1986-01-27

[Stage Direction]
The House resumed from Friday, January 24, consideration of the motion of Mrs. McDougall (Minister of State (Finance)) that Bill C-82, an Act to amend the Petroleum and Gas Revenue Tax Act and the Income Tax Act, be read the third time and passed.
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, I am pleased to have this opportunity to speak on Bill C-82, a Bill with respect to the petroleum and gas revenue tax. The Government, in deleting this tax, promised a great deal. It promised us that this would be the haven of the oil and industry in western Canada and that, as a result of this Bill, the funds which were being freed up from this tax would be put back into the oil and gas sector. It told us this would ensure for us in Canada continued expansion of the oil and gas industry. We are now hearing a very different tune from the Government.
As we on this side of the House speak on behalf of the consumers of Canada, we are told that the prices are the way they are because we have to pay for our social programs and for the development of the oil and gas industry in Canada. I myself and Hon. Members on this side of the House thought we had already paid for the development and expansion of the oil and gas industry. The Government told us when the PGRT was done away with that this was going to be the vehicle through which we would have continued expansion. In the words of the Minister of Energy, Mines and Resources (Miss Carney), this was to be the engine for growth in the oil and gas sector. That evidently is not what the Government is saying at the present time. It is saying that high prices are the guarantee of expansion in the oil and gas sector. The oil companies are now declaring higher profits. They have had the benefit of the funds which were freed up as a result of doing away with the petroleum and gas revenue tax and they have not been taxed on any windfall profit for the old oil they discovered years and years ago. So they are enjoying quite a good deal out of the policies of the Government. However, the Canadian oil companies and the consumers lost the benefit they had through the new oil reference price and by losing that benefit they are placed in the same position as the multinationals but do not have these large reserves of old oil on which they can rely. What we have now with prices going down is a Western Accord, an Atlantic Accord and a Budget presented on May 23 which did not take into consideration the needs of the consumers. Yet the Government is steadfast in saying that the high prices of oil and gas are the answer.
It has been said again and again that it is lower gasoline prices in Canada that are good for the economy, that lower prices will reduce inflation and will allow the manufacturers, industrialists and entrepreneurs a little leeway so they can look after the indebtedness they incurred as well as be able to modernize and expand, and that their backs will come away from the wall in many cases. But the Government is steadfast in its belief, and why? Because it assured the Canadian public that by doing away with the petroleum gas revenue tax the oil and gas industry was assured that its expansion and steady growth would not waver. This is not what Canadians believe. Canadians believe that the Government is callous with regard to the needs of the consumers. They believe they have been forgotten. The Government told the country that it wanted to do away with the petroleum and gas revenue tax in order to develop the energy sector, then immediately it passed along the benefits to the multinational oil companies without any regard to the needs of the consumer. In fact, any regard to the needs of the consumers was negative because the Government immediately proceeded to put on a further tax in September and then again in January of this year.
The Government spent over $1 billion to bail out two banks. On the other hand, our own Crown corporation, Petro-Canada, on two occasions over the last three months raised the price of gasoline. When that company was brought into being the then Minister of Energy, Mines and Resources, Donald Macdonald, told Canadians it would assure us of a supply of oil and gas at a reasonable price. That was the purpose of Petro-Canada initially. What has it now become? It has now become a vehicle for this Government to increase the price of gasoline. Members of this House, like Canadians generally, see Petro-Canada's prices as being higher than those of other companies. Yet the Minister of Energy, Mines and Resources stated last week that she did not know anything about Petro-Canada's higher prices. Why is Petro-Canada doing this? To serve the Government's crazed ambitions.
[DOT] (mo)


Mr. Skelly:: Crazed ambitions?

January 27, 1986
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Russell Gregoire MacLellan: Yes, crazed ambitions. The short-term reason, the Government says, is that it is not satisfied with the profit on the downstream activities of Petro-Canada. Yet this same company took over another company, Gulf Canada, which had a more successful downstream operation, and it is now preparing to get rid of the employees of Gulf Canada who were responsible for this more profitable downstream operation. It just does not make any sense, but then again the oil and gas policy of this Government does not make any sense.
The long-term reason for Petro-Canada increasing prices is that the Government wants to put Petro-Canada in as profitable a position as possible so that it can be privatized. When the shares are sold in the market they will be much more attractive because of this more profitable position of Petro-Canada. The Minister stated on television last evening that it was the Government's intention to privatize Petro-Canada but the Government says it does not know whom that will be. How does the Government expect to fool the Canadian public, by using their money? It is the public who is paying higher gasoline prices. It is the public's money that the Government is giving to the multinational oil companies by doing away with the PGRT. It is the public's $1 billion this Government is using to bail out bankrupt banks. If the Government continues this policy the public will be using their money to buy back from themselves their own Crown corporation. Given the economic difficulties being experienced by people in this country, this is not inequitable, it is immoral.
Higher gasoline prices do not hit just wealthy Canadians; they have a much greater effect on low-income Canadians. Increased prices are hitting very, very hard. Yet gasoline prices have been going down in all other parts of the western world for months.
It is unfortunate, but the Government's policies are having a very derogatory effect on Canadians' opinion of Petro-Canada. Canadians know that Petro-Canada is the leader in these price increases. As a result, they are developing a more jaundiced attitude towards this Crown corporation. What they saw as a very positive step, a most encouraging beginning, has now become a nightmare. The Canadian consumer is being consumed by the policies of this Government through this Crown corporation being used in this way. How long can this go on? How long can Canadians continue to pay these prices? We have been told by the Minister that the world-wide reductions in the price of oil will be passed along to the consumer. We do not know how long that is going to take or to what extent the price reductions will be passed along. Why? Because we do not know whether the oil companies are going to give the full benefit of these reductions to the consumer or whether they are going to increase their margins. We certainly do not know what the Government is going to do with respect to its tax policy regarding gasoline. However, we do know that if the price of gasoline went up, consumers would be paying more tomorrow. There would not be any of this waiting for two or three months until they use up their present reserves and then pass along the increase to consumers. Oh, no, that only applies when the price goes down. When it goes up, the increase is
passed along to consumers the next day. That is not what we had in mind when Petro-Canada was formed.
The Government has told us that we should not complain about higher oil and gas prices because the Husky upgrader, the Hibernia field and the Venture deal are at stake. The Government is saying it needs these higher prices so it can pass along the profits in order to develop these projects. People may have believed that story last spring when the Western Accord was signed, but to give out that same story a second time as being the reason for higher gasoline prices is just not going to wash anywhere in this country. It is time for the Government to come clean with Canadians and admit that the reason it is letting prices go up is that it wants to do away with Petro-Canada, privatize it and make it look as good as possible with regard to profits so that it can get the best possible price for a private issue of shares. Also, the Government has made a commitment to the multinationals, the major players in the oil and gas industry, that they will be looked after.
The Government has not given that same assurance to consumers recently as it did during the election campaign. During the election campaign, that was only one of many promises that the Government made to the people of Canada. The Government has not made that promise lately because it knows that even it cannot give that kind of assurance with the picture so grossly balanced in favour of the companies and against consumers.
This is becoming a major question in the country at the present time. Consumers are angry. They are furious with the Government, not only because of the higher prices or because the Government led them believe one thing and then did another, but because the Government is now insulting their intelligence by dragging out the same answers that it dragged out last year and the year before during the election campaign. The Government is telling Canadian consumers that it is giving them the right answers and they should believe them. However, not only are the Canadian consumers not believing but, with each maladjusted reason that the Government brings forward, the hypocrisy of the Government, its lack of concern for consumers, and the complete loss of confidence of the Canadian public in the Government becomes more apparent.


Raymond John Skelly: Mr. Speaker, would the previous speaker give us an indication of what the effect on taxpayers will be if the revenue from the PGRT is removed? Would he give an indication of the type of thing that will happen to Government services and the type of thing that will happen to the tax burden on people in Canada and, in particular, in the region of the country which he represents, because of this ill-conceived plan of the Government?


Russell Gregoire MacLellan: Mr. Speaker, I would be pleased to do that. By 1990 the reduction of the PGRT will cost the Canadian taxpayer between $2 billion and $3 billion in taxes, which the multinationals, the oil and gas producers, will no longer have to pay and which will be passed along to the Canadian
January 27, 1986

consumer. In addition, in the last year the Government has given over $1 billion to bail out two banks in the country.
How is the Government going to replace these revenues? It is going to replace them with the earnings of the people of Canada. At the same time as the Government is partially deindexing family allowances and exorbitantly taxing gasoline, again taking from those who need help the most and who can least afford to bear this tax, it is giving to the largest corporations in the country. Therefore, not only are people being taxed more, but they are not getting the benefits of this taxation. It is going to companies which, for the most part, are owned outside of Canada. In the case of the banks, the largest amounts were owed to groups, individuals, and corporations outside of Canada, not to mention the corporations in Canada which could afford to bear the cost of these losses more easily than could individuals in the country.
As well, the Government is reducing the number of civil servants. It is telling the Canadian people that the reason we have such a high deficit is that the Public Service has not been doing its job. The Government says there are too many civil servants and that they are lazy. The Government is using the public servants, former Governments, and the people of Canada as a scapegoat for its activities and poor policies. It is one thing to act in this way and another to use innocent parties who have laboured hard in good faith in the country as a scapegoat.


Mr. Gauthier:: Mr. Speaker, I remember hearing the Member ask the Minister of Energy, Mines and Resources (Miss Carney) a question last week about the fact that Petro-Canada was increasing the price of gasoline, in other words, moving with the pack of multinational companies in moving up the price of gasoline. If I may paraphrase, the Member asked the Minister why Petro-Canada, which was supposed to be our window on the industry and was supposed to have been established to ensure fair and equitable prices on the market, was following the pack like sheep. He asked, secondly, whether it was the policy of the Government to increase the profit picture of Petro-Canada so that it could be sold to the general public. Over the weekend we heard the Minister state on TV that that was her policy. Could the Member give us his views on Petro-Canada and on how he feels about the promise of the Minister to privatize it?


Russell Gregoire MacLellan: Mr. Speaker, as I have said before, I think this is one of the most insidious features of the Government's policy with respect to oil and gas. The Minister stated on television last evening that it is her design to privatize Petro-Canada. When I asked her last week why Petro-Canada was leading price increases and why, during the last three months, Petro-Canada increased the price of gasoline on two occasions, she said that she had no idea and did not know of these price increases. I have grave doubts about the response of the Minister of Energy, Mines and Resources in this regard. I think it is becoming increasingly clear why the Government is allowing Petro-Canada to increase its gasoline prices.
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The irony is that it is beautiful for the multinational oil companies to have Petro-Canada leading the price increases because when Petro-Canada increases its prices the other companies come right in behind and increase their prices by the same amount. What can the Government do to prohibit this when its own Crown corporation is leading the way? The multinationals get a free ride. They can increase their prices without the Government being able to say anything to them.
Where is the report of the Restrictive Trade Practices Commission, which has been repeatedly postponed, which the consumers of the country have every reason to believe will do something to help them? It is being postponed and postponed until the Government feels that it can be released without any of its aims, such as the privatization of Petro-Canada, being hindered. This is not a Government acting in the best interests of consumers or of the people of the country.


Mr. Marchi:: Mr. Speaker, I listened attentively to my hon. colleague. He is right when he talks about consumers being upset with respect to increasing prices at the gas pumps. This is something that cuts across all lines. It is not specific to a certain region or community of the country. It cuts across all economic and class lines and is something that all individuals and families can appreciate. At the very time when the price of world oil is dropping at a very significant rate, they are going to the pumps and paying more. One response given by the Minister of Energy, Mines and Resources (Miss Carney) in the House of Commons is that it has not worked its way through the system and the drop in world prices have not been reflected at the gas pumps. Yet this morning I had an interesting conversation with a visitor from Nebraska who said that prices in the United States are continuously dropping. Somehow, just to our south, that price decrease has worked its way into the system, yet we have a response that it has not worked its way through our system to be reflected in the price at the gas pumps.
Is the Minister's response a valid statement or is it just an excuse? The prices in the United States are definitely working their way to the pumps at the gas stations but we have not seen that happen in Canada. Why?


Russell Gregoire MacLellan: Mr. Speaker, I thank my colleague for that important question. It highlights the difference between Canada and the United States where consumers have the benefit of a price decrease within a matter of days. In fact, in certain places in the United States where the price is lowest, such as the State of Maryland, Americans are paying approximately half of what Canadian consumers are paying for gasoline. That is an unconscionable difference, to the detriment of Canadian consumers.
The Minister tells us that we will have the benefit of this world price decrease but it may take two or three months to be passed on to the consumer.
Not only have we not seen a price reduction, there has been an increase in the price of gasoline even though the Minister

January 27, 1986
Petroleum and Gas Revenue Tax Act was telling us at the time of the Western Accord and the Budget that deregulation would mean lower prices for Canadian consumers. That is what we were led to believe, but the prices continued to increase.
Even if the Minister wants the price to go down, there is no guarantee that the oil and gas companies will pass those reductions on to the consumer. The oil and gas companies in this country know that they have the Government under their thumb and that it dances to their tune. It is the oil companies rather than the consumers who will tell the Government what its policy on oil and gas will be.


Raymond John Skelly: Mr. Speaker, who will be the primary beneficiaries as a result of the elimination of the PGRT? Can the Hon. Member indicate one resource company in Canada that would be the largest beneficiary of the removal of this tax and tell us where the enormous profits earned by it might be disposed of other than in Canada?


Russell Gregoire MacLellan: Mr. Speaker, the beneficiaries from the elimination of the PGRT will be the major oil companies in this country. The reason is that the five major multinationals in this country own 75 per cent of the old oil. This is S3 a barrel for oil that was found prior to 1974. Today, the world oil price has been reduced to under $20 U.S. a barrel from some $28 U.S. a barrel a few months ago. That is still a major difference from the $3 a barrel for oil which these multinationals found and still have locked in their reserves. They will still make a major profit.
They are complaining that lower prices mean that they cannot go ahead with upgraders in the West and cannot proceed with offshore projects like Beaufort, Hibernia and Venture. That will simply not wash in this country.


Raymond John Skelly: Mr. Speaker, today's debate is very interesting because it illustrates the irony of the Liberal Party's position. My remarks are not intended to detract from the excellent speech made by the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) who clearly pinpointed the problem. I see that the Minister of State for Finance (Mrs. McDougall) is nodding her head in agreement. No doubt she feels guilty about participating with a group who is ruining this country. I believe she understands the problem, and if she had a greater voice in Cabinet, there would be much less danger of the Government pursuing this road to destruction. Perhaps there should be a Cabinet shift, as my colleague points out, to place her in charge of energy.
However, it is ironic that the Liberals complain about cutting the PGRT because it is they who started the ball rolling. I recall making many of the same arguments in the last Parliament that the Member for Cape Breton-The Sydneys are making in his speech about the devestation that would follow this kind of action.
I believe that the basic problem is that the PGRT is a very large source of revenue to the Government of Canada. It is essentially a royalty that is imposed on reserves that we hold and that revenue is guaranteed during the good and the bad
times. It can be used to provide services and benefits for Canadians.
It is my understanding that Imperial Oil is the largest holder of old oil in Canada. I understand that at one time the cost of production of that oil, which was discovered years ago and is still in the ground waiting to be produced, was something in the order of 50 cents a barrel. Let us assume that it is slightly higher, if the Tories cannot accept that figure. Nevertheless, the cost of production was very modest compared to today's prices.
Imperial Oil, which holds the largest conventional reserves of old oil stands to be the largest beneficiary. If this tax is eliminated, it will be an absolute windfall to Imperial Oil and the other major multinational oil companies, without any benefit to Canadians. Imperial Oil can decide to invest those profits in the South China Sea or elsewhere in the world. This Bill will add to its $600 million profit this year.
Furthermore, the tax revenues to the Government of Canada will drop while the profits to Imperial Oil and the other large multinational oil companies will rise. The oil companies will pay less taxes on their profits as a result of the tax incentives to oil companies contained within the provisions devised by the Minister of Finance (Mr. Wilson) and the Minister of Energy, Mines and Resources (Miss Carney). While they will pay less tax under the guise of exploring for oil and guaranteeing the security of supply, the revenues to the Government will decrease by more than $2 billion. The dramatic rise in profits of the oil companies will not be taxed because of the tax incentives that have been proposed allegedly to help with exploration and improved upgrading of the technology.
The fact is that the Government has given the major oil companies an absolute windfall which it does not intend to tax. The net result for the taxpayer will be reduced Government services. For instance, post-secondary education will suffer, job creation will suffer and health care will suffer because the Government will simply not have the money if it continues to do this on every front. It will simply destroy its source of revenue and be unable to provide the services required by the people of Canada. Moreover, if the Government intends to maintain these services and the oil companies do not have to contribute, you can be sure that the Canadian taxpayers will have to pay more. Let me just say as a brief summary on that line of thought that this initiative was the product of the past Government. Because of the ideological fixation of the present Government in power, this was an ideal opportunity to continue down the same misguided track, basically providing windfalls for banks, oil companies and shafting ordinary Canadians.
In terms of the energy policy at work in the Government, the point was made by the Minister of Energy, Mines and Resources last night who mentioned that she would like to privatize PetroCan, which does not surprise anybody.


Mr. Nickerson:: Hear, hear!
January 27, 1986


Raymond John Skelly: Hear, hear! Another philosophically fixed individual, excellent. I think it is time the Government stood up, came clean with Canadians, and told them exactly what its game plans are. There is no doubt the Government wants to privatize a company upon which Canadians have spent billions and billions just to get a foothold on the energy industry in Canada.
In the past, energy has been controlled by multinational corporations. Decisions have been made outside Canada and Canadians have suffered enormously for the failure to have any kind of a window on the industry or any kind of control over it. The present Government would turn the industry back to the multinationals and allow the future of Canadians to be mortgaged to them.
We had PetroCan put together, but it would have been a very different operation had it been struck under an NDP Government. In about October, 1973 the concept was first laid out in this House in a speech by Tommy Douglas who outlined the basic principles under which a national energy corporation should operate. Had those principles been followed, we would not be looking at a major oil company in Canada that was as much as anything a price leader and a participator in price fixing, but at a price leader in terms of giving benefits to Canadians and leading in price reduction.
Ultimately it struck me that the purpose of Petro-Canada was to allow Canadians to have an influence in the way that energy was developed and that would involve benefits to Canadians, not to the multinationals. Where possible, Petro-Canada would form joint ventures with other multinationals in the development of resources to give guidance and establish directions of benefit to Canadians and so make sure that Canadians stayed ahead with exploration and technology. But the Conservatives would have privatized that. They want to put their faith in the multinationals who have shafted us in the past and, given a chance, will shaft us in the future.
What about security of supply, Mr. Speaker? 1 believe the President of Imperial Oil prior to the energy crisis in the early 1970s said that we have 900 years worth of oil, and after that, he said, we will be out of oil.


Mr. Turner (Ottawa-Carleton):: They lied.


Raymond John Skelly: They lied. What do we have though in terms of any adequate information on direction and development of the energy industry in Canada without at least something on the scale of Petro-Canada?
I for one am pleased that the Conservative Party has finally come clean and told us what it wants to do with Petro-Canada. It wants to get rid of it and take away the investment that has taken years to build up which put the corporation in the position of having some influence on the direction in which energy development goes in Canada. To dump it borders on absolute negligence. I am certain people on the benches opposite will be held accountable for the decisions Cabinet has taken.
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It will be interesting to watch gas pricing come the next election. In British Columbia gas pricing has had a terrible effect on communities, especially rural communities and those farther away from the main centres where the price of gasoline runs between 60 cents and 70 cents a litre. What about the cost of doing business in those communities? British Columbia is probably one of the provinces in Canada that has had the least recovery after the devastating recession. The communities I represent on the coast of British Columbia are having an extremely difficult time getting involved in the recovery that appears to be going on in central Canada and in other areas of the country one of the main problems being the cost of energy. When you are paying 60 cents or 70 cents a litre, it is an extremely large share-


Mrs. Sparrow:: In B.C. they don't pay.


Raymond John Skelly: Nobody pays 60 cents to 70 cents a litre?


Herbert O. Sparrow: In B.C. they don't.


Raymond John Skelly: It is time to provide a little proof for the Member. Communities in B.C. cannot get involved in an effective recovery because of the cost of ferry travel, the cost of air travel and the cost of doing business, of which freight is an extremely large percentage. Consumers are being shafted.
Gas pricing will have an effect on the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway). It would be nice to hear him talking about the effects of gas prices in his riding. It would be nice to hear him say that we should get rid of Petro-Canada. I suspect people will put two and two together and suggest that a properly run Canadian owned oil company would change that direction.
But the problem goes back to the nature of the Government. The Minister of Energy, Mines and Resources indicated that she is going to privatize and get rid of an important asset which the Canadian people have built up. I think the ideological fixation that the Government has that everything must go back to the private sector and that there is no place for a mixed economy is fairly interesting. That is the kind of thinking and action that has brought the Conservatives from about 52 per cent support, according to the Gallup poll, to 38 per cent. I would suspect that this fall is not finished. It is not just the Government's failure to do anything effective with gas pricing and the failture to do anything constructive with Petro-Canada to set some price decrease in place that have caused the drop; a lot of other things have influenced people, such as, as one example, patronage activities that would even have embarrassed the previous Government, which was a patronage leader.
People believe that the Conservative Government is the government of big business, a government for banks, oil companies and for everybody but the ordinary Canadians. That is the bottom line. Thirty-eight per cent support in the Gallup poll is not the stopping point for this outfit either, Mr. Speaker.

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It is a real tragedy because there was a crying demand for a change to set a different course of action from the stale Liberal Government that was stuck in its ways, that made patronage an art, and that did not represent the wishes of Canadians. It was past time for the Liberals to go. They should have gone well before they were sent to their just reward in September, 1984.
For this Government to turn around and commit political suicide in a year and a half is astounding. The people never endorsed what the Government proposed. People were looking for a sound change, not the kind of disaster that is being inflicted on them by questionable activity.
It is interesting that those back-benchers are silent on this PGRT Bill.


Mr. Blenkarn:: Oh, come on!


Raymond John Skelly: They are silent on gas pricing. I hear one of them moaning and groaning now. They should jump up and tell the Prime Minister (Mr. Mulroney) that he is dead wrong. One example I love is that the Prime Minister said that they had to cut the old age pension, that it was the best thing since sliced bread.


Mr. Valcourt:: He never said that.


Raymond John Skelly: They fought in the trenches for days, weeks and months on that. After his back-benchers had returned to their ridings and told people that there had to be a cut in indexation and that the deficit had to come down, the Prime Minister turned around several months later and said: "I guess we were wrong; we do not have to do it". The upshot is that he made his back-benchers look like fools. I do not know how they can return to their ridings and explain "Tunagate", the clam scam or the many other things for which the Government will really be remembered.


Bernard Valcourt: A drop in unemployment and a drop in interest rates.


Raymond John Skelly: The Hon. Member is talking about the fortuitous accidents that happen to befall the Government.


Some Hon. Members:: Oh, oh!


Raymond John Skelly: Prior to the last election it was predicted that there would be a recovery. They are the beneficiaries, standing there with their hands open and their minds empty. It is incredible to watch them claim responsibility for the upturn in the economy. That is complete rubbish, and Canadians know it. 1 ask them to look at the Gallup poll. If they think Canadians believe them, why is the Gallup poll at 38 per cent? Canadians think that the Government is the worst thing that has happened to the country since it was formed. One does not have to travel very far to get that opinion. They were the same people who had tremendous expectations that there would be the dawning of a new era; it was really the dawning of a
disaster. Enough suffering over a five-year period will convince Canadians generally that the course of action was a bad one and that they will have to look at something different from the Liberal Party and of course something completely different from the Conservative Party. If we are talking about the PGRT, it is time to turn this around. If we are talking about protecting pensions and post-secondary education, it is time to turn this around. The back-benchers of the Conservative Party cannot sit over there and say nothing. They have to rise and criticize the Prime Minister. They have to rise and condemn the Cabinet for the direction being taken. Where will their seats go? What are they doing to the people they represent?


Bernard Valcourt: You are worried about my seat! Don't worry about my seat.


Raymond John Skelly: I find that surprising. The PGRT concerns us all. The Hon. Member who just spoke out should tell the people whom he represents about the wrong-headedness of the Government, the wrong direction it is taking and the harm which will come from it. If he were truly representing his riding, he would tell them how he dissociates himself from the direction of the Government. Then I think he would have his seat, but he probably would have crossed the floor by that time. When the lights go on and he realizes the direction which should be taken, he will certainly look at some other option.
There are few people over there with the courage of their convictions, able to stand on principle and represent the people in an effective way. So far we have had one, that is, the former Minister of the Environment and Minister of State for Transport. She has risen and said: "I have had enough of this; this is the wrong direction in which to be travelling". I predict that there will be more. Not everyone on those benches can continue to carry the line. I hope, when the next speaker for the Conservative Party rises in her place-


Mr. Keeper:: Do you think she will?


Raymond John Skelly: -to comment on the PGRT, that as one of the back-benchers in the Conservative Party she will speak in the interests of ordinary Canadians, not just in the interests of banks and oil companies. I am convinced that that will commence, that there will be a change, a move toward principle. That is what will turn around the Prime Minister and turn around the ideological fixation of the Cabinet. Then the harm to Canadians will be stopped, and they will proceed in a different direction. I see that my time is drawing nigh. If someone would pit me a question, I would certainly be glad to carry on for another 10 minutes and develop some of the things which I had to let sit in my speech.


