1985-10-08

[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-79, an Act respecting the provision of compensation to depositors of Canada Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect of uninsured deposits, be read the second time and referred to a legislative committee; and the amendment of Mr. Turner (Vancouver Quadra) (p. 7379).
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, I would like to take part in this debate on Bill C-79, because we in the New Democratic Party are definitely opposed to the Government's decision to hand more than one billion dollars over to companies that had deposits with both banks, that is, with the Canadian Commercial Bank and the Northland Bank, and to do so despite the fact that the deposits were not insured.
Mr. Speaker, there are a number of myths that have been spread around in this debate by some of the speakers on the Conservative side. The story is that the Canadian Commercial Bank was a small Western bank, a regional bank, that was helping the average customer out West and was forced into bankruptcy as a result of the National Energy Program.
Mr. Speaker, I have just looked into the growth figures for the assets of this bank, since some of the Conservative Members have pointed out that the bank was forced into bankruptcy as a result of a program launched by the Liberal Government in 1980.
Mr. Speaker, the facts show otherwise. Between 1982 and 1984, the assets of the Canadian Commercial Bank grew from less than $2 billion to about $4.5 billion, thus tripling within a two-and-a-half-year period. This means that most of the bank's obligations, most of its loans were contracted after the Liberal Government's energy program was put into place. So it was the management of the Canadian Commercial Bank that
knowingly made loans on an unsound basis, which have now forced the bank into bankruptcy.
Mr. Speaker, it is also clear that it was not just a small bank run by well-intentioned businessmen and women. There is a whole history of poor management at the Canadian Commercial Bank. In 1981, the bank decided to expand and diversify, the result being that 45 per cent of its assets would be in the U.S. This is not just a regional bank! It was a bank with dealings across Canada that now decided to purchase the Westland Bank in California and also to make further investments in the United States.
However, instead of investing in other sectors of the American economy, it decided to invest in the energy sector. This meant that all its eggs were in one basket, or just about.
Mr. Speaker, they knew that nearly half of their business would be in the United States. So it was not a regional bank. [English]
Mr. Speaker, the Conservative Members who have spoken on this particular subject seemed to think that this was a jolly little western bank, a regional bank and that it should be encouraged because it was making westerners stand proud and giving them a chance to deal with someone locally who would understand the problems of their region.
What the Conservative Members do not say is that while the CCB may have intended to fulfil that role when it first began, it had many other plans as well. They do not talk about the way in which the Chairman, Howard Eaton, took the bank into all kinds of very shaky financial deals. They do not talk about the link with Leonard Rosenberg, the man who at one time sank Crown Trust, Greymac and Seaway Trust in Ontario, who at one point controlled 27 per cent of the share capital of the Canadian Commercial Bank despite the Canadian rules that indicate that a shareholder's holdings should be no more than a maximum of 10 per cent. They do not talk about the fact that in 1983 a cease and desist order was issued on the subsidiary that the CCB had acquired in the United States, the Westland Bank. The cease and desist order made it quite clear that the Westland Bank had made lousy investments, that its accounting practices were wrong, its lending practices were questionable, its costs of doing business and therefore its overheads were too high. Those were the same problems which prevailed with respect to the Canadian Commercial Bank as well.
In its drive to expand at an imprudent pace the Canadian Commercial Bank almost tripled in terms of assets between 1981 and 1984. Its biggest growth, and therefore the biggest increase in obligations which we as taxpayers are now being asked to pay for, was not taken into account before the

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National Energy Program was put forward as some Conservative Members have been saying, but came after the National Energy Program was a fact of life. The various taxes imposed by the Liberal Government were a fact of life. The impact that that was going to have, if there was going to be an impact, on drilling, on exploration and on the growth of the oil industry in western Canada was a known quantity when most of the growth of the Canadian Commercial Bank occurred. Therefore it is a myth for members of the Government to claim as they are claiming that it was the NEP that did this poor little bank in.
Incompetence is incompetence whether it takes place in western Canada or whether it takes place in eastern Canada. Mismanagement is mismanagement whether it takes place in western Canada or whether it takes place in eastern Canada. I think that for Conservatives to use this debate as an excuse to vent their frustrations about the National Energy Program is a complete red herring. They should in fact be looking at the factors that brought this Bank down, looking at the incompetence not just of the management of the Canadian Commercial Bank but also the incompetence of the Inspector General of Banks, both under the old Government and the new Government, and the political incompetence which has led us into a commitment made by this Government to bail out depositors in these banks to the tune of something over $1 billion.
The current Bill calls for a payment of $875 million, but that is not all. The Bill does not count the costs that have already been incurred, including the fact that the Canada Deposit Insurance Corporation is in for some $600 million in insured deposits, $280 million for the CCB and $320 million for the Northland Bank. The Bill does not talk about the fact that the Government of Canada and the CDIC already incurred an obligation of some $120 million in the $250-million bail-out that was entered into in March. The Bill does not count the fact that the Bank of Canada has advanced some $1.3 billion to the Canadian Commercial Bank and some $500 million to the Northland Bank through its rescue efforts over the course of the last six months.
Taken all together, we are talking about more than $3 billion, $875 million of which is a direct charge on the Treasury. The money advanced by CDIC will also be a charge in terms of borrowing from the Government of Canada because the Canada Deposit Insurance Corporation is broke right now and any money it advances has to be borrowed from the Treasury. Back in the spring, the Minister of Finance (Mr. Wilson) presented a Budget which projected that we would reduce the deficit by $2 billion or from some $35 billion to some $33 billion. Now we see that more than half of that has been taken up through this one foolhardy project. I for one say that the deficit of Canada should not be allowed to rise and rise continuously just because we are bailing out big corporations and individuals who put money into these banks when they should have known the risks they were taking.
In addition, the money advanced by the Bank of Canada may well wind up being a charge. We just do not know yet if we will have to pay that charge indirectly.

What we are seeing, Mr. Speaker, is considerable incompetence on the part of the bank and also of the Government, and we can see this as failure on the part of the Government to act responsibly.
Mr. Speaker, let us first talk about the Government's competence. If a company had financial problems and decided to go to ask a bank for a loan, obviously, a banker would say: Show us all your accounts and prove you are capable of repaying the loan and of recovering once your problems have been solved.
Mr. Speaker, I know people who go to a bank, individuals as well as companies and who are not forthright about their problems. They say: I need $5,000 or $5 million, if they really need $10,000 or $10 million, but they do not want to be frank with the bank because it would refuse to help them if they asked for a more substantial amount.
That was the situation at the Canadian Commercial Bank. The director, the president, the entire executive of this bank decided to hide the bank's real position, thinking they might be able to solve their problems. They asked for a bail-out of $255 million, although they themselves knew perfectly well that the kind of situation they were in would require much more.
Mr. Speaker, for a number of years, the Canadian Commercial Bank had a policy of safeguarding some of its loans by making additional ones.

They gave more money to borrowers to allow them to pay their interest payments and keep their loans from going into default. [Translation]
Mr. Speaker, the bank knew that, and the Bank of Canada . . . the Inspector General of Banks should have known that as well, but instead of asking the kind of questions a bank would have asked, no question were asked at all.
In fact, last May when we debated this matter involving the $255 million, we saw a very curious situation. The Minister of State for Finance (Mrs. McDougall) at that time assured the House that the profits of the Canadian Commercial Bank would rise. I believe I gave some figures with which she agreed. She said that the estimates were that the bank, which had made only $800,000 in 1984 and which was going into a terrible situation with the write-offs in 1985, would nonetheless make $12 million in profit in 1986; $32 million in 1987; $38 million 1989; and $38 million per annum thereafter.
The Minister of State for Finance used to be a respected excutive on Bay Street. She used to work for the Minister of Finance. He, too, was an executive on Bay Street. 1 wonder

what on earth the country would come to if these people were running the financial affairs of the private sector. Last spring, they were acting as if they were babes in the woods. They were accepting stories which no one in their right mind would have accepted.
Certainly, in participating in that debate, I for one cast my doubts on those estimates of the types of profits which were said to be available. As I indicated, if that type of profitability were available in the banking sector and if the laws of free enterprise worked, then there would be a great many other people to skim off those profits and bring them down to a level which would be more reasonable. In fact, that prediction came true. The bank was nowhere near restoring solvency and nothing was done by the Government to establish exactly what the situation was for a full four months after the Canadian Commercial Bank came in and asked for assistance.
On behalf of my Party I asked where the devil the Bank of Canada was when the press reports came out about the Westland Bank and its problems. I asked where the devil the Inspector General of Banks was. Even if he had only eight inspectors, it seems to me he could well have gone to the tenth largest bank in the country and placed some inspectors in it in order to find out what the devil was going on. If he was not aware of what the situation was, then he was incompetent. If he was aware and was not telling the Minister, then he was irresponsible. Either way, we feel very strongly that his resignation is one of the things which should result from this particular affair.
I am talking not of events which occurred in the course of a month or two, as happened with the rape of Crown Trust in Ontario. I am talking about events which went on for a very long period of time. The rotten management and the rotten management practices at the Canadian Commercial Bank were known for a long time. They were common parlance in the banking industry. The bankers themselves in the big five banks knew the problems they were having with prudent lending practices, in terms of losses which they were taking in Alberta and in British Columbia. They knew, too, that the Canadian Commercial Bank, as a junior bank, was taking risks which they were not prepared to take. Let us face it, pigs do not fly and rotten loans do not turn to gold. Therefore, they knew that the losses experienced by those banks must be a lot greater than the loss experiences they were having with their rather more prudent lending.
Did the Inspector General go in? No. Did the Inspector General hire consultants if he was unable to send his own inspectors in? No. Did the Minister of State for Finance, who must have been seized of these problems when she took over responsibility for the banks back in the fall of 1984, tell him that something should be done? No. The Minister of State for Finance keeps on joking that women are not good enough to sit on the boards of directors of Canadian banks; but now she is running them. Is that not a turn-around? Yes, it is. Quite frankly, I say to her that her responsibility is to prove the type of confidence women can have in the banking sector and not just demonstrate incompetence. We are looking at $1 billion
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which will flow down the drain because of incompetence, not just of the staff but of the ministry.
I am reminded of the fact that the Minister said she tried to get a director and could not obtain one. She could have named the Inspector General to the board of directors of the Canadian Commercial Bank and told the management of that bank that she would take him off as soon as they put someone decent on the board. She could have placed officials from the Department of Finance on the board, or even retired bankers, as her nominies. She would have been entitled to do that as a condition of the bail-out. However, that did not take place.
Some three years ago, we saw an example of responsibility under the parliamentary system in Great Britain. The Minister and Hon. Members will recall that at that time the Foreign Office staff in Buenos Aires failed to notify their superiors in Whitehall that Argentina was on the verge of making an attack on the Falklands. The gossip was abroad in Buenos Aires at that time and either the Foreign Office staff, the diplomatic staff, did not know, in which case they were incompetent, or they knew and did not tell Whitehall, in which case they were irresponsible. Lord Carrington, who was a very trusted and very senior member of the British Cabinet, submitted his resignation which was accepted because he took full responsibility for the incompetence or irresponsibility of the people who worked under him. He had no knowledge of this, it was not his fault, but he took the responsibility.
I suggest, Mr. Speaker, that it is about time we had that kind of behaviour in this House of Commons. I suggest that when it became clear to the Minister of State for Finance that the bail-out was not working and that the commitments she, the Minister of Finance, the Governor of the Bank and the Inspector General of Banks made might cost the taxpayers a large amount of money, she should in fact have submitted her resignation-which should have been accepted-because that would have been the honourable thing to do. In this case, as well, I would point out, it is not just a matter of things which were done on behalf of the Minister of State for Finance without her knowing. This was a dosier which was a major responsibility in which she was very closely involved and, therefore, she had the ability to know what was going on.
When the Inspector General did not go in, Mr. Speaker, for months upon months to find out about the other portfolio, the Minister of State for Finance should have demanded his head. She should have said, "go in there and find out what is happening". But she did not. She waited for four months, and that was totally irresponsible.


Mr. Hnatyshyn:: What have you got against western Canada?


Michael Morris Cassidy: The Hon. Member who is heckling is not in his seat, Mr. Speaker. Incompetence is incompetence whether it is in the east or the west. The Minister of State for Finance comes from the riding of St. Paul's, which is in eastern Canada. If she came from Alberta, I would still demand her

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resignation because of her irresponsibility, which is costing the taxpayers of Canada more than $8 billion.
I would like to conclude, Mr. Speaker, by suggesting what we could do with $1 billion. We are going to be told over the next three years that we cannot do all of these things because of the deficit. We are going to be told, "We do not have any money". We have heard that already. The National Research Council is devastated because of spending cuts. Environmental services are devastated because of spending cuts. With $1 billion, we could spend $500 million and create 66,000 jobs by increasing the number of social housing units financed by CME1C to 50,000. That is something we could do right now but we will not be able to do it because the Minister of State for Finance blew $1 billion on the bail-out of the Canadian Commercial Bank and the Northland Bank.
We could spend $150 million as a down payment in developing a national universal daycare system so that women and families could have that kind of care for their kids, which is essential for young families in these days. The Progressive Conservatives promised a nationwide network of transition houses. That was one of the promises made on television by the now Prime Minister (Mr. Mulroney). We could take $50 million and use that to produce 4,000 new jobs for women and support 300 transition houses to provide refuge for women whose lives and health have been threatened by sexual and physical violence, one of whom in Ottawa, in my riding, was killed a few months ago after 30 years of abuse by her husband.
We could use funding to put $200 million into reforestation and put the economy in western Canada, particularly British Columbia, back on its feet. The forests are being raped right now, Mr. Speaker. We could use $100 million to provide farm mortgage refinancing and $7 million to restore Canagrex as an international marketing agency for farmers, again to help the economy of western Canada.
But if our Party proposes these things, the Government is going to say, "No, we cannot do that because we blew $1 billion on Barbara's folly," and that, Mr. Speaker, is inexcusable. That is why we are opposing this particular Bill.


The Acting Speaker (Mr. Paproski):: There being no questions or comments, we shall resume debate.


Mr. George Minaker (Winnipeg-St. James):: Mr. Speaker, I am very pleased to take part in the debate on Bill C-79. 1 feel it is important that we develop the history leading up to the need to bring this Bill forward, what actually took place. I believe this has a bearing on why this Bill is here today.
We were seven months old as a Government, Mr. Speaker, when we were faced with this situation in western Canada. I might point out that these problems occurred far before we, as a government, had the responsibility to deal with this matter. In 1980, changes to the Bank Act resulted in 58 new banks being established in our country. Yet the regulations affecting banks have not even been revised since that date. There has been no regulatory change at all. Not only that, the Liberal Government of the day came out with its famous National
Energy Program which devastated the banks in western Canada. We know the effect it had on our economy, yet the Government made no effort to change the regulations or assist in the development of a regional bank in western Canada. I might add that the NDP supported the Liberal Government in establishing the NEP. As a member of the Government from western Canada, I am very proud that we tried to save these regional banks in western Canada. Regional banks are very, very important to our economy, not only in western Canada but in all areas of the country. Regional banks have the pulse of the community in which they operate. They know the small business community, they are part of it. I am a member of the Standing Committee on Finance, Trade and Economic Affairs and we had a long series of hearings during which we had the good fortune to hear a presentation from a well-known U.S. economist by the name of Thibaut de Saint Phalle. He is well known in the economic field. I want to quote the following from page 8 of his brief to the committee:
[DOT]	(1125)
Regional development is particularly important to Canada given the extent of its undeveloped wealth. It should be high on the Government's priority list. But regional development in no way depends upon local regulatory authority.
He believes the regional banking system is important to our economy, and I support 100 per cent the efforts of our Government to retain these regional banks in western Canada. He went on to say:
Recent events in western Canada involving the difficulties of two small Canadian banks may well discourage the Canadian Government from taking action at the present time on the proposals before this committee. There is always a natural tendency to believe in such situations that the event would not have occurred if there had been more Government regulation. We are passing through a similar phase in the United States during a period of time where savings and loans, a large money-centre bank, and numerous government-securities firms have gone under. If local development, which is so necessary in a developing, though mature, economy like Canada's, is to progress, local banking institutions are in my view to be encouraged regardless of temporary set backs.
Mr. Speaker, I would also like to comment on the Opposition's position and the effect it had on this entire situation. Back in March the Governor of the Bank of Canada, the Inspector General of Banks, six of the Schedule A banks, along with the Provinces of Alberta and B.C. as well as the federal Government, sat down and decided it was worth while saving these regional banks based on the information they had at that time. That to me was a visible assurance to the people who had money deposited in these banks. This group of Government and industry representatives came together and said that this cash infusion should result in the stability of the bank. That was a visual insurance to the investors and depositors that it was safe to leave their money there. There is no doubt in my mind that the depositors felt assured that everything was going to be fine.
[DOT]	(1130)
What was the Opposition's position on this, Mr. Speaker? It had an integral part in this scenario, and I believe it was a discredited part. There were wild statements made in the House of Commons by the Leader of the Opposition (Mr. Turner). To give you an idea of how the Opposition was trying
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to disturb the stability of the depositors and investors, I would like to quote the Leader of the Opposition as reported in Hansard of September 17. He said:
Mr. Speaker, would the Prime Minister have authorized the bail-out if he had known, as we now know, that between the time the CCB received a cease and desist order from the Federal Reserve Bank in San Francisco and the time it came before the Inspector General of Banks on March 14, it had transferred all of its good assets and good loans down to the California subsidiary? The California subsidiary is still prospering; it is the Canadian parent in western Canada which is now bankrupt.
A headline the next norning read, "CCB transferred millions of dollars to the U.S., Liberals charge". 1 quote from The Globe and Mail of September 18 the following:
The Liberals charged in the House of Commons yesterday that the Canadian Commercial Bank transferred up to $300 million in good loans to its ailing U.S. subsidiary shortly before the CCB itself received a $255 million bail-out.
The next day in The Citizen a headline read, "U.S. contradicts Grits on CCB cash transfer". The article reads in part as follows:
However, David Scott, deputy superintendent of the State Banking Department in Los Angeles, told The Citizen Wednesday the U.S. Federal Reserve Board did not warn the CCB of a pending "cease and desist order" about Feb. 21 as Turner claimed.
He also said there was no flow of $300 million in assets to the Commercial Center Bank, the CCB's California subsidiary.
I think that was part of discouraging the depositors and investors in the Canadian Commercial Bank. It obviously concerned them when the Leader of the Opposition made false charges of this nature right in the House. This is the kind of support that the Official Opposition gave to the attempt to save a western regional bank. The NDP itself is not without fault. It called for an emergency debate on the Northland Bank.


Mr. Riis:: The Speaker agreed with it and so did you.


Clement George Minaker: They talked about the CCB and its potential failure. They talked about the crisis in the banking industry. All of these words are cause for alarm for depositors and investors in those banks. At that time the Government was trying to assist the integration of moneys into the Northland Bank to help it survive the situation it was in. Therefore, the NDP is not without fault in my opinion. They discouraged the attempted salvation of these two regional banks in western Canada.
I feel that the Government has a moral obligation to help the depositors and investors who stayed with the bank upon receiving visual assurance in March when the banking community got together with the provincial and federal Governments to save these institutions. Who are these depositors?


Nelson Andrew Riis: The Bank of America.


Clement George Minaker: It is interesting to note who they are. If we had decided not to help these uninsured depositors I wonder whether the Opposition would have taken the reverse approach and asked us why we were not helping the credit unions. There is approximately $130 million on deposit by the credit unions and their centrals in these facilities. Does the Hon. Member
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for Kamloops-Shuswap (Mr. Riis) have a credit union in his riding which has moneys in that bank?


Nelson Andrew Riis: Three of them.


Clement George Minaker: Is there a school in his riding which is a depositor in that bank?


Nelson Andrew Riis: No.


Clement George Minaker: They are very selective in the way in which they would like this assistance to flow. Among the depositors are pension funds, both public and private, with third parties involved.


Nelson Andrew Riis: Which ones are they?


Clement George Minaker: Why should they not get their money back if there is a moral obligation? Does the Opposition want to become selective and give the money only to the credit unions, universities, colleges, and schools?


Nelson Andrew Riis: That's right.


Clement George Minaker: If it does not want to give any money back, why does it persist in giving the Government heck with regard to transfer payments to the provinces? The transfer payments which the federal Government gives to the provinces cover education, medicare, and the costs of the provincial Governments themselves which have deposits in these banks. On one hand opposition Members say that we are not giving enough in provincial transfer payments, and on the other hand they are criticizing us for helping out the facilities and institutions which happen to have deposits in this bank. I have great difficulty in understanding why, on the one hand they want to save the credit unions but, on the other hand, they criticize us for assisting them in this particular situation. My understanding is that the credit unions have more money invested in these two banks than the foreign banks have. Can we decide to give money only to the credit unions? There are labour unions with money on deposit. Do we give money only to them?


Nelson Andrew Riis: Name them. Who are they?


Clement George Minaker: I find it difficult to understand how the members of the Liberal Opposition can say that $100 million is needed for Domtar in Quebec, and, on the other hand, they criticize the federal Government for trying to help small industries across Canada which have moneys on deposit in this bank. As Hon. Members know, small businesses could have been using this bank as a clearing house. At the time when the bank was closed down they may have had accounts in a surplus situation. They owe people money, and all of a sudden they lost $140,000. This is a situation through which we can help a wide range of institutions by supporting the uninsured depositors.
I would like to refer again to the Opposition's approach to what I call selective aid. The Hon. Member for Ottawa Centre (Mr. Cassidy) said that we could assist other agencies with that money. A member of the Liberal Party stood up and said

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that the fishermen need $6 million or $8 million in aid. A member of the NDP stood up and said that we must help the farmers. I agree that we have problems in western Canada, but do we become so selective that we decide to help the farmers, but not those farmers who have retired and have their pension money in these banks? Does the Opposition want selective aid? Does it want to discriminate against depositors? Does it feel that there is no moral obligation to those who had faith and tried to keep this western regional bank going?


Nelson Andrew Riis: Not the Bank of America.


Clement George Minaker: Is that the position the NDP has taken? In my opinion we have a responsibility to ensure that our economy continues to grow.
Finally, the statement we hear about a billion dollar bail-out is incorrect.


Nelson Andrew Riis: It is $3 billion.


Clement George Minaker: A $3 billion bail-out is also incorrect. You are assuming that there is a 100 per cent loss on all of the assets of those two failed banks. However, there will be some money left when these banks are wound down. Perhaps it will be 60 cents or 70 cents on the dollar.


Nelson Andrew Riis: It could be 30 cents.


Clement George Minaker: It could be 50 cents or 60 cents. However, we are looking at the difference. For example, if there is $530 million in uninsured deposits, we are talking about only $160 million if there is a return of 70 cents on the dollar. Is it not worth-while for the economy of Canada to spend $160 million on that one bank, if that is the liquidation cost, to save the credit unions, the hospitals, institutions, schools, unions and those third-party depositors who have their money invested in pension plans? The statements in the press reflect a 100 per cent loss, yet we know that this will not happen.
The Hon. Member for Ottawa Centre suggested that all the money will come under general budgetary costs. That is not correct. Members of the Finance Committee know and Members of the House should know that the deposit insurance fund, which is financed by the banking institution, will bear a major portion of the costs. They know that there is a proposal being considered to increase the premium from one-thirtieth of 1 per cent to one-tenth of 1 per cent of the deposits. Yet, Members of the Opposition will not say so. They claim that the taxpayers will bear all the costs.
I am pleased to support this Bill. I believe that we are correct in recognizing the moral obligation to these depositors and that it will be good for the country in the long run. When Canadians realize that the actual costs are much lower than those being projected by the media and the Opposition, they will see that in the long run this measure will be good for Canada and Canadians.


Mr. Gray (Windsor West):: Mr. Speaker, I understand that I will be the next speaker for the Official Opposition. However, before entering the debate, I want to ask the Hon. Member how he can claim that statements made by the Leader of the Official Opposition on September 17 harmed the confidence of depositors and investors in the Canadian Commercial Bank when the Government itself closed down that bank two weeks before?


Clement George Minaker: Mr. Speaker, I believe that it was harmful to the Northland Bank and the whole banking system in western Canada. It caused fear not only among depositors but among investors about the stability of the banks and whether there would be a run on the banks. The general public does not really differentiate between the CCB and the Northland Bank. They consider it in terms of a western regional bank.
It was not only that statement that was harmful but also the general questioning throughout the period after the infusion of funds took place in March. I believe that the constant questioning on this issue undermined the confidence of those people who may have either deposited or invested in the CCB. I was using the statement referred to by the Hon. Member as an example of how the Opposition would make any statement in order to gain political points. I believe that affected the ability of Northland to find investors to keep it going.


Herbert Eser (Herb) Gray: Mr. Speaker, surely the lack of confidence in the Northland Bank was created by the Government itself when it linked the Northland Bank with the Canadian Commercial Bank by trying to wind it up last March at the same time it applied to wind up the Canadian Commercial Bank. If the Government itself made that expression of lack of confidence, how can the Hon. Member expect the financial community itself to have any more confidence in that bank?
Furthermore, is it not a fact that doubts about the viability of the Canadian Commercial Bank and the Northland Bank were expressed from the time of the rescue in March and afterwards by financial journalists and the financial community itself, which is well before questions were raised last September when the Government announced that it was closing down the Canadian Commercial Bank? Is the Hon. Member telling the financial community that it should have shut up and not asked any questions?


Clement George Minaker: No, Mr. Speaker.


Mr. Nystrom:: Mr. Speaker, I have a very short question and, depending on the answer, a quick supplementary. Does the Hon. Member believe in free enterprise? A yes or no answer would be adequate.


Clement George Minaker: Yes, Mr. Speaker, I believe in free enterprise.
I also believe that there are moral obligations involved when the free enterprise system is encouraged to save a facility. The provinces of Alberta and British Columbia, the Government of Canada, the Governor of the Bank of Canada, the Inspector General of Banks and six major banks indicated at the time
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they invested their money that, based upon the information they had the bank was sound and could continue operations. They asked free enterprise to stick with the bank, and I believe there is a moral obligation to those people who stayed with it pursuant to the assurances they had in March. I believe in free enterprise.


Lorne Edmund Nystrom: How can this be called free enterprise when there is such massive government interference amounting to hundreds of millions of dollars? It was always my understanding that the free enterprise system meant letting the market forces determine the weak from the strong so that those who cannot compete in the market-place would unfortunately fail. That is what I have been told by many free enterprisers over the years, "If you cannot survive in the market-place, you probably should not be there because you are inefficient".
How can the Hon. Member be a free enterpriser on the one hand while, on the other hand, justify such massive Government intervention and bail-outs? That is not free enterprise at all.


Clement George Minaker: Mr. Speaker, let me throw the question back to the Hon. Member. If he is for free enterprise, does he support the request for aid to the farming community because of the drought situation or do we just let the market-place take its toll? In the case of a drought, it was an act of God, while in the other case it was an act of the Liberal Party with its National Energy Program.


Mr. Clinch:: Mr. Speaker, the Hon. Member referred to the National Energy Program and how it negatively affected western Canada. Would he elaborate on that statement, because it would be very enlightening for Members from the east to know how that program affected confidence in western Canada and ultimately how confidence in those banks may have been diminished because of that program?


Clement George Minaker: I thank my colleague for that question. I will attempt to keep my answer short but I could go on for 25 minutes on this subject.
The first impact after the National Energy Program was announced was an exodus of drilling rigs to the United States. Without the search for oil and gas, primarily in the provinces of Saskatchewan and Alberta, the demand for manpower began to decrease. There was no drilling or construction of new refineries. The demand in the real estate markets for such things as housing and the activity in the business community fell.
These banks obviously had real estate holdings in the various spinoff industries from the oil finds. That was the general impact that took place and one of the major reasons that these banks failed.


Mr. Murphy:: Mr. Speaker, I have a comment and then a question for the Hon. Member for Winnipeg-St. James (Mr. Minaker). He made much about the fact that the National Energy Program created hardships in western Canada. How-
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ever, if he looks at the situation, especially the one at the Canadian Commercial Bank, he will realize that there was bad management of that bank. Certainly that was made very public over the last few months.
We, as taxpayers of Canada, are being asked to bail out an undisclosed number of individuals and corporations. We do not know who they are or how much they will get. I think we should know those facts.
I realize that I have very little time in which to direct my question to the Hon. Member. However, he used to be a Cabinet Minister in the Province of Manitoba under the premiership of Sterling Lyon. Does he not believe that Sterling Lyon, who is a member of the Board of Directors of the Canadian Commercial Bank and who has always been a strong free enterpriser, would tell him that if we do not know to whom the money is going, we should not pay it?


