of $300 million a year just to replant the good and medium backlog sites in British Columbia alone. In the whole of the Estimates, there is less than half of what is required by British Columbia alone. Historically, less than five cents on the dollar has been going back into the forest sector federally. My quick calculations indicate that less than one cent out of the dollar will now be put back under the new Estimates. Perhaps the Minister could explain, first, the reason for the cuts and, second, in light of the promises made during the election campaign by his own candidates that a billion dollars a year would be spent by the federal Government, where is the billion?


Robert René de Cotret: Mr. Speaker, I took notice of that question when the Hon. Member's colleague raised it in his reply to my statement. I would like the indulgence of the Hon. Member to give me time to look at the specifics of that particular item. I will be happy to give him an answer or have the Minister responsible give him the answer.


James Ross Fulton: Mr. Speaker, one would assume that the President of the Treasury Board would be able to respond in relation to Canada's largest industry. One Canadian in 10 is employed in this industry. I am sure the President of the Treasury Board is well aware that in British Columbia alone, his own Government officials have identified a need for $300 million a year. There is only $175 million for the whole of Canada.


Robert René de Cotret: Mr. Speaker, at the very great risk of stating misleading facts in this House, which I certainly would not want to do, I would again respectfully ask the Hon. Member to give me some time to take the question under notice and give him the appropriate answer.


Mr. Keeper:: Mr. Speaker, the Estimates which the Minister just tabled project cutting some 600 positions from the Canada Employment and Immigration Commission and at the same time reducing the allocation for unemployment insurance on the assumption that unemployment is going down. In light of the fact that Government job-creation programs will only provide some 30,000 person-years of work and when unemployment went up last, it was the highest in five years, how can the Government justify cutting back on the allocation for employment programs?


Robert René de Cotret: Mr. Speaker, in terms of the expenditures that are put forth by the new Government with respect to job
Main Estimates, 1985-86
creation and job training, if one looks through the numbers carefully, one will notice that in 1984-85 the total amount of money expended in these programs was of the order of $1.8 billion. What is contained in the Estimates that were presented today, plus the announcement that was made by the Minister responsible at the First Ministers' conference recently, would mean that in 1985-86 that would be increased to $2.5 billion, with a potential of an extra hundred million on top of that. There is a very significant increase in the amount of funds being allocated for employment and job training by the new Government.


Cyril Keeper: Mr. Speaker, if what the Minister says is accurate, that he is in fact increasing the money for employment, how can he then justify cutting 600 positions from the Canada Employment and Immigration Department? People are waiting for their unemployment insurance. Job-creation programs require adequate administration. How can positions be cut at a time like this?


Robert René de Cotret: Mr. Speaker, to the best of my knowledge, the improvements in the reduction in the workforce involving that Department comes from a reorganization and technological improvements in the delivery systems. However, I would be happy to go into that further with the Minister responsible if that is not the full answer.


Nelson Andrew Riis: Mr. Speaker, my question is to the President of the Treasury Board (Mr. de Cotret). A quick glance at the Estimates would indicate that the largest increase that pushes expenditures up to over $100 billion is the debt servicing charge that now accounts for a substantial $5.6 billion increase for this year. Would the President of the Treasury Board agree that if the Government were to find itself lowering interest rates substantially, that in fact would go a significant way to eliminating essentially that entire $5.6 billion increase?


Robert René de Cotret: Mr. Speaker, there is no question that the pressures of the service charges on the public debt, on the over-all expenditures and on the deficit are some of the major sources of the problems we are facing today. I think my colleague, the Minister of Finance (Mr. Wilson), has replied to this question time and time again. We live in an international context, in which the interlinkages between the economies are having the effect of pushing interest rates up. We are also living in a situation in which a deficit of the size of the one that we inherited from the prior Government is acting on our domestic markets in a way that is not helpful when trying to get those interest rates down. Certainly I, and I am sure all Members of the House, would share the positive belief in an eventual decline in interest rates, and that is certainly a goal toward which the Government is working.


Nelson Andrew Riis: Mr. Speaker, my supplementary question deals with a point that was raised previously. The Farm Credit Corporation indicated in its recent report that something like 70 per cent of the farmers of Canada were in a virtual crisis situation in terms of debt management. Is it correct then that

February 26, 1985
Main Estimates, 1985-86
by the Estimates, the Government has seen fit to reduce the borrowing portfolio of the Farm Credit Corporation by some $400 million? If that is the case, is this an indication that the Government is moving away from providing financing for the Canadian farm sector?


Robert René de Cotret: Mr. Speaker, as I said in answer to a previous question, the level of funding for the Farm Credit Corporation will ensure that its level of activity in 1985-86 will be fully consistent with the demand that is expected and with the trends and demands we witnessed in 1984-85.


Maurice Brydon Foster: Mr. Speaker, I have a supplementary question regarding the Farm Credit Corporation. Will the Farm Credit Corporation be borrowing from the private sector the equivalent of the $400 million which is being cut from its budget in the Estimates? It does have the power to borrow from the private sector. Perhaps the Minister could clarify that.
I would also like to ask the Minister why the Government is choosing to impose some $25 million worth of additional service charges on agricultural producers for inspection fees on various commodities and for research. Why is the Government imposing additional fees on agricultural production, ROP and that sort of thing, of $3 million and additional fees of $5 million on agricultural research? This is a very difficult time for many sectors of the agricultural community. Why is the Government now imposing additional fees of some $32 million?


Robert René de Cotret: Mr. Speaker, I will say again that the changes that were made and presented in the Estimates with regard to the Farm Credit Corporation will allow the Farm Credit Corporation to meet the demand for loans from the agricultural constituency in the year to come. It is not a cut that will in any way inhibit that particular agency or keep it from meeting the demands of its particular constituency.
Regarding user fees, throughout Government, because of the six and five program, we have seen the level of user fees relative to costs decline very substantially. Last November we announced our intention to get user fees back up to a level that is more consistent with historical patterns. That is all we are doing in this case. An Hon. Member spoke a while ago of being even-handed throughout the country and of making sure that everyone pays his fair share. We must be even-handed regarding user fees to see that the costs are spread out.


Mr. Baker:: Mr. Speaker, my question is perhaps the most relevant question that could be asked today given the new regime of the Estimates as they have been presented. As outlined in the documents tabled today, these expenditure reductions are identical to the ones that were presented to the House previously by the President of the Treasury Board. They are identical to the individual cuts announced by individual Ministers since Parliament resumed.
Some of these program reductions and eliminations in certain Departments have encountered vigorous objections from provincial Governments and individuals in this country. I can give as an example the elimination of the fishing vessel insurance scheme or the charging for telephone calls to weather offices. There is a whole list of such program reductions and eliminations. What manoeuvreability does each Minister now have within his own departmental budget to reinstate or change some of the programs that have been cancelled or substantially reduced? In other words, as far as the President of the Treasury Board (Mr. de Cotret) is concerned, does each Minister now have a responsibility under this new regime to cut another program within his Department if he is to change that which is contained within these documents? That is a very relevant question, Mr. Speaker.


Robert René de Cotret: Mr. Speaker, I believe that that is a relevant question. The typical experience of similar exercises in the past has been that after an initial will to reduce expenditures has been shown, six months down the road there is a very serious erosion and the object of the exercise is often defeated. I am very happy to report that six months after this exercise, the announcement of a reduction in expenditures plus some revenue increases of $4,244 billion, we are still at $4,244 billion.


Michael Morris Cassidy: Mr. Speaker, my question to the Minister is very straightforward. At the time of the Budget in 1979, the Conservative Government published an estimate of tax expenditures which was to run at 30 per cent or 40 per cent of direct government expenditures. Is it the Government's intention to do that again in 1985? Will we see such an outline of tax expenditures either prior to the Budget or at the time of the Budget this spring?


Robert René de Cotret: Mr. Speaker, with all due respect, I think the question should be addressed to my colleague, the Minister of Finance (Mr. Wilson), and I do not wish to respond to it either in the affirmative or in the negative. I think it is a very valid question and one which I would like my colleague to have the opportunity of answering.


Nelson Andrew Riis: Mr. Speaker, the Export Development Corporation and the Canadian Commercial Corporation have been making presentations. Their very critical role in the future of the country for the next number of years is becoming more paramount in that we need to open up new export possibilities. Yet I see that in the Estimates, we are decreasing the portfolio of the Export Development Corporation by $47 million and the portfolio of the Canadian Commercial Corporation by nearly $9 million. Can the President of the Treasury Board explain how this is in the best interests of the country, this being such a critical point in time? While he is on his feet, could he indicate to the House whether or not he believes that the $27 million we set aside to run the Senate is a decent investment?


Robert René de Cotret: Mr. Speaker, to answer the second question first, I am sure the Hon. Member knows that the budgets for the operations of Parliament, both the Senate and the House, are not under the purview of the Treasury Board nor of the Government. They are set in this place by the Commissioners of Internal Economy and in the other place by an equivalent body. Far be it from me to comment on a matter that does not fall within my purview.
February 26, 1985

In terms of the Hon. Member's first question regarding EDC and CCC, I would like to have a chance to take that question as notice. I do not think that there has been a major shift in emphasis. It may just be a question of the submissions that were made by those agencies. There may be some slight policy change, but I would like to wait and give the Hon. Member a full and detailed answer.


James Ross Fulton: Mr. Speaker, I would like to direct the President of the Treasury Board to the area of fisheries and oceans where there has been approximately a $100 million cut in capital expenditures. My question is twofold. First, during the election campaign last year, the current Minister of Fisheries and Oceans (Mr. Fraser) indicated, first, that there would be a buy-back of approximately $100 million from the fishing fleet in British Columbia, and, second that $200 million would be spent on salmon enhancement. Both of those matters fall under the capital expenditure for the Department of Fisheries and oceans, which is decreasing from $210 million to $124 million.
First, where is the $300 million in capital costs for the salmon enhancement and the fleet buy-back? Second, how sizeable does the President of the Treasury Board think the Supplementary Estimates will be at the end of this fiscal year? Will we find large amounts related to forestry and fisheries and oceans being smuggled into the Supplementary Estimates, or are the fisheries and oceans Estimates considered to be reasonably accurate?


Robert René de Cotret: Mr. Speaker, 1 can assure the Hon. Members that we do not expect that the Supplementary Estimates will be used as a device to smuggle in expenditures that we now know about and do not want to talk about. If anything, he will notice that the reserves which have been provided for this year are less than in past years. That is largely because we have tried to put as much of the known expenditures into the Main Estimates, rather than keeping larger reserves for the Supplementary Estimates. I can assure the Hon. Member that the Government is fully committed to restraint, the control of expenditures and living within the numbers that are published in these Estimates.


George Roland Henderson: Mr. Speaker, my question follows that of my colleague. It relates to inspection fees as they pertain to agricultural products, specifically potatoes. Did I understand correctly the President of the Treasury Board that inspection fees-as announced in the economic statement of the Minister of Finance (Mr. Wilson) and in a letter which was sent to the P.E.I. Potato Marketing Board and the P.E.I. Potato Producers' Association which told them that there was a 33 cent per hundredweight fee-would be levied for field inspection for No. 1 table stock potatoes? I may have misunderstood, but I believe that the President of the Treasury Board said that it
Petitions
was a fait accompli and that it will stand and come into effect April 1, 1985?


Robert René de Cotret: Mr. Speaker, I did not confirm or imply any such specific issue. I only made a statement on broad principle as it affects cost recovery throughout government services.


Mr. Speaker:: Petitions.


Mr. Malepart:: Mr. Speaker, I have one quick question.


Mr. Speaker:: With great respect, I indicated to Members earlier that I was waiting to see who was rising in order to indicate when the time would expire. I will allow one question.


Jean-Claude Malépart: Mr. Speaker, I have a very short question for the President of the Treasury Board. 1 was looking at the appropriations for spending on agricultural programs, but I cannot seem to find them in the Estimates. Could the Minister inform the House where I could find an entry reflecting the commitment made by his colleague, the Minister of Public Works (Mr. La Salle) respecting $13 million to help hog producers? I cannot seem to find that amount among the appropriations.


