1985-01-21

OFFICIAL REPORT

[Stage Direction]
FIRST SESSION-THIRTY-THIRD PARLIAMENT 33-34 Elizabeth II

[Stage Direction]
Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada
Available from Canadian Government Publishing Centre, Supply and Services Canada, Ottawa, Canada K1A OSS.
[Stage Direction]
Monday, January 21, 1985


[Stage Direction]
The House resumed from Monday, December 17, 1984, consideration of the motion of Mr. Stevens that Bill C-15, an Act respecting investment in Canada, be read the second time and referred to the Standing Committee on Regional Development; and on the amendment of Mr. Gray (Windsor West) (p. 1302).
Mr. George Baker (Gander-Twillingate):: Thank you, Mr. Speaker.


Mr. Hnatyshyn:: I hope you had a good Christmas.


George Baker: Mr. Speaker, I hope all Members had a good Christmas and I welcome them back to the House. I hope that our continued session will be very productive and that the Government of Canada will change its attitude toward the people of Canada and give them a break instead of introducing further cuts to two very important programs instituted by the former Liberal Government, a Government which had a feel for people. We can see now how this particular Government is preoccupied with the deficit and not really interested in the people of Canada.
I want to conclude my remarks, Mr. Speaker, on the amendment of the Opposition House Leader. The motion was made primarily for two reasons: one, that the Bill introduced to the House is rather hazy and does not meet the objectives stated by the Minister in its introduction; second, that the actions of this Government certainly do not bear out the intentions of the Bill as outlined by the Minister of Regional Industrial Expansion (Mr. Stevens).
We have seen the actions taken by this Government since the House adjourned for the Christmas break. We saw the federal Government meeting with the provincial Governments in a spirit of consultation and deciding to sock-it to small businessmen again by increasing the Canada Pension Plan rates for all businesses in Canada, all employers and all employees.
To consult with the provincial Governments on this action might seem strange to the general population of this country. Why would the Government of Canada consult with the provincial Governments on this measure? Surely it is not only because of the Government's stated intention to consult. To consult with the provincial Premiers about an increase in the CPP rates is like consulting with landlords on a rent increase. It is exactly the same. It was not explained by the Minister of Finance (Mr. Wilson) or the provincial Ministers of Finance that the CPP fund has been used since its inception to provide money to provincial Governments for their spending programs. In other words, since 1966 or 1967 there has been a drain on the fund surplus by provincial Governments based on what their businesses and workers contribute to the fund. However, Mr. Speaker, the provinces have yet to pay any money back to the fund. As I recall, the money was borrowed on the basis of 20-year debentures. In other words, every month the provincial governments borrow money from the CPP fund on a 20-year debenture and there have been no repayments to that fund since the provincial Governments starting borrowing. However, repayments are supposed to start in 1986.
What has not been explained, Mr. Speaker, by the Minister of Finance or his provincial counterparts, and certainly what Canadians want to know, is what will happen to those repayments in the hundreds of millions of dollars which will start in 1986. How will that jibe with the amount of money that is predicted to be required by the CPP fund in the year 2000? So to consult with the provincial Governments on this issue but not explain it to the Canadian people is, to say the least, completely misleading. It certainly does not jibe with the stated intentions of the Government. Or is it the intention of this Government to increase the amount of money loaned to the provincial Governments? In other words, are we getting these increases in order to give back to the provincial Governments the money they will have to start paying to the fund in 1986?
As I said, Mr. Speaker, it is because there have been so many actions by this Government which do not agree with the stated intentions of this Bill that the Opposition House Leader has had to introduce his amendment.
In introducing the Bill the Minister stated that the primary concern of the Government was job creation. In fact, he was so preoccupied with that thought that he jumped for glee when the Prime Minister (Mr. Mulroney) and the Minister of Employment and Immigration (Miss MacDonald) were very pleased to state at the beginning of this month that they had created 96,000 jobs in the private sector since they came to power. I heard on the radio and saw on television the Prime Minister and the Minister of Employment and Immigration

January 21, 1985
Investment Canada Act
taking credit for the 96,000 jobs which were created since the Tories came to power on September 4. It is too bad they did not check the record. If they had they would have seen that in the comparable period under the Trudeau administration more jobs were created in the last three months. If the Government wants to take credit for private sector jobs created in the country, it works out to something like 24,000 jobs a month. During the last three months of the Trudeau administration it worked out to about 32,000 jobs a month in the private sector. In the two months in which the Leader of the Opposition (Mr. Turner) was in power it works out to even more than that. He beat them all; it works out to 33,000 jobs a month in the private sector.
The point is that it is unfortunate that governments try to take credit where credit is not due because they were not really responsible for anything. The effect, if any, of the signals sent out by the Government was to decrease private sector jobs.
One need only look at what I would call the bible of the new Government which is contained in the expenditure and program review of the President of the Treasury Board (Mr. de Cotret). This outlines that in special export payments in the dairy products area they are cutting out $6.2 million. The Minister of Regional Industrial Expansion is so interested in making exceptions for cultural agencies in this Bill that they have cut out $7.5 million. They have cut out $250 million for grants to the petroleum industry. That certainly does not jibe with this Bill. They have cut $60.8 million from energy research and development. They have cut $4 million from the program for export market development which provides federal assistance to business through the sharing of financial risk in entering more export markets. They have cut $5 million from the Canadian Commercial Corporation. They have cut $11.7 million from programs to assist in the development of the fishing industry. The list goes on and on, Mr. Speaker.
We come to the very department of the Minister who introduced this Bill and we see a cut of $200 million in providing financial assistance to support private sector initiatives in the coming year. They are going to increase fares on VIA Rail. They are going to increase the cost of transporting goods and save $93 million. They have cut $2.8 million from the mobility program to move workers around the country to where they can get jobs. That makes it almost impossible for a person to get a grant to move from an area of high unemployment in the country. To make matters worse, in that same department they cut out the job sharing and job training program and the youth exchange program.
These cuts relating to the very Bill introduced by this Minister make us wonder what we are dealing with in the House of Commons. When the Minister of Employment and Immigration is asked what she and the Government have done since they came to power, she always points to the $400 million fund for direct job creation. Practically every Progressive Conservative candidate who ran in the last election went
around deriding that program and demanding that it come to an end.
You must realize, Mr. Speaker, that while these jobs are being filled a young person or a female who has never worked before, both of whom are of paramount concern to the stated claim of the Minister of Employment and Immigration, is not allowed to be referred by Canada Manpower to any of the jobs. According to the guidelines sent out by the Minister of Employment and Immigration to the Canada Manpower centres in the country, the direct job creation program of the federal Government states that no young person who has never drawn unemployment insurance before is allowed to go to work on a direct job creation program of the federal Government.
U5)
With respect to women, who the Minister claims to be so interested in getting into the workforce, no woman who has never been in the workforce before and drawn unemployment insurance is allowed to be hired. We should think about that. Rather than consider hazy proposals by the Minister of Regional Industrial Expansion, should we not, as the House of Commons, be concentrating on what is actually happening to people throughout the country and realize that those job descriptions will not permit these people to gain employment?
As I have already stated, the problem goes right back to consultations with the provincial Governments three years ago. Their major concern was to get their own expenditures down and they decided that for all job-creation programs under federal and provincial negotiations they would ensure that people on social assistance are hired first. In that case, the federal Government decided that it would make sure that everyone who is drawing unemployment insurance is hired second. This is the situation which led to the guidelines.
You have indicated that I have one minute left, Mr. Speaker, and I have not even addressed the Bill. There are many issues to address. The Government has made so many errors and has introduced so many cuts that affect so many people that I have not even been able to address the Bill since I began speaking at eleven o'clock.


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


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, let me extend best wishes for 1985 to you, to other Members of the House and indeed to all Canadians. I hope that the House will be able to achieve something for the people of Canada in this coming year.
I appreciate the opportunity to speak to Bill C-15 because of its importance in determining the future of the Canadian economy and Canadian society. Like the cut-backs that were announced in the fall, this is one of the very early but very clear indications of the direction in which the Government is intending to head. I and my Party have a great deal of opposition to that direction. We believe that it will not help the Canadian people.
January 21, 1985

First, I want to examine the method that the Government is using in trying to promote this Bill. Let us examine some of the rhetoric that the Government has been using. When the Government talked about sending out signals it was using activist language designed to convey the concept of an activist government doing something about our economy when it is actually abdicating its responsibility. It is sending out a signal that the Canadian barn door is open and the Canadian watchman is asleep on the job.
We also hear rhetoric from the Government about returning decision-making to the market-place. The market-place presents a friendly image to most Canadians because it has a small town connotation, such as a meeting place for people. The image of government, as opposed to the market-place, is one of a big, bureaucratic and alienated entity. People feel much more at home with the friendly image of the marketplace than they do with the image of big government.
We must ask what is the reality behind the image of the market-place when we talk about it in 1985. The reality is that our market-place in 1985 is dominated by multinational corporations which are characterized by interlocking directorates, world-wide networks of information and access to resources and the mobility of capital. It means financial resources and power that are greater than the financial resources and power of many nations in the world and an ethic that is dominated by the maximization of profits.
We hear much rhetoric that speaks of takeover capitalists in terms of risk-takers. The risk-taker is presented as the existential hero of our time. But there is a fear in our Party that the real risk-takers in Canada-and there are real risk-takers among some small business people-will be crowded out and swamped by foreign firm takeovers.
We are concerned about the weak nature of combines legislation in Canada. Certainly the past Liberal Government did nothing to strengthen it and from many of the noises we have heard from the present Government it does not seem to have that as a very high priority either. By opening the door to foreign capital, we will place more Canadian businesses at greater risk than ever before and we will all be living much more dangerously. So much for the image of the risk-taker.
Dian Cohen and Kristin Shannon, in their book The Next Canadian Economy, worry about the growing tendency for capitalist takeovers and for capital to concentrate on safe investments where there is no risk. There is a growing tendency toward takeovers that do not create jobs. If we can judge from our own experience in British Columbia, and I presume it is the same in other parts of Canada, takeovers very often involve a loss of employment. How will this kind of opening up to that kind of capital encourage Canadian risk-takers? It will not encourage them at all, Mr. Speaker. It will place them at greater risk, at greater danger, and it will lead to a loss of jobs.
We need to ask where will this process end. The Tories say that FIRA is an obstacle to international investment in Canada. Stephen Clarkson in his book Canada and the
Investment Canada Act
Reagan Challenge details some of the American objections to FIRA. He points to the objection that the Americans had to performance requirements that would require companies buying into Canada to have a certain level of Canadian content or that would require a certain level of job creation.
Suppose we get rid of FIRA? Suppose we do as Bill C-15 proposes and no longer have those particular obstacles to foreign investment but we still do not attract foreign investment. What then? Suppose foreign investment capital decides that our environmental regulations are a detriment to investing here. Does that mean we will change our regulations with regard to the environment? Is our environment up for sale? Suppose labour standards stand in the way of foreign capital coming here. Does that mean we will be changing our labour standards to make more acceptable to foreign investment? Where does the process end?
One thing this Bill does is recognize the reality of foreign capital in terms of its power and mobility. It recognizes it largely by bowing down and serving it as though it were some god to be worshipped. We all know that FIRA was not an adequate tool for dealing with the reality of foreign investment, but it was one tool that perhaps could have been improved.
An example might be helpful. Let us look to some of the early history of labour unions in Canada. Around the turn of the century and especially in British Columbia there was a lot of opposition in labour unions to immigration. Many working people saw immigrants as a threat to their standard of living. Working people tried to organize to fight for better wages and for safer and better working conditions. Immigrants, however, would often be hired at lower wages and were willing to work in poorer conditions. The unions had two options. They could either give up the struggle and say: "Because of these immigrants under-cutting what we are trying to do, there is no use fighting so let us carry on working for lower wages in poor conditions"-which is essentially what the Tories are doing with FIRA-or take a position which said: "Let's try and keep immigrants out of Canada. Let's try to maintain Canada as an enclave for people who have set decent standards of living and keep other people out".
That was the position they took for awhile and it did not work. Finally they decided to fight for decent wages and decent conditions. They also decided to open up the concept of unions to a wider kind of solidarity which included everybody. On the basis of that they were able to establish decent working conditions and decent wages for all people.
I am suggesting that that is what we have to do with FIRA. We have to maintain the restrictions of FIRA to ensure that Canadians are protected. However, we have to move beyond that to a wider solidarity with other people in the world. We have to attack the question of ensuring that the actions of multinational corporations in the world are responsible ones. This cannot be done by one nation alone; it has to be done by Canada acting in concert with other nations.

January 21, 1985
Investment Canada Act
I do not like to see the Government simply abdicating its responsibilities or saying that there is nothing more it can do, so it will simply abolish FIR A and open the doors for foreign capital to come in and do what it wants. We should maintain FIRA. We should try to strengthen it. As the labour unions did in the early part of this century, we have to expand the concept of solidarity with other people in the world. We have to work in an international manner to insist that multinational corporations act in a responsible way.


The Acting Speaker (Mr. Paproski):: Are there any questions or comments on the Hon. Member's speech? Is the House ready for the question? The Hon. Member for Algoma (Mr. Foster).


Mr. Maurice Foster (Algoma):: Mr. Speaker, I am pleased to have an opportunity to say a few words on this Bill. The Investment Canada Bill raises the many concerns of Canadians about the approach of the Prime Minister (Mr. Mulroney) towards the United States from the moment he won the election and was sworn into office. Before he ever met with the press or with the House of Commons, he immediately hied himself off to Washington to say to the Americans: "Come to Canada and buy out whatever you want with no questions asked". This Bill really follows through with that approach.
Let us look at the history of the Prime Minister. We see that his idea of Canada is kind of a branch plant operation from Washington. Clearly that is his approach in foreign affairs and in investment, right from the early days when he used to sing Danny Boy on Colonel McCormick's knee in Baie Comeau, his constituency. His general approach has been to see Canada as a branch plant operation of the United States. When he was with the Iron Ore Company of Canada and was in charge of the Sept lies and Schefferville operation, and when he got his orders from Cleveland to shut it down, and Brian said "Shut it down". Of course, that is his general approach with this Bill.
Canadians are really very uneasy with this approach. There has clearly been a lot of foreign investment in Canada. We need a lot of foreign investment but we want it on our terms. We do not want the situation to be wide open where American companies come in to buy out and take over the sales forces of small Canadian companies that have been doing a good job and are concerned not only with their economic welfare but with the welfare of Canadians as a whole. We do not want them expanding their markets in our country and then shutting down the manufacturing side, only to be supplied from the United States. That was the idea of FIRA. It was rather successful. I doubt that it discouraged much serious foreign investment in this country.
Let us look at the foreign investment that we had in those years. In the period 1964 to 1973, we averaged approximately $690 million per year in foreign investment. Since the FIRA agency was established in 1974, we averaged $1.4 billion of investment. The average investment in the last four years has
been $2 billion per year. In 1983, the capital inflow into Canada was $2.8 billion.
This investment was all on the basis of whether it was advantageous to Canada. Surely it is not too much to ask a foreign investor whether he is coming into Canada on the basis that there will be a benefit to this country. If a company says no, that it wants our market but will do the manufacturing and research in the United States as well as have the management there, that is unreasonable. I do not see that we are turning away anybody who is interested in providing a benefit to Canada. If we look at how FIRA has operated over that period, we see that 92 per cent of the applications have been approved. Since 1982 when the rules and regulations were streamlined, modernized and updated, 97 per cent of the applications have been approved.
Those raw figures do not indicate whether we were able to negotiate local management or a bigger chunk of the international pie. It does not show how much R and D we were able to promote for Canada. The Prime Minister threw away this bargaining tool on his first visit to Washington, before he met with Parliament or even with the Canadian press. He stated that we would adopt what they want us to do with regard to the National Energy Program, FIRA and defence spending. He should have used the power of FIRA to negotiate a better position for Canada. In my opinion, the Prime Minister was not a very good negotiator. The United States does not have a monolithic system where the President has all the power. A lot of power resides with the Congress and the Senate. When you negotiate, you should negotiate from a position of strength, using all the tools at your disposal.
In a front page article in the Thunder Bay Chronicle Journal of January 15, it is reported that Senator Larry Craig, a Republican from Idaho, and Congressman Jim Weaver, a Democrat from Oregon, are sponsoring a bill in Congress to limit imports of Canadian softwood lumber to 25 per cent of United States demand. That is approximately 8 per cent less than currently. The impact of that decision would result in plants closing in northwestern and northeastern Ontario and British Columbia. It is planned to start hearings on this legislation in February.
We need only look back two years to the International Trade Commission hearings which went on for 33 weeks and the Secretary of Commerce hearings which were held at the same time to find that there is a very protectionist position in the United States Congress. If we want to respond to that, we must use every bargaining tool that we have. Clearly FIRA could be used. We should not give away our bargaining position. I will be interested in seeing whether the proposition being sponsored by these two congressional leaders, one of whom is chairman of the United States Interior Subcommittee on Mining and Forestry Management, will result in 8 per cent of the United States market for softwood lumber being closed to Canadian suppliers. It will be interesting to see whether our Government's attitude is that they can do what they want. These points need to be bargained on a mature basis, not by a subservient government in Ottawa responding to a dominant

and much more powerful neighbour. Our positions should be mature and we should deal on a much more equal basis than what the Prime Minister would have us do under this Bill. Canadians are very concerned about the present attitude and approach. There are many restrictions in the United States, such as the "Buy America Act" which provides a barrier to Canadian urban transportation equipment going into the United States.
A recent study by the Brookings Institute indicates that non-tariff barriers erected by the United States against Canada and other countries increased from 20 per cent in 1980 to 35 per cent in 1983. It cannot be all one way. We cannot ask them to come and buy anything they want with no questions asked at the same time as these non-tariff barriers are being erected. We have to act in a much more mature and positive manner than what is proposed in this Bill.
The Tories and the Prime Minister like to rail against the National Energy Program and the idea of Canada having a 25 per cent carried interest in our oil resources in the Canada Lands. They talk about the loss of billions of dollars in investment. When we look at the billions of dollars of investment that went to the United States in the early 1980s, we see that much of it went there to increase our ownership of Canadian oil companies, and in the last three or four years Canadian ownership of our energy sector for petroleum and natural gas increased from 28 per cent to 40 per cent. The objective was to reach 50 per cent by 1990. I do not know whether that will be changed. I hope that will not change once the Minister of Energy, Mines and Resources (Miss Carney) has negotiated her deal with the provincial Governments. The objective of the National Energy Program was to see that we became oil self-sufficient by the year 1990. In fact, on a net basis we became self-sufficient by 1983. It is pretty significant that we became self-sufficient in a two or three-year period.
A few weeks ago some of my colleagues and I had the opportunity to be briefed by the Department of Energy, Mines and Resources. Officials of that Department revealed that their projections show us to be self-sufficient in oil until the end of the century. That is not bad. This happened seven years sooner than we had dared to hope it would happen when the National Energy Program was established. We are self-sufficient in oil with the bringing on stream of the new western basin oil, enhanced recovery, the tar sands and so on. As well, the frontier oil in the Beaufort Sea and the East Coast offshore has been brought on stream.
We are now oil self-sufficient. According to the Department of Energy, Mines and Resources, our oil and gas explorations and developments are up some 53 per cent over those of 1980, and 1980 was a record year. As well, our natural gas reserves are so extensive that we now have some 33 years' supply, and in fact there is not much of a demand for further exploration and development at this time.
The results to which I have referred are very encouraging. We can see the tremendous strides that have been taken in
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improving our natural gas reserves. On a net basis we are self-sufficient in oil now through to the end of the century. Canadian ownership has moved up from 28 per cent to 40 per cent. Those achievements are very significant in our move toward greater Canadianization and greater ownership of our natural resources.
Referring to this Bill, Mr. Speaker, the proof of the pudding, as they say, is in the eating. I believe the proof of the Tory approach to foreign investment will be in the results. It is interesting to note that there have been reports indicating that U.S. bankers see no increased capital flow into Canada. I think it really boils down to the opportunity that exists for investment, profit and making a buck. That is a legitimate business approach and one to which we are not opposed provided it is good for the country.
In the City of Sault Ste. Marie, which is in my constituency, the Abitibi-Price plant was planning to shut down or sell out its operation. There was an opportunity for a group from the United States to take over the plant. We negotiated a great deal in order to get financial assistance from the Government of Canada and the Province of Ontario to see that that plant, which employed some 400 or 500 people, would have an opportunity to change its product line and modernize and upgrade. This happened exactly a year ago and took a period of months.
At that time we were very concerned that the plant might shut down. We were dealing with a massive Canadian company, Abitibi, and a small entrepreneur from the United States whose interests, ideas and ingenuity we welcomed. However, the problem was not with FIRA. The FIRA screening never concerned this entrepreneur and I do not think it concerned anyone else involved because his idea was an obviously good one and he had a new product line to sell. He has now taken over the company and indicates that he hopes to expand.
We welcome that kind of investment and innovative approach that changed an old round wood mill to a plant producing a new product line, the super calender line, for which there is a market in the United States. There was practically no problem with the FIRA screening of that company. The American company which was set up to operate the Abitibi plant in Sault Ste. Marie, a plant which is now known as St. Mary's paper, felt that FIRA was not a problem. The problem was getting financial assistance, much of which ended up coming from the two senior levels of government.
I would be surprised if the criteria of most American, West German, Japanese and other investors are not economic opportunities. For instance, in Saturday's Toronto Star on page D-l, I saw an article which indicated that at this time Nissan was not interested in investing in Canada in order to establish a new plant. It is planning to expand into Britain, the United States, China and Southeast Asia but it has no plans to expand into Canada at this time. That can be compared with the four new plants which were established in Canada last spring. This Bill will not suddenly make a big difference in the kind of foreign investment that is coming into our country.

January 21, 1985
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The Acting Speaker (Mr. Paproski):: Are there any questions or comments on the Hon. Member's speech?
While I am standing, I would like to bring to the attention of Hon. Members that under Standing Order 35(2), we have now entered a period in which speeches of only 10 minutes maximum will be allowed with no opportunity for questions or comments.


Mr. Paul Dick (Parliamentary Secretary to Minister of State (Government House Leader)):: Mr. Speaker, this morning I was rather horrified to find out that the Hon. Members from the New Democratic Party and the Liberal Party who spoke are in favour of unemployment. It appears from what they are saying that they do not want us to create jobs in this country.


Mr. Blackburn (Brant):: We know why you're speaking now. We can't ask you any questions.


Paul Wyatt Dick: I would gladly have spoken earlier but unfortunately the Speaker recognized someone else. Perhaps the Hon. Member would like to quarrel with the Speaker, something I would not wish to do. However, I will be glad to discuss this matter with the Hon. Member and perhaps, if there is unanimous consent, questions can be asked after I speak.
I have not heard as much junk as I heard this morning in an awful long time, Mr. Speaker. The Hon. Member for Cowi-chan-Malahat-The Islands (Mr. Manly), an NDP Member, said that our Party was against immigration. When our Party was last in power for a brief period of time in 1979, which Party allowed 50,000 refugees into this country? The Hon. Member forgot to mention that. Who is trying to get people into this country now-


James Douglas Manly: Mr. Speaker, I rise on a point of order. I certainly never said and did not mean to imply that the Conservative Party was against immigration. I do not think Conservative Members were listening very carefully. If I did say that, I would want to apologize and withdraw it. However, I would like to check the "blues" to be certain about what I said.


The Acting Speaker (Mr. Paproski):: I believe the Hon. Member has made his point.


Paul Wyatt Dick: Mr. Speaker, he did say that. Perhaps he simply misstated his thoughts. However, we will be glad to look at the "blues". I would like to make sure it is put on the record that we encourage immigration and encourage people to come to this country to work and to fulfil their desire of beginning a new life in this country.
I would also like to speak about the words of the Hon. Member for Algoma (Mr. Foster) who said that he believed that FIRA was important and that the NEP was good. During the last election the people of this country voted in with an overwhelming majority the Party which said it wanted to change FIRA and the National Energy Program. Is the Hon. Member saying he disagrees with the Canadian people who
voted as they did? Is he saying that he wants to change it back to the way of the Liberals who did all kinds of things without any consultation which loused up this country? Is he saying he would like to go against what 50 per cent of the voters decided back on September 4?


Maurice Brydon Foster: Fifty per cent voted against you, too.


Paul Wyatt Dick: Does the Hon. Member think that his Party's 28 per cent is more reflective of what the Canadian people want? It sounds to me as though the Liberals, again in their arrogance, do not care that the voters very clearly said that they wanted to change FIRA and the National Energy Program, and that they wanted to get Canada running again.
I would like to refer to a few events which happened in the past, Mr. Speaker. In 1973 the group of people aged 14 years to 24 years had a 9.7 per cent unemployment rate. In 1974 unemployment had risen to 10.6 per cent and it continued to rise each and every year right through the 1970s during the time the Liberal Party was in power partly because of its kind of autocratic rule and the fact that the Canadian people had lost confidence. Those Canadians with money have taken something like $68 billion in the last eight years and invested it outside of this country. For the first time we had this massive outflow of capital. Canadians are developing the downtown core of Dallas, Texas. Canadians are buying up Florida left, right and centre. It was the Reichman brothers, Canadians, who bought seven or eight skyscrapers in New York. Canadians invested outside of Canada because they could not stand the government which the Liberals and their NDP buddies were providing this country. That is why Canadians made massive changes in their voting patterns back in September. They wanted a new start and a new chance.
I would just like to point out that for three months our Party has been talking positively about an opportunity for people to invest in this country, for foreigners to invest in this country, and that in the month of December, for the first time in years, unemployment has gone down. There were 100,000 new jobs started up.


Mr. Riis:: What about trade?


James Douglas Manly: What about British Columbia?


Paul Wyatt Dick: British Columbia? There were 100,000 jobs in Canada.


Mr. Keeper:: How many people have given up looking for work?


Paul Wyatt Dick: I believe, Mr. Speaker, that that is a small modicum of success and if those Hon. Members opposite would only have the faith that the Canadian people have and go along with us for another year or two, I am very optimistic there will be many thousands of new jobs created. But the Opposition Parties bring out a red herring and ask if Canada is going to change the Canada Labour (Standards) Code. That is a hypothetical question. That is way off in the future. Some
January 21, 1985

dreamer opposite thinks that because we change something dealing with foreign investment, we will do away with child labour laws in this country. That is ridiculous and it is a red herring which the Liberal-NDP coalition have always tried to throw up.


Mr. Boudria:: They are your friends, not ours.


Paul Wyatt Dick: This Party ran on a platform to put people back to work and when we do so we find the New Democratic Party criticizing us, saying we are going to cut out jobs. Those Hon. Members were the ones who supported the Liberals in minority governments. They were the ones, along with the Liberals, who brought down the Conservative Government in 1979. It is that coalition which has brought about unemployment and driven investment out of this country. That is what our Party wants to change and that is, obviously, what the Canadian people want to change.


Derek Nigel Ernest Blackburn: You had better begin by changing Reagan.


Paul Wyatt Dick: We want to change the name from the Foreign Investment Review Agency to something which is more positive, such as Investment Canada. If those Hon. Members would read the Bill they would note that Part IV deals with reviews and Part III deals with notifications. We are not wiping this out entirely because no one in their right mind is going to let everybody come in. We are still providing a review mechanism for consideration of any massive takeovers or expansions in this country.
The Hon. Member for Algoma said that under the Liberal administration, supported by the little pink rump from out west, 92 per cent of the applications were approved. Then the law was changed in 1982 and 97 per cent were approved. If one is going to have a rubber stamp, then why not put something positive into it? Why not change it a little so that there is the same approval rate but it encourages people to come into this country rather than being always negative, as the New Democratic and Liberal Parties always are when it comes to dealing with unemployment and investment in this country.
Yes, there are problems and we must consider them. We must have a review and must know what foreign ownership there is in this country. The Americans do it. Just last month I noted that a Canadian who bought some land in Mississippi has now been ordered by the courts to turn it over because foreigners are not allowed to own land. When the Canadian Development Corporation was trying to buy out the Kidd Creek mine owned by Texas Gulf, it ended up in a long series of court battles in Texas where it was illegal for a foreign country to buy up control of a Texas corporation. It was only through protracted negotiations and after some switching of assets that Canadians got control of the Kidd Creek mine, but the deal was held up by American laws. There are laws in the United States midwest against the ownership of oil and gas lands and farming lands.


