1986-12-15

Mr. Speaker:: I have the honour to lay upon the Table the revised paragraph 7.95 to the Report of the Auditor General of Canada to the House of Commons for the fiscal year ending March 31, 1986. I remind Hon. Members that this document is deemed to have been permanently referred to the Standing Committee on Public Accounts.


THE ADMINISTRATION
Hon. Barbara McDougall (Minister of State (Privatization)):: Mr. Speaker, I rise today pursuant to Standing Order 19(6) and as Minister responsible for regulatory affairs to inform the House of an important milestone in the implementation of the Government's regulatory reform strategy. Hon. Members will recall that the Minister of Finance (Mr. Wilson) identified regulatory reform as an important contributor to economic growth and job creation when he announced the Government's agenda for economic renewal in November 1984.
The Government subsequently developed a comprehensive regulatory reform strategy as a result of the work of the Ministerial task force on program review. The strategy and our smarter regulation policy were announced in February. Since then, there has been virtually constant action in the Government to bring about needed and practical improvements in regulatory programs and the federal regulatory system.
Regulation is the use of law to control or prohibit private behaviour. A democratically elected Parliament is recognized as the source of those laws and of regulations affecting the freedom of all the people. It follows that Parliament has a special responsibility in encouraging sound, practical regulatory reform.
Of course, a major purpose of the regulatory plan is to respond still further to the Government's commitment to open
Government. The document gives the public early notice of our intentions and this will help individuals to influence reglation at the start and not just at the end of the regulatory pipeline.
[ Translation]
That is why I see it as especially appropriate to announce in the House today that we are releasing, simultaneously with this statement, the first annual regulatory plan prepared by a federal Government.
The regulatory plan for 1987 provides a comprehensive list of regulatory initiatives planned by 25 federal Departments and agencies for next year.
It is the result of the introduction of compulsory planning and priority setting introduced to the federal regulatory system as a result of the regulatory reform strategy. Because it covers all planned federal regulatory activity during a specific 12-month planning period and because it has been approved by Cabinet as a planning document, the 1987 regulatory plan goes well beyond the scope and objectives of the old regulatory agendas.

In the same spirit, I see the annual plan becoming a very useful reference document for Members of Parliament. Copies of the 1987 plan are being circulated at this time to Members' offices as well as copies of an information kit prepared to accompany the plan's release.
One of my main objectives has been to ensure that the plan is a useful tool for Members of Parliament and I hope they will let me have any suggestions on how we can improve next year's edition. This is a good example of how the smarter regulation policy is producing practical, helpful improvements that have long been needed.


Hon. Bob Kaplan (York Centre):: Mr. Speaker, I was asked to act as Liberal critic on this matter because I happen to be co-chairman of the Joint Committee on Regulations. That is why my reply will not be as charitable as the Minister may have wished.

I have to say that I am interested in this document but I cannot receive it with the kind of enthusiasm with which the Minister has delivered it. It is not all that different from the regulatory agenda approach introduced years ago by my colleauge, the Hon. Member for Windsor West (Mr. Gray) when he was the President of the Treasury Board. Like that document, the trouble with this document is that it is not a law

December 15, 1986
Statements by Ministers
of Canada. It is not a regulation. It has no status or authority, other than a commitment by the Government to comply with it. In other words, any Department will continue to be free to put out regulations whenever it likes. Those regulations will stand or fall, not in relation to this plan but in relation to the law.
[DOT] (mo)
I regret that after the commitment the Government made to the regulatory reform process that it has not been prepared to do something that will have more authority than justify a statement. I hope that it will not unduly encumber the process of Departments, and that in cases where regulations have very little consequence that those regulations will be able to go forward and will not be encumbered by all this material, which although it is well intended, has to be characterized as additional red tape for departments. It is red tape that could produce good results. I do wish to indicate that it is not always a good thing, unless it is applied with sensitivity and taken seriously by the departments.
I am suspicious about the commitment of the Government to regulatory reform because of the behaviour of the Government and its caucus in relation to the regulatory process. This is a good time to mention it, because the Government wants the country to accept this document and to see it as a reform. Since it has no legal authority, it will only have meaning if the Government is committed to it.
These are the reasons that the Government has very little commitment to regulatory reform. First, it has not yet acted to amend the Statutory Instruments Act. In 1983 when Mark MacGuigan was the Minister of Justice he made a commitment that the Statutory Instruments Act would be amended. It has no teeth, it has no disallowance power, and no one was more enthusiastic about Mr. MacGuigan's commitment than the Opposition. So all of this regulatory process could be effectively controlled by a regulatory instruments process. No amendments have been introduced to carry that out.
Second, the attendance of Conservative members at the Standing Joint Committee on Regulations and other Statutory Instruments has prevented us from doing our job. Four meetings have been called with two Liberal members, one NDP member, nine Conservative members-


Mr. Speaker:: Order, please. There may be problems with attendance at committees, and there are sometimes problems with attendance in the House. Hon. Members know that we have a long tradition of not commenting on it. The Chair does not know what the problems in attendance might be. It may have nothing to do with lack of diligence, it may be other more pressing obligations. I would ask the Hon. Member, who is an experienced Member, to not comment further on that particular matter.


Robert Phillip Kaplan: I wish to simply say that for four meetings the committee has not been able to review regulations because there was no quorum.


An Hon. Member:: Were you there?


Robert Phillip Kaplan: Yes, I was.


Mr. Speaker:: Order, please. It is quite appropriate for the Hon. Member to say that unfortunately there was not a quorum. But it is not appropriate to single out any particular Member. The Chair is mindful that I have just heard at least one Member question whether or not the Hon. Member for York Centre (Mr. Kaplan) was there. This is an issue which I do not want to get into. Perhaps the Hon. Member for York Centre could complete his remarks.


Robert Phillip Kaplan: My third point in challenging the credibility of this Government as a regulatory reformer is the behaviour of the Minister's former Department when she was Minister of State for Finance in dealing with regulations which we brought to the attention of the Government that challenged its constitutional authority. The committee has the responsibility of reviewing regulations. Although I could have mentioned several, I have mentioned the Hon. Minister's Department because she is charged now with the SOR/82-359, the Natural Gas and Gas Liquids Tax Regulation.
On December 5, 1984, our legal counsel wrote to the Department asking them to respond to a challenge to a regulation to its authority. There was no reply to the letter. On April 10, 1985, we wrote again. A committee of Parliament wrote to the Minister's Department and did not even receive the courtesy of a reply saying that our letter would be looked into.
The first letter was on December 5, 1984, the second letter was on April 10, 1985, the third letter was on August 20, and there was not even the courtesy of a reply from the Minister's Department. On January 2, 1986 our legal counsel wrote and again there was no reply. On April 17, 1986 the co-chairman of the committee and the vice-chairman wrote to the Minister asking for a reply to all these letters that had been written. There was no reply. On September 17, 1986 we wrote again and asked the Government to deal with, in our view, a breach of the regulations and there was no reply. So these are the reformers. I will believe it when I see it.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I wish to say a few words on the statement by the Minister. They will be very few because the spokesman for the New Democratic Party on this particular issue had a prior commitment. We did not receive notice of this from the Minister's office or a statement ahead of time. I am not sure whether it was the Minister's office that was late in sending it, or whether the confusion resulted on our side. Maybe it was Canada Post. But we have not received notice of it. The Member for Vancouver-Kingsway (Mr. Waddell) is our spokesman on this particular issue and he has other commitments at this time.
I wish to say to the Minister that we follow this issue. It is an important issue for people. We know about the committee that has been going on. The only point that I wish to make this
December 15, 1986

morning is that this issue of regulatory reform is an issue which we should make sure works on behalf of the average Canadian who is affected by the laws of Canada. There will always be regulations. There will always be reform and update of regulations, regardless of which Government is in power. There must be a process that ensures that the regulations of Government work on behalf of ordinary citizens. All too often the ordinary citizen is met with red tape, regulations, and guidelines that are beyond his or her comprehension. They tend to see parliamentarians and public servants, particularly at the federal level in Ottawa, drafting very complicated regulations that can only be interpreted by lawyers, or accountants, and sometimes for the benefit of lawyers and accountants.
It is encumbent upon all of us in the three Parties in the House to make sure that the regulations are drafted in the most efficient and effective way possible that work and serve ordinary Canadians.

People are the most important factor. There are Canadian men and women across this country who have to work with federal Government programs, any programs. We have a policy for farmers, a policy for fishermen, a welfare policy, there are Old Age Security pensions, just about anything, Mr. Speaker. But the main thing is to communicate with Canadians across this country.

It is very important in any reform process that we have input from ordinary people, and from their organizations and associations.


The Acting Speaker (Mr. Paproski):: Statements by Ministers. The Hon. President of the Treasury Board (Mr. de Cotret).


CORRECTIONAL SERVICES
Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, on November 5, 1986, I indicated that, further to the request of my colleague, the Solicitor General of Canada (Mr. Kelleher), I was asking that a review be made of the circumstances which surrounded the award of the Port-Cartier project direction contract to Bechtel Quebec Ltd. The request for such a review followed allegations that the Code of Conflict of Interest may have been breached. This review has been completed. The following facts were brought to my attention.
In July, 1985 Correctional Services appointed Mr. Robert McCulloch, then at the service of Correctional Services, interim project director for the Port-Cartier project. Robert McCulloch was a Bechtel Canada employee, working in the
Statements by Ministers
public service by way of an Interchange Canada agreement. Since this agreement was coming to an end, it was decided to retain the services of Robert McCulloch by contract.
A request was forwarded to Bechtel Canada Limited to prepare a proposal which would be relied upon to draft a project direction contract. Correctional Services attempted to enter into a sole source agreement with Bechtel. This attempt was not accepted, and the Department of Supply and Services required that requests for proposals be sought.

In December 1985, the Minister of Supply and Services invited thirteen companies to submit proposals. Eight, including Bechtel, responded. After an analysis of the proposals, three out of eight were retained for consideration, including Bechtel. The latter company was awarded the contract because its proposal was judged to be the best and least costly. An analysis of the circumstances of the entire process has shown that once the decision was made to go ahead with the construction of a penitentiary institution within a relatively short time frame, the flexibility required to develope a work plan and policies was somewhat reduced.
Mr. McCulloch should not have been appointed as acting director for the project since it was known that he would not be able to perform those duties up to the project's completion.

The analysis further indicates that Robert McCulloch's status, for example, a senior Bechtel employee and Correctional Services officer, placed him in a conflict of interest situation as soon as it was determined that Bechtel was to be requested to prepare a proposal which would lead to a contract. Robert McCulloch should then have been removed from both the project and the contracting process which would lead to a contract with the firm, Bechtel.
Robert McCulloch who, by the term of his Interchange agreement, was subject to the Conflict of Interest Code, and senior Correctional Services employees should have been more concerned about the conflict of interest situation which existed, particularly since in September, 1985, when these events were unfolding, the Prime Minister (Mr. Mulroney) tabled in the House a Conflict of Interest Code, which code was introducing clearer and tougher rules.
I have asked my colleague, the Solicitor General (Mr. Kelleher), to require the Correctional Services Commissioner, Rheal Leblanc, to examine carefully the facts which surround the matter and take such measures as he feels are needed to deal with it.
I have also asked my colleague, the Hon. Minister of Supply and Services (Mrs. Vezina), who has accepted, to terminate the contract between Robert McCulloch, Bechtel, and the Crown in the public interest.

December 15, 1986
Statements by Ministers
The Solicitor General will also be taking the necessary steps to provide for the continuation of project direction through the offices of Correctional Services and Public Works Canada.
The decision to terminate the contract is consistent with the Government's commitment with respect to the Conflict of Interest Code.


Mr. John Nunziata (York South-Weston):: Mr. Speaker, I should first like to indicate that the Official Opposition was only provided with a copy of the Minister's statement literally minutes ago. It would seem to me that there should be some common courtesies in the House. Where statements are to be delivered by Ministers, they should be given to opposition Parties in advance, in order to give opposition Parties an opportunity to assess properly the statements to be made. I hope the Minister will recognize the difficult position in which he puts the Official Opposition in trying to respond to as important a statement as the one made by the Minister. Be that as it may, I will attempt to respond to the statement of the Minister.
It is obvious from what the Minister stated that there has been a conflict of interest, that rules and regulations were not followed in this particular case. We in the Opposition have indicated from the start that an investigation was necessary into the whole question of the prison in the riding of the Prime Minister (Mr. Mulroney).
The Auditor General indicated that $41 million of taxpayers' money was literally frittered away because of the Prime Minister's desire to locate the prison in Manicouagan, his riding. The Prime Minister, through Ministers of the Crown, indicated on a number of occasions that there was a need for a prison in Port-Cartier, notwithstanding the fact that the Auditor General concluded there was no such need for a protective custody prison in Manicouagan. Despite the statements of the Auditor General, the Government continued to insist that in fact there was a need. In effect, the Government, through various Ministers of the Crown, called in question the objectivity and the independence of the Auditor General. It was unprecedented in the history of the Office of the Auditor General for Ministers of the Crown to attack the Auditor General with regard to his objectivity and with regard to his independence.
I see you signalling, Mr. Speaker-


The Acting Speaker (Mr. Paproski):: One minute.


John V. Nunziata: With the leave of the House, I would ask for the opportunity to complete my comments.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: I am allowing the Hon. Member an extra minute to complete his comments.


John V. Nunziata: Perhaps I will have to make comments at another time. However, the bottom line is that there has been a conflict of interest. They are holding Mr. McCulloch
responsible; they are making a scapegoat of him. In fact the Minister should be held responsible and the Minister should resign. If not, the conflict of interest guidelines are a farce.
They are saying that Mr. McCulloch was responsible for putting himself in a conflict of interest situation. I suggest that it is the Prime Minister who put Mr. McCulloch and Bechtel in a conflict of interest situation by insisting a prison go in his riding and by insisting that the contract be completed by September, 1988. It is the Minister's resignation which is needed, not simply the termination of the contract. This leads me to another point-


The Acting Speaker (Mr. Paproski):: I regret to inform the Hon. Member that his time has expired.


Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, it was obviously the Prime Minister (Mr. Mulroney) who gave directions to go full speed ahead with the plan for a penitentiary at Port-Cartier, without regard for the consequences.
The President of the Treasury Board (Mr. de Cotret) has now recognized the existence of a conflict of interest that was pointed out here in the House. However, he has not blamed the Prime Minister, although it was the Prime Minister's insistence on this project-despite the cost and despite the fact that all Government tendering practices would be and were adhered to-that created this situation.

I recall to Hon. Members of the House that the Prime Minister (Mr. Mulroney) decided he wanted to have this prison as a bon-bon to give to the people of Port-Cartier. It is clear that Port-Cartier would prefer to have real development, development which provided a variety of jobs, not just prison guard jobs. However, when it was decided in the first place, he incurred an estimated $41 million in extra costs because of the relocation of the prison from Drummondville. The report of the Auditor General indicated that it would have been $10 million cheaper to have renovated the prison in Laval rather than to move it to Drummondville.
The Government decided to move at full speed and damn the consequences. It is now turning around and making a statement that poor Mr. McCulloch is to blame, that he should have realized there was a conflict of interest and should have kept out of it when he was asked if he would please stay on for a few months at the end of his Interchange Canada contract in order to get the project under way. It seems that the Government should have understood that if it were asking this particular official, who had been in Government for a very short period of time on an Interchange contract, it should have looked at the question of conflict of interest.
To blame the Commissioner of Correctional Services, Mr. Rheal Leblanc, for the fact that the contract was not put forward correctly and that there was a conflict of interest also begs the real question-why was the Government going at such a pace? We know the reason. It was because the Prime



December 15, 1986

Minister wanted to cut the blue ribbon on the project before a possible election in May or June, 1988. That was the reason. It was a politically motivated project. The Government now finds that it has egg on its face. However, I welcome the fact that it has decided to put on the brakes in terms of the particular contract.
I want to tell the people at Bechtel Canada that I regret their having been drawn into this matter for reasons I do not believe were their responsibility at all. I think that a private sector company has been ill served by the Government which put political priorities ahead of doing business in the ordinary way that the Government should, namely, in a way in which the bidding process is fair, above board and gives a fair chance to everybody. If Bechtel's bid was the lowest bid, then in the normal course of events it should have been awarded the contract. The fact that a conflict of interest emerged was not Bechtel's fault, was not Mr. McCulloch's fault, it was the Government's fault because Brian Mulroney wanted that prison in Port Cartier.


The Acting Speaker (Mr. Paproski):: The Hon. Member's time has expired. Presenting reports from Interparliamentary Delegations.


Michael Morris Cassidy: Mr. Speaker, I have a point of order. Because I knew my time was limited in responding to statements I want to say that I express grave concern over the practice of the Government to give statements to Opposition critics-


The Acting Speaker (Mr. Paproski):: Order. Presentation of Reports from Committees.


GOVERNMENT OPERATIONS
Mr. Felix Holtmann (Selkirk-Interlake):: Mr. Speaker, I have the honour to present in both official languages the first report of the Standing Committee on Government Operations.
Pursuant to provisional Standing Order 99(2), your committee requests a Government response to this report. This report addresses a number of concerns relating to the Canada Post Corporation, namely, changes in rural mail delivery; closure of rural post offices; reduction in subsidies for weekly newspapers and changes in the mailing status of religious periodicals; delivery services in new subdivisions; technical deficiencies of supermailboxes and reliability of service. I emphasize that your committee intends to exercise its power under provisional Standing Order 96(2) to review and report to the House from time to time on the progress achieved by Canada Post in implementing its corporate plan.
Petitions
I wish to express, on behalf of the committee, my appreciation for the contribution of many Members of Parliament who attended the meetings although they were not members of the committee.
[Editor's Note: See today's Votes and Proceedings.]


PETITIONS
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, it is my honour and duty to present a petition on behalf of, I think, most of the citizens of the town of Blaine Lake, including a number of very high profile Conservatives. The petition calls upon Parliament not to put through changes to the Patent Act which will increase prices of prescription drugs for Canadians and to allow production of generic drugs and the lower cost of drugs to continue.


Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, I am presenting a petition from residents of my riding in Winnipeg with regard to the patent drug legislation which the Government has before the House. They point out that this legislation will increase the cost of patent drugs to consumers, to people who have to rely on patent drugs on an ongoing basis, that it will increase the cost to taxpayers because of increased costs for provincial drug programs. The petitioners indicate that this legislation is a gift to the multinational drug companies and they call upon Parliament to rescind the legislation.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I have the honour to present several petitions in the name of constituents and residents of this country. Whereas the Government of Canada having imposed a retaliatory tariff on imported books in the English language which has limited the access of Canadian literature and information and: whereas the tariff has had little negative effect on the publishing industry of the United States yet penalizes Canada's consumers, book publishers, booksellers, distributors and Canada's culture and; whereas rising book prices have placed a strain on the book acquisition policies and programs of our nation's public and specialized libraries, the petitioners humbly pray and call upon Parliament to rescind this tariff which threatens irreparable harm to the Canadian book industry and compromises federal policy on cultural industries in respect of free trade negotiations.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I have a number of petitions from the villages of Drake and

December 15, 1986
Introduction of Bills
Dundurn in my riding. The petitioners note that the Government's proposals to change the Patent Act relating to prescription drugs will increase drug prices for Canadian consumers and will severely restrict the ability of average Canadians to buy necessary prescription drugs. They humbly pray and call upon Parliament to reject these proposals which will increase prescription drug prices for Canadians.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I have the privilege to present another petition under Standing Order 106. This petition relates to the attempt of the Government to change the Patent Act. People from Flin Flon, Cross Lake, Grand Rapids, St. Boniface and Thompson indicate in their petition that they believe this will only increase drug prices for Canadian consumers, that it will severely restrict the ability of average Canadians to buy necessary prescription drugs, and that this is only another example of the Canadian Government giving concessions to the United States at the expense of average Canadians in the free trade negotiations. Therefore, the petitioners humbly pray and call upon Parliament to reject these proposals which will increase prescription drug prices for Canadians.



FISHERIES IMPROVEMENT LOANS ACT


Hon. Thomas Siddon (Minister of Fisheries and Oceans) moved: for leave to introduce Bill C-32, an Act to amend the Fisheries Improvement Loans Act.


The Acting Speaker (Mr. Paproski):: Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.

Mr. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I ask that all questions be allowed to stand.


The Acting Speaker (Mr. Paproski):: Is it agreed?


Some Hon. Members:: Agreed.

I wish to inform the House that because of the ministerial statements Government Orders will be extended today by 25 minutes beginning at 1 o'clock p.m.
M0)



GOVERNMENT ORDERS


Hon. John Wise (Minister of Agriculture) moved: that Bill C-31, an Act to amend the Farm Improvement Loans Act, be read the second time and referred to a legislative committee.


Philip Derek Lewis: Mr. Speaker, there have been discussions among the parties and I believe you will find there is unanimous consent to handle all stages of this Bill, including reference to Committee of the Whole, in this sitting.


Mr. Maurice Foster (Algoma):: Mr. Speaker, we have agreed to this even though introduction of the Bill has been delayed for months. We would like to have the Bill go to committee where we would have the time to deal with it, but in view of the necessity to have it passed before the end of the year we have agreed to deal with it in Committee of the Whole.


Victor Fredrich (Vic) Althouse: Mr. Speaker, this is a brief extension of a law which has been in effect since 1945 and we will accept it continuing for another six months.


The Acting Speaker (Mr. Paproski):: Is there unanimous consent?


Some Hon. Members:: Agreed.


John Wise: Mr. Speaker, as was indicated, the purpose of Bill C-31 is to extend for six months the Farm Improvement Loans Act. The Act has always contained a sunset clause. The initial period of the Act was three years, and it has been extended since then, from time, to time usually for three-year intervals. This has provided an opportunity to reconsider the provisions of the Act and amend it as necessary to ensure that it continues to meet the needs of Canadian farmers.
The last extension of this Act involved the period of 18 months from July 1, 1985 to December 31, 1986. It was our intention to carry out a full review of the program during that 18-month period so that we would be in a position to propose needed amendments to make it more useful and then extend it for a longer period of time.
Substantial work has been done on this review. However, the need to deal with some very serious financial problems facing farmers has made it impossible to complete the review and the necessary consultations with farm organizations and lenders across the country. It is because of the need to provide additional time to complete the review and the necessary consultations that I seek an amendment to the Act which will

December 15, 1986

extend my authority to guarantee new loans for an additional six months.
Over the course of the review it has become apparent that in some ways the Act has indeed achieved many of its original objectives. When the program was first introduced some 41 years ago, in 1945, there was little mid-term credit available to farmers from commercial lenders. Between 1945 and the middle-1960s a very substantial part of the credit provided to farmers was guaranteed under this Act. In the late 1960s and through the 1970s the use of the program declined as commercial lenders introduced their own loan programs for farmers. The decline in the number and dollar amounts of loans extended under the Act continued into the 1980s as the serious financial difficulties facing agriculture caused farmers to cut back on their investment in farm machinery, equipment and buildings. Despite that decline, the program continues to occupy a small but very significant place in the field of agricultural credit. In 1985, the last year for which figures are available, there were just under 12,000 loans extended for a total amount of SI65 million.
While this program occupies only a relatively small part of the over-all agricultural credit field, it is important to remember that it is only one part of the over-all contribution of the federal Government to the credit needs of Canadian farmers. The Farm Credit Corporation has long played a major role in long-term agricultural credit. With the serious financial difficulties facing farmers we have strengthened that role by taking such special measures as reducing the rate of interest paid by farmers locked into high interest rate loans and by introducing new financial instruments such as a shared risk mortgage and Commodity-based Loan Program. We have also strengthened and extended existing agricultural credit programs such as the small business bond, the Prairie Grain Advance Payments Act and the Advance Payments for Crops Act. We also introduced a system of Farm Debt Review Boards to help farmers in financial difficulty reach settlements with their creditors. All of these initiatives have helped farmers obtain the credit they need in a period of serious financial distress.
At the same time, the initiatives taken in agricultural credit are but a small part of the total assistance we have provided to farmers in a period when external forces have created very serious difficulties for many farmers in this country. These initiatives have ranged from steps taken to effectively offset all federal sales and excise taxes on farm fuels to the $1 billion special Canada grains program that the Prime Minister (Mr. Mulroney) announced December 9.
When the review of this Act was carried out, suggestions were made that a radical restructuring is not really needed. However, additional work and consultation is necessary to verify this view and identify the adjustment and changes which need to be made if the Act is to continue to fulfil its role in the agricultural credit field. Again, the review is not yet complete but the consultations we have had with farm groups suggest there is basic support for the program and a recognition that
Farm Improvement Loans Act
some adjustment may be necessary to ensure its continued contribution to Canadian agriculture. Indeed, the Canadian Federation of Agriculture indicated its support for the program and recommended there be a short extension to permit additional time for the review and consultation to be completed.
With the passage of this Act it is my intention to complete the review as quickly as possible and introduce substantive amendments early in the new year. That will ensure ample time for deliberations on the amendments by Parliament before the six-month extension period expires. Therefore I urge my colleagues, indeed all Hon. Members of this House, to support the Bill so that we can meet the needs of Canadian farmers during that interval.


Maurice Brydon Foster: Mr. Speaker, I am pleased to have an opportunity to speak on Bill C-31. While the Minister has yet to get his act together concerning exactly how he is going to amend the Bill, at least the uncertainty which has reigned supreme in this country since September 26, when a press report indicated the Government might be cancelling the program, has ended. We learned last Thursday or Friday that the Government was going to extend the program for another six months at least. I take it from the Minister's comments this morning that he may actually continue the program in the future and improve it. That is encouraging since the farm debt crisis facing Canadian agricultural since the fall of 1984 is one area where the Government has failed to take any very effective action.


John Wise: Just about $3 billion, that is all.