Robert René de Cotret: Mr. Speaker, I think this matter, as the Hon. Member knows perfectly well, has been discussed for a number of months and that it was understood it would not be included in the Estimates tabled today. However, it is certainly a matter we are giving careful consideration.


PETITIONS
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, at the request of my constituents, members of the Carrousel du P'tit Monde d'Anjou Inc., I have the honour to present to the House a petition asking that the support given to that association in previous years by Canada Works not be discontinued, including the five positions created to structure and maintain the operations of the Carrousel, an organization to help to train young families.


Iain Francis Angus: Mr. Speaker, I have the honour to present a petition, signed by 205 citizens of this nation, which calls for the reinstatement of The Friendly Giant television program on CBC. The petitioners claim that the program has unique value, an educational function and that it promotes Canadian identity and culture.

February 26, 1985
Reference to Committee


Mr. W. R. Bud Jardine (Northumberland-Miramichi):: Mr. Speaker, I have the honour to present a petition from a group of anglers from the Miramichi region which deals with the cut-backs on fly salmon fishing in 1984. In the petition they express concern about the Government's present salmon regulations. They have asked me to convey to the House, with this petition, their objections to the present quotas. I do so and submit this petition on their behalf.



JUSTICE AND LEGAL AFFAIRS


Ramon John Hnatyshyn: Mr. Speaker, there have been consultations with the House Leaders with respect to the reference to Committee of Sessional Paper No. 331-4/6 which deals with equality issues in federal law. I think, Mr. Speaker, if you were to ask for unanimous consent, and I could put the motion, you would find that it would be adopted. The draft order is as follows:
That the Standing Committee on Justice and Legal Affairs be empowered to examine, inquire into and report on equality rights under the Canadian Charter of Rights and Freedoms;
That the document entitled "Discussion Paper on Equality Issues in Federal Law", tabled in the House on January 31, 1985, (Sessional Paper No. 331-4/6), be referred to the Committee;
That the Committee seek the views and opinions of Canadians, both individuals and organizations on the subject matter of the Discussion Paper;
That the Committee review federal statutes, and particularly those mentioned in the Discussion Paper, in order to ensure their conformity with the letter and spirit of equality and non-discrimination guarantees in the Charter;
That the Committee report and make recommendations for any necessary changes or other actions to the House no later than September 9, 1985;
That the Committee have the power to retain expert, professional, technical and clerical staff;
That the Committee be empowered to adjourn from place to place within Canada; and
That notwithstanding the usual practices of this House, if the House is not sitting when an interim or final report of the Committee is completed, the Committee shall report its findings by depositing its report with the Clerk of the House, and that it shall thereupon be deemed to have been laid upon the Table.


Mr. Guilbault (Saint-Jacques):: Mr. Speaker, I would like to confirm that we have been consulted on this matter and that we agree. As a matter of fact, we wish to express our satisfaction that the reporting date has been postponed to September 9. That will allow more Canadians to express their views. We give unanimous consent.


Mr. Speaker:: Does the Hon. Government House Leader have consent to introduce the motion?


Some Hon. Members:: Agreed.


Mr. Speaker:: The House has heard the terms of the motion. Shall I dispense?


Some Hon. Members:: Dispense.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Monique Bernatchez Tardif: Mr. Speaker, the following questions will be answered today: Nos. 217, 219, 221 and 245.


Mr. Howie: As of the last date for which information is available, what proportion of the employees of the Department of the Environment were women?


Hon. Suzanne Blais-Grenier (Minister of the Environment):: 29.07 per cent.


Mr. Howie: As of the last date for which information is available, what proportion of the employees of the Department of Public Works were women?


Hon. Roch La Salle (Minister of Public Works):: 24.5 per cent.


Mr. Howie: In the fiscal year 1983-84, were any lawyers in New Brunswick, outside of the government, employed by the Department of Justice and, if so, how many and, in each case, what was the total expenditure related to their remuneration?


Hon. John C. Crosbie (Minister of Justice):: 1. Yes.
2.	Fifty-two.
3.	See list below.
Moncton	Brison, Emery	9,661.41
	Drapcau, Ernest	38,297.36
	Innes, Bosse & Mills	50,351.64
	Lampert, Irwin	8.366.76
	Leblanc, Bernard	90.00
	McAllister, Gregg	524.00
	Rideout, McGrath & Co.	15,969.06
	Robichaud, Brigitte	120.00
	Sheeham, Mark	1,132.00
Newcastle	Burchill, William	480.00
	Lordon, Denis	10,483.53
	Smith & Smith	22,278.95
Oromocto	Mckay & Whittaker	3,510.00Perth Andover	Shaw, Graema	1,913.20Richibucto	Richard, Clermont	11,261.67Sackville	Meldrum, W. W.	978.80
February 26, 1985

Shediac	Robichaud, Theogene	6,178.50St. George	Larsen, Glen	7,072.97St. John	Barry, O'Neil & Company Gilbert, McGloan, Gillis & Co. McKenna, Hubert Purnell & Brien Teed, Eric	3,498.99 848.65 10,494.80 31,921.28 16,792.82St. Joseph	Gauthier, Jacques	4,001.24St. Stephen	Hansen & MacDonald McConkey, Dana W.	16,094.71 25.00Tracadie .	Doiron, Leo	30,526.90Woodstock	Depow, Herve Maddox & Maclnnis	1,305.00 4,584.43Bathurst	Richard, John	5,260.58Campbellton	Dumont, Guy	1,830.07Edmunston	Tweedie, Edgar	2,059.99Fredericton	Calabrese & Whitehead Jackson, Leslie Mockler, Eugene J.	6,064.82 5,561.68 282,588.95Moncton	Drapeau, Ernest Innes, Bosse & Mills	16,359.00 2,462.50Newcastle	Smith & Smith	9,329.21St. John	Barry, O'Neil & Company Clark, Drummie & Company McKelvey, Neil Palmer, O'Connell & Co.	11,269.09 21,225.18 31,704.12 407.94Woodstock	Maddox & Maclnnis	221.51Bathurst	Gallagher, Micheal	6,863.60Buctouche	Michaud, Leblanc & Co.	2,671.75Campbellton	Senechal & McBrearty	627.60Caraquet	Leger, Reginald	13,749.29Dalhousie	Hayes, Paul	4,414.94Fredericton	Jackson, Leslie Kingston, C.V.	1,126.02 4,724.50Grand Falls	Duffle, Paul	552.30Hampton	Day, Lutz & Co.	864.42Lameque	Noel, Roger A.	1,002.76Minto	Lawson, William	5,896.06Moncton	Innes, Bosse & Mills	13,970.48Newcastle	Bowes, Michael McKenna, Frank Smith & Smith	1,726.00 96.50 34,982.63Richibucto	Richard, Clermont	985.90Shcdiac	Robichaud, Theogene	3,772.61St. John	Colwell, Ryan & Co. Gilbert, McGloan, Gillis & Co. Leger, Franklyn	160.64 14,537.42 305.36St. Stephen	Hansen & McDonald DPW-CONTRACTS AWARDED	981.80


Mr. Boudria: From September 4, 1984 to December 31, 1984, how many Department of Public Works contracts have been awarded or filled by suppliers or contractors, originating in part or in whole, from the constituency of Joliette and, in each case, what was the total value of the contracts and the names of the individuals or companies who were awarded each of these contracts respectively?


Roch La Salle: Two
contracts have been awarded from the Constituency of Joliette. The names of the two contractors and the value of each contract are as follows:
Small Businesses Loans Act
Name	Contract Amount
M. Gabriel Parent, Joliette, Quebec	$ 2,000
Construction Fernand Perrault, Joliette, Quebec	$45,100


Monique Bernatchez Tardif: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Bissonnette that Bill C-23, and Act to amend the Small Businesses Loans Act, be read the second time and referred to the Standing Committee on Regional Development.
Michael Morris Cassidy: Mr. Speaker, I would like to comment on a few aspects of Bill C-23, with particular relevance to how it substantially meets the goals of arriving at a more adequate policy to assist and encourage small business in Canada. Some of my colleagues have spoken to the Bill and have expressed concern about a couple of major points. One of their concerns was the allotment of a further $1 billion for lending. Certainly, that will not be adequate to meet the needs that businesses can anticipate over the next few years. Second,-and we have said this again and again in the House-they are concerned about the fact that interest rates are such an important factor for small businesses, that to ignore that and try to pretend that interest rates are beyond the power of the Government is something which is injurious to the extreme to small businesses in Canada.
As far as the Bill is concerned, Mr. Speaker, if more assistance is being provided, then the New Democratic Party finds itself in favour of that. Our concerns are that regardless of the general opinion that small business is a good thing-an opinion which is held by Hon. Members of all sides of this House-that is still not translated into practical action which would have meaning for many small businesses which are seeking to establish themselves or to expand in order to provide job opportunities and new forms of ideas, innovation and enterprise.
This is important to my riding, Mr. Speaker. We have had such enormous success stories, such as the growth of Mitel

February 26, 1985
Small Businesses Loans Act
from a small company in a garage ten or twelve years ago, financed, I think, on someone's Visa card, to the industrial giant it is today. There are large numbers of other high-tech companies which have grown in Ottawa over the course of the last few years. There has been as well a very substantial number of enterprises in my riding flowing from our ethno-cultural communities, from the Chinese restaurants along Somerset Street to the grocery stores. These small businesses have been developed by new Canadians who want to establish themselves, and they have been in fact making a great contribution to my riding. That is the story, of course right across the country.
Bill C-23, although it addresses the issue of financing, does not go beyond what I see to be the basic issue for small business in this country today, that is, the issue of power. Small business people live and work and do their business in what has to be described as a free enterprise kind of system where in fact they are the ones who are the most vulnerable to the winds of change and forces of a free enterprise economy while their big brothers and sisters, the major corporations, are not in that kind of situation at all. To say that free enterprise exists for free enterprise today is to say that the Wild West can still be found in Palm Springs, California. That is not true any more for major corporations. They have all kinds of means of sheltering themselves from the vicissitudes of high interest rates, fluctuations in the dollar and other kinds of things which can be devastating in their impact on smaller businesses. Big business and multi-national corporations, in general, pay taxes which are at rates much lower than what is paid by small business. Big business often has access to sources of capital at much lower rates than small business. They do not get called by their banker and forced to sign the mortgage for their own home, for example, in order to keep their business alive when things are tough. If the company is Chrysler Canada, Massey-Ferguson or Dome, if your name is Conrad Black or your company is Norcen, under those circumstances you will get the ear of governments in tough times when assistance is needed in order to survive.
We are running at a rate of some 30,000 bankruptcies among small business every year. Those are bankruptcies of small businesses which did not have the clout of Mr. Black, Chrysler or Massey-Ferguson. Therefore, they were left to sink or swim and, unfortunately, too many of them were forced to sink. We have no adequate monopoly control or anti-monopoly program in this country, and big business interests have successfully prevented that kind of legislation from being passed and have as well prevented changes being made to the Restrictive Trade Practices Act.
From the time I was last in this place, Mr. Speaker, as a journalist covering Parliament back in the 1960s, we have not seen effective changes in Canada's control of monopolies. Yet what is the picture in terms of job creation? Have the tax concessions, the big loans and that kind of thing really done a lot to create jobs? The answer is no. As many Hon. Members have said in this debate on Bill C-23, small business is the major source of job creation, not just in this country but in the
United States and, increasingly, in the European countries as well. Whether one looks at countries like Hungary, China or countries in the western industrial world, it is recognized more and more that there are some very special and important virtues in having enterprises which are relatively small and limited where people can relate to each other face to face. These are the countries where ideas and innovation have tended, and are tending, to be found.
If the issue is the question of the imbalance of power between those big corporations which receive the tax concessions and other favours from government and the small businesses which in fact are creating the jobs and providing new sources of hope for ordinary Canadians, then it seems to me that we should confront that question rather than try to sweep it under the rug. The New Democratic Party is very concerned about trying to do that, about trying to ensure that small business has a more adequate place in the life of this country. I do not think of the concept of free enterprise because we do not have free enterprise for business any more. Because of the concessions, the hand-outs and the controls by multi-nationals, the oligopolies and the monopolies, the other kinds of restraints of trade, and the market niches which exist for big business, they do not live in a free enterprise type of environment. Small enterprise does. I suggest that what we should be looking toward, Mr. Speaker, is the concept of "fair" enterprise which recognizes and rewards the contributions which small business makes in terms of the economy.
Over the course of the last month or so, a number of members of my caucus, myself included, have travelled from coast to coast in Canada on a task force on jobs. People have been telling us that control of the economy and of economic development should be decentralized. They do not trust big government. They do not trust centralized agencies any more. They want to do things themselves, Mr. Speaker. They want some encouragement. They say, "Give us the tools and we will finish the job". There has been a good deal of positive comment from groups which have come before us, sometimes from regions where it is hard to see how one could possibly be positive about their prospects. In our ridings we have all seen that the birth of enterprise is in fact important and is something to be nourished. There may be a bit more of it today than there was a few years ago. Our task force will be looking for ways of encouraging that kind of development.
I believe one of the concepts which needs to be developed is what I call "the concept of fair enterprise". What that concept requires is that small business be given a fair chance to grow, to survive and to play its role in the economy of Ottawa Centre, Ontario and of Canada. On the other side, it is also reasonable to suggest that small business should be prepared to take on responsibility, to accept and to co-operate with government initiatives and leadership where they are being offered. I think it is reasonable that if we in government seek to nurture small enterprise, in turn small business should respect efforts made by government to ensure that wages are adequate, that health and safety conditions are decent and to ensure that working people have a right to speak for themselves through
February 26, 1985