Clement George Minaker: Mr. Speaker, I do not think that I would be giving away Cabinet secrets by saying that when we were in the Government of Manitoba we discussed the question of saving the credit unions in that province.


Rodney Edward Murphy: But you did not do it.


Clement George Minaker: We would have done it. We were in the final stages at the time defeat occurred; we were in the throes of saving the credit unions. We, as a Government, did not ask for the names of the people who had moneys on deposit with the credit unions.


Rodney Edward Murphy: And you did not bail them out.


Clement George Minaker: The Premier of Manitoba at that time, Sterling Lyon, did not request the names of the depositors in all credit unions in Manitoba. I see no difference in this case.
I have been a member of different levels of Government, and I had to sign declarations of holdings, et cetera. I never believed in them but I signed them. If an individual obeys the regulations of the land and the regulations of a bank, if he has moneys on deposit in that bank and has the faith to leave it there, then I see no reason why we would need to know his or her name.


Mr. MacLellan:: Mr. Speaker, I certainly do not agree with the comment that the National Energy Program caused the problems in these two western banks. The Government is trying to throw the blame on the former Liberal Government. It is ridiculous to state that that is the reason; we have heard the comments about bad management and about the moneys which went from this bank out of the country.
If the Hon. Member for Winnipeg-St. James (Mr. Minaker) and his Government firmly believe that the National Energy Program was the cause of the problems, and since the NEP has been in place for quite a number of years, why did they not bite the bullet in March? Surely, if it was only the National Energy Program, the additional months would not make any difference.

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Clement George Minaker: Mr. Speaker, I will try to keep my answer short. The information given to the Government and to the bank involved indicated that an infusion of money at that time would stabilize the bank. Being a Government which believes in regional banks, we have tried to maintain both banks. If the Hon. Member has an opportunity to read Hansard tomorrow, he will see that I indicated that I felt the National Energy Program was a major contributor to the failure of these banks, not the only one.


Herbert Eser (Herb) Gray: Mr. Speaker, yesterday the Right Hon. Leader of the Opposition (Mr. Turner) moved the following amendment:
this House declines to give second reading to a Bill, the principle of which is to permit payments of large, but unspecified amounts of public moneys to unspecified persons or corporations, thereby substantially denigrating parliamentary accountability for expenditure of public funds.
In speaking about this Bill, and in particular about the amendment, the first point which has to be made is that this Conservative Government must bear the full and ultimate responsibility and blame for a fiasco which will cost taxpayers, not simply the $875 million requested in the Bill, but close to $3 billion in total. I am talking about the Government's bungling first last March of the rescue of the Canadian Commercial Bank, the failure and closing of that bank itself and then the failure of the Northland Bank over the past few weeks. The $875 million, which the Bill indicates would be needed to reimburse uninsured depositors in the Canadian Commercial Bank and in the Northland Bank, is only one part, the smallest part, of what Canadians will have to pay for the Government's mismanagement of the CCB and the Northland Bank affairs. The Government will have to find close to $2 billion to cover the advances of the Bank of Canada to the two banks in question. We are talking about amounts which are very large. Certainly the $875 million in this Bill alone is a very large amount by anyone's standards, by the standards of any Canadian in any walk of life.
There is a basic principle which in this case above all has to apply, that is, if taxpayers' moneys are to be spent, then Parliament on behalf of taxpayers should know who will get that money. If, as the Deputy Prime Minister (Mr. Nielsen) said, this principle applies to cases such as the travel expenditures of the Minister of State for Transport (Mrs. Blais-Greni-er), surely it must apply when we are talking about billions of dollars, not just thousands of dollars, which have to come from the ordinary taxpayer, the ordinary Canadian.
The Minister of State for Finance (Mrs. McDougall) said yesterday that the privacy of individuals has to be protected, that was what the law indicated and that was what individual depositors were entitled to, if they were to have faith in our banking system. Surely what she said applies only in circumstances where depositors deal with their banks in the ordinary way and when their banks are doing business in the ordinary way. However, when we are talking about the failure of the Canadian Commercial Bank and the Northland Bank, surely we are not dealing with normal circumstances. These banks have failed, and the normal course of action under the law is
October 8, 1985
that depositors would be compensated only for deposits under $60,000. Surely depositors knew that, or should have known that, when they put their money into those two banks. Canadians are entitled to ask why Parliament should treat these depositors differently when it comes to reimbursing them for amounts above $60,000, if these people are not even willing to disclose their identity and the Government is not even insisting that they disclose their identity to Parliament and to Canadians generally.
The Government in itself and by itself supplies the reason for the approach in this Bill. It provides the answer to the basic question as to why depositors should be reimbursed for deposits in the Canadian Commercial Bank and in the Northland Bank in excess of the amounts insured under the ordinary law. The answer is a simple one. The Government is saying that this should be done because this incompetent Conservative Government induced depositors to stay with these banks when it said that they were viable and would survive. The Minister of Finance (Mr. Wilson) and the Minister of State for Finance said over and over again that the bail-out or the rescue last March of the Canadian Commercial Bank made the bank viable. In effect, the Government gave its word that the Canadian Commercial Bank would survive.
The Government was wrong. It bungled the bail-out. It bungled its obligation to monitor the situation properly after the bail-out had been approved by Parliament. This incompetent Conservative Government is asking Parliament, and therefore ordinary taxpayers, individual Canadians, to pay for its own incompetence and its own mishandling of this bank fiasco.
Mr. Speaker, these are extraordinary circumstances and surely the Government's argument that the privacy of depositors should be respected cannot apply in these extraordinary circumstances. The Government says that the Bank Act prevents it from releasing the names of the depositors. I say, show us exactly where in The Bank Act it says that this cannot be done. If there are legal opinions that the Bank Act says this, show us the legal opinions in question; table them in the House. Even if the Bank Act does say that the confidentiality and the identity of depositors has to be respected, surely the Act can be amended to clear up this point to take into account the very extraordinary circumstances that we are dealing with now, circumstances that the Bank Act was not intended to deal with in the ordinary course of its application to the banking industry of this country.
Let me say again, surely the Bank Act and what it says about the privacy of depositors applies only in a normal bank situation where a bank continues to do business in the ordinary way. Here we are dealing with the winding up of a bank, in effect a bankruptcy proceeding, in effect the bankruptcy of a bank. In a bankruptcy proceeding if a creditor wants to be paid what he is owed by the bankrupt firm, that creditor has to file a claim and his identity is public, it is known, it is listed. That list is public. If he does not want to do that, then that creditor's claim is not paid.
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The Government has failed to provide any convincing and reasonable explanation that any ordinary Canadian would accept as to why things should be different when it comes to paying the uninsured depositors of the Canadian Commercial Bank and the Northland Bank. I say that no bona fide depositor would feel that the terms on which he or she put money into the Canadian Commercial Bank or the Northland Bank were not being followed if it was a requirement of the law that in order to be reimbursed for uninsured deposits his or her identity had to be disclosed. Those terms were only that deposits were confidential in the ordinary course of banking business and if the bank failed each depositor would get only $60,000 from the Canada Deposit Insurance Corporation. Any person who wants his identity to remain confidential, if that person is a depositor in the Canadian Commercial Bank or the Northland Bank, is saying in effect that reimbursement should be made only for the first $60,000 of the deposit.
In this Bill the Government has gone partway toward the Liberal position in that the Bill says that a depositor must file a claim for the uninsured amount of his deposit. However, the Bill does not specifically say that the depositor's identity must be publicly disclosed. We say that the Government can and should insist on this as a condition of the claim being paid, and in fact the list of claimants has to be made public and this has to be written clearly into the law.
Why should any bona fide depositor object to this? What has any depositor got to hide, or, a much better question, what does this incompetent and bungling Government have to hide? Are we talking about firms or individuals who are particular friends of the Government? What exactly, under the circumstances, is the Government trying to keep back if identities are not disclosed? If the indentities of uninsured depositors are not disclosed, then the Government itself has created doubt and a suspicion which will be left hanging over this fiasco for a long time to come.
We are not talking, after all, only about little guys looking for a safe place in which to put their life savings. The figures tabled yesterday by the Minister also suggest that there are a lot of depositors who put their money into these banks as an investment to get a higher return. A higher return implies a higher risk, and this Government has not yet made a convincing case as to why people who put money in deposits into the Canadian Commercial Bank and the Northland Bank as investment should not bear all or part of that risk above $60,000 rather than having the burden assumed by the ordinary Canadian taxpayer.
The only real answer to this kind of question is that the Government is saying that the depositors in these banks should not have to suffer from the bungling of the Governemnt and its Ministers and that the burden should be placed on the ordinary taxpayer. There was bungling here, there was incompetence, there was mismanagement of the situation by the Government and its Ministers in how they dealt with this bank fiasco.
The Government is trying to evade its responsibility by talking about the economy of western Canada and by suggest-
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ing that the problems of the banks were recent and even hinting at problems with the system of bank regulation and bank inspection. When the Government first proposed the bail-out of the Canadian Commercial Bank last March it blamed the problems of the Canadian Commercial Bank not on the western Canadian economy and the National Energy Program but on the Canadian Commercial Bank's own investments in California in energy projects and real estate. There was not any National Energy Program in California.
When it comes to the possibility of problems with the Canadian Commercial Bank and the Northland Bank, going back several years, and the question of the efficiency of the regulatory system with which the Government found itself when it took office, let me say this. No bank failed under the last Liberal Government. No bank has failed in this country since 1923. It is only after this incompetent Conservative Government took office that we have the failure of not one but two banks. If there are problems with the regulatory system, is it not funny that that regulatory system worked until the Conservatives took office? I repeat, no bank failures took place under previous Liberal Governments. They happened only when the Conservatives took over.
If the system of bank inspection needed improvement, why did the Conservative Government not move immediately to make changes as soon as it took office? The Conservatives boasted how they had been spending years to plan the transition, years to plan what had to be done once they took office. They moved quickly in their November economic statement to modify all sorts of Government programs and Departments. They could have done something with the office of the Inspector General of Banks if the problems connected with it were so obvious. Instead, they continued to make decisions based on the operations of the Inspector General's office as they found it when they took office. They made decisions for which they have to assume responsibility.
The fact is that only this incompetent Government and its two incompetent Ministers, the Minister of Finance and the Minister of State for Finance, are responsible for the decision to bail out the Canadian Commercial Bank and only they are responsible for the decision about the form and manner of that bail-out last March. This took place after the Conservatives had been in office for a good seven months-or should 1 say a very bad seven months.
The Conservatives said to Parliament last March: "The situation is urgent; the Bill to save the Canadian Commercial Bank has to be passed quickly. We worked out a package", they said, "and it is the right package. We worked it out in consultation with the banks and the provincial Governments. Trust us", the Government said, "we know what we are doing".
With all the doubts we had about the Government, we felt, with great reluctance, that if the banks and the provinces were involved surely the Government would not put forward a proposal that had not been properly worked out and was not soundly based. It turns out that this Conservative Government misled the Canadian people and Parliament because we now

October 8, 1985
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know that there was no proper basis for the Government's decision to structure and carry out the bail-out package it had put before Parliament last March. We now find that there had been no independent evaluation or assessment of the Canadian Commercial Bank's loan portfolio before the Government decided to rescue that Bank. The Government in fact, before that rescue decision, rejected offers of the other chartered banks to carry out a quick but sound independent assessment of the value of the Canadian Commercial Bank loan portfolio. This bungling Government, instead of carrying out a sound assessment of the loans or having the other banks do it, took the word of the bank management, the very people who had been there when the Canadian Commercial Bank got into trouble. This bungling Government did not even insist as a condition of its rescue of the Canadian Commercial Bank that that incompetent management be replaced.
Obviously this bungling Government did not properly monitor the operations of the Canadian Commercial Bank once the rescue package was in place. Its previous management was left in place by the Government and the Government did not even make sure that that management filed reports of liquidity, reports required by the law. The rescue package was in place and the Government went back to sleep and put the wellbeing of the financial system at risk. The Government finally got around to having an independent assessment done of the value of the Canadian Commercial Bank loans only months after the bail-out was approved.
Not only the Government as such but the Minister of Finance and the Minister of State for Finance must bear personal responsibility for this fiasco. The Prime Minister (Mr. Mulroney) also must bear personal responsibility. There are strong rumours which have not been denied indicating that the Prime Minister personally insisted that this bail-out be carried out in a rushed, hurried and incomplete manner so as not to spoil the PR image of his national economic showcase, a showcase he has put forward in his imperial presidential style under the guise of valid consultation with the Canadian people. That did not turn out to be the case at all, as we learned from the Budget.
It is this incompetent Conservative Government and its bungling Ministers who made the deision and must bear the responsibility for the decision to rescue the Canadian Commercial Bank. The form of the rescue package and the lack of proper analysis before the package was decided on is their responsibility as well. They must bear the responsibility and blame for saying over and over again that the Canadian Commercial Bank was viable once the package was in place, thus enticing people to deposit and keep money in that bank. They must bear the blame for the failure of Northland by linking Northland to the Canadian Commercial Bank last March in a way that I think almost ensured its failure. Now, to compound its bungling, this incompetent Government wants Parliament to hand over almost $1 billion to people it will not identify. Taxpayers have a right to know who is being bailed out. Parliament has a right to have, on behalf of the Canadian
people, a list of the names and addresses of all those who have deposits in those banks. To conclude, I would like to say that if the Government does not do this, Canadians will ask what the incompetent Government has to hide in this entire matter and whom it is protecting. Canadians will draw their own conclusions, conclusions which will, quite properly, be adverse to this incompetent Government.
The amendment proposed by the Leader of the Opposition must be approved by this House if the public interest is to be protected. I say on behalf of all Canadians, approve this amendment or this Bill does not deserve to be approved by the House.


Mr. Orlikow:: Mr. Speaker, I would like to ask the Hon. Member a question. In his speech, he mentioned that no bank failed while the Liberal Party formed the Government and it is only since this Conservative Government took over that we have had these problems. Does the Hon. Member not recognize the fact that while no banks failed between the years 1980 and 1984 while the Liberals formed the Government, 17 trust companies failed? People with deposits in those trust companies have been compensated or will be compensated by the Canada Deposit Insurance Corporation, a federal institution.
Does the Hon. Member not realize that if the Liberal Government had established the kind of monitoring policies which were needed and which we now see were so deficient, we would not have had the failures of those trust companies or of the banks with which we are now dealing? The Hon. Member shoul look at his own record and not simply attack the Conservatives, though I am certainly not here to defend the Conservative Government.


Herbert Eser (Herb) Gray: Mr. Speaker, the Hon. Member said that he is not here to defend the Conservative Government. However, he certainly sounds as if he were. He may want to rise later to withdraw his remarks.
I would like to deal with the specific question raised by the Hon. Member. If the Hon. Member were to check, he would find that the trust companies in question all fell under provincial jurisdiction-


Mr. Blenkarn:: They were not.


Herbert Eser (Herb) Gray: They were not subject to federal jurisdiction. If I am wrong, I will correct that but either all or most of them fell under provincial jurisdiction. If I am not mistaken, most of the trust companies in question fell under the jurisdiction of Conservative provincial Governments. I think we have to deal with matters under our own jurisdiction.
I repeat that the regulatory system of banks worked until the Conservatives took over. No banks failed until this incompetent Conservative Government took office.


Mr. Lanthier:: Mr. Speaker, the House is now debating an amendment aimed at revealing the identity of the banks' depositors. Members opposite seem to have their signals mixed up, they are attempting to compare or add apples and oranges.
October 8, 1985

I learned the rudiments of finance on St. James Street, which may or may not be in the same league as Bay Street, but the Hon. Member can always consult his colleague, the little guy from Bay Street, and find out whether the principles are different. We were told there is no common link between the depositors and the shareholders of a banking institution. In a case of liquidation debenture holders and shareholders are not covered and their identity is made public as it is in any other bankruptcy, Mr. Speaker. I think an attempt is being made in the debate at confusing the issue of confidentiality in banking institutions. Incidentally 1 might point out that confidentiality is a relative concept here since the Government has access to everything. There are some countries where confidentiality is a commercial commodity-Switzerland to name one. We are not prepared to go that far, but had Liberal Party Members attended all sittings of the Standing Committee on Finance, Trade and Economic Affairs they would have seen for themselves the banks, credit unions and caisses populaires were all strongly against publishing the names of depositors before or after the collapse of a banking institution.


Herbert Eser (Herb) Gray: Mr. Speaker, fortunately I do not have my colleague's experience on St. James Street. Quite possibly such experience is no better than that of the Minister of State (Finance) (Mrs. McDougall) and the Minister of Finance (Mr. Wilson) on Bay Street, because it sure did not help them avoid the bank fiasco.
Mr. Speaker, I emphasize the fact the identity of bank depositors must remain secret only when the institutions continue to operate in the normal way. We are talking about an extraordinary situation, the collapse of a bank. On behalf of ordinary Canadians 1 have to say that if the Government wants to waste almost $3 billion of the taxpayers' money, we want to know the names of individuals who expect to get their money back, because this whole exercise is due to the incompetence of this bankrupt Government.


The Acting Speaker (Mr. Paproski):: Questions or comments. The Hon. Member for Gatineau (Mrs. Mailly).


Mrs. Mailly:: Mr. Speaker, the Hon. Member for Windsor West claims that not a single bank went belly up when his Government was in office. Well, the whole country went bankrupt while you were in office! Unemployment reached unprecedented levels, interest rates skyrocketed to the extent that the one region in Canada which at long last might have spurred our economic recovery had to throw in the towel, not only because of those interest rates but because of the National Energy Program as well. There is no need to hide the facts and take this holier-than-thou approach. You know that your policies did ruin our country's economy. The only explanation for the fact that not a single bank declared bankruptcy is that they had agreements which we want to honour today.
Some individuals may have made the unfortunate decision to deposit money in banks which perhaps were not as conventional as others, but I fail to see why we should punish them by
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revealing their identity as well as jeopardizing their privacy and their confidentiality. That is indeed a lack of ethics which is strangely similar to the kind of approach you took when you were on the Government side.


Herbert Eser (Herb) Gray: Mr. Speaker, 1 should like to say first of all that if the Hon. Member is referring to a situation which has existed in Canada for a number of years, she should recognize that Canada shared these economic problems with all the other countries of the Western world, and that if the situation is now better than it used to be, it is not so much because of the policies of this Government but rather because of those of the Liberal Government, the impact of which took a little time to be felt.
Also, Mr. Speaker, if we refer to the situation of the banks, in spite of the economic situation and the energy program, we are blaming a decision of this Conservative Government ... an ill-advised decision made in March of this year to bail out the Commercial Bank of Canada. 1 have presented the facts to clearly demonstrate that this decision was quite wrong then and that the Government must now assume full responsibility for that decision, as well as for allowing both these banks to fail a month or so ago.
No matter what Hon. Members opposite may say, Mr. Speaker, and whatever the economic situation may have been these past few years, their party was in power when these two banks failed, and they failed because of decisions taken last March by this same Government. We have been dealing daily with this situation for over a month now, and this bankrupt Government must assume full responsibility for the failure of these two banks, although it is the Canadian people who in the end will have to foot the bill.
1 can assure you, Mr. Speaker, that it is this bankrupt Government which will foot the bill come election time.


The Acting Speaker (Mr. Paproski):: The time for questions and comments has now terminated. 1 recognize the Hon. Member for Yorkton-Melville (Mr. Nystrom) on debate.


Lorne Edmund Nystrom: Mr. Speaker, I too wish to say a few words with respect to this Bill. A good place to start is by taking a look at what happened in this House many years ago, long before 1 arrive. In 1957 the Government of the day under the leadership of Louis St. Laurent had grown arrogant with old age. At the time there was the great pipeline debate. Prior to the 1957 election, C. D. Howe, a powerful Minister in that Government, threw up his hands and said: "What's a million?" We now have a Government which, after only a year in office, is in effect throwing up its hands and saying: "What's a billion?" C. D. Howe was defeated after he made that comment. He was defeated by Douglas Fisher in the Lakehead riding. The people thought he was

October 8, 1985
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being sloppy and arrogant with the use of taxpayers' money when he made his comment. How times change.
[Translation}
Mr. Speaker, it is C. D. Howe who asked a long time ago: "What is a million?" He was defeated by the Ontario voters of Thunder-Bay becaused he had asked this question: "What's a million?"
Now we have a Government which has just asked "What's a billion?" As if it was not enough for this Government to give away one billion dollars of our money, it also refuses to tell us to whom the money will be paid.

We do not even have a list of the depositors of this particular bank.
I make my second point because I am surprised at some of my good friends in the Conservative Party who believe in free enterprise. They believe in the capitalist system. They believe that the market-place should determine what happens. They believe in free trade. They believe that the efficient survive and the inefficient go under. Yet we now have two banks which have gone bankrupt and these same free enterprisers are saying they should be rescued through massive Government intervention. I say to my friends in the Conservative Party: Rebel, you disciples of free entreprise. Do they not believe in the system? Do Members opposite not see that these banks have been inefficient through bad management? The shareholders of these banks have invested money at their own risk. They were taking a risk. If they are badly managed institutions then why not let them go belly up?
I have listened for years and years to members of the Conservative Party espouse the philosophy of free enterprise. I disagree with the whole ideology. However, I respect what those people are saying. I expect them to remain consistent. I want to know how they can stand up in the House and say that we should have socialism for the rich and free enterprise for the poor.
I come from a part of the country in which a drought is affecting the farmers of southerwestern Saskatchewan. We have had the double disaster of too much rain and too much snow. If Hon. Members had watched television last night they would have seen the snow falling down. Yet, the Saskatchewan Chamber of Commerce said 1st week that there should not be emergency aid for the farmers. It said that it is their tough luck. However, there should be emergency aid for the big banks and big depositors in this country because they are friends of the Government. This Government espouses socialism for the rich and free enterprise for the poor.
I say to Government Members across the way: If the Government is to bail out big bankers and rich Tory friends, why can it not supply emergency aid to the farmers of western Canada? If John Diefenbaker were in the House today, I am sure he would be absolutely astounded and shocked. He used to stand in the front row. He would be shocked at the utter disregard of ordinary Canadians by a Conservative Government in Canada. The Conservative Party is now more interested in Bay Street and its friends. It is a Government which is bringing in socialism for the rich and free enterprise for the poor.

And I know, Mr. Speaker, that my new Quebec colleagues probably do not agree at all with the situation.

I do not know if it is the type of Party these people thought they were joining. I make that appeal. Disciples of free enterprise, stand up and rebel in the House. If they want a free enterprise system, then let them be consistent and have one. If they do not want that type of system, then let them not fool us with rhetoric and let them not mislead the people of Canada. I say that if we can spend $1 billion on bankers in the country, then we can spend a few million dollars on farmers who are suffering from a national disaster.
I was in Regina a week ago last Friday and I saw a few hundred farmers in a demonstration who came out and said: "Why is there not any assistance?" My good friend, the Hon. Member for Assiniboia (Mr. Gustafson), has been given the task by the Prime Minister (Mr. Mulroney) of studying the drought situation in southern Saskatchewan and the southern Prairies. We have been told time and time again that his report would be on the Prime Minister's desk in September. We were told there would be something coming from the report very soon. Yet we have not seen the report. Where is the report? It seems to take the Government weeks and weeks to study a situation affecting ordinary Canadians, the farmers of the West, yet it takes it only a few days to bail out banks and rich people in the country. That is a contradiction. That shows who the true friends of the Conservative Party are in this country. I see an Hon. Member on the back bench of the Conservative Party agreeing with me.
Where is the report from the Hon. Member for Assiniboia? The farmers want to know where it is. The farmers want to know why there is a double standard. They want to know why the Government is so fast in bailing out rich bankers, many of them foreigners, and so slow to bring aid to the farmers of Saskatchewan. I believe there is something in the order of $108 million being given to foreign bankers-


Nelson Andrew Riis: It is $134 million.


Lorne Edmund Nystrom: Some $134 million will be given to foreign bankers. Instead of that money going to foreign bankers, let us put up the same amount to start an emergency fund for prairie farmers because of the weather situation on the Prairies. I hope we have some support for this idea from some of the back-benchers of the Conservative Party. I know I have a few friends in that Party who believe that the western farmers need some help. I believe the whole thing we are seeing now is a tremendous double standard. I can give the Minister of State for Finance (Mrs. McDougall) a list of bankrupt farmers in my riding who could be bailed out if we are going to bail out the banks. I can think of a farmer in the town of Kenora, for example, who, through no fault of his own, had to undergo the
October 8, 1985

process very recently of forclosure on his farm. I know another farmer in the Yorkton area and other farmers throughout Saskatchewan and, indeed, Canada, who went bankrupt. 1 know small businessmen and small businesswomen who have gone bankrupt. 1 know people who are having trouble with their mortgages. There are Albertans who are having trouble with their mortgages because of the oil boom which has collapsed. Why not bail out some of those people?
I am talking about consistency, Mr. Speaker. I am talking about having the same philosophy for the small people of this country as we have for the big people. Why this double standard? Why can we not have an emergency fund of several hundred million dollars for farmers if we can put up $1 billion for the banks of this country?
Another point I would like to make, Mr. Speaker, is that we are told we are helping western Canada is when we help the great western institutions. What I say as a western Canadian, that there has been bad management and that there is a bad Bill before the House. If this is because there is an incompetent Minister, it is still wrong whether the bank is in western Canada or in eastern Canada. To me a wrong is a wrong and I do not feel we should play the kind of regional politics in this House, saying that the only reason we are doing this is that the bank is located in western Canada. A wrong is a wrong, Mr. Speaker, whether it is in Saskatchewan, Quebec, Newfoundland or even in Edmonton, your beautiful city, Mr. Speaker. I can understand why you would agree with that particular point.
I do not want to defend my colleagues in the Liberal Party but with respect to the point which is made that it is the National Energy Program which destroyed absolutely everything in western Canada, I ask the question: Why have the assets in the Canadian Commercial Bank from 1981 to 1984 gone up from around $2 billion to around $4.5 billion? Obviously the National Energy Program cannot be the only reason, otherwise the assets in that particular bank would not have gone up so radically between 1981 and 1984.
I submit to you, Mr. Speaker, that what we are seeing here is incompetence on the part of the Government. We have seen in the last few months the collapse of two banks in this country, the Canadian Commercial Bank and the Northland Bank. This is the first time in 60 odd years we have seen this happen in Canada. We have a Government which is falling apart at the seams in spite of its very large majority. We are seeing a Prime Minister who has communication problems right in his own office. He is not being told of important political problems in the country. In fact, the Minister of Justice (Mr. Crosbie) said in Newfoundland yesterday or the day before, according to newspaper reports, that the Prime Minister's senior advisers are not politically smart. I agree with the Minister of Justice. That is just another side of the incompetence of the Government across the way. I know the Minister of Justice is a very competent long-time politician and he would not say this unless he knew what he spoke of.
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The Prime Minister's Office is incompetent. It does not have political smarts. That is one reason this Government is floundering.
We have seen in the last few weeks two Ministers resign, and now there is a third Minister who should resign. A Minister resigned last fall as well. Several different Conservative Party officials disagreed publicly with the Prime Minister, but many of them have retracted or changed what they said after they had been quoted and named in the press. We have heard the charges of racism in this House, which were withdrawn by the Deputy Prime Minister (Mr. Nielsen), and we have heard innuendoes from the Prime Minister himself that, for example, the Anglophone press is very unfair to the Minister of State for Transport (Mrs. Blais-Grenier). Those kind of innuendoes are not withdrawn. I suggest, Mr. Speaker, that there is across the way a very incompetent Government.

IVIrs. Mailly: Mr. Speaker, I was wondering just how relevant the remarks of the Hon. Member for Yorkton-Melville (Mr. Nystrom) are.


The Acting Speaker (Mr. Paproski):: I was asking myself the same thing. I think the Hon. Member, who has been here 17 years that I can remember, knows very well that there is such a thing as relevancy and I hope that he will get back to the debate of the day.


Lorne Edmund Nystrom: I never argue with you, Mr. Speaker. The Speaker is part of the club of '68. I would never argue with him. He is a very distinguished and senior statesman in this House.


Some Hon. Members:: Hear, hear!


Lorne Edmund Nystrom: I really resent, Mr. Speaker, that some members of the Party with whom you used to sit laughed at you when I called you a statesman.


Some Hon. Members:: Never.