Derek Nigel Ernest Blackburn: And radio stations and TV stations.
Investment Canada Act


Paul Wyatt Dick: The Americans are not the only ones. An American cannot buy a radio or TV station in this country. I do not mind that. The Americans are protecting their interests and we are protecting ours. But we should be aware of these things. I agree that there must be a review and that there should be notification, and this Act respecting investment in Canada provides for those very things so we will be aware.
I would like to point out that there has been a steady increase in unemployment in this country since the 1972-1974 era, since we brought in the Foreign Investment Review Act. That may not be the only reason.


Nelson Andrew Riis: You are right.


Paul Wyatt Dick: Remember, it was the New Democratic Party which gave us that Government in 1974 and in 1980. The NDP, in supporting the Liberals, gave us the Government which created that atmosphere. It may be an intangible. We cannot predict exactly how many jobs will be created this month or this year, but we know that if we create a better atmosphere, a more co-operative atmosphere, people will invest in Canada. We want Canadians to keep their money here. We want to get back that $68 billion which flowed out of Canada in the last eight years. If we had kept that money here instead of creating jobs in other lands, principally in the United States-Florida, it seems-we would be much better off.


The Acting Speaker (Mr. Paproski):: Order.


Paul Wyatt Dick: I am sorry my time has run out, Mr. Speaker, but I hope the New Democratic Party and the Liberals will start acting positively and talk about creating jobs rather than supporting unemployment.


The Acting Speaker (Mr. Paproski):: I am sorry, the Hon. Member's time has expired. I trust everyone rested well over the holidays. I recognize the Hon. Member for Kamloops-Shuswap (Mr. Riis).


Nelson Andrew Riis: Mr. Speaker, in response to the last speaker, I will say that we will have something positive to say. One of the most positive things we are going to say is that this Bill should be hoisted for the next six months. This Bill, an Act respecting investment in Canada, should be renamed, Mr. Speaker. It should really be called "an Act to sell out Canada". It could be called "an Act to give more control over the future of our children to foreigners".


Paul Wyatt Dick: Let's get them to work. Let's get them off unemployment.


Nelson Andrew Riis: If this were the United States of America, and if this were Congress, the galleries would be packed today. People would be standing and fighting for their own country, not fighting to find some way to give their country away to foreign citizens.


Paul Wyatt Dick: They want jobs.

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Nelson Andrew Riis: Then let us get them working, Mr. Speaker. I would like to ask the Elon. Member opposite, who is doing all the responding-I won't say "yelling"-to tell us where research and development is going to take place in the country. It is going to take place in a branch plant of a foreign company or it is going to take place back home where the parent company sits? The facts are perfectly clear, Mr. Speaker: the research and development takes place in the parent company's headquarters, not in a foreign branch plant.
If this were Congress today and Congress was told that 30 per cent of all non-financial institutions in the U.S. were owned or controlled by foreign interests, there would be panic. It is only 3 per cent there but what do we find before Congress today? There are Bills being presented to almost every economic committee of Congress to protect American enterprises at home because 3 per cent of all non-financial institutions are foreign-controlled. But here the percentage is 30 per cent. In the manufacturing sector it is 48 per cent. In mining it is 40 per cent. The oil and gas industry, one of the most critical resource sectors in our country, is 65 per cent foreign controlled. This means that the Government of Canada is saying that it wants the economic future of our sons and daughters, our grandchildren, nieces and nephews, to be determined in Hong Kong, Tokyo, Frankfurt and other cities in foreign countries.


Mr. King:: You know better than that.


Nelson Andrew Riis: I do not know better than that! Let the Hon. Member stand in his place and prove that the economic future of his grandchildren, and I assume he has grandchildren, is not being determined by businessmen from Hong Kong, Japan or the U.S. It is certainly not being determined by Canadians. No other industrialized nation in the world is faced with the percentage of foreign control that I have just quoted. No other industrialized nation would tolerate for a moment that amount of foreign control. But not only do we accept it, the Government of Canada says we want more. Can you believe it, Mr. Speaker? The Government of Canada is saying that we want more foreign investment, more foreign control of our economy, that we want to have more research and development done outside of this country.
It is time we started looking at what this Bill really represents. It means that research and development is going to move out of our country. As foreign control of our economy increases, research and development is done in the country of the parent company. This will result in an exodus of jobs. Many of these branch plants are here to serve the Canadian market only. Not long ago the President of Bell & Howell said this to Canadians: "You have to understand our mandate here in Canada. Bell & Howell has been established here since 1954 with the prime objective of selling its products to the Canadian market without the intention to export to other markets, as our parent company has arrangements for export to Europe and the rest of the world".
One of the critical challenges facing Canadian industry today, Mr. Speaker, is to identify, explore and develop new foreign markets. Yet the President of Bell & Howell says that they are here for the sole purpose of not doing that. A branch plant in Canada is not encouraged, it does not have the mandate, to go out and open up new export opportunities. Why are manufacturers not exploring overseas markets? Why are out resource companies not exploring more overseas markets? Because they are here to develop the Canadian market only.
Consider what that means to the development of a sourcing-in-Canada policy. One of the strongest policies in the United States is the "Buy American" policy. Buy American first. What is our policy in this country as a result of this Bill? It is to buy foreign products as much as possible. It is only natural that foreign branch plants in this country will do their sourcing back home; it is financially to their benefit to do so. Wherever possible they will source their component parts with their parent company or other branch plants. What does that mean for competing Canadian firms? It means that sourcing from Canadian sources as a priority is being put on the back burner. Source foreign is essentially what the Government is saying to the people of Canada.
The best or most recent example I can think of concerning what foreign control means is when the Soviets were building a major pipeline through central Europe and a number of companies operating in Canada said that they could not participate in that project because their American parent companies were prohibited by law from doing so.


Mr. McDermid:: We introduced a law to change that.


Nelson Andrew Riis: There was a law in the United States called the Trading with the Enemy Act. The name has been changed in the last little while but it is to the effect that American branch plants cannot trade with countries we trade with, Mr. Speaker. Cuba is an example. I ask the members of the Government opposite, what does this mean for Canada's economy when so much of it is controlled by foreigners? In some sectors it is 90 per cent, in some it goes as high as 99 per cent controlled by outside foreign interests. What does this mean when those branch plants make profits? Where do the profits go? Are they inevitably invested back here in Canada? Sometimes they are but more often than not it is only natural that they go back to the parent company.
By having Bill C-15 before us today, Mr. Speaker, we are suggesting that we want more money to be drained out of Canada through remission of profits and dividends to other countries. That money should stay here and be invested. So I ask those people opposite to consider that this Bill will result in less research and development and unfair competition for Canadian-owned firms. It will result in profits and dividends being moved out of the country. It will not encourage the development of new markets overseas. Why are we doing this? The Gray report of the 1960s and the Watkins report of the 1970s pointed out in hundreds of pages why we should not be progressing with this Bill today. Have Members opposite read
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those reports? If they had, I could not imagine how they could have the courage to speak in favour of Bill C-15, an Act to sell out Canada. I do not understand why Members opposite would be continuing this debate when we should be moving on the amendment right now to hoist this Bill for six months in the hope that economic and financial sanity would once again return to the benches of the Government.


Mr. Roland de Corneille (Eglinton-Lawrence):: Mr. Speaker, Bill C-15, entitled the Investment Canada Act, which we are debating today, is just about the only Bill that the Conservative Government has offered us on the Order Paper that is not a Bill the previous Liberal Government proposed and tried to get the Tories to pass. Now the Tories want the House to pass the Bills proposed last year by the Liberals which they opposed or dragged their feet on. Bill C-15 is merely the first offering by the Tories, made by Tories and designed for Tories.
While this Bill will be debated now, when it is put into the context of the problems that face Canadians in 1985, it is tragic to think that despite the need for a constructive program to put more than a million people back to work, despite the need for us to be able to provide jobs this summer for a very large number of young people, despite the urgent need for us to try to salvage our ecology and prevent the horrors of acid rain, despite the economic and fiscal problems we have, the best the Tories can offer us nearly five months after being elected to office is only one new Bill that was not designed by the previous Liberal Government; that is, Bill C-15. Five months!
For a Tory Government that said it was going to create tens of thousands of jobs and rejuvenate this country, we see precious little that has happened over this time. Again we are seeing that "Tory times are tough times". This is because it is a do-nothing government. Tories can tell you what is wrong with almost anything, but given power they cannot do a thing that is right.
Unfortunately, that is also the case with Bill C-15, the offering we have today. One of the most valuable contributions of this Bill, and perhaps its only one, is its title, "Investment Canada". If the object of the exercise is to get more foreign investment in Canada, the title of the Bill is probably a good public relations move. This proposed new title sounds more streamlined than the present title, "Foreign Investment Review Act", or FIR A. If our objective is to simply increase the number of foreign dollars invested in Canada, a sleazy name-change might help.
The reason that FIRA was introduced in the first place was not to discourage foreign investment in Canada, but rather to ensure that foreign investments would be made in such a way as to provide some significant benefit to Canada, in contradistinction to investments that could or would weaken Canadian companies, enfeeble Canadian ability to compete, destroy Canadian jobs, defer or prevent growth of Canadian research and development and so on. We looked at our own house in
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Canada and saw that the percentage of foreign ownership in some key areas of our resource industry was out of balance. Canadians agreed with this, the polls showed it, and the Government received the support of the people. Canadians everywhere agreed, and they agree now, that just as the United States has entire sectors of its economy off limits for foreign control, such as shipping, the aircraft industry, air transport, broadcasting, defence production and on and on, we in Canada believe that it is in our interest, just as it is for any other sovereign nation, to have limits on the degree of foreign control of our key industries. Canadians agreed that we had a right, as does every other sovereign nation on earth, to fully share in the benefits of our own resources.
FIRA was not introduced to discourage foreign investment in Canada, but it was an honest title which proclaimed what Canadians wanted to have and wanted to say to the world. It said that Canada is open for business but is not up for sale. Canada's businesses and resources are not to be sacked, gutted, or sold out at cheap, firesale prices.
On December 11, 1984, with the introductory words of the Minister of Regional Industrial Expansion (Mr. Stevens) on the Investment Canada Bill, he set out to dismantle the progress we have made in this country to place our country under the control of Canadian entrepreneurs and workers. This Tory Minister is trying to reverse the process of asserting our right to exploit our own resources to our own benefit and to keep the advantages we gain from the inventiveness of our own scientists and researchers. He is undermining the great strides which the last Government made to affirm our own Canadian way of life and to proclaim our sovereignty.
The Minister says he is going to wipe out the Foreign Investment Review Agency and replace it with something called "Investment Canada". Under this name the new organization is supposed to do the same kind of screening of investments FIRA did, with the big exception that the holes in the screens will be so big that many or most of the businesses of Canada will not be shielded or protected from raids by foreign investors who can come and buy them up and eviscerate them. It will only register the intentions of those who will invest over $5 million directly or $50 million indirectly. The screen which the former Government put up, ponderous though some may think it was, protected the jobs of Canadians because any large investments or takeovers under the Liberal FIRA management had to show that they were for the benefit of Canadians. If 11 per cent of the foreign investors were discouraged by FIRA, which is what the evidence seems to indicate, that is a small enough price to pay to save jobs for Canadians, our resources and research.
Other countries take stringent steps to wall out foreign competition and products. In the United States, that great paragon of conservative free enterprise, there is enterprise but it is not free, at least not to all. A recent study by the Brooking Institute shows that 35 per cent of American manufactured goods are protected by quotas and "buy American" rules and other non-tariff restrictions, and that this protection has gone up, not down, by 15 per cent in the last three years under

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Reagan rule. While our boy scouts in the Tory Government do their good deed for the United States and open the door to American and other foreign investors, they have the door slammed in their face by United States protectionism mechanisms.
This Tory Government is not just bad, Mr. Speaker, it appears to be a disaster. The reason American or any other foreign investors will invest in Canada is certainly not because we might change the name from the Foreign Investment Review Act to the Investment Canada Act-from FIRA to ICA. The reason investors will invest in Canada is that they believe this country is a good place to invest their money to earn profits and have equity value gains. It will be because of security and profits, not because of the name change or because they must fill out fewer forms. It is because money can be earned in Canada and because this is a safe country with a stable Government. It is a stable country in which to live, operate and invest. That is the reason people will invest. No superficial changes or attempts to sell out this country are going to attract American or other investors. Investment is made because there is an honest dollar to be earned by honest investment in this country.
Despite the nonsensical, misleading assertions and statistics of the Tories before, during and since the election, the amount of foreign investment, direct or by portfolio investment on new issues, is very considerable indeed. Foreigners invest in this country because we have a stable and good country and a good climate for investment. Thank you for allowing me this time, Mr. Speaker.


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, on this first day back, given the new adornment which I sport, I thought I might rise and say a word or two to get out of the way all of the barracking and hooting that I will have to put up with.
I do not want to make a speech about this so much today as just to share some views that I have about the move that the Government is taking and to try to juxtapose those views with what is happening in Washington at the moment. I said some time ago, on behalf of my colleagues in this Party, that we were vitally concerned about the potential for economic disaster that exists if a country does not have any way of making some determinations about what kind of investment, development and job opportunities will be developed within its own borders. It is equally important to be able to decide when and under what circumstances it is appropriate for foreigners to be involved in investment within our country.
Quite frequently one hears people who are on the conservative side of the argument-not necessarily the Conservative side of the House because I include a number of Liberals in that conservative argument-making the point that Canada does not require any review procedure with regard to investment because American investors will do what is in the best interest of the business community which, by its very nature, is in the best interest of the country. Frankly, there are so many
errors in that belief that it would be impossible to name them all in the short time that is available today.
Let me say that I have never believed that the Foreign Investment Review Agency as we have known it pursued the job that it was given with the kind of intensity that I would have liked. Although that agency did extract commitments about jobs, research and development and the manner in which investors in Canada operated, it really did very little to follow that up and insist that those investors did in fact fulfil their commitments.
All that aside, at least it was a window on investment and gave us a sense of what was happening with respect to foreign investors and how they were performing compared to domestic employers and domestic corporations that were operating within the same general economic area. Therefore, that agency was valuable in that respect because the reports of FIRA could allow one to determine who was buying what, how much was being accumulated and what sectors of the economy were of interest to certain kinds of investors. It was valuable because outside investment must go through a procedure which made such investment public. It also afforded Canadians a vehicle with which to say no if that was the most appropriate action. I believe the Government's present action will eliminate those very useful exercises.
What I Find most distressing about this is that when the Government is eliminating FIRA, American investors who are talking about their domestic economy are advising the U.S. Government that it should be restricting Canada's entry into the United States if not by way of investment, certainly by way of sale of products.
Hearings have been held in Washington during the past week which are directly related to the question of free trade, sectoral or otherwise. Those hearings are aimed at deciding what the business community in the United States believes is best for it. I was somewhat surprised to read in the paper that a significant number of those appearing at those hearings are suggesting to the U.S. Congress that it ought not to give in to Canada's request for sectoral free trade.
I know that you had a particular interest in this matter before you were elevated to your lofty position, Mr. Speaker. When these matters came before the House of Commons in the past, it always appeared as though Canada was responding to questions that were posed from the White House with respect to opening up the trade barriers and making it easier for a free flow of trade between the two countries. While the message that was given in Canada by the former Trade Minister or the present Trade Minister was that the United States had initiated these discussions, it appears that the reverse was being said in the United States. United States manufacturers, industrialists and investors who were concerned about the U.S. economy were being told that it was Canadians who were trying to initiate the opening up of the trade lines, reduction of trade barriers and the introduction of sectoral if not total free trade.
I suggest we should wait for the results of the hearings before the Congress in Washington and the eventual negotia-
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tions that will presumably take place between Canada and the United States before the Government dismantles and eliminates those agencies which protect Canada from an unnecessary, perhaps unwanted or perhaps unfettered investment in areas where we may not want that investment.
I believe we should have an agency which we can use to screen new investment. This is necessary in order to make some accurate assessments about the effectiveness of the entire free trade initiative. Such a free trade arrangement may totally eliminate the incentive of American investors to invest in Canada. They may have considered investing in Canada regardless of free trade but as a result of the elimination of those barriers they would no longer be required to invest in Canada because their production for the Canadian market could simply made up by the end run of their production which is unused by the parent operation in the United States. Without the appropriate monitoring agency with regard to free trade arrangements, there will be no means of assessing the effectiveness or impact of those free trade arrangements on investment in Canada.
The Government wants to proceed with this Bill in the belief that it was one of its major planks in its election platform. However, until there is a clearer picture of what will happen in the negotiations over the question of free or sectoral trade with the United States and their impact not only on the United States and Canada but on the balance of our trading partners, I suggest that the Government postpone this measure for now.


Mr. Lawrence I. O'Neil (Cape Breton Highlands-Canso):: Mr. Speaker, let me begin by wishing a happy new year to all Members of the House. I would add that 1985 will be a better year as a result of what happened on September 4.
This debate on Bill C-15 is particularly opportune for me as a Member of Parliament from Nova Scotia. Just on Friday an international corporation announced plans to build a major facility in Nova Scotia. This announcement calls for the investment of millions of dollars and the creation of hundreds of jobs for Nova Scotians. I represent the Cape Breton Highlands-Canso constituency in northeastern Nova Scotia.
This corporation will put unemployed Nova Scotians back to work. Nova Scotians call my office as well as the offices of many other Government officials. They are not concerned about whether the corporation is foreign. People want a cheque at the end of the week. People want to be able to pay their bills in the same way that Members of this House pay them. People of Cape Breton have been denied this opportunity for months and in many cases for years.
I want to congratulate the Government of Nova Scotia, Premier Buchanan and his Minister of Development for the aggressive manner in which they sought the investment the people of Nova Scotia so dearly want. This corporation is co-operating in an admirable manner with the Government of Nova Scotia to develop training programs so that untrained
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Nova Scotians who want to work can be put to work and will gain training as a result.
Foreign investment means jobs. It means there is an opportunity for young, bright and energetic Canadians to become productive members in our economy. We in this Party strongly support that kind of investment. This is not a debate about ideology; the question here is unemployment, Mr. Speaker.


Some Hon. Members:: Hear, hear!


Lawrence I. O'Neil: In our area of chronic unemployment I know full well the social costs that have been paid for the ideological pursuits of the previous Government.
This debate is also about our need for capital. Unemployed Canadians and their families are continuing to pay the price for the blind nationalism of the previous Government. The people of Cape Breton want jobs. They want foreign investment if that means jobs. My constituents and constituents in other parts of Cape Breton have the most to gain from legislation of this nature. Yes, in the past we have paid the highest price for the policies of the previous Government.
In 1974 when FIRA was introduced unemployment was far lower than it is today. The people of Cape Breton Highlands-Canso have waited a decade for the rush of Canadian investment promised in the early 1970s. They have paid the price dearly. They have endured years of hardship. They have suffered the social consequences of unemployment. Yes, Mr. Speaker, the people I represent decided they have paid enough. On September 4, 1984 they opted for change, the change which this Government represents.
What about our future? Canada needs $100 billion in new equity investment between now and 1991. If the existing legislation is not altered, we will experience a serious shortfall in our capital needs. Canada was recently ranked last among 22 countries with respect to its receptiveness to foreign investment. That reputation is another legacy of FIRA, a legacy which meant lost opportunities for Canadians. Our Party campaigned on a commitment calling for more investment. Our Government has moved quickly to honour this commitment.
The Prime Minister (Mr. Mulroney) has invited nonCanadian investors to Canada. Our Prime Minister has expressed the strongest possible support for Canadian investment. We are committed to creating an atmosphere in Canada so that Canadians will invest at home and their money will go to work for the benefit of all Canadians. Surely this Government need not apologize for that. Surely this Government is not expected to apologize for its determination to assist the needy, or for its determination to put employment ahead of ideology.
The Bill under discussion is known as the Investment Canada Bill. The effect of this Bill is to replace FIRA with a new agency, namely, Investment Canada. This agency's mandate will be to encourage and facilitate investment. It is the kind of investment that creates jobs, introduces innovative ideas and technologies. Clearly Canada's reputation as a place

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to invest must be improved. This legislation changes the name and mandate of F1RA. In doing so it goes a long way toward improving Canada's reputation. It is a clear statement to Canadians and non-Canadians alike that we want to increase investment and to stimulate trade and industrial development.
Major acquisitions by non-Canadians will still be assessed on the basis of their net benefit to the economy, but that process will be greatly altered. The new process will be simpler and faster. For example, almost all investments to establish new businesses in Canada will be eliminated from review. This Bill eliminates from review most acquisitions of businesses in Canada by non-Canadians except for major acquisitions that can have an important impact on the economic, industrial or cultural interests of Canada. This Bill provides authority to review smaller acquisitions and the establishment of new businesses in culturally sensitive areas, such as book publishing, film production and distribution. This Bill recognizes the difference between acquisitions of businesses in Canada where the majority of assets in the transaction are located in Canada and those where the Canadian assets are only part of a larger transaction which occurs outside of Canada. This Bill ensures speedy decisions on proposals that require review by establishing firm deadlines through simplifying the decision-making process and providing advance consultation to potential investors.
I might add, Mr. Speaker, that during the course of this debate Members of the Opposition have stood to speak on FIRA and have said in its defence that it really has not discouraged foreign investment. Then they go on to give a litany of reasons why we should be against foreign investment. That is the paradox of their position. Having recognized that foreign investment can and will create the jobs which this country needs, recognizing that Canadians want to work and have a balanced view of this problem, we in this Party and our Government are moving to attract new jobs to Canada. The people of Cape Breton Highlands-Canso look forward to foreign investment and to jobs for themselves and for their families. They would prefer that Canadians invest, and they have invited Canadians to do so for decades. Surely we should not be asked to endure more decades of economic underdevelopment with its accompanying social costs.


Mr. George Henderson (Egmont):: Mr. Speaker, I am pleased to speak to Bill C-15, the Investment Canada Act. Some people in the House of Commons may wonder why I, coming from Prince Edward Island, would be overly concerned about changing the name of FIRA to Investment Canada.
In Atlantic Canada FIRA itself did not have a major impact. It certainly did not have the major impact on Prince Edward Island that it have on many of the other provinces. If we were to look at the figures for investment in the Atlantic region over the last ten years, Atlantic Canada only accounted for 3 per cent of acquisitions and 5 per cent of new businesses. That is not to say this proposed Investment Canada Bill will not change the effect that foreign investment will have on the Atlantic provinces.
Foreign investment is needed in Canada for reasons of development and job creation. It was needed historically for regional development and contributes to the present regional and over-all development of Canadian resources. In the late 1800s and the early 1900s foreign investment was necessary for the building of our transportation system. Foreign capital was needed to complete it. Capital at that time usually came in the form of portfolio investments which left control of Canadian enterprises in Canadian hands.
Today we find a bit of a different situation. Investment today is direct, with the ownership of most of Canada's major companies no longer in Canadian hands. We do not want to discourage investment in Canada, but we should all be trying to increase the level of Canadian ownership in Canadian companies. Of course, Canadian ownership ensures that the best interests of Canadians are being observed. A balance between investment and ownership can be reached. Canada has bountiful resources. There are many opportunities for successful investment by making use of those resources. However, it is equally important that Canadians maintain control over their resources, especially those resources based upon our primary industries, such as agriculture, fishing, forestry and mining. It is important for the future of those industries and for the maintenance of a competitive role for Canada in the international market-place.
I should like to look at some of the changes from FIRA to Investment Canada. One of the most notable is that responsibility will be taken away from Cabinet in the final decision of reviewing applications. No longer will there be regional representation that can determine what is best for the regional interests of Canada. In other words, the Minister responsible for Investment Canada can basically make that decision on his own. That troubles me as a Member of Parliament from Atlantic Canada, certainly from Prince Edward Island. I am not sure whether the Minister understands entirely what Atlantic Canada is all about.
We would have to take a look at some of the statements of that Minister in the last number of years. First, he has not been a great proponent of job creation in the context we in Atlantic Canada know. Our area is a very depressed one. It relies very heavily on job creation. It does not have the heavy industrial base which exists in some parts of our great country, specifically in central Canada. We are dependent upon our basic traditional resources-agriculture, fishing and mining.
The debate thus far has been mainly centred on south of the border, on what happens with investment between the United States and Canada. Most of the speeches were concentrated on American investment. There is another investment opportunity which was used in the past and will likely be used in the future, that is, European investment. I do not know whether the Minister and the Government have fully thought out exactly what could happen under the Investment Canada Act in the fishing industry if it is not carefully scrutinized. The Minister responsible has stated, for example, that Fishery
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Products International, that Crown corporation or that investment of the Government of Canada, is up for sale if there are buyers. The Hon. Member for St. John's East (Mr. McGrath) said that we have about as much chance of selling that company as putting a man on the moon. I sort of agree with him at this time. Most of those companies have fishery quotas. It would be very easy for any foreign investor who is a competitor to buy up the assets of some large companies and make them inactive for certain periods of time. Naturally one is in business to make a profit; there is nothing wrong with that. We may well be looking at the closure of many plants, displacing or putting out of work thousands of people in Atlantic Canada. That is a very genuine concern in terms of a foreign takeover, especially as it relates to the fishing industry.
Let us take another look at agriculture, in particular the processing of potato products. If the situation in the United States or in another country was such that it might want to eliminate competition, a corporation could come into this country and buy up some of the potato processing plants and perhaps put them on the back burner. Just as we are asking for this piece of legislation to be put on the back burner for further study, they could be put on the back burner until such time as new markets are gained for a specific corporation, thus eliminating any such previous markets held by firms such as McCain or Cavendish Farms. I am not very clear about the answers to those questions. Some of these things could conceivably happen. If they happen, they would certainly be to the detriment of Canadians. I am concerned about those matters.
Let us look at the World Court decision which gave Canada control over a very rich part of the Georges Bank. This should be of great benefit to Canadian fishermen. However, the United States International Trade Commission issued a report indicating that Canadian fish imports to the U.S. allowed an unfair advantage to Canadian fishermen who received such benefits as market assistance and vessel subsidies from the Canadian Government. In essence, the commission has supported the contention of American fishermen that Canadians are dumping fish on the American market. There is a threat that this will result in countervailing duties on Canadian fish entering the U.S. market.
We have to look carefully at any new idea of Investment Canada. Perhaps the name change is all right, but the content scares me and many Members on this side of the House. More time is needed by the Government. Sometimes it is nice to rush through legislation. We sat on that side of the House. Some of * us understand that Ministers like to get through new legislation. Only legislation which benefits all Canadians is good legislation. This is why sometimes what we do in haste may be to the detriment of certain areas of the country.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, I appreciate the opportunity to speak in this debate today. The Minister, the Hon. Member for Lanark-Renfrew-Carleton (Mr. Dick) and the Hon. Member for Cape Breton Highlands-Canso (Mr. O'Neil) have implied that the debate today was about the future of employment in Canada. Nothing could be further from the truth because what we are debating today is
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foreign control of the industry of Canada. We are debating whether or not Canada should be concerned about foreign control of its industry. We are debating whether or not there should be a review procedure in place for the control of money coming in and possibly even money going out. We are also debating the effect of an increase of foreign control of our economy on Canadian entrepreneurship. Those are the matters we are debating today.
We know there is a need for jobs and that jobs can be made available by the development of industries and by the development of the economy. But who should do it? That is what we are debating, not whether the jobs are necessary. We are debating whether the method being established by the Government is the proper one to deal with the problem.
This Bill will sell out Canada. It will turn the industrial estates across Canada into foreign enclaves. We already face a branch plant structure in Canada. This will be the common standard for Canada. Eventually there will be so little production by Canadian firms that it will reduce the amount of possible exports.
At present, 51 per cent of Canadian manufacturing is foreign controlled. Foreign interests control 98 per cent of the rubber industry in Canada, 51 per cent of agricultural machinery production, 92 per cent of transportation equipment, 70 per cent of electrical apparatus, 71 per cent of the chemicals and 52 per cent of the small miscellaneous items purchased in the store. Many of those items can be produced by Canadian entrepreneurs. The Government, through this Bill, is suggesting that the production not be done by Canadians but by foreigners.
What is the effect of 55 per cent or more foreign control, such as we have in Canada? As my colleague stated previously, Canada is the only country with this kind of foreign ownership. In 1982 foreign control of industry in Sweden increased from 7 per cent to 7.2 per cent. What did the Swedes do? They immediately put in place controls to disallow the increase of foreign development in that country. The increase in foreign investment in Sweden was curtailed immediately. They were worried when foreign control of their industry went above 7 per cent. We are not worried that it is over 50 per cent in Canada. In fact, we are offering the sale of Canada in order that we will have a larger portion of our economy foreign owned.
What happens when there is foreign investment in a country?