organizations, unions, or other vehicles they happen to choose.
1 do not think it is fair to say that, because small businesses should be encouraged, as a consequence they should be free to avoid the laws. We should be encouraging, rather than discouraging. There are a number of rules and regulations we make through Government. Let us not forget them. Let us try to ensure, however, that in applying them, they are sensitive to the different needs of smaller enterprises. I believe in the fact that inevitably small businesses in order to survive are going to have to make profits. I accept that. My Party accepts that, because if they do not make profits, they do not survive.
People sometimes have need for expertise as well. When a small business starts up and then fails, it is later asked why that particular business failed to survive. The reason seems to be that the proprietor or the entrepreneur knew about marketing but did not know about production and finance, or he knew about production but did not know a darn about finance. He needed some assistance and advice. I think we have to try to provide ways of giving people that kind of assistance and advice. 1 would like to see in my riding of Ottawa Centre and across the country groups of people who have been successful in small business devoting a bit of their time to provide consulting services to other people who are on their way up. I would like to see those advisory services expended. In view of the difficulty which exists for governments and organizations to provide assistance for small business, we need to be looking at decentralized sources of venture capital, perhaps co-operatives, in which municipalities or very small-scale funding mechanisms can be found in order to assist with the birth and encouragement of small businesses.
We need to be aware of the fact that some small businesses will fail. If they do, we should try to ensure a relatively soft landing for the people who had the spunk to set the business up in the first place. In other words, you should not be in a situation where you are taken to the cleaners by the receivers if you have to go bankrupt, as is too often the case these days. Possibly, legitimate looses incurred in a small business which failed should be available to the small business persons to write off against other income if they start to get back on their feet. Perhaps there should be other ways to minimize their losses so that instead of having to wait for six or seven years to get their act back together, those small business persons can get going again and start another small business, if that is what they want to do, or make some other similar contribution to the economy. In other words, there has to be a vigorous process of enterprise formation. In order to have that, people have to know that the stakes are not too high if they happen not to succeed the first time they try.
I also want to suggest that when we are looking at the needs of small business, we should recognize that small businesses at different stages will have varying needs. At one stage it is advice, at another stage it is financing, at another stage it is access to marketing channels, and at yet another stage it is access to subcontracts in order to make parts or components or provide services for larger firms. I do not think we recognize
Small Businesses Loans Act
the great variety of need out there in the small business sector. Not all those needs can be met through government, but certainly some of them can. At the very least the FBDB and other small business services provided by the federal Government can be more flexible and should be more sensitive to those particular needs.
I had a case come through my door the other day in my riding. This was a franchisee with his business just outside Ottawa. He had taken a loan from the FBDB back in 1981 at 18 per cent. After four years that franchisee was still stuck with paying 18 per cent in order to keep the business alive, and the FBDB was not prepared to make any kind of arrangement to allow that particular small business to buy out of that loan and borrow at today's rates which are a great deal more sensible, this despite the fact the business was being driven to the wall by having paid those high interest rates year after year. That is one of the reasons why, through the course of this debate, we have emphasized the importance of interest rates.
We should also consider addressing the question of the corporate structure and how it affects small business. We need a variety of corporate structures. In the future we are going to see a great deal more different forms of organizations. We are already seeing the phenomenon of worker buy-outs. We need to have more vehicles by which workers can participate in the ownership of their enterprise, particularly when it is small enterprise, and it does not necessarily have to be what we know as a joint stock company. We need to look for the development of co-operatives in which there is a certain amount of entrepreneurship or perhaps a shared enterprise in which municipalities will joint with the private sector in encouraging small business, as has occurred in places like Jamestown and Buffalo, New York.


Mr. Horner:: Why?


Michael Morris Cassidy: I hear someone on the other side asking why. I ask, why not? Why do we have to stifle that particular kind of innovation just because it happens to involve government participation in helping to create jobs and so on? I am sorry that the Hon. Member from Brampton would feel so upset about that particular kind of thing. It seems to me that those kinds of innovative ideas would be good in encouraging small businesses, and I do not think we should think small business has to be a replica of General Motors or Massey-Ferguson. God help us if it were to be.
I look at the coming innovation in enterprise forms from other countries of the world like the very intriguing experiments now taking place in the People's Republic of China. This is not because I think the economy of China is a model for this country-


Mr. McDermid:: That is a good example! You are going the other way.


Michael Morris Cassidy: -but because I think we should be looking for a number of different ways of doing things. I will tell my hon. friend a story. A constituent of mine, a Mr. Peter Lee, a supporter of mine with a successful garage in my riding, has

February 26, 1985
Small Businesses Loans Act
just been to Peking and talked with the Chinese Government about establishing a garage in the capital of China. He has come back and told me that the incentives to small business in the People's Republic of China happen to be more generous than they are here in the People's Republic of Canada. Well, that makes you think, Mr. Speaker. I would like to make some other specific suggestions prior to concluding.

I would like to conclude my remarks by making specific suggestions which are likely to help small business in Canada and which might complement the measures proposed in Bill C-23.
First and foremost, we have to do something about interest rates to make sure that they are not unduly high; among other things, I believe that Canadian banks ought to be compelled to set aside a given percentage of their loans specifically for small business.

Secondly, Mr. Speaker, many small businesses have a great deal of difficulty doing business with the Government of Canada and the provincial Governments. The tiny small-business services, the tiny manufacturer who wants to expand, is often in competition with government procurement agencies which say that they have always bought from some manufacturer in St. Louis or some other part of the U.S. and they are going to continue that rather than letting this small firm have access to business which will allow it to grow. Given the importance of government in the economy, government as a consumer of intermediate products, for example, that has to be changed. In the U.S. now the Small Business Administration has ensured that the federal Government sets aside as a target a very substantial portion of its procurement to be dedicated to purchases from the small business sector. We should be talking about that here in Canada and encouraging the provinces as well.


John Horton McDermid: It is being done.


Michael Morris Cassidy: We should be cutting the red tape and questioning the requirements for substantial tender bonds, so that small businesses can bid for contracts from the federal Government. We should ensure that large companies which win major bids should be required to subcontract a certain proportion of their work to small firms. The Department of Regional Industrial Expansion and others should be doing their utmost to encourage major companies to subcontract to smaller companies and to make sure those smaller companies are Canadian.
It is interesting to me that while the major companies in this country are in the majority controlled abroad, small businesses are 95 per cent or 98 per cent controlled by Canadians. They do their procurement in the main here in Canada. They are contributing an awful lot more to our economy than is the typical larger business in very many cases. Yet I am struck, as are people who visit Canada, by how much the nuts and bolts, the intermediate products, things you buy in your hardware
store, the things that business needs to use in the office in this country, do not come from Canadian sources but from abroad. Why does printing and stationery materials come from abroad when we have one of the largest pulp and paper producing sectors in the world? These kinds of questions are very serious and these are the areas where we can develop and encourage the growth of small business.
My time is about up, Mr. Speaker, but I would like to see much greater concentration on ensuring that the results of research and development are made available in a form which small businesses can use. I mentioned the need to reform our bankruptcy laws so they do not devastate small businesses which happen to go under. I mentioned the need for a much broader variety in forms of ownership in order that co-operatives and other innovative structures and their workers can be encouraged to participate in learning the skills of management, doing business and becoming small businesses so that they may also share the responsibilities of businesses.
I believe those comments are positive and constructive and would complement the increase in financing that is being proposed in Bill C-23.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Scarborough West (Mr. Stackhouse)-Canadian International Development Agency-Monitoring of food relief distribution in Ethiopia; the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly)-External Affairs-South Africa-Conduct of Canadian companies-Government guidelines, (b) Visit of apartheid apologist; the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie)-Environmental affairs-Acid rains-Federal-provincial agreement on control measures, (b) Federal Government funding.
February 26, 1985



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Bissonnette that Bill C-23, an Act to amend the Small Businesses Loans Act, be read the second time and referred to the Standing Committee on Regional Development.
John Horton McDermid: Mr. Speaker, is the Hon. Member not aware that the Government of Canada is currently conducting sessions throughout the country for the small business sector about how to sell to Government procedures for getting involved and how to get on bid lists? These seminars are taking place and programs are being conducted whereby products presently being imported are being displayed to Canadian entrepreneurs, primarily in the small business sector, to see if they can produce them here in Canada to be supplied to the Government of Canada? Does he know if that is taking place?


Michael Morris Cassidy: Mr. Speaker, I am aware that that is going on.
I applaud such a move and I think it is desirable. It has taken a long time for it to start.
As the Hon. Member knows, my previous experience has been in Ontario. It took a long time before Ontario began the kind of innovation that is occurring at the federal level now. However, it is not close to the scale it should be at today.
I believe there should be an annual report in the House made by the Minister of State for Small Businesses (Mr. Bissonnette) in terms of the targets the Government is setting for procurement from the small business sector in Canada and how it is performing in relation to those targets. If that progress is not sufficient, we would then be in a position to make the Government accountable to ensure that it does better in the future.
The Hon. Member will agree with me that while this is taking place now, it was a long time before the country began to focus on that kind of valuable assistance to encourage small businesses to grow by dint of being able to sell more adequately to the Government.
There are still many obstacles, such as a delay of a year and a half to get a contract before there is any cash flow and sales in return. Furthermore, tender bonds or other obstacles are put in the way of small business. This effectively rules them out of participating effectively with the Government.


Mr. Deputy Speaker:: Resuming debate.


Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, I have a few comments to make on Bill C-23, an Act to Amend the Small Businesses Loans Act.
Small Businesses Loans Act
Today, in my mail, there was a document I received from the Canadian Federation of Independent Business in which it is stated:
The difficulty in obtaining adequate financing often is one of the major problems faced by new or growing businesses.
It goes on to say:
Since the interest rate crisis has receded in 1982, the overall tax burden is the main problem referred to by most businesses in the National Survey-
That was a poll carried out by that firm, and all Hon. Members have had the findings sent to their offices. That poll was carried out regularly, month after month. It helps us a good deal as Members of Parliament, because precisely it gives us the views of the Canadian Federation of Independent Business.
From the very first day the legislation was discussed, everyone has been referring to the importance of small and mediumsized businesses. And upon listening to several speeches, I have come to realize the extent of the expansion experienced by our small entrepreneurs, but the main thing I am realizing is that those small businesses are the ones most often penalized.
First, the Government over there inflicted Bill C-15 upon them. Now they are faced with Bill C-23. It would seem the Government cannot force itself to help our small and mediumsized businesses. These people often speak of consultation and discussion, but they have been ignoring a number of good suggestions. For instance, I read early in February a rather interesting speech made by the President of Gulf Canada. In that speech, this gentleman reminded us of the Government's intention to leave job creation to the private sector, something with which he is in total agreement. However, he goes on to offer suggestions to improve conditions for small and mediumsized businesses.
He is suggesting among other things that we reconsider the following programs: the unemployment insurance scheme, health and safety in the work-place, and the pension plan. He recalls that wherever a business has a deficit, the burden is shouldered by the manager-owner personally. In fact, the whole tax system could also be revamped, he said. It could be provided that the realization of capital gains, when the owner dies, should not lead to a forced sale. Small and medium-sized business owners could be granted the same treatment as farmers, who can roll over the family farm to their children without tax being paid on the capital gains.
The same applies to the pension plan. Why not treat small businessmen the same way as we do farmers allowing them to transfer any taxable capital gains realized between 1971 and 1983 in an RRSP?
Many changes could be made to lighten the burden of small businesses, but we have now been presented with Bill C-23, which will frustrate them even more and make them waste even more time.

February 26, 1985
Small Businesses Loans Act
Mr. Speaker, more and more women are heads of businesses. It is a fact that over 30 per cent of new businesses are headed by women. I think that they show a lot of courage, especially in these difficult times.
All the figures show that this Bill will affect the most vulnerable group in Canada, namely women between the ages of 35 and 45. Moreover, the proportion of businesses owned by people under 30 has doubled between 1964 and 1980 while that of businesses owned by women has tripled.
In addition, we can see that women are as involved financially as men. However, this is where equality stops. Collateral required of women when they ask a bank for a loan is not always the same as for men. Only a few years ago, a woman had to give the name of her husband when asking a bank for a loan. What will happen to women when they want to borrow to start a business, especially with the fee of 1 per cent of the amount of the loan which will have to be paid by the lending institution to the federal Government? If the banks are already suspicious of businessmen, what will they think of women who want to get into business? I wonder whether bankers will change their minds on this subject, especially since 10 per cent of the risk will have to be assumed by the financial institution. What will happen in practice?
We should not think that the banks will reduce their profits. These losses will have to be incurred by someone, that is for sure. We should not think either that getting a loan will be as easy as before. It is quite clear that the banks will not be any quicker to approve loans, which will mean another loss of time. Who will be penalized? The answer is quite simple, Mr. Speaker, it will be the small businessman.
What about the times when a business would only need minimal assistance to get through a difficult period? There is no thought of providing such assistance to our businessmen and women. It would sometimes take very little money, but it is too much for the businessman. Some type of assistance could have been provided for such difficult times.
It is a well known fact that small businessmen spend most of their time taking care of their business. They are often willing to give their free time to support their business. Many young businessmen even borrow the personal savings of their friends and families.
All of us have known these small businesses which involve most of the family members. While one of the spouse is the main shareholder and the other is its main business executive, most everybody comes in once in a while to lend a hand. These small businesses can survive only at the cost of major sacrifices.
It is a fact that entrepreneurship among Canadian men and women continue to flourish in spite of various problems. Thousands of Canadians, previously unemployed, have created
their own jobs, and in my Saint-Michel-Ahuntsic riding office, I often come across people complaining that they cannot find jobs. I suggest to them to start a new business. Often, as I was saying, these people are women and they have a hard time, because the banks demand additional guarantees from them. I fear that banking establishments will eventually "pass on" to their customers the cost for their 10 per cent share of the losses and the 1 per cent loan fee which they must pay to the government.
There are in Canada some 750,000 small businesses. What people do not realize at first sight is that these small businesses generate much economic activities in all Canadian towns and villages. For that matter, statistical data show that small businesses play an important role in creating and preserving jobs. Thanks to the regional development for which they are responsible, several Quebec municipalities have flourished and prospered.
This morning, I noticed that several of my colleagues who live in the country or in small villages-personnally, I live in a major metropolitan centre-seem to think that their people experience more difficulties in obtaining these loans. That is indeed a pity, for everybody keeps saying and repeating that the private sector in general and small and medium-size businesses in particular are the key to the survival of the Canadian economy.
Like many others, Mr. Speaker, I wonder if the government is not turning its back on progress. For the past few weeks, I have had the impression that most of the bills we have been dealing with are taking us back 20 years. All this serves only to destroy the achievements of so many years. I see that the Hon. Member from Hochelaga-Maisonneuve (Mr. Desrosiers) agrees with me.


Édouard Desrosiers: Not at all! Absolutely not!


Marie Thérèse Rollande Killens: This Government really shows that its priorities are not those of Canadians. If I wanted to be mean, I would say to the Hon. Member for Hochelaga-Maisonneuve that the Government is obviously more often trying to please the Americans than the Canadians.


Don Boudria: It is true.


Marie Thérèse Rollande Killens: I do not think that the Bill as such would be good for the financial situation of small businesses. Indeed, if it were passed in its present form on third reading, it would have a baneful effect on most medium and small businesses.
Vested interests are denied. Conditions will be made more difficult for them. Men and women in the business sector have much more to do than to spend several hours a week filling those questionnaires. It is already difficult enough to manage a company without having to go from one bank and one district office to another.
February 26, 1985

Mr. Speaker, as my colleague the Hon. Member for Hamilton East (Mrs. Copps) said in her speech on February 7, the Government has adopted a kind of Pontius Pilate approach and abandoned small businesses. It merely entrusts the whole affair with the Governor in Council if not the Minister who will have the last say about future amendments.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the Chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate Chamber.
And being returned:
["It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.\nGovernment Appointments and Contracts"]
Mr. Speaker:: I have the honour to inform the House that when the House went up to the Senate Chamber the Deputy Governor General was pleased to give, in Her Majesty's name, the Royal Assent to the following Bills:
Bill C-13, an Act to amend the Public Works Act and the Public Lands Grants Act-Chapter No. 1.
Bill C-21, an Act to amend the Currency Act-Chapter No. 2.
Bill C-17, an Act to amend the Excise Tax Act and the Excise Act-Chapter No. 3.
Bill C-28, an Act to amend the Pension Act-Chapter No. 4.



John Horton McDermid: Mr. Speaker, I rise on a point of order. The Hon. Government House Leader asked me to announce the business of the House for tomorrow. We will continue with Bill C-23. Once that is completed, we will carry on with Bill C-24.


Mr. Speaker:: It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.
Government Appointments and Contracts



PRIVATE MEMBERS' BUSINESS-MOTIONS

["The hour provided for the consideration of Private Members' Business has now expired."]
Mr. Speaker:: Is there unanimous consent for the House to proceed to notice No. 34?


Some Hon. Members:: Agreed.



Don Boudria: Thai the Standing Committee on Miscellaneous Estimates be empowered to examine all aspects of appointments made by the government, except those made by the Public Service Commission, and to examine all aspects of government contracts including those relating to advertising for services let by the government, for the period commencing September 17, 1984.
He said: Mr. Speaker, it gives me great pleasure to participate in this very important debate this afternoon. Of course, all Hon. Members will recognize that this is a very important issue and one which affects the credibility not only of the Government but of the Prime Minister (Mr. Mulroney) personally because of the commitments he made during the election campaign.
I remind the House of an article which appeared in The Toronto Star on January 5, 1985, alleging that certain government advertising contracts had been given to friends of the Conservative Party. These contracts were allegedly given, or were to be given, to those friends of the Conservative Party by a pre-arranged deal whereby certain individuals would contribute funds to the Conservative Party in exchange for getting those contracts. Those allegations appeared on January 5 in The Toronto Star and on January 7 in The Globe and Mail. Also I remind the House that I immediately wrote to the Commissioner of the Royal Canadian Mounted Police and asked that a criminal investigation be launched into this issue because of potential violations to Section 108 and Section 110 of the Criminal Code of Canada involving corruption. The RCMP is still conducting inquiries into this issue. They had been to Montreal and Toronto to interview different individuals and will be reporting to us shortly as to whether they will be launching a criminal investigation.
In my view, government advertising contracts should be tendered in a very different way. The Minister of Supply and Services (Mr. Andre) has told the Canadian public that it is not done in any other way in any other country in the western world. He told all of us that we cannot have a structure by which government advertising contracts would be tendered, that this would be impractical in the Minister's opinion.
I beg to differ with the Minister of Supply and Services. We could look into the possibility of having an internal agency of

February 26, 1985
Government Appointments and Contracts record. Why can we not have public servants do the grouping of the advertising contracts in order to obtain the better rates that one gets when grouping contracts together? There is no reason why that kind of structure cannot be looked at by the parliamentary committee, as I suggested.
From there on, there is no reason why a parliamentary committee cannot interview various experts in the advertising sector who could tell us of new and better ways to award government advertising contracts. There is no doubt in my mind, and I do not think there is doubt in the mind of any Member, that the present structure is inadequate and improper. Of course, it reeks of political partisanship.
I want to remind Hon. Members of certain commitments that the Prime Minister (Mr. Mulroney) made during the election campaign which we had not that long ago. Let me read a few of the commitments for the benefit of all Members. On July 9, 1984, the Prime Minister said:
I commit myself to set up criteria for quality which will impress the Canadian people. I think that what took place is completely unacceptable in an open and democratic society. We are going to reform this instrument of our national life.
This, Mr. Speaker, was said by the present Prime Minister on July 9, 1984.


Some Hon. Members:: Hear, hear!


Don Boudria: I am glad to see some Tory Members applauding that initiative. No doubt when they speak later this afternoon those Members, like myself, will condemn the Prime Minister for the actions that he has taken, condemn him for the blatant political patronage that he has exercised, and condemn the Prime Minister for having breached a sacred trust, to use an expression that has been used sometimes before by certain Conservative politicians in this country. On July 16, the Prime Minister said:
The method of making appointments could be corrected by dramatic measures.
Where are the dramatic measures? This Government has been in power for six months and what has it done?


An Hon. Member:: We won the election.


Don Boudria: Yes, they won the election by making 338 promises, by making commitments to the Canadian people that they would reform the institution. What have they done? They have broken almost every single promise that they made to the Canadian public.
Let me read another promise of the Prime Minister, this one made on July 16. This explains the views of this Government. It really tells what has been going on. This is what the Prime Minister said:
I was talking to Tories then and that is what they wanted to hear. Talking to the Canadian public during an election campaign is something else.
That is the kind of double standard that the Prime Minister has used. Time and time again he has told what they want to hear and has done completely the opposite. It is time that the Prime Minister delivered some of those promises that he made to the Canadian people.
Hon. Members may ask how we could reform some of those institutions. Perhaps the Prime Minister should have thought of that before making the promise during the election campaign. However, being the constructive Opposition that we are, let us outline some of the methods by which the Government could improve the present process.
Certain appointments, because of their power and prestige or remuneration, or because of the public and media perception of the past and present abuse, might be removed from the political arena in whole or in part or subjected to a parliamentary process, much like the Prime Minister suggested during the election campaign and not delivered upon. Frequently, a combination of both professional and parliamentary scrutiny could be appropriate. Let me express some of the alternatives.
[ Translation]
In the United States, for instance, Congress and the Senate especially are empowered to examine or confirm many presidential appointments to senior positions. In Canada, there are three ways a similar procedure could be applied, each with its own specific advantages and drawbacks. I shall elaborate.
Appointments to senior positions in the Government could be referred for consideration to a standing committee. This committee could be a so-called ad hoc committee or else an existing committee could be used, as I suggested in today's motion. Referral to a committee of the House of Commons would make it possible for elected representatives to exercise control over appointments of senior officials.
Quite recently, we have heard Progressive Conservative Members speak in this House to emphasize the importance of elected representatives.
I hope Hon. Members will vote in favour of referral to a committee so that our elected representatives will be able to speak to this matter.
Mr. Speaker, another possibility would be to have the appointments reviewed by a committee of the Senate, which could check political appointments, and the same committee could review appointments and give the House and the Canadian people the assurance that the people who would hold these positions were competent in the areas in question.
We could also have a review by several committees or by joint committees of the Senate and the House of Commons, and in this way we could take advantage of both the experience of our Hon. colleagues in the other Chamber and that of the elected Members of the House of Commons. In this way, Mr. Speaker, we could take advantage of the resources of both the House and the Senate.
We could also have appointments reviewed by professional associations, for instance, and then refer the matter to the House, more or less like the Bar Association does before suggesting names for appointments to the bench.
Mr. Speaker, these are some of the ways we could deal with political appointments in order to remove the partisan aspects
February 26, 1985

which exist today, thus meeting the solemn commitment made by the Leader of the Progressive Conservative Party during the last election campaign.