Maurice Brydon Foster: We have seen a lot of hype about what the Government is going to do but we have not seen very much action. That is of great concern because during the 1984 election campaign the Government committed itself to allocating the necessary funds to assist producers in refinancing their loans at prevailing rates of interest. The amended Farm Improvement Loans Act might be useful in that regard because the rate of interest is 1 per cent above prime.
[DOT] (USO)
In 1979, 25,309 loans were granted under this program for total financial assistance of $265 million. In 1984 only half as many loans, 12,000 were granted for total financial assistance of $159 million. We on this side of the House wonder why so little is being made available to farmers. Perhaps the Minister will explain in Committee of the Whole why the Government is leaving us uncertain as to whether or not it is phasing the program out and why the funds seem to be unavailable.
The FCC is the important funding agency of the federal Government. Thirty-two per cent of its inventory of loans is outstanding at interest rates of between 12.75 per cent and
16.75	per cent. That seems to fly in the face of the Government's campaign commitment that it would reschedule loans to current interest rates. The Government found funding in the FCC in 1984 which allowed it to reschedule some loans to

December 15, 1986
Farm Improvement Loans Act
12.75	per cent. Farmers who would swear that they were going broke had their loans rescheduled from 14 per cent and up to
12.75 per cent. It is hard to say what would have happened had there not been $575 million left in the FCC funding account in the fall of 1984.
There has been great uncertainty as to whether the Government was going to renew this program. A report in The Globe and Mail of September 26 said that there was millions at stake for cash-starved farmers and that the axe may fall on farm and fishing loan schemes. At that time the Minister obviously did not have a commitment from the Government to continue this program. He issued a press release on October 6 in which he said that he considered it a priority for Canadian farmers to have access to adequate credit. However, he did not really clarify until last Friday whether the axe would fall on this legislation.
That type of uncertainty is exactly what our agricultural community does not want. We did not know for certain until a week ago whether the Government was going to proceed with its special grain program for western Canada. The Opposition, the prairie pools and other groups have been calling upon the Government to provide assistance of between $2 billion and $4 billion a year. Finally last Tuesday the Minister and the Prime Minister (Mr. Mulroney) announced that they were going to make the payment. However, they are going to spread it out over such a period of time that many farmers who are facing financial crises right now will not receive assistance until next April or May. In fact, farmers on average will receive only $1,500 in January or February. The $3,500 balance of assistance under that program will not be received until next April or May. For the 39,000 farmers in serious financial difficulty that assistance will come so late that it will be questionable how much help it will be.
This assistance, however, is more real than the announcement made by the Prime Minister last April 30 of $300 million or $400 million of so-called assistance, which resulted in no assistance at all because most farmers received very little from it. That program was supposed to freeze freight rates. However, it turned out that it was only a recalculation of the volume of freight rates. There was no real saving of $42 million. It was only a smoke and mirrors operation.
The Minister also implied that the Government was going to increase the domestic price of wheat from $7 to $11. In fact, it was only increasing the range. Farmers had expected a $200 million to $300 million benefit from that. He announced with great flourish that on May 1 he would remove the 2-cent a litre excise tax which he had imposed in September of 1985. He expected everyone to cheer. They did not cheer. In fact, most farmers wanted to know why the Government had imposed this 2-cent a litre tax which cost farmers $60 million or $70 million when farmers were already in serious financial difficulty. Why would any Government which was serious about helping farmers do that in the first place?
In addition, there has been tremendous uncertainty about the free trade negotiations. We wonder what kind of deal
Simon Reisman will make in the dark of the night. We wonder whether he will trade away our marketing and stabilization programs. This week 50 or 60 farmers are coming to Ottawa to find out whether the Government will make the final payment on No. 1 and No. 2 wheat. There is a precedent for the Government making that final payment as it did for durum wheat in 1969-70. Farmers want to know why that $190 or $200 million payment will not be made directly to them. I am sure the Minister will change his mind and make that final payment which will be so beneficial to farmers, especially in view of the fact that he has delayed it for many months.
We are also interested in knowing why the Government is not extending the moratorium on FCC loans for the same time that it is procrastinating in making the final payment on the special grains program. I can hear the Minister saying that he has not lifted the moratorium; perhaps in Committee of the Whole he will be able to announce that he will extend the moratorium on FCC foreclosures for another few months.
Let us consider the Government's financial assistance to farmers. During this Fiscal year it is providing some $65 million for the farm debt crisis, the largest proportion of which is for the Canadian Rural Transition Program which is designed to take farmers off the farm. Some $20 million is going to that program, some $10 million for the Farm Debt Review Board and the actual financial assistance for the FCC to write down loans is only $10 million. The Provinces of Ontario, Saskatchewan and Alberta are providing a great deal more proportionately.
There is some $20 million allocated to the commodity-based mortgage for the reduction of interest rates, but when we read the fine print we see that over the ten-year life of those mortgages most farmers will in fact not only pay back all of that $20 million of interest that has been allocated, they will end up paying some 12.75 per cent interest on that program. The Government itself makes it clear in its advertisements that this is not a subsidy program and there is no assistance really available unless the value of the commodity stays extremely low.
In spite of all our misgivings about the Government's plans and the uncertainty about whether the Government will renew or hopefully improve the program for farmers who make use of it, we believe that the Bill should be passed and the life of the program extended. When we get to Committee of the Whole I will want to know why this program is not used in many parts of the country, such as in Ontario where a very small percentage of these loans are approved. Farmers are often paying from 12 per cent to 15 per cent interest, when a program such as this is available. I hope the Minister is prepared to make a commitment to ensure that the chartered banks make adequate funds available, as was promised in the 1984 general election.
December 15, 1986

In conclusion, we are prepared to pass the Bill today and see the life of the Farm Improvement Loans Act extended for another six months.
Mir. Vic Althouse (Humboldt-Lake Centre): Mr. Speaker, the Bill we are debating today is an interim measure by which the Minister can extend the life of the Farm Improvement Loans Act for another six months. The Minister has been facing a dilemma regarding the Farm Improvement Loans Act and, like all dilemmas, it has two horns. First, shortly after the Minister of Agriculture (Mr. Wise) took office he had consultations with his various provincial counterparts and their Deputy Ministers. He was told in 1984 that the Farm Improvement Loans Act should be continued, but with some changes. Among those changes that were proposed was that the rate of interest be fixed as it was when the Act was originally introduced. Furthermore, these fixed rates should continue from one to five years and the Government's guarantees for the loans and the other aspects of the program should continue.
Faced with that proposal, which I support, he has also been faced with the proposal by the Nielsen Task Force which looked at the Farm Improvement Loans Act and said: "The study team recommends to the task force that the Government consider allowing the program to expire and transfer the administration of the claims payment to the Farm Credit Corporation". The Minister has had to deal with this conflicting advice and I believe we should examine those choices in this debate.
Since 1945 farmers have used the Farm Improvement Loans Act which has extended loans of various amounts. The program had been renewed every three years until it expired on June 30, 1985, when the Minister decided to extend it until the end of 1986. If we did not pass this Bill to extend the Farm Improvement Loans Act for another six months, it would cease at the end of this month. It is unclear what would happen with the guarantees from the federal Government on a number of loans, some of which could extend for as long as 15 years, in the event that those loans were not paid.
We are proposing to support the Minister's proposal of a six-month extension today in the hope and understanding that he will be able to convince his Cabinet colleagues that the only choice for the Farm Improvement Loans Act is that offered by the provincial Ministers of Agriculture and their Deputy Ministers, to strengthen the Farm Improvement Loans Act so that it can once again offer loans to farmers at fixed interest rates and for a term running from one to five years.
Let me explain the actual purpose of the Farm Improvement Loans Act. I have already indicated that it was established in 1945 to make it possible for farmers to obtain loans from banks for a medium term of one to five years. Later, it was expanded to permit loans for buildings and other assets which have a longer life so that a loan could run for as long as ten years. The possibility of buying land under the Farm Improvement Loans Act with loans running for as long as 15 years was
Farm Improvement Loans Act
included in the last two or three renewals of the legislation. The maximum loan currently offered is up to $100,000 with the interest rate set at the banks' prime rate plus 1 per cent. I think this is one of the things about which provincial Ministers and their deputies were concerned.
As you know, Mr. Speaker, under the last change to the Bank Act the kinds of loans which have become prevalent under Section 176 of the Bank Act are those where interest rates vary on a weekly basis and the borrower pays 1 per cent, 2 per cent or 3 per cent over that prime rate. The farmer does not really know what interest rate he will be paying six months from now or, indeed, even next week, because it changes.
Therefore, the provincial Ministers of Agriculture and their deputies suggested it was time to go back to a fixed rate for these kinds of loans in particular because farmers were being asked to pay rates considerably higher than inflation and considerably more than what agriculture could generate in terms of ability to repay. Since these loans are generally taken out by beginning farmers or those who are adding to their machinery and buildings, it is important the rate not be set too much higher than their ability to repay.
The terms of the loans are not unreasonable. They are very little different than what some of the banks will offer outside of the Farm Improvement Loans Act. A farmer must put up 25 per cent collateral on most loans with the loan amounting to up to 75 per cent of the value of the machinery, buildings or livestock. There has been one change with respect to the amount of assets the farmer or borrower must put up and that is when the purchaser wants to purchase real estate. In that case the loan can be for as much as 90 per cent of the value of the real estate.
The program has been designed to protect the lender-the banks, in most cases, although credit unions can also make loans under the Farm Improvement Loans Act-against losses. The federal Government provides some funding in the event there are losses. However, the losses have not been great under this program. Since 1945 the average losses claimed under this program have resulted in a cost to the federal Government under this Act in the amount of .2 per cent of 1 per cent, so we are talking about very small losses. In other words, farmers have been very good risks under this program and have used it very carefully.
Losses, however, have increased since the farm debt crisis which was triggered in 1981 by high interest rates. Losses in 1985 were expected to reach a high of about $5 million which, considering the total amount loaned and paid back, is still much less than 1 per cent of the total amount provided. Even at the increased rate of loss over the last few years, it is still far less than 1 per cent. It is not something about which the Nielsen task force had to worry. It is not a cost unduly high for the Government of Canada to carry. It costs something less than $5 million to keep the lending portfolios of the banks

December 15, 1986
Farm Improvement Loans Act
current as they effect loans under the Farm Improvement Loans Act.
I think it is important, if there is going to be a choice, and I want to reiterate this to the House, that the loans act continue in place, but not just for six months. We should go back to the three-year program which had been in place since 1945 and back to the fixed rate operation which made the program useful and usable up until recent times. Perhaps the House does not realize, but interest is becoming a very big part of farm costs. I would like to cite some figures and I know these are the kinds of things which put everyone to sleep. However, I think most everyone is asleep anyway, so what can I lose?


Mr. Turner (Ottawa-Carleton):: Pardon?


Victor Fredrich (Vic) Althouse: Between 1973 and 1975, as an example, farmers had $8.81 to $7.94 of net income for every dollar of interest they had to pay. Back in those days they had a fairly large amount of net income with which to make interest payments. Those were sort of the glory years for agriculture in terms of the farmers' ability to pay interest. Between 1979 and 1984 we went down hill badly. We went from $8.81 back in 1973 to $2.81 in 1984 of net income for every dollar of interest we had to pay, according to the latest figures. Within a decade we are left with a great deal of our net income going to the payment of interest rates.
It was a Liberal Government up to 1984, and then I believe it was a Conservative Government. I do not know what conclusion we should come to from that. On the surface one would have to say that with a Liberal Government in 1973 and the Conservative Government in 1984, things had gone down hill badly, but I think there was more to it than that.
I believe there is still a very great need for this kind of program. We have seen studies recently which show the need has become so great it has been recognized by the provinces who have been picking up on the fact that the Farm Improvement Loans program is not all it should be. Therefore, we have seen over past years a number of provincial programs which attempt to fill the need from which the federal Government appears to be backing away. Instead of the prime plus one kind of lending, we see provinces introducing programs which attempt to provide better, more stable financing for farmers, such as the Quebec Farm Improvement Loans Act which provides interest rates at prime plus one half of 1 per cent. That is only slightly better than the federal program, but it subsidizes the first 3 per cent of interest up to the first $15,000.
The program in British Columbia provides up to a maximum of $300,000. It is available to those people who are not eligible for credit under normal financing. The Province of Alberta has a similar kind of program but it has no maximum loan which can be made, therefore farmers can go over the $300,000 maximum which is available in British Columbia. The rest of the Alberta program is similar to the Farm Improvement Loans program.
The Province of Saskatchewan does not have a particular loan program except for some livestock operations. Its particular program provides interest rates at prime plus 2 per cent. It is aimed at those farmers who are having great difficulty in getting credit to expand their operations. Manitoba has a program which is limited to $60,000. That program is aimed at operating credit, as well as for some livestock and machinery. Ontario has an operating loan guarantee, but no intermediate loan guarantee, similar to the Farm Improvement Loans program, and the Atlantic region has no program at all.
I think it is useful to point out at this point in time that one of the reasons the Nielsen task force gave for getting rid of the farm improvement loans program was that most of the advantage ended up going to the cropping areas of the country, and in particular to Saskatchewan. The report was worded in such a way that it almost sounded as if it was the kind of program that could be very easily dropped since most of the advantage seemed to go to Saskatchewan. I do not know if the task force felt that Saskatchewan was not very important or if it simply felt that there was not very much political clout likely to come out of Saskatchewan which only has 14 Members of Parliament out of 282. At any rate, that assessment stands and the task force continues to stand by its proposal to do away with the program.
I think we should note just in passing that the Nielsen task force report said that its study team on business subsidies and services proposed the continuation with user-fees and reduced guarantees for the business improvement loans under the Small Businesses Loans Act. That loan activity is about three to four times the level of the Farm Improvement Loans Act and has 10 times the losses. The Nielsen task force thought that this program for small businesses should continue even though its loss ratio was much higher and it seems to be less effective than the Farm Improvement Loans Act. This discrepancy in the Nielsen task force was picked up on in part by the Ontario Institute of Agrologists which just completed a study that is in the hands of many Members of the House.
The Institute points out that in its opinion, the Nielsen task force has overrated some other aspects of the economy and underrated the importance of agriculture. It also points out that in one of his assessments of the Nielsen task force, Dean Freeman McEwen of the Ontario Agricultural College at Guelph was quoted in the press of October 27 of this year as saying:
He noted a task force led by former Deputy Prime Minister Erik Nielsen put farm subsidies and tax expenditures at $4.1 billion last year. He said small businesses received $16.4 billion in federal subsidies and services in 1985.
"I would be prepared to lay on the table side by side the contribution of agriculture to Canada and the contribution of small business to Canada," McEwen told a news conference in Aberfoyle near Guelph. "Small business is just getting a whale of a good deal."
Hon. Members who are generally aware of the importance of small business in the growth of Canada should also be aware that in the opinion of many experts who understand
December 15, 1986

agriculture better than those Hon. Members of Parliament, the contribution and potential contribution of agriculture to Canada far outweighs that of small business and that agicul-ture is not getting its fair share of assistance from this Government, nor did it get its fair share from previous Governments.
In closing, I would like to remind the House that using the floating rate loans which have been used for the last five or six years under the Farm Improvement Loans Act is in effect asking farmers to pay rates higher than the rate of inflation and much higher than the ability of farms to generate money to repay those loans. We are now asking farmers to pay in the neighbourhood of 11 per cent and 12 per cent for loans to add to the equipment, livestock and buildings on the farms and to add to their ability to produce. We are asking this at a time when inflation is somewhere between 4 per cent and 5 per cent. People who are lending money are therefore taking 6 per cent to 7 per cent of real interest.
When the Farm Improvement Loans Act program was begun the fixed rate was 5 per cent and inflation was between 2 and 3 per cent. Real interests was 2 per cent to 3 per cent at most. For the last nearly 10 years, we have been asked to carry high real interest rates when agriculture as an entity across Canada has only rarely been able to generate profits in excess of 2 per cent or 3 per cent. The ability to repay stands at 2 per cent or 3 per cent, but the cost agriculture is being asked to bear stands at 6 per cent or 7 per cent in real interest rates terms. This makes it virtually impossible for young, albeit, efficient farmers to carry these rates.
In the last few seconds that I shall speak on this issue today I would like to make a renewed call to all government Members. I realize the Minister has probably had this matter before Cabinet for some time. I would hope that when Cabinet must make a final decision on supporting the Farm Improvement Loans Act at fixed rates as Agriculture Ministers across Canada have proposed, the Government will listen to those Agriculture Ministers and will ignore the inappropriate and inopportune recommendation of the Nielsen task force so that we may continue to make this program available to farmers in the future.


The Acting Speaker (Mr. Paproski):: Is the House ready for the question?


Some Hon. Members:: Question.


The Acting Speaker (Mr. Paproski):: Mr. Wise, seconded by Mr. Hees, moves that Bill C-31, an Act to amend the Farm Improvement Loans Act, be now read a second time and, by unanimous consent, referred to the Committee of the Whole.
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and the House went into committee thereon, Mr. Paproski in the chair.
Farm Improvement Loans Act
Steve Eugene Paproski: Order. House in Committee of the Whole on Bill C-31, an Act to amend the Farm Improvement Loans Act.
Shall Clause 1 carry?
On Clause 1-


Maurice Brydon Foster: Mr. Chairman, I have a few questions for the Minister on the Farm Improvement Loans Act. Has the program been subscribed to the maximum level of the funds that are available? Why have a program like this which is so sparsely utilized in provinces like Ontario, for instance? The program seems to be well used in Saskatchewan and the other prairie provinces, but it is not utilized to any great extent in Ontario. Is it simply the case that all the available loan guarantees are totally used up, or is it the case of the banks simply refusing to issue loans under this program because they can make more money issuing loans under some other program? Would the Government be willing to require that a certain level of its funding be made available under this program?
Even today many farmers are stuck with borrowing funds at 12 and 15 per cent. Obviously, the industry cannot afford this. For instance, only 9.5 per cent of the funds are used in Ontario, which is the second largest agricultural producing province, and it may have as large a capacity as Saskatchewan. Why is this program gradually running down? In 1979 there were 25,000 loans made available. In 1984 there were only 12,000 loans made available, even though the interest rate advantage is desperately needed today, perhaps even more so than in 1979. Could the Minister inform the House about those matters?


John Wise: Saskatchwan has the greatest participation rate with 38 per cent utilization. The second province is Alberta with 29.3 per cent. The third is Manitoba with 12.8 per cent. The fourth is Ontario with 9.5 per cent. The fifth is British Columbia with 4.1 per cent.
The Hon. Member's question is interesting and one to which we have been attempting to seek the answer. The provincial industry rate subsidy programs are not as enticing and beneficial as, for example, those of the provinces of Quebec or Nova Scotia. I stand to be corrected, but I believe that the Province of Prince Edward Island also has a fairly good provincial program and interest rate reduction, and perhaps there might be some other programs. First, I am tempted to believe that it is the nature of farmers because the program is a national program; second, the banks carry out the same program and apply the same policy across the country. We have been asking staff people who have been associated with this program for longer than you and I, Mr. Chairman, and that is also the question that we are putting to farm organizations. There does not seem to be a legitimate reason for it.
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December 15, 1986
Farm Improvement Loans Act
With respect to the other question that the Hon. Member raises, it sounds to me as if he has been reading some of my old speeches when I was in Opposition. I can recall that during those days the bankers used to have three stock answers: One, they had never heard of the program before; it was not their policy to lend under the Farm Improvement Loans Act; that their allotment or quota was totally used up. Of course, we know it is nonsense, all three observations.
There has been some discussion that perhaps to provide a greater incentive for the banks to participate to a greater extent we may have to consider a slight increase over prime plus one, that is, if we wish greater participation in the program. That does not interest me very much, and I am sure it does not interest the farm community or the farm leadership.
These are some of the hard questions in respect of which we need time to sit down with more farm organizations, to determine exactly in which direction they would prefer us to go.


Steve Eugene Paproski: On a supplementary question, the Hon. Member for Algoma (Mr. Foster).


Maurice Brydon Foster: I am interested in knowing whether the Minister is personally committed to the idea of requiring that a certain percentage of the loans made to farmers by the chartered banks, whether they would have to be made available under the Farm Improvement Loans Act when the Government is reviewing it during the next six months. Is the Government giving consideration to extending this to cover working capital as well as capital items such as machinery, land, and improvements? Is the Government prepared to consider that in its plan?
I ask these things, Mr. Chairman, because the current rate of interest, the real interest that many farmers are paying, is almost as high today as it was in 1981 or 1982 during the high rates of interest. The inflation rate back in those days was 10 or 11 per cent. If interest rates were 17 or 18 per cent in those days, and today they are 10 or 12 per cent with inflation rates that are only 3 or 4 per cent, the interest rate is still high. That is why there has been the tremendous downturn in farm asset value. For instance, the Farm Credit Corporation told the Standing Committee on Agriculture last week that farm asset values had dropped by almost 7 per cent in the last 12 months. That means that if the farm asset values were $100 billion in the summer or fall of 1985, they were some $7 billion less, or almost double the net farm income. With this tremendous drop in farm asset values, it is little wonder that so many farmers who are heavily leveraged are losing their equity and facing the loss of their land because their equity is going down. Any move toward giving lower interest rates will benefit that situation. Certainly, many farmers complain about paying 12, 13, or 14 per cent even though theoretically there is money available under this program at 1 per cent above prime. Could the Minister give us some indication on this points?


John Wise: I have listened to the Hon. Member's speech and had some difficulty following the logic of it. His first question seemed to be quite sensible and reasonable, but I had the feeling that he is slipping back into that questionable logic that he expressed in his speech.
One of the major contributing factors and why we are dealing with a very serious financial difficulty in agriculture today is a direct result of the lack of programs, action, commitment, and financial support provided to the farm community over that period of time when the Hon. Member was a government Member. What were some of the messages flowing out of that Government that he was a member of? Well, they indicated that the inflation rate would remain constant throughout this period of time that we are presently going through. Of course, that turned out to be dead wrong.
The second observation was that the commodity prices would be at an all time high. Of course, we see them at an all time low for the last 50-year period. The Hon. Member's Government indicated that energy costs would remain constant throughout this period of time. It did not foresee what would happen to energy costs. It indicated that we would be going through a period of time when we would experience a shortage of commodities. All major food producing countries in the world are going through a period of surplus in supply, so they were dead wrong. They also indicated that interest rates would remain stable throughout the latter part of the 1970s and throughout the 1980s. However, what happened to interest rates? They went from 9 per cent to 24 per cent.
We have talked with young farmers across the country, day in and day out, seven days a week. We asked them what was a major contributing factor to the financial difficulties they were experiencing. They say that it was interest rates. They planned their operations on 9 per cent and 10 per cent interest rates, but interest rates increased from 9 per cent to 24 per cent. That is what killed them; that is what crippled them.
Every 1 per cent of interest rate is a cost to Canadian farmers of about $140 million. Interest rates increased from 9 per cent to 24 per cent or some 15 points. All one has to do is a mathematical calculation to arrive at the result to the farm community.
When the Liberal Government was in office it transferred an added input cost to Canadian farmers of about $2 billion. What did they do about it? We cannot say they did nothing, because they had a little program called the Special Farm Assistance Program. It was selective, and it helped about 1,900 farmers. However, who paid for it? It was not the Consolidated Revenue Fund. It was fellow borrowers, fellow clients of the Farm Credit Corporation, who paid. We changed that. We took that extra burden off the shoulders of FCC clients and we picked it up, thanks to the support of my colleagues and the Minister of Finance. We are picking up the extra $80 million, affecting some 5,600 clients.
December 15, 1986

I understand the frustration of the Hon. Member who was a government Member for a long time. He campaigned and provided election commitments to farmers. He came back here and sat in the Liberal Government benches, and that Government did not fulfil any of the campaign commitments. I understand his frustration. When he compares the record of his Government to the record of this Government, I understand his frustration.


Victor Fredrich (Vic) Althouse: Mr. Chairman, the only clause with which we are dealing today provides that during the period from July 1, 1980 through to June 30, 1987, $1,550 million will be made available to the banks for guarantees on loans during that period of time. Could the Minister update us on how much of that allocation has already been used? Is the extension over the seven years an increase, a decrease, or a continuation of the same level of loan guarantees to banking institutions?


John Wise: Mr. Chairman, I have checked with my officials and they indicate that we have at least a half billion dollars to be utilized. If the past is any indication of what future requirements might be, and no doubt it will be, there would be an adequate amount of money left to deal with the demand on the Farm Improvement Loans Act.


Victor Fredrich (Vic) Althouse: Mr. Chairman, in the report of the Nielsen task force, the subcommittee looking at farm credit and the Farm Improvement Loans Act, it was indicated that losses were still less than 1 per cent. In other words, the guarantees the Government was required to make to the end of 1984 were still below 1 per cent. Could we have an update on what percentage of losses we are facing in more recent times?


John Wise: Mr. Chairman, we would have in the portfolio about $5 billion. Our losses would be $4.8 million. I gather that would be less than 1 per cent.


Victor Fredrich (Vic) Althouse: Mr. Chairman, I will make a slight change in direction. In one of the Minister's responses to the Hon. Member for Algoma he speculated that perhaps it might be necessary to extend the interest rate from 1 per cent to 1.5 per cent or 2 per cent of prime. I want to raise that issue with him because it seemed to be somewhat of a psychological slip.
I understood that we would try to go to a fixed rate rather than to an increase in the floating rate. Is it an indication that the Minister is beginning to waver and listen to some of his cabinet colleagues? Will we be looking at a fixed rate? At what range of interest is he looking for the fixed rate? Will it be just a few percentage points over the real interest rate or the rate of inflation?


John Wise: No, Mr. Chairman. I want to make very clear that it was not a slip of the tongue or anything of that nature. It was a frank observation of one of the options we might consider. There is no way in legislation to force the banks to participate to any extent or to increase their participation to a greater extent under the program. It would be nothing short of wishful thinking.
Farm Improvement Loans Act
If it is the conclusion of farm leaders that they want greater participation in the loan program, and obviously that would be one way in which we could successfully encourage the banks to participate to a greater extent. I think it is just a reality. We may have to consider it as one of the options.
I indicated that it was not good news to me-and I am sure it would not be good news to Canadian farmers-because farmers would like to see greater participation at the existing prime plus one or perhaps prime plus a half like they have in Quebec. I do not know, but we will have to look at it. I made that observation deliberately.
I listened to the Hon. Member's speech when he talked about a 41 year history. I do not know what period of time it was; I have not had a chance to check it. However, he indicated that there were fixed rates over that period. It is an option which we will have to consider. I think it would be an option which farmers perhaps would support. No doubt they would be prepared to pay a bit of a premium for that stability in the program.
Farm leaders have suggested other options. One was that perhaps we could raise the $100,000 limit. Maybe we should consider other criteria to be eligible. At the moment quotas and things of that nature are not eligible under the Farm Improvement Loans Act. I do not know what we would do on that one. It would depend upon the position taken by farm leaders. I see the Hon. Member smiling. He knows the problem there as well as I do.
Also, an individual can have one, two, three, four, or more farm improvement loans. Perhaps for administrative purposes it would be possible for him to put them all under one loan. There are a number of things at which we could look, but certainly fixed interest would be helpful.


Stanley J. Hovdebo: Mr. Chairman, in one of my other lives I am a member of the Standing Committee on Public Accounts. Every time we ask Government Members and Deputy Ministers why they have done certain things they tell us that this is part of the restraint emanating from the Nielsen task force or the task force which attempted to review it. Many of us got the impression that the task force report was put on the shelf and ignored. Obviously it was put on the shelf as far as Parliament was concerned, but not as far as the departments are concerned.
Because of the different approach that the Nielsen task force took on this legislation, can the Minister assure us-I am pleased to hear the Minister talking about certain changes that might be plausible-that one of those changes is not a recommendation of the Nielsen task force which was to eliminate this Act and program entirely six months down the road? I know the Minister has been talking around this suggestion quite a bit this morning. I still want that assurance that we are not talking about a six months extension and then the elimination of the program.

December 15, 1986
Farm Improvement Loans Act


John Wise: Mr. Chairman, the Hon. Member poses two questions. He talks about restraint. This is Government restraint and it has to be by necessity. To continue to spend money like our predecessors we would be taking $3 out of every $4 of taxpayers' money simply to carry the interest on the debt. We would not have any money for small business people, for farmers, for grains and oil seeds people, and who knows who else would fall in line. If the Hon. Member examines the record, restraint on behalf of our Government has not reached Canadian farmers.
If we compare our contribution to our predecessors, we are up $2.7 billion this year, not counting the latest billion. Since we have assumed office, our Government has taken 350 initiatives delivering $5.7 billion directly into the pockets of Canadian farmers. Again, that does not include the latest billion which would bring the total to $6.7 billion. Because of the importance of agriculture domestically and internationally, and because of the priority the Government places on agriculture-yes, Canadian farmers are going through difficult times, the most difficult in 50 years-we are responding to those difficulties to the maximum of our financial capabilities.
Hon. Members always seem to misunderstand the Nielsen task force. Maybe they do so for their own purposes from time to time. I suggest that perhaps it might be, but we must remember that the Nielsen task force expressed options and recommendations. These options and recommendations are not Government policy. I repeat and I am sure I will have to say it again, they are not Government policy. If we had followed the recommendation in the Nielsen task force we would not have delivered to the dairy farmers the long term dairy policy of $1.5 billion; we would not have doubled the advance payments crop legislation, and I do not think that we would have extended this Act. I do not know which preceded which, the last extension or the tabling of the Nielsen task force. The only appropriate message that I can send to the Hon. Member, which should give him some comfort, is that if it were Government policy to let the program expire, then we would not be here today asking for a six month extension. We are asking for a little more time to consult with the farm leaders. We could have acted unilaterally. We could have been back here with a three year extension right now. That is not what we prefer to do. We want to take the necessary time to carry out consultations with the farm community to ensure greater utilization of this Act.


