1986-04-08

Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to Petitions Nos. 331-46, 331-47, 331-49, 331-50, 331-51, 331-54, 331-55, 331-56, 331-61, 33177, 331-78, 331-80, 331-93, 331-94, 331-95, 115, 116, 117, 143 and 167.
I would also comment that these are in response to petitions with respect to the Morgentaler Clinic in Toronto.
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FINANCE AND ECONOMIC AFFAIRS


Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, I have the honour to present the first report of the Standing Committee on Finance and Economic Affairs, in both official languages.
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PETITIONS
Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, I have the honour to present two petitions to this House. The first petition is from 33 residents of Aylmer, Nepean and Ottawa in the national capital region. The second petition is from 32 residents of the same region, Gloucester, Aylmer, Nepean, Cumberland, Carlsbad Springs and Navan. These petitioners are strongly opposed to the potential destruction of parkland within the Mile Circle by the National Capital Commission's recommendation to the Government that this national piece of real estate be used for future embassy locations.


Mr. Dennis H. Cochrane (Moncton):: Mr. Speaker, once again I have the honour and privilege to present to the House a petition which has been duly certified by the Clerk of Petitions. It is signed by citizens in the greater Moncton area who are expressing their concern with regard to the current assessment being conducted by Canadian National into the shop capacity throughout Canada. The petitioners are concerned that this assessment will have a negative effect upon the employment figures in the greater Moncton area and, therefore, a drastic effect upon the economy of southeastern New Brunswick and the province as a whole, and they call upon Parliament to prevent any downgrading of the facilities in Moncton.
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t Translation]


Philip Derek Lewis: Mr. Speaker, if question No. 455 could be made an order for return, the return would be tabled immediately.


Mr. Speaker:: Is it the pleasure of the House that question No. 455 be deemed to have been made an order for return?


Some Hon. Members:: Agreed.


Mr. Heap: 1.	Since the implementation of the new Immigration Act in 1978, how many deportations occurred for the year (a) April, 1979 to March, 1980 (b) April, 1980 to March, 1981 (c) April, 1981 to March, 1982 (d) April, 1982 to March, 1983 (e) April, 1983 to March, 1984 (0 April, 1984 to June, 1985?
2.	What types of immigration violations caused these deportations?
3.	Were the deportees returned to their countries of origin and (a) if so, what were they (b) if not, how many were sent to other countries and which ones?
4.	Of the total number of deportations which occurred between April, 1979 and June, 1985, how many (a) were permanent residents in Canada for more than 5 years (b) came to Canada as landed immigrants prior to (i) 21 years old (ii) 5 years old?
Return tabled.


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

April 8, 1986
Competition Tribunal Act Mr. Speaker: Shall the remaining questions stand?


Some Hon. Members:: Agreed.



COMPETITION TRIBUNAL ACT


[Stage Direction]
The House resumed from Monday, April 7, consideration of the motion of Mr. Cote (Langelier) that Bill C-91, an Act to establish the Competition Tribunal and to amend the Combines Investigation Act and the Bank Act and other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, in rising to address Bill C-91 this morning, I will make the same observation as was made by other Hon. Members of this House, an observation which I think is extremely relevant to discussion of the Bill, about the present planned takeover of the Genstar Corporation by Imasco. This is a paradigm of the type of corporate manoeuvre or strategy which should be regulated by the Competition Act. It is a very good example of the problems which can arise in an economy such as we have in Canada when policies of corporate concentration are allowed to be pursued. I am glad to say that although the basis may be somewhat tentative, we do at least have some countenanced legislation which will give the Government some powers in this type of merger.
What I would like to do initially is outline the problems which can arise in an economy like ours if this kind of merger were to go through, particularly, of course, if it were to be repeated. I would like to draw parallels between that merger manoeuvre and the sort of clauses which should be in Bill C-91, and are not, and the clauses which are in Bill C-91.
What we have, and what we have seen over the last few years in Canada, is a continuing trend of corporate concentration which has tended to put power in the hands of a decreasing circle of people, an increasing number of whom live and have their major business interests outside of this country. What that means is that Canadian trade and commerce is gradually falling under the domination of groups that have a trans-national base, a multinationial corporate ethic and ethos, and which have practices that may very well be at variance with those we would desire to see as Canadians and which, frankly, are verging on the sort of concentration that is repugnant to Canadian ideals and to previous Canadian commercial and corporate practice.
[DOT] (mo)
It has been observed that Genstar swallowed Canada Trust and Canada Permanent and is now being swallowed by Imasco. It puts one in mind of the saw that big fleas have little fleas upon their backs to bite them and that little fleas have
lesser fleas, and so on ad infinitum. What we see is in the reverse. It is a system whereby each corporate takeover will be no more than a preparatory manoeuvre for the next round of corporate takeovers in which the larger corporations will take over the smaller ones. We will see an increasing concentration of corporate power outside the boundaries of the country. As we have found out with the American legislation concerning domestic international sales corporations and the export of goods in certain categories to countries considered to be hostile and embargoed, we will see increasingly that these activities will be taken beyond the framework of Canadian legislation and beyond Canada's ability to regulate.
The problem is this. Clause 64 of Bill C-91 does not deal with conglomerate mergers. It only deals with the concentration of holdings within a specific industry, be it on the horizontal level with one phase of a specific industry controlled by a single interest, or very few interests, or be it on the vertical level where an entire industry, the entire phases of supply of a goods or service, are controlled by a single corporation.
What we in the New Democratic Party would like to see is the withdrawal of Bill C-91. We would like to see it reintroduced with provisions which will govern conglomerate mergers and with significant strengthening measures. We believe that it is hard to see where Bill C-91 offers any improvement over the four other competition Bills that have been introduced in the House since 1971.
Of course, that raises the question as to why these Bills have come in and why so little progress has been made in the regulation of competition in Canada. I think it is plain to see that there are conflicting ideologies within the Liberal and Progressive Conservative Parties. There are those ideologies which are laissez-faire. They believe in the complete and unfettered freedom of the market-place to determine the forms of corporate organization and the forms of company structure. There are ideologies which are closer to those of the New Democratic Party. They recognize that there are authentic and genuine Canadian interests which must be protected, not by arbitrary interference in any sector of the economy but by a firm set of rules which are laid down and which will regulate all sectors of the economy, including the operation of Crown corporations at both the federal and provincial level. As the newspapers have been reporting, I am glad to see that there are Members on the Government side who are opposing this deal. They want to make sure that we have some say as a Parliament and as a Government over the type of corporate structures which will exercise enormous economic power and, frankly, political power.
What we are seeing with the increasing concentration is a tendency toward the Japanese system known as the Zaibatsu system, a system which works quite well in that country. It is a system that is antithetical to many of the values which Canadians hold true. It serves different values, some of them
April 8, 1986

quite worthy. However, I do not feel that within the context of a country so large and so diverse as Canada that competition policy can be allowed to function on the same level as it would function in a geographically small country such as Japan. It is a unitary state which has been hallmarked over the last 60 years by a singleness of purpose, which does not exist in Canada and which I do not think we should necessarily be promoting.
For example, Japanese companies look toward providing lifetime employment for their employees. Japanese business ethics and business practice, while very effective in that country, and no doubt harmonious with its cultural values and institutions, will be totally alien to Canadians in our context and our cultures.
We see that there have been incentives offered to staff people in these Canadian conglomerates to encourage others to deal with other companies within their conglomerate. We see the very real linkage between the goods and service economy and between the financial economy of intermediaries, of arbitragists, of lenders and borrowers, which enables the conglomerate that controls financial institutions to exercise enormous power that is largely unfettered in Canada at the present time. This is known as self-dealing. It is the system whereby the financial institution loses its independence, its arm's length relationship with its customers, and is bent toward furthering the finance or corporate goals of the parent.
That was very clearly the case in the instances of a Toronto financier and his trust companies, Seaway, Greymac, and Crown Trust. It is something which, without effective competition legislation to regulate conglomerate mergers, would always stand as a temptation to the people who exercise the controlling interest in the resulting multi-industry and mixed-industry conglomerates.
The record of corporate concentration in Canada is sad, since there has been no commitment to the lifetime employment system which makes it such a practical institution in, for example, Japan. Rather, we have seen the reverse. We have seen that the commitment is toward the reduction of employment. The commitment is toward eliminating employment which pays a respectable wage and replacing it with low-wage employment, for example, in the case of Dominion Stores. These are not the consequences that members of the New Democratic Party want to see from a revision of our competition policy.
There is other opposition to this measure as well. Perhaps we should be glad that there can still be opposition in the newspapers. After all, I point out that there is very little to prevent any conglomerate now having gobbled up a financial corporation from lending itself the money to buy out a newspaper that could act as a house journal and a propaganda organ on the Canadian market. We have such headlines as: "Big-biz takeovers bad news". In my hand I have an editorial entitled: "The macabre feast". On the side of the coin is a headline which states: "Hiram Walker's latest moves are making economic history". Apparently, there is one corporation that
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has decided that corporate concentration is perhaps not the way to go.
In the minutes I have remaining I would like to turn to the market where the need for competition is most evident and where it is obvious that Bill C-91 must have some bite and teeth for it to be effective. I refer to the market for refined petroleum products. This is a market in which major multinational corporations have always had control. They have been able, because of their vertical control in the Canadian industry, to exercise price-rigging, to fix the price at any and all levels with very little reference to the needs of ordinary consumers and, indeed, without much regard to government policy either.
I would like to quote from a letter from the Petroleum Marketers Association of Canada which states that Canada has the weakest anti-trust laws of any western democracy. There is little doubt that this Bill will be too weak to do anything about increasing independent share of the market or anything about high gasoline and home heating prices. That is my worry. It is my concern that we will not see eliminated that nine cents per litre which the Petroleum Marketers Association of Canada estimates to be the effect of price rigging and of oligopoly control of the Canadian market. We will not see eliminated that nine cents per litre that Canadian consumers are currently paying as a premium for having the Canadian oil industry controlled by a few major players resident outside the country.
A press release from the Petroleum Marketers Association of Canada indicates that this mechanism keeps rack prices to independents artificially high, threatens independents that majors will force down retail prices and squeeze margins if independents import cheap gasoline, will be used to keep retail prices up themselves and will be used to maintain inefficiencies. I do not think there is a community in this country that has not felt the impact of this form of price rigging by the oil-company majors. Certainly in my own riding there are a number of communities where competition does not exist, and has never existed, and where there is absolutely no guarantee or certainty that it would exist after the passage of a Bill such as Bill C-91.
In those communities to which I refer, the people have been told very frankly by the oil companies that the oil companies do not consider it necessary to compete in those communities, that they are perfectly willing to continue selling refined oil products at 14 cents per litre in a community that is only 230 kilometres away from here, that it really does not matter to them because it is not part of their marketing strategy. People just 230 kilometres up the road are paying a higher price which now equates to a premium of something like one-third over the cost of gasoline sold in more fortunate communities.
What will Bill C-91 do about those sorts of things? The whole problem with the Bill is that it has been written in large degree with the assistance of the very people who would be

April 8, 1986
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most likely to be regulated by effective competition legislation. It would appear that the Minister has listened to the representatives of large business and that not enough notice has been taken of the lobbying efforts of the organizations that represent small business and the Canadian consumer.
My Party tabled a letter to the Minister of Consumer and Corporate Affairs (Mr. Cote) listing seven independent experts whom we believed should be consulted on Canadian competition policy and whose views we felt were worth taking into account in the framing and tabling of new legislation. Our follow up indictes that there has been only the most perfunctory consultation with these experts, and that by and large it is the interests and representations of large business organizations that have been included in the legislation.
The House of Commons cannot afford, and the Government should not be able to get away with introducing in Canada competition legislation that will lead to a replay of the history of having one successful prosecution for price rigging in the last 100 years. That sort of regulation is not what the Government was elected to bring in. It is not the sort of toothless bulldog that the people of Canada will allow to shamble around the alleys of corporate power.
The people of Canada want to see legislation with teeth, legislation that will prevent price fixing and corporate concentration, legislation that will control self-dealing and above all legislation that will ensure the delivery of all products and services, and particularly refined gasoline products, to Canadians at prices that represent only a fair return and a fair producer margin and do not include padding for inefficiencies, financing of future takeovers, funding of corporate expansion and the general support framework for concentration of corporate power in Canada. I fear that if Bill C-91 is passed as is, it will allow all those things to continue, possibly even at a greater speed than they have in the past.


Mr. Ouellet:: Mr. Speaker, I would like to ask the Hon. Member who just spoke whether he believes that the Bill tabled by the Minister, especially in the section that concerns mergers, is an adequate response to the present need for legislation on competition in order to prevent mergers that would be disastrous to the Canadian economy.
To me it seems clear that Bill C-29, as tabled in the House by the previous Government, had the advantage of providing a whole series of factors that had to be taken into consideration when deciding whether a merger was acceptable or not. I think that with Bill C-91, the Minister has diluted the impact and the scope of the Bill, especially in the section on mergers, by removing the very factors that should be considered when assessing whether a merger is good or bad for the Canadian economy.


John Edmund Parry: Mr. Speaker, I want to thank my hon. colleague for his question and comments.
As far as Bill C-29 is concerned, since I was not a Member of this House when the Bill was tabled, I would rather not make any judgment on its merits.
However, as far as the present Bill is concerned, I fully agree with my hon. colleague, in that it does not provide the same legislative or governmental authority for regulating mergers that could have disastrous consequences for the Canadian economy.


The Acting Speaker (Mr. Paproski):: Order. Questions and comments? The period provided for questions and comments has now expired. The Hon. Member for Notre-Dame-de-Grace-Lachine East (Mr.Allmand).

Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, I am pleased to participate in this debate on Bill C-91 because I had introduced a similar Bill in 1978 prior to the 1979 election. While this Bill tends to go in the same direction as the Bill I had introduced, a Bill which was known as Bill C-13, it is not quite as strong in many areas. However, as my hon. colleagues have said, the Bill is certainly an improvement over the legislation that is presently in force and we will support the motion to send it to committee where we hope that, with extensive hearings, we might be able to agree on certain amendments that would strengthen the Bill.
Bill C-91 has had a long history. The process began in 1969, I believe, with the report of the Economic Council of Canada on competition policy. That report was very critical of the legislation that was in place, the Combines Investigation Act, and its record in dealing with restrictive practices and mergers in the market-place. The report of the Economic Council at that time recommended wide-ranging legislation to correct the abuses and shortcomings in the Combines Investigation Act and its implementation.
Initially Bill C-256 was introduced in 1971 by the Hon. Ron Basford who was the Minister of Consumer and Corporate Affairs at that time. That Bill was met with massive objections from the business community. In many cases those objections were wrongly directed. However, the Bill was debated. It went to committee and stayed there for ever and a day. When that session came to an end that Bill died. Following that, another attempt was made in 1975 when the previous Bill was split into two parts, and Bill C-2 was finally passed. In 1977, Bill C-42 was introduced to carry on the reform of the competition legislation. It also died on the Order Paper due to opposition Then I introduced Bill C-13 in 1978. In 1984, Bill C-29 was introduced by the former Hon. Member for Nickel Belt, Judy Erola, and now we have Bill C-91. We have had six Bills attempting to deal with this important subject since the report of the Economic Council of Canada in 1969.
These Bills attempted to deal with several problems in the legislation which were criticized over the years. The most important one was the absolute failure of the provisions in the
April 8, 1986

legislation, in the Combines Investigation Act, to deal with mergers and with monopolies. In the 75-year history of the legislation there was not one conviction under the provisions dealing with mergers and, as far as I know, there was only one conviction under the monopoly provisions, that is, the provisions dealing with the abuse of dominant positions in the market-place. Virtually those two very important provisions in the law have been ineffective.
Much important time was spent by officials in the Department of Justice and in the Department of Consumer and Corporate Affairs preparing cases against businesses and individuals who had, in their opinion, violated the provisions of the Act, but they were never successful. Why were they not successful? It was because the legislation was of a criminal nature. One had to prove beyond a reasonable doubt that the merger was harmful to competition, harmful to the free market economy and the market-place. The abusive dominant position had to be proved beyond a reasonable doubt. It was virtually impossible to mount that kind of proof when we were dealing with conversations between individuals and not with the eyewitness observations which comprise proof in other criminal cases. Of course there was very little written documentation when people got together to abuse the market-place. Most of that activity would be of a nature that could not be proved in that way.
The reason the legislation was of a criminal nature is that for a long time the law relating to civil matters had been under provincial jurisdiction and the federal Government had been left with criminal law jurisdiction. It tried to deal with these important problems under the criminal law, and it just never worked.
There was also criticism of the conspiracy sections of the Combines Investigation Act. There have been convictions under those provisions, but over the years the fines have been so low that they have amounted to being simply a payment to carry on illegal activity. I am pleased to see that in Bill C-91 the maximum level of fines has been increased to $5 million. That is very important because very often large firms which violate or abuse the market-place can well afford by such abuse to pay a low fine and still make huge profits in the market-place, either by monopolistic practices or otherwise.
I have pointed to the fact that this is the sixth Bill since the report of the Economic Council in 1969. Each time a Bill was introduced to deal with these important matters it was delayed interminably by opposition, principally on the part of the "Gang of Five", as W. T. Stanbury of the University of British Columbia calls them; the "Gang of Five" being the Canadian Chamber of Commerce, the Canadian Manufacturers Association, the Business Council on National Issues, the Grocery Products Manuacturers of Canada and the Canadian Bar Association. Each time an attempt was made to bring in better competition legislation, there was massive lobbying, submissions to committee, more submissions, hearings, et cetera.
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Mr. Murphy:: And the Liberals gave up.


Mr. Allmand:: I can tell the Hon. Member that when I was the Minister there was not one attempt by the NDP to assist in this legislation.


Rodney Edward Murphy: Oh, come on.


William Warren Allmand: As a matter of fact, I looked through the various Question Periods over the entire period of time, and the NDP showed little interest in this legislation. I do not know why. I would expect them to be more interested in it.
Those who were opposed to the legislation knew very well how it would affect their ability to make profits, but it was very difficult to translate the important provisions of competition reform in a way in which it could be well understood by the man on the street. Of course, the man on the street is interested in the lowest price and the best goods and services possible in the market-place. However, it was difficult to translate the complex provisions in the competition legislation so that he understood that it was to his benefit.
When these Bills were before the House-and almost the same thing is happening now-we did not receive massive support from the general public in favour of them. However, we received massive opposition by large businesses, the "Gang of Five " and the members of those associations. What is very interesting about this debate, which has been ongoing for many years, is that these are the people who say they believe in the free market economy. They continually brag that they are free enterprisers and that they believe in free competition. However, whenever we try to do something to make the market economy work in a more competitive way they oppose it. Why do they oppose it? It is because they are not really interested in the principle of free competition. They are interested in maintaining their dominant position, once they have attained it. In other words, for many of those firms the only thing which matters is the bottom line, not principle. I am sorry to say that, but that is what in fact happens. If they are in a position to dominate the market, they do not want to see the young enterprising small company come in to challenge them. They want to keep their dominant position, and to hang with the free market system.
In Canada over all these years we have had multinationals which in the United States had to submit to much tougher and much more effective anti-trust legislation. They were willing to live with it in the United States, but the subsidiaries of those same companies opposed that legislation in Canada right down the line. They said that while it was good for the United States, it was not appropriate in Canada.
Other countries such as the European Economic Community, Britain and West Germany, countries, which had great success in business, were revising and reforming their competition legislation, but some of the dinosaurs in Canada were opposing it. In my opinion, they were being paranoic in opposing it, and showing themselves to be a bit hypocritical. On the one hand they stood for the free market economy but

April 8, 1986
Competition Tribunal Act
opposed legislation which would have made the market economy more competitive. Because they were so big, well organized and well financed, they were able to mount massive publicity campaigns saying how bad the various Bills were. When they are up against the five big associations, to which 1 referred, they did not have much success.
We also had associations of small businesses which supported those Bills over the years; for example, the Independent Petroleum Association. Small businesses knew how they were being treated, in many cases by the large companies, the multinationals and the combines that were going on, and how they were hurt by predatory practices to prevent new entries into the market-place, and refusals to deal.
I congratulate the Government for bringing in this Bill. It is not as strong in its present form as I would like it to be, but it is certainly a step in the right direction. We will support the motion to send Bill C-91 to committee where we will listen to witnesses and perhaps try to improve on the Bill to make the legislation even better.
The purpose of competition legislation and the original purpose of the Combines Investigation Act had fine principles, but the legislation was ineffective because it was criminal type legislation. The purposes have always been the same, namely, to promote fairness and honesty in the market-place, to promote economic efficiency, to prevent or reduce the abuse of economic power by large conglomerates, to protect the consumer and to protect small business. These have been the goals over the years. They are worthy goals and ones we support.
I earlier mentioned Professor Stanbury of the University of British Columbia. He is probably one of the best known experts in Canada on this subject and he has written extensively about it over the years. He points to some of the improvements that this Bill will bring about in our competition legislation. He levels, however, two important criticisms against the Bill. One would hope that we could concentrate or focus on these shortcomings when the Bill goes to Committee. First, with respect to mergers, mergers will now come under civil law provisions rather than criminal law provisions. This means we will be able to use the substantial burden of proof, or the predominant burden of proof, rather than proving beyond reasonable doubt, which is the burden of proof required in criminal law cases.
The central task for the judges in the new competition tribunal will be to determine whether a proposed merger is, and these are the words, in the Bill, "likely to prevent or lessen competition substantially". Professor Stanbury points out, and probably with reason, that the word "substantially" is not defined. That may put up a very serious roadblock to making this legisation effective, if the courts judge that "substantially" is a very large barrier to cross. As a result we will be no better off with this Bill than with the merger provisions in the present legislation. The word "substantially" could cause a lot of
difficulty when we go to prove that mergers are likely to prevent or lessen competition.
Professor Stanbury also has some criticism for the new monopoly section. Once again it is a good thing these provisions have been transferred from criminal law jurisdiction into civil law jurisdiction. It may still be very difficult to enforce, because the Crown will have to establish four items of proof. First, the Crown will have to prove that one or more firms substantially or completely control the relevant market. That will not be easy to prove even with the civil burden of proof. Second, the Crown will have to prove that the firms have engaged in a practice of anti-competitive acts, such as those listed in the section. That may be easier than the first burden, but it is still difficult. Third, the object of the practice is to lessen competition. It is easy enough sometimes to prove that certain firms are engaging in certain practices, but then to prove that their purpose, their intention, in doing those things is to lessen competition might be extremely difficult. Fourth, the practice of lessening competition has had, is having, or likely to have the effect of lessening competition substantially. Once again, that word "substantially" could cause a lot of problems for the Crown in trying to prove its case where there is abuse of dominant position in the market-place.
A Bill like this has to provide balance. It is always a question of judgment as to what that balance should be. But it has to be a balance between the rights and responsibilities of large businesses as opposed to small business, especially small business that is trying to enter a market-place dominated by big firms. We must also maintain a balance between investors, entrepreneurs and consumers. We do not want to discourage investment or to harm consumers. We want to be sure they get the best possible goods and services at the best possible prices.
We will vote to send this Bill to committee, not because we approve of everything in the Bill, but because we believe it is a step in the right direction. Once in committee, having heard witnesses, experts and consumers, we will try to make amendments. We reserve our right, however, to take a different position on this Bill once it returns to the House for third reading. If no improvement is made, we will have to decide whether or not we will still support the Bill. We are hopeful that improvements can be made in committee. I look forward to participating in the committee procedures.


Mr. Nystrom:: Mr. Speaker, this Bill before the House is probably the fifth generation of Bills in competition policy going back to 1969. As I recall, we have had a whole series of Bills since 1971. I see five pieces-


William Warren Allmand: This is Bill number six.


Lorne Edmund Nystrom: This is Bill number six? The first one was Bill C-256 in 1971, then Bill C-42, Bill C-13 and Bill C-29. I have obviously missed one if this Bill before the House is the sixth attempt at competition policy.
One of the concerns I have is that there is a powerful corporate lobby in Canada which always seems to succeed in
April 8, 1986

convincing Members of Parliament to water down competition policy. The Hon. Member for Notre-Dame-de-Grace- Lachine East (Mr. Allmand) mentioned the big five, the National Council on Business Issues and so on, that are lobbying very hard in this area. I notice the advisory council, for example, is made up of people from the business community and the business community only.
I am really concerned as a Member of Parliament in a riding that represents a lot of very ordinary Canadians that their voice is not being heard when legislation of this type is drafted. The Member was the Minister of Consumer and Corporate Affairs at one time. I know personally where he stands on these issues. He is a good progressive Liberal. He would like to see a much tougher competition policy, but why was this not done when the Liberal Party was in power? It was in power for many, many years. The Liberals had several studies, several different papers and they made several different attempts at changing competition policy. Why was the Liberal Party always consistently persuaded by big business to come out with a toothless tiger when it came to competition policy?
I know the Member will and say that the Liberal Party did not get enough pressure from the NDP. I do not think that is good enough. The Liberals were the Government. They had a majority. Why were they not able to stand up to the business community in Canada and defend the ordinary Canadian workers, ordinary Canadian farmers and small business? Why could the Liberals not do that? They had a mandate for many, many years.


William Warren Allmand: Mr. Speaker, as I pointed out, there was some legislation passed. As a matter of fact, I think my hon. colleague, the Hon. Member for Papineau (Mr. Ouellet) was the Minister in 1975 when Bill C-2 passed. Perhaps that is the Bill he does not have on the list. He mentioned Bills C-256, C-42, C-13, C-29, and now C-91.
In answer to my hon. colleague's question, following the strong lobbying against Bill C-256, it was divided into two Bills. It was a long, very complicated, omnibus type Bill. Part of it was made Bill C-2 and the other was referred to a parliamentary committee under the chairmanship of Norm Cafik who, at that time, was the Member for Ontario. After a certain amount of debate in the House, Bill C-2 was passed. Some of the things originally proposed by the Economic Council were passed in Bill C-2.
The Member's question is still a legitimate one. As I tried to indicate in my original remarks, when these Bills were introduced and sent to committee the big business community, in particular, strongly opposed them. I went out looking for support for the Bills. I invited people to appear before the committee. Professor Stanbury, other academics, the Consumers Association of Canada, and other organizations such as the Independent Petroleum Association did support it. However, for every national association which supported the Bill, about
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20 well organized and heavily financed organizations opposed it.
Members of the House of Commons in all political Parties were receiving all kinds of letters. The letters did not all appear to be coming from the big business community. Letters were received from individuals saying what terrible legislation this was and very few letters were received in support of the legislation. That is in contrast to the heavy lobby on both sides when the Government attempted to deindex the old age pension.
I was committed to the Bill, but I had a hard time convincing many of my colleagues who were preoccupied with other issues in caucus and in Parliament. I looked for support from all Parties at the time, and priorities were elsewhere; with energy, interest rates, employment, or whatever. I had a very difficult time, as a Minister, convincing ordinary people in the church groups and the various coalitions which usually support these things, that this was just as important an issue for the things they believed in, including lower prices, anti-inflationary tendencies, and better services and products. With 20 Bills on the Order Paper, great support for 19 of them, and all kinds of opposition to poor competition Bill No. C-13,1 had a tough time convincing my colleagues that we should spend time on it in the House of Commons.
All of these Bills have led to a refining of the negotiation process. It is obvious that the present Bill C-91, built on the negotiations undertaken by Miss Erola and those undertaken by myself, is more acceptable to the business community. I hope that we at least get this Bill through.


Lorne Edmund Nystrom: Mr. Speaker, would the Member admit that the reason it is more acceptable to the business community is that the Government's advisory group consisted of the Business Council on National Issues, the Canadian Chamber of Commerce, the Canadian Manufacturers Association, the Grocery Products Manufacturing Association of Canada, and the Canadian Bar Association? All of these groups are very conservative, big business oriented groups which I am sure would not represent many members of the Conservative Party who pretend to believe in so-called free enterprise and small business in the country. Does the Member agree that perhaps this is why this Bill is now acceptable to the big business community in the country? In effect, they have written the doggone Bill and it is something they can live with. There has been no representation from farmers, trade unions, consumer representative groups, community associations, women's groups, or native groups. Is this Bill more acceptable to big business because it was conceived by big business and the Minister of Consumer and Corporate Affairs (Mr. Cote) is now delivering it on their behalf? Is that not the case?