As I was mentioning a moment ago, one thing we have to do is ensure that the people who are recipients of political plum jobs which the Government offers to them are indeed qualified for the functions they will be undertaking. I read in the Ottawa Citizen not long ago that Mr. William Hawkins had been appointed to the Textile Board. By his own admission, Mr. Hawkins clearly stated, according to the same report, that he was not qualified for the job, that he had not applied for it and had no idea why the Government chose him for that function in the first place. There is not doubt in my mind that with that kind of information, a parliamentary committee reviewing the candidacy of such an applicant may have second thoughts before recommending to the House that he be appointed.
Not long ago, there was the appointment of Roy McMurtry as High Commissioner in England.


Some Hon. Members:: Hear, hear!


Don Boudria: I am glad to hear the applause in this House. I happen to know Mr. McMurtry quite well and consider him a personal friend. I feel that he is qualified for that job.


Some Hon. Members:: Hear, hear!


Don Boudria: That is good. However, we are not discussing the calibre of that individual; we are discussing the process that was used. The Prime Minister said that important political appointments in the area of economy or external affairs would be reviewed by a parliamentary committee. I would ask Members across the way what is more important to the area of external affairs than the High Commissioner representing this country in Great Britain. If that is not an important position, then what is? If it is an important position, then just maybe the Prime Minister of the country should deliver on the promise he made some six months ago.
We are told that the Prime Minister has, after the numerous questions I have raised in the House, finally asked the chairman of the Committee on the Reform of the House to look at the possibility of finding a formula to interview those candidates in the future. That is nonsense. Where I come from, it does not take six months to figure out a procedure for interviewing candidates.
After six months, all the Prime Minister has offered us is this possibility of a solution. We need more than that from the Prime Minister. We need leadership. We need the Prime Minsiter to deliver on the promises he made. If he cannot deliver on those promises, the Prime Minister should rise in the House and apologize to the Canadian people for having made a mistake when he told them he would deliver on a promise. He should now admit that he is unable to deliver on that
Government Appointments and Contracts promise and that he does not have the competence to deliver on the things he offered in the first place.

I see my colleagues of the Progressive Conservative Party, the bookends on this side of the House, Mr. Speaker, and I hope that the bookends who have been elected to the House-


An Hon. Member:: There are not too many books.


Don Boudria: No, and not too much support that I can see, Mr. Speaker, because there are very few bookends to support the Government this afternoon. Still I hope the bookends in the House will take the floor and support the commitment made by the Prime Minister during the election campaign, while at the same time denouncing the attitude of the Prime Minister since the September 4 election.
Mr. Speaker, no one can claim at the same time that the Prime Minister was right during the election campaign and that he is still right today, because he is doing exactly the opposite of what he said during the campaign. I note that my colleague on this side of the House is nodding approvingly, the Prime Minister is right when he contradicts himself. It is possible, Mr. Speaker, perhaps that is the mentality of the Progressive Conservative Party. That must be how the Conservative Members get to think that the Government has the right simultaneously to tell the people two different things.
I know I cannot say that Hon. Members give the Government the right to lie, that would be unparliamentary. Let us say that Members of the Progressive Conservative Party think that the Government has the right to tell Canadians two different things at the same time. That is how Members of the Progressive Conservative Party can support the Prime Minister when he acts in such a way as to deceive the people of this country.
So far, Mr. Speaker, we have been getting unsatisfactory answers from the Prime Minister and the Deputy Prime Minister (Mr. Nielsen). Reference to committee is called for to debate this issue. I hope the committee will be given a mandate today and will convene soon so that we might establish the necessary criteria and then hire applicants for those important positions, as promised by the Prime Minister during the last election campaign.

Further, I believe that as of today, the Government should immediately place a moratorium on political appointments for a period of two months. In those two months, we could establish the necessary parliamentary structures the Prime Minister promised during the election campaign. Once those structures are in place, then the candidates that are appointed to high offices will be appointed not only with the consent of the Government but with the support of the House and of the people of our country.
80164-.14

February 26, 1985
Government Appointments and Contracts


Mr. Bud Bradley (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, having heard what the Hon. Member has said, I can see why there are only two members of the rat pack and one second-row member present in the Liberal seats.


Mr. Deputy Speaker:: Order, please. I would ask the Hon. Member not to refer to the presence or absence of Hon. Members in the House. They may be in committee meetings.


T.A. Bud Bradley: I am sorry, Mr. Speaker. That was an oversight on my part and one for which I apologize. It was just the shock of seeing the bare seats that overwhelmed me.
The Hon. Member called for an internal agency of record. I would ask the Hon. Member if he is now suggesting we have another CUIO, or if he remembers how violently he opposed that little item. The Hon. Member spoke of various ways in which we could look at things. He spoke about referring the matter to a standing committee, a series of committees or a joint committee.


Don Boudria: I talked about alternatives.


T.A. Bud Bradley: I might add, Mr. Speaker, that if we had a joint committee at the present time that included members of the Senate and of the whole House and that studied all contracts, it might grind to a sudden halt. The Hon. Member referred to a committee of professionals set up to review these appointments and to review the contracts given by the Government.
The Hon. Member has said that where he comes from, it does not take six months to create a committee to review these things. Perhaps if he told us where he came from, we would understand why it does not take six months to do so. I am sure that he wants proper leadership. He wants committees that will look-


Don Boudria: We are not getting any leadership.


T.A. Bud Bradley: He wants committees that will look at these matters and give them serious consideration. That does not happen overnight. He calls for leadership.


Don Boudria: Do it.


T.A. Bud Bradley: We have leadership. Our leader is showing leadership. Having heard what the Hon. Member has said today and having seen the absence-excuse me, Mr. Speaker-of his Leader, it is obvious that he does not have leadership in his Party. Possibly he has not been present for the last six years to see how nice it is to have leadership in the Government all of a sudden. We appreciate the leadership that we have from our Leader, the Prime Minister of the country.
I would like to read the motion of the Hon. Member because-


Mr. Nunziata:: It's a good motion.


T.A. Bud Bradley: It is an interesting motion. However, the Hon. Member did not speak to the motion. The motion refers to the
Standing Committee on Miscellaneous Estimates and not to all of the alternatives of which the Hon. Member spoke. The motion states that the Standing Committee on Miscellaneous Estimates should be empowered to examine all aspects of appointments made by the Government except those made by the Public Service Commission and to examine all aspects of government contracts including those relating to advertising for services let by the Government.
This is an important issue. It is a serious issue. However, I guess from the tone of the Hon. Member's presentation, the tone of the Hon. Member's motion and the tone of the heckling from the pack at the back that he is concerned about how this Government does business. I take exception to that. I challenge the Hon. Member to say that any Minister on this side of the House is not taking his responsibilities seriously.


John V. Nunziata: The Defence Minister.


T.A. Bud Bradley: I defy him to say that the Acting Minister of Defence (Mr. Clark) is not doing his job.


John V. Nunziata: The former Defence Minister.


T.A. Bud Bradley: I defy him to say that the Minister of Transport (Mr. Mazankowski) is not seriously concerned about transport in Canada. I defy him to say that the Minister of National Health and Welfare (Mr. Epp) is not concerned about issues that arise in the area of health and welfare.


Some Hon. Members:: Oh, oh!


T.A. Bud Bradley: We could name them all because they are all responsible and they all carry out their duties. It surprises me that two members of the pack over there are making a lot of noise. It would be unparliamentary for me to say that I did not know that rats were so vocal, so I will not make a statement such as that. However, they are loud over there. If the third famous member of the pack were in the House, the House can be assured that it would even be louder. I know the Member opposite is aware that the appointments which have been made since September 17 have been fully defended in the House when they had been raised and challenged, because this Government fulfils its obligations and Fills its positions with qualified individuals.


Don Boudria: What about Hawkins?


T.A. Bud Bradley: For example, I could cite the case of the Canadian Arsenals Limited. I have been waiting for a question from the Hon. Member for weeks on this subject, but he is afraid to ask the question. We approached the President of Canadian Arsenals Limited and asked him what qualities he wanted in the members of the board. He provided characteristics which were desired in board members, and this administration fulfilled these requirements in our appointments.
The only contract award that has caused discussion in the House is that of the Agency of Record, which is the organization for the placement of advertising. After questions were
February 26, 1985

raised, two Hon. Members received copies of the AOR contract and there have been no further comments from those Members on the matter.
It is an extremely important issue. Traditionally, the appointment of the Agency of Record was not one which was subjected to the competitive process. The appointment of a new AOR was an effort to save money for the taxpayers of Canada. My Department was able to negotiate a new contract, which resulted in savings of $18,000 per month. I might remind the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) that the AOR was introduced by the previous Conservative Government to save money. Since 1981, the AOR has saved the Government of Canada $3.6 million.
I would like to cite a few other points which will show the magnitude of this motion. I would like to cite from the annual report of the Department of Supply and Services, which I am sure the Hon. Member has memorized. With respect to purchasing highlights, during the 1983-84 fiscal year, the Department of Supply and Services placed 350,232 contractual documents, which had a total value of $10,563 billion. That is the highest value of contracts which has been issued in the history of the Department's contracting activity.
The second part of the motion states that the Standing Committee on Miscellaneous Estimates be empowered to examine all aspects of government contracts including those relating to advertising for services let by the Government. As 1 have just stated, the Department of Supply and Services alone had over 350,000 contracts last year. If all of those contracts had been referred to committee, the committee would sit-in the 170 sitting days of the House-every day, and it would have to consider 2,000 contracts a day to examine only those let by DSS, not the Department of Public Works or other Departments of the Government. Or, if the Hon. Member wants to sit every day of the week, the committee would have to consider 1,000 contracts a day every day of the year. I do not think that is what the Hon. Member had in mind when he drafted the motion. If it was, he certainly did not think before he wrote it.
We could look at the area of printing production. I am proud of this Department. The printing production provides a centralized copying, duplicating and printing service to Parliament and to government Departments. The main plant is situated in Hull, Quebec, and it fulfills the printing requirements of Parliament and government Departments which, because of their sensitive and urgent nature, must be processed in-house. A network of 48 outside plants operates throughout the national capital region and provides on-site service for government Departments and processing short-run requirements. The total manufacture or in-house printing business volume for fiscal year 1983-84 was $66 million. Does the Hon. Member want the committee to sit and review every printing contract which goes to those 48 outside plants in the Ottawa region?
What about the Advertising Management Services Branch? It is one of which I am sure the Hon. Member is well aware. That branch contracts on behalf of government Departments
Government Appointments and Contracts for advertising agency services, including the services of the Agency of Record. The branch also contracts for the purchase of media space and time through the Agency of Record. During the 1983-84 fiscal year there were 483 contractual documents, with a total expenditure of $66.9 million, which were awarded on behalf of client Departments. I might also point out that by taking advantage of the prompt payment discounts which are offered by media suppliers, savings of $322,417 were achieved for the benefit of client Departments. If those 483 contracts had to sit on a table waiting for review by a committee, there would not have been over $322,000 savings for prompt payment. The contracts would not yet have been approved.
I could go on. The annual report is full of examples. I could talk about the Consumer Products and Traffic Management Branch. That branch is responsible for the acquisition of food, drugs, clothing, and textiles, the movement of personnel, household effects and freight. That branch purchased products and services which totalled $310 million in fiscal year 1983-84. The products included uniforms, protective clothing, tents, tarpaulins, flags, books, buttons and mail bags. That branch also purchased canned goods, ration packs, wheat, edible oil, beans and corn for foreign aid programs, and hospital equipment for both federal and provincial Governments. The branch also purchased drugs, infirmaries, and other medical installations.
I could go on to cite examples which would indicate the futility of referring to the Standing Committee on Miscellaneous Estimates, all the contracts of the Government of Canada for review. I could speak about the Marine, Electronics and Industrial Systems Directorate, the purchasing which it does and its contracts.