Stanley J. Hovdebo: I would point out just as a comment, Mr. Chairman, that there are a number of recommendations about agriculture in the Nielsen task force that have been put into effect, restraints are taking place and there are increases in charges in a number of areas and so on. The suggestion that agriculture is outside of the task force report and that other areas are not using the recommendations does not follow through.
I find that loans in another program, made under the farm and small business bond program, a program which was extended for two years, are not necessarily being renewed by
banks. Are we to have the same kind of thing happening in this program as in that, where, as we move down the road, the relationship between the bank and the farmer will still push the farmer out because the bank is not necessarily renewing these loans when they come due?


John Wise: Mr. Chairman, I do not have before me the latest information on the participation of the small business bond, but I will be happy to inquire and supply the information to the Hon. Member. I have not encountered that at all.
The biggest difficulty in the program, and it is widely known, is that as far we are concerned the banks are not participating to as great an extent as I believe they can. We should, however, recognize some of the banks that do participate. The Canadian Imperial Bank of Commerce has participated to the extent of 45 per cent. The second bank is the Toronto-Dominion Bank with participation at 19.6 per cent, then the Bank of Nova Scotia at 15.8 per cent, the Bank of Montreal at 8.7 per cent and the Royal Bank is 8.3 per cent. I do not see any reason that other banks could not participate to the same rate and extent as the Canadian Imperial Bank of Commerce at 45 per cent. I am dealing with percentages here, Mr. Chairman, and one would have to look at the actual amount of dollars, I suppose.


Maurice Brydon Foster: Mr. Chairman, I think the Minister in his last statement has outlined the problem exactly. Surely in Committee of the Whole with the Minister and his officials here we should be able to get answers. Why are chartered banks not making more funds available under the program? Is the Government willing to put pressure on them to provide more money? We know that the commodity-based loan, which is the principal instrument the Government has available to assist farmers facing bankruptcy or foreclosure, will cost most borrowers 12.75 per cent by the time they make the final payment. If we are going to have some lower cost money available to farmers, the regular chartered banks should provide funds to farmers facing financial difficulty under this program. Perhaps after Question Period the Minister could respond in some detail as to what the Government is prepared to do to provide a greater amount of money under this Act. It is not just a matter of renewing the Act until the end of June. We have to make sure the chartered banks make the funds available to farmers.


Steve Eugene Paproski: Before I recognize the Minister I would like to advise the Hon. Member that we are carrying on until 1.25 so there will be ample opportunity for the Minister to answer the question.


John Wise: Mr. Chairman, I would ask the Hon. Member to go back and do his mathematical calculation again as to what clients of the Commodity-based Loan Program might be paying. As far as I can determine he is again dead wrong. Some loans under the program are at 6 per cent and those
December 15, 1986

grain and oil-seed farmers will actually be paying less than that.
I cannot recall his second question.


Maurice Brydon Foster: I ask the Minister to review the documentation under the Commodity-based Loan Program. Some of the government literature says this is not a subsidy or assistance program. As the value of the commodity goes up the farmer has to pay more, up to a level of 2 per cent above the regular FCC loan rate which is 12.75 per cent right now. When it first came out in the spring it was 13.25 per cent and it is the principal instrument.
However, I think what is more important today is whether the Government is prepared to encourage the banks to make more money available. Will he call in the respective bank presidents and say we would like to see a certain percentage of the relevant loans made available under this Act? Clearly it is a much better rate of interest than that of a regular commercial loan from a chartered bank. I hope the Minister is willing to take some initiative in that regard because there are very few instruments available which provide this level of interest rates for farmers.


John Wise: Mr. Chairman, if the Hon. Member thinks this Parliament can legislate that, then he is whistling in the dark. It is a fairyland type of approach. The reality is that we cannot. The other approach is to try and encourage the banks in this manner, and that is exactly what we have been trying to do. That is exactly why we want a longer time for review, so we can carry out the consultative process with farm lenders and The Canadian Bankers' Association and perhaps individual banks.
The other part of the equation is the farm community, of course. That is what I meant when I indicated that if we really want greater participation, then we will have to face facts, be honest, realistic, and consider whether or not it is worth the cost, be it an extra half of one per cent or whatever, to get greater participation. Are there other options such as the banks programs, the Alberta Treasury program, the programs extended by credit unions, or provincial government interest rate subsidy programs? All those factors have to be taken into consideration and that is exactly what we are attempting to do.


Victor Fredrich (Vic) Althouse: Mr. Chairman, the Minister has talked about recognizing facts and working from the information we have in front of us. That information is the data he presented concerning the proportion of banks utilizing this Act. I think he had the Canadian Imperial Bank of Commerce leading the list with something in the neighbourhood of 45 per cent utilization. My recollection, and it may be wrong, is that that bank is generally the second or third most important agricultural lender and the Royal Bank is usually the biggest lender. Yet the Royal Bank was down to about what, 6 per cent or 5 per cent?


John Wise: No, it is number five.
Farm Improvement Loans Act


Victor Fredrich (Vic) Althouse: Very low utilization at any rate.


John Wise: 8.3 per cent.


Victor Fredrich (Vic) Althouse: Given those figures, and before he offers the banks an increase in the interest rate as an enticement to take up more loans under this Act, would he attempt to discover why some of the very largest banks, such as the Royal Bank, use the program so little? It seems to me that if I were managing a bank I would be taking the action that the CIBC is taking, trying to put as many loans under the Act as I could. That would make certain the customers were less likely to go out of business. That is what I would do as a banker intent upon performing my function as a lender to help people stay in business so I could continue to make loans. However, if my bank's policy was to provide the kind of lending that would eventually lead to it taking over farm land, I would pursue a quite different policy.
I am wondering if he has looked at that, and if perhaps the Royal Bank's policy of providing equity loans which permits them to in effect take over a big chunk of the farm assets and manage them for the farmer, or have the farmer manage them for the bank, whichever, may be more of an impediment than the actual rate. I hope we can get a commitment from the Minister to investigate this and perhaps report back to the House or to the committee concerned.


John Wise: Mr. Chairman, I again underline to the House that when I was naming the banks in order of participation I was dealing on a percentage basis. As well, I suppose that before drawing any real conclusions about this rate of participation we would want to provide an opportunity to determine how much lending there was in their individual portfolios in the agri-food industry. Will we be seeking that information? The short answer is absolutely.
Clause 1 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Paproski):: When shall the Bill be read the third time? By leave, now?


Some Hon. Members:: Agreed.


John Wise: that Bill C-31, an Act to amend the Farm Improvement Loans Act, be read the third time and passed.
Motion agreed to and Bill read the third time and passed.


John Wise: Mr. Speaker, I would like to take a few seconds to express my appreciation and that of the Government for the co-operation I have received from both my critics in dealing with Bill C-31 on pretty short notice. I appreciate that very much.

December 15, 1986
Fisheries Improvement Loans Act


Maurice Brydon Foster: Mr. Speaker, we try in all cases to pass urgently-needed farm legislation in one or two sittings of the House. We continued that practice today because we know of the urgency in the farm community for this legislation to be passed.


FISHERIES IMPROVEMENT LOANS ACT
Thomas Edward Siddon: that Bill C-32, an Act to amend the Fisheries Improvement Loans Act, be read the second time and referred to a legislative committee.


Philip Derek Lewis: Mr. Speaker, there have been discussions among the Parties. I believe there is a disposition to pass this Bill through all stages at this sitting of the House. Therefore, it would be deferred to a Committee of the Whole House. I think you would find unanimous consent for that.


Mr. George Henderson (Egmont):: Mr. Speaker, we will try to pass this Bill as quickly as possible. A couple of my colleagues do want to speak on it. Hopefully we can complete it today.


The Acting Speaker (Mr. Paproski):: Mr. Siddon by unanimous consent, moved that Bill C-32, an Act to amend the Fisheries Improvement Loans Act, be read the second time and, by unanimous consent, referred to a Committee of the Whole. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and, by unanimous consent, the House went into committee thereon, Mr. Paproski in the chair.
On Clause 1-
Thomas Edward Siddon: Mr. Speaker, I, too, would like to express my gratitude to the Opposition Parties and their official critics for allowing us to expedite Bill C-32 which was introduced and given first reading earlier this day.
The history of the Fisheries Improvement Loans Act is slightly different than that of the Farm Improvement Loans Act, it having been first adopted in December, 1955. However, the purpose of this Act is much the same as that of the Farm Improvement Loans Act which was just debated in this Chamber. Loans guaranteed under the Fisheries Improvement Loans Act are guaranteed to a specified ceiling within a designated period.
The present period, Period 9, as provided for in Section 6(2) of the legislation, will expire December 31, 1986, unless the
amendment the Government is proposing today is approved by all Parties. This Bill will do nothing more than alter the date appearing on page 108-9 in Section 6(1) of the present Fisheries Improvement Loans Act which says that the payments to lenders are guaranteed up to December 31, 1986.
Since its inception in December of 1955 the Fisheries Improvement Loans Act has guaranteed some 18,000 loans totaling $246 million, most of which have been repaid without claims under the provisions of this Act. As at the end of the last fiscal year there was approximately $13.5 million in claims against total loans of $246 million for a default rate of about 5.5 per cent, which is not at all alarming.
The Bill is designed to facilitate credit to fishermen who need money for the purchase or construction of a fishing vessel, the purchase or construction of equipment such as auxiliary boats, engines, winches, electronic equipment, nets and so forth, or for the major repair or overhaul of a fishing vessel.
The legislation presently in place authorizes the federal Government to guarantee lenders against losses incurred on loans made in accordance with its provisions. It specifies that the maximum amount which a fisherman may have outstanding under the provisions of the Act at any one time may not exceed $150,000 and the maximum repayment period is 15 years. The rate of interest charged on loans guaranteed under the Act is set at 1 per cent over the prime lending rate of chartered banks. This is a very favourable rate for fishermen with the present level being 10.75 plus 1 per cent. The rate under the legislation floats with the prime rate for the duration of the loan.
The legislation also sets out the total principal amount of guaranteed loans that may be made by all lending institutions lending funds under this Act during the lending period. The present approved level for Period 9, which would have expired on December 31 of this year, is $30 million. There is a portion of that $30 million which has not yet been secured by borrowers which allows us to propose, by way of this amendment, a six-month extension of the provisions of the Act.
Loans granted under the Fisheries Improvement Loans Act must be secured in the form of a chattel or marine mortgage on the item purchased or constructed and the lender is given a written promise by the borrower to repay the loan. It should be noted that if the borrower defaults he or she remains liable to the Crown for the repayment of that loan when the lending institution is compensated under this Act. Other terms and conditions of each loan are worked out between the applicant and the lender.
We are asking for a six-month extension to the present Period 9 of loan authority in order to consider options to improve our program of providing financial services and assistance to fishermen. For example, the loans extended during Periods 6 and 7 from 1977 to 1982 have resulted in a rate of default considerably in excess of the ceilings provided for within the Act. This has caused problems for many
December 15, 1986

fishermen. In addition, we are looking for means to integrate more effectively our loan support assistance with the programs provided by provincial loans boards. As well, we are looking at options for financing fishermen through the Federal Business Development Bank, for instance, or by way of a meshing of this program with the Small Businesses Loans Act. For all of these reasons we have asked for a six-month extension with a view to improving financial services and access to loans on the part of fishermen. We will require no additional financial support to facilitate this extension.
Therefore, I am asking the co-operation of all Members of the House in ensuring that this amendment is given speedy passage today. It is important to maintain continuity in the provision of loans to fishermen through to the proposed termination date of June 30, 1987. I invite response from members of the Opposition at this committee stage and I hope we can pass the legislation in a timely way.


George Roland Henderson: Mr. Chairman, I want to speak briefly to the amendment to the Fisheries Improvement Loans Act. The Minister is correct that this Bill extends the effect of the Act for an additional six months and I am pleased with the reasons he has given for doing so. It is a good program which I believe the Minister should have extended for a year or longer. However, there are certain problems with it, such as the 10 per cent ceiling with respect to banks. I am also pleased that the Minister will use this six-month extension to consider options for improving the legislation.
The Nielsen Task Force report presented options to the House some time ago, including a recommendation that the Government consider termination of the Fisheries Improvement Loans Act, since less federal Government intervention in fisheries and allowing the industry to function in response to market forces are major thrusts of the study. Such was the conclusion of the study team which went on to say, to that extent, that financial assistance required by fishermen can be obtained from provincial loan boards or financial institutions. I hope this is not happening to this program and that the Minister is serious when he says the Fisheries Improvement Loans Act will continue and be improved to meet the needs of those for whom it is designed so that fishermen can meet their obligations in the industry.
I am somewhat skeptical because many other good fisheries programs have been phased out by the Government in the past. For example, there is the vessel subsidy program that was very important to fishermen and enabled them to obtain a one-third subsidy from the federal Government and assist them in obtaining loans from financial institutions.
Mr. Chairman, may I close here and continue my remarks after lunch?


Steve Eugene Paproski: Order. It being 1.25 o'clock, shall I rise, report progress, and request leave to sit again later this day?


Some Hon. Members:: Agreed.
Progress reported.


The Acting Speaker (Mr. Paproski):: It being 1.25 o'clock, I do now leave the Chair until two o'clock this day.
At 1.25 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mrs. Lucie Pepin (Outremont):: Mr. Speaker, according to a study by Statistics Canada published last week, women working full time in 1984 were paid 33 per cent less than men.
Furthermore, it seems the difference depended on a number of factors, including the "occupational" sector. Women working full time in education earned 25 per cent less than men, while women working in the services sector earned 46 per cent less. The picture is even less rosy when we realize that 80 per cent of all women work in the services sector.
Mr. Speaker, in 1967, women working full time were earning the equivalent of 58 per cent of the wages earned by men. Twenty years later, the situation has improved very little in this respect. It is therefore absurd to believe that genuine employment equity could be achieved through legislation like Bill C-62, whose provisions merely tend to confine women even more to the structural ghettos of unskilled and poorly paid jobs.



ENVIRONMENTAL AFFAIRS


Mr. Elliott Hardey (Kent):: Mr. Speaker, the overhauling of Canada's pollution laws has been talked about by politicians, government officials and environmental groups for two decades. Recent polls now indicate that Canadians place the protection of our environment first on our priority list, even above jobs. The 37 million people who live in the Great Lakes Basin on both sides of the Border should be able to draw drinking water from anywhere in that vast system confident that the water is free from toxic industrial waste.
Polluters beware. The Minister of the Environment (Mr. McMillan) will introduce a draft Bill this week designed to put

December 15, 1986
polluters out of business, to get control of thousands of chemicals presently in the market-place, to govern the introduction of new chemicals, and to control trans-border pollution which will lead to the end of acid rain.
1 applaud this move by the Government and fully expect Hon. Members on all sides of the House to co-operate to ensure this Bill will lead quickly to the elimination of conflicting regulations and finally to the proper protection of perhaps our most important possession, the environment.



UNITED STATES DUTY ON CANADIAN SOFTWOOD LUMBER

Mr. Jim Fulton (Skeena):: Mr. Speaker, happy birthday!


Some Hon. Members:: Hear, hear!


James Ross Fulton: The 15 per cent countervail duty on Canadian softwood is illegal. In fact it is nothing more than thinly veiled extortion. The United States is determined to convince American citizens that there are hidden subsidies to Canadian lumber producers. The December 5 issue of Financial Post reveals that this campaign against Canada now includes disinformation as part of the strategy. A recent 11 p.m. news broadcast on WINK-TV in Fort Myers, Florida, led with a story: "And if you're going to build a house, prepare to pay an extra $1,000 for the lumber and blame it on the Canadian Government".
We know the White House is involved in corruption, arms smuggling, mining of harbours and various forms of terrorism, but how is it that our neighbour and ally has chosen extortion and fabrication as part of the free trade special for Canada's largest industry and source of balance of trade? We all know that on three key occasions the political incompetence of the Premier of British Columbia got us into the glue. The final 10 per cent offer, and the final, final 15 per cent offer by the Minister for International Trade (Miss Carney) got us in deeper. But the real insult is to have the U.S. media blame Canada for the illegal acts of extortion by the U.S. Government.



TRIBUTE TO MR. JEAN PERRON OF LA SARRE, QUE.

Mr. Guy St. Julien (Abitibi):: Mr. Speaker, today, I wish to pay tribute to Mr. Jean Perron, President and Chief of Operations at Normick Perron in the Abitibi-Temiscamingue region. Mr. Perron was given an honorary degree by the University of Quebec at Abitibi-Temiscamingue. This is the
first time it has awarded an honorary doctorate to a well-known figure.
Mr. Perron has the qualities of a leader. He is an excellent businessman with a keen interest in research. People in Quebec and across Canada are aware of the importance of Normick Perron to the socio-economic development of this country.
In his speech, the President of the University, Mr. Remy Trudel, stressed the continuing growth of the company which has become an important part of the forestry industry east of the Rockies in less than twenty years.
In turn, Mr. Perron emphasized the essential role played by our teachers in training young people by giving them role models known for their courage and initiative. He also stressed the importance of involving the regions in their own regional development.
Mr. Speaker, the people of Abitibi-Temiscamingue are proud of Jean Perron, who is from La Sarre.	.



EXTERNAL AFFAIRS


[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, during the week of November 17 five Canadian Members of Parliament and myself, along with parliamentarians from 21 countries, attended the annual Parliamentary Forum at the United Nations. This Forum was sponsored by Parliamentarians for Global Action, formerly Parliamentarians for World Order, which is a network of approximately 600 parliamentarians in 36 countries who focus on disarmament, development, and the reform of international institutions.
This year the subject for discussion was the World Economy in Crisis: Debt, protectionism, and military budgets. Among the keynote speakers were John Kenneth Galbraith, Lester Thurow, and the Prime Minister of Peru, Dr. Alva Castro.
Parliamentarians for Global Action was the principal initiator of the five-continent peace initiative and has now launched an international campaign against hunger. I invite all Hon. Members to join with us in these important pursuits.
[Stage Direction]

"-TO SEE OURSELS AS ITHERS SEE US!"
Mr. Alan Redway (York East):: Mr. Speaker, Dick Dodds, the Director of Education for the Borough of East York, the
December 15, 1986

majority of which is located in my constituency, has urged the teachers in his schools to think twice before taking their students to either the Ontario Legislature or the House of Commons because, as he puts it, the undisciplined, unproductive and disrespectful proceedings do little to project or promote viable examples for students.
While behaviour in the House has improved vastly this fall, there is still a tendency on the part of many Hon. Members, encouraged perhaps by the needs of the media, to treat the House of Commons as a theatre, while most Canadians think of it as a place for serious national business. Hopefully this Christmas we will all receive a present from the famous Scottish poet, Robbie Burns:
"-the giftie gie us
To see oursels as ithers see us".



AGRICULTURE


Stanley J. Hovdebo: Mr. Speaker, last June when the House debated and passed the Farm Debt Review Act, my colleagues and I expressed grave concerns that the Act would be ineffective. We said that the Act provided no real incentives to creditors to be reasonable in adjusting terms of credit to farmers. In short, we said that the Act had no teeth.
We have been proven right. Farmers are telling us that the review system is not working. Not only are the boards heavily overworked but too many creditors simply are not interested in finding workable solutions to the problems.
Even the good friend of the Minister of Agriculture (Mr. Wise), Premier Devine, is unimpressed with the Farm Debt Review Act. The Premier has said that the federal Act is so inadequate that his Government has been forced to extend the Saskatchewan Farmland Security Act. At least the Saskatchewan Act allows farmers to appeal to the court if a creditor proves to be unreasonable. I therefore call upon the Minister of Agriculture to prepare amendments to strengthen the federal Farm Debt Review Act which will undergo a statutory review early in the new year.



HUMAN RIGHTS


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, violence of an ethnic or religious origin appears to be escalating in the Indian sub-continent. To illustrate, let us take three headlines from this morning's Globe and Mail'. "54 killed, 310
injured in Pakistani ethnic riot", "Hindus riot in Amritsar after funeral of politician", and "25 Tamils left dead in clashes".
What greater affront to human rights can there be than when people are wantonly murdered and forced to live in fear for their very lives? Canada has always spoken out on human rights violations and ought to use all its persuasive powers through the United Nations, the Commonwealth, and its relations with the countries involved to bring about a reduction in these unnecessary killings.



CANADIAN ARMED FORCES


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, I have in my hand a copy of the restricted memo which has just come from the Canadian Armed Forces regarding the charter task force report. After extensive study which involved no discussion with anyone outside of the Armed Forces, the task force concluded that there is currently insufficient positive evidence that mixed gender employment could be further expanded without an adverse impact on operational effectiveness.
Since when is it the responsibility of the citizens of Canada to prove equality? In fact the specific instructions given to the Armed Forces by the Minister of National Defence (Mr. Beatty) and the Minister of Justice (Mr. Hnatyshyn) were to find ways of implementing equality. After extensive examination which involved no outside discussion whatsoever, the armed forces have concluded that they cannot promote equality today but two years hence they might be prepared to do so. I say that that particular guarantee is not enough. I would ask the Minister of National Defence to step in immediately and determine that a task force on operational effectiveness includes civilians as well as members of the military, so that we can ensure true equality for minorities in this country.



AGRICULTURE


Mr. Geoff Wilson (Swift Current-Maple Creek):: Mr. Speaker, the Government continues to tackle the grain income problem on two fronts. Domestically, a number of ongoing programs are already in place to assist grain and oil seed farmers. These include the Western Grain Stabilization Fund which this year has paid out $859 million, and federal-provincial crop insurance which has paid out $320 million. This Government has effectively removed all federal taxes on

December 15, 1986
farm fuels. Coupled with last week's announcement of a $1 billion Special Canadian Grains Program, these initiatives represent the greatest governmental response to agriculture in Canadian history.
But farmers know that the root cause of their low prices lies beyond our borders, and that the long-term solution is to end international grain subsidy wars. It is for this reason that the Government of Canada continues to work strenuously on the international scene. That is why Canada has succeeded in making agriculture a top priority in the new round of negotiations under the General Agreement on Tariffs and Trade.



CANADA POST CORPORATION


Mr. John Parry (Kenora-Rainy River):: Yesterday, Mr. Speaker, I had the privilege of attenting the Rural Dignity of Canada founding convention in the riding of the Minister of Supply and Services (Mrs. Vezina). This meeting attracted 800 people to Saint-Esprit-on a Sunday evening, in a blinding snow storm-including delegates from all regions of Canada, from British Columbia to Newfoundland.
The vision of the founding convention is to create a coalition of all Canadians to safeguard rural postal services which have been imperilled by the irrealistic policy of the Government, as implemented by Post Canada officials.
Mr. Speaker, since the Prime Minister (Mr. Mulroney) stated in this House last December 5, and I quote: "There shall be no second-class citizens in this country- postal services or otherwise.", time has come for the Prime Minister to live up to his own words. No more shutdowns! No more cutbacks! Let us have rural dignity in Canada!



VICTORIES FOR CANADIAN MEN AND WOMEN'S SKI TEAMS

Mr. Scott Fennell (Ontario):: Mr. Speaker, I wish to draw to the attention of the House that achievement in any field requires dedication, and a strong sense of team effort. No one person can achieve success completely on their own. In sport, it requires the dedication of coaches, family, and the entire team.
Canada enjoys the benefits of four seasons. Yesterday we had an example of supreme effort on behalf of two Canadian teams in France and Italy. The Canadian women's and men's ski teams each had two who placed in the top ten in World
Cup downhill competitions. I wish to commend particularly the gold cup medal efforts of Laurie Graham of Inglewood, Ontario, and Rob Boyd of Whistler, British Columbia.



INTERNATIONAL MONETARY FUND


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, the International Monetary Fund could learn a lesson from recent events in Zambia where looting and rioting took place following the abolition of food subsidies. At the urging of the IMF, the Government had doubled the price of corn meal, which is the staple diet of urban Zambians. The situation became so bad that President Kaunda had to restore food subsidies.
The IMF must stop imposing economic prescriptions which disregard social realities and widespread poverty in less developed countries. The gap in outlook between the IMF boardroom and the conditions of people in the streets of Lusaka is alarming. Forcing the doubling of the price of corn meal can have devastating repercussions on people whose pockets are virtually empty.
The IMF must come to its senses, recognize the importance of non-monetary values, and replace its insensitive policy with one that recognizes the social reality that the North must accept, namely, the debt situation of the least developed countries cannot be corrected by forcing Governments directly or indirectly to increase the price of food or the level of unemployment.



FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS EQUALIZATION PAYMENTS OFFER

Rodney Edward Murphy: Mr. Speaker, last Friday the federal Minister of Finance (Mr. Wilson) met with his provincial counterparts. In that meeting the Minister announced that he was going to be phasing in a $175 million increase in equalization payments. Many of the provincial Finance Ministers believed that this money was going to come in a one-year term, as that was what the Prime Minister (Mr. Mulroney) promised them at the First Ministers' Conference.
In addition to this cut-back, many provinces still feel betrayed by the decision of the Finance Minister to cut the Established Programs Financing Program, the money that went for medicare, post-secondary education, and other causes.
It is very important that the federal Government recognize the needs of all provinces, not only give the have-not provinces
December 15, 1986

and what they need for equalization, but the full amount promised by the Prime Minister. It is also important that the Government fully restore the EPF cuts which it made last year.



DEVELOPMENT OF HIBERNIA OILFIELD

Hon. William Rompkey (Grand Falls-White Bay- Labrador):: Mr. Speaker, the Premier of Newfoundland has recently been very critical of the Government of Canada for the lack of progress on the Hibernia project. He said:
Newfoundland is going to be saying clearly and unmistakably-get on with it and fast.
He also said that there was no question it was now up to Ottawa to make the concessions necessary to strike a fiscal deal with Mobil Oil Canada Limited, the operator of the oilfield southeast of Newfoundland. Those were the comments of the Premier of Newfoundland who has been noticeably quiet since the Government took office.
However, what is its record? Not only have we seen cuts in government programs such as fisheries and transport which have been devastating in the Atlantic region, but now the Government threatens to cut back further on equalization grants, something we have taken for granted over the years.
I call upon the Government of Canada, as has the Premier of Newfoundland, to get the Hibernia project going immediately and to create the jobs which its Members promised during the last election campaign.


Mr. Speaker:: Oral Questions.


John Napier Turner: Mr. Speaker, I offer you my personal compliments on this day, your birthday.


Some Hon. Members:: Hear, hear!


An Hon. Member:: Does he look his age?


John Napier Turner: Despite government comments, I think you are looking pretty good, Mr. Speaker.



ORAL QUESTION PERIOD


John Napier Turner: Mr. Speaker, my question is directed to the Prime Minister. He should know that his own involvement in events leading up to
Oral Questions
the awarding of the contract to move the prison from Drum-mondville to Port-Cartier in his own riding has now prompted additional scrutiny from the Auditor General. At least three members of the Prime Minister's Cabinet were derelict in their responsibilities in acceding to improper tendering and ignoring the conflict of interest guidelines. Will the Prime Minister approve an independent judicial inquiry into all facts and circumstances leading up to the awarding of the contract and the acceleration of the contract in order to meet the Prime Minister's personal deadline to have it ready for opening in 1988?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, with regard to the last part of the comments of my right hon. friend, there was no acceleration of the contract. As I understand the information, the termination date was set by the previous Government with regard to the construction of the replacement facility for Laval.


Mr. Broadbent:: You can blame those guys for a lot, but not for that.