Herbert O. Sparrow: Mr. Speaker, I rise on a question and comment. I thought I would take this opportunity to inform my colleague just what the PGRT was. He related it directly to reserves. The PGRT was a well-head tax on gross revenues from production; it had nothing to do with reserves. The phase out of the PGRT does not hand billions of dollars to the oil companies. The moneys which were generated from this unfair
January 27, 1986

tax went mainly to PIP, plus a very expensive means for keeping an artificially low-priced crude and natural gas in the country. This is one of the main reasons that we have got into so many difficulties.


Mr. Axworthy:: Did she say "artificially low-priced crude and natural gas"?


Herbert O. Sparrow: Also I want to inform my colleague that oil and gas investments are up by some $2 billion or more in the past year, that is, up by 25 per cent. This investment is creating thousands of new jobs across the country by stimulating exploration, an activity which creates energy security. The number of wells drilled is up by 23 per cent, and land sales are up by 73 per cent. Could I ask my colleague what he has against creating 25,000 new jobs directly related to the oil industry? What does he have against creating new jobs or new investment for the country?


Raymond John Skelly: Mr. Speaker, I thought the statement of the previous speaker was an excellent one. Her statement that the Liberal Government had kept the price of oil, gasoline and other fuel products artificially low during its term of office is astounding. It summarizes the position of the Conservative Party. There is no denying it; everyone in the House and in the country heard her say that during the Liberal regime of the last few years they kept the price of gasoline artificially low. That is a farce. Everyone knows what happened to the price of gasoline. Next to interest rates it is probably the worst thing that has happened to Canadians. I draw as a conclusion from what she said in her statement that the Conservatives would like to see the price of gasoline rise. They would like to see the profits of Imperial Oil continue to rise and sky-rocket as they have.


Herbert O. Sparrow: Do you know about supply and demand?


Raymond John Skelly: It is astounding. I have drawn from her statement the following conclusions-first, that the price of gasoline has been kept artificially low over the years and that the Conservatives will increase it; and, second, that they will not tax the windfall profits of oil companies from dramatically increased prices of oil and gas as a result of these incentives. Therefore, with fewer government revenues, services will have to be cut and it will basically be a disaster. I firmly believe that, and I think down deep she does as well.


Herbert O. Sparrow: No.


Raymond John Skelly: I think she is a little reluctant to speak out at this time. There is not that many of them speaking out against the direction of the Government, and the consequences are very serious. I had hoped that when she spoke we would have a situation where another Conservative was taking a more independent position in the interest of ordinary Canadians.


Herbert O. Sparrow: You bet we are interested in ordinary Canadians.
Petroleum and Gas Revenue Tax Act


Raymond John Skelly: I cannot understand what they are taking which would affect their perception in such a way as to distort the facts concerning the 25,000 new jobs. It is the recovery which is going on in some areas of the country. It is happening in spite of the Conservatives, in spite of the Conservatives. There would likely be more jobs if the Conservatives would simply get out of the way and stop throwing obstructions in the way of development and expansion of employment. Only 38 per cent of Canadians believe the nonsense that was included in the statement of the previous speaker, who is simply repeating the nonsense of the Prime Minister. At any rate, thank you for your tolerance, Mr. Speaker.


Mr. Hawkes:: It is amazing to sit in this Chamber year after year. There was an election sought in 1979 on the issue of taxation at the gas pump. Our Party proposed we increase taxation at the pump. We lost that election and we got the PGRT. Here is a member of the New Democratic Party supposedly standing up for the ordinary man.
Mr. Speaker, five years later, after having supported that program, he fails to understand that a tax which is levelled at the well-head, the PGRT, is a tax which works its way through the entire refining process. It shows up at the consumer level, not on gasoline that goes into a Cadillac, not exclusively on that. It shows up in the budget of every senior citizen in this country who has to heat his or her home.
He stands up here as if he were the champion of the downtrodden and those who cannot afford it. Well, he defeated a Budget that had taxation on gasoline so that those who drove a Cadillac paid more, those who drove a small car paid less, and those who drove no car paid nothing. His Party in turn came and supported the PGRT, which took money out of the pockets of senior citizens who they could not avoid paying it because they had to heat their homes. His Party turned down a tax credit that was to go to those same senior citizens that would have reduced costs for the poor segment of society. That is the kind of proposal that this Party has made time after time, year after year. It is working; the poor people in this society are better off today because we are the Government. The 500,000 who are working today are ordinary Canadians drawing an ordinary income, and they love it.
For the Hon. Member to speak with that kind of hypocrisy is almost more than this House should be required to bear.


Some Hon. Members:: Hear, hear!


Frederick James (Jim) Hawkes: Let's get rid of the PGRT.


Raymond John Skelly: We have seen over the last century people who have distorted history to fit their own needs. I have never heard a better example of it. The Hon. Member does not recall the Member from Alberta admitting after that particular election that he was wrong and saying: "Yes, I was wrong. I take full responsibility for the Budget and the foul-up and everything else". What happens is that the distortion is enormous. The man stood up after the election and said, "I

January 27, 1986
Petroleum and Gas Revenue Tax Act
screwed up, it was my fault. I made a dumb move". Now, we all accepted that, why can't you guys? They wanted to go to the polls. With the Social Credit Party and the Government there was a one-seat margin, that was unsustainable. He came in with a housing tax credit and went to the people, and the people felt about him the same way they feel about the present Government. It is time to get rid of it. If you called the vote today you would not be sitting on that side of the House. Unless some of you guys start standing up and speaking out on behalf of Canadians and against the Prime Minister and the Cabinet and the direction they are taking, you are going to go the way of the 1979 Parliament. You are going to be a memory around here and a picture on the wall. I would be glad to continue, Mr. Speaker.


Mr. Speaker:: Resuming debate.


Lloyd Axworthy: Mr. Speaker, this is an interesting paradox. We are here debating a Bill whose time has passed. Outside in the world around us the whole structure of the oil industry and oil pricing is shattering into pieces. The whole premise upon which the Western Accord was built has not been totally erased. Oil prices have now dropped something like $7 in the past three weeks, $5 billion worth of revenues have been lost, and as a result the basic philosophy that was contained in the Western Accord is under severe and total disruption.
Here we are in Parliament debating a Bill which is going to put in place a structure that is already obsolescent, that is no longer relevant to the conditions of the oil industry and the conditions faced by Canadian consumers. It is perhaps a prime example of how the machinery of Government grinds slowly. In this case the machinery of the Government has become totally immobilized, frozen in its tracks. The reason is that the ideological basis upon which the whole Western Accord was built has now been totally challenged. Like all good ideologues, the Conservatives are incapable of being able to adapt to new conditions. They are frozen and immobilized in the cast of their own preconceived thought and therefore can no longer adapt or change or respond to new conditions.
As a result, we are being faced with a policy that is beng put in place that in fact will be running counter to the economic vitality and growth of this country. Just look at the PGRT that was defended just a moment ago by the Member from Calgary. I want to quote to you an article which just recently appeared in the Western Economic Review. I guarantee you, this is not a magazine that is put out by any Liberal source. It is called "Macroeconomic Impact of the Western Accord". It was printed in the fall, 1985 volume. It said:
The 1990 federal deficit will be $3.9 billion higher than it would have been otherwise as a result of the elimination of the PGRT.
I would guess that, since this Government was elected to office that about a million times, maybe two million times we have heard the Minister of Finance (Mr. Wilson), the Minister of State for Finance (Mrs. McDougall) and the Prime Minister (Mr. Mulroney), plus every Conservative Member of Parliament and I do not think there has been one who has not said
that the primary objective of the Government of Canada is to reduce the deficit. Is that not what all of you have been saying? Once we get the deficit down, unless we get our economic machinery in order, the economy will not thrive. That is your stated objective. The number one single objective of the Conservative Government was deficit reduction. If you look at the economic analysis, the cumulative loss from 1985 to 1990, according to a very objective economic analysis of the macroeconomics, based upon the proper forecasting method, will be $12.2 billion. I quote again from page 105 of this article which reads:
The net cumulative loss for the federal Government is $12.2 billion between 1985 and 1990.
It may come as a matter of some suprise-


Mr. Speaker:: The Hon. Member for Calgary West (Mr. Hawkes) rises on a point of order.


Frederick James (Jim) Hawkes: I am having trouble following the speech. Could he tell us what is price assumption there for a barrel of crude so we can follow that argument?


Lloyd Axworthy: Mr. Speaker, I would be glad to submit this article to the Hon. Member so perhaps he could start his education at some point of time.
The fact that we are trying to make-


An Hon. Member:: Education both ways.


Lloyd Axworthy: Some people I know are beyond retraining, but those of us who are Liberals always have an optimism about the basic flexibility of human nature, so there is always hope for the Member from Calgary.
The fact is that the primary goal established by the Conservative Government is being totally contradicted by this Bill. The Government is countering its stated goal of reducing the deficit by eliminating the PGRT in the way it has been done.
Let me deal with a further point made in the same article to which I had referred. It is pointed out that in addition to the net loss of revenue coming from the total elimination of the PGRT, the imposition of new excise taxes will add an even further burden to the economy. The article indicated that the excise tax offsets the impact of the Western Accord in terms of whatever employment stimulation or growth potential there might have been. I believe those are facts that should be taken into account.
We cannot measure the effect of the Western Accord in isolation. We must measure it in relation to the substantial increase in excise taxes that have been imposed on the Canadian consumer. This will reduce consumption and have a negative effect on employment. The Government's policies are running headlong into one another. There is no rhyme or reason to them, there is no symmetry to them. If we wonder why Canadians are losing faith and confidence in the Government, it is because they realize that the Minister of Finance and the Minister of Energy, Mines and Resources (Miss
January 27, 1986

Carney) do not talk to each other any longer. They have put totally contradictory policies in place.
The kind of analysis contained in this particular article to which I have referred becomes even more serious and dramatic when taking into account the conditions we now face. The entire Western Accord was built upon the basic assumption that oil prices would remain flat or decline only marginally. There is a very small range of gas prices upon which the Western Accord was based. Those are not my words, Mr. Speaker. In the Western Accord itself, there is a contingency plan which indicates that if prices increase dramatically or decrease dramatically, the Government will have to step in to impose a new regime. That is part of the policy of the Western Accord. Yet the Government is frozen from doing anything about it.
The Western Accord was based upon a very narrow price range for oil at the well-head, a price range that already in the past week has been totally exceeded. What answers have we got from the Minister of Energy, Mines and Resources? She has shrugged her shoulders and said that it is the market-place that will decide. The market-place is not deciding. The fact is that there is no connection between pricing and demand at this point in time. Again the facts totally contradict the premise of the policy.
At the same time that the Government said it would deregulate the oil and gas industry by removing taxes, it was coming at it from the other flank by imposing a whole new set of federal taxes to offset totally, contradict, eliminate and wipe out the benefits of that deregulation. The question of credibility is a very important one for a Government. This Government probably holds the record for losing the confidence of the Canadian people faster than any other Government. It has even surpassed the incredible diminution of support for Mr. Diefenbaker's Government. This has happened not because the Government is malevolent but just because it does not know what it is doing.
The energy policy was supposed to be the centre of the new economic order which was the basis of the entire Conservative Government campaign. Energy was to be the driving engine of growth. The Hon. Member for Calgary South (Mrs. Sparrow) rose to say that there would be 25,000 new jobs created and new investment. I would ask her if that is going to happen with a $5-billion loss in revenue in the past month.


Herbert O. Sparrow: It already has.


Lloyd Axworthy: No, it has not happened. I am sorry. What is going to happen to Hibernia? Where is the Husky upgrader? Has a decision been made on that? No, it is still in limbo. What about the various heavy oil projects and the frontier exploration? What is going to happen to all the major oil projects as the price begins to fall dramatically and there is no cushioning? What is going to happen to the engine of growth? What is the Government doing about it? It has a Bill before the House to eliminate the PGRT based upon an analysis done three or four years ago. It has nothing to do or say about the conditions we face today.
Petroleum and Gas Revenue Tax Act
Taking a macro-economic or budgetary point of view, the thrust of the Government's other economic policies is running totally counter to the elimination of the PGRT. It strikes me as exceedingly hypocritical for a Government to be lauding its efforts to reduce the deficit while we know full well that the increase to the deficit will be $3.5 billion.
The Government had alternatives. A series of papers were produced by the Economic Council about a year and a half ago dealing with changing the tax regime on the oil and gas industry as it should have changed as conditions changed. There is the possibility for an excess profit tax as a way of recapturing some revenue. Certainly a Liberal Government would never have introduced the kind of heavy burden of additional excise taxes that has created the counter-movement to the results of the elimination of the PGRT. Surely Conservative Members of Parliament and of Cabinet would have enough wit to realize that if they take taxes off from one side and increase them on the other, they will totally eliminate whatever benefits are supposed to be created. If the PGRT is eliminated and a substantial amount of cash revenue is added to the oil industry, one would assume that there would be more investment. That was the risk that was being taken. It is a different philosophy but we have to accept it.
We had a different point of view. We felt that revenue should be more broadly shared and that the Government should have a larger part of that revenue so it could be allocated toward social programs and other programs of economic benefit. I would repeat to Members from western Canada that a direct result of that was the ability to change the western grain transportation system, something which in itself is generating a large economic impact in the West through new capital investment. That was paid for by the recovery of revenues through the PGRT. We felt that there were other economic initiatives in western Canada that had to be financed including the modernization of the railway system to meet the demands of the coal and grain producers for a modern transportation system. We had to recover revenue somewhere and rather than having it all concentrated in one industry, we tried to share it. Conservative Members were against that and they won the election. That is fair enough. Why then should they turn themselves up on their heads by introducing a whole new set of excise taxes that negate that influence?
The rationale for the Conservative position was put very clearly by my colleague this morning. Who is being taxed? Conservative Members feel that it is much fairer and more equitable to raise taxes from the consumers than from the industry. That is the difference between our two positions. That is the real nub of the issue. The Government will put the taxes directly on to the consumer, in this case, except that it lost just one small piece of economic rational thinking, namely, that taxes are taxes are taxes, and that when we draw that money from the consumers, it will also have an impact upon the energy industry itself because it will reduce consumption. It will reduce growth and it will draw money away from consumers in terms of the purchase of other goods and services

January 27, 1986
Petroleum and Gas Revenue Tax Act
including the products of the oil industry. That is why this particular study in the Western Economic Review properly points out that:
Furthermore, an examination of the impact of the increase in the motive fuels excise tax suggests that attempts to recoup the revenue losses from other sectors of the economy may undo much of the positive impact of the accord-
There is, I think, fairly clear and irrefutable evidence that we are debating a Bill which simply does not make much economic sense. It should be sent back and be redrafted. It should be looked at not only in relation to the larger budgetary objectives of the Government, but it surely must be reviewed and reexamined in light of the new conditions of the oil and energy sector of our economy. Surely we can expect that from a Government who has representatives from the oil producing sector in good numbers, people who claim they know the oil industry well, and we take them at their word. When those Hon. Members went back to their constituencies this weekend, they must have heard what the concerns were. There is a major dislocatior and disruption taking place. If those Hon. Members h. e not heard that, then I suggest they get out of the isolation ward in which they exist, because I certainly have heard it. Oil industry people have talked to me in the last 48 hours and they have told me what is going on. Equally so, if those Hon. Members are not, at least, talking to people in the industry, I suggest they talk to the people who put their ballots in the box on September 4, because they are the ones who are going to the gas pumps every day. They are now starting petitions right across Canada demanding to know why it is that at least the promise made by the Minister of Energy, Mines and Resources when she spoke at a conference was not kept. She said: "Falling oil prices will immediately result in better deals for the consumer". They are asking why that has not occurred.
It strikes me that if there is to be from this Government any sense of responsiveness to the interests of the people of this country, then surely it must open its eyes and ears, listen, watch carefully what is taking place in our energy sector and try to come to grips with it.
Before I conclude I would like to comment on the point which was raised by my colleague, our energy critic, when he said that what was even more disturbing were the comments made by the Minister of Energy, Mines and Resources last weekend concerning Petro-Canada. We know that this Government is hell-bent on privatization, but there should be one fundamental test of whether one privatizes a Crown corporation or keeps it in the public sector. Does it serve the public's interest? Petro-Canada was established for a number of reasons well known to this House. It was primarily to make sure that there was some ability for Canadian interest to help shape energy policies and, more important, to provide some leadership on behalf of the public. There was a very wide suspicion that not always did the oil industry, the multinationals, work totally in the interests of the consumer and that it would be helpful to have a countervail. I believe that Petro-Canada, over the initial years of its functioning, served that purpose. What
we have had revealed to us this weekend is really a secret conspiracy, that even before the Government privatizes and puts the shares on the market, it has basically given the mandate to Petro-Canada to be a gouger like everyone else. Rather than trying to lead the industry, at a time when oil prices are falling to bring prices down, to be responsive, in fact the Government was responsible for two substantital wholesale price increases. The Crown corporation which was established to serve the public interest is being encouraged in fact to pump up its own revenue base so that the share offering can be at a higher level when the Government wants to privatize.
If anything is more nefarious than that kind of shenanigan, that kind of financial inflation by the Government of the Petro-Canada revenue base, I do not know what it could be. The Government has distorted and destroyed the public interest in that Crown corporation, and that, I think, is one of the most serious indictments that can be raised. The Government is not coming clean with the Canadian public and it is using an agency of Government, not to serve the public interest, but to work against it.


Mr. Deputy Speaker:: Are there questions or comments on the speech of the Hon. Member? Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is the following one. Mrs. McDougall, seconded by Mr. Oberle, moves that Bill C-82, an Act to amend the Petroleum Gas and Revenue Tax Act and the Income Tax Act, be now read the third time and passed. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Deputy Speaker:: All those in favour please say yea.


Some Hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed please say nay.


Some Hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the yeas have it.
And more than five Members having risen:


Mr. Deputy Speaker:: Call in the Members.


Mr. Speaker:: I declare the motion carried.
Bill read the third time and passed.


Mr. Speaker:: Shall I call it one o'clock and introduce the next matter at three o'clock?


Some Hon. Members:: Agreed.


Mr. Speaker:: It being one o'clock, I do now leave the Chair until two o'clock this afternoon.
At 12:59 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Mr. Speaker:: Before calling Statements pursuant to Standing Order 22, I am advised that there may be a desire to have a special brief period of statements and to have procedures delayed accordingly. At the conclusion of this round of special statements, we would then call Statements under Standing Order 22.
The Late Gerard Duquet


THE LATE GERARD DUQUET
Mr. Gaston Isabelle (Hull-Aylmer):: Mr. Speaker, it is with great sadness that I face my task today of announcing to the Members of this House the passing away of a former colleague, the former Member for Quebec East, Gerard Duquet.
Mr. Duquet was extraordinary: always courteous, smiling, friendly, and diplomatic. As a Member he was always ready to serve.
On his many trips as an official representative of his country, he always conducted himself with honour and distinction, and those who had the pleasure of travelling with him will remember the eloquence and pride with which he spoke of his love for his native country, Canada.
He was elected in 1965, and although as a Member of Parliament, his great dedication often exceeded his physical strength, he never let this show.
During his long political career, his greatest joy was to be a faithful representative and intimate associate of the community he represented in Parliament.
He held a number of positions in the House, but those he preferred and in which he made a major contribution were the positions he held on the Standing Committee on Management and Member Services.
A fierce defender of the rights of his colleagues, he always represented the voice of experience, rational thinking and logic. Finally, he was a true parliamentarian, and his colleagues will remember him as a paragon among members, dedicated to his country and to his constituents. Mr. Speaker, he belonged to the elite of our parliamentary system.
I am sure all my colleagues will wish to join me in addressing our sincere condolences to his wife, other members of his family, and to his friends.


Hon. Roch La Salle (Minister of Public Works):: Mr. Speaker, I cannot but agree with the words spoken by the Hon. Member for Hull-Aylmer (Mr. Isabelle), who knew the former Member for Quebec East, Mr. Duquet, personally, and perhaps even better than I did.
When I arrived in the House of Commons in 1968, I had the pleasure of getting to know our colleague, and, Mr. Speaker, I wish to express my deepest regrets at his passing away. I also would like to say I believe Mr. Duquet was always very much respected on both sides of the House, for his speeches as well as for his actions. He was a politician who, through his achievements, demonstrated his lively interest in the province of Quebec and his country. I know that practically his whole life was dedicated to politics. I think I can say, without exaggeration, that he did so out of a desire to serve his fellow men.

January 27, 1986
Today, speaking on behalf of all my colleagues, the Prime Minister of Canada (Mr. Mulroney) and the entire Cabinet, I wish to offer his family the customary condolences, and I want them to know we shall remember with respect his contribution to the House of Commons and the manner in which he served a community which he represented so faithfully and so well.


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, I want to join with my two colleagues in paying tribute to Mr. Gerard Duquet for his service both to Canada as a whole and to his community in particular. Mr. Duquet, as I had come to know him, brought to the House of Commons a considerable breadth of experience, not only in matters parliamentary but in terms of the community which he served and the business world. He was very highly regarded by his associates in business throughout the time leading up to his election to the House of Commons. He brought to the many committees of the House that he sat on a perspective which is so necessary in coming to decisions.
He was also representative of a large number of the people within the province that he served so well, representing them not only here but within the many organizations that stem and flow from the Province of Quebec. I want to extend on behalf of my colleagues, and to join with those of other Members of Parliament, our deepest sympathies to his family and to his friends.


Mr. Speaker:: I am sure the House would want to show its respect and its sympathy in the usual way.
[Editor's Note: Whereupon the House stood in silence.]


Mr. Speaker:: We will now proceed to Statements Under Standing Order 22 with eight minutes extended.



STATEMENTS PURSUANT TO S.O. 22


Lloyd Axworthy: Mr. Speaker, I want to spend a few moments talking about an industry in western Canada that is in danger of dying, an industry which has importance for something like 50 communities, and which is now desperate for some assistance from the Government. I speak of the sugar-beet industry, which over the years has provided a very important source of income and employment in the Provinces of Alberta and Manitoba.
Unless a decision is made this week on a national sugar policy, that industry will not be in a position to plant a crop next year. That will mean the livelihood of many farmers and
producers, as well as of many workers in the sugar refining plant in Winnipeg, will cease to exist. That is not necessary since there have been widespread consultations and many promises.
There have been commitments for action on the part of the Government. What has been missing is an answer to the serious plight of that industry. The time is growing short, and unless some specific response is made within a matter of a few days we will no longer have a very important industry in a very important region of our country.
1 rise today to urge the members of the Cabinet to come to grips with the sugar-beet problem in Canada and to come forward with a policy so that industry can survive.



TAXATION


Mr. Mike Cassidy (Ottawa-Centre):: Mr. Speaker, since my colleagues conducting the New Democratic Party's 1986 tax review are already in Winnipeg today to start our national tour and consult with Canadians on the tax system, I would like to demonstrate the straightforwardness and clarity of our legislation with a reading from the Canadian Income Tax Act, 1985.
This is Section 110.1(3):
(3) Idem. For the purposes of this section, subject to subsection (2), interest included in computing a taxpayer's income for a taxation year shall be deemed to include
(a)	the amount by which the aggregate of ail amounts each of which is an annuity payment included by virtue of paragraph 56(1 )(d) in computing the taxpayer's income for the year exceeds the aggregate of all amounts each of which is the capital element of the payment as determined or established under paragraph 60(a);
(b)	the amount, if any, by which
(i)	the aggregate of amounts each of which is an amount included by virtue of subsection 148(1) or (1.1) in computing the taxpayer's income for the year in respect of the disposition of an interest in a life insurance policy
exceeds
(ii)	the portion thereof arising from a disposition described in subparagraph 148(9)(c)(ii) in respect of that policy; and
(c)	the aggregate of all amounts each of which is an amount included-


Mr. Speaker:: I am sorry to interrupt the Hon. Member but his time has expired.



ABORTION


Mr. Gordon Taylor (Bow River):: Mr. Speaker, Statistics Canada's figures show that from 1975 to 1983 there were
January 27, 1986

548,133 abortions in Canada. What a grizzly compendium! Half a million babies were murdered in the womb.
What did we do with these babies that were aborted? They had no burial; instead, their cut-up bodies were treated as medical waste and incinerated with hospital garbage. Doesn't that make you sick?
I have no evidence that this is going on in Canada, but in some countries foetuses are commercialized and sold to manufacturers. At the Swiss-French border in 1983, guards intercepted a truck loaded with frozen human foetuses destined for a cosmetic factory. U.S. hospital authorities revealed that they had collected $68,000 from commercial firms for organs of aborted and dead premature babies.
Canada does not keep statistics on the number of aborted babies born alive. Sometimes something goes wrong in the abortion process and a baby is born alive. In the U.S., some of these babies have lived while others were left to die. In fact charges have been laid against people who stood by and did nothing to save the life of a live aborted child.
We seem to have rights for everyone except the unborn. It is high time that we recognized, by legislation, the rights of the unborn; their right to live!



INSURANCE


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, we hear that the cost of liability insurance for our national ski team has increased by 420 per cent, so that the association will have to spend $150,000 more than it was expecting to pay this year.
We wonder whether the Conservative Government was serious when it announced last week it would help our Canadian skiers. The result is so disastrous that the Canadian Ski Association is not sure it is going to take out this insurance, owing to a lack of funds. Is the Conservative Government going to act responsibly and pay the difference of $150,000, and thus make it possible for our athletes to take part in international competitions? The Conservative Government is actually letting the insurance companies hold our athletes to ransom.
This morning, Mr. Speaker, we heard that-

Soaring insurance costs may force parachute worlds to move from B.C. in '87.
How can the Government allow this to happen?