William Warren Allmand: Mr. Speaker, I agree with the Hon. Member. I think the Bill is more acceptable because concessions have been made. We will be dealing with the Bill in committee, at which time I hope we can convince Government Members, upon hearing witnesses, that there should be changes. If there

April 8, 1986
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is going to be an advisory council on the appointment of people to the competition board, we should ensure that the balance of advice comes from the consumer and producer side as well as the big business side. We will certainly be pressing for amendments in that area.


Mr. Gauthier:: Mr. Speaker, I would like to ask a question of my colleague and friend, the Member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand), regarding to the new aspect in the competition Bill, the prenotification requirements. The provisions require that certain companies prenotify the director and provide documentation as required for transactions where the combined assets or the gross revenues of the parties exceed $500 million in the case of a merger. I also understand that these provisions apply where the assets or gross revenues of the target company exceed $35 million, and for amalgamations where the target company's assets or gross revenues exceed $70 million. That is the new aspect of the law.
I would like to know how my friend would answer the questions people in my riding are asking me with regard to how preventive we must be in legislation of this nature. By setting the ceiling of $500 million we are indeed exceeding many other countries in terms of these kinds of mergers and takeovers. The Member is a former Minister and is familiar with the subject. Does he have any idea how preventive this legislation must be in terms of its amounts? Why did we choose $500 milllion?


William Warren Allmand: Mr. Speaker, in the previous Bills introduced by Liberal Governments there were also provisions for prenotification with respect to mergers. These provisions are slightly different. When the Bill reaches committee we must examine in detail whether the amounts referred to are reasonable and just, or too high or too low, considering the present value of the dollar, the Canadian economy, the profits that could be made, and so on. I think the prenotification provisions are very important. We supported prenotification provisions in the previous Bill. I think they can do a lot to help prevent damage from taking place. If those provisions did not exist, we would sometimes find out about mergers after they had been agreed to. Business people, lawyers, and accountants may spend a lot of time cooking up something which will not be agreed to by the authorities under this legislation. Therefore, I think prenotification is a good preventive measure. It should be the function of the committee to decide whether or not the details are correct.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I welcome the opportunity to make a few remarks on Bill C-91. The first thing we should note is that this Bill is less than it seems. It masquerades as a serious attempt to deal with the important problems facing industry and the market-place, the important problems of protecting the consumer, small producer and small business person. In fact, however, this Bill is nothing more than a charade. For example, I would like to read the statement of the purpose of the Bill:
The purpose of this Act is to maintain and encourage competition in Canada in order to promote the efficiency and adapatability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices.
That is admirable. I do not think there is any Member of the House who would want to dispute or oppose that purpose, particularly the last part. The problem is that the Bill does not really meet the purpose it sets out. It is like other legislation the Tories have introduced in this session. The employment equity Bill sets out some very noble goals but completely fails in its objective.
There are two reasons why we have such a weak Bill. The first is ideological and the second is pragmatic. From an ideological point of view, there is a hard core within the Conservative Party who believe very strongly in the myth of the self-regulating free market. Society will benefit if only the Government does not interfere. Perhaps I am stating this too baldly, perhaps not. Even hard core Tory back-benchers have begun to recognize that this ideology cannot stand up to the reality of today's corporate world. Even they have to recognize that the predatory power of concentrated wealth which destroys smaller businesses has to be resisted at some point. Even if they fail to see how this so-called free market does not really protect the consumer, they recognize that by the law of the jungle only the very largest animals can be free from fear. Even then, they continue to live only so long as they find some smaller animals to devour. Recognizing that, we now have Conservative back-benchers standing up, and rightly so, to oppose the Imasco takeover of Genstar. This is commendable. They are finally recognizing that here at least is the point at which they should be drawing a line. However, we have to ask where were they-


Donald Alex Blenkarn: Where were you people on this issue?


James Douglas Manly: -before?


Donald Alex Blenkarn: Why weren't you leading the charge?


James Douglas Manly: The New Democrats have been leading the charge on this issue and others.


Donald Alex Blenkarn: You were quiet, silent.


James Douglas Manly: We would like to see a little more leadership from-


The Acting Speaker (Mr. Paproski):: Order, please. I hope we will allow the Hon. Member to finish his speech and then I will allow the other Hon. Member to question and comment.


James Douglas Manly: Mr. Speaker, perhaps the Hon. Member or others might even want to speak on this Bill. They talked a great deal about putting up a big fight but we have not seen much of a fight yet.
April 8, 1986

It is interesting to note that even the bankers are very concerned about this conglomerate takeover of a financial institution because of the danger of self-dealing. It is reported that most failures of financial institutions, including three-quarters of the bank collapses in the U.S., result from massive self-dealing. Yet here we have a Bill which, as I read it, specifically excludes this whole question of conglomerate mergers. Clause 67(2) says:
For greater certainty, this section does not apply in respect of the acquisition of assets of a combination.
That explicitly excludes the concern we have over the Imasco takeover of Genstar. Yesterday a special Bill was tabled which the Government hopes will deal with that question, but in the meantime the deal is proceeding apace and we have no assurance that it is going to be stopped.
While the Conservatives have this ideological fixation on a so-called free market, they are beginning to recognize the need for legislation which will curb the worst excesses of that system. However, their commitment to the myth is so strong that the legislation is weak. It is important to remember that the market is a human creation and it must be regulated by humans. It will not regulate itself. On that basis the representatives of the people, namely, the Government, should be regulating it in the interests of the people.
Back in 1910 Teddy Roosevelt had some interesting things to say about this:
It is my personal belief that the same kind and degree of control and supervision which should be exercised over public service corporations should be extended also to combinations which control necessaries of life, such as meat, oil, and coal, or which deal in them on an important scale.
I have no doubt that the ordinary man who has control of them is much like ourselves. I have no doubt he would like to do well, but I want to have enough supervision to help him realize that desire to do well.
We do not need to point the finger at the people in charge of these corporations or paint them as bogymen, or as people who are evil in a way other people are not. We can say, as Teddy Roosevelt said, that no doubt they are the same as we are. No doubt they wish to do well. However, we have a responsibility to provide the kind of supervision which will ensure that they do good. So I urge the Conservatives to shuck off this ideological fixation they have with the so-called free market.
The second reason this Bill is weak is pragmatic; that is to say, big business lobbyists got to the Government. In fact, there were five groups who were particularly involved in vetting this Bill before it ever came before the House of Commons, the Business Council on National Issues, the Canadian Chamber of Commerce, the Canadian Manufacturers Association, the Grocery Products Manufacturers Association, and the Canadian Bar Association. These five groups obviously got to the Minister and went through the provisions that were to be included in the Bill to make sure there was nothing they could not live with. The fact that it is so acceptable to them is fairly conclusive proof that the Bill does not offer the kind of protection consumers need.
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We have just finished several years of Liberal Government. While the Liberals perhaps do not share the ideological opposition of the Conservatives to regulation in the marketplace, they were quite susceptible to the pragmatic reasons for having a weak Bill. They let a lot of the same lobbyists get to them.
It was instructive to hear the Hon. Member for Nore-Dame-de-Grace-Lachine East (Mr. Allmand) saying he was glad this Bill was more acceptable to the business community. Since 1971 we have had four Bills introduced before this one and not passed. This is the fifth attempt to bring in legislation to deal with the whole question of consumers.
It is my understanding from talking to people who have looked at the previous Bills that this Bill is the weakest of all. It is interesting that when the Liberals were criticized yesterday for failing to act, the Hon. Member for Papineau (Mr. Ouellet) said that one of the reasons they did not get their Bill passed was because of the bell ringing incident during which the bells rang for two weeks and the House was stalled by the Conservatives. It struck me as being rather strange, that this must have been the two weeks during which the Liberal Government was to be at the very peak of its performance, that it had so much great legislation to be passed in that short two-week period which never saw the light of day, and has been buried ever since, all because of that short two-week bell ringing incident. If the Liberals have nothing else to thank the Conservatives for they should be down on their knees every day thanking the Conservatives for that bell ringing incident, giving them that great excuse for all the legislation they did not pass over the last 20 years. Certainly that has some relationship to this anti-combine legislation.
The need for this kind of legislation is very obvious. Since
1979	there have been some 22 mergers in Canada involving assets with a transaction value of over half a billion dollars. In
1980	the British Columbia Resources Investment Corporation acquired Kaiser Resources Limited, or 66 per cent of it, for $665 million. Those of us from British Columbia know all about the BC Resources Investment Corporation. For others, I would just like to remind you that BCRIC was Premier Bennett's experiment in people's capitalism. He was going to show the people of British Columbia what capitalism was all about, so he took the assets of the province that had been built up over a number of years in public ownership, and he put these within the British Columbia Resources Investment Corporation. He gave everybody six free shares, and then he put some shares on the open market. A lot of small people put their life savings into those shares. They bought them at $6 a share. They took Bill Bennett's word. This was their entry into the whole world of capitalism led by the Social Credit Premier of British Columbia. This is the same corporation that took over Kaiser Resources. Today those shares are trading around $2, if you can get $2 for them. They went from $6 down to $2. That is people's capitalism under the Social Credit Government.

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We can look at the takeover in 1981 by Noranda Mines Limited of McMillan Bloedel, 49.8 per cent at S626 million. McMillan Bloedel is one of the largest employers in British Columbia. It has a long history of involvement in the forestry industry and was taken over by Noranda Mines, a corporation that has no real history or interest in the forest industry. Later that same year Brascade Resources Inc. took over Noranda Mines for $1.6 billion. Here we have Noranda taking over McMillan Bloedel and then we have Brascade taking over Noranda. We have the big fish coming along and swallowing the smaller fish.
We have to ask where it is all going to stop. We do not have confidence that this Bill will solve this problem. We see in some of the definitions that we have of anti-competitive acts that Government knows what these are. It defines them as squeezing, acquisition by a supplier of a customer who would otherwise be available to a competitor, the use of fighting brands introduced selectively on a temporary business to discipline or eliminate a competitor, pre-emption of scarce facilities for resources required by a competitor for the operation of a business, buying up of product to prevent the erosion of existing price levels, adoption of products specifications that are incompatible with products produced by any other person, designed to prevent his entry into or eliminate him from a market, or requiring or inducing a supplier to sell only or primarily to certain customers.
The Bill defines all of these in Section 50 as the abuse of dominant position and as anti-competitive acts. Section 51 imposes the conditions under which an application by the law takes place. These conditions have to be met before the tribunal may make any order prohibiting these practices. As my hon. friend from Nickel Belt said yesterday, this Section is filled with weasel words that allow practically anything to happen.
For example, in Section 51(c) "the practice has had, is having or is likely to have the effect of preventing or lessening competition substantially in a market". There can be a lot of debate about what the word "substantially" means. It is going to be a lawyers' field day, but it is not going to provide much protection for the average consumer.
In conclusion, I want to say that Canada badly needs legislation to protect consumers from monopoly and predatory pricing practices. It badly needs legislation to protect smaller businesses from being gobbled up and eliminated, for no other reason than the desire for bigness. It badly needs proper anticombines legislation. Unfortunately, Bill C-91 does not meet that need, and on this basis I urge the Government to bring in some proper amendments that will make it more effective.


Donald Alex Blenkarn: I would like to make a couple of comments and then perhaps ask the Member a question. He will realize that this is the fourth Bill that has been introduced on competition over a period of time. I remember one was introduced by one Tony Abbott, the Minister of Consumer and Corporate Affairs following the 1974 Parliament. He defeated
me in the general election and went on to be Consumer and Corporate Affairs Minister, and the competition act defeated him.
Then we had the Hon. Member for Papineau (Mr. Ouellet)who introduced a paper on competition. It was circulated around the countryside, and every storekeeper, every small businessman, every person in the whole country that was in any way involved in franchises or whatever formed almost a squad to run the Minister out on the rails. That Minister was very fortunate in losing the portfolio of Consumer and Corporate Affairs. So the Bill has had a very rough time.
The Hon. Member will know that there has been a great deal of consultation. For example, the Consumers' Assocation of Canada has been heavily involved. The Canadian Federation of Independent Business and the Canadian Independent Petroleum Association heavily support the Bill. I wonder, in view of that support, and in view of the very hard history, why the New Democratic Party and, in particular, the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly), would not stand up and applaud the Government for introducing the legislation, and applaud the Minister of Consumer and Corporate Affairs (Mr. Cote), bearing in mind the way other Ministers of that portfolio have gone down the pipe with competition Bills. He should be applauded for having the strength of character to introduce this Bill.


James Douglas Manly: Mr. Speaker, the Hon. Member talked about strength of character being needed to introduce this Bill. I am speechless at the idea that the introduction of a Bill like this requires strength of character. That is utterly beyond my comprehension, unless the Tories have a completely different understanding of what "strength of character" is all about. The Hon. Member talked about the great deal of consulation which has taken place. The labour movement was essentially asked a few questions, but there was no extensive follow-up with the labour movement, or any consultation. The Consumers' Association of Canada was essentially told to take it or leave it. It was not really involved in helping to draft the kind of legislation which is needed by the Canadian public for its protection. I do not think that the introduction of this Bill requires any kind of strength of character. Certainly, it is not the kind of Bill I would want to applaud.


Donald Alex Blenkarn: Mr. Speaker, is it the view of the Hon. Member of the New Democratic Party that, for example, Crown corporations should not be included in a Competition Bill? Is it his Party's view that the banks should be able to carry on the way they have and not be covered by a competition Bill? Does the Hon. Member not begin to understand that for the first time Governments have had the strength to be able to say to Crown corporations and the banks: "You, too, are going to be subject to the competition legislation this Government proposes"?
April 8, 1986


James Douglas Manly: Mr. Speaker, I do not think at any point in my speech I said that everything in this Bill was wrong. What I said was that this Bill does not begin to deal with real problems facing the Canadian consumer. The Bill has the weasel words like "substantially" lessening competition. So what we have is a field day for lawyers. Instead of having a Bill with some teeth to give consumers some real protection, we have a Bill which is fairly thick, which has a lot of verbiage, but which does not do the job required.


Mr. Domm:: Mr. Speaker, I would like to ask the Hon. Member of the New Democratic Party if he would explain why he would make the statement in the House that the Consumers' Association of Canada does not endorse the Bill, and has not been consulted? It has written letters of support. In fact, it was the Consumers' Association of Canada which asked that a tribunal be set up. It was one of its key thrusts, in order that we could have representation from the business sector in deciding whether major corporations were gaining a dominant position in the marketplace. Where did the Hon. Member get his information that the Consumers' Association does not support this Bill?


James Douglas Manly: Mr. Speaker, I wish the Hon. Member would listen to what I said. I did not say the Consumers' Association of Canada did not support this Bill. I said that the Consumers' Association of Canada was in effect told to take it or leave it, like it or lump it, and that it had better start making the right noises. That is in effect what has happened. It is making some of the right noises, but that does not mean that the Bill really satisfies the Consumers' Association of Canada, or that is going to meet the needs of consumers across Canada.


William Henry (Bill) Domm: Mr. Speaker, I think, in fairness to the Consumers' Association of Canada the Hon. Member should give his source of information. If the Hon. Member has been advised that it was told to take it or lump it, then I would like to know who advised him that that was the position of the Consumers' Association of Canada, which last summer in July and August endorsed the Bill and asked for certain things which are included. The Hon. Member rises in this House and repeatedly tells us he has been advised under the table, from a brown envelope or somehow, that the Consumers' Association of Canada has said it was told to take it or lump it. Would the Hon. Member be more specific? Who said to take it or lump it?


Lorne Edmund Nystrom: I was told by Blaikie.


James Douglas Manly: The Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie) told the Hon. Member for Yorkton-Melville (Mr. Nystrom), and I heard it right from the horse's mouth.


Some Hon. Members:: Oh, oh!


Mr. Blaikie:: Point of order.
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The Acting Speaker (Mr. Paproski):: Are there any further questions or comments? The time for questions or comments has now terminated. Resuming debate.


Donald Alex Blenkarn: Mr. Speaker, I thought the last interjection by the Hon. Member for Cowi-chan-Malahat-The Islands (Mr. Manly) that he received his information from the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie) was a pretty good indication of the depth of the research the New Democratic Party put into this Bill. I note the Hon. Member for Yorkton-Melville (Mr. Nystrom) said that he was also involved in this research into the Consumers' Association of Canada.


William Alexander (Bill) Blaikie: Believe it or not, Don.


Donald Alex Blenkarn: But, seriously, Mr. Speaker, when a Member of Parliament impugns an association like the Consumers' Association of Canada, that Member of Parliament is doing damage to a voluntary association. He should prove that it has said it has not been given a fair hearing, totally disapproved of the Bill and that it was told to lump it or leave it. That is a pretty serious accusation against a very valid association. To make that accusation and refuse to back it up is certainly, in my view, not the kind of thing we should expect from Hon. Members in this Chamber.
Some attack was made with respect to our philosophy in connection with competition. I want to make it very clear to this House, particularly to the New Democratic Party, that we believe very strongly in the private marketplace. But, we believe that the private marketplace should be open and free for competition amongst various parties in the private marketplace. It is our philosophy and our hope that there will be as many active competitors in the marketplace as possible. We do not, quite frankly, enjoy having to use the state, which really amounts to bureaucrats and the dictatorship of the state, to try to force the divestiture or control of businesses. What we want to do is create a climate whereby there is as much open competition as possible. Let it be very clear that if we cannot by persuasion create a climate of openness of competition, then we will not resist using the powers of the state. That also is the philosophy of this Party.
I want to point out to the Hon. Member, because he said some things about Members of the Conservative Party making some statements concerning the Genstar and Imasco matter, that not just Members of the Conservative Party but all of the Members of the Finance Committee last evening endorsed a resolution asking the Minister of State for Finance (Mrs. McDougall), who introduced Bill C-103, to block the Imasco takeover of Canada Trust. The Progressive Conservative Party is taking the lead on this whole question. We did not hear a thing from Members of the New Democratic Party for weeks and weeks, in fact, not until yesterday in Question Period in the House of Commons. They finally caught on to the fact that, perhaps, non-financial institutions would take over a very major financial company.
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April 8, 1986
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Mr. Orlikow:: You know that's nonsense!


Mr. Gormley:: Oh boy, there speaks an expert!


Donald Alex Blenkarn: Bill C-91 is a first-class Bill. For the first time it will set up a competition tribunal which will combine the judicial concept with the business concept. In effect, the tribunal will act as a court-type operation. It will deal with the serious business problems which come before us in terms of the conflicting views of businessmen and citizens generally. It will deal with them in a sensible and business-like fashion. It will be better than a court in that it will have an independent business attitude on the bench, so to speak. However, it will be a court in the sense that it will be staffed by people who have judicial training as well as by people with business training.
This legislation will leave us open once again to use the strength of our country so that our businesses can be internationally competitive. One of the problems with our present combines legislation is that it can be used to destroy the international competitiveness of Canadian business. Under the legislation which is before us, mergers and acquisitions which will assist Canada in its international dealings will be allowed to take place. In this way Canadian products and services can be marketed internationally. That is a very important thrust contained in the Bill.
Another important thrust in the Bill is the concept of prenotification. In other words, if a takeover is contemplated by a company worth $500 million, then it must pre-notify the Minister. There are 21 days in which to reply. That is another important aspect of this legislation.
It is essential that, for the first time, we have brought the banks into the act as well as Crown corporations. Many Hon. Members will remember the situation with the former Government in which a cartel was established in connection with the sale of uranium. The only ones who could be prosecuted were the private companies which were part of the cartel. Here was a situation in which the Government was, in fact, illegally promoting the cartel, but the only people who could be prosecuted were the private companies. The Government members of the cartel were let off scot-free, including the Minister. Surely that was wrong. This Bill solves that problem.
I wish to congratulate the Minister of State for Finance who introduced Bill C-103 in an urgent fashion yesterday. That Bill again demonstrates the intention of the Government to stand tough with respect to how the financial institutions of the country are run and governed. In a sense that Bill is a companion piece to the legislation before us. It gives the Minister a great deal of power in preventing takeovers which are not in the Canadian interest.
Since the question of takeovers of our institutions is continually before us, it is important to analyze the whole question surrounding it. I would like to read into the record some of the testimony given by Bernard Ghert of The Cadillac
Fairview Corporation to the Standing Committee on Finance, Trade and Economic Affairs. Mr. Ghert stated:
The concern for public policy is not simply that those with such power will earn excess profits. Rather the concern is that these large groups will have the ability to earn an acceptable level of profits (e.g., sufficient to prevent a takeover) and be able to use their power to achieve objectivies other than increasing the shareholders' wealth. This power may be used to alter the behaviour of other firms involuntarily, e.g.,
-by advancing the interests of some customers or suppliers and/or by penalizing others;
-by undermining the position of rivals in ways inconsistent with maximizing the wealth of one's own shareholders;
-by providing excess rewards, pecuniary or otherwise, to the top management coalition that effectively controls the corporation; or
-by using economic power to influence public policy via the political process, i.e., expenditures on lobbying, advocacy advertising, public relations, campaign contributions and the ability to redirect corporate locational decisions.
Corporate concentration with respect to financial institutions has potentially greater ramifications than in the non-financial or "real" side of the economy because of the particular characteristics of money and related near-money assets.
This testimony was commented upon favourably by writers in the financial papers and in the regular media.
The Finance Committee recommended this fall that there be serious controls placed on the ownership of financial institutions. A financial institution is not just a boot and shoe company. It has the power of massive leverage. For example, for every one dollar in assets of its shareholders' money Canada Trust is entitled to borrow $25 more from the marketplace. Thus it has a 25-to-one leverage. It is presently operating at about 18-to-one or 19-to-one. That is amazing gearing.
It means that for a couple of billion dollars one can gain control of $21 billion or $22 billion. That is the essence of this whole problem. It is unusual for a boot and shoe company to have more leverage than one-to-one or two-to-one. In such a company there is really very little borrowed money involved. Most of the money in such a company is equity money. In such a case we are really not talking about control of vast amounts of money because of the leverage involved.
Very little equity controls massive amounts of money in financial companies. When a financial company is involved, and there is this gearing, it is essential that we look very closely at who the shareholders of the company are and what group has control. This is so because the control of that massive amount of money means that all sorts of transactions can come one's way.
In meetings of the Finance Committee this fall I had a private chat with one trust officer who, for obvious reasons, will remain undisclosed in name. He said: "Don, you don't really make any money on the leverage operation or the management of a company. You buy these things because of the power you get to make the deals. It is a power which allows you to get in on the ground floor of a deal because you can supply the mortgage. This gives you the edge. The power is in the right to have access to this great pot of money". That is the very reason it is absolutely essential that there be controls placed on financial institutions.
April 8, 1986

For a moment 1 would like to talk about other takeovers. 1 think it only fair to point out to the House, and I think Hon. Members will agree, that just bidding the shares of a corporation up in value on the market-place does not create any new wealth. It does not create new jobs that build Canada. Indeed, it probably hurts the country. When shares are bid up, the new price level of the shares must be justified. There has to be a price-earnings ratio and a return on the investment again. The company has to be organized in such a fashion that the new high price can be validated.
In the Genstar takeover of Canada Trust, $1.2 billion in debt was created. If the Imasco deal went ahead, there would be another $2.4 billion in debt created. Where is the money to pay that debt going to come from? Does it come from the depositors? Does it come from the borrowers? Does it come from fast deals? What benefit is there to Canada? I think we all have to ask those questions because in many senses these transactions are financed by us.
Yesterday, the Hon. Member for Kamloops-Shuswap (Mr. Riis) asked the Minister of Finance (Mr. Wilson) what was the cost of borrowing and what was going to happen. It is clear that since there is interest deductibility in this country, when one buys a capital asset the person buying the capital asset is entitled to deduct from his other taxable profits the interest cost. Therefore, in many senses you and I, Sir, pay the bill.
One might ask why we allow that tax deductibility. The obvious reason is that we must have a tax system very much in line with the tax system that exists in the United States. Prior to 1970 Canada did not allow the deductibility of interest used to buy capital assets, but the Americans did. All sorts of companies in our economy were acquired by foreigners simply because the foreigners could deduct the interest and our guys could not.
I remember being involved in a takeover situation. A group of us from Port Credit were putting some money together to buy a construction company. My young brother is now involved in that construction company. We were faced with an alternate bid from an American construction company that wanted to get into Canada. The American company could pay a heck of a lot more than we could because it could deduct interest and we could not. We were a little faster than the American company and we managed to make the deal. However, our real problem was that that company could deduct interest and we could not. The Income Tax Act was subsequently changed to make that possible. But I would point out to the House that the effect of that change is to make takeovers very much more probable.
Without allowing the deductibility of interest, many of the takeovers, and indeed I suggest most of the takeovers that we have seen occur in the past two or three years would not have taken place. The proposed Imasco takeover could not take place without some borrowed money. Whether all the money has to be borrowed or not is another matter, but certainly some
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money has to be borrowed. The Genstar takeover of Canada Trust could not have happened without the huge amounts of money advanced by a syndicate put together by the Toronto Dominion Bank through Gordon Capital.
We might ask why we allow this kind of thing. The answer is that our tax laws have to be relatively in line with those of the United States. As we enter into trade negotiations with the United States, one of the things we might negotiate with the United States, since the Americans have the same problem with takeovers as we do, is limitations on the deductibility of interest for the purposes of takeovers.
I mentioned initially that competition legislation has been before the House on a number of occasions. The legislation has always failed, not because there was not enough time to put it through but because the legislation got to committee and was absolutely destroyed by representations made from all sides. It is difficult to have legislation that affects people right across the country without having it hurt some people.
While this Bill may have some imperfections-I suppose every piece of legislation we produce has imperfections-I suggest it is important that it proceed now and be passed speedily. For the first time in 16 years, we will at least see some changes made to the competition legislation, and for the first time in 75 years there will be some legislation on the books that makes sense.


David Orlikow: Mr. Speaker, I would like to ask the Hon. Member a question. First, let me say that the reason the Bills did not pass when brought forward by the former Liberal Government is that there was a great deal of opposition to them. That opposition came mainly from the business community which did not get everything it wanted. This time, the Conservative Government avoided that by calling in the five big business organizations and letting them work on the Bill.
Until recently, when we spoke of competition legislation and the necessity for it, we were thinking of things like a steel company buying another steel company or a pulp and paper company buying another pulp and paper company and in that way lessening competition. However, what we are facing now are conglomerate takeovers. I would like to ask the Hon. Member how this Bill deals with those takeovers.
Let me give the Hon. Member a few illustrations of what has happened in recent years. Noranda took over MacMillan Bloedel and paid over $600 million for it. Then Brascade took over Noranda and paid $1.6 billion for that takeover. Canadian Pacific took Canadian International Paper and paid $1 billion for it. Bell Canada took over TransCanada Pipe and paid over $600 million for it. The Thomson interests took over the Hudson's Bay and paid about $641 million for it.
What did those takeovers accomplish? Was a single new job created? Do these companies really know the operations of the companies they took over? Do they know how to make them more efficient and bring in new technologies? They do not, and that has also been the experience in the United States. Big oil companies got involved in acquisitions of companies outside of

April 8, 1986
Competition Tribunal Act
the oil business three or four years ago and are now selling those companies at huge losses because they realize they do not know the businesses they acquired.
Does this Bill in any way give the Government, Parliament or an agency of the Government the authority to look into these conglomerate takeovers which have become so prevalent and decide whether or not they are good for the country?


Donald Alex Blenkarn: First, Mr. Speaker, the pre-notification requirements in this Bill require every takeover company with over $500 million in sales or $500 million in assets, the big companies about which the Hon. Member and I are concerned, to notify the Government.
Let us look at the Gulf and Hiram Walker transaction for a moment. Hiram Walker is involved in the energy industry, and Gulf is also involved in that industry. There may well be something which would reduce competition, and if the Bill were in place it may well be that the takeover could be prohibited. With takeovers such as the one of which I am speaking we often find that they are occurring because another interest is ancillary, like or close to the interest of the business of the company taking over. In most cases the pre-notification and the provisions of the Bill will allow the Government to come to grips with the problem. Perhaps it will not in every case. However, if we take a look at the Bill, and at Bill C-103, we come to the realization that most takeover activity will be subject to pretty serious review.