Mr. Shields:: Jobs.


Stanley J. Hovdebo: I am glad the Hon. Member said that. Just before this past Christmas, Black & Decker took over a plant in Barrie. In the process of that plant being closed, the Town of Barrie lost 600 jobs. That is what foreign ownership can do.
Why would a company allow a Canadian branch plant to compete with the parent plant? If the American parent plant is

January 21, 1985
Investment Canada Act
having a problem getting rid of its goods, will it let the Canadian branch plant produce and compete with the parent? There is no way they would allow that. The first plant to go would be the branch plant in Canada. This Government now wants to increase that kind of ownership.
First we have the loss of jobs. Not every takeover creates jobs. A large part of foreign investment has been and will continue to be for the purpose of taking over plants and companies in Canada. Following a takeover, the logical procedure is to allow the plant to operate for a while. When it starts to compete with the parent company, it is shut down.
We believe this Bill should be hoisted and looked at again before it is passed. We do not want the amount of money that is presently flowing into the United States to be increased. The statistics which I have, and they are more than a year old, indicate that $2 million per hour flows from Canada into the United States. That $2 million per hour is in the form of interest on bonds, interest on investments, research and development and profits to companies operating in Canada. If that amount continues to increase, eventually all of the profits, all of the research and development and our hope of getting control of our economy will have gone to the multinational corporations, most of which are controlled by the United States.
We have a real difference in priorities. This Government has prided itself on the private sector, small business being the engine of the economy. This Bill is forcing small entrepreneurs who want to produce a given item to compete against the large multinationals, with the kind of backing the large multinationals have. Instead of protecting the small entrepreneur, this Government makes him compete with the large multinational. In fact, the large multinationals are invited to come here and either take over an existing operation or set up a plant in competition to it. That is an example of lack of planning and lack of recognition by this Government. This is what will happen if this country is left open to unlimited development or control by foreign investment.


The Acting Speaker (Mr. Paproski):: Order, please. The Hon. Member for Hamilton East.


Ms. Copps:: Mr. Speaker, may I call it one o'clock?


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mrs. Lucie Pepin (Outremont):: Mr. Speaker, since the Minister of Finance (Mr. Wilson) made his economic statement, many groups, especially in the arts and the cultural sphere, have advised me of their concerns. The budgetary cutbacks planned in connection with federal cultural programs are quite alarming. The cuts of $75 million at the CBC, $3.5 million at the Canada Council and $1.5 million at the National Film Board, to mention only a few, will have a very detrimental effect on Canada's cultural development.
We must not forget that cultural activities constitute an industry in themselves. The main parties concerned have every reason to be alarmed, and I would therefore urge the Minister of Finance to reconsider his proposals, as the cutbacks will have a disastrous impact on one of the most dynamic sectors of our economy.



TRANSPORT


Mr. Fernand Ladouceur (Labelle):: Mr. Speaker, today I would like to discuss a matter that gave rise to considerable comment in 1981 in the regional press and created much bitterness among my constituents, the people of Labelle.
Mr. Speaker, I am referring to the unilateral decision by VIA Rail to eliminate passenger rail services in Labelle because they were no longer considered a viable proposition by the authorities at the time. The decision was never reconsidered by the former Minister of Transport and was made without consideration for the wishes of the public.
Mr. Speaker, this cut in passenger rail service-I am referring to the "P'tit train du Nord"-and, more recently, the application made by CP Rail for permission to drop its freight service, all this has had and will continue to have serious consequences, including the adverse effect on our local tourist industry and on local economic development at the corporate level and among small-and medium-sized businesses, and discouraging projects by local businessmen.
That is why I would like to draw the attention of the House today, to the excellent work being done by the present Minister of Transport who has ordered a six-month study of the potential of small branch lines in terms of local transportation services provided by the private sector. As you know, Mr. Speaker, because the territory is so vast, transportation in the
January 21, 1985

riding of Labelle is by road only, which, for all practical purposes, has created a monopoly situation with respect to transportation for the travelling public, and any situation .. .


Mr. Speaker:: I am sorry, but the Hon. Member's time has expired. The Hon. Member for Humboldt-Lake Centre (Mr. Althouse).



AGRICULTURE


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, as the Parliament of Canada resumes, I want to draw attention to the continuing and worsening financial crisis facing Canadian farmers. Low farm incomes have continued over the last decade. Net farm incomes are now almost identical to those of 10 years ago. It costs almost three times as much to live today as it did in 1974, but Canada's farmers are being told that they will have to adapt to a much reduced real net income.
When confronted with the facts, the Government speaks of harsh realities and of how many of the existing farmers should not remain in business, or it says that when the market is working there must be failures. With these glib ideological statements, the Government ignores the facts.
Who is being forced out of farming? It is the so-called technologically superior producers who are being forced into bankruptcy. It is the most productive farmers who are in the younger age groups who are being forced out. These farmers made the apparently unforgiveable error of attempting to upgrade their productive capabilities.
The special needs of beginning farmers are being ignored by the Government as it recycles the old policies of the previous Government. It offers only minor respite from high interest rates. It will allow higher-cost loans to be rescheduled, but at 13'/4 per cent. This is happening in an industry that has shown an ability to generate a return of only 3 per cent to 4 per cent.
There may be some hope, Mr. Speaker. The Government now seems to be talking about a rent-back provision reminiscent of the Saskatchewan land bank scheme. Will the new Government ignore its philosophical rhetoric and actually-


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



HAPPY NEW YEAR GREETING

Mr. Gordon Taylor (Bow River):: Mr. Speaker, Happy New Year! What? With a $200 billion debt, over one million people unemployed, a deficit of $37 billion and our treasury empty and, I am saying "Happy New Year"?
Yes! We have tremendous untouched natural resources; the finest soil in the world; an abundance of livestock, manufacturing, industrial and transportation potential which is probably greater than that of any other country; a skilled and energetic people, including thousands of youths who are able to train for any technical job in the world; universities of high standards; oceans and rivers loaded with fish; entrepreneurs large and small who are ready to invest and go to work; teeming cities; beautiful contrysides; clean air and clean water. Indeed, we have an abundance of everything that is needed for a worthwhile, good, and healthy life.
We have a great country, and a new Government that is determined to hold Canada together through fair and honest dealings by providing an opportunity to management and workers to increase productivity. Productivity is the bottom line when dealing with paying off our debts and helping all those who need help.
King George VI brought hope to the free world when it was facing annihilation by quoting a poem by Haskins, which reads as follows:
And I said to the man who stood at the gate of the year: Give me a light that I may tread safely into the unknown!
And he replied: Go out into the darkness and put thine hand into the hand of God. That shall be to thee better than light and safer than a known way.
So Happy New Year, Canada!



NATIONAL PARKS


Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, on November 9, 1984, the Government of Canada announced that the restoration of one of Canada's most visited historical sites, the Halifax Citadel, has been cancelled, and that the completion of capital projects at the Fortress of Louisbourg has also been frozen. As all Members are aware, the Halifax Citadel is one of the last surviving examples in North America of a bastioned fortification. It incorporates the past, and presents it to its visitors. It conveys the feeling of history to all who visit this site. It provides us with culture and helps explain why we have two great official languages, English and French.
The Citadel is scheduled to be completed in the 1988-89 fiscal year and, if left uncompleted, will end up as an eyesore and disgrace not only to the people of Halifax but to Parks Canada personnel as well. The cost in closing out this project is substantial because of the required mothballing of equipment, severance pay, loss of employment, and the potential loss of tourist dollars.
The freeze on capital projects at the Fortress of Louisbourg, which I might add is the jewel of Parks Canada, will stall major maintenance to exterior details of some of the buildings which require installation of period shelters and storm windows to protect the buildings during the winter season. 1 urge that the Minister responsible for Parks Canada, and the

January 21, 1985
Minister responsible for the Province of Nova Scotia, take this matter up immediately and reverse this very regressive action.



THE ECONOMY


Mrs. Mary Collins (Capilano):: Mr. Speaker, I wish to bring to the attention of the House a question which is on the minds of so many Canadians as they start the new year, the question of confidence. During the past month all Members have met and talked with fellow Canadians across the country, gauged their mood, and discussed their expectations. In my own case I spoke to many of the people of Capilano, including retailers, students, homemakers, and leaders in the business community. The message they asked me to convey to this House deals with the necessity to build and substantiate the growing sense of confidence which they have felt since the new Government took office.
From many people, I heard: "We are getting ready to make new investments; we are thinking about expanding our activities. Customers are calling and we are on the brink of creating new jobs and of expanding our trade potential. However, what we need from you is an assurance of continuity. We like what we have heard. Provide us with more, and show that you are truly serious about your faith in the private sector and the ability of the Canadian entrepreneur".
As we embark upon our duties for 1985 we must realize jointly that, no matter what Party we represent, we have a responsibility to our fellow Canadians who are seeking work, and to those who are seeking hope and opportunity. We have a responsibility to conduct ourselves in ways which will raise the level of respect for Parliament, and we have a responsibility to debate and put in place-


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



NUCLEAR ARMAMENTS


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, I wish to raise a major concern expressed by many Canadians, and that is the contingency plans of the United States Government to use Canadian military bases and military equipment to store and deliver U.S. nuclear weapons, and specifically nuclear depth charges at Comox and Greenwood. The vast majority of Canadians oppose the concept of Canada's involvement in the storage or delivery of nuclear weapons, and call upon the Prime Minister (Mr. Mulroney) to state unequivocally that Canada will not be involved in the storage or delivery of U.S. nuclear weapons.
Canadians remember that the Canadian Government would never acknowledge or give details on the presence or deployment of nuclear weapons in Canada. It would never provide Canadians with information about the testing of the Cruise missile. In the past the American administration has put Canadian bases on alert, which is a compromise in Canadian sovereignty. In the past the United States has flown nuclear weapons regularly into Canada, to be used in the event of a conflict. Present hon. members of the Government, and many candidates in the past election campaign, committed themselves to creating a nuclear weapons free zone in Canada. It is time for the Prime Minister to stand and clear up this matter and ensure that both Canadians and Americans understand that Canada will never be a base for, and Canadians will never use, nuclear weapons.



SHIPBUILDING


Mr. Edouard Desrosiers (Hochelaga-Maisonneuve):: Mr. Speaker, I wish to censor the former Liberal Government most emphatically for the way it has hurt the Canadian shipbuilding industry in recent years by taking its business to foreign countries. As a result, the 16,000 jobs still existing a few years ago dwindled to 7,260 by September 30 last year, and this does not include all the indirect employment lost in related industries. Fortunately, the Liberal Party has almost become a thing of the past. We in the Progressive Conservative Party are now going to try to restore order to our economy.
Mr. Speaker, I remind my hon. colleagues on the Government side and on the Opposition benches of an important meeting I shall be having this Wednesday with representatives of the shipbuilding industry. The unions will also take part, and the press will be welcome. In recent years, this basic industry, an essential sector of our economy, has experienced a serious economic slump. It will require quick intervention on our part, which may even mean eliminating the loopholes allowed by the former Liberal Government and which Liberal policy still contains today.



THE ADMINISTRATION


Mr. John Nunziata (York South-Weston):: Mr. Speaker, last month's pre-Christmas orgy of Conservative patronage is but another example of how deliberately and shamefully dishonest the Conservatives were with Canadians during the election campaign.
January 21, 1985


Some Hon. Members:: Oh, oh!


Raymond John Skelly: Sit down.


John V. Nunziata: The Prime Minister (Mr. Mulroney) is displaying unparallelled hyprocrisy and contempt for the Canadian public by the manner in which he is appointing his bagmen and Tory friends to patronage positions. If Liberal patronage was so wrong, Mr. Speaker, what makes Conservative patronage so right?
Now that the Prime Minister has an option, now that he has a choice, now that he can say no to the old systems and attitudes, he is saying yes. Herein lies the hyprocrisy. Is the devil making him do it, or is he simply living up to his pre-election promise to dance with the Tories "who brung him"? Is it any wonder, Mr. Speaker, that Canadians seriously question the credibility and integrity of the Government?
The Prime Minister's unspeakable arrogance is not going unnoticed by the Canadian public. Canadians will remember the Prime Minister campaigning long and hard during the election campaign against the evils of patronage. Canadians will remember the pre-Christmas pork-barrelling. Where are the criteria for quality which he promised that will impress the Canadian people? Where is the reform that he promised us? More important, Mr. Speaker, where is the honesty in this Government? If there is anything worse than an "old whore", Mr. Speaker, it is a hypocritical "old whore".


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



THE PRIME MINISTER

Mr. Dan McKenzie (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, our great Prime Minister (Mr. Mulroney) is truly deserving of the immense praise and acclamation we in the House of Commons wish to bestow on him today. Our outstanding and dynamic leader has succeeded in uniting Canada, an accomplishment which, until now, had only been aspired to. The November Gallup Poll has concluded that Canadians are no longer lacking confidence in the future of Confederation.
The Prime Minister has attained an historic benchmark in Canadian politics through his achievement in bringing about unity and harmony. Separatism in the west and in Quebec has been laid to rest, resulting in a strong and united Canada solidly fused by the Prime Minister. The spirit of unity in this Government, which represents all parts of the nation, is a true reflection of the unanimity now held between Canadians.
Congratulations and thanks to the Prime Minister for his paramount triumph, which is regarded as a supreme success by all.


Some Hon. Members:: Hear, hear!
_________________________________________1493
Oral Questions



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, I can only say, at the beginning of a new year in Parliament, that we did not start this particular performance of applause, but I do want to say to the Prime Minister, in personal terms, that I wish him health and happiness. Apart from that-


An Hon. Member:: That is far enough.


John Napier Turner: One thing I do want to say is that this Party takes particular satisfaction in the fact that it appears, as a result of a statement made by the Minister of National Health and Welfare, that the Government has retreated from its attack on the principle of universality-


Some Hon. Members:: Hear, hear!


John Napier Turner: -of our social programs, particularly old age pensions and family allowances. We will await the document to see if we are really satisfied with the position of the Government because, Mr. Speaker, Ministers of this Government, indeed, the Prime Minister, have been changing their positions and reversing themselves as frequently as tides in the Bay of Fundy.


An Hon. Member:: Right on.


John Napier Turner: The Minister of National Health and Welfare did say, however, that the Government was still considering eliminating the income tax exemption for our senior citizens. In view of the fact that our senior citizens are among the least affluent in our country, particularly women, would the Prime Minister make a commitment to the effect that the Government will not eliminate the old age income tax exemption when that paper is produced?


Hon. Jake Epp (Minister of National Health and Welfare):: I believe the Right Hon. Leader of the Opposition, when he takes a look at the statement that was made on Friday last, and statements made by the Prime Minister, will see that universality was not in question, that that remains, that there was not going to be a means test, and that there was not going to be-


An Hon. Member:: It is a sacred trust.


Arthur Jacob (Jake) Epp: Yes, a sacred trust, and that is what we maintain.


Some Hon. Members:: Hear, hear!


Arthur Jacob (Jake) Epp: That being the case, the Right Hon. Leader of the Opposition, I am sure when he sees the paper next Monday, a week today, will have our positions confirmed, and not his alleged agenda.

January 21, 1985
Oral Questions


John Napier Turner: We will look forward to that, Mr. Speaker.


INDEXATION OF FAMILY ALLOWANCES AND OLD AGE PENSIONS
John Napier Turner: Since the Minister of National Health and Welfare has risen to reply for the Prime Minister, would he comment on the other remarks he made in response to questions when he emerged from the Meech Lake discussions, that the Government was still considering discontinuing the indexation of our family allowances and old age pension payments? Surely when we are talking about the most vulnerable element of our society, our citizens who need it most, that is not in the mind of the Government.


Arthur Jacob (Jake) Epp: Mr. Speaker, I say to the Right Hon. Leader of the Opposition that I did not make any statements coming out of Meech Lake, so I believe he should check that detail. Second, in terms of the position, or the debate which he is trying to recreate, I believe if the Right Hon. Leader of the Opposition would examine my remarks he would find that what he has said does not stand that test, and the position we have taken very clearly is that the program which is in place, the universal program for the elderly and the family benefits, remains.
We are going to put forward a consultation paper. I hope that the Right Hon. Leader of the Opposition can convince his caucus that, while they might have a political agenda which is valid from their point of view, there is a greater agenda, and that is how do we best protect the social programs for those who need them most.


John Napier Turner: Mr. Speaker, I want to assure the hon. gentleman that our agenda is on behalf of the senior citizens and the families of this country. The fact that the Minister had to rewrite that paper during the Christmas holidays indicates just how important that agenda was.


Some Hon. Members:: Hear, hear!


CANADA PENSION PLAN
John Napier Turner: My
final supplementary question is directed to the Prime Minister, Mr. Speaker. The Minister of Finance made a statement-and I hope he will confirm it-that the Government is contemplating raising the premiums on the Canada Pension Plan. That being so, where is the commitment that the Government made during the election campaign to introduce a homemaker's pension? If there are going to be these extra funds generated, where is the homemaker's pension? What is the Government's position on that particular subject?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I made the comment, as the Right Hon. Member has indicated, in reference to the Canada Pension Plan premiums. That was the extent of the comment that I made. I would ask him to be patient in respect to the other question that he put.


EMPLOYMENT
[Stage Direction]
Hon. Warren Allmand (N'otre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the Minister of Employment. In less than three months thousands of Canadian students will be out of universities and colleges looking for jobs to pay for next year's tuition and other expenses. In November the Minister of Finance cancelled the successful Summer Canada Program, and so far we have had nothing announced to take its place. When, if at all, is the Minister going to announce a program for summer employment for students, and will it contain a direct employment provision so that we can make sure those students get the jobs they need before next year's term.
Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, coming out of the very successful federal-provincial conference on employment strategies last Thursday, I stated at that time that summer programs for students would be finalized within a couple of weeks. I may say that I am pleased to tell the House that those programs will have the co-operation of the provincial Governments and the private sector. I may also add that these programs will be more career-oriented than those of the past, so that students working this summer will be able to use that experience as a training ground for permanent jobs in the future.


CAREER ACCESS PROGRAM INQUIRY
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, it has been customary to announce the summer program well before Christmas. We are now into the month of January and we still do not have anything. As everyone knows, it takes a good deal of lead time to put these programs into operation successfully.
The Minister talked about career oriented programs. Last year, as part of the Summer Canada Program, we had Career-Access, a very successful program. Will she continue that program in this summer's program?
Flora Isabel MacDonald: Mr. Speaker, for the benefit of the Hon. Member, there are many aspects of Career-Access still in operation. He may not be aware of that. Indeed there will be many programs that will be announced for this summer, and I think when the Hon. Member sees them he will be very satisfied.


FINANCE
Nelson Andrew Riis: Mr. Speaker, my question is directed to the Minister of Finance whose economic statement resulted in about $4 billion being cut from a variety of program expenditures. However, the billions of dollars involved in corporate tax expenditures were not touched. In the days following his statement the Minister indicated that he would be studying the matter and the Government would be looking into the restructuring of the total corporate tax structure. Is that study under way, and will it result in changes being introduced via the Budget in an overhaul of our corporate tax structure?


Geoff Wilson: Mr. Speaker, I would like to remind the Hon. Member that certain things have flowed out of the economy in particular in my economic statement. We do have, as some would say, tens of thousands of new jobs, but you can count it up to about 100,000 new jobs since the turn of September. There has been a significant drop in interest rates. We have seen a very positive performance in retail sales during the month of November, directly in response to the economic statement. A lot of very positive things have come forward.
In response to the specific question, yes, work is going on right now in the Department on the whole question of tax expenditures. I hope that I will be bringing something forward around the time of the Budget, in that connection.


STUDY TIMEFRAME
Nelson Andrew Riis: Mr. Speaker, will that study be completed by Budget time, and will the overhaul of the corporate tax structure be part of the Budget, or will that study continue beyond the budget date?


Geoff Wilson: Mr. Speaker, the Hon. Member is asking a question about a very, very complex area of tax reform. It is not going to take place within the period of a few months. However, we should have a very good basis for judging the basis of that reform so that decisions can flow quickly from it.


EMPLOYMENT
Hon. Jean Lapierre (Shefford):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration.
Since September 4 of last year, Quebec has been suffering a number of severe setbacks owing to loss of jobs. In the Montreal area, the Government has made cuts in VIA Rail and the CBC. In Berthier, Melchers has closed down, and the
Oral Questions
economy in the Saint-Maurice area will be severely affected as a result of the liquidation of Wabasso and the resulting loss of nearly 1,200 jobs. My question to the Minister is as follows: Is the Government going to become financially involved in "rescue operations" for Melchers and Wabasso instead of standing aside and blaming the workers for their misfortune, as the Minister of Public Works did last week?


Flora Isabel MacDonald: Mr. Speaker, we have decided to offer the services of an industrial commission to help unemployed workers in Montreal-

I would say to the Hon. Member that, in addition to the commissions which will be working with these groups, whether in connection with the lay-offs at Wabasso or Melchers, we are also examining the various sectors in the Trois-Rivieres region and other regions to see whether or not they can now be designated for additional programs such as ILAP, the modified ILAP, or whether they come under the terms of SERB. I am looking at these programs in conjunction with my colleagues, the Minister of Labour and the Minister of Regional Industrial Expansion.


Jean-C. Lapierre: I have a supplementary, Mr. Speaker.
I am delighted to see that the Minister is willing to use the previous Government's programs which she has been known to criticize with considerable fervour. However, the people of Trois-Rivieres and Berthierville are very uneasy, since they know the Prime Minister is an expert at creating ghost towns.
I would therefore ask the Minister what specific measures she intends to take to prevent Berthierville and Trois-Rivieres from meeting the same fate as Schefferville.


Flora Isabel MacDonald: Mr. Speaker, I said the Government was very concerned about the lay-offs at Wabasso and other companies. I have already announced that we would start helping committees to assist the workers concerned, and we shall continue to help workers in this industry.


FINANCE
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is for the Prime Minister. I hope he will cease muzzling himself for the Question Period on this point.
Before Christmas the Government announced over $4 billion in cuts in programs affecting ordinary Canadians. The Minister of Finance has just acknowledged that the $20 billion tax expenditure program which benefits corporations, and which the Auditor General and many businessmen have called into question as entailing millions of dollars of potential waste

Oral Questions
to the economy, is going to remain unchanged in the forthcoming Budget. My question is simply this. Why is the Government prepared to change programs directly affecting middle and low income Canadians in a very negative way, but is leaving unchanged in this Budget expenditures of hundreds of millions of dollars which could be saved, and which could result in our leaving our social programs entirely alone?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I do not know why the Leader of the New Democratic Party would presume to articulate policies that will be in the Budget. I would have thought that he would have joined in some modest rejoicing in the fact that, in a short period of time, almost 100,000 new jobs have been created. The bank rate is down 2.7 points, which I think he would agree is very important. The unemployment rate dropped below 11 percentage points for the first time in 32 months. I think that is very healthy and encouraging for the people of Canada to know.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: While these signals of improvement are, I acknowledge, modest, they are important, and I can assure my hon. friend that the point to which he referred, and others, will be actively considered and included by the Government in economic statements and Budgets designed to create jobs in Canada. That is what it is all about, the creation of employment, and that is precisely what we are going to do.


GOVERNMENT POLICY
John Edward Broadbent: Mr. Speaker, 1 listened to the Minister of Finance with care, and I heard him say that the kind of studies that my colleague asked about in his question just a few minutes ago, are going to continue after the Budget. He did not say that we are going to have major corporate tax reform in this Budget. He said that there are going to be studies which will continue. I would like the Prime Minister to clarify this question, because it involves millions of dollars and affects social programs and jobs.
A document produced by the Government which shows two things was brought to my attention over the Christmas period. It shows that corporate tax reduction policy is the most costly and the least effective method of job creation. That is a document produced by a federal Department. Is the Prime Minister prepared to act on this? Is he prepared to act in the coming Budget? Specifically, will he change corporate tax policy to ensure that dollars going out to corporations will only go to them if directly related to job creation? Will he put an end to give-aways?


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Mr. Speaker, I will tell my hon. friend what he already knows-a policy that has been consistent throughout the years. Tax changes will be announced in the Budget, and not anywhere else.


REQUEST THAT POLICY BE ENDED
John Edward Broadbent: Mr. Speaker, it is not quite so easy. The Prime Minister himself said after the meeting at Meech Lake there were going to be other expenditure cuts. I am referring to what the Prime Minister has said. He said there would be expenditure cuts, and if I understood him correctly that was in the social program direction, but he can clarify that. Why can he not tell the people of Canada in the interest of justice, fairness, and job creation, that he will put an end to a corporate tax policy which is costing us billions of dollars and is ineffective in creating jobs?


Martin Brian Mulroney: Mr. Speaker, we are committed to a policy of greater fairness in the tax system, both for individuals and corporations. We are committed as well to the creation of jobs. My hon. friend might agree that we have done a reasonable job so far in creating almost 100,000 new full-time jobs in Canada in a three-month period. I can assure you that all intentions and policies which will be announced at an appropriate time by the Minister of Finance will be designed to do precisely that.


CANADA PENSION PLAN
Hon. Douglas C. Frith (Sudbury):: Mr. Speaker, in the past surpluses in the Canada Pension Plan have been used by the provinces as a source of cheap borrowing. My question is for the Minister of Finance. In the present round of renegotiations with the provinces on the contribution rates, would he guarantee Parliament that he will stop abuse by the provinces in the way in which they have those funds and, instead, advocate those surpluses be used to enhance the payments to Canada's disabled through the Canada Pension Plan disability payments, and to introduce, for the first time in Canadian history, the ability of Canadians to take early retirement? The Province of Quebec made this move one year ago.


Geoff Wilson: Mr. Speaker, it is very interesting to watch all these conversions on the road to Damascus. The Liberals established the Canada Pension Plan to provide for the cheap borrowing by the provinces in 1966. I do not know what has changed since then that the Opposition is going to criticize the Government for reviewing this whole policy at this time.
We are looking at the structure of premiums, with the provinces. This matter has been recommended to Governments for a number of years but was continually put off by the Opposition when it was in Government. We are looking at this because there is some real concern on the part of pensioners as to the integrity and sufficiency of the pension plan. There is also concern by the provinces as to whether the money will be there for them to borrow. We also want to allow small business to make plans based on what has been acknowledged is an
January 21, 1985

inevitable increase in premiums if we are going to maintain the viability of the Canada Pension Plan.


Douglas Cockburn Frith: Mr. Speaker, there have been more conversions on the road to Meech Lake than there ever were on the road to Damascus.


REQUEST FOR DISABILITY BENEFIT INCREASE
Douglas Cockburn Frith: My supplementary question is for the Minister of Finance. If there are going to be significant increases in the contribution rate to the Canada Pension Plan this will result in a significant surplus being created. Will the Minister not advocate the use of surpluses to enhance the disability payments to the disabled? Will he not look at the possibility of allowing Canadians a chance of early retirement, thereby creating job opportunities for our young people who presently have the highest unemployment rate?


Geoff Wilson: Mr. Speaker, the Hon. Member does not tell the House that if no changes are made to the Canada Pension Plan it will be broke in a number of years, so changes must be made. That is the essence of the review that the provincial Finance Ministers and myself made a week ago in Montreal. We will be looking at the impact of changes, not only on the size of the fund, and therefore the monies that would be redirected to the provinces, but also on the impact on small business which is concerned that any significant increase over and above what is needed in the Canada Pension Plan will make it more difficult for it to create jobs. We do not want to have that impact on small business.


FINANCE
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is for the Minister of Finance. I have just returned from British Columbia and I want to tell the Minister that food banks-


Some Hon. Members:: Oh, oh!


Margaret Anne Mitchell: I want to tell the Minister and the Government that food banks have doubled, and people are being turned away hungry. The unemployment rate has increased, with 25,000 jobs having been lost over the past three months. Crime rates are up, and children are being permanently damaged by poverty. This is just in British Columbia.
People simply cannot take such additional harsh restraint measures as I understand he is proposing in his coming Budget. Why will he not introduce the kind of corporate and personal tax reforms that our Leader and Party have been advocating? Why will he not let people know that for once he is going to benefit ordinary people rather than the corporate sector?
Oral Questions


Some Hon. Members:: Hear, hear!


Geoff Wilson: Mr. Speaker, first of all I would like to welcome the Hon. Member back to Ottawa.