VOLUNTARY ORGANIZATIONS


[Stage Direction]
CARIBBEAN ISLANDS	[DOT] <I4I5>
Mr. Bob Pennock (Etobicoke North):: Mr. Speaker, last October I was contacted by the Metropolitan Toronto Police Force which requested my assistance in securing transportation for surplus goods it had collected and was donating to communities in various Commonwealth Caribbean islands, particularly Jamaica and Grenada. This program, initiated by the Commonwealth Caribbean Committee operates without a budget and solely on the volunteer time donated by concerned individuals.
On behalf of the Commonwealth Caribbean Committee, I wish to extend my thanks to the Minister of National Defence (Mr. Nielsen) for agreeing to provide cargo space aboard Armed Forces Hercules for hospital equipment and educational material destined for the islands. In a letter to me, the Toronto Police Force said of this assistance:
This program is important to needy communities and children in these Commonwealth Caribbean islands. It also shows them that Canada is a nation that cares about others less fortunate than we are.
Not only does the Government care about the underdeveloped areas of the Caribbean, it is backing this up with action, action that will directly benefit those who are most in need. This is a Government with a heart.



INCOME TAX ACT


Dave Nickerson: Today's Income Tax Act can only be described as a compilation of incomprehensible mumbo-jumbo. Why has something which is relatively simple in concept grown to be such a monster? The answer lies in the Liberal-NDP approach to taxation which has prevailed over so many years. The socialists have looked upon income tax as primarily a means of redistributing income from the productive to the non-productive sectors of society. During their tenure in office, successive Liberal Governments, egged on by their friends in the New Democratic Party, added layer upon layer of obfuscation and incomprehensibility.
The time has come to make a real effort to simplify and render understandable our tax legislation. The basic idea behind taxation must be to raise, in as painless and equitable a way as possible, only those moneys required for necessary public purposes.
We must strip away the yellowed layers of socialist varnish to reveal a fair, honest, equitable, and understandable tax system.

January 27, 1986



S O. 22 HEALTH GLUE SNIFFING RE-EMERGENCE IN WINNIPEG

Cyril Keeper: Mr. Speaker, glue sniffing has re-emerged in Winnipeg as an urgent concern and it probably has national dimensions as well. It involves the abuse of common household dimensions as well. It involves the abuse of common household products such as nail polish remover and contact cement. The effect of glue sniffing is to cloud the brain. It encourages vandalism, the exchange of sexual favours, and it has even killed young people through accidental over exposure.
The Winnipeg Indian Family Centre burned down recently. The community sought the causes of glue sniffing and found it in unmet human needs, lack of recreational facilities, and in free access to the product.
We had a bylaw in Winnipeg which regulated the sale of these products, kept them behind the counters and limited the age of people allowed access to them. The bylaw worked and the incidents of glue sniffing decreased in numbers. However, the courts threw the bylaw out. It is now a federal responsibility. The federal Government must act. We need to know whether the federal Government cares enough about community concerns and children, or if it will only respond to the business desire for the products to remain unregulated. These products can kill. Something can be done-


Mr. Speaker:: Order. The Hon. Member knows the rules against displays. The Hon. Member for Swift Current-Maple Creek.



THE ECONOMY


Mr. Geoff Wilson (Swift Current-Maple Creek):: Mr. Speaker, the head of the Canadian Labour Congress recently stated: "Government should realize their concern for jobs for all Canadians must override their preoccupation with deficits". What an incredible statement! If deficits are the answer, then why do so many remain unemployed after years of deficit financing? If, according to the Liberals and the NDP, deficits create jobs, why is it that 1.5 million Canadians were out of work when we took office? The truth is that deficits do not create jobs, they cost jobs.
Deficits rob Canadians of financial, social, and human resources. Money used to pay interest on the outstanding debt are simply not available for other government purposes, or indeed, to reduce taxes.
September 4, 1984, marked a watershed. For the first time in a generation we have a Government which is willing to face up to the deficit. The goal is job creation all right, but job creation through responsible deficit reduction. During the first seven months of this fiscal year the deficit actually went down. We have created more jobs in 17 months than the Liberals did
in the previous five years. These encouraging figures are concrete proof that the policies set forth in the May Budget are paying off. This represents a clear break with a trend established by successive Liberal Governments which pushed an ever-increasing deficit burden onto the backs of Canadians and nearly destroyed our economy. Stay the course, Mike Wilson, you are on the right track!



INDIAN AFFAIRS


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, Indian control of Indian education is supposed to be a long-standing policy of the federal Government. The policy recognized that if Indian students were to have the same opportunities that are available to other Canadians, Indian communities would have to participate in making basic decisions about schools and curricula. Unfortunately the Conservative Government of New Brunswick has given notice that it will no longer recognize a 1967 Indian education agreement with the federal Government.
The province does not agree with the section which allows individual Indian bands to control their education funds directly. The Kingsclear Indian Band in New Brunswick has asked for its education funding directly from the federal Government so it can purchase education services as desired by the Band. Instead of co-operating with the Band, the Conservative provincial Government has chosen to end the agreement. As the federal Government now claims to support Indian self-government, it should support the New Brunswick chiefs on this issue. Talk about self-government is a meaningless fraud unless Indian people have control in areas, which, by departmental policy, they already should have control.



ROYAL CANADIAN MOUNTED POLICE


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, I rise to express the opinion that the Hon. Member for Hamilton East (Ms. Copps) and the Hon. Member for York South-Weston (Mr. Nunziata) should rise in this House and issue a formal apology to the two female peace officers whose privileges were abused by the actions of those two Members last week. They should also write a formal letter of explanation to the Commissioner of the RCMP so that the personnel files of the two peace officers contain a clear explanation showing that the Hon. Members acted on their own and without permission of the two peace officers concerned.
January 27, 1986

As Members of Parliament we have an awesome power to do good or bad. In this case the two Members put their political interests above the personal interests of the two female peace officers. Women in the workplace have enough problems without MPs adding to the load. I am sure our colleagues will do the honourable thing and issue an apology, as well as a letter of explanation to the Commissioner.


Some Hon. Members:: Hear, hear!



PRESENCE IN GALLERY OF AUSTRALIAN MINISTER FOR RESOURCES AND ENERGY

Mr. Speaker:: May I advise Members-


Ms. Copps:: The Solicitor General should stop interfering with the system of justice.


Mr. Speaker:: Order, please.


Some Hon. Members:: Shhh!


Mr. Speaker:: Order, please.
May I advise Hon. Members, of the presence in alphabetical order of the presence in our gallery today of the Minister for Resources and Energy of Australia, Senator Gareth Evans.


Some Hon. Members:: Hear, hear!



PRESENCE IN GALLERY OF CHINESE MINISTER OF PHYSICAL CULTURE AND SPORTS

Mr. Speaker:: As well may I advise of the presence of the Minister in charge of the State Physical Culture and Sports Commission of the People's Republic of China, the Hon. Li Menghua.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


John Napier Turner: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. Last week her Department cut off grants to the Vancouver Food Bank which will affect 10 full-time employees. Since food banks in several cities, together with other charitable organizations, are dealing directly with the sick and needy, why would her Department choose to cut off the food bank at this time?
Oral Questions


Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, the Hon. Member knows that the programs in which my Department is engaged are now directed toward the training of people for long-term employment. We are making very real contribution to the way in which people will be able to take advantage of the job development and job-creation programs, and in employment growth in our country. It is for that reason I was pleased to see that in British Columbia the number of new jobs created in the last month increased substantially.


EFFECT OF NEW PROGRAMS ON CHARITABLE ORGANIZATIONS
John Napier Turner: Mr. Speaker, that answer is not going to impress the thousands of people who have to line up at food banks to feed their families,
I tell you that.
The Minister has changed the rules. That threatens the future of thousands of charitable organizations dealing with the sick and needy. Her bureaucracy is now insisting that charitable organizations like the Vancouver Food Bank fire their existing employees and hire new ones so they can qualify under her program. Would she look into it because it is a mess?


Flora Isabel MacDonald: Mr. Speaker, I am very pleased with the way these new programs are developing. I can tell the Hon. Member that in British Columbia some 1,650 new job training and job-creation projects have been created this year. Some 7,200 are now involved in these projects which will give them new opportunities for the future. This involves the expenditure of some $56 million this year which has already been allocated. I feel that in doing this we have not only supported those projects directly involved in the training of people in co-operation with the private sector, but 70 per cent of them are operating in co-operation with community organizations which are dedicated to helping individuals.
[ Translation]


CHARITABLE ORGANIZATIONS-SUBSIDIES-GOVERNMENT POSITION
John Napier Turner: Mr. Speaker, in the Montreal area alone, 500 community organizations have let the Minister know they have been "cut" by her department. They have no more funds. I will put the question directly to the Minister once again. Why should these charitable organizations have to fire their experienced employees? Why should they have to hire new staff to be eligible for her Department's subsidies? Why the confusion?


Flora Isabel MacDonald: Mr. Speaker, as I explained to the Leader of the Opposition, 70 per cent of the projects already approved in the Province of Quebec are sponsored by community organiza-

January 27, 1986
Oral Questions
tions. The rules have not changed except for the requirement of a training component so that the people who are involved in these projects have a better opportunity than they had in the past of acquiring a permanent job when they finish.


PRICE OF GASOLINE IN ATLANTIC PROVINCES
Hon. William Rompkey (Grand Falls-White Bay-Labrador):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Today in the Atlantic provinces a litre of gasoline can be as high as 75 cents. Mr. Speaker, that is higher than the Canadian dollar and, unlike the Canadian dollar, gas prices are going up.
Does the Minister realize how crippling this is for a worker who puts gas in his pickup truck, or for a fisherman who puts gas in his outboard motor? Will she move now to roll back that increasing spiral so that workers in the Atlantic provinces can earn a decent living?


Hon. Pat Carney (Minister of Energy, Mines and Resources):: Mr. Speaker, as I have already informed the House in response to similar questions last week, Canadians buy more than gasoline when they fill up their tanks at the gas stations. They are paying for social services such as old age pensions-


Some Hon. Members:: Oh, oh!


Pat Carney: -and for post secondary education. They are paying for the whole range of social services that Canadians have indicated they want to support.


Sheila Maureen Copps: They are paying the multinational oil companies their profits.


Bill Rompkey: Mr. Speaker, that answer is as valueless as gas prices are expensive.


REQUEST FOR MINISTERIAL ACTION
Bill Rompkey: Mr. Speaker, I want to tell the Minister that a logger in central Newfoundland pays 55 cents a litre for gas for his chain saw.


Mr. Speaker:: Order, please. Just a supplementary question, please.


Bill Rompkey: At that price it is not the trees that are geting cut down, it is the loggers.
Will the Minister establish a fair price for gasoline? That policy and others of the Government are crippling the economy of the Atlantic area.


Pat Carney: Mr. Speaker, I suggest that the Hon. Member's
rhetoric should have been saved for the time when his Party was in power. His Party increased gasoline prices 80 per cent under the NEP.


Some Hon. Members:: Oh, oh!


PETRO-CANADA REQUEST FOR RETENTION IN PUBLIC SECTOR
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, 1 have a question for the Prime Minister. Last week we were urging the Minister of Energy, Mines and Resources to instruct Petro-Canada to live up to its public mandate by keeping prices down to a reasonable level. She refused. Last night on the television program Sunday Report we learned why, when the Minister announced her intention to continue with the privatization of Petro-Canada.
Last August the Prime Minister said: "It is Conservative policy to maintain Petro-Canada". Any privatization of Petro-Canada would have the effect of destroying its public mandate and making it a profit maximizer just like Shell or Imperial Oil. Therefore, will the Prime Minister undertake to the House to maintain Petro-Canada completely in the public sector?


Right Hon. Brian Mulroney (Prime Minister):: No, Mr. Speaker, we will not give that undertaking if my hon. friend is requesting an undertaking that, forever and a day, Petro-Canada will be 100 per cent state owned. It may very well be that the national interest could best be served by issuing a part of the shares in favour of ordinary Canadians. That may very well be in the national interest and, if it is, we will proceed along those lines. However, there is no doubt that this Party is supportive of the concept of a national energy company, but one that does work on behalf of all Canadians.


John Edward Broadbent: Mr. Speaker, ordinary Canadians now own Petro-Canada completely. They do not need a change from that.


MINISTER'S POSITION
John Edward Broadbent: Mr. Speaker, my supplementary question is for the Minister of Energy, Mines and Resources. Considering that Petro-Canada cannot serve a broad national mandate on the one hand and be a profit maximizer on the other-which is acknowledged by the Chairman of Petro-Canada in the current annual report of that Corporation-will she admit that she refused to instruct Petro-Canada to bring down prices last week because she wants to maximize its profits in order to fatten it up to be sold off to the private sector? Will she admit that?


Pat Carney: No, Mr. Speaker.
January 27, 1986


John Edward Broadbent: Obviously they are not going to bring down prices and are setting out to destroy Petro-Canada.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: The last Conservative Prime Minister who laughed about the fate of Petro-Canada lost his job. I warn the Prime Minister that the same thing will happen to him.


CORPORATION'S MANDATE
John Edward Broadbent: Mr. Speaker, my supplementary question is directed to the Minister of Energy, Mines and Resources. Considering that the Act was passed-


Mr. Crosbie:: You're wasting gas, Ed.


John Edward Broadbent: Considering that the Act to establish Petro-Canada that was passed by Parliament gives it a broad mandate to explore, refine, and have reasonable prices, will the Minister admit that the new mandate given to Petro-Canada's Chairman completely violates the Act by requesting Petro-Canada to maximize its profits and, therefore, ignore the consumer as well as other Canadian interests?


Pat Carney: Mr. Speaker, the mandate is given to Petro-Canada by the Minister responsible for Petro-Canada, which is myself. I represent the Government and hold a share. The mandate says in particular that the Corporation is now being given a new mandate by its shareholder to operate in a commercial private sector fashion with emphasis on profitability and the need to maximize the return on the Government of Canada's investment. This involves billions of dollars of our most valuable frontier resources.
I remind the Hon. Member that this was the first Government to collect a dividend from Petro-Canada. We collected $30 million from Petro-Canada in the last Budget. One cannot ask a company to operate as if it is a private sector company, collect dividends from it which are returned to the Government of Canada, and then ask it to indulge in artificial pricing.


PRICE OF GASOLINE IN NORTHERN ONTARIO
Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. The people of northern Ontario are outraged because the prices for gasoline remain at an all-time high at the same time that world oil prices are falling very dramatically. Will the Minister explain to the motorists of northern Ontario why they can save $10 in filling up their tanks simply by driving across the bridge from Sault Ste. Marie, Ontario, to The Soo, Michigan? Why are northern Ontario's neighbours in Minnesota paying the equivalent of 46 cents a litre when my
Oral Questions
constituents in Nakina, Ontario, are paying more than 63 cents a litre?


Pat Carney: Mr. Speaker, the reason is that taxes in Canada account for approximately a third of the cost of gasoline. Canadians are paying for medicare, old age pensions and other social services at the gas pump; Americans are not.


WORLD OIL PRICES
B. Keith Penner: Mr. Speaker, the Minister is not addressing the issue of falling world prices. When world oil prices rise there is almost immediately a price increase at the pumps. Now, when they are falling, there is a long delay before there is even a small decrease in the price of gasoline at the pumps. Will the Minister explain why?


Pat Carney: Mr. Speaker, I know that the Hon. Member would not willfully mislead the House, so I assume that he has forgotten that under the Conservative regime, when my colleague, the present House Leader, was the Minister of Energy, Mines and Resources, he put in place a mechanism to ensure that price increases could not be imposed for 60 days to allow those increases to move through the system. Similarly, I have advised the House that, as crude prices come down and those decreases to through the system-I remind the House that Canadian companies dropped the price of crude last week-we expect that Canadians will have some benefit at the pump.


PETRO-CANADA ONTARIO GOVERNMENT STUDY
Ian Deans: Mr. Speaker, my question is directed to the Prime Minister. He indicated that at some point the Government might be prepared to sell some part of Petro-Canada to the private sector. Does he not recognize that a report commissioned for the previous Conservative Government in Ontario stated that the Government must act so as to protect minority shareholder interests and cannot operate as an instrument of over-all government policy if it sells part of its shares publicly? Is that what he wants to see happen?


Pat Carney: Mr. Speaker, of course that is not what we want to see happen. That is why we are proceeding with such care to examine the issue of public participation in Petro-Canada.


GOVERNMENT POLICY
Ian Deans: Mr. Speaker, am I to understand from the Minister's answer that it is no longer Government policy to sell off part of Petro-Canada but that she is considering the possibility? Is it Government policy to sell off
10188

January 27, 1986
Oral Questions
part of Petro-Canada or is it Government policy not to sell it? Which is it?


Some Hon. Members:: Oh, oh!


Pat Carney: Mr. Speaker, before the Hon. Member gets completely carried away, let me read from the rest of Petro-Canada's mandate as dictated by me.


John Edward Broadbent: That is your mandate. That is not the Act.


Pat Carney: If the House cares to listen, it states: "However, the Government maintains the right as a shareholder to formally direct Petro-Canada to carry out certain activities in the national interest".
Some of these include Hibernia and Venture and the High Arctic. Our intention with Petro-Canada is to ensure that it will be in a position to develop these very vital resources for our energy supply in the future.


GULF REFINERY CLOSURE IN MONTREAL-EFFECT ON CONSUMERS EXPECTING PRICE REDUCTION
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, the people of Montreal are also continuing to pay a lot for gas, despite the fact that world prices have started to fall dramatically.
I want to direct my question to the Minister of Energy, Mines and Resources, and inform her that this morning regular gas was selling for 59 cents a litre at the Petrocan station at 5985 Cote-des-Neiges, Montreal.
Meanwhile, in Boston the same gas was selling for 41.7 cents a litre, and 43 cents a litre-


Mr. Speaker:: Order, please. These are becoming long preambles. May I have a question, please?
[ Translation]


Jacques Guilbault: I would like to ask the Minister how closing down the Gulf refinery in Montreal can help the Montreal consumer who is waiting in vain for a drop in gas prices to reflect the drop in the price of crude oil?


Pat Carney: Mr. Speaker, I believe the Hon. Member is confusing two issues. I stated in the House that the supply and demand situation is quite in balance in Quebec. I have also said in the House that, as the price decreases work their way through the system, consumers in Montreal and other parts of Canada can excpect some benefit.
May I point out that one of the reasons why Montrealers pay such high prices as he quotes is that the provincial Government in Quebec applies a very high rate of tax. It is about 22 per cent of the cost of a litre of gasoline. I suggest that he is addressing his question to the wrong Minister.


REDUCTION OF GASOLINE PRICES-GOVERNMENT POSITION
Jacques Guilbault: Mr. Speaker, I simply want to ask the Minister how many thousands of signatures the national committee for the reduction of gas prices will have to collect before the Government decides to act in the interests of consumers?
In other words, what will it take for the Government to break down and to do something about the price of gas?


Pat Carney: Mr. Speaker, the Government has already acted to the benefit of consumers by putting in place a market-sensitive system where gas price decreases can be passed along to the consumer, not like his Party which put in place a system whereby gas prices increased 80 per cent under that Government.


TOURISM
Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, my question is directed to the Minister of Tourism. Last Wednesday he told the House, as reported at page 10038 of Hansard:
-price has not had a significant impact on Americans' intentions to holiday in Canada.
On that day and since, he and I received several telegrams from different tourism industry associations, including the Tourism Association of Canada and the Northwest Ontario Travel Association, saying that high gas prices are a problem. Will the Minister take some action to lower those prices, or will he continue to tell the industry that he knows their business, they don't, and "father knows best"?


Hon. Jack Murta (Minister of State (Tourism)):: Mr. Speaker, studies conducted by both Tourism Canada and the tourist industry in the United States have indicated without a shadow of a doubt that the price of gasoline in Canada does not have a significant impact on an American's intention to travel in this country.
What we want to do and what we are doing in Tourism Canada is going out and raising the awareness of Canada in the U.S. market so that more people will come up into this country. The price of gasoline is not a factor.
January 27, 1986


REPORTED STATEMENTS IN 1984
John Edmund Parry: Mr. Speaker, I thank the Minister for an answer which, though mistaken, was at least understandable. Since the Prime Minister and several of his colleagues said in 1984 that the price of gasoline was a problem for the tourist industry, would the Minister tell us now that the Prime Minister was wrong or that conditions have changed since 1984 and, if so, would he tell us how?


Jack Burnett Murta: No, I
won't, Mr. Speaker. The question is quite irrelevant.


Some Hon. Members:: Oh, oh!


Jean-Robert Gauthier: Arrogance is catching over there.


PETRO-CANADA DECEMBER PRICE INCREASE
Russell Gregoire MacLellan: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. Last Monday the Minister stated that she did not know of any price increases by Petro-Canada in recent months, yet there have been two such price increases in gasoline in the last three months. Why, for instance, on December 9 was the price of gasoline increased by Petro-Canada when the price of crude had been decreasing worldwide in the months before that price increase?


Pat Carney: Mr. Speaker, I am not aware-and I will check Hansard-of making the comments which have been attributed to me. I do not comment on specific companies' marketing practices in specific areas. Governments do not set the price of gasoline. They reflect competition in the market-place, transportation and world prices. I may point out to the Hon. Member, because he is the critic in this field, that the component of a litre of gasoline which is directly attributable to the cost of crude is around 40 per cent to 44 per cent. Therefore it is not possible to have the kind of dramatic declines in gasoline prices as he is suggesting has taken place.


PRICE CHARGED BY OTTAWA SERVICE STATION
Russell Gregoire MacLellan: Mr. Speaker, if market conditions prevail, why, in July when crude went down from $28 per barrel U.S. to $26.93 per barrel, did we not feel any decrease in this country? We only received increases in gasoline prices. Why is the price of gasoline charged by Petro-Canada on the Merival strip in Ottawa West 1.3 cents per litre higher, according to a very irate consumer, than the price of gasoline charged by any of its competitors? Why is the Minister-


Mr. Speaker:: Order, please. That is two questions.
Oral Questions


Pat Carney: Mr. Speaker, I am truly unaware of a question directed to the Minister. If he wants to know about the cost of gasoline at an individual gas station, I suggest he should ask either the dealer or Petro-Canada directly.


PUBLIC SERVICE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. On Friday he made public the Burns Report on executive compensation in the Public Service. Why, when Mr. Burns recommended a maximum salary range for Bill Hopper, Chairman of Petro-Canada, of $340,000, did the Prime Minister have the gall to increase his maximum salary range to some $475,000, which is more in one day than old age pensioners on the GIS and OAS receive in two months? Why did he have the gall to hand out such a handsome increase to Mr. Hopper?


Hon. Ray Hnatyshyn (President of the Privy Council):: Mr. Speaker, in response to the Hon. Member I should start by saying that the proposition which he put forward is purely and utterly false. There is no basis in fact in what he said in respect of that particular increase. The situation is that there was an advisory group on executive compensation in the Public Service created by Mr. Trudeau. It made recommendations with respect to senior positions in the Public Service and in Crown corporations. The average increase is about 5 per cent in respect of compensation, less than that recommended by the particular group. I simply say to the Hon. Member that the particular group in question recommended higher compensation, but the decision of the Government was to give it on a lower basis, about 5 per cent on the average.


SALARY OF VIA RAIL CHAIRMAN
Lorne Edmund Nystrom: Mr. Speaker, I should like to ask the Prime Minister to answer a question about his old crony, Lawrence Hanigan, former PC candidate and now Chairman of VIA Rail. Why did he agree to increase the maximum pay for Mr. Hanigan by some $36,000 per year, which is a 40 per cent increase, while at the same time chisel the children of the country with a 31-cent per month increase in family allowances?


Ramon John Hnatyshyn: Mr. Speaker, again the proposition put forward by the Hon. Member is simply false. I wish, when he poses questions in the House, he would get his facts straight. That has absolutely nothing to do with the facts. The reality is that the 1984 range refers to his predecessor, Mr. Renouf, whose job was parttime. There was no increase in respect of Mr. Hanigan at all.

January 27, 1986
Oral Questions


ENVIRONMENTAL AFFAIRS
Mr. Elliott Hardey (Kent):: Mr. Speaker, my question is directed to the Minister of the Environment. It deals with continuing shore-line flooding in my riding which is part of the Great Lakes basin, particularly during the storm of December 2. Recognizing that this is a problem which calls for a longterm solution, could the Minister indicate to the House what action he is taking toward identifying such long-term measures?


Hon. Tom McMillan (Minister of the Environment):: Mr. Speaker, the Government of Canada shares the Hon. Member's deep concern on this matter. He will appreciate that the situation in Lake Erie is a little unlike that in Lake Ontario and Lake Superior in the sense that the lake itself cannot be regulated as to the water level. However, the Secretary of State for External Affairs and I are exploring together ways in which our two Departments can act urgently on the matter directly, and indirectly through the International Joint Commission. In the meantime, because the matter is very largely within provincial jurisdiction, I have met with Vince Kerrio, my counterpart, the Minister responsible for natural resources, and we have earmarked $8.4 million on an urgent basis for damage reduction. We are exploring how we can co-operate in other ways as well.


IMMIGRATION
Sergio Marchi: Mr. Speaker, my question is directed to the Minister of State for Immigration. Last year the Government dramatically increased the fees for individuals seeking Canadian citizenship. Now the Government is imposing fees for visas sought by immigrants, students, workers and visitors wanting to come to Canada. Given that this is another regressive move by a Minister who should be an advocate for his constituency rather than act as the Minister of Finance, is he prepared to abandon this immigration tax fully? If he is after revenues, why does he not tax the phoney immigration consultants who are raking in thousands of dollars on the backs of innocent individuals?


Hon. Walter McLean (Minister of State (Immigration)):: Mr. Speaker, the hon. Member should inform himself of the facts. The Government is not in fact imposing any processing fees on refugees, short-term visitors or students at this time. What we have here is a partial cost recovery. This processing fee is in line with what other countries are doing. There is no evidence that it will in any way impede the immigration flow into Canada. Those who are coming are being asked to pay only a third of the cost. This is a processing cost, not a cost for a visa.