David Orlikow: Mr. Speaker, let me explore further the illustration which the Hon. Member used, the takeover by Gulf of Hiram Walker. I think Hiram Walker has been in the liquor business for more than 100 years. I presume it knows that business because of that, and it is a profitable business. In its desire to diversify, it bought into the oil and gas business. It is very new in that business and I doubt that it knows as much about it as it knows about the liquor business. Gulf is now proposing to take over Hiram Walker. Apparently Hiram Walker is not selling its oil and gas interests, just its liquor interests. Would the Hon. Member explain the economic rationale of that? I am not referring to the point of view of the people who own and manage Hiram Walker. I am sure that whatever they do will protect their interests, but how can that takeover possibly help Canadians?


Donald Alex Blenkarn: Mr. Speaker, as I said earlier in my remarks, obviously the question of whether or not Canadians will be helped in the takeover is one that would have to be reviewed under the provisions of the Bill. I really do not think that the details of the Hiram Walker and Gulf dance around the mulberry bush in court and elsewhere should be a concern of ours in discussing the particular Bill and its details. In that the Bill would require pre-notification, in that Hiram Walker is now partly an oil company with the ownership of Home Oil
and Consumers Gas, and in that Gulf is in the oil and gas business, surely there is the possibility of a lessening of competition. It would seem to me that the Bill would cover that takeover. The dancing around the mulberry bush, which the directors are doing to protect their jobs or other interests, is a matter which perhaps the Hon. Member and I can enjoy and understand; if we want, we can invest in the stock-market and take our chances. However, the essence of the Bill is that it is a review mechanism so that the lessening of competition by the takeover route can be prohibited.


David Orlikow: The tribunal which will be conducting the review, does it have the power or the right to say in respect of one of these takeovers that there is no benefit to the country, that it will not produce any new jobs or provide any new technology and therefore it cannot be done? Does the tribunal have that power? If not, what is the point of the review?


Donald Alex Blenkarn: The point of the review is that this is a piece of competition legislation, and if there is a lessening of competition then a decision will be rendered on that basis. Surely it is not the business of the Government to worry about whether there are profits or no profits in a transaction.


David Orlikow: How about jobs? Should the Government not worry about jobs?


Donald Alex Blenkarn: We cannot expect one piece of legislation to solve all the problems of a society as complex as ours. Surely the Bill goes a long way toward getting at the issue of competition.


David Orlikow: No way.


Donald Alex Blenkarn: I hear the Hon. Member. I suggest to him that the Bill is a good step forward. It is far better than anyone heretofore has been able to produce, certainly within the last 16 years.


The Acting Speaker (Mr. Paproski):: Is the Hon. Member for Sudbury (Mr. Frith) rising on a question or comment?


Mr. Frith:: Mr. Speaker, I should like to make a comment. In view of the fact that I will be the next speaker, I wonder whether there would be unanimous consent to call it one o'clock so that we can start afresh after Question Period.


The Acting Speaker (Mr. Paproski):: The period provided for questions and comments is now terminated. I will recognize the Hon. Member for Sudbury as the first speaker. Does the House agree to calling it one o'clock?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Paproski):: It being one o'clock, I do now leave the chair until two o'clock this day.
At 12.57 p.m. the House took recess.
April 8, 1986



COMMONS DEBATES AFTER RECESS

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


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, it recently came to public attention that the Progressive Conservative Party of New Brunswick paid $123,628 in legal fees for the defence of a Mr. Richard Hatfield against a charge of possession of marijuana.
The charge was laid by the RCMP in respect to Mr. Hatfield's standing as a private citizen and was not influenced by or initiated on account of his position or political office.
I request that the office of the Minister of National Revenue (Mr. MacKay) begin an immediate investigation into a legality of the use of funds solicited for political use in the legal defence against a charge of possession of marijuana.
I also request a ruling on whether anyone in receipt of such a benefit is required to pay income tax on what is clearly a taxable benefit.
Donations to political Parties are made by Canadians to ensure the continuation of Canada's democratic institutions. Is it correct that an individual's legal defence should be paid from such funds? I await the findings of the Minister of National Revenue.



NUCLEAR ARMAMENTS


Mr. Derek Blackburn (Brant):: Mr. Speaker, last week the Yukon Legislature voted to oppose Cruise missile testing and increased military activity in the north. This was a free vote on a private Member's motion, and the Government Leader clearly urged all Members to follow their consciences. The Liberals, symbolically, split on this issue.
The Government should note that people who have to live with the Cruise missile hanging over their heads are not too happy about it. They frankly do not like Canada's contribution to the nuclear arms race. They are concerned for their safety when the Cruise missile crashes in two consecutive tests, and they do not want their backyards turned into playgrounds for the Pentagon.
While defence planners tend to look upon our North as a big empty space, just perfect for military exercises, northerners
have a much different vision of their homeland. It is time that we took notice of that vision and consulted them before subjecting their homeland to low-level flights by Cruise missiles, NATO fighters, or B-52s. The Government should first assess the impact of this activity on northerners' lives and homes, and ask them if they approve.



CANADIAN BROADCASTING CORPORATION


Mr. Andre Plourde (Kamouraska-Riviere-du-Loup):: Mr. Speaker, I rise in this House to denounce the incompetence of the President of the CBC, Pierre Juneau and his colleague, Louis O'Neil. Last week, a great deal of publicity accompanied an announcement that cut backs would be made in regional programming at Matane, Rimouski, Sept-iles and Chicoutimi, communities that are bound to suffer since the situation for the communications media is already far from ideal.
Mr. Juneau and Mr. O'Neil have opted for the easy way out by hitting those who cannot strike back. Why not seek out areas where money is really being wasted, and 1 am thinking of the duplication of responsibilities and the top-heavy administrative machine we find at the headquarters of this superstructure in Montreal?
The CBC will have to cut its expenditures, I agree, but I cannot tolerate this being done by depriving the Lower Saint Lawrence, the Gaspe and the North Shore of services that constitute an indispensable part of the economy of these regions.



PORNOGRAPHY


Mr. Bob Horner (Mississauga North):: Mr. Speaker, I rise on behalf of my constituents in Mississauga North who are increasingly concerned about the widespread and growing distribution of pornographic materials.
The number of complaints to my office concerning pornography has risen dramatically. This is not surprising in view of the fact that recently many of my constituents received in their mail a flashy looking envelope advertising an "exclusive video offer" addressed to "mature viewers only".
It may be unparliamentary to describe further the contents of this exclusive video offer, but you can be assured, Mr. COMMONS DEBATES
April 8, 1986
Speaker, that the private citizens, organizations, and even church groups, who received this so-called mail were deeply disturbed.
Canada Post very recently passed a regulation disallowing the distribution of such material. This is not enough. Our Government must act swiftly to pass legislation to control the spread of degrading, offensive, and harmful pornography.



AGRICULTURE


Mr. Maurice Foster (Algoma):: Mr. Speaker, the Government of Canada is giving some $10 million to Dreamstreet Holsteins to do some phoney research on the colour of dairy cattle. This obviously is a tax scam to rip off the taxpayers of Canada since the research seems to be useless.
Agriculture Canada researchers have denounced the scheme as something from which we should walk away. National Revenue apparently turned the project down several times last year before the Minister approved it in December.
What political pressure was brought to bear to get it approved? Who gets the money? Does it go to rich investors in New York? How does Canadian agriculture benefit from this scheme? Why does the Minister of Agriculture (Mr. Wise) support the project when his departmental officials do not? I call upon the Ministers of Agriculture and National Revenue (Mr. MacKay) to cancel the project, or come before a parliamentary committee and explain why they are spending millions of dollars of taxpayers' money this way.



RESEARCH


David Orlikow: Mr. Speaker, it is becoming increasingly clear that the Government's claim that it will increase budgets to the three federally funded research councils by $ 1 billion over the next five years is, in the words of the Dean of Science of the University of Manitoba, Dr. Bigelow, "entirely a sham, created by bogus manipulation of the figures".
First, to reach a target amount to offset annual inflation at 4 per cent per year, the Government would have to commit $654 million by 1990-91. The Government has only committed an unconditional amount of $536 million, or a shortfall of $118 million.
Second, additional funds will have to be provided on a matching basis with private sector donations, a very dubious concept in that private companies are more interested in product applications than in research.
Third, even if maximum private donations are matched by the Government, the amount made available to the three research councils in 1990-91 would be $692 million, which is only 6 per cent higher than the amount required to offset 4 per cent annual inflation.
Mr Speaker: Order, please. Sixty seconds. The Hon. Member for Athabaska.



REMOVAL OF PETROLEUM AND GAS REVENUE TAX ADVOCATED

Mr. Jack Shields (Athabasca):: Mr. Speaker, I cannot overemphasize very severe economic downturn in western Canada caused by the falling oil prices. Thousands of jobs are being lost as small, medium, and large producers cut staff and related exploration activity in an attempt to survive. Heavy oil and oil sands development, so vital to our country's security and economic future, is slowly grinding to a halt. The Government still collects a front end production tax. The Petroleum and Gas Revenue Tax is a profit tax. The problem is that there is no profit for producers at today's prices.
It is time for the Government to announce the removal of the PGRT once and for all. It is time for the Government to get rid of this discriminatory tax created by the former Government.
Let us send the message to western Canada that the Government still supports the need for a strong energy sector and that the Government still believes energy to be the engine for economic growth. Get rid of the Liberal PGRT.



NATIONAL DEFENCE


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, the recently published report of the Special Committee of the Senate on National Defence and Military Air Transport concludes as follows:
Air Transport Group and Ten Tactical Air Group provide our country with excellent service, but they are over-committed, short of aircraft, at minimal or inadequate manning levels, and operate fleets which must be renovated and strengthened over the next 15 years.
The report, Sir, is highly critical of the "fits and starts" which characterized military procurement under the previous Liberal Government. Like the hon. Senators who authored this
April 8, 1986

excellent report. Members of this House also look forward to the early tabling of the promised White Paper on National Defence.



UNEMPLOYMENT


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, the good news keeps coming in, ever since a Conservative Government was elected in Ottawa. Last Friday, Statistics Canada announced that the unemployment rate in Canada had gone down again. From 11.7 per cent in September 1984, it has now dropped to 9.6 per cent in 1986, the lowest unemployment rate in at least four years. Mr. Speaker, this is the result of sound policies, policies that promote the creation of real jobs throughout this country.
Among our youth, the unemployment rate dropped from 18.4 per cent during the last election to 15.9 per cent in March. This means a drop of more than 79,000 in the number of young people who are unemployed. I may recall that in four years of Liberal Government, 142,000 more young people became unemployed. When the Leader of the Opposition was Minister of Finance, 115,000 young people joined the ranks of the unemployed. Unlike our Liberal opponents, we don't waste time making the headlines, but we concentrate on putting Canada back on the road to prosperity.



NUCLEAR ARMAMENTS


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, scheduling another underground nuclear test is not the way to create an atmosphere conducive to world arms control and mutual balanced force reduction. Canadians are saying that nuclear tests should become a memory of the past-they do not make sense. Therefore, Canadians, by and large, do not support today's test in Nevada because they are very uneasy about nuclear tests in general.
O)
It is worth noting for the record that of the 1,509 nuclear tests held so far, India has held one, China has held 29, the U.K. has held 38, France has held 128, the Soviet Union has held 556, and with today's test the United States has logged 758. What real purpose is served by holding nuclear tests in this day and age?



TERRORISM


Mr. Bob Pennock (Etobicoke North):: Mr. Speaker, terrorism is a cancer festering in the body of our global village. Canada is no longer a peaceful nation which was once insulated from this bloodshed. The time has come to face the reality that terrorism is ultimately aimed at destroying the foundation of our civilization. No citizen of the world is immune from this threat.
The time has come for all peace-loving nations to join together in a common front. We need to go beyond the various UN conventions and the Helsinki Accord to establish an international plan of action. Our Government has initiated some much-needed improvements to deal with this threat in Canada. However, more needs to be done. Let Canada become the world leader in developing a sound, co-ordinated plan of action or agreement against terrorism which would be acceptable to any peace-loving nation in the world.



FORESTRY


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, the National Forestry Congress begins in Ottawa tonight to address the serious issues facing Canada's forest industry. The industry is under attack on a number of fronts, including the U.S. forest industry. It is facing serious underfunding problems and, in spite of being Canada's number one export industry, it still does not rate the status of a full federal Ministry.
Surely this is an ideal opportunity for the Government to demonstrate the priority this critical Ministry deserves by declaring in the next two days the creation of a full Ministry of Forestry for Canada. The industry is too important to be regulated to a third-rate status. Mr. Prime Minister (Mr. Mulroney), give the Minister responsible for forests something to do. Give him an opportunity to do a real job.



VOLUNTARY ORGANIZATIONS


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, all of us owe a debt of gratitude to those who have taught us bits of wisdom and given us excellent advice and insight to understand better the world in which we live and work. We owe, as well, a tremendous debt to our country and our home communities which have given us safe and secure havens to build on our hopes, and to help fulfil our needs and aspirations.

April 8, 1986
We must, as well, acknowledge those organizations and service clubs which make life better for those around us. They keep reminding us that we owe society service above selfinterest, that we have a responsibility to support the causes with which one can identify. They channel people's efforts to meet the needs of society, whether they provide service to the family, funding for education, medical care, social agencies or cultural pursuits. None of us can afford to decline the opportunity for self-involvement in order to make the world a better place in which to live.



FINANCE


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, the recent federal Budget of the Minister of Finance (Mr. Wilson) calls for new rules affecting salary deferment plans. From now on deferred salary will be taxed on an accrual rather than on a cash receipt basis. That effectively abolishes an excellent job- creation arrangement.
For example, teachers in Nova Scotia use the deferred salary leave to make openings available for others in their profession who are desperately seeking a year's work. The plan also helps school boards save money. This is a plan that works. It is essential and beneficial in relation to job retention and job opportunities, to phased-in retirement, and it permits teachers to remain abreast of current developments in the educational field. I call upon the Government to reconsider a job-creation plan far better than any it has imposed since it was elected.


BASEBALL-"NEXT YEAR" IS HERE!


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, today that annual madness re-exerts its grip on the Canadian psyche. Strikes, balls, and double plays become the words of common conversation. Stieb, Reardon, Raines and Moseby-these names ring bells and encourage fond thoughts of relaxing summer afternoons at the ball park, stretching into fall pennant drives.
How well I remember sitting behind the dug-out in Montreal's Olympic Stadium as our beloved Expos were eliminated from competition by the nasty Dodgers in 1981; or, last year the ectasy of the American League East win over the Yankees, and the agony of Kansas City's final game victory over the Blue Jays. Oh well, hope springs eternal. This is now the "next year" we predicted would come at the end of last season.
Today we, all 25 million Canadians, take the Field, represented by the young men of summer, in our quest for the
elusive World Series. I wonder what they will say in New York, Detroit, St. Louis or Los Angeles as the World Series of 1986 alternates between Montreal and Toronto. This is the stuff dreams are made of!


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Minister of State for Finance. We are faced in this country with a growing phenomenon of a concentration of corporate power. The Minister herself knows the danger of industrial companies taking over financial companies, particularly banks and trust companies. This allows companies in trouble to use depositors' money for their own purposes. In the instance of the Imasco takeover of Genstar, will she use the powers that she gives herself in the Bill she introduced yesterday to block that transfer?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, this is one of the areas that the Government has been very concerned about, and that is why we discussed it at some length in the Green Paper we produced about a year ago, after years and years of inaction in this area. When I have the facts at my disposal in this case, I will make my decision.


SELF-DEALING-GOVERNMENT POSITION
John Napier Turner: The
facts speak for themselves, Mr. Speaker. Self-dealing operations are the major cause of many bank failures in the United States, and the victims of such failures are ordinary citizens, including people who contribute to retirement funds.
Again here is my question: Will the Government honour its promise and make self-dealing operations illegal?


Barbara Jean McDougall: Mr. Speaker, we have indicated in our Green Paper, and I have done it in speeches in this House and in speeches elsewhere to the public, that we have a great deal of concern about self-dealing. It is one of the causes for financial institution failure, but it is not the only cause. Naturally we will look at any transfer of ownership that comes to our attention in light of what is in the public interest particularly for the depositors.
April 8, 1986


COMMITTEE'S UNANIMOUS REPORT
John Napier Turner: Mr. Speaker, the facts speak for themselves and we are bringing this particular instance to her attention. She is faced now with the unanimous report of the finance committee of this House which resolved that non-financial institutions should not be allowed to take over financial institutions. There is increasing rumbling in the back-benches of the Government. Will she accept the recommendation of the unanimous report of a committee of this House?


Barbara Jean McDougall: Mr. Speaker, I will take into consideration the recommendation of the Committee as I will take into consideration other information, which includes information which is still to come from the company.


STATEMENT ATTRIBUTED TO MINISTER
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is directed to the Minister of State for Finance. Before Imasco's bid to take over Genstar Corporation was made public the Minister told the Financial Post that she has no problem with industrial groups controlling financial institutions. Since the Minister was informed of the takeover bid before it was made public, will she tell the House whether she made that statement knowing that Imasco was bidding to take over Canada's largest trust company?


Barbara Jean McDougall: Mr. Speaker, that article was one of a series that was produced in the latter part of March in which we discussed a broad range of issues, and ownership policy is one of those issues. I cannot honestly tell you if it was before or after.


MINISTER'S POSITION
Aideen Nicholson: Exactly when did the Minister say that in her view it was all right for conglomerates to go their merry way, and is that still her position?


Barbara Jean McDougall: Mr. Speaker, I never said that conglomerates could go their merry way. In the Green Paper we have produced some ways of dealing with the situation. The parliamentary committee produced some ways of dealing with this situation. We will consider all of those when we make our decision.


STATEMENT MADE BY SUPERINTENDENT OF INSURANCE
Nelson Andrew Riis: Mr. Speaker, my question is directed to the Minister of State for Finance. Last night the Superintendent of Insurance, who is responsible for Canadian trust companies chartered federally, indicated that he could provide no compelling evidence at all to show that Imasco's takeover of Genstar was in the best interests of Canada. My question to the Minister is can she?
Oral Questions


Barbara Jean McDougall: Mr. Speaker, I do not think he said the reverse either, and I have told the House that when 1 have all of the information available-


David Orlikow: How much more do you need?


Barbara Jean McDougall: -which is to come from the company, then we will look at all of the issues involved. There are many issues besides ownership at which we intend to look.


REQUEST THAT MINISTER BLOCK TAKEOVER
Nelson Andrew Riis: Mr. Speaker, the Committee on Finance now in its report, as well as in a motion recently passed, stated unanimously that it wanted to recommend that the Minister block the takeover of Imasco. Given that probably every single Member of the House of Commons now supports the blocking of this takeover, would the Minister simply respond to the wishes of every single Hon. Member of the House and agree to block this takeover? Will she state that right now?


Barbara Jean McDougall: Mr. Speaker, I will make the decision in the normal course of events when I have all of the facts at my disposal.


PETRO-CANADA PRICE OF GASOLINE
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Deputy Prime Minister. If the Government is interested in consumers as it claims, why is it allowing Petro-Canada, the people's own oil company, to charge Canadians 7.5 cents a litre more for gasoline than it is charging Americans?


Mr. John McDermid (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, I think if the Hon. Member looked into the situation a little further he would find that Petro-Canada is working at its refinery at Clarkson on contract to a company in the United States which has bought crude oil from Canada and is paying Petro-Canada to refine the oil for it in Oakville. Naturally, that gas is being shipped into the United States.


Russell Gregoire MacLellan: Mr. Speaker, this is Canadian oil which is being sold to Americans. Petro-Canada and Imperial Oil have no trouble meeting the American price-


Mr. Hnatyshyn:: Order.


Russell Gregoire MacLellan: -but they won't sell it to Canadians at that price.

April 8, 1986
Oral Questions GOVERNMENT POSITION


Russell Gregoire MacLellan: Why is
the Government continually allowing oil companies to pick the pockets of Canadians?


John Horton McDermid: Mr. Speaker, the Government is not interfering in the market-place. The cheaper gasoline coming into Canada via independents from the United States is forcing prices to go down in this country. Fair competition like that will continue to keep the prices down and that is what we want for the consumer, fair prices for them here in Canada, low prices, and that is what they are now getting.


PHARMACEUTICAL INDUSTRY
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Deputy Prime Minister. One Minister has just said that it is the Government's policy not to let conglomerates go their merry way, but the senior spokesperson for international trade in the United States, who reports directly to President Reagan, is reported to have said yesterday that the U.S. Government has become impatient with the Government of Canada for its tardiness in changing our patent laws as they affect drug prices and large conglomerates. Are we now going to have legislation introduced in Canada which will benefit the multinational drug companies, precisely because that is what the United States wants?


William Henry (Bill) Domm: Mr. Speaker, I will give the same answer to that question which was given in the House of Commons yesterday by the Minister responsible, the Minister of Consumer and Corporate Affairs. We will be announcing a policy. We are in consultation. The position will be the same as it has always been. When it is announced, whatever the policy is, it will create jobs.


Some Hon. Members:: Oh, oh!


William Henry (Bill) Domm: It will not eliminate generic manufacturing. I am sure that, unlike the former administration which found it impossible to deal with the situation in any form, we will deal with it in order to create economic growth and jobs.


John Edward Broadbent: Mr. Speaker, as a supplementary question for the Minister of National Health and Welfare, I will say to the Hon. Member who just replied that one thing we know-


Ramon John Hnatyshyn: Order. Question.


John Edward Broadbent: -is that the change will cost Canadians $200 million a year in drug prices.


Mr. Speaker:: Order, please. Question to the Minister.


POSSIBLE EFFECT ON SENIOR CITIZENS
John Edward Broadbent: My supplementary question to the Minister of National Health and Welfare is this. Since the Eastman report has estimated that a change could cost Canadians some $200 million a year, and since senior citizens will be the major group of Canadians affected, will the Minister assure the House that, before legislation is passed, the senior citizens of Canada will have a chance to appear before that committee and have their views heard and listened to by the Government?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, first, the Hon. Member should realize that Eastman also recommended changes to the present system. That is something which should be taken into consideration.
Second, the Hon. Member asked whether or not senior citizens and other groups would have the right to appear before the committee should the Government come forward with legislation. That is generally the procedure when legislation is before the House. I think it will apply in this case as well.


VIEWS OF PROVINCES
John Edward Broadbent: Mr. Speaker, we will take that as a promise and not as a sacred trust.
Since the Minister is responsible for health services in general-and he should obviously have a concern about this- will he assure the House that the changes contemplated in the years affecting the holding of patents will not be more substantial than those recommended in the Eastman report? Has the Minister consulted with the provinces to find out their views with respect to how they will be affected?


Arthur Jacob (Jake) Epp: Mr. Speaker, I hope the Hon. Member has more assurance of his own ability and that of members of his Party who sit on the Health Committee, or the appropriate committee to which any legislation might be referred. They can ask for whatever witnesses they want to appear or think should appear.
Regarding any elements of any legislation, the Hon. Member will have to wait until it is produced, if and when it is produced.
April 8, 1986


FALLING OIL PRICES-EFFECT ON EMPLOYMENT
Maurice Brydon Foster: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Last year the Minister promised to create hundreds of thousands of jobs in the energy industry. Today tens of thousands of jobs are being lost in Alberta and Saskatchewan, and thousands of jobs are at stake in Ontario at places such as Algoma Steel in Sault Ste. Marie. When will the Government act to preserve these jobs which are being lost daily?


John Horton McDermid: Mr. Speaker, 1 can inform the Hon. member that at this moment the Minister is meeting with her provincial counterparts in order to discuss the impact of the low world energy prices on our producing provinces. I am sure an announcement will result from that meeting later on today.


REQUEST FOR GOVERNMENT PROGRAM
Maurice Brydon Foster: Mr. Speaker, it is obvious that Alberta has acted already with $400 million worth of aid to the petroleum industry. When will the Government come forward with a program to save the jobs in these industries, such as the jobs in Sault Ste. Marie at Algoma Steel?


John Horton McDermid: Mr. Speaker, I can tell the Hon. Member this. If the National Energy Program were still in place today those same oil companies would be paying $1 billion more in taxes. The taxes were cut when we redefined the energy policies of the Government. That has helped the energy industry. They would be in deep trouble today-far greater trouble-if the National Energy Program were still in place. I can tell the Hon. Member that 700 small Canadian companies would be paying the PGRT today if the NEP were in place. That number is now down to 70 because of the policies of the Government. Help is there for the energy companies and-


Mr. Speaker:: Order, please.


GENERAL STANDARDS BOARD
Lorne Edmund Nystrom: Mr. Speaker, my question is for the Minister of Supply and Services. Farmers, truckers, taxi-drivers, and many others, have been complaining recently about the declining quality of diesel fuel. The fact is that this decline in quality is increasing the wear and tear on the engines of their vehicles. Can the Minister, who is responsible for the Canadian General Standards Board, the board which sets the Cetane levels for diesel fuel, assure the House
Oral Questions
that there will be no further downgrading of the quality of diesel fuel and that, in fact, there will be an upgrading of the quality of diesel fuel so that when users buy diesel fuel they can be assured it will not hurt their vehicles?


Hon. Stewart Mclnnes (Minister of Supply and Services):: Mr. Speaker, I will take notice of the representation made by the Hon. Member. It is a rather esoteric inquiry.


Some Hon. Members:: Oh, oh!


Stewart Donald McInnes: I will be glad to reply to him in the fullness of time.


MEMBERSHIP OF BOARD
Lorne Edmund Nystrom: Mr. Speaker, it is not esoteric for the farmers of the country. Can the Minister explain to the House why the members of the Middle Distillate Fuel Committee of the Canadian General Standards Board are dominated by members of oil companies when this is the board which sets the very regulations which are supposed to guide them? Why are there not any farmers on this board? Why are there not any members of other diesel fuel users on this board? Why is it dominated by oil companies?


Stewart Donald McInnes: Mr. Speaker, the Hon. Member is making another representation. I will inquire to see if it has merit.


CANADA-UNITED STATES NEGOTIATIONS-PATENT LAWS
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I would like to ask a question of the Minister for International Trade. Was it accurate when the U.S. trade representative, Clayton Yeutter, said that in fact the Government much earlier had made promises to the U.S. Government to alter the patent laws substantially? What promises were made to the U.S. Government, and why were promises made before the House had a chance to examine the legislation, know what it contains, and know what will be sacrificed by the Canadian consumer?


Hon. James Kelleher (Minister for International Trade):: Mr. Speaker, the Government has no intention of doing anything that in the long run will be harmful to the Canadian consumer. That is not the way the Government operates, and it will not operate that way in the future.


CANADIAN POSITION
Lloyd Axworthy: Mr. Speaker, how about the short run? Was Mr. Yeutter correct in saying that the Government has already given concessions?

April 8, 1986
Oral Questions
Was that discussed by the Prime Minister at the Washington summit? What kind of concessions were given and what kind of promises were made? Why is the Government doing this before the House has had a chance to examine the legislation?


James Francis Kelleher: Mr. Speaker, as we advised earlier, the Hon. Minister of Consumer and Corporate Affairs will be making an announcement on this matter in due course.


HOUSING
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I have a question for the Minister of Labour who is responsible for housing. The coroner for the City of Vancouver, to whom I spoke this morning, told me that on April 4 at 9.15 a.m., at the corner of Pender and Carroll Streets in Vancouver, Harold Scarrow, age 61, who was to be evicted from a room for which he was paying $225 a month at the Lotus Hotel, to make way for Expo guests paying $50 per day, threw himself under a dump truck and died. What is the Government of Canada doing to stop this inhumane treatment of poor people who cannot really defend themselves?


Hon. Bill McKnight (Minister of Labour):: Mr. Speaker, 1 can inform the Hon. Member that with the changes in the National Housing Program which we are now negotiating, we will meet the needs of those needy Canadians like the one he has described twice as fast as under the old program. I can inform the Hon. Member that last year the expenditures on social housing in the Province of British Columbia-


John Napier Turner: Went down.


William Hunter (Bill) McKnight: - increased 23 per cent in 1985 over 1984.