Lorne Edmund Nystrom: I feel that to be a terrible slight when we have such a very distinguished gentleman in the chair, and 1 would not argue with him.
I was just talking about how incompetent the Government was and that is one of the reasons these banks have collapsed. I suppose I got carried away in mentioning the resignations of two Ministers, the failure of the banks and the lack of communication in the Prime Minister's Office, and so on, but 1 thought that I should mention, them as further evidence that what we are dealing with here is an incompetent Government.
By interjecting, Mr. Speaker, you have reminded me of something I was not going to mention, but I will. We are hearing time and time again from across the way-and in fact the Hon. Member from New Brunswick mentioned it a few minutes ago-that it is the incompetence of the Liberal Government with its National Energy Program which caused this

October 8, 1985
Depositors Compensation
country so many problems. I do not disagree with that. Last September 4, of course, the voters of this country punished the Liberal Party and threw it out. That Party went down from approximately 140 seats to only 40 seats. It was a massive reduction. The people of Canada had spoken and we all agree with their decision. I am sure the Liberals themselves agree with it. But this new Government has now had over a year. Finally the time must come when a Government begins to stand on its own record. The time must come when a Government must take responsibility for itself rather than blame someone else for everything that has gone wrong. I think that time has come. I think that judgment date has arrived. It has come piece by piece, and this particular Bill before us today is another example of the incompetence of the Government.
We are told, Mr. Speaker, to vote for a Bill to provide around $1 billion to the depositors of these particular banks. I represent 70,000 people in the Yorkton-Melville constituency. And $1 billion is a lot of money to them. As C. D. Howe said, "What is $1 million?". But he was thrown out on his ear. We now have a Minister who in effect is saying "What is $1 billion?". I was elected, Mr. Speaker, to represent the people of Yorkton-Melville. I am not going to sign a blank cheque for $ 1 billion, or participate in signing that blank cheque, particularly when I do not know who is getting that money.
According to the profile of the Canadian Commercial Bank as of June 30-and I want to put this on the record-the Government of Canada had $14.4 million on deposit; the various provinces had $45 million on deposit; the individuals, and we do not know who all those individual Canadians are, had $308.5 million on deposit. I said, "Canadians". They are not all Canadians, of course, they could be individuals anywhere in the world. The banks themselves had $267.2 million on deposit. Then there is a category called "others". I do not know who the "others" might be. Perhaps they are the Edmonton Eskimo football team, but $774.6 million was on deposit from "others" in the Canadian Commercial Bank. That totals up to $1.4 billion.
I am not about to agree, Mr. Speaker, and facilitate the passage of a Bill which in effect asks Parliament to sign a blank cheque for money which I believe could be used in a much better way. It could be used to create jobs, to help the small business people and, in particular, the farmers of western Canada through an emergency drought relief fund because of the natural disasters with which they are faced. There was a drought in the beginning and now there is snow. That is a double disaster the farmers are facing in western Canada. I believe we can stimulate the economy of this country by helping the base industry such as the farmers and the fishermen. You do not stimulate the economy of this country by helping the big banks.
Mr. Speaker, we now have a Government which is bent on helping multinational corporations as well as the rich in this
country. It is not at all bent on helping the farm producers of Western Canada, our unemployed and ordinary Canadians. [English]
I plead with my friends in the Conservative backbenches to be consistent with their philosophy of free enterprise. Here are two companies which failed because of bad management. If you believe in free enterprise, then the efficient company, the one that can make it in the market-place, will survive and the others will fall by the wayside. Here are two giants who have fallen. I ask my friends in the Conservative Party, why the rush to support a Minister of Finance and a Minister of State for Finance in bailing out these big, big people in our country when they cannot give similar aid or even half of it to the ordinary farmers of the West and the ordinary working people of Canada?


Mr. McDermid:: Mr. Speaker, as I look through the list of those who deposited money in both these banks, I note that labour unions had almost $7 million invested. I gather that labour unions are made up of ordinary people, not big bankers as the Hon. Member refers to them. I notice as well among the list of depositors some school boards, colleges and universities, and religious organizations. I notice charitable organizations have almost $15 million on deposit. Those organizations are made up of ordinary people donating money to a cause trying to do good for other Canadians. How can the Hon. Member go on and talk about the big banks being saved when in most instances, when you go through this list, you find it is the ordinary people who are being helped?


Lorne Edmund Nystrom: Mr. Speaker, I would like to see that information. All we have is a listing by category. We do not have a list of how much individual big banks or big business have deposited in the bank. I do not think he or I were elected to sign a blank cheque. If he were in opposition, he would be getting up and asking the same kinds of questions. Why a blank cheque? How much do we have to pay to the foreign banks and big companies? I do not know. If we could see a list, perhaps we could set up a hardship fund for organizations like the ones he has mentioned. All I am asking for is to see a list of the companies and individuals affected, and I say that is not asking too much. He mentions $7 million for labour unions. I am sure there are municipalities and pension funds involved, but from what I can see those are in the minority.


John Horton McDermid: They are not.


Lorne Edmund Nystrom: I would like to see the list and have it tabled in the House because I am not going to sign a blank cheque.


John Horton McDermid: You want the labour union's name?


Lorne Edmund Nystrom: We have responsible Government. We are supposed to have freedom of information. I remember Jed Baldwin, a great and distinguished parliamentarian from Alberta, getting up and saying that what we need is greater freedom of information in this country. I remember the Government of Joe Clark moving in that direction. What has happened to that philosophy in the Conservative Party now
October 8, 1985

that it is in power, albeit with another man at the head? All I am asking for is that the Government provide us with a list of those depositors.


Mrs. McDougall:: Mr. Speaker, I recall that the Hon. Member for Yorkton-Melville (Mr. Nystrom) urged me very strongly last winter to pay off uninsured depositors in Pioneer Trust. He never once asked for a list of those depositors. Neither did the NDP in the Province of Saskatchewan raise the issue of a list of uninsured depositors when the Government paid those depositors. Perhaps he can explain the inconsistency?


Lorne Edmund Nystrom: Someone used the word "hypocrisy". If the Minister will look back at that case, it was a different situation.


Some Hon. Members:: Oh!


Lorne Edmund Nystrom: I will explain it.


John Horton McDermid: Maybe because you are from Saskatchewan.


Lorne Edmund Nystrom: No. I raised the question about people who were uninsured despite the fact they had less than $60,000 on deposit. The Minister remembers that. I gave her documentation concerning ordinary farmers in Saskatchewan who bought income averaging certificates. The Minister is nodding her head. These were people who thought they were insured and they received documentation from the CDIC to that effect. Pioneer Trust said that they were insured. These were deposits of less than $60,000 but the regulation at the time-and 1 think it was number 12 or number 13, I cannot remember all the details-said that if the IAC was for a term in excess of five years it was not insured. These people thought they were insured up to $60,000. It was not one farmer, it was a lot of them.


John Horton McDermid: What about the rest of the depositors?


Lorne Edmund Nystrom: I remember a guy from Englefeld who had, I think, $30,000 invested in Pioneer Trust and he was not insured. This was the specific case that I brought to the attention of the Minister. She looked into it, went over it with her officials, agreed this was an injustice, people had been misled, and of course that was rectified. As you can see, I am not always negative; I am giving the Minister credit for doing something good. I am saying to my friends across the way that they should stand up for something good as well.


Mr. McKinnon:: Mr. Speaker, the Hon. Member made quite a thing out of C. D. Howe's remark about a million and I presume he is unfamiliar with what C. D. Howe had to say, which was not that at all. He was being cross-examined by the Hon. Howard Green and what he actually said was:
So I hope the Hon. Member will agree that to operate a department with 1,100 people for a year, $3 million is not exorbitant. Will he go that far with
me?
Depositors Compensation
This was translated by the press into: "What's a million?", which he never said. I think the reason Doug Fisher beat him in the subsequent election might have had more to do with another quotation of Mr. Howe's when he said:
Who would stop us? Don't take yourself too seriously. If we wanted to get away with it who would stop us?
He was talking about a constant whittling down of trade preferences by the Government. The Hon. Member for Winnipeg North (Mr. Orlikow) just paid tribute to the Conservative attitude over the years and I thought I might repay a small favour.


Lorne Edmund Nystrom: Mr. Speaker, I thank the Hon. Member for his contribution. He is a former paperboy in the City of Yorkton and I always listen very closely to his words of wisdom. No doubt that is what C. D. Howe said in the House. My colleague, the Hon. Member for Winnipeg North (Mr. Orlikow), who has been in politics much longer than me, said that C. D. Howe actually said: "What's a million?" in the election campaign of 1957. My comment today was that C. D. Howe was defeated after he said that, and today we have a Government which is saying in effect: "What's a billion?" I think that is wrong.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated.


Claudy Mailly: Mr. Speaker, the Opposition is delaying passage of this Bill. That means that the depositors who had confidently invested their money in a Western regional bank will have to wait a long time before being reimbursed.
The Hon. Member for Yorkton-Melville (Mr. Nystrom), who boasted about having our friendship and respect, should know that our respect for him has gone down a lot since he has risen to speak. Mr. Speaker, he says that the big banks, the bigwigs, the very wealthy, will benefit from this legislation. He complains about not having the list of those who will be reimbursed. Yet, the Minister of State for Finance tabled yesterday the list of categories of depositors, and I do not see that many very wealthy people on it. When we look, for instance, at the figures for the municipalities, we see things things like populations of 25,000. I cannot believe that in a village with a population of 25,000, all 25,000 would be very wealthy people.
This small municipality is owed $10 million. An amount of $10 million is a lot for a municipality of 25,000 people.
Another municipality has a population of 50,000. That is even smaller than my city of Gatineau, which is considered an average-size town. This small town is owed $143,000. Then, there is a town with the same population as Gatineau which is owed $4 million.
I can tell the Hon. Member for Yorkton-Melville that if the town of Gatineau had had the misfortune of investing $4

October, 8 1985
Depositors Compensation
million of the Gatineau taxpayers' money in the Canadian Commercial Bank, there would be a major crisis in the municipality.
In fact, I heard this morning on the radio a financial advisor for the city of Hull who spoke about the investment of this city, which has a population of 55,000 and is therefore a small town, which investment had been recommended by financial experts. The Hull advisor said that the town had been approached by the big chartered bank after people had been encouraged to trust the Canadian Commercial Bank and it was the big bank which told him: Why do you no longer have your deposits with us? Why do you have your deposits with a small regional bank? That is when the City of Hull tried to withdraw part of its investment.
However, there is still at least $5 million in the Canadian Commercial Bank which belong to Hull taxpayers. Yet, I do not believe that these are very wealthy people, Mr. Speaker.
In my opinion, the Hon. Member, whom we used to respect, does not do himself any credit by using such methods and by trying to criticize the Government and to suggest that the decision made last March was ill-advised. He speaks about the list of depositors. He wants the names of those who had deposits with the Canadian Commercial Bank. But would he pass a judgment after receiving such a list? Would he be the one to decide, for instance, that Municipality A and Pension Fund B would be reimbursed, but Labour Union C would not be because it had invested an enormous amount, which means that it is a big union and therefore very wealthy. Does this mean that Union C should not be reimbursed?
How would he choose amongst the mutual funds? Would he choose on the basis of the amount invested? Of the population served? Of the language spoken? Of the size of the area? Of whether the area served is rural or urban? How would he choose?
Mr. Speaker, it is nonsense to ask for a list of depositors before helping all of those who invested in all good faith in the Canadian Commercial Bank.
As recently as yesterday, we saw the lawyers involved with the Estey Commission which is investigating the unfortunate situation of the two banks, and it is very difficult to get access to documents deemed confidential under the legislation.
Mr. Speaker, it is provided for in our conventions that the indentity of depositors and the amounts of their deposits are to be kept confidential. It is a well-known fact that we have a most stable society in which private property and the privacy of citizens are respected. Our banking system, also one of the most stable in the world, requires that sort of confidentiality. When we have expert and legal opinion to the effect that the names of those depositors should not be disclosed, I see no reason why the Opposition could ask us to breach conventions that have been serving us well.
We know full well, Mr. Speaker, that the Liberal Party, when they were in power, did breach a number of times and seriously several of those conventions with respect to business matters. This is why confidence of the business community declined to a point where there was tremendous harm done to the economy and an astronomical rise in unemployment. In their Government's energy program the Liberals also failed to show any respect for the business people who are building this country and who were on the point of providing Western Canada with the most remarkable development opportunities.
As far as the New Democratic Party is concerned, they believe that private property is some sort of a sin or crime. Virtue is not being rich, it is being poor. It is indeed because of that lack of respect for business conventions such as for instance the passing of retroactive legislation aimed at people who had invested in confidence in Western Canada's oil development that this country's economy was undermined. So Mr. Speaker, we are once again witnessing an effort, a new attack from the Liberals in the Official Opposition and from the New Democratic Party against conventions that are protecting our economic community and and our quality of life.
With their meddling habits, the Official Opposition and the New Democratic Party have developed an attitude that is harmful to the business community and public enterprise. We, who belong to a party that respects private enterprise, private property, and the privacy of citizens, will not accept that, under the guise of feigned outrage, a new attack be launched to once more undermine efforts at protecting private property and the privacy of citizens. This is witchhunting, Mr. Speaker. It is true that those depositors will be getting refunds from the Public Treasury, but they are still entitled to that confidentiality so long as we are not satisfied that there is an essential need to brush it aside. This would then be a most serious precedent, as stated a number of times by witnesses before the Standing Committee on Finance, Trade and Economic Affairs. They said that if ever there was a breach of banking confidentiality, then the whole banking system would be endangered. One has but to check the minutes of the Committee to see how concerned they were with the Opposition launching such a witchhunt, using that kind of an excuse.
As far as the Leader of the Official Opposition is concerned, reading from press clippings and Hansard for mid-March, we see that he was absolutely silent on the issue. Maybe he recalled that he represented a Western constituency, or maybe he wanted to act responsibly. It is unfortunate that he has now strayed from that responsible position that honored him last March. We even noted in the speech he made yesterday, that he is trying to backtrack from that first attitude. This in my view is quite typical coming from the Leader of the Opposition, Mr. Speaker. He does not seem to be able to stick to his decisions. He suggests they were imposed upon him or,
October 8, 1985

when he finds out that the wind has turned, he makes an about-face.
Mr. Speaker, I believe it is almost one p.m., and I would like to continue this afternoon, if you will allow me, rather than being cut right in the middle-
It is time for the Government to accommodate the tourist operators. Bailing out the banks does not build a healthy economy. Supporting a growth industry like tourism does. Listen to what the industry is saying. The tourist operators know what works.


The Acting Speaker (Mr. Paproski):: The Hon. Member has eight more minutes, plus ten minutes for questions and comments.

It being one o'clock, I do now leave the chair until two o'clock this day.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, "Tourism Tomorrow" is the title of a conference taking place this week here in Ottawa. Industry and Government have gathered at the Congress Centre to discuss the future of tourism. I too am concerned about what lies ahead for tourism. However, my concerns run through a different vein.
The tourism sector has been hailed as our proudest growth industry. But there will be no tourism industry tomorrow if the Government continues to stymie the efforts of operators across the country. "Change the image of Canada", the Government says. "Give it more sex appeal". This industry needs serious consideration before sex appeal.
How do we convince Canadians to vacation in their own country when the price of gasoline has skyrocketed? By January, 1987, the cost of filling up at the pumps will have jumped 18 cents a gallon. Canadians will stop dead in their tracks when that hits them in the pocket book.
How do we persuade foreigners to explore our vast and diverse regions when the Government is not prepared to launch an effective marketing campaign? It will not spend the dollars to sell our wares in a way that works.
Closer to home, our local operators need assistance to grow and prosper. They are small business people. Provide them with what it takes to ensure that tourists return to our rugged regions year after year.



PETROLEUM INCENTIVES PROGRAM-EFFECT OF CANCELLATION

Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, the Minister of Energy, Mines and Resources (Miss Carney) is treating the Province of Nova Scotia in particular as a poor orphan.
Unbelievably, without any replacement or alternatives, she announced the end of the Petroleum Incentives Program, or PIP grants, which had sparked offshore drilling for gas and oil. Either in business terms or public policy terms, it is totally unacceptable to pull the plug without an alternative plan.
Uncertainty will kill hopes for prosperity from offshore gas development. Companies must plan, even if the Department of Energy, Mines and Resources does not. Drilling projects are ending, leases are expiring and, give it another month or so, companies will leave and not come back.
The Prime Minister (Mr. Mulroney) promised "jobs, jobs, jobs" and economic development for Atlantic Canada. However, the September report of Informetrica predicts a loss of jobs and no production from the Venture development. That would be a tragedy.
There you have it, Mr. Speaker. No PIP, no alternatives, no hurry, and no concern. Why has the Minister of Energy, Mines and Resources, who was such a Santa Claus with the Western Accord, become such a Scrooge to Nova Scotia? Surely Nova Scotia deserves more than this foggy silence from the Minister.



EXTERNAL AFFAIRS


Mr. Alex Kindy (Calgary East):: Mr. Speaker, the bombing and devastation of Tunis last week by the State of Israel was in direct violation of the Geneva and Hague conventions as well as of the United Nations Charter to which both Israel and Canada are signatories.
The terrorist activities by a dissident group of Palestinians in piracy on the high seas, as well as the murder of innocent Israelis in Egypt, can no doubt be tied into the bombing.
The attack on Tunisia resulted in the death of women and children, not by a phantom terrorist group, claimed by no one,

October 8, 1985
but by the most sophisticated armed force in the world-the State of Israel.
Canada, as a respected and peaceful nation and as a friend of Tunisia, Egypt, and Israel, should not hestitate to indicate our disgust with the unlawful incursion on the sovereignty of Tunisia, the murder of innocent civilians in Egypt, and the terrorist piracy by a fanatical few Palestinians.
I urge the Government to move as soon as possible to raise a motion of censure and condemnation in the United Nations of the State of Israel as being in willful and direct violation of the ninth and tenth Conventions of the Hague and Geneva and United Nations Charter, in concert with a motion of condemnation of the terrorist activities of Palestinians against innocent people of any nationality.


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



ABORIGINAL RIGHTS


Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, we welcome the decision by Greenpeace to suspend their European anti-fur campaign and trust that this signifies a new appreciation of the importance of hunting and trapping to Canada's aboriginal peoples. We are proud of the success which Indigenous Survival International has achieved, particularly through the efforts of its co-chairman, Mr. Georges Erasmus.
Canada's native peoples have enjoyed a harmonious relationship with nature for thousands of years. Indigenous Survival International promotes an awareness that cultural survival for native peoples depends upon their right to hunt, trap and fish. Our Government believes in the sustainable use of the world's renewable resources and encourages the efforts of Indigenous Survival International to promote the wise conservation of these resources.
While this recent success by ISI is encouraging, it is only a beginning. Much work remains to be done before other groups realize that their anti-fur crusades threaten to destroy native peoples and their cultures.
I am confident that the Government of Canada will continue to support the right of native peoples to pursue their traditional ways of life.



THE FAMILY


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, I have with me thousands of petitions signed by mothers protesting the Government's decision to cut S55 million from income support programs for families with children, and more specifically, to de-index family allowances.
Mr. Speaker, the families I met in Montreal, in Quebec City and in other communities seriously question the Government's decision to cut $55 million from these important programs, while at the same time it is tabling a Bill for the purpose of spending $800 million to compensate rich people and rich corporations in connection with the two bank failures, and they also wonder why the Progressive Conservative Government, at a time when it is cutting $55 million from programs that are vital to families with children, has decided to table a Bill to raise the salaries of our poor judges from a mere $117,000 to $135,000.
Mr. Speaker, I trust that all the Members of this House will invite the Right Hon. Prime Minister (Mr. Mulroney) to withdraw Bill C-70, in order to deal fairly with families with children.



CANADA ELECTIONS ACT


Rodney Edward Murphy: Mr. Speaker, I realize that it is only Tuesday, but we already have a winner for the "Retraction of the Week" award. He is John Vincent, a key figure in the Frontenac Riding Association of the former Minister of Communications. On the weekend, Mr. Vincent claimed that $3,000 for chartering buses to the Conservative Leader's election rally was not the responsibility of the local campaign but was properly the responsibility of the federal Conservative campaign. This figure would have put either Conservative campaign in violation of the law.
Yesterday, after the issue was raised publicly, Mr. Vincent claimed that the undeclared cost of the buses was only $2,000, an amount which would, by itself, keep the federal campaign under the election expense limits. In awarding this week's retraction award to Mr. Vincent, I ask only this question: Who from the Prime Minister's office called Mr. Vincent?
Obviously, this series of statements by Conservative campaign officials points out the necessity for ensuring that the RCMP inquiry not only looks at the undeclared expenses of the Frontenac campaign but at the national Conservative campaign as well. In that vein, I have written to the Chief Electoral Officer and the Solicitor General (Mr. Beatty).
October 8, 1985



POLITICAL PARTIES


Mr. Joe Reid (St. Catharines):: Mr. Speaker, recently I was the recipient of a fund raising plea from the Liberal Party of Canada. That was their first mistake, for why in their confused minds would they include me, a true blue Tory, on their mailing list?
However, their confusion does not stop there. That same letter goes on to set out Liberal Party achievements. Talk about stretching, misrepresentation and dreaming. One achievement they claim is that Ontario Liberals managed to defeat the Tories in last May's election.
Just to keep the record straight, not only did the Liberals not defeat the Conservatives in the May election, the Tories hold five more seats than the Liberals. However, the Liberals had to bow down, compromise, and sell out to their friends, the NDP, to defeat the Tories in the Legislature.
There is still more of this distortion of fact and truth. The Liberals say they scored an upset victory in the Yukon. I feel certain that the Leader of the Opposition (Mr. Turner) would not want the public to be misled that way. He has too much respect for the Deputy Prime Minister (Mr. Nielsen) for that. The Tories are strongly entrenched in the Yukon federally and they form the Oppositon in the Territorial Government were the NDP, not the Liberals, are in power.
I urge the Right Hon. Leader of the Opposition to check with his officials, speech writers and fund raisers so that he can bring a halt to the pot calling the kettle black.



MEMBERS OF PARLIAMENT


Mr. Gordon Taylor (Bow River):: Mr. Speaker, the Opposition is losing all credibility. A few days ago the Liberal Leader stated in the House that the CCB had moved $300 million in assets to a U.S. subsidiary, which was promptly denied by the American authorities. It appears that he was angry because the rat pack was outratting him, so he took over the job of ratting. Incidentally, he is doing a better job at it than the rat pack. Whenever the Liberals make an untrue statement, the NDP, not to be outdone, say: "Me too, me too, me too".
Instead of taking the high road by improving legislation and working for a united Canada, opposition Members revel in character assassination of good and honest Ministers. When they think they have a Minister down, they all jump on him or her at once like a pack of wolves. Will the Opposition ever learn that one does not build a country or a Party by negativism or by making untrue sensational statements just to get the headlines in the press?
Our Prime Minister (Mr. Mulroney) and the Government are acting positively. We are carrying out the mandate given
to us by the Canadian people to heal the wounds inflicted by the Liberals during years of misrule. We may make mistakes, but they will be honest errors. We may have to bleed a little at times, but we will keep right on building a united nation, creating a climate to encourage investment and jobs, fostering prosperious agricultural and manufacturing industries until every-


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



ROYAL CANADIAN MOUNTED POLICE


Mr. John Nunziata (York South-Weston):: Mr. Speaker, it appears that Commission Simmonds of the RCMP has allowed himself to become a mouthpiece for the Prime Minister (Mr. Mulroney). In a politically partisan letter to a Toronto newspaper, the Commissioner challenged journalist Claire Hoy to name his source to substantiate the claim that Mrs. Mulroney asked the RCMP to salute her.
This type of action by the Commissioner is very uncharacteristic. In the RCMP's internal review of the Hatfield case, the Commissioner took a completely different view of a journalist revealing his source. Writing on Mr. Nick Hill's involvement in the Hatfield case, the Commissioner indicated:
He refused to disclose his source, which is an understandable position for a journalist to take.
Why does the Commissioner change his tune in this instance and challenge Claire Hoy to reveal his source?
Editorializing on the work of Mr. Hoy, the Commissioner went on to indicate:
There is little that Hoy writes ... that holds much appeal for members of the RCMP who have little respect for vitriolic babbling.
It is highly unusual for the Commissioner of the RCMP to criticize a journalist just because the journalist happens to be critical of the Conservative Government or reveals information which is embarrassing to the Government. It is not his role to be a propaganda organ for the Prime Minister's Office. It is unprofessional and unbecoming of the head of the RCMP to criticize the work of a journalist in such a partisan fashion. I would hope that the Commissioner realizes that the RCMP is there-


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

October 8, 1985



INCOME TAX


Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, 1 should like to inform Hon. Members of the House of a situation which was brought to my attention by several senior citizens in my riding of Brandon-Souris. As we are aware, many senior citizens invest a large portion of their savings in Canada Savings Bonds. However, as income tax is not deducted from interest payments, or from most other sources of income for seniors, that income tax frequently must be prepaid on a quarterly basis, even though interest from those bonds is not received until November.
Unfortunately, it is often quite difficult for many senior citizens to do their own calculations on the amount of interest they will receive and on the amount their payments must be. Furthermore, they fail to understand why they must make income tax payments on money which is yet to be received.
Perhaps, to alleviate some of these problems, income tax could be automatically deducted from interest payments on bonds as it is from RRSP pay-outs, or perhaps bond holders might be able to have their interest paid on a quarterly basis as well. Certainly in an age of electronic banking this could be an option. Failing these reforms, the least that could be done to ease the situation would be to ask the Government to issue a statement, or a bill, to senior citizens reminding them of when to pay and calculating that payment for them.
Senior citizens in Canada are not opposed to paying their fair share of income tax, but they do not feel that that tax should be paid until the income is actually received.



AGRICULTURE


Lorne Edmund Nystrom: Mr. Speaker, Hon. Members of Parliament are no doubt aware of the terrible drought which affected southern Saskatchewan or the southern Prairies last summer. Now we have the double disaster of a drought on one hand and rain and snow on the other hand, so that the grain in the fields is lying under snow and cannot be harvested.
Last summer, the Prime Minister (Mr. Mulroney) asked the Hon. Member or Assiniboia (Mr. Gustafson) to head up a task force which would make recommendations to assist farmers suffering from the drought. That was not weeks and weeks and weeks ago. Where is that report? Farmers want to see it and its recommendations. They want that report made public now.
A number of years ago C. D. Howe said: "What's a million?" and he was thrown out of office. We now have a Government which is in effect saying in aiding the banks: "What's a billion?" The Government has a billion dollars for the banks but it has nothing at all for the grain farmers of western Canada. I call upon the Government to come up with
an acreage payment immediately for western farmers who are suffering from the drought, and for other western farmers who are suffering because their grain is lying under snow and rain. We need that assistance now. We want an acreage payment, and we want it now.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Minister of State for Finance. Yesterday, in the House of Commons, she said that it was not the Government's intention to set a precedent in compensating uninsured depositors in our financial institutions.
My question relates to the future policy of the Government. Is it, then, her intention to rescue only depositors who were led into error by her statements and those of her colleagues and by the report of the Inspector General?


Barbara Jean McDougall: Mr. Speaker, I have already made it clear in the House, and in other statements I have made, that we have in every way regarded institutions which have come to our attention as unique, and we have taken into account, in the circumstances, what we feel must be done on behalf of depositors, taxpayers, and economic conditions. In this case we made a decision which we feel is perfectly appropriate. We will continue to make our decisions on those bases, should such an eventuality arise again.


INQUIRY WHY FOREIGN BANKS WILL BE COMPENSATED
John Napier Turner: Mr. Speaker, I have a supplementary for the Minister. Could she inform the House why she thinks it is fair to compensate foreign banks which had deposits with the Canadian Commercial Bank or the Northland Bank, but refuses to reimburse holders of debentures or shares, such as investment funds, pension funds and credit unions?


Barbara Jean McDougall: Mr. Speaker, I had thought that this Bill was being debated before the House, but I am prepared to answer the question. There is a definition of "depositor" within the CDIC Act. It is the only appropriate precedent for how one defines a depositor. We have used that definition in this case, and I think it is perfectly appropriate.
October 8, 1985

[ Translation]


REQUEST FOR IDENTIFICATION OF TWO DEPOSITORS RECEIVING COMPENSATION
John Napier Turner: would like to put a supplementary, in the public interest, Mr. Speaker.
The documents released yesterday by the Minister show that one private citizen had invested $1,423,668 at the Canadian Commercial Bank and another had invested $2,154,555 at the Northland Bank, which means that these two people, and we do not even know whether they are Canadians or not, will receive a total of over $3.5 million-


Mr. Speaker:: I am afraid I had risen to ask the Right Hon. Member to ask his question and that his question was asked when the microphone was off. Perhaps the right hon. gentleman could repeat his question.