Don Boudria: What about patronage?


T.A. Bud Bradley: I could go on to patronage, and I will. Appointments are part of the Hon. Member's motion. He is aware that I am the Parliamentary Secretary to the Minister of Supply and Services and that I am concerned about the accusations and the comments he has made about the Department. I am not prepared to sit back and let him say those things. The Department has some 10,000 employees who oversee all the contracts of the Government. How can he propose that it should be done by a standing committee of the House of Commons, which would have to review some 2,000 contracts a day?


Mr. Gray (Bonaventure-Iles-de-la-Madeleine):: The Liberals did it with one person.


T.A. Bud Bradley: That's right. As my hon. friend said, in the last Government the Liberals did it with one person. We are not prepared to do that.
The Hon. Member has made accusations against the Prime Minister (Mr. Mulroney). We would look at Hansard of February 5, 1985, when the Hon. Member for Glengarry-Pre-scott-Russell raised a question. In that question he said:

February 26, 1985
Government Appointments and Contracts
1 have a question for the Prime Minister. During the election campaign the Prime Minister said on the CTV program Question Period that the key position affecting economic of foreign policy should be screened by a House of Commons committee.
The Prime Minister replied:
1 have communicated with the Hon. Member for St. John's East, who is chairing the task force on parliamentary reform, ably assisted by the agriculture critic of the Liberal Party.
The Prime Minister said nice things about the agriculture critic. Sometimes I wonder. He is showing leadership, and when he says nice things about people he means it. I will not quote the nice things he said about the Hon. Member because the Hon. Member does not have a grain of-


Don Boudria: A rat.


T.A. Bud Bradley: Yes, but I would not say that. The Prime Minister continued and said that he had "asked him and his distinguished colleagues if they could provide a formula whereby such appointments will be vetted by committees of the House of Commons, as we all wish". Obviously, the Hon. Member for Glengarry-Prescott-Russell is not a member of that committee. He may not know how committees such as this work. He undoubtedly knows that the committee is working in camera, working hard and that it sits for long hours. The committee will provide a solution which I am sure will bring happiness to all because it will be done properly. He talks about these things-


John V. Nunziata: Is it any wonder he is not a Minister?


T.A. Bud Bradley: Will someone stop pulling the Hon. Member's chain? An Hon. Member of the New Democratic Party is pulling a chain in the pack area.
I ask the Hon. Member if he does not agree with the appointment of Lloyd Francis? I ask him if he does not think that Stephen Lewis is a good ambassador for Canada to the United Nations?


Don Boudria: What about the rest?


T.A. Bud Bradley: What is the Hon. Member's complaint about Bruce Phillips? As I said a while ago, I might suggest that he walk forward six steps, turn about and face his own front bench, then start asking about appointments. He should ask the previous Prime Minister. Where was the Hon. Member at that time? He was a Member of this House.


John V. Nunziata: You promised to change it.


T.A. Bud Bradley: No, no, he wasn't. He is just finding his wings and his four legs and learning what it is about, Mr. Speaker. I am sure that wherever he came from it does not take six months to create a committee. Possibly where he was, he could have asked his Leader about the appointment of Mr. Mac-Eachen, Mr. Pitfield, Joyce Fairburn, or Michael Kirby.


Don Boudria: Who made the promise to David Cunningham?


T.A. Bud Bradley: Who made the promise? The Hon. Member's Leader made the promise to the former Prime Minister. He promised him that when he became Prime Minister, he would appoint all those Liberals to the Senate. That is who made the promise, Mr. Speaker, and we on this side know how the Liberals kept their promises. We see how it is costing the Government of Canada and the people of this country millions of dollars because of the promise the Hon. Member's Leader made of putting some fellow by the name of MacEachen in the Senate, Mr. Speaker.


Don Boudria: Order.


T.A. Bud Bradley: We agree that a review is required for the appointments to the political system. That is why the Prime Minister of this country has asked the Hon. Member for St. John's East (Mr. McGrath) to undertake such a task. This is something which, as the Prime Minister says, we all want.


John V. Nunziata: After three months of my asking for it.


T.A. Bud Bradley: It is under review. The Hon. Member says, after three months of his asking for it. I am sure my colleagues on this side of the House are aware that we have been asking for it for the last 16 years. Time is needed to create an efficient process, Mr. Speaker. We can look at the U.S. Senate. As the Hon. Member mentioned, a confirmation is required by the U.S. Senate for appointments in the United States. But we might remember that Attorney General Meese was appointed by the president last year and his approval was not received until February of this year. We might point out that the American Senate breezes through some 140,000 appointments and literally rubberstamps them. We don't want that, Mr. Speaker. We want a good committee which faces responsibility and does its job. We will work toward that, Mr. Speaker. We will work for the betterment of this Parliament not to its detriment as the Liberals have done for the last 16 years. We have a Prime Minister who in this area, as in all areas, offers leadership, not dictatorship.


Michael Morris Cassidy: Mr. Speaker, I am glad that this subject is getting ventilated in the House of Commons because it has been a concern of mine for some time. I feel it is a serious issue and I want to take it seriously, although I must say, to have a member of the Liberal Party making these proposals for reform is a bit like having Dracula clean up the blood bank, as we used to say in the Ontario Legislature.


Some Hon. Members:: Hear, hear!


Michael Morris Cassidy: I would remind my hon. friend from Glengarry-Prescott-Russell (Mr. Boudria), who, I believe, will be making a contribution to this House, that it was only back in July that the Turner Government-only days before the election was called-awarded a 21-month contract for the Agency of Record to a consortium of four advertising agencies known as Canadian Media Corporation which has strong ties to the Liberal Party. I raised the question of the Agency of Record when the House resumed in January. Of course, the only
February 26, 1985

difference between that and the award which was made by the Progressive Conservative Party Government on January 7 was that its award for the Agency of Record went to a firm with Conservative links rather than to a firm with Liberal links.
Frankly, I think the allegations are largely irrelevant. The fact is that this has been used and is being used by both of the old Parties as a means of rewarding their friends and for the purpose of keeping an advertising capacity in the wings to help develop advertising for them in forthcoming election campaigns. The Hon. Member who raises this issue should be aware that he is one of the very few people in his caucus who, I believe, can justifiably raise the issue. Most of his colleagues sat in government in the House of Commons, watched and did nothing, and did not even have the grace to hold their nose at the patronage practices of the Liberals when they were in power.
I would like to deal with the question of appointments. This resolution properly raises the subject, although I would say to my hon. friend that perhaps it could have been drafted in a better way. It does raise the issue of misspending, the use of abusive contracts such as the one for the Agency of Record, as well as the question of appointments.
I would like to deal with appointments first. As all Hon. Members have recognized, the issue of appointments came up during the course of the election campaign. Even prior to that time, the Prime Minister (Mr. Mulroney) indicated in his book Where I stand that he thought that at the very least, major economic appointments made by Governments, such as that of the Deputy Minister of Trade, the Deputy Minister of Finance or the head of the Economic Council of Canada, should be subject to some form of parliamentary review. He did not say in what form it should be. He thought that this was something which should be developed. But that was a promise made in his book, which was reiterated by the Prime Minister when he appeared in the Leaders' debate on television during the election campaign. A very specific promise was made. Yet when I raised this issue with the Deputy Prime Minister (Mr. Nielsen) shortly after we resumed in January, all I was told was that he was assured that the select committee on parliamentary reform was looking at that particular issue. Essentially the same answer came from the Prime Minister a few days later.
It is a fact, Mr. Speaker, and, I feel, a regrettable one, that when the terms of reference for that committee were drawn up, the Government overlooked including in the terms of reference this particular question around which a specific promise has been made by the Prime Minister during the course of the election campaign. Frankly, I was distressed at the tone of some of the remarks made by the Parliamentary Secretary to the Minister of Supply and Services (Mr. Bradley) a few moments ago. He seemed to be going on the defensive rather than saying, "Look. I don't like the tone of the Hon. Member for Glengarry-Prescott-Russell or some of the cracks he is making about us, but, yes, we are serious about this particular issue".
Government Appointments and Contracts
I appeal to Hon. Members on all sides. I believe this is an area where we do have an opportunity in this House to make strides forward with respect to a reform, a reform which I believe would be very innovative in terms of parliamentary government. I have taken the trouble to do some research on this particular subject in terms of the extent to which other legislatures, parliaments or assemblies actually vet or review major appointments made by their particular Governments. I think it is a case that every Government has to have a certain number of appointments which do not come about on merit or through the civil service process but, one way or the other, are made by the head of state or the government of the day. To what extent do other legislatures review those appointments?
The fact is that in the Mother of Parliaments, according to the research I was able to do, because it is a centralized and unitary system in Great Britain, there are large numbers of such appointments made by the Government and, in fact, there is no form of parliamentary review except through questions or Estimates, the same devices we use here. It is possible, of course, to criticize a bad appointment through questioning, as we can do and sometimes do, as was done today when the facts of the appointment of Mr. Hawkins were raised in the House. But that is not an adequate form of review.
The Parliamentary Secretary, on the other hand, wants to push this to the extreme. There are potentially many thousands of appointments made in a year by the Government. That is our system. The Parliamentary Secretary asks if parliamentary committees should review all of those. He asks if the Hon. Member is suggesting that every contract of the hundreds of thousands of contracts awarded by the Government of Canada each year should be scrutinized by a parliamentary committee. For practical reasons, that is impossible. In the United States, to take a second example, there is a process of review of appointments which is very widespread. The Parliamentary Secretary indicated that a lot of those payments are rubberstamped. That is correct, because hundreds of thousands are subject to that kind of review in a particular year. However, what happens in that system, which is definitely different from ours, is that the Senate committees, and I think House committees as well, have the right to look at any particular appointment. They could focus on the appointment of a federal judge in Alabama, if they chose, although generally they tend to concentrate on the several hundred appointments to senior levels of government in a system which has two and three tiers of political appointments. This is unlike our own, where the Deputy Ministers and Assistant Deputy Ministers are not such political appointments. In the U.S. the system is selective, although they have the power to look at almost anything.
One way or another this will come up before the committee on parliamentary reform. I have been planning and preparing a brief for that particular committee. I hope that in response to this particular debate, and I put this forward constructively, the Prime Minister or the Deputy Prime Minister (Mr. Nielsen) might get up in the House in a couple of days and