Martin Brian Mulroney: If he accepts the fact-and I do not know whether he does-that the duly elected Government is empowered to make decisions with regard to federal installations, including in various regions of the country, that we have done. It was done in a proper manner, which will be looked at by voters at the appropriate time. This morning the President of the Treasury Board referred to the conflict of interest situation, which is following a normal course. The Government has acted properly and above-board.


TRANSFER OF PRISON FROM DRUMMONDV1LLE TO PORT- CARTIER-POSSIBILITY OF CONFLICT OF INTEREST-PRIME MINISTER'S POSITION
John Napier Turner: The
prison to which the Prime Minister is referring was the original institution at Drummondville, the prison approved by the previous Government, not the expedient transfer to Port-Cartier. Is it not true that both the Solicitor General and his predecessor turned a blind eye on the conflict of interest which became obvious when the Prime Minister brought pressure to bear so as to finish the Port-Cartier prison as soon as possible? Will the Prime Minister dismiss these two Ministers, or is he prepared to take the honourable course and admit that he assumes full responsibility for deciding to shelve the Drummondville prison project and transfer it to Port-Cartier for his own political reasons?


Martin Brian Mulroney: Mr. Speaker, what an insipid question. The Government took action in this case, and Ministers behaved with dignity at all times. We did follow procedures and rules. The former Solicitor General, faced with such a construction project dilemma, said this:

December 15, 1986
Oral Questions
We have to consider a number of objectives in making fundamental choices like a $44 million decision here. I could argue that the best place for this would be Toronto. Toronto has a lot of the infrastructure required. But I do not think that Canadians want everything to go to Toronto-
And so on.

Yes, but the question was asked. The former administration decided that new facilities were needed. The duly elected Government decided that such facilities would be located in Port-Cartier, on the basis of the same criteria advocated by the former Solicitor General, and of considerations related to regional economic expansion and national well-being.


An Hon. Member:: Exactly!


TRANSFER OF PRISON LOCATION
John Napier Turner: Mr. Speaker, doesn't the Prime Minister recognize that he could take some of the heat out of this issue by admitting before this House that it was his personal decision to transfer the prison from Drummondville to Port-Cartier at an extra expense of $41 million, and to accelerate the contract in order to arrange for the opening and completion of the prison in time for the fall of 1988 in his own riding and, in trying to accelerate the construction, his Ministers were forced to break the existing rules on conflict of interest and on the tendering process? Why doesn't the Prime Minister just get up and admit that?


Martin Brian Mulroney: Because, Mr. Speaker, both of the allegations of the right hon. gentleman are completely false. That is why. The decision can be sustained, will be, and has been by the Solicitor General.
In regard to the first point about the extra expense, the Auditor General has his opinion in that regard. I am not going to quarrel with it. The opinion is pro-rated over the life of the installation. In that case, if the Auditor General, I suppose, is right, people will still be blaming Sir. John. A. for building Kingston.


AWARDING OF CONTRACT FOR PORT-CARTIER PRISON-POSSIBLE CONFLICT OF INTEREST
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is also directed to the Prime Minister and concerns the awarding of a contract at Port-Cartier. This morning, the President of the Treasury Board informed the House that Bechtel was awarded a contract because its proposal was judged to be the best, and I am quoting directly. Is it not a fact that this proposal was the best one because it was the only one that would fit the Prime Minister's political agenda? And why did the Government fail to follow the guidelines of the conflict of interest legislation, the provisions
of Section 49 that make it quite clear the contract should never have been awarded to Bechtel?


Robert René de Cotret: Mr. Speaker, the conflict of interest guidelines were followed in this case. After a detailed investigation of all the facts, I announced this morning that the Government wanted to rescind the contract awarded to Bechtel because there was both an apparent and a real conflict of interest in this case.


RESPONSIBILITY FOR ADMINISTERING CONSTRUCTION CONTRACT
Don Boudria: Mr. Speaker, offering a few heads did not work for Ronald Reagan, and it is not going to work today here either.
My supplementary question for the Prime Minister concerns the statement that Correctional Services and Public Works will now be continuing to direct the Port-Cartier project. Can the Prime Minister tell us how it is that the Member for Halifax, the former Minister of Supply and Services, could not administer the contract in that role and that he has now been given the responsibility for administering similar or the same contracts in his new role of Minister of Public Works? Should he not be fired instead of being given new contracts to administer? Is it not obvious that he cannot do that job?


Robert René de Cotret: Mr. Speaker, the procedure that we are following is very normal. It is the typical procedure for any government.


Mr. Rodriguez:: Typical Tory.


Robert René de Cotret: It is normal for any government, Mr. Speaker. We have decided to rescind the contract to Bechtel for the reasons I outlined this morning, and the responsible Departments which are Public Works, the Department of Supply and Services, and Correctional Services, will ensure that the work is continued and a new contract is awarded.


John Edward Broadbent: Mr. Speaker, the Minister decided to rescind the contract only after the Government was caught doing something it ought never to have done in the first place.


CONSTRUCTION SCHEDULE
John Edward Broadbent: Mr. Speaker, my question is directed to the Prime Minister. There were two statements this morning, one by the Auditor General and one by the Minister. The Auditor General said, his words, not mine, that the Government showed preferential treatment in making this decision. In his statement in the House afterwards, the Minister, incredibly, blamed everyone, including civil servants, but the Government itself. He said the reason all these normal contractual procedures were broken was because the decision had been reached to build the prison within "a tight schedule". Will the Prime Minister now acknowledge the
December 15, 1986

reason this schedule was imposed is that he decided to give himself a gift in his own riding for political purposes?


Martin Brian Mulroney: Mr. Speaker, the statement by my hon. friend is absolutely inaccurate. There was no such indication by me or my office at any time in any circumstances. If my hon. friend wishes to be fair in his analysis, the completion date was imposed by the previous Government with regard to a substitute facility for Laval. I do not change at all nor do I make any apologies for the Government decision to locate it in Port-Cartier pursuant to criteria set out by the former Solicitor General in the Liberal Government.
We took a decision concerning Port-Cartier and we stand by that decision. It was a proper and honourable decision for a region of this country which is entitled to some assistance and should never be penalized simply because it is represented by a Prime Minister, or another Minister, or the Leader of the NDP.


PRISON SITE LOCATION
John Edward Broadbent: Mr. Speaker, the Prime Minister knows perfectly well that the decision made by the previous Government concerned a prison in another community, not a community in the Prime Minister's riding. That is a fact.
My question to the Prime Minister is simply this: Why is the Government blaming everyone, even its officials, for the Government's decision to build a penitentiary in the Prime Minister's riding for purely political reasons?


Martin Brian Mulroney: Mr. Speaker, that too is entirely false. The Government is not blaming anyone. The President of the Treasury Board quite appropriately initiated an investigation, and he has drawn a number of conclusions from that investigation to date.
You were referring to another prison, in a riding in New Brunswick, and comparing it with the riding of Manicouagan. I hope the Leader of the New Democratic Party is not claiming that peripheral areas like the North Shore and Eastern Quebec do not have a right to federal facilities, because I can tell you that federal Government facilities in remote areas are very rare indeed. In my own riding there were none.
That was why the Government decided it was entirely fair and honourable to act in the interests of efficiency. We could build all federal facilities between Ottawa and Toronto, but that would be unfair to the rest of the country.


ACCEPTANCE OF RESPONSIBILITY
John Edward Broadbent: Mr. Speaker, we do not need to listen to lectures about regional development. We
Oral Questions
believe there ought to be regional development in all the poorer parts of this country, including the Prime Minister's riding.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: However, we do not believe in squandering $41 million of the public's money for electoral reasons. That is the difference.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: If the Prime Minister would like to put an end to this and get it out of the House of Commons, will he get up and acknowledge that this decision was a mistake, taken at the highest level of government, and the Government will now commit itself to integrity in government and put an end to short run political decisions?


Martin Brian Mulroney: My hon. friend says he is in favour of regional economic development, including the constituency of Manicouagan.


John Edward Broadbent: Yes.


Martin Brian Mulroney: Then perhaps he could tell us what he has in mind for Port-Cartier? During the time in question a substantial part of the population was out of work without any hope at all, and without any help from the federal Government. In fact, if you examine the record of the federal Government with regard to development in the constituency of Manicouagan, in the interior of British Columbia, or in northern Ontario, you will find that it was very, very wanting.
The present Government believes in fairness. We make no apologies to anyone for making decisions which result in no squandering of public funds. I can think of no better use of public funds than for the Government of Canada to signal to people in faraway regions that taxpayers' money will be spent on them and their children for the future so they will not have to seek exile elsewhere in Canada.


PRESENCE IN GALLERY OF HON. JEAN GAUVIN, NEW BRUNSWICK MINISTER OF HOUSING
Mr. Speaker:: I would like to draw the attention of Hon. Members to the presence in the gallery of the Hon. Jean Gauvin, Minister of Housing of the Government of New Brunswick.

December 15, 1986
Oral Questions


PENITENTIARIES
John V. Nunziata: Mr. Speaker, my question is on the same subject. The facts are clear. There has been a conflict of interest. The issue is now one of ministerial accountability. I will direct my question to the Prime Minister. Would he not agree that it is unfair to make Robert McCulloch the scapegoat in this matter? Would he not agree that the ultimate responsibility for this conflict of interest lies directly on his shoulders and directly with other Ministers of the Crown? Will he not do the honourable thing and assume responsibility for this conflict of interest?


Robert René de Cotret: Mr. Speaker, as my hon. colleague opposite well knows, we have made an extensive inquiry to determine all the facts and issues pertinent to this question. We determined that there was a real conflict of interest. We have identified some parties to that conflict of interest. We have taken action to deal with it. Further, we asked the Commissioner of Correctional Services to take appropriate action within his Department to the extent he deems fit. I believe that the actions which led up to this situation have been thoroughly investigated and reported to this House.


Mr. Tobin:: Who is responsible?


MINISTERIAL RESPONSIBILITY
John V. Nunziata: Mr. Speaker, the Minister and the Prime Minister are passing the buck. The issue is who should be held responsible for this conflict of interest. I will direct my question again to the Prime Minister. It has been admitted that there was a conflict of interest. If the Prime Minister believes in the integrity of the conflict of interest guidelines, will he not stand in his place and admit that his Ministers must assume some responsibility for their incompetence in this matter?


Robert René de Cotret: Mr. Speaker, we have dealt with this issue exactly according to the conflict of interest guidelines.


Don Boudria: No you haven't.


Robert René de Cotret: We have imposed the sanctions which are appropriate in this case according to that code of conduct.


Don Boudria: That's not true.


ALLEGATIONS PRIME MINISTER ACCELERATED PROCESS LEADING TO AWARDING OF PORT-CARTIER CONTRACT
Michael Morris Cassidy: Mr. Speaker, my question is directed to the Prime Minister who has just stated that the awarding of the Port-Cartier prison contract was not accelerated. In his statement tabled in the House today the
Auditor General reaffirms his belief that indeed the process was accelerated and says as well that Correctional Service Canada officials saw fit to speed up the process, including in certain instances dealing with only one supplier. Therefore CSC officials thought it was justified to accelerate the process and, finally, the President of the Treasury Board has indicated quite clearly that time was of the essence. Now then, does the Prime Minister deny all such statements by officials and Ministers of his Government that he was right to speed up the contract since he had decided to make an election gift to his constituents?


Hon. Janies Kelleher (Solicitor General of Canada):: Mr. Speaker, I can advise the Hon. Member quite categorically that there was no speeding up of the opening up of Port-Cartier by the Government. In fact as early as 1981 the former Government made the decision to close Laval. This is confirmed by a Treasury Board minute. In two subsequent 1984 Treasury Board minutes signed by the former Solicitor General it was determined that Laval would close in 1987 or 1988. Port-Cartier was to be built with an opening date to meet that deadline in order that it could receive the prisoners which would become available due to the closing of Laval.


Some Hon. Members:: Hear, hear!


BUILDING SCHEDULE
Michael Morris Cassidy: Mr. Speaker, I will direct my supplementary question to the Solicitor General who is responsible for Corrections Canada. When the Government changed its mind at least a year and a quarter had passed since the decision was made to build a new prison at Drummond-ville, where it was easy to build. It was hard to build in Port-Cartier and was bound to take more time. Therefore, the Prime Minister's Office made this conflict of interest almost inevitable by saying that the prison should be built on the old schedule rather than adopting a realistic schedule. That is what happened.


Mr. Mazankowski:: That's false.


James Francis Kelleher: Mr. Speaker, with the greatest respect, the Hon. Member's statement is absolutely false and incorrect. I refer him to my earlier answer. There was no speeding up whatsoever of the contract. The deadline for the closing of Laval had been set by the former Government. We were trying to open Port-Cartier to meet that closing date in order to accommodate the prisoners from Laval.


John Edward Broadbent: Read de Cotret's statement this morning.


Michael Morris Cassidy: The public will judge on this one.
December 15, 1986


OPPORTUNITY TO DELAY CLOSURE OF LAVAL PENITENTIARY
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, to the Solicitor General who claims that construction was accelerated at Port-Cartier not to compromise the closure of the Laval penitentiary, I should like to direct a simple question: Would it not have been better to delay the closing of the Laval penitentiary instead of accelerating the Port-Cartier project?


James Francis Kelleher: Mr. Speaker, as I have already advised the Hon. Member, the date for the closing of Laval had been set. We were trying to meet that deadline. There was no speeding up. It was a government decision to build this prison in Port-Cartier to assist a regionally depressed area of the country.


REASONS FOR DECISION
Jacques Guilbault: I will repeat my question. The Minister's response is just another question. Why did you not change the decision which you claim was taken before, and delay the closing of and transfer of prisoners from Laval? Was it not because you wanted the Port-Cartier penitentiary to be ready before the next election? Admit it!


James Francis Kelleher: Mr. Speaker, I have nothing to admit to the Hon. Member along the lines suggested by him. I have told him that we were trying to open Port-Cartier by that date in order to meet the closing date set by his Government.


PUBLIC SERVICE
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, today we are learning about the consequences of the political interference involved in the Prime Minister's prison. Today we have also learned about the actions of civil servants in trying to find work for one of the Prime Minister's friends, Mr. Shay.
Would the Prime Minister not agree that civil servants are being sent a message, which must be changed, that their job is to serve the cronyism of the Conservative Party in Government?


Martin Brian Mulroney: No, Mr. Speaker.


PRIME MINISTER'S POSITION
Howard Douglas McCurdy: Mr. Speaker, it would seem that the Prime Minister is not-
Oral Questions Mr. La Salle: What is your question?


Some Hon. Members:: Question, question.


Some Hon. Members:: Spit it out.


Mr. Speaker:: Order, please. The Hon. Member will put his question.


Howard Douglas McCurdy: Mr. Speaker, I will repeat my question to the Prime Minister. Does he not think it is about time that an extremely strong message is sent to his Ministers, the civil service, and his friends, that there will be no more bargaining away of the interests of Canadian people just to give his friends jobs?


Martin Brian Mulroney: Mr. Speaker, as my hon. friend knows, that question is mean-spirited and vexatious. I know that when he does not bring his music he cannot sing. I am sure that on a more moderate day he would want to withdraw that question.


ALLEGED REQUEST TO CHASE MANHATTAN BANK
Robert Phillip Kaplan: Mr. Speaker, my question is directed to the Prime Minister. Will he tell us what possible justification there is for having the Government of Canada and Devco tell the Chase Manhattan Bank to try to find work for Robert "Shay", a friend of his, in a contract being done for Cape Breton Regional Development, other than it being the most blatant kind of cronyism?


Martin Brian Mulroney: Mr. Speaker, it is my understanding that the matter in question was not sustained by any written document. There was no work at all associated with Mr. Shea, who is a friend of mine and a very good friend of Canada. I think that the indication that there was no involvement of any kind by me, directly or indirectly, is that there has never been any beneficial relationship of any kind between Mr. Shea and this Government.


REFERENCE IN DOCUMENT
Robert Phillip Kaplan: Mr. Speaker, the Prime Minister denies that there is a document in writing. What does he make of this sentence from a report by an official, John D. McLure, outlining a proposed contract, who says:
-Chase will, at the Minister's request-
-meaning the Minister of Regional Industrial Expansion:
-find some work for Mr. Shay of Boston (a friend of the Prime Minister).
There it is in writing. Why are officials being asked to do things like this?


Martin Brian Mulroney: Mr. Speaker, what kind of proof is this? I understand that Mr. McLure denies signing such a document and that it does not bear his signature. I understand that from the same story.

December 15, 1986
Oral Questions
Why would my hon. friend try to tarnish the reputation of someone on that kind of allegation?


EXTERNAL AFFAIRS
Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is directed to the Minister of Justice. Apparently on Friday he phoned the Attorney General of the United States with respect to the Iran arms deal and the Attorney General was to phone him back this morning. What information did the Attorney General of the United States give him with respect to Canadian involvement in the Iranian arms deal?


Hon. Ray Hnatyshyn (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I have had the opportunity to speak with Mr. Meese, and I talked to him again this morning. He indicated that he and the Department of Justice are quite prepared to co-operate with our officials and the Royal Canadian Mounted Police with respect to an investigation as to whether any Canadian law has been broken. Mr. Meese did in fact confirm to me that Mr. Fraser and Mr. Miller, whose names have been in the press in the last few days, are the people in question.


RCMP INVESTIGATION
Derek Nigel Ernest Blackburn: Mr. Speaker, in view of this information and any other information that the Minister has, is he prepared now to launch a fullscale investigation into Canadian involvement with respect to these two individuals or any others who could be involved?


Ramon John Hnatyshyn: Mr. Speaker, as was pointed out earlier, the RCMP have entered into an investigation as to whether or not Canadian law has been broken. I am very pleased that our American friends have agreed to facilitate interviews and discussions in order to make sure that our investigation goes forward. I believe we should allow this investigation to proceed and allow the RCMP to conclude its investigation. If there is a prosecution that results from it, so be it. However, the investigation should proceed without speculation on a day-today basis.


PUBLIC WORKS
Mrs. Lise Bourgault (Argenteuil-Papineau):: Mr. Speaker, my question is directed to the Minister of State responsible for Mirabel.
Mr. Speaker, like all the people from Mirabel, I was delighted to read in the press today that the Minister would not retire before he had ceded back all Mirabel land?
Mr. Speaker, although 65 per cent of the land sales was to everyone's satisfaction, could the Minister give the House the assurance today that nothing will be left undone to settle some of the more contentious land transactions?


Hon. Roch La Salle (Minister of State):: Mr. Speaker, I welcome this opportunity to remind the senior Members of this House of the many and complex discussions that took place as a result of these expropriations. Today, I am pleased to acknowledge to the Hon. Member that of the sale proposals concerning 1,600 saleable properties when I took over this file, 65 per cent have already been signed, and within the next 12 months, we should have finalized the entirely justified repossession of this land by the original owners.
As for the contentious cases, I can give the Hon. Member the assurance that this week I will be meeting with my director general to discuss them and give those concerned the assurance that they will be given all the help and assistance they need to obtain the fairest possible settlement.


EXTERNAL AFFAIRS
Sheila Maureen Copps: My question is directed to the Prime Minister. In light of press reports this morning that External Affairs Minister, Joe Clark, got nowhere-


Some Hon. Members:: Order.


Sheila Maureen Copps: -when he raised the matter of Irangate with Secretary of State Shultz, will the Prime Minister, given his close personal relationship with the President of the United States, tell us why his Government was kept in the dark for over two months with respect to the Canadian connection in the Irangate affair?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, may I say to the Hon. Member that while I appreciate her personal references to me, I will try to refrain from making any to her. Let me indicate to her that I
December 15, 1986

at least intend to respect the rules of the House as they relate to the identification of individuals.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: I think it is evident to everyone that one of the difficulties in this case is that such facts as might turn out to exist as a result of the investigation in the United States are not known by officials in the United States and consequently have not been capable of being transmitted to us. In the conversation this morning between the Attorney General of Canada and the Attorney General of the United States, we received an indication that all information germane to investigations into Canadian law that we are carrying out through the RCMP will be made available to Canadian authorities.


Sheila Maureen Copps: I asked the Prime Minister if he would tell our country, Canada, why it was kept in the dark for two months. I am not asking the Secretary of State for External Affairs to make any patronizing comments, as is his usual habit.


Some Hon. Members:: Oh, oh!


CANADA-UNITED STATES RELATIONS
Sheila Maureen Copps: Mr. Speaker, I would like to have an answer from the Prime Minister for the people of Canada. Given his extremely close relationship with the President of the United States, why were he and Canada kept in the dark for over two months about the Canadian connection in the Irangate affair? This is his first chance to tell the House.


Charles Joseph Clark: Mr. Speaker, that question-if that is what it was- has been answered. The Hon. Member should know that those allegations are probably baseless.


PENITENTIARIES
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, my question is directed to the Solicitor General. The President of the Treasury Board clearly said this morning: "The flexibility required to develop a work plan within prescribed rules and policies was somewhat reduced". The Government had an option. Why did it not pursue the option of keeping the existing prison open in order to build Port-Cartier within the prescribed rules and policies so that the integrity of the Government's operations in this matter could have been preserved?


James Francis Kelleher: Mr. Speaker, I think it is self-evident that there is never any
Oral Questions
justification for a breach of the conflict of interest rules. We have found that there was a breach and we are dealing with it appropriately. Quite frankly, I fail to see what the Hon. Member is complaining about, as I believe it has been dealt with and handled well by the President of the Treasury Board.


GOVERNMENT POSITION
William Alexander (Bill) Blaikie: Mr. Speaker, the Government cannot have it both ways. It cannot maintain that conflict of interest rules were breached and that there was no acceleration. It was the acceleration that caused the conflict of interest. Why did the Government not pursue its other option to keep existing prisons open for as long as it took to build the Port-Cartier prison according to the rules and policies established by the Government, if that was to be its decision?


James Francis Kelleher: Mr. Speaker, I have already explained that the former Government had made the decision to close the prison. We were attempting to meet that and we also wanted to assist an economically depressed area. Therefore, we proceeded as expeditiously as we could.


MUNICIPAL AFFAIRS
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is directed to the Minister of Finance. Will he explain why he has rejected a unanimous request from all 260 members of the Canadian Association of Municipalities-a request that was supported by all ten provinces-that the federal Government share in a five-year program to renew the infrastructure of our cities, so creating 300,000 person years of work?


Geoff Wilson: Mr. Speaker, as the Hon. Member, I think, is quite well aware, the question of municipal infrastructure is the responsibility of the municipalities and provincial Governments. We have our hands full in dealing with matters which are exclusively 100 per cent, federal government responsibility. Until we are able to get a better financial picture and our deficit down and under a greater degree of control, it will be very difficult for us to deal with this type of matter.
I advised the municipalities of this a long time ago, and the allegations they have made over the past weekend are quite wrong.


MINISTER'S POSITION
Aideen Nicholson: Mr. Speaker, our mayors are asking for an investment in the capital account of this country for roads, sewers and bridges, not luxuries. With

December 15, 1986
Oral Questions
employment still at 9.5 per cent, how can the Minister refuse this opportunity to put Canadians back to work?


Geoff Wilson: Mr. Speaker, what the Hon. Member is asking myself and the Government to do is ignore the areas in which we have 100 per cent responsibility and deal with matters which are under the jurisdiction of the municipalities and provinces. I do not think that is a reasonable position for the Hon. Member to take, and I think if she thought about it carefully, she would agree with me.
If the Hon. Member is suggesting, as I take it from the look on her face she is, that we should ignore these areas of 100 per cent responsiblity of the federal Government, would she tell me which areas she would like us to ignore as a Government so we can get into those areas of-


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


EXTERNAL AFFAIRS
Mr. Chris Speyer (Cambridge):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and it pertains to Phillip Engs. Can the Minister tell us whether or not the Government has been officially notified if charges have been laid against Mr. Engs? If so, could the Minister give the House particulars of the charges and also advise the House what he and the Government are doing to protect the rights and interests of Mr. Engs?


Charles Joseph Clark: I can advise that we have received official confirmation that Mr. Engs has been arrested in Iran on suspicion of espionage. Tomorrow I am sending a message, which will be delivered by the Danish Ambassador who acts for Canada in Iran on these affairs, to the Foreign Minister of Iran asking for full information on the circustances with respect to Mr. Engs. I am also seeking an undertaking that we will have the right of consular access to Mr. Engs so we will be in the maximum position to protect his interests.
If I might, I would like to express my appreciation of the fulsome degree to which the Danish authorities have cooperated with Canada in these circumstances where they are represented in Tehran and we are not.


Some Hon. Members:: Hear, hear!


MUNICIPAL AFFAIRS
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is directed to the Minister of the Environment. It follows on the questions regarding the Federation of Canadian Municipalities' rebuilding program. The Minister will be aware that part of that program will bring about efficient use of water and better treatment of sewage waste. Would he not agree, in light of the report of the inquiry on federal water policy which indicated it was a federal responsibility, that the Minister of Finance is wrong and the federal Government does have a role to play in funding this very important program which, incidentally, will be repaid through increased taxes and lower unemployment pay-outs?


Hon. Tom McMillan (Minister of the Environment):: Mr. Speaker, the Hon. Member's question is based on a false premise, namely, that the Pearse report stated this was a matter of federal responsibility. It said no such thing.

[ Translation]


FINANCE
Lorne Edmund Nystrom: Mr. Speaker, my question is directed to the Minister of Finance. The Minister referred to the role of the provinces, but last week, he informed his provincial counterparts that the $175 million increase in equalization payments would be paid over a period of two years, instead of one year as promised by the Prime Minister and himself. Mr. Speaker, my question is: Does the Minister intend to meet the political commitment made by himself and the Prime Minister? Is he going to change his mind here and now to help the six poorest provinces in Canada?


Geoff Wilson: Mr. Speaker, I think the Hon. Member has it wrong. What was proposed by a committee of finance officials from both the provinces and the federal Government was to enhance the equalization program by $175 million, on top of the existing growth rate of between 4 per cent and 6 per cent.
What I said to the Finance Ministers on Friday was that we would accept that proposal but we would only be able to do it over a two-year period. Therefore, the full amount of the proposal will be in place as of 1988-89.


Lorne Edmund Nystrom: That is two years, not one.


Mr. Wilson (Etobicoke Centre):: I think that is perfectly consistent with anything I have said-


Lorne Edmund Nystrom: But you promised one.
December 15, 1986


Michael Holcombe Wilson: The Hon. Member said I promised one. I challenge him to tell me exactly where I promised one.


Mr. Speaker:: Order, please.


IMMIGRATION
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. It concerns the Immigration Appeal Board ruling that an American citizen who was convicted of child molesting in Canada and who is wanted on similar charges in the United States is allowed to remain in this country. Last Thursday I asked the Minister of State for Immigration to appeal the case to the Federal Court but he rejected the suggestion and in fact said that action was "political interference".
I ask the Minister for Employment and Immigration today why the Government refuses to act legitimately, as is its right, and appeal this case to the Federal Court so that citizens can be protected from such undesirable characters and our immigration standards and policies may regain some form of the credibility they have recently lost?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: Mr. Speaker, last week, the Minister of State (Immigration) pointed out that the Department was proceeding with a very careful analysis of the technical factors on which the Immigration Office's decision was based. If as a result of this assessment, we find there are grounds for appealing the case to the Federal Court, the Department will certainly take action. I may add that we should be in a position to respond on this matter by this Friday.


GOVERNMENT POLICY
Sergio Marchi: Mr. Speaker, it was this Government which reopened the case. It was this Government which issued an order for deportation. Why is there now such procrastination, given the preceding action by the Government, to take full advantage of a legitimate course of action through the federal Court of Appeal so that Canadians may be confident that our immigration policies are intact and will come to the aid of citizens who tonight in Vancouver are establishing a group to fight this incredible decision?