John Napier Turner: Who are these two people, Mr. Speaker, who were mentioned yesterday by the Minister and who will receive more than $3.5 million, if the Bill now before the House is adopted?


Barbara Jean McDougall: Mr. Speaker, I have indicated that 1 have prepared for the House a table of the categories of depositors. I continue to be prepared to put before Mr. Justice Estey a full list of the depositors and have him reach a decision on whether or not it should be published.


Some Hon. Members:: Hear, hear!


Mr. Penner:: This is the highest court right here.


MINISTER'S PRESENCE
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is also directed to the Minister of State for Finance. Can the Minister confirm that she was in Canada during the entire month of July and the first two weeks of August, a period which was crucial for the health and safety of the Canadian Commercial Bank and the Northland Bank?


Barbara Jean McDougall: Mr. Speaker, I was not in Canada in July, and I was in Canada in the first two weeks of August.


MINISTER'S ABSENCE
Aideen Nicholson: Mr. Speaker, given the magnitude of this problem, given that Canadian taxpayers are now being left with a bill of almost $1 billion, and that this was the most important issue for financial institutions in 62
Oral Questions
years, did the Minister not consider that it might have been wise to remain in Canada?


Barbara Jean McDougall: Mr. Speaker, as I understand it, we live in the age of the telephone.


Some Hon. Members:: Hear, hear!


PRIME MINISTER'S OFFICE
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I have a question for a man of unimpeachable integrity, namely, the Minister of Justice.


Mr. Crosbie:: Thank you.


John Edward Broadbent: In recent weeks we have had a Cabinet Minister, a Member of Parliament, and the National Director of the Conservative Party all publicly contradict the Prime Minister's staff. Today, however, another step has been taken that is potentially quite serious. We have had the Minister of Justice describe the performance of the staff in very negative terms.


Some Hon. Members:: Order, order!


Ramon John Hnatyshyn: You are out of order again today.


John Edward Broadbent: My question to the Minister is this. Given the importance of the Prime Minister's staff to the functioning of the Government will the Minister of Justice elaborate on what he had to say earlier?


Ramon John Hnatyshyn: Don't you know the rules around here?


Mr. Clark (Yellowhead):: Sure he does, although he breaks them. He shows contempt for the House of Commons.


An Hon. Member:: He knows better.


Mr. Speaker:: Order, please. 1 think the Hon. Member for Oshawa knows full well that questions to the Minister of Justice should relate to the Justice portfolio. I invite him to ask questions of the Minister of Justice in his ministerial portfolio.


John Edward Broadbent: My question of course pertains to the work that is done by the Minister of Justice. I want to ask him, when he described the Prime Minister's staff in those terms, was it because in exercising his responsibility as Minister of Justice he made a request to the Prime Minister's office that was never conveyed to the Prime Minister, or did he ask for some other project to be carried out that was not carried out by the Prime Minister's staff.


John Carnell Crosbie: Mr. Speaker, both the question and the

October 8, 1985
Oral Questions
Leader of the New Democratic Party are peachable rather than impeachable. I made no statement yesterday giving my views on the PMO. I said what other people were alleging with reference to the PMO.


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: That is right.


John Carnell Crosbie: Those personages being Members of the Opposition offices. The present PMO is far superior to anything that Coutts or Axworthy could possibly produce.


An Hon. Member:: Where is Pinocchio today?


John Carnell Crosbie: I find it to be perfectly satisfactory despite the scurvy allegations and imputations of the hon. gentlemen opposite.


DESCRIPTION OF STAFF
John Edward Broadbent: Making that comparison with Mr. Coutts is to damn with faint praise, may I put it that way.


John Carnell Crosbie: Yes, you may.


John Edward Broadbent: With reference to the question that was put to him, which was would he say that the Prime Minister's staff consists of a bunch of dolts, the Minister is quoted to have said "that is as good as possible interpretation as any".
Is the Minister of Justice taking back those words or does he stand by them?


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, order! The Member for Oshawa knows full well that-I think we all know what he is doing but it is not a question that is appropriate to Question Period.


Charles Joseph Clark: It is abuse of the House of Commons.


Mr. Speaker:: The Hon. Member for Egmont.


SALE OF CANNED TUNA-MINISTER'S ALLEGED STATEMENT
Mr. George Henderson (Egmont):: My question on the same subject is to the Deputy Prime Minister. The Minister of Justice has criticized the Prime Minister's staff for its handling of the tuna affair. The Minister said that the senior staff in the Prime Minister's office should have taken immediate action to withdraw the tainted tuna from supermarkets as soon as they found out it was unfit for human consumption.


John Carnell Crosbie: I did not state that.


George Roland Henderson: Does the Deputy Prime Minister agree with that statement by the Minister of Justice?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: The answer to that question has been given over and over and over again.


An Hon. Member:: It still smells.


Erik Nielsen: With respect to the staff in the Prime Minister's office, unlike many of those critics who advance uninformed and unfounded opinions with respect to those personnel-


An Hon. Member:: Like the Minister of Justice.


Erik Nielsen: -I can assure him that they are of the highest possible calibre, certainly an improvement over the previous crew that was there.


MINISTER'S POSITION
George Roland Henderson: The Deputy Prime Minister is suggesting that the Member for St. John's West is ill informed. My supplementary question is to the Deputy Prime Minister. Why did the Justice Minister change his statement about the level of competency in the Prime Minister's office? Did the Minister of Justice have a sudden attack of amnesia or was he given an ultimatum, change your story or resign?


John Carnell Crosbie: Mr. Speaker, I have stated in this House and I state again, that I made no such statement. I have not been asked by anyone to withdraw any statement because 1 can't withdraw a statement I did not make. An interview was twisted, and the hon. gentleman-


Mr. Angus:: You mean they got the best of you, John?


John Carnell Crosbie: -seeks to twist it further. No such statement has been made; no word of criticism has passed my lips about the PMO and that is the position, so there it is.


Mr. Speaker:: The Hon. Member for Kamloops-Shuswap.


FINANCIAL INSTITUTIONS DEPOSITORS COMPENSATION ACT
Nelson Andrew Riis: Thank you, Mr. Speaker.


John Carnell Crosbie: And anyone who wants to put his seat on the line, do so. You are running out of seats over there.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, order.


October 8, 1985


Nelson Andrew Riis: Thank you very much, Mr. Speaker. For someone who has not made a statement, he seems a little jumpy.
My question is directed to the Minister of State for Finance. Now that she has committed the taxpayers of Canada to this billion dollar bail-out, given the information she provided to the House yesterday, would she confirm that 70 per cent of the bail-out money will go to domestic banks, foreign banks, investment dealers, large corporations and provincial Governments? Will she confirm that 70 per cent would go to those categories?


Charles Joseph Clark: Order.


Mr. Speaker:: Order, please. We had a question earlier relating to policy in the future which became a question relating to anticipation of the Bill before the House. The Hon. Member is indeed asking a question about the matter that is currently under debate in the House and he should know that that is not therefore in order. Does the Hon. Member have a question with regard to other policy?


Nelson Andrew Riis: Mr. Speaker-


Mr. Speaker:: Order. Could I invite all the Ministers who want to tell me what Beauchesne's says, to do it somewhere else.


Some Hon. Members:: Hear, hear!


CANADIAN POLICY
Nelson Andrew Riis: Mr. Speaker, my new question to the Minister of State for Finance is this. Considering that in the United Kingdom as well as West Germany and the United States the Governments in those countries have never seen it appropriate to use taxpayers' money to bail out uninsured depositors above the insured limit, would she explain why the Government of Canada has felt that this is required in Canada when it has not been required in West Germany, in the United Kingdom or in the United States of America?


Barbara Jean McDougall: Mr. Speaker, I am not responsible for policy in West Germany, the United Kingdom or any such country. I am responsible for policy in this country and I stand by our decision to assist the economy of western Canada, which I am sorry that the NDP has totally lost interest in, by looking after our financial institutions in those areas, and the depositors and the borrowers in those areas.


PENITENTIARIES
John V. Nunziata: Mr. Speaker, in the absence of the Solicitor General I would like to address my question to the Deputy Prime Minister. Can he advise the
Oral Questions
House whether it is the intention of the federal Government to privatize federal prisons in order to cut costs?


Erik Nielsen: I am afraid that that is a question that will have to await the return of the Solicitor General. I will take it as notice and bring it to his attention.


PROGRAM REVIEW INQUIRY
John V. Nunziata: Can the Deputy Prime Minister confirm that as part of his task force a study has been conducted which will recommend the privatization of federal prisons and is he prepared to table that report in this House of Commons?


Erik Nielsen: 1 know of no such plan with respect to the work on program review. The study team that is examining Justice has just been composed. It is one of the last to be composed and hopefully it will be completing its work by the end of November.


FINANCIAL INSTITUTIONS
Nelson Andrew Riis: Mr. Speaker, my question is directed to the Minister of State for Finance. I wonder if the Minister could explain why she feels it is appropriate to use taxpayers' money to bail out foreign banks with uninsured deposits in Canadian institutions when that does not happen in the United States, West Germany and the United Kingdom. In other words, if those countries do not bail out their own banks, why should we feel an obligation to do so?


Barbara Jean McDougall: Mr. Speaker, I feel the responsibility to look after the integrity of our banking system. Those depositors to which the Hon. Member referred are just as legitimate as other depositors. As well, we do not have the kinds of regulations that exist in those countries, regulations which I very much want to put before the House and have passed as quickly as possible.


SHIPBUILDING
Hon. Andre Ouellet (Papineau):: Mr. Speaker, my question is directed to the Minister of Supply and Services.

October 8, 1985
Oral Questions
Last September 30 the Prime Minister reluctantly met with Canadian Vickers Limited workers in Montreal. Since then, did the Prime Minister ask the Minister of Supply and Services to look into this matter, did he report on that meeting, and does the Minister intend to make sure that this contract, awarded for the construction of frigates in Montreal, will be honoured?


Hon. Stewart Mclnnes (Minister of Supply and Services):: Mr. Speaker, the Prime Minister has not been in touch with me concerning this matter but the Hon. Member for Hochelaga-Maisonneuve has made representations on behalf of all the workers. He brought representatives of the union to my office last week. Tomorrow I will be having a meeting with the president of Vickers. This matter involves a very complicated legal question and I have solicited a legal opinion to determine what course of action we might have available. It is a serious problem. We are dealing with it and we hope to have an appropriate response shortly.


INQUIRY IF CONTRACTS WILL BE HONOURED
André Ouellet: Mr. Speaker, I thank the Minister for his answer. I am glad he will meet with Vickers management.
I would like to ask him whether he will tell company officials that all frigate and shipbuilding contracts must be honoured. Under those contracts awarded by his predecessor, the work was to be shared equitably by the various shipbuilding yards throughout Canada, and this contract in particular was to be carried out by Vickers workers in Montreal.
Will the Minister tell the president of Vickers that the contracts must be honoured?


Mr. Speaker:: Order, please.


Stewart Donald McInnes: Mr. Speaker, I am not sure what the question was, but I can indicate that there will be no movement of workers out of the Province of Quebec. All that is envisaged by Vickers is a possible move of workers from Montreal to Quebec City. That may be something over which the Government of Canada has no power. It may be a matter of contract. That is what I have undertaken to determine: what are we legally entitled to do?


SOCIAL SECURITY
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, this is Family Week and I would like to ask the Deputy Prime Minister about the Government's priorities. Is it more important to the Government to use $1 billion to bail out banks or is it more important to use this money to maintain fully indexed family allowances for Canada's children through 1990?


Erik Nielsen: Mr. Speaker, the Party that now forms the Government has always considered the family unit to be at the root of all of its policies and will always use the appropriate priority whenever any of these decisions have to be made.


FAMILY VIOLENCE
Margaret Anne Mitchell: Mr. Speaker, if the family is the most important unit, I would like to know why there has been no action taken on the promise made by the Prime Minister to do something about battered women and families. Why would the Deputy Prime Minister not recommend to Cabinet that the Government take just 3 per cent of the bank bail-out money to create 300 new transition houses across Canada?


Hon. Walter McLean (Minister of State (Immigration)):: Mr. Speaker, the Hon. Member suggests that there is an instant answer. The Hon. Member knows that the delivery of service to battered women and the question of the funding of transition houses is a number one priority. My colleague, the Minister of National Health and Welfare, has been dealing with the provinces, as well as the Minister responsible for housing. This is a priority in federal-provincial discussions. The Hon. Member has our assurance that this is a priority of the Government.


CANADIAN NATIONAL RAILWAYS
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, my question is for the Minister of Transport. In view of the fact that the Government's White Paper entitled Freedom to Move quite properly observes that the Government should be sensitive to allowing Crown corporations unfairly to cross-subsidize their operations, will the Minister now move to forbid CN from operating any rail service below a compensatory rate?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, as I am sure the Hon. Member is aware, the document entitled Freedom to Move has been referred to the Standing Committee on Transport. Through its terms of reference, I have asked it specifically to consider this important matter as it is an issue that has been raised throughout the country.
October 8, 1985


PUBLIC SERVICE
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is for the President of the Treasury Board. Last week the Minister of Indian Affairs and Northern Development confirmed to the House that through a massive reorganization of his Department there were up to 1,500 job cuts in that Department. Weeks before we had been told of job cuts in the Public Service of Canada, in Transport Canada, in the Department of Communications and in the Department of the Secretary of State, affecting thousands of employees. What career planning does the Minister have in mind for these public servants? Does he plan to offer them retraining, or does the Government have a plan to help these workers recycle themselves or find alternative employment in the Public Service of Canada?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, it is quite true that in the last several days announcements have been made about the potential layoff of some employees in the Public Service, quite in line with what was announced in the May Budget, which was a reduction of 2 per cent in the actual workforce for the coming fiscal year. However, I am very happy to say that regarding workforce adjustment policies as well as most of the other commitments we have undertaken vis-a-vis the unions, we have worked out a policy that provides for the kind of pre-notice, retraining and recycling within the Public Service that will minimize the adjustment of these workers to an obviously difficult situation.


JOB SECURITY
Jean-Robert Gauthier: A supplementary question, Mr. Speaker.
Can the Minister confirm to the House that those employees will get the same service and the same attention from the Public Service Commission and, for instance, will a priority list be established? Will they have the right to appear before the PSC to make sure that everything is done to help them find other jobs?


Robert René de Cotret: Mr. Speaker, not only is everything done to enable them to find other jobs within the Public Service, but they are indeed given priority. Notice periods have been negotiated with the unions so that displaced employees may benefit from the most complete retraining available. If I may refer to what happened after last November's exercises, all but 130-odd employees out of about 3,000-I do not remember the exact figure-have so far been recycled within the Public Service. We hope to be able to do the same thing in the future.
Oral Questions


CONSUMER AFFAIRS
David Orlikow: Mr. Speaker, I would like to direct a question to the Minister of Consumer and Corporate Affairs. The Minister has been urged repeatedly by church, consumer, and anti-poverty organizations to stop the discounting of income tax refunds. Last month at a federal-provincial meeting of Ministers of Consumer Affairs, it was agreed that income tax discounting of tax returns of persons receiving the child tax credit should be stopped. Today the Minister received a telex from the Manitoba Minister of Consumer Affairs asking when action would be taken. Can the Minister give the House any information as to when he proposes to deal with this question?


Hon. Michel Cote (Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker, I simply want to answer that we have been considering this matter for several months. We have had many consultations with the parties concerned as well as with the provinces. I may remind my hon. friend that a policy of this kind involves a number of other departments as well. We are consulting with our colleagues and intend to make a decision as soon as possible.


REQUEST THAT PRACTICE BE BANNED
David Orlikow: Mr. Speaker, it is now less than three months until the next tax year commences. The Minister has to do something. Can he tell these organizations and the Manitoba Minister why he cannot ban the discounting of the child tax credit and of all income tax returns since this has already been done successfully in Quebec and the United States? What is the difficulty the Minister has in defending our poorest Canadians?


Some Hon. Members:: Hear, hear!


Michel Côté: Mr. Speaker, there are of course a number of problems, but it would take too long to mention all of them this afternoon. Can you imagine what is involved?
However, I have already indicated I intend to deal with the situation as soon as possible, and I hope the matter will be settled before the start of the new income tax season.

October 8, 1985
Oral Questions


GOVERNMENT OF CANADA
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is for the Deputy Prime Minister. It involves the same extraordinary interview of the Hon. Member for St. John's West at VOCM in St. John's. My question involves the way the Government passes information on to the public.
With respect to the Prime Minister telling the truth, the Minister was quoted as saying that he would be crazy if he was not because these things are not important enough for him not to have told the truth. Does that statement suggest that for matters of unimportance the Government will tell the truth and that for matters of extreme importance the Government may not tell the truth? Will he please clarify how the Government decides to fess up or not?


Erik Nielsen: Mr. Speaker, I doubt very much the relevancy of the Hon. Member's question with respect to my ministerial responsibilities. Nonetheless, I can assure him, as I have assured Hon. Members before him who have asked the same type of question, that the calibre of staff in the Prime Minister's Office is of the highest possible quality. I am sure the Minister of Justice shares that view with me, as he has already stated in the House today.


B. Keith Penner: He does not share any such view.


POLICY INQUIRY
Brian Vincent Tobin: Mr. Speaker, I think the Deputy Prime Minister failed to understand the question. It is critical when a Minister of Justice of the Government of Canada suggests the Prime Minister was telling the truth because the matter was not important enough not to have told the truth. It other words, the matter was not important enough to have lied. Is there such a policy in this administration, as suggested by the Minister of Justice, that on unimportant matters they will tell the truth but on matters of great importance, great political exposure, they may not tell the truth? Is that the policy of the Government?


John Carnell Crosbie: Mr. Speaker, that is the most extraordinary pulling out of a 10-minute interview, a scattered word here and there. It befouls and smirches the reputation of the hon. gentleman in the way he asks his question. It should not be permitted, Mr. Speaker. It is a disgrace that this type of questioning is permitted.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: That won't work, John.


Ms. Copps:: Tell the truth, John.


John Carnell Crosbie: You would not know the truth if it struck you in the head.


Mr. Speaker:: Order, please.


Sheila Maureen Copps: Erase the tape, John.


John Carnell Crosbie: Another bunch of twisters. You are incapable of even reading straight.


Mr. Speaker:: Are Hon. Members finished yelling at each other now?


John Carnell Crosbie: I have not even started.


Mr. Speaker:: Would Hon. Members like us to stop Question Period for three or four minutes so that they can go on? Question. The Hon. Member for Ottawa Centre (Mr. Cassidy).

[ Translation]


SMALL BUSINESS
Michael Morris Cassidy: Mr. Speaker, they do not even know enough to calm down!
My question is directed to the Minister of Regional Industrial Expansion and concerns the closing of Dominion Textiles plants at Saint-Jean and Valleyfield.
Considering statements by the union that these shutdowns were an attempt on the part of the company to break the union, will the Minister conduct an inquiry into the use of public funds and review all federal subsidies earmarked for modernizing the plant, in order to establish this was not an attempt to break the union?


Hon. Andre Bissonnette (Minister of State (Small Businesses)):: Mr. Speaker, we are well acquainted with the problem at Dominion Textile. Yesterday, I met with the president of the company, and we are trying to find solutions so that Dominion Textile will not have to close down, and if it were obliged to do so as a result of the situation in the textile industry, we will find another use for the plant, even before it closes down.


JOBS-GOVERNMENT POSITION
Michael Morris Cassidy: Mr. Speaker, is this an undertaking that the jobs of these employees will be restored, especially considering the fact that this is the most modern textile plant in Quebec?


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October 8, 1985

Will the Government give the House the assurance that the company will not close down simply to try to avoid having a union that works for its employees?


André Bissonnette: Mr. Speaker, the Government cannot interfere in the operations of a private company, nor can it dictate any guidelines. However, our Government, unlike what happened during the last five years, is trying to find jobs and to restore the textile industry.


ADMINISTRATION OF JUSTICE
Joseph Lloyd Reid: Mr. Speaker, my question is for the Minister of Justice. He will know that the Federal Court of Canada has ruled that the Minister of Justice and not the courts must deal with the extradition matter of Joseph Kindler. When will the Minister send this man back to the United States where he can be properly tried and punished for a most heinous murder committed there?


John Carnell Crosbie: Mr. Speaker, it is a pleasure to be asked a relevant question about a matter of public policy.


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: The position with reference to the person involved is that the appeal period has not yet expired. However, counsel for Mr. Kindler wishes to write me to set out reasons why I should exercise my discretion under the extradition treaty, on behalf of her client. I may well give her a chance to come to make an oral presentation as well. Once that is done, then a decision will be made.


John Edward Broadbent: Check it with the PMO.


John Carnell Crosbie: l cannot make a decision until the lawyer for the person involved has been given a chance to make representations.


NATIONAL REVENUE
Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, my question is for the Minister of National Revenue. If the Minister has been briefed, he will have read an article in Maclean's magazine dated October 14 entitled "Sweetheart Tax Ruling" which deals with the Gulf acquisition. If the Minister has read the article he will have seen that the taxpayer was able to accomplish indirectly what could not be accomplished directly. Will the Minister not agree that it
Oral Questions
would be improper and not in accordance with the guidelines of his Department to give a ruling in such circumstances?


Hon. Elmer M. MacKay (Minister of National Revenue):: Mr. Speaker, again, the distinguished Member opposite, because of his previous experience, knows that in asking a question such as the one he has asked he is inviting me to violate some of the important principles of Canadian income tax jurisprudence. He knows that I cannot make such an observation under the circumstances. I have assured him before that to the best of my knowledge any such actions which were taken with reference to the provisions of our Income Tax Act were taken according to law. Unless he has evidence to the contrary, I can go no further.


AMOUNT INVOLVED
Donald James Johnston: Mr. Speaker, if the Government will not be forthcoming with respect to the contents of this ruling, will the Minister at least tell the House-


Charles Joseph Clark: The Minister follows the law.


John Carnell Crosbie: You are a lawyer, remember?


Donald James Johnston: We have heard enough from you today.


John Carnell Crosbie: You are a tax expert.


Donald James Johnston: Will the Minister please tell the House whether in fact the contribution of Canadian taxpayers-you and me, Mr. Speaker, and other Members of this Chamber- exceeds $1 billion?


Elmer MacIntosh MacKay: Mr. Speaker, again, my hon. friend knows that for me to hazard an opinion, a guess, or to provide information of that nature, would be very much against the traditions of what the income tax laws of this country stand for. I ask the Hon. Member opposite how he would like to have his affairs disclosed in the House of Commons.


EXPLORATION INCENTIVES PROGRAM
Ian Gardiner Waddell: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Last spring, in the Western Accord, she announced the end of the Petroleum Incentive Program grants called the PIP grants. These are grants for offshore exploration mainly in Canada Lands. The Minister is aware that these grants led to quite a bit of offshore exploration in Nova Scotia. She has put nothing in to replace it. Does she think this is fair, especially to the Province of Nova Scotia, whose oil and gas boom is collapsing now around Nova Scotians?
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October 8, 1985
Oral Questions
Hon. Pat Carney (Minister of Energy, Mines and
Resources): Mr. Speaker, the Hon. Member should know that my colleague, the Hon. Minister of Supply and Services, has announced, in Halifax, that we will be revealing shortly the contents of our new incentive program. I am sure that he will welcome such an initiative.


Ian Gardiner Waddell: The Minister should know, perhaps, that her Department said not before the end of the year.


TIMING OF ANNOUNCEMENT
Ian Gardiner Waddell: Mr. Speaker, given that the rigs are leaving now, that companies are making other plans, that there is instability in Nova Scotia, would the Minister speed up that decision and, for goodness sake, announce a decision fairly soon so that the Government does not treat Nova Scotia like some orphaned province?
Hon. Pat Carney (Minister of Energy, Mines and
Resources): Mr. Speaker, the Hon. Member can be assured that we are not treating Nova Scotia like an orphaned province. I have already told the Hon. Member that we are going to be announcing our new incentive program shortly. Is he suggesting that he would prefer we do nothing?


BANKS AND BANKING
Jean-Claude Malépart: Mr. Speaker, the Prime Minister, the Minister of National Health and Welfare and the Minister of Finance being absent, I will direct my question to the Minister of State (Finance) who is carrying on the fight in the House of Commons to reward individuals who have deposited more than $60,000 in the banking institutions.
I have here petitions signed by people from across Canada. Can the Minister explain what social justice notion prompted her action to cut $55 million off income support programs for families with children, and then hand out $1 billion to banks whose depositors have more than $60,000? On what social justice notion did she base her decision?


Barbara Jean McDougall: Mr. Speaker, our actions with respect to the bank are designed to help ordinary Canadians. Many of the Canadians who have deposits in these banks, who are westerness, are individuals. They are small businesses and employ people. I have pointed that out to this House time after time.


John Edward Broadbent: Give us the list, Barbara.


REQUEST FOR WITHDRAWAL OF BILL C-79
Jean-Claude Malépart: Mr. Speaker, does the Minister know that she will penalize 3.5 million Canadian families just to reward 100-odd rich bank depositors? Is the Minister prepared to recommend to the Prime Minister that Bill C-79 be withdrawn?


Barbara Jean McDougall: Mr. Speaker, I have no intention of withdrawing Bill C-79.


REQUEST FOR EDUCATION PROGRAM ON AIDS
Mr. Neil Young (Beaches):: Mr. Speaker, my question is directed to the Deputy Prime Minister. Could the Deputy Prime Minister advise the House whether the Government is considering entering into a public education campaign across the country to satisfy a growing concern amongst Canadians with respect to AIDS?


Erik Nielsen: Mr. Speaker, not to my knowledge. I know the Minister of National Health and Welfare is very concerned about increasing public awareness with respect to this disease. Perhaps I could take the question as notice and ensure that it is brought to the attention of the Minister of National Health and Welfare for a fuller response on his return.


FUNDING OF RESEARCH
Neil Young: Mr. Speaker, my supplementary question is directed again to the Deputy Prime Minister. Could he take it as notice to the Minister of National Health and Welfare to inquire whether the Government intends to increase the amount of monies which could be made available for research into Aids?


Erik Nielsen: Mr. Speaker, I will certainly take it as notice and ensure that the Minister of National Health and Welfare gets back to the Hon. Member. If my recollection is accurate, I believe that the Government is already assisting some operations to increase public awareness in this area, particularly-as I am informed by my colleague-in the Vancouver area.


CANADA POST CORPORATION
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, my question is directed to the Minister responsible for Canada
October 8, 1985

Post. I continue to receive many complaints about this Crown Corporation, its high cost and its poor service. I understand there are at least three studies under way, the private sector task force, the Auditor General's review, and the Laventhol and Horwath Review. What is the Minister's timetable for action in this area of vital concern to thousands and thousands of Canadians?


Michel Côté: Mr. Speaker, in reply to the Hon. Member, the Auditor General's final report is expected to be submitted to the board of directors of the Post Office by the middle of November. It is its responsibility to decide whether or not to make it public. The Fisher report on the Ed Varma situation is expected to be submitted by the end of this month and, again, it will be submitted to the Minister, Ed Varma, and the corporation, and we intend to make it public as soon as we receive it. The Marchment report is expected to be submitted at the beginning of November and as soon as we receive the recommendations we will properly deal with that.


LLOYDMINSTER HEAVY OIL UPGRADER PROJECT
Russell Gregoire MacLellan: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. Would the Minister tell the House why her Government is reviewing the federal commitment to the Husky Oil upgrader project in Lloydminster?


Hon. Pat Carney (Minister of Energy, Mines and Resources):: Mr. Speaker, I think it would be prudent of any Government to review the terms of a $750 million loan guarantee in the light of the improved conditions which the Western Accord has given the industry.


IMPACT OF WESTERN ACCORD
Russell Gregoire MacLellan: Mr. Speaker, my supplementary question is directed to the same Minister. Will she explain why she said last May that this project was a direct result of the Western Accord? And why did she take credit for creating 15,000 person years of employment when the federal Government is now reviewing its commitment to the entire project which was originally approved by the former Liberal Government?