Sheila Maureen Copps: Because it was the lowest in the country in 1984.


REQUEST FOR FEDERAL INTERVENTION
Ian Gardiner Waddell: Mr. Speaker, I do not know if the Minister heard my question. Given that at the end of February there was another suicide of a man evicted from the Patricia Hotel in order to make way for Expo guests, would the Minister-


Ramon John Hnatyshyn: There's no Minister of Hotels.


Ian Gardiner Waddell: Would the Minister use the good offices of the federal Government, through the Prime Minister, to deal directly with Premier Bennett of British Columbia and make sure that this situation does not continue?


William Hunter (Bill) McKnight: Mr. Speaker, we recognize the concern of the Hon. Member and others in this matter. It does not fall within the jurisdiction of the federal
Government. The federal Government is attempting to negotiate a housing agreement across Canada that will change-


Ian Gardiner Waddell: How many more suicides are we going to have?


William Hunter (Bill) McKnight: The Hon. Member asks how many more suicides there will be. I deeply regret the loss of life, but the Hon. Member must recognize that we are attempting to change a program, which under the previous administration only targeted one-third of its dollars to those in need, to a program that targets 100 per cent of the federal government expenditures to those Canadians truly in need.


NATIONAL REVENUE
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, my question is directed to the Minister of National Revenue. This is the worst year for accuracy on the part of Revenue Canada. Forty-three per cent of the questions addressed to the Department of National Revenue are wrongly answered. Why did the Minister of National Revenue not train his personnel to answer correctly all inquiries of Canadians who need answers to file their income tax returns?


Hon. Elmer M. MacKay (Minister of National Revenue):: Mr. Speaker, I can tell the House and my colleague opposite that the Department and I are deeply disappointed and puzzled by this rather poor performance by our people. We are looking at remedial action. Some of the outstanding recommendations of the Woods-Gordon report and other options are being studied at the present time. We could think of instituting a two-tier system. As the Hon. Member knows, we used to be involved in silent monitoring, which is no longer acceptable. 1 can assure the Hon. Member that our officials are studying the matter and we hope to improve the situation in the near future.


OFFICIALS' KNOWLEDGE OF THE LAW
Alfonso Gagliano: Mr. Speaker, Canadians have 22 days left to file their tax returns. On whom can those Canadians rely to prepare their tax returns if Revenue Canada officials do not even know their own legislation?


Elmer MacIntosh MacKay: Mr. Speaker, I have already told my colleague opposite that we recognize the seriousness of the situation. We regret that the situation cannot be reported in a more favourable light. On the other hand, personnel are doing the best they can and it
April 8, 1986

may be that, upon analysis, the results will not be as disappointing as they may first appear.


REGIONAL ECONOMIC EXPANSION
John Edmund Parry: Mr. Speaker, I wish to direct a question to the Minister of Regional Industrial Expansion.
Does the Minister know that GM might close its Boisbriand plant as early as in 1987, and will he promise the House to meet with GM management to discuss the future of this plant which provides work for 4,000 men and women and tens of thousands of indirect jobs?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, I would be very pleased to take the Hon. Member's question as a representation. If it would be helpful to meet with the parties he has indicated, certainly 1 would be more than willing to do so.


REQUEST THAT MINISTER PERSUADE GM TO MODERNIZE PLANT
John Edmund Parry: Mr. Speaker, since it is a fact that this plant's production costs are the lowest in North America, can the Minister ask GM to use the plant's profits to upgrade its facilities?


Sinclair McKnight Stevens: Mr. Speaker, as I am sure most Members of the House are aware, and as the Hon. Member is certainly aware, GM has either spent or committed to spend $6.4 billion between 1980 and 1990. I think that is a very credible commitment to Canada and I would certainly suggest that the Hon. Member put his question in that context. GM has been a good corporate citizen in Canada.


CANADA LABOUR CODE
Mrs. Lise Bourgault (Argenteuil-Papineau):: Mr. Speaker, my question is directed to the Minister of Labour.
Because of a technicality in the Canada Labour Code, the Burns Agency, which has a contract with Air Canada at the
Oral Questions
airports at Montreal and Quebec City, pays its baggage inspectors $2.20 per hour less than their colleagues at other Canadian airports.
Could the Minister inform the House what he intends to do to force the Burns Security Agency and Air Canada to correct this unfair situation which, I may add, affects many of my constituents who are paid less for duties that involve greater responsibilities?


William Hunter (Bill) McKnight: Mr. Speaker, 1 can inform the Hon. Member that the issue in the industrial dispute of which she is speaking is one that will be settled by bargaining between the union that represents the employees and Burns Security Services. I have put forward a mediator, Mr. Doucet, at the request of the company and the union, to assist them in their negotiations. The areas of work in question are not those areas covered by a provincial decree. Provincial decrees are within provincial jurisdiction. Industrial relations are within the federal jurisdiction.


AIRPORTS
Mr. George Baker (Gander-Twillingate):: Mr. Speaker, my question is for the Minister of Transport who, in a sneaky fashion after the House closed for the Easter recess, approved an application by Air Canada to move its flights from Gander to St. John's, Newfoundland, despite the objections of tens of thousands of Newfoundlanders in all federal ridings. Was the Minister aware that Air Canada said the following a year ago:
We cannot move to St. John's. Proper facilities do not exist at that airport for international flights.
Could the Minister explain what or who changed Air Canada's mind since the facilities have not changed?


Mr. Rodriguez:: John Crosbie.


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, I am not sure what kind of correspondence the Hon. Member has in his hands but I have in my possession a letter from the President and Chief Executive Officer of Air Canada requesting that international flights to the U.K be transferred from Gander to St. John's. In my letter of-


Maurice Brydon Foster: The devil and Crosbie made you do it.


Donald Frank Mazankowski: In my letter to the President and Chief Executive Officer, I indicated that we would be able to accommodate Air Canada in that regard after consultation with my cabinet colleagues; namely, the Minister of Agriculture, the Minister of National Revenue, the Minister of-


Mr. Speaker:: Order. Order, please.

April 8, 1986
Oral Questions


REASON FOR CHANGE
George Baker: Mr. Speaker, I will tell the Minister what I have in my hand. Will the Minister not admit that the real reason they changed their minds and the Minister approved the application was a threat by the Minister of Justice that "Air Canada had better conduct transatlantic flights from St. John's or there's going to be trouble for someone"? Was that not the real reason for the change of mind by Air Canada? The Minister knows it.


Some Hon. Members:: Hear, hear!


Donald Frank Mazankowski: Mr. Speaker, I know the Hon. Member will not like this answer, but the real reason is that Air Canada requested the move, and we responded in a positive fashion.


John Napier Turner: Oh, come on, Maz.


CANADIAN ARMED FORCES
John R. Rodriguez: Mr. Speaker, my question is directed to the Associate Minister of National Defence. Could he tell the House why the spouses of present Armed Forces personnel are being bullied by the Defence Department not to sign petitions which protest recent U1 changes?


Hon. Harvie Andre (Associate Minister of National Defence):: Mr. Speaker, as the Hon. Member knows, in keeping with the long-standing and well-founded tradition of not involving the military in political activities, base commanders have quite properly interpreted Queen's Regulations and Rules to mean that political activity of this sort is not proper on military bases.


John Edward Broadbent: For their spouses!


John R. Rodriguez: Mr. Speaker, my supplementary question is directed to the same Minister. Is it the Government's position that the spouses of Armed Forces personnel are restricted in the exercise of their rights by virtue of marriage? Is that what he is saying?


Harvie Andre: Absolutely not, Mr. Speaker.


Some Hon. Members:: Oh?


Harvie Andre: Absolutely not. The question is on military bases and political activity on military bases.


John R. Rodriguez: Where else should their spouses live?


Harvie Andre: Perhaps the Hon. Member feels that it is appropriate to have the military involved in political activity. We do not, in keeping with long-standing tradition, and base commanders are simply enforcing the rules.



ROAD SAFETY


Mr. Gordon Taylor (Bow River):: Mr. Speaker, my question is directed to the best Minister of Transport Canada has ever had.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Next, next!


Mr. Speaker:: Order, please. Question, please.


Gordon Edward Taylor: What part does the federal Government play with regard to the safety of equipment on school buses which carry Canada's greatest treasure, namely, our girls and boys? Is any co-ordination being carried out leading to uniformity in equipment and operations in the provinces?


Donald Frank Mazankowski: Mr. Speaker, I thank the Hon. Member for that question. I like those kinds of questions, especially the preamble. Perhaps George may not agree.


Mr. Hees:: You can't win them all.


Donald Frank Mazankowski: To answer the question, yes, Transport Canada provides the design, manufacturing and functioning standards for school buses in Canada. There are some 35 standards. They are monitored and inspected on a regular basis by the Transport Canada Road Safety Directorate. As far as provincial safety equipment is concerned, that is coordinated under the CCMTA, an organization of which I am sure the Hon. Member is aware.



ROYAL CANADIAN MOUNTED POLICE


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is directed to the Acting Minister of Public Works. Could the Minister confirm that a criminal investigation has been undertaken by the RCMP concerning the contracting practices of his Department in the construction of the Museum of Man in Hull, and will he indicate to the House the nature of the investigation?
April 8, 1986


Hon. Perrin Beatty (Solicitor General of Canada):: Mr. Speaker, probably that question could be properly addressed to the Solicitor General. The Hon. Member will know that there have been press reports indicating that a police investigation is under way and, as a consequence, it would not be appropriate to comment further.


Mr. Speaker:: I will listen to the supplementary question, but I remind the Member of our rules with regard to sub judice convention.


Don Boudria: Of course the Minister will know that as yet no charges have been laid as far as we know.



INQUIRY WHETHER CHARGES HAVE BEEN LAID

Don Boudria: Mr. Speaker, perhaps my supplementary should be directed to the Minister, since he seems to have other information. Were any charges laid? And if so, was a Member or were several Members of this House named in these charges?


Henry Perrin Beatty: Mr. Speaker, as the Hon. Member knows, in cases where there are police investigations it is not appropriate to raise the matter on the floor of the House of Commons so as not to prejudice the results of a police investigation or the ability of an individual to get a fair trial. I think the Hon. Member will respect that.



FINANCIAL INSTITUTIONS


William Alexander (Bill) Blaikie: Mr. Speaker, my question is for the Minister of State for Finance. Does she see the decision last night by the finance committee as the first fruits of parliamentary reform in the new independence of committees and, if so, why will she not respect that spirit of parliamentary reform and heed the unanimous recommendation of that committee now?


Barbara Jean McDougall: Mr. Speaker, this question was more or less asked before. I have said, first of all, that I respect very much the parliamentary reform process. I also respect very much the opinions of the people on that committee. I do not yet have all the information. At the risk of repeating myself as well, when I have that information I will make the decision in the best interests of depositors and the financial system of Canada, as I have always done before in matters of this nature.
Oral Questions



PARLIAMENTARY COMMITTEE'S UNANIMOUS RECOMMENDATION

William Alexander (Bill) Blaikie: Mr. Speaker, why does the Minister place the unanimous recommendation of a committee of the House as a fact along with any other fact? As far as the House and Members of Parliament are concerned, that should be a paramount fact in the mind of the Minister-a unanimous recommendation of a committee of the House.


Barbara Jean McDougall: Mr. Speaker, I do not know if I could say it more clearly than I have. I respect the process, I respect the Members, and I will take their views well under advisement.


John Napier Turner: Thank you very much, Barbara.



VETERANS AFFAIRS


Mr. William G. Lesick (Edmonton East):: Mr. Speaker, my question is directed to the jolly Minister of Veterans Affairs. Many veterans in my riding have expressed concerns-


Mr. Speaker:: Could we please stop these comments now? A question, please.


Harvie Andre: How come insults are okay and not compliments?


William Lesick: Many veterans in my riding have expressed concerns regarding the harmonization of the war veterans allowance assessment requirements and those used by the Department of National Health and Welfare for the Guaranteed Income Supplement. Could the Minister assure my constituents that the War Veterans Allowance Benefits will not be adversely affected?


George Harris Hees: Mr. Speaker, I am very glad to be able to assure the Hon. Member for Edmonton East, who always takes a very keen and useful interest in his veterans and their welfare, that no recipient of the War Veterans Allowance will see his or her benefits reduced in any way due to harmonization. In fact, on the contrary, veterans will benefit from this move by seeing paperwork reduced and simplified, and the resultant administrative savings will be applied to the Veterans' Independence Program, a truly great and imaginative program.

April 8, 1986
Oral Questions



REGIONAL ECONOMIC EXPANSION


Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion, and it concerns the Matane paper mill. The answer given by the Minister yesterday in the House has created uncertainty in Matane with respect to the future of the paper mill project.
Therefore I want to ask the Minister, in order to reassure the people of Matane, whether he is still prepared to meet the commitment he made to the Government of Quebec, namely, to enter into a joint financing agreement for the paper mill project in Matane.


Sinclair McKnight Stevens: Mr. Speaker, when a similar question was raised yesterday, I indicated that certainly we are willing to carry on with our negotiations, including those with the Province of Quebec. At the present time the Saugbrugs company in Norway is not in a position even to consider a deal. In fact I spoke with its Chairman, Mr. Per Etholm, yesterday in Norway. He said that nothing could be done on the Canadian side at this point, until their annual meeting was held on April 24, at which time it will be decided who in fact is in control of the company.



COMMITMENT TO QUEBEC GOVERNMENT RELATING TO INVESTMENT-POSITION OF FEDERAL GOVERNMENT

Jacques Guilbault: I have a supplementary, Mr. Speaker. The Minister has not added anything to what he said yesterday. This is what we want to know: Does the federal Government still have the political will to meet the commitment made to the Government of Quebec, whether the investor is the Norwegian firm or any other serious investor? That is what the people of Matane want to know, and that is what I am asking the Minister.


Sinclair McKnight Stevens: Mr. Speaker, I am sorry if the Hon. Member finds that when you ask repetitive questions you get repetitive answers. The point is, as I indicated yesterday, that we would very much like to see a major project consummated in the Matane area. We are certainly interested in discussing the project with all parties, including the Province of Quebec, and that interest will continue, hopefully, to a successful conclusion.



LABOUR CONDITIONS


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, my question is for the Minister of Labour. It pertains to the 16,000 forest workers in British Columbia who have been laid off. More than 5,500 of them are over the age of 50.
Since the forest industrial relations people and the IWA have been trying to have a meeting with the Minister, would the Minister be prepared, while the group is in Ottawa for the forest conference this week, to undertake to have a meeting with them to discuss the plight of those workers and possibly set in place a labour adjustment operation, similar to the ones in Ontario?


William Hunter (Bill) McKnight: Mr. Speaker, I can inform the Hon. Member that last spring 1 met with both the IWA and the industry. We discussed the concern on behalf of the industry and the union about the inability to have early retirement worked in to the pension plan which those members had.


Mr. Benjamin:: A year ago?


William Hunter (Bill) McKnight: At that time I asked the executive of the IWA to provide me with all the information they could. Unfortunately, they were busy assisting in protecting the exports of lumber to the United States at that time and were not able to get back to me with information.
I have met with them before, I am willing to meet them again. I do not know what my schedule is now, but if there is a request, I will meet them. As the international vice-president of the IWA knows, my door is always open.



REQUEST FOR GOVERNMENT ASSISTANCE

Raymond John Skelly: Mr. Speaker, they would appreciate that, and since they are in the lobby today, they will be bringing forward their request.
Some 5,500 of those workers are on pension. They have been laid off for more than two years, and a break in their pension will certainly be of harm to them. Would the Minister be prepared to discuss with these workers ways in which the Government of Canada can assist those who have been laid off and whose pensions are being destroyed now because of the break in the time they have worked?


William Hunter (Bill) McKnight: Mr. Speaker, as the Hon. Member is aware, the Budget introduced by the Minister of Finance contained a Program for Older Worker Adjustment. Some $125 million was identified for it.
We are going forward with discussions with industry, the provinces, and with the unions to make that program work across Canada. I will see if it fits into the criteria that are explained to them.
April 8, 1986



EMPLOYMENT


David Charles Dingwall: Mr. Speaker, my question is for the Deputy Prime Minister. Fifty-seven persons employed in trades training in Nova Scotia have received termination notices which read, in part:
A substantial reduction in federal funding is unfortunately resulting in a reduction in training programs.
I would ask the Deputy Prime Minister on behalf of the Government to explain why Nova Scotians have to accept a 38 per cent reduction in trades training, thereby depriving Canadians in that region of training which would enable them to obtain meaningful jobs?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, with respect to the specific question, I will take notice of it for the Minister of Employment and Immigration.
I would point out to the Hon. Member the positive side of the employment picture is that the unemployment rate has fallen from 11.7 per cent in September, 1984, to 9.6 per cent in March, 1986, the lowest rate in four years.


Leslie Gordon Benjamin: That was not the question.


Erik Nielsen: Jobs are being created faster in Canada than in any other OECD nation. I could give the hon. gentleman further statistics, but I think I might bore his bias.



REQUEST FOR ADDITIONAL FUNDING

David Charles Dingwall: Mr. Speaker, I would remind the Deputy Prime Minister that at one institution in Nova Scotia there are approximately 2,500 people on a waiting list for the basic training skills development program. With these cutbacks, only 60 people will be available for that particular program.
Will the Deputy Prime Minister reconsider providing additional moneys in Nova Scotia for trades training for those people who are desperately seeking some form of job training for jobs in the future?


Erik Nielsen: Mr. Speaker, the hon. gentleman should know that, compared with the administration that he supported when he was on this side of the House, jobs are being created almost 4.5 times the rate at which they were being created when his administration was in office. Total unemployment has fallen by 227,000.
The programs that have been put in place, far-reaching, imaginative programs, by this Government under the guidance of the Minister of Employment and Immigration have had that very positive result. Instead of complaining, the Hon. Member should be applauding.
Oral Questions COMMUNICATIONS



BELL CANADA TELEPHONE BILLS-REFUSAL OF CASH PAYMENT

Robert Nesbitt Horner: Mr. Speaker, my question is for the Minister of Communications and Culture. It has come to my attention that certain Bell Canada offices, both in my riding and in other parts of the country, are no longer accepting cash for payment of telephone bills. In view of the inconvenience this causes many Canadians, and in view of the fact that cash is still legal tender, would the Minister take whatever action is necessary to correct this situation?


Hon. Marcel Masse (Minister of Communications):: Mr. Speaker, I am aware that in recent months Bell Canada has changed its policy regarding cash payments at some of its offices. I understand that Bell has taken this action in the interest of efficiency since, as in the case of most utility companies, the majority of Bell subscribers pay their bills by mail or at banks.


Jacques Guilbault: Did you write the question too?


Marcel Masse: The CRTC is aware of this issue and has asked Bell for more information. I believe the CRTC is in the best position to determine how the public interest-


Mr. Speaker:: Order, please.



FINANCIAL INSTITUTIONS


Ian Deans: Mr. Speaker, my question is for the Minister of State for Finance. Why is the 10 per cent ownership rule, which applies to chartered banks in Canada, not appropriate for trust companies?


Barbara Jean McDougall: Mr. Speaker, ownership is only one of the factors that has an impact on solvency and capital in the interests of depositors. There are many other factors as well; the financial resources of the company involved, the quality of the management; all those things. My concern is for the depositors, the solvency of the institutions and the competitive nature of Canadian business.



GOVERNMENT POLICY

Ian Deans: Mr. Speaker, does the Minister not recognize that that particular ownership rule was put in place to protect the depositors she now claims she is concerned about?
Why are the bank depositors protected in that way and trust company depositors left to their own devices?

April 8, 1986
Oral Questions


Barbara Jean McDougall: would like, with respect, Mr. Speaker, to correct one piece of information. The 10 per cent rule, as I recall, was put in to prevent foreign ownership of the Canadian banking system.


Ian Deans: And to protect depositors.


Barbara Jean McDougall: As we have seen, not only in Canada but in other countries, ownership ordinarily held is only one of the factors that has an impact on how financial institutions behave and on their solvency requirements.



MERCURY LEVELS AMONG JAMES BAY CREE POPULATION

Douglas Cockburn Frith: Mr. Speaker, my question is for the Minister of National Health and Welfare. Is he prepared to use the power given to him under the Environmental Contaminants Act and request an inquiry into the pollution levels of mercury in the James Bay reservoir, levels that are so high that they are described by Allen Peen, Director of Lands and Environment Development for the Cree Regional Authority, as more extensive and widespread than anywhere else in the world?


Arthur Jacob (Jake) Epp: Mr. Speaker, we are concerned about the issue which the Hon. Member has raised. We are co-operating in whatever way we can, both within the jurisdiction of the federal Government as well as with the provincial Government. This matter is being monitored very closely by us. We have not yet come to conclusions on what kind of remedies, if any, should be found or can be made.



REQUEST FOR RELEASE OF DEPARTMENTAL DATA

Douglas Cockburn Frith: Mr. Speaker, would the Minister at least release Health and Welfare's National Surveillance Program tracking data from the 1970s requested by the Cree Regional Authority from the Minister's Department a year ago, a request which has still not been acted upon? They would very much like to have ongoing tracking data.


Arthur Jacob (Jake) Epp: Mr. Speaker, I will look at that request, and if it is possible, if there are no impediments, I will be glad to see whether we can meet that request.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Cote (Langelier) that Bill C-91, an Act to establish the Competition Tribunal and to amend the Combines Investigation Act and the Bank Act and other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Douglas Cockburn Frith: Mr. Speaker, I take great pleasure in resuming the debate on Bill C-91. I would like to preface my remarks by indicating to you, as have other members of my Party, that we intend to support Bill C-91 in principle at second reading. We do so despite some misgivings about areas where we feel the Bill could be improved. We do so as well because we happen to believe, contrary to the belief of my colleagues to my left in the New Democratic Party, given the historical development and the difficulty we have had in getting any kind of competition Bill through the House of Commons, that this Bill is better legislation than that which exists today to protect the consumers in the country.
Given that caveat, Mr. Speaker, we are prepared to support the Bill in principle. I do, however, wish to speak on certain parts to which the Liberal Party believes it can move amendments in committee, to improve the legislation. We hope we will be listened to by the Government.
I believe that since the Hon. Judy Erola, previously the Member of Parliament for Nickel Belt, introduced the last competitions Bill, the current Minister of Consumer and Corporate Affairs (Mr. Cote) has done a reasonable job of consultation and has put forward amendments which I believe will improve the legislation. With regard to those improvements, Mr. Speaker, the Bill differs from the previous Bill in that problems with corporate takeovers will be referred to a tribunal rather than the court system. I believe that is a significant improvement. I understand it was the Consumer's Association of Canada which recommended to the Government that the tribunal system replace the court system for appeals. I believe that that in itself is an improvement to the legislation.
I also believe very strongly, Mr. Speaker, that appointing lay members to the tribunal will be a step forward.


Mr. Speaker:: Order, please. Could I ask Members to hold their meetings somewhere else, out of respect for the Hon. Member who has the floor?


Douglas Cockburn Frith: Thank you, Mr. Speaker. I want to speak about the improvements to the Bill because 1 think they are fundamental to the reason the Liberal Party will support the Bill in principle at second reading. I firmly believe that the tribunal system is an improvement over the previous legislation. The
April 8, 1986

tribunal system will allow, for the first time, lay members to be appointed to ensure that consumer voices are heard when these matters are discussed.
Another improvement in the legislation is that Part VII matters have been removed from criminal jurisdiction and are now a matter of civil liability. That in itself is an improvement because restrictive trade practices and anti-competitive behaviour would then only require proof "on the balance of probabilities" as opposed to the criminal burden of "beyond a reasonable doubt". I believe that having it under criminal jurisdiction in previous legislation was a detriment to the ability of the inspectors within the Department of Consumer and Corporate Affairs to successfully charge corporations with violations, or restrictive trade practices.
Before I continue in a general way to outline some of our other concerns, it is important to note that Bill C-91 is before us to ensure, first and foremost, that free competition exists in the country. That is a very important principle. Second, the interest of consumers would be protected by this legislation. A third major and probably very controversial point, Mr. Speaker, is the achievement of economic efficiency. A number of speakers have already taken part in this debate. They have spoken about the need for maintaining free competition, the need to prevent abuses of economic power-in other words to protect the consumer-and the paramount need, in terms of our legislative program, to achieve economic efficiency in the economy.
I know that some Members have indicated previously that they find it odd that the five big lobby groups in the country have had a significant impact on previous legislation. Speaker after speaker has indicated that previous Governments have had difficulty passing any legislation with respect to competition because the lobby groups have been very successful in putting forth their viewpoints. Consumers have been very difficult to motivate in terms of lobby groups and, as a result, the weighting has been more on the side of big business than on that of the consumer. That fact is pointed to as one of the major reasons that previous Governments have failed to pass a competition Bill with objectives similar to those outlined in Bill C-91.
I do not find that surprising, Mr. Speaker. We in this House are not political virgins. We recognize that lobby groups are involved in every piece of legislation that comes before Parliament. I have no dispute with the big five, which includes the Canadian Manufacturers Association, the Business Council on National Issues, and the Canadian Chamber of Commerce. They have done the job which lobbyists are expected to do. It is our job, as Parliamentarians, to take into consideration the testimony given to the committee. We must also listen to the viewpoints expressed by other interest groups in the country. That is part and parcel of the political process in the country.
My colleagues to the left in the New Democratic Party have chastised some members of my Party on some of their interventions. They have asked why the Liberal Government
Competition Tribunal Act
was unable to get certain pieces of legislation through the House of Commons. It sounds to me like they are political virgins, that they are surprised that lobby groups have that degree of power.
When the Liberal Government brought in its Budget in November of 1981, through which we were attempting to make the tax system more equitable, the then Minister of Finance told our caucus to expect a great deal of pressure from lobby groups. He indicated that as a result of that Budget of 1981 one million more Canadians would have more disposable income in their hands. In other words, the Budget of 1981 was going to beneficially affect one million Canadians, and only approximately 225,000 Canadians would be adversely affected by that Budget.
Being a neophyte in the political arena, it came as a bit of a surprise to me that not one of the one million Canadians who would benefit from the legislation bothered to phone me as a Member of Parliament. However, I can assure you that all of the 225,000 Canadians being adversely affected by the legislation made sure that their views were made known to the Liberal caucus.
I recall very clearly, Mr. Speaker, that when it came time to vote on that Budget, through which we were attempting to rectify inequities in the tax system, my colleagues in the New Democratic Party consistently voted with the 225,000 Canadians who lobbied hard to reverse a number of major measures in that Budget. It therefore comes as a surprise to me today that the New Democratic Party is now pointing to the Liberal Party and chatising it for its inability to progress with competition policy.
I want to speak for a few moments on the principle of economic efficiency. That in itself is a laudable goal of any competition policy. Perhaps it is at the heart of the debate which will take place here regarding the Imasco takeover of Genstar. But more importantly, it allows us to raise the issue of other takeovers which have created a great deal of concentration of ownership of questionable value to the public interest. That is at the heart of the issue of achieving economic efficiency.
There are many in this country opposed to the Government intervening in corporate takeovers. The basis for their objection is that if Canadian conglomerates are going to compete in an international economy, they will have to do so with the same financial clout as the other players. In other words, as the Hon. Member for Mississauga South (Mr. Blenkarn) pointed out this morning, it hinges upon the degree of integration that our economic system has with its American counterpart. It also raises the question of the extent to which we can use Government intervention to prevent corporate concentration from the standpoint of taxation.
As you know, the integration between the Canadian and American tax systems plays an integral part in corporate

April 8, 1986
Competition Tribunal Act
decision-making in North America. The Canadian tax system cannot be completely out of whack with the American system when it comes to allowing conglomerates on either side of the border taking over other conglomerates. We will have to distinguish between the non-financial corporate takeover of a financial institution from other takeovers in which financial institutions are not involved.
For example, let us go back to the takeover of Northern Telecom by Bell Telephone. There were those who argued that the degree of corporate concentration would not be in the public interest. I would argue that to some extent each one of these takeovers has to be judged on its own merit. That is why I am pleased to see that the Government has introduced the principle of a tribunal review. My argument is that that kind of corporate takeover was beneficial to the public interest because it created a company which is recognized world-wide as a leader in its field. As a result of that merger, Canadians have achieved some supremacy in the field of communications, which supremacy would not have been achieved had that takeover been prevented by Government legislation.
On the other hand, I have serious misgivings about some of the other corporate takeovers in this country. I am not now talking about the Genstar and Imasco deal, I am talking about takeovers involving two non-financial institution conglomerates. For example, last summer's takeover of Gulf Canada by Olympia & York. I do not disagree with the accounting principles used by Olympia & York. Frankly, they are doing what every other Canadian company does every day, and it is legal. However, that takeover cost the taxpayers $1 billion in foregone tax revenue, and not one job was created.
That is the kind of takeover this legislation will cover and justifiably so. That kind of takeover should go before the tribunal. It should be ascertained whether or not the public interest is being served. That is where I find fault with this legislation to some extent. In more cases than not there is no specific clause in the legislation which will allow class action suits to take place. There is nothing in the legislation which will allow a determination of whether the public interest is being served.
As another example we have the latest attempt by Olympia & York to purchase Hiram Walker. Whether or not they are successful remains to be seen. Hiram Walker, in an attempt to get around the bid by Olympia & York, is attempting to divest itself of its liquor business. The point I am making is that under this proposed legislation it would not be possible for that deal to be referred to the tribunal to determine whether or not it makes good sense for the workers involved in Windsor. This is the kind of thing that I believe should be added to the Bill.
As I indicated, I hope we can get this legislation through and into committee as quickly as possible. I hope members of the committee will view the representations made by various interested groups and Members of the Opposition to enhance the ability of the tribunal to look at corporate takeovers from the point of view of whether or not they serve the public interest.
I have indicated as well that I have some concern about the degree of corporate concentration of ownership in Canada over the last 15 to 20 years. I must share part of the blame, I suppose, if there is blame to be attached. However, whether it is a Conservative Government or a Liberal Government matters little. The point is that whenever we talk about corporate concentration, the argument is made for the need for integration of the tax system here and in the U.S. That argument was made when we were in power and it is being made now that the Conservatives are in power. It seems to me there is some validity to the argument.
I do not believe we live in a self-contained world. The tax system here has implications for foreign investment and foreign takeovers. The Hon. Member for Mississauga South properly pointed out that prior to 1970, when U.S. companies purchased Canadian entities, the interest on the money they borrowed to do so could be deducted from income from other sources. Yet Canadian corporations were not allowed the same benefit in Canada. As a result, up until 1970 we had ever-increasing foreign ownership of key sectors of our economy. That led to the pressure to change the tax laws to allow Canadian companies the same tax privileges as those in the U.S. We could then have Canadian conglomerates becoming larger and larger. To some extent I think that has been beneficial for the Canadian economy.
However, there has to be a public debate on how we are going to prevent abuse of corporate concentration of power, compatible with a tax system which we all recognize has to be integrated with that of the U.S. I would point out that in Canada at present 100 of the largest corporations control more than 50 per cent of the business assets. In the U.S. it is only roughly 30 per cent. So the concentration of power issue in Canada is of paramount importance, and we still do not address it in this legislation. Yet it will become of increasing importance, particularly when we have six or seven families in Canada who control the majority of the assets of the corporations listed on Canadian stock exchanges. That I hope can be addressed in committee, and with that I will entertain questions.