February 26, 1985
Government Appointments and Contracts announce that the Government was making a specific reference. Perhaps the Prime Minister might simply write to the Hon. Member for St. John's East (Mr. McGrath) and ask that the committee specifically take up the question of the extent of patronage appointments, or Order in Council appointments as they are also called, and how they would be reviewed by a parliamentary committee or committees. Since I am a member of the Standing Committee on Miscellaneous Estimates, I plead with this House not to make all those appointments subject to review by that particular committee. It would make more sense if an appropriate committee were to have the responsibility of looking at appropriate appointments. Standing Committee on Finance, Trade and Economic Affairs, for example, would look at appointments of, let us say, Deputy Minister of Finance, Governor of the Bank of Canada, Chairman of the Economic Council, and the deputy ministers and assistant deputy ministers of Regional Industrial Expansion. Similarly for the Standing Committee on Fisheries and Forestry, the Department of Fisheries and Oceans, the Standing Committee on Agriculture and major appointments to such agencies as the Farm Credit Corporation, as well as of the Deputy Minister of Agriculture.
What I am suggesting is that the responsibility for review should be spread around the House. As well, it seems to me that not every appointment should have to be automatically reviewed by a Commons committee. My reason is quite simple; it is that there are a lot of appointments. Many of them are relatively routine. If there is something of a blue tinge to some of the appointments, well, some of that is to be expected. Where there is competence and there happens to be partisanship, I think a lot of people will say that is O.K.
The other day I welcomed Mrs. Pigott when she made her first appearance before the Standing Committee on National Resources and Public Works in her new roles as chairperson of the National Capital Commission. She is a well known Conservative, but she is also a publicly spirited individual with a great deal of capacity who I think will be a good chairperson for that agency. However, in my responsibilities as Member for Ottawa Centre, I would have liked the opportunity to have a committee ask the appointee to that particular agency, whoever it may have been, to appear before a committee in order to let the committee review that particular decision. Therefore, I think we probably need a two-tier process, which is effectively what has emerged in the U.S. The U.S. is the only jurisdiction which has gone a serious distance down the way, according to my research, in having a review of major government or Order in Council appointments.
My proposal is that it should be possible-and the committee on parliamentary reform might well come up with a list- to come up with a certain level or type of position which should automatically be referred to an appropriate committee for review. I would have thought that deputy ministers, assistant deputy ministers and then the heads of, let us say, 20, 30 or 40 major Crown corporations and government agencies would be covered. Among them might be the chairperson or president of Atomic Energy of Canada, Canadian National,
Air Canada, the Farm Credit Corporation, the Federal Business Development Bank, the Bank of Canada and certain groups like that. The Science Council and the National Research Council should, I think, automatically be subject to review. Beyond that, there is a much wider number of appointments, some to full-time jobs and some to jobs which are honorific or only part-time. I do not think the committee should have to summon as a witness someone who has been appointed to a job on some agency or board which involves the individual sitting for maybe five or six days a year and getting $200 per diem. That does not make much sense. Well, the Hon. Member for Glengarry-Prescott-Russell says yes, but they should be able to. With that I agree. The power to review those Order in Council appointments should be there even though, as a matter of course, most of them would not be subject to review.
The device which is used frequently with respect to delegated legislation in the United Kingdom is one we could follow here. Where a regulation or piece of delegated legislation has been put together in Britain, it is frequently, according to the terms of the umbrella legislation passed by Parliament, required to lie on the Table of Parliament for a certain period of time. Some 30 days is often the period proposed, and that would be suitable in this particular case. Therefore, the appointment of a citizenship judge or an appointment to some agency where the appointee is going to earn $1,000 a year providing some advice to government should lie on the Table of this House for a period of 30 days and the appointment should not come into force, except for emergency circumstances, until that period has passed.
It also seems to me that there should be a device by which Members can refer such appointments to an appropriate committee. The kind of device I would see would be, for example, having such appointments referred to an appropriate committee on the request of any 10 Members of the House of Commons, since we are talking about this place and since we want to abolish the other place. That would mean that most appointments would get routine review in the sense that the opposition Parties would ensure their critics would look at appointments in their particular area to make sure they were not particularly objectionable. In certain cases it could help to cleanse the system by bringing a minor appointment up before the committee because some issues of principle were involved. Without taking too much time of any individual committee, it would mean that the major appointments of an Order in Council nature would be automatically referred and considered.
It is my feeling as a parliamentarian that the responsibility for the appointments probably has to continue to rest with the Government. Therefore, I would tend to suggest that the review carried out by a committee, either optionally or because it is required to do so, would have to be concluded within a certain specified period of time, say 15 days beyond the 30-day period, and that the review would result in ventilating the issue of the appointment, possibly in a recommendation, although given the Government's majority, there might be no recom-
February 26, 1985

mendation. But I do not think at this time we are ready to say that a committee should actually have the power to refuse an appointment. However, there should be the power to make such a stink that the Government might discreetly decide it would not proceed with an appointment which proved to be particularly objectionable. That would enforce a kind of accountability in the process and avoid such monstrosities as the appointment of Bryce Mackasey to the ambassadorship of Portugal. That appointment was eventually withdrawn, mainly because the people of Canada objected and the Government of Portugal got into the act. We would have a way by which that kind of misuse of patronage could in fact be controlled.
The time for this debate is coming to an end, Mr. Speaker, and I want to give another Hon. Member a minute or two to speak. I will just say that the question of contracts which are let without tender, which includes 85 per cent of services' contracts, is also an area for abuse. I do not believe we need parliamentary review of each contract, but I think we need to have a change in the system and I am seeking to have that reviewed through the Standing Committee on Public Accounts.


Mr. Deputy Speaker:: The hour provided for the consideration of Private Members' Business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Reg Stackhouse (Scarborough West):: Mr. Speaker, under the leadership of the Canadian Government, the country has made an inspiring response to the crisis in Ethiopia. But that should not blind us to a possible deficiency of the program.
The Auditor General's report on CIDA claims that there are often too few field workers monitoring aid programs. Unless arrangements have changed recently, that is the deficiency in Ethiopia today. There may be no Canadian Government worker assigned full time to monitoring the distribution of Canadian food relief there.
The embassy staff of about six is preoccupied with other duties. It is not realistic to assume that NGO staff can do what only Government officials can do.
What this can mean, not simply to governments and officials but to the hungry, is being shown day by day in the provinces of Eritrea and Tigre.
Adjournment Debate
Mr. Peter McPhearson, the administrator of the United States Agency for International Development, has said on public TV that of all the famine affected areas on the continent of Africa, the most gravely affected are these in the north of Ethiopia, namely Eritrea and Tigre.
Mr. Brian Kline, the deputy director of the East African office for AID, has told my office that Mr. McPhearson has indicated that the Ethiopian Government is "actively pressing bilateral donors to deny assistance to rebel held areas".
From talking with several authorities who have visited the famine affected areas of Africa, it appears that there is reason to fear that the Ethiopian Government may be attempting a Biafran type situation in the north of their own country. The Wall Street Journal has pointed out, "Hunger will do what helicopter gunships and rocket launchers can't".
On February 1, 1985, I raised the point in the House that a ship carrying Canadian food relief to Ethiopia had been forced to wait for unloading facilities while a ship carrying Soviet military equipment was unloaded. On that very afternoon, the New York Times ran a story that was entitled "Aid Officials Say Ethiopia May put Arms Before Food".
A United States Congressman, with whom my office and I have discussed this situation, has indicated that intelligence reports indicate that ships from two NATO countries had been seized and prevented from unloading.
Only yesterday, Vice-President Bush, in speaking to the National Press Club, stated:
Food for starving millions still takes a back seat to military cargo when authorities decide the order in which ships can dock in the ports of Ethiopia.
I am concerned about reports of Ethiopian Government and rebel obstruction of free world relief efforts in Ethiopia itself. You have probably heard a number of charges and they are shocking. For example, we have received reports in the news media of the selling of food and the feeding of soldiers with relief aid. According to reports from Metro Toronto people from Tigre, refugees fleeing from Tigre to the Sudan have reportedly been bombed by Ethiopian planes. Hungry civilians have been denied food because they lacked Government registration cards.
In late December and early January the death rates in the refugee camps on the Sudan-Ethiopian border were among the highest in medical history. They rivalled those on the Cam-bodian-Thai border in the late 1970s.
Mr. Dan Connell of Grassroots International indicated that the amount of aid to the areas in the north of Ethiopia may be less than 5 per cent of what arrives in Government run feeding stations in that country. As a result, the death toll is climbing daily. Already more than 200,000 in Tigre have perished, and all behind a curtain of silence that is attempting to keep the public from any awareness of what is happening.
To quote Vice President Bush again:
Famine has been so devastating in Ethiopia in part because the government has used it as an instrument of war in Eritrea and Tigre. The Ethiopian government has refused "to allow relief agencies safe passage to take food into areas of Eritrea and Tigre not under its control".

February 26, 1985
Adjournment Debate
The Ethiopian Government controls about 6,000 trucks, yet it has put only about 5 per cent of those toward getting food from the docks to the feeding centres. However, in September, it spent millions of dollars on its tenth anniversary celebration.
Our concern should not be either to knock or defend our relief program. Its merits stand by themselves. It is an impressive program. Every member of the Government deserves great credit and great thanks for the initiatives that have been taken to make it possible. What should concern us first is that we maintain the credibility of that program by being able to give full assurance to the public that food relief is going to the people for whom it is intended; and second, that the people for whom it is intended are having their needs met.
I urge the Minister to call upon the Ethiopian Government and the rebels alike to grant safe passage to all who will attempt to take food into Eritrea and Tigre. Put the hungry first. Let that be the message to those who are seeking to put their own political aspirations first, and to make sure they do, let us assign field workers who can monitor the distribution of the food that Canadians have sent.


Hon. Monique Vezina (Minister for External Relations):: Mr. Speaker, I want to thank the Hon. Member for giving me this opportunity to reassure Canadians about this important matter.
The Government has taken various steps to ensure that Canadian food relief for Ethiopia is reaching the people who need it and to whom it is directed. The program's concept and the choice of distributing organizations reflect the government's concern for monitoring and accounting for the distribution of this food relief.
First of all, we have insisted on having a considerable part of our food relief distributed by well-known non-governmental organizations. This year more than half of the aid provided to Ethiopia under our regular food relief budget was distributed through the International Committee of the Red Cross, the Central Mennonite Committee and the Lutheran Association of Canada for World Assistance. These organizations are in a position to indicate exactly how the goods are being used. As for the rest, this is assistance provided from government to government.
The World Food Program is supervising distribution of food on behalf of the Government of Canada. As Hon. Members are aware, the World Food Program is an extremely efficient channel for bringing in emergency relief. Thanks to its extensive program in Ethiopia and its experienced field personnel, it is particularly qualified to provide this vital support service.
The Hon. Member may be aware that thanks to the resources of the Special Africa Fund and the contribution by the Government of Ontario, 25,000 additional tons of grain have been sent to Ethiopia by this country. In this particular
case, most of the distributing will be done on behalf of the Government of Ethiopia by non-governmental and international organizations such as the World University Service of Canada, the Office of the United Nations High Commissioner for Refugees and Norwegian Church Aid. These organizations will monitor distribution in consultation with the Canadian Embassy and will make progress reports.
I would like to add that most non-governmental and international observers in Ethiopia are of the opinion that food distribution through official Ethiopian channels is taking place with a minimum of loss. It is also true that Ethiopia does not have the administrative resources to provide donors with all the reports they would need on the distribution of their donations.
Finally, Mr. Speaker, I would like to point out that at this very moment, the Hon. David MacDonald, the Canadian emergency relief co-ordinator, is in Sudan to observe the situation in that country. Canadians may be confident that we have taken all the necessary action to ensure that our aid will have maximum impact.