Pat Carney: Mr. Speaker, this Government is on record as supporting the biprovincial project. It is because of the improved economics of the project under the terms of the Western Accord that we are making sure that the over-all financial package is attractive enough for it to proceed.
Oral Questions PORTS


PORT OF CHURCHILL-IMPROVEMENT PROJECTS
Rodney Edward Murphy: Mr. Speaker, my question is directed to the Minister of Transport. The Minister knows that in 1984 there was a federal-provincial agreement signed which was aimed at revitalizing the Port of Churchill. In the timetable set out in that agreement, work was supposed to be done on dust control immediately, dredging of the harbour was to be done by the summer of 1985, and a new tugboat was to be ready for the summer of 1986. Would the Minister tell western Canadians when that work is actually going to start?


Donald Frank Mazankowski: Mr. Speaker, those projects are still under active consideration. In fact, I have had discussions with the Minister of Transport for the Province of Alberta with a view to an extension of the shipping season into Churchill and the assurance that icebreaking services would be made available. In so far as the subagreement is concerned, ongoing discussions have taken place. The rehabilitation of boxcars is occurring. Some other elements of it are still under active consideration. With respect to-


Mr. Speaker:: Order, please. This is beginning to be a statement.


Rodney Edward Murphy: Mr. Speaker, I believe the Minister of Transport meant to refer to the provincial Minister of Transportation in Manitoba with respect to consultations about extending the port season.


FEDERAL-PROVINCIAL AGREEMENT
Rodney Edward Murphy: Mr. Speaker, the Minister has responsibility for certain aspects of that federal-provincial agreement. When is he going to live up to those aspects of the agreement? When is the money going to come from the federal Government?


Donald Frank Mazankowski: Mr. Speaker, we do have responsibilities with respect to the ERDA subagreements. We also have responsibilities to the taxpayers to see that the money is spent prudently and wisely.


FISHERIES
David Charles Dingwall: Mr. Speaker, my question is directed to the Government House Leader. In view of the comments made by the Minister of Justice in reference to the Member of Parliament, Mr. McCain, that "The only issue that might have been brought up was the complaint that fish inspectors, the bureaucrats, were out of hand. I mean, he may have complained somewhere of bureaucrats, so it could have been brought up in that

October 8, 1985
Point of Order-Mr. Riis
way"-he was referring to caucus-in view of these new comments and revelations, will the House Leader agree now to appoint a parliamentary committee to investigate the whole tuna affair in order to exonerate the Minister of Justice?


John Edward Broadbent: Just say yes, Ray, and sit down.


Ramon John Hnatyshyn: Mr. Speaker, I do not believe that I or most Canadians feel that the Minister of Justice requires any exoneration. He just finished pointing out that the statements attributed to him are not in fact what he said. I do not think anything can be clearer than that, and the normal parliamentary tradition is that we accept the word of the Hon. Minister.


AGRICULTURE
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, my question is directed to the Minister responsible for the Wheat Board. Prairie farmers have a considerable investment in grain elevators across the country. Could the Minister give us some indication of whether the policy of the Government is to force farmers to haul to elevators other than their own in an attempt to have them pay back their advance payments?


Hon. Charles Mayer (Minister of State (Canadian Wheat Board)):: Mr. Speaker, I think the Member raises a rather technical matter having to do with how farmers are required to pay back their advance payments before they are considered in default and charged interest. We have been dealing with a lot of these cases and I would be very happy to deal with whatever concerns are raised by his constituents if he would provide me with the full details. It is a serious matter and we are perfectly willing and able to do whatever we can to assist farmers if, as the import of his question suggests, a hardship is caused by asking people to haul their grain further than they need to haul it.


POINT OF ORDER
Mr. Speaker:: I am in receipt of a notice concerning a point of order by the Hon. Member for Kamloops-Shuswap (Mr. Riis).


Nelson Andrew Riis: Mr. Speaker, during Question Period the Right Hon. Leader of the Opposition (Mr. Turner) posed an appropriate question asking for the names of individuals who were large depositors in the two failed banks in western Canada. Later on in that same Question Period I asked a general question about the Minister's
reaction to a large category and you said that was an inappropriate question. I seek a clarification on why one was appropriate and one was not?


Mr. Speaker:: I invite the Hon. Member to come and see me. I tried to indicate at the time that I had been in some difficulty in the earlier questions because the questioning had begun with questions about future policy and then came back to what might have been a matter of the Bill. When I heard the Hon. Member's first question it was quite clear to me that it related specifically to the Bill. It is always difficult in a situation as fluid and as political as the bank question to make a distinction between the Bill and other matters. If the Hon. Member is aggrieved, I would be more than happy to consider it again with him. My only intent was to remind Hon. Members that it is improper to ask questions during Question Period on a matter currently before the House.



ROUTINE PROCEEDINGS


Mr. Charles-Eugene Marin (Gaspe):: Mr. Speaker, 1 have the honour to present the fourth report of the Standing Committee on Health, Welfare and Social Affairs, in both official languages.
[Editor's Note: For above report, see today's Votes and Proceedings.]


PETITIONS
Nelson Andrew Riis: Mr. Speaker, it is my pleasure to present a petition on behalf of a number of residents of the Kamloops area who are concerned that the Minister of Employment and Immigration (Miss MacDonald) has announced that workers laid off after December 31 of this year will have their pension benefits deducted from their unemployment insurance benefits, thus effectively eliminating the pension package benefit for the workers.


Rodney Edward Murphy: Mr. Speaker, I also have a petition signed by residents of Flin Flon, Manitoba, in which they complain about the Government's intention to have pension benefits, which are essential to the maintenance of family income and compensation to workers for their lifelong contribution to society, included as income for unemployment insurance purposes. They ask that all retired employees keep their pension benefits and receive their unemployment benefits without deduction of pension income.
October 8, 1985


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I have the honour to present a petition signed by many members of the Ontario Secondary School Teachers Federation protesting changes in the Unemployment Insurance Act which are to come into effect on January 1, 1986. They call upon Parliament to ensure that such a change is not proceeded with and that those who are pensioned off are able to collect their pensions as well as unemployment insurance if they so qualify.


Stanley J. Hovdebo: Mr. Speaker, it is my pleasure and honour to present to the House a petition signed by a number of residents of the area surrounding Prince Albert in which they ask the House of Commons to reinstate full indexation of universal family allowance and rescind unfair tax increases.


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, I have the honour in this National Family Week to present petitions from constituents in the City of Thunder Bay and the Township of Nipigon. They protest deindexation of the family allowance and the massive cut-backs to our child care system, and call upon the House of Commons to restore indexation of family allowances.



TRANSPORT


Ramon John Hnatyshyn: Mr. Speaker, there have been consultations among the Parties and I think you will find there will be unanimous consent without debate of the following motion:
That the fifth report of the Standing Committee on Transport, presented to the House on Tuesday, October 1, be concurred in.


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


Some Hon. Members:: Agreed.


Mr. Speaker:: There being such consent, shall the motion carry?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Paul Dick (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I ask that all questions be allowed to stand.


Mr. Speaker:: Shall all questions be allowed to stand?
Depositors Compensation


Allan Bruce McKinnon: Mr. Speaker, I would like to ask the Parliamentary Secretary when he could hope to provide an answer to Question No. 379 which I asked on May 24, and inquired about again a month ago. This is one of a pair of questions on closely related subjects, one having to do with the Supplementary Retirement Benefits Act, which has been answered, and one to do with the Canadian Forces superannuation account, which has not been answered. I am worried that one of these is being held up because it will present a view opposite to the one that the Parliamentary Secretary or someone else may want to present to the House.
I would like to point out as well that the answer to Question No. 383 contained a gratuitous note at the bottom which appears to be an answer to a question I did not ask. It is purely subjective in nature and I ask, when the Parliamentary Secretary does answer Question No. 379, that he spare me the editorializing on the subject matter.


Paul Wyatt Dick: Mr. Speaker, I can indicate to the Hon. Member that part of the answer to the question he asked would involve some other areas of Government where there are negotiations going on at present. I propose to answer that question upon the completion of those negotiations.


Mr. Speaker:: Shall all questions be allowed to stand?


Some Hon. Members:: Agreed.


Mr. Speaker:: Shall the Hon. Member for Victoria (Mr. McKinnon) and the Parliamentary Secretary have a meeting later?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-79, an Act respecting the provision of compensation to depositors of Canada Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect of uninsured deposits, be read the second time and referred to a legislative committee; and the amendment of Mr. Turner (Vancouver Quadra) (p. 7379).
Claudy Mailly: Mr. Speaker, in concluding this morning, I said it was unfortunate that the Leader of the Opposition had relinquished the responsible ways he had shown so well last March when he supported the rescue plan.
I read in an article in the Edmonton Journal that what the Leader of the Opposition, claimed, was unfounded and I quote:

October 8, 1985
Depositors Compensation

"It's unlikely that the Canadian Commercial Bank pumped $300 million into its U.S. subsidiary, as charged by Liberal Leader John Turner, a California banking regulator said Wednesday. "To my knowledge, there was no such infusion of funds", said David Scott, California deputy superintendent of banks "Remember that Westlands only has $386 million of assets in total"."

Mr. Speaker, this reminds me of a statement made by the Leader of the Opposition when he was Prime Minister, when he said that the Progressive Conservative Party was going to fire 600,000 public servants as soon as we were elected, although everybody knew perfectly well we only had 258,000 public servants in Canada. So there was some amateur exaggeration involved, and unfortunately, the Leader of the Opposition is now resuming this practice.
Journalists, whom the Leader of the Opposition quotes with such authority and relish, also had a few things to say, namely that the Government had no choice but to lend a helping hand to this regional bank so as to safeguard its deposits and also avoid hurting the economy of Western Canada which was slow to recoup and was in fact lagging behind the rest of the country's economic recovery. 1 would like to quote here from a column by John Ferguson of Southam News, which appeared in the Ottawa Citizen on March 26, 1985, the day after the rescue plan for the Canadian Commercial Bank was announced. He said, and I quote:
"The continuing problems faced by the Canadian Commercial Bank underline the fact that the economic recovery is still very uneven, with the West lagging well behind the rest of the country. A major part of the Commercial Bank's problems are the result of the large number of poor loans it has in western Canada, much of the money loaned to the oil and gas industry or for home mortgages during the boom years".

He went on to say:

"Money that would have been paid to the debenture holders out of future bank profits now will increase the Commercial Bank cash flow making it more likely the banks and the governments will get paid back".

Mr. Speaker, people really thought the rescue plan would succeed. This journalist also had the following to say, and I quote:

"Allowing the ten-year-old bank to go under would have negative impact on financial markets, possibly even with some effect on the value of the dollar. Finally, if the Commercial Bank had gone under, there would have been losses to several pension fund investors. Quebec's Caisse de Depot, which
invests money for the Quebec Pension plan, held 10 per cent ownership according to a 1983 prospectus filed by the bank. The Canadian National Rail pension fund, the Air Canada pension trust, the Alberta Government Telephone pension fund, and the Alberta Teachers' retirement fund also would have lost out if the bank had been allowed to go under".
[ Translation]
Mr. Speaker, it is obvious that a decision had been made, and even our journalist who does not have a reputation for being particularly soft on this Government admitted that the decision was a sound one. However, Mr. Speaker, a few weeks later, at a meeting of the Committee on Finance, Trade and Economic Affairs, some doubts were raised about this measure which had been taken to help the regional bank, and they were raised by the Hon. Member for Trinity (Miss Nicholson), which led the chairman of the board of directors of the Canadian Commercial Bank, Mr. Paul Paine, to complain in June that the proceedings of the committee on which this particular Member was sitting had undermined the public's confidence in the Bank during the rescue period. I would like to quote from an article in the Calgary Herald of June 14, by David Triguero, where he says, and 1 quote:

"Paine emphasized that CCB management practice had been approved and supported by William Kennett, Federal Inspector General of Banks, and Gerald Bouey, Governor of the Bank of Canada, who may be described as 'all people of high degree of independent credibility and people who understand banking'. Its critics, on the other hand, 'are not terribly familiar with banking and could not be expected to learn much in the few short sessions that the committee heard evidence' ".

However, Mr. Speaker, the Hon. Member for Trinity had already raised doubts about the rescue operations. Lack of responsibility, Mr. Speaker? It is not surprising that the rescue plan did not succeed.
Another subject is that of deregulation of the banking system.

A very good part of this debate, Mr. Speaker, should focus on Liberal inaction on regulatory reform for the last 16 years. Even John Evans, former Liberal Chairman of the Committee on Finance, Trade and Economic Affairs, admitted last week on the CBC that the previous Government was well aware of the problems vis-a-vis financial institution regulations, and yet did not act. Our Government, Mr. Speaker, on the contrary, is committed to regulatory reform and has indicated so in the Throne Speech, the economic statement, the Wyman Report, and a discussion paper on financial institutions. Earlier, the Hon. Member for Windsor West (Mr. Gray) asked why we did not do anything immediately. The reason for that is that we were busy mopping up the mess that the Liberals left us; a mess of unemployment, high interest rates, and a large deficit.
October 8, 1985



Mr. Speaker, eleven institutions were operating in Canada when the Bank Act was revised in 1980. After that, the number jumped to 70, which means that 59 new institutions began to operate after the revision of the Bank Act, yet no effort was made by the previous administration to change the regulations.
So Mr. Kennett had to make do with what was there when the Canadian Commercial Bank problem arose.
Why did the Liberals fail to make the necessary changes? Perhaps they were too busy trying to thwart the western petroleum industry which was about to show that it no longer needed to depend on the central Government.
For instance we know that Mr. Lalonde's philosophy was that the central Government had to be very strong, intervene in everything, and tell the regions how and when to develop.

In other words, Mr. Speaker, instead of backing the winners they were bleeding the winners. That is why we found ourselves in a situation where a bank that was doing very well in the boom years suddenly found itself in difficulty. Today we are faced with the results of the bad administration which we suffered for almost 20 years, and we want to help its victims. However, we are told by the same Liberal Party and by the same NDP, which supported the energy program and several other policies that were so detrimental to the West, that they cannot have their money, that they are big, rich and powerful, even though they are small municipalities, small credit unions, and small insurance companies. Somebody somewhere has a life insurance policy on a loved one and would probably depend on the insurance money to raise a family if a tragedy happened. However, the money is tied up in the Canadian Commercial Bank and we are not allowed to give them relief because they are considered to be very rich people.

Again, Mr. Speaker, I repeat what I said earlier. 1 think that the request for a list of depositors is nonsense. 1 think it is immoral to want to intervene in the private life of Canadians. And I think it is about time this Bill be adopted by the House. We have wasted enough time and must get back to work immediately, as we began to do, on a review of the banking regulations and give the Inspector of Banks the tools he needs to ensure that our banking system remains sound.


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


Lorne Edmund Nystrom: Mr. Speaker, you speak Fench very well. 1 have a question for the Hon. Member for Gatineau (Mrs. Mailly). This morning she spoke eloquently on the issue of the Canadian Commercial Bank collapse and she argued why she thinks it has now become necessary to help people who have deposits with the Canadian Commercial Bank.
Here is my question. If we are going to help the Canadian Commercial Bank, should we not do the same thing for small-and medium-sized businesses? A lot of them in my riding face
Depositors Compensation
similar problems and a good many of them had to close down. There are quite a few farmers in my riding, they had to cope with drought, then lots of snow and rain, bad weather generally, so should we not now do for farmers and small businesses what the Hon. Member wants to do for the Canadian Commercial Bank?


The Acting Speaker (Mr. Paproski):: The Hon. Member for Gatineau (Mrs. Mailly).


Claudy Mailly: Mr. Speaker, the Hon. Member for Yorkton-Melville (Mr. Nystrom) knows very well that in cases of small businessmen and farmers he is talking about shareholders, people who own businesses and are experiencing difficulties, whereas the Bill we are debating today has to do with depositors, people who invested their savings in a bank they thought was sound. That is an aspect of our overall banking system and a different situation altogether.
But as you know, Mr. Speaker, we already help farmers as well as small- and medium-sized businesses. We have already brought in legislation to help such businesses in Canada. We also advocated a legislative measure-for which the New Democratic Party had no use at all, as I recall-to abolish the capital gains tax on farms.
Again they sang the same old tune: those farmers are too rich as it is, we should not abolish the capital gains tax.
They said the same thing when we wanted to abolish the capital gains tax on small- and medium-sized businesses. In our judgment that is one way to help them and make sure that the business remains in the family.
Mr. Speaker, I think the Hon. Member should be consistent. If he wants to do something worthwhile for people he should take a second look at this measure-Bill C-79-and approve it to help the depositors, just as he should do in the case of other legislative measures designed to assist small businessmen and farmers through abolition of the capital gains tax.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Yorkton-Melville (Mr. Nystrom) on a supplementary question.


Lorne Edmund Nystrom: Mr. Speaker, the Hon. Member has just referred to capital gains. If a small- or medium-sized business were to file for bankruptcy, how could any change in the capital gains legislation be of any help? 1 fail to see the logic, Mr. Speaker. I am talking about a situation where a company is bankrupt, yet she suggested an amendment to the capital gains legislation. It has to be the other way around! To help someone through the capital gains tax, that someone must have capital gains to begin with.


Claudy Mailly: Exactly, Mr. Speaker, there is no ambiguity. The abolition of the capital gains tax will give a bit more cash to small businesses. You always make the same mistake. The NDP Members always make this mistake, and so do the

October 8, 1985
Depositors Compensation
Liberals, when they say that those who have capital gains are wealthy because they have made a profit. However, they should know that small businesses which do not make a profit will soon be in trouble.
There is no ambiguity. In one case, the good is to help the depositors who got caught in a bankruptcy caused by the deterioration of the economic climate due to ill-advised policies of the previous Government. The other is an assistance program for small businesses, because when they go under, it is very often because they do not have the cash they need to operate.
We saw this with small businesses in the oil sector. These small businesses which borrowed from the Canadian Commercial Bank did not have enough cash flow because they were overtaxed by the Liberal Government which wanted to centralize everything in Ottawa without allowing a single region to develop.


Claude Lanthier: Mr. Speaker, the Hon. Member for Gatineau (Mrs. Mailly) has raised a very important point in saying that, in 1980, the Canadian financial market included 11 banks and that, one year later, this figure increased to approximately 70.
I would like the Hon. Member for Gatineau to comment on the relationship between the haphazard manner in which our predecessors launched all these new banks and the situation last week at the Committee on Finance, Trade and Economic Affairs, which was considering the reform of financial institutions, when the Liberal Party did not see fit to send any representatives to the Committee while this serious work was going on. I would also like her to comment on the relationship between these two things which are strangely similar.


Claudy Mailly: Mr. Speaker, my colleague has just given a perfect example of the ambivalence of the Liberals who pretend to want to help everyone, but who are never there when the time comes to make a positive rather than a negative contribution.
We are certainly interested in reviewing these regulations. This should have been done a long time ago, Mr. Speaker, as 1 pointed out in my speech, and I am very happy that my Government is following up on the promise made in the throne speech to the effect that these regulations would be reviewed urgently. If this had been done two years ago, heaven knows that we would not be faced with such a tragic situation today!


Jean-Robert Gauthier: Mr. Speaker, in view of the exchanges between Government Members, 1 should like to quote from an editorial from the well-known Edmonton Journal dated October 2, 1985, which reads as follows:

"The Tories say the Liberals allowed foreign banks to open with inadequate regulations". That is from the Edmonton Journal of Octber 2. It goes on to say, "If the regulation was so lax why did McDougall's spring Green Paper on Banking
propose to further deregulate the industry by allowing insurance companies to get into money lending, perhaps creating hundreds of new Schedule C banks?"
If deregulation is not the answer, what is?


Claudy Mailly: Mr. Speaker, as usual, the Member for Ottawa-Vanier (Mr. Gauthier) is taking something out of context.


Jean-Robert Gauthier: No.


Claudy Mailly: He is taking an article from the paper. They seem to run their Opposition by reading the paper. Every morning they read the paper and decide what their position will be for the day. If the paper changes the day after, they change their position. We have seen that with the Leader of the Opposition.
[ Translation]
As a reed bowing in the wind; if reporters tell them that they are good-looking, that they are fair and chubby, they are pleased, but as soon as the circumstances change, everything becomes different. The regulatory process is not the only issue with which he deals, there is also deregulation and a new control procedure. Did you know, Mr. Speaker, that in Mr. Kennett's office there are only six employees to help him audit the banks while in the state of New York there are 300 experts working under the Inspector of Banks, for they have of course a banking system which is said to be less conventional than ours. However, six employees for a whole country compared with 300 employees for one single state-
Then, Mr. Speaker, obviously what we needed was a new approach to review and regulation. Besides, we came to realize that when another bill relating to trusts, for instance, was debated under the previous administration. We were well aware that the Liberal Party which was then in power wanted to extend to trusts all sorts of measures which were previously unavailable while they were not required to assume as many responsibilities as the banks but they wanted the same advantages-


The Acting Speaker (Mr. Paproski):: The time for questions and comments has expired. Debate.
[ Translation]


Jean-Robert Gauthier: Mr. Speaker, I hope the Hon. Member for Gatineau (Mrs. Mailly) is going to stay near her seat, because we have a few things to say to each other. In any case, 1 would like to read to her the last paragraph, since I only have a minute, of the editorial that appeared in the Edmonton Journal on October 2, 1985, which reads as follows:

"Principles lost in bank fiasco". It states, "By trying to blame the Liberals for the collapse of the Canadian Commercial
October 8, 1985

Bank and Northland Bank, the Government shows it is bankrupt of any sense of responsibility for its actions".

Mr. Speaker, in taking this opportunity to speak to Bill C-79 and especially to the amendment. I would simply like to clarify the issue and start by saying that the amendment before the House is what is referred to as a reasoned amendment and objects to the principle contained in Bill C-79. The House will recall the amendment was moved by the Leader of my party, Mr. Turner, and seconded by myself, and it reads as follows: "this House declines to give second reading to a Bill, the principle of which is to permit payments of large, but unspecified amounts of public monies to unspecified persons or corporations, thereby substantially denigrating Parliamentary accountability for expenditure of public funds."
Mr. Speaker, if there is one thing we do in this House, it is that we are accountable to our constituents and to Canadians in general, and in this respect, I think it is very important that the federal Government, with the spending powers it has, should be able at all times to justify its expenditures and do so publicly.
The purpose of Bill C-79 being considered today is to authorize the expenditure of $875 million to compensate uninsured depositors who had invested money with the Canadian Commercial Bank, the Northland Bank and the CCB Mortgages Investment Corporation, and all this without revealing the names of the people who stand to benefit from this legislation. The legislation is of course meant to compensate over and above the usual $60,000 paid to any Canadian depositor in a bank that is a member of the Canada Deposit Insurance Corporation. In other words, Canadians are insured for up to $60,000 by public funds, an insurance fund to which we contribute a percentage of our deposits.
Mr. Speaker, all the editorials I have in front of me obviously repeat the same thing. I am going to read one that appeared in the Toronto Star on October 7, which reads as follows:
"How on earth can the Progressive Conservative Government continue to argue that Canadians should not be told the names of depositors in two failed western banks who are being bailed out with public money? A Government Bill asks Parliament to approve an $875 million public expenditure to finance the bail-out but it ignores the taxpayers' right to know where their money will go".

Mr. Speaker, that is what the argument is essentially about. Why not release the list of uninsured depositors covered by this legislation?

Are they trying to pass the buck? Is the Government saying what it said in March of this year when it requested money from taxpayers to save the Canadian Commercial Bank which indeed failed? At that time we had to trust the Government
Depositors Compensation
and have confidence in it. Should its continued stonewalling on the issue to date require from us an act of faith or an act of good will? Should we tell the Government to go ahead and spend close to $1 billion without telling us where the money is going? On the basis of its lack of disclosure, we ask the Government today to come clean and tell us who is covered or who will benefit. Confidence in the Government is not enhanced by stonewalling on its part.

Mr. Speaker, last March, the Government told the House: "Quick, something must be done, it is very urgent and our banking system is in peril. One of our banks is in trouble. Now be nice and adopt the Bill, without too much debate, please, and you are going to be asked to give us your support, because trust us, this measure is going to help make viable one of our banking institutions, the Canadian Commercial Bank."
Mr. Speaker, we all know this was false, that the Government had failed to do its homework, that it misled the Canadian people, that it spoke without sufficient knowledge of the facts, without having the requisite studies on the table, studies that should have been done. It misled us, and the result is that $255 million were spent in March 1985, and that today, they are asking us for another $875 million-

In Bill C-79, the Government is asking for $875 million, as 1 said. In my riding of Ottawa-Vanier, $875 million is a lot of money. I have been asked by constituents to whom these moneys are going. Will it go to the poor, the unemployed, elderly people, widows or women living below the poverty line? The answer is no. Will the money be used for economically deprived children in our schools to better feed and clothe them? Again the answer is no. This huge sum of money, this king's ransom, will be used to bail out uninsured depositors of two chartered banks which the Government allowed to die. More important, this Bill will bail out not only two banks but two Ministers, two incompetent Ministers-the Minister of Finance (Mr. Wilson) and the Minister of State for Finance (Mrs. McDougall). That is what the Bill does. It bails them out. It gives them an out on the backs of taxpayers.
I remind the House and the people who are listening today that both the Minister of Finance and the Minister of State for Finance assured the House on numerous occasions in debate, in Committee of the Whole and repeatedly in Question Period, that both banks would be or could be kept in business.
I return to the magnitude of the sum involved. I have done some calculations. Since it is not going to the poor or to the elderly, since it is not going to clothe and feed children, I asked myself with what people would identify when considering $875 million. It could mean 28 million family allowance cheques of $31.27. It could mean 3.1 million Old Age Security cheques of $282.94 per month. It could mean 2.6 million Guaranteed Income Security payments or 1.5 million spousal allowance payments. The $875 million is not going to the poor or to the elderly. It is going to bail out people who, by the admission of many specialists, benefited from an investment which was

October 8, 1985
Depositors Compensation
superior to the going market rate. They took that money, and I hope they took the risk; they should bear the brunt. One cannot argue, as the Government is doing, that this is a precedent. If it happens in a year or so from now, the Government will say that it could not be anticipated and hide behind ignorance of the facts.
I should like to refer to the City of Ottawa and to put the $875 million into perspective once again. The City of Ottawa raises approximately $300 million per year in taxes. In fact, the exact figures for 1985 are as follows: municipal taxes, $66,527,600; regional taxes, $81,834,600; school taxes, separate and public combined, $143,052,000, for a grand total of $291,414,200. The total tax collected by the City of Vanier in the year 1985 was $11,268,000. If we combine the taxes for the City of Ottawa and for the City of Vanier, $875 million would mean no taxes for a period of three years. Of course that is discounting the interest on the money which would be deposited. That is the magnitude of this sum of money. At the going rate of interest of 8 or 9 per cent today, it is a phenomenal amount of money.


John Horton McDermid: What about the municipalities?


Jean-Robert Gauthier: I will get to the municipalities. I see the Hon. Member has moved over to be one of the book-ends; he is much better across the way.


John Horton McDermid: What about the shareholders?


Jean-Robert Gauthier: I will deal with the shareholders, but right now I am trying to explain-and the Hon. Member would not understand that-what $875 million means in my riding. I will talk about the shareholders, because it is an interesting point. On the question of depositors and shareholders I wrote to the Minister in April-and I do not know if the Hon. Member did that-because I was concerned. We had participated in a very serious debate here, so I wrote to the Minister on April 22 asking her specifically what were the commitments of the Canadian Commercial Bank with regard to the proportion of the bank's business in Canadian and United States loans. I also asked the Minister about ownership, for a list of shareholders showing the number of shares held, and so on.
On May 21, 1985 the Minister answered and supplied me with a profile of deposits showing at least $635 million of deposits. I also saw in the answer she gave me a profile of the loan portfolios and something which I thought rather interesting, the major common shareholders and major preferred shareholders. Up until now we have failed to talk much about shareholders and I would like to address that point since I was invited to do so by the Hon. Member.
The common shareholders were pension trust funds, and I can name them all: Air Canada pension trust fund; Alberta Government telephone employees trust fund; the Teacher's Retirement Fund of Alberta; la Caisse de depot du Placement du Quebec; the CNR pension trust fund; the CBC-I even find in there the City of Ottawa superannuation fund, 106,086
common shares-down the drain-they have lost it, pretty well. What were those shares worth in March as compared to today? There is a whole list of shareholders which I would be glad to submit to anyone who is interested. I only have 20 minutes so I do not want to read this into the record. I have already made this public so people can have access to this document if they so desire. The reason I am talking about the magnitude of $875 million is, as stated in the reasoned amendment before us, that we on this side object to paying out $875 million to unknown depositors. We object to being asked again by this Government to perform blindly an act of faith.
I asked myself when I first saw this, why would the Government have what we would call-
[ Translation]
-a special bill. Why did the Government introduce such a bill in the House when we are all aware that the Winding-up Act could perfectly apply to the failure of a bank. I believe it is Section 87 of the Winding-up Act which provides that when a creditor wants to submit a claim, he or she must do so openly and publicly. Section 97(7) of the Bankruptcy Act, which does not apply to banks, but does apply in all other cases, provides for something similar. Whoever wants to be reimbursed must publicly submit a claim to a receiver, providing him with his or her name, the amount claimed and all the necessary evidence in support of the claim.
1 ask you, Mr. Speaker, why do we have before us a bill which exceptionally changes the rules of the game. For instance, Clause 3 states that the Minister of Finance may, on application in the prescribed form and manner, make payment to the depositor of an amount equal to so much of the deposit-
Mr. Speaker, the Government had to find a way out, because the Winding-up Act, which applies to Banks, and the Bankruptcy Act, which does not, would both have compelled it to provide the names of all the creditors who have so far submitted claims to the curator or the receiver. Mr. Speaker, that is the purpose of our amendment to the legislation we are dealing with today. We want to know who the depositors are, as it is our duty to do so, that we may say to our constituents: The depositors are simply Mr. or Mrs. so and so, this and that corporation, this or that financial institution, this or that foreign bank, for they have submitted claims to the curator or the receiver.