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


Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, it is with a great deal of interest that I rise today to speak to Bill C-91. We welcome this Bill. Its main quality is that it is better than the present almost non-existent legislation dealing with competition. As my hon. colleague just said, the incredible concentration of power now in the hands of six or seven families is of serious and ongoing concern. It is rhetorical to ask wehther do we need this piece of legislation. It is timely because of the number of mergers taking place across this country in the past year or so. Such a concentration of power in the hands of too few is counterproductive for most Canadians.
April 8, 1986

Competition is a vital key to the private sector and the private enterprise system. Some economists tell us that the more competition in the market-place the better it is for everyone because prices are lower due to the wide variety of choice of firms producing the same or similar types of products. This makes for better competition. Small business, provided it can face the competition, as it must, can assume its special position in the market. The challenge, with the innovation it brings, can lead to improved products and services, as well as keep the competition on its toes. This will in the long run benefit all of us-the consumer-that is you and me. In other words, the consumer benefits from lower prices and the wide range and variety of products available. On the other hand, when there is little competition product choice is restricted and prices are generally high.
I remember the sugar fiasco we all lived through. We went into the store and took a bag of sugar off the shelf. By the time we looked at the price and got to the checkout counter the price had gone up and we had to pay more.
Consumers and small businesses suffer the most from restricted trade and restricted competition. In a few moments I will give some examples of how the concentration of ownership has caused problems for a sector of the cultural industry, leading inevitably to a lack of ability to compete. This is not an esoteric subject, this is quotidian for monsieur et madame; it is tout-le-monde. What we are discussing here is a restraint through competition which leads to a restraint of selfexpression on the part of hundreds and hundreds, perhaps thousands of talented and creative Canadians in a wide variety of fields.
Essentially what we do is take the food out of their mouths. Most certainly we shrink their take-home pay when we have a high concentration and lack of competition in the field of cultural enterprises-artists, musicians, singers, sound and light technicians, film and script writers, stage and screen actors, producers, people iwth diversified jobs. That is what we are talking about and that is what competition in the cultural industrial field is all about.
Small entrepreneurs create the bulk of jobs that exist in Canada. We have an obligation to encourage and protect competition and fair trade practices to ensure the best conditions for an active, healthy market-place. The Liberal Party will be looking for indications that small business is protected from unfair competition by Bill C-91.
Let us look at competition in the film industry. The vertical integration of distribution and ownership concentration in the Canadian film industry has a severe negative impact on competition in this country, because it restricts trade andpre-vents entry into the Canadian market. The showcasing through our theatre screens is thereby limited, because "Distribution determines who can see what, when and how", to quote a report from the film industry task force.
As a result a special relationship between distributors and exhibitors in the 1920s large American studios were able to
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take control of the Canadian market, and things have not changed very much since then. An inquiry into these exclusive relationships in the film industry reached the following conclusions: That a combine exists in the motion picture industry in Canada within the meaning of the Combines Investigation Act; and that a combine exists and has existed at least since the year 1926. It is also felt that the combine has operated and is likely to operate to the detriment of the interests of the public.
The commissioner identified the members of the combine as Famous Players and the distributors, Paramount, Universal, Fox, Columbia, RKO, Warner, First National and a few others. He concluded that by reason of agreements, arrangements and other activities of the above mentioned, Famous Players in this instance has been able to acquire, particularly in the large cities and towns in Canada where the most profitable business is, such substantial control as to reduce competition to a minimum, making it extremely difficult for the independent theatres to survive. Booking arrangements have been restricted by the pooling and operating agreements and acquisitions I have just mentioned.
Canadian law at the time provided no remedy. Not much has changed since then, regretfully. Canadian law as early as 1930 demonstrated no apparent concern about the lack of open competition in Canada's film industry. We addressed this issue again in 1982, and I will have more to say about that in a moment.
Our neighbour to the south had the same situation with concentration of distribution. The United States Supreme Court decided in 1948, under the Sherman Act, that it was contrary to the public interest to have direct or indirect control over American theatre networks by these companies. The Supreme Court subsequently forced the five vertically integrated distribution companies-Paramount, Twentieth Century Fox, Loew's, which is now MGM, RKO and Warner Brothers-to divest themselves of all interest in film exhibition. In order to reduce ownership concentration in exhibition, the five had to give up about 1,200 of the 1,300 theatres they directly or indirectly controlled. As a result of that judgment, competition intensified at all levels, and the creativity and performance of the American film industry improved substantially. I think we could look forward to the same thing here. It is an unfortunate fact that the American action has not had any influence in Canada. This is just an overview or simplification of the major areas of concern for our cultural industries.
In 1982 the Cineplex Corporation, a Canadian theatrical chain, lodged a complaint with the Restrictive Trade Practices Commission. Cineplex alleged that seven of the large distributors operating in Canada had concluded long-term contracts under which they were committed to furnishing films to the two largest theatre chains, that is Odeon and Famous Players, excluding Cineplex and other companies. In other words the showcase was cut off and we had a restrictive trade practice, a cutting back of competition.

April 8, 1986
Competition Tribunal Act
As a result of the allegation, negotiations took place. An agreement was reached with the distributors to modify their distribution practices to "allow exhibitors to compete for each film". Following a decision of the Restrictive Trade Practices Commission under Section 31.2 of the Combines Investigation Act we got the commitment to modify the distribution practices and allow for the present "open bidding" system. In fact the report of the film industry task force, which reported to our Minister of CommunicationsfMr. Masse) in December, did not find that "open bidding" had really begun or was really truly working.
Let us consider Cineplex, as an example. In January of this year France Film lodged a complaint to the director of the Restrictive Trade Practices Commission stating that open bidding has not been the practice and that the 1982 agreement has been broken.
[ Translation]
-Mr. Speaker, I draw your attention to this article published in La Presse of Thursday, January 16, 1986 under the heading: "France Film attack against Odeon and United Cinemas":
Yesterday the France Film cinema chain Filed a request with the Canadian Restrictive Trade Practices Commission in an attempt to put a stop to unfair competition from Cineplex-Odeon and United Cinemas. France Film President Pierre Rene stated that "we were often among the highest bidders last fall, yet we failed to get any of the films we wanted to have".
"We are convinced that Cineplex and Famous Players, a Gulf and Western subsidiary-
-and we in the House know all about Gulf and Western-
-and parent company of United Cinemas, did obtain copies of the films they wanted without even bidding, or by submitting lower bids than we did-
France Film, which supplies the Saint-Denis and Desjardins Complex cinemas as well as the Cinema de Paris in Quebec City and Sherbrooke among others- all told 30-odd cinemas in Quebec-was unable to obtain any of these American films-
At issue here was a matter of money, a loss of income at the most crucial time of the year, the winter holiday season-
We are still awaiting an answer from the Restrictive Trade Practices Commission on the complaint lodged by France Film. Hon. Members in this House probably do not realize the intensity and seriousness of the problem of concentration in the Canadian film industry. I can say the same for many of the sectors of the cultural industries which are big business. In 1985 in Canada there are still only two major theatre chains, Odeon-Cineplex with 472 screens and Famous Players with 471 screens. Together, they take in over 60 per cent of box office receipts. Each theatre chain is vertically integrated with a distributor. Famous Players and Paramount are both owned by the same conglomerate, Gulf and Western. Cineplex-Odeon is associated with Pan-Canadian and Universal through its MCA interests.
Any distributor vertically integrated with either of the major theatre chains can use this access to the main points of sale to acquire all commercially valuable foreign or domestic movies. As a result, other Canadian distributors' access to the major theatre chains is decidedly limited. By controlling distribution of the most lucrative productions, the company consolidates its position as an exhibitor, it is in a position to limit competition in exhibition and cause difficulties for other chains' minicircuits and independent theatre owners. The last two are then vulnerable to buy-outs and takeovers. The resulting impact is that a few companies are allowed to get bigger and bigger by swallowing up smaller, innovative enterprises.
By the way, this also hits our consumers who are captive to the promotion which can be put on these larger chains and which are often not equally accessible across our lands. 1 think it is wonderful that Golden Agers can, I believe, either Tuesday night or Wednesday night, go to all the films and cinema they wish for $2.50, if they live in the major centres. But what about those who live in the hinterland where there are no such theatres? The film industry identified the problem with concentration in the film industry. It felt that this was a problem because significant competition is essential to a healthy and orderly market-place and therefore recommended that the Government take the necessary steps to prevent and eliminate any vertical integration of distribution and exhibition which would limit competition and restrain trade in the Canadian film industry.
Not only in the film industry do we find examples of concentration of ownership and power. The Canadian broadcasting industry is currently seeing firsthand the old bugaboo of corporation ownwership in broadcasting and cross-ownership in broadcasting, newspapers and electronic media. In a current case before the Canadian CRTC, arguments are being presented over whether the Power Corporation of Canada, a large and diversified holding company, will be granted permission to buy Tele-Metropole Incorporated. If that deal is approved, we will see Montreal's largest French language newspaper, La Presse, which owns as well three other daily newspapers in the province, eight weekly publications and a radio station, now take over a major television network. I would suggest that this is of serious concern. This application would have been virtually unthinkable in the days of the Kent Commission in the early 1980s. I believe that is the most striking example of a new era of deal making in the communications industry. We are as well witnessing other media magnates such as the Bassett and Eaton families of Baton Broadcasting and Allan Waters of Chum Ltd. who are getting into the act and expanding their operations through acquisition. This is totally unacceptable and leads me to believe that power tends to connect and absolute power connects absolutely.
The Conservative Government signalled support for such concentration and cross-media ownership last May by cancelling, without so much as a whisper, a former 1982 cabinet directive that the CRTC prevent cross-ownership. The
April 8, 1986

directive, I believe, was applied only once in its short life in a 1983 case involving the broadcasting licence of New Brunswick's Irving family. Its request for cross-media ownership was turned down, in essence, because it would have allowed too high a concentration of power in the communications field. The question was, basically, how much one owns of what is available. In this instance, there was very high concentration of ownership in a small area.
Last September the Conservatives dropped the Liberal directive and the CTRC now has the authority to allow K. C. Irving and his sons to control newspapers, television and radio stations in New Brunswick. I was tempted to show you a list of their holdings, Mr. Speaker, but I decided that it was not such a good idea. It is just that it does create a certain series of problems when one looks at competition and control.
David McKendry, a regulatory industries analyst with the Consumers' Association of Canada, said that the Irving decision, "was as good as telling the industry that cross-media ownership is fine and this Government is not concerned about it". But we have to be concerned about every-day Canadians and their right to unbiased information with such a concentration as that of the Irving family and, potentially, the Power Corporation, which has significant and diverse holdings not only in the media industry but also in other fields which require the free investigative powers of journalists and the electronic media to ensure coverage of vital issues with a relevantly unjaundiced eye. The Power Corporation and the Irving family can assure and reassure us over and over again that they do not interfere in the editorial policy. Perhaps they do not and perhaps they have no intention of doing so. But they may not always be the owners of these mechanisms of communication and who knows what the other corporate takeover entity might do and what the impact would be on journalistic independence. When it comes to the power of the pocketbook, there is every possibility that the media would remain silent and compromise journalistic freedom for the sake of their pay cheques from those it is protecting.
In summation, access by the Canadian public to the media and to the theatre is an important element of social and cultural enrichment. By ensuring free competition, we are allowing small enterprises to flourish and at present, with such a large emphasis on employment, I would think that the Government would understand it is in small business that employment is created and thus strengthen this Bill even further to disallow such concentrations of ownership.
In relation to cultural industries, we are very concerned with two areas which are of importance with respect to Bill C-91, that is the abuse of the dominant position and mergers. The Liberal Party is concerned about the abuse of dominant position provisions because Bill C-91 has added a new requirement concerning the object of the practice. This in effect becomes an additional test and renders proof more difficult. How will we be able to prevent film, cable and book distribution from abusing the dominant position?
Competition Tribunal Act
[ Translation]
Mr. Speaker, all this may seem very technical, and that is why I am now going to talk about the provisions regarding mergers involving cultural industries. In fact, this is the Achilles heel of the present legislation, and it is quite easy to prove. Since 1910, there has been only one conviction under this section of the Act.

I think we have taken the right approach by transferring this matter from criminal to civil law. This Bill has been weakened considerably, if we consider that in Bill C-29 we took into account 12 factors in determining if the law had been breached. In Bill C-91 the following important factors have been left out: the size differential between the relevant business and its competitors; any history of anti-competitive behaviour; any likelihood that the merger will result in the removal of a vigorous and effective competitor; any evidence of intent to prevent or lessen competition; and the likelihood that the merger will stimulate competition.
In the field of telecommunications we will have to monitor competition policy carefully as we are faced with much new technology-the implications of satellites, fibre optics and cable. Therefore, I deplore that in Clause 65 of the Bill concerning criteria for evaluation of mergers the nature and extent of change and innovations in a relevant market will no longer be applicable. Consequently, in view of all this, Bill C-91 will not be as effective for cultural industries because it does not address mergers on as wide a criteria base as is needed for these industries. They have either been diluted or removed.

I have to challenge the priorities of the Bill's objectives. In fact, I think it is clear that this Government is too concerned about economic efficiency at the national and international levels, so much so that it seems to have lost its perspective and completely forgotten the consumer. A striking example is the difficulty third parties will have in gaining access to the Competition Tribunal, which also goes to show how little consideration the consumer is given in this legislation.

I would like to finish by asking the same question as was asked by Adam Smith. "Is... improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconvenience to the society?"
Perhaps we might all feel that this Bill will improve upon the existing legislation-it will. However, it might not be what we want. We should seek to improve the circumstances of the greater number of Canadians who are at a disadvantage when there is little competition in the market-place. In this case I stress the importance of the circumstances of the greater number of Canadian consumers of cultural goods.
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The Acting Speaker (Mr. Charest):: Are there questions or comments? The Parliamentary Secretary to the Minister of Consumer and Corporate Affairs (Mr. Domm).


William Henry (Bill) Domm: Mr. Speaker, I would like to ask a question of the Hon. Member for Mount Royal (Mrs. Finestone). Given the fact that there is a provision in Bill C-91 which provides the Government with a mechanism to deal with the problems in the film industry when competition is unduly lessened, why will the Hon. Member not support the Bill?


Sheila Finestone: Mr. Speaker, if my colleague thinks that I said I would not support the Bill then I regret that. I started my remarks by saying that it is a good Bill but that it needs some improvement. I said that this was the time for change and that the time had come. I said that 1 welcomed the Bill. What I pointed out was the removal of certain constraints and measures which would be used to evaluate mergers. That was my concern.


William Henry (Bill) Domm: Mr. Speaker, in the Hon. Member's remarks with respect to the film industry, what is it that bothers her with respect to the idea that integration vertically in the film industry would create a lack of competition? How would she stiffen up that provision?


Sheila Finestone: Mr. Speaker, I was referring to the factors which have been left out. I would be appreciative if members of the committee would reconsider these factors when the Bill is being studied. I suggest members of the committee look at Bill C-29 and compare it to Bill C-91. In so doing, they will see that the factors which are left out are of concern, particularly with respect to all cultural industries where the distribution of films and books, et cetera, are key factors. The size differential between the relevant businesses of the parties to the merger and their competitors is a key issue, particularly here in Canada where our industries are smaller and must face the large American competitors coming into the country.
If the Hon. Member recalls, yesterday I asked where the criteria of Investment Canada begin and end in terms of this Bill. I think there is an overlapping of jurisdictions which needs some clarification, particularly with respect to that factor. Also, any history of anti-competitor behaviour on the part of any party must be considered. I do not want to name names but I can tell Hon. Members that there is a fine history of anti-competitive behaviour in Canada. The report with respect to France Film which is before Hon. Members is good proof of that. The report deals with Cineplex Odeon, Famous Players and France Film. Cineplex Odeon brought the complaint before it was joined by Odeon and the Rank firm. I think it is quite relevant.
Another factor which has been left out of Bill C-91 is with respect to any likelihood that the merger will result in the removal of a vigorous and effective competitor. Then there is the factor dealing with any evidence of intent to prevent or lessen competition. There is also the factor with respect to any
April 8, 1986
likelihood that the merger will result in a substantial foreclosure of sources of products or distributors. I would ask the Hon. Member to take a look at what is happening in the book publishing and distribution industry and what happened to a number of booksellers which we have out in the market-place.
There is another factor with respect to the nature and extent of change and innovation in the relevant market. I would ask the Hon. Member to look at what is happening in the cable and satellite industries and to consider the fact that technology is changing at such a rapid pace. How can we measure if we do not have a measuring stick in place when looking at mergers? It is very important.
Then there is the likelihood that the merger will stimulate competition. This is another factor which I think should be taken into consideration.


William Henry (Bill) Domm: Mr. Speaker, I would like to point out a few things to the Hon. Member. When talking about Bill C-29 we are talking about a Bill which was not enacted. It was a Bill of the former Government. We have been talking about these types of Bills for 16 years now. We have been dealing with competition legislation which has been in place for some 75 years.
Let us consider the five points which the Hon. Member has mentioned. First, this Bill strengthens rather than weakens or lessens control in the following ways. The maximum fine for conspiracy is increased up to $5 million from considerably less than that in the previous Government's Bill. The Hon. Member spoke about lessening competition. The "test in merger" which we are using states "lessen competition substantially". The test that would have been used by the Hon. Member's Party was to "lessen competition significantly". The Hon. Member can play on words all she wants. When we talk about competition and substantial reductions in it there are more teeth contained in the word "significantly" than were contained in Bill C-29. The thresholds for pre-notification have been reduced. In Bill C-29 one had to acquire a company in excess of $70 million. That was the threshold. In Bill C-91 it has only to be in excess of $35 million for investigation, prenotification and a hearing before the tribunal to take place.
As admitted by the Consumers' Association of Canada in its press releases, the setting up of a competition tribunal is a strengthening of the legislation. It is pleased to see Bill C-91 allowing a tribunal to investigate mergers which might create a lessening of competition. Finally, the investigative powers of the director of investigations and research are made more effective in conformity with the Charter of Rights and Freedoms.
With these five strengthening provisions that we can use to get at mergers which reduce competition in the market-place, I think that the Hon. Member would be anxious to see not only some ideas of the former Government put in place but some strengthening ideas which have been included in Bill C-91. The sooner we get the matter to committee the sooner we can call all the witnesses the Hon. Member would like to hear from

April 8, 1986

and the sooner we can bring the legislation back for third reading. A great many mergers which have taken place in the last 20 years have taken place because no Government has brought in any legislation with any teeth in it to stop what the Hon. Member wants to have stopped.


Sheila Finestone: Mr. Speaker, first, I appreciate the Hon. Member bringing these points to my attention. I am delighted that the Government has taken into consideration Bill C-29. It is not interfering by filibustering as Members opposite did when they were in opposition when Bill C-29 was before the House. At that time they rang the bells and made life very difficult for a Party that was in a minority position. We are responding in the way that we must respond. We are pleased that there is now a position of dominance, perhaps, which is covered in the Bill. Therefore, we will not be subject to the harassments and pressures of big business. We will not cave in. Further, we will support the Government's efforts in this regard. I would like to suggest that the Government review some of the defences since fines are not enough. By the time we get around to imposing fines the damage is sometimes irreversible.


Lorne Edmund Nystrom: Mr. Speaker, I too wish to say a few words on the principle behind Bill C-91, the amendment to the Combines Investigation Act. I have been here since 1968 and I can recall many times when attempts were made to bring combines legislation into the House. In fact, if my memory serves me correctly, this is the sixth time legislation has been proposed to amend the Combines Investigation Act.
Way back in 1969, the Economic Council of Canada did a study and recommended that we needed a stronger combines legislation to provoke more genuine competition in the marketplace. As a result of that, a whole string of Bills were introduced starting with Bill C-2 back in 1971 and then moving on to Bill C-256, Bill C-42, Bill C-13, Bill C-29 and now Bill C-91.
I see we have a new Speaker in the House. I would like to commend you on your new position, Mr. Speaker. You look very distinguished sitting in that chair. I am sure that your constituents in The Battlefords-Meadow Lake will be very proud. There is no increase in pay, by the way.
This is the sixth attempt to amend the competition legislation in Canada. I suppose the only positive thing we can say about this Bill is that it will probably pass. It is better than the others and so it will pass. In the past, tremendous business lobbies have persuaded various Ministers of previous Liberal Governments to withdraw legislation, sometimes in a minority Government and sometimes in a majority Government. However, in all cases the business lobby was very powerful and well financed and hired efficient PR people. These lobbyists persuaded parliamentarians to withdraw the legislation.
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The legislation we have today is in many ways still very much of a toothless tiger, as our critic, the Hon. Member for Winnipeg North (Mr. Orlikow), has said. As reported on page 11935 of Hansard, he said:
If we are going to be fair, we must say that this Bill is better than its predecessor. I say that only because the legislation we have had until now has proven completely useless. Previous Bills have failed to do anything to control mergers or see that we have any real competition.
The Bill that we are dealing with today is in many ways like a toothless old hound dog and one reason for that is that, as I understand it, the advisory committee to the Minister included five very powerful groups that were in the same ball park regarding their interests. Those groups were the Business Council on National Issues, a very powerful lobbying group with a certain point of view; the Canadian Chamber of Commerce, a very large business group with a certain point of view; and the Canadian Manufacturers' Association, again a business group representing large manufacturing firms with a certain point of view that is not unlike the point of view of the two previous groups. As well, there was the Grocery Products Manufacturers of Canada Association, again an organization of business types with a very similar point of view to that of the Chamber of Commerce, the Manufacturers' Association and the Council on National Issues. These four groups come from the same general sector of Canadian society in terms of outlook, interests and ideology. They were joined by the Canadian Bar Association, not a business organization but a fairly conservative, staid type of organization.
[ Translation]
I am sure the Hon. Member from Quebec agrees with me. He is entirely in agreement, because these five organizations are even too conservative for the Conservative Member from Quebec, because he is a red Tory, a Conservative who is more progressive than his Minister.

What is the definition of a red Tory?


Mr. Bouchard:: The meaning of red.


Lorne Edmund Nystrom: I am asked about the meaning of a red Tory. I am sorry that you are in the chair, Mr. Speaker. Perhaps you could define that better than I. I was here for many years with John Diefenbaker. His riding bordered yours, Mr. Speaker, and was not too far from mine. He was a good example of a red Tory in certain ways, as was Robert Stanfield. There have been a few members of the Conservative Party who at times have been more progressive than Liberals.


Mr. Crosbie:: That wouldn't be hard.


Lorne Edmund Nystrom: The Minister of Justice (Mr. Crosbie) says that that would not be hard. He too is in many ways a red Tory, but of course he was a Liberal for many, many years back in the days of Joey Smallwood.


John Carnell Crosbie: I'm a black Tory.

April 8, 1986
Competition Tribunal Act


An Hon. Member:: Everybody is entitled to one mistake.


Lorne Edmund Nystrom: He is entitled to one mistake? I hope he keeps it at one mistake.


John Carnell Crosbie: I'm not going over with you guys, I can tell you that.


Lorne Edmund Nystrom: Well, John, you are progressing. You moved from the Liberals to the Conservatives. By the time you're 50, you will probably be here.
The reason this Bill is so conservative is that these five groups were on the advisory committee. I am very curious about this fact. I have nothing against the Chamber of Commerce or the Canadian Manufacturers' Association. In fact, there have been New Democratic Party Governments in Manitoba, Saskatchewan and British Columbia that have had advisory committees composed of Chambers of Commerce and manufacturing groups, but while these people were on their advisory groups, there were also representatives of trade unions or farm organizations, consumer groups, academic groups, women's organizations and community groups.
It seems to be fairly strange that we have a relatively new Government and a new Prime Minister (Mr. Mulroney) who has spent much time criticizing the old Party of the Minister of Justice, the Liberal Party, for being very centralist and for being controlled by the bureaucracy and a few people within the Prime Minister's Office rather than listening to the people of Canada. The Conservatives said that they would open up the Government. To use the words of a former Prime Minister, Conservatives said that there would be more participatory democracy and openness in this Government. Yet on the drafting of a very important piece of legislation, farmers and fishermen were not represented nor were consumers or ordinary Canadians.
I am sure that if you were not in that chair, Mr. Speaker, you would be making a speech about how concerned you are that your constituents like mine have been frozen out from representing their views on this committee that advised the Minister when he drafted the new competition legislation. In a democracy, it is very important that advisory groups to Ministers who are members of any Party be reflective of the country as a whole, but this did not happen in this case. That is one reason why this legislation is acceptable to big business. That is one reason why big business is not fighting this legislation. Big business is getting about 90 per cent, if not more, of what it wanted from the Conservative Government.
I would like to make only one point and that is that we need much stronger legislation. Our Party has been consistent on that point. The Hon. Member for Winnipeg North, our spokesman, has outlined the different things he would like to see changed in this particular Bill. He has mentioned legislation that he would like to see strengthened. I hope that when this Bill gets to committee stage, there will be a broad cross section of Canadians who will come before the committee to tell us what they want in a competition policy for Canada. We
need a competition policy. We need legislation to make sure that companies do not form monopolies or oligopolies or become monstrous giants that gouge, steal from and pick the pockets of ordinary Canadians.
Before I sit down this afternoon, I would like to tell the House of one example of an industry in which there is, in my opinion, a near monopoly created because of a lack of legislation. Here I am not criticizing the Conservative Government because it has only been in office for 18 months. I am talking about farm chemical companies. In Canada, there are a few farm chemical companies, almost all of which are owned by Americans or foreign companies. These companies sell chemicals to Canadian farmers and they have a monopoly on their patents of 17 years once the chemicals are registered.
When looking at the price of chemicals in Canada, one sees that farmers are being gouged. They are paying excessive rates for farm chemicals. The reason I mention this now is that it is so relevant to the question of competition. I think Parliament should pass a law to provide for generic farm chemicals just like the one that provides for generic pharmaceuticals. If a chemical company develops a new chemical at the present time, it has a 17-year exclusive monopoly on the sale and production of that chemical in Canada. There can be no competition whatsoever under Canadian law. That is not good enough. It is particularly not good enough in a Parliament which is discussing competition policy.
I should like to put a few facts on the record about farm chemicals as an example of why we need stronger competition policy. A survey was conducted recently by the Manitoba Institute of Agrologists for the Senate Committee on Agriculture. The Senate is a fairly staid and conservative institution.