Mr. Waddell:: Don't be so smug. Don't be so patronizing.


Margaret Anne Mitchell: It's about time you went out there yourself.


Mr. Wilson (Etobicoke Centre):: Let me respond to the question.


Mr. Blaikie:: It is not a joking matter, Mike.


Michael Holcombe Wilson: I responded to the question put by the Member for Kamloops-Shuswap to the effect that there would not be major tax reform in this Budget. It is too early for that. There are too many complexities.


John Edward Broadbent: It is too late.


Michael Holcombe Wilson: I will say to the Leader of the NDP that if he wants to have a disruptive tax policy that will upset job creation by small business, the way to go about doing it is to throw a fast tax reform on them too soon, without proper thought.
The direction of the economic statement in November was to reduce interest rates. A reduction in interest rates will have the most far reaching effect of creating jobs and addressing the problems that the hon. lady referred to a moment ago.


REQUEST FOR TAX CHANGES
Margaret Anne Mitchell: Mr. Speaker, let me go back to a comment made earlier by the Minister of National Health and Welfare about his concerns about how best to protect social programs for those who need it most. Will the Minister of Finance follow our leader's suggestion and reform the child tax exemptions, impose a minimum tax, and raise the marginal tax rates so that there will be a savings which can then be put into increased family benefits for families that need it desperately?


Geoff Wilson: Mr. Speaker, I believe that all of the matters which the Hon. Member has put forward today are matters which are best dealt with in a Budget. I appreciate the comments that she has made. I disagree with some, but we will have to wait until a Budget to see how those are dealt with.


EMPLOYMENT
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, my question is directed to the Minister of Employment and Immi-

January 21, 1985
Oral Questions
gration. The Government has cut back on job programs specifically directed to the youth of this country-school to work transition apprenticeship programs like First Chance on-the-job training. Under the new Government, how long will it take before the economy can absorb the 454,000 jobless youth we are faced with today? Will the Minister take the House into her confidence and tell us what the Government will do for these young people?


Flora Isabel MacDonald: Mr. Speaker, perhaps the Hon. Member was not in the House earlier when I responded to a question from her colleague, the Member for Notre Dame-de-Grace.


Mr. Allmand:: That was about Summer Works.


Flora Isabel MacDonald: I would say that the plans with regard to young people will be announced within a couple of weeks.


GOVERNMENT POSITION
Sheila Finestone: Mr. Speaker-first of all, Madam Minister, I was not speaking about students looking for a summer job, but about three quarters of our youth who are no longer in school, but on the labour market and without a job.
Madam Minister, you have not been straightforward with the Canadian people. You and your colleagues talked about seasonally-adjusted rates while I am speaking about rates which are not seasonally-adjusted, which show a loss of 11,000 jobs between October and December. What action has been taken to reduce this unacceptable level of unemployment?


Flora Isabel MacDonald: Mr. Speaker, one thing about which 1 can be absolutely sure, when it comes to questions from Members in the Liberal Party, is that they will never recognize any good news when they see it.


Some Hon. Members:: Oh, oh!


Flora Isabel MacDonald: I can understand that, given the fact that their standing in the polls continues to drop month after month. When you get locked into bad news like that, it is hard to change your mindset.
I would point out to the Hon. Member that, thankfully, the unemployment rate for youth has begun to come down and has dropped a full percentage point in the last month.


AGRICULTURE
Geoff Wilson: Mr. Speaker, my question is directed to the representative of the Minister of Agriculture. Scientists at the Agriculture Research Station in Swift Current, Saskatchewan, have developed a new variety of medium hard wheat, HY320. Through some ten years of testing this variety has proven to yield some 30 per cent more than the Red Spring wheat hard varieties. It also appears that there are export markets for HY320. When can we expect HY320 to be licensed?


Hon. Gerald S. Merrithew (Minister of State (Forestry)):: Mr. Speaker, I might point out that the Minister responsible for the Wheat Board is presently on government duty in Saskatchewan. I believe the Hon. Member has raised a point which certainly the grain producers feel is very important. I know that the approval procedure has the support of the Wheat Board, the Canadian Grain Commission, Agriculture Canada, and others. It is my understanding that the matter is now under review and a decision is expected very shortly.


NUCLEAR ARMAMENTS
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, my question is directed to the Minister of National Defence who said that he did not know anything about the United States' plans to deploy 32 nuclear depth bombs in a time of crisis at Greenwood and Comox. Since the Minister now knows about the U.S. deployment plans, does he continue to argue, as he did last week in a radio program, that in fact Canada has no need to know and no right to know about U.S. nuclear deployment plans, and that Canada is in fact simply an extension of U.S. territory in nuclear matters?


Hon. Robert C. Coates (Minister of National Defence):: Mr. Speaker, it is nice to hear where Canada stands as a nation from an NDP point of view. I find it rather difficult to reconcile what the Hon. Member is saying to me in relation to a so-called leaked document in the United States with her statement that perhaps the NDP should now consider some common sense and reconsider their position as far as NATO is concerned.
With respect to the question, I want to say that the document to which the Hon. Member is referring is an old document that was conceived in 1975. It has nothing to do with consultation between Canada and the United States. I can assure the Hon. Member that if there are any plans in the future in relation to mutual defence between Canada and the United States, there will be consultation with this Government.


Pauline Jewett: Mr. Speaker, the Minister should resign.
January 21, 1985


CANADIAN POLICY
Pauline Jewett: Mr. Speaker, the Minister will know that the nuclear planning group has no knowledge of U.S. contingency plans for the deployment of nuclear weapons outside of its territory, nor did the Canadian Government have any knowledge. Now that the Minister does know, will he communicate Canadian policy to the United States before it makes further contingency plans? That policy is the one adopted previously by the Prime Minister that there will be no nuclear weapons on Canadian soil.


Robert Carman Coates: Mr. Speaker, there is a simple answer to the Hon. Member's question. There are no such plans.


THE ECONOMY
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I wish to direct a question to the Minister of Finance with respect to the very important matter of job creation. He is probably aware of the musings of his colleague, the Minister of National Defence, over the Christmas holidays, suggesting that the economic recovery strategy of the Conservative Government is increased defence expenditures. At a time when there are cut-backs on help to industry, cut-backs on research and development, and a threat of increased taxes for pensioners, does the Minister of Finance endorse the position taken by the Minister of National Defence that we will have economic recovery by spending more money on armaments?


Geoff Wilson: Mr. Speaker, the Hon. Member should cast his mind back to November 8 when we clearly set out a very broad economic development program, part of which is related to the very successful performance that we have seen in Canada over the past four months with the creation of 100,000 jobs. I invite him to look at the broad economic program. There are various elements in the program to which the Hon. Member may want to refer, but the three part program is the over-all economic development program that we have set out in a broad way which will create many thousands more jobs than have been created to date.


GOVERNMENT POLICY
Lloyd Axworthy: Mr. Speaker, 1 would suggest that it might be more helpful if the Minister's colleague, the Minister of National Defence, read that statement and quit misleading the Canadian people that the way we will create jobs is by spending money on arms.
I want to know from the Minister of Finance, or perhaps the Prime Minister, if they are now disavowing and rejecting the position of the Minister of National Defence, who says that we are going to create economic recovery in Canada by spending
Oral Questions
money on arms. Is the Minister prepared now to say that that is a foolish policy and will not have the results which the Minister of National Defence says it will?


Pauline Jewett: You should know. You spent lots yourself.


Geoff Wilson: Mr. Speaker, what the Minister of National Defence has said is that a contribution can be made by the very successful defence sharing arrangement that he and the Secretary of Defense in the States have worked out, whereby small business and medium-sized business can participate to a much greater extent than in the past in the broad range of defence spending programs in the United States. That will create jobs in Canada, in addition to all the other factors that were directly addressed in the economic statement of November 8.


Some Hon. Members:: Hear, hear!


Lloyd Axworthy: We are a war machine, are we?


GOVERNMENT ADVERTISING
Mr. Michael Cassidy (Ottawa Centre):: Mr. Speaker, I have a question for the Prime Minister. It concerns the quite extraordinary contract of $1.8 million a year which has been awarded by the Government to an advertising firm headed by Messrs. Pierre Nantel and Peter Simpson. In view of the commitment the Prime Minister made in the election campaign to clean up the patronage practices of the former Liberal Government, can the Prime Minister explain why such an important contract is being awarded, with no tender being called, despite the fact that this is explicitly required under Section 8 of Chapter 310 of Appendix F of the Treasury Board's Government Contract Regulations?


Hon. Harvie Andre (Minister of Supply and Services):: Mr. Speaker, when the Prime Minister assigned these responsibilities to me he asked me to take initiatives to reduce the cost of advertising to the Government of Canada. One of the initiatives we took immediately was to wind up the CUIO. Another initiative was to seek a better contract with the agency of record than the previous administration had with its agency of record. We negotiated a better contract resulting in a savings to the Government of $18,000 a month. We will be taken more initiatives to save more money for the taxpayer, because that is the mandate I have from the Prime Minister.


Some Hon. Members:: Hear, hear!


MEASURES TAKEN BY GOVERNMENT
Michael Morris Cassidy: Mr. Speaker, I have a supplementary question. Will the Minister say how many other firms were asked how much they would have been prepared to accept to do the job? If the Government is not

January 21, 1985
Oral Questions
prepared to rescind this contract, what measures will the Minister take to ensure that a Conservative advertising placement agency does not use its powers over the placement of $60 million worth of advertising to reward media favourable to the Government, and penalize media that oppose the Government?


Harvie Andre: Mr. Speaker, the $60 million figure is a figure from the previous administration. That is not our figure. It is not what we will be spending.
The advertising business is not amenable to tendering. It is not tendered anywhere in the world-in the free world, that is, where they have advertising.


Some Hon. Members:: Oh, oh!


Lloyd Axworthy: Let's hear it for the Communist market system.


Harvie Andre: My instructions to my officials were very explicit. They were to negotiate a contract that would result in the saving of dollars to the taxpayers of Canada. We will, in addition, be implementing an element of competition in advertising that Departments might undertake-


Ian Deans: I thought that there wasn't any in the free world.


Harvie Andre: -by providing for those Departments a list of three, four, or five agencies, so that these agencies might compete for the business, instead of the previous system where a single agency was assigned to a specific Department.


Some Hon. Members:: Hear, hear!


NORTH ATLANTIC TREATY ORGANIZATION
Mr. Alan Redway (York East):: Mr. Speaker, my question is for the Minister of National Defence. Could the Minister advise the House whether a decision has now been made to give 20 CF-104 aircraft to Turkey? If it has, would the Minister be prepared to reconsider that decision in light of the on-going concerns and problems with our NATO allies, Greece and Turkey, in light of the fact that Canada has had a peace-keeping force on Cyprus for the last 20 years, and in light of the fact that the United Nations' recent efforts for mediation on Cyprus have been terminated this weekend?


Robert Carman Coates: Mr. Speaker, the decision on the CF-104s is a decision that was taken some two years ago. It was taken after consultations with all of our NATO allies, including Greece and Turkey. At that particular moment Greece indicated no interest in those aircraft and, as a result, Turkey indicated an interest, and certain arrangements were made.
The Greek Government recently has indicated a reconsideration of its original position and has asked us to examine the possibility of providing Greece with some aircraft. We have indicated a willingness to give consideration to some of the additional surplus equipment that we have available being provided to Greece. Discussions are going on at this time in that regard.


GOVERNMENT ADVERTISING
Don Boudria: Mr. Speaker, I have a question relating to the issue of government advertising. My question is for the Minister of Supply and Services. The Minister will recall that over the last few weeks there has been quite a bit of controversy over the issue of government advertising and certain allegations have been made. Is the Minister now prepared to indicate whether the Government is willing to co-operate fully with a Royal Canadian Mounted Police criminal investigation into the allegations that were made to that effect over the Christmas holidays?


Harvie Andre: Mr. Speaker, the press reports that led to the Member writing a letter to the RCMP were inaccurate. There are absolutely no kick-backs involved. My instructions to my officials were to sign a contract that would result in a saving to the Canadian public. They fulfilled that contract with no other conditions.
We are fully co-operating with the RCMP. I have made the contracts in question available to the RCMP. The Member can have them, and so can anybody else. I have them here. Members can examine the contracts at any time. I must ask the Hon. Member to recognize that what he is suggesting is criminal activity, and there is a tradition in this place that one is very careful about making those kinds of charges.


Don Boudria: Mr. Speaker, I have not charged anyone with anything. I have asked the Minister for his co-operation. That is all I have asked.


PARLIAMENTARY COMMITTEE INQUIRY
Don Boudria: Mr. Speaker, in view of the controversy which the allocation of this contract has given rise to in the last few months, can the Minister assure the House that this whole issue could be settled by a Parliamentary Commission which would be responsible for ensuring that, in the future, this type of contract will be awarded either through tenders or another process, with the co-operation of the industry, which could appear before this Parliamentary Commission to assure us that the promises
January 21, 1985

made by the Government during the election campaign will be kept and that government patronage will be eliminated?


Harvie Andre: Mr. Speaker, 1 will assure the Hon. Member that the contracts I signed on behalf of the Government will result in a better deal for the taxpayers than any signed by the previous administration with its advertising agencies.
I would also inform the Hon. Member that the advertising business is not susceptible to the tendering process. The agencies are paid a percentage of the total advertising budget. That is the way it is done. I do not think it is within our capability to change that practice that has been in place for 100 years. I will guarantee to the Hon. Member that he will be able to examine the contracts that we have signed, the future ones, and satisfy himself that we are getting full value for the taxpayers, which is fundamental to the mandate the Prime Minister gave me.


NATIONAL REVENUE
Ian Deans: Mr. Speaker, my question is directed to the Minister of National Revenue. Why does he feel that it is necessary to provide for his Department a policy which would result in the intimidation of taxpayers who would reasonably believe that they may have cause to complain about their tax treatment but who, in fact, would be dissuaded from doing so because of the Minister's actions?


Hon. Perrin Beatty (Minister of National Revenue):: Mr. Speaker, far from that. At the very same time as the Hon. Member and his colleagues sat mute last year, Members on this side of the House went across the country saying that taxpayers' rights had to be respected by the tax Department. That remains our policy, even though the Hon. Member remained silent throughout the whole period.
What I have said was, I thought, in keeping with the position the Hon. Member took last fall. Perhaps he has changed. His position then was that the Government should be as forthcoming and accountable as possible. What I have said is that I want to ensure that, where allegations are made about my Department's activities, we are held fully to account, and that we are forced to do so publicly.


CLERK OF PETITIONS' REPORT
Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Spadina (Mr. Heap) on Friday, December 21, 1984, meets the requirements of the Standing Orders as to form.
Disarmament Talks HOUSE OF COMMONS


Mr. Speaker:: I am pleased to announce today the recent appointment by Governor in Council of Mary Anne Griffith as Clerk Assistant (Research) of the House of Commons.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Mary Anne Griffith joined the House of Commons staff in 1970 and worked for various services, including the Committee Reporting Service, the Committees and Private Legislation Branch, as well as the offices of the Clerk and the Administrator of the House. Recently, she was principal clerk of the Research Branch for the Table.

As Clerk Assistant (Research), she will continue to guide the work of that branch whose mandate includes research for the Chair, the Table and Members of the House, as well as the publication of procedural papers and volumes of precedents. The branch is now undertaking a major project which includes the creation of a procedural data base and the eventual publication of a comprehensive new work on Canadian parliamentary practice and procedure.

This appointment gives evidence of the significant development of professional research within the House procedural services.

I have come to know our new Clerk Assistant extremely well and, as always, this House is extraordinarily well served.


Some Hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, on January 8, following two days of meetings in Geneva, United States Secretary of State Mr. George Shultz and Soviet Foreign Minister Mr. Andrei Gromyko agreed to undertake a new set of bilateral negotiations on nuclear arms and space weapons. That agreement represents an important step forward in relations between the United States and the Soviet Union and in the prospect of reducing the danger of nuclear conflict. The negotiating process which it initiates can have far-reaching and positive implications for East-West relations and also for negotiations in multilateral arms control fora in which Canada is a direct

January 21, 1985
Disarmament Talks
participant. I take this first occasion in this session of Parliament to congratulate both the United States and the Soviet Union for resuming negotiations.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: We are especially enheartened by the objectives agreed upon by the two parties, namely prevent an arms race in space and put an end to that race on earth, restrict and reduce nuclear weapons, and reinforce the strategic stability so as to pave the way for a complete ban on nuclear arms. Such objectives have long since been the main components of Canada's foreign policy. As indicated in the joint statement issued at the end of the Shultz-Gromyko talks, the object of those negotiations is, and I quote:
a complex series of questions related to space and nuclear weapons-both strategic and medium-range-which questions shall be considered and resolved with all respect for their interdependence.
It has been agreed that one of the major topics of discussion will be the existing relationship between offensive and defensive systems.
Defensive systems will include the strategic defence initiative of the United States and the Soviet defence systems. It is therefore quite appropriate that both existing and future defence systems of the two parties be on the agenda of those negotiations.

The United States President, Mr. Reagan, has stated that the strategic defence initiative is a research program designed to examine the feasibility of strengthening strategic stability and reducing reliance on nuclear weapons through greater attention to non-nuclear defensive measures. To date, the full extent of the program has not been explored and it would therefore be premature to draw definitive conclusions about it. Given the extraordinarily complex technical questions which SDI raises, questions which even an intensive research program is unlikely to resolve for many years, if ever, it is obvious that it is a highly hypothetical concept.
As the program is presently understood, research on SDI does not in and of itself contravene the provisions of either the 1967 Outer Space Treaty or of the 1972 Anti-Ballistic Missile Treaty, both of which Canada strongly supports. In light of significant Soviet advances in ballistic missile defence research in recent years and deployment of an actual ballistic missile defence system, it is only prudent that the West keep abreast of the feasibility of such projects.
However, actual development and deployment of space-based ballistic missile defence systems by either side would transgress the limits of the ABM Treaty as currently constituted. That could have serious implications for arms control and would therefore warrant close and careful attention by all concerned. We welcome in this regard President Reagan's affirmation that the U.S.A. would not proceed beyond research without discussion and negotiation.
We should be under no illusion that the course charted at Geneva will be an easy one. It will not be. What we are witnessing now is the beginning of a long and sensitive process. The conduct of Canada should be calculated to encourage the success of that process. Nothing is more important than that the two nuclear superpowers agree on means to end the arms race.
For our part, Canada will continue to work actively in the United Nations, in NATO and elsewhere to make practical progress on arms control and to improve understanding between East and West. The agreement at Geneva, after a long and dangerous stalemate, offers a new chance and the world cannot waste that opportunity.


Some Hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, I thank the Minister for giving us some notice of his statement; we received it just before 1.30 this afternoon. However, I want to thank him for his report to the House and for giving us some idea of the Government's position on the resumption of talks between the two major superpowers. We are glad to use this occasion to congratulate both the Soviet Union and the United States on resuming those negotiations. [Translation]
The nuclear arms race is the most urgent problem facing mankind today. As the Minister said, a complete ban on nuclear weapons remains the major concern of Canada's foreign policy.
What the Minister did not mention, however, is the tradition of Canadians and their successive Governments to speak out for common sense, dialogue and a meaningful position in the world's quest for peace. While the Minister did say of the Gromyko-Shultz meetings, and I use his words, "the conduct of Canadians should be calculated to encourage the success of the process", it appears from his statement that the Minister and the Government are doing little more than restating the United States position. There is no indication that Canada will play any role in search of peace in the tradition of Pierre Trudeau, Lester Pearson or Louis St. Laurent.


Some Hon. Members:: Hear, hear!


John Napier Turner: The Minister said in London that the present Government was not about to continue, and I think I use his words, "the drama of the peace initiative of Mr. Trudeau". I say to him quite clearly that the drama is not in the initiative. The drama is in the problem and the risk to the world in this nuclear crisis. In fact, the Government of Canada now appears to tolerate, if not to fully support, the development of the star wars concept which past Governments of this country have always rejected.


Some Hon. Members:: Hear, hear!
January 21, 1985


John Napier Turner: There could be no more of a destabilizing element in those negotiations or in the escalation of the threat than that particular initiative by the United States.
I want to point out that members of the Liberal Party in this House have been the only ones who have consistently argued for an active interventionist, international Canadian role. That is why during the motion on arms control in this House before Christmas, we proposed an amendment to a motion from the NDP which motion rejected the Liberal tradition of realism in the arms race. We voted unanimously on that amendment, despite some of the comments afterward. In fact, when we talk about shading a view, I notice the statements over the past weekend of the Member for New Westminster-Coquitlam (Ms. Jewett) to the effect that her party, the NDP, should review the opposition to the NATO Treaty. I am very interested to see the comments on the monolithic unity of that Party on this issue in subsequent weeks.
We seized the opportunity to put before this House sensible propositions which would have sent a clear message to both superpowers to put on their agenda for these negotiations the negotiation of a mutually verifiable nuclear freeze with reductions, strengthening of the nuclear non-proliferation treaty, renewed emphasis on mutual and balanced force reduction talks in Vienna, those talks having broken off, the moving up in the United Nations of the special session on disarmament which is now scheduled only for 1986, an agreement to ban the testing of high altitude anti-satellite weapons, star wars, about which I have been talking, and to refine and improve nuclear weapons verification techniques. In short, our idea was that the Parliament of Canada could send a clear, unanimous message to the two superpowers to find agreement on these issues.
That amendment was rejected by both of the other Parties, too locked in to the left and the right ideologies to support constructive dialogue between the superpowers. The point is that the possibility of nuclear confrontation is not just an issue for the superpowers. It affects every man, woman and child on this planet.


Some Hon. Members:: Hear, hear!


John Napier Turner: Every Government speaking on behalf of Canada has the duty to speak out for constructive dialogue on this issue and to put pressure on both superpowers to find a solution. I see the Prime Minister (Mr. Mulroney) in the House. I am glad he is here because the issue is important. In response to a question before Christmas from my colleague from Winnipeg-Fort Garry (Mr. Axworthv), he accused that Member and indirectly the Members of this Party of being anti-American in taking this point of view. I say to him that it is not anti-American-and I do not stand in his shadow in wanting a better enhancement of our relationship with the United States-to insist on an independent foreign policy and to look at this most crucial issue in the eyes of humanity and in the eyes of most Canadian citizens. He said in New York that Canada is open for business again. I always
Disarmament Talks
thought that this country was open for business. Whatever point he was making in New York, I say to him that we may be open for business, but we are not up for sale.


Some Hon. Members:: Hear, hear!


John Napier Turner: This means sometimes having the courage to tell our friends the truth. My caucus and I are deeply disappointed that the Government has rejected the opportunity to follow that tradition and to accept that duty. I urge the Minister and the Prime Minister to move the active quest for peace up somewhat higher on the Government's agenda.


Some Hon. Members:: Hear, hear!


Pauline Jewett: Mr. Speaker, I wish to thank the Secretary of State for External Affairs (Mr. Clark) for renewing the practice of making a statement on motions and enabling the two other Parties in the House to respond to it. Like the Minister and my colleagues, and I am sure his colleagues-I really do not know where the Liberals stand-I am pleased to say to the Minister on behalf of my colleagues that the foreign ministers of the two superpowers did in fact agree to at least start talks. We have no idea whether any positions have changed, softened or anything, but it is in the interests of world peace, if we ever reach it, that negotiations do proceed.
I was a little disturbed to see them broken into three baskets in the way they were. Many of us would have preferred to have seen negotiations on intermediate and strategic weapons joined. I would have liked to have the view of the Minister on that matter.
I would also have liked a further explanation from the Minister as to what the U.S. and the Soviets mean in the communique by saying that the negotiations will address "a complex of questions concerning space and nuclear arms with all these questions considered and resolved in their inter-relationship". I wonder if the Minister's envoy to Ottawa succeeded in explaining that to the Minister because I know that the Minister takes a rather dim view of bureaucratise. I take it to mean that the three sets of talks will be linked and there will not be a simple dealing with only one set of negotiations and then going to another and then to another. Since they are not merged in a single basket, it is absolutely essential that there be very close links among the three sets of talks.
The rest of the Minister's statement addresses in an extraordinarily convoluted way the strategic defence initiative of President Reagan. I find that the Minister has basically taken his advice on this from the United States Department of Defence rather than taking any independent advice. For example, he said that it would be premature to draw definitive conclusions about the SDL He says that given the extraordinarily complex technical questions that it raises, it is obvious that it is a highly hypothetical concept. That is what the United States Defence Department is saying but that is not what most of the ablest scholars in the United States are saying. In fact, they are saying quite the opposite, that we do

January 21, 1985
Disarmament Talks
know enough about the SDI to know that it will produce yet another round in the nuclear arms race. Once again, we are deceiving people everywhere by thinking that some so-called defence system can work. The Minister himself has swallowed that.
In the next paragraph, the Minister speaks of significant Soviet advances in ballistic missile defence research in recent years and of deployment of an actual ballistic missile defence system. Does the Minister not know that the Soviets deployed that system under the ABM treaty, something which they were allowed to do? He makes it sound as if they have suddenly just now deployed an ABM system. The U.S. declined but the Soviets did so around Moscow.
The Minister rather scares us into thinking that the Soviets are making all of these great advances in ballistic missile defence. Does he not know that the U.S. military has said that the Soviets cannot possibly match U.S. technology in star wars developments? Of course, that is why the Soviets do not want those developments to begin.
Dealing with the next paragraph, does the Minister really believe that the U.S. will stop the research on star wars? Does he not know that the Americans have already tested component parts, something which I think is contrary to the ABM treaty? Does the Minister not know that more tests and even partial deployment of star wars are coming? Has he been taken in completely to believe that only research is in progress? Clearly he has been taken in. Since so much of the Minister's statement deals with star wars, I find it very alarming that he has been taken in completely by what the American Secretary of Defence has told him to believe. I would hope that on a further occasion we will hear from the Minister a more critical and thoughtful examination of the strategic defence initiative.


Mr. Speaker:: Questions?


Lloyd Axworthy: Mr. Speaker, I would like to raise several questions for the Secretary of State for External Affairs (Mr. Clark) regarding a very shocking reversal of the tradition of the country of being an effective advocate for arms control measures. The Minister has said that he does not believe that the Government should take a stand against star wars even though, in his own statement to the United Nations, he made a clear case for the prevention of any form of militarization of outer space. First, I would like to know why he is now reversing the position he took when he spoke before the United Nations by allowing the introduction of a new military force in outer space?
Second, how does the Minister deal with the issue of which he as a student of history would be aware, that throughout the entire history of arms development since the Second World War and the nuclear age both great powers have always played a catch-up game? When any one power indicates that it is about to make a new technological breakthrough, the other power responds in like kind. If we support the United States in
its $25 billion research program, are we also to tell the Soviets to go ahead with their $25 billion research program or missile system so that they may catch up to the Americans?
In other words, how does the Secretary of State for External Affairs in any way reconcile the incredible instability that the star wars SDI program represents with the entire area of superpower relationships? For goodness sake, why is he breaking with the tradition that this country has adopted for years of putting forward its advocacy to try to restrain the arms race rather than supporting a measure that will only add to the arms race?


Charles Joseph Clark: Mr. Speaker, there are a couple of comments I should make in answer to that question. The first has to do with the idea of a reversal of traditions. I find that rather strange coming from the Hon. Member, from the Leader of the Liberal Party (Mr. Turner) and indeed from the spokesperson for the New Democratic Party who, at the time of the Bomarc decision, was, if I am correct, a member of the Liberal Party. There has been only one occasion in the history of Canada on which the question of nuclear arms on Canadian soil was a question of differences between Parties. At that time the Progressive Conservative Party, the Party which now forms the Government of Canada, opposed the question of the placing of the Bomarc missile here. The Liberal Party and the present spokesperson for the NDP, in her then incarnation as a Liberal, supported the nuclearization of this country.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: If there is a question of reversal of positions, there is no doubt that the Hon. Member for Win-nipeg-Fort Garry (Mr. Axworthy) speaks with a certain expertise. What is important here is that when the Hon. Member for Winnipeg-Fort Garry suggests that in terms of the nuclear situation in the world we are involved in a catch-up game between superpowers, he is out of date. What we are involved in now is a negotiation between the two superpowers. It might be that the Hon. Member would prefer to be at the table himself. He is not at the table. The Soviet Union and the United States are at the table. There is a negotiation in progress and the most important role for this country to play is to ensure that the negotiation with the agenda now before it has the prospect of success. It would be unpardonable for this country, this Government or this Parliament to take a position which would throw those negotiations off course.