Benoît Bouchard: Mr. Speaker, I said earlier that we were doing a re-evaluation on a point of law. That is absolutely fundamental, and it has always been our reference point. The decision
Oral Questions
that will be made by this Friday will in fact refer to this particular aspect.


POSSIBILITY OF EXTRADITION PROCEEDINGS LAUNCHED BY UNITED STATES
Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, my question is supplementary to the last question. Is the Minister for Employment and Immigration aware that there are possible pending extradition orders from two States in the United States in this particular case? Would the Minister enunciate to the House whether or not his Department is aware of these extradition proceedings which are in place against this individual?


Jean-Robert Gauthier: We hope so.


Benoît Bouchard: Mr. Speaker, I would like to make it clear to the Hon. Member that the Department has been apprised of all the facts. Last week, the Minister of State (Immigration) pointed out that it was becoming very difficult for the Government to intervene on a matter of substance, and that we intended and are in fact now proceeding to analyze points of law, and if we find anything, we intend to intervene quickly by this Friday.


CANADA POST CORPORATION
Cyril Keeper: My question is directed to the Minister responsible for Canada Post. I would like to know what kind of assurances or guarantees he is now prepared to give residents in rural areas that the service will not be cut back, and we want the Parliamentary Committee to express their protests in this respect.


Hon. Michel Cote (Minister of Regional Industrial Expansion):: Mr. Speaker, we just received the Parliamentary Committee's report today, with its recommendations on rural services. We will be taking these recommendations into consideration. We will then ask Canada Post to respond to these recommendations, and we will announce the changes before this House.


REQUEST FOR ASSURANCE ON MAINTENANCE OF RURAL SERVICE
Cyril Keeper: Mr. Speaker, we need specific assurances from the Government that it will maintain rural postal service.

December 15, 1986
Privilege-Mr. Crosbie


Mr. Speaker:: Would the Hon. Member put the question,
please?


Cyril Keeper: When will the Minister give the House specific assurances that rural postal service will be maintained, that he will stop closing rural post offices, and that he will not introduce superboxes into the rural areas?


Michel Côté: Mr. Speaker, the Hon. Member is a member of this Committee. The report was tabled this morning, and the recommendations will be examined by Canada Post which will respond to those recommendations before this House.


COST OF SUPERMAILBOXES
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, my question is addressed to the Minister responsible for the post office. Now that Tory Members of the Government's operated committee have accepted supermailboxes as a permanent way to deliver mail in Canada, rejecting the views of a majority of Canadians who are opposed to such a monstrosity, can the Minister tell us the cost of the supermailboxes, including installation, and how long this is expected to last?


Michel Côté: Mr. Speaker, I repeat, Canada Post tabled a plan that was analyzed by the Government, and in the spirit of parliamentary reform, we submitted this plan to the Committee for consideration, and that Committee has responded with a number of recommendations. We are going to ask Canada Post to examine these recommendations, including the matter of the superboxes, and we will respond accordingly.


Mr. Speaker:: I am sorry, but the period provided for oral questions has now expired. The Minister of Transport (Mr. Crosbie), on a point of order.


PRIVILEGE
Hon. John C. Crosbie (Minister of Transport):: Mr. Speaker, I rise on a matter of privilege which has to do with a question asked the House last Thursday when I was absent. I refer to page 2016 of Hansard where an improper question was asked by the Hon. Member for Hamilton East (Ms. Copps) who was swatting at gnats by asking the question-


Mr. Speaker:: Order. Order, please. The Hon. Minister is rising on a question of privilege or a point of order. It helps the
Chair if accusations, if it is an accusation, and the facts are put forward, but until the Chair has heard the question I think it is probably helpful not to impute motives to any Hon. Member.


John Carnell Crosbie: Mr. Speaker, I certainly want to take your advice. The Hon. Member for Hamilton East asked a question in which she tried to tie me, "a present Minister of this Government-a former Minister of the Newfoundland provincial Government" with one Roy Furmark. The question is couched in terms that would suggest that because this particular Minister, myself, at one time knew this Mr. Roy Furmark, I was somehow associated with the events that occurred surrounding the so-called Canadian connection in Iran. In a supplementary question, the Hon. Member referred to "one of the negotiators involved with the Government of Newfoundland of the time, including a current Minister of this Government", and she went on.
My objection to these alleged facts is the impropriety of a Member suggesting that because one Hon. Member knew another person 10 years earlier, that Hon. Member was in constant communication with the one allegedly known to him 10 years earlier and therefore would know everything about Irangate. The finger was pointed at me as possibly being a bosom buddy of the Ayatollah Khomeini. This is guilt by disassociation. It was a McCarthyite attempt to cast suspicions at me-


Mr. Speaker:: Order.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


John Carnell Crosbie: Is there no sense of fairness in all those ranks, Mr. Speaker?


Mr. Speaker:: Order. The Hon. Minister has raised a complaint about statements made by another Hon. Member. That is clearly not a question of privilege, nor was any notice of such received by the Chair. I think the Hon. Minister is getting well into an area of debate and I think that it is probably time to end the intervention.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in committee of Bill C-32, an Act to amend the Fisheries Improvement Loans Act-Mr. Siddon-Mr. Paproski in the chair.
Steve Eugene Paproski: Order. House in Committee of the Whole on Bill C-32, an Act to amend the Fisheries Improvement Loans Act. When the committee was interrupted at 1.25
December 15, 1986

o'clock p.m., Clause 1 of the Bill was under consideration and the Hon. Member for Egmont had the floor.


George Roland Henderson: Mr. Chairman, when the Chair called it 1.25 I was mentioning that the Government and the Ministers are not making as a priority the fishing industry of Canada. At that time I cited some of the programs of the previous Government that were extremely beneficial to the fishing industry but were eliminated by this Government. Of course, this ties in with the Bill we are discussing here today because it does relate specifically to the income of fishermen.
When I talked about the vessel subsidy program, I related how helpful it was for fishermen who made large capital expenditures on their vessels and equipment. These fishermen could use the one-third vessel subsidy allotted to them by the federal Government as part of a down payment or collateral required to obtain a vessel or upgrade one.
I would also like to mention the insignificant amount of funds the Government is giving to small craft harbours. Only approximately $46 million will be going into small craft harbours this year. Every Hon. Member who comes from a fishing community will realize that that is a mere pittance compared to what is needed for a very worth-while industry.
I receive letters daily from people from all over Canada. I have a copy of a letter addressed to the Minister that I wish to read into Hansard. It reads:
Dear Mr. Minister
I wish to draw to your attention the deplorable state of affairs.
The wharfage situation in Comox-Courtenay area is inadequate to say the least. The overcrowding and potential fire hazard on the present site is a deterrent to anyone having a vessel on these premises.
One has to wonder if this riding being N.D.P. has any connection with your apathy towards investing in the Comox Valley wharfage facilities.
Your past performance indicates you run to the pork-barrel to grease the skids of your constituency-Tom; prove me wrong.
This letter is from the West Coast. I have received a hundred letters from people there who are complaining to me that they are in dire need of a better infrastructure as it relates to their wharfs, harbours and piers.
Of course, it is the same thing on the Atlantic coast. Almost every harbour wharf needs some work done. The amount of money this Government is putting into these programs has a direct relationship to the income of fishermen. In order to get the best price for the product they take from the waters, fishermen have to have good quality, ice on board, unloading derricks, and a fast mode of transportation to get their product to the processing plant and to the consumer as quickly as possible. These are some of the areas in which this Government and this Minister have let the fishing industry of this country down, and let it down badly.
On top of that, there is the imposition of user fees, the doubling of licencing fees on the West Coast, and there are many other aspects to the fishing industry that are not at all
Fisheries Improvement Loans Act
being dealt with to the satisfaction of the fishermen and the industry. I must emphasize that this is a very important industry. On the Atlantic coast, it is one of our largest industries. Thousands of families depend solely on the fishery. Any lessening of effort by the federal Government toward the well-being of the fishery is certainly not accepted in good light in Altantic Canada.
We are going to give consent to this extension for six months. I will take the Minister at his word, but I will ask the question later on, does the Minister mean what he says, that he is going to bring the Bill back in six months time with improvements? There are some flaws in the Bill, and were they corrected they would certainly go a long way to helping the fishermen who are in dire straits. There are many areas in Atlantic Canada that had a very poor fishing season this year. Along with the other program cuts, there is the Forget Commission Report which comes down very hard on the side of fishermen. There is a lot of concern right now in the industry about what this Government is doing on their behalf. I will end with these few remarks, Mr. Chairman. I am sure I have some colleagues who wish to follow me, and I may have some questions later on.


Mr. Manly:: I am glad to have the opportunity to make a few remarks with regard to Bill C-32, amendments to the Fisheries Improvement Loans Act which will extend the life of that Act for another six months. In the New Democratic Party we are quite happy to give agreement to quick passage of this Bill, because this is obviously an Act that has provided a program of some help to some individuals in the fishing industry. For example, in the last year for which we have a report, 1984-85, there were 879 loans guaranteed which totalled almost $15 million. Since the program's inception in 1955 to the year 1984-85 there were 17,253 loans totalling some $227 million. Over the life of the program some $10 million was paid out in claims to lending agencies for loans that were in difficulty. It is important to recognize that $8.5 million of that $10 million was paid out in the last four years of the program, during which the fishing industry was having difficult times when it was caught in a squeeze between high input costs and very poor returns.
While the program may be good for some individuals, we have no idea what the Government thinks about the program's effect over the long term on the industry as whole. The Government does not know. That is why we are dealing with a six-month extension at the present time. That is why in June of 1985 the Government came before the House for an 18-month extension. At that time the then Minister said, as recorded at page 6161 of Hansard for June 15, 1985:
In the event that any Members wonder why that is so-
He was referring to why they were asking for an 18-month extension.
-it is of course because all programs including this one are being carefully reviewed. In the meantime, I think it is in the interests of the fishing community that speedy passage of this Bill be given by the House.

December 15, 1986
Fisheries Improvement Loans Act
The program review to which the then Minister referred was tabled in the House on March 11. It was available to the Government before that time, but it still has not indicated what its plans are for the fishing industry.
With regard to this particular program, the Nielsen committee task force stated:
A major problem in the fisheries, which has been identified by many studies, is over-capacity with too many fishermen pursuing too few fish. This program can be seen as adding to this problem, and is inconsistent with federal programs to buy back fishing licences to reduce efforts in the industry.
The effect of this program is to subsidize low-risk fishermen who would be able to obtain credit through normal channels, as well as high-risk fishermen who are required to put up little of their own money.
It is not quite that easy even for low-risk fishermen to get loans through normal channels. The banks want some guarantee. The task force further states:
The study team recommends to the Task Force that the Government consider termination of the Fisheries Improvement Loans Program. A major thrust of the study team's recommendations is for less federal Government intervention in the fisheries, and for allowing the industry to function in response to true market forces.
We have seen in the last few months a move by the Government to quietly implement some of the recommendations the Nielsen task force has made; to implement these without adequate debate, either in the House or within the fishing industry itself. Fishing licences have doubled. There have been cuts in the Department of Fisheries and Oceans staff. There have been cuts in research. There have been cuts in the Fishing Vessel Assistance Program. All these things have been done on an ad hoc basis without giving either the House or the industry any idea of what the Government's over-all plan or policy is.
There are two theories as to what the Government is doing here. I and my colleagues in caucus have a disagreement on this. There are those of us who feel that what the Government is doing is a matter of piecemeal adhockery; that it does not know itself what it is trying to do and what its objectives are, but it is doing it anyhow. The other theory is that there is a conspiracy that the Government really does know what it is doing, and even when it stumbles and falls it is stumbling and falling towards some objective. I subscribe to the First theory, that the Government does not know what it is doing. Whatever the explanation, there is a great deal of uncertainty in the industry. That should be of concern to Members on all sides of the House.
One subject that has already been referred to is the unemployment insurance program as it relates to people in the fishing industry. The Nielsen task force report, as well as the recently tabled Forget Commission report, recommends doing away with unemployment insurance for people who are in the fishing industry. The Forget Commission Report recommends that it should be phased out over a five-year program. The Government has refused to indicate that it categorically rejects that type of recommendation which would be extremely harmful to fishing communities and fishing provinces on both coasts of Canada. It has not categorically rejected that. Instead it says that it will take the Forget Commission report
as a background paper, a $5.2 million background paper, and will tell us its plans next May.
During the election campaign Conservative Members on the West Coast promised that there would be a $100 million buyback program to reduce the capacity of the fleet. We have not heard anything about it in the last few months. There is no buy-back program. Fishermen are being squeezed out despite the good season.
There is a story in the current issue of the union paper, The Fisherman, about a West Coast fisherman who is quitting after 30 years. Even though there was a good season on the coast, he lost money. He talks about the short openings, a recurrent feature of fisheries management today, and indicates there is almost panic among fishermen to get out there and get fish regardless of the weather. Some 16 fishermen lost their lives on the West Coast in the last year. He points to a fear that the time of the small independent fisherman might be almost over, and that if the industry survives, it will survive in the form of fish farms or aquaculture or through a centralized fleet in the hands of a few large companies.
While the six month extension of the Fisheries Improvement Loans Act might help some individuals, my concern is that it will not solve the basic problem of uncertainty. There is a need for the Government to eliminate uncertainty by indicating a clear process of consultation, so that those most involved in the industry can help determine their own future. The Government has done away with the MAC, the Minister's advisory committee, and has established a system wherein a committee will be appointed by the Minister himself. However, there is considerable skepticism on the coast about whether or not it will work.
I suggest to the Minister and to the Government as a whole that there should be no more expensive decoys such as the Nielsen task force report or the Forget Commission report. The Government should come clean with what it hopes to do and establish a process which will allow the people most involved in the industry to have a say in it.
Bill C-32 will mean that one piece of the jigsaw, the Fisheries Improvement Loans Act, will be in place for the next six months. However, the rest of the jigsaw is scattered all over; people have no idea what will be the over-all pattern. The Minister indicated that changes were needed to resolve the problem involved in the limitation of guarantees once a certain level of claim for debts and difficulties has been reached. The difficulty was pointed out to the Minister in the last few months. At the very time when conditions were most difficult for fishermen, they found that their loans were being called by the banks because the guarantees had become inoperative. The Minister is aware of the problem. He has promised to do something about it by next spring. We look forward to the changes which he promised to bring in.
December 15, 1986

I should like to draw a final item to the attention of the Minister. Recently he won a court case in which his power to allocate between gear types and socio-economic conditions was deemed to be within his jurisdiction under the Constitution. Bill C-32 which gives him these powers is no longer necessary and, as the sunset clause becomes operative, it will die. However, Bill C-32 also guarantees consultation with the industry. I suggest that the Minister should reintroduce legislation in the House to reinstate the guarantee of consultation with the industry so that the people most affected will have the knowledge that the consultation is being written into the law, that it is not something just at the whim of the Minister.
In conclusion, we are glad to give support to the six month extension, but we urge the Government to come in with a process which will remove uncertainty in the fishing industry on both coasts, so that the fishing communities and the people involved in the industry will have some idea of what the future holds for them.


Brian Vincent Tobin: Mr. Chairman, I am pleased to participate in the debate on Bill C-32. I should like to echo the words of my colleague, the Hon. Member for Egmont, the critic for the Liberal Party. We in the Liberal Party are prepared to see the Bill receive rather speedy approval today, but we have some problem with it.
The Minister of Fisheries and Oceans has been aware for the last year of the great numbers of fishermen across Canada who through no fault of their own have defaulted on guaranteed fisheries improvement loans. They defaulted particularly last year, more so than this year, because of the nature of the fisheries and of the economy associated with it. They were rather amazed, indeed shocked, to discover that their so-called guaranteed federal fisheries improvement loans were not guaranteed at all. Fishermen have discovered that because of the fine print in the Bill, which we are now extending for six months, the Minister can say at his discretion when a particular lending institution has reached its quota of bad loans.
For example, if 10 per cent of the loans of the Bank of Nova Scotia in a lending zone and during a lending period-and that is the terminology used-turn out to be bad loans and it makes a claim on the Government of Canada, any other fisherman who defaults, unlike his neighbours and colleagues, does not have the benefit of the Government of Canada guaranteeing his bad loan. Fishermen have found out that lending institutions will come after them with collection agencies or people making third party demands.
I wrote a letter to the Minister of Fisheries and Oceans in which I illustrated one particular case a year ago. In fact, in October, 1985 I made initial contacts with the office of the Minister of Fisheries about a particular case. It was the case of Mr. Wilfred White of Sandy Cove, Newfoundland, which is in my riding. He was one of many-and I have been told it is thousands-of fishermen across the country who through no fault of their own, but because of difficult circumstances and a
Fisheries Improvement Loans Act
desperate fishery for several years in a row, defaulted on their loans. This gentleman put all his personal moneys into the fishery and into making his loan payments. He sold off equipment and recreation vehicles to try to make his loan payments. He went down fighting, clinging by his fingernails to his boat and his gear. He tried to make a living and to make his payments. Nevertheless he went down. He had not borrowed the money for holidays, for personal aggrandizement or for luxuries. He borrowed the money for investment in the fishery. Having borrowed the money for that purpose, he said: "Thank God, at least the Government of Canada under the guaranteed fisheries improvement loan will see to the bad debt which now rests with the Bank of Nova Scotia".
What happened to Wilfred White, this man who clung on to the last instant, who invested every last dime to the last second trying to make a go of it in the fishery? What happened to his guaranteed federal government loan? He received a letter from the Bank of Nova Scotia which referred to his liaility under fisheries improvement loan No. 0669, granted on April 7, 1980, for $11,250. The bank confirmed that it forwarded its claim for loss to the Government of Canada and that its claim under period 6 was rejected. It went on to indicate that it had no other alternative but to look to Mr. White for liquidation of the debt.
I called the branch manager of the Bank of Nova Scotia on the northern peninsula of Newfoundland and asked: "What the hell is going on? Why are you threatening and sending in collection agencies to harass Wilfred White, an honest man, a decent man, and a good man"? The bank manager said: "I agree. He is an honest, decent and good man and I am embarrassed that I have to take this kind of action."


Some Hon. Members:: Oh, oh!


Brian Vincent Tobin: Members of the New Democratic Party may laugh and think it is funny that fishermen-


Bill Rompkey: They lost the seat.


Brian Vincent Tobin: Yes, they lost the seat.-are trying to make a go of it in Newfoundland. They may laugh. They may think that the problems of the fishermen are no more than a matter to be chuckled at in this House. They may think that the representation I make on behalf of the fishermen of northern Newfoundland is inadequate and something to be laughed at. However, let me tell my colleague from the New Democratic Party that Wilfred White is only one of dozens in his community who has been-it is not too strong a word to say-shafted by this Government. Let us look at what the legislation we are extending today for six months says:
-to make any payment to any lender-
Lenders being banks:
-in respect of loss sustained by it as a result of a guaranteed loan made during the period-

December 15, 1986
Fisheries Improvement Loans Act
The wording of this legislation is misleading. It does not make any payment to any lender, the banks, with respect to any loss under guaranteed loans. The loans are not guaranteed. There is an escape clause. If you live in an area and deal with a bank where the economy is bad and where more than 10 per cent of the lenders have had to default at the 10 per cent level, the bank can stop receiving guarantees from the Government of Canada.
What if my colleague were a fisherman, received a loan and defaulted early, say the first time he got in trouble he gave up the ghost, went to the bank and said: "I default"? He gets his loan paid for by the Government of Canada because he is within the first 10 per cent of those to default. If my other colleague is a fighter, hangs on to the bitter end, struggles for a couple of years, not properly clothing, feeding or looking after his family in order to hang on, finally gives up, goes to the bank and says: "I have defaulted", they tell him that the first 10 per cent has been taken up and there is nothing they can do for him. What happens then?
Is it a question of having a bad credit rating? Is it a question of being embarrassed personally because you are in trouble with the bank? Fishermen are embarrassed. They have their pride.
Is that all it is? Is it a question of having great difficulty next time out getting a loan? Is that all it is? It is all of that, but much more, Mr. Chairman. It is a bank coming at you through a series of collection agencies out of St. John's, Halifax or Toronto, sending a notice to a fisherman in Sandy Cove, Newfoundland, a notice concerning his Government guaranteed loan, telling him that he better sell his truck, his house or whatever gear he has left with which to make a living for himself and his family and that he better scrape up $11,000 and repay the bank because the bank's books must be balanced. He must suffer the indignity of something less than a welfare regime because his so-called Government guaranteed loan is no guarantee at all.
That has been going on in record numbers, in particular in the last year, and I know the Minister is aware of it. It may have happened in previous years, but recently there has been a dramatic increase. The reason is that the Minister-it is not the Minister's fault-has inherited a fishery where in some parts of this country there have been four or five desperate years in a row. He has inherited fishermen who have been on their backs, trying to make a go of it for four or five years in a row, some of whom have finally buckled under the crushing burden of loan repayment. The Minister has been aware of this situation for a year.
I ask the Minister, as much as it is pleasant to see the basic concept of a fishermen's improvement loan extended for six more months because it would have run out otherwise, why it was not possible during the last year, when we Members of Parliament were aware of this problem, to have come forward with a new Bill today? Why have an extension to an existing problem that seeks to provide remedies to inherent injustice and unfairness?
I want an assurance from the Minister of Fisheries and Oceans that this Bill we pass today is not an exercise in fading out the Fisheries Improvement Loans Act over six months. I want a minimal assurance in expressing my disappointment that as we do not have a new Bill before us today that in six months he will come before us with a new Bill, one that will be relevant to existing circumstances evident in the fishery of eastern Canada and indeed in the fishery of the West Coast of Canada, in the Province of British Columbia.
I want the Minister to examine the plight of all of the Wilfred Whites of Canada, legitimate fishermen, honest people seeking to do an honest day's work and in the course of bringing in some new Bill to examine whether or not retroactively some kind of justice and sense of fairness can be introduced so that the unreasonable penalty that Wilfred White and many others have paid and are continuing to pay can somehow be rectified.
I, with my colleagues, support the notion that this Bill be extended for six months, but only because the concept of a fishermen's improvement loan is a good one and ought not to be lost. I cannot in good conscience-and I have written the Minister repeatedly on this issue-say that the Bill we are passing today is one that is worthy of the name Fisheries Improvement Loans Act, it is not. I beg the Minister of Fisheries of rectify this problem as quickly as possible.


Thomas Edward Siddon: Mr. Chairman, the Member has put a question and a proposal to me. I would like to respond to the suggestion that he has made. As the Minister responsible for all the fishermen of Canada, I certainly sympathize with the concerns of individual fishermen, such as Wilfred White and others whose particular adverse circumstances are brought to my attention from time to time.
I am somewhat disappointed that the Hon. Member was not able to be with us earlier when we commenced debate on Bill C-32. I understand that that was probably not possible. I did indicate that the six month period we are requesting, by way of an extension to the current loan period referred to as period nine, is not merely to find a way of amending the current Fisheries Improvement Loans Act, although that might be one consequence we will arrive at by the end of the next six months in 1987, but to look at other ways of consolidating and improving the provision of preferential financing for fishermen, whether it be through the Federal Business Development Bank, by consolidation with the Small Loans Act or perhaps even consolidation with the Farm Improvement Loans Act.
Those questions are currently being examined. I want to assure the Hon. Member, not in the context of the interpretation he places on the Nielsen task force recommendation, but with a view to improving the way in which we manage credit services for fishermen that the general thrust of this Government and this Minister is to improve the way in which we manage all the services of Government and the fishery.
I do not want to appear antagonistic in suggesting that the loan period, which is causing the difficulty for the Hon.
December 15, 1986

Member's fishermen in particular, was established by way of legislation adopted prior to July 1, 1977. Period six extended a certain ceiling on loans to be financed by the major chartered banks for the period July 1, 1977, to June 30, 1980. In that period an unprecedented number of loans were issued by the major banks, some $77 million worth. Then many of the fishermen who took out those loans for various kinds of vessel improvements, equipment, et cetera, discovered, in the early 1980s, that the crushing burden of high interest rates put them in a position where they could no longer meet their loan payments.
It was the double whammy of a high rate of lending by the banks, in period six in particular, and high interest rates. We found that portion of the loans guaranteed by the Government of Canada was less than all of the defaults over the last two years. I think all Hon. Members understand that. The reason for this is the formula contained in Section 6(2)(ii) of the Act. It requires that the Government guarantee will amount to only 90 per cent on the first $125,000, 50 per cent on the next $125,000 and 10 per cent on anything above that.
In effect, under the old legislation we are allowed to guarantee defaults to the extent of 10 per cent plus a 1 or 2 per cent correction out of a total portfolio of some $76 million. The number of individuals caught in this bind is not large, but I am looking for remedies for the cases we are dealing with. I must remind Hon. Members that we have to work co-operatively with provincial loan boards in this respect. That is one reason for the requested extension of period nine. We can in that time devise a better remedy for those extremely abnormal circumstances when interest rates take off as they did in the early 1980s.
I will conclude by urging the Hon. Member to support us in speedy passage of this Bill. Over the next six months we will attempt to make the necessary amendments, which must be done in consultation with fishermen, provincial loan boards and provincial Governments, and I undertake to do that. However, I must register the caveat that what comes out at the end of that process may not be just an improvement to this Act, it may be something else. I undertake to ensure that the something else is consistent with the need to continue to assist in the development of the fishery in an orderly and helpful way.


Bill Rompkey: Mr. Chairman, I, too, support my colleagues in wanting to see this Bill passed quickly and I share in the comments just made by my colleague, the Hon. Member for Humber-Port au Port-St. Barbe.
I want to use this opportunity, and I hope you will give me some latitude, to ask a question on an issue which is very important today to inshore fishermen in Newfoundland. I am glad to see the Minister of Employment and Immigration in the House. I hope he will listen to what I have to say because it applies particularly to him. I am sure the Minister of Fisheries
Fisheries Improvement Loans Act
and Oceans would be interested as well. If I could just get the attention of the Minister of Employment and Immigration?


Philip Derek Lewis: It is a Liberal Member who is talking to him.


Bill Rompkey: I want to tell the Minister about an existing situation and get his assurances on a certain matter. Because of a failure in the inshore fishery of Newfoundland, some $4 million was allocated to create work programs for those fishermen who did not qualify for unemployment insurance this winter as a result of the failure of the inshore fishery. That is much less than was allocated last year, which was $6 million. There have been radio reports in Newfoundland that only $1 million of that $4 million is to be taken up by fishermen because of the qualification restrictions put on it by the Department. If the radio reports are correct, and I hope they are not, then only a very small minority of the inshore fishermen who did not qualify through no fault of their own will qualify for unemployment insurance.
The Government of Canada has allocated some $800 million to farmers in western Canada and only $4 million for inshore fishermen in Newfoundland. I want an assurance from the Minister that all of that $4 million will be available and that those who do not qualify for unemployment insurance this year for those reasons will not be excluded from this program. Can the Minister give that assurance this afternoon?


Steve Eugene Paproski: I will allow the Minister of Fisheries and Oceans to answer that question but not the Minister of Employment and Immigration.


Thomas Edward Siddon: Mr. Chairman, I am sure the Hon. Member will understand it is probably more appropriate that I attempt to respond to his question. All I can say on behalf of my colleague and myself at this point is that we have had discussions since this problem developed with a view to using it, not exclusively but to a considerable measure, to assist those inshore fishermen. This will enable them to undertake projects which will be beneficial to themselves as fishermen and at the same time allow them to supplement their earnings in the way the Hon. Member has suggested. We will continue with those discussions. I can assure the Hon. Member that my colleague and I are both very sympathetic to the situation.


Bill Rompkey: But what is the answer to the question?