When speaking to the main motion, I will want to review the history and the reasons why we voted for this promise of a bail-out in March and why today we are so mad-that is the word-at a Government that did not play ball as seriously as it should have. We were asked to restore confidence by performing an act of faith in the Government's proposal. I have a chronology of events here. The Government had not even asked the external auditors what was going on in the CCB. It had not even bothered to ask experts in the banking field, although the banks offered voluntarily to do it. The banks said.
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"We will examine the portfolio of loans and we will tell you". This was in March, before this fiasco occurred, and the Government said no.
By refusing to do the elementary and serious investigation that it should have done it put Canadians as a whole, taxpayers specifically, and Members of Parliament in a situation where we have a Bill before us that proposes to bailout two banks, Canadian Commercial and Northland.
Northland is an entity by itself that was brought in, dragged in, pushed in, or packaged by this Government. We all remember the famous interview that Mr. Neapole gave on TV when he said that this Government wanted to destroy him. Here is a president of a bank accusing this Government, several weeks before, saying that the Government is out to get him. I would like to speak on that on the main motion, but I think I made my point on the $875 million and why this reasoned amendment has to be approved by this House. Thank you, Mr. Speaker.


Claudy Mailly: .Mr. Speaker, the Hon. Member for Ottawa-Vanier (Mr. Gauthier) knows very well that it was the practice for the banks to have their auditing done by their own internal auditors and the Inspector of Banks, under the existing statute, which we want to change because we feel it does not protect Canadian citizens as we can see now. As I said, the Hon. Member knows very well that it was the practice not to perform any special bank audits, since they were left to the auditor himself.
He knows also he did not have time, over the week-end when we had to make a rapid decision to ensure that the next Monday, when the Commercial Bank of Canada would open its doors, depositors would not feel afraid of losing their investments. It was in order to restore confidence that the Government stepped in, and the chartered banks at that point were in agreement to save that bank. Now, with hindsight, and because a "20-20 retroactive vision is very clear" as the saying goes, trying re-do what had not been possible to do at that point is not fair.
I would like to ask him a question. How would he make the difference, simply looking at a list of depositors, in order to decide who is going to be compensated and who is not to be, with compensation based on the financial status of the person or the institution that made the deposit with the Commercial Bank of Canada?
Mr. Speaker, I am looking, for instance, at a list that was supplied by the Minister of State (Finance) (Mrs. McDou-gall), where, if banks, whether Schedule A or B banks or Trust Companies are eliminated, there are at least $123 million of investments that would be lost if the Bill were not to pass.
And by coincidence, he mentioned that the City of Vanier, I believe, had some $11 million in tax revenues. Looking at the first two classes of municipalities, those with populations of
Depositors Compensation
25,000 and 50,000, and I think this is about the size of the municipality he is representing, that totals $11 million.
In other words, we would ask a municipality like Vanier to relinquinsh some $11 million, unless we make a choice from that list. How would he go about making that choice?
Moreover, looking at individuals, at the $60,000-$99,999 deposit levels, I am saying that individuals who invested that kind of money may be pensioners who sold their family house and invested the money in that bank, in order to have subsist-ance income, to enjoy a secure retirement in later years. At that point, are we to decide that those are rich people and that we will not compensate them, simply because the figure here exceeds $60,000? This would be simply dropping pensioners who perhaps had put all their savings in that bank and would be left with nothing to live on. The Bill is intended for them also.
Tell me, Mr. Member for Ottawa-Vanier (Mr. Gauthier), how would you make the difference? Whom would you compensate, and whom would you not compensate?


The Acting Speaker (Mr. Paproski):: The Hon. Member for Vanier (Mr. Gauthier).


Jean-Robert Gauthier: Mr. Speaker, two points were raised by the Hon. Member for Gatineau. First, whether banks are inspected and how that is done.
I can say that regarding the inspection of the Canadian Commercial Bank, and this is the opinion of the Committee of the House that examined the bankruptcy question, and I refer to what was reported in the proceedings of the Committee, namely that the history of the CCB has been marked by a series of imprudent loans, dubious accounting policies, inadequate disclosure of information and deficient supervision. That says it all.
Even if inspection was carried out, if accounting policies are dubious, loans imprudent and disclosure is inadequate, it seems to me that says it all. It was the bank's own poor administrative practice which caused it to collapse.
As for the second question raised by the Hon. Member, I think she made an important point. Of course municipalities are anxious to recover their deposits. I would be the first to agree. I would say to the Hon. Member: Let these municipalities say so publicly. Thus far, and the Hon. Member knows as well as I do, Kanata has said: We have $9 million in the Canadian Commercial Bank. Everybody knows that today. This is one of the municipalities with a population of between 50,000 and 100,000, perhaps a bit more, but in any case, it has $9 million on deposit with the Canadian Commercial Bank.
It is also a fact, and it was said publicly, that St. Catharines in Ontario was in the same position. Toronto as well. Hull had a few million dollars. Some municipalities, and I know munic-

October 8, 1985
Depositors Compensation
ipal affairs as well as I do education, had made a habit of investing in debentures and other investments with these banks because their rates were a quarter or half a point higher.
I do not know whether the Hon. Member for Gatineau saw the interview with the Mayor of Kanata on the weekend. She told the public clearly what her position was, which one had some trouble accepting as a valid reason. She said: "Our administrators have a mandate to invest the municipality's revenues at the best going rate, for as long as we do not need those monies". I would say to the Hon. Member for Gatineau, that if interest rates had gone down and if the investment in question had been discussed by the Mayor at that time, perhaps her administrators would have been more prudent. Now the Mayor has publicly admitted that Kanata has changed its investment methods as a result of this unfortunate experience, and that it will no longer be left up to the discretion of the select few to decide what should be done with public monies.
I think there is a lesson here for municipalities to be more careful and to be a little less, I do not want to say demanding but they will have to be a little more reasonable. And they should not invest in high risk situations. Of course the rate is higher. The profits are higher. But if the risk is greater, it means you might lose your shirt. I am not saying that the municipalities of Kanata and St. Catharines and Toronto, which are public bodies, should lose their deposits. I am just saying that all these municipalities should have the good grace to tell us publicly tomorrow morning who they are. And why not do so on a voluntary basis? I urge all depositors to do so, to make this information public before the House, by sending a letter to the Clerk of the House saying: I am a depositor, I have x dollars on deposit. What is wrong with that, what is wrong with saying these things in public, with saying: 1 want to be helped with public funds, and 1 am in a position, and am agreeable to, releasing that information?
I think that is the solution. I say to the Hon. Member for Gatineau that neither of us can vote blindfold, our ears muffled and our mouths shut. There is a fishy smell, but the fact remains that Members of this House will have to remember that when they spend money, they are to be accountable to their constituents. That is the answer to the question.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Yorkton-Melville (Mr. Nystrom).


Lorne Edmund Nystrom: Mr. Speaker, I would like to put a question to my friend the Hon. Member for Ottawa-Vanier.
I agree with the thrust of his remarks, and our Party has been saying the same thing all along. However I am wondering why the Hon. Member was in favour of the Bill last March when the Government introduced its legislative measure to rescue the Canadian Commercial Bank. Why did you co-sign the cheques, why did you support the Minister of Finance, why did you support the Prime Minister? I think you showed a lot
of faith in the Conservative Government. Why did you do that? You no longer agree now, so why did you co-sign the cheques five or six months ago?


Jean-Robert Gauthier: I think I answered that question in my remarks, Mr. Speaker. I said we had been misled, that perhaps we had been dragged into the operation without realizing its full impact. I admit that last March 1 voted to try to save a banking institution because the Government, which I believed and thought sincere and serious, had told us many times in the House "If you do as we ask, one bank will be saved, a lot of people will be spared, and the deposits will be guaranteed". Well, I am confident that the Canadian banking system is second to none and I did the act of faith the Government expected from me. Today, people with perfect hindsight tell me: "You made a mistake, Gauthier!" So I did, 1 was led down the garden path by a Government in which I had faith, but never ever will I again have faith in this Government, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: I regret, but questions and comments are over. The Hon. Member for Winnipeg North (Mr. Orlikow).


David Orlikow: Mr. Speaker, we are now being asked to call upon the people of Canada to put $875 million into the winding up of the affairs of the Canadian Commercial Bank and the Northland Bank. We ought to remember that this is not the first such request made of this House. We ought to remember that in March, Parliament agreed, over the objections of members of the New Democratic Party, to put $225 million into the failing bank. We were told by the Minister of State for Finance (Mrs. McDougall) and the Minister of Finance (Mr. Wilson) that if that $225 million was made available, the Canadian Commercial Bank would become a viable operation.
These two banks are the first in recent history to find themselves in this kind of trouble. However, in recent years, financial institutions and trust companies have got into trouble. Indeed, from 1980 on, 17 trust companies went bankrupt. We learned today that another trust company in Alberta is no longer financially viable.
This morning when I asked the Hon. Member for Windsor West (Mr. Gray) a question about the responsibility of the former Liberal Government which did not set up a system to protect the people against failures of trust companies, he said that all or most of these failed trust companies were operating under provincial charters and therefore the then Liberal federal Government was not responsible. However, we have a federal corporation called the Canada Deposit Corporation which was set up to guarantee people who have deposits in trust companies and banks that they will not lose their money if they have less than $60,000 on deposit. This is a Crown corporation which has already had to pay out well over $1 billion. Since the Crown corporation, in the process of dealing with trust companies which became insolvent, now owns $1.5
October 8, 1985

billion worth of property, surely the former Government ought to have begun to ask what was wrong with our financial institutions. We cannot blame this Conservative Government for the failure of the former Government to bring in legislation to set up a system which would regulate and protect the people who deposit money in financial institutions.
However, the Minister of Finance and the Minister of State for Finance told the people of Canada in March that if $225 million was provided to help the Canadian Commercial Bank it would become a viable operation. We have to ask ourselves on what basis they said that. Don McGillivray, who writes a regular column in the Southam papers, in an article which appeared in The Citizen of Ottawa in September asked: "Who pays for the crash of the Canadian Commercial Bank?" He said that it would be the ordinary Canadians. About the present situation and the amount of money required, he said, "it need not have been so large if the bank regulators had been watching more closely and the Government had not tried to pump life into a bank which was clinically dead in March". Don McGillivray is correct. In fact, in March, that bank was dead. It could not be revived.
How did the Government conclude in March that it should try to keep that bank going? The Government depended upon the Inspector General of Banks and the Governor of the Bank of Canada. If the Government did not know in March that the advice it was receiving was bad, then it certainly should have known in May and June. In May and June the Standing Committee on Finance, Trade and Economic Affairs heard representations regarding the CCB from bank officials, the Inspector General of Banks, auditors of the banks and the Governor of the Bank of Canada. The evidence in that regard was damning. It was clear that the advice given to the Government belief was all wrong. It was clear that the Canadian Commercial Bank could not survive. I say that if the Government did not know in March it was receiving bad advice from the Inspector General of Banks, then it should have known in May and June. It should certainly know now when it is asking the people of Canada to put up substantially more than $1 billion to take care of the mistakes made by those officials and by the Government.
I would like to deal for a moment with the Inspector General of Banks. Several years before the news in 1985 about the CCB's difficulties, he was told by the Superintendent of Insurance that Leonard Rosenberg, who was so instrumental in creating one of the largest disasters in the field of trust companies which this country has ever seen, was involved in wheeling and dealing with the then President of the Canadian Commercial Bank, Mr. Eaton. This was several years before it became apparent that the bank was in grave trouble and that it was involved in very questionable financial dealings. Indeed, at one point, Mr. Rosenberg, or Mr. Rosenberg and his family, controlled probably more than twice as many of the shares of the bank as are permitted to be held under the provisions of the Bank Act. Surely, the Inspector General of Banks should have been aware of what was happening. Surely he should
Depositors Compensation
have taken notice. Surely he should have been monitoring the operations of the Canadian Commercial Bank on a careful and day-to-day basis. He did not do that. When he appeared before the Finance committee he said that when he looked at the operations of the bank in trying to find out about the poor loans, loans which were probably never to be repaid, he depended almost exclusively on the information which he received from the officers of the bank and bank employees.
There was another occasion when the Inspector General of Banks should have been put on notice. I would like to quote one short paragraph from page 6 of the June report of the Standing Committee on Finance, Trade and Economic Affairs which reads:
On October 12, 1983, the Federal Deposit Insurance Corporation (FDIC) issued a "Cease and Desist Order" against the Westlands Bank. The FDIC cited numerous reasons for the order, including hazardous lending, lax collection practices, large volume of poor quality loans, inadequate liquidity, inadequate equity capital and reserves, inadequate loan loss provision, large overhead expenses and poor management.
The Westlands Bank was 100 per cent owned by the Canadian Commercial Bank. It started with a minority share of that bank. However, when it was told by the American regulatory authorities that the Westlands bank was in some difficulty and that the authorities were not satisfied with the way the bank was operating, the Canadian Commercial Bank moved to take 100 per cent control of the bank. Surely, in 1983, when the Federal Deposit Insurance Corporation of the United States issued that cease and desist order, the Inspector General of Banks should have been on notice that he had to keep a very careful eye on the Canadian Commercial Bank. He seemed not to pay any attention to that. He did virtually nothing until he was told in 1985 that the bank needed a major infusion of financial help or it would be forced to close down.
The Governor of the Bank of Canada intervened in the CCB situation. In 1983 he did something which was unprecedented. He called The Globe and Mail and said that, in his view, the Canadian Commercial Bank was a viable operation. Indeed, while the Finance committee was holding its hearings in May and June, and after the committee had heard from the officials of the bank, the Inspector General and the auditors about all the things which had gone wrong with the Canadian Commercial Bank and the dishonest way in which it had acted on some occasions, the Governor of the Bank of Canada told the committee that he still had confidence that the then officers of the bank could mount a viable operation.
I ask Hon. Members to compare those statements of the Governor of the Bank of Canada with a speech he made just a few days ago on September 25 in Toronto when he said:
The Bank of Canada ... is not involved in monitoring the Financial soundness of individual banks and supervising their behaviour. Parliament has not given us that responsibility or the powers that would enable us to fulfil that function. The Bank of Canada has no bank auditors, no bank examiners, no power to require details of individual loans, deposits or any other kind of private transaction.
If the Bank of Canada does not have the type of power about which the Governor of the bank spoke a few days ago, whey then did he intervene in 1983 and again in the spring of

October 8, 1985
Depositors Compensation
this year to tell the people of Canada that he considered the bank to be a viable operation?
We have heard a great deal from Hon. Members on the Government side about the difficulties the credit unions, municipalities and pension funds would be in if this money were not approved. We are told how much money they will lose if they, as uninsured depositors, do not get their money. However, I am certain, Mr. Speaker, that a large part of the reason those organizations left their money on deposit in the Canadian Commercial Bank and the Northland Bank was that they were assured by the Inspector General of Banks, the Governor of the Bank of Canada, the Minister of Finance and the Minister of State for Finance that these were viable operations. When these organizations receive that kind of advice from senior Ministers and from senior public servants, who can blame them for leaving their money in those banks? In the Standing Committee on Finance, Trade and Economic Affairs back in May and June we heard from the auditors of the bank. The Bank Act requires banks to have two set of external auditors. The Canadian Commercial Bank had two of the most prestigious auditing firms in this country and, indeed, if I am not mistaken, they are international auditors with offices in many countries. The amazing thing and, to me, the most disturbing of what we have heard is that the auditors had one set of opinions about the Canadian Commercial Bank which they gave to the directors of the bank, and another set of opinions which they gave to the bank and which the bank use publicly in its annual report. What was said by the committee about the audit report to the officers and directors of the bank appears on page 17 of the report of the Standing Committee on Finance, Trade and Economic Affairs: The Committee asks, and I quote:
Did the annual report of CCB for 1984 represent a fair and accurate view of the Bank's financial position at the time?
The report continues, and I quote:
-the total size of the Bank's marginal loans revealed through the support agreement constitute sufficient evidence for the Committee to question the auditors' decision to issue an unqualified opinion.
That was done. The report continues:
However, the auditors also knew that the financial statements approved by them would be used not only by CCB's existing shareholders, but also potential shareholders, creditors and potential creditors.
I do not have the time to quote the auditor's report to the bank directors, but many of the business practices of the bank were questioned. There were a great number of questions in committee about the fact that the bank was given an opinion by the auditors that it was a viable operation which the bank could use in its annual report.
We have to ask ourselves, Mr. Speaker, what about the directors of the bank? There were some very prestigious leaders of the business community who were directors of the bank, for instance, the former Premier of Manitoba, Mr. Sterling Lyon. What were the directors doing except taking the fees which were paid to them? Did they not have a responsibility to the depositors, to the shareholders and to the
public to see that the bank was operating in a sensible and prudent way? Obviously not, Mr. Speaker, because except for a few who resigned very quietly because they were dissatisfied with the way the bank was operating, the directors simply took their money and kept quiet.
What about the Canada Deposit Insurance Corporation, Mr. Speaker? As I have indicated, over a period of a few years it was made responsible to pay out $1.5 billion because of the losses of the trust companies. Surely, it has a responsibility in this case. I say that the Government acted without sufficient knowledge. It ignored the offer of the chartered banks to send in their experienced personnel who could and would have looked at the real situation of the Canadian Commercial Bank and told the Government what was needed. The Government acted with haste, and without care and in an irresponsible way and we certainly are not going to support this Bill.


Mrs. Sparrow:: Mr. Speaker, my colleague, the Hon. Member for Winnipeg North (Mr. Orlikow), has reiterated for the past few minutes the inadequacies of the present banking system. I want to assure him that the Minister of State for Finance (Mrs. McDougall) totally agrees with him. When our Party came into Government 13 months ago, we inherited a system which was totally inadequate. The Minister of State for Finance has put her mind to reviewing the whole mandate of the Inspector General and seeing that the system is reviewed.
I also want to suggest to my hon. friend that regional banks are extremely important to western Canada. They tend to facilitate small and medium sized businesses. Between 80 per cent and 85 per cent of jobs are created through small business and our Government is out to support jobs. Our main platform is to increase the economy and to put people back to work. The Hon. Member has to realize that regional banks are extremely important and this Government realizes that western Canada did, perhaps, suffer a great downturn when the National Energy Program was brought in by the Liberal Government in 1980. The small banks have suffered due to the National Energy Program but the new Minister of Energy, Mines and Resources (Miss Carney) has incorporated the Western Accord as of last March and things are on an upturn out West. However, if we had not undergone the severe limitation of the PGRT which caused so many of our rigs to leave western Canada: Alberta, Saskatchewan and British Columbia, perhaps these banks would never have gotten into that position.
I would like to ask my hon. friend a question with respect to releasing the names of the uninsured depositors. Would he be in favour of having his personal financial status made public to Canadian citizens? Also, would he like his income tax return made public?


David Orlikow: Mr. Speaker, there are a number of questions but I will do my best to deal with them. Firt, as a resident of a western city, Winnipeg, I am all in favour of regional financial institutions. However, I only favour them if they are operated efficiently, honestly and with sound business principles. I am opposed to any financial institution which is run as sloppily, as
October 8, 1985

carelessly and as dishonestly as the Canadian Commercial Bank.
The Hon. Member says that the Minister recognizes the need for a better system of regulation. I say to the Hon. Member that the Minister may say that, but the Minister is proposing a big expansion of financial institutions to let the trust companies and the insurance companies get into the banking business. The Hon. Member should note the comments made by the Hon. Member for Gatineau (Mrs. Mailly) a few moments ago who pointed out that the State of New York has 300 people working in the Government department which monitors the operations of its financial institutions. 1 will wait with a great deal of interest but not much hope to see whether this Government, which is so determined to downsize virtually every one of its Departments, will be prepared to hire the people required to monitor our financial institutions. It was one thing to have a small monitoring agency when we had only the big five Banks. They are so powerful that even if they make some bad loans they can carry the loss. It is another thing entirely if we are going to have the kind of competition and the large number of institutions which the Hon. Member referred to. The Hon. Member also said that the Canadian Commercial Bank got into trouble because of the National Energy Program. If she reads the evidence she will know that the bank got into trouble not because of the NEP, but because of some very bad investments, including the Westlands Bank.
Today's newspapers talk about the virtual stoppage of exploration for oil and gas off the Atlantic coast. If that continues, I wonder what the spokespersons for this Government will say. They will not be able to blame that situation on the former Liberal Government because it is their Government and their policies which are in place at a time when the oil and gas exploration off the Atlantic coast is being virtually stopped.


Herbert O. Sparrow: Mr. Speaker, I just wanted to clarify a couple of points with the Hon. Member. He seems to be mixing the Nova Scotia agreement with the Western Accord. They are two separate entities. One covers exploration and development on Canada Lands and the other concerns provincial lands and the two must not be mixed together. As well, he said he did not hold out much hope for a review of the banking system by the Minister. I want him to know that he should have a lot of hope because the Minister realizes that the Inspector General does not have the authority to go in and review and supervise all operations of banks which appear or might appear to be in some difficulty. He will see some changes in the Bank Act and increased activity in the area of inspection in the banking system so we can move forward and not have any further developments along these lines.


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



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 46 it is my duty to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for York East (Mr. Redway)-Environmental affairs-(a) Municipal sewer improvement programs; the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall)-Trade-(a) Canadian lumber exports to United States. (b) Government policy; the Hon. Member for Cape Breton Highlands-Canso (Mr. O'Neil)-Historic sites- Grassy Island project, N.S.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-79, an Act respecting the provision of compensation to depositors of Canada Commercial Bank, CCB Mortgage Investment Corporation and Northland Bank in respect of uninsured deposits, be read the second time and referred to a legislative committee; and the amendment of Mr. Turner (Vancouver Quadra) (p. 7379).
Donald James Johnston: Mr. Speaker, I welcome this opportunity to take part in this debate. I read very carefully the speech made by the Minister of State (Finance) (Mrs. McDougall) in the House yesterday, and I did not find much of any substance.
Mr. Speaker, I did find what we call in English, and sometimes in French as well, a canard, in fact four canards. And I am not referring to the French word for a particular fowl, but to the word "canard" according to my English dictionary, where a "canard" ...

I would like to refer to The Oxford Dictionary because it is used frequently in English in this context. It says that a canard is an absurd, extravagant rumour or report or hoax. Of course-

-in French the same meaning can be applied to this word, but it is also a commonly known bird-

October 8, 1985
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Well, a duck will fly but I can say that the arguments put forward by the Minister of State for Finance (Mrs. McDou-gall) in support of Bill C-79 will not fly. None of these canards will fly and it is for that reason that I rise to support the amendment to the Bill proposed yesterday by my Leader.
I am a little tired, and I expect you are as well, Mr. Speaker, of hearing speaker after speaker on the Tory benches rise to blame the problems of the Canadian Commercial Bank and the Northland Bank on the previous Government and the National Energy Program. There is truly a canard which will not fly. Canadians are too smart to swallow that kind of nonsense at this stage and I really cannot believe that deep in their heart of hearts, and I include my friend from Calgary South (Mrs. Sparrow), Members opposite really think that this situation has been well managed by this Government. Nor do I think that the Chairman of the Standing Committee on Finance, Trade and Economic Affairs, who is in this House today, thinks that this situation has been well managed by the Government. 1 know, Party discipline being what it is, that they will be reluctant to speak out for fear of receiving a call from the Prime Minister's Office. However, no one can accept the rationale put forward by my friend, the Minister of State for Finance. What did she tell us yesterday? She said, and I refer to page 7371 of Hansard-.
We are compensating these depositors because the situation facing these two banks reflects unique and particular circumstances.
Well, true, bad management existed but is that unique? It is not unique in the case of any financial institution which fails. Bad loans, are they unique? The only unique thing in this whole affair was the way in which the Government mismanaged the situation and made misrepresentations to the Canadian public and this House as to the viability of the banks. I refer once more to the statement made by the Minister of State for Finance in this House on March 25 of this year when she said, after the $255 million bail-out, that this bank is now a viable bank, it will be profitable in the future, and we will be repaid, as will other members of the support group, out of the future profits of the bank. That is the only thing that is unique. It was the failure of the Government to manage this situation properly and the misleading of the Canadian public and depositors who were induced to keep their deposits in the CCB.
I would like to draw attention to a telephone call we received from a gentleman who had purchased a $10,000 annuity five years ago at the Continental Trust Company. The company's accounts were frozen last June and on September 20 a liquidation was announced. Because his funds were not to be repaid within five years or less, they were not insured by the CDIC. The gentleman in question said that he would be happy to accept this, or not happy but he would accept it, probably reluctantly. He understood the terms under which he entered into this contract but he believed all Canadians were being treated the same way. Well, when he hears that uninsured depositors are being bailed out of two banks just two weeks after the Continental folded, how can he regard that as being
fair and equitable? Do you suppose that that gentleman regards the circumstances of the Canadian Commercial Bank or the Northland Bank as unique and justifying that kind of treatment? I suggest not.
This speech-if I may refer to the second canard-tells us that depositors who stayed with these banks shared the Government's view that regional financial institutions can play an important role in Canada. That is why the depositors stayed with the bank and that is why we are being told that these depositors are to be bailed out. That statement is so fatuous that it should not be uttered in this House. No Canadian is going to believe that depositors stayed with this bank because they were concerned about regional banks. They were concerned about their money and they were told by the Minister in this House that their money was safe.
Seriously, Mr. Speaker, do you think that the City of Kanata, which I understand has some $7 million in one of these banks, left its money in the bank because it shared the Government's view that these regional financial institutions can play an important role? Do you think that the City of St. Catharines, Ontario, with $25 million of its taxpayers' money, did that as well? Does anyone suggest that the City of Westmount in my riding, with $2 million in the Northland Bank, left its money in on that belief? Surely this is the most extravagant canard that we have heard uttered in the House. These depositors left their money in that bank because they were told that their money was secure and that the bank was viable. Some of the shareholders may have stayed with these banks for the reasons suggested by the Minister, but the shareholders are not going to be reimbursed. Some of the debenture holders, but not all of them, may have stayed for those reasons as well. I will come to them in as few moments.
A third canard which will not fly is the statement by the Minister that our Government examined all the options at the time of the support package. I cannot say that that statement is untrue, Mr. Speaker. Perhaps the options were examined, but the only sensible options were rejected and the option which was accepted was the worst of all possible worlds. Many of those options were described in some detail in the speech of my Leader yesterday. It is clear that the Minister was aware of the circumstances of the bank when she was first briefed in September 1984. There was a panic in March. You will remember, Mr. Speaker, the three great show biz events presented by the Government. The first was the First Ministers' Conference on St. Valentine's Day, then came the Shamrock Conference on St. Patrick's Day, and then the National Economic Summit on March 22. Right in the middle of that conference this financial Titanic, the CCB, struck an iceberg and started to sink.
No one was on the lookout, Mr. Speaker. The damage to the bank at that point was clearly beyond repair and it was inevitable that the CCB would go down. We were all invited to help bail it out and we did, being told that it was sound and would float. Speaking of options, Mr. Speaker, the chartered
October 8, 1985

banks even offered to examine the loan portfolio of the CCB to see if the bank really could float. That offer was denied. They also suggested that the management of the bank be changed because management was clearly at the root of the difficulties of the CCB. That suggestion was also rejected. When one suggests that the various options were examined, they may have been, but it is equally true that they were rejected. The bank immediately began to sink and the bail-out of $225 million was put right down a black hole on the strength of the Minister's recommendations. Worse than that, Mr. Speaker, they tied the Northland Bank to this financial Titanic and sent them both down. That could probably have been avoided by giving the Northland Bank a support package in March and allowing the CCB to go the way it was inevitably destined to
go-
We lost $225 million the first time around. We are now being asked for a further $875 million to pay off uninsured depositors. I see that Richardson Greenshields has estimated that the total loss will probably be in the neighbourhood of $2 billion. Do you know what $2 billion means, Mr. Speaker? It means that by the end of this exercise each Canadian taxpayer, of which, according to the 1982 tax returns filed, there are between 10 million and 11 million in Canada, will be required to fork up just under $200 in order to bail out the Minister and this Government from the disastrous course it set last March when it designed that support package for the CCB without knowing the facts. I am sure you will agree, Mr. Speaker, that each taxpayer can find better things to do with close to $200 of capital than to use it to pay off depositors and to bail out the Government from circumstances of its own making. To add insult to injury, we are all being asked to reach into our pockets and, blindfolded, hand that money over to depositors who present themselves for payment.
This brings me to the last canard. In his speech the Minister defends this on the ground of confidentiality. She says that to violate the confidentiality of the Bank Act would put all depositors in Canadian institutions at peril should any Government in future wish to get access to and publish that data. I heard the Member for Calgary South compound that canard by asking how you would like to have all of your financial data exposed in public. Nobody is asking for that, Mr. Speaker. [Translation]
All we want to know is who are the people who will receive this generous contribution from the Canadian taxpayers? Is that asking too much? The people do not even have to identify themselves to get this free payment. I, for one, find it absolutely unbelievable that we would be asked and even forced to do that through legislation in the House. If we keep going down the path already staked out by the Minister we will be forced to hand out our savings and our money to those nameless individuals. It is quite unthinkable. It is unacceptable. [English]
That is the reason that no sensible person could support this particular piece of legislation. How could we support this largess? This is not a case of people going to get their deposits
Depositors Compensation
from a bank under the provisions of the Bank Act. These people are having an ex gratia payment made to them by the taxpayers of this country. The amount of $875 billion which is being asked for here would require between $83 and $84 from every single taxpayer. That is not rational and does not even meet a test of common sense. That canard about confidentiality must be shot down as quickly as possible before it gets into flight.
I hope that Members of the Government side will have the courage to stand on this point and to say in caucus and to the Minister in question that this is not reasonable, fair, or sensible, that they will not accept it, and that they want an amendment to this Bill which will require any depositor who is to receive payment to be identified.