GOVERNMENT POLICY
Sergio Marchi: Mr. Speaker, it is a disgrace that Canadians are being asked to pay $125 to try to bring in their mothers and fathers to this country; it is simply a disgrace. Does the Minister honestly feel that this fee is a fair and morally acceptable one and that it does not run counter to the plans of increasing immigration and enhancing his colleague's plan of strengthening the tourist industry?


Walter Franklin McLean: Mr. Speaker, the Hon. Member cannot have it both ways. On the one hand he stands and tells the Government that we must maintain the human face of the Government, that we must maintain the services to those least able to protect themselves. In this particular case we have underlined our humanitarian concerns for refugees. We are examining the student aspects, and we are merely offsetting the cost here by assessing those who can afford to pay a portion of it. If Canadian citizenship is worth anything those who wish to immigrate, they will be ready to pay this portion of the cost, and that is all that is being asked.


ENVIRONMENTAL AFFAIRS
Mr. Howard McCurdy (Windsor-Walkerville):: My question is directed to the Secretary of State for External Affairs. In response to the United States State Department request for Canadian help in controlling Great Lakes water levels and serious flooding, Ontario Hydro was to reduce flows into Lake Superior from the Ogoki reservoir. Will the Secretary of State indicate Canada's response to allegations from the American portion of the International Joint Commission and the State Department that Ontario Hydro, in effect, reneged on that agreement?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, I believe the Hon. Member is referring to a report in a Detroit newspaper. That newspaper report is false.


LAKE ERIE-INTERNATIONAL JOINT COMMISSION STUDY
Howard Douglas McCurdy: Mr. Speaker, I think the matter does bear a more careful look than has been indicated by the Secretary of State for External Affairs. Nevertheless, I have a supplementary question which is directed to the Secretary of State with respect to Canada's role in controlling levels in the Great Lakes, and, therefore, serious flooding. Will the Secretary of State agree with the request by the International Joint Commission and the U.S. State Department for Canadian participation in a joint reference to the International Joint Commission to reopen the IJC study on full regulation of Lake Erie levels?
January 27, 1986


Charles Joseph Clark: Mr. Speaker, a few moments ago that precise question was raised by the Progressive Conservative Member for Kent and it was replied to by the Minister of the Enrironment.


REMOVAL OF TARIFF ON COMPUTER PARTS
Mr. Alan Redway (York East):: My question is for the Minister of State for Finance. Last week the Government removed the tariff on the importation of computer parts. Will the Minister advise the House whether there were similar trade concessions given Canada by other nations and what the impact of all of this will be on our own computer industry, particularly the 3,000 workers in my constituency who work for IBM?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, I would like to thank the Hon. Member for his question, because the tariff elimination on both semiconductors and computer parts I think is going to enhance our trading opportunities enormously in the future. The Canadian industry is very pleased with this move. Both Japan and the United States have made similar moves. We are looking for expanded trading opportunities, which can only benefit the industry and the workers in Canada.
* *
*


INSURANCE
Alfonso Gagliano: Mr. Speaker, my question is for the Minister of State for Finance. Since court settlements are very high in the United States, and since 75 per cent of insurance companies operating in Canada are foreign-owned, why is the Minister allowing the insurance companies to cover their loss in the United States at the expense of the Canadian consumer by increasing policy insurance premiums?
[ Translation]
Oral Questions REQUEST FOR INQUIRY


Alfonso Gagliano: Mr. Speaker, I have a supplementary. After ten Liberal Members, now the Superintendent of Insurance Canada also wants to investigate the insurance industry. Does the Minister intend to open the books on the insurance industry so that Canadians can find out why we have this crisis situation?


Barbara Jean McDougall: Mr. Speaker, I think the concern we have expressed on behalf of the consumer and the work we have done with a number of people having problems, and with the industry, have started to bring some benefits on the consumer side where there have been real problems. The examination of the industry which we have been doing on an ongoing basis and which was part of our financial institutions discussion over the summer months and into the fall, I think has clarified a lot of the things we need to know, and we are continuing to improve in this sector.
* *
*


WELFARE
Mr. David Orlikow (Winnipeg North):: I would like to direct a question to the Minister of National Health and Welfare. Has his Department done any studies into the increasing use of food banks established by voluntary agencies which are providing meals or food baskets, helping to meet the needs of the poorest people in Canada, and whether this is due to the fact that the welfare plan established by the provinces, of which the federal Government pays 50 per cent of the cost? Why are the provinces not meeting the needs of the people?


Hon. Jake Epp (Minister of National Health and Welfare):: We are well aware of the food banks and their work. That question has been asked earlier in this House. Regarding the level of welfare payments, the Member is correct in identifying that the provinces have established the levels of payment. In my own province, if he takes a look at its levels, they are not the highest in Canada. I think what he also clearly identified is that the federal Government keeps paying on a cost-sharing basis 50 per cent of the costs incurred which come under provincial jurisdiction.


Barbara Jean McDougall: Mr. Speaker, there is a foreign component, but there are also many domestic companies involved in this industry. As I have said in this House before, we are working on the issue of availability of insurance where we see problems. We are narrowing down the focus of the discussion to where we see the real longer term problems, and we will be dealing with solvency and capital issues of all companies operating in Canada in the near future.


WELFARE PAYMENTS IN NEW BRUNSWICK
David Orlikow: When we see that in a province like New Brunswick a single person on welfare gets $108 a month when the poverty level is over $9,000 a year, surely the Government of Canada should be discussing with the provinces the inadequate assistance given, rather than simply saying we will pay 50 per cent whether it meets the needs of the people or not. Would the Minister discuss this question with the provincial Ministers?

January 27, 1986
Oral Questions


Arthur Jacob (Jake) Epp: I will discuss it. In fact at the last meeting of Ministers Social Welfare the question was discussed. At that time it was agreed between the provinces and the federal Government that we would be twinning the cost of social assistance where people wanted to take training or were able to take some part-time work and they were afraid, for instance, to lose dental benefits or pharmacare benefits for their children, especially single women. It was twinned, and a number of people have taken advantage of those kinds of opportunities. I think we are getting people from welfare into greater independence. This is a constant issue before us.


LOTTERIES
Mr. Joe Reid (St. Catharines):: Mr. Speaker, my question is directed to the Minister of Justice, and arises out of the recent Criminal Code amendments transferring the sports pool lottery games to the provinces. Coming from a vulnerable community on the frontier, may I ask the Minister can those amendments be interpreted as paving the way for provinces to get into slot machine and Las Vegas type gambling operations as some of the provinces now interpret that legislation?


John Carnell Crosbie: Mr. Speaker, the legislation in question was passed with the co-operation of all Members of this House, I am glad to be able to report, and with the support of all the provinces. I think that the legislation that was passed does not extend the law very extensively in this direction. It may help to clarify it. The situation is, of course, that even before these amendments were passed the provinces could, if they decided to do so, permit Governments or licensed charitable organizations to conduct casinos. Slot machines have been operated by Governments in Manitoba and Alberta without complaint.
To sum up, Mr. Speaker, the matter is now in the hands of the provinces. They can allow gambling such as permitted by the Bill if they wish, or forbid it. It is in their hands. It was part of an arrangement entered into with them and all Members of this House supported the legislation. I do not think there is any chance of Las Vegas style private gambling in this country.


AGRICULTURE
Lloyd Axworthy: Mr. Speaker, I have a question for the Minister of Agriculture. As the Minister well knows,the sugar-beet industry of western Canada is in danger of dying unless immediate action is taken. This will influence thousands of jobs and the livelihood of
many hundreds of communities in the west. Can he assure the House this afternoon that the Government will bring down a national sugar policy this week so the farmers can properly go about preparing for the planting of next year's crop?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I certainly appreciate the interest of the former Minister in this very important subject. However, I am sure the former Minister will recognize that this Government need not take a back seat to any Government in the measures it has taken on behalf of the agricultural industry.


Some Hon. Members:: Hear, hear!


John Wise: He will know that we have passed more agriculture legislation in eight months than the previous Government did in eight years.
We have also taken over 107 initiatives which transferred well over $2 billion from the Consolidated Revenue Fund to the agricultural industry. That indeed is a record.


REQUEST FOR EARLY ANNOUNCEMENT
Lloyd Axworthy: Mr. Speaker, that brief and enlightening history was fascinating but it is of absolutely no help to the sugar-beet growers of western Canada. The Minister knows how crucial it is that those thousands of producers have an answer immediately so that they can prepare for next year's crop. Will a national sugar policy be announced this week?


John Wise: Mr. Speaker, my colleague, the Hon. Minister of State for the Canadian Wheat Board, has provided the leadership in this particular issue. As everyone will know, he has consulted with each and every sector of the industry. However, to this point in time the Government has not yet made a decision.


ATOMIC ENERGY OF CANADA LIMITED
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, 1 have a question for the Minister of Energy, Mines and Resources. The Minister will be aware of a concern expressed by the Manitoba Government and others about the list of potential American radioactive dump sites released recently, and she will also be aware of an impending agreement between AECL and the U.S. Department of Energy for further cooperation at the Lac du Bonnet underground research laboratory. Given this concern, will the Minister, who is responsible for AECL, instruct AECL not to enter into any agreement with the U.S. Department of Energy with respect to research on radioactive waste disposal until such time as those sites which could potentially affect Canada are removed from the American list?
January 27, 1986


Pat Carney: Mr. Speaker, the Hon. Member should be aware that I have already conveyed to the Premier of Manitoba my assurances that the AECL research site will not become a permanent site.


UNITED STATES DUMP SITE
William Alexander (Bill) Blaikie: Mr. Speaker, that is not the question I asked. It is a question I have asked before but it is not the one I just asked. I asked the Minister if she will instruct AECL not to enter into any agreement with the U.S. Department of Energy with respect to the URL and Lac du Bonnet until such time as the American sites which could potentially affect Canada are removed from the list of sites. If not, we will be co-operating in polluting our own backyard.


Charles Joseph Clark: Mr. Speaker, the House will know that largely through the personal initiative of Members of the House such as the Hon. Member for Shefford, the Government of Canada was successful in persuading the United States to remove the Vermont site from the list. There has now been a new list brought forward containing a few number of sites that might raise problems for Canada. I have already been approached by the Hon. Member for Brandon-Souris and Conservative Members from Saskatchewan, and I am sure their pressures will be brought to bear as effectively upon the Government of the United States as were the pressures brought by the Conservative Member for Shefford.


CANADA-UNITED STATES NEGOTIATIONS-ROLE OF PROVINCES
Sheila Maureen Copps: Mr. Speaker, my question is directed to the Prime Minister. Can the Prime Minister clear up for the House today which version of events is correct vis-a-vis the provinces' role in free trade negotiations: his version as reported in the press today or his version from Halifax; full participataion or third-party participation?


Martin Brian Mulroney: Mr. Speaker, there is no inconsistency. Ambassador Reisman was in fact to have met tomorrow but will be meeting on February 4 with provincial representatives pursuant to the document agreed upon in Halifax to define further the manner in which this kind of co-operation can be brought about.


PRIME MINISTER'S POSITION
Sheila Maureen Copps: Mr. Speaker, I am surprised that the negotiator has been elevated to ambassador. I realized that his salary might have been elevated but I was not sure that he had become an ambassador.
Oral Questions
Obviously the people of Canada want to know whether or not the provinces will have a direct role at the negotiating table as was promised by the Prime Minister at the Halifax discussion. Does he stand by the statement he made in Halifax or has he once again misled the people of Canada as to his intentions?


Martin Brian Mulroney: Mr. Speaker, for the benefit of the Hon. Member, there has been no eleveation of Simon Reisman recently. He was appointed ambassador some months ago on the same day we appointed him to his present job. Like many other things, that has just dawned on the Hon. Member.
In regard to the methodology, there is nothing inconsistent at all with what has taken place. Ambassador Reisman is working very closely and well with his provincial colleagues to develop a plan which will ensure the greatest degree of participation possible for the provinces in the process. That has been our objective as opposed to other views taken by previous Governments that would have completely excluded the provinces from the elaboration and implementation of this kind of process. We are in favour of full participation.


AGRICULTURE
Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, my question is directed to the Minister of Agriculture. Is it still the intention of the Minister to introduce bankruptcy legislation with teeth and power to renegotiate interest rates and reduce debt, as he described it, as he promised a month before Christmas?


John Wise: Mr. Speaker, we continue to study that approach and we are looking at a number of options at the moment.


ENVIRONMENTAL AFFAIRS
Geoff Wilson: Mr. Speaker, my question is for the Minister of the Environment and concerns the future of the Prairie Wildlife Interpretation Centre near Webb, Saskatchewan. The 1986 summer season is fast approaching and I would ask the Minister if he could comment on the future of the centre, both for this coming summer and for the long term.


Thomas Michael McMillan: Mr. Speaker, briefly, we want to keep the Centre open. We want to arrive at an arrangement that would enable everyone concerned to know of it well in advance of the arrangement. For that purpose, I wrote to the Minister responsible for parks and

January 27, 1986
Point of Order[DOT]-Mr. Gray (Windsor West) renewable resources in Saskatchewan on January 9, proposing that there be a cost-shared arrangement split 50-50 between the federal Government and the province. I certainly have not received a response to date. If that proposal is not possible, then I would prefer in the short term a contractual arrangement with the private sector. The main thing is that we are going to keep that Centre open and we are going to make an arrangement at an early date.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by the Hon. Member for Westmorland-Kent (Mr. Robichaud) on Friday, January 24, 1986, meet the requirements of the Standing Orders as to form.



POINTS OF ORDER


Mr. Speaker:: I am in a position to advise the House as to my views on a point of order respecting the sub judice convention.
On Thursday, January 23, 1986, the House Leader for the Official Opposition (Mr. Gray) raised a point of order with respect to remarks made by the Solicitor General (Mr. Beatty) in response to a question from the Hon. Member for Capilano (Mrs. Collins). The Opposition House Leader felt that the Solicitor General had breached the sub judice convention of the House in his response. After having had the opportunity to examine the matter in detail, I am now prepared to rule on this point.
In this specific case, the Hon. Member for York South-Wes-ton (Mr. Nunziata) and the Hon. Member for Hamilton East (Ms. Copps) wrote on January 22, 1986, to the Chief Commissioner of the Canadian Human Rights Commission requesting that an investigation be undertaken into certain charges of sexism within the RCMP. As the commission may or may not proceed with such an inquiry, it certainly seems to me that it would be premature for me to rule that such a matter should be considered sub judice at this time.
When there are matters which are sub judice, it is clear that the Chair does have discretion, and I might take this opportunity to remind Hon. Members of the guidelines set down by the Special Committee on the Rights and Immunities of Members in its first report tabled April 29, 1977. The committee recommended that the Speaker
-should only exercise this discretion in exceptional cases where it is clear to him that to do otherwise could be harmful to specific individuals.
Further, the committee states:
-a Member who calls for the suppression of a matter on grounds of sub judice should be obliged to demonstrate to the satisfaction of the Chair that he has reasonable grounds for fearing that prejudice might result.
In terms of the specific application made by the Hon. Member for Windsor West, I have not been convinced of such possible prejudice.
I may say to Hon. Members that the freedom of speech accorded to Members of Parliament is a fundamental right without which they would be hampered in the performance of their duties. It is therefore my feeling that the Speaker should interfere with that freedom of speech only in exceptional cases where it is clear that to do otherwise could be harmful to specific individuals.



CORRECTION OF RECORD REGARDING REFERENCE TO MEMBER

Charles Joseph Clark: Mr. Speaker, I rise on a point of order simply to correct the record. In the House a few moments ago, I referred to the Hon. Member for Shefford (Mr. Lapierre) when naturally I intended to refer to the Hon. Member for Sherbrooke (Mr. Charest), the Hon. Member for Brome-Missisquoi (Mrs. Bertrand) and the Hon. Member for Megantic-Compton-Stan-stead (Mr. Gerin).


Hon. Herb Gray (Windsor West):: Mr. Speaker, I would like to speak to this point of order. The record should be allowed to remain as it is because the Hon. Member for Shefford (Mr. Lapierre) was in the forefront of the fight which caused the Americans to withdraw the dump site. Other Hon. Members may have played a role, but the lead role was clearly carried out by the Hon. Member for Shefford, and the record should continue to make that clear.


Mr. Speaker:: The Hon. Member will know that the record will show what has been said by all those involved.



ROUTINE PROCEEDINGS


Blaine Allen Thacker: Mr. Speaker, it is an honour to submit a petition today signed by over 18,000 residents of southern Alberta. It concerns the continued existence of the sugar beet industry in Canada. The concern is widespread in view of the fact that while there are only some 600 producers, this petition bears the names of over 18,000 Albertans. Cabinet has before it a proposal with respect to a national sweetner policy-
January 27, 1986


Mr. Speaker:: Order, please. I do not want to interrupt Hon. Members when they are presenting petitions but the Hon. Member is outlining the subject and not simply presenting a petition. 1 think he knows he should simply make a summary and read the prayer, perhaps.


Blaine Allen Thacker: It is critical that Cabinet make a decision this week and I pray that it will do so.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I have a petition from my constituency of Essex-Windsor asking for action on the Badgley Report on sexual abuse of children. In particular, this petition urges the Government to take action on that part of the report which will permit children to give evidence in proceedings which deal with sexual abuses affecting them.
It has been undertaken by the Block Parents Groups throughout Essex-Windsor and represents an important initiative.


Steven W. Langdon: I have a second petition which deals with the question of family allowance and protests once more the cut-back in family allowances which has been implemented by this Government. It comes from my constituency, particularly the Town of Essex.


Howard Douglas McCurdy: Mr. Speaker, I have a petition which has also been circulated by the Block Parents Association. It has collected some 700 signatures. It again refers to the failure to act on the Badgley Commission Report and it specifically expresses concern about the need for changes in the Criminal Code and the Canada Evidence Act to make it possible for children to testify without the requirement for technical corroboration. I would like to emphasize the fact that this is the first of many petitions since this is the beginning of a cross-country campaign to get a response to this issue.


Mr. Speaker:: Order, please. Introduction of Bills.


Mr. Belsher:: I have a point of order, Mr. Speaker. Are we finished with petitions?


Mr. Speaker:: I am sorry, the Hon. Member did not rise. Is he now rising on a petition?


Ross Belsher: I was up three times, Mr. Speaker.


Mr. Speaker:: I am perfectly happy if the House agrees to go back to petitions. However, I did look and the Hon. Member did not rise.


Some Hon. Members:: Agreed.
Order Paper Questions OPPOSITION TO DIVORCE LEGISLATION


Ross Belsher: Mr. Speaker, I have the honour to present to the House a petition from the Association for Reformed Political Action located in Fraser Valley East. This association believes that marriage is an institution given to mankind by God and that the marriage vows carry the obligation of life-long commitment given under oath before God and witnesses. They are concerned about the federal Government's divorce legislation and ask Parliament to retract any legislation which would permit no fault divorce, no court divorce, or any other means of making divorce quick and easy.


Mr. Speaker:: First reading of Senate Public Bills.


Mr. Cochrane:: Mr. Speaker-


Mr. Speaker:: May I remind Hon. Members that if they do not rise, I cannot recognize them.


Dennis H. Cochrane: If you don't see me, you don't know 1 have risen.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, question No. 203 will be answered today.


Mr. Greenaway: 1.	What was the total amount paid to/or billed by the firm Woods Gordon for the study of the administration of the Income Tax Act by Revenue Canada?
2.	Did Woods Gordon subcontract any of the work and, if so (a) to whom (6) what was the value of each subcontract (c) what was the nature of the work done by the subcontractors?
3.	Will there be further costs associated with this study which Revenue Canada will have to bear and, if so, at what cost?
4.	Will the study be made public and, if so, on what date?


Hon. Elmer M. MacKay (Minister of National Revenue):: 1.
Total amount paid: S2,206,708.
2.	(a) Dimension Consultants. (b) $205,000. (c) Survey of staff attitudes and concerns.
3.	No.
4.	Woods Gordon's summary report was tabled in the House of Commons on June 25, 1985.


Philip Derek Lewis: Mr. Speaker, I ask that the remaining questions be allowed to stand.

January 27, 1986


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


Some Hon. Members:: Agreed.


Mr. Speaker:: I am in receipt of a notice of application under S.O. 31 from the Hon. Member for Trinity (Miss Nicholson).


Miss Aideen Nicholson (Trinity):: Mr. Speaker, I would like to propose a motion pursuant to Standing Order 31 for the adjournment of the House to discuss an important and specific matter requiring urgent consideration, that is, the collapse of the Canadian dollar to an all-time low against American currency.


Mr. Speaker:: The Hon. Member for Trinity (Miss Nicholson) properly gave me notice of her intention to request an emergency debate on this matter under Standing Order 31. I certainly agree with her and with all Hon. Members that the pressure on the Canadian dollar is undoubtedly a matter of grave concern. However, I think all Hon. Members will also know that it is a problem of a continuing nature rather than that of a sudden emergency. My predecessors have consistently ruled in such cases that Standing Order 31 does not contemplate the raising of ongoing problems on an emergency basis except in very special circumstances. For example, on June 2, 1982, Speaker Sauve ruled in relation to an exactly similar application that the falling dollar was a problem of a continuing nature and not in the nature of a genuine emergency calling for immediate and urgent consideration. On November 9, 1976, by way of a similar example, Speaker Jerome made a similar ruling in respect of a request for an emergency debate on the rising level of unemployment.
I would also point out that although as yet no allotted days have been designated during the current period, it does seem to me the opportunity to debate this matter could well occur within what is a reasonable space of time. Therefore, in the present circumstances, I am obliged to rule that the application does not meet the requirements contemplated by the Standing Order.



GOVERNMENT ORDERS


Barbara Jean McDougall: that Bill C-86, an Act to amend the Canada Deposit Insurance Corporation Act, be read the second time and referred to a legislative committee.
She said: Mr. Speaker, this Bill, as the House knows, provides for important amendments to the law under which the Canada Deposit Insurance Corporation operates. The primary goal of this corporation and of this Bill is to protect small depositors in our financial institutions by strengthening the financial position of the deposit insurance system. I am confident that this goal has the support of all Hon. Members and I would hope that the House will give prompt second reading to the Bill and refer it to committee for more detailed consideration.
It is a straightforward Bill which contains two main provisions. The first provision would authorize an increase in the premiums paid by member institutions of the Canada Deposit Insurance Corporation. This would represent the start of an ongoing process initiated by our Government to reduce the size of the CDIC's deficit. The second major provision would permit the appointment of additional members to the board of directors of the CDIC. New members would then come from the private sector and would provide a new kind of expertise for the corporation's decision-making process.
I will elaborate a little later on these two provisions but first I would like to outline the context in which this Bill is being presented. Early in our mandate we recognized the need to update legislation affecting financial institutions and virtually every aspect of this important economic sector. This legislation which we are discussing today is only one aspect of a broad ongoing effort to bring about reform of the supervisory and regulatory framework for financial institutions in Canada.
The discussion paper on the regulation of financial institutions, which I issued last April, placed the issues and the need for reform squarely before the public and this Parliament. The specific proposals in the paper have attracted widespread discussion, debate, and some additional proposals. I do want to point out to Hon. Members that this process has been helpful and effective in our ongoing policy review and I want to thank Members for participating fully in this debate. In particular, the Standing Committee on Finance, Trade and Economic Affairs has presented its report with a very large number of very thoughtful recommendations. The committee addressed the issues which the Government outlined in the discussion paper last April, and its report is a most important contribution towards the goal of strengthening and supervision of our financial institutions.
January 27, 1986

In the ongoing process of policy development that report will certainly be a key reference point. In the meantime, however, the Government feels that early action is required in certain areas specifically. We can and must make a start now on rebuilding the resources of the Canada Deposit Insurance Corporation. That step was recommended in the committee report. In addition, certain steps can and should be taken now to reinforce the regulatory powers of both the Inspector General of Banks and the Superintendent of Insurance. Those measures were proposed separately in a draft Bill. Interested parties have submitted their comments and we shall take action on those measures soon.
Let me say quite clearly that these Bills are really interim measures. They must be considered on their merits, but further and more fundamental measures must be taken to deal adequately with the broad issues facing us in the field of financial institutions. Those effective and responsible measures will be developed in the ongoing process of discussion and consultation begun last spring.
The problems affecting the deposit insurance system which are addressed in this Bill are not a recent development, as Hon. Members know. The deposit insurance fund moved into a deficit position following the failure of several member institutions in 1983, just about three years ago. The deficiency in the fund at the end of the 1983 calendar year was $332 million. This deficit was based on estimated losses totalling $650 million arising from the failure of several member institutions in 1983. In its 1984 annual report the Corporation revised its estimate of expected losses to incorporate a change in the accounting treatment of member institutions which are in the process of being wound up through agency agreements, and to reflect the failure of member institutions in 1984 and early 1985. As a result of these provisions the 1984 annual report indicated that the deficit in the fund totalled $871 million. It is the corporation's belief that this provision was more realistic and reflected more accurately the financial risk attached to the likelihood of recovering the funds advanced by the corporation to institutions experiencing financial troubles. More recent failures this year have put added pressures on the deposit insurance system.
The basic function of the CDIC has been to provide insurance for small depositors through an insurance fund financed by premiums paid by member institutions. It has always been intended that this would be a self-financing operation and, under its statutory powers, the CDIC has been able to finance the deficit of recent years through loans from the Consolidated Revenue Fund. That is not a long-term solution and it has been evident for some time that the deposit insurance system should be returned to a sound, self-sustaining basis. The CDIC plays a key role in supporting public policy objectives in the financial system, particularly in the protection of consumers, which has to be our number one goal, and in contributing to public confidence in the stability of our system.
Those were the main considerations in the action I took last January to set up a committee from the private sector to evaluate and recommend changes to the deposit insurance
Canada Deposit Insurance Corporation Act system. This was done by a committee chaired by Robert Wyman of Vancouver which submitted its report last spring, and I do want to commend Mr. Wyman and his fellow members of the committee for the very substantive piece of work they did.
When the problems of the Canadian Commercial Bank and the Northland Bank were made public on September 1, I reaffirmed this Government's determination to follow through with action in this field. Under this Bill the premiums paid by CDIC member institutions into the deposit insurance fund will be increased from the present level of one-thirtieth of 1 per cent to one-tenth of 1 per cent of insured deposits. That premium rate is consistent with the recommendation of the standing committee. There is a sunset provision as well. The legal authorization for this increase will expire at a given time, and it was designed so that a subsequent level of premium payments can be determined as part of the complete review of the deposit insurance system which is now under way. That review was advocated by the Wyman Committee which also recommended an increase in the rate of premium payments.
Other recommendations of the Wyman Committee Report, including further steps to restore the financial position of the deposit insurance fund, are being considered in the over-all policy review of CDIC legislation. The elimination of the CDIC deficit will necessarily be an extended process, and the earlier we begin, the better. The longer we delay an increase in premiums paid to the CDIC, the higher the deficit will grow due to the burden of interest payments to finance past deficits. At the level of insured deposits in 1984, the CDIC will have a premium increase of over $160 million with a higher premium rate. This will greatly assist the corporation in recouping its deficit. I therefore urge Hon. Members to pass this Bill as expeditiously as possible.
In this Bill as well the Government has decided to take immediate action on another recommendation of the Wyman Committee that the composition of the board of directors be broadened through the appointment of directors from outside the Public Service. Such individuals would bring to the corporation knowledge and expertise from the private sector, perhaps a regional perspective, and thereby enhance the decisionmaking process at the board level of the CDIC. The Bill would authorize the appointment of up to four directors who are not employed in any capacity in the Public Service of Canada. At present the CDIC board consists of five members: The Chairman of the Board, who comes from outside the Public Service, the others are board members by virtue of their office; the Governor of the Bank of Canada; the Deputy Minister of Finance; the Inspector General of Banks; and the Superintendent of Insurance. The Government was fortunate earlier this year in obtaining the services of Ronald McKinley, a former Chairman of the Clarkson Company, as Chairman of the CDIC. Mr. McKinley will make and has already made a valuable contribution in developing and implementing new policies for the CDIC. The proposal in this Bill will enable us to seek out further expertise from the private sector in the process of strengthening the deposit insurance system.