James Douglas Manly: Mr. Chairman, the Minister said that when he brings in legislation in six months it may be to this Act or it may be tied in with agricultural improvements or small business or some other package. Are the Minister and his Government committed to the idea that the fishing industry needs some kind of government guarantee loan program and that it should not simply be left to the mercy of market forces and the normal lending institutions, as the Nielsen task force suggests?


Thomas Edward Siddon: Mr. Chairman, we understand the special needs and circumstances of fishermen. Whether it be a federal

December 15, 1986
Fisheries Improvement Loans Act
Government guarantee program or some other form of special consideration, whatever evolves between now and the end of the six-month period will be of special benefit to ensure that fishermen can continue to finance their activities without being subject to the kind of perdition that he refers to. I am working closely with my colleagues to that end and we hope the program which evolves will be equally or more helpful and eliminate some of the problems we were debating earlier this afternoon.


James Douglas Manly: Mr. Chairman, can the Minister indicate how he sees the future of this Act or its successor in relation to the Conservative Party's promise to bring in a SI00 million buyback program for the West Coast, which promise was made during the 1984 election campaign?


Thomas Edward Siddon: I am very pleased that the Hon. Member asked that question. He touches upon one of the strange paradoxes, of which there are many, in regard to the management of the fisheries. Over an extended period of time we have financed, on a preferential basis, the expansion of our fleet, in this case the West Coast salmon and herring fleet, largely through the Fisheries Improvement Loans Act. Almost 50 per cent of the loans guaranteed under this program encouraged the expansion and modernization of that fleet. On the other hand, we have an acknowledged problem of excess capacity. This problem also exists in some areas of the Atlantic fisheries. It is alleged that this is one of the serious difficulties which we must confront in the southwest area of Nova Scotia in particular.
The new initiative, in whatever form it takes, must specifically recognize the fact that if the Government properly spends money to modernize the vessels and make them more efficient and safe, it should not be expected to buy them back when they become too efficient and there are too many of them. That is why, in these times of tight finances, I do not favour a direct government funded buy-back program, bearing in mind that the people of Canada have already contributed significantly through programs like FILA to the building of those vessels in the first place.


James Douglas Manly: Just to be perfectly clear, is it correct that the 1984 election promise is, in the words of Richard Nixon, "inoperative"?


Thomas Edward Siddon: Mr. Chairman, if the Hon. Member examines what he considers to be a promise, I think he will find that the Progressive Conservative Party, running for election at that time, indicated that some fleet rationalization initiatives would have to be taken. From my perspective, there was never a promise that it would be funded by the general revenues of the people of Canada, although some initial funding would be required, as Dr. Peter Pearse recommended some time ago, to get such a program under way. My priority for the West Coast, as I have stated repeatedly, has been to produce more salmon rather than to buy out fishing boats and reduce the amount of employment available to fishermen. I believe we
should expand the resource upon which their livelihood is based.


Mr. Baker:: Mr. Chairman, the Minister keeps referring to FILA and how great it is. I presume that is the Fisheries Improvement Loans Act. Why would the Minister not amend the Bill presently before the House to change the 10 per cent to 15 per cent in order that the 1,000 fishing enterprises which were recently hit by the banks could have their loans guaranteed by the federal Government?
That is the problem with this Bill. There are fishermen in seven provinces who signed up under this Act for loans from banks. Lo and behold, when they could not pay their loans they sold the gear they had bought and the federal Government then refused to honour its guarantee to the banks. The Minister said that was because the banks had exceeded the 10 per cent specified in the Act.
This has never happened before in the history of the Fisheries Improvement Loans Act, which dates back to the 1950s. It has never happened before that practically every bank and financial institution in Canada has been cut off from the federal guarantee. Practically every bank in the Minister's riding in British Columbia was notified by FILA that it had exceeded the 10 per cent. It makes no sense for the Minister to say that it was only the Bank of Montreal and the Bank of Commerce. It was also the Royal Bank and the Bank of Nova Scotia. The Royal Bank of Canada and the Bank of Nova Scotia should hang their heads in shame at the thought of the letters they sent out to hundreds of fishermen. One day those financial institutions will have to admit publicly what they did to fishing enterprises and families in British Columbia, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland, and on the north shore of Quebec.
My question to the Minister is very simple. The purpose of this Bill is to extend the period of time for six months. The last Bill which came before the House was for a one-year extension. All previous Bills were for three-year or five-year extensions. We are now going to extend it for six months, quite obviously to do away with it.
This has never happened before since the Act was adopted in the mid-1950s. Therefore why does the Minister not simply change the formula to get all the fishing enterprises off the hook with the banks? In other words, why does the Government of Canada not pay up the guarantees? The Government stood in the House the other day and claimed there was $1 billion for the farmers of Canada. Where is the paltry amount of money needed by the fishermen of Canada? They signed a piece of paper which said they were guaranteed by the federal Government. When they could not pay, they discovered that they were not guaranteed by the Government of Canada and had collection agencies, the courts and the banks down their necks.
I am told by FILA that there are 1,500 fishing enterprises in seven provinces involved in this. That is what they tell me but there are probably more than that. Take as an example a
December 15, 1986

fisherman who made $5,000 in 1986 and owes $30,000. He must put up all his property and remortgage his home. We have great pride in our banks, which have a great sense of community spirit and humanitarianism. The first thing they did was to send letters to all these people asking them to take out life insurance on their loans since the federal Government no longer guarantees them. Just imagine that, Mr. Chairman. That is the banks for you.
The Minister could get the banks off the hook. I do not like the letters which the banks sent out or the actions which they took. I received a dossier the other day from Nova Scotia containing some incredible letters. However, the banks are claiming ignorance of what was in the Act. They should have known what was in it. Why does the Minister not simply change the percentage in order that the federal Government can guarantee the loans which the fishermen thought were guaranteed by the Government when they signed at the bank? That is a pretty simple question. I do not know whether the Minister has Cabinet or Treasury Board authorization. However, would he entertain such an amendment to the Bill or support a special Cabinet order to pay those fishermen off since he is going to phase out the Fisheries Improvement Loans Act anyway?


Thomas Edward Siddon: Mr. Chairman, the Hon. Member knows that I do not have authorization to accept such an amendment and neither could I accept it. If the Member were in the banking business, whether in a private or public sector financial institution, he would never advocate that all loans in default be paid off by the proprietor. The reality is that in the 31 years since the Fisheries Improvement Loans Act was first adopted in 1955 until March 31 of this year, 18,000 loans were made. There have only been 611 claims paid to lenders for defaults at an average of $13,500.
The Hon. Member knows that when a fisherman undertakes an obligation to repay one of these loans, he will incur that obligation just as any other borrower, whether or not the bank received satisfaction under this Act. In other words, if the loan goes into default with the bank and the lender can claim against the Fisheries Improvement Loans Act, the liability will remain in perpetuity with the fishermen because it remains a liability to the Crown. I do not believe the Hon. Member is advocating that in all cases fishermen merely have their defaults paid off by the Government of Canada. Why would we have a loan system in the first place which entails a certain obligation, indeed a written undertaking, to repay this amount?
I cannot accept the proposal. The Hon. Member has referred to some 1,500 fisheries enterprises, as he calls them, which are being impacted by this unfortunate development associated with loans entered into in the early part of the 1980s. However, he has never provided me with a list of such institutions, nor, I am told by my officials, is there a list that is anywhere near that magnitude of loans in default. I do not
Fisheries Improvement Loans Act
think it is appropriate for a Member to exaggerate and sow the seeds of antagonism toward the Government for a program that he adopted and approved as a member of the Government at that time. It is he and his colleagues opposite who set these limits and established the conditions under which these fishermen are now facing hardship.
In legitimate cases we will try, through adjustments to the form of assistance given to fishermen, to rectify these injustices. However, we cannot make the system wide open and promise to pay off all the loans of fishermen who have fallen into default. I hope the Hon. Member will appreciate that.


George Baker: Mr. Chairman, I want to raise two matters. Those fishermen who had to put up their homes, their pick-up trucks and mortgage their lives because of this problem with the Fisheries Improvement Loans Act notified the Minister of Fisheries and Oceans. In fact, I have countless numbers of letters which I can give the Minister. If he is saying that he would solve the problem if it existed, then let me tell him that there are seven in the community of Summerford in Notre Dame Bay, and there are 14 in Twillingate. The Minister should check the mail if he believes they do not exist. He should talk to the former Minister if he says that he has not received letters because that is where I obtained my letters. I have copies of each letter from the Minister.
The Minister asks why the Government of Canada should pay off the fisherman who has defaulted on his loan. What is the purpose of the Fisheries Improvement Loans Act if it is not to provide a guarantee to a fisherman who cannot pay off his loan? That is when the Act comes into force. The first thing a fisherman loses is the property he bought with the bank loan that was guaranteed by the federal Government. According to the Fisheries Improvement Loans Act, for fishermen in the first 10 per cent, the difference between what the bank received on the sale of the property and what the fisherman received as a loan is paid by the federal Government. That is the purpose of the Act.
The Minister seems to be saying that regardless of whether the fisherman is in the first 10 per cent or the second 10 per cent, he should still owe the money to the federal Government. That may be legally correct, that there is no longer any debt because it is paid for by the federal Government. The Minister says that there are not 1,500 such cases in Canada and Hon. Members should not be allowed to state such figures. I suggest that the Minister should tell us exactly how many fishermen have been in this situation in the last two years. He cannot tell us that because he does not know. He does not know because he has no way of knowing. He simply notifies the banks that they have reached a limit and, for example, a letter to pay off Mr. Ron Jones in Summerford in Notre Dame Bay.
The Minister's Department sends a letter to the bank saying that the bank has reached the limit of its claims. The Minister has no way of knowing how many times the bank sends letters notifying the fishermen that they no longer honour their loans. The letters from the banks simply say that they have been

December 15, 1986
Fisheries Improvement Loans Act
informed by the federal Department of Fisheries and Oceans that those fishermen are no longer guaranteed under the Fisheries Improvement Loans Act.
The House may recall that we presented the letters to the House over a year ago, showing exactly what was said. The Minister says that the numbers are wrong but he has no way of knowing the exact figure.


An Hon. Member:: Do you know?


George Baker: No, I do not know. However, estimates have been given to me and we have received complaints from seven provinces in Canada, including British Columbia. It is not only poor Newfoundland or the east coast of Newfoundland that are affected, but also British Columbia and other provinces.
The Government is ultimately the only body that can correct this situation unless the banks of Canada were to agree to forget about these defaulted payments. However, we know that when the banks deal with people like fishermen and farmers, they operate the same as collection agencies. In fact, I am surprised that banks across Canada have not opened collection agencies in their front offices to act on behalf of the Government of Canada and others.
There is a major flaw in the Fisheries Improvement Loans Act. It only came to light in the past two years because the fishery was not as bad as it was in the mid and late 1970s. The Minister has made several speeches in this chamber in which he recognized that the fisheries were in difficulty and people could not pay their loans. We would certainly support the Minister if he were to assist the fishermen of Canada and introduce a change to guarantee all the loans.
The Minister is going to eliminate the provisions of this Act. As a final Christmas present to all those fishing enterprises that were notified by the banks, why not introduce a provision that will pay off their loans as well. That is the point I am attempting to make.


Thomas Edward Siddon: Mr. Chairman, I believe I detected a repetition of the previous question in the comments of the Hon. Member. I would like to respond to him as concisely as I can. The Hon. Member suggested that we somehow establish a loan program in which the people of Canada guarantee a certain portion of the liability and that it be a loan program not a grant program.
I remind Hon. Members that in the entire period of this program, since the first legislation was passed in 1955, the claims paid to the lending institutions have amounted to $13.5 million and the recovery of those claims has amounted to only $319,000. In other words, Mr. Chairman, the people of Canada have paid out $13.5 million against those claims in recognition of the liability of the Government of Canada. Those claims have been paid, but those fishermen who remain liable have only paid to the extent of $300,000. Therefore, we have virtually guaranteed at the point the bank pays off the loan that that is the last we will hear from the fishermen.
I do not believe the Hon. Member is suggesting we let everyone off scot-free. Why not call it a grant program, if that be the case? We believe that people who borrow money should accept some degree of responsibility for the repayment of the loan, as we do in the private banking industry. We accept that the Government should help out in a small way, as is done by the 1 per cent plus prime limit on the interest rate, but I do not think the Government can be expected to go a whole lot further in dealing with the small number of fishermen who, perhaps for reasons of misfortune, bad management or bad judgment, find themselves in a position of not being able to pay back.
When the Hon. Member throws numbers around such as "1,500 fishing enterprises", he is distorting and exaggerating to a serious degree. If the letters I have received are any measure of the number of cases where this is bringing hardship to fishermen, then those 20 or so letters I have received since I was appointed Minister would be a very small measure of the seriousness of this problem compared with the numbers the Hon. Member is throwing around.
I might also add that in the past two years we have seen a remarkable recovery in the fishing industry. Last year earnings were up 20 per cent over the previous year and landings were up 10 per cent. This year the performance will be just as remarkable. Foreign exchange earnings from the Atlantic fishery alone will exceed $2 billion this year. While it is true there will always be some unfortunate fishermen, particularly in the Hon. Member's province, about whom 1 am deeply concerned and will try to help in every way I can, there will nevertheless be cases which cannot be resolved merely by absolving the fishermen of their responsibility to pay back.
When the Hon. Member refers to the banking institutions, I share his concern, because we have found that some banks quickly exceeded their maximum liability and others did not. That suggests to me that perhaps some banks, or branches at least, have been more careless when a fisherman went into default in perhaps paying them off without a whole lot of hassle or a lot of attempt to collect. They consumed the maximum amount we could agree to under the formula which the Hon. Member's Government adopted and the fishermen have had to look somewhere else for assistance. Other banking institutions, and I will not name them, still have some of their access to guarantees unfulfilled. I will make a commitment to the Hon. Member that during the period of the next six months we will look at that situation. We will look at the extent to which some of the banks have not consumed all of their acccess to assistance under this program while others consumed their access very, very quickly.
I might add, Mr. Chairman, that in doing that we should not penalize those who have not consumed all of their access to guarantees under this program merely to advantage those banks which quickly came to the Government asking that a claim be made. Perhaps that focuses on one of the basic faults of the Fisheries Improvement Loans Act, an Act, I repeat, that the Hon. Member stood in this House and approved. He
December 15, 1986

renewed those periods of loan guarantees probably two or three times in his time in the House as a member of the Government. Now we have this problem today which suggests there is a basic flaw in the Fisheries Improvement Loans Act. We are not asking for a two-year extension, only six months, because we intend to correct that situation.


George Baker: Mr. Chairman, the problem with foreclosures in the 1,500 cases which I said were in existence in seven provinces came up only in the past couple of years because the banks were notified by the Government of Canada that loans which were taken out in the 1970s and early 1980s had gone over their limit. A fisherman owning a boat is called an "enterprise", for the Minister's benefit, which is the terminology used by the banks. The fisherman stopped making payments on his loans and, of course, his property was taken and sold, which is the normal procedure. Then a claim was made by the bank to the federal Government, which is also the normal procedure under this guarantee. Therefore, it took that period of time.
The Minister says I am exaggerating and distorting the numbers. How does he know I am exaggerating and distorting the numbers when he does not know the numbers? Neither does his adviser, the expert sitting in front of him. No one knows what the numbers are.


Steve Eugene Paproski: Order, please. I would hope that the Hon. Member's statement would be directed just to the Minister.


George Baker: Mr. Chairman, I thought the Minister would want to check it out with someone. The fact is that the banks are notified in a letter from the Department of Fisheries that they have exceeded their guarantee limit with the federal Government. The banks then take over and notify the fishermen. It has nothing to do with the Minister of Fisheries nor the Department of Fisheries. I predict the Minister will rise in a moment and say: "We have asked the financial institutions from time to time about the numbers of loans we cannot collect", but he cannot be accurate on the numbers.
A year ago I took the number of representations we had and contacted the banks concerned. We came up with a general figure. That figure we came up with a year ago has now, I am sure, been exceeded because I am positive that even more people have started to default. Therefore, the numbers keep growing. The Minister can verify this, but I believe it takes some 15 years before we know just how balanced the books are with respect to the Fisheries Improvement Loans Act.
Therefore, I go back to the original question. The Minister says earnings are up 20 per cent and landings are up 10 per cent. Yes, Mr. Chairman, the landings were up on those big offshore boats, the landings on codfish on the East Coast and everywhere else was up. National Sea Products went up on the stock market. If one wants to make money these days, one would go with National Sea Products because it was given the factory freezer trawler licences by the federal Government.
Fisheries Improvement Loans Act
Yes, the landings went up and will keep going up for National Sea Products and the other companies. However, landings are down for the inshore fishermen. The Minister of Fisheries has not been around long enough to know what we call an inshore fishery. Although the Department of Fisheries says so, an inshore fisherman is not a fellow with a herring or cabling licence who has a 50-foot boat. In our books, he is not an inshore fisherman because he was able to sell to the fish plants this summer.
The inshore fishermen, the fellows with 18, 20, 25 and 30-foot boats could not sell to the fish plants. There was no big amount of money coming to them. The fishing industry's council or whatever it is, the Economic Council of Canada, the Atlantic Provinces Economic Council, the Newfoundland Minister of Fisheries and the federal Minister of Fisheries are all saying what a marvellous year 1986 was since landings were up. The poor fishermen all along the coast of Newfoundland are saying: "Are these fellows in Mexico? Are they from another world? From where are they operating? They must have their heads in the sand". Of course, on the books landings were up but they were not up for the inshore fishermen, the ones who take advantage of these fisheries improvement loans. Many of them got stuck because the federal Government's guarantee was not enough.
Granted, this measure was brought in when the Liberals were in power. It was brought in in the 1950s. It was redone in the 1960s and the 1970s. The last time it was redone was a year ago when this Government was in power. The formula was brought in by the Liberals, true, but the Bill before the House changes the Act. All I am asking is while the Minister is doing that, why does he not change the formula and backdate it to take care of those fishermen? The Minister says that there are not 1,500 of those fishermen. If the number is so small, why not amend the Bill and take care of those few fishermen. Maybe then I will let the Bill go through.


Maurice Brydon Foster: Mr. Chairman, I am interested in this legislation, particularly as it applies to the fishing industry in the Great Lakes. Not only are fishermen there having difficulties, but they are also having trouble maintaining wharfs and facilities because of the extremely high water level from which the Great Lakes are suffering. For instance, I am told that in the Lake Huron, Lake Erie and Lake St. Clair area, 55 of the 88 wharfs in small craft harbours are in serious disrepair due to the high water. Still the Department maintains an incredibly low amount of support, some $2.5 million, toward maintaining those wharfs not only in Ontario but in Manitoba, Saskatchewan, Alberta and the Northwest Territories. Those provinces have all been gathered under the umbrella of small craft harbours which works out of Burlington.
If fishermen will not have to spend all their fisheries improvement loans on fixing government wharfs, it is essential that the Department provide additional funding. I know the Minister has been concerned about this issue. He has received

December 15, 1986
Adjournment Motion
many representations from our side of the House, from his own side of the House and from members of the NDP.
I hope the Minister might be able to give us an indication of just what is the situation with regard to small craft harbours. Besides renewing this legislation which is essential, will the Minister be able to improve the wharfs at places like South Baymouth, Meldrum Bay, Spanish, Hilton Beach, Richard's Landing, Little Current, Desbarats and Blind River, all of which support fishing and small craft activity?
I would like to know if the Minister will be able to provide a program of recovery and rehabilitation for those 55 wharfs in small craft harbours which have been damaged by the high water this past year or two. I wonder if he will be able to get the additional support and assistance required to carry out those improvements. I am told that it would require several million dollars over and above the regular maintenance budget so I hope the Minister will be given the latitutde to indicate to the millions of people who live in that area of Ontario and the West, people who depend on small craft harbour grants from the Department of Fisheries and Oceans, that they will receive moneys for the improvements which are so desperately needed.
We note from a recent report from Michigan that President Reagan has declared some 22 counties in the State of Michigan as disaster areas. The three levels of Government in the U.S. have committed some $10 million for flood improvement to small craft harbours and coastal areas. I hope that we might be able to receive the same kind of assistance in the Ontario region from the small craft harbours department which, of course, is a vital part of the Minister's Department of Fisheries and Oceans.


Thomas Edward Siddon: Mr. Chairman, I have a brief reaction to that. I think all Hon. Members would like to see the legislation before us wound up quickly. I gather there are other important items that we might debate this afternoon as well.
The Hon. Member is concerned about the high water levels in the Great Lakes. I certainly must consider seriously the damage that has been caused and it appears that in the foreseeable future, there will be no immediate turnaround. We cannot expect the water level to drop by three feet in the next 12 months. I am looking very seriously at special means of dealing with the situation. I hope early in the new year to bring in a report on it.


Steve Eugene Paproski: Shall Clause 1 carry?


Some Hon. Members:: Agreed.
Clause 1 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Paproski):: When shall the Bill be read the third time? By leave, now?


Some Hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 66, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Brant (Mr. Blackburn)-Disarmament-(a) United States Strategic Defense Initiative- Government position, (b) Research undertaken by United States; the Hon. Member for Papineau (Mr. Ouellet)-Air transport-(a) Purchase of Canadian Pacific Airlines by Pacific Western Airlines, (b) Minister's position; the Hon. Member for Laurier (Mr. Berger)-National Research Council-(a) Size of budget and staff, (b) Budgetary cutbacks-Government position.



GOVERNMENT ORDERS


Thomas Edward Siddon: that Bill C-32, an Act to amend the Fisheries Improvement Loans Act, be read the third time and passed.


George Baker: Mr. Speaker, as was explained during committee stage of this Bill, I and other Hon. Members have serious reservations about what is happening in the fishing community as it relates to moneys that were supposedly guaranteed by the federal Government and were then not paid because of a formula that triggered in when times were bad.
I suppose holding up this piece of legislation would not do any good, although I can tell you that I have a good mind to do that. As you know, on third reading there is unlimited time to speak on a Bill. I was thinking of it a moment ago as it relates to fishermen, and in the few remarks that I will make, I wish to explain why.
Many Members of this House represent the personal problems of fishermen. A great many Members in this Chamber have represented fishermen over the past two years in trying to deal with this problem of the Fisheries Improvement Loans Act, and the notification from the banks that loans were no longer guaranteed under the Act. A typical case is a call from a fisherman who would state: "I have just received a letter from the bank saying I owe them $20,000, and I have $2 in my bank account. What am I going to do?" A letter would be received that stated: "The bank notifies me
December 15, 1986

they want full payment of $20,000 because that is the difference between what my gear has sold for and what I totally owe that bank, although, when I went into the bank, there was a sign that said 'Get a fisheries improvement loan guaranteed by the federal Government'".
The Minister has said that there are only a few of those fishermen. Nothing that we say to the Minister will make him change his mind and modify this Bill to take care of those few fishermen who were dealt such a back-handed slap by the Government and the financial institutions.
It is all too common now to see cases where fishermen have had to pay money back to the Government, to the banks under fisheries improvement loans, and who are stuck in a very bad financial situation. I had a few cases the other day that were rather shocking. For example, I had cases of 34 fishermen referred to me. They had won their cases three weeks ago before the Federal Court in Ottawa against the Unemployment Insurance Commission. They had been fighting for about six or seven years and had finally won their cases against the federal Government. The judge ruled that the fishermen won their cases. The Unemployment Insurance Commission took the decisions from all of these court cases three weeks ago, and decided that the fishermen did not win their cases. It is not going to pay up what the fishermen had already paid in.
As an example, Mr. Speaker, I will read from the case of Eric Keats, appellant, and the Minister of National Revenue, respondent; and the case of Anthony Burke, appellant, and the Minister of National Revenue, respondent. This was a judgment handed down by Mr. Justice Trahan three weeks ago in which the judge states that he has no alternative but to grant the appeals. Justice Trahan states: "It is ordered and adjudged that the determination by the Minister-be reversed". This is on the Unemployment Insurance Act. The judge further states;
I have nothing but admiration for Mr. Eric Atkinson, solicitor for the respondent, for the way in which he took the decision, with the authorization of the Minister of National Revenue, to ask the court to grant the Appeals-
After reading that, Mr. Speaker, one would have to say, "My goodness, the appellant won the case". But, oh, no, not with this Government. Not with the Department of Fisheries and Oceans, the Unemployment Insurance Commission, and the Department of National Revenue. No. Now they are saying the fishermen did not win their cases.
In looking at the cases that go to the courts regarding the fisheries improvement loans, that judgment is not being considered in favour of the fishermen at all. You find that some of the same people who were granted appeals under the Unemployment Insurance Act were nailed with loans that they had taken out under the Fisheries Improvement Loans Act.
I have 34 cases here from three weeks ago. On each one I phoned the Unemployment Insurance Commission and was told that the Unemployment Insurance Commission was not going to pay because it felt it had won. It feels that its lawyers in the Unemployment Insurance Commission are the foremost authority. They know what they are doing. The lawyers in the
Fisheries Improvement Loans Act
Unemployment Insurance Commission know what they are doing. "We will not pay back these poor fishermen the money that they paid and the fines they paid because we believe that the judge meant to rule in favour of the Government of Canada here in the Federal Court three weeks ago."
I went over each of the 34 cases. Apparently, there are 121. But I went over the 34 cases, and I found out what the Government was claiming as the phrase that made it decide it won. The judge states:
I have no alternative but to grant the Appeals 83-560 (UI) and 83-508 (UI) according to the submission brought forth by the Respondent's Solicitor.
According to the judge, the respondent's solicitor had asked the court to grant the appeals. The judge then turned around and sent to every single one of these fishermen a judgment that stated: "It is ordered and adjudged that the determination by the Minister-be reversed-"
The point is that the Government is seen to be an awfully cold body of people as it relates to the fishermen of eastern Canada. It appears that the Government has said to the Departments, "Look, let's find every way possible to save money". When the Fisheries Improvement Loans Act comes up it states, "Let's get rid of it". It says that because it feels the same thing could be done under the Small Businesses Loans Act as is done under the Fisheries Improvement Loans Act. It even says that the same can be done by the Federal Business Development Bank as is done under the Fisheries Improvement Loans Act. Nothing could be further from the truth. It cannot be done. If you read this Act, you see that it is directed toward fishermen. The Small Businesses Loans Act is not directed toward fishermen at all, and neither is FBDB. Looking at the reference to FBDB, now there is something. Fishermen applying under FBDB to buy a new engine? Sure. They could apply this year and it would probably be dealt with in 1990.
The Government is searching for ways to save money. There were three people who worked in the Fisheries Improvement Loans Act administration, and now there is one. That is all. Of course, when this Act is done away with in six months time, they may still have somebody there because some of these loans will be in effect for at least 15 years.
To leave these fishermen high and dry and to say in the case of people who had received loans that some of them are covered by federal Government guarantee and others are not covered by a federal loan guarantee is not good enough.
It depended upon the point in time a fishermen came into the bank and said that he could not make any more payments. However, the fellow who tossed it up in the air and said that he would quit the fishery benefited. Rather than work like a slave looking for fish, he walked into the bank with his fisheries improvement loan, guaranteed by the federal Government, and said that he would not try for another year. He was paid. It was the fellow who struggled to make his payments and just barely made it who found himself high and dry, with collection

December 15, 1986
Coastal Fisheries Protection Act
agencies down his neck day and night. He was the fellow who was brought to court and had his property seized.
There is no way the Minister can know the number of fishermen who were so affected by the fault in the Act. It only happened since the Government came into office two years ago. The Minister notified the banks about the cut off of the loans, affecting every fisherman who claimed thereafter. The Government of Canada notified only the banks.
A little over a year ago we calculated the figures given to us by the banks and found that it involved 1,500 fishing enterprises in seven Canadian provinces. I dare say that that number has risen by the hundreds. After notification by the Government the banks notified fishermen that they must obtain life insurance on their loans. They did not need it before because the loans were guaranteed by the federal Government. They called them all in, even the ones who were honouring their loans. They were called in or received letters indicating that they needed insurance on their loans. The banks simply said that the federal Department of Fisheries would no longer honour the loans. On top of that there was the climate in the fishing community, with a report coming in saying that their loans under the Fisheries Improvement Loans Act would now be taken away, terminated, and folded into the FBDB or the Small Businesses Loans Act. There is now talk that their unemployment insurance will be affected as well. Actions such as this are happening now.
As I mentioned earlier a group of fishermen, over 100 of them, have fought for seven years before appeal boards and before the courts. Finally 34 of them won their cases in black and white from a justice of the Federal Court, and the Unemployment Insurance Commission turned around and said: "No, we do not think you won". It was in black and white that they won, but they were required to appeal. They did not have any money to hire lawyers. These fishermen were represented by Members of Parliament who were doing it free because they were representing their constituents.
The general attitude of the Government of Canada toward fishermen leaves a lot to be desired. This is why I said to the Hon. Member for Egmont (Mr. Henderson), the official fisheries critic, that I had in mind to rise at third reading and not sit down. I had in mind to hold up the Bill all night, tomorrow, and the next day until Christmas, and then it would be too late. I know of cases similar to the fisheries improvement cases in which the federal Government said that they had not won their cases before the Federal Court although it was in black and white that they did. Again it was the heavy hand of the federal Government. As the Hon. Member for Egmont said, at least this is an extension of the fisheries improvement loans for six months. He indicated that I would not make it any better or worse by talking all night, all day tomorrow, and all day the next day.