Some Hon. Members:: Hear, hear!


William Warren Allmand: Mr. Speaker, in his statement the Minister gave us a great deal of rhetoric in favour of disarmament. However, I would like to refer him to the question that was asked by my hon. colleague, the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), regarding a statement made by the Minister of National Defence (Mr. Coates), who said that one of the ways of increasing employment in this country is to increase expenditures on armaments. I refer the Minister to the well known Thorson report and I quote from an article
January 21, 1985

published in the Chicago Sun-Times written by Pat Orvis. In summarizing that report the article reads as follows:
The arms race costs jobs rather than creating them, according to a report on "The Relationship Between Disarmament and Development" done for the United Nations by 27 countries,-
This report is informally known as the Thorson report. I can also refer the Hon. Minister to many other statements which indicate that moneys invested in armaments have the smallest multiplier effect in producing jobs of any sector.


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


William Warren Allmand: Yes, I will put the question. Armaments can be compared with retail trade, education, hospitals, newspapers, power manufacture, metal manufacture and other sectors.
I wish to ask the Minister two questions. Does the Minister approve of the statement made by the Minister of National Defence, who indicated that we can solve the job problems of this country by spending more money on armaments? Second, how can he convince the world that he is serious about disarmament when the Minister of National Defence is suggesting that we greatly increase our armaments production in order to produce jobs, something which will not even happen?


Charles Joseph Clark: Mr. Speaker, it may well be and indeed it is the case that in a perfect world there would be no need to spend money on defence. We do not live in a perfect world. We live in a world that is torn and divided not only by conflicts between nations but by conflicts about values. The conflicts about values are conflicts in which Canada is not neutral. We stand for freedom. We play our role for our allies in defence of freedom.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: We are prepared to accept our obligations in the defence of freedom just as we are prepared to accept our obligations in encouraging arms control and disarmament.
I will not read a long list, but I do make the point that under the former Liberal Government the consultative committee on disarmament was never convened. It has now been convened by the disarmament adviser appointed by this Government. Even in a time of budgetary restraint, this Government is now spending money to ensure that Canada is able to carry on its contribution to the essential process of verification of arms control agreements should they be achieved. The list is long and it goes on. The point 1 would like to make is that it is absolutely consistent to work simultaneously toward both peace and freedom and that is the commitment of this Government.


Some Hon. Members:: Hear, hear!


Mr. Robinson:: Mr. Speaker, I would like to return to a question which was raised by my colleague, the Hon. Member for New Westminster-Coquitlam (Ms. Jewett), and to take up the Minister's very disturbing suggestion that the process of
Disarmament Talks
what he has called research into the star wars concept is basically acceptable to the Canadian Government. 1 would like to ask the Minister one question on that matter and one question on a related subject.
Would the Minister clarify to Parliament and the people of Canada whether or not he has any differences whatsoever with the American Government's position and the position of Ronald Reagan with respect to the so-called research on star wars?
Will he indicate precisely what his knowledge is of the extent to which there has been not merely research but as well a number of important steps taken on the road to deployment? What differences, if any, exist between the position of the Government of Canada and the Government of the United States with respect to the star wars research and deployment?
Second, Mr. Speaker, on another very important subject the Minister has indicated that Canada is prepared to take our stand in defence of freedom and, of course, we agree with that.


Some Hon. Members:: Oh, oh!


Ramon John Hnatyshyn: What about NATO?


Svend Johannes Robinson: I want to ask the Minister whether taking such a stand includes Canada being included in contingency plans by the United States Government, past or present, without our knowledge and consent? Would the Minister clearly indicate-


Mr. Speaker:: Thank you.


Charles Joseph Clark: Mr. Speaker, I suppose nothing could demonstrate the difference in attitude toward our responsibilities to achieve some agreement on arms control better than the suggestion that, at a time when delicate negotiations have finally begun, we, instead of supporting the people at the table, should be scrounging around looking for differences which we can advertise. So that might have some effect on setting those negotiations off course. That may be the position of the New Democratic Party, but it is not the position of the Government of Canada.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: A general question has been asked as to whether there is any difference at all on a concept which is in an early hypothetical stage-


Pauline Jewett: It's not hypothetical.


Charles Joseph Clark: -and that has to do with a very complex question. The only way I can answer that, Mr. Speaker, is to ask the Hon. Member, if he has a specific question to put to me regarding an aspect of the research involved in the SDI, to put it to me rather than to hide behind that kind of general and evasive questioning.
1506

January 21, 1985
Disarmament Talks
With regard to the Hon. Member's last question, I cannot speak for the conduct of past Governments. I can speak for the conduct of this Government. We have sought and have received, as a result of events in recent days, a clear assurance from the Government of the United States that there will absolutely be consultation regarding any nuclear action in time of crisis which might affect Canada-


Pauline Jewett: Too late.


Charles Joseph Clark: -and that no such action would be taken without the agreement of Canada.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: I will allow one more question.


Mr. Tobin:: Mr. Speaker, while the Secretary of State for External Affairs (Mr. Clark) and the New Democratic Party are debating where they stand or do not stand on star wars, let me tell them that the Liberal Party is against star wars whether in the United States or in the Soviet Union, and we are definitive about that.
I find it somewhat fascinating, a convoluted exercise in mental gymnastics, to try to follow the logic in this statement. On the one hand, we have the Secretary of State for External Affairs indicating that the Government of Canada approves tacitly, or turns a blind eye, on SDI development research- $25 billion worth-in the United States and, on the other hand, in the very same statement we find the words, "to date the full extent of the program has not been explored and it would, therefore, be premature to draw definitive conclusions about it". That is right, it would be premature for this country to send a signal across the western world that somehow we tacitly approve that United States expenditure. Surely the Minister has no difficulty, not in taking sides, but in saying to both the United States and the Soviet Union that the development of nuclear weapons or new technology in space is wrong and we unequivocally oppose it in the United States or in the Soviet Union. Why can the Minister not take that position now? I am not asking him to take sides.


Charles Joseph Clark: Mr. Speaker, all I can say, I suppose, about the prelude to the Hon. Member's question- and I take it he speaks on behalf of the Liberal Party-is that some members of the Liberal Party are definitive; some members of the Liberal Party are much less definitive on this question.


Mr. Gauthier:: Name them.


Charles Joseph Clark: We would look forward to learning what their position is. Our view is that the most important question at issue now, the most important development not only in arms control but, indeed, in the possibility of the world achieving peace, has been the resumption of negotiations between the super powers. Those two super powers have established an agenda. It is a broad agenda.
It is my view, as well as the view of this Government, that our action, our public comment and our private comment, including those made during my visit to the Soviet Union in April, should be to both sides to do everything we can to encourage the success of those negotiations and not to suc-comb to the temptation to address a partisan audience at home in a way which would set off course those essential negotiations.


Some Hon. Members:: Hear, hear!


INTERNATIONAL YOUTH YEAR
Hon. Andree Champagne (Minister of State (Youth)):: Mr. Speaker, 1985 is still young, and I hope that you and our hon. colleagues will allow me to offer my best wishes for the new year. With you and with all those who have remained young in heart and spirit, I want to wish the young people of this country and young people the world over the very best during this year.
Today, I have the honour of officially proclaiming the beginning of the International Year of Youth, and I urge every Member of this House to help us work together for the benefit of young Canadians.

Today's generation is a rich mosaic. It is no longer the almost uniform group it was in decades past. It seeks a greater role in Canadian society. The adult world, which is also very diversified and which is undergoing rapid technological change while grappling with serious economic difficulties, to some poses a challenge and to others a threat. However, we must not exaggerate the scope of the challenge. We should not underestimate the potential of our young people. Most of today's youth is well equipped to confront life's obstacles. Becoming better informed and better educated, the young people of today are demonstrating great realism. Prospects for meaningful work, global peace and security and the state of the environment, top the list of their concerns. They cannot succeed alone. We as Member of this House have a responsibility. We must attempt to break down the prejudices against young people and encourage our partners in the business and labour communities to make their fields more accessible to them. [Translation]
In the interests of young people themselves, we should stop making youth a political issue.
The situation of young people today deserves special attention but should be considered within the context of society as a whole. Although our vision of the world and our philosophies may not always coincide, there are a number of concrete points on which we should be able to agree. There is, for instance, one area that concerns us all, and that is the need to create
January 21, 1985

permanent jobs. The best way to achieve this is to get our economy back on a sound basis. In this respect, the Government will continue to take any action that is necessary to promote the economic renewal that will lead to the creation of new jobs.
The International Year of Youth also provides an excellent opportunity to renew our approach to young people, and we, as Members of this House, are in a very good position to listen to young people, to register and consider their aspirations and to encourage them to participate fully in the life of this country.
We are also particularly well placed to make the public aware of the situation of our young people and the asset they represent, of the need to encourage them and welcome them with open arms.
The program developed by the Government for the International Year of Youth takes into consideration the points I have just mentioned as well as the themes proposed by the United Nations: participation, development and peace.

The year's activities include a grant program which is intended to facilitate the implementation of special projects undertaken by young people or on behalf of young people by volunteer groups and agencies. In addition, partial funding will be provided for joint initiatives by the Youth Secretariat and other federal departments and agencies. The peace and development program will increase the understanding of young Canadians of international realities here and abroad. An information and communication program is being established to inform Canadians about the situation of young people and to promote greater awareness of their contribution to society. I will soon be announcing appointments to an advisory committee composed of young people from all parts of Canada. Finally, five national forums will be held in various regions of the country. These exchanges will reflect our intention to involve young people fully in the development of the policies that will affect them.
However, International Youth Year is more than just a program and a string of projects, Mr. Speaker. It is a year for discussion and action. It is first and foremost a year that belongs to young people and all those who are interested in their welfare. Considerable time and energy has already been committed by many Canadians and I commend them for their efforts.

As we embark full of hope on this International Year of Youth, we must bear in mind that our aim is not to find some magic formula but to make progress.
Mr. Speaker, on this day when Parliament resumes its work, I wish to repeat this Government's intention to promote actively training for young people. The Youth Training Options First Chance Programme has been set up as a pilot project, and my colleague, the Minister of Employment and
International Youth Year
Immigration (Miss MacDonald) is developing new programs to provide young people with training consistent with the demands of a modern economy.

This Government will not overlook students who will need summer employment. However, before embarking on a new program we wish to consult broadly to determine how best to achieve this objective. Youth is one of Canada's untapped resources and I am committed to seeing that International Youth Year reaches beyond 1985. If we work alongside young people and our partners in the social and economic sectors, this special year will be more than just a year of celebration; it will be a year of real progress for and by youth. These are the objectives that I have established and will endeavour to realize during International Youth Year in close co-operation with each and every Canadian.


Sheila Finestone: Mr. Speaker, the Liberal Party of Canada welcomes the opportunity that this International Year of Youth offers us to renew our focus and commitment to all the youth of this country. We are sensitive to their concerns and aware that our future lies in their potential to contribute to the ongoing growth and development of this great nation. In these turbulent times the future security and protection of this major human resource is as important as short-term Fiscal considerations. Public policy must be innovative as well as just. In launching the International Year of Youth, the Minister of State has made abundantly clear once again that neither she nor the Tory caucus are committed to preventing a serious tragedy among our youth. They promised jobs but announced cuts. Sixteen to 37 per cent of our youth are unemployed in parts of Canada, and the Government offers nothing to assuage their disillusionment or to assure their sense of dignity and self-worth. A significant part of our society is now adrift. Their scars will last a lifetime. It will affect us all and make a mockery of the themes of participation, development and peace which are the focus of this year.

Although I do not feel inclined to criticize the Minister of State for Youth, I must point out a few shortcomings in her work and action. There are close to half a million young people, one out of four, that are unemployed. If the Minister is concerned with and wants to talk about those of our young people who perform well in our society and put the accent on them, I have no objection. But is that where the true priority lies given such high unemployment, the suicide rate, the growing use of drugs and alcohol, delinquency, single mothers, poverty and so on? Her department which was allotted a $28 million budget, was established to operate programs and projects for the International Youth Year and to speak on behalf of the young. Judging from her action to this date, it would seem that either she does not understand what her role is, or worse still, her colleagues do not listen to her. Who then speaks for the young? Clearly, it is not the Minister.

January 21, 1985
International Youth Year
The programs already announced are but a drop in the bucket. Her projects bring no encouragement whatsoever to the young who are being hurt, who see no future and no job opportunities, who feel short-changed by society. If her caucus think that the private sector alone will create enough jobs for those 454,000 young unemployed, they are daydreaming! [English]
True, the Minister has a narrow mandate, but she does have a role as advocate for young people and their concerns. Yet she stated this past weekend that the federal Government is not going to single out any one group for special consideration in 1985. This is in strange contradiction to her mandate, one which is unacceptable to me. Where was her voice when her Government severely scaled down the Youth Training Options First Chance Program? This is the most flagrant indication of the Conservatives' lack of care and concern toward our youth's needs. The reasoning for the First Chance Program was very important. While Government was spending billions of dollars on post-secondary education, very little was directed toward the preparation and training of three-quarters of our youth who need practical career help for their transition from school to the labour force where the unemployment level is the highest. Our youth need work and appropriate training. These are the key issues, Madam Minister.
Where was she when the young entrepreneur programs were chopped and the young workers exchange program terminated? Where was the Minister when $85 million was cut from summer employment programs?
Consultation is fine, but leadership is needed, too. How long do youth have to wait for government action on employment? The Minister allowed the Minister of Finance (Mr. Wilson) and the Minister of Employment and Immigration (Miss MacDonald) to put the cart before the horse when they stripped and cut important programs which affect our youth. She should have insisted that the programs geared for youth stay in place until the new Tory orientations for 1986 were ready to go. Did we hear the Minister speak out about cutting the chance to earn and learn for our youth? International youth themes of participation and development will not be met by this Government's rhetoric.

Where was the Minister when Radio Canada and CBC underwent drastic cuts? What were involved were quality cultural programs aimed at our young people.
Where was she when the Solicitor General was asked to postpone until after April 1st the implementation of the Young Offenders' Act?

Where was she when the Minister of National Defence (Mr. Coates) attacked peace protesters, when reforestation programs were slashed and when the volunteer training program, Katimavik, was cut? Has she forgotten that ecology and disarmament are prime concerns for young people? Where is her voice with respect to various mental health questions raised by the Badgley report and the growing suicide rate of our
young people? Where was her support on the issue of social housing which affects poor young families and single parents?
Young Canadians, Mr. Speaker, employed or unemployed, do not go to the Rideau Club or belong to the Chamber of Commerce. The Minister must reflect their concerns and take actions on their behalf. It is a noble gesture to celebrate the United Nations Year of Youth, but, Mr. Speaker, the Minister has shown that her voice, her advocacy, has not been heard. Her silence screams at us, and youth are scandalized by Tory insensitivity and misguided priorities. I think young Canadians deserve better than this.

Our Canadian youth needs a voice that can be heard. Their future is at stake.


Svend Johannes Robinson: Mr. Speaker, first I would like to join with all Members of this House, I am sure, in congratulating Canadian young people on the International Year of Youth which has been proclaimed this year by the United Nations. It has three central themes, that of participation, development and peace. These are themes which I am sure all Members of this House would support on a non-partisan basis.
I must say that, in listening with care to the remarks of the Minister, I tried to put myself in the place of a young man or woman in my constituency or a constituency in any part of this country who has been out of work for many months, someone who perhaps has a young family or is a student looking to this summer without the hope of a summer job or a longer-term job. I put myself in the position of that young person and asked myself what hope can be drawn from the actions of the Government to date. Actions speak much louder than words, Mr. Speaker. The central themes, as chosen by the United Nations, of participation, development and peace should be reflected in the actions of member Governments. Yet the Government has so far failed Canadians in the most important challenge of all of providing full and meaningful employment of our young people.
The Toronto Star published a survey yesterday of the major concerns of young people. I am sure that the Minister saw that survey. It showed a very disturbing result. Some 65 per cent of young people had a very deep and serious concern about unemployment. The Government says that we should trust it because the business sector is going to be stimulated and in turn jobs will be provided; the old trickle down theory. It was not worked before, Mr. Speaker, and it certainly is not going to work today. There are close to 700,000 young Canadians between the ages of 15 and 24 who want to work but cannot find jobs.
I do not have the time to give the many personal examples that I, and I am sure all Members of the House, could give of the anguish and financial and emotional hardship which is caused by this failure to provide meaningful jobs. That is the
January 21, 1985

most damning indictment of the Government's failure to act to date. There has been reference made already to the Summer Canada Program. The Minister has promised that there will be more, but surely students should have been told by now what the nature of the new Summer Canada Program will be. Surely the voice of the Minister of State for Youth (Mrs. Champagne) should have been raised long ago demanding that her Government take meaningful action for summer jobs for students.
Reference has been made to post-secondary education by both the Minister and the Liberal Member who just spoke. At the same time as the Government talks about optimism and hope for the future for young people it is freezing the level of Canada student loans. Tory provincial Governments are talking about adopting policies which would create bastions of elitism of our post-secondary institutions. The Bovey Commission advocates dramatically increased tuition fees. The Liberal Government policy of cutting back on funding to post-secondary education has certainly not been reversed by this Tory Government.
I noted that peace was selected as a central theme for the International Year of Youth. Indeed, what more crucial or essential question could there be than peace and disarmament? Just today the Secretary of State for External Affairs (Mr. Clark) suggested that Canada is acquiescing in the research and testing of a new generation of weapons. What will young people think when they hear of that decision by this Government?

Mr. Speaker, I would also urge the Minister to consider thoroughly the recommendations of the Badgley Commission to make sure that our young people are better protected against the sexual and other abuses examined by the Commission.
As for the Young Offenders Act, Mr. Speaker, I hope that the Minister will co-operate with her colleague the Solicitor General of Canada (Mr. MacKay) and demand that this important legislation be fully implemented as soon as possible. The Minister knows quite well that the legislation is meant to meet the special needs of young people under 18 years of age who have often been neglected in our legal system. And I hope the Minister will urge her colleague the Solicitor General to resist the pressures of provincial conservative governments which would like him to abstain from promulgating that legislation protecting the equality of our young people everywhere in Canada.

In closing let me say that I certainly join with the House in celebrating with enthusiasm the symbolic significance of the International Year of Youth. Youth are concerned as well, of course, about unemployment. The Minister, as the advocate for youth, has been silent on unemployment and a clean environment. The Minister is silent on the cut-backs to the
International Youth Year
Canada Wildlife Service, the quality and maintenance of our parks and programs designed to conduct research into the effects of toxic industrial chemicals. Young people are concerned about this and they want a Minister who will speak out on their behalf on these concerns.
We had International Women's Year and that was a hopeful beginning. This year is a symbolic beginning, but I urge the Minister to recognize that young people demand action in the areas that I have outlined. They demand action to put an end to the injustices of global poverty. We must provide that leadership to them, Mr. Speaker. We must not fail our young people in this of all years.


Mr. Speaker:: Questions?


David Charles Dingwall: Mr. Speaker, I have a brief comment and then a question for the Minister. Although I can join with the Minister in applauding that it is the year for youth, I am appalled at the fact that there has been no concrete action taken by the Government to assist young people in the country.
I point out to the Minister very clearly and unequivocally that young people in the country are fed up with politicians, particularly on the government side, who talk of prosperity tomorrow. The youth of the country want prosperity now. They want jobs now. They want an opportunity to improve themselves. They do not want more rhetoric from this Minister.
When is this Minister going to implement the recommendations which were contained in the employment advisory board report which talked about a pre-retirement plan to provide more jobs for youth? It talked about reducing the hours of the work week. What is the Minister going to do? Has she done anything on that or is she hiding outside the Cabinet room listening to the musings of other Ministers? What is she going to do?
[ Translation]


Mr. Rossi:: You are not on television now. This is the time to speak out. You are not play acting in "Un homme et son peche."


Andrée  Champagne: Mr. Speaker, I could not help hearing the comment of the Hon. Member for Bourassa (Mr. Rossi) since he was obviously a faithful fan of that famous TV series. He showed good taste in those days.

I can understand that the young people are fed up with politicians. They have had 22 years of this. The Member said they want prosperity now. The Government would certainly like to be able to have all of the money, but the cupboards were bare. The Minister of Employment and Immigration (Miss MacDonald) said a few minutes ago in the House that she will be announcing a replacement for Summer Canada. She is the Minister responsible for this and it is not for me to make her announcements.

January 21, 1985
International Youth Year


Mr. Rodriguez:: Mr. Speaker, I want to ask the Minister a very direct question. If she has no concern for youth within her Ministry, just exactly what is her role in that Cabinet?


Carlo Rossi: She is an actress.


Ramon John Hnatyshyn: Order. You are a clown.


Andrée  Champagne: Mr. Speaker, I am a very vocal spokesperson for young people within the Cabinet, as my colleagues will agree. The Government has had to make some very difficult decisions, some of which affected young people. We will have to suffer the problems of the last 22 years for a while longer. However, we are working very hard, and I can tell the Member that I am doing my job within the Cabinet as well as outside the Cabinet.


Mr. Marchi:: Mr. Speaker, in her speech, the Minister of State for Youth (Mrs. Champagne) referred to youth as a rich multicultural mosaic. She went on to say that we should cut down the prejudices. I agree with her.
One recurring theme that came through loud and clear during my meetings with the various ethnocultural organizations of the country is unemployment among their ranks. The Minister will see in the report on visible minorities that in some cases unemployment among young people in visible minorities in certain regions of the country that are most depressed is up to 87 per cent.
What specific programs would the Minister and her Government introduce to address that very real and significant problem, particularly in the most depressed areas in this country?


Andrée  Champagne: Mr. Speaker, I do not believe that 87 per cent unemployment among certain people started on September 4. We are looking into those problems along with the Minister of State for Multicultural-ism (Mr. Murta). The Canadian mosaic will be well represented in the advisory committee to the Minister, and I am sure that the Minister of Employment and Immigration will make sure that those programs will be varied and well suited to the different regions of Canada and the different needs of the provinces. I am sure the situation will be much better in the months to come.


James Douglas Manly: Mr. Speaker, as we celebrate this International Year of Youth, what advice would she give to young people in British Columbia, for example, where there are 25,000 fewer jobs today than there were when her Government took office? There are 200,000 unemployed people in British Columbia today.
What opportunities are there for young people who will come out of schools and colleges in the summer? As we celebrate their year, what opportunities are there after cutbacks were announced to the program in November? Why has it taken this long for the Government even to get around to saying it will announce a new program? Why is this program
not in place now so that young people will be able to plan their lives and have something to celebrate?
[ Translation]


Andrée  Champagne: Mr. Speaker, a summer employment program had been suggested by Hon. Members opposite during the last election campaign. Following a review, this program proved impracticable and extremely costly. We then decided to hold consultations which took me as recently as last week to British Columbia where I had conversations with many young students and where I met a month ago with Mr. McClelland, the Minister responsible for the International Year of Youth and Young People. Efforts are being made everywhere and I know that we will see the results very shortly.


Mr. Malepart:: Mr. Speaker, the Minister has just stated that the previous government had proposed a program. She is wrong. The Summer Canada Student Program was already in place. I think it is important to say so.
A moment ago, you indicated to my friend the Hon. Member for Bourassa (Mr. Rossi) that he had been watching a good program in which you were starring. I watched it too. Unfortunately, I must say that if her performance as an actress was outstanding, her performance as a Minister is very poor. What young Canadians need now and what this government is not likely to give them is action and not speeches. All this patter is great fun. Our students need the Summer Canada programs which gave them the opportunity to acquire some experience. Young people like those in the Montreal-Sainte-Marie, Hochelaga-Maisonneuve and Rosemont ridings are those who will pay the price for this too close association with the private sector and the provinces, for you want to help only university students at the expense of high school students.
I should like therefore to know whether the Minister will stand up for these young people from the working class who are high school students and who will be unable to attend the CEGEP if they cannot find jobs this summer.


Andrée  Champagne: Mr. Speaker, I demonstrated the importance the government is giving to the training of our young people, both those who are still attending school and those who have graduated from high school or university, when I spoke of this kind of blend of the two programs a moment ago. I was not referring to the Summer Canada program, but rather to the training program which was put forward last summer. The Summer Canada program will be replaced very shortly; you will realize then that there is something for everybody, for university students as well as all classes of our society and all regions in Canada.


Mr. Orlikow:: Mr. Speaker, when discussing the International Year of the Youth, we are supposed to be celebrating this year. Earlier today the Prime Minister (Mr. Mulroney)
January 21, 1985

expressed pleasure about the fact that the rate of unemployment has dropped below 11 per cent for the first time in a long time. We know that the unemployment rate among young people is almost 20 per cent.
The Minister said that the Summer Canada Program devised by the former Government has been scrapped and that there will be an alternative program. Assuming that it is a better program than the Summer Canada Program, it will only employ a very small percentage of unemployed young people. At the end of this International Year of the Youth, how much less than the almost 20 per cent at present will the unemployment rate for young people be and what will our young people have to celebrate?


Andrée  Champagne: Mr. Speaker, along with the Member opposite I want to say that 1 am disappointed with everyone being so gloomy today when we are expressing hope for the young people of Canada.


Jean-Robert Gauthier: Give us something to be happy about.


Andrée  Champagne: I said in my speech that I am not a magician. I will not predict the percentage, but I am sure that, with the help of my colleagues in the Government, it will be lower than it is now and especially lower than it was during the reign of the former Government.


George Baker: Mr. Speaker, I am not asking the Minister to be a magician. 1 am asking her to ask the Minister of Employment and Immigration (Miss MacDonald) to do something for unemployed young people who are poor.
Will the Minister ask the Minister of Employment and Immigration to change the guidelines for the hiring on direct job creation programs by Canada Works in Section 38 to allow people between the ages of 18 and 25 to qualify for a referral? Under the Minister's guidelines they cannot even get a referral for a job under direct job creation programs of the federal government. It is a fact, Mr. Speaker. Will the Minister check with somebody, her Deputy Minister, somebody, and find out whether what this Member is saying is correct? If she does that and finds out I am correct, will she ask the Minister of Employment to change that guideline, which is outright discrimination about which the Human Rights Commission should be concerned and certainly about which this Minister of Youth (Mrs. Champagne) should be concerned. I am asking the Minister a question. Does she understand, first, what I am talking about? If she does not understand what I am talking about, will she tell the House that she will try and find out what I am talking about? Will she do that on behalf of the poor unemployed young people of this country who, if they are 18 years of age, do not qualify for welfare if they are living at home? You do not qualify for family allowance when you reach 18, and you do not qualify for any of the jobs announced by the Government under the direct job creation program. Yes or no? Will she ask the Minister of Employment to change this?
International Youth Year


Andrée  Champagne: Mr. Speaker, I know that some of those criteria are being looked at at this time. I know that the Minister, certainly in the conversations and in the meetings we have had over the last couple of months, will hopefully help the young people in that very sector.


John V. Nunziata: Where do you stand?


Andrée  Champagne: I would like to remind the Hon. Member that within all the programs in my Department, because we have not talked about them at all, I have to live with some criteria that were defined by members of the Hon. Member's Party.


George Baker: Why don't you change them?


Andrée  Champagne: Because there is a question of equity between people who have already been refused, and we are not allowed to have one new job according to that. Yes, this Government will be changing those criteria.


Cyril Keeper: Mr. Speaker, the Minister claims to be a loud voice in Cabinet for the concerns of youth. Obviously the Minister knows that young people would like to make a contribution to Canadian society. They would like to have jobs. They are concerned about global justice and about the disparities in income between Canada and Third World countries. They are concerned about peace and disarmament.
Looking at the record of this Government today and the fact that something like one out of every four young people is without work, the fact that development aid has been cut and that the Minister's Government has allowed the testing of the Cruise missile, I wonder just how loudly this Minister has been speaking in Cabinet for the concerns of young people? How can she explain this record of this Government in line with her mandate to speak up for the concerns of young people in Canada?


Andrée  Champagne: Mr. Speaker, according to the remarks originating from every part of the House-either during the speech made by the Hon. Member for Mount Royal (Mrs. Finestone) or during those we have just heard-you would think I was the only one responsible for all existing problems, not only in Canada but throughout the continent, if not the world. Believe me, I am discharging my responsibilities in the Cabinet, and I think people will have to be more patient and that the aspirations of everyone in this International Youth Year ... As 1 said earlier, we may not be swaying a magic wand, but we will make significant progress for and with the help of young people, and, I should hope, with the co-operation of the Members of the House.