January 27, 1986
Canada Deposit Insurance Corporation Act
In conclusion, once again I urge that the House give this legislation speedy passage. The CDIC plays a key role in protecting the savings of small depositors in our financial institutions. This Bill will increase its ability to do that job and thereby help to build greater confidence among the public in the strength and stability of our financial system in the future.


Aideen Nicholson: Mr. Speaker, the ongoing review of the regulation and supervision of Canadian financial institutions began in the last Government. The Bill before the House today takes two more steps along the road. In her appearance before the House of Commons Finance Committee on September 9, 1985, the Minister of State for Finance (Mrs. McDougall) gave notice of the provisions of this Bill and of draft legislation, both of which she described then as items of high priority and both of which were tabled in the House on November 29, 1985.
Bill C-86 proposes to do two things. First, it proposes an increase in the premium level paid by the CDIC's member institutions. Currently they pay one-thirtieth of 1 per cent of their insured deposits. Bill C-86 proposes to triple that to one-tenth of 1 per cent. The increase is to be in effect for one year only. Second, the Bill proposes increasing the size of the CDIC's board of directors to include members from outside the public service.
While the CDIC is meant to be funded by its member institutions, it has been operating from a deficit position for some time, existing on funds borrowed through its $ 1.5 billion line of credit from the Consolidated Revenue Fund. The CDIC deficit, now estimated at over $1 billion, reflects the recent troubles of Canadian financial institutions, the spectacular failure of several Ontario trust and loan companies, and, more recently, the Government bail-out and subsequent failure of the Canadian Commercial Bank and the failure of the Northland Bank.
In 1982 deposit insurance coverage was increased from $20,000 to $60,000 after the Ontario Government seized three trust companies, believing public funds were at risk. In order to protect those funds, the federal Government moved to ensure all depositors in the institutions at the new higher rate.
In 1985, as part of the CCB bail-out, the CDIC committed $75 million. According to its 1984 annual report, CDIC did not make any provision for loss as it expected to be fully reimbursed. Later, when the CCB went into receivership and the Northland Bank seemed doomed to follow, the Government announced its intention to reimburse all depositors in both institutions, even those whose deposits exceeded the $60,000 limit.
Insofar as insured deposits are concerned, CDIC paid out $250 million to Canadian Commercial Bank depositors and $170 million to Northland depositors. That, of course, does not include the payments to uninsured depositors which were authorized by a separate Act passed in this House and which came to $430 million for the Canadian Commercial Bank and
$470 million for Northland. At this point estimates are putting the CDIC's deficit at $ 1.2 billion.
Apart from the financial stresses imposed by the failure of financial institutions in recent years, the CDIC is also having to deal with the burden of administrative work which it was never designed to deal with. The CDIC was established in 1967, basically to maintain an insurance fund to protect the savings of Canadians and the ceiling on deposit insurance targeted the protection toward the small or so-called unsophisticated depositor. Until the "Trust companies affair" in Ontario and the collapse of Fidelity Trust in Alberta, the CDIC had quietly processed premiums and dealt with administrative paperwork but, with the trust company difficulties and the later bank failures the CDIC was drawn into a new and unaccustomed monitoring role.
The CDIC is, after all, the insurer and not the regulator under present legislation. Its staff and board of directors are small. While staff size has increased in the last four years, many of the new preoccupations of the agency are being handled by outsiders: consultants providing information and analysis with regard to institutions being wound down, agents on long-term contracts to look after particular problems, and private sector committees set up by CDIC to deal with such things as the disposition of real estate assets on CDIC's books.
Currently the CDIC has an estimated $1 billion in real estate financed by 18 failed institutions all across Canada. CDIC resources have been stretched very thin by the circumstances. Clearly it was, and is, necessary to have review and change in a system that, through force of circumstances, has exceeded its operational bounds and evolved beyond its original purpose.
Of course, the experience of CDIC in the past few years has been paralleled by tremendous change and ferment in the financial services industry in general. Deposit insurance is an integral part of the system. This is why the House of Commons Finance Committee and the Senate Banking Committee considered together the Green Paper on financial institutions and the private sector Wyman committee report on the CDIC. Because deposit insurance is really inseparable from financial institution regulation, it is necessary to put the provisions of Bill C-86 in context.
We are in the middle of a review process whereby reasonable caution must be balanced with the feeling of urgency engendered by the events of the last three years. The interaction of several factors including concentration of ownership and control, predominance of real estate related activities, high-risk transactions, and adverse economic conditions has shown the vulnerability of existing prevention and detection mechanisms. The legislation coming out of the current review process must steer a very careful path indeed. The supervisory system must be effective, but must not be so rigid as to stifle the industry, cut off emerging policies, or over-emphasize supervision. It must also, as far as possible, reconcile the interests and objectives of the parties involved, particularly in different jurisdictions.
January 27, 1986

The draft legislation to increase the powers of federal regulators tabled with Bill C-86 last November is the Government's first step in addressing the issue. The two proposals in Bill C-86 are more in the nature of interim measures. While there appears to be general agreement that CDIC premiums should increase to reflect recent risk experience, it is clear that the proposed increase will not be sufficient to clear the deficit. The assumption appears to be that this increase for one year will ease the deficit somewhat until a long-term solution is found. From the Minister's statements I gather that she is expecting to offer us long-term solutions in the near future.
The House of Commons Finance Committee recommended eliminating the CDIC deficit in 10 to 25 years through surcharges on member institutions. The Senate committee and the Wyman committee both recommended eliminating the deficit in 10 years and separating deficit financing from operational financing. Since the Bill before us is apparently not designed to address the long-term situation of CDIC, these are matters we would do well to keep in mind since the House is sure to be considering the issue again, presumably before this temporary premium increase expires.
The second proposal in the Bill, that to increase the size of the CDIC's board of directors, is a proposal also made by the Wyman committee and the Senate Committee on Banking, Trade and Commerce. The objective here is to have the benefit of private sector expertise on the board of directors. The board as presently constituted has public servants only, with the exception of the chairman. In this case, the information in the Bill is limited and will need to be fleshed out in committee. I hope the Minister will be able to provide the committee with the draft regulations because there are a number of questions that come to mind about the role of these directors and how to ensure that they are people who are close enough to the financial services industry to have practical and useful experience without getting into conflict of interest situations at the same time.
The Wyman committee is against appointing people actively employed in CDIC member institutions, although it recommended the participation of individuals with extensive background in financial services and professional expertise in the areas of real estate, liquidations, corporate and commercial law and accounting. The Senate committee, on the other hand, recommends provincial as well as private sector representation on the board, specifying a 13-member board with industry as well as independent members.
The Bill itself does not make clear just what form the private sector representation will take. However, the Minister's comments during her September 9 appearance before the Finance Committee indicate that the Government's appointments will seek to avoid direct industry participation. At that time the Minister said:
Conditions concerning the eligibility of prospective Board members would be incorporated in the legislation to ensure that conflicts of interest do not arise and that no Board member is associated with any single member institution.
Canada Deposit Insurance Corporation Act
We need to know more about the conditions of eligibility. It is clearly desirable to have private sector experience on the board of directors, but it is difficult to judge just how beneficial or practical this will be without knowing what conditions or constraints the Government will put around the appointment of new board members. I trust that there will be more information forthcoming in committee.
This is not a controversial Bill and, while we have some questions on which we hope to get further information in committee, we will not be putting up very many speakers or holding it in the House for long at this stage.


Cyril Keeper: Mr. Speaker, we in the New Democratic Party will not be obstructing this legislation in any way. We intend to see that the matter is dealt with expeditiously today so that it can go to committee where the necessary questions can be dealt with.
This legislation deals with the Canada Deposit Insurance Corporation. I know that many Members in the House are quite familiar with this subject but there are others in the public who may not be familiar with the function of the Canada Deposit Insurance Corporation, even in light of the publicity that has swirled around the banks in the last months.
The Canada Deposit Insurance Corporation is a body which insures deposits in banks so that ordinary people will not lose their shift if a bank should fail. Individual accounts are insured to a maximum of $60,000. That is a worth-while and useful function in a society such as ours which depends so heavily on credit. This is a relatively minor piece of legislation and does not deal with the regulation of financial institutions in any fundamental way.
The purpose of this legislation is twofold. First, it increases the size of the board of directors of Canada Deposit Insurance Corporation from five to nine members. We question why there is such an increase at this stage as well as the fact that the seats will be allocated to private sector members only. Will such appointments be on the basis of merit and knowledge in the financial institutions and concern for consumers in the country or will it be on the basis of partisan political considerations as we have seen lately?
We are concerned that the Bill does not provide any assurance that the best qualified individuals for the job are being appointed. Why can there not be provision in the Bill for these appointments to have parliamentary review before they are made? The Prime Minister (Mr. Mulroney) has spoken in the past about Order in Council appointments being reviewed by a parliamentary committee. The Conservative Party spoke very strongly about parliamentary reform when in Opposition and this would be an opportunity for the Government to take some action.


Mr. McDermid:: It is in the parliamentary reform. You are holding it up.


Donald Alex Blenkarn: Approve the parliamentary reform.

January 27, 1986
Canada Deposit Insurance Corporation Act


Cyril Keeper: Allow Parliament to review those appointments of new board members to the Canada Deposit Insurance Corporation before they are final.


John Horton McDermid: Put the parliamentary reform through and we will get it.


Cyril Keeper: I hear comments from the sidelines. Why does this legislation not provide for a public review of these Order in Council appointments before they are made? Furthermore, why does the legislation continue to provide for alternates to sit on the board of the Canada Deposit Insurance Corporation? We will not know who these alternatives are and what interests they represent.
We have further questions about the detail of this legislation we would like the Government to answer before it is approved. One possible explanation for why the Government is increasing the size of the board is contained within the recommendations of the Wyman Report. A major component of that report states that we now live in an environment of deregulation and it is essential that CDIC reflect this reality. That is a possible explanation of why there is an increase in the size of the board and why those board members are private sector members only. I question the notion that we can talk about an environment of deregulation when it comes to banks, trust companies and loan companies.
Surely the experience of the last several months with bank failures has shown that we have an environment of inadequate and ineffective regulation. The notion that the Canada Deposit Insurance Corporation should reflect an environment of deregulation is a misdirection of public policy. We on this side of the House wonder why there is no representation of consumers on this board. Why does the legislation not contain a provision for that? Could the Department of Consumer and Corporate Affairs not represent consumer interest on this board, to balance the private sector interests in this legislation? Why is there not some citizen form of representation to take care of consumer interests? The increase in the size of the board is a token of reform. It is not real reform or a fundamental reshaping of regulations for our financial institutions. No new powers are being given to the board. By way of example, let us consider the number of people in Canada who monitor and inspect banks. There are something like 16 of them, whereas in a comparable situation in the United States there are something like 1,500 people doing that work. There are changes of substance which have to be made in terms of regulating our banks. The Minister mentioned that changes would be coming in the future. We hope that they live up to that promise.
Another change brought about by the legislation is an increase in premiums, the premiums paid by banks, trust companies and loan companies to insure their depositors' savings. Since the corporation has a deficit of $1.2 billion, it is clear that an increase in premiums is justified. At the same time that the premiums are being increased, why do we
continue to allow banks and trust companies to obtain rebates on their insurance premiums in good years? If it is necessary to increase the rates of premiums, why do we allow that to continue in the legislation? I would welcome being able to go to my insurance company in a good year, when my house did not burn down, to obtain a rebate. That is not possible for ordinary citizens; the insurance industry does not work that way.
Why are large banks, trust companies and loan companies able to go to the Canada Deposit Insurance Corporation and say: "This has been a good year. There have been no catastro-phies, so give us a rebate on our insurance premiums"? Presumably they paid for insurance on the chance of a disaster occurring and since there was not one they already had the service. Why do we privilege banks this way? Why are premiums being increased at the same time as this provision is being allowed to continue in the legislation? Why do we leave the status quo such that the Canada Deposit Insurance Corporation has no clout or no option to cancel an insurance policy? If a trust company is not performing well, why does the Canada Deposit Insurance Corporation not have the capacity to say: "Hold it a minute; you are too bad a risk and we choose not to insure you"? We wonder why that option is not in the legislation governing CDIC to give it a little clout, as it insures banks, trust companies and loan companies.
The increased premiums could likely be passed on to consumers by the trust companies and banks. This raises a fundamental question. While it is possible to justify the increase in premiums on the basis that the Canada Deposit Insurance Corporation has a large deficit, it points to the fundamental fact that regulating our financial institutions is not simply a matter of insurance. It has something to do with what risks are involved and what we can do to reduce those risks. With the rates of insurance going wild these days, with insurance companies taking advantage of municipalities, for example, in terms of their insurance needs, it should be obvious that to approach the problem simply from the point of view of insurance is inadequate. This piece of legislation in itself is minor, in a way; it contains only a couple of provisions. We are lacking more fundamental reform of the regulations for financial institutions. This legislation is only a stop-gap measure.
The problem of regulating financial institutions is a major one. If we refer back to the headlines with regard to CCB and Northland, we know that there are real questions with regard to the efficacy of the regulations of our financial institutions. Why was the Canadian Commercial Bank able to operate as it did over a period of years without our regulatory agencies exposing the problem, without our regulatory agencies saying that there was a serious problem which needed to be dealt with and the Government reacting and handling the situation? I have talked with some acquaintances in the financial community who indicated that there was a well-known rumour in the community that the Canadian Commercial Bank was not being well managed. There are very serious questions about how we regulate financial institutions.
January 27, 1986

As long as we insure the deposits, not only those of ordinary Canadians of average income but those of very large depositors, such as large banks and foreign banks, we need effective regulations which turn up the problems before they become too big, because in the end the public is asked to pay.
There is much documentation with regard to the difficulties in terms of our regulations affecting financial institutions. A number of reports have called for broader reform than what is before the House today. We have received a Senate report, a report of the Finance Committee and one by the Wyman committee appointed by the Minister.
We hope to see more fundamental reform coming from the Government. We hope it comes soon. By way of example, we support the recommendation of the Finance Committee which called for a national financial administrative agency which would co-ordinate efforts in the area of the regulation of financial institutions, including the Canada Deposit Insurance Corporation, the Inspector General of Banks and the Department of Insurance which inspects trust companies and loan companies. We await with great interest more fundamental reform coming from the Government.
I want to say at this point that the handling of the collapse of the Canadian Commercial Bank and the Northland Bank has had its negative fall out, particularly for credit unions. They are good financial institutions which have served us well. They represent the value of co-operation, people getting together to solve their own problems. Yet, from the backwash of the problems of the failure of the Canadian Commercial Bank, some people have gone to their credit union to ask: "Are you insured by the Canada Deposit Insurance Corporation?" The credit unions are not. They are sound financial institutions but they are not insured in this way.
Credit unions would like to find some way to be affiliated with the Canada Deposit Insurance Corporation. I do not have a concrete proposal as to how that should be done, but they would like to be affiliated so that they can reassure people of their soundness and so that the Government can see the soundness of these financial institutions. That is something that needs to be on the agenda for the Government when it is considering the reform of financial institutions.

Mr. Speaker, I want to say a few words in the other official language. This legislation has two aspects. The first is that it increases the size of the Corporation's board of directors. Now we would like to know why the increase applies only to private sector representation and not to the public sector, such as the Department of Consumer and Corporate Affairs? And why not have consumer representation?
The other specific measure provided under this legislation is an increase in insurance premiums for banks and other financial institutions.
Canada Deposit Insurance Corporation Act
We would like to know why the Corporation's premiums are being increased without giving the banks the option of cancelling insurance contracts. Why increase the premiums while maintaining the option of giving the banks a discount?
Mr. Speaker, the main issue, as we see it, is that the legislation before the House today raises a number of questions. In fact, it neglects the most important thing that has to be done in the future, which is to carry out a reform of the legislation regulating financial institutions, a thorough reform.
Mr. Speaker, we all know that we have had a lot of problems with the Canadian Commercial Bank and the Northlands Bank. These problems have shown that we ought to review our regulations for the financial sector. Are these regulations effective? Experience has shown that they are very weak. When is the Government going to carry out a reform in this area?
Mr. Speaker, these are some of the things we want this Government to do very soon.


Donald Alex Blenkarn: Mr. Speaker, we have to commend the Government for bringing in this interim measure to bit by bit get control of the problem of the Canada Deposit Insurance Corporation. Members will appreciate that as of the financial end of last year there was roughly $1.2 billion in anticipated losses and shortage. Obviously, with certain costs expended this year in handling the problems of the Canadian Commercial Bank and the Northland Bank, that shortage will be substantially increased. It is important that premiums, as authorized under the present statute, be increased. That was the reason the House of Commons Finance Committee recommended that the premiums be increased from one-thirtieth of 1 per cent to one-tenth of 1 per cent on an interim basis until such time as a new organization might take a look at the whole matter and determine a premium or a method of getting rid of the enormous liability faced by this deposit insurance account. The Bill, in this sense, follows the suggestion of the House with respect to premiums.
I want to address the House briefly with respect to the question of directors. It is exceptionally important that this corporation have private directors that know their way around the street. Unfortunately, the course of this corporation over its period of existence has been a corporation directed by public servants in Ottawa. As a practical matter it has not even been the Public Service referred to in the Bill. While the governor of the bank, the Superintendent of Insurance, the Inspector General of Banks, the Deputy Minister of Finance, are supposed to be directors, in fact, they send their substitutes. There were really no meetings. There was really no getting down to it and looking at the interests of the corporations. Therefore the corporation, to some extent, was operated almost as a department of Government.
When we had problems with the Crown Trust, Greymac, and the Seaway affair, the Government came to the House and said: "We have a political problem, we are not covering

January 27, 1986
Canada Deposit Insurance Corporation Act enough people on their deposits; therefore increase the amount of coverage, back date it and pay everybody $60,000 insurance". That was fine for the people who received the money, but it certainly was not a happy condition for those who were contributing the money. That is a good part of the reason we have this massive deficiency. A second reason for the deficiency is that for political reasons Governments have said to the board: "Well, you should cover everybody". Therefore the Canada Deposit Insurance Corporation covered everybody in Greymac, Crown Trust and Seaway.
When my mayor in this City of Mississauga said we should not bail out uninsured depositors, I had to remind her we bailed out the City of Mississauga for $1 million on the Greymac affair. We bailed out municipalities and credit unions and everyone else with the CDIC on trust company failures. When the other side talks about bail-outs let us say that they were the guys who invented the bail-out.
It has been a problem for successive Governments to know when to draw a line. It is all very easy to say: "Don't pay anybody except the insured depositors". We have paid people other than insured depositors and it is only in the case of the banks, the Canadian Commercial and the Northland, that a Government was honest enough to come to the House of Commons and say that it will pass a statute to bail out or pay off uninsured depositors. When this happened previously, it was done through CDIC and the board of directors with no reference to the real issues in the market-place.
In a sense, the banks and trust companies that have been contributing the money to make the insurance fund work have in many cases and properly so said that they do not mind paying for liabilities resulting from guarantees for $20,000 or even for $60,000. However, they wonder if we really expect them to pay a liability resulting from guaranteeing all and sundry. They have a point there.
If we are going to expect the financial institutions, through a special tax on deposits because that is what a premium is, to pay this back-debt largely created by a previous Government that wanted to look reasonably good and did not want to declare honestly in the House what the situation was, then we ought to at least make sure that the directors of the CDIC come from the organizations or organizational groups that put up the money. It is in that sense that I suggest that two of these directors have trust company backgrounds and perhaps be nominated by the Trust Companies Association and two have banking backgrounds and perhaps be nominated by the Canadian Bankers' Association. I think it is essential that institutions we are insuring realize that they are using their money for the Deposit Insurance Corporation to look after only $60,000 worth of deposit insurance.
When insuring institutions that are likely to or could go into default, the directors of the corporation should have the knowledge of the street that is required of any insurance corporation. This insurance corporation has not been run well. It has run up massive deficits and in many senses, those massive deficits are
the result of politics playing with the fund. It is time that policies not be allowed to play with the fund. The fund is there to protect depositors up to $60,000, not to protect all and sundry, and not to give funds away. If Parliament wants the corporation to insure people beyond that amount, another solution must be found.
In its report to the House dated November 6, the House of Commons Finance Committee recommended that we have an arrangement through the National Financial Administration Agency whereby the agency, acting as liquidator, could arrange to pay out an estimated liquidation value to depositors with more than the $60,000 insured amount. That type of approach would relieve the pressure that is always on Government to pay out to uninsured depositors.
The Government agreed to cover the uninsured depositors and then debenture holders and preferred shareholders came to the Government to ask: "Why not us?". It seems that every time people get into trouble, they come to the Government and ask: "Why not us too? Why are we not included?". That situation has to cease. I think it is important that this corporation be operated in a sensible commercial fashion.
The Bill before us is an interim measure. It only deals with two issues. One of these issues is an increase in premiums but there is no indication in the Bill how those premiums will work to pay off the deficit. Premiums will pay off the deficit over time, and it was the view of the Finance Committee of the House that this type of premium run until December 31,1986, and that the National Insurance Administration Agency, a new organization for financial institutions, presumably put into place during this calendar year, be in a position to take over the Canada Deposit Insurance Corporation and perhaps operate it as the Canada Deposit Insurance Fund. That fund would set the premiums applicable to cover the deficit and make sure that the premiums were collected.
My friend from the New Democratic Party suggested that Parliament should have some sort of say as to the appointment of the directors. That is exactly what Parliament wants but it is his Party that is opposing the reform of Parliament that would allow Parliament and the committees of the House to confirm and review Order in Council appointments. When members of the NDP hold up parliamentary reform but at the same time make the statements with respect to directorships that that Member made, we begin to wonder where they stand.


Cyril Keeper: Put it in the legislation.


Donald Alex Blenkarn: Parliamentary reform would require all directorships to be approved. What does the Hon. Member want, just to have this one approved and none of the others? Is that the kind of reform he wants? Is that the attitude to parliamentary reform that his Party supports? It is not ours. Hopefully he will have an opportunity to debate that issue and stand for or against parliamentary reform in a very few days.
I would like to return to the question of the mess in which the former Government got the Canada Deposit Insurance Corporation. Because it was afraid to come to Parliament for appropriation and did not want to increase the deficit unduly,
January 27, 1986

the former Government directed that the Canada Deposit Insurance Corporation borrow money on the Seaway matter, the Grey mac matter and the Crown Trust matter from the trust companies it had appointed as the agents to wind up those defaulting trust companies. Until very recently, Central Trust was able to receive one-quarter over Canadian bank prime rate to lend money to the Government of Canada. The Midland Bank which, as shown by the Morrison Report, was largely responsible for the shenanigans that went together with the Seaway matter, was able to receive one-quarter over bank prime rate for the money the Midland Bank lent to the CDIC to organize that receivership. Much of the problem with this corporation exists because not only did it borrow money but it borrowed money on the guarantee of the Government of Canada that it be lent at one-quarter over bank prime rate. In other words, the Government required the CDIC to pay more than any Crown corporation or agency of Government has ever had to pay in interest. Why was that? Because the Government wanted to hide back in the bush the cost of what it was doing.
Hon. Members will know that in Supplementary Estimates (B) filed this year, the present Government is coming clean with the people of Canada. It put through an estimate of nearly the $900 million required to pay the liability run up over those years of bailing out uninsured depositors. Yet we heard the rhetoric of the Hon. Member for Winnipeg North Centre (Mr. Keeper) who was talking about uninsured depositors. They bailed them out and we had to pay the cost of that bail-out.
It is important that this Bill pass and that it pass quickly. It is important for the House of Commons to get down to the business of reorganizing the inspection system and the prudential management system of financial institutions. The management and supervision of these institutions has been sadly lacking. We have all heard and seen the evidence on television and elsewhere given before the Estey Commission. Many of us who were involved in the report of the Finance Committee heard a great deal of evidence, both in public and in camera, with respect to how institutions in the financial field were supervised and managed. It is time the Government brought forth a package of legislation. It is my hope that the Minister will be bringing to the House a package of legislation which will get down to the business of properly supervising and managing our institutions.