George Roland Henderson: They will ram it through anyway.


George Baker: Yes, they will ram it through. However, it is enough to make one mad. These cases involve some of my
constituents and of course constituents from other parts of Canada. The heavy hand of the Unemployment Insurance Commission and the heavy hand of the federal Government came down on these poor, unfortunate fishermen with whom the judge agreed in their cases before the Federal Court after seven years of fighting.
We must find some way to right this wrong. I do not know how, unless we ask the Minister of National Revenue (Mr. MacKay) who acted on behalf of the federal Government to rise in the House and explain. Did he lose these cases? That is what the judge said. If he says he lost them, then he will have to pay all fishermen in eastern Canada. The Minister of National Revenue is a good lawyer. He knows how to read a judge's decision. Perhaps I will ask him that question tomorrow or the next day to see what he says and to see whether he is on the side of fishermen and on the side of justice in society.
Again I ask the Minister of Fisheries, in re-examining the Fisheries Improvement Loans Act, to look at those poor, unfortunate people who have had their property and everything else seized by the banks, all because they did not come in yesterday-they came in today-to get their loans guaranteed. They thought they had a guarantee from the Government.
Motion agreed to and Bill read the third time and passed.


COASTAL FISHERIES PROTECTION ACT
Thomas Edward Siddon: that Bill C-26, an Act to amend the Coastal Fisheries Protection Act, be read the second time and referred to a legislative committee.


Philip Derek Lewis: Mr. Speaker, I rise on a point of order. There have been discussions among the Parties, and I think Your Honour would find unanimous consent to put the Bill through all stages today, which would necessitate reference to Committee of the Whole rather than to a legislative committee.


The Acting Speaker (Mr. Paproski):: Is that agreed?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and, by unanimous consent, the House went into committee thereon, Mr. Paproski in the chair.
Steve Eugene Paproski: Order. House in Committee of the Whole on Bill C-26, an Act to amend the Coastal Fisheries Protection Act.
Shall Clause 1 carry?
On Clause 1-Punishment


Bill Rompkey: Mr. Chairman, I have no intention of opposing the legislation before us or of holding it up, for that
December 15, 1986

matter. However, I have some very serious questions for the Minister. As a matter of fact, I think we should congratulate him for the initiative which he is showing in this regard. I think it is a good move that penalties in the offshore are being increased. It is a measure which I applaud. We required that enforcement in that foreign fishermen or foreign ships cannot feel that they can come into Canadian waters with impunity. I fully support the actions of the Minister in this regard.
The Minister is doing something right, but everything he has done has not been right. I should like to ask him some questions about some of those other areas while we are on the topic because they are of great concern to fishermen in my riding. When we were dealing with the last Bill, the Hon. Member for Egmont mentioned the question of small craft harbours and the serious deterioration of many wharfs and breakwaters in fishing communities. I want to raise with the Minister the particular case of Lance au Loup in my riding in southern Labrador where $1 million was allocated for the improvement of a regional wharf for long liners in the straits area.
The wharf is half done. We have 12 or 15 long liners and 12 or 15 small fishing boats depending on that marine facility. It is incomplete and it is indicative of what has been happening. Attention has to be paid to our small craft harbours. We must have adequate funds. I remember very clearly one of the things our Party did when in government was to put adequate funds into small craft harbours. I remember one year in which $60 million-probably in the middle 1970s-was allocated to small craft harbours. We had a minimum of $30 million a year. That was before inflation overtook the present budget. The Minister has to address the issue that you cannot carry on a fishing industry if you do not have the proper wherewithal. It is like trying to sell automobiles without a garage. It cannot be done and the Minister has to pay attention, particularly to Lance au Loup.
There are two other issues I want to raise with the Minister, both of which he will know about, and I hope he will respond to them. The first is the situation at La Scie. La Scie is in a Catch-22 situation. The Minister, following along with the policy of our Party when we were the Government, brought in, according to the Kirby recommendations, what is known as the resource short plant program. That program is to assist those small communities and fish plants on the northeast coast of Newfoundland and elsewhere that do not get an adequate supply of fish from the inshore fishery. It is to have a supply of offshore fish landed at the small inshore plants, making them viable and keeping them going for a longer period of the year. Also, if a plant belongs to a company which has an offshore fleet, it cannot qualify for the resource short plant program. That is the situation in which La Scie finds itself.
It is interesting to know that La Scie was built, I believe, by the Government of Canada, many years ago. It is a community of about 3,000 people and serves a whole peninsula. The
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economy of the whole of the Baie Verte peninsula depends on that regional plant. I draw that to the Minister's attention because there is no way the community of La Scie can survive on inshore fish alone. La Scie has to have an allocation of offshore fish. I would ask the Minister to either amend the resource short plant program guidelines so that La Scie can be accommodated or allocate a supply of fish from elsewhere.
There was a proposal, for example, to allocate fish from a new facility that was built on the Labrador coast called Punchbowl, but nothing happened. That community and indeed the whole peninsula, which happens to be not only in my riding but in the riding of the provincial Minister of Fisheries, is in jeopardy because it does not have an adequate supply of fish. I hope the Minister will give us an answer of substance as to what he intends to do about this problem.
Third is an issue which we have raised with him and with his predecessor before. It also flows out of the Kirby task force report, namely, the concept of a northern fisheries development corporation. The Minister will know that in certain areas of the northern peninsula of Newfoundland and along the coast of Labrador we have marginal plants. These plants in small communities cannot survive because they are not part of a multinational organization but are simply small community plants.
Kirby's idea was to put those marginal plants together in what he described as a northern fisheries development corporation and to allocate federal funds, management and marketing expertise. If that were done in a collective way, the aggregate would be stronger than the parts that make it up. Each of those plants would benefit by being part of a larger cooperative effort, but that did not happen. When in Government our Party set aside $15 million to improve some of those plants and to set up that over all northern fisheries development corporation. Nothing has happened. The money has gone elsewhere. In the meantime, small plants are still struggling. I have not seen any better answer come along, neither have I seen any alternative action taken. I say to the Minister one of two things: either come up with a better idea and put it into effect or put in place the northern fisheries development corporation. The situation will not get better, it will only get worse.
The Minister will know that evidently the stocks we thought were off the shores of Newfoundland and Labrador in 2J and 3KL are not as strong as everybody thought them to be. The resource is not there that we thought was there. Everyone will have to tighten his belt a little. That means even more belt tightening for people who are in the position that I have described. Small marginal plants are at an even greater disadvantage because of weakness in the stocks.
Will the Minister follow through now by setting up the northern fisheries development corporation for the northern peninsula and for the coast of Labrador or will he come up with some alternative suggestion about how those particular plants are supposed to operate and maintain viability in the face of the factors I have just described?
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Thomas Edward Siddon: Mr. Chairman, I believe that all Hon. Members would like to see these amendments to the Coastal Fisheries Protection Act adopted today as January 1 will represent the tenth anniversary of the extension by Canada of our offshore fisheries boundary to 200 miles. I think it is particularly timely and important that we recognize the prevalence of overfishing in the area at the limit of the 200 mile boundary and beyond. Through the introduction of improved surveillance methods, improved means of enforcement, higher fines and penalties, we hope to take greater control of those precious groundfish stocks, especially as they pertain to the Province of Newfoundland, in the area known as the nose and tail of the Grand Banks. I am urging and asking all Members to be as co-operative as they can.
At this point I want to compliment my colleague, the Hon. Secretary of State for External Affairs who is in the House today. Without his leadership and co-operation we would not have been able to make significant announcements in the month of June which encompassed the measures before the House today, which were among a number of important new initiatives to toughen up and improve enforcement of those stocks for the benefit of Atlantic Canadian fishermen. I will make further comment at third reading stage, assuming we have time at the end.
I will concisely respond to the questions asked by my colleague. He asked me to give some indication of the future of the small craft harbours program, and how we intend to handle the situation of La Scie in his riding. He asked also about the status of the northern fisheries development corporation, which was an outgrowth of the Kirby task force review and is a commitment which this Government made some time ago and which we have not yet fulfilled.
The Member is correct when he indicates that the Government of which he was a part increased significantly the funding for small craft harbours. That took place in particular in the years 1983 and 1984.1 do not want to criticize the Hon. Member or his Government for raising the budget for small craft harbours from about $42 to $44 million to $60 million during those two years, but I think it is reflective of what has been wrong in the management of our small craft harbour program.
If you go back over the history of that program since the responsibility to maintain those wharfs and harbours was changed from the Department of Public Works to the Department of Fisheries and Oceans, you will see that before every election a big shot of funding was made and brand new facilities were built. The problem is that over the past 30 years from the post-war period, there has been no ongoing budget to manage, maintain and dredge all of the 2,200 harbours across Canada for which I am responsible.
The Hon. Member knows there were certain references in the Throne Speech. We have been promising for some months a new policy approach to management of those harbours so as
to involve the fishermen more directly in the decisions on priorities and equipment purchase as well as the provision of services. We want to use available labour closer to home and at the same time overcome a number of deficiencies resulting from deterioration of those harbours. What I undertake to the Hon. Member is that we will put in place a new management regime which will not only deal with the necessary expansion and improvement to breakwaters and wharfs, but over the long term will allow us to improve general maintenance and eliminate safety-related deficiencies. I must tell him that we cannot do that at the present level of funding, but I am working toward major improvements in that area.
With respect to the La Scie situation, the Hon. Member knows that last year a competition was held to determine who would operate the new fish buying and servicing centre known as Punchbowl on the Labrador coast. One of the bidders was National Sea Products on behalf of the plant at La Scie. For reasons relating to the nature of their bid in relation to that of the Saltfish Corporation and one other bidder, they did not succeed in gaining the right to buy fish at Punchbowl and deliver it to La Scie as they intended. I undertake to the Hon. Member to reconsider the eligiblity of the plant at La Scie in the coming year because the program will be up for grabs again in 1987.
Finally, on the question of the northern fisheries development corporation, I am very conscious of the necessity for finding improved ways to expand the economy of Labrador and northern Newfoundland in order to help many of those marginal communities whose existence is dependent on the seasonal fishery, the inshore fishery in particular, and for whom the greater part of the year offers little opportunity and little hope. I am giving very careful attention to ways to embody the northern fisheries development corporation concept in a new initiative but not necessarily by creating yet another Crown corporation.
I do not believe the solution to problems is necessarily to be found in creating new institutions. We have to define our goals and objectives and then develop a plan to achieve them. I am giving serious thought to this and working co-operatively with the Newfoundland Minister of Fisheries. I hope to have something soon which the Hon. Member will see as a satisfying response to the undertaking made and a way of offering hope and increased economic opportunity to the people in his riding.


James Douglas Manly: Mr. Chairman, I am glad to make a few comments on Bill C-26, an Act to amend the Coastal Fisheries Protection Act, and raise a few questions with him about it. The Act increases the fines payable by foreign vessels who transgress Canadian fishing regulations. That is something all Members of this House support. Unfortunately, it has become a necessity in the last few years.
The American poet, Charles Olson, in his Maximus poems, said that fishing was our first wild west. That was certainly true in the early years when Basque and Bretton fishermen
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were coming over to the Grand Banks. There were occasional disputes and sometimes violence. Over a period of time there was, however, a sense that there was enough for everyone and a reasonable regime developed so that fishing disputes were settled without violence. Unfortunately, that seems to have broken down in the last few years because of increased pressure upon the resource by other countries as well as the increased needs of Canadian fishermen.
As the Minister pointed out, 10 years ago we unilaterally extended our economic zone to 200 miles. However, some areas of the Grand Banks, the nose and tail, are still outside of that zone. They are lucrative areas for other countries to fish. They also provide some temptation for foreign fishermen to sneak into the 200-mile economic zone of Canada in a form of piracy and literally rob us of our fish. Last spring we had the rather exciting spectacle of Canadian fisheries officers being kidnapped by Spanish fishing vessels and that resulted in an exciting sea chase and so on. That sort of thing should not happen and the legislation we have before us today is intended to prevent it from happening again.
There are two needs to be dealt with in this situation. First there is the short-term need for some tough measures, such as those announced by the Minister last June. These increased fines are a part of those measures. We need to be tough in enforcing the fisheries regulations for foreign vessels. On that basis we are fully prepared to support the increase in fines. Of the other measures announced by the Minister, some of them are regrettable but obviously necessary.
Second, we have the need to return to the rule of law and reason. We can all agree that the best kind of police force is that which never needs to use weapons and force. In fact, the best kind of police force is one that does not even need to be seen, but where people know the rule of law exists and will be enforced. I hope the Minister and other members of the Government are able to work toward an international civilized approach to our fish stocks so that we can eliminate the present situation where we have to play cops and robbers and act like a beleaguered corner store operator worried about a hold-up. That kind of thing is no more healthier on the international scene than it is in the corner store. Canada has developed some reasonable regulations and we would like to see them used on an international basis.
The Leader of the Newfoundland NDP suggested that the 200-mile zone should be extended unilaterally to take in the nose and tail of the Grand Banks. That suggestion was picked up by the Premier of Newfoundland and brought to the First Ministers' Conference. I understand a committee was established to look into that. I would be interested in knowing the status of that committee. Has it been set up? Who is on it? What are its terms of reference? When can we expect some answers from it?
Second, it is not enough for us to just raise the maximum fine. There has to be some way of getting the message through to the courts that they have to raise the level of fines they are imposing because in some parts of eastern Canada the courts
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are imposing very low fines when compared to the current maximum. If we are going to raise the maximum, we must send a message to our courts that international fisheries violations are serious enough that they should be considering imposing the maximum fines in a number of those cases.
Third, I would appreciate it if the Minister could bring us up to date on some of the measures he announced last June 13. In particular, he said that the Government would be arming DFO Atlantic offshore patrol vessels and boarding parties. I would like to know what is happening with that. He said the Government would be exloring with DND and MOT means of increasing dedicated air and sea surveillance, acquiring one dual engine helicopter for sea patrols, and developing an electronic fishing licence which will facilitate identification of licensed vessels. I would appreciate some update as to what is happening in those areas. Again, I want to indicate our general support for this measure.


Thomas Edward Siddon: Mr. Chairman, as I indicated earlier, at the end of third reading debate I will give an overview of why the Government is proceeding in this fashion. However, I will now deal with the Member's specific questions. First, he asks about the discussions which arose from the First Ministers' Conference held in Halifax in November, 1985. At that time, driven largely by the strongly held views of the Province of Newfoundland that we should do more to show our commitment to manage and maintain the stocks on the Grand Banks for the benefit of Atlantic Canadian fishermen, it was decided that federal and provincial Ministers responsible for fisheries would meet and develop a strategy for dealing with this general problem of foreign-overfishing, both within and beyond the present 200-mile fishing zone.
As a result of that, I met with provincial Ministers first in St. John's in January, 1986, and subsequently on more than a half dozen occasions. This led to a proposed course of action on the management and enforcement of regulations for the offshore fisheries. As well, we reached a very high degree of understanding and agreement on issues as diverse as aquaculture, the quality of our fish products and marketing initiatives, and international trade.
When we presented our report at the First Ministers' Conference in November of this year in Vancouver, it represented a unanimous series of recommendations to our respective governments on ways to enhance the economic benefit and employment created by our fisheries in all parts of Canada. This referred to the recreational fishery as well as the commercial. It gave attention to the potential for the shore-based processing industry to grow and to improve the quality of our products.
There was one question left unresolved at the meeting in Vancouver. That was the dilemma of how to gain increased control over the groundfish stock, particularly the precious northern cod stock which swims back and forth within and beyond the 200-mile fishing limit at the extremities of the

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Grand Banks known as the nose and the tail of the Grand Banks. We believe and have argued at the Northwest Atlantic Fisheries Association that those resources are really a part of Canadian stocks which live a significant part of their lives within the Canadian 200-mile economic limit and that they, therefore, should be managed from the perspective of conserving and enhancing them for the benefit of Canadian fishermen by Canada.
For that reason, the Government of Newfoundland has advocated that the boundary be extended to encompass the nose and tail of the Grand Banks. For reasons of complexity of law and international diplomacy, it is not feasible now or in the foreseeable future, from the standpoint of precedents in law, for Canada to extend that boundary. However, the Premier of Newfoundland proposed to the Prime Minister and other Premiers in Vancouver that we establish a special working group to study ways and means to give effect to that which we desire, that is, to enhance our ability to manage those resources, which we believe to be Canadian resources, for the benefit of Canadian fishermen. The proposal was that only when they are surplus to our own requirments would they be shared with foreign nations and that we should find ways to improve the effectiveness with which we manage those resources whether or not it is possible to extend the boundary which, at the present time, does not seem possible.
The Hon. Member also asked for specifics about other aspects of the announcements I made in St. John's, Newfoundland, on June 13. We are dealing today with the issue of significantly increasing the fines for violations of the Coastal Fisheries Protection Act by both foreign and Canadian vessels. Canadian vessels are singled out in the Act with regard to the practice of buying Fish from a foreign vessel and transporting it into Canadian waters, that being clearly illegal under the Coastal Fisheries Protection Act. Today we are dealing with significant increases in the penalties for such offences as well as for foreign vessels which illegally enter the Canadian zone.
We are in the process of selecting a twin-engine helicopter which will operate from the pads on our two major offshore coastal patrol vessels on the Grand Banks, those being the Leonard J. Cowley and the Cape Roger. We are well advanced in the preparation of a Treasury Board submission for the purpose of acquiring that helicopter which will effectively extend the range and the ability to give early warning to fishing vessels which are violating our fishing boundaries. The area which those very costly patrol vessels can surveil will be extended by a factor of three or four.
We will also be committing funding to obtain fixed-wing high-altitude surveillance support from a private operator with a specially instrumented aircraft for monitoring offences of our coastal fishing zone. We will continue to enjoy the support of the Department of National Defence which has made available significant hours of surveillance using the tracker aircraft, the Aurora aircraft based in Greenwood, Nova Scotia, and destroyers. In each case a certain number of
hours are made available to the Department of Fisheries and Oceans for such surveillance.
With regard to the arming of patrol vessels, the armaments have been purchased. The training is in process and very comprehensive and carefully considered rules of engagement are being established to ensure that these armaments are used to show that we intend to uphold the provisions of the Coastal Fisheries Protection Act, but in the most responsible way as all Canadians would expect such armaments to be used in the defence of our fishing zone.
The final aspect of the announcements dealt with the development of an electronic fishing licence. This would be somewhat like an emergency location transmitter on an aircraft. However, rather than sending out only a single tone, it would send out a code which would convey the number of the fishing licence carried by that vessel. Any foreign vessel found fishing in Canadian waters which was not emitting this electonic signal would be in clear violation and would be pursued and, hopefully, apprehended for illegal fishing. We are requesting proposals from the private sector for the development of such an electronic fishing licence. The technology is not complicated. It is an adaptation of an existing technology. We are encouraging the submission of proposals for the development of such a system.
I have probably elaborated at greater length than the Hon. Member expected, but I hope my comments have been helpful.


George Baker: Mr. Chairman, I listened to the Minister of Fisheries and Oceans with great interest. I do not know whether to agree with the intent of the Bill. Some may say that one would have to agree with increasing the fines for those people who violate our fishing laws, but it is morally wrong for the Government to watch as the French fleet, in the vast area south of Newfoundland and east of Nova Scotia, take four times their allocation this year. They were allocated 7,600 tonnes of fish and the metropolitan fleet from France took 26,000 tonnes in the area that goes over 200 miles down from Newfoundland to the mid-Atlantic. There was not one observer aboard those boats. However, if a Canadian overfishes his quota, the boat is hauled in and he is arrested.
The Minister can say that there is a legal dispute with the Government of France, but that does nothing about the fact that the total allowable catch on the south coast of Newfoundland and eastern Nova Scotia was surpassed this year. What did the Minister do about this? He cut back on the Canadian quota so that Canadian fishermen have a quota on the East Coast that is less than last year's quota. Meanwhile, the French continue to overfish to the point they are four times their quota for the East Coast of Canada.
Let us consider another flaw in the Bill. The Minister talks about preserving the stocks on the nose and the tail of the banks. I will give him some credit for the fact that he got an agreement from NAFO that no one would fish in some of
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those areas. This means that a Canadian fisherman fishing in those areas would be charged. However, if a Spanish or Portuguese boat fished these areas, there would be a diplomatic note from NAFO to that country, alerting it to the fact that it is not allowed to fish in this area. Furthermore, the United States does not come under NAFO and therefore can put its entire fleet in that area. Canadians will be fined for fishing in that area. The Americans, who are not part of NAFO, are there now, as well as the Koreans. The Spanish fished in this area three weeks ago and were sent a diplomatic note.
The fact that the Minister cannot arrest American fishermen who go to this area angers many boat owners on the East Coast of Canada. Yet, the Government brings in a Bill that increases the fine for Newfoundlanders. The other day, a fisherman was arrested because his boat was 49 feet 11.5 inches long. If his boat was 50 feet long he could have received a quota. The skipper of the boat was from Newfoundland and the boat came from Conception Bay. The skipper is known as Blackie and people from Nova Scotia will know about whom I am talking. He was 202 miles off the coast of Newfoundland with a boat that was 49 feet, 11 inches long, and he was arrested, dragged into St. John's, and charged. I believe it is wrong to increase the fines in an area that is prohibited to Canadians but open to the Americans.
The Minister said that the nose and the tail of the bank is a Canadian resource. He should explain to the House why Americans are allowed there but Canadians are not. While he may argue that the Americans are not part of NAFO, that does not help Canadian fishermen who know that the Americans are in that area where they are not permitted. It does not help the Newfoundland fishermen to know that the French are overfishing their quota by four, yet no charges are laid because there is a diplomatic dispute between the two countries.
There is only one in 10 foreign boats that have observers. The Minister should explain why he does not put more observers on these foreign boats.
I want to say something about Canadian boats. The inshore fishermen in Newfoundland are now adversely affected three ways: overfishing by foreigners, factory freezer trawlers that were approved by the Government and which gave National Sea Products the boost on the stock market, and the pound quotas now given to Canadian boats. There should be more observers on those large Canadian boats which can presently wash the small fish overboard.
The Government believes this Bill will solve the problem of foreign overfishing by charging Canadians while letting foreigners off scot-free because of a border dispute. That is not good enough in the area where the French overfished its quota by four, and it is not good enough in the nose and tail of the bank where the Americans and everyone else who is not part of NAFO are allowed to fish. This action by the Government is unacceptable.


Mr. McCain:: Mr. Chairman, I listened to the Hon. Member's speech with great interest. When we negotiated at the
Coastal Fisheries Protection Act
Law of the Sea Conference, we gave up the tail and the nose of the bank before we got to the bargaining table. That was discussed long before the present Minister assumed his portfolio. Recently, we were told that during all the surveillance that took place under the Minister who is now in the other place, the observers never saw foreign gear hauled in from the water or saw landed fish in the factory trawler. There was no surveillance.
I agree with the Member that surveillance is still inadequate, but that problem was inherited. I agree that the problem must be addressed, but under no circumstances should the Minister be blamed when observers were not even being put on the boats five years ago. Canadian boats were not being weighed and we were not even estimating the weight of fish that were being taken aboard foreign trawlers.
There is a great foofaraw about what is happening today. The nose and the tail were given away and as a result of the Law of the Sea Conference all those involved with the fishery know that we no longer have the control we want. How it is going to be resolved, I do not know, but blaming the Minister and the Government for an impossible situation which we inherited is not really what I would have expected from the Hon. Member whom I regard so highly and will continue to do so.


George Baker: Mr. Chairman, this Minister of Fisheries, under the guise of trying to save the stocks on the nose and tail of the banks-and we all want to save the stocks-reached an agreement with the North Atlantic Fisheries Organization, to which so many countries belong, in the last three months, to stop fishing in an area which was considered to be a spawning ground. However, what he forgot in saying that no Canadian boat was allowed to fish there was that the Americans were not a part of NAFO. Perhaps he did not forget. Perhaps he sent his Deputy Minister to have negotiations with the United States. But, to my knowledge, it has not stopped the American fleet from fishing in an area which his Department says we cannot put our boats because it is a NAFO area and the Americans do not belong to NAFO.


Fred Alward McCain: Because we gave it away.


George Baker: The Hon. Member says it is because we gave it away. Well, that area of the banks is right on the line and a little bit outside of the 200 mile zone. There is no doubt about that. However, it is considered internationally to be a Canadian resource. That is why the agreement was made. Where I have extreme difficulty is that the Government tells us that Canadians are not allowed to fish in those areas off the East Coast of Canada but there is nothing we can do about the Americans and any number of other countries because they are not a part of NAFO. I think Canadians on St. Pierre and Miquelon off the South Coast of Newfoundland are just as angry as we are with the Metropolitan Fleet from France. But right is right and wrong is no man's right. We cannot allow a

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Coastal Fisheries Protection Act
foreign country to overfish a quota by four times with the excuse that we have no control over them, whereas if a Canadian boat went out, that fisherman would be arrested. That is where the Government and I differ.
We do not say the Minister is completely off track but he is certainly not on track as far as being equal and fair. The Minister can stand up and say he cannot control the French in areas 3P or 3J, or whatever one calls it, on the South Coast of Newfoundland. He can say it is in negotiaton. However, if it is in negotiation, we do not hit the poor Canadian boat owner without getting something back from the French and we certainly do not arrest a Canadian boat owner whose boat is right next to an American boat. The American is fishing away and out comes the patrol vessel. The Canadian boat owner is told he is fishing illegally and has to be towed into St. John's, Newfoundland. The Canadian skipper asks about the American right next to him and he is told that the American cannot be touched because he is not a part of NAFO. That is not good enough.