An Hon. Member:: Sometimes.


Lorne Edmund Nystrom: It has become radical in recent weeks, but it was a fairly conservative and staid institution before that time. The Manitoba Institute of Agrologists indicated that the price of active ingredients in a sample of non-patented herbicides averaged $2.96 per pound while a sample of patented herbicides showed a price of $29.67 per pound. On average it was 10 times as high. When active ingredient chemicals were off patent, the price was one-tenth of the price of chemicals under exclusive patents held by multinational companies.
Let us look at the price of Round-up, which is produced by a company called Monsanto. By the way, Monsanto is a very large multinational company which produces a chemical used very widely in your province, Mr. Speaker, as well as in mine. The company is foreign owned. It has an exclusive 17-year patent on the product called Round-up. According to a study conducted by Merrill Lynch, a very renowned stockbrokerage firm, in June, 1982, the market share for Round-up was 100 per cent controlled by Monsanto because there was no competition. The Round-up sales in 1982 amounted to $472 million. Its gross profit margin was 75 per cent, and its gross
April 8, 1986

profits were $357 million. Its net income was $181 million and the earnings per share were about $4.50. Let us refer to the projected market share, the projected earnings and sales of the Monsanto product, Round-up, according to Merrill Lynch. From 1982 to 1988 it will keep 100 per cent of the market because it has an exclusive patent for the product. No competition will be allowed under Canadian law. The company will have that exclusive right. The $472 million of sales in 1982 will go up to $1 billion in 1988 according to the projection. Also we see the net income of the company going up from $180 million to $333 million, guaranteed by the law. We see the profit or the earnings per share going up from $4.50 to $8.25, again guaranteed by the law. It is an example of why we should not only look at competition policy but at the patent laws as well. However, the Minister of Consumer and Corporate Affairs (Mr. Cote) is now entertaining the thought of perhaps changing the generic pharmaceutical legislation to allow for an exclusive patent once again as was the case prior to 1970. That is a backward step, a step toward giving more and more power to fewer and fewer people who control pharmaceuticals in Canada.
Returning to Monsanto for a few moments, I know the Parliamentary Secretary is not a westerner and is not as familiar with some of these terms. Round-up is a very important chemical for farmers. The evidence before the Senate Committee on Agriculture indicated that the price of Roundup in Canada was sitting at $24 per litre. However, the price in Australia was some $17 per litre, again according to the study by Merrill Lynch. The price is about 40 per cent higher in Canada despite the fact that it is 9,000 miles closer to the source where Round-up is produced. Round-up is patented in both countries, but for marketing purposes it is sold for a lower price by Monsanto in Australia. In fact, in order to indicate the size of the particular company, its development costs are about $40 million, and these costs are recovered every 24 days through the company's sales around the world. Every 24 days it sells enough chemicals to make up its development costs of some $40 million. This powerful, multinational company is gouging farmers by charging excessive rates for its farm chemicals. However, in Australia, where the stuff has to be shipped an extra 9,000 miles, the company charges 40 per cent less.
There is something wrong with our laws when we as parliamentarians allow that kind of situation to occur in Canada. That is why we should not be afraid of big companies and should be drafting tougher laws when it comes to competition, patents, generics and such things.
I should like to refer to a few more examples of what I mean. There is a chemical called Atrazine which is used out West on rape-seed and in central Canada on corn. Perhaps the Hon. Member for Peterborough (Mr. Domm) will be more familiar with that particular chemical. Atrazine dopped by about 30 per cent in price from the late 1970s despite inflation because it came off patent. In the late 1970s the price of Atrazine was $43.50 for a 10-litre jug. The price after patent
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in 1984 dropped down to $30 for the same 10-litre jug, a drop of some 30 per cent, without even taking inflation into account. It was because it came off patent and there was some competition for the particular product. It is a good example of what can happen when there is more competition in the marketplace and what can happen when a certain company has a monopoly. It is a good example to use when discussing the principles of the Bill before us, why the Bill should be strengthened and why good competition legislation is needed in Canada.
There are various other examples one could use. The Hon. Member for Winnipeg North recently spoke in the House about generic pharmaceuticals. In 1969, when I first came down here, I recall that there was legislation before the House to end the exclusive 17-year patents for pharmaceutical companies. They were ended and, as a result, we have found that pharmaceutical prices dropped significantly compared with those in the United States. In fact, the Eastman Report indicated that the average price of chemicals in Canada in 1969 was about 9 per cent higher than the price in the United States. By 1976, after we had generic pharmaceuticals for a few years, the average price of pharmaceuticals in Canada was 21 per cent lower than the price in the United States. In fact, there was a time when Hoffman-Laroche was so determined to stop copies of its popular tranquillizer, Valium, from getting into hospitals that it gave away Valium to hospitals for one year. That just shows the size of the company and the assets it has to promote its tranquillizer, Valium. It is another good example of why we need strong competition legislation. If we do not have it, farmers and consumers will pay much more than they should for the various products they must buy.
The reason I have used farm chemicals as an example this afternoon is that I come from a farm riding. Because of the economic situation in the world today, I know that the income of farmers is going down. The price of grain is also down. The Americans have a farm Bill which is very protectionistic. It will drive the price of wheat down by another 20 per cent to 25 per cent, according to the federal Government. Also there has been a drought on the Prairies. On the other side of the ledger, there has been a tremendous increase in input costs for products such as fertilizers and up until recently fuel costs. By the way, the price of diesel is still not tracking its way down, as it should. However, one large input cost is that of farm chemicals. In my remaining minute let me say that in 1984 the Canadian farm chemical business had sales of $778 million, three-quarters of $1 billion. It is a big industry and there are big rip-offs, Mr. Speaker. In fact, there is a gentleman named Mr. Gawdy, who you may know, at Melfort who is trying to set up a company in competition with some of these huge multinationals. He could sell farm chemicals 20 per cent, 30 per cent, probably 50 per cent or 60 per cent cheaper to farmers in our province if we had a change in the patent laws and in the product specification Act of this country. Not only Mr. Gawdy, but the co-operatives, the wheat pools, the provincial wheat pools, provincial Governments or the federal Government or joint ventures between all sorts of people can

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produce farm chemicals at a much cheaper rate. We can produce a lot more at a much cheaper rate in this country.
I make an appeal to this House to make sure, when the Bill goes to committee, that we strengthen the legislation, that we get input from more than just the big business community and big business concerns and that we have some genuine competition legislation. Later on we should amend the Patent Act so that we can get farm chemicals and other products to ordinary Canadians at a price that is reasonable so that they can carry on their livelihood and make a contribution to this great country of Canada.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Gormley):: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for York East (Mr. Redway)-Penitentiaries- recommended abolition of mandatory supervision release; the Hon. Member for Davenport (Mr. Caccia)- Environmental Affairs- Acid rain-United States' emissions, (b) Prime Minister's discussions with the United States President; the Hon. Member for Beaches (Mr. Young)-Child Care-funding of services, (b) request for additional funding.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Cote that Bill C-91, an Act to establish the Competition Tribunal and to amend the Combines Investigation Act and the Bank Act and other Acts in consequence thereof, be read the second time and referred to a legislative committee.
William Henry (Bill) Domm: Mr. Speaker, I have a question for the Hon. Member for Yorkton-Melville (Mr. Nystrom). Is the Hon. Member really convinced that there has not been consultation with the kinds of people the Hon. Member represents in his riding in Saskatchewan?


Lorne Edmund Nystrom: Mr. Speaker, I am told by the Hon. Member for Winnipeg North that the Minister announced there was an advisory committee that included the five groups to which I referred. If that is the case, that is certainly not a wide enough consultation. Those five groups represent four big business
interests and the Canadian Bar Association. I do not think that is good enough.
I know that there are businesses in my riding that belong to the Chamber of Commerce, but there are many small businesses. When the Canadian Chamber of Commerce speaks, it usually speaks for bigger companies not for the small people in a place like Kamsack, Saskatchewan. I made the point made by the spokesman for my Party that the advisory council consisting of only four business groups and the Canadian Bar Association is not good enough.


William Henry (Bill) Domm: Mr. Speaker, I think I should clear up the misconception that in the West and in the area of Saskatchewan and other prairie provinces as well as in British Columbia there was more than just correspondence in the form of consultation. I was part of a group, including the Minister of Consumer and Corporate Affairs (Mr. Cote) who went to the western provinces and met with Ministers of Consumer and Commercial Relations in the provinces. I think they are well able and capable of speaking for consumers in the various provinces. We met with them, we discussed our intent as it pertains to competition legislation. We heard their input. If that is not good enough, I am sure the Hon. Member for Yorkton-Melville (Mr. Nystrom) will know someone in his area who is a member of the Canadian Federation of Independent Petroleum marketers, not big corporations but independent marketers across this country, and we had full consultation with them.
To add to that, there must be people in Saskatchewan who belong to organizations like the Canadian Federation of Labour. We had correspondence directly with its President. He had dialogued directly with officials within the Department of Consumer and Corporate Affairs. It was at his urging in large measure that we incorporated into Bill C-91 the provision for the tribunal. He liked it.
I am sure the President represents a lot of labour in the province not only in Saskatchewan but in other provinces as well. There was consultation with organizations like the Canadian Federation of Independent Businessmen, one of the largest national organizations representing businesses doing less than $2 million a year, and 100 representations were made to the Department of Consumer and Corporate Affairs and the Minister directly so I fail to see that there has not been a broad range of consultation and a general consensus that this Bill is urgently needed. I have yet to hear from anyone who does not want the Bill to proceed to committee directly. If there is some fine tuning, that is the place to do it, not by taking up too much time in this House.


Lorne Edmund Nystrom: Mr. Speaker, the Parliamentary Secretary mentioned the Canadian Federation of Labour. It is indeed very small in Saskatchewan. Most of our people are affiliated with the Canadian Labour Congress.
The Parliamentary Secretary was very careful to say that there was full consultation with all these groups by himself or the Minister, that there was correspondence with a whole
April 8, 1986

series of organizations and individuals, and that' there was dialogue with all kinds of different people concerned about this Bill. These are words I heard from Liberal Governments year in and year out: dialogue, correspondence, communication and so on.
Is it or is it not the case that there was an advisory committee and that the advisory committee consisted of the Business Council on National Issues, the Canadian Chamber of Commerce, the Canadian Manufacturers' Association, the Grocery Products Manufacturers of Canada and the Canadian Bar Association? The Parliamentary Secretary nods.
I have been around the workings of Parliament and Government long enough to know that when there is an advisory council, that council usually has an awful lot of influence. Often when you consult other groups that are not on the advisory council, it is window dressing, it is lip service.
I could probably go through Hansard and dig out speeches which the Hon. Member for Peterborough made when he was on this side of the House in which he said similar kinds of things. The Liberal Parliamentary Secretary would get up and say "Well, we consulted the farmers or the NFU. We consulted the steelworkers of America" and so on. The important thing is who is appointed to the advisory council.
Four business groups and one group of lawyers who represent the business groups were appointed. We have business groups and their lawyers advising the Minister on this issue. That is the point I made. I do not see that as having real input from various groups. Sure you can get a letter from the Consumers' Association of Canada. You can call up that Association and ask for advice. You can dialogue a little bit if you want with the President of the National Farmers Union or someone else. Why not put representatives of the farming community on the advisory committee? Why not put representatives of the labour movement on the advisory committee? Why not put some consumer representatives on the advisory committee? Why not put someone from the Status of Women or the Action Committee on the Status of Women on the advisory committee?
It seems to me, Mr. Speaker, if you want to have a truly representative piece of legislation, that is where you put them. These advisory committees have a lot of influence. They are the ones who tend to have more expertise, who tend to dialogue with experts in the area and who tend to have the ear of the Minister. Maybe this Parliamentary Secretary did an awful lot of consulting on his own. I do not try to pretend that he did not, but it is a lot easier to be consulted in a genuine way if you are a member of the advisory committee. Perhaps I could ask why this was not done.


William Henry (Bill) Domm: Mr. Speaker, perhaps it would be an ideal situation if we took the 2,850 associations and organizations across Canada and had formed an advisory committee.


Lorne Edmund Nystrom: Now you are being silly.
Competition Tribunal Act


William Henry (Bill) Domm: We cannot have all of them on the committee. I was glad to hear the Hon. Member for Yorkton-Melville (Mr. Nystrom) agree that we should have had organizations like the Canadian Labour Congress because he has members from that group in his riding. I can report to him that we did. We had correspondence with the Canadian Labour Congress. We asked to meet.


Lorne Edmund Nystrom: A letter?


William Henry (Bill) Domm: They wrote us a letter and told us what they would like. The net result is that our people from the Department of Consumer and Corporate Affairs met them. They did not come to meet the Department's people. As a result of that meeting, they asked us to give serious consideration to the tribunal as a method of judging the dominant position in the market-place. We did, and I am sure they appreciate it. I want the Member to know that we did consult with the Canadian Labour Congress.


Alfonso Gagliano: Mr. Speaker, today I also have a few comments to make on Bill C-91, and I may say that the Liberal Party of Canada feels that sound competition legislation is necessary to ensure genuine competition on the Canadian market. However, in the course of this debate, we would like to contribute some ideas and solutions, to give this legislation teeth so that it can truly deal with the intolerable situations that develop every day in this country.
Yesterday, the Parliamentary Secretary to the Minister of Consumer and Corporate Affairs (Mr. Domm) said that the Bill would be a great help to Canadian small businesses.
Mr. Speaker, I would like to take this opportunity to read a long letter from one of my consitutuents in the riding of Saint-Leonard-Anjou, a small businessman who, after many years of research and hard work, managed to invent a new process. He converts cars and trucks from gasoline to natural gas. This gentleman got in touch with Gaz Metropolitain Inc. Mr. Speaker, I shall quote directly from a letter of which I sent copies to the Minister of Energy, Mines and Resources (Ms. Carney), the Minister of State for Small Businesses (Mr. Bissonnette) and the Minister of Consumer and Corporate Affairs (Mr. Cote).
I hereby wish to inform you of the problems and difficulties I have been having with, both personally and as a business, in addition to the machinations of G.N.C. Quebec,
-a branch of Gaz Metropolitain-
-Conversion Division, and especially Real Lefebvre and Sylvain Denis. I urge you to take action as soon as possible, if possible before Christmas. I want to be quite clear about the following items-
The letter is addressed to Mr. Martin, President of the company. Item one
1.	Stop raiding my workshop for customers and trying to convince them that G.N.C. does a better job.

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Competition Tribunal Act
2.	G.N.C. should not work on conversions already done by us without our permission (we have had no returns to date except for adjustments or defective parts).
3.	A guarantee applies to work done in our workshop.
4.	Stop urging customers to avoid our workshop and stop all negative criticism of our business-we have proof this is happening.
5.	Mr. Lefebvre and Mr. Denis are to stop immediately any abuse, either in writing or verbal, for the purpose of making me close my dealership.
6.	Stop all discrimination against me because of my Italian ethnic background.
7.	Stop immediately all threats about closing down my business if my prices differ from G.N.C.'s, since this is illegal and against the "Price Fixing Combine Act".
8.	The G.N.C. centre should be a technical centre to help dealers and should not compete directly with them. It should stop all unfair competition.
9.	Stop preventing G.N.C. employees from working in another concession.
10.	As far as their so-called "Come Back" is concerned, I am a qualified first class technician, #101177. G.N.C. has an incredible number of dissatisfied customers and repairs, unbeknown to its senior executive, so that people are becoming reluctant to having their cars converted.
11.	I suggest the formation of an independent G.N.C. committee to control operations of systems installed throughout Quebec, which would include customer service.
12.	I want a guarantee on the land for my dealership.
13.	According to Sylvain Denis, they want to close down my dealership and give it to the Shell Station only.
There is another whole page, and I will stop here at the end of the letter, Mr. Speaker-
Mr. Martin, I hope you will understand what I am trying to say. I am personally willing to meet you at any time if you want further details or want to discuss anything. I am in business, I create jobs, and I want things to be fair for small businesses as well as for the multinationals. I am a resident of Quebec and I pay my share of taxes. Awaiting your reply, and hoping you will answer as soon as possible, 1 remain.
Yours very truly.
Carmelo Nicolo
Mr. Speaker, here is one of thousands of small business people who are always struggling against the competition. Even if we do get through Bill C-91 today, this is not going to solve any of their problems.
Nevertheless, in their speeches and whenever they rise in the House, Government Members constantly refer to small businesses and mention everything they have done to help this group.
We saw another instance of this last week, when the Minister of Finance (Mr. Wilson) announced his new regulations on small business investment in pension plans. What was missing from or rather, what should have appeared in this press release? It was the words: small businesses. And they were missing because the new rules apply mainly to large businesses. Mr. Speaker, according to these regulations, the entrepreneur, members of his family and his associates may not invest in small business. How are investors going to invest in small business without asking for certain guarantees, without having a system that will ensure they get a return on their investment and that their investment is a good one?
The Government does not want to understand all this and keeps prohibiting small business from investing in its own pension fund and its own business.
Mr. Speaker, this is obvious from the document entitled "Investment in Small Business", published by the Minister of State for Small Businesses. It mentions that a pension fund would take the money and administer it through the small business. Upon reading this paper we realize that the whole scheme is unacceptable and unrealistic.
Mr. Speaker, I do not know if the Hon. Parliamentary Secretary to the Minister of Consumer and Corporate Affairs (Mr. Domm) read press release 10 of the Petroleum Marketers Association of Canada. It reads:
There is no doubt that the Minister has brought forth an elaborate package, with all the appropriate buzz words (trade enhancement, job creation, fairness, reliance on market forces and private sector, as the trend to deregulation continues, etc.).
Unfortunately, the Minister has listened too much to the representatives of Big Business (B.C.N.I., Canadian Chamber, C.M.A., Grocery Products Mfg. Association, and Canadian Bar Association), and not enough to consumers and small business....
Our next step is to greatly strengthen this Bill at Second Reading. We believe that we can count on M.P.'s of all parties for this non-partisan effort, which the McGrath reforms now make possible.
We know that our concerns are shared by the Consumers Association of Canada, the Canadian Federation of Independent Business, the National Automotive Trades Association, and the Canadian Organization of Small Business, and we look forward to working with them on this most important endeavour.
That is in response to the Parliamentary Secretary's statement that he had the support of the small business groups. As seen in the press release of the Petroleum Marketers Association of Canada, that is not so.

Mr. Speaker, I would also like to talk about something that happened in my riding at the end of the year. It involved an industry in my riding, SKD Technology at Ville D'Anjou which has lost 200 jobs, and neither this Bill nor the present Bill nor the Bill on foreign investment would have been able to save these jobs, and Government Members did nothing to help these employees keep their jobs. The facts are as follows: Continental Can had a shock absorber plant at Ville D'Anjou, which employed about 200 people, and a decision was made to sell the plant to the Marmon Group. At that time, if the transaction had been arranged directly, there would have been some problems with the Investment Canada Act, since both companies are foreign entities. They decided to announce the plant was closing down, and Marmon Group bought the building and equipment, and in that way was not obliged to go through Investment Canada, and the upshot was that 200 jobs in Montreal East were lost, out of a total of 5,000. Mr. Speaker, if we read through this Bill, there is absolutely nothing there to protect those jobs.
April 8, 1986

There is also a letter written to one of my colleagues by a wholesaler, and I would also like to quote a few passages, for the record, so that Members will realize that there is competition and very strong competition at that, between small businesses and large businesses. And when Government Members stand up in the House to say that a Bill like C-91 helps small businesses, that is just not the case, and this letter emphasizes the fact it is not, although the Government would have us think otherwise.
1 quote a letter from W. A. MacLeod & Son Ltd:
The danger we face as wholesalers comes in the form of large anti-competitive conglomerates who threaten to damage us irreparably by marshalling their economic might against us. Their tactic is loss leader selling. Because of their huge size, they can sustain temporary losses. Slowly but surely, the use of this tactic can drive us out of business.

Mr. Speaker, we know very well-we often see advertisements-I see my colleague from Dollard (Mr. Weiner), a former drugstore owner who surely had such experiences-as I was saying, we often see cartons of cigarettes advertised at below cost price to attract customers. This Bill will do nothing to remedy that situation. Hopefully we will be able to get a closer look at that in committee, because it is now a problem for small businessmen and no independent storer owner can face that kind of competition. I continue quoting the letter:

Never before has the threat been as great. With the recent spate of mergers between large companies, the critical balance between big and small businesses could be irredeemably tipped towards the huge conglomerates. If their unreasonable and unfair practices go unchecked, the economy could be severely crippled. Wholesaling will become dominated by very few large sellers who will each have an entire market to themselves.
As with my fellow NATCD members, all the profits from my company remain in this locality. As an independent entrepreneur, I am part of the backbone of a healthy economy. In this age of rapid change, Canadian business needs all the imagination, flexibility and entrepreneurship it can muster.
As the owner of a small wholesaling business, I can be more responsive to changes in the business climate than a large bureaucratic, centrally located conglomerate.
Some examples of such business in direct competition with us. TRA Wholesale owned by the Sobey's group, Mason's Wholesale owned by Bolands Ltd. would operate IGA Supermarkets. Another serious threat to us in this area is Atlantic Wholesalers owned by Loblaws who are not yet in the area, but there have been rumours of this for some time now. Ever since TRA Wholesale have moved into Sydney, we have watched our profit margins on confectionery drastically decline. They regularly practise the use of "loss-leaders" and you and I know they can afford to. However, as a small independent wholesaler, I cannot.
On November 18, 1985, the NATCD President, Bill Marcus, wrote to the ... Minister of Consumer and Corporate Affairs, requesting an amendment to the Combines Investigation Act to prohibit loss leader selling. The Minister in his reply of December 11, 1985 recognized our concerns:
I appreciate how damaging below cost pricing can be when it is engaged in for the purpose of lessening competition or eliminating competitors from the market.
Nevertheless, the Minister's full response was less than satisfactory. He considered it not appropriate to legislate an outright prohibition against loss leading pricing, suggesting that his forthcoming proposals to amend the Act (subsequently introduced in the House on December 17, 1985) would enable
Competition Tribunal Act
competition law to deal more effectively with predatory conduct through a new civil provision dealing with abuse of dominant position, to be adjudicated by a new Competition Tribunal.
I could continue because there are another two pages to the letter, but let me just say that small business is simply asking for a competition law with teeth. We must be able to stop some unscrupulous big businesses who are trying to take away the markets of small business which create most of the jobs in the local community. I do not see anywhere in this Bill that such protection can be achieved. Therefore, once this Bill moves to committee I hope Members will look into these details and make sure that all small business and consumer groups have their say. Then, when the Bill comes back to the House for third reading or clause-by-clause study, we can make sure that we have a competition law with enough teeth to protect consumers and small business.
Another example of what we can deal with under this legislation is the crisis in the liability insurance business. We had to ask the Minister to intervene in this situation, and when he did not we had to use the law to get an inquiry. We are still waiting for an answer and this is a problem which has to be solved. Then we have the Gulf refinery closing in the east end of Montreal. One company threatened to close its refinery and leave Quebec if another refinery was sold to someone else and remained open. This is the kind of situation we have to deal with today. We have to solve this problem once and for all and make sure that everyone in Canada is allowed to do business without being pushed around.


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


Mr. Epp (Thunder Bay-Nipigon):: Mr. Speaker, the question before the House is of enormous importance. It is one of the two or three most important economic questions facing this Parliament. I wonder if you could ascertain whether there is a quorum, given the vital importance of this legislation.
And the count having been taken'.


The Acting Speaker (Mr. Charest):: Technically there is no quorum at present in the House. Ring the bells.
And the bells having been rung:


The Acting Speaker (Mr. Charest):: There is now a quorum. Debate.