EXTERNAL AFFAIRS-SOUTH AFRICA-CONDUCT OF CANADIAN COMPANIES-GOVERNMENT GUIDELINES. (B) VISIT OF APARTHEID APOLOGIST
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, on December 21, 1984, the Hon. Member for Scarborough West (Mr. Stackhouse) asked what I thought was a very legitimate question. He referred to the visit of the Reverend Bishop Desmond Tutu, a Nobel Peace Prize winner. He asked the Prime Minister what consideration was being given to increasing Canadian pressure on South Africa to abolish apartheid, a very important and concise question.
The Prime Minister (Mr. Mulroney) completely evaded the question and tried to wash the whole situation over with Irish blarney. I hope I will not be accused of racism by using that term. The Prime Minister said:
Mr. Speaker, I was honoured, as we all were yesterday, by the presence of Bishop Tutu in the House. I had the privilege of a private meeting with him wherein he gave me the benefit of his views. I indicated to him how helpful they would be to the new Government as we get into a foreign policy review. Of course the question of our relationship with South Africa will be very carefully re-examined.
The Prime Minister said absolutely nothing in response to that very important question asked by the Hon. Member for Scarborough West.
On February 15, I asked a question about the non-compliance of the Bata Shoe Company with the voluntary guidelines for Canadian companies operating in South Africa. In his own way the Secretary of State for External Affairs (Mr. Clark) said just as little as did the Prime Minister in response to the earlier question. He talked about a review of policy in light of the well-known Canadian abhorrence of the policy of apartheid.
February 26, 1985

Some of us have some questions as to just how serious the Conservative Party holds that policy of abhorrence for apartheid when we have seen a number of Tory Members take expense paid trips to South Africa. We wonder just how abhorred they are by that policy.
Then the Minister went on to say with respect to reports concerning particular companies, "the best way to judge their performance as employers would be for the companies concerned to issue public reports, as called for by our present code of conduct". That is precisely the point-29 out of 30 of the companies from Canada operating in South Africa have not bothered to file a report since 1981. To say that the best way would be for them to file a report is a complete non-starter in terms of dealing with a very important situation. Obviously what the Secretary of State for External Affairs thinks is the best way is not working. It is important that they should come up with something a little better.
I suggested one small step-compulsory compliance for all companies doing any business with the federal Government. The federal purchasing power should be at the service of human rights both in Canada and overseas. That would be one small step which could be taken. It would bring companies such as Bata Shoes to report on what it has been doing so that we would have some idea of the way in which it is working. However, the Government would not indicate that it was prepared to take even that one small step.
Today Canada is hosting Gaza Buthelezi, who is the leader of Bantustan where the Bata Shoe Company operates. Official Canadian policy claims that we do not recognize the so-called homelands or Bantustans. We do not pretend, as does the Government of South Africa, that the Government of those Bantustans are in any way independent. They are simply puppets, and that is supposed to be our official policy. Over the past few years some four million black Africans have been forcibly removed from the general area of South Africa and on to the most arid, unproductive land. The whole system of Bantustans is integral to the system of apartheid, and we are supposed to reject it. Why then are we rolling out the red carpet for Mr. Buthelezi who is trying to drum financial support for the South African economy?
Mr. Buthelezi claims to be an opponent of apartheid and of the Botha Government, but we have only to look at his actions to raise very serious questions about that. He claims to be the democratically elected leader of his people in Kwazulu, but in the 1978 election when his Party won all the seats in Kwazulu, only 14 per cent of the people had been registered and only 38 per cent of those registered actually bothered to vote. In other words, slightly more than 5 per cent of the total population gave this man his mandate, and he claims to be a democratically elected leader. He purports to reject the new Constitution introduced by the Botha Government because it does not recognize citizenship for blacks.
He claims that this is a non-negotiable item. At the same time, he opposes leaders like Bishop Desmond Tutu for not, as
Adjournment Debate
he says, recognizing the necessity for compromise politics. He lives and operates in a country where the possibility of compromise politics is completely ruled out by the South African Government. The great majority of the people living in South Africa are not regarded as citizens. They have no say, no way of shaping any of the compromise, yet he rejects other black leaders because they do not recognize the necessity of compromise politics. They recognize the impossibility of compromise politics. He points out that in his view, economic pressure will not work. I suggest that the great lengths to which the South African Government has gone to avoid economic pressure indicates that it does work. In fact, any black Afican who speaks out and demands sanctions is liable to be charged with an indictable offence and sent to jail.
I would, therefore, like to raise the question that was raised on December 15. What consideration is the Government giving to increasing Canadian pressure on South Africa to abolish apartheid? In what direction is the policy review that the Secretary of State for External Affairs mentioned going to go?


Mr. Gerry Weiner (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I would recall for the House that the code of conduct concerning the employment practices of Canadian companies operating in South Africa was issued on April 28, 1978. Its main provisions concern general working conditions, collective bargaining, wages, fringe benefits, training and promotion and race relations.
Since the code's adoption, a number of companies have issued public reports, although most have not done so on a regular basis. One feature of the code has been its voluntary nature. A second feature has been that companies are requested to issue their reports publicly rather than report to a government agency for scrutiny. To have done otherwise would have raised questions about the extraterritorial application of Canadian law.
In the absence of an official monitoring mechanism, the code has not operated as effectively as had been hoped. Consultations have been held with the Canadian companies concerned and interested church and labour groups on how the code could be made more effective. As the Secretary of State for External Affairs (Mr. Clark) informed the House on February 19, a number of options are under consideration as part of a complete review of relations with South Africa and any changes will be announced to the House.
In conclusion, I would add that although there have been criticisms of codes of conduct by those favouring disinvestment and economic sanctions, most observers close to the scene believe that they have led to improvements in working conditions for non-whites. We should not disparage any gains in the fight against apartheid or slackening in our efforts to promote basic change. Our common purpose must be to encourage the removal of apartheid by peaceful means.
As the Secretary of State for External Affairs informed the House on February 15, Canada is reviewing its relations with South Africa, and the Government wishes to consult extensive-

February 26, 1985
Adjournment Debate
ly with people whose views are relevant. Canadian policy is one of dialogue, including dialogue with those with whom we do not always agree. It may be noted that all major black leaders in South Africa are controversial figures in their own country.
While Chief Buthelezi is not a guest of the Canadian Government, we are happy to take advantage of his presence in Ottawa to review the situation in his country with him. The Minister of External Relations (Mrs. Vezina) will be meeting Chief Buthelezi to hear his views. Like Chief Buthelezi, we are opposed to apartheid and we cannot say that the present South African constitution, which excludes blacks, has abandoned the concept of apartheid. We, too, have reservations about the effectiveness of economic sanctions in fostering peaceful change and we are concerned about the effects they would have on the poorest segments of the South African population.


ENVIRONMENTAL AFFAIRS-ACID RAIN-FEDERAL-PROVINCIAL AGREEMENT ON CONTROL MEASURES. (B) FEDERAL GOVERNMENT FUNDING
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, today I would like to follow up on a question 1 asked of the Minister of the Environment (Mrs. Blais-Grenier) on February 6. I see that the Minister is here to respond. I think it is a very good practice which apparently is being followed by the new Government of having Ministers themselves respond during the Adjournment Debate. I hope that that continues for as long as possible.
On February 6, I asked the Minister about the agreement that she had reached with the provinces with respect to acid rain. I believe I asked the Prime Minister (Mr. Mulroney) as well just when concrete money would be allocated toward reaching the goals set by the federal Government and provinces with respect to a reduction in acid rain. I did so in following up the remarks that the Prime Minister is now famous for having made about Canada having to go to the bargaining table with the United States with respect to acid rain with its hands clean, and having to clean up our own back yard if we wanted to bargain from strength when it comes to talking to the United States about acid rain. I agree with that principle and I have made it clear that I thought that that was a good sentiment expressed by the Prime Minister.
My question that day was directed toward eliciting from the Prime Minister just when the Government would follow up on that insight of his by allocating concrete money toward the pursuit of the reduction of acid rain that was agreed upon by the federal Government and the provinces. As well, if not on that day, then on another day, I asked the Prime Minister when, and preferably before the visit of President Reagan on March 17, the Canadian Government would be announcing that it would bring auto emission standards down to the level of those of the United States. If we did that, we would not be in the position of having the President or Americans in general telling us that we have not met American standards as yet.
The Prime Minister has had a great deal to say about Canadian-American relationships and about wanting to improve them. He has been critical of the relationship that existed between the previous Liberal Government and the United States. A word that he has often used is "maturity". I believe that is a good word to use to describe the kind of relationship that we ought to have with the United States of America.
In that context, given that we know the President will be here soon and that there will be an opportunity for direct discussions between the President and the Prime Minister, I would like to say that maturity is a two-way street. I am sure we could debate the ways in which Canada might be able to improve the maturity of its relationship with the United States. In my view, it would mean being more independent of American foreign policy and more willing to have a peer relationship with the United States. Whatever it might mean, maturity is a two-way street, and if maturity is the goal, then the Prime Minister ought to have something to say to the President about a few things that have happened recently. For instance, he ought to be concerned about the attitude Americans have taken toward New Zealand and its attempt to respond to the democratically expressed wishes of its people with respect to nuclear powered and nuclear-armed ships docking in its ports. Is that an example of the maturity of the response of Americans when countries choose to be mature and independent from the wishes of the United States.
Another such action recently took place in Manitoba. Efforts were made by the Manitoba Government, by many Manitoba citizens and, indeed, by the federal Government, to have removed the part of the Garrison River Diversion Project which would have endangered Manitoba waters. In response, the North Dakota legislature has passed a Bill which would have the effect of making impossible the transmission of electricity from Manitoba to Nebraska.
This is particularly ironic in the sense that this is a case in which we were very concerned about the environmental consequences of something, and we were successful in preventing what we thought would be damaging, and the Americans, through the North Dakota legislature have said that they would refuse to import Canadian electricity. Then, the other day, with respect to acid rain, there was a Bill introduced by Democratic Senator William Proxmire which indicated that if Canada did not clean up its act on acid rain, the Americans might refuse to allow the importation of Canadian electricity. On the one hand we are getting it because we are environmentally sensitive, so the Americans are going to ban our imports. On the other hand we are getting it because we are not adequately environmentally sensitive. I must ask if this is a rational and mature response to Canadians-and in this case Manitobans-who want to prevent their water, fish and marine life from being downgraded by the introduction of American waters. Those are the things which the Prime Minister should speak to President Reagan about when they meet on March 17.
February 26, 1985

A number of things must be said. One, that we will bring our auto emission standards into line with those of the U.S.; two, that Canada will put money behind the agreement that the Minister signed with the provinces, and three, that a mature relationship requires that maturity exist on both sides and that Americans-when it comes to things like the Garrison Diversion Project-ought to respect the fact that Manitoba had no choice and would have been irresponsible if it had not done everything in its power to prevent that project from going ahead as it was originally intended. That is the kind of maturity 1 would like to see on the south side of the border. Perhaps at another time we could debate what would constitute a mature Canadian stance with respect to American-Canadian relationships.


Suzanne Blais-Grenier: First of all, Mr. Speaker, I should tell my colleague that I appreciate his very positive remarks concerning my presence in the House. However, I hasten to add that I do not share his pessimism about our relations with the United States. On the contrary, I am quite confident that we will be able to solve common problems in harmony.
As the Right Hon. the Prime Minister (Mr. Mulroney) said during his election campaign, the acid rain issue is our priority and, as early as last month, we did convene a federal-provin-
Adjournment Debate
cial conference to seek ways to reach agreement on lowering sulfur dioxide emissions. The conference was held last February 5 and made it possible to follow up on the work already begun by the former Government. We ended up with a clear-cut objective to reduce acid emissions: by 1994, acid emissions in Canada's eastern provinces will be limited to 2,300,000 tonnes.
Such provincial limits reflect the efforts made by each participant and show to what extent it is imperative that the provinces and the federal Government be at one on such an issue. Some of my provincial colleagues used the word historical when referring to the agreement we managed to negotiate among ourselves.
It stands to reason that the federal Government and the provinces must share the costs with industry in a field of activity which is always under economic constraints. 1 believe that this co-operation will continue in coming months and that we will eventually be in a position to announce new measures likely to please all Canadians.


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


[Stage Direction]
The House adjourned at 6.29 p.m.
[Stage Direction]
Wednesday, February 27, 1985