George Roland Henderson: Mr. Chairman, what I think my colleague, the Hon. Member for Gander-Twillingate, has brought home so vividly here today is the fact that this legislation touches a much broader situation than fisheries management. The Hon. Member mentioned the situation in St. Pierre and Miquelon where the Metropolitan Fleet from France is overfishing and we have no control whatsoever. He mentioned other situations as well. I think the Government and the Minister are badly lacking in fisheries management. I think the fishermen and the people of Canada see that.
The Minister of Fisheries in Nova Scotia reported there is misreporting of catches up to 30 per cent to 50 per cent. 1 do not know how accurate those figures are, but it leaves little for the fishermen in Atlantic Canada and in British Columbia. How can they trust the Government when they hear these stories circulating, particularly when they hear it from provincial Ministers?
This legislation on which we on this side agree-and we will pass it expeditiously today-will not be a panacea to all the ills of the fishery. 1 hope the Minister understands that. It is one thing to have stiffer fines and penalties for foreign overfishing, but how do we enforce those penalties? Since this Government took office we have seen nothing but cuts on the enforcement side of the Department of Fisheries. The Minister mentioned earlier that he was going to expand surveillance and I hope he does. I hope he brings surveillance back to an acceptable level because one reason there is overfishing by foreign fleets is because of the price of fish, which creates a greater demand. I hope the Minister does not believe that by bringing in this legislation it will cure all the ills of the fisheries.
There are many other issues on which we should be speaking when it comes to fish management. There are issues the Government should address very promptly. When the Committee on Fisheries and Oceans travelled to Atlantic Canada, and I see some Hon. Members here who were with us, a number of
issues were put before us by the fishermen. One concern was the problem with the grey seal. I hope when the report on that is made public it will be referred to the Committee on Fisheries and Oceans and dealt with as quickly as possible.
We in the Opposition are prepared to help in any way, shape or form, the Minister and the Government to better manage the fish stocks but I must say it is very disturbing to find out last week or a week and a half ago that the Minister allocated x number of tuna to the Japanese in the St. Margaret Bay area.
I have a letter to the editor of a local newspaper, which I will not read it because it is too long, condemning the Minister and asking for his resignation because of how he handled that situation. I think that was a terrible decision made by the Minister and 1 hope he will learn from that mistake. It is a limited fishery. For the Minister to say it was an experimental long line Japanese fishery is so ludicrous it is not even worth mentioning. There is one thing the tuna fishermen in Prince Edward Island know and that is the keg and line and the fact that a limited number of fishermen have licences to catch tuna. That is one of the reasons there has not been too many tuna caught this year.
I am told by Mr. Robert McFadden, a member of the Atlantic Bluefin Tuna Advisory Committee, that there were nearly 400 tuna caught weighing less than 300 pounds. Good advice for the Minister would be to accept the recommendations of those advisory committees. Certainly when tuna this size is given to a foreign country, it does not say much for the management of the fisheries and the respect fishermen have for that sort of management. While we can be very critical of this, the damage has been done. I hope that it is not repeated in the future by this Minister.
I would like to get the legislation passed today, but I would like to ask the Minister if he intends, along with passing this legislation, to provide for more enforcement and to better manage the fishery resource. This is only the tip of the iceberg. Stiff fines can be imposed but we must be able to catch someone in order to impose those fines.
There are thousands of miles of coastline around Nova Scotia, Newfoundland, Quebec, Prince Edward Island and New Brunswick. To be fair, I realize that there cannot be a policeman on every corner. However, with these kinds of fines, there will be much more temptation for a sort of hit-and-run type of fishing. We will have to put more teeth in the legislation than the penalties for which it provides. In fact, we will have to back it up with some authority. I hope the Minister is prepared to loosen the purse strings when it comes to enforcement.


Thomas Edward Siddon: Mr. Chairman, I would like to make my response short because we want to get this Bill through the House this afternoon if at all possible. I would point out to the Hon. Member that with the reorganization within the
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Department which was announced in February and with the regional reorganization that occurred in September, there have been only minor changes to the enforcement contingent. I believe there was a reduction of three out of 700 persons assigned to enforcement duties. However, there have been other increases arising out of funding which was announced in June to embody the various initiatives we are discussing in this debate this afternoon.
I should also point out that some 100 observers are now travelling on foreign vessels in Canadian waters. With the introduction of full cost recovery for observers, we will be adding 100 new observers and they will now be monitoring the fishery on Canadian vessels offshore. We have increased the contingent of observers by some 100 and in fact we are strengthening both the enforcement and the observer functions in this way.


Steve Eugene Paproski: Shall Clause 1 carry?


Some Hon. Members:: Agreed.
Clause 1 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Paproski):: When shall the Bill be read the third time? By leave, now?


Some Hon. Members:: Agreed.


Thomas Edward Siddon: that Bill C-26, an Act to amend the Coastal Fisheries Protection Act, be read the third time and passed.
He said: Mr. Speaker, I would like to rise at this point to offer a summary response to a number of the comments that have been made by my hon. colleagues. I think it is only appropriate that I do this because of some of the particularly forceful assertions which were offered by my colleague, the Hon. Member for Gander-Twillingate (Mr. Baker).
It seems from my perspective that the Hon. Member for Gander-Twillingate is not content with half a bushel. He wants the whole thing. The fact is that when the Party of which he is a member was in Government some 10 years ago, as the Hon. Member for Carleton-Charlotte (Mr. McCain) has pointed out, the Government did not achieve the control of which the Hon. Member now speaks as being highly desirable in spite of the fact that under international law, such an extension beyond the 200-mile limit would not yet be recognized nor would be feasible in the immediate future.
That in no way negates the benefits to be gained by increasing our ability to police our Fishery at the extremity of the 200-mile fishing limit for those vessels which have been displaced from within the 200-mile limit and hover along the boundary awaiting opportunities to sneak in at night to take fish essentially out of the boats of our own fishermen and the mouths of their children. We are therefore bringing measures
Coastal Fisheries Protection Act
before the House today which will substantially increase the deterrents to foreign fishing within and at the limit of our 200-mile fisheries zone.
I for one would be extremely disappointed if Hon. Members opposite did not support the substantial increases in fines and penalties which are contained within Bill C-26. The spokesman for the Official Opposition has already indicated that support will be forthcoming. I think it is particularly significant that he has said that because, as we celebrate the tenth anniversary of Canada's assertion of the 200-mile exclusive fishing zone, we are raising the fines for illegal fishing without a licence within Canadian waters from $100,000 to $750,000 maximum on indictment, an increase of seven and a half times.
We will increase the fine for convictions of illegal fishing by summary conviction from $25,000 to $150,000, a sixfold increase. For other offences, a number of which are set out in the Sections of the present Coastal Fisheries Protection Act and its regulations including evading arrest and failing to stop when commanded, fines under indictment will be increased from $25,000 to $500,000, an increase of 20 times. For summary conviction offences of the same nature, the fines will be increased from a maximum of $5,000 to a maximum of $100,000, an increase of some 20 times.
Why are these increased fines necessary? In the past three or four years, as we have displaced foreign fishing vessels from within our 200-mile limit to the very rich extremities of the Grand Bank known as the nose and tail of the Bank, we have seen a very rapid escalation in illegal fishing along the line of and within the Canadian 200-mile zone. The result of that is that in 1984, there were 49 detected violations and seven convictions. Total fines of $8,000 were imposed and the average fine was $1,000. That was the situation in 1984.
In 1985 there was a virtual doubling of violations from 49 to 90. In 1985 we collected fines of $1.25 million with an average fine of $56,000. Comparing those fines with the levels that we are discussing today, we can see how important this additional deterrence will be. Already in 1986 we have had 48 violations, but at this time in the year that represents a substantial reduction from the number of violations recorded in 1985. So far this year $286,000 in fines have been levied with an average fine of $25,000, and $46,000 in forfeitures of catch.
The principles embodied in this Bill are to give effect to the various measures announced in a speech I gave in St. John's, Newfoundland, on Friday, June 13. At that time, I indicated that we would substantially increase our ability to detect violations, and that we would substantially increase our ability to chase and apprehend violators. All of that would be of little significance if we then did not have the legal provision to essentially throw the book at those who would offend against our exclusive fishing zone. That is why it is essential that these significant increases in penalty be approved today.

December 15, 1986
Adjournment Debate
I spoke earlier at the committee stage about our decision to arm our offshore patrol vessels, of which there are five operating on the Atlantic coast, with light machine-gun armaments, and to ensure that those armaments are used according to rules of engagement, so that we are in no way seen to be irresponsible or unduly antagonistic. However, we must show foreign nations, including the United States, and vessels of any other foreign origin, that Canadian fish stocks within our fishing zone are to first benefit our Canadian fishing communities and fishermen.
Hon. Members have spoken about certain complications where, as a member of the Northwest Atlantic Fisheries Organization, we enter into arrangements with foreign countries that recognize Canada's authority to manage these fish stocks, both within and beyond the 200-mile limit. In exchange for their co-operation, they are allowed to fish for surplus stocks within the Canadian zone. At the same time, we expect their full co-operation on conservation measures on the nose and tail of the Grand Banks.
Unfortunately, as the Hon. Member for Gander-Twillin-gate has indicated, there are certain complications. There are unresolved questions of allocation to the French Metropolitan Fleet which are presently being discussed at the diplomatic level, as the Hon. Member well knows. There is the problem of overfishing by that French fleet in area 3PS which surrounds the islands of St. Pierre and Miquelon. Something has to be done to bring under control that blatant abuse of resources which we believe to be Canadian. Next year the long-term agreement expires with the European nations, the Economic Community. Under our policy that allocation which the European nations have enjoyed will not be renewed. But there is also a problem with the American vessels, as the Member for Gander-Twillingate has pointed out.
Since The Hague line was established, conveying to Canada a greater portion of the rich fish stocks on Georges Bank, some of the U.S. vessels that formerly fished in an area which is now part of the Canadian Fisheries zone are fishing on the tail of the Grand Banks. They are not fishing for our prime cod stocks, but they are indeed fishing for flat-fish or flounder.
Diplomatic initiatives must be continued to encourage the Americans to fish responsibly and not to abuse our stocks, as well as all of the other countries that will be subject to the fines established under this legislation.
Thank you, Mr. Speaker, for your co-operation and that of all Members. I am sure that their good sense will persuade them to support this very important and positive initiative on behalf of the fishermen of Atlantic Canada.


George Baker: Mr. Speaker, I know that I only have a couple of minutes. The fact is that today the Minister has decreased the quotas for Canadian fishermen on the East Coast. They have been decreased for groundfish. At the same time it is recognized, as the Minister just did, that the French Metropolitan Fleet is overfishing by four times what it is allowed in that entire area off the coast of
Newfoundland and off the east coast of Nova Scotia. After we agreed for conservation purposes with NAFO to cut out our fishing on the tail of the bank, the Americans moved in with their fleet. The Minister says that there is nothing he can legally do about that.
The Canadian quotas are cut back. If they fish any more than their quota, they are arrested and will receive big fines. The fishermen will never get out of jail. Yet the French fleet is overfishing all it wants. The Americans are on the tail of the bank overfishing all they want. Right next to them are the Canadians who will be arrested and given these great new fines. The Minister of Fisheries and Oceans (Mr. Siddon) has admitted, and he is absolutely correct, that right now the Canadian Government cannot do anything about the foreign fleets. Yet the Canadian quotas have been reduced for groundfish off the East Coast.
What we are saying to the federal Government today is to beware. Canadian fishermen will not put up with this much longer. They will not accept that double standard that is being presented to them by this Government. They are not going to take it, and they will show their displeasure with this Government when the next election rolls around.


James Douglas Manly: Mr. Speaker, very briefly, so that we can get this Bill through, I wish to indicate our support for the measures the Government is taking in increasing the fines that will be levied against foreign vessels which transgress Canadian fisheries regulations, and Canadian vessels which pick up any foreign catches. That is important. The previous Member who spoke did not mean to indicate that Canadian fishermen will be hit with these high fines, because that is not the way the Bill reads, as I understand it. I stand to be corrected if the Member is correct.
These measures are important. I urge the Government to continue to take a strong position vis-a-vis France and the United States and get them to respect Canadian rights and Canadian conservation measures in these waters. Again, I am happy to give my support for these measures.
Motion agreed to and Bill read the third time and passed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Derek Nigel Ernest Blackburn: Mr. Speaker, these proceedings arise out of a question I put to the Prime Minister (Mr. Mulroney) right after the collapse of the Reykjavik Summit. That summit fell apart because President Reagan rejected a
December 15, 1986

Soviet offer to cut offensive nuclear missiles and keep star wars research in the laboratory for 10 years. Instead, President Reagan wishes to deploy a ballistic missile defence system after 10 years of development.
I asked my question for the reason that President Reagan's position flatly contradicted Canadian Government policy. That policy was set out by the Secretary of State for External Affairs (Mr. Clark) in the House on January 23. It can be summed up in one sentence:
Our stance toward SDI research is rooted in the need to conform strictly with the provisions of the ABM treaty.
Article V of that treaty reads as follows:
Each party undertakes not to develop, test, or deploy ABM systems or components which are sea-based, air-based, space-based or mobile land-based.
Clearly the Government could no longer support President Reagan. He wanted development and deployment, which is explicitly forbidden. I was therefore astounded when the Prime Minister asserted that his Government's policy was still in effect. How could this be?
We found out when the Secretary of State for External Affairs returned from Europe. He told the House that the summit had been a great success. The only thing left to work out, according to the Minister, was the definition of research. He said that should be left to American and Soviet negotiators.
The Secretary did a great disservice to the country. Canadian lives are at risk, and they will suffer the consequences of another arms race. The Government has a responsibility to speak out for them. He also conveniently ignored the fact that his Government's policy rested on a Canadian interpretation of star wars and the ABM treaty.
Let us look at how the Americans see that treaty. Paul Nitze, the President's special adviser on arms control, told a New York audience on October 31:
The restrictions of Article V of the treaty do not apply to ABM systems based on other physical principles and their components.
He went on to say:
The United States need not accept limitations on permitted development and testing activities.
In a nutshell, the Canadian Government says it will support star wars only if research conforms strictly with the ABM treaty, and the Americans say they can and will ignore that treaty. Therefore, the Government can no longer support star wars.
Reykjavik should have crushed any illusions that the Government had about star wars. The House will remember that the Government began by defending SDI as prudent research to keep up with the Soviet Union. However, prudent research is exactly what President Reagan turned down by refusing to keep research in the laboratory for 10 years.
Adjournment Debate
Neither is star wars a bargaining chip. Some argued that star wars would bring the Soviets back to the bargaining table. However, when Mr. Gorbachev came and made the concessions in offensive arms which the West had been seeking for years, President Reagan would not bargain. Instead he wanted to deploy his "insurance policy". Finally, the Secretary of State for External Affairs argued that star wars could be the subject of negotiation under the ABM treaty. However, Mr. Nitze's statements make it clear that the Americans will not accept limits on SDI.
It has come down to a choice between star wars and arms control. SDI is riding roughshod over existing arms control treaties, and it is preventing new agreements from being signed.
In conclusion, Canada must now say no to star wars. A responsible friend and ally would tell the United States that breaking treaties and passing up the chance for arms reductions is not in anyone's best interests.


Mr. Jean-Guy Hudon (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I am sure the Hon. Member knows that SDI is a research program concerning various ABM defence concepts. The technical feasibility of such a project can be ascertained only after further research which will be completed in the early 1990s, if ever.
The Government supports this research program which it views as a precautionary measure warranted by the existence of a similar program in the U.S.S.R. For a number of years now the Soviets have been doing extensive ABM defence research at centres such as Sary Shagan. In addition, both superpowers should indeed consider the possibility of jointly and progressively abandoning a deterrent, system based on guaranteed mutual destruction through offensive nuclear weapons and opt instead for defensive systems combined with reduced arsenals of offensive weapons.
This was the position of the American negotiators at the Geneva discussions on nuclear and space armament, and we supported it.
Mr. Speaker, there is no doubt that SDI has something to do with the U.S.S.R. returning to the Geneva negotiation table and the more pragmatic approach taken by the Soviets in recent months. It is unfortunate that at Reykjavik Mr. Gorbachev unilaterally chose to make the SDI interruption a prerequisite of progress in other sectors of nuclear armament control.
The Hon. Member for Brant was wondering about a connection between SDI and the ABM missile treaty. Had he quoted Article V of the treaty in extenso he would have realized that both signatories to the treaty have undertaken not to develop, test, or deploy ABM systems or components which are sea-based, air-based, space-based or mobile land-based.

December 15, 1986
Adjournment Debate
However, the Treaty authorizes the development and deployment of a fixed land system as well as research on all types of systems.
In Reykjavik, Soviet Secretary General Gorbachev however added a new dimension to the discussions by requiring that all research on anti-missile defence systems be carried out only in laboratories, which would go beyond the restrictions contained in Clause V of the Treaty. Indeed, the word "laboratory" is not even mentioned in the Treaty, much less defined.
Has my allotted time expired, Mr. Speaker?


The Acting Speaker (Mr. Paproski):: It has. The Hon. Member for Papineau (Mr. Ouellet).


PURCHASE OF CANADIAN PACIFIC AIRLINES BY PACIFIC WESTERN AIRLINES. (B) MINISTER'S POSITION.
Hon. Andre Ouellet (Papineau):: Mr. Speaker, on December 3 of this year, in a question to the Minister of Transport, I raised the matter of the sale of CP Air to Pacific Western Airlines of Calgary. I asked the question because we Liberals, like so many Canadians, are very concerned about the increasing concentration of power in the air transport industry. If this sale is approved by the Canadian Transport Commission, it will be the seventh major takeover in Canada in less than two years. This sale, if it is approved, will put Canada in a situation where two carriers control 90 per cent of the air traffic in this country.
In the circumstances, we might have expected an entirely different answer from the Minister, because we can hardly take lightly a matter that is causing considerable concern to workers in the transport industry as well as to users of the services offered by our Canadian airlines.
The Minister said, and I quote, at page 1736 of Hansard'.
-I think that Canada will be better served by having two healthy competitors than by having the giant Air Canada and a group of financially weak or regionally small airlines. We will have both. We will have two large competitive national airlines and a plethora of smaller regional and local airlines.
Unfortunately for the Minister and perhaps more importantly for Canadians, the Minister's analysis does not stand the test of scrutiny. Indeed, how can the Minister suggest that following the sale we would have the best of both worlds, in effect, two large carriers competing with small regional airlines when in fact over the last two years seven major takeovers have concentrated 90 per cent of traffic in the hands of two carriers? Surely the Minister cannot be suggesting that what we are experiencing today in Canada is competition in any meaningful sense of the word. Surely the Minister is well aware that, in fact, what we are experiencing is concentration of ownership in fewer and fewer hands, a situation that is becoming very serious, having to deal with the disappearance of more and more regional carriers with the resulting loss in employment and service all across Canada.
I spoke earlier about the concern of airline industry workers over the effect this purchase and sale might have on their jobs. They had expected, quite legitimately, that the Minister would offer assurances that this sale, if approved, would not result in any loss of employment. In fact, news of the purchase was immediately condemned by leaders of the Brotherhood of Railway and Airline Clerks who are afraid job losses will occur. I regret that the Minister ignored their fear and has not addressed it in the House. Neither has he addressed the eventual loss of service for the region.
[ Translation]
It is a foregone conclusion that Canadian Pacific and Pacific Western, which cover about the same territory in Western Canada, will no longer compete for those routes in the future. It is also clear that the new company will see to it that routes are rationalized, so that the travelling public in Western Canada, which up to now has had a choice of airlines, will no longer have that option in the future, the result being higher prices and all the other consequences of such an arrangement.
What I find surprising at this point is that despite the assurances we were given a few months ago by the Minister of Consumer and Corporate Affairs when the new competition legislation was adopted in the House, no information or prior notice was given the Department of Consumer and Corporate Affairs regarding this takeover. This means that we on this side of the House were misled by the Canadian Government when it told us it was putting in place new competition legislation that would prevent takeovers if the impact would be to substantially reduce competition. Indeed the new competition legislation has yet to be enforced, and a takeover which may have dire consequences on Canadian air transport can become reality without monitoring on the part of both the Minister of Transport, who seems to be rejoicing at this takeover, and the Minister of Consumer and Corporate Affairs, who did not have the nerve to ensure that his legislation was in force and who failed to take appropriate steps to compel Pacific Western to give the Director of Investigation and Research on combines due notice of this takeover before it was finalized.
I am asking the Minister to take another look at this file and make sure that Canada will still have two major air carriers as we had before, as well as six or seven large regional carriers and lots of small local carriers.
Such was the situation before the Conservatives came to power, but it is deteriorating at the very moment when the Government is talking about deregulation legislation which is supposed to increase competitiveness and rejuvenate the air transport market. I think the Conservative Government is treating the population as fools. I realize that we are getting close to Christmas, but the fool in all this is the Minister of Transport, not the Canadian people.
December 15, 1986


Mr. J. M. Forrestall (Parliamentary Secretary to Minister of Regional Industrial Expansion):: Mr. Speaker, it is the Hon. Member for Papineau (Mr. Ouellet) and his Party who treated Canadians as fools. He sits in his place and says certain things are being done and ignores other facts. The fact is that there is ample opportunity for recourse.
The Member rose to his feet on December 3 and asked the Minister to intervene, rescind and disallow. The fact is there are laws and regulations in this country. I do not know why the former Minister, as knowledgeable as he sometimes seems to be, would not know that. Section 27 of the National Transportation Act stipulates that any air carrier which proposes to acquire another transportation system must give notice to the CTC, which in turn must give notice to the public. The Member is a former Minister and he knows that. The CTC may receive objections, investigate and may hold public hearings if it considers such hearings to be necessary or desirable and in the public interest.
The CTC may intervene of its own accord. It does not need an objection, as the Hon. Member knows. In either case, the CTC is empowered to disallow, of its own authority and by its own experience, that of which the Hon. Member expresses concern and says we have no capacity with respect to.
The CTC's decision on this matter may be appealed to the Cabinet under Section 64 of the NTA. In addition, the very powerful provisions covering mergers in the new Competition Act apply to transactions such as PWA's purchase of CPAL. The Member for Papineau knows that. I wonder what is after with his smoke and mirrors act.
The CTC has a considerable degree of independence from the Government and it would be both premature and inappropriate for any Minister, let alone this Minister, to directly or indirectly intervene in this decision-making process.
The matter will go through the process. If there are objections, they will be lodged with the appropriate authority. If the CTC deems it necessary, as I expect it will, it will call public hearings and that will be the end of the matter. Due process will prevail. The Member's instructions to the Government to intervene are inappropriate and simply not acceptable, as he knows.


NATIONAL RESEARCH COUNCIL-SIZE OF BUDGET AND STAFF. (B) BUDGETARY CUT-BACKS-GOVERNMENT POSITION
Mr. David Berger (Laurier):: Mr. Speaker, in the middle of October when the Minister of Science and Technology (Mr. Oberle) made his somewhat infamous statement that there are no cuts at the National Research Council, it really stretched the credulity of Canadians across the country. It was a bit like the Prime Minister (Mr. Mulroney) saying he had nothing to do with putting a prison in his riding. We had to find the truth from another source.
Adjournment Debate
At the press conference given by the President of the National Research Council, Dr. Larkin Kerwin, he said it would be much more difficult to avoid lay-offs with this round of cuts than with the previous round. You will recall that after the Government took office in 1984, 400 positions were eliminated at the National Research Council. Through various techniques such as a hiring freeze, early retirement and reassignment of personnel within the NRC, the Council was able to avoid all but a few lay-offs. However, Dr. Kerwin admitted that the fat had been cut and that it would be much harder to avoid lay-offs with the 200 positions which must be cut by next April 1 on the orders of the Government.
The truth is that it is ridiculous to suggest that you can recycle highly specialized scientists. Several weeks ago there was a front-page article in The Financial Post which quoted, among others, a researcher at the National Research Council who said that suggesting that one can recycle a scientist who has dedicated his life to work in a particular field was like telling a heart surgeon that from now on he can only operate on kidneys.
The truth was told by Dr. Basinski, a recipient of the Order of Canada, who has been told that he can remain with only one technician. He is losing the rest of his staff and support personnel. He indicated that under those circumstances it would probably be a waste of his time and of taxpayers' money for him to continue. The truth is that morale has never been so low as it is at the National Research Council under the policies of the Government.
I recall speaking to a scientist recently who told me that even if the cuts were reversed today, he is not sure he would want to remain at the NRC, which he regards as more of a liability than an asset to him at this time in his career.
How did we get into this sorry state of affairs? Denny Doyle, a member of the outside Council, perhaps provided a small explanation when he told our committee several weeks ago that at his behest, the NRC prepared a five-year plan after the cuts in 1984. He felt that the best way to let the Government know about the NRC's plans was to put it down on paper and give the Government an opportunity to react. If there was any disagreement with what the NRC was doing, presumably the Government, through the Minister, would say so.
The Minister of State for Science and Technology is proud to say that as one of his first actions he endorsed the five-year plan. He has repeated this endlessly, yet in one breath he endorses the plan, then asks the NRC to cut another $20 million from its budget. Is it surprising that Mr. Doyle said to our committee that he is really not sure what the shareholder, meaning the Government, wants from the NRC.
1 want to be very clear. I am not saying that there should be no changes at the National Research Council, but changes should be justified and should be implemented in an orderly fashion, in a process that is rigorous and respected. This has not happened at the NRC.

December 15, 1986
Adjournment Debate
I can give several further examples. For instance, I can point to the recommendations of the Wright Report that were published in July, 1984. To date, there has been no formal response by the Government to this examination of government policies and programs for technology development.
In August, 1985, the former Minister of Science and Technology asked for the views of the Science Council of Canada on how the Government might implement the recommendations of the task force. In September, 1985, the Science Council recommended that a review of government labs be undertaken by an agency at arm's length to the Government. Such a review should be thorough, fair, comprehensive and forward looking. To be successful, the review would need the support and interest of government scientists and engineers and the clients of the labs, and therefore should include interviews with them.
Fifteen months have gone by since the Science Council of Canada made these recommendations and no apparent response has yet been given by the Government.
I am suggesting that the National Research Council is operating in a policy vacuum. It does not know what is expected of it because it has not been told by its political masters. Canadians deserve a detailed statement of government policy with respect to the National Research Council and government labs. Until such time, the cuts that were announced by the Government in October should be rescinded.


Mr. Gordon Towers (Parliamentary Secretary to Minister of State for Science and Technology):: Mr. Speaker, the National Research Council is the single largest research body in Canada. The Government has new priorities for science and technology and it is only natural that there be a re-evaluation of individual government programs, including those within the NRC.
When programs which may have been justifiable within the context of past objectives are re-examined in terms of new priorities, some are found to be inappropriate. They are discontinued. These decisions cannot be considered cuts if, at
the same time, other programs are expanded and initiated. This is what is happening in NRC.
Between 1984-85 and 1987-88 the budget of NRC will fall by about $50 million. However, all but $10 million of this reduction is accounted for by less construction. Research contributions, salaries and operating costs have not fallen significantly so that in total, the effective program at NRC is not reduced. Of course, some programs have been discontinued. At the same time, there are offsetting increases in biotechnology and other areas which will approximately equal these recent reductions.
Driving this reallocation of priorities within NRC is the Government's view of Canadian science and technology. This view is still being hammered out in discussions with provincial, university and industry representatives and significant announcements will soon be made. The Speech from the Throne outlined a renewed commitment by the federal Government to science and technology in Canada and announced several initiatives such as a national advisory board on industrial technology to be chaired by the Prime Minister (Mr. Mulroney), the introduction of a federal science and technology strategy and the establishment of a Canadian space agency. Some of the Government's intentions are clear and have influenced decisions made at NRC and elsewhere. The reallocation of work at NRC and other Government laboratories is taking place in the context of an expanded role for university and industry researchers. The expansion in external research will be the foundation for a sustained increase in total research and development in the future.
As the Minister has often stated, Canada must move into the 21st century in so far as research, science and technology is concerned.


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


[Stage Direction]
The House adjourned at 6.27 p.m.
[Stage Direction]

Tuesday, December 16, 1986