Abram Ernest Epp: Mr. Speaker, I appreciate your recognizing the lack of a quorum a moment ago and ensuring that more Members are in the House.
As I said a moment ago, the question of competition in the Canadian economy is surely among the two or three most important questions that come before this Parliament. I would suggest that, in terms of cost to the middle and lower-income Canadians particularly, the only thing that could match or top this concern is the unfairness of the present tax system which

April 8, 1986
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extracts billions of dollars from the pockets of individuals, while at the same time wealthy Canadians and big companies get off almost scot-free. There are those who avoid paying taxes for years at a time. I suggest that that is the only topic that is more important than this matter of competition which is before us in Bill C-91.
There are a few topics I have looked forward to discussing in this Parliament with more anticipation than this particular topic because I have made a study of the development of market controlling companies in the years around the turn of the century. I have also had an interesting time looking at the development of the laws of this land which are supposed to provide for competition. In looking at the early development of competition law in this country I have seen just the sort of behaviour by Governments which the Conservative Government is serving up in Bill C-91.
One of the remarkable things about Canadian consideration of competition is the fact that a Canadian Act, the Act of 1889, is actually older than the Sherman Act, which was passed a couple of years later. The remarkable thing is that at the national level the Canadian Parliament was ahead of the American Congress almost 100 years ago in looking at the threats to competition that faced companies.
One of the most interesting questions that faces one in looking at the situation of that first attempt to deal with competition is the question of whether the attempt of 1888-89 was in fact a serious one. There are colleagues of mine in the historical profession who are convinced that it was not a serious attempt. I, for my part, in reading very carefully what was said in the House of Commons in 1888-89 in the last century, as well as what was said in the Senate, have come to the conclusion that it was a serious attempt by some Members of Parliament. It was a serious attempt which is very much like the efforts that the Member for York-Scarborough (Mr. McCrossan) and the Hon. Member for Don Valley East (Mr. Attewell) have been making in the last days. It is always interesting to hear back-benchers speak up and try to influence the policy of Government.
It is distressing and depressing to see the way in which these Members fail as Governments yield time after time to the pressure of big business and refuse to legislate effectively. That is why I look back a hundred years in scanning something of the history of competition law in this country. It is a very similar process and situation time after time of Governments yielding to pressure with the result that there is not any effective law.
One of the evidences that I see in 1888 that convinces me that N. Clarke Wallace-who was the leader at the time of this effort to control combinations in restraint of trade-is the fact that he had a select committee struck to look at the situation. That select committee included not a single big city lawyer, not a single representative of the corporate interests of Canada in the 1880s. Instead, it included a variety of business people, people who were involved in trade in small towns; some millers, a few lawyers from outlying areas and a farmer or two.
That mix of Members of Parliament that he put forward in 1888 looked at the question of whether there were already then companies that had a sufficiently strong position in the Canadian economy to necessitate a law to restrain them in their getting together in combinations against the interests of consumers. The fact that he struck that kind of a committee is one of the reasons that I am convinced that N. Clarke Wallace really wanted a strong law. I do not have anything like the time to explain and explore what he did at the time, but let me say that the sad fact is that he put forward a Bill in 1888 and in 1889 presented it again, but because it was too late in 1889 to carry it through, before the House of Commons had passed something, that Bill of his had been transformed into something else. Before the Senate had passed the version that he had to settle for, we had the law which ended up in the 1890s in the Criminal Code. We had all that paraphernalia of having to restrain competition unduly, which has been a delight to lawyers ever since, and which has allowed the business people of this country to combine together in various ways with impunity. There has been very little successful prosecution.
The fact that that happened in 1889, almost a hundred years ago, suggests at the very beginning what the difficulties of Members of Parliament would be. Governments yielded to these business interests, and the result was that there was no effective law.
There were some interesting developments in the 1890s in an attempt to strengthen the law. Those Members of Parliament, and a few Senators too, who thought that the law should be stronger, made diligent attempts year after year to try to amend the Act, to strike out this adjective "unduly", which was particularly restrictive on prosecutions. One of the most amusing incidents occurred in the Senate. It became clear that if a Bill could not pass the Senate, there was no point to passing it in the Commons. When one year a Senator put a measure forward and used arguments about the importance of Senate action regarding a combination between undertakers and casket manufacturers being one of the agreements amongst business people that cost consumers money, he seems to have appealed to a concern of some of the Senators who were, after all, near their last days and a little concerned about the cost of funerals. The Bill actually passed the Senate that year and got absolutely nowhere in the House of Commons, as a demonstration that the Government was going to ensure that if the Senate actually slipped up that way and passed it the Commons would not have the chance to make it the law of the land.
The difficulty that faced legislators in those days was their conviction that the reason there were such agreements among Canadian companies is that we had a tariff, and behind the Customs Tariff barriers companies were able to get together and rip off the consumers who were buying their products. All of those Liberals who were free traders in those days of course wanted to take care of the Customs Tariff, to get rid of the national policy which they were blaming for all of this. Wallace, of course, believed in the national policy and was not
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concerned about whether it was the reason or the cause for it. He wanted an effective law that would allow the prosecutors to deal with agreements of this sort. The law actually had some effect on business people even though I have been describing it as-I think any scholar would-completely useless because of the almost total lack of effective prosecutions. It led business people to get together in mergers rather than to have agreements among themselves.
I believe that can be seen from one particular pair of mergers which occurred at the beginning of the 1890s. There was no doubt almost 100 years ago that the manufacturers of cotton textiles had come together in two groups, one controlling the grey cotton producers and the other in charge of the whites and coloured cottons. These agreements very obviously worked. When there was an over-production situation, they closed down plants. There was not much doubt in the minds of the public that they had in fact colluded in this way. Yet with the Act passed, how could they be sure that they would not end up in court being prosecuted? So the result was a merger of these two groups into two companies. One company ended up in 1905 being transformed into the Dominion Textile Company, and it has gone on victoriously ever since as a product of the merger of the early 1890s and the second reorganization in 1905.
This response by businessmen indicated that they were very uncertain about what the effective law might be. The Government tried to reassure them with weak law. I think the only thing one needs to say about the Combines Investigation Act of 1909 is to recognize that the Government of those days- the Liberals even more then than the Conservatives-was prepared to consider the possibility that the Customs Tariff was the cause, and if there was some kind of agreement among producers behind the tariff barrier, it would just reduce the tariff. One of those actions occurred in 1903 against newsprint producers. The only significant addition that Mackenzie King made with the 1909 Combines Investigation Act was to say that the Government should assist consumers in demonstrating that a combination has been effected behind the tariff barrier. The Combines Investigation Act did precious little other than providing a publicly financed process for inquiry into this process.
I mention that because the Minister in introducing this Bill yesterday suggested that very little has changed since the Combines Investigation Act in 1910. I do not think that is fair in terms of later attempts to amend the law. It is all too true in principle in the sense that the activities of 1889, 1909 and 1910 were largely processes of yielding to the business interests of the day and creating law which would not send anyone to prison and probably would not even lead to any large fines. But there have been some changes in the law since 1910. Those changes deserve some recognition.
One might almost say that if the Conservative Party had been more successful in holding political power in this century,
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our competition law might well have a different shape. The tribunal approach, which is part of the legislation we shall be considering in committee if we give this Bill second reading, is anything but a novelty coming from a Conservative Government. One can go back to the years just after the First World War and find a Conservative attempt to use that kind of public body which would use other than the criminal law in the courts to deal with competition. That attempt was swept aside by the Mackenzie King Government after its election victory in 1921 and the Combines Investigation Act was brought back. Then, in the middle 1930s, the Government of R. B. Bennett, particularly H. H. Stevens, the then Minister of Trade and Commerce, pressed inquiries into the kinds of use of economic power which existed in Canadian manufacturing and retailing. The endeavours of Mr. Stevens led to a second attempt by Conservatives to use a commission or tribunal approach to the problem. After the defeat of 1935, this was swept away, and we had again the Combines Investigation Act approach, unsatisfactory and inadequate as it had been. These are the sorts of features I find in looking back over the years which lead me to think that conceivably in this competition law there are some possibilities. But when one compares what is put before us now in Bill C-91 with what was presented 15 years ago and the more recent history of competition law in Canada, one finds there is not very much reason for satisfaction.
I think that is particularly unfortunate given the possibilities we had at the beginning of the 1970s. I want to suggest that the year 1971 and the period immediately following, the beginning of the 1970s, was one of the most disappointing eras one can look to. I think it reflects particularly badly on the Prime Minister of those years, the Right Hon. Pierre Elliott Trudeau. In 1971 we had in Bill C-256 a comprehensive attempt at competition law. On the tax side, the fiscal policy, we had an Income Tax Act which took up the work of the Carter Commission on taxation and attempted a substantial reform. The terribly depressing reality is that Bill C-256 was never carried to conclusion. The Income Tax Act was amended and overlaid with all of those provisions. After 15 years of additions to the Bill, of course, it has the accountants of the land protesting that the tax system of this country is too complex. Surely, there is an incredible irony in Conservative charges and the charges of so many other people that Mr. Trudeau was some kind of left winger. There may be some aspects of the actions by his Government which could justify one saying that there was some significant development in social policy, but in the absolutely fundamental areas of taxation and competition policy, he and his Governments buckled to business pressure and left us with a completely emasculated competition law and with a tax system which transfers wealth in incredible amounts from individual middle and lower income Canadians to the wealthy.
The fact that we have both of these features operating in competition by public policy is what arouses one to such outrage about the situation as to have led me a few minutes ago to ask for a quorum count in order to ensure that when we are debating these matters, which are fundamental to the well-
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being of Canadians, we have enough Hon. Members in the House to ensure we can carry on a lawful debate on these questions.
The terrible realities of the weakness of competition law, the failure of the law to deal with mergers of the sort which could lead to market dominating combinations, the failure of Canadian law to ever grapple with the existence of monopolies in various areas, have led to the situation that the Hon. Member for Winnipeg North (Mr. Orlikow) was pointing to yesterday. Attempts have been made to calculate the costs to Canadians of our competition law. These estimates suggest that it could be as much as 7.5 per cent of GNP. That is a cost to consumers of $31 billion. That is an incredible amount of money.
The weakness of the law has led to a situation where Canada has such a concentrated economy with a small number of families and economic interests controlling so many companies and so much of what goes on in the economy, that the Canadian Bankers' Association, that small club of chartered banks, admittedly added to by some international banks in the last years, could point to concentrations in those other areas. That is the end result of competition law, the failure of it, in this country.
The Government has taken the same approach again in that it has consulted with these leading business interests, satisfied them, had the advice of corporate lawyers ad nauseam, and given us a law that leaves out many of the provisions we need for class action and so on. These are the reasons 1 join with my colleagues in our caucus in opposing this Bill with all the energy I can bring to bear.
I call upon the Government to respond to the concerns of its own back-benchers and give us a law which will really allow us to create the competition which the Government says it wants to create and which Canadian consumers so desperately need if we are to have an effective economy.


Rodney Edward Murphy: Mr. Speaker, I too wish to speak to the legislation in front of us today. It has been a concern of mine for many years that we have not developed a piece of legislation which will ensure a competitive state in terms of our economy. For years we have heard people from all three political Parties get up in the House and talk about the virtues of small business. They have extolled the fact that it is the backbone of our economy and that men and women involved in small businesses create jobs for many Canadians. Yet over the years we have seen a small group of people gain almost complete control of our economy. We have seen figures which suggest that nine families have virtual control of our economy.
Whether it was under the previous Liberal Government, or the present Government, we have not seen legislation pass the House of Commons which would in any way, shape or form give us the ability to control the corporate conglomerates
which are running our country. This is not just a view based on political philosophy or on whether one believes that large corporations dominate control of the economy, which I believe is the case. It is a matter of effective management. Yesterday, the Hon. Member for Winnipeg North in speaking to this Bill talked about Noranda Mines taking over MacMillan Bloedel for $626 million. He went on to point out that later on Brascan took over Noranda for $1.6 billion. All that money did not create any new jobs. It did not mean new research and development or new competitiveness, which is what some people say is necessary. What it meant is that the management of MacMillan Bloedel passed to Noranda Mines and then it passed to Brascan. The people in Brascan did not know anything about the lumber industry and they knew very little about mining. What happened was the taking away of effective management. Instead of having people who are actually involved in one particular industry looking after their factories, shops, mines, et cetera, we start a system of developing large conglomerates. This takes away management from the actual shop floor and the business which it manages.
I am sure many Canadians believe it to be true that we are developing a system in which we are passing over the financial management of firms and leaving the actual decision making to those who are not capable of making decisions. In other words, as we build these economic empires which quite often benefit from tax loopholes we end up with a situation in which important management decisions cannot be made by the people who are at the top of the pyramid. The people at the top of the pyramid may know how to take advantage of tax loopholes. They may also know how to win a phoney paper battle in the stock exchanges of the country. But they know very little about operating the mine of which they are now the owners; or they may know very little about the operations of a forest industry company such as MacMillan Bloedel. So it is of concern that we have lost the ability to manage based on experience in the industry because the ownership has transferred from the industry to a financial holding company which really has no knowledge and no expertise in the very corporations which they are now controlling.
I have similar concerns with respect to the way ownership has been concentrated in many of our other industries. The present Government and the previous Liberal Government talked about deregulation in order to increase competition. To illustrate my next point I will take the example of our airline companies. We talked about deregulation at the same time as we saw one airline take over other airline companies, or at least attempt to do so. For example, Canadian Pacific took over Eastern Provincial. It is now trying to take over Nordair. We are in a situation in which we talk about deregulation with the idea of creating more competition while at the same time we allow more corporate concentration. In effect, this means that the decision making of Canadian Pacific will certainly not be of the type that is needed in order to foster more companies competing for business.
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Because of the fact that corporate concentration means there is no, or very limited, competition, and because we are taking away effective management of our industries as a result of these conglomerates, we should be concerned about what is happening in the country.
The events of the last few months and those of the last few years indicate that there are other concerns which we must also have. One is with respect to the very matter with which we are dealing today. 1 refer to non-financial institutions taking over the management of financial institutions. Under the legislation which is before us it is quite possible, through the complete ownership of Canada Trust, that Imasco will be in a self-dealing situation. In other words, the lending of money from its own trust company with no controls to prevent it from dealing in its self-interest, as opposed to dealing in the interest of those people who invest in Canada Trust, is a serious problem. We have heard the Minister and others defend the situation by saying it is not a matter of ownership or a matter of the concentration of ownership with which we must be concerned. We have been told that all we should be concerned with is the fact that perhaps we need to fix up our regulations. We have been told that we need to have better regulations in order to ensure that Imasco, or any other group of people who have control of a financial institution, whether it be a trust company or bank, exercises its power of ownership in the public interest and in the interest of its depositors.
It might also be true that if we had adequate regulation of banks and our financial institutions such as trust companies then we would not have to be worried about ownership. However, the two bank failures last year indicate that when it comes to the regulation of banks and the effective control and supervision of those regulations we are not ready. Among other reasons for these bank failures, it has been indicated that there were many dubious loans made to those who were in ownership positions of the two banks. Those are serious concerns. If it were only regulations and adequate enforcement of those regulations that would look after our problems, that should have happened last year and those banks should not have gone under. The Canadian taxpayers would not be in the position they are today of having to pay millions upon millions of dollars to those people who deposited money in those banks.
Those who say that adequate government regulations will solve our problems would probably be correct in an ideal world. In an ideal world, the Conservative Government and the previous Liberal Government would have acted to institute the types of regulations that we need and to make sure that there are adequately financed supervisory groups to enforce those regulations.
One of the other things that we learned as a result of the bank inquiries is that the Inspector General of Banks was looking for additional staff last year to supervise those banks that went under, but he could not get the money from the federal Government. The Conservatives who were in power last
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year and the Liberals who were in power the year prior to that had denied him the money he had requested in order to have a staff that could regulate those banks. If he had that staff, perhaps the bank failures would not have taken place. We did not spend the money that was needed at that time, but now we are spending hundreds of millions of dollars resulting from the fact that the Government would not spend the money necessary to supervise those banks.
The Minister responsible for this legislation has risen to say that regulations will solve the problems and that we do not have to worry about corporate concentration of ownership or having financial institutions, through their non-financial institutions, involved in self-dealing. I have to wonder if she is really thinking about what happened last year when this same lack of supervision and adequate regulations allowed two banks to fail. I agree that regulations would help. I agree that adequate supervision of those regulations would certainly help to enhance the protection of investors. However, I think we have to worry about more than just self-dealing. I think we also have to worry about how economic decisions are going to be made.
Earlier on I expressed concern about the concentration of ownership. We have to be worried about concentration of ownership not only within the mining, forestry and drug industries, although those are legitimate concerns, but we must have even more concern when our financial institutions fall under this kind of concentrated ownership. It is no surprise to us to find out that we are talking not only about Canada Trust but about a number of trust and mortgage companies that are likely to fall under the corporate umbrella of Imasco. We are talking about a number of institutions which will be controlled by Imasco and are presently controlled by Genstar.
In Canada, there is no method of controlling the decisionmaking process of Imasco to ensure that Canada Trust money is being lent in ways which would serve the real economic interests of our country. If a number of small banks and trust companies make those independent decisions which may not be in the best interests of our country, that is bad enough. The fact that there are a number of players in the financial game helps to protect those small businesses that want to make loans. However,once we allow for a concentration of ownership, it makes it very difficult for a small business person to go to a local financial institution and make the financial arrangements he or she wants to make. There is no longer a smorgasbord of institutions to which one may go to discuss terms. One ends up seeking a loan in a very limited market.
Because there is no real competition in the banks at this time and because the concentration of ownership in trust companies is increasing and will increase as a result of this move, there really are no options of which small businessmen, farmers and others who want to borrow money may take advantage. For all of these reasons, we need to have real competition legislation.
I have to agree with others who have said that the legislation before us is not good enough. We need more protection than

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this Bill offers. It upsets me that on this very important issue, we have not spent the time over the last 10 or 15 years required to see how we can effectively control the concentration of ownership and secure the diversification of financial lending institutions that is so important to Canada. Studies have been done and the House of Commons committees have looked at the matter from time to time, but there has not been the political will on the part of various Governments to make sure that we have effective legislation. The same thing is happening again today.
We know that the present legislation is favoured by many of the very powerful groups in our nation because they helped to write the legislation. The people who helped to write this legislation are the very people from whom this legislation is supposed to protect us. The fact that the consumers' associations, labour movement and farm organizations were not involved in the drafting of this legislation while those in the higher echelons of the corporate sector were is enough reason for us to be afraid about the weakness of this legislation.
Those are the types of concerns we in this Party and many Canadians have. We know that one of the reasons we have not passed adequate competition legislation is that there have been loud voices. Large institutions have had the ability to prevent the House of Commons from exercising its political will by passing the legislation that we need to protect the consumer, the farmer and our own economy.
We now have before us a piece of legislation which was drafted in the corporate boardrooms. Members of all three Parties know that it will not provide the protection necessary to prevent the Imasco takeover. We know that it would not have prevented the Genstar takeover which occurred last fall and it probably will not prevent the next takeover about which we will hear one or two months from now.
Why are we not getting the legislation we need? Why is the Minister of State for Finance (Mrs. McDougall) talking about this legislation as is the Minister of Consumer and Corporate Affairs (Mr. Cote) rather than acting to protect our interests? Why are they not doing that? I realize that I am running out of time, Mr. Speaker, but let me suggest to you the reason they are not doing that. It is that too much power is being used by those in positions of power. They have the ability by themselves and through their lobbyists to control what senior bureaucrats think and what cabinet Ministers do, whether the previous Liberal Government or the present Conservative Government is in power. This is proven by the fact that there have been six attempts to get competition legislation through the House and we have only managed to pass one weak Bill so far. It is time for Canadians to realize that competition legislation is something which protects them. It is in place to protect farmers and workers. It is in place to protect the interests of consumers, whether it is people who want to deal with banks and trust companies or whether it is people who want to purchase goods such as drugs, lumber or any other product. Competition legislation which ensures adequate competition in our nation is legislation for ordinary Canadians.
It should not be the type of legislation we have now which justifies and aids corporate conglomerates in Canada.


John Kenneth Gormley: Mr. Speaker, I have a question for the Hon. Member. He referred to the need to protect Canadians and 1 believe he said that Canadians were not consulted widely enough in the consultative process. The Consumer Association of Canada and the Canadian Federation of Independent Business were indeed involved in the consultations. Is he saying that these are the groups from which we have to protect Canadians?


Rodney Edward Murphy: Mr. Speaker, I recognize that there were discussions with these groups. Those are not the groups from which we need protection, but I suggest that consumer associations and others do not really believe that this is the strongest legislation we can have to protect their interests and the interests of other Canadians.


Mr. Nunziata:: Mr. Speaker, the Conservative Member who just asked a question seemed to indicate that somehow the Consumer Association of Canada and the Canadian Federation of Independent Business were involved in the consultative process. I do not quibble with the Hon. Member as to whether or not they were consulted, but it is important to determine the degree of consultation and the degree of input by those two organizations compared with the involvement of the so-called Gang of Five- the Canadian Chamber of Commerce, the Canadian Manufacturers Association, the Business Council on National Issues, the Grocery Products Manufacturers of Canada and the Canadian Bar Association. It is public information that the so-called Gang of Five actually participated on a clause by clause basis, suggesting and recommending and insisting upon certain clauses being included in the new legislation. Indeed the Consumers Association of Canada and the Canadian Federation of Independent Business were consulted, but they were simply asked for their general views.
Having made that point, I should like to direct a question to the Hon. Member for Churchill (Mr. Murphy). Does he believe that the consultative process in respect of the drafting of Bill C-91 was a fair process in the sense that all interested parties were listened to equally? Does he believe that the submissions of the Gang of Five carried as much weight as the submissions of those organizations representing small business and consumers? I suspect that those who carried the day were members of the so-called Gang of Five and those who represent big business in Canada. It is obvious that the legislation before the House, compared with the legislation introduced by the previous administration, is more business oriented. It allows for more loopholes for those who are represented by the Gang of Five. Would the Hon. Member for Churchill comment upon the consultative process?
I was also interested in hearing his views in respect of the purpose of competition legislation. He quite rightly pointed out
April 8, 1986

that its purpose was to protect consumers and that it was not to allow business the opportunity to be involved in mergers, conspiracies and monopolies to the detriment of competition and to the detriment of consumers in our society. Does he believe that Canadian consumers-and he referred to them as ordinary Canadians-are adequately protected and that the purpose of competition legislation is well served by this particular piece of legislation? As the official critic for the Liberal Party pointed out, while the legislation is a step in the right direction, it is still in need of amendment and of a different orientation, an orientation which would put consumers and the interests of consumers first and foremost. Would the Hon. Member comment upon the points I have raised?


Rodney Edward Murphy: Obviously I agree with the Hon. Member and he agrees with me about the fact that competition legislation is not meeting the needs of ordinary Canadians or consumers. I believe the legislation could be much stronger. I will not debate whether the legislation of the previous Liberal Government or its proposals for legislation were better than the present legislation before the House. I merely point out that that legislation was never passed by the Liberal Government, which indicates that it was not on its real political agenda. Despite the fact that the Liberal Government has some problems getting legislation through, it was a majority Government for most of the last 15 years and it had the ability to introduce and pass legislation if it really desired to do so. The fact that the Liberal Government did not pass strong and reasonable competition legislation indicates the lack of political will about which I spoke earlier.
In terms of the general question asked by the Hon. Member, there is a difference between being consulted and being consulted. I should like to refer to what happened in the case of consumer associations and others who represent the less powerful in society. They had meetings. They were shown some outlines of the Bill. In some cases they actually agreed with the general direction of the legislation. Sometimes they actually believed that the legislation would do a good job. In other cases they agreed with the legislation because they did not think they would get anything better in terms of competition legislation. Based in part upon our history of not passing competition legislation, consumer associations sometimes agree to passing legislation because they know they cannot get anything better and suspect that a Conservative Government perhaps will never pass competition legislation unless they accept weak legislation such as that before us at the present time. Those groups were consulted and in some cases they agreed with the legislation. However, there were other groups which were never consulted.
Were the labour groups really consulted? Were farmers really consulted? Were other consumer groups really consulted? Yes, there was very limited consultation with some of those groups, but let us compare the amount of consultation which took place with them and the effectiveness of that consultation with the consultation with the Big Five. Over the last seven years I have sat on enough committees of the House
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of Commons, as I am sure have other Members, to know that we listen to a number of groups that appear before committees. We will hear 15 or 16 witnesses on a piece of legislation, but some of them have a lot more say than others. Some of the witnesses are there for the clause by clause study. Some of the witnesses have the financial resources to ensure that legislation is written in the way they want it to be written. This is what happened in the case of the competition legislation with which we are dealing today. Sure, you talk with the Consumers Association and with other groups, but the people who had the resources and the ear of the Government were able to dictate the way this legislation was written. As a result of that, this legislation is imperfect and will not deal with the legitimate concern of Canadians.


The Acting Speaker (Mr. Charest):: A very, very short supplementary question from the Hon. Member for York South-Weston (Mr. Nunziata).


John V. Nunziata: Mr. Speaker, having said what the Hon. Member has said, I am sure the Hon. Member for Churchill (Mr. Murphy) will recognize that there is one final opportunity to hear submissions from the Consumers Association of Canada, the Federation of Small Business and the Consumer Protection Association at committee stage. At present we are dealing with second reading of this legislation.
Recognizing that that opportunity exists, can the Hon. Member explain why the New Democratic Party has stated that it intends to obstruct this Bill, delay its passage, notwithstanding the fact that, flawed as it may be, Bill C-91 is a step in the right direction, and it is certainly better than the existing Combines Investigation Act?
Can the Hon. Member for Churchill on behalf of his Party indicate to the House and to Canadians that the New Democratic Party will co-operate with the hearing of witnesses, those representing both big business and small business and organizations representing consumers, in order to try to persuade the Government, difficult as it may be, to adopt certain recommendations in the interest of consumers?


The Acting Speaker (Mr. Charest):: Order, please. I am sorry to interrupt the Hon. Member. Resuming debate. The Hon. Member for The Battlefords-Meadow Lake (Mr. Gormley).


John Kenneth Gormley: Mr. Speaker, I welcome this opportunity to say a few words this afternoon during debate on Bill C-91 and its ramifications for competition law in Canada and the Combines Investigation Act.
A strong, effective competition law is an essential part of the Government's economic policy. There is a critical need to update our economic legislation. The existing law is out of date and out of touch. The changes being proposed in Bill C-91 will give Canadians an effective, enforceable and up-to-date

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competition law, something that is long overdue. Competition law sets the rules of the game. Canadians need a competition law that works.
I want to begin by highlighting some of the points in Bill C-91 and what they touch on. By way of some comment, I would like to address a few thoughts to the comments made by my hon. colleagues in the Opposition.
Some of the highlights of this legislation will involve international competition. International competition is emphasized throughout to help Canadian business compete in world markets.
As for adjudication provisions, the new competition tribunal to be established will combine judicial and business expertise to deal with anti-competitive mergers and trade practices. Investigatory powers will now be dealt with in a more effective fashion. New investigatory powers of the director of investigation and research will be made consistent with the Charter of Rights and Freedoms. There will be more attention in this legislation to the issues of merger. Obviously in recent days and weeks there has been considerable discussion about mergers, particularly from the Opposition as evidenced today.
The competition tribunal can stop mergers that lessen competition substantially. International trade will be a major factor in this, and pre-notification is required for large mergers. I will be touching on these in greater depth later in my comments, Mr. Speaker, but I wanted to highlight a few of these for the record.
As far as the abuse of dominant position or what is known as monopoly is concerned, the tribunal can stop anti-competitive practices on behalf of monopolies. Also in the area of conspiracy, there has been a considerable tightening up in that regard. Banks will now be included in this legislation as well as Crown corporations.
To run over these particular highlights, I would like in a few moments to deal in greater depth with several of these proposals. It has been 60 years since the last change to competition legislation in Canada and 75 years since there has been any degree of substantial change.
I would like to comment on how the opposition Parties have been dealing with this matter so far. While not being an overly great fan of the Official Opposition, I must remark that in this particular instance the Liberal Party has dealt with its response in a reasonably responsible fashion. We have heard such expressions as "improvement from the past" in debate today. We have also heard many members of the Official Opposition standing to support passage of this Bill into committee stage where it can be dealt with in greater detail and, of course, in the new spirit of reform of the House of Commons- here I am sure I am speaking on behalf of all Members-where it can be dealt with through an exhaustive study of the provisions in order to ensure that this legislation, as effective as it is, stays to be an effective voice and an effective measure of competition law.
The Liberal Party as well in government has been the author of no less than four previous pieces of legislation that dealt with competition law. In so doing, many of the speakers today have agreed that Bill C-91 does go significantly further. I give credit to the Official Opposition for dealing in this respect in a reasonably responsible fashion.


John V. Nunziata: What about the NDP?


John Kenneth Gormley: I hear a Member asking what about the NDP. In Saskatchewan, maybe it is because we have only 14 Members out of 282, we are proud of electing to this House of Commons Members who are very strong in spirit if not voice as advocates of the Saskatchewan way of life. Unfortunately, the Saskatchewan way of life is often reflected in the number of New Democratic Members who continue to put appearances in here after every four years.


Abram Ernest Epp: Say it for competition.


John Kenneth Gormley: That could be called competition, I suppose, as one NDP Member reminds me. We have heard comments today, from members of the New Democratic Party particularly, that I think bear a further look.
The Hon. Member for Yorkton-Melville (Mr. Nystrom), my friend who obviously predates me by many years in this House, has referred to the input in smaller Saskatchewan communities from people in the smaller businesses of Saskatchewan and ways of making a livelihood. He refers to this as part of competition.
I will touch on it later, Mr. Speaker, but I would like to remind the Member that the degree of input received in this process through the formulation of the Bill has come from groups like the Canadian Chamber of Commerce, which is made up of many small chambers of commerce like our Chamber of Commerce in The Battlefords which reflects small retail businesses, agricultural service companies and oil field service companies. We have seen people from The Battlefords Chamber of Commerce emerge as some of the primary leaders in the Saskatchewan Chamber. Of course, we are well heard in the national Chamber. As well we hear from groups like the Federation of Independent Business and the Consumers Association of Canada. I do take some exception to what the Member for Yorkton-Melville said, that there is no input into this kind of competition legislation from smaller communities and from smaller businesses in different and perhaps more remote walks of life in Canada.
Another long-term habit of the New Democratic Party is what I call the vilification of business. We heard members of the NDP at length today and the day before, in referring to the Big Five, I think they call them, somehow referring to the evils of Canadian business. As one examines further the measures contained in Bill C-91, as we will in committee and in this House, we will see that part of the philosophy of legislation that deals with competition has to address itself primarily to the kind of business environment we want for Canada.
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A member of the New Democratic Party this morning said, with particular respect to the tribunal being established, that the state should have the power to examine business transactions and question whether there is a profit motive or if there are other job guarantees. The tribunal should have the power to disallow these kinds of business operations and transactions. That begins with a fundamental premise that business transactions, the doing of business in Canada, begins from the state determining how much or how little you should be allowed to do. Obviously responsible competition legislation should start with the premise that we have a market-place. We have businesses large and small that are conducting business and, within the bounds or constraints, competition legislation is designed as an effective measure of protection for consumers, protection as we will deal with it in Bill C-91.
The provision for takeovers and mergers, which has been dealt with to a great extent due to recent events, has often been overlooked by members of the New Democratic Party who have conveniently forgotten that this is a comprehensive Bill to deal with competition. It obviously deals with mergers but, as a member of my Party mentioned earlier today, if one looks at the newly tabled Bill C-103 in connection with Bill C-91, one can see how the Government is able to deal with, as an example, the Imasco-Genstar takeover which has been debated at such great length here.
I would now like to deal in greater detail with some of the points contained in Bill C-91. I would like to indicate why I think they are good, timely, and effective measures. Notification will be required of all proposed mergers or takeovers involving companies with combined assets of more than $500 million, or with a takeover cost of at least $35 million. If the director of combines believes that the deal would reduce competition, the merger would go before the tribunal for adjudication. From that measure an appeal of the tribunal's findings could then be made to the federal court. For the first time international competition is givin explicit recognition and a great deal more emphasis. This law will recognize that in some instances concentration may be necessary to make Canadian industry world competitive to the benefit of consumers and businesses all across our country.