January 21, 1985
Order Paper Questions


PETITIONS
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, I would like to present a petition this afternoon on behalf of a number of concerned citizens of the Village of Penobsquis who are extremely upset about the proposed cut in post office hours, a subject on which the postal corporation has asked the local post office to present a proposal. People in rural Canada, let alone rural New Brunswick, are extremely concerned about the treatment they are receiving. I ask this Government to treat them as fairly and as equitably as Canada Post is apparently intending to treat urban customers.


Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, I am honoured to present a petition on behalf of my constituents of the riding of Saint-Michel-Ahuntsic who urge this House to take into consideration their concern with respect to the abolition of the Summer Canada Program and other job creation programs. The unemployment rate is so high throughout Canada that those workers quite properly wonder whether their jobs are secure. In addition, Mr. Speaker, many young people in my riding are quite upset by the possibility of going into debt or quitting school as a result of being unemployed this summer.


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, at the request of my constituents, I have the honour to present to the House a petition against the abolition of the Summer Canada Student Employment Program which until now used to fund summer camp activities in three schools of my riding, Dante, Honore-Mercier and Pierre-de-Coubertin.
Mr. Speaker, this measure will prevent a great many children from taking part during their summer holiday in programs organized in their neighbourhood, while at the same time doing away with summer jobs for students who look after those programs.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
John Horton McDermid: Mr. Speaker, the following questions will be answered today: Nos. 21, 32, 54, 77, 96, 102, 107, 112, 125, 162, and 163.


Mr. Howie: How many lawyers are employed by the Department of the Environment?


Hon. Suzanne Blais-Grenier (Minister of the Environment):: There are six lawyers assigned to the Department from the Department of Justice.


Mr. Howie: 1.	Will tenders be called for the construction of the "J" Divisional Headquarters of the R.C.M.P. in Fredericton, New Brunswick and, if so, on what date?
2.	What is the present status of planning for the project?
3.	Were outside consultants, architects, or planners engaged and, if so, what (a) are their names (b) amount was allocated for their services?


Hon. Roch La Salle (Minister of Public Works):: 1. Tender call for main project contract scheduled for April 30, 1985.
2.	Based on Treasury Board effective project approval of June 5, 1984, working drawings and specifications are proceeding and at present are 66 per cent complete.
3.	With Treasury Board Approval the original consultants' agreement was extended and
(a)	Prime consultants Duschenes & Fish and Neill and Gunter Ltd. in partnership were engaged to proceed with working drawings and construction supervision.
(b)	The present maximum contractual cost of the prime consultants' agreement is $1,900,000. which covers professional services for all stages of design and construction supervision.
116335 CANADA INC.


Mr. Howie: To the knowledge of the government is 116335 Canada Inc. a subsidiary of the Canadian National Railway and, if so, what are the (a) names (b) positions of the persons who occupy positions on the Board of Directors and, in each case, what amount was he/she paid in respect of that position in the fiscal year ended March 31, 1984?	'


Hon. Don. Mazankowski (Minister of Transport):: The
Management of Canadian National Railways advises as follows: 116335 Canada Inc. ceased to exist effective January 1, 1983.
(a) and (b) Not applicable.


Mr. Nunziata: Have any requests been made for warrants for surveillance by the security service and, if so, how many?


Hon. Elmer M. MacKay (Solicitor General of Canada):: Applications for warrants have been made by the Service in accordance with the provisions of section 21 of the Canadian Security Intelligence Service Act. It is not in the interests of
January 21, 1985

national security to reveal at this time the number of applications made for warrants.


Mr. Dingwall: Will the Minister of Transport provide moneys to set up a Regional Marine Center that will accommodate the Canadian Coast Guard offices in Louisbourg,


Donald Frank Mazankowski: No. (a)
Not applicable, (b) There are no Coast Guard offices in Louisbourg. Existing accommodations for the Louisbourg lifeboat station are adequate.


Mr. Orlikow: Did the CRTC hold formal hearings from September 4 to November 16, 1984 into the application of CN-CP Telecommunications to provide interchange competition and, if so, how many (a) items of correspondence were received from individuals and groups by the office of the Minister of Communications concerning telephone system deregulation and telephone rate structure rebalancing (b) petitions were received by the office of the Minister concerning telephone system deregulation and telephone rate structure rebalancing and how many individuals had signed the petitions?


Hon. Marcel Masse (Minister of Communications):: The
Canadian Radio-television and Telecommunications Commission (CRTC) held public hearings from September 4 to November 16, 1984 on an application by CNCP Telecommunications to provide long distance telephone service.
As of December 10, 1984: (a) 10,899 items of correspondence concerning deregulation and rate rebalancing of telephone service have been received from individuals and groups by the office of the Minister of Communications; (b) 51 petitions signed by 5,592 individuals have been received.


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


Hon. Barbara McDougall (Minister of State (Finance)):: Ways to improve the efficiency of Canada's tax system are always under review by the Department of Finance. In particular, Canada's commodity tax system has been under intensive review for some years. Several alternatives to the present manufacturers' sales tax have been identified and value added taxation is one of them. While no detailed studies of a value added tax have been prepared by the Department of Finance, the report of the Federal Sales Tax Review Committee sub-
Order Paper Questions
mitted to the Government in May, 1983 has a discussion of this option.
The Department of Finance has commenced a review of value added tax (VAT) following the Federal Sales Tax Review Committee report. First hand information about the operation of existing value added systems in the European Economic Community was obtained during a recent visit to Europe by officials from Finance and Revenue Canada. Information gathered by this group forms the basis for work now in progress in the Department to evaluate this option.
This activity should not be interpreted as endorsement by the federal Government of the value added tax alternative. No decision has been made to replace the manufacturers' sales tax, let alone the nature of a possible replacement.
No external studies of federal-provincial aspects of value added taxation are in progress, though federal-provincial aspects are central to the feasibility of such an option in Canada and are under consideration in the Department of Finance.
One external study on the operation of VAT has recently been commissioned by the Department. This examines the relatively difficult areas of housing and financial sectors under a VAT framework. This study will cost $21,500.
No studies have yet been completed in the Department. When any studies are completed, the Government will examine the feasibility of making them available to the public.


Mr. Boudria: Since the September 4 election, how many Department of Public Works contracts have been awarded or Filled by suppliers or contractors, originating in part or in whole, from the Constitutency of Manicouagan and, in each case, what was the total value of the contracts?


Roch La Salle: Since the September 4 election four public works contracts have been awarded. The total value of each of the four contracts is as follows: $6,720, $23,302, $11,799, $58,670.


Mr. Robichaud: 1.	Were courses given to chiefs of staff of cabinet ministers' and, if so (a) at what cost (b) how long did they last?
2.	Were tenders called before the contract was awarded to the Biolink Management firm and, if so (a) how many tenders were examined (b) what were the names of individuals or firms who submitted a tender (c) what were the amounts of the tenders?


Hon. Erik Nielsen (Deputy Prime Minister and President of the Privy Council):: 1. Chiefs of Staff were able to subscribe to a course (a) costing $986.80 per participant; and (b) over a period of one evening and two full days.
2. No contract was awarded by the Government of Canada to the Biolink Management firm.

January 21, 1985
Investment Canada Act


Mr. Orlikow: Has the Ministry of State for Science and Technology cut any projects in its science and technology programs in order to absorb the reduction in its expenditures required by the economic statement made by the Minister of Finance in the House on November 8, 1984 and, if so, what are they and what are the projected costs?


Hon. Thomas Siddon (Minister of State for Science and Technology):: There has been no reduction in expenditures resulting from the economic statement made by the Minister of Finance in the House on November 8, 1984.


Mr. Orlikow: Has the Secretary of State cut any projects in its science and technology programs in order to absorb the reduction in its expenditures required by the economic statement made by the Minister of Finance in the House on November 8, 1984 and, if so, what are they and what are the projected costs?


Hon. Walter McLean (Secretary of State):: The Department of the Secretary of State does not administer science and technology programs.


Mr. Speaker:: The questions as enumerated by the Parliamentary Secretary have been answered.


John Horton McDermid: Mr. Speaker, I would ask that the remaining questions be allowed to stand.


Mr. Speaker:: Shall the remaining questions stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Stevens that Bill C-15, an Act respecting investment in Canada, be read the second time and referred to the Standing Committee on Regional Development, and the amendment thereto by Mr. Gray (Windsor West (p. 1302).
Sheila Maureen Copps: Mr. Speaker, this is my first opportunity to join the Hon. Member for Bow River (Mr. Taylor) who this morning extended his wishes for a Happy New Year to the members of the House of Commons and to all Canadians. I am sure I express the views of my colleagues in the Liberal Party when I wish all Canadians a Happy New
Year. It is for that reason that I see much difficulty in this measure being introduced by the Tory Government.
Mr. Speaker, it is a well known fact that the issue of investment in Canada is of concern to all Canadians because, as was promised by our Prime Minister during the election campaign, as soon as elected a Conservative Government would create thousands of jobs. We in the Liberal Party said we would introduce a policy that would create that kind of jobs for all Canadians. Unfortunately, the kind of measure introduced by this Government will do exactly the opposite. Mr. Speaker, I would like to indicate that since the setting up by the former Liberal Government of the Foreign Investment Review Agency, we had the pleasure as Canadians to exercise a degree of control over our economy.

I, too, like the Member for Bow River (Mr. Taylor) would like to wish all Canadians a happy new year. I, too, like the Hon. Member for Bow River and the Prime Minister (Mr. Mul-roney) of this country would like to help to create tens upon thousands of jobs for Canadians. But, Mr. Speaker, the motion before us with respect to the Government's move to take the teeth out of the Foreign Investment Review Agency with the creation of Investment Canada does not promise the nirvana that this Government would have Canadian people believe will be brought about. It does not offer the kinds of job guarantees and creative approaches to the new economy for which we in the Liberal Party are looking. It does not say to Canadians that we will welcome foreign investment as long as it does not result in a loss of Canadian jobs, as long as Canadian can retain the kind of control we are beginning to achieve over our own economy.
The Government would have us believe that in fact the Foreign Investment Review Agency was a failure, but the facts speak otherwise. From 1974, from the creation of FIRA to 1982, if we look at the figures in the manufacturing, petroleum, natural gas mining and smelting sectors-in fact, in all sectors of the Canadian economy-we see that Canadian ownership began to play an increasing role in our investment. I should like to bring a personal example to bear. If we look at foreign multinational companies, those which have caused closures of many Canadian plants during the economic downturn, we see that those firms did not look to the Canadian Government to ask how we could keep our economy going. They did not look to the Canadian people to secure jobs and to guarantee jobs for them. When times got tough, foreign investment got going; they left this country in such a way as to leave Canadians employed in branch plants with no jobs, no security, no hope for the future. In the 10-year period since the introduction of FIRA, Canadians have begun to realize the objectives of gaining control over our own economy.
Certainly it is with great fear and trepidation that I look at the policy of the Government which is to snuggle so close to the American President and Republican economic policies of the United States as to embrace the whole concept of free
January 21, 1985

trade. We know by quoting a former member of the Conservative Party that not all foreign investment is necessarily good for the economy. I refer to an article which appeared in The Citizen this January in which is was indicated that it was naive to think that all foreign investments would boost the economy and that some capital could bring harm, as economist and former Tory Member of Parliament Jim Gillies warned in a newspaper article.
We know that if the Government moves in the direction of free trade which has been espoused by a number of its members as we will see, according to estimates by the Ontario Economic Council, under multilateral free trade, employment in leather goods, miscellaneous manufacturing and machinery would be cut by at least 10 per cent and the knitting mill industry in Canada virtually wiped out.

Mr. Speaker, I would like to know whether the Quebec government members support a policy which will lead to the total destruction and disappearance of the Canadian textile industry. As a representative of a constituency in South Western Ontario, I saw Wabasso close down in that region, and I know quite well that the Canadian people would support a policy whose major objective would be to maintain and guarantee jobs for Canadians.

I see nothing in this government legislation which tells Canadians that we will welcome foreign investment as long as it is coupled with the protection of Canadian jobs. I should like to turn to Gallup-

-the poll which says that more than two-thirds of Canadians are afraid of losing their job.

We have a challenge in this House of Commons which involves a made-in-Canada economic policy including a move toward full employment, creative measures relating to the issue of early retirement and a stimulation of the economy on a domestic level through the development of an industrial strategy, not merely a scraping and bowing to foreign investment such as was articulated by the Prime Minister (Mr. Mulroney) when he went to New York to say that the country was up for sale.
If there is one heritage of which the Liberal Party can be proud, it is that we have Canadianized our economy. Unlike a former Prime Minister who said that we should be drawers of water and hewers of wood, this Party believes in stimulating the economy at the secondary level, even if it involves certain elements of domestic protection. I know about a situation in my own riding involving Susan Shoes. Very shortly the Government will be faced with the opportunity to renegotiate tariff quotas with respect to the importation of shoes. My colleagues and I will be fighting hard, not only to save jobs for Canadians but to tell multinational firms what we want, as we did with FIRA. FIRA was not a block to foreign investment to Canada.
Investment Canada Act
FIRA was a tool with which we told companies that if they wanted to come to Canada to take advantage of our tremendous natural resources and tremendous productivity offered by Canadian workers, they would be able to do so by ensuring their participation fully in the Canadian economy, including the job guarantees which we do not see in the document tabled by the Government.
Earlier in a discussion regarding this Bill I said that it should be renamed. It should not be called Investment Canada. It should be renamed "Abandon Canada". Under the lack of leadership of the Government which we have seen with the star wars policy and with the shallow shell of a foreign investment review policy, this is a Government which is not committed to a made-in-Canada economic strategy. It is not committed to creative new ideas. It is not committed to job creation and job guarantees for millions of Canadians who are looking for leadership.
It is on that sad note that I conclude my remarks that the new year will not be a very happy one for Canadians unless the Government agrees to our hoist motion to sit on this Bill for at least six months before proceeding with a measure which will mean lost jobs for Canadians from coast to coast.


Mr. Elliott Hardey (Kent):: Mr. Speaker, I am pleased to have the opportunity to rise in the House and participate in the continuation of the debate on Bill C-15, a Bill which will benefit all parts of Canada through the encouragement of investment and the creation of jobs. It will be particularly welcome in my riding of Kent in southwestern Ontario.
We have an area with some of the most productive agricultural land in Canada. We are also very progressive industrially and anxious to expand the manufacturing sector. New housing areas are continually growing. Just last week we had an announcement of an interest free federal-provincial loan to help build 32 units of moderate-cost rental housing in the City of Chatham. We have natural gas supplies, unlimited hydroelectric power and good water supplies, along with excellent highways and township roads. We have all the requirements for industrial growth. What we need is capital.
Canadians want jobs. That is their number one priority, and it is certainly understandable. As a Government we want to make it possible for private industry to provide those jobs. Government alone cannot provide long-term, meaningful employment. Although I know some Hon. Members in the House have expressed the view that the Bill before us will result in lost jobs, frankly I do not believe it.
In a survey this past summer, the European Management Forum ranked Canada as twenty-eighth out of 28 nations in its receptiveness of foreign investment. That figure would not present any problem if we had ample investment capital in the country to develop industrially to the point which is necessary to put our people to work, but it is obvious that we do not have it and that FIRA was not doing the job despite the defence put forward for that agency in the course of this debate.
An Hon. Member opposite was worried that this Bill would steal jobs from working men and women. The gentleman was

January 21, 1985
Investment Canada Act
further worried that economic and social policies in the country would be determined by foreign investors. I remind him that between 1980 and 1984, $18 billion of direct investment capital left Canada. There is no need to ask what effect that had on working men and women. The answer is obvious.
The Foreign Investment Review Agency, or FIRA as it is called, was established in 1974 to screen foreign investment proposals and to determine if those investments would have significant benefits to Canada. Unfortunately, instead of encouraging investment, it sent out signals leading interested foreign and domestic investors to think Canada was not receptive to foreign investment.
The Bill before us will undo the damage that FIRA has done, and it puts a new agency into place with a clear mandate to encourage and facilitate investment, with a fresh and different philosophical approach. I think the approach is worth noting and I draw attention to the preamble to Bill C-15 which states that "increased capital and technology would benefit Canada" and therefore proposes "to encourage investment in Canada by Canadians and non-Canadians that contribute to economic growth and employment opportunities". FIRA, by contrast, stresses "that the extent to which control of Canadian industry, trade and commerce has been acquired by persons other than Canadians and the effect thereof on the ability of Canadians to maintain effective control over their economic environment is a matter of national concern,". Under the present Bill, the criterion for allowance is net benefit to Canada, which is a more practical approach.
Canadians asked for change, in fact they demanded change, and the economic statement made it clear that the Government intends to carry out that mandate. As part of that change of thrust, a clear message is going out that Canada wishes to become a better place for foreign investors to do business.
There are those, of course, who believe that foreign investment in Canada is dangerous and who call for less rather than more foreign capital. That would be fine if we did not need foreign investment, but we do. The Conference Board of Canada in its second in a series of studies on the role of foreign investment in Canada received some very interesting replies to the questionnaires it sent out. According to the study's author, over half of those surveyed said that FIRA had hindered their investment plans.
The President of the Conference Board in a release last week has now concluded that although the second report indicated that there were a number of areas of concern to investors in Canada, in looking at the new legislation, each of these areas has been addressed.
This Bill has won the general approval of the business community, and I can think of no endorsement more significant than that of the Vice-President of the Canadian Chamber of Commerce who is quoted as saying, "Now we have something solid-here's the beef'. I believe he put that very well.
The Financial Post of January 5 calls this new legislation a giant step forward on the foreign investment front. It goes on to call for the Government to deal with the present unfinished business and to administer the new legislation in a manner which keeps the focus on the role foreign investment must play quickly in the national economic strategy of reliance on the private sector.
For those who argue that foreign investment rules should be tightened, not loosened, there is no reason for them to be worried about this new legislation. Investment Canada, while welcoming foreign capital, still reserves the authority to review any purchase in sensitive areas or when the investment is over a certain amount. The money is not coming into Canada without scrutiny, but it will come in without hindrance unless there is a valid reason for delay.
For those who call for less foreign investment and less involvement with the U.S., it would be well to remember that almost a third of Canada's Gross National Product in 1983 was attributable to exports. Of total exports, 73 per cent went to the United States, as did 80 per cent of manufactured goods. This means that about 20 per cent of Canada's GNP and the jobs of 3 million Canadians depend on the U.S. market.
The newly industrialized countries have become more competitive, and protectionist pressures have grown in the U.S. Canada is particularly vulnerable in that our $130 billion in two-way trade is much more important to us than it is to the Americans. We should not take that market for granted in spite of our proximity to the States and our long history of friendly relations.
If we are to create 2 million new jobs over the next few years, it is estimated that we will need about $4 billion in foreign investment, and even at that we will still need three Canadian dollars for every one foreign dollar.
We have reached a point where we have to be practical in our approach. Under this new Bill, the maximum turnover time for a foreign investment application will be 45 days. The Minister will decide, rather than the full Cabinet, if the new foreign investment offers a net benefit to Canada. We will no longer read articles like the one in the Halifax Chronicle of December 8 last when, in a column about foreign investment, it mentioned the whole Cabinet pondering a $1,000 takeover when the average cost to the taxpayers of a FIRA review is $6,000. That certainly is a case of over-kill.
Investment Canada represents an honest effort to find a solution to the long-standing problem of how to get the necessary capital to develop and still maintain control over our own destiny. This Bill offers an opportunity to do both in a realistic way.
It is obvious that Canadians will not, or cannot, provide the investment necessary, and the only answer is foreign capital, since Government alone cannot provide the 1,500,000 jobs so urgently needed in this country.
In my own riding, there are firms that are ready to expand and have the expertise and manpower. What they lack is
January 21, 1985

money. These firms do not want to be taken over and they are not afraid of that happening. They would welcome an input of foreign capital.
I discussed this Bill with a couple of businessmen in my riding and, in the words of Mike McGregor, President of Canadian Fram in Chatham, it is "time for the agency to develop a new personality. Even a new name helps eliminate the stifling nature that has created an unfriendly approach to foreign investment in Canada".
Don Benn, President of Benns Iron Foundry in Wal-laceburg, also came out in support of this new agency, and he warned that "Canada should not consider itself a completely developed nation. We need foreign investment to increase our productivity and develop our human and natural resources and, as more foreign dollars begin to move into Canada, Canadians will likely find themselves also investing in their own country instead of savings accounts. The present level of 11 per cent of Canadian dollars in savings accounts should be reduced to about 4 per cent".
I can sympathize with the fear of losing control that comes through loud and clear in the course of this debate. I understand that view as long as it does not go beyond reason. I would say that the Hon. Member who felt that the end result of this legislation will be that Canadians' standard of living will suffer immeasurably, has not looked into homes in his riding where the breadwinner is unemployed. These people are already suffering and they are searching desperately for work. That is a situation that cannot be ignored.
I call for a realistic approach on this question of foreign investment and foreign capital. Canadians have shown no inclination to risk their capital, and the economy cannot expand without the necessary funds. It is as simple as that.
Under this new agency, potential foreign investors with less than $5 million will be able to proceed without review. With respect to the fears expressed about harm to the already struggling business community in Canada, there is no reason to think that that will be the case.


The Acting Speaker (Mr. Charest):: Order. I respectfully advise the Hon. Member that his 10 minute period is up.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
[ Translation]

The Acting Speaker (Mr. Charest):: 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 Ottawa-Vanier (Mr. Gauthier)-Social security (a) Level of revenue affected by budgetary cut-backs
Investment Canada Act
(b) Budgetary cut-backs-Position of Baie-Comeau residents; the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall)-Unemployment insurance (a) Policy applicable to pension income and severance pay (b) Calculation of benefits; the Hon. Member for Mississauga South (Mr. Blenkarn)- National Revenue-Verification of research and development investment.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Stevens that Bill C-15, an Act respecting investment in Canada, be read the second time and referred to the Standing Committee on Regional Development; and on the amendment of Mr. Gray (Windsor West) (p. 1302).
Cyril Keeper: Mr. Speaker, I welcome the opportunity to participate in this debate. What the Government is proposing to do is of crucial importance to the Canadian economy. I say "proposing to do" because there is still a serious question as to whether this legislation will get through this House. By debating the legislation we hope to give the Government time to reflect on what it is doing, and by making points in debating the legislation we will give the Government reason for reflection.
In this legislation the Government is proposing to abandon the review of foreign direct investment in Canada. It will abandon any effective review of that foreign direct investment. It is taking the controls away from foreign direct investment and at the same time promising that this will bring about economic renewal in Canada and that it will provide jobs for Canadians. This is an empty promise and I intend, while speaking today, to demonstrate why that promise is empty.
I think we must also ask ourselves, if the action that the Government is proposing to take will not result in economic benefits for Canada, in economic renewal or in a greater number of jobs, why is the Government taking this action? It seems to me it is taking this action for a number of reasons, but one of them deals with its ideological commitments. The Government which was elected on September 4 has an ideological commitment to the unregulated free market. Its philosophy is similar to that of the American economist, Milton Friedman, who was the idea man for the economic experiment that took place in Chile right after the coup d'etat, the death of Salvador Allende and the putting in place of the military regime. In that country, a monetarist economic experiment was carried out which was a total and utter disaster for the

January 21, 1985
Investment Canada Act
economy of that country, a country which was once the most industrialized nation in the southern hemisphere.
This Government is committed to carrying out the same kind of experiment here in Canada. It is committed to hitching our economic wagon to the philosophical notion of an unregulated free market. It is bringing this legislation forward because of its ideological commitment and not because of a reasoned examination of the economy and of the likely results of its action. This is sad because Conservative Members belong to a Party which historically has recognized the need for a national economic strategy in this country. The first Prime Minister of the country ran on the platform of a national policy. Clearly, if Canada is to survive in the very harsh competitive environment that exists internationally today, we need a national economic policy.
This Party is abandoning its own traditions and heritage in the economic field. Its move to free, direct foreign investment and away from regulation is not only misdirected but is also sad. It is an abandonment of the Party's own political heritage.
I would like to deal with some facts about the Canadian experience with direct foreign investment in order to give the Government some reason to reflect on its notion that the deregulation of the entrance of foreign investment into Canada will be of benefit to our country. Foreign-controlled firms do not spend as much as Canadian firms on research and development. This is very significant because research and development underpins economic growth and productivity.
I wish to read a few statistics into the record which come from the Economic Council of Canada. We all know that small firms are the firms that account for most of the job-creation activity in a modern economy, so it is crucial to observe what is happening with small firms. Dealing with firms that employ fewer than 50 employees, the ratio of research and development over sales is 11.2 per cent. What is the record with regard to foreign companies, Mr. Speaker? If foreign direct investment is to be a great boon to the Canadian economy, we would expect that the ratio would be higher or, if not higher, then at least the same as the ratio for Canadian companies. While Canadian companies with fewer than 50 employees have a research and development over sales ratio of 11.2 per cent, the ratio for foreign companies of the same size is 3.3 per cent. Foreign companies spend less than a third spent by Canadian companies on research and development.
If we are concerned about the country's record with regard to research and development and if we are concerned about the impact of our policies on small business, one of the great creators of employment, then we should ask ourselves about the action of the Government to deregulate the entrance of foreign investment into the country. However, perhaps this is simply an aberration. Perhaps this is only the case with small firms that are involved in the economy. Perhaps when dealing with larger firms, foreign-controlled companies might lead to greater research and development and therefore to a better Canadian economy. Let us examine some of the facts.
In firms that employ 50 to 100 employees, the ratio of R and D over sales for Canadian firms is 10.1 per cent. The ratio
for foreign-controlled firms is 4.3 per cent. That is less than half of the rate of investment in research and development of Canadian firms. With regard to firms that employ 100 to 200 employees, foreign firms invest at a ratio of 3.7 per cent while Canadian firms invest at a ratio of 9.1 per cent. Dealing with firms that employ more than 500 employees, Canadian companies invest at the rate of 10.3 per cent while foreign firms invest at the rate of 2 per cent. That is about a fifth of the rate of investment made by Canadian firms.
If we are concerned about the strength of the Canadian economy, about productivity and about our capacity to compete internationally, then we must ask ourselves some very serious questions about foreign investment. We must ask ourselves whether a particular investment will be to the benefit of the Canadian economy or whether it will be to the detriment of the Canadian economy. We have documented evidence that indicates that firms controlled by foreign investors spend less on research and development in this country and therefore undermine the strength of the Canadian economy.
It is not only in the area of research and development that the Canadian experience has taught us to be wary of direct foreign investment. For example, when a firm undertakes any particular activity, there are always spinoff benefits from purchases in the area of machinery and other productive inputs. These spinoffs can benefit Canadian suppliers. However, through experience, we have found that foreign-controlled firms import more of their requirements than do Canadian firms. Firms controlled by foreign investors spend less of their dollars here in Canada and spend more-I take it my time is running out? I will just sum up briefly, Mr. Speaker.


The Acting Speaker (Mr. Charest):: Respectfully, the Hon. Member's time has more than run out.


Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, as I take part in this debate today I should like to begin with a few words which accurately describe the changes initiated since September 4. Finally, yes, finally, the Government, our Canadian Government, has initiated a true policy of co-operation with its partners in the private sector.
Bill C-15 now on second reading is the concrete evidence of the major guidelines for economic recovery which our government proposed during the election campaign. Faced with a massive national deficit of nearly $38 billion and a record unemployment rate, the Canadian Government must effect a major change of direction. The Progressive Conservative Party did realize this need for change and this is what the Canadian people have asked us to do.
People come to see us in our constituency offices. People even stop us in the street. What worries them, what they want to discuss with us, is the question of jobs. People want to work; they want jobs. They urge us to take action to improve their
January 21, 1985

lot. What we are doing with Bill C-15 is precisely a step in this direction.
We want to get rid of that piece of legislation of the previous Liberal Government which has irritated businessmen and stopped them from investing in Canada. We are finally doing something to help Canadian men and women looking for a job by opening up our doors to investors. We shall abolish FIRA and replace it with Investment Canada.
Mr. Speaker, the new and vigorous initiatives taken by our Government in the areas of economic recovery and employment are realistic. They are pragmatic and draw their inspiration from the major social and economic tendencies of our industrial society. The major philosophy behind Bill C-15 creating Investment Canada tells us that the state alone can never replace a new type of partnership between the Government and the private sector. Mr. Speaker, by itself, Canada will never get out of the impasse created by the welfare state nurtured by our Liberal predecessors. In spite of its few electoralist virtues at the time, this welfare state has succeeded only in leading our country into a constitutional, economic and social dead-end.
To have a better idea of the national situation before our coming to power, we must add the unprecedented unemployment problem throughout the country, with an unenviable record high rate of 18.6 per cent recently reached in my region of Chicoutimi-Jonquiere. By opening the door to foreing investors, Bill C-15 shows our national will to create a new partnership between the state and the private sector with a view to building a new social and economic order. Finally, we are abolishing the welfare state and replacing it with a new cooperation between the public and private sectors where each will respect and promote the activities of its economic partner in its own field. This is the new spirit behind the creation of Investment Canada.
Mr. Speaker, I am happy and proud to be part of this new team, this new government of reconciliation, and to take part in the creation of Investment Canada to replace FIRA, the Foreign Investment Review Agency. It should be understood that our new open door policy to foreign investors is not simply the result of a political whim. We must recall that foreign investors, whether American, Japanese or other, were shocked to have to come before FIRA and submit to investigations which were often long and useless. In any case, the intervention of FIRA verged on the ridiculous. It is sufficient to recall in this regard that 98 p. 100 of all proposals were approved. When we want to protect Canadian businesses against potential foreign invaders, we cannot use a net with holes of that size. Thanks to Bill C-15, Canada will be open to investors.
However, welcoming investors does not mean that we will shun our responsibilities. Investment Canada will promote foreign investment. Briefly stated, a foreign investor will be able to inject directly $5 million in our economy or $50 million into a business under Canadian control without having to submit to unpleasant and loathsome investigations or reviews.
Investment Canada Act
This is the open door policy. However, beyond this, Investment Canada will make its presence felt by firm controls and initiatives to protect our businesses against overly strong competition or losses of control. The door will be open, but there will be controls in the case of major investments. In addition, in every case without any exception, Canadian culture and identity will have to be respected.
Mr. Speaker, Investment Canada means jobs. It provides a needed economic stimulus. Investment Canada spells an open-arms policy, not discrimination. Investment Canada is the link between recovery and prudence.
In the longer term, this new policy will change our moneysaving mentality. In that respect, Bill C-15 will encourage Canadians to invest in their own economy. Those investments will indeed make Canadians appreciate the advantages of more direct control over their own economic levers.
Mr. Speaker, Investment Canada is a challenge for the future, particularly for us in remote areas.
The presence of major industrial complexes in the riding of Jonquiere-pulp, paper and aluminum companies-ought to attract investors anxious to set up labour-intensive processing plants. The existing Grande-Anse deep water harbour and the impending construction of a major highway encourage investors to look favourably upon our region. I can say in no uncertain terms that foreign investors are welcome in our region.
Recently, in May 1984, during the summit on the economic development of our region, local Saguenay-Lac-Saint-Jean and Jonquiere riding leaders did reach a regional consensus on that point.
Well, quite appropriately, the Bill sponsored by the Minister of Regional Industrial Expansion (Mr. Stevens) reflects the political will of this new government, which is to promote the establishment of industries in Canada. Particularly through Investment Canada, Bill C-15 stands as evidence that we are listening to the regions and aware of their needs, especially when it comes to gainful employment. We are doing something, Mr. Speaker, and I am proud to follow up on the concerns expressed during our regional economic summit and speak on behalf of the people of the riding of Jonquiere. I fully support this Bill.


David Charles Dingwall: Mr. Speaker, I briefly want to say at this point in the debate that I can well appreciate the fact that the Minister responsible for this piece of legislation, either intentionally or otherwise, is not here to listen to the concerns of Members of Parliament with respect to it. There can be no question, as echoed by other members of my caucus and of my Party, that foreign investment in Canada is certainly welcome. There is no question about that, Mr. Speaker. However, there are a number of issues that we in this Party believe are paramount in the sense

January 21, 1985
Canada Safe Drinking Water Act that we as Canadians ought to have some control, if you will, over where that investment may take place in the borders of our country. It is amazing to me, Mr. Speaker, coming as I do from one of those areas of the country which is beautiful in its geography but, unfortunately, its economic clout is not as great as other areas of Canada, to see Hon. Members on the government side stand in their places and echo the sentiment that foreign investment will rid Canada and the youth of this country of unemployment because it will create lots of jobs. But we heard in committee, Mr. Speaker, before the last federal election from a Tory provincial Minister of Fisheries. He was asked about foreign investment with respect to the fisheries and as to where he and his Government would seek financial assistance to help the crippled fisheries industry in Atlantic Canada. Despite the musings of the Tory Members of Parliament who, for the first time in this Parliament, have stood in their places and addressed the very important issue which faces the Canadian people, the Minister could not provide an answer. Therefore, I listen with a great deal of doubt to the words and sentiments expressed by Hon. Members of the Tory Party that opening the floodgates to foreign investment, whether from the United States or other parts of the world, will be of great benefit to Canadians in terms of creating jobs. I have yet to see the conclusive evidence the Government says it has with regard to creating jobs. Furthermore, in concluding my remarks at this point, Mr. Speaker-


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



PRIVATE MEMBERS' BUSINESS-PUBLIC BILLS

['Mr. Speaker, I would like to rise to advise the House of the business for tomorrow and Wednesday. I have had discussions with the Opposition House Leaders and have advised them of my intention to carry on tomorrow with the Investment Canada legislation that is now before the House. If we are able to deal with that legislation tomorrow, I would like to follow it up with Bill C-20 which deals with communications.\nWith respect to Wednesday, Mr. Speaker, I would like to designate that day as the first allotted opposition day. Once we have had the opportunity of carrying on further consultations, I hope I can rise on Wednesday and let the House know what will be happening during the rest of the week.']
The Acting Speaker (Mr. Charest):: Shall all orders and items preceding No. 33 stand?


Some Hon. Members:: Stand.



Mr. Neil Young (Beaches) moved: that Bill C-212, an Act to protect and enhance the quality of drinking water in Canada, be read the second time and referred to the Standing Committee on Fisheries and Forestry.
He said: Mr. Speaker, I am pleased to speak on second reading of my Bill. The Canada Safe Drinking Water Act is intended to address some of the serious concerns felt by
Canadians about the quality of drinking water on which we rely every day.
The recent report of the Niagara River Toxics Committee underscores the gravity of the present environmental situation in the Niagara-Lake Ontario water system. This report is another in a long list of environmental warnings on which governments should be taking prompt action. The evidence is clear to anyone who cares to look that there is a crisis in this water system caused by toxic chemical wastes either being directly discharged or which are leaching into the Niagara River from chemical waste dump sites. No one knows, however, just how great the economic social, medical and personal costs of this pollution are at present or will be in the future.
In this Bill, I propose to move toward some resolution of this problem. The Bill provides opportunities for public involvement in the making of regulations to set maximum permissible levels for contaminants and other substances in drinking water. The Bill calls for the establishment of a Water Review Board which would be empowered to hold hearings on the safety of our drinking water. It provides for the establishment of a Water Advisory Council which would advise the Minister of the Environment of the results of current research related to drinking water quality and the effects of contaminants in drinking water. The Bill would also make it an offence for the operator of a public system to provide water which contravenes the regulations or fails to comply with monitoring and notice requirements, and would permit water users to sue to recover damages for contravention of the Act.
The Niagara River Toxics Committee was set up in 1981 to investigate toxic chemicals entering the river. It is a committee of government representatives from Canada and the United States. A recent report of the committee focused public attention once again on the magnitude of the danger posed by toxic wastes in the Niagara River and in Lake Ontario. The committee indentified 261 chemicals which exist in the river system. Of these, only 34 were considered to be of little or no concern. Fifty-seven other chemicals were felt to require immediate regulatory action because they pose an environmental or human health risk.
Because of a lack of information, scientists just do not know how worried we should be about the other 168 identified chemicals. The lack of knowledge about chemicals is a constant thread in discussions dealing with toxic contamination. Most chemicals have not been in existence long enough for us to know what long-term effects they will have on people and on other life. Of course, the industries that make and profit from these chemicals are quick to minimize the risk, yet there is a real need for independent trustworthy information on which to base policy on how those chemicals affect our environment. Even though we are told that only minute quantities of compounds exist in our water systems, and we are constantly advised there is no immediate concern about our drinking water, this has failed to satisfy public concern on the matter.
We are told by many knowledgeable scientists and environmental groups such as Pollution Probe that the effects of bio-accumulation, dramatically increasing the concentration of
January 21, 1985

contaminants in higher levels of the food chain, are indeed cause for alarm.
The Niagara River Toxics Committee identified 29 point sources located on the U.S. side of the river that contributed 91 per cent of the total pollutants found in the Niagara River. On the Canadian side are eight point sources which account for 9 per cent of the contaminants. Each day these sources produce an estimated 1,323 kilograms of metals and cyanides and 270 kilograms of organic contaminants. The non-point sources of toxic chemicals are much more difficult to estimate. However, they have a frightening potential for damage. On the Canadian side, of 17 waste disposal sites, the committee determined that only five had significant potential for contamination of the Niagara River. There is no detailed inventory on the quantities and types of contaminants likely to be found at these sites. On the American side, Mr. Speaker, 164 hazardous waste disposal sites located within three miles of the Niagara River were classified by the toxics committee as potential contaminant contributors to the river.
If no action is taken, much of this toxic material may leak into the river system. According to the Layman's Guide to the Niagara River Toxics Committee Report, which is an unofficial report produced for internal use by Environment Canada, we learn that:
The reality is that given the existence of these dumps in their present state, it is not a question of whether this leakage will occur, it is merely a question of how much and when.
The Hyde Park dump is considered the most serious of the dumpsites because of the known presence of dioxin there. The site, which was used by Hooker Chemicals, a company now owned by Occidental Petroleum, from 1953 to 1975, after the infamous Love Canal was filled, holds 80,000 tons of hazardous chemical wastes, including an estimated minimum of one ton of dioxin, an extremely toxic chemical and carcinogen. At present, it is estimated that the total amound of dioxin that has entered Lake Ontario is roughly between one ounce and one pound. This small amount has resulted in detectable levels of the chemical in herring gulls and fish and more recently in raw drinking water. Surveys done in 1983 showed that the extent of chemical migration from the site was considerable. This site has the potential to cause an environmental disaster of unprecedented proportions.
The Layman s Guide to the Niagara River Toxics Committee Report goes on to state:
Clearly, the Niagara River and Lake Ontario are poisoned ecosystems in which all media including people, contain varying amounts of biocides or chemicals, produced specifically to kill biota. Ethically, this situation should not be acceptable.
Again, it states:
The sobering reality is that, given the existence of these dump sites in their present state, particularly those containing TCDD, the most potent dioxin, the potential for a contamination event that would irreversibly eliminate the ecosystem all the way down the St. Lawrence and beyond cannot be dismissed.
The Niagara River provides 83 per cent of the tributary flow to Lake Ontario. Four million Ontario residents draw
Canada Safe Drinking Water Act
their water from the lake and millions more from the St. Lawrence River system. According to Pollution Probe, Toronto drinking water contains traces of more than 50 hazardous contaminants. Existing water treatment facilities were designed more than 40 years ago and have effectively eliminated viral and bacterial illnesses transmitted by disease-causing agents in the water. They are not, however, capable of removing toxic chemical waste. Among the chemicals found in Toronto are mutagens, that is chemicals that will cause mutations. It is now believed that a side effect of the present chlorination technology used to purify Toronto water is that mutagens are in fact increased through this process.
Although we are told that the drinking water from Lake Ontario is presently well within safety guidelines, citizens can take little solace in the fact that there are no legally enforceable standards in existence and that the guidelines that do exist apply to a limited number of chemical contaminants. Another governmental body, the federal-provincial working group on drinking water, has developed guidelines for only 42 substances. Less than half of those relate to toxic organics. There are no guidelines for hundreds of toxic compounds that now find their way into the water system. The guidelines that do exist are often considered to be dangerously high.
When these guidelines were established they were done on a chemical by chemical basis, even though people are exposed to a whole combination of different substances. The harmful consequences of these combinations can only be guessed at because the research being done on this is minimal. Medical research has shown that often the effect of two harmful substances together is much more serious than either substance in isolation. According to the National Research Council, asbestos workers are nine times more susceptible to cancer than the general public, and asbestos workers who smoke are 92 times more likely to die of the disease. To ignore the possibility of similarly tragic consequences of minute amounts of several different chemicals in drinking water is extremely irresponsible.
Although we know that many chemicals are hazardous in large quantities, little is known of the effects of the tiny amounts of toxic material in drinking water over a long period of time. Many chemicals build up in human and animal tissues, and only after many years will signs of the effects of that contamination show. Since human beings -are at the top of the food chain, we are more likely to have the strongest concentrations of these chemicals in our bodies over time.
A Pollution Probe report, Drinking Water, Make it Safe, states:
Of the 53 contaminants identified in Toronto's treated drinking water, 16 are recognized ... as causing cancer in test animals and/or humans ... Also present in Toronto drinking water are industrial solvents such as xylene and toluene. Although not cancer-causing, these two solvents are known to cause liver and kidney damage from continuous exposure.
If we avoid addressing the problem now, we are ensuring that we, or our descendants, will pay an awesome price in illnesses and personal suffering.

January 21, 1985
Canada Safe Drinking Water Act
Contaminants from the Love Canal site are believed to have caused cancer chromosome damage, birth defects and respiratory trouble. We just do not know how great a price will be paid somewhere down the road for medical treatment, hospital charges, disability pensions, days lost from work and personal suffering.
Residents of Toronto are concerned about the quality of the water they drink. It is estimated that Toronto residents spend $4 million per year on bottled drinking water. What about the economic costs of a polluted water system, Mr. Speaker? Again according to the Layman's Guide to which I referred before:
The economic value of Lake Ontario is enormous. The replacement cost of this resource has never been estimated. Increasing contamination of this resource will make it necessary for us to undertake this calculation as it becomes obvious that this resource is not inviolate.
As I pointed out, Mr. Speaker, one of the crucial faults with the present situation regarding drinking water quality is the lack of enforceable standards. We have some guidelines but they are not enforceable and cover a very limited range of the chemicals to which we are exposed in water, and it is questionable whether the maximum limits are really safe. That is why I propose the creation of a Water Review Board which would provide opportunities for public input into the making of regulations to set levels for contaminants in drinking water.
In the face of the serious problems facing Lake Ontario and our water environment generally, I find it absolutely incredible that the actions of this particular Government would have been such that they seriously affect, if not destroy, the policing activities which have been going on by scientists through government funding over the years. The present Government says it is making industrial growth a priority in Canada. We certainly need jobs, Mr. Speaker, but let us not create them at the expense of the environment and people's health. Let me assure the Government that environmental health concerns are not seen by Canadians as a luxury.
I, along with many other Canadians, was disappointed to hear the response of the present Minister of State for Science and Technology (Mr. Siddon) on CBC radio to questions about cut-backs in environmental research. He said he considered "environmental quality as a service; it is not in itself an engine of economic growth". This implies that environmental quality has to take a back seat to industrial growth. I completely reject that notion. It is this type of attitude which has created the environmental crisis that our planet faces today. We do not own our environment. We simply borrow it from future generations. We have absolutely no right at all to use our environment as some kind of giant sewage disposal system for industry. Surely industry and Government have a responsibility to ensure that our environment is a safe place in which present generations and future generations which have yet to be born can live.
During the election campaign, the present Government stated:
A P.C. Government will work with the provincial Governments to establish a set of regulations which will lead to standards for safe drinking water. This will
be accomplished with due regard to the best practical technology and to economic constraints.
I would simply invite members of the Government not to talk this Bill out. Rather, they should ensure that the Bill is referred to committee where the public can have full input not only into the existence of those hazardous chemical wastes in drinking water, but can also undertake a close examination and have some input as to how the Government is formulating policies in so far as they affect our environment.
I have had more correspondence, not only from constituents, but from people across the country who are seriously concerned about what the Government is doing with regard to these cut-backs in environmental projects and in research. I would urge Members of the government side to use whatever pressure they can within their own caucus circles to put pressure on the policy makers to ensure that our environment is not going to take a back seat when Government is formulating policy.


Sheila Maureen Copps: Mr. Speaker, I certainly want to join in the debate today since I represent the great riding of Hamilton East which happens to be the most industrialized riding in the country of Canada. The people of Hamilton, and in particular the steel workers, are well aware of the problems associated with the environment and in particular the problem of clean water which we are being confronted with in the discussion of the Bill today.
Having spent some time in the Ontario legislature, I have some understanding of the process involved with respect to provincial involvement. It seems to me that we must look at this issue of clean water, not only from the federal perspective, but also from the point of view of provincial as well as municipal responsiblity.
The Member for Beaches (Mr. Young) will be aware that the Canada Water Act was originally introduced by a Liberal Government at the federal level to give this country jurisdiction over our water. At the same time we have seen from time to time very serious problems being created because of the lack of provincial intervention.
I speak specifically of the situation in the Niagara River and more particularly about the situation in the Member's own riding of Beaches last year. The House will be aware that the federal Government, through its Capital Recovery Program, was able to provide financial assistance to try to clean up the situation of the beaches not only in the riding of Beaches, but across the City of Toronto and other regions of Ontario, including Sudbury and St. Catharines.
As a Liberal, I am proud to say that our role in bringing environmental issues to public attention takes a back seat to no one. I think of the work that was done by the former Member for Sault Ste Marie on the issue of acid rain. His committee was able to bring to the attention of the public and of Parliament the necessity for Canada to be prepared to act alone on acid rain emissions if the United States, under the
January 21, 1985

leadership of its President, was not prepared to recognize the problem. The issue of acid rain is rapidly coming to a head as the President of the United States remains among the very few to recognize the direct relationship between sulphur dioxide emissions and the destruction of our environment.
It saddens me as a Canadian, and particularly as a Liberal, to see the position taken by the Government, which is again another hands off position and a refusal to intervene in the issue of environment, which is the most critical area of Canadian quality of life. Not only has the Government taken a hands off approach to the whole acid rain question, we can see through the budget review process, the environmental statement and the actions of the Minister of the Environment (Mrs. Blais-Grenier) that the Government has made a political decision to cut back on budgetary expenditures with respect to the environment across Canada.
In my own area there is the Canada Centre for Inland Waters with the herring-gull collection program. In fact, the Minister was forced to do a double flip on her position. However, notwithstanding her public relations promotion with respect to the reinstatement of that program, indeed it has not been fully reinstated. Groups across Canada that are concerned about the environment have been deeply disappointed by the position of the Government and of the Prime Minister.
During the election campaign, the Prime Minister (Mr. Mulroney) took the time to send a letter to the Canadian Coalition on Acid Rain stating all of the wonderful things he would do the moment he was elected. We can see the results of that. They are pitiful.
[ Translation]
Mr. Speaker, the government generally and the Prime Minister in particular have made promises concerning the environment, and although I represent the most industrialized riding in Canada, I know the days are long gone when most people claimed that environment programs were impracticable because they were costly in jobs. We realize today that by protecting the environment, we are creating jobs for the future.


An Hon. Member:: What have you done over the past 20 years?


Sheila Maureen Copps: The Hon. Member would like to know what we have done over the past 20 years, Mr. Speaker. I will tell you what we have done. We have implemented the Clear Water Act and established a consensus within such committees as that chaired by Mr. Ron Irwin, made up of representatives of the three political parties, and which dealt with the acid rain issue.
Before the election, all Tory members agreed that Canada should carry out negotiations with the United States to reduce the level of toxic pollutants in Canada, especially sulfur dioxides. Yet, when they formed the new government, they forgot their promises altogether. Now, they refuse to act, unless they have the full support of the American president. There is something I should like to know, Mr. Speaker: As Canadian
Canada Safe Drinking Water Act citizens living in Quebec, Ontario, or any of the other provinces, are we merely puppets of the United States? If not, I will ask you through bills such as this one which was introduced by the Hon. Member for Beaches (Mr. Young) to increase the support which the Canadian people is giving to environmental issues.

In my riding, the Windermere Basin has been recognized as one of the three most pollutted bodies of water in North America, as cited by the International Joint Commission. This is a result of the negligence of provincial Governments such as that of the Province of Ontario which has refused to recognize the serious nature of the pollution problem at places like Windermere Basin and the upper Ottawa street dump in my own community.
The provincial Government's refusal to upgrade sewer systems across the province has led us to a situation where the federal Government was forced last year to try to bail out the sewage systems in the Cities of St. Catharines, Sudbury and Toronto simply because the provincial Government was not prepared to make a firm commitment to clean water.
The record is clear. The Member for Beeches has already stated the situation as outlined by Pollution Probe in the City of Toronto with respect to the Great Lakes and particularly the people who drink the water in Lake Ontario. I not only drink the water of Lake Ontario, I swim in the water of Lake Ontario. I have very serious concerns about the degradation of the quality of water as I have seen it over the last few years.
The issue of the environment is one on which we can unite across Party lines. It is an issue that involves standing up to the American administration and saying that we will act on our own to reduce sulphur dioxide emissions if the American Government continues to resist all scientific evidence and international information and if the U.S. Government continues to insist that sulphur dioxide emissions are not the cause of acid rain across our nation. We are currently the recipients of a laissez faire-

-a policy of laissez faire on the part of our government, in spite of the letter which the Prime Minister wrote during the election campaign to Canadian coalitions against acid rains. He wrote: As soon as I am elected, I shall do my utmost to raise this issue within international circles. But we see what has happened. Ever since he has been elected, he has done everything the President of the United States wanted. He has done nothing to defend Canadian rights on the environment, to defend our rights to clear water to drink, to clean air to breathe and other vested interests like those of my constituents.

The people in my riding would like the Government to live up to the promises that it has made, particularly with respect to the environment.

January 21, 1985
Canada Safe Drinking Water Act
Politicians no longer refuse to recognize environmental change because of its expected negative impact on the economy. We now realize that we need to maintain a quality of life in industrialized countries and cities in order to expand into the sunrise industries. This Bill and other measures which can draw attention to the lack of commitment to this area by the Conservative Government are welcomed by our members and our Party. We are now entering 1985.

We are entering 1985. We are giving one last chance. [English]
We will give the Government a last chance to tell the Canadian people that it will reverse its direction with respect to the environment. We will ask the Minister of the Environment not only to fully reinstate the herring-gull program but to reinstate and increase the Government's financial commitment and its international political commitment to the issues that face us with respect to the environment.
If the Government is not prepared to do this and to introduce measures that will force provincial Governments across the country to respect the demands about the environment being directed to them by our citizens, then the election of September 4 was a fraud. I must confess that the election of September 4 has been a fraud, perpetrated on the Canadian people by a Government that promised to clean up the environment, that promised to deal with acid rain and that promised to talk tough with the Americans. Instead, its promises have totaly collapsed as a result of the pandering and kowtowing the likes to which have never been seen before in the country of Canada.


Mr. Jean-Luc Joncas (Matapedia-Matane):: Mr. Speaker, I am pleased to note the interest and concern shown by the Hon. Member for Beaches (Mr. Young) in tabling Bill C-212, an Act to protect and enhance the quality of drinking water in Canada.
The public is very concerned about what is happening to fresh water supplies destined for human consumption, especially when there is any suspicion of chemical contamination of drinking water taken from surface or ground water sources. This contamination may be caused by a number of factors, including leaching of toxic waste discharges, pesticide contained in water drained from agricultural land, pesticide percolating through farm wells, the presence of nitrates as a result of using fertilizer, the presence of arsenic and uranium in areas where there has been mining activity, waste evacuation and leakage from holding ponds and discharges.
Public concern about the quality of drinking water has led to a phenomenal boom in the sales of equipment for treating the household water supply. A number of equipment types are a matter of some concern to public health authorities because of the bacteriological problems they create. In fact, there is no
legislation that provides for adequate control over this equipment. Some people have opted for bottled water, a decision that is a burden on the consumer's pocketbook, while the quality of the bottled water may be inferior to the water it is supposed to replace. A source of safe drinking water is essential to survival. Drinking water is usually defined as safe if it is devoid of contaminants while containing enough minerals to make it pleasant to the taste.
Bill C-212 raises a number of questions that concern both the federal and the provincial governments and will require further discussion with the provinces. The House is of course aware that matters relating to the quality of drinking water which come under the jurisdiction of this Parliament are the responsibility of the Hon. Jake Epp, Minister of National Health and Welfare. In line with his mandate and his responsibility with respect to the quality of drinking water, the Minister of National Health and Welfare has started talks with the provincial governments with a view to formulating proposals and tabling in the House a Bill concerning the quality of drinking water in Canada. The purpose of that Bill will be to set objectives for ensuring the quality of drinking water. The Bill will also provide for quality control of chemical products and substances used in water treatment and of equipment designed for this purpose. My Department supports without reservation the work being done by the Department of National Health and Welfare. The quality of drinking water depends on the quality of the water supply. Environment Canada is concerned with this matter and works in close co-operation with the provinces on the evaluation and protection of lakes, waterways and ground water reserves in Canada. Whenever possible, preventing contamination of drinking water before the water reaches the treatment plants is preferable to building costly treatment plants for the purpose of eliminating the contaminants. Consequently, my Department complements the activities of Health and Welfare Canada in this area. More specifically, it identifies and evaluates the main sources of drinking water, prepares federal-provincial guidelines for water quality and develops guidelines for the discharge of effluents as well as pollution control plans to promote better procedures for waste discharge.
Mr. Speaker, I would like to draw the attention of the House to the existence of an important committee that is concerned with these matters at the federal level, and which is chaired by my Department. Created in 1968, the Interdepartmental Committee on Water is responsible for coordinating federal programs concerning water resources and for advising the Government on such programs. Since the committee was formed, it has been busy meeting the requirements of its mandate and has held 53 meetings. A total of 21 departments and agencies concerned with water issues are represented on the committee, which has 27 members. Sub-committees and task forces are formed as needed. At the present time, five sub-committees are examining respectively the agreement on
January 21, 1985

water quality in the Great Lakes, the quality of our water supplies, floods, preparation of replies to reports by the International Joint Commission and finally, the co-ordination of federal activities with respect to the Mackenzie Basin.
In addition to the work of these sub-committees, I would like to mention several problems or matters of interest that were brought to the attention of the Interdepartmental Committee last year, including the Commission of inquiry on federal policy on water; a draft policy by the Department of Fisheries and Oceans on the management of fish habitat; the Qu'Appelle water supply project; a water purification plant for the cities of Regina and Moose Jaw; the Fraser estuary management plan; the Canadian heritage waterways network; water and soil conservation in Western Canada; a study of mercury in the Wabigoon-English River system; exports of water by tanker ship; special projects in Ontario; a Bill concerning drinking water proposed by Health and Welfare Canada. Mr. Speaker, through this committee, other departments with an interest in water issues will be asked to work together with Health and Welfare Canada on drafting the legislation on the quality of drinking water to which I referred earlier.
Mr. Speaker, I also wish to draw your attention to the inquiry on the federal Government's policy on water. The Commission on Inquiry is now winding up its last round of public hearings which started on September 18 in Halifax. In the course of these hearings, committee members have met with over 200 Canadian citizens and representatives of agencies to discuss federal water policy and hear briefs on the subject. The committee is responsible for identifying and describing present water problems, including drinking water, and for identifying the ramification for the provincial, federal and international jurisdictions concerned. The Committee's final report will be forwarded on July 31, 1985. There is no doubt that the recommendations on the quality of drinking water will make up an important part of it. All through this study the consultation process is viewed in such a way as to include a large number of water issues that will have some bearing on the global question of how to provide Canadians with drinking water of a very high quality.
I bring this to your attention, Mr. Speaker, because in my view it is premature at this point to discuss legislation on the quality of drinking water in Canada within the framework of a Private Members' Bill. I am convinced that my colleague, the Hon. Minister of National Health and Welfare (Mr. Epp), will make good use of Bill C-212 and the results of the Pearse Committee investigation when preparing recommendations on the quality of drinking water.
Mr. Speaker, I would also like to take this opportunity to raise other issues. My Department is chairing the Interdepartmental Committee on Toxic Chemicals. It is the potential presence of toxic chemicals in drinking water that is the greatest single threat to human health. The IDCTC is current-
Canada Safe Drinking Water Act ly preparing a number of plans for dealing with the major issues relating to those chemicals. It is important to prepare a plan to deal with good quality drinking water and to provide for the coordination and effectiveness of federal action in that area.
The traditional role of the provinces and the municipalities in areas such as the construction, operation and maintenance of water purification plants and affluent treatment stations, as well as in the establishment of standards concerning drinking water quality are of prime importance for supplying Canadians with good quality drinking water.
In drafting a drinking water quality legislation, it is important to allow enough time for the Canadian Government and provinces to thoroughly review the question, because such consultation is essential to the preparation of any federal legislation in that area.
Questions pertaining to drinking water supplies and quality have constantly been included in the priorities of the Health Ministers' Conference and the Advisory Committee on Hygiene and Work Environment. Task forces responsible to the Advisory Committee, with representatives from the Canadian Government and the Provinces, have drafted recommendations on the quality of drinking water in Canada that are currently under review. Toxic chemicals are being discussed more closely in the latest edition of those recommendations. The recommendations deal with maximum concentration of substances that can influence the quality of drinking water and water used for other domestic purposes.
My Department is co-operating in the drafting of those recommendations by giving expert advice on matters pertaining to environment, the seepage of contaminants and the end use of chemicals that can affect drinking water. The implementation of those recommendations is not mandatory. However, they are finding their way into drinking water requirements established by the various agencies.
Water quality objectives provide not only a standard to determine whether water quality is acceptable, but also a means to ensure effective management of water quality by specifying limits to protect certain uses, including the supply of drinking water.
Similar objectives have been set under the Canada-United-States Agreement concerning the quality of the water in the Great Lakes and for the purpose of other joint agreements. At the meeting of the Canadian Resource and Environment Ministers Council held in 1984, the participants decided to standardize all across Canada the water quality guidelines. Those guidelines provide the basic scientific information used in the establishment of quality goals for specific areas.
The Canadian Government will assume that responsibility, in co-operation with the Provinces, by publishing surface water guidelines. The latter will deal with a number of water uses,

January 21, 1985
Canada Safe Drinking Water Act
including domestic use, and will be of significant value to ensure Canadians a good quality water supply.
Mr. Speaker, my Department and other federal Departments as well as the provinces work with zeal on another project. I refer to guidelines concerning the quality of surface water, a project leading to the setting of standards on the quality of water. If I may, Mr. Speaker, I should like to make a few remarks on the aims of standards for the quality of water and their use. The quality of water is usually measured on the basis of its capacity to meet various needs. Is the water drinkable? Can it allow the growth of healthy schools of fish or the benthos? Will a direct contact with water provoke a skin rash? Is the water adequate to irrigate the land or to water the cattle? It may be difficult to answer those questions which seems so simple especially if we consider that the accessibility of drinking water depends on public perception and the availability of adequate treatment techniques.
Fisheries depend on the management of fish species and the food chain. The industry of aquatic recreation is growing even in areas with a low recreational potential. The quality of water for irrigation depends on the type of soil and culture. It is possible to answer those questions by drawing up or selecting criteria to determine relevant qualities for a particular use. From those criteria, quality standards are set and applied by organizations to manage water resources normally intended for various uses. Those standards provide acceptable or desirable concentration limits for various matters found in water, in sediments or in biotas.
I also want to mention the National Conference on critical issues related to the quality of drinking water held last February and organized by the Federation of Canadian Environmental Associations. Delegates from Canada, the United States and Europe attended this conference. While the participants shared to some extent the same concerns for the quality of drinking water, they did not agree on the seriousness of the problem and even less on the way to solve it. It is important to take these opinions into account before introducing a bill in this House.
On the other hand, I wish to emphasize that there is no shortage of laws and regulations related to water resources. Indeed, there are already 15 major federal statutes and 82 provincial laws in this area, for a total of nearly 100. Before introducing another bill, we must make sure, like the Minister of National Health and Welfare is certainly doing at this time, that we understand the problem and have examined all the legislative options available.
Mr. Speaker, it is obvious that Bill C-12 is based on good intentions, but it does not really constitute an adequate mechanism to promote harmony between the Federal Government and the provinces and to protect and improve the quality of drinking water in Canada. I have already explained how the Department of National Health and Welfare, in co-operation with several other departments including my own and the inquiry committee, is now examining this question.
I therefore recommend that Bill C-12 be withdrawn until my colleague, the Hon. Minister of National Health and Welfare, can introduce his own bill which will allow the House to review in depth federal concerns related to drinking water.