As I said a moment ago, Mr. Speaker, we have four canards that cannot fly in these circumstances, and it is simply a matter of being reasonable, having a full explanation in the House, and a Government willing to accept the proposed amendment. Indeed, given the circumstances, we must support the motion because the Government has yet to take a reasonable position.

Therefore, I say that this Bill either has to go back to the drawing board or be radically amended. That is the reason I stand here to speak in support of a motion which was put to the House by our Leader yesterday.


Mr. Lewis:: Mr. Speaker, we have had the benefit of the remarks of my hon. friend who was a member of the Cabinet during the infamous period of the National Energy Policy which is really the reason why we have had to take these steps on behalf of these western regional banks.
While I do not want to ask him to apologize for that, I would ask him to enlighten us on any efforts that were made by the former Liberal administration to tighten up the regulatory process. The Hon. Member will know that the former Parliamentary Secretary to the Minister of Finance chaired a committee which recommended in 1982, some three years ago, tightening the regulatory process for banks. He will know that nothing was done, despite the fact that it was well known in financial circles that much had to be done to improve the regulatory process.
As well as having to bear the shame for the National Energy Program, the Hon. Member must bear the shame for the fact that during the time he was a member of Cabinet no action was taken by the Liberal Party to tighten the regulatory process. Although this is a rather large confessional in which to make such a statement, having seen all of the evidence and facing this embarrassment, will he not do the honourable thing and admit that during the last five years when he was a member of Cabinet the very important regulatory process was left to further ruin and ultimately led to the failure of these banks? I invite him to do the honourable thing at this time.

October 8, 1985
Depositors Compensation


Donald James Johnston: Mr. Speaker, I think the Hon. Member is speaking tongue in cheek, which is fair enough in the course of this debate. I would suggest to him that regulations can always be improved, but no banks failed while I was in Government. I suspect the reason was that whereas the regulatory mechanism might not have been as good as it should have been, the Ministers were on top of their Departments and knew what was taking place. This kind of problem would not have escaped their attention. That is a reasonable assumption to make.
However, that is not to say that the regulatory apparatus should not be improved. In fact, with the group of Ministers in Government today I suggest that the regulatory mechanisms should be tightened substantially in all departments to ensure that when those Ministers are not at the controls and do not know what is going on the bureaucracy can keep the ship of state on course.
With respect to the national energy question, I would have thought that the Hon. Member might have been one of those to stand in his place and admit that there was a monumental gaffe created and that the National Energy Program has become a whipping boy for every problem that emerges in western Canada. For Members of the Government, the National Energy Program has become the motto "Damn the CPR", recalling the old saying out West. However, before this debate became more partisan as the magnitude of this financial Titanic revealed itself, the Minister of State for Finance put the position clearly in the House. On March 25 in the House she said, speaking of the CCB, that this particular problem was triggered by something that happened within the bank's loan portfolio in California which then, of course, created problems within the organization as a whole.
That was an honest statement. That was taking the high road. I suspect that she received a call from the Prime Minister's office and subsequently I have noted that she too has leaned to the pressure to blame everything on the National Energy Program.
I believe that the Minister told us exactly as it was and is. I repeat that our Government had no bank failures and indeed the present Government probably requires a better regulatory mechanism if this kind of disaster is not to repeat itself.


Claude Lanthier: A point of order, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: The Parliamentary Secretary to the Minister of Finance (Mr. Lanthier).


Claude Lanthier: A point of order, Mr. Speaker. There is a tripartite agreement whereby the Government side will let the Hon. Member for Regina East (Mr. de Jong) have the floor now so that we will have two speakers in a row tomorrow. We also seek the unanimous consent of the House to let the Hon. Member sit while he delivers his speech because he has been injured.


The Acting Speaker (Mr. Paproski):: I understand there has been agreement by all Parties in the House to make an exception to Standing Order 33 and allow the Hon. Member for Regina East (Mr. de Jong) to remain seated. I hope he will soon be able to stand but since he has a fractured foot, we will allow him to speak from his seat.


Mr. Simon de Jong (Regina East):: Thank you very much, Mr. Speaker. I wish to thank Members of the House for giving unanimous consent to allow me to make my remarks in my place this afternoon. I understand that from the television angle I look like a midget. I assure the people of Canada that I am not. I wish to especially thank the Government Member who allowed me to make my remarks this afternoon. Tomorrow, hopefully, a cast will be put on my foot but it will lay me up for the next 72 hours.
There are some very important questions I wish to address in the course of this deabte. They go beyond a partisan approach. Bank failures and the possibility of bank failures is a serious question that we have not had to address in this country for many years. We have always assumed that our bank system was safe and sound. Over the years, Canadians have taken pride in the security of our banking system. This supposition on the part of depositors and the public of Canada, as well as Governments of all political persuasions, perhaps lulled us into a false sense of security.
Although the events of the last year have shocked all of us, I believe it should not have been a shock because the warning signs were there. We have seen a significant number of smaller financial institutions, namely trust companies, go under in the last number of years. Therefore, I dispute the statement made by the Member for Saint-Henri-Westmount (Mr. Johnston), a former Minister of Finance. While he is technically correct that no bank went under when he was Minister of Finance, it is true that a number of smaller trust companies failed when his party was in power.
There had been many warning signals that our financial institutions were in trouble and the fact that some have failed warants increased regulation and support for CDIC and the office of the Inspector General of Banks. I believe that it is also true that the Inspector General of Banks requested more manpower in the past and that this was turned down by Treasury Board under the previous administration. It must accept responsibility for the sad state of affairs we are facing today.
I do not envy the position in which the Government finds itself. While the two banks in question are not among the large banks in this country, they are important as far as banks in the world are concerned. A significant number of small businesses, particularly in Calgary and Edmonton, had their funds tied up in this institution. I appreciate the difficulty in which the Government finds itself. No Government wants to see a large number of small companies and small business people going under through no fault of their own. We know as well that there is a fair number of those depositors who are not sophis-
October 8, 1985

ticated depositors in the true sense of the word. Many of them are charitable organizations and public institutions such as municipalities, hospitals, et cetera. While we oppose the Bill, we are not adverse to helping such individuals, as well as public and quasi-public charitable institutions. My colleague, our finance critic, suggested the establishment of a special fund for hardship cases. Perhaps we should consider assisting small businesses which use banking institutions, not for the interest paid but for the services offered, such as chequing accounts and so on. Perhaps they should be given 100 per cent on their deposits.
Obviously the Canadian Commercial Bank and the Northland Bank situation points out that we desperately need some policies. Is the Government to become the backer or the guarantor of last resort in every instance or in every case? If that is the case, it puts the country or the public purse in an impossible situation.
When does a Government bail out uninsured depositors and when does it not do so? It is an impossible situation. Surely we cannot bail out only the big guys and not the small guys. That is inherently unfair. During Question Period today we learned that no other Government of any country has bailed out uninsured depositors. Uninsured depositors have been bailed out, but it is the financial system or the banking system which has paid. When the Government considers options in developing a consistent policy, it has to keep the principle in mind that the financial system must cover the cost of any bail-out of uninsured depositors, not the public purse. That is one principle upon which we must insist.
After all, if the Government has to bail out uninsured depositors in the end from the public purse, we in the New Democratic Party suggest that it is about time it collected some of the profits to be made. Why should the Government pick up the losses but never have an opportunity to participate in the profits? Perhaps there should be an available fund so that credit unions, municipalities and hospital boards with excess funds for a small period of time can invest in a publicly owned and controlled deposit-like institution and not experience the risks which they obviously experienced with Northland and the Canadian Commercial Bank. To reiterate the point, if the Government is to pick up all losses, surely in heaven's name it should also have an opportunity to participate in the profit-making.
The other point to which I wanted to address myself has been addressed by a fair number of Government Members, particularly those from Alberta. They made the point in the House that the cause of the problem was the National Energy Program. I was not happy with the National Energy Program for a variety of reasons, most of which were quite different from those of the Conservative Party when it was in Opposition. However, I also felt that in many ways the NEP was a grab by the central Government of the resources of western Canada. As a western Canadian, I was not all that happy with the program. However, to blame the collapse of the CCB and
Depositors Compensation
the Northland Bank on the National Energy Program alone is a disservice to western Canada. Government Members, particularly those from Alberta, must recognize a few simple facts. The economic atmosphere which existed in Alberta during the oil boom was very unhealthy. The land speculation which was occurring, particularly in the cities of Edmonton and Calgary, was also unhealthy. The Province of Saskatchewan experienced a bit of a boom during that period of time, but it had a NDP Government which believed in economic planning and in Keynesian economics. Essentially it believed that in boom times some of the excess wealth should be put away for rainy days. The Government of Saskatchewan at that time did not allow the land speculation which occurred in Edmonton and in Calgary. Through the Saskatchwan Housing Corporation, that Government became involved in developing new tracts of land so that the prices of homes in Regina did not go sky-high. In that way the cost of housing and urban land in Regina was kept down, so that when the boom started to fade that province did not experience the type of bust which occurred in Edmonton and in Calgary. It was able to maintain a stable and sound economic climate in the Province of Saskatchewan. Unfortunately, in Alberta, with a gung-ho type of free enterprise system, huge profits were made when the time was ripe, but when the bust came, all the costs and social hardships ensued which are very often borne by the public.
It is ironic that these great free enterprisers from Alberta are now standing in the House, justifying a Government bailout and insisting upon more Government regulations and inspectors. What a contradiction in terms, especially coming from those gung-ho free enterprisers out of Alberta.
The type of political atmosphere which has existed in Alberta has not been a healthy one. It has not been healthy for the country and certainly not for the Province of Alberta. The people of that province are now paying the price. Hopefully they will understand some of the political repercussions and implications of what happened. The period of time during the Alberta boom was a period in which banks and business people became greedy. They tried to increase their profits as much as they could. Their greed led to the downfall of the Canadian Commercial Bank. It is unfortunate when I hear members of the Conservative Party from Alberta indicate in the House that they have not learned that lesson. They do not attribute any of the downfall of the CCB to the bad management, the high risk loans and the type of greed which prevailed in that province at that particular time. It was that greed which led to the downfall of the Canadian Commercial Bank and of the Northland Bank. That greed was abetted by the Government of Alberta and its political philosophy or attitude which allowed a tremendous boom to occur but, when the bust occurred, which led to many shattered lives and businesses. It is a prime example of how a responsible Government involved in economic planning would have taken a different course, as we did in the Province of Saskatchewan. Yes, we had a boom, but we did not have a boom based upon greed. We did not allow the greed to send the prices of real estate sky-high. When the bad times came we had a cushion. Surely the people

October 8, 1985
Canadian Armed Forces
of Alberta, as other western Canadians who have experienced the boom and bust cycle, should have known better.


Charles Joseph Clark: Mr. Speaker, I rise on a point of order. Is the Hon. Member attributing this quality of greed to all people of Alberta?


Simon Leendert de Jong: Absolutely not; no, absolutely not.


The Acting Speaker (Mr. Paproski):: On that point, I wish the Hon. Member well with his fractured foot.

It being five o'clock the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   CANADIAN ARMED FORCES
[Stage Direction]
ADVISABILITY OF ESTABLISHING DENTAL PLAN Mr. Jack Shields (Athabasca) moved:
That, in the opinion of this House, the Government should consider the advisability of establishing a dental plan for the Canadian Armed Forces.
He said: Mr. Speaker, the rules of the House do not allow me to propose an amendment to my own motion. The motion as is there has a word missing and I would like you to seek unanimous consent of the House to add that word to my motion.
The Acting Speaker (Mr. Paproski):: Is there unanimous
consent?


Some Hon. Members:: Agreed.


Mr. Shields:: Mr. Speaker, I want to thank my colleagues in the House. The motion reads:
That, in the opinion of this House, the Government should consider the advisability of establishing a dental plan for the Canadian Armed Forces.
I want to add the word "dependants".


The Acting Speaker (Mr. Paproski):: Is it agreed that the motion should read: "That, in the opinion of this House, the Government should consider the advisability of establishing a dental plan for the Canadian Armed Forces dependants"? Moved by Mr. Shields, seconded by Mr. Brightwell:
That, in the opinion of this House, the Government should consider the advisability of establishing a dental plan for the Canadian Armed Forces dependants.


Jack Wendele Shields: Mr. Speaker, I want to first thank my colleagues in the House for giving me unanimous consent to add
the word "dependants" because the way the original motion ran it was rather redundant. As we know all members of the Canadian Armed Forces have dental and medical plans.
It has become an issue in this past while, Mr. Speaker, particularly among dependants of the Armed Forces personnel, that they do not have access to private plans as do most others in the workforce in Canada. For example, teachers in most jurisdictions have access to a group dental plan and are able to purchase or insure their families and their children for the required dental care by joining the plans. The cost is not prohibitive. It runs approximately $15 to $20 per month.
People who have made representations to me have indicated very clearly that they are not asking the Government to pick up the tab. What they are asking the Government to do is establish a group for them, approach an insurance company on their behalf as a group so that individuals within the Armed Forces may subscribe to that by way of payroll deduction. In other words, they are not asking the Government to add to the budget of any department; they are not asking the Government to do one single thing except establish a group so that dependants of Armed Forces personnel may, by their husbands or wives payroll deductions, enrol in the dental plan. In this day and age I think we all know the difficulty and the cost of medical services and how they have gone up dramatically. In this day and age it is not uncommon to find companies that employ 37, 40 and 50 people enrolled in a dental plan on behalf of their employees. I just cite a couple of examples. There is a small school board in my riding in northeastern Alberta that has 211 families enrolled and 126 singles. They are all teachers and they are enrolled in a dental plan. The cost for the singles is around $14 a month and for the families around $35 a month. The key was that the insurance company that was approached had to have a unit to work with and this they do not have in the Armed Forces at the present time.
Another small company has 37 singles enrolled at a cost of $15 a month and 16 families at $39 a month, or slightly higher depending on the make-up of the family. TransCanada Pipelines is another much larger one. I will not quote the cost but because of its size it is significantly lower than the ones 1 indicated before. They have 1,480 families and 414 singles enrolled in their plan.
One can easily determine by looking at all of the Armed Forces personnel across Canada whose dependants are not covered by any dental services that it would make a very large group indeed. I think it would be very lucrative for an insurance company and many insurance companies would come forward and be quite willing to cover a plan like this if it was administered at the payroll deduction centre. Queens regulations today indicate that there is an entitlement to dental treatment. Of course all members of the Armed Forces personnel office are men. Dental care for dependants under certain circumstances does exist, for instance, in an isolated or an overseas posting. In some isolated units such as Alsask, Saskatchewan; Goose Bay, Gypsumville, Manitoba; Holberg, B.C.; Inuvik; Masset, B.C.; Mont Apica, Quebec; Senneterre, Quebec; Sioux Lookout, Ontario; and Yellowknife, NWT
October 8, 1985

dental facilities are covered along with medical, for obvious reasons.
Cold Lake, a major base in my riding, was considered isolated to March 1, 1983. One can imagine the problems that existed when on March 1, 1983 Cold Lake base, which houses approximately 4,000 dependants living on the base, all of a sudden was without dental coverage. There were cases where some of the children were having orthodontic work done and they were not prepared for the bill which came in for the cost of their dental care. They were not able to get the necessary insurance coverage. There are cases documented to be by constituents where individuals, families, mothers had to leave the home where they were working and raising their children and get a job to pay a dental bill. Somehow this just does not ring properly to me. I think there is something wrong when the Department of National Defence or Treasury Board will not take the time to just set up or set in motion and set in place an organization that would allow individuals at their request to come forward and say "deduct from my monthly pay for enrollment into the dental plan". They do not ask for something for nothing. They are willing to pay for it.
I am not going to waste the time of the House on this. 1 think I have made myself clear. I am not asking the Government to put forward any money. I am only making a reasonable request to the Government to set up a group plan to allow members of the Armed Forces to participate in a payroll deduction plan so that their families can be protected with dental care.
Thank you Mr. Speaker.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I am very happy to rise in support of the Hon. Member for Athabasca (Mr. Shields) and his motion which would provide for dental care plan for dependants of Armed Forces personnel. I am glad to support this. I am sure that there is no Member of the House who would want to oppose it. Certainly no one will want to oppose it vocally. I only hope that the Members of his own Party will support it actively by allowing this motion to come to a vote so that the House can declare itself in support of this very important motion.
I think that all Members in the House will agree that the Conservative Government has taken a bit of a beating in the last few weeks. The Hon. Member's motion gives it an opportunity to redeem itself in the eyes of the Canadian public. I commend this not only to the back-benchers but also to members of the Government. Here is the chance for the Government to take a positive, assertive role in helping to do something for the Canadian people.
I think we must recognize that the failure to include dental care in our comprehensive medicare program is something that needs to be addressed. We need dental care for more than just Armed Forces personnel, but that is a good place to begin. Back in 1964 when Chief Justice Emmett Hall drafted the report that led to medicare, he said that we had to go beyond
Canadian Armed Forces
simply paying for visits to the doctor. In his report, he said the following:
No one would suggest that the payment of medical bills is not an important item, but it is after all but one item in the full range of health services and in any objective approach it could not be permitted to dominate the whole field.
There are many other areas in the health service field that cry out for improvement: mental illness, retarded children, crippled children, the crippling diseases, paraplegics, the aged and infirm, dental services and drug costs.
We have not really begun to move on the basic agenda contained in Mr. Justice Emmett Hall's report. I think it is time that we did so. We should not only look at the need for dental care for Armed Forces personnel but we should move toward a comprehensive dental care program for Canadians all across the country.
It is important to realize the the need for dental care, and I would like to share with the House a few statistics regarding that need. Only 50 per cent of Canadians visit dentists annually. The fact is that children from low-income families are three times as likely to have poor teeth as those from other families. In 1979 in Ontario, 29 per cent of decayed teeth in five-year olds had not been filled. By the age of 13, 32 per cent of decayed teeth in children had not been filled. This indicates that there is a very large segment of society that is not getting even the most basic of dental care. In fact, pregnant women also tend to have poor teeth. A decade-old study done by Nutrition Canada indicated that 90 per cent of pregnant women under the age of 20 had bad teeth.
While most provinces offer some kind of denticare program, it is significant that the Provinces of Ontario and British Columbia, two of the provinces which should be among the richest Provinces of Canada, do not offer those programs. The Province of British Columbia was beginning to establish such a program when it was cut back in the name of false restraint. To restrain public spending at the expense of the dental health of children is, in my opinion, a crime.
The failure to provide adequate dental care along with our medicare program indicates that we still consider dental care to be somewhat of a fringe benefit or cosmetic option that can be taken or left alone. The feeling is that if people can afford dental care, that is fine, but if they are too poor to afford it, it is not that serious. This is a fundamental mistake. Unless there is an active program of dental care, people will pay for it with their health in later years. The emphasis should be on early detection and prevention. Healthy teeth and gums are not simply a matter of looking good but are a matter of basic health.
From my own family experience, and I am sure from the family experiences of Members on all sides of the House, I know that even orthodontic work is not simply a cosmetic matter. The need to have a healthy bite and proper spacing is something that affects basic health. Yet we know how terribly expensive orthodontic work can be. Many Members of this House wish that we were covered by some kind of a dental program to meet those needs. If this is true for Members of Parliament who have a reasonable salary, to put it in terms my fellow Members will appreciate, and if we find it difficult to pay for orthodontic work, how much more is that the case for

October 8, 1985
Canadian Armed Forces
other Canadians, many of whom are on very restricted incomes? Certainly that applies to the vast number of people in the Armed Forces.
We know that many unions have negotiated dental plans for their members and members' families. However, a very high percentage of Canadians are still not covered by any dental program, and that includes members of the Armed Forces and public servants. When other Canadians are able to negotiate programs with their employers, why is it that the Canadian Government is such a poor employer?
I am very happy to suggest that this Bill is a good beginning. Let us begin with the Armed Forces. Give the Armed Forces the opportunity to negotiate a dental plan. Let us then extend this opportunity to all federal public employees and let us work toward the day when there is a comprehensive dental program that will service the needs of all Canadians.
On that basis, I am very pleased to support the motion of the Hon. Member and I hope that it will come to a vote. 1 know that if it does come to a vote, it will receive the unanimous support of all Members of the House.


Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, I would like to compliment the Hon. Member for bringing this motion before the House today. The motion refers to Canadian Armed Forces personnel. I understand that that was an error and that the Hon. Member means to refer to dependants of military personnel. That is a very good point indeed.
We must remember that members of the Canadian Armed Forces are consistently on the move. We know that they do not have the opportunity to settle in and form deep roots in the communities to which they are posted.


Mr. Oberle:: We are going to get them root canals.


Leonard Donald Hopkins: The Hon. Member wants to throw in a joke, but this is no joking matter. As I was saying, members of the Armed Forces are posted from place to place and each time they go to a different base, they have to find a dentist in the area who will look after their dependants. Then, two years later, they may be posted to another base and they have to go through the same process all over again.
The Canadian Armed Forces personnel themselves have had a dental plan for some time. The "Dental Treatment and Service for Dependants and other Civilians" document dealing with this matter contains one paragraph of particular interest here and is with regard to dental examination prior to posting to isolated areas. It reads as follows:
Service members, dependants and other civilians may be located in an area where limited or no dental care is available. Prior to their departure and to ensure that they do not become an administrative burden, they will be provided with a dental examination, advised of their dental condition and of the dental care restrictions at the new location.
I believe that that is a very important provision. I share with my hon. colleagues a great admiration for all members of the Canadian Armed Forces and the important work they carry out for this nation. My Party and I feel that it is important to
make every effort to ensure that our military personnel and their dependants receive every service to make their lives more enjoyable and, indeed, more comfortable. Theirs is a task which requires a great sacrifice. This is the least we can do as a nation and as a Government to show our appreciation for their dedicated service. Therefore, I support the general thrust of the motion which seeks to make available to dependants of Armed Forces personnel an adequate dental plan.
[DOT] (W20)
I would also like to place on the record that it is not only in cases of medical care and dental care that the dependants of Armed Forces personnel have a challenge as they move from place to place in Canada. I had the privilege of teaching in an Armed Forces high school. We had families coming and going all the time. It is very difficult for families, children and teenagers to adjust in moving from one community to another and in changing friends and schools. I think we need to have an appreciation for the other pressures and challenges which families of military personnel face. Therefore it is incumbent upon the House to look very seriously upon this motion which is before us today.
I can understand that there has been an expression of willingness on the part of the dependants who would benefit from such a plan to underwrite the costs of it to a degree. I can think of no reason to oppose such a plan. I think it is an admirable one, especially if there will be no additional drain on the federal Treasury other than through the matching of funds which are put in by dependants of military personnel. It would be a good plan for the Department of National Defence to sit down with the Department of National Health and Welfare and, indeed, with the Health Ministers from the various provinces to discuss how such plans can indeed be put into place.
While we are discussing dental plans for dependants of Armed Forces personnel, we certainly cannot overlook the fact that we have a great many civilians in Canada who are in dire need of dental care. Last week an individual who needs new dentures came into my office. He is an elderly person and cannot afford the $650 which it will set him back to pay for those dentures. There is no question that while we look upon a dental plan for dependants of the Canadian Armed Forces that we certainly must be looking at this situation across the nation as a whole. My hon. friend across the way who made the comment earlier spoke about root canals. I did not understand what he was saying in the first instance. However, I appreciate his comments in view of the statement I was making at the time.
There is a good feeling in the House with respect to the motion before us. I think there would be a good feeling in the House to look at dental plans across the nation as a whole. We citizens realize that when we have these plans someone has to pay for them. The money has to come from somewhere. I think it behooves each one of us, each and every Canadian, to realize that if we are to have this type of coverage then it would be in a contibutory fashion. The taxpayers would come in with a
October 8, 1985

share of the cost, as would the provinces at the federal-provincial health level.
Canadians are fortunate to have the types of medical care plans which are in place in Canada already. With the wealth of our resources and with the human generosity which Canadians have shown with respect to looking after their neighbours and in being their brothers' keepers, there is a feeling that there are many people in Canada today who just simply cannot afford the costs of dental care. This is a very serious issue indeed. We should look at it and try to make progress in order to help these people out in the future.
I assure all interested parties that given the nature of this Government I doubt if there will be any real action taken with respect to this plan being implemented in the foreseable future. We have seen that this Government has been cutting back in many areas with respect to taxes and pension allocations relating to individual Canadians. That is no reason for it not to look at improvements and, indeed, even review the cut-backs which have taken place which affect individual Canadians. We cannot continue to cut back on personal benefits to the general public of Canada and still end up 10 years down the road with the good quality of service we have today in medical care.
It takes a great deal of diplomacy to bring about dental plans and medical care plans because they involve federal-provincial relations to thenth degree. The provincial Governments in Canada are always trying to get as much money out of the federal Treasury as they possibly can while the federal Treasury always tries to hold back as much as it can. The federal Government does not want to raise taxes which places it in the bad eye of the public. I suggest to the Hon. Member who puts forward the motion today that he has many friends who support his cause. I hope the Government is prepared to take a serious approach with respect to the implementation of a dental care plan for dependants of members of the Canadian Armed Forces and at the same time look at a national dental care plan for Canada.
As we progress as a nation, broaden our industrial base and manage our national resources better than they have ever been managed at times in the past, we will be in a better position to pay for these services. We will be in a better position to pay the Government portion for the service while at the same time retaining the medical care services which are already in place in Canada. I would suggest, Mr. Speaker, that the Department of National Defence and the Dental Association of Canada should have a very close relationship in order to overcome many of the difficulties faced by the families of our Armed Forces as a result of being moved from community to community. I would hope that all dentists across Canada would be particularly sensitive to the needs of new people moving into Canadian Armed Forces bases in Canada and that they would take those people into their offices and treat them as first-class customers while they are in the community. It is very important that we make these families feel welcome wherever they go in Canada. Of course, one of the ways of making them feel welcome is to make sure the community to which they are moved or posted has the necessary services to provide to them.
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In the case where these families are moved to an isolated community, I quoted the section from the DND document which explains the kinds of services which are available to them before they leave.
In closing, Mr. Speaker, I would simply say that the Liberal Party of Canada is very much in favour of looking into a dental plan for dependants of the Canadian Armed Forces personnel. Certainly, at the same time, we are in favour of looking at the national picture for other Canadians across this country who need that type of attention.