Mr. Deputy Speaker:: Questions or comments? Debate.


Howard Douglas McCurdy: Mr. Speaker, I must confess that I do hesitate to rise to speak to a Bill relating to a matter which is somewhat arcane to a microbiologist by trade. However, there are some observations I do wish to make now that the opportunity has presented itself.
The Bill, as has been indicated by several previous speakers, attempts to implement some needed changes in the manner in which the Canada Deposit Insurance Corporation functions. This really is just a part of a whole list of changes which have
Canada Deposit Insurance Corporation Act been recognized as necessary in the regulatory system for financial institutions in Canada. As has been indicated in the Wyman Report and elsewhere, there has, over the last decade or so, been rather dramatic changes in the economic and political conditions which affect the environment in which our financial institutions operate. We are familiar with most of these; double digit inflation, rather more dramatically extreme business cycles, frequent changes in interest rates, high interest rates and Government deficits. In this environment, financial institutions sought rapid growth and higher profits and this was in part pursued through new technologies being made available, especially in the area of computers and communications, including credit cards, automated teller machines, satellite communications and so on.
As a consequence, the financial services industry has changed immensely. There are new products such as daily interest accounts. Rapid transfer of funds from across international borders is now possible in response to perceptions of imminent dangers. We have had an increased muddying of the waters regarding the separation of what is termed the four pillars; banking, trust, insurance and investment.
The regulatory mechanism clearly has not kept pace, nor has the Canada Deposit Insurance Corporation. In addition to the federal Government's Green Paper on the Regulation of Financial Institutions, and the House Finance Committee's report on financial institutions, we have had two reports specifically having to do with the CDIC, the Wyman Report and, of course, the Senate Banking Committee report on deposit insurance.
The period from 1967 to 1982, as we know, was uneventful for the CDIC. Indeed, through much of that period rebates were returned on premiums because of the surplus which existed in the insurance fund. However, in 1982 there was a rather dramatic change which was the first sign of more serious and catastrophic changes which have occurred in the last year. One of the events which most recently took place was the failure of the CCB and the Northland Bank. The Wyman Report and the Senate report suggested a number of changes to the CDIC to permit it to operate in a high risk environment, to control the degree of risk to which it was exposed and to put it on a more sound financial basis. In general, what was recommended both by the Senate report and the Wyman Report was to allow the Canada Deposit Insurance Corporation some ready degree of selectivity with respect to its making available insurance and its continuation for financial institutions based upon certain standards of performance.
Corollary to this, it was pointed out that the CDIC should have the mechanisms for getting greater information with respect to its insured institutions which would adopt standards of performance which the CDIC would monitor. Furthermore, both reports recommended that there be greater authority accorded to the CDIC to step in and ensure that the operations of insured institutions met standards which would put such institutions on a solid basis, and to be able to do so promptly.
In order to do all of this, the need was pointed out for increased staff to carry out these regulatory, supervisory and

January 27, 1986
Canada Deposit Insurance Corporation Act
examining functions, as well as to develop the criteria for establishing what constitutes sound practice. Co-insurance was suggested to prevent multiple deposits which are a way of insuring that all deposits are insured by using a number of institutions, and it was also suggested that this be a means of increasing greater recognition of risk on the part of depositors.
Increases in premiums from one thirtieth of 1 per cent to one tenth of 1 per cent of insured deposits was suggested, and that the Canadian Deposit Insurance Fund be set at a level of .75 per cent of the total insured deposits. Finally, changes in the composition and size of the board were suggested.
In spite of rather extensive recommendations for change in the CDIC, this Bill deals with only two. It increases the level of premiums, which is fine. One might have hoped there would be some reference to the need to increase the total amount of the fund in proportion to insured deposits but that might come at a later time. Perhaps it is not so critical in the present context. What is serious, I think, is what has been recommended with respect to the composition of the board. The Bill would increase the size of the board from five members to nine, and it would do so substantially by increasing the number of private members from industry who sit on the board. The net result of this would be to provide a majority on the board of non-Government personnel. Thus we would have a situation in which if there is need for the CDIC to obtain moneys from the Consolidated Revenue Fund, the determination would be made not by Government officials but by a majority of private individuals who would be doing so, I would suggest, inappropriately.
Interestingly enough, this proposition is inconsistent with what was recommended by the Wyman and the Senate reports. We take no exception to the need to have industry representatives on the board who have no present connection with the particular institutions. This would have the effect of solving one of the problems which was revealed during the CCB and the Northland affairs, and that is a certain degree of conflict of interest in which others on the board, the Superintendent of Insurance, the Governor of the Bank of Canada and the Inspector General of Banks, made a decision outside of the context of the CDIC which determined subsequent action by the CDIC. I think there are many of us who would support the argument that there needs to be some other disinterested representation on the board to ensure that that kind of thing does not occur.
However, as I indicated earlier, it is inappropriate that institutional representatives from the private sphere should outnumber the other representatives. There is another problem which arises with the Bill and that is that the Bill allows for alternate members to replace these private or institutional representatives on the board. Now we have a situation where we may have alternative members of the board, in direct contradiction of the recommendation of the Wyman Report. There can be no merit in having a relatively uninformed person involved in the decision-making process. More importantly, there is no basis on which one can clear away any possible suspicion of a conflict of interest. There is also a
potential conflict of interest concerning the permanent members of the board in the sense that the Minister of State for Finance (Mrs. McDougall) promised there would be regulations concerning the eligibility of prospective board members but no such provision appears in the Bill. We raised the question of how we can be sure that we will not be faced with the problem of conflict of interest. How can we be sure of the appointment of members who will act in the interests of the public rather than those of some particular institution? We asked those questions because there is no specific process by which Parliament can have an opportunity to vet prospective appointees. This is a serious deficiency in the Bill and it ought to be addressed by an amendment.
Beyond all that, speaking of the principle of the Bill, we can say that it is a step forward. In the face of rather significant requirements for changes in the operation of the CDIC which are not addressed in this Bill, it is a very tiny step. Therefore, I want to emphasize once more the deficiencies in this Bill which warrant re-examination. First we have the question of the majority of members of the Board being from the private sector, which specifically was rejected by the Wyman committee and the Senate committee. The second problem is the proposition that there should be alternate members. This is really quite unacceptable and it should be changed by amendment forthwith.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: Mrs. McDougall, seconded by Mr. Hnatyshyn, moves that Bill C-86, an Act to amend the Canada Deposit Insurance Corporation Act, be read the second time and referred to a legislative committee. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


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


Mr. Deputy Speaker:: 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 Cochrane-Superior (Mr. Penner)-Aboriginal Rights-Lyell Island logging-Request for reimposition of moratorium. (b) Existence of aboriginal title; the Hon. Member for York East (Mr. Redway)-Young Offenders
January 27, 1986

Act-Request for amendments to deal with sentencing; the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie)- Trade-Water resources-Position of Canadian negotiator. (b) Grand Canal project.



GOVERNMENT ORDERS


Right Hon. Joe Clark (for the Minister of Energy, Mines and Resources) moved: that Bill C-85, an Act to amend the Petroleum Incentives Program Act, be read the second time and referred to a legislative committee.


John Horton McDermid: Mr. Speaker, at the end of October last the Minister-


Jean-Robert Gauthier: Point of order, Mr. Speaker. I know the situation is different today than it was last Friday because we are at second reading, not third. Nevertheless, the first three speakers on second reading have 40 minutes each, I understand. Do I take it now that this is the second speaker on the Government side? If I follow your ruling on Friday, the Minister moves the motion, decides not to speak and that is his speech. Then the Parliamentary Secretary speaks, that is the second speech. The third speech will be on this side or to my left. That will be the first three speakers if I follow your logic of last week, unless you are going to change your mind and tell me I was right on Friday.


Mr. Deputy Speaker:: For second reading proceedings, each of the first three speakers will have 40 minutes. As far as the argument-

*-the Hon. Member raised Friday is concerned, there will be a decision this week. The Hon. Member for Ottawa-Vanier (Mr. Gauthier).


Jean-Robert Gauthier: Mr. Speaker, the first speaker on the Government side is the Hon. Member who has the floor, not the Minister who moved the motion. Is that what you are saying?


Mr. Deputy Speaker:: As the Hon. Member is aware, this is not quite the same as the point he raised Friday. I would refer him to Standing Order 36.2
(2) When second reading of aGovernmentjbill is being considered, no Member except the Prime Minister and the Leader of the Opposition shall speak for more than:
(a) forty minutes if that Member is the first, second or third speaker;
So the first three Members will have 40 minutes each, without subsequent questions or comments. The Parliamentary
Petroleum Incentives Program Act Secretary to the Minister of Energy, Mines and Resources (Mr. McDermid).


John Horton McDermid: Mr. Speaker, as 1 was saying before we were so unnecessarily interrupted-


Jean-Robert Gauthier: Oh, 1 am not too sure of that. I am not too sure of that.


John Horton McDermid: Have you finished? I was talking about last October when the Minister of Energy, Mines and Resources (Miss Carney) announced the Progressive Conservative Government's new frontier energy policy. She said that policy, along with the Western and Atlantic Accords, marked the end of the previous Liberal Government's National Energy Program. The NEP was synonymous with inordinate Government regulation and a stifling tax regime. It robbed Canadians of opportunity and it seriously impaired the economic and energy potential of this country. The Petroleum Incentives Program, or PIP as it is referred to, was one of the NEP's most damaging measures. Today I am pleased to address this House on a Bill which will eliminate PIP payments as of March 31, 1986.
Some 14 months ago the people of Canada gave the Progressive Conservatives an overwhelming mandate for change. We presented Canadians with a choice and they voted for our approach to energy, to government and to the economy. Our overriding goals were national reconciliation, economic renewal, and social justice. Fundamental changes were required for us to achieve these goals. We identified five key economic initiatives that form the basis of our Government's long-term approach to fiscal and economic management. They are: reduction of the deficit; establishment of a positive investment climate; strengthening of Canada's trade relationships; removal of Government obstacles in the market-place; and reform of the NEP.
We have already made important progress on each of these five initiatives. The rate of growth of the federal deficit has declined as a direct result of the May Budget introduced by the Minister of Finance (Mr. Wilson). The Budget stimulated economic growth and produced appropriate Government revenues. It applied the first substantial restraint in Ottawa's spending in almost a quarter of a century. We have reduced spending this year by $4.4 billion. A total of $75 billion has been eliminated from planned expenditures to 1990. More than $1 billion of those cuts originated in the Minister's Department.
The Economic Council of Canada recently said in its annual report that the Budget has "changed for the better many of the ominous trends related to deficits of the past decade". We will be strengthening our deficit-cutting measures in the future. The Council also referred in its report to Canada's weak investment record in 1984. This poor performance was directly attributable to the policies of the previous Government. The Economic Council identified the Atlantic and West-

January 27, 1986
Petroleum Incentives Program Act ern Accords as two initiatives that will encourage expanded investment in Canada. Today the energy industry and other industrial sectors are attracting vital foreign investment.
One of the first moves to create a positive investment climate was to abolish the restrictive Foreign Investment Review Agency. FIRA was replaced with Investment Canada, a body that is positive in nature, rather than a negative force like FIRA was. Enhanced international trade is key to our future prosperity. Here, again, we are making important progress. The Prime Minister (Mr. Mulroney) announced in this House several months ago that he had approached President Reagan to express Canada's interest in pursuing a new trade agreement with the United States. That agreement moved one step closer to reality recently with the setting up of the preparatory committee for trade negotiations.
The Government will be pursuing clear goals in our talks with the United States. At stake are more than two million jobs which depend directly on Canadian access to the U.S. market. We are also intent on expanding markets for Canadian goods in other regions of the world. The Minister for International Trade (Mr. Kelleher) has identified the Pacific Rim as a priority area. The Government will assist the private sector in expanding into this huge, but extremely competitive, market.
Another fundamental goal is the removal of unnecessary Government obstacles in the market-place. Deregulation is underway in key industries such as communications, transportation, and energy. Direct grants to industry are being replaced by fiscal incentives that encourage profit-making and investment.
Our fifth economic initiative, Mr. Speaker, was to replace the Liberals' National Energy Program. This called for radical restructuring of the operating environment for the energy industry in Canada. The Progressive Conservative Party has always supported the goals of the National Energy Program; opportunity, fairness, and energy security, but we have vehemently opposed the measures put in place by the previous Government to achieve these goals. The National Energy Program did not create opportunity, it crippled the industry's entrepreneurial spirit. The National Energy Program was not fair. It discriminated against regions of the country and against foreign firms operating in Canada. The National Energy Program did not create energy security, it provided grants that rewarded activity rather than success. The National Energy Program, in fact, was an unprecedented exercise in market intervention, discrimination, and confiscatory and retroactive measures.
The Petroleum Incentive Program damaged Canada's international reputation, split the country regionally, and cost the federal treasury billions of dollars. PIP discriminated against western Canada. It paid up to 80 per cent of drilling costs in the frontier regions and only 35 per cent on provincial lands. It discriminated on the basis of nationality. Canadian taxpayers paid dearly for this program. PIP was costing them an average of $1.6 billion a year and the total cost of the program will be in excess of $7 billion.
The Bill before this House today will eliminate petroleum incentive payments as of March 31, 1986. We are not abandoning our existing commitments under PIP. This Bill contains provisions in which expenses will be eligible for payments after March 31, 1986. Companies with exploration commitments in place when the Western Accord was signed will find that we will honour these commitments to the end of 1987. Our proposal for the phase-out of PIP is both realistic and reasonable. It comes as no surprise to the industry. We promised it at Prince Albert before the election, we announced it in the Western Accord, and we gave the industry a full year following the Western Accord to adjust to the new circumstances.
The Progressive Conservative Government recognizes that investment in Canada can best be achieved by rewarding success rather than by subsidizing effort. While eliminating PIP we are ending many burdensome taxes which rob the industry of its ability to reinvest and to grow. However, we recognize that additional incentives are required to maintain exploration in the high-risk frontier regions. To help bridge the gap between the termination of PIP and the timing of expected frontier oil and gas developments, we recently announced that a new tax-based incentive will be introduced by the Minister of Finance. The 25 per cent exploration tax credit will be applicable to exploration expenses in excess of $5 million per well anywhere in Canada. It will encourage continued exploration in the frontiers without discriminating against other oil and gas regions of Canada.
To ensure that the tax credit assists companies that are currently non-taxpaying, which are mostly Canadian companies, it will be refundable at a rate of 40 per cent. It also allows non-taxable companies, in certain circumstances, to pass the tax credit on to their investors who may be in a taxable position.
The exploration tax credit began on December 1 and will continue to the end of 1990. It will be applicable only to well expenses that do not qualify for federal or Alberta petroleum incentive payments. It is an equitable and cost-effective measure to encourage frontier exploration and ensure energy security for Canadians. However, there is little doubt that some companies created only to get PIP grants will have to restructure their operations. We are telling them they must be as innovative in adapting to our regime as they were in adapting to the last.
The industry recognizes and accepts the new realities, Mr. Speaker. I would like to quote from a recent report in Doig's Digest on life after PIP. That sounds like a soap opera. The author of that report wrote: "Now that Ottawa has removed the last parts of the National Energy Program, industry finds itself without a Linus blanket and it will now have to stand on its own two feet in a highly competitive market-place". The Digest also referred to PIP as a bad dream and as noted that its phase-out means that: "Economic and geological considerations, rather than politics, will now take precedence in the drilling of frontier wells".
The termination of PIP and the introduction of the exploration tax credit are fully consistent with the Government's goals
January 27, 1986

as set out in the Prince Albert statement of July, 1984. We promised at that time to replace the Petroleum Incentives Program with more efficient tax-based incentives which encourage Canadian companies to participate in oil and gas development. The Prince Albert statement enunciated the following principles: energy as an engine of economic growth, energy self-sufficiency, increased Canadian participation, fair treatment of consumers and producers, and co-operation between the federal and provincial Governments and industry.
The principles outlined in Prince Albert are evident in the new natural gas and frontier energy policies the Minister announced in this House last fall to great applause. Our new frontier energy policy creates an internationally competitive exploration and development regime. One element of that regime is the 25 per cent exploration tax credit I spoke of earlier, but the new policy is much more far-reaching. It corrects some of the National Energy Program's mistakes and allows us to build on our energy strengths. We will be replacing the National Energy Program's controversial Canada Oil and Gas Act with an entirely new piece of legislation, the Canada Petroleum Resources Act. Under the National Energy Program legislation, the Government was able to confiscate 25 per cent of successful drilling projects retroactively. That provision damaged Canada's investment climate and our international reputation.
There will be no Crown share provision in the new Canada Petroleum Resources Act. The National Energy Program management regime was highly interventionist, placing greater reliance on bureaucratic processes than on market forces. Our legislation will emphasize market solutions.
We are ending the National Energy Program inflexible royalty regime and replacing it with one that is profit-sensitive and encourages investment. It will be modelled after the Alberta royalty regime that applies to oil sands and enhanced oil recovery projects. Royalties will be modest in the first few years but will rise as projects begin to earn reasonable profits. Royalties will be subject to further consultation and negotiation on a project-by-project basis.
The new system takes account of the role provincial governments play in royalties. In the Newfoundland offshore, for example, the provincial Government will set royalties as agreed in the Atlantic Accord.
The National Energy Program gave special treatment to Petro-Canada, even though it was competing against private firms that did not have the benefit of special favours. Under our legislation there will be no more special favours. Petro-Canada will compete in the market-place like other companies.
The National Energy Program gave the Minister broad discretion in using extraordinary powers to direct the industry in the frontiers. There was no way to appeal such decisions. Some of these powers are being eliminated. Others will be maintained but we will limit their extent and the way they are used. The National Energy Program required 50 per cent
Petroleum Incentives Program Act
Canadian ownership of frontier production projects. We support that goal, but we oppose the tactics used to achieve it.
The National Energy Program gave the previous Government the power to expropriate holdings without compensation in order to raise ownership to 50 per cent. That provision was applied to projects that started before the requirement was implemented. We are keeping the 50 per cent requirement but it will not be applied retroactively. There will be no expropriation without compensation. Instead, the industry will be expected to develop its own solutions to achieve greater Canadian participation. The sale of assets to raise the Canadian ownership level will be used only as a last resort. In those cases, they will be sold at market value.
This approach is fair to all investors. However, it will still provide opportunities for increased Canadian ownership. It is important to note that Canadian ownership in the oil and gas industry rose to 47 per cent from 42 per cent in the last year. This represents more progress in one year than the previous three years under the National Energy Program. Our domestic ownership requirements have been accepted by industry. At our request, Mobil Canada has agreed to offer for sale sufficient portions of the Hibernia and Venture frontier projects to ensure that our 50 per cent ownership objectives can be met, even for these 1979 discoveries.
When the Minister introduced our new frontier energy policy in the House, she also announced that we have reached an agreement with the producing provinces on natural gas markets and pricing. The natural gas negotiations were difficult for governments and the industry but we succeeded in coming to an agreement that achieves a balance between the interests of consumers and producers. For consumers, the Toronto wholesale price is immediately frozen for the year. Their access to natural gas supplies at competitive market prices is immediately enhanced. There will be a one-year transition period in which we move away from a Government determined natural gas price to one created by negotiation between the buyers and the sellers. After November 1, 1986, all natural gas prices will be determined through these negotiations.
Consumers will not pay the toll increase of 11 cents a gigajoule recently granted TransCanada Pipelines. We have eliminated the Canadian ownership special charge which added to the price of natural gas. This should mean lower home-heating costs this winter. As a matter of fact, my last bill from the utility which services my home, Consumers Gas, contained a letter which announced a reduction on my bill. It is there for all to see, a lower price for me to heat my home this winter. The proof is in the pudding.
Producers gain greater access to the valuable export market under the new agreement. Exports already represent some $4 billion in sales annually. As much as a quarter of those revenues might have been lost if we had not changed the export rules. The Toronto wholesale price will no longer be used as a bench-mark for export prices. These will now be determined on the basis of a more equitable and more logical regional price test. The new test ensures that Canadian con-

January 27, 1986
Petroleum Incentives Program Act
sumers will not pay more for Canadian gas than their American neighbours.
Under the new agreement, producers may export gas by order without limits on the amount, as long as the terms of the contracts do not exceed two years. The National Energy Board is holding hearings on the best way to determine an appropriate surplus. We are pressing the provinces and the industry to do what is necessary to realize the benefits of the natural gas agreement during the transition period. We were particularly pleased to hear that Ontario's Energy Minister, Vince Kerrio, supports the introduction of interim contract carriage during the transition period. This will enable lower prices negotiated by large Ontario industrial consumers with Alberta gas producers to occur now.
The Government of Canada has moved quickly on a number of provisions in the natural gas agreement. The National Energy Board regulations were amended to remove volume limits on short-term export sales. Last November 8, the National Energy Board issued for comment guidelines for shortterm sales and changes to contracts and licences.
The National Energy Board began its hearings, which started last November 19 in Calgary. It scheduled a hearing for January 13 into duplication of demand charges, Trans-Canada's T-Service tariff and other matters. That hearing has been held in abeyance for a couple of weeks. Meanwhile, the National Energy Board has received an application for T-service to be provided by TransCanada on an interim basis. The Minister's Department has drafted terms and conditions for a natural gas pipeline review panel and circulated them for comments from the provinces, as hads been decided in the gas agreement. A committee to monitor the implementation of the agreement was established in co-operation with the provinces. The committee met for the first time on January 15 and I can report that it had a very productive meeting.
We are encouraged by the willingness of the producers to offer direct sales to end users. For example, a major Ontario petro-chemical plant, Cyanamid, and Alberta producers have negotiated a direct sale with prices well under current levels. The company is working out interim transportation arrangements with the transmission and distribution companies involved in getting the gas to the plant. I believe the message is clear. Given the right energy policy environment, markets can work for the benefit of both producers and consumers.
In February, 1985, we reached an agreement with the Province of Newfoundland and Labrador. The Atlantic Accord makes the province an equal partner in the development of its offshore oil and gas resources. It ended years of bitter federal-provincial disputes which created uncertainty at a time when the industry was planning to commit billions of dollars to offshore exploration and development. It provides for revenue sharing in offshore oil and gas resources on the same basis as if they were on land. I could go on and speak about that particular agreement as well as the Western Accord and the gas agreement. All of these are very important.
We are now talking about the phasing out of PIP and accomplishing this with the introduction of this Bill. With the
Atlantic Accord and Western Accord, the new frontier energy policy and the natural gas markets and pricing agreements, the Progressive Conservative Government has corrected much of the damage caused by years of ill-conceived Liberal policies. We did it in only 14 months, without sacrificing the interests of consumers, producers, distributors or taxpayers. We did it without the disputes which were so much a part of the daily business of the previous Government. We have united Canadians using energy as the engine of economic growth. I am sure Bill C-85 will receive rapid passage because of its wide acceptance across Canada.
Some Flon. Members: Hear, hear!