Mr. Tom Hockin (London West):: Mr. Speaker, as the Hon. Member for London West I am pleased to participate in this debate. My riding is surrounded by three beautiful lakes. The occasionally turbulent Medway Creek and the beautiful Thames River also run through my riding. London has a system of wells which are among the most elaborate and the earliest in the history of Canada. The question of water drinkability and water safety concerns me and my constituents.
For this reason I wanted to explore and outline the system of protection and enhancement which exists at the federal level. In reviewing the Bill it is necessary to be aware of the responsibilities of the federal and provincial Governments. Also it is necessary to be aware of the areas of close co-operation between those two levels. This is an important concern in a Bill such as this one where there is a need for full and complete discussion with the provinces. The federal Government is already deeply involved in drinking water safety as are the provincial agencies.
I should like to review the range of activities carried out by the Government so that we may better put this Act into perspective. It should be appreciated that we are already involved in a wide range of activities, some of which go beyond the scope of the proposed Bill. About 85 per cent of Canadians obtain their drinking water from municipal water distribution systems. These systems include facilities for both the distribution of water and the provision of the treatment necessary to ensure safe water. While about 90 per cent of municipalities in Canada have water disinfection facilities, only about a third of them have filtration systems, a basic component of conventional water treatment. There is a great deal of regional disparity in the country in the availability of treated water. Few municipalities have facilities which could be called state of the art.
Responsibility for matters relating to drinking water supplies in Canada is, like many things, multijurisdictional. Responsibilities are shared among federal departments and provincial and municipal Governments. The provinces have the primary responsibility to protect and control water sources from which water supplies are drawn. That is their primary responsibility. Also they are to define the standards which drinking water must meet. Municipalities and water utilities are generally delegated authority to produce and deliver safe drinking water to residents. The federal Government has similar responsibilities within federal lands and territories. In addition, federal responsibilities include the conduct of research to assess water quality and to develop guidelines for drinking water quality. The federal and provincial Governments share responsibility for international water sources such as the Great Lakes.
January 21, 1985

Co-operation among federal departments and provincial or municipal agencies is very close. For instance, first, major studies of drinking water treatment have been undertaken with federal and provincial co-operation. The federal-provincial working group on drinking water is responsible for making recommendations regarding Canadian drinking water quality guidelines. Second, in the past, many water treatment plants were constructed with federal assistance through CMHC. While no funds are currently available for such programs on a regular basis, direct assistance to specific drinking water projects for municipalities has been provided by the federal Government under special programs. Third, the federal Government provides assistance to the three prairie provinces for well and dug-out construction in rural areas under the Prairie Farm Rehabilitation Act.
This Government is concerned about the safety of drinking water and is already involved in a wide range of activities involving a number of departments. Under the direction of the Minister of National Health and Welfare (Mr. Epp), this Government develops guidelines for Canadian drinking water quality, in collaboration with the provinces and with the help of the Department of the Environment. These guidelines are used by responsible agencies for developing drinking water requirements and for assessing the safety of tapwater.
The Department of National Health and Welfare also conducts national surveys for specific contaminants in drinking water, toxicological and epidemiological studies on relationships between contaminants and human health, and research into drinking water contamination problems. Extensive work is also carried out by that Department to develop new analytical technology; to investigate techniques for water treatment for drinking purposes, alone or in conjunction with the provinces; and to conduct research and evaluation studies on home water treatment devices for private supplies and individual homes. All of this information is made available to the public in the form of publications and special information releases.
The Department of National Health and Welfare also enforces bottled water regulations and revises them, as required, and monitors drinking water quality in the workplace for all federal public servants in urban and rural environments and federal ships.
This Government also has considerable involvement in providing safe drinking water to Indian and northern communities. The Department of National Health and Welfare monitors raw and potable water quality and the operation of treatment plants, and provides advice on the design of community water services in Indian and northern communities. This work is carried out in collaboration with the Department of Indian Affairs and Northern Development and also involves training native water treatment operators.
The Department of National Health and Welfare also administers the "potable water regulations for common carriers" under the Health and Welfare Act. This important Act requires the approval and monitoring of all water supplies on interprovincial and international trains, buses, ships, aircraft,
Canada Safe Drinking Water Act
ferries and Great Lakes vessels. At the federal level, the health-related aspects of drinking water are the concern of the Department of National Health and Welfare. There are a large number of other human health-related concerns, including food, drugs and medical devices for which National Health and Welfare is responsible, and therefore it is appropriate that the Department retain the responsibility for drinking water.
I have gone on at length about the responsibilities assumed by the Department of National Health and Welfare for drinking water safety. Other federal Departments also contribute to ensuring the safety of Canadian drinking water. Environment Canada has commissioned an inquiry on federal water policy, chaired by Mr. Pearse, which has been conducting hearings across Canada on this most important topic. The results of these hearings will have a bearing on the issue of safe drinking water, and it is premature to assume what the conclusions of the inquiry will be. Environment Canada believes that it is important to protect the rivers and lakes that are our drinking water supplies. This preventive approach is surely much safer and in the long run less expensive than building expensive treatment plants to produce safe drinking water or trying to clean up contaminated rivers and lakes. Environment Canada is following this strategy and has identified as a high priority the need to identify and assess the quality and quantity of rivers, lakes and groundwaters that are major sources of drinking water. This will be carried out using existing federal-provincial agreements on monitoring the quality and quantity of water.
Environment Canada is also developing, with the provinces and the Department of National Health and Welfare, water quality guidelines for raw drinking water supplies. These guidelines will be published under the auspices of the Canadian Council of Resource and Environment Ministers and will be applicable to all Canadian waters. They will define the quality of rivers and lakes. Having defined the water quality that is necessary for our supplies, it is also necessary to put in place appropriate control measures. This will be done. In order to help protect drinking water supplies, Environment Canada develops effluent guidelines and pollution control initiatives to help protect surface and groundwater supplies.
Let us now turn to the Fisheries Act and see what is being done. Environment Canada has developed effluent guidelines and pollution control initiatives in eight sectors under the Fisheries Act. Environment Canada maintains an inventory of municipal waterworks as well as waterworks systems and it is evolving new guidelines.
In conclusion, the range and nature of these activities, and I have only introduced some of them, show that the system is in place and that there is a concern for safe drinking water. A number of studies and mechanisms of co-operation are in place. Our commitment to water safety and to the quality of drinking water in Canada should not be doubted. I believe that the machinery for co-operation among Governments is there and that it can enhance and protect water in this country. If they do not, we will not hesitate to improve on them.

January 21, 1985
Adjournment Debate


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, in the minute that remains, I would like to congratulate the mover of this motion. I think he will recognize that he is moving into a very touchy constitutional area. The spokesman presented the reasons why it should not be gone forward with. At the same time, be of good cheer. I am simply saying that 92 per cent of all this pollution that he talked about is a money maker. The way to get around the provinces to show them how this can be cured without spending their money and making money for the individual to do it at the same time is the quickest way to get action.
1 will conclude with one sentence. Clean water is a problem for the whole world. I will wager that in the next two decades we will have in most countries of the world methods of cleaning water not only to have water that is free from solids, but water that is free of germs and viruses and, second, water that cures major diseases at the same time. That knowledge has been under way and collected over the last 14 years, oddly enough by an Ontario company. We will have that around the world in the next couple of decades, but we have to work cooperatively with the provinces with a sense of goodwill and not under dictation by the central Government.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, I would like to rise to advise the House of the business for tomorrow and Wednesday. I have had discussions with the Opposition House Leaders and have advised them of my intention to carry on tomorrow with the Investment Canada legislation that is now before the House. If we are able to deal with that legislation tomorrow, I would like to follow it up with Bill C-20 which deals with communications.
With respect to Wednesday, Mr. Speaker, I would like to designate that day as the first allotted opposition day. Once we have had the opportunity of carrying on further consultations, I hope I can rise on Wednesday and let the House know what will be happening during the rest of the week.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Jean-Robert Gauthier: Mr. Speaker, I am pleased with this opportunity to refer again to a question I raised a month ago in the House with the Right Hon. Prime Minister (Mr. Mulroney), which concerned the universality of access to and eligibility for social programs in this country. The House will remember that the debate both in the House and elsewhere taxed the patience of Canadians who were anxious to know what the Government intended to do with these programs. Statements by the Minister of Finance (Mr. Wilson), the Minister of National Health and Welfare (Mr. Epp) and the Prime Minister were so contradictory that public opinion was becoming very concerned, and I think that was ample justification for the debate we had in this House. Hon. Members will recall that on December 14th I asked the Prime Minister at what income level he intended to cut back or reduce benefits provided under social programs and services.
The Prime Minister answered that his Government wanted to consult. Good. It wanted to consult with Opposition Members, consult with the unions, and consult with the private sector. He referred to the First Ministers' Conference scheduled for February 14th and 15th of this year, he said how anxious he was to bring help to needy Canadians, and he urged me to co-operate with the Government; I will read his exact words: to co-operate with us in the preparation of more generous policies towards our destitute fellow Canadians. That is an admirable principle, and although it did not answer my question, which was to what income level they were going to cut back services, it was an evasive but nevertheless informative reply.
In my question I said to the Prime Minister that 90 per cent of Canadians were earning less than $35,000, that is, the majority of Canadians had tax returns that fall below the $35,000 mark. An average of $26,000 would seem more realistic. These are the same people who obviously are paying for a large part of our present social programs through their annual income tax.
Hon. Members will recall that for weeks on end the Prime Minister and his Cabinet colleagues waffled on the issue of universality, not quite sure what they wanted, not quite sure what they ought to do. Indeed, they just did not seem to be able to find a way out of their own mish-mash of electoral promises. They had made so many promises that they were forgetting many things, including their ultimate objective. They had promised jobs, jobs, and more jobs. Well, they did lower their sights. I happen to know that the unemployment rate in my riding of Ottawa-Vanier stood at 6.8 per cent one year ago and thatit is now 9.4 per cent. The unemployment rate has gone up as well in Ottawa-Carleton. Obviously, that is not because the government has created jobs, quite the contrary, it has been slashing right and left.
January 21, 1985

We were told that social programs were a sacred trust.
A sacred trust of this Government. But what happened? We had six straight weeks of debate, indecision, absolute confusion amongst those in the front-benches and chaos with respect to public opinion.


Mr. Blenkarn:: No, no.


Jean-Robert Gauthier: 1 hear the Hon. Member saying, no, no. But that Hon. Member was also absent during that debate. We on this side heard loudly every day from constituents who told us they were concerned and, indeed, very worried about the intentions of this Government.
Last Friday, six weeks to eight weeks after debate had started, and an article in the Ottawa Citizen of January 19 quotes the Minister, the Minister of National Health and Welfare (Mr. Epp) stated:
Health Minister Jake Epp announced Friday the Government has no intention of changing the universal aspect of programs now in place, and specifically ruled out a special surtax on benefits paid to high-income Canadians.
Instead, the Government will consider other options for improving the social benefits package in a review paper to be released January 28.
This white paper or green paper-God knows what it will be, it could even be a brown paper, as far as 1 am concerned- will state the position, I guess, of the Government. I think it is the biggest con job that we have ever had. We hear that it is a sacred trust. We hear the Prime Minister (Mr. Mulroney) setting up the Canadian public, telling Canadians, "We have a terrible situation here. We are going to have a budget which is going to have a real hard and mean touch to it. We are really going to have to give it to you guys in Canada and we are going to use the fiscal system, the income tax". But what will the Prime Minister actually use? Will he use the $1,000 interest deduction?


Donald Alex Blenkarn: Yes.


Jean-Robert Gauthier: The Hon. Member says yes. 1 know him to be a well informed Hon. Member and I will take his nod to mean affirmative action. But will senior citizens be told that maybe their deductions will be reduced, to the extent of even being eliminated? Will the Child Tax Credit be reduced?


Donald Alex Blenkarn: No, no.


Jean-Robert Gauthier: Will Canadians be also told that other exemptions, and there are quite a number of them, will be reduced in order for the Government to bring in more funds? These ways and means the Government will use to bring in new funds will be made public next Monday. I can tell you, Mr. Speaker, we on this side will be studying very attentively the position of the Government on the sacred trust approach to universal programs. We will no doubt want public debate on this paper.
Adjournment Debate
I see you indicating, Mr. Speaker, that I have little time left. I am sorry because I would love to debate this. I have a whole series of notes here dealing with the subject. However, I guess I will get an opportunity to debate this subject next week after we have had a chance to study the position of the Government in this paper that is to be published. I look forward to that.


Mrs. Gabrielle Bertrand (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the question raised by the Hon. Member for Ottawa-Vanier (Mr. Gauthier) implies that the government is considering lower social security standards, particularly benefits, old age security and family allowances. The government never did announce such measures. However, we believe that a review of those social programs is necessary if we are to implement a worthwhile social policy designed to allocate our resources properly during this period when heavy constraints are a drain on the financial resources of the federal government.
We have every intention of stabilizing our social programs, while respecting the principle of equity in our social policy.
In addition, the Hon. Member for Ottawa-Vanier will recall that, in the Speech from the Throne and in our economic statement, we did announce our intention to extend the spouse allowance program to all low income widows and widowers aged 60 to 64. That measure shows that, far from wanting to weaken existing social programs, we will do our best to improve them.
I want to say again that any proposed change in social programs will take into consideration our priority, which is to protect needy Canadians. Let it be clearly understood that we have no intention whatsoever to cut the benefits of those people.
As you know, we will soon make public a working document on family allowances as well as on benefits and tax relief for the elderly. The government will be seeking the advice of all interested parties, including the Hon. Member for Ottawa-Vanier, and ask for their suggestions concerning improvements to those programs.


UNEMPLOYMENT INSURANCE (A) POLICY APPLICABLE TO PENSION INCOME AND SEVERANCE PAY (B) CALCULATION OF BENEFITS
David Charles Dingwall: Mr. Speaker, I rise regarding a question I asked of the Minister of Employment and Immigration (Miss MacDonald) on November 27, 1984. It is not a debating point, Mr. Speaker, but it is a fundamental issue which the Government of Canada must confront in the next number of months. It is particularly fundamental to the senior citizens of Canada. The Government is suggesting that severance pay and pension income will

January 21, 1985
Adjournment Debate
now be included for purposes of determining unemployment insurance benefits for older Canadians.
There are issues in this country, Mr. Speaker, which are important, but I have never seen the hypocrisy shown by this Government regarding this important issue. During the election campaign the Tories were the Party of moderation, the Party of pension reform. But what have they done? Yes, they have reformed, Mr. Speaker, in a way which affects very negatively those Canadians who are least able to deal with those changes. The Government is saying to older Canadians, many of whom have worked for 30 or 40 years, that when they reach the age of 65 and wish to retire they will be prevented, or deferred if you will, from collecting unemployment insurance.
I hear the Hon. Member for Mississauga South (Mr. Blen-karn) muttering over there. He does not have the guts to go into the union halls across this country and put on the record his position as a Tory Member of Parliament. That is hypocrisy, Mr. Speaker, by another Tory Member of Parliament and we see it here every day. I will not take issue with him because he is not a bad guy, if you can believe that.
To go back to my point, Mr. Speaker, this is an important issue and this Government promised pension reform. But it is hitting older Canadians in their last year of employment. It shows what the ideology, the philosophy of the Conservative Party is. On the one hand they say we must do something through moderation and reform of pensions. Their actions do not match their rhetoric. They have completely reversed themselves. They have singled out the retired person who has worked for an extended period of time and has planned with his spouse and family to set up his income so that they may take advantage of a program which they have paid into for an extended period of time.
The Conservative Party does not believe in the Unemployment Insurance Act. They believe it to be a welfare program. I do not, Mr. Speaker, and neither does my Party. We believe it to be an insurance program into which individuals across the country pay sums of money. Canadians who have paid sums of money into the unemployment insurance program ought not to be prevented from collecting UIC benefits as the Government is suggesting they should. The Conservatives will say that they will get their money from UIC. However, they will have to end up on skid row before they will be able to take advantage of unemployment insurance.
That is hypocrisy by a Prime Minister whose mutterings during the campaign were that his Party stood for the little guy. The Conservative Party stood as the paragon of all good to those individuals less fortunate than we are. What have they done? They have done the complete opposite.
In closing, Mr. Speaker, I will say that Tory times are tough times. What the Tories have done to the retired workers in this country in four months is devastating. They have allowed the Minister of Employment and Immigration to take money from those who are in greatest need to hire, at a $30 million price
tag, individuals who are going to police and harass those on unemployment insurance. Shame on the Minister of Employment and Immigration and shame on those sheep over there, like the Hon. Member from Mississauga. They should be ashamed of their Party and their leader. They ought to resign forthwith.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of National Revenue and Canada Post):: Mr. Speaker, as already stated by the Minister, unemployment insurance benefits will continue to be fairly and equitably computed for all Canadians. Under the present rules, the severance pay can be supplemented with unemployment insurance benefits. Thus for a period up to 50 weeks a double income is provided.
It has been decided that from March 31, 1985, the payment of unemployment insurance benefits will be delayed or reduced as a result of earnings paid on the termination of employment. Those earnings include more especially the severance pay, the pension, the retirement allowances, credit for accumulated sick leave, premiums, gratuities, wages in lieu of notice, holiday pay and retroactive salary payments. Those provisions will eliminate the payment from two sources but will continue to provide to the beneficiary all the advantages of the system that is making up for any shortfall while avoiding the duplication of remuneration.
As for the retirement pensions, changes will come into effect in January 1986. It will be possible to draw unemployment insurance benefits while receiving a pension, but the latter will be subjected to the rule of 25 per cent which provides that any remuneration over 25 per cent of the weekly benefits rate will be deducted from payable benefits. The postponement of those changes will allow the private sector to make necessary adjustments.
It should be noted, Mr. Speaker, that the proposed amendments will apply to all workers and not only to senior citizens, as suggested by the Hon. Member. However, temporary measures will protect workers who have already negotiated severance payments in accordance with unemployment insurance regulations now in effect. Consequently, workers receiving benefits before the enforcement of those changes will be subjected to the present rules. Moreover, workers covered by a collective agreement or an employee-employer agreement dealing with the closure of a plant will be subjected to the present rules until the expiry of the agreement.
I should like to emphasize that in such countries as Austria and Germany, older unemployed people who become eligible for old age security pensions before age 65 have their benefits suspended. In the United States, Mr. Speaker, in accordance with federal legislation, all pensions paid by the government or another party and based on an individual's past record of employment also reduce unemployment insurance benefits.
January 21, 1985


The Acting Speaker (Mr. Charest):: I am sorry, but the Hon. Member's time has expired.


David Charles Dingwall: A point of order.


The Acting Speaker (Mr. Charest):: There is no point of order permitted during the adjournment debate.


NATIONAL REVENUE-VERIFICATION OF RESEARCH AND DEVELOPMENT INVESTMENTS
Donald Alex Blenkarn: Mr. Speaker, I rise tonight with respect to a question that I raised with the Minister of National Revenue (Mr. Beatty) on December 10. It concerns the famous R and D tax credit scheme that was put through the House in the last income tax Bill presented by the former Government.
That scheme enables a company to sell its R and D tax credits in such a fashion as to pass them on to some other taxpayer. The effect of a quick flip of R and D tax credits has been to significantly damage the national revenue. That was clearly pointed out by this Party while in opposition. We were particularly opposed to this particular provision of the income tax Bill.
Indeed, the effect of the amendment of a year ago was to reduce the revenue this year by at least $1.5 billion as people have taken advantage of R and D tax flips to wipe out or substantially eliminate personal and corporate tax.
Based on the federal tax payable on an individual basis of 34 per cent and an average return of 50 per cent on an individual basis and a possible 50 per cent on a federal corporate basis, not only is there a massive transfer in any case, it is an absolute reduction in tax payable. Very few companies and individuals pay at the maximum rate. The effect of the provisions of the Act is to reduce federal tax beyond what could conceivably he paid by virtually any taxpayer.
Furthermore, the effect of this $1.5 billion loss of revenue would not be so bad, perhaps, if we received $3 billion to $4.5 billion worth of new R and D. In that case we would have changed Canada from spending about $1.1 per cent or 1.2 per cent of its GNP on research and development to something in excess of 2 per cent in one year. However, I doubt that is the case. I suspect that there has been a great deal of fudging the books with respect to R and D tax credits.
The problem I wish to raise with the Minister is that he suggests he can do nothing unless there is fraud. It is very difficult to prove fraud in tax law and criminal law. Therefore I believe the Minister should introduce amendments to the Income Tax Act, not only to deal with the matter on a fraud basis but to change the whole concept of R and D tax credits so that while the tax credits exist, they are fair and compensate companies for conducting research and development that is valued, already paid for and completed, and which is not proposed research and development. Also to provide that R
Adjournment Debate
and D be handled in such a fashion that we are sure when money is taken from the treasury of the country that the research and development is done and done in such a way as to contribute to the growth of the country.
We cannot go on, as did the previous government, throwing away the taxpayers worth. What we must do is change this whole provision of the Income Tax Act; not just the quick flip provisions which the Minister has dealt with by regulation, but the whole provision so that the Income Tax Act will provide, when you do R and D, that you get back a portion as a tax credit toward the R and D actually expended. If you have no taxes payable, a tax credit is not too useful to you. As a quid pro quo the Government ought to make a positive transfer to those doing R and D. After the R and D has been done, after we have the baby we ought to pay for it, but we should not be paying for R and D in advance.
Under the present system money is deducted, an account is set up and you are supposed to spend the money on research and development. There is not real tight definition of research and development. Money is deducted, transfers are made from one person to another. Bankruptcies can occur and in many cases I very much fear that the present hole in the Income Tax Act is going to lead to a massive reduction in revenue, not only this year as indicated by the Minister, but next year and the year after. The present system, while it may not lead to many prosecutions for fraud, will lead to a serious erosion in revenue with very little benefit to the national wealth.
I say to the Parliamentary Secretary that he should take back to his Minister the view that the provisions of this Act must be changed to make the R and D tax credit sensible.


Pierre H. Vincent: Mr. Speaker, the scientific research investment tax credit was implemented in January, 1984 in respect to expenditures made since April, 1983. This scheme made it possible to transfer as a tax credit as much as 50 per cent of research expenditures to investors in a research corporation. Through one of the characteristics of this scheme, an investor could use the "sale-repurchase" mechanism of titles to make quick gains without any risk involved.
People quickly realized that this mechanism was the main way to use the scheme, with the result that the research firm involved received less than half of the funds it needed to carry out the eligible research without being subject to Income Tax payment under Part VIII. This tax must be paid by a corporation which transfers tax credits to investors. This tax is refundable or non chargeable if the corporation spends enough funds on eligible research within the prescribed time.
Therefore, in order to cope with the provisions of the legislation and those requirements, the Minister launched a review program under which assessments were made with respect to the income tax provided for in Part VIII Income

January 21, 1985
Adjournment Debate
Tax, and a case by case examination determined whether a guarantee should be obtained or collection measures immediately taken. When bona fide research work had been done with sufficient funds to eliminate any income tax under Part VIII, no action was to be taken, Mr. Speaker.
This has been a fair way to deal with the situation, in order to avoid abuse without jeopardizing the program.
However, in view of the questions raised as to the efficiency and effectiveness of the program, since all the funds were not directed to the intended beneficiary, the Minister of Finance (Mr. Wilson) announced last October 10 a freeze on the sale-repurchase of shares qualifying for the income tax credit for scientific research. That freeze will remain in force until a complete review of the program has been made, in consultation with the interested parties, including individual Members of Parliament.
The Government has taken the firm commitment to improve incentives aimed at increasing research and development work
in Canada, and is seeking more effective ways of directing fiscal incentives to those firms involved in research and development work, so they may derive maximum benefits.
In the meantime, Mr. Speaker, common shares meeting the criteria for entitlement to the income tax credit on the purchase of equity shares will be entitled to the research credit.
Further, in order to ensure a fair transition, some arrangements were recognized as vested interests provided they had been made or substantially advanced before the announcement by the Minister of Finance (Mr. Wilson).
Concerning the application submitted, Mr. Speaker, they will be re-examined to ensure that they are bona fide, and where any fraud is uncovered, appropriate measures will be taken.


The Acting Speaker (Mr. Charest):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at eleven o'clock a.m., pursuant to Standing Order 2(1).
At 6.30 p.m., the House adjourned.

Tuesday, January 22, 1985