Abram Ernest Epp: An excuse for domestic monopoly.


John Kenneth Gormley: Mr. Speaker, I hear an NDP Member say "an excuse for domestic monopoly". Considering the kind of state-dominated economy that the New Democratic Party would like to wreak upon us, that kind of comment is not surprising. Again I refer back to my Saskatchewan roots. With regard to competition and the degree of forward investment in Canada, one need only look at the Saskatchewan experience of the nationalization of potash mines by the NDP.
In Saskatchewan a man is hoping in vain to be Premier again. The Leader of the NDP is saying that, in the very
Competition Tribunal Act
unlikely event that the NDP was re-elected in Saskatchewan, it has, at least at the Party policy level, given itself the authorization to take back anything that the present Progressive Conservative Government has privatized or initiated on behalf of the people of Saskatchewan. It is that kind of attitude that makes that Member's comments not particularly surprising. However, I will not become sidetracked again, Mr. Speaker, as there are a number of things we can talk about with regard to Bill C-91.
Criminal laws against monopoly will be replaced by civil prohibitions against anti-competitive behaviour. It is virtually impossible to obtain a criminal investigation. At least this has been the experience in the past with combines legislation. At this point a new approach is necessitated. Under this new approach we will be dealing with the measure in which the tribunal will be working. This is again a point in contrast to earlier legislation.
There have been questions asked about whether this law will benefit Canadian consumers. Obviously competition law is a framework piece of legislation which offers general benefits to the consumer. Effective competition laws ensure that we have an economy predicated upon competition, the market, and a measure of free enterprise. With effective legislation such as this there is, in turn, benefit to consumers through lower prices, increased choices, and protection against conspiracy and anti-competitive behaviour.
I want to touch upon the role of the tribunal in this legislation. It has been compared to that in Bill C-29 of the previous Liberal Government. The provision for use of a tribunal can be compared to the former proposal in Bill C-29 for using the courts. There are arguments on both sides. It is our view that the tribunal is a better way of proceeding. It provides, in large measure, a more effective way of adjudicating decisions which come before it.
A judge of the Federal Court of Canada will chair the tribunal. There will be up to four judicial members. On the recommendation of the Minister of Consumer and Corporate Affairs (Mr. Cote), the Governor in Council will appoint up to eight lay members. The prospective appointees will be vetted by a statutory advisory committee comprising persons knowledgeable in the industry, in commerce, and in public affairs, including representatives of the big and small business communities, consumer groups, and labour.
The point which has been raised more than any other in today's debate is who had input into the formulation of Bill C-91. That question has been bandied about by the New Democratic Party in particular which is crying about the woes of big, bad business, as the NDP refers to Canadian free enterprise. I would like to list some of the over 100 organizations which were consulted. They include the Chamber of Commerce, the Consumer's Association, the Business Council on National Issues, the Manufacturers Association, the Bar Association, the Grocery Products Manufacturers of Canada, the Canadian Federation of Independent Petroleum Marketers, and the Petroleum Marketers Association of Canada.

April 8, 1986
Competition Tribunal Act
1 think it would be instructive to put something on the record to indicate how the Consumers Association of Canada views this. I have a news release dated December 17, 1985, the day on which this Bill was tabled. The Consumer's Association of Canada says:
The new competition Act tabled today by Consumer Affairs Minister Michel Cote promises real progress for consumers and is a major improvement over current legislation....
Urging-
I emphasize the words "urging" for the record, Mr. Speaker.
-that the bill get the highest priority, CAC's economic issues committee chairman, Robert Kerton, said it will help create "a marketplace where providers of goods and services must be innovative and competitive in meeting consumers' wants and needs if they are to prosper".
The news release goes on to say:
It should also help prevent wasteful mergers that reduce competition and concentrate economic power in fewer hands without compensating consumers through better prices, choice, or quality.
Kerton listed many positive features of the new Bill, including several that CAC has pressed for. Among them:
Corporate mergers and monopolies will become matters of civil rather than criminal law, making it more enforceable.
A new tribunal with no cabinet override will handle noncriminal matters; consumer groups will have a role in nominating tribunal members.
Merger provisions will be substantially strengthened.
Crown corporations will be included in the Act...
Conspiracy provisions ... will be strengthened ....
Monopoly provisions will be strengthened ....
CAC will be highly supportive of these amendments....
I would like to make a few remarks with respect to Crown corporations. It has been the experience in dealing with competition legislation that Crown corporations have been exempt, particularly in cases of unfair competition or what is known quite openly as "cartels". We all remember the Eldorado case in which it was actually ruled that a Crown corporation would not be liable for action under the Combines Investigation Act to the same extent that a private business would. In the Eldorado case the ruling was that Crown corporations would be immune when acting within their purposes. In the interest of fairness, all Crown corporations which are engaged in commercial activity should be subject to the same rules of conduct as private firms. That is contained in the Bill and that in itself is a landmark measure.
Again to hunker back to my Province of Saskatchewan, we have a preponderance of Crown corporations. Many of them are of the monopoly utility type that in a very conservative fashion are seen as rendering the best service when publicly-owned. That is obviously a conservative notion if one looks at a community in the sense all of us do philosophically with its involvement in looking after individual needs. However, in Saskatchewan, where we have had a socialist Government for 40 years, we have many Crown corporations competing head-to-head with private enterprise, and with, I argue, very
questionable reasons for being. Therefore, I find it very encouraging that provincial Crown corporations will be included in this legislation along with their federal counterparts and they will not be allowed to indulge in anti-competitive activities.
There is much more that could be said on this Bill, of course, but I thank you and the House for the opportunity to speak in support of Bill C-91.


The Acting Speaker (Mr. Charest):: Questions or comments.


Abram Ernest Epp: Mr. Speaker, 1 would like to offer some comments on the speech which the Hon. Member has just made and on the speech of my friend from Churchill earlier. The Hon. Member for The Battlefords- Meadow Lake (Mr. Gormley) feels himself to be in an ideological battle time after time. He speaks in defence of free enterprise against the fearful socialists. I suggest that one of the very real difficulties that we in the NDP face, one faced by our predecessor, the CCF going back to its first leader in the early 1920s, is that where economic power becomes concentrated in few hands we cannot get back to the kind of competitive economy that my friend believes in. The alternative has to be public ownership. If we cannot use regulation to deal effectively with natural monopolies, what other means do we have but to establish public ownership and trust that the Government of the day, sensitive to the needs of consumers, will ensure that these public enterprises operate responsibly? I do not feel quite ready to go that far today. I do not want to see the corporations controlled by the nine family groups passing into public hands, because that would represent an incredible concentration of power. If those companies ended up in the hands of a few public appointees, how concentrated would the power then be? It is precisely because of that problem that we want effective competition law.
I was interested to see that in making his comments yesterday the Official Opposition critic quoted from Adam Smith on the matter of competition. He quoted what is in fact one of my favourite Smith quotations which is very rarely taken seriously. I challenge my friends on the government side to take this statement very, very seriously. More than 200 years ago he said:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
Adam Smith was so convinced that business people would get together against the public interests that he did not even want a register of business people at City Hall so that someone could look the list over and say: "Aha, so these are the people that do the same things I do". Adam Smith hoped for a world in which competition would really prevail. It does not take a great deal of knowledge of economic theory among Government Members to realize that in competition of that sort, profits would melt away. Prices would be driven towards the cost of production. The existence of profits, which our friends are so eager for, are in a sense-
April 8, 1986


The Acting Speaker (Mr. Charest):: Order, please. On a point of order, the Hon. Member for York East (Mr. Redway).


Mr. Redway:: Mr. Speaker, as I understand the purpose of the time for questions and comments, the comments and questions should be short and not consist of an entire speech. The Hon. Member would have that opportunity on another occasion.


Mr. Rossi:: You did the same thing yesterday.


Alan Redway: Who, me?


The Acting Speaker (Mr. Charest):: Order. I think I signalled to the Hon. Member that the time may have come for a question.


Abram Ernest Epp: Mr. Speaker, the other issue on which I will just offer a brief comment is that in the Canada of today, where economic power is as concentrated as it is, we are perilously close to the kind of society that in days past our forebears in England criticized when they looked at Imperial Germany and Japan. We have economic and political power here which is in grave danger-


The Acting Speaker (Mr. Charest):: Order. I am sorry to interrupt the Hon. Member. The Hon. Member for The Battlefords-Meadow Lake (Mr. Gormley).


John Kenneth Gormley: Mr. Speaker, it makes one tingle all over to be able to debate Adam Smith at three minutes to six. I would like to have the opportunity some other time. Throw in Edmund Burke and we will have a very good session.
As to philosophy, the CCF, the prairie grassroots agrarian movement, has nothing in common with the NDP. We all know that, particularly those who have been raised in Saskatchewan.


John V. Nunziata: Mr. Speaker, in precisely three minutes the six o'clock news will be on in all jurisdictions in this time zone. One of the major stories tonight will be the proposed merger between Imasco and Genstar. This legislation, Bill C-91, will, to a certain degree, address the issues involved. The Hon. Member has obviously given a lot of consideration to this legislation and I would like to ask him about the retroactive effect of the Bill. I asked the Parliamentary Secretary this precise question and he was unable to answer so I would like to ask the Hon. Member whether this legislation will have any effect whatsoever on the Hiram Walker-Gulf situation. If not, should this legislation in his view have a retroactive effect in order to ensure that that particular deal is properly scrutinized to determine whether or not it is in the best interests of Canadians? I am sure all those who are about to watch the six o'clock news will be very concerned about the whole question of mergers. I see the Hon. Member is obtaining his instructions from the Parliamentary Secretary across the way. I think he is about ready to answer the question.
Adjournment Debate


John Kenneth Gormley: Mr. Speaker, I wanted to ask the Parliamentary Secretary if we should have that Member repeat his question. However, I think I got the gist of it. 1 would like to advise the Hon. Member that if he is here during Question Period every day he should take note of what has been happening in the Standing Committee on Finance, Trade and Economic Affairs which has been well publicized and the recommendations it made on the Bill tabled yesterday.


The Acting Speaker (Mr. Charest):: Order, please.


John V. Nunziata: We are ready for the six o'clock news.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 66 deemed to have been moved.

Alan Redway: Mr. Speaker, some 14 months ago, on the night of January 30, 1985, one Leander Chesterfield Savoury, known to his friends as "Pappa Lea", entered an Esso self-serve gas station on Jane Street south of Highway 401 in the City of North York in Metropolitan Toronto. At that time he held up the attendant at that service station with a sawed-off shotgun. During the hold-up, the shotgun was fired three times. As he left the service station, Savoury was accosted by members of the Metropolitan Toronto Police Department hold-up squad and intelligence squad. They identified themselves and called upon Savoury to throw down his weapon. Savoury pointed the shotgun at the members of the police department. They, in turn, fired at him, and as a result, Savoury was killed.
Recently there was a coroner's investigation into the death of Leander Chesterfield Savoury. As a result of that coroner's investigation, it was found that at the time of his death he was on mandatory supervision, having been released from prison. At the time of his death, he was 21 years of age. He was a man with no fixed address. He was convicted for the first time in adult court for illegal possession of a weapon when he was 16 years of age.
Evidence at the coroner's inquest showed that Savoury was released on mandatory supervision in October of 1984, and that between that time and January 30, 1985 when he was killed in that police shoot-out, a period of time that was only about three brief months, he had been in contact with his parole officer on three occasions, once in person and twice by telephone.
The evidence given at the coroner's inquest also showed that he was the prime suspect in eight other robberies in the

April 8, 1986
Adjournment Debate
Metropolitan Toronto area during the month of January,
1985.	In one of those robberies, the attendant of a gas bar had been killed by the accused robber with a sawed-off shotgun, the same type of weapon that Savoury used on the night of his own death.
Is it any wonder, when those facts were disclosed to the coroner's jury a few short weeks ago, that the coroner's jury said it felt the mandatory supervision that Savoury was on at the time of his death was grossly inadequate? Is it any wonder that the coroner's jury said as well that it believed that this kind of inadequate mandatory supervision was not an isolated incident? It is a common occurrence in this sort of a situation with mandatory supervision cases. Is it any wonder as well that the coroner's jury recommended that mandatory supervision for dangerous offenders should be reviewed and substantially revised? Is it any wonder that the coroner's jury in this case urged this House and this Parliament to adopt without delay Bill C-67?
Bill C-67 came to us for third reading some time ago. The Bill will give the National Parole Board the power to deny automatic release to dangerous offenders. Is it any wonder, bearing in mind all of these circumstances, that the public has lost confidence in our criminal justice system? There are some of us who feel that when a judge sentences someone to prison, that sentence should mean something. It should not be subject to being shortened at any cost or at any time. Even the Law Reform Commission of Canada has said that. At the very least, when a judge imposes a sentence, the person should not automatically get out of prison after serving only two thirds of his sentence. There should be a procedure whereby the National Parole Board in the case of a dangerous offender can require that person to remain in prison and serve the entire term. That is the sort of thing which is provided for in Bill C-67.
Bill C-67 was reported back to this House on February 1,
1986.	It had gone through first reading, second reading and an extensive examination in committee. It was rushed through committee to get it back here at the beginning of February of this year. However, since that time nothing has happened. I hope that tonight we will hear from the Parliamentary Secretary that the Government intends to get on with third reading of this Bill. Let us get this Bill passed and into effect so that the people of Canada can have a better sense of confidence in our criminal justice system.


Mr. Gordon Towers (Parliamentary Secretary to Solicitor General of Canada):: Mr. Speaker, I recognize the concern of the Hon. Member for York East (Mr. Redway) and also his efforts to improve the correctional service system in Canada. I wish to add to the remarks made by the Hon. Member for York East on March 24, as well as today. The Hon. Member commented on the verdict of the coroner's jury on the death of Leander Savoury. Savoury was under mandatory supervision when he died as a result of police intervention while he was
committing an armed robbery and holding a kiosk attendant at gunpoint. The jury found that the two policemen involved were blameless and that Mr. Savoury died as a result of his own actions.
It is my feeling that there is some confusion about mandatory supervision in Canadian society. 1 would like to offer some clarification. I do not think that Canadians at this time really want the wholesale abolition of mandatory supervision for offenders sentenced to penitentiary terms. Mandatory supervision is an added measure of protection for society when these people are released, and that is the vast majority of penitentiary inmates.
Prior to 1970, inmates were released after serving two thirds of their sentence as a result of earned remission, which is often referred to as "time off for good behaviour". They were released without any supervision, just as if the sentence of the court had ended. In 1970, the Parole Act was amended to render these inmates who were released as a result of remission subject to supervision until the last day of their sentence. The rationale was that these inmates who had not been considered a good enough risk for parole were even more in need of supervision than parolees.
Since 1970, every person sentenced to a penitentiary term is under some form of control until the last day of the sentence. Before we decide to abolish mandatory supervision, we must ask whether the alternative of no supervision during this critical transition is better. There are some Canadians who want to abolish remission altogether so that inmates cannot earn any time off for good behaviour while incarcerated. There are some who even want to abolish parole so that a sentence of five years means five years to the day, no matter what. Do we really want such a harsh system in Canada, one which in effect would lengthen penitentiary sentences by one third?
Some of the American states which had opted for "flat sentences", as they are known, are reinstating a more flexible system because of the disastrous practical and psychological consequences of the other approach. It would overcrowd our jails. I hasten to say that dangerous criminals should not be released on parole.
There is a correctional law review committee within the Department of the Solicitor General which is mandated to study the remission system and the release process. The issues are very complex and, first and foremost, require clarification of our values as Canadians on rehabilitation and punishment. This committee will report in one year. I expect that from its study a clearer legal mandate for corrections will emerge.
In answer to the Hon. Member's question, I hasten to say that Bill C-67 should be passed very quickly. It should not be delayed by opposition in the other place, that is, by the Liberals, or by the New Democratic Party in the House of Commons, as we have been warned. If that Bill had been in place, it is possible that Mr. Savoury would not have been
April 8, 1986

released. A few days before the release of this man, which was automatic under the current law, the Parole Board had commented in writing to the Correctional Services of Canada that this was "a dangerous release".
The solution is not further elimination of mandatory supervision but more flexible use of the Parole Board's judgment with respect to the release of individual offenders. Dangerous criminals should be kept incarcerated until they have served their full sentence. I trust that Bill C-67 will be brought before the House in the very near future.


ENVIRONMENTAL AFFAIRS-ACID RAIN-UNITED STATES' EMISSIONS. (B) PRIME MINISTER'S DISCUSSIONS WITH UNITED STATES PRESIDENT
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, on March 19 in the House, the Minister of the Environment (Mr. McMillan) stated:
The Prime Minister has achieved a real triumph on behalf of Canadians and I suggest that... the Hon. Member should join other Canadians across the country in rejoicing over a major Canadian accomplishment.
The Minister was referring to the question of acid rain and the last summit.
Let us compare this major accomplishment with what was said in the House on March 11, 1981, five years ago, when President Reagan expressed his concern about transboundary pollution. At that time he said:
We want to continue to work co-operatively to understand and control the air and water pollution that respects no borders.
The reference at that time puts President Reagan ahead of where he found himself in 1986 at the last summit.
In addition, let us look for a moment to the recommendation in the envoys' report in which there is no promise to cut so much as one milligram of sulphur emissions. However, on page 29 of the report there is a hope that the Commercial Demonstration Program will result in some "near-term reductions in U.S. air emissions" which affect the Canadian environment.
With our hopes pinned on the Commercial Demonstration Program, let us take a closer look at page 29 of the report. It states that the Government should provide half the funding, some $2.5 billion, for projects which industry recommend for which it is prepared to contribute the other half of the funding. So what Canada has agreed to is a program which amounts to zero if the polluters who have consistently resisted controls do not provide the funds for commercial demonstration projects. Therein lies the substance of the Minister's optimism that some near-term reductions in sulphur dioxide emissions may then result.
At the very least we might have hoped that the envoys' report, or the commitment made by President Reagan, would have included a process for negotiating some sort of a clean air treaty, as was proposed in the 1980 Memorandum of Intent. We were told by the Minister to look at page 4 of the envoys' report. Indeed, page 4 makes a reference to the need for a
Adjournment Debate
bilateral accord. However, it is not contained in the recommendations but rather as a piece of background information. Nowhere in the envoys' report is there a specific call for action or a process described to negotiate a clean air agreement between the two countries. In this respect, it falls short of even regaining the position of August 1980.
With these points in mind, I would put this question to the Minister through the Parliamentary Secretary: Is it really a major accomplishment, as he described it in the House, or is it more like the Prime Minister (Mr. Mulroney) himself described it in The Globe and Mail of March 2, 1986, as being not such a big deal?
We heard the Minister of the Environment make a new statement over television on Sunday during Question Period. At that time, he said:
We're going to have to have, in both Canada and the United States-specific targets for substantial reductions in acid rain causing emissions. We're going to have to have schedules to achieve the target and we're going to have to have specific commitments of cash for both purposes-We have a summit a year from now, in Canada, in which acid rain will be put on the agenda again.
The Minister went on to say that at the next summit, the discussion will focus on the questions of targets, schedules and commitments of cash. Yet the Prime Minister is reported on March 22 to have said that he had asked Mr. Reagan to cut U.S. emissions of acid rain pollution, but he cannot persuade the unpersuadable. That is a fairly realistic statement. Why then is the Minister of the Environment committing himself while the Prime Minister, the only person who attended the meeting, believes President Reagan to be unpersuadable? Is the Minister just raising false hopes for political purposes?
Much has been said about the Government reaching a new phase in Canada-U.S. relations on acid rain, but is it really so? If you look at the record, Mr. Speaker, and there is not much time to do that, you will realize that in addition to the Memorandum of Intent of August 1980; in addition to President Reagan's statement of March 1981 that he wants to continue to work co-operatively to understand and control the water and air pollution that respects no borders; in addition to formal negotiations that began under the terms and conditions of the Memorandum of Intent of June 1981; in addition to the March 1984 formation of the 30% Club as an international initiative to cut acid rain; and in addition to the March 1984 agreements with the provinces renewed in June 1984, a lot of action has taken place. However, now we have to look clearly at what the Minister of the Environment said on Sunday when he spoke about emission controls that will be put on the table at the next summit when the Prime Minister and President Reagan will meet again. It is of course necessary to bring the Parliamentary Secretary and the Minister down to earth with historical facts, but will the Parliamentary Secretary now tell us what precisely is the schedule of cuts in sulphur emissions in the U.S. to which the Minister referred during the television program on Sunday?

April 8, 1986
Adjournment Debate


Mr. G. M. Gurbin (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, the position of the Canadian Government has always been very clear. It is that our objective, both by the actions we take within Canada and the accord that we must reach with the United States, is to reduce the sulphur emissions that are falling on Canadian lakes, forests and territory by 50 per cent by 1994. The Hon. Member for Davenport (Mr. Caccia) knows that full well. There has never been any question about that. If he would care to look at the other comments made by the Minister of the Environment (Mr. McMillan) and the Prime Minister (Mr. Mulroney), indicating that we need to reach a bilateral accord with the United States, he would see that there remains no question about that.
We are fully aware of that position, but the issue here is whether we are going to be able to achieve it within the time frame and whether we are going to be able to achieve real results from real programs. I think that is a fair and legitimate question for everyone to ask. That is the reason the Minister said things the way he did on Sunday night and the reason the Prime Minister is not trying to tell anyone in Canada that the job is done or that there is not much more work to do.
In the time allotted to me, I have adequate time to account for the change in the position taken in 1981 when Mr. Reagan was here. Nothing substantial was accomplished by the previous Government or its Ministers to bring forward what we have today, that is, a significant breakthrough, and I am sure most fair-minded Canadians would agree. Apart from the real reductions which may result from the commitment of money and the co-operation of the American Congress with the American industry, we have a recognition that the problem is bilateral and requires a bilateral accord to achieve a successful result.


Mr. Caccia:: We had that six years ago, in 1980.


Gary Michael Gurbin: If the process was there six years ago, it was going nowhere. I would have to say that the process was nonexistent. The words were there, as were many of the comments of the Hon. Member for Davenport, but nothing was accomplished. It was not my criticism or that of the Government which indicated that time had been lost. It was a parliamentary committee which indicated that time had been lost not only in Canada-and the Government has put that in order by concluding provincial agreements-but in advancing the necessary agreements and bilateral accords with the Government of the United States. Precious time was lost in that five-year period. We are now on a substantially improved track. We all have honest and legitimate hopes that we will reach a successful conclusion within the next few years.


CHILD CARE-FUNDING OF SERVICES. (B) REQUEST FOR ADDITIONAL FUNDING
Mr. Neil Young (Beaches):: Mr. Speaker, on March 17, I asked the Minister of State for Immigration (Mr. McLean),
who is also responsible for the Status of Women, a question about child care. I asked whether the Government was prepared to provide additional funds for child care services as an indication of good faith in fulfilling its election promises. Unfortunately, as so often is the case, the response was vague. The Minister used the current parliamentary task force examining child care as an excuse to put off government action until some undefined time in the future.
The fact is that the need for greatly improved child care services has been proven time and time again. The Government should have committed funds in its recent Budget to child care. This would be an indication of good faith on the part of the Government, and it would be an indication that the parliamentary task force on child care actually means something. So far it seems as if the Government is willing to use the task force as a way of further stalling to avoid its commitment made at election time.
As an initial first step to show its serious intentions, the Government should commit $300 million toward the child care system. That should be the Government's immediate response to an urgent situation. Over the next few months, the parliamentary task force on child care will draw up a plan to implement universal child care, but we should like to see a concrete demonstration of the Government's commitment.
The need for an improved publicly supported child care system has been demonstrated often. Some 20 or more studies in past years have documented the necessity of an expanded publicly funded system of child care. The recent task force chaired by Dr. Katie Cooke found that child care was in crisis in Canada. The current supply of licensed child care spaces is able to accommodate less than 9 per cent of children requiring non-parental care on a full-time basis. In the last 30 years the changes in family structures and the increase in the participation of women in the labour force have moved far ahead of government policy on child care.
The vast majority of Canadian women of child bearing age participate in the paid workforce. In 1983, 69 per cent of all women between the ages of 20 years and 44 years worked outside the home. Of course, this trend will continue. In 1983, 49 per cent of mothers with children under the age of three and 56 per cent of mothers with pre-schoolers in the three to five age group were in the paid labour force.
The percentage was even higher for mothers whose youngest child was between the ages of six and ten. The Canadian Day Care Advocacy Association pointed out in a recent report that there are about 172,000 spaces for children in licensed day care facilities, yet there are almost two million children 12 years old and under in Canada. For many families, licensed child care services are not available. Also, many families find quality child care unaffordable.
Because of unstable and patchwork funding for child care, it is hard to maintain high quality programs. Child care staff
April 8, 1986

subsidize the real cost of child care by working hard for low salaries. Varied policies, funding and distribution services across the country have created a situation where some Canadian families have access to child care services and some do not. The care and well-being of our children is a social as well as individual responsibility. Women must not be penalized for maternity.
During the election campaign, which brought the present Government to power, the now Prime Minister (Mr. Mul-roney) promised cash dollars for child care. He said:
We view the provision of day care as requiring leadership in funds from the federal government because proper day care facilities are an instrument for economic advancement and fairness for women.
The need for child care services has been adequately proven and shown by the Prime Minister during the election campaign, by women themselves, by children and indeed by numerous studies conducted at the federal level. As a very minimum, the Government has an obligation to provide funding now for child care services to show a good indication of faith in Canada's future and Canada's children.


Mr. Gerry Weiner (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, I share the Hon. Member's concern for child care and the need for adequate child care facilities. I also realize that it will take public dollars to develop and support those child care facilities.
The Hon. Member must recognize that social justice is an important aim of a group of people who took over the management of this country in September, 1984. Of course, we had a few things to put in place before we could get to all of the things we wanted to do. Those had to do with putting people back to work and with giving people a sense of well-being. We do have four or five years to establish all of the priorities that we talked about in the summer of 1984.
As a Member of this Government, finding workable, affordable solutions to the present child care crisis has been and remains a priority objective. It is clear that public dollars will have to be used to develop and support a system of child care adequate to the needs of children and their families. The
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inability to pay for adequate, suitable, quality care severely restricts, in fact one could say removes parents' choices and unnecessarily exposes children to risk.
When we realize that only 9 per cent of children who need supervised care are in licensed care, we must accept that their families are not choosing the care they prefer, but finding what they can and, in most cases, are using inadequately supervised care. In other words, families must make tremendous sacrifices and may still find themselves in unsuitable and costly arrangements.
As you know, Mr. Speaker, the provinces have the major responsibility for regulating and delivering child care. I am convinced that to improve the over-all situation, co-operative action is required. The Katie Cooke task force, in a comprehensive research document which recommends short, medium and long-term options, proposes a system comparable to the education system, financed solely from public funds coming from the federal and provincial Governments. How we will achieve this is very much in the hands of the parliamentary task force on child care which is seeking public input on the issue, the federal-provincial health and social services ministers and the finance ministers.
The Government is committed and convinced that it is necessary to take steps to improve the child care system. However, we must also strike a balance between our fiscal priorities and our social policy responsibilities. Whatever the direction taken, we will ill serve women, children, families and society if we fail to make significant improvements to the current situation.


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


[Stage Direction]
The House adjourned at 6.30 p.m.
[Stage Direction]

Wednesday, April 9, 1986