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


PRIVATE MEMBERS' BUSINESS-PUBLIC BILLS   LOBBY REGISTRATION ACT MEASURE TO ENACT
Hon. James A. McGrath (St. John's East) moved: that Bill C-248, an Act to register lobbyists, be read the second time and referred to the Standing Committee on Procedure and Organization.
He said: Mr. Speaker, first of all let me say in respect to the genesis of this Bill that it is a Bill which has been around for more than a decade in one form or another. The present Bill before the House which I have the honour to sponsor was last put forward by the late Walter Baker who at that time was the Hon. Member for Nepean-Carleton. He felt strongly on the subject. Indeed, we owe a great deal to his research in bringing the subject to the point where it is today. Where we are today, of course, is that the Government has indicated its desire to move in the form of legislation to provide for the registration of lobbyists. In compliance with that commitment, it has wisely, in my opinion, tabled a Green Paper last December 5 entitled "Lobbying and the Registration of Paid Lobbyists-a Discussion Paper". I use the word "wisely" because this is a very complex issue. Indeed, on the surface it would seem to be a very simple, straightforward matter, that is, to provide for a form of registration for lobbyists. However, it is complex because before we can do that we have to define what is a lobbyist.
Let me illustrate. Is a solicitor coming to Ottawa on behalf of a client to seek a patent, to seek a copyright, or some form of legal exercise, a lobbyist? The immediate response is no, and I agree with that. Yet, he is doing it on a fee for service
January 27, 1986

basis. We had to be extremely careful not to cast too broad a net in our definition of what is a lobbyist.
For the purposes of this Bill I have classed lobbyists in three categories. First, there are trade sector lobbyists. They are obvious; they have been here for years. For example, we have the Canadian Association of Broadcasters, the dairy people and the cheese people. The various people involved in agriculture have offices here to protect and look after their interests and indeed to pursue these interests with the Government of the day. This is a legitimate exercise. We have these trade lobbyists. They have offices in Ottawa and they operate up front.
Then we have a second group. These are the people who represent the voluntary sector. The obvious one which comes to mind is the Canadian Red Cross, but there are others. For example, we have people who operate offices here and have paid executives on behalf of the Right to Life movement. They pursue the interests of their organizations by trying to influence the Government to change the Criminal Code and the legislation affecting abortion. Of course we have people who pursue other interests in terms of representing the voluntary sector, whether it be capital punishment, the rights of nonsmokers and those of smokers or what have you. All of these are legitimate in, and of, their own right. Not only do these people have the right to lobby the Government and Parliament, but we had to be careful not to do anything to restrict that right. We have to be extremely prudent that we do not, by way of legislation, restrict the rights of citizens in any way to have access to the Government and to Members of Parliament.
Then there is a third group. These are the so-called consultants who operate on a fee for service basis. We have seen a growth in this group over the past dozen years or so. Indeed, I would anticipate with the reforms in this institution that they will become even more active as they target Members of Members of Parliament, who will have considerable leeway in their legislative powers, will become legitimate targets for lobbying. For example, if we are to reform private Mmebers' business, as I hope we will, notwithstanding some of the reservations expressed by members of the Opposition Parties, then there will be private Members' Bills which will become law. Obviously private Members would then be the target of lobbyists who will want to get various Bills of one kind or another through to become law. It is all the more urgent that we address this matter. It seems to me that it flows almost consequentially from the work of the Special Committee on the Reform of the House of Commons. Indeed, I presented the Bill for first reading just a few days after the presentation of the Second and Third Reports of the Special Committee on the Reform of the House of Commons; I believe it was on the day we adjourned, which would have been June 28 last year.
Just as a matter of interest, I examined the Order Paper and I think that currently there are a total of 60 private Members' Bills in place. I do not know what will be the fate of this particular private Member's Bill, but certainly we all know what happens generally speaking to private Members' Bills in the House-they are talked out, so no one takes us seriously.
Lobby Registration Act
Indeed, not even the Hon. Member for Hamilton Mountain (Mr. Deans), speaking on his own behalf presumably and speaking on behalf of his Party, took private Members' business seriously when he said, as quoted in The Globe and Mail of January 21; "It is not the role of the private Member to legislate on matters of great national significance". 1 do not agree with that. The Hon. Member for Hamilton Mountain is a great parliamentarian who has contributed significantly to parliamentary reform. He was an active member of the Lefebvre committee in the last Parliament and provided leadership and support to the reform committee whose reports are now before the House. I do not believe that that truly reflects his views. When we examine the Order Paper and the 60 private Members' Bills which are there, 18 of them come from the Party represented by the Hon. Member for Hamilton Mountain. Just taking a look at some of the private Members' Bills, we have Bill C-202, an Act to Amend the Criminal Code (capital punishment); Bill C-205 an Act to Amend the Criminal Code (gun control); an Act to revoke the conviction of Louis Riel; an Act to amend the Criminal Code (abortion); an Act to require assistance in the search of missing children; an Act respecting the conservation, export and diversion of water resources; and an Act to amend the Criminal Code (child abuse). I believe that these are matters of great national significance. I further believe that no one would deny Members of Parliament the right to bring in Bills to address these matters of great national concern and ultimately to have these Bills become law.
Bill C-248, which has been before the House since June 28, has been postponed on three separate occasions. I postponed it deliberately because I was hoping that the measures dealing with the reform of private Members' business would be in place and that this could be the kind of Bill which- and I say "could" because it would be subject to the scrutiny and judgment of my parliamentary peers-could be deemed worthy of second reading and going on to a committee. I deliberately did so because I felt that we would now have in place provisions whereby that could happen. Of course I refer to the private Members' provisions of the Third Report of the Special Committee on the Reform of the House of Commons. I hope indeed that will happen. In any event, 1 felt it was time to get on with this Bill. In fairness to other Members who have Bills, I should really address mine and give the House a chance to speak to it.
I have talked about the fundamental right of private citizens to be able to make representations to the Government and to Parliament. I talked about the absolute necessity to be very careful in anything we do so as not to deny or restrict in any way that fundamental right. That is a fundamental right of any citizen in a democratic society. My concern is not with these people, although I must repeat, we have to be careful not to do anything to restrict that legitimate activity. My concern is to address what we call the paid lobbyists, because their actions are beyond public scrutiny. It is my conviction that it is time we formally recognize the presence and the role of the

January 27, 1986
Lobby Registration Act
professional lobbyists in our parliamentary system. I see nothing wrong with that. Indeed, I think that the professional lobbyist has an important part to play in our parliamentary system.
We must be careful that we put in place certain standards in order to ensure that the activities of paid lobbyists respect the fundamental ethics of our parliamentary practices and proceedings. All of us in this House have our own standard of ethics. In addition to that we are guided by the provisions of the Senate and House of Commons Act in terms of how we conduct ourselves vis-a-vis conflict of interest. As well there is a move to provide further guidelines governing conflict of interest for Members of Parliament.
The difficulty is to find the lobbyists. I will quote for the House how the Bill attempts to do that, and I am not suggesting in any way that this is at all adequate, because that is a judgment that should be made, and hopefully will be made, by a parliamentary committee. The Bill says a lobbyist is:
Any person who, for payment, attempts to influence, directly or indirectly
(a)	the introduction, passage, defeat, or amendment or any legislation before
either House of Parliament, or
(b)	a decision to be taken on any matter coming within the administrative
jurisdiction of a Minister of the Crown, whether or not that matter has come
or is likely to come before either House of Parliament for legislative action.
At least that is an attempt at a definition. I would like to see a parliamentary committee take that and go to work on it, either improve it or change it or throw it out. It is conceivable that Parliament, in its wisdom, may decide that, we should not legislate in this area. We should not have a Bill governing the conduct and registration of lobbyists. We should at least take a look at the question. That is what the Bill attempts to do. It attempts essentially to put in place a registry. That is why I suggest in the Bill that the registry, since it concerns both Houses Of Parliament, be administered by the Clerk of the Senate and the Clerk of the House of Commons.
Under this registry, paid lobbyists would be required to register at the beginning of each calendar year. They would have to submit their name and business address, the name and address of the person on whose behalf they are employed to lobby, and the duration of the employment for that purpose. Finally, Mr. Speaker, the Bill would also outline penalties for non-compliance.
I want to take a look at other countries because I think the House should learn from what has happened in other jurisdictions. I took a look at Australia, which is probably closest to us in terms of the way they administer their affairs and the fact that it is a federal state with a Westminster type of Parliament. In Australia there are two registers. One is a special register for lobbyists representing foreign Governments and agencies. That is not a bad idea. I believe an argument could be made for that kind of registry in and of its own right. The other is a general register of lobbyists and their clients. Both of these are kept by the Department of the special Minister of State in Canberra. He is a Minister for Parliament. The registers are confidential and are only for the use of Ministers
and officials on a need-to-know basis. Under the Australian system, lobbyists can actually be denied access to government Ministers and officials if those lobbyists are not on the register. Furthermore, Ministers and senior public servants can be dismissed for non-compliance.
I move on to the United Kingdom. There is no legislation in the United Kingdom, and consequently no form of mandatory registration. What they have in the United Kingdom is a very strong code of personal conduct regarding the activities of lobbyists. Their actions are governed by two major public institutions. These are the Public Relations Consultants Association and the Institute of Public Relations. Both of these groups have codes of conduct and are empowered to expel members for violations of these codes. Nothing, however, prevents expelled members from continuing to lobby the Government. The United Kingdom Government is very interested in what we are doing. It has expressed great interest in what comes out of this legislation, and indeed the Government's Green Paper and its intention to proceed with a Bill.
Finally, Sir, we have to take a look at the jurisdiction nearest to us, and perhaps the one with which we are most familiar, and that is the United States. The activities of the congressional lobbyists in the United States are covered under the provisions of the 1946 Regulation of Lobbying Act. The Act required lobbyists to register with the Secretary of the Senate and the Clerk of the House of Representatives. They must also provide detailed information on themselves, their clients and their individual or individuals lobbied.
There has long been a consensus, however, that the American lobbying Act is in serious need of review. Indeed, it is legislation that really is almost unenforceable because the Act lacks definitive punitive powers, it only deals with lobbyists who are dealing with Congress. It does not cover lobbyists who are dealing with the executive branch of Government, nor does it cover lobbyists who are dealing with the very powerful regulatory agencies that are in place in the United States. We must be careful not to make the mistake that they made in the U.S. in 1946 in bringing in a Bill that is, to all intents and purposes, ineffective and consequently one that is itself the subject of lobbyists, because now they are in a catch-22 situation. The lobbyists are so strong they do not want this Bill changed so they constantly keep pressuring Congress to leave the lobbyist Bill alone, for their purposes saying it is all right the way it is. We must not get ourselves in that kind of a situation.
I hope that either this Bill or its subject matter or the Government's Green Paper-preferably both-would be referred to an appropriate Standing Committee very quickly. I would like that committee to take a look at the provisions of this Bill, which I do not believe are adequate and which I believe casts far too broad a net. In the spirit of the way in which we operate in private Members' time here it is a means of getting this before the House. It is merely a parliamentary vehicle. Let us take a look at it and see how seriously flawed it is. Let us take a look at the American experience to see how flawed that experience is and how ineffective it is. Let us take
January 27, 1986

a look at what happened in Australia. Let us hear from the people who are actively involved professionally in lobbying in Canada-these are people whom we all know, they are respected corporate citizens of this country, whether they are in the voluntary sector or whether they are trade lobbyists or whether they are professional lobbyists-I think we should hear from them. When we have the evidence in then we can decide first if we are going to legislate, and I believe we should, and second, what kind of legislation we should put in place. If there is ever a case to be made for Parliament legislating itself as opposed to having legislation emanating from the Government it is on this kind of measure, a measure to govern the conduct of the people who are going to be making representations to Members of Parliament and to Members of the Government with regard to public policy and legislation. Such a study, in my view, is an immediate necessity. I believe there is a consensus in the country that such a study is really long overdue and that there is the need to legislate in this particular area.
Before I take my seat, 1 want to congratulate the Minister of Consumer and Corporate Affairs (Mr. Cote) for bringing in the Green Paper. I want to congratulate the Prime Minister (Mr. Mulroney) for the leadership he has shown in the statement he made to the House last year announcing it was the intention of the Government to bring in a measure to provide for the registration of lobbyists. I would also like to thank my late colleague, the Hon. Walter Baker, who brought this Bill to the House and provided a great deal of the research on which I have depended in coming to my conclusions on this subject. Finally, may I say to the Members of the House that I commend this measure to them in the hope that it will get to a Parliamentary Committee.


Sheila Maureen Copps: Mr. Speaker, I too am pleased to join the debate and I want to congratulate the Hon. Member for St. John's East (Mr. McGrath) on his initiative. I think it is an issue that concerns all Canadians and I believe that is so not only of the question of the registration and approach of lobbyists to the Government but also of all of the questions surrounding a number of patronage issues on which, unfortunately, the Government has chosen thus far not to act.
For the purposes of today's discussion, I think we must zero in on something a little more specific and that is whether or not a private Member's Bill such as the one drafted today will indeed be used to complement action in this area or whether it could subsequently be used by the Government as a smokescreen so that it does nothing. Of course, I am referring specifically to the Government Green Paper which is now before the House under discussion and has called for public response to the suggestion that we bring in legislation dealing with lobbyists.
Unfortunately, the promise that was made by the Prime Minister (Mr. Mulroney) last September to move immediately with legislation on the issue of lobbying has followed the route of a number of unfulfilled promises and has become hollow.
Lobby Registration Act
My fear is that if we specifically address ourselves to the private Member's Bill, however well intentioned it may be and I believe it to be well intentioned, that private Member's Bill, with the Government's majority, will go nowhere. Those of us who would suggest that a private Member's Bill will see the light of day in terms of legislation are not looking at the facts as they have shown themselves to be over the last number of years.
On this subject, a comment was made in last April's issue of a business magazine. This article dealt with the changes on Parliament Hill and with how lobbyists should get their messages across. The comment made by lawyer Arthur Drache in that article is as follows:
For the most part, the ordinary member of Parliament has little power to affect legislation, even if he were Uncle Harry's next-door neighbor.
Uncle Harry is a Congressman in the United States.
Unlike their congressional brethren in the U.S., where individual legislators have the power to affect proposed legislation, Canadian federal parliamentarians outside the ministry and cabinet committees ratify rather than legislate. They examine only what they're allowed to examine.
"Your local MP doesn't have a heck of a lot of clout in deciding public policy," says lawyer Arthur Drache. "The ministers and your key decision makers in the bureaucracy are your vital audiences."
This article was attempting to address the business community on the dos and dont's of lobbying.
We know that at this point in time, the private Member is largely ignored when it comes to cabinet and executive decision making. We can look to the factory-freezer trawler issue as one very blatant example of this. If in fact that private Member through a private Member's Bill does not have the ear of the Government, I fear that if we focus attention on the specific private Member's Bill as presented by the Hon. Member for St. John's East, we will forget the fact that the Prime Minister made a promise almost six months ago to immediately bring in legislation to deal with the question of lobbyists. He did not promise a discussion paper. He did not promise another study. He did not promise a Green Paper. He promised action and legislation and he said that he wanted to move immediately on this very difficult issue.

I shall, if I may, take a few minutes to recall the answer given by our Member who is an expert on these matters, the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria), who unfortunately cannot be with us today because he is at the Standing Committee on Agriculture. The Hon. Member said that on September 9, 1985, during a speech in the House of Commons, the Prime Minister himself stated: I have therefore asked my hon. colleague, the Minister of Consumer and Corporate Affairs, to prepare legislation as soon as possible to regulate lobbying activities. We all know that three months and ten days later, the Minister of Consumer and Corporate Affairs tabled, not legislation, not a bill, but merely a working paper inviting Canadians to give their views, a decision that has further delayed fulfilment of a commitment that is long overdue.

January 27, 1986
Lobby Registration Act
The working paper offers legislative options such as selfregulation-and we all know that is not going to work for lobbying-and a code of ethics. If we look at self-regulation and the specific case of Mr. Frank Moores, we see that in January, the Government decided to ask all federally regulated companies not to hire professional lobbyists like Government Consultants International.

We know that the Prime Minister issued a directive on January 7 stating that all Crown corporations must cancel all contracts with consulting firms including those run by Conservatives to lobby the federal Government on their behalf. Despite this so-called directive, Petro-Canada continued its contract with Government Consultants International, an Ottawa-based lobbying firm owned by the former Newfoundland Premier, Frank Moores. We know that at least one Crown corporation has absolutely ignored a so-called government directive.
We are talking about the issue of self-regulation or an in-house code of ethics for paid lobbyists because that is what has been suggested by the Minister in the Green Paper. I hope that that suggestion will never see the light of day. If there is self-regulation, we know that there will not be a positive response on the part of paid lobbyists.
When it comes to the issue of lobbying, my concern is that for the most part, there are a number of organizations that come to the Government on issues of national importance on a daily, weekly, monthly and yearly basis. Are we to focus on the Canadian Council on Social Development? I think not because it has a board of directors and is a non-profit organization that can open its books to anyone at any time. Similarly, the National Action Committee on the Status of Women would have no problems in registering, I daresay. At the same time, these are not the organizations that have been able to influence the corridors of power for sums of money about which we know nothing. I believe the most important thing for us to do is to get a definition of lobbyists and specifically paid lobbyists on the table in the form of Government legislation.
All of us in the House would love to see parliamentary reform which would allow the private Member's Bill to come forward in a way which we have not seen, not only during this administration but during past administrations. We know that generally speaking, private Members' Bills are going nowhere. I do not want to give the Government a chance to ignore its basic responsibility and its promises to the people on the issue of lobbying by presenting what can be seen as a red herring in the form of this private Member's Bill.
It would be my concern and the concern of members of my Party that by allowing this particular private Member's Bill to supplant in the order of business a government-led piece of legislation which could already be on the table, we would be saying that this is not an important issue for the Government but is simply a private Member's issue which really does not deal with the agenda that the Government has set for 1986 even though the Prime Minister himself promised legislation specifically governing lobbyists. Our particular concern is with
those lobbyists who are paid literally hundreds of thousands of unpublished dollars to affect public policy and budgets.
I should be a little skeptical about government legislation on lobbying when I look at the promises made by the Prime Minister on the issue of patronage. That is an issue which in fact elicited much public debate during the course of the leaders' debate prior to the election of September of 1984. We know that the Prime Minister who once stated: "You dance with them that brung you", is in fact applying that particular philosophy of politics in his own daily life. We can look to an article which was written by Jeffrey Simpson in The Globe and Mail last Saturday. He bumped into someone from Anti-gonish and this constituent and great friend of the Prime Minister was extremely upset because he had not received a job from the Government. He talked about a number of Government appointments which have been made by the office of the self-same Prime Minister who spoke in such volumes about the previous Liberal administration. He asked, and I quote:
"And how about my old friend Sam Wakim? He walked off with a chunk of the Export Development Corporation's legal business. Took it from an Ottawa firm to a Toronto firm."
"The Prime Minister denied knowing anything about it."
"Were you born yesterday? Sam's an old St. FX graduate. Classmate of Brian's. Read him the first edition of The Globe every night.... Good for Sam. Good for Pierrette. Good for Ian MacDonald. Wrote Brian's biography.... "Ian's a nice guy.... Jean Bazin. Rodrigue Pageau's wife. Roger Nantel. Fernand Roberge. Lucien Bouchard.


An Hon. Member:: What's this all about?


Sheila Maureen Copps: The Hon. Member asks me what this is all about. I guess it is what makes us in the Opposition just a little skeptical about the Government's alleged intentions on the issue of registration for lobbyists. We know this Prime Minister and this Government have raised the art of patronage to a form of heights so high they have never been seen by any previous administration. In that regard, I guess we are a little skeptical about the kind of positive legislation which will come forth from the Government.
We know, for example, that Government Consultants International, despite directives from the Prime Minister's office, has continued to work for Petro-Canada. Is it perhaps Government Consultants International which is having such an effect on the Minister of Energy, Mines and Resources (Miss Carney) so as to paralyse her and the country in the face of rising gas prices at a time when the price of oil is falling to world lows? Why is it that the Minister of Energy, Mines and Resources refuses day after day in the House of Commons to act on the question of the rising price of gasoline in contradiction to every economic trend in every other country in the world? Perhaps, GCI has got to the Minister. Perhaps GCI and its lobbyists through Petro-Canada, have turned the Minister into the mouthpiece for Petro-Canada rather than making Petro-Canada an instrument of public energy policy.
It is in that regard that we are just a little skeptical not only about the intentions of the Minister with respect to his Green
January 27, 1986

Paper but of the concern that we in this House look only to the private Members' legislation, as suggested. I think it was suggested with some measure of respect and merit by the Hon. Member for St. John's East. If we turn to his legislation, then we will ignore the Government's responsibility to deliver a Government law to cap these excesses immediately so we can start getting some sanity back into Petro-Canada, into the company which was supposedly formed to help the energy prices and policies rather than to hurt it as we see occurring at the current moment.

Mr. Speaker, if we look at the lifespan of Private Member's Bills since the Sixties, even under the Liberal Government, it is clear these Bills do not survive unless the Government has the political desire to pursue the matter.
Mr. Speaker, since last December a discussion paper by the Minister of Consumer and Corporate Affairs (Mr. C6te) was tabled, which, in fact, discusses this particular subject, I would like to ask the Government why it is not proceeding with its own legislation, as promised by the Prime Minister (Mr. Mulroney) last September. Why is he maintaining this smoke screen, as it were, pretending with Canadians that the Government is doing something concrete about lobbying, while at the same time refusing to table a Bill in this House?

As I said before, I believe the Hon. Member for St. John's East has a legitimate beef. I think he has a beef which could be supported by all Members on all sides of the House. He pointed out in his remarks, and I think we can testify to the fact, that lobbyist legislation is working in other countries. It is working in the United States and in a number of other countries. At the same time, if we look at the congressional system in the United States which allows the private Member much more action and activity, we find that those same private Members have been hostaged, in a sense, to the political action committees and to the packs which have sprung up in the thousands of members across the United States. I would hate to see the day when we in the Parliament of Canada were hostage to packs in the same way as we now see happening in the United States. Unfortunately, if we proceed with parliamentary reform and the absolute removal of executive responsibility through the Cabinet, we are going to see ourselves fractured into the kind of congressional system which has led to the abuse of lobbyist power in the United States.
I believe there are two sides to that coin and I believe it will be addressed in the issue of parliamentary reform in the weeks and months to come. At the same time, if we look at the release which the Minister of Consumer and Corporate Affairs (Mr. Cote) tabled in the House on December 9, we find he speaks specifically to a number of major initiatives which he says "are intended to ensure the highest possible ethical standards for both the Government and the Public Service". Among these is a proposal to prepare legislation to govern certain aspects of lobbying.
Lobby Registration Act
Notwithstanding these broad and, I think, defensible comments, the Minister did not come in with a law or with legislation. He came in with another discussion paper so that we could discuss why it is that the Government-owned Crown corporation of Petro-Canada can, with immunity, violate directives from the Prime Minister's office by continuing to hire for consultation Government Consultants International, a firm which obviously has extremely political connections with the Progressive Conservative Party since it is headed up by the former Conservative Premier of Newfoundland.
These questions are not going to be answered by a discussion paper. They will not be answered by a private member's Bill, however well intentioned that private member's Bill may be. These questions will be answered when the Government is prepared to come up with legislation which will define exactly what a lobbyist is and when it comes up with a piece of legislation which is prepared to tell the people of Canada just how much these gun-slingers are being paid and just what intention, direct and indirect, they have in the changing and modifying of public policy within Canada. We know it is likely in the very near future that the Minister of Finance (Mr. Wilson) will bring forth a Budget. In the same way, we know that, obviously, the Minister of Finance will be tapped by a number of interest groups, particularly the business community. I think it is fair to say that the lobbyists which have had the most success happen to come from the business community. In an article called "Pitching Your Message To Ottawa" by Graham Davies, it indicates quite clearly the Government's interest in the messages borne by representives of the business community. The article states, and I quote:
-there is a new co-operative climate that is enticing planeloads of corporate executives, bankers, oilmen and small-business operators to the nation's capital. They are coming to Ottawa to take up the Conservative Government's challenge to engage in dialogue and consultation on the Tory program for economic renewal.
The Government wants to get its Budget message across. One can expect to pay up to $200 for such a hired gun, but we would like to know who is speaking for the young people, the unemployed and the senior citizens? Who is speaking for these people at the same time these paid lobbyists are currently being allowed to carry on their activities unfettered behind the corridors of power without being accountable to the Parliament of Canada? I believe that one way of dealing with this situation is by demanding that the Minister of Consumer and Corporate Affairs immediately introduce legislation, backed by the Government and not simply a Private Members' Bill, which will address the very serious issue of paid lobbyists. That will ensure that those people who are influencing Government public policy are on the record. It is time we opened the books. It is time Petro-Canada told us how much Government Consultants International is being paid and why it has been successful in convincing the Minister of Energy, Mines and Resources not to hold the cap on gas prices. With that in mind, we would like to see Government action, not another Private Members' Bill or a discussion paper.

January 27, 1986
Lobby Registration Act


Philip Derek Lewis: Point of order, Mr. Speaker. In response to the last speaker's request for government action, I am prepared to advise the House on behalf of the Government that we are prepared to refer the subject matter of this Bill to the Standing Committee on Procedure and Organization. Further, in accordance with government Motion No. 71, we are prepared to refer the document "Lobbying and the Registration of Paid Lobbyists", prepared by the Government, to the same committee. The committee is to report its findings no later than March 30, 1986. If I have unanimous consent of the House I am prepared to make such a motion shortly before six o'clock, immediately after the NDP has had an opportunity to respond.


Some Hon. Members:: Hear, hear!


Sheila Maureen Copps: It's a red herring.


Some Hon. Members:: Oh, oh!


Jean-Robert Gauthier: On that same point of order, Mr. Speaker. The Government wants to again send this document "Lobbying and the Registration of Paid Lobbyists", a discussion paper which has already been referred-


Philip Derek Lewis: No. It is on the Order Paper.


Jean-Robert Gauthier: It is a proposed motion. Why don't you move it?


Philip Derek Lewis: I just said-


Jean-Robert Gauthier: Move it on Government time under Government Orders, not Private Members' Hour. You do not need to do it in Private Members' time. It is a Government initiative which asks for a report not later than March 30, 1986. My point is if it is a government initiative and a Minister wants to stand in his place during Routine Proceedings and make that motion, we would give it serious consideration. However, for the Parliamentary Secretary to try and bootleg that thing at this time when we all want to speak on this important initiative I think is wrong.


Some Hon. Members:: Oh, oh!


John Horton McDermid: We will see who talks it out.


Jean-Robert Gauthier: Stick around. I have learned a lot from you, McDermid.


William Alexander (Bill) Blaikie: On the same point of order, Mr. Speaker. I would have had some reservations about only the Bill going to committee. I hope I will have a chance to speak in a few minutes about why I do not like-and I speak only for myself-the whole thing. However, in any event, I have no quarrel with it going to committee in this form only because the whole paper is being referred as well. That would have the effect of doing what the Government wants to do and I do not think it would give the Government the kind of out which my colleagues to the right maintain it will. Therefore, I have no objection to such a motion being made.


Some Hon. Members:: Hear, hear!


Jean-Robert Gauthier: Mr. Speaker, my last comment was that you can hardly bootleg something like this on a point of order. The Hon. Member has to have the floor to do that. If the Member wants to speak to his motion some time in the debate, which was my point, then he can do so. To come in on a point of order and try and push that through in that way I think is irregular.