John Horton McDermid: Mr. Speaker, I am pleased to join in the debate today. I am not surprised at the position taken by my hon. friend from the New Democratic Party. I am somewhat surprised at the position taken by my friend, the Hon. Member for Renfrew-Pembroke-Nipissing-


Leonard Donald Hopkins: Renfrew-Nipissing-Pembroke.


John Horton McDermid: Well, the people in Pembroke were never last in my book but obviously the Hon. Member thinks they are. I spent three wonderful years-


Leonard Donald Hopkins: Mr. Speaker, I rise on a point of order. The Hon. Member for Brampton-Georgetown (Mr. McDermid) is just trying to get in a cheap shot. It is quite traditional in this House that all Hon. Members are identified by their riding name. If the Hon. Member were really with it, having lived in Pembroke as he has for a number of years, he would have known better. He would have known the name of the riding.


The Acting Speaker (Mr. Paproski):: That is not a point of order.


John Horton McDermid: Mr. Speaker, the reason I put Pembroke where I did is because I have a lot more admiration for Pembroke than the Hon. Member. I am surprised at the Hon. Member for standing up in the House and making the statement he did. I give the Hon. Member full marks. I campaigned against him many, many years ago. He was the winner and we were the losers at that particular time. He is a great supporter of the Armed Forces and I understand that. However, I am surprised that in all the years his Party was in Government I never heard him once stand in this House and suggest in Private Members' Hour-when he had all the opportunity in the world-a dental plan for the Armed Forces or for anyone else, for that matter.


Leonard Donald Hopkins: Oh, no? Are you sure about that?


John Horton McDermid: I think the record will show that. I do not believe he has ever done so. He was first elected in 1962 or 1963-


Leonard Donald Hopkins: No, you are wrong again, John.

October 8, 1985
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John Horton McDermid: It is ancient history, anyway. We all know that. It was quite a while ago. He has been in the House for quite a number of years and has been a strong supporter of the Armed Forces, and I give him full marks for that. He has also been a strong supporter for NATO and NORAD and he gets full marks for that as well. However, for him to stand up today and all of a sudden advocate a dental plan, when he has had that opportunity for so many years in this House of Commons, I think is really pushing his credibility just a little too much.
Having said that, Mr. Speaker, I want to commend my hon. friend who brought this Bill forward.


Leonard Donald Hopkins: He is not here.


John Horton McDermid: He is here, don't worry. I believe the Hon. Member for Athabasca (Mr. Shields) has a very great concern. He, like the Hon. Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins)-I am glad I said it correctly; it made the Hon. Member feel better-has a genuine interest in this subject and is not afraid to stand up in the House and introduce a motion like this. I do not believe there is anyone in this House who would disagree that the Armed Forces are entitled to expect fair and equitable treatment as part of the terms and conditions under which they render service to this country.
It may be useful, to put this debate into context, Mr. Speaker, to describe to the House the general practice followed in establishing military compensation. It is essentially based on compatibility with the Public Service. This principle was established by a decision of Cabinet-I might say, a Liberal Cabinet-in October of 1971. It was reaffirmed in 1982 by the then President of the Treasury Board and the Minister of National Defence. I might remind my hon. friend that he was in the House at that time on the Government side and supported that decision.
Although military compensation is based on comparability with the Public Service, it cannot be equated precisely because there are many functions performed in the military context which do not exist in the Public Service. I believe we all agree with that. To bridge those differences, a large number of Public Service trades have been taken as standards, for pay purposes, for certain military trades. By using averaging process and projections, it is possible to arrive at a basis upon which the Treasury Board can establish military compensation on the recommendations of the Department of National Defence. This process has its good side and its bad side. I am the first to admit that. However, I believe that it is fact to say that over the years it has resulted in a compensation package which is comprehensive in its scope and is indeed fair and equitable to members of the Armed Forces as well as to their dependants.
I feel, with your permission, Mr. Speaker, that I should take this occasion to review some of the programs which are in place to provide for their welfare. First and foremost is their pension plan which ranks among the best in the country. Members of the Armed Forces have an insurance plan to protect their incomes in the event of long-term disability. The
Government contributes to the cost of providing provincial health insurance for their dependants and makes available a program to cover the dependants for health costs which are not provincially insured. Members of the Armed Forces have a sound program to provide benefits for injury or death on duty, a cost-shared life insurance program and an extensive program of income supplementation which ensures the maintenance of a decent standard of living for his dependants in the event of death or disability of a member from any cause.
There are measures for the continuance of pay during a short-term illness and comprehensive programs of medical and dental services at government expense. I am not citing these few examples to suggest that members of the Armed Forces are over-protected. The programs in place are no more than are due those members in comparison with other groups and by the special nature of their duties. The purpose of giving these examples is to simply illustrate that the Armed Forces are in no sense a forgotten group in terms of their service-related benefits, nor will it ever be a forgotten group under this administration.
With that background in mind, I wish to address some of the broader issues which the Treasury Board must consider when group benefit programs of this kind are under discussion.
Treasury Board is directly responsible for the expenditure of public funds on group benefits not only for the Armed Forces but for the Public Service, the Royal Canadian Mounted Police and many other groups as well; consequently, the Board cannot view a proposed change to the compensation package of any one of these groups in total isolation, but must consider the implications for all of the groups. This does not mean that a change in the benefits of one group will automatically apply to the others. Such is quite definitely not the case, because otherwise the individuality so essential to each of the groups would be lost. The ability of the employer to tailor benefits to the needs of unique groups would be seriously undermined. If that were the case, the possibility always exists that benefits which would be appropriate for one group would be applied inappropriately to another.
I said at the outset that members of the Armed Forces must be treated fairly and equitably. By the same token, employees in the Public Service and members of the RCMP must be treated fairly and equitably. Again, this does not mean that benefits must be the same for all three groups. Service in the Armed Forces and employment in the Public Service are different in many obvious ways and those differences are reflected in various ways. For example. Armed Forces members have access to a program of comprehensive dental care which is paid for by the Government.
In view of the fact that there have been discussions with union representatives concerning employees who do not benefit from a Government sponsored dental plan, it may be of interest to all Hon. Members if I were to outline recent developments in the ongoing discussions which have been
October 8, 1985

taking place with Public Service unions on the dental care issue.
All Hon. Members will be aware that Public Service unions have been seeking a dental plan for a number of years, and their position has been clearly stated. Succeeding Governments have undertaken to try to ensure that public servants enjoy a compensation package which is comparable to the package in other employment sectors. That philosophy is much easier to expound that to apply. The fact is, Mr. Speaker, that a goodly number of working Canadians do not have dental plans to help them with their expenses, and we should not lose sight of that fact. Nevertheless, when one examines those groups of employers which have traditionally been used as the basis for com-parision, dental plans are indeed widespread.
It is important to recognize that the introduction of a dental plan will have an impact on the Government's benefit expenditures. All Hon. Members will appreciate this when I point out that, if all three groups-the Public Service and dependants of members of the Armed Forces and the RCMP-were covered by dental care plans, the potential insured population, including the families, could be well over one million persons. The actual number of plan members, if the plan were universal, would exceed 300,000. Simply for illustration, the total cost could exceed $100 million annually for a very basic plan. Now, Mr. Speaker, the Government would not pick up this entire cost, but only a share of it. Nevertheless, the potential expenditure of public funds is considerable.
It is only natural that the unions want to see a dental plan introduced on the most favourable possible terms for their members. For its part, the Government must seek the best achievable balance between its responsibility to provide a competitive benefit package and its responsibility to taxpayers to keep its over-all expenditures on Public Service benefits at at reasonable and defensible level.
This Government approached the issue in good faith. Serious negotiations were undertaken with unions in short order, and real impetus was given to the issue for the first time. These negotiations are still under way and the Government has every intention of pursuing them to a fair and responsible conclusion. Naturally there can be no guarantee of an early conclusion to the negotiations, nor can the spirit of the negotiations be betrayed by discussing the details publicly at this time. However, I am confident that they are being pursued with vigour.
We have remarked at some length on the discussions with Public Service unions. The reason I have done so is to demonstrate this Government's commitment to find a way to extend dental care to those groups which wish to have it, where it can be demonstrated that it is possible to do so, and it is warranted to do so, on the basis of comparability. At the same time, this must be achieved in a fiscally responsible way at a time when so many demands are being made, by competing priorities, on the finite resource available to the Government.
In closing, having gone through some oral surgery recently, I know the expense is large. At the same time, dentists tell me that with the new methods of teeth care and education, the
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normal drill and fill will almost be non-existent within the next very short period of time. Young people are today taking good care of their teeth, something which we probably neglected when we were that age. I am sure that those are your own teeth that I see smiling out at me, Mr. Speaker, and for an old football player that is amazing.


Herbert O. Sparrow: Why amazing?


John Horton McDermid: He played before they used helmets- masks, sorry.


Some Hon. Members:: Oh, oh!


John Horton McDermid: Not helmets, masks!


The Acting Speaker (Mr. Paproski):: Point of order. I would just like the Hon. Member to know that we did not need orthodontists. When we got elbows in our teeth they straightened out by themselves.


John Horton McDermid: All I am saying is that dental care is taking a new direction and most of the care is preventative. As the years go on, dentists say that the practice of dentistry will be entirely different, although it will continue to be very expensive for those who have to use it. I feel very confident that this Government, in its negotiations, will give the best possible hearing to this request by the Public Service, the RCMP and the military, and I am confident that the conclusion will be for the best for all concerned.


Douglas Grinslade Lewis: Mr. Speaker, I appreciate this opportunity to deliver a few remarks with respect to my colleague's motion. I want to join with the Hon. Member for Brampton-Georgetown (Mr. McDermid) in complimenting my colleague, the Hon. Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins), on the continued interest he has taken in the members of the Armed Services. I know he has been interested in this subject for several years. I guess it is only recently that he felt he could put on the floor of the House of Commons motions which would benefit the Armed Services. I know he found it quite constraining when the Liberal Party over the years allowed the Armed Services to dwindle. I know he was a leader, perhaps the only one in that Party, in wanting the Armed Services to go forward. He is to be complimented because he had very little support from the Liberal Party during those long years. While we were in the wilderness, he was in his own wilderness, shall we say. Mr. Speaker, my colleague, the Hon. Member for Brampton-Georgetown, made reference to ongoing negotiations between the Government and the Public Service. The House will know that we have put these negotiations on a new footing. Instead of using the technique of the former Government of shouting and threatening, we are sitting down at the bargaining table and discussing the issues between employer and employee on a very reasonable and meaningful basis.
One of the things referred to is the question of a dental plan for all public servants. I am pleased to tell the House that

October 8, 1985
Canadian Armed Forces
those matters are going forward. There is no question that the cost of dental services concerns every Member of this House, whether on behalf of himself or herself or of dependants. It is a very major cost in today's society. I know that in Ontario fluoridation, although it was resisted quite strongly originally, has improved the teeth of the people who have had the benefit of it. I know for a fact that my children do not seem to go to the dentist nearly as often as I used to.
However, I have had some experience with orthodontists. As a result, I want my five children to be orthodontists because I think there is a great future for young people in that profession. I do not know whether one should refer to personal experiences, but last week my daughter had her braces removed after having worn them for some 18 months. Orthodontists do some wonderful work. Her teeth were straight and she was looking forward to going to a party the next day. I think that everyone's children should have that advantage and that is certainly on the table at the present time although I am not at liberty to say what point those negotiations have reached.
Having set the stage with those general remarks, Mr. Speaker, I would like to talk about the Government's position with respect to a dental plan. I know that Members of the House are anxious to have a hard look taken at a dental plan for all people who work under federal jurisdiction. Members of the Armed Forces and all other public servants are well aware that for many other Canadians in the work force dental bills are not the problem they used to be because these employees have access, through their employers, to dental plans which pay their dental bills. It is bound to be a source of concern for members of the Armed Forces that they not only have access to dental services, but are able to pay for them. In referring to the problems of the Armed Forces my colleague made reference to physical access in that dental facilities are not available in all of the places where Armed Forces personnel are posted. We want to have that matter up-graded. At the same time as we are concerned about the physical access we must be concerned about financial access. There are dental facilities available to armed services employees at cost. We want to have that expanded.
I would like to put the entire question of a dental plan in greater perspective. I think it is fair to say that the dental plan for public servants is seen as what might be called a capping stone of an entire benefits package which the Government is working on at the present time. We know that it has become the norm among large employers and the federal Government, as a very large employer, must conform to what is being done in the non-public servant world. Many of these plans accept a large part of the responsibility for ensuring that employees have access to the programs that spread the risk, attract the employer funds, and promote the financial security of the employees who are retiring, who become ill, or who are injured on the job as well as the security of the employee's family in the event of his or her death.
I think it is fair to say that the Government of Canada has been a fair employee through the years. We would like to have an increase in that fairness in many ways and we would like to do that within the demands and constaints of the horrendous deficit that was left to us by the Liberal Party. We would do many things in terms of social benefits for all Canadians if we had not been left with the crippling deficit amassed by the Liberal Party over the last 16 years. That is a partisan view and I do not want it to interfere with a non-partisan discussion on the issue of a dental plan for dependants of armed services employees.
The Government is criticized if it is not seen to be spending taxpayers' money wisely. There is no question that to many people a dental plan put into place by the Government would be seen to be spending the money wisely. Sometimes we are damned if wo do and damned if we do not. For that reason we are taking a hard look at different types of dental plans and considering the cost. I am in a position to personally assure the House that we have discussed this matter with the interested parties and are studying it carefully to ensure that it is not only a fair plan for employees, but reasonable for the employer.
The Government has been concerned about the issues of pensions, long-term disability insurance, health insurance, and numerous other programs as well as being concerned about the question of a dental plan. The Government is ahead of the market in some ways in that it is doing more for its employees than is being done for those in private enterprise. In other areas, such as this one, we find the Government is lagging behind that which is the norm in private enterprise. It is our job to up-grade and yet not overtake such that we will be criticized by private enterprise which says that it cannot afford to do with the money it has left what the Government is trying to do with the money given it by private enterprise. That is a balancing act which all Governments have to do with public employees.
There is no question that the Government must promote dental hygiene, whether preventative methods or orthodontic work. There is no question that we are continuing the work of the previous Government with regard to promoting dental hygiene. No matter how critical I have been of the previous regime, and no matter how many opportunities it has given me, I have never been critical of its efforts with respect to dental hygiene. I would like to conclude on that point and perhaps continue the next time this matter is brought before the House.


The Acting Speaker (Mr. Paproski):: The hour provided for the consideration of private Members' business has now expired.
October 8, 1985



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Alan Redway (York East):: Mr. Speaker, you may be aware of a very serious pollution and health problem in Metropolitan Toronto that has existed for many years. This problem has resulted in the closing of most of the beaches on the waterfront of Toronto along Lake Ontario in the last three or four summers, but it has existed for much longer. In any event, the beaches have been closed as a result of water pollution caused by raw sewage that has been flowing into Lake Ontario from the homes in Metropolitan Toronto. This has been caused by an antiquated sewer system in many parts of Metropolitan Toronto. It is a sewer system which combines both sanitary sewers with storm sewers. Of course, that means that the storm water created during a severe rain storm flows into the same sewer pipe into which sanitary sewage flows. When there is a storm, this overflows the filtration plants, floods into the rivers and streams and then pollutes the waterfront with raw sewage, causing not only a pollution problem but a severe health problem. That is particularly severe in the southern part of my riding which contains a major portion of the Borough of East York.
The problem is that the combined sewer system is antiquated. The problem can only be solved by separating the sanitary sewer system and the storm sewer system. This is being done in newer subdivisions in the newer urban areas but has not been done as yet in the older urban areas of cities because it is an extremely costly process. This problem not only results in lake pollution but in a health hazard in individual homes all over. When there is a rain storm in my riding, the combined water in the sewer pipes-some of it sanitary, some of it storm- backs up quite frequently into basements and floods those basements with raw sewage. It is quite clear that this creates an obvious health hazard.
As I said, the solution is to separate these two storm sewers, which is a costly process. The municipalities in Metropolitan Toronto have committed large sums-in fact millions of dollars-for a great many years toward separating their sewer system. The Province of Ontario has assisted in many instances as well and has provided millions of dollars.
Metropolitan Toronto, particularly a portion of my riding which includes the Borough of East York, has been looking for federal funding for a number of years. Between 1962 and 1982 we received federal funding for sewer separation problems. Unfortunately that has disappeared since 1982. The federal Government did supply funding for sewer separation programs as part of its job creation program, and I must give the former
Adjournment Debate
Government a great deal of credit for that, but once this funding expires, it has been made clear that there will be no extension of that program.
We need and are looking for further federal assistance in the sewer separation problem in order to eliminate pollution and the health hazard involved. I was pleased to see that last week, the National Water Policy Report recommended that there be some additional funding from the federal Government for both the municipalities and the provinces to help eliminate this problem.
Yesterday, I put a question on this subject to the Minister of the Environment (Mr. McMillan), asking whether he supported the recommendations contained in the National Water Policy Report or the Pearse report, and whether he would urge the Government to contribute financially to help with local sewer improvement programs. In fact, the Minister indicated that he had met with his provincial counterparts and that they had discussed the problem and the report. There was an indication that the federal Government was prepared to consider it. As of yesterday we had an indication of hope from the Minister that some help and some support would be forthcoming. I trust that the Parliamentary Secretary this evening will be able to turn that hope into help, and give us an indication that the federal Government will agree to giving financial help for sewer improvement projects to the municipalities. I am looking forward to hearing from him in that respect.


Mr. G. M. Gurbin (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, at the very least, I want to let the Hon. Member for York East (Mr. Redway) know that the Government, and in particular the Parliamentary Secretary, appreciate the clarity of his question and his indication of hope for federal support. I think he pointed out a problem on which we all must focus. However, with all respect, it is a problem not confined to just that area mentioned by the Hon. Member. It is a much broader problem.
According to the surveys to which the Pearse inquiry had access, about 84 per cent of the municipal population is served by sewers but only 57 per cent by some form of sewage treatment. Despite the fact that in some areas of Ontario, and in a way which affects beaches and perhaps basements-


David Charles Dingwall: Tell us about Nova Scotia.


Gary Michael Gurbin: Nova Scotia may well be one of the areas where there may be sewer collection but no form of sewage treatment. As was indicated by the Minister in response to a question, perhaps only 10 per cent of the sewage in eastern Canada is adequately treated. The problem is real. The problem is there. No one can deny it. The Pearse report brought it into focus for everyone to deal with.
Also it was indicated in the Pearse report that the total replacement costs of the Canadian waterworks and of the waste water system were estimated at $62 billion and $47.5

October 8, 1985
Adjournment Debate
billion respectively, or approximately $3,000 per capita. That gives an indication of the financial magnitude of the problem.
In conclusion, the Minister indicated very clearly that he talked with the provincial Ministers. They are now in a position where they will come back to us at the federal level with their response to the Pearse inquiry on federal water policy. At that point in time the Ministers will be able to discuss further what position and what role the federal Government might take in the resolution of the problem.


TRADE-CANADIAN LUMBER EXPORTS TO UNITED STATES. (B) GOVERNMENT POLICY
David Charles Dingwall: Mr. Speaker, yesterday I directed a question to the Secretary of State for External Affairs (Mr. Clark) concerning Canadian lumber exports to the United States and the position of the Government of Canada.
By way of introduction, the whole issue of trade and trade-related matters is becoming of increasing importance to Canadians not only on the West Coast but indeed throughout Canada. Basically the thrust of my concern was that the United States Ambassador suggested in his speech in Saskatoon that Canadians in the lumber industry ought to voluntarily reduce the amount of their exports to the United States.
Some individuals in the United States Congress and others are concerned that Canada has increased relatively substantially the amount of lumber exported to the United States and as a conciliatory measure the United States suggests that we should voluntarily limit or restrict those lumber exports.
Many individuals in the industry certainly do not agree with the United States ambassador. I do not agree with what he has said and by his reply to my question the Minister has indicated as well that he does not agree with that statement. I had hoped to obtain from the Minister while questioning him, and perhaps I will now through the Parliamentary Secretary, exactly what has transpired between the Minister of State for External Affairs and the United States ambassador.
It is not sufficient, I suggest to you, that we just hear that the Minister does not agree. I think we have to know what was said by the Secretary of State for External Affairs. We have to know if a diplomatic note was forwarded, the form of those representations, and whether representations were made by the Prime Minister to the President with regard to this particular issue.
It does not suffice to say that this whole matter cannot be revealed because we are now in the process of opening up general prospects for the negotiation of free trade with the United States. There are just too many jobs on the West Coast, particularly in the Province of British Columbia where unemployment is extremely high at this point in time, for the Government to provide us with such a very short answer to this very, very important problem.
I can understand that if perhaps the Secretary of State for External Affairs has rebuked, if you will, the United States ambassador regarding this particular issue that perhaps he does not want to say so publicly. But I think in the Canadian interests, notwithstanding the Minister's own personal affection, if you will, for the United States ambassador, we have to know what Canadian policy is, what was said on behalf of Canadians, when it was said and where it was said. These issues are of paramount importance to Canadians.
I would hope that when the Parliamentary Secretary avails himself of this opportunity to reply in respect of my concerns he will shed light on this important matter. Canadians from coast to coast will be watching and listening to what he is going to be saying on behalf of all the people of Canada. I await with great interest the Parliamentary Secretary's remarks.


Mr. Gerry Weiner (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I want to thank the Hon. Member for his question. I too am very deeply concerned about jobs.
As the former Mayor of Dollard-Des Ormeaux and a long time active worker in my community I may tell him that in the City of St. Laurent there are 78,000 jobs and every time we see protectionist elements arising in the United States, we expect that those jobs will be affected.
The United States is the single most important market for Canadian lumber producers, taking 60 per cent of all Canadian production. There has been a flurry of congressional Bills aimed at restricting Canadian lumber imports, the most important of which is legislation introduced by Congressman Sam Gibbons. In short, the Gibbons' Bill would modify U.S. countervail law to deem that a subsidy existed where Canadian stumpage prices fell short of an arbitrary U.S. benchmark.
While we continue to focus our representations on the Congress and Administration in Washington we have, since the outset, developed a comprehensive and well co-ordinated campaign of private and public diplomacy to meet this threat to continued access for Canadian softwood lumber to the U.S. market. In parallel to our forceful representations to the Congress and Administration on this issue, our consultates in the U.S. have been alerting and mobilizing U.S. interests that would be adversely affected by the imposition of trade restrictions on Canadian lumber. Many of these U.S. interests, including the National Lumber and Building Materials Dealers Association, the Manufactured Housing Institute and the National Association of Home Builders are now actively lobbying against the proposed legislation. In addition our consultates have contacted the editorial boards of major newspapers across the U.S. to set the record straight and to ensure that they are aware of the facts. This activity has already shown positive results in terms of a number of editorials in U.S. publications, including the New York Times, supportive of the Canadian position.
The Government will continue to work closely with the Canadian industry in provinces to safeguard access for
October 8, 1985

Canadian softwood lumber products to the important U.S. market.
1 should like to refer to a statement made by U.S. Ambassador Niles last week suggesting that the Canadian lumber industry might help to take some of the heat out of protectionist pressures in the U.S. to restrict imports of Canadian softwood lumber by voluntarily restraining its export levels to the U.S. market. My understanding is that this was a personal view expressed by the U.S. ambassador. Any such action might well have serious anti-trust implications and these are considerations which would, I am certain, be taken fully into account by the Canadian industry. I want to underline that, for its part, the Canadian Government has not been asked to negotiate a restraint arrangement nor is it prepared at this time to entertain such a possibility.
Canada stands to suffer more than any other foreign country if the U.S. Congress imposes new restrictions on imports. The Prime Minister (Mr. Mulroney) is well aware of that, and that is precisely why he wrote the President of the United States with a view to exploring with the Congress-


The Acting Speaker (Mr. Paproski):: I regret that the Hon. Parliamentary Secretary's time has expired.


HISTORIC SITES-GRASSY ISLAND PROJECT, N.S.
Mr. Lawrence I. O'Neil (Cape Breton Highlands-Canso):: Mr. Speaker, I rise at this time to follow up on a question I directed to the Hon. Minister of the Environment (Mr. McMillan) concerning a national historical project that has been identified for an area of Guysborough County in my constituency. I prefaced my question to the Minister by indicating the very severe economic circumstances in which we find ourselves in that part of Canada and I also highlighted the commitment of the Government of Canada to getting the economic show on the road in this region. Last week I identified for the Government a series of initiatives and this was one of them.
Grassy Island National Historic Site has been studied by officials of Parks Canada and a very thorough management plan has been prepared which reviews in some detail the benefits of this project. In addition to its historical significance, it has very important economic benefits in that it opens up an area of Guysborough County to the tourism industry.
Canso is a community that is at the end of a highway on a piece of land that juts out into the ocean and, for that obvious reason, it became one of our early fishing fortresses. However, today that represents a difficulty when it comes to developing the tourism industry.
This project is seen as an important catalyst to drawing tourists along the eastern shore of Nova Scotia and into the Canso area so that those in the area can develop restaurants and motel facilities and diversity the local economy, which to this point is almost totally dependent upon the fishing indus-
Adjournment Debate
try, an industry which has served Nova Scotia so well for several centuries.
The historical significance of the area is also well known to the people there. The people have embraced this project as a reflection of their identity, as a project through which they can express the great pride they have in their history and as a showcase for all Canadians. It is the site of the first fishing fortress in North America and in that respect has national significance for all Canadians. My constituents have very aggressively promoted this project for a number of decades.
I was very pleased to hear from the Minister yesterday that he as well embraces this project and has made it a personal priority. The Minister and I had the opportunity on another occasion to discuss in some detail the economic, social and historical benefits that this project will bring to my constituents. My constituents are prepared to build on their strengths, to become self-sufficient, to offer their resources and to build the jobs that we require. We are now looking to the Government to do its part in bringing forward this important initiative which is really not a costly project in the total picture. I look forward to hearing the remarks of the Parliamentary Secretary to the Minister in following up this matter in order that this project can get off the ground at an early date.


Gary Michael Gurbin: Mr. Speaker, I wish to start by thanking the Hon. Member for Cape Breton Highlands-Canso (Mr. O'Neil) for his ongoing excellent representation in the interests of seeing the Grassy Island park come to fruition. He has described very well not only the principal factor which has attracted the federal Government to this area, but also the important local aspects in terms of the economy should we see this area proclaimed, if you will, a national historic site as soon as possible.
There are several matters which we would like to emphasize with respect to the historic aspects. While it has been indicated that this is perhaps the first fishing fortress in North America, since the 17th and 18th centuries it has been the starting point when looking back to see where our fishing industry began. It gives us an opportunity to identify that for Canadians in a number of interesting ways.
I wish to spend the next few moments talking about the items we have planned for the future, as a part of the 1983 management plan development Parks Canada, to give people an indication of what we have in store. Having already spent a major portion of the total $1.7 million allocated, we are looking forward in the near future to the construction of a visitors reception centre, the preservation and stabilization of the heritage resources, including the foundations of various domestic and commercial buildings and the earthen walls of For William Augustus, and the interpretation of Grassy Island's historical resources, both in the visitor reception centre and on the island. Artifacts recovered from the late 1970 achaeological investigations on the island will be used in the visitors centre. A boat access from the mainland to the

October 8, 1985
Adjournment Debate
island, including dock facilities near the visitors centre and the island, will be provided. Last, but not least, washroom and parking facilities will be provided.
These proposals add up to an exciting development package for this area. With the continued efforts of the Hon. Member who has, in fact, discussed this matter with the Minister and with departmental officials, I know we will see things unfold in this area in the reasonably near future.
The constraints we have are really two. It is clear that we are in a tight spot financially and that there is a budgetary problem with which the Minister of the Environment (Mr. McMillan) has to deal in regard to capital expenditures. There is a significant effort required for the engineering and additional planning for many of these facilities. However, with the indication the Hon. Member has already received from the Minister I think he can count on this being done in the reasonably near future.


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


[Stage Direction]
The House adjourned at 6.23 p.m.
[Stage Direction]
Wednesday, October 9, 1985