Philip Derek Lewis: I said shortly before six.


Mr. Deputy Speaker:: We are still in debate. If something is to happen it will happen before six o'clock, but nothing had happened yet.


William Alexander (Bill) Blaikie: Mr. Speaker, I want to begin by commending the Hon. Member for St. John's East (Mr. McGrath) for his traditional persistence in pursuing matters of great importance to him, and particularly for the tradition, now well established, of carrying on the work of the Hon. Walter Baker. Many times in this and other Parliaments I have found myself on the same wavelength as the Hon. Member or, for that matter, the Hon. Walter Baker, particularly with respect to parliamentary reform. However, I want to say at this point-and I stress that I am speaking only for myself because, as I believe he pointed out, Members from my Party have indicated support for the idea of registering lobbyists. Indeed, the first Private Members' motion to that effect was not from the Hon. Walter Baker but from another deceased Member of this House, Barry Mather, an NDP Member of Parliament. Therefore the reservations that I express are only my own and I want to make that clear from the beginning.
My concern is that by moving to register lobbyists, we are making a statement about politics in Canada. We are defining the kind of politics we regard as entrenched in and part and parcel of the life of Canada. I do not say this out of any naivete. I realize lobbying has gone on from before Confederation. I know many hundreds of thousands of dollars are spent in the financing of paid lobbyists here on the Hill. However, my concern is, to put it simply, that by moving to register lobbyists we are accepting a certain view of politics which I want to reject. There have always been competing views of the political process here in Canada. By moving to register lobbyists we are saying that a particular view of politics has won the day. I call that kind of politics "brokerage politics" or small "1" liberal politics, that is the view of politics that sees the role of Government, indeed of Parliament, as engaging in a series of trade-offs between the interests of various groups in the country. There are other views of politics which have existed alongside that view. That is, the politics of competing ideas; competing ideas about the common good; competing ideas about the public interest; competing ideas on many levels. There is also what I might call the co-operative model. This is the reason that some countries have not gone so far as to register lobbyists. They say they do not really need to do that because they have more of a consensual or co-operative view of
January 27, 1986

politics. They sit down with various sectors and work out a consensus between them.
What I am saying to the Hon. Member for St. John's East, and I hope he can see my point, is that by moving to register lobbyists we will be giving a kind of legitimacy, or sanctity if you will, to an element of our political process which I think is to be lamented. In that sense I am opposed to the idea. It will have the effect of allowing one particular view of politics to win out over those others, which I admit are always going to be somewhat blurred or overlapping, but which nevertheless are in competition with each other. Rather than declaring a victory for one view of politics over the other I would just as soon they continued to compete with each other in the potitical market-place, to use a phrase popular with Members on the Government side.
There is also a difficulty in deciding what a lobbyist is. I once worked for the United Church in a social action ministry in the north end of Winnipeg. I often went to City Hall to argue for better housing or different landlord/tenant regulations and various other things affecting people in the area in which the Stella Mission was located. Was I a lobbyist? I was not being paid directly by the groups on whose behalf I was speaking. I was being paid by the church, which was concerned about a particular area. The Hon. Member for St. John's East said we have to watch that we do not cast the net too broadly.
I guess the point I am making is that as soon as you begin to cast the net you have given weight to this particular view of what politics is all about and it is only a matter of time before you debase the coinage of everyone who is interested in advocating a certain view of what the country should be like. We are then all on the same level with the high-priced consultants who are doing the lobbying in the back corridors on behalf of PetroCan or whoever. That reduces everyone to this kind of money-grubbing level. I object to that. I know that is not what the Hon. Member has in mind. What he has in mind is to bring under control and make more visible the high-powered lobbying that goes on here so that Canadians will know more about what is going on.
However, I think that experience in the United States will bear out that those who are doing things which they would rather not have the public know about will still find ways to do them. They will still find ways to have the inappropriate influence that the Hon. Member wants to bring under public scrutiny. It is those who speak out on behalf of others who cannot hire people to speak for them, people who speak on behalf of the poor and powerless in our society who do not have any clout, who will be eventually listed and will receive the most scrutiny.
As I am sure you and other Hon. Members can see, Mr. Speaker, I have a great deal of reservation about this whole concept. I think the argument could be made that it would be a sad day for Canadian politics when we come to the point where we think that our politics are so much like this that we want to institutionalize it in this way. I am sure that other
Lobby Registration Act
Members of my caucus would have a different view. I make this argument all on my own.
I thought it was unfortunate that the Hon. Member for St. John's East referred to that quote by the Hon. Member for Hamilton Mountain (Mr. Deans). I do not think that is helpful in the current context of trying to nurse the process of parliamentary reform to a happy conclusion.
This is my first opportunity to say something in a public forum, about much comment recently about what bothered the NDP with regard to the reforms at the last minute when everything seemed to be going so well. If you check the record on Private Members' Business you will see that what the Government finally presented in the form of proposed Standing Orders in the third week of December is different than what the reform committee recommended.
In the proposed Standing Orders which the Government introduced just before we recessed for Christmas, the Special Committee on Private Members' Business was given the power to allocate consecutively the five hours of debate which would be given to each of the six Bills that would be selected out of the 20 priority Bills for coming to a vote. That was not in the original proposal of the committee. The original proposal specified that those five hours would take place intermittently, whereby a Bill would come up for an hour's debate, even though it had been designated for a vote, then the other 19 Bills would be debated. That process would be repeated so that no matter what was introduced as a private Member's Bill there would be sufficient time for the public to come to understand what was happening. It would be a much more lengthy process than that which would be possible if the Standing Orders proposed before Christmas were to be enacted. Under that proposal the private Members' committee could decide that a particular Bill should have five hours of consecutive debate. A private Member's Bill could go from start to finish in about a week and a half. That is not what the committee had recommended.
I want to make it clear that our caucus is not holding back on a committee proposal. We are holding back on a Government proposal which is different than what the committee proposed. I do not think that has always been clear. That may be a wrinkle in the Standing Orders which was quite unintended by the Government and quite innocent. It has not been brought out into the light of day that this is the problem.
I thought I could, under the rules of relevancy, get away with using this opportunity to explain that since the Hon. Member for St. John's East referred to an article about parliamentary reform. I wanted to use this opportunity to clarify the problem. It is not an insurmountable problem. If the collective political will in this place still exists to go ahead with the exciting new kind of Parliament that many of us had in mind when they made those recommendations, we can still do that. For God's sake, let us not lose that little window of opportunity that we have by getting stuck on proposals that are already made. I say that in particular to the Government. Let us try to get in step with the proposals which the committee originally made and see what we can do. I have no

January 27, 1986
Lobby Registration Act
intention of talking out the Hon. Member's Bill so I will sit down even though there are a few more things I could say.


Philip Derek Lewis: Mr. Speaker, I think that the debate on this matter has been healthy and helpful. Therefore, Mr. Speaker, if I have the unanimous consent of the House, I will move:
That the motion be amended by deleting all the words after the word "that" and substituting the following therefor:
"Bill C-248, an Act to register lobbyists, be not now read a second time, but
that the order be discharged, the Bill withdrawn, and the subject matter
thereof referred to the Standing Committee on Procedure and Organization". And, further, that in accordance with Government Motion No. 71, the document "Lobbying and the Registration of Paid Lobbyists" prepared by the Government and tabled in the House be referred to the same Standing Committee on Procedure and Organization, and that the committee report its findings no later than March 30, 1986".
I think there has been an indication from my colleague in the NDP that he wishes this matter to be discussed and does not wish the Bill to be talked out. I think there is a disposition among my colleagues that the matter go to committee to be discussed fully. Therefore, I would ask that you ask for unanimous consent to put this motion to the House.


Mr. Deputy Speaker:: Is there unanimous consent that the motion be put to the House?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: There is no unanimous consent.


John Horton McDermid: I have not heard anyone say "no". Call for the yeas and the nays.


M. Gauthier:: You guys have to get your procedure together. Bring somebody in there who knows something about procedure. You can't put a motion if you haven't got unanimous consent, and you haven't got it.


An Hon. Member:: Yes we have.


Jean-Robert Gauthier: No you haven't. I am standing in my place waiting for the Speaker to recognize me.


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


Jean-Robert Gauthier: No.


Sheila Maureen Copps: No.


Mr. Deputy Speaker:: There is none.


John Horton McDermid: Now we know where the Grits stand.


Philip Derek Lewis: Mr. Speaker, I rise on a point of order. 1 would like the record to show that the only nays came from Members of the Liberal Party.


Jean-Robert Gauthier: Mr. Speaker, I am now more convinced than ever that the Government was trying to bootleg something in here by the back door by using
the Parliamentary Secretary to do something which I do not think is in keeping with what we would call Private Members' Hour. Doing Government business in Government time, fine, but doing Government business in Private Members' Hour, no, Sir. That is clear? That is why, Mr. Speaker, I want to speak on this Bill because I think it is very important that we address this Bill and the subject matter at hand.

Mr. Speaker, the Bill provides for the registration of lobbyists, and a declaration by them stating in whose interest they are working. It imposes a fine and disqualification from lobbying for those convicted of evading these provisions.
This is in fact the purpose of Bill C-248, and ...


Mr. Deputy Speaker:: I am sorry but I have to interrupt the Hon. Member. The hour provided for the consideration of Private Members' Business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

B. Keith Penner: Mr. Speaker, on several occasions questions have been raised in the House of Commons concerning an Indian nation in the Province of British Columbia and a dispute it is having with respect to one part of the area claimed as hereditary lands, and economic activities taking place in that area prior to a just settlement of this outstanding claim.
I want to provide the House with a little background before I register the discontent I have with the response from the Minister. Let me begin by saying that the question of the Haida Indian people and the logging that has been going on at Lyell Island have been raised by myself and many other Hon. Members of the House, including the Leader of the Opposition, who has said that the logging on that island ought to be the subject of a continuous moratorium until there is a just settlement of this outstanding claim.
I must begin by talking about the hereditary lands of the Haida people, the Queen Charlotte Islands themselves. The Haida people call these lands "The Land of Haida" or "beautiful islands".
Part of the Queen Charlottes is known as South Moresby. What a unique and fascinating area of Canada this is. South Moresby is therefore a part of the Haida lands that they claim
January 27, 1986

as having been in their possession for thousands of years. South Moresby contains the highest concentration of endemic plants, birds, mammals and insects of any area of its size in all of North America.
There are major archaeological sites located in South Moresby, as part of the Haida lands. So valuable and important are these archaeological sites that responsible citizens of Canada who have the required knowledge and expertise to make these judgments have gone to the United Nations to ask that this be declared a UNESCO World Heritage Site.
One will find on South Moresby primeval rain forests containing western red cedar, yellow cedar, western hemlock and sitca spruce, among the largest of their genera.
The claim of the Haida people has already been accepted by the Government of Canada. The Province of British Columbia is a signatory to the Constitution of Canada which recognizes that aboriginal rights do exist. Since we have a recognition of rights and a claim that has been accepted, it is only logical that we would want to postpone any development, whether it is cutting down trees, building roads, establishing new towns or mining, until there is a just settlement.
At one moment in time the British Columbia Government seemed to have recognized that point, because on one part of South Moresby, which is called Lyell Island, it imposed a moratorium upon a logging company which wanted to log in that area. Suddenly, without announcement and to the surprise and dismay of the Haida people, that moratorium was lifted. Naturally the Haida protested. What Member in the House would not stand, as did the Haida, to protect their own homelands? They stood against the power of the British Columbia Government and the police. Now we know why. We know that there was some conflict of interest going on among the Ministers of British Columbia and that particular logging company. That is a Canadian scandal, at least a scandal which belongs to British Columbia that we all regret.
I raise this matter at the time of adjournment and ask the Minister to use his authority and power as the trustee of the Indian people to urge the B.C. Government to reimpose that moratorium; let the logging stop, go to the bargaining table and negotiate a just, fair and equitable settlement. We know how to do that in Canada. We have done it before. We can do it for the Haida people in British Columbia. It just requires the political will.
I call upon the Minister, who has the right sentiments, emotions and approach, to provide stronger leadership in this particular case. We need not worry about the sensitivity of the British Columbia Government. It has already betrayed that sensitivity. We have to bear in mind, above all, the rights of the Haida people who have title and want to negotiate a just claim. I call upon the Government to give leadership and fill the trusteeship role. Let us begin to bargain in good faith with the Haida people over South Moresby and Lyell Island.
Adjournment Debate


Mr. Gordon Towers (Parliamentary Secretary to Solicitor General of Canada);: Mr. Speaker, I am pleased to have the opportunity on behalf of the Minister of Indian Affairs and Northern Development (Mr. Crombie) to clarify the Government's position on this important question.
Perhaps a little background would be useful to keep the matter in perspective. Lyell Island is part of the South Moresby Archipelago in the Queen Charlotte Islands in the Province of British Columbia. The whole of the Queen Charlottes and the surrounding seas are claimed by the Haida Nation, who base their claim on the concept of aboriginal title. The claim was submitted to Canada in November, 1980. It was then reviewed and accepted, pursuant to the current policy on comprehensive native claims, on Juen 30, 1983, for eventual negotiation. Negotiations with the Haida have not yet begun.
As noted previously, the area covered by the entire claim is very large, and it is left to the negotiations to set out the specific rights and benefits which the Haida should derive in a claim settlement agreement. As stated in the current federal policy, where claims fall in areas of provincial jurisdiction, or where provincial interests and responsibilities are affected, the provinces must be involved in claims negotiations. Right now, although 14 claims have been accepted in British Columbia, only the claim of the Nishga Tribal Council is under active negotiation.
In July of last year the Minister appointed a task force on comprehensive claims policy and charged the task force with making recommendations on improving the present policy and facilitating the negotiating process. The report of this task force will be formally submitted shortly, and the Minister will be reviewing these recommendations with a view to the development of a more efficient and effective policy and process.
In the specific situation of Lyell Island, the provincial Minister of the Environment announced on October 18 of last year that logging on Lyell Island could resume. Logging has been suspended since June, 1984. On October 20, 1985, a contingent of Haida physically blocked the resumption of logging. Ten of the Haida were eventually convicted of contempt of court and given suspended sentences. The Minister visited British Columbia in early December and met with both the Haida and his counterparts in the provincial Government and, as a result, the province agreed to a series of meetings with Haida leaders. Logging was temporarily suspended for the Christmas season. Logging resumed on January 20, but the Haida have suspended their blockage pending another meeting on the issue with the B.C. Attorney General which is scheduled for early in February. It would not be appropriate to speculate on what the outcome of this meeting might be. I can assure the House that the Minister stands ready to offer whatever further assistance he can to all the concerned parties in seeking a solution to this dispute.

January 27, 1986
Adjournment Debate


YOUNG OFFENDERS ACT-REQUEST FOR AMENDMENTS TO DEAL WITH SENTENCING
Alan Redway: As you know, Mr. Speaker, I have asked a number of questions in this House over the past year and a few months relating to the Young Offenders Act and problems with it. I asked a question relating to the Young Offenders Act on December 19 that specifically dealt with the case of a 14-year-old who was charged and later convicted of the murder of three separate individuals. The penalty meted out by the judge on that conviction was limited to a total of three years, because of the provisions that now exist in the Young Offenders Act.
After I asked that question, Mr. Speaker, as you are aware, the Solicitor General (Mr. Beatty) announced that he was going to be bringing forward amendments to the Young Offenders Act. That was a source of great delight to me, and I believe to most of the people in this entire country.
For many months now a great number of problems with the Young Offenders Act have been pointed out in this House. Police forces across the land, parole officers, members of the public and a great variety of people in this country have expressed concern about a number of difficulties that exist with the Young Offenders Act. Nobody has ever suggested that we should do away with the Act altogether, scrap it or go back to the Juvenile Delinquents Act or any similar legislation. What we have been suggesting is that there be amendments to the Act, amendments that would deal with the problems that have been arising, and arising quite regularly across this country since the Act came into force.
The Solicitor General has now announced that he is going to be introducing a series of amendments that will hopefully deal with most if not all of the problems that have been pointed out over the last few months. He has indicated he is first going to be dealing with the question of violation of conditions of parole, or those who fail to keep the peace while they are on parole. That is a problem that has been pointed out by police departments and law enforcement agencies; the difficulty of actually dealing quickly with young offenders who breach the terms of their probation. The Solicitor General has now, to the delight of everyone, indicated that he is going to be introducing amendments which will allow the police to deal more effectively with the detention of young offenders after arrests. There are difficulties relating to different categories of young offenders, whether at the lower or upper end or the range defined by the Young Offenders Act.
In addition he said that he wants to make some changes with respect to that part of the Act that states that a young offender's name cannot be published, even in a situation where that may present a danger to the public. The Solicitor General has indicated that he is going to propose amendments to the Act which will allow for the retention of records of young offenders acquitted of crimes, particularly in instances where they have been acquited by reason of insanity. At the moment those records are destroyed; no record at all is kept. He has indicated that he is going to make it a crime for an adult to
counsel a young person to commit a crime. That will be included in the Criminal Code, of course, rather than the Young Offenders Act. He has indicated that he is going to make changes to the rules of evidence with relation to corroboration of children's evidence. Finally, he is going to make some changes with respect to the maximum sentences that can be meted out.
Now, all of those things are excellent suggestions and I applaud the Solicitor General for them, but there are still some problems. There is still that problem, as I pointed out in my question of December 19, dealing with the matter of a 14-year-old who was tried as a juvenile offender, not tried as an adult under the Criminal Code. In that case, the Solicitor General indicated that under the Young Offenders Act that sort of proceeding could be moved up to an adult court but the provincial Attorney General has indicated that the problem lies with the Young Offenders Act. I do not know who is right but I think we need to have the question clarified. We have to make sure that the public understands that if there is provision now in the Young Offenders Act to deal with that, it should be dealt with that way and that the problem does not lie with the Act.
Second, there is still the problem in relation to those who are under 12 years of age. That has not been dealt with by the Solicitor General of Canada in his suggestions for amendments to the Act. I think it is still a problem which troubles police departments and the public across the country. I hope the Solicitor General will address that problem so that we can put to rest once and for all the fears and concerns of the people of Canada with respect to the Yound Offenders Act. It would be dreadful if we introduced amendments to the Act and then found that they did not deal with all the concerns and problems.
Obviously, we will have to see the actual amendments before we can put to rest the concerns of the public. I hope that tonight the Parliamentary Secretary will tell us that all of these things including the problem relating to those under 12, will be deal with and dealt with adequately. Perhaps then we will be able to put to rest the fears of the people of Canada.


Thomas Gordon Towers: Mr. Speaker, the Young Offenders Act has established a comprehensive process for dealing with young people who have been accused or convicted of criminal offences. Its various procedures and programs seek to ensure that the particular needs of the adolescent offender are recognized and responded to. The Act has created a basis for a system of juvenile justice that has been broadly supported.
The limits of the Act and of juvenile justice are also recognized and the legislation, therefore, provides for young people accused of serious crimes to be tried in the ordinary courts as if they were adults. The Act provides that at any time before the courts have made adjudication, the Crown or the young person may apply for a transfer and the court must then decide whether or not to make such a decision.
January 27, 1986

In giving consideration to this matter, the court must take the following factors into account: first, the seriousness of the offence and the circumstances in which it was committed; second, the age, maturity, character, background and record of the accused; third, the adequacy of the Young Offenders Act or the Criminal Code to deal with the circumstances of the case; fourth, the availability of treatment and correctional resources; and fifth, any other factors raised in the hearing that the court considers relevant.
In making its deliberations, the court is guided by the principles of the Act which are specifically stated in Section 3 of the Act including the declaration that (a) young people are responsible for their own behaviour; (b) society must be afforded the necessary protection from illegal behaviour; and (c) the special needs of young people should be dealt with.
Clearly the Young Offenders Act has made provisions that enable courts to assess individual cases and make determinations about the most appropriate way of dealing with specific situations. This way the law and the courts are able to react to the need to protect society without abandoning the special needs of young people immediately.
The transfer provision has proven an effective means of dealing with these two issues, and transfer hearings have permitted the facts of each case to be thoroughly examined and, as necessary, appealed before the superior courts. It is obviously crucial then that the hearing itself take place. The Solicitor General (Mr. Beatty) will therefore propose an amendment to the Young Offenders Act that will require a mandatory transfer hearing where there has been a death. Under the present law, a hearing is at the discretion of the Crown. This proposal would ensure that the juvenile justice system retain the flexibility it requires while guaranteeing that the question of transfer be heard by the courts in every case where the most serious crimes are involved. This and other matters will be placed before Parliament as soon as possible. I thank the Hon. Member for York East (Mr. Redway) for bringing this matter before the House of Commons at this time.


TRADE-WATER RESOURCES-POSITION OF CANADIAN NEGOTIATOR. (B) GRAND CANAL PROJECT
William Alexander (Bill) Blaikie: Mr. Speaker, I rise to pursue a question I asked first of the Secretary of State for External Affairs (Mr. Clark), and then of the Prime Minister (Mr. Mulroney), although the Prime Minister chose not to answer my question and had the Secretary of State for External Affairs answer it. It had to do with the position of the Government of Canada with respect to water exports. I am referring in particular to the concerns which many Canadians have about the opinions expressed both before and refer Mr. Reisman's appointment as Canada's free trade negotiator. He is well known as a promoter of what is known as the Grand Canal project, which is a project to dam James Bay and pipe the water back down into the Great Lakes and to the United States.
Adjournment Debate
Mr. Reisman in the past has said that in his view water exports could be the cornerstone of any free trade agreement with the United States. It has been worrisome enough that someone as well known as Mr. Reisman would have this view, but more so to myself and others when people like the now Premier of Quebec, Mr. Bourassa, are promoting this game. We know that there is a powerful group of people in the country who are in favour of this proposal.
Mr. Reisman was made the chief negotiator for the Government of Canada on free trade. The Government was asked its position and the Secretary of State for External Affairs said to me on a previous occasion in the House that water was not on the negotiating table. That is why it is a mystery to me that the chief negotiator continues on occasion to talk as if it is.
I asked the Secretary of State for External Affairs to clarify the Government's position which, as far as I can make out, continues to be that water is not on the negotiating table. I asked him to tell Mr. Reisman that in his capacity as chief negotiator for Canada in the free trade negotiations with the United States he should shut up about water exports, if for no other reason than out of respect for the view of his employer, the Government of Canada, which has said that that is something that is not to be discussed. I also wanted to find out where the Prime Minister stood on this question. I asked him to tell the House whether or not he maintained his earlier enthusiasm for the Grand Canal Project. The Secretary of State for External Affairs, said I was referring to things people said before they came to this House. I am not referring to things people said before they came to this House. The Prime Minister in this House previously indicated that he regarded this project with enthusiasm. So we need the Prime Minister's clarification.
We also need clarification from the Liberal Party. It is confusing for the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) to rise and ask difficult questions of the Government about Mr. Reisman's pronouncements on water export when right behind him is sitting the Hon. Member for Grand Falls-White Bay-Labrador (Mr. Rompkey) who has risen in the House to ask questions and to say things which have been positive about the Grand Canal project. The Liberal Party like to have it both ways on free trade and on a number of other issues and it is trying to have it both ways on the Grand Canal project and our water exports. I do not believe my colleagues in the New Democratic Party, or the Government, should let the Liberal Party get away with that. I believe that should be pointed out and that is precisely what I am trying to do here today. We have some very powerful Liberals in this country who are lining up behind that project. It is not just the Premier of Quebec. I know there are former Liberal Members of Parliament involved in the promotion of this scheme and who are very excited about it. So I think it is misleading, to say the least, on the basis of the questions asked by the Hon. Member for Winnipeg-Fort Garry, to assume that the Liberal Party has somehow made up its minds about water exports and about the Grand Canal projects because it certainly has not.
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Adjournment Debate
I know the Parliamentary Secretary will not be able to clarify the Liberal position on this, but I hope he will be able to clarify the position of the Prime Minister and his Government. I hope that what will be forthcoming will be a statement by the Government that they have made it very clear to Mr. Reisman that he is not to talk about water exports anymore, that he is not to talk about the Grand Canal project, and that he ought to show respect, if not for the views of the NDP environment critic, at least for the views of the Government whose very handsomely-paid employee he is.


Mr. Chuck Cook (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I will try to clarify the issue for the befuddled Member.
In the past few months many attempts have been made to link the question of large-scale export of water by diversion with that of Canada-U.S. trade negotiations. The Hon. Member has been involved in that. The Government has made clear on more than one occasion its position on these assertions. In fact, as early as September 30, 1985, the Minister of the Environment (Mr. McMillan) stated, at the time of the release of the report of the federal inquiry on water by the Pearse Commission, that he saw no linkage between exports of water and free trade. Since then the Government has reiterated the position that Canada-U.S. trade negotiations will be just that-trade negotiations-not negotiations designed to
surrender in any way Canada's control over our own natural resources. The Government of Canada has not been approached by any U.S. state or federal agency, formally or informally, on the question of exports of water.


William Alexander (Bill) Blaikie: What about Canadian?


Charles Henry (Chuck) Cook: Nor is it expected that this topic will be raised in the context of trade negotiations.
Much has been made of late concerning Mr. Reisman's views on water exports to the U.S. Mr. Reisman has stated clearly that he has not commented upon or issued any statement concerning water exports since his appointment as free trade negotiator. Recent comments concerning water published in the media and attributed to Mr. Reisman were in fact drawn from an unauthorized statement given by a member of Mr. Reisman's staff without his knowledge. Mr. Reisman, as trade negotiator, obviously will take his instructions from the Government, and the Government has made it perfectly clear that Canada will always retain full control over its natural resources.
Surely that answer should be sufficient, even for a Member who wants to continually confuse things.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.28 p.m.
[Stage Direction]

Tuesday, January 